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Vertu Capital Ltd (VCBC)

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Tuesday 30 April, 2019

Vertu Capital Ltd

Annual Financial Report 2018

RNS Number : 5842X
Vertu Capital Limited
30 April 2019
 

Vertu Capital Limited

30 April 2019

 

 

Vertu Capital Limited

("VERTU" OR "THE COMPANY")

 

Vertu Announces Publication of 2018 Annual Report

 

London, 30 April 2019: Vertu Capital Limited ("Vertu"), (LSE:VCBC) a company that was formed in September 2014 to undertake an acquisition of a target company or business in the financial services sector - including (but not to the exclusion of other types of business) fund management businesses, niche investment banks, trustee & custodian services businesses and financial planning businesses, announces its publication of financial results for the year ended 31 December 2018.

 

The financial information set out below does not constitute the Company's statutory accounts for the period ending 31 December 2018.  The financial information for 2018 is derived from the statutory accounts for that year.  The auditors, Crowe Clark Whitehill LLP, have reported on the 2018 accounts. Their report was unqualified and did not include a reference to any matters to which the auditors draw attention by way of emphasis without qualifying their report.  The financial information for 2017 is derived from the statutory accounts for that year.

 

The preliminary announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the period ended 31 December 2018.  The information included in this preliminary announcement is based on the Company's financial statements which are prepared in accordance with International Financial Reporting Standards (IFRS).  The Company expects to publish full financial statements that comply with IFRS today.

 

An electronic copy of the Annual Report and Notice of AGM are now available to the public on the Company's website at www.vertucapital.co.uk

 

ENDS

 

About Vertu Capital Limited

 

The Company has been formed to undertake an acquisition of a target company or business in the financial services sector - including (but not to the exclusion of other types of business) fund management businesses, niche investment banks, trustee & custodian services businesses and financial planning businesses.

 

For further information please contact:

 

William Du

Tel: +603 5613 3388

Fax : +603 5613 3399

Email : [email protected]

 

 

 

 

 

 

 

VERTU CAPITAL LIMITED

 

 

 

ANNUAL REPORT AND

NON-STATUTORY FINANCIAL STATEMENTS

 

For the year ended 31 December 2018

 

 

 

 

 

Directors (all non-executive)

Kiat Wai (also known as 'William') Du

Shunita Maghji

Simon James Retter

Mark Jonathan Mortlock Simmonds

Company Secretary

Rada Palanisamy

No. 23, Jalan BP3A

Taman Bukit Permata

Batu Caves

68100 Selangor

Malaysia

Registered Office

Offshore Incorporations (Cayman) Limited

Floor 4, Willow House

Cricket Square

PO Box 2804

Grand Cayman KY1-1112

Cayman Islands

Head Office

Suite A-02-02, 2nd Floor

Empire Office Tower

Jalan SS16/1, Subang Jaya

47500 Selangor DE

Malaysia

Auditors

Crowe U.K. LLP

St. Bride's House

10 Salisbury Square

London

EC4Y 8EH

Bankers

OCBC Bank

65 Chulia Street

OCBC Centre

Singapore

049513

Legal advisers to the Company

Harney Westwood & Riegels Singapore LLP

20 Collyer Quay #21-02

Singapore 049319

 

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED TO 31 DECEMBER 2018

 

 

I have pleasure in presenting the financial statements of Vertu Capital Limited (the "Company") and its wholly owned subsidiary (together referred as the "Group") for the year ended 31 December 2018.

 

In the previous year, the Company entered into a non-binding letter of intent for the proposed acquisition of the entire issued share capital of VCB Malaysia Berhad, a company incorporated in Malaysia, for consideration of £350,000 payable in cash on completion. Regrettably the letter of intent entered into was terminated by mutual consent during the year as was publicly announced on 12 February 2018.

 

Following the terminations of potential acquisition of VCB Malaysia, the Company aims to identify target companies or business.

 

On 26 March 2018 the Company increased its paid-up capital through issuance of 19,999,999 new ordinary shares at a price of 1.025 pence per share raising gross cash proceeds of £205,000 before expenses.

 

The Group reported a net loss of £166,863 (0.14p per share) for the year 2018. As at 31 December 2018, the Group had cash at bank of £488,912.

