REG - daVictus Plc - Annual Financial Report ended 31 December 2023
30/04/2024 13:00
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RNS Number : 6424M daVictus plc 30 April 2024
DAVICTUS PLC
("DAVICTUS" OR "THE COMPANY")
FINAL RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2023
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 2023.
Highlights for the period:
- Our franchise operations have continued to perform well, both in
Malaysia and Thailand.
- The profit before tax of the Group for the year is £90,396 (2022:
£228,628). Cash and cash equivalents of the Group as of 31 December 2023 is
£129,610 (2022: £260,308).
- Following a period of evaluation, we have found that providing
restaurant management services represents a viable opportunity for revenue
diversification. This strategic shift allows us to leverage our industry
expertise and create additional value for our company.
The annual report and accounts is available on the Company's website
at: http://www.davictus.co.uk (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
In addition, The annual report will also be uploaded to the National Storage
Mechanism and will be available for viewing shortly
For more information please contact:
daVictus plc
Robert Pincock
Telephone +603 5613
3388
Email: Robert@davictus.co.uk (mailto:Robert@davictus.co.uk)
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CHAIRMAN'S STATEMENT
Dear Shareholders,
I am happy to present the financial results of daVictus Plc and its
subsidiaries undertakings for the year ended 31 December 2023.
The year under review has been characterized by steady progress for our
Company in its core activity. Despite facing several challenges, we have
managed to navigate the business landscape effectively and achieve
satisfactory results.
Our franchise operations have continued to perform well, thanks to the
dedication and hard work of our franchise partners both in Malaysia and
Thailand. Their contributions have been instrumental in driving growth and
maintaining profitability across our network.
In terms of expansion, we have opted for a cautious approach by delaying any
immediate plans. This decision reflects our commitment to prudent financial
management and ensuring the long-term sustainability of our business. This is
due to some projected uncertainties in the regional markets arising from high
inflation projection and careful spending attitude.
Following a period of evaluation, we have found that providing restaurant
management services represents a viable opportunity for revenue
diversification. This strategic shift allows us to leverage our industry
expertise and create additional value for our company.
Looking ahead, we remain cautiously optimistic about the future. While we
continue to explore potential opportunities for growth, we are mindful of the
prevailing economic conditions and remain focused on making informed decisions
that benefits our stakeholders.
I extend my gratitude to our shareholders, employees, customers and
franchisees for their continued support and dedication. It is through our
collective efforts that we are able to navigate challenges and drive progress
for daVictus Plc.
On behalf of the Board of Directors, I look forward to the opportunities and
challenges that lie ahead as we strive to achieve our goals and deliver value
to our stakeholders.
ABD HADI BIN ABD MAJID
Chairman
30 April 2024
STRATEGIC REPORT
Operational and Financial Review
The profit before tax of the Group for the year is £90,396 (2022: £228,628).
Cash and cash equivalents of the Group as of 31 December 2023 is £129,610
(2022: £260,308).
Financial risk and uncertainties
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 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:
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. Management are in continuous discussions with the customers in
assessing the financial position and performance to manage credit risk on the
customers.
Board of Directors
Abd Hadi bin Abd Majid (aged 74) - 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 45) - 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 63) - 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
TomCo Energy and Harland & Wolff. Mr Groat is a Fellow of the Institute of
Chartered Accountants in England and Wales.
The strategic report was approved by the Board on 30 April 2024 and is signed
on its behalf by;
………………………………………….
ROBERT PINCOCK
Director
30 April 2024
DIRECTORS REPORT
The Directors present their Report with the financial statements of the
Company and its subsidiary (together the "Group") for year ended 31 December
2023.
Results and dividends
The results for the year are set out in the Statement of Comprehensive Income
on page 23. 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 South East Asia and/or the Far East.
The Company will retain flexibility between: (i) establishing a new franchise
in a new region, in which case it would purchase the franchise and then build
a management team to operate the franchise; or (ii) purchasing an established
franchise and seeking to grow this both within its established region and in
other regions in Asia.
The Group's business risk
An explanation of the Group's financial risk management objectives, policies
and strategies is set out in note 17 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 2023 were as
follows:
Abd Hadi bin Abd Majid
Robert Logan Pincock
Maurice James Malcolm Groat
Directors' interest
As at 31 December 2023, 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 31 December 2023.
Number of Ordinary Shares % of
Party Name 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 (Director) 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 2024, 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, 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 and when they fall due for a period of atleast 12
months from the date of approving the financial statements.
As a franchisee restaurant operator with two franchised restaurants in
Malaysia and Thailand, we have evaluated the financial position and
performance of our business for the year ended 2023 and upto the date of this
report. After careful consideration, we believe that our business is a going
concern and has the ability to continue operations in the foreseeable future.
