Annual Financial Report

RNS Number : 5039Q

daVictus plc

19 June 2020

 

19 June 2020

DAVICTUS PLC

("DAVICTUS" OR "THE COMPANY")

FINAL RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019

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 2019.

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

The annual report and accounts for the period ended 31 December 2019 has been uploaded to the National Storage Mechanism and will be available for viewing shortly at http://www.morningstar.co.uk/uk/NSM

 

 For more information please contact:

daVictus plc
Robert Pincock	[phone]

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") for year ended 31 December 2019.

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 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. The Board strongly believe this acquisition of the HAVANA will give a positive outlook to the Company and drive shareholder returns.  

The Company further announced on 26 March 2020, that it has signed a Memorandum of Understanding (MOU) with Asia Food Venture Sdn Bhd (AFV) to appoint the first franchisee of its premium dining restaurant concept in Kuala Lumpur, Malaysia.

Due to the timing of the emergence of COVID-19 and lockdown, the Company's trading performance for the year ended 31 December 2019 has not yet been impacted. At this stage, Covid-19 impact on our business is limited . Our first franchisee's restaurant opening might be slightly delayed from intended scheduled. However, the Company takes this opportunity to assist franchisees revise restaurant guidelines to adapt with the new normal of post COVID-19 customer behaviour after reopening the economy.

In addition, the welfare of our employees and customers remains paramount and, to this end, the Company is taking all appropriate measures to keep people safe whilst ensuring continuity of our operations 

The Company will continue to monitor this matter very closely and will keep the overhead low to maintain the business liquidity and stay resilient during this unexpected situation in year 2020.

Abd Hadi Bin Abd Majid

Chairman

19 June 2020

 

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.

Cash on hand as of 31 December 2019 is £116,553.

Financial risk management objectives and policies

The Company does not at present enter into any forward exchange rate contracts or any other hedging arrangements. The main financial risks arising from the Company'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 Company's exposure to the risk of changes in market interest rates relates primarily to the Company's overdraft accounts with major banking institutions.

The Company'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 Company 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 Company, which comprise cash and time deposits and accounts receivable, the Company'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 for year ended 31 December 2019.

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 Company's business risk

An explanation of the Company's financial risk management objectives, policies and strategies is set out in note 11 and the Operating and Financial Review. 

Key events

On 19 February 2019, The Company agreed to enter into non-binding conditional heads of terms with Typical Dutch N.V. ("TDNV") under which it was proposed that DaVictus acquire the intellectual property rights in a restaurant concept currently owned by TDNV, including their recipes, collection of Cuban/Havana graphics for a restaurant concept branded as HAVANA Rolled Cigar Music Café (or simply "the HAVANA").

Directors

The Directors who served the Company during the year and their beneficial interest in the Ordinary Shares of the Company at 31 December 2019 were as follows:

Abd Hadi bin Abd Majid
Robert Logan Pincock
Maurice James Malcolm Groat

 

Directors' interest

As at 31 December 2019, Robert Pincock, one of our directors, owns 1,250,000 ordinary shares, which represents an 10.29 % 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 May 2020

Party Name	Number of Ordinary Shares	% of Share Capital
Belldom Limited	1,259,999	10.37
Robert Pincock	1,250,000	10.29
Amber Oak Holdings Limited	1,127,250	9.28
Eastman Ventures Limited	1,104,454	9.09
Infinity Mission Limited	1,035,000	8.52
Link Summit Limited	988,343	8.14
Nordic Alliance Holding Limited	888,546	7.90
West Park Capital Manager Ltd	400,500	3.29

Capital and returns management

The investment size for acquisition will be dependent on the franchise name and type of franchise agreement, with each opportunity being evaluated on a case-by-case basis. The Directors believe that, following an acquisition, further equity capital raisings may be required by the Company for working capital purposes as the Company pursues its objectives.

The Company expects that any returns for Shareholders would derive primarily from capital appreciation of the Ordinary Shares and any dividends paid pursuant to the Company's dividend policy.

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 Company will continue to be able to meet its liabilities as they fall due for the foreseeable future.

In addition to the already known effects of the COVID-19 outbreak and resulting government measures, the macroeconomic uncertainty causes disruption to economic activity, and it is unknown what the longer term impact on our business may be. The COVID-19 virus can evolve in various directions. Management seeks to obtain the best possible information to enable us to assess these risks and implement appropriate measures to respond.