 

For the year 2017 the Company had reported a net loss of £129,319 (0.13p per share).

 

The main expense for the Company is its legal and professional costs. The management intends to monitor and control this to be cost efficient and minimise its net loss before a suitable acquisition.    

 

The Board looks forward to providing further updates to shareholders in due course and actively reviewed a number of potential acquisition opportunities across the sector, none of which has met the necessary criteria for selection.

 

 

 

 

 

 

 

Chairman

 

30 April, 2019

 

 

Directors' report

 

The Directors present their report together with the audited non-statutory financial statements of Vertu Capital Limited (the "Company") and its wholly owned subsidiary (together the "Group") for the year ended 31 December 2018.

 

Vertu Capital Limited was incorporated on 12 September 2014 in the Cayman Islands, as an exempted company with limited liability under the Companies Law. The registered office of the Company is at the offices of Offshore Incorporations (Cayman) Limited, Floor 4, Willow House, Cricket Square, PO Box 2804, Grand Cayman KY1-1112, Cayman Islands.

 

The Company's Ordinary shares are currently admitted to a standard listing on the Official List and to trading on the London Stock Exchange.

 

The Company's nature of operations is to act as a special purpose acquisition company.

 

Results and dividends

 

The results for the year are set out in the Consolidated Statement of Comprehensive Income on page 12. The Directors do not recommend the payment of a dividend on the ordinary shares.

 

Company objective

 

The Company has been formed to undertake an acquisition of a target company or business in the financial services sector - including (but not to the exclusion of other types of business) fund management businesses, niche investment banks, trustee & custodian services businesses and financial planning businesses.

 

In line with the purpose of the Company, the Company is pursuing specific processes to identify a suitable acquisition in order to secure the best possible value for shareholders, consistent with achieving both capital growth and income for shareholders.

 

The Company's business risk

 

As the Group has no operating history, the Group may fail to execute its business plan or strategy that the Group will be unable to identify a target company for acquisition. This has been mitigated with the board's regular review of the Group's business plan. An explanation of the Company's financial risk management objectives, policies and strategies is set out in note 12.

 

Key events

 

In 2016 it was proposed through letter of intent for the Company to acquire the entire issued share capital of VCB Malaysia Berhad, a company incorporated in Malaysia for consideration of £350,000 payable in cash on completion.

 

On 18 February 2018 it was announced the proposed acquisition has been terminated.

 

On 26 March 2018 the Company increased its paid-up capital through issuance of 19,999,999 new ordinary shares at a price of 1.025 pence per share raising gross cash proceeds of £205,000 before expenses.

 

 

Directors

 

The Directors of the Company during the year were:

 

William Du Kiat Wai 

Shunita Maghji

Simon James Retter

Mark Jonathan Mortlock Simmonds (appointed 4 May 2018)

 

Directors' interest

 

None of the directors hold any shares of the Company.

 

Substantial shareholders

 

The Company has been notified of the following interests of 3 per cent or more in its issued share capital as at 11 March 2019.

 

 

 

Party Name

Number of Ordinary Shares

% of

Share Capital

 

 

 

Nordic Alliance Holdings Limited

17.16

Infinity Mission Limited

13.00

Amber Oak Holdings Limited

12.34

Link Summit Limited

12.08

Belldom Limited

8.08

West Park Capital Managers Ltd

4.08

Eastman Ventures Limited

3.75

 

Capital and returns management

 

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 amount of any such additional equity to be raised, which could be substantial, will depend on the nature of the acquisition opportunities which arise and the form of consideration the Company uses to make the acquisition and cannot be determined at this time.

 

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 Company intends to pay dividends on the Ordinary Shares following an acquisition at such times (if any) and in such amounts (if any) as the Board determines appropriate in its absolute discretion. The Company's current intention is to retain any earnings for use in its business operations, and the Company does not anticipate declaring any dividends in the foreseeable future. The Company will only pay dividends to the extent that to do so is in accordance with all applicable laws.