Our assessment is based on various factors, including the performance of our
restaurants, market conditions, and our ability to generate sufficient revenue
to cover operating expenses and meet our
Going concern (continued)
financial obligations as they become due. We have also considered our ability
to maintain our relationships with our franchisors and our suppliers, as well
as our ability to attract and retain customers.
Furthermore, we have implemented sound financial management practices,
including budgeting, cash flow management, and expense control measures, to
ensure that our operations remain sustainable in the long term.
We are delighted to inform you that our franchisees in Malaysia and Thailand
have demonstrated exceptional performance, and we look forward to exploring
further growth opportunities in these markets. However, we have implemented a
prudent expansion strategy, and we will only commence evaluating franchisee
inquiries from Singapore, Indonesia, Philippines, and Vietnam in the near
future.
Furthermore, the company is actively exploring options to offer restaurant
management services to other restaurants beyond our flagship Havana Dining
franchise. This tactical decision will allow us to capitalize on our industry
proficiency and generate supplementary revenue sources for the company.
The company remains committed to backing domestic/local sourcing to facilitate
its supply chain, while simultaneously adhering to the standard operating
procedures in sanitation practices during food preparation and handling.
The Company will not pay any dividends this year.
Based on our evaluation, we believe that our business has adequate resources
to continue operating in the foreseeable future and will remain a going
concern.
Section 172 Report
As required by Section 172 of the UK Companies Act 2006, a director of a
company must act in the way he or she considers, in good faith, would likely
promote the success of the company for the benefit of the shareholders. In
doing so, the director must have regard, amongst other matters, to the
following issues:
• likely consequences of any decisions in the long term;
• interests of the company's employees;
• need to foster the company's business relationships with
suppliers/customers and others;
• impact of the company's operations on the community and
environment;
• company's reputation for high standards of business conduct; and
• need to act fairly between members of the company.
As set out in the Strategic Report, the Board remains focused on providing for
shareholders through the long-term success of the Company. The means by which
this is achieved is set out further below.
Likely consequences of any decisions in the long term
The Strategic Report set out the Group's strategy. In applying this strategy,
particularly in seeking new business prospect the Board assesses the long-term
future of those business with a view to maximise shareholder return. The
approach to general strategy and risk management strategy of the Group is set
out in 'Principal risk and uncertainties' of the Strategic Report.
Section 172 Report (continued)
The Board regularly reviews its long-term strategy. This has encompassed not
only the current phase of strategic development, but also future areas of
growth. Input is regularly taken from specialists within the business and
external advisers about what issues might frame the commercial environment in
which the business will operate in future and the Board regularly considers
how it can best respond to that framework. The resulting assessment of future
development helps inform the Board's decision-making and the balance between
short-term and long-term measures and actions.
Interest of Employees
The Company has a very limited number of employees and all have direct access
to the Directors on a daily basis resulting an open and honest approach with
regular updates across businesses and operations within the Group. Employees'
salaries and benefits are remunerated to be at par with related industry
standard. The Board periodically reviewed initiatives that are being
implemented to enhance the career and personal development of employees.
Performance management and reward processes are clearly defined to ensure
everyone understands how what they do links to reward and recognition.
Need to foster the company's business relationships with suppliers/customers
and others.
The Board reviewed information on the Group's performance against key quality
targets each month and was updated at Board meetings on actions undertaken to
rectify any significant quality issues.
Impact of the company's operations on the community and environment
The Group takes its responsibility within the community and wider environment
seriously. As the Group own companies operation has very minimal community and
environmental impact, it is committed to conducting business in an efficient
and responsible manner, in line with current best practice guidelines in
management of food & beverages sectors through its business associates.
Those operations integrate environmental, social and health and safety
considerations to maintain its "social licence to operate" in all its business
activities.
The desirability of the company maintaining a reputation for high standards of
business conduct
The Directors are committed to high standards of business conduct and
governance as set out in Corporate Governance Statement. Where there is a need
to seek advice on particular issues, the Board will consult with its lawyers
and nominated advisors to ensure that its reputation for good business conduct
is maintained.
The need to act fairly between members of the Group.
The primary focus of the Board's business decisions is on ensuring the
long-term sustainability of the Group. The Board recognises that in seeking to
maintain long-term profitability, the Group is reliant on the support of all
of its stakeholders, including the Group's workforce, its customers, suppliers
and the communities in which its businesses operate.