However with all those risks and impact above, The Company have taken and will take a number of measures to monitor and prevent the effects of the COVID-19 virus. This includes safety and health measures for our people (ie social distancing and working from home), securing the supply of materials that are essential to our production process, securing additional financing from directors to support continuity of our operations and communication to our key stakeholders.

In addition, as a F&B franchiser, the company assists franchisees to adopt the new normal of post-COVID-19 customer behavior to restaurant guideline such as

· Exploration of take-out, drive-through & delivery options

· Increased domestic/local sourcing for supply chain

· New & expanded sanitization practices in the preparing and handling food

· Simplifying the operation and SKUs reduces sourcing risks and is simply easier to manage

The Company will not pay any dividends this year. Based on the facts and circumstances known at this moment and the possible scenarios about how the COVID-19 virus and resulting government measures could evolve, management has determined that the use of the going concern assumption is warranted, but that there is a material uncertainty resulting from COVID-19 and the reliance support of the directors that may cast significant doubt upon the entity's ability to continue as a going concern and, therefore, that it may be unable to realize its assets and discharge its liabilities in the normal course of business. 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 Company 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 following an acquisition.

(1)  Structure and process. The Company 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.

(3)  Board balance and size.  Because of its small size and low level of commercial activity, the Company 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 Company's Audit and Remuneration Committees.

(10)  daVictus held Annual General Meeting on 1 August  2019 with engagement with shareholder who attended to vote for the given resolutions and approved those resolutions including the adoption of audited account 2018, 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 three 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.

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.

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 company and of the profit or loss of the company 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 company will continue in business.

The directors are responsible for keeping proper accounting records that are sufficient to show and explain the company'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 company's transactions and disclose with reasonable accuracy at any time the financial position of the company. 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 Company; and

· the management report includes a fair review of the development and performance of the business and the position of the Company, 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 Company'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 Company's statutory auditor is aware of that information.

Subsequent events

On 19 February 2020, a prospectus relating to: (i) the Company's conditional acquisition by way of a reverse takeover of the intellectual property rights in a restaurant concept owned by Typical Dutch N.V. ("TDNV");   (ii) the placing of 900,000 new ordinary shares of no par value at 15 pence per share; and (iii) the admission of 12,150,00 ordinary shares of no par value to the Official List (by way of Standard Listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange's Main Market for listed securities ("Admission") was approved by the Financial Conduct Authority.

On 26 March 2020, the Company announced that it has signed a Memorandum of Understanding (MOU) with Asia Food Venture Sdn Bhd (AFV) to appoint the first franchisee of its premium dining restaurant concept in Kuala Lumpur, Malaysia.

On 6 May 2020 , the Company newly incorporated Havana Dining Ltd, incorporated in British Virgin Island, for the purpose of business operations as a wholly-owned subsidiary of the Company including running of the day-to-day operations.

Furthermore, The COVID-19 outbreak has developed rapidly in 2020, with a significant number of infections. Measures taken by various governments to contain the virus have affected economic activity in overall. The Company have taken a number of measures to monitor and prevent the effects of the COVID-19 virus such safety and health measures for our people, such as social distancing and working from home. At this stage, the impact on our business and results is limited. We will continue to follow the various national policies and advice and in parallel will do our utmost to continue our operations in the best and safest way possible without jeopardizing the health of our people.

This responsibility statement was approved by the Board of Directors on 19 June 2020 and is signed on its behalf by;

….

Robert Pincock

Director

19 June 2020

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 2019, which comprise:

· the statement of comprehensive income for the year ended 31 December 2019;

· the statements of financial position as at 31 December 2019;

· 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 Company 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 Company's affairs as at 31 December 2019 and of the Company'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 note 2(c) the financial statements, regarding the Company's ability to continue as a going concern; this is dependent on the Company's ability to generate sufficient cash flows and relies on short term financing from directors to support the continuity of operational activities. The COVID-19 pandemic places increased pressure on working capital requirements and the ability of the Company to comply with safety and health measures in the future. As indicated in note 2 (c), there is a material uncertainty resulting from the COVID-19 pandemic and the reliance support of the directors that may cast significant doubt upon the Company's ability to continue as going concern. Our opinion is not modified in respect of this matter.