 

 

 

Corporate governance

 

In order to implement its business strategy, the Company has adopted a corporate governance structure whereby the key features of its structure are:-

 

·    a wholly non-executive board with independent non-executive Directors. The Board is knowledgeable and experienced and has extensive experience of making acquisitions;

·    consistent with the rules applicable to companies with a Standard Listing, unless required by law or other regulatory process, Shareholder approval is not required in order for the Company to complete the acquisition. The Company will, however, be required to obtain the approval of the Board of Directors, before it may complete the acquisition;

·    the Board is not subject to the provisions of a formal governance code and given its present size do not intend to formally adopt any specific code nor any diversity policy, but will apply governance the directors consider to be appropriate, having due regard to the principles of governance set out in the UK Corporate Governance Code;

·    until an acquisition is made, the Company will not have separate audit and risk, nominations or remuneration committees. The Board as a whole will instead review audit and risk matters, as well as the Board's size, structure and composition and the scale and structure of the Directors' fees, taking into account the interests of Shareholders and the performance of the Company, and will take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company's financial statements and take responsibility for any formal announcements on the Company's financial performance;

·    the Corporate Governance Code recommends the submission of all directors for re-election at annual intervals. None of the Directors will be required to retire by rotation and be submitted for re-election until the first annual general meeting of the Company following the Acquisition; and

·    following an 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 the Model Code and to comply or explain any derogation from the UK Corporate Governance Code.

 

Auditors and disclosure of information

 

The directors confirm that:

·     there is no relevant audit information of which the Company's non-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 non-statutory auditor is aware of that information.

 

 

 

Responsibility Statement

 

The Directors are responsible for preparing the annual report and the non-statutory financial statements in accordance with applicable law and regulations. The directors have prepared non-statutory financial statements in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").

 

International Accounting Standard 1 requires that non-statutory financial statements present fairly for each financial year the Group's financial position, financial performance and cash flows. This requires the faithful representation of transactions, other events and conditions in accordance with the definitions and recognition criteria for the assets, liabilities, income and expenses set out in the International Accounting Standards Board's "Framework for the Preparation and Presentation of Financial Statements". In virtually all circumstance, a fair representation will be achieve by compliance with IFRS. The directors are also required to:

 

-     properly select and apply accounting policies;

-     present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-     provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and

-     make an assessment of the Company and the Group's ability to continue as a going concern.

 

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time, the financial position of the Group. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The maintenance and integrity of the Vertu Capital Limited website is the responsibility of the Directors; work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website.

 

Legislation in the Cayman Islands 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 are responsible for preparing the non-statutory financial statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ('DTR') and with International Financial Reporting Standards as adopted by the European Union.

 

The directors confirm, to the best of their knowledge that:

·     the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

 

·     the financial statements include a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

 

 

Auditors

 

On 25 June 2018, Crowe Clark Whitehill LLP changed its name to Crowe U.K. LLP.

 

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.

 

Events after the reporting date

 

There are no subsequent events requiring disclosure in these non-statutory financial statements.

 

This responsibility statement was approved by the Board of Directors on 30 April, 2019 and is signed on its behalf by;

 

 

 

 

 

William Du Kiat Wai

Director

 

 

 

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF VERTU CAPITAL LIMITED

 

We have audited the non-statutory financial statements of Vertu Capital Limited (the "Company") and its subsidiary undertaking (together with the "Group") for the year ended 31 December 2018, which comprise:

·     the consolidated statement of comprehensive income for the year ended 31 December 2018;

·     the consolidated statements of financial position as at 31 December 2018;

·     the consolidated statements of cash flows and consolidated statements of changes in equity for the year then ended; and

·     notes to the non-statutory 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 non-statutory financial statements is applicable law and International Financial Reporting Standards  as adopted by the European Union (IFRS).   

In our opinion, the non-statutory financial statements:

·     give a true and fair view of the state of the Group's affairs as at 31 December 2018 and of the Group's loss for the year then ended; and

·     have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

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 non-statutory 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.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you when:

·     The directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

·     The directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company and the Group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the non-statutory financial statements are authorised for issue.

 

 

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 non-statutory 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 non-statutory financial statements as a whole to be £12,500 (2017: £11,000), based on approximately 3% of the Group's net assets at the year end.

We use a different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the non-statutory 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 £550 (2017: £550). Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Overview of the scope of our audit

We performed a full scope audit on the Group in accordance with International Standards on Auditing (UK) ("ISAs (UK)").