The Group has a system of financial controls and reporting procedures in place
which are considered to be appropriate given the size and structure of the
Group and the nature of risks associated with the Group's assets. Key
procedures include:
· due diligence on new acquisitions;
· Board-level liaison with management of investees including, where
appropriate, board representation;
· monthly management account reporting;
Section 172 Report (continued)
· review of investments and market risk with monthly reporting to the
Board;
· regular cashflow re-forecasting as circumstances change; and
· involvement of the Executive Directors in the day-to-day operations
of the Group of companies.
Task Force on Climate-related Financial Disclosures (TFCD Statement)
Introduction
The Company is a franchisor of premium dining restaurants with commitment to
sustainability and responsible business practices. As a responsible business,
we acknowledge the potential impact of climate change on our operations, and
we recognize the need to disclose our climate-related risks and opportunities
in line with the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD).
Governance
The Company recognizes the importance of strong governance and oversight in
managing climate-related risks and opportunities. Our Board of Directors have
an ultimate responsibility towards ensuring that our climate-related risks and
opportunities are identified, assessed, and managed effectively. The Board has
established a Sustainability Committee to oversee our climate-related
initiatives and ensure that they are integrated into our overall business
strategy. The sustainability committee reports to the Board on a regular basis
and provides guidance on its approach to sustainability.
Strategy
As a franchisor, the Company does not operate restaurants directly but only
licenses the use of its brand and business model to franchisees. We recognize
that our franchisees' operations can have a significant impact on the
environment, and as such, we are committed towards working with them to
minimize this impact.
We have developed a Sustainability Framework that sets out our approach to
managing climate-related risks and opportunities. The Framework includes the
following key elements:
· Committed to promoting environmental best practices by encourage
our franchisees to adopt sustainable business practices.
· Committed to supporting our franchisees in their efforts to
reduce their carbon footprint and minimize their impact on the environment.
· Committed to reviewing and advising our franchisees on their
environmental performances and to identify areas for improvement and support
continuous improvement
· Committed to increasing energy efficiency by encouraging our
franchisees to adopt energy-efficient equipment and to implement energy
management systems
· Committed to reducing waste by encouraging our franchisees to
adopt sustainable packaging including reusable and recyclable materials
Task Force on Climate-related Financial Disclosures (TFCD Statement)
(continued)
Risk Management
The Company have identified climate-related risks that could affect our
operations, including physical risks such as extreme weather and supply chain
disruptions, as well as transition risks such as regulatory changes and shifts
in consumer preferences. The company has implemented measures to mitigate
these risks, including:
· Conducting regular climate risk assessments and scenario analysis
to identify potential risks and opportunities.
· Developing a carbon reduction plan to reduce the carbon footprint
within our franchisee's operations.
· Engaging with our franchisees and their suppliers to encourage
them to adopt sustainable practices, including reducing greenhouse gas
emissions and improving resource efficiency.
The Company have established a number of metrics and targets to measure and
track our progress in managing climate-related risks and opportunities. These
include:
· Carbon footprint: We are working with our franchisees to collect
data on their carbon footprint and establish baseline metrics for tracking
progress.
· Renewable energy: We have set a target to increase the proportion
of renewable energy used by our franchisees to 50% by 2030.
· Waste reduction: We are working with our franchisees to establish
waste reduction targets and implement best practices for reducing waste.
Opportunities
We have identified the following opportunities related to climate change that
may benefit our business:
1. Cost
Savings
Implementing energy-efficient equipment and reducing waste can lead to
cost savings which would result in increase in profitability.
2. Brand
Reputation
Commitment to sustainability can enhance our brand reputation and
attract environmentally conscious customers.
3.
Innovation
Developing innovative solutions for reducing our carbon footprint can lead to
new business opportunities and competitive advantage.
Conclusion
The Company is fully committed towards managing climate-related risks and
opportunities and promoting sustainable business practices within our
franchise network. We believe that addressing climate change is not only the
right thing to do but also makes good business sense. We will continue to work
with our franchisees, suppliers, and stakeholders to minimize our impact on
the environment and towards creating value for all our stakeholders.
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.
(3) Board balance and size. Because of its small size and low level of
commercial activity, the Group is well managed by 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 9 August 2023 engaging
shareholders who attended to vote for the given resolutions and approved those
resolutions including the adoption of the audited financial statements for the
year-ended 31 December 2022, 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, Johnsons, Chartered Accountants, 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 30
April 2024 and is signed on its behalf by;
………………………..
ROBERT PINCOCK
Director
30 April 2024
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 (together referred as the "Group") for the year ended 31
December 2023 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cashflows and
notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in the
preparation applicable law and and UK adopted International Financial
Reporting Standards (UK adopted IFRS).