 

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 £2,500 (2018: £7,000), 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. 

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 £125 (2018: £350). 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. The Company's accounting records are administered from one central location, the Company's registered office and our audit was conducted on these records.

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. We have determined that there are no key audit matters to communicate in our report.

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.

The Company is a cash shell formed to acquire businesses operating in or owning Australian, European and/ or North American food and beverage ("Western F&B") eatery franchises in South East Asia and/ or the Far East. A substantive approach has been adopted to audit the financial statements with external confirmations obtained for the cash balances.

We have nothing to report in this regard.

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.

Stephen Bullock (Senior Statutory Auditor)

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

London

19 June 2020

 

Statement of Comprehensive Income

for year ended 31 December 2019

	Note	Year ended 31 December 2019		Year ended 31 December 2018
		£		£
Income
Interest Income		855		1,081
Administrative expenses		(240,422)		(142,458)
Operating loss and loss before taxation	4	(239,567)		(141,377)
Taxation	5	-		-
Loss for the year		(239,567)		(141,377)
Loss per share
Basic and diluted (pence per share)	6	(2.13)		(1.26)

The notes to the financial statements form an integral part of these financial statements

There is no other comprehensive income (2018: £nil).

 

Statement of Financial Position

as at 31 December 2019

	Note	As at 31 December 2019		As at 31 December 2018
Assets		£		£
Current assets
Cash and cash equivalents	7	116,553		355,629
Total current assets		116,553		355,629
Total assets		116,553		355,629
Equity and liabilities
Capital and reserves
Stated capital	8	1,053,400		1,053,400
Retained loss		(967,226)		(727,659)
Total equity		86,174		325,741
Liabilities
Current liabilities
Other payables	9	30,379		29,888
Total liabilities		30,379		29,888
Total equity and liabilities		116,553		355,629

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 19 June 2020 and signed on its behalf by;

…

Robert Pincock

Director

19 June 2020
 

Statement of Changes in Equity

For the year ended 31 December 2019

	Stated capital		Retained loss		Total
	£		£		£
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

For the year ended 31 December 2018

	Stated capital		Retained loss		Total
	£		£		£
As at 1 January 2018	1,053,400		(586,282)		467,118
Loss for the year	-		(141,377)		(141,377)
Total comprehensive loss for the year	-		(141,377)		(141,377)
As at 31 December 2018	1,053,400		(727,659)		325,741

The notes to the financial statements form an integral part of these financial statements

 

Statement of Cash Flows

for the year ended 31 December 2019

		Year ended 31 December 2019		Year ended 31 December 2018
	Note	£		£
Cash flow from operating activities
Operating loss		(239,567)		(141,377)
Changes in working capital
Increase in trade and other payables		491		12,616
Net cash used in operating activities		(239,076)		(128,761)
Decrease in cash and cash equivalents		(239,076)		(128,761)
Cash and cash equivalents at beginning of the year		355,629		484,390
Cash and cash equivalents at end of the year		116,553		355,629

The notes to the financial statements form an integral part of these financial statements 

Notes to the financial statements

1.  General information

The Company was incorporated as a public company under the Companies (Jersey) Law 1991 and had not commenced substantive operations during the period under review.

The registered office is   28 Esplanade, St. Helier, JERSEY, JE1 8SB . The Company has been formed to undertake one or more acquisitions of businesses (either shares or assets) which operate in or own Australian, European and/or North American food and beverage ("Western F&B") eatery franchises in South East Asia and/or the Far East.

The financial statements of the Company are presented in British Pound Sterling ("£").

2.  Summary of significant accounting policies

The Board has reviewed the accounting policies set out below and considers them to be the most appropriate to the Company's business activities.

a)  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, and effective, or issued and early adopted, as at the date of these statements. The financial statements have been prepared under the historical cost convention as modified for financial assets carried at fair value.

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Company. The Directors anticipate that all of the pronouncements will be adopted in the Company's accounting policies for the first period beginning on or after the effective date of the pronouncement.