In our opinion the financial statements:
• give a true and fair view of the state of the Group as at 31
December 2023, and its profit for the year then ended;
• have been properly prepared in accordance with UK adopted IFRS;
• 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 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 applicable to public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with those requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors'
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 Group's ability to continue to adopt the going concern basis
of accounting included:
• Obtaining an understanding of management's rationale for use of
going concern basis of accounting through reviewing the going concern
assessment, underlying forecasts and assumptions and through enquiries of
management and those charged with governance;
• Assessing the appropriateness of the key assumptions made by
management in preparing cash flow forecasts for a period of at least twelve
months from the date of approving the financial statements. We have assessed
the reliability of these forecasts to our expectations based on our
understanding of the Group and its business plan; and
• Evaluating the reasonableness of management's stress testing
scenario assumptions;
• Assessing the appropriateness of going concern disclosures by
evaluating the consistency with management's assessment and for compliance
with requirements of applicable law and UK adopted IFRS.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's ability to continue as
a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect
to going concern are described in the relevant sections of this report.
However, because not all future events or conditions can be predicted, this
statement is not a guarantee as to the Group's ability to continue as a going
concern.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Group and its
environment, including the Group-wide controls, and assessing the risks of
material misstatement in the financial statements. We also addressed the risk
of management override of internal controls, including assessing whether there
was evidence of bias by the Directors that may have represented a risk of
material misstatement. The Group involves the Company and a subsidiary. The
scope of our audit was influenced by the level of Group materiality and
component materiality we determined.
The scope determined for Group's subsidiary is full scope audit and the audit
is performed by another audit firm in their capacity as component auditors. We
interacted regularly with the component audit teams where appropriate
throughout the course of the audit, which included holding planning meetings,
maintaining regular communications on the status of the audits, reviewing key
working papers and taking responsibility for the scope and direction of the
audit process.
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account an understanding of their activities, the accounting processes and
controls, and the industry in which the Group operates. Our planned audit
testing was directed accordingly and was focused on areas where we assessed
there to be the highest risk of material misstatement.
During the audit we reassessed and re-evaluated audit risks and tailored our
approach accordingly.
The audit testing included substantive testing on significant transactions,
balances and disclosures, the extent of which was based on various factors
such as our overall assessment of the control environment, the effectiveness
of controls and the management of specific risks.
We communicated with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant findings,
including any significant deficiencies in internal control that we identified
during the audit.
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 due to fraud or error) 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.
These matters were addressed in the context of our audit of the financial
statements, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter description How the matter was addressed in our audit
Revenue recognition The procedures performed on the revenue include:
The Group's revenue for the year is £300,000 (2022: £411,358). • We have performed walkthrough to obtain an understanding of the
entity process for revenue recognition.
• We have verified the completeness of the revenue recognised for
Refer to note 2 Accounting policies (page 29) and note 4 Revenue (page 32). the year.
• We agreed the performance obligations identified by management for
the franchisee contracts to ensure the adopted accounting policy was
Group's revenue comprises of 4 revenue streams and its recognition policy appropriate.
varies depending on the underlying contract and could result in each revenue
stream being recognised at a point in time or over time where certain • We selected contracts with the customers and reviewed their terms
conditions are met. and conditions. Based on this understanding, we considered if the underlying
income was recognised in accordance with the stated accounting policy and IFRS
15.
• We performed cut-off procedures to ensure completeness of the
revenue recognised in the year.
• We have reviewed the appropriateness of the financial statement
disclosures.
We found that the revenue recognised in the year is appropriate.
Impairment assessment of trade receivables The procedures performed on impairment assessment of trade receivable include:
The Group's trade receivable at year-end is £331,749 (2022: £175,525). a. We have obtained list of debtors at year-end and ensured completeness.
b. For sample of invoices, we have tested the underlying supporting
documents including franchisee agreements to confirm the accuracy of the
Refer to note 2 Accounting policies (page 30, 31 3) and note 9 Trade and other receivables at year-end.
receivables (page 35).
c. We have obtained the direct balance confirmations from debtors at
year-end and noted no material differences.
We consider impairment assessment of trade receivable to be a key audit matter d. We have reviewed the payment plans agreed by management with the
as it involved judgement on the recoverability of the amounts due from the customers to settle the outstanding balances. We have reviewed the post
customer. The Group's customers are in the restaurant industry in Malaysia and year-end payments to confirm that the customers are making payments as per the
Thailand and is currently recovering from the impact of COVID-19. agreed terms of the payment plan.
e. We have enquired with management on the financial position of the
customers and noted that the customer has sufficient cashflows to be able to
make payments as per the payment plans.
f. We have reviewed the appropriateness of the disclosures in the
financial statements.
We found that the impairment assessment performed by management is
appropriate.
Our application of materiality
Our definition of materiality considers the value of error or omission on the
financial statements that, individually or in aggregate, would change or
influence of the economic decision of a reasonably knowledgeable user of those
financial statements. Misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of the
identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a
whole. Materiality is used in planning the scope of our work, executing that
work and evaluation the results.
Overall materiality £4,500 (2022: £10,980)
Basis for determining overall materiality We determined materiality based on 1.5% of the Group's revenue (2022: 2% of
total assets).
We have considered the primary users of the financial statements to be
shareholders, management and regulators.
We considered that Group's revenue is key benchmark to use in setting overall
materiality as the users of the financial statements are primarily focussed on
revenue in measuring Group's success and its ability to generate profits in
the long term.
Performance materiality £2,250 (2022: £8,235)
We set the performance materiality based on 50% (2022: 75%) of overall
materiality.
Performance materiality is the application of materiality at the individual
account or balance level, set at an amount to reduce, to an appropriately low
level, the probability that the aggregate of the uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
In determining performance materiality, we considered several factors
including our understanding of the control environment of the Group.
Error reporting threshold We agreed with the Board of Directors that we would report to them
misstatements identified during our audit above £225 (2022: £549) and if in
our opinion matters that merited reporting on qualitative grounds. We also
reported to the Board any disclosure matters that we identified when assessing
the overall presentation of the financial statements.
Other information
The other information comprises the information included the Strategic Report
and Director's 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.
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 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 this regard.
Other matters on which we are required to report by exception
Under the Companies (Jersey) Law 1991, we are required to report to you if, in
our opinion:
· proper accounting records have not been kept; or
· financial statements are not in agreement with the accounting records
and; or
· we have not received all the information and explanations we require
for audit.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Directors' responsibilities statement set out
on page 14, 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 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
based on these financial statements.
Extent to which 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.
These audit procedures were designed to provide reasonable assurance that the
financial statements were free from misstatements due to fraud or error. The
risk of not detecting irregularities that result from fraud is higher than the
risk of not detecting one resulting from error and detecting irregularities
that result from fraud is inherently more difficult than detecting those that
result from error, as fraud may involve collusion, deliberate concealment,
forgery or intentional misrepresentations. Also, the further removed
non-compliance with laws and regulations is from events and transactions
reflected in the financial statements, the less likely we would become aware
of it.
Identifying and assessing potential risks arising from irregularities,
including fraud
The extent to the procedures undertaken to identify and assess the risk of
material misstatement in respect of irregularities, including fraud, included
the following:
• We considered the nature of the industry and sector the control
environment, business performance including remuneration policies and the
Group's own risk assessment that irregularities might occur as a result of
fraud or error. From our sector experience and through discussion with the
Directors, we obtained an understanding of the legal and regulatory framework
applicable to the Group focusing on laws and regulations that could reasonably
be expected to have a direct material effect on the financial statements.
• We enquired of the Directors and management concerning the Group's
policies and procedures relating to:
- Identifying, evaluating and complying with the laws and
regulations and whether they were aware of any instances of non-compliance;
- Detecting and responding on the risks of fraud and whether they
had any knowledge of actual or suspected fraud; and
- The internal controls established to mitigate risks related to
fraud or non-compliance with laws and regulations.
• We assessed the susceptibility of the financial statements to
material misstatement, including how fraud might occur by evaluating
management's incentives and opportunities for manipulation of the financial
statements. This included utilising the spectrum of inherent risk and an
evaluation of the risk of management override of controls. We determined that
the principal risks were related to posting inappropriate journal entries to
increase revenue or reduce costs, creating fictitious transactions to hide
losses or to improve financial performance, and management bias in accounting
estimates particular to the valuation of the unquoted investments.
Audit response to risks identified
In respect of the above procedures:
• we corroborated the result of our enquiries through review of the
minutes of the Group's board.
• audit procedures performed by the engagement team in connection
with the risks identified including:
- reviewing financial statement disclosures and testing to
supporting documentation to assess compliance with applicable laws and
regulations expected to have a direct impact on the financial statements.
- testing journal entries, including those processed late for
financial statements preparation, those posted by infrequent or unexpected
users, those posted to unusual account combinations.
- enquiry of management around actual and potential litigation and
claims.
- reviewing accounting estimate for bias including challenging the
assumptions and judgments made by management in its significant accounting
estimates, in particular those relating to the determination of valuation of
unquoted investments;
- obtaining confirmations from third parties to confirm account
balances at year-end and testing supporting documents to confirm existence of
investments.
• we communicated relevant laws and regulations and potential fraud
risks to all engagement team members and remained alert to any indication of
fraud or non-compliance with laws and regulations throughout the audit.
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.
Other requirements
We were appointed by the Directors on 30 January 2024. Our total uninterrupted
period of engagement is one year covering the year ended 31 December 2023.