The Company has not early adopted amended standards and interpretations which are currently in issue but not effective for accounting periods commencing on 1 January 2019 as adopted by the EU. The Directors do not anticipate that the adoption of standards and interpretations will have a material impact on the Company's financial statements in the periods of initial application.

b)  Standards and interpretations issued but not yet applied

At the date of authorisation of this financial information, the Directors have reviewed the Standards in issue by the International Accounting Standards Board ("IASB") and IFRIC, which are effective for annual accounting periods ending on or after the stated effective date. In their view, none of these standards would have a material impact on the financial reporting of the Company for being non-trading company.

 

Notes to the financial statements (continued)

2. Summary of significant accounting policies (continued)

c)  Going concern

At 31 December 2019, the Company had cash of approximately £116,553, which the Directors believe 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 financial statements have been prepared on a going concern basis.

In addition to the already known effects of the COVID-19 outbreak and resulting government measures, the macroeconomic uncertainty causes disruption to economic activity, and it is unknown what the longer term impact on our business may be. The COVID-19 virus can evolve in various directions. Management seeks to obtain the best possible information to enable us to assess these risks and implement appropriate measures to respond.

The significant impact of COVID-19 to our business is summarised below:

· Delay in restaurant opening by the first franchisees. - Due to MCO (movement control order) announced by Malaysian Government, the delay of one month is expected to launch the new restaurants.

· Working capital will be effected for one month.  The Company has arranged additional short term financing from directors to support continuity of our operations

· A 'New Normal' of consumer behavior - Post COVID-19 , consumers are more aware of hygiene and social distance while dining out and are likely to do more take away/delivery online from the restaurant.

· This might impact the business revenue of franchisees, and reduce the royalty payment that is by percentage of gross revenue sales.

However with all those risks and impact above, The Company has taken and will take a number of measures to monitor and prevent the effects of the COVID-19 virus. These include safety and health measures for our people (ie social distancing and working from home), securing the supply of materials that are essential to our production process, securing additional financing from directors to support continuity of our operations and communication to our key stakeholders.

In addition, as a F&B franchiser, the company assists franchisees to adopt the new normal of post-COVID-19 customer behavior to restaurant guideline such as

· Exploration of take-out, drive-through & delivery opportunities

· Increased domestic/local sourcing for supply chain

· New & expanded sanitization practices in the preparing and handling food

· Simplifying the operation and SKUs reduces sourcing risks and is simply easier to manage

Notes to the financial statements (continued)

2. Summary of significant accounting policies (continued)

c)  Going concern (Continued)

The Company will not propose to pay out any dividends this year. Based on the facts and circumstances known at this moment and the possible scenarios about how the COVID-19 virus and resulting government measures could evolve, management has determined that the use of the going concern assumption is warranted, but that there is a material uncertainty resulting from COVID-19 and the reliance support of the directors that may cast significant doubt upon the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. Based on the circumstances described above, the financial statements are prepared on the assumption that the entity is a going concern.

If the Company was unable to secure sufficient funding to enable it to continue on a going concern basis then adjustments would be necessary to write down assets to their recoverable amounts, reclassify non-current assets and long-term liabilities as current and provide for additional liabilities.

d)  Cash and cash equivalents

The Company considers any cash on short-term deposits and other short term investments to be cash equivalents.

e)  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 Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided for using the liability method on temporary differences at the balance sheet 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 balance sheet 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 balance sheet date and are recognised to the extent that is probable that future taxable profits will allow the deferred income tax asset to be recovered.

f)  Financial instruments

Financial assets and financial liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Notes to the financial statements (continued)

2. Summary of significant accounting policies (continued)

g)  Financial assets

Financial assets comprise of loans and receivables 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.

h)  Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost.

Financial liabilities are classified as at fair value through profit or loss if the financial liability is either held for trading or it is designated as such upon initial recognition.

Other financial liabilities

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.

i)  Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or they expire.

j)  Segmental reporting

The Directors are of the opinion that the business comprises of a single economic activity, that of an investment company.

Therefore the financial information of the single segment is the same as that set out in the Company statement of comprehensive income, Company statement of financial position, the Company statement of changes to equity and the Company statement of Cash flows.

 

Notes to the financial statements (continued)

3.  Critical accounting estimates and judgements

The Company's nature of operations is to act as a special purpose acquisition company. Thus significantly reduces the level of estimates and assumptions required. The Directors do not consider there to be any critical accounting estimates and judgements that require to be separately reported.