We did not provide any non-audit services which are prohibited by the FRC's
Ethical Standard to the Group, and we remain independent of the Group in
conducting our audit.
Our opinion is consistent with our report to the Audit Committee.
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 and the terms of
engagement by the Company. 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 the further matters we are required to state to
them in accordance with the terms agreed with the Company, 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.
Edmund Cartwright FCCA FMAAT (Senior Statutory Auditor)
for and on behalf of Johnsons Chartered Accountants, Statutory Auditor
London, United Kingdom
Date:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for year ended 31 December 2023
Note As at As at
31-Dec-2023 31-Dec-2022
£ £
Revenue 4 300,000 411,358
Direct cost - -
Gross Profit 300,000 411,358
Other Income
Interest income 5 1
300,005 411,359
Administrative expenses (209,609) (182,731)
Operating profit before taxation 5 90,396 228,628
Income tax expense 6 - -
Profit for the year 90,396 228,628
attributable to equity shareholders
OTHER COMPREHENSIVE INCOME
Loss on disposal of investment - (9,159)
-------------------- ----------------
TOTAL COMPREHENSIVE PROFIT FOR THE YEAR 90,396 219,469
============ ==========
Basic and diluted (pence per share) 7 0.68 1.71
The notes to the financial statements form an integral part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2023
Assets Note As at As at
31-Dec-2023 31-Dec-2022
£ £
Non-current assets
Right of use asset 8 - 30,422
Trade and other receivables 9 73,314 -
73,314 30,422
Current assets
Trade and other receivables 9 285,625 200,192
Cash and cash equivalents 10 129,610 260,308
Total current assets 415,235 460,500
Total assets 488,549 490,922
Equity and liabilities
Capital and reserves
Stated capital 11 1,224,400 1,224,400
Accumulated loss (918,239) (1,008,635)
Total equity 306,161 215,765
Liabilities
Non-current liability
Lease liability 12 - -
Current liabilities
Other payables 13 49,055 29,404
Lease liability 12 - 32,420
Deferred Income 13 133,333 213,333
Total current liabilities 182,388 275,157
Total liabilities 182,388 275,157
Total equity and liabilities 488,549 490,922
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 30 April
2024 and signed on its behalf by;
………………………
Robert Pincock
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share capital Accumulated loss Total
£ £ £
As at 1 January 2023 1,224,400 (1,008,635) 215,765
Profit for the year - 90,396 90,396
As at 31 December 2023 1,224,400 (918,239) 306,161
For the year ended 31 December 2022
Share capital Accumulated loss Total
£ £ £
1,224,400 (1,237,270) (12.870)
As at 1 January 2022
Accumulated loss of subsidiary disposed during the year 9,166
-
9,166
- 219,469 219,469
Profit for the year
As at 31 December 2022 1,224,400 (1.008,635) 215,765
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2023
As at As at
31-Dec-2023 31-Dec-2022
£ £
Cash flow from operating activities
Operating profit for the year 90,396 219,469
Adjustment for:
Depreciation of right-of-use-assets 30,422 30,422
Loss on disposal of investment - 9,159
Interest income (5) (1)
Interest on lease liability 1,182 3,426
121,995 262,475
Changes in working capital
Trade and other receivables (158,751) (152,731)
Other payables (60,349) 87,852
Amount due to directors - (318)
Net cash (used in) / from operating activities (97,105) 197,278
Cash Flow from Financing activities
Interest income 5 1
Proceed from disposal of investment - 8
Repayment on lease liability (33,602) (33,602)
Net cash used in financing activities (33,593) (33,593)
(Decrease)/increase in cash and cash equivalents (130,698) 163,685
Effect of exchange differences - (1)
Cash and cash equivalents at beginning of the year 260,308 96,624
Cash and cash equivalents at end of the year 129,610 260,308
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 Financial Reporting Standards. The financial statements have
been prepared under the historical cost convention as modified for financial
assets carried at fair value.
The financial information of the Group is presented in British Pound Sterling
("£") which is the functional currency of the Group.
Under Article 105 (11) of the Companies (Jersey) 1991 ("the Law"), the
Directors of a holding Company need no prepare separate financial statements
if consolidated accounts for the Company are prepared, unless required to do
so by the members of the Company by ordinary resolution. The members of the
Company has not passed a resolution requiring separate financial statements
and, in opinion of the Directors, the Company meets the definition of a
holding Company as set out in the Law, the Directors have elected not to
prepare separate financial statements.
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 profit after tax for the year of £90,396 (2022: (£219,469).
The Group recorded net cash (used in)/generated from operating activities of
£97,105 (2022: £197,278). At the reporting date the group held cash and cash
equivalents of £129,610 (2022: £260,308) and net equity of £306,161 (2022:
£215,765).
The financial statement are prepared on a going concern basis, which assumes
that the Group will continue to be able to meet its liabilities as and when
they fall due in the foreseeable future.
As a franchisee restaurant operator with two franchised restaurants in
Malaysia and Thailand, we have evaluated the financial position and
performance of our business for the year ended 2023. After careful
consideration, we believe that our business is a going concern and has the
ability to continue operations in the foreseeable future.
Our assessment is based on various factors, including the performance of our
restaurants, market conditions, and our ability to generate sufficient revenue
to cover operating expenses and meet our financial obligations as they become
due. We have also considered our ability to maintain our relationships with
our franchisors and our suppliers, as well as our ability to attract and
retain customers.
Furthermore, we have implemented sound financial management practices,
including budgeting, cash flow management, and expense control measures, to
ensure that our operations remain sustainable in the long term.
Our franchisees in Malaysia and Thailand have demonstrated exceptional
performance, and we look forward to exploring further growth opportunities in
these markets. However, we have implemented a prudent expansion strategy, and
we will only commence evaluating franchisee inquiries from Singapore,
Indonesia, Philippines, and Vietnam in the near future.
The company is actively exploring options to offer restaurant management
services to other restaurants beyond our flagship Havana Dining franchise.
This tactical decision will allow us to capitalize on our industry proficiency
and generate supplementary revenue sources for the company.
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, lifetime 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 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:
Impairment of receivables
Management determines whether impairment provision is required against amounts
due from customers based on the ability of the customers to generate profits
and cashflows. The directors are satisfied that there is no impairment
required in relation to amounts due from customers.
4. REVENUE
As at As at
31-Dec-2023 31-Dec-2022
£ £
Franchise Fees 80,000 80,000
Brand Licence Fees 100,000 100,000
Compliance Fees 120,000 120,000
Restaurant management fee - 111,358
300,000 411,358
The Groups' revenue is derived from franchise related fees including franchise
fee, brand licence fee, compliance fee and royalties according to Restaurant
Franchise Agreements with Havana Café Sdn Bhd, Everest Consulting Co.,
Limited and Eatzania Sdn Bhd in Malaysia and Thailand. The Group in the
current year has provided waiver of restaurant management fees and royalties
from the franchisees to support their recovery the impact of COVID-19.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. PROFIT / (LOSS) BEFORE TAXATION
The loss before taxation is stated after charging:
As at As at
31-Dec-2023 31-Dec-2022
£ £
Fees payable to the Group's auditors
- Audit of the Group's financial statements 24,341 19,099
- Other assurance services - -
Secretarial services fees 10,430 9,290
Professional fees 37,239 30,878
Depreciation of right-of-use assets 30,422 30,422
Interest on lease liability 1,182 3,426
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.
Malaysian income tax is calculated at the statutory tax rate of 24 per cent of
the estimated assessable profits for the financial year. The Group's
subsidiary has not made any taxable losses in the 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 2023
and year ended 31 December 2022, as the Group did not generate any assessable
profits during the reporting period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. EARNINGS PER SHARE
Earnings per ordinary share is calculated by dividing the profit / (loss)
attributable to equity holders of the company by the weighted average number
of ordinary shares in issue during the year. 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.
Profit / (Loss) per share attributed to ordinary shareholders
As at As at
31-Dec-2023 31-Dec-2022
Profit for the year from continuing operations (£) 90,396 228,628
Weighted average shares in issue (unit) 13,350,000 13,350,000
Profit per share (pence per share) 0.68 1.71
8. RIGHT-OF-USE ASSETS
£
Cost
As at 1 January 2023 91,266
As at 31.12.2023 91,266
Accumulated depreciation
As at 1 January 2023 60,844
Charge for the year 30,422
As at 31 December 2023 91,266
Net Book Value
At 31 December 2023 -
At 31 December 2022 30,422
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. TRADE AND OTHER RECEIVABLES
As at As at
31-Dec-2023 31-Dec-2022
£ £
Current:
Trade Receivables 258,435 175,525
Other Receivables 27,190 24,667
285,625 200,192
Non-current:
Trade Receivables 73,314 -
73,314 -
Trade receivables represents the amounts due from the franchisees at year-end.
The Group has agreed on the payment plans with the franchisees to clear the
outstanding balances. As per the agreed payment plans, an amount of £73,314
is expected to be settled after a period of 12 months from the year and hence
reclassified as non-current asset at year-end.
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 17(a).