4.  Loss before income tax

The loss before income tax is stated after charging:

	2019		2018
	£		£
Director emoluments	29,000		29,000
Fees payable to the Company's auditors -  Audit of the Company's financial statements -  Other assurance services -  Non audit services relating to corporate finance transactions	11,000 1,000 17,500		10,500 1,000 -
Secretarial services fees	17,608		19,008
Professional fees	41,000		36,000
Other costs associated to the acquisition transaction	70,000		-

5.  Income tax

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.

6.  Loss per share

The calculation of loss per share is based on the following loss and number of shares:

	2019		2018
Loss for the year from continuing operations (£)	239,567		141,377
Weighted average shares in issue (unit)	11,250,000		11,250,000
Loss per share (pence per share)	2.13		1.26

Basic loss per share is calculated by dividing the loss for the year from continuing operations of the Company by the weighted average number of Ordinary Shares in issue during the year.

There are no potential dilutive shares in issue therefore the diluted loss per share has not been calculated.

 

Notes to the financial statements (continued)

7.  Cash and cash equivalents 

	2019		2018
	£		£
Bank accounts	116,553		355,629

8.  Stated capital

	Number of Ordinary Shares		£
As at 1 January  2019 and 31 December 2019	11,250,000		1,053,400

9.  Other payables

	2019		2018
	£		£
Other creditors	6,322		17,331
Amount due to Director	318		318
Accruals	23,739		12,239
	30,379		29,888

Amounts due to a Director represents director's fees payable as at the end of the reporting period. These amounts are interest free and repayable on demand.

10.  Directors' emoluments

The details concerning Directors' emoluments are as follow:

	2019		2018
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

There are no other employment benefits offered to the Directors.

The Directors are considered to be the Company's key management.

 

Notes to the financial statements (continued)

11.  Financial instruments

The Company's principal financial instruments comprise cash and cash equivalents and trade and other payables. The Company's accounting policies and method adopted, including the criteria for recognition, the basis on which income and expenses are recognised in respect of each class of financial assets, financial liability and equity instrument are set out in Note 2. The Company does not use financial instruments for speculative purposes.

The principal financial instruments used by the Company, from which financial instrument risk arises, are as follows:

	2019		2018
	£		£
Cash and cash equivalents	116,553		355,629
Financial liabilities measured at amortised cost	(30,379)		(29,888)

a)  Liquidity risk

The Company regularly reviews its major funding positions to ensure that it has adequate financial resources in meeting its financial obligations. The Company takes liquidity risk into consideration when deciding its sources of funds.

b)  Credit risk

The Company does not have any major concentrations of credit risk related to any individual customer or counterparty.

c)  Capital risk management

The Company defines capital as the total equity of the Company. The Company's objectives when managing capital are to safeguard the Company'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.

d)  Fair value of financial assets and liabilities

There are no material differences between the fair value of the Company's financial assets and liabilities and their carrying values in the financial information.

 

Notes to the financial statements (continued)

12.  Staff costs

During year ended 31 December 2019, there were no staff costs, as the Company, other than the Director's fees as disclosed in note 10. The Company employed no staff.

13.  Related party transactions

Included within current liabilities is an amount of £318 (2018: £318) owing to Abd Hadi bin Abd Majid, a Director.

14.  Subsequent events

On 19 February 2020, a prospectus relating to: (i) the Company's conditional acquisition by way of a reverse takeover of the intellectual property rights in a restaurant concept owned by Typical Dutch N.V. ("TDNV");   (ii) the placing of 900,000 new ordinary shares of no par value at 15 pence per share; and (iii) the admission of 12,150,00 ordinary shares of no par value to the Official List (by way of Standard Listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange's Main Market for listed securities ("Admission") was approved by the Financial Conduct Authority.

On 26 March 2020, the Company announced that it has signed a Memorandum of Understanding (MOU) with Asia Food Venture Sdn Bhd (AFV) to appoint the first franchisee of its premium dining restaurant concept in Kuala Lumpur, Malaysia.

On 6 May 2020, the Company acquired Havana Dining Ltd,, BVI-incorporated Company, for the purpose of business operations as a wholly-owned subsidiary of the Company including running of the day-to-day operations.

Since the COVID-19 pandemic, the directors will be looking closely at ways to efficiently reduce the cost structure to match any reduction or delay in revenue. As a result, there are no subsequent events that have impacted these financial statements.

 

END

 

 

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