10. CASH AND CASH EQUIVALENT
Cash and cash equivalents are denominated in the following
currencies:
As at As at
31-Dec-2023 31-Dec-2022
£ £
Great Britain Pound 5,324 7,044
Malaysia Ringgit 124,286 253,264
129,610 260,308
11. SHARE CAPITAL
As at As at
31-Dec-2023 31-Dec-2023
No of Shares £
As at 1 January 2023 13,350,000 1,224,400
Issuance of new ordinary shares - -
As at 31 December 2023 13,350,000 1,224,400
The ordinary shares carry voting and dividend rights.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. LEASE LIABILITIES
As at As at
31-Dec-2023 31-Dec-2022
£ £
At 1 January 33,602 67,204
Additions - -
Interest in suspense (1,182) (4,608)
32,420 62,596
Interest expense recognised in income statement 1,182 3,426
Repayment of principal (33,602) (33,602)
- 32,420
Repayment of lease liabilities as follow:
As at As at
31-Dec-2023 31-Dec-2022
£ £
Within one year - 33,602
After one year but not later than five years - -
- 33,602
13. OTHER PAYABLES
As at As at
31-Dec-2023 31-Dec-2022
£ £
Other creditors 47,225 9,823
Deferred income 133,333 213,333
Accruals and provision 1,830 19,581
182,388 242,737
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. SUBSIDIARY UNDERTAKING
The details of the subsidiaries in the Group are as follows:
Name of company Country of incorporation Effective holding Principal activities
Direct holding:
Davictus World Sdn Bhd Malaysia 100% Management and administration of Group operation
Address: No.9, 1(st) Floor, SS15/2A,
47500 Subang Jaya, Selangor, Malaysia
On 22 February 2022, the board of directors approved the disposal of the
subsidiary company Havana Dining Limited. Havana Dining Limited is no longer a
subsidiary company of daVictus Plc and Davictus Sdn Bhd becomes a direct
holding.
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-2023 31-Dec-2022
£ £
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 2023, 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. FINANCIAL INSTRUMENTS
The Group is exposed through its operations to the following financial risks:
• Credit risk
• Fair value
• Foreign exchange risk, and
• Liquidity risk.
The Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group's objectives, policies and
processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
• Trade receivables
• Cash and cash equivalents
• Trade and other payables
• Right of use assets and lease liabilities
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)
17. 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.
c) 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 amounts owed by
franchisee customers, which are past due but not impaired, at the end of
reporting year. Management has agreed payment plans with the franchisee
customers to ensure the settlement of the outstanding debt. Management further
reviewed the financial position and performance of the franchisee customers
and are satisfied that the total outstanding amount is recoverable from
customers and that no provision is required as at year-end. The franchisee
customers is continuing to make payments as per the payment plans subsequent
to the year-end.
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.
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)
17. FINANCIAL INSTRUMENTS (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 value Contractual cash flow Within one year 2-5 years
1-2 years
At 31 December 2023
Trade and other payable 49,055 49,055 49,055 - -
Lease liability - - - - -
49,055 49,055 49,055 - -
At 31 December 2022
Trade and other payable 29,404 29,404 29,404 - -
Lease Liability 32,420 32,602 32,602 - -
61,824 63,006 63,006 - -
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 2023
Financial assets
- Cash and cash equivalents 124,286 5,324 129,610
- Trade and other receivables (excluding prepayments) 105,499 247,624 353,123
229,785 252,948 482,733
Financial liabilities
- Other payables (15,888) (33,157) (49,055)
Net financial assets 213,897 219,791 433,688
At 31 December 2022
Financial assets
- Cash and cash equivalents 253,256 7,053 260,308
- Trade and other receivables (excluding prepayments) 397 177,525 177,921
253,653 184,577 438,229
Financial liabilities
- Other payables (1,459) (60,365) (61,824)
Net financial assets 252,194 124,212 376,405
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
17. FINANCIAL INSTRUMENTS (Continued)
c) Foreign currency risk (continued)
The sensitivity analysis in the table below details the impact of changes in
foreign exchange rates of MYR on the Group's post-tax profit or loss for each
year.
Change in forex rate Amount (GBP)
+5% increase in MYR to GBP 10,045
-5% decrease in MYR to GBP 11,102
It is assumed that the named currency is strengthening or weakening against
all other currencies, while all the other currencies remain constant.
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.
18. 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. The Group do not have any
externally imposed capital requirements.
19. RELATED PARTY TRANSACTIONS
The principal activity of the Group's subsidiary is that of managing the
Group's activity including collection of amounts due from customers and
payments to vendors for the services received.
20. CAPITAL COMMITMENTS
The Group has no capital commitments.
21. SUBSEQUENT EVENTS
There have been no significant events after the reporting date to the date of
signing these accounts
which have a material financial statement impact at 31 December 2023.
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