We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we looked at areas where the Directors made subjective judgements, which involved making assumptions and considering future events that are inherently uncertain, such as their going concern assessment. 

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the non-statutory financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the non-statutory financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

 

 

This is not a complete list of all risks identified by our audit.

Key audit matter

How the scope of our audit addressed the key audit matter

Going concern

During the period the Group recorded a loss and experienced net cash outflows. The expenditure incurred in the year amounted to £167k and the Group had a cash balance of £489k at 31 December 2018.

There is a risk that the going concern basis of preparation may not be appropriate.

 

We obtained budgets and forecasts for a period of at least twelve months from the date of approval of the non-statutory financial statements and the underlying assumption and challenged management on their reasonableness and reliability.

We inquired of key management in relation to knowledge of events or conditions beyond the period of management's assessment that may cast significant doubt on the entity's ability to continue as going concern.

We reviewed and considered any additional facts or information that may have become available since the date on which management made its assessment.

We discussed and evaluated management's plans for prospective transactions.

 

Our audit procedures in relation to the matter were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on the matter individually and we express no such opinion.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the non-statutory financial statements and our auditor's report thereon. Our opinion on the non-statutory 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 non-statutory financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the non-statutory 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 non -statutory 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.

 

 

Responsibilities of the directors for the non-statutory financial statements

As explained more fully in the directors' responsibilities statement set out on page 6, the directors are responsible for the preparation of the non-statutory 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 non-statutory financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the non-statutory financial statements, the directors are responsible for assessing the Company and 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 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 non-statutory 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 non-statutory financial statements.

A further description of our responsibilities for the audit of the non-statutory 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, in accordance with the terms of our engagement letter. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Stephen Bullock (Senior Statutory Auditor)

for and on behalf of

Crowe U.K. LLP

Statutory Auditor

London

30 April 2019

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

 

Year ended

31 December 2018

 

Year ended

31 December 2017

 

Notes

 

£

 

£

 

 

 

 

 

 

REVENUE

 

 

-

 

-

 

 

 

-

 

-

Other operating expenses

4

 

(166,863)

 

(129,319)

OPERATING LOSS BEFORE TAXATION

 

 

(166,863)

 

(129,319)

Income tax expense

5

 

-

 

-

LOSS FOR THE PERIOD ATTRIBUTABLE TO

EQUITY HOLDERS OF THE COMPANY

 

 

(166,863)

 

(129,319)

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME

 

 

 

 

 

Other comprehensive income

 

 

-

 

-

 

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

 

 

(166,863)

 

(129,319)

 

 

 

 

 

 

Basic and diluted loss per share (pence)

8

 

(0.14) p

 

(0.13) p

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

 

 

 

As at

31 December 2018

 

As at

31 December 2017

 

Notes

 

£

 

£

CURRENT ASSETS

 

 

 

 

 

Other receivables

7

 

6,795

 

6,563

Cash and cash equivalents

 

 

488,912

 

421,255

 

 

 

495,707

 

427,818

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Other payables

 

 

43,585

 

28,982

Amount owing to directors

 

 

36,399

 

16,250

 

 

 

79,984

 

45,232

NET ASSETS

 

 

415,723

 

382,586

 

 

 

 

 

 

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

 

 

 

 

 

Share capital

9

 

1,200,000

 

1,000,000

Retained earnings

 

 

(784,277)

 

(617,414)

TOTAL EQUITY

 

 

415,723

 

382,586

 

 

 

 

 

 

 

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

 

This report was approved by the board and authorised for issue on and signed on its behalf by;

 

 

 

 

………………………

William Du Kiat Wai

Director

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

 

 

Year ended

31 December 2018

 

Year ended

31 December 2017

 

Notes

 

£

 

£

 

 

 

 

 

 

Cash flow from operating activities

 

 

 

 

 

Loss before tax

 

 

(166,863)

 

(129,319)

Changes in working capital

 

 

 

 

 

Other receivables

 

 

(232)

 

Other payables

 

 

14,603

 

(18,216)

 

 

 

14,371

 

(18,711)

Net cash outflow from operating activities

 

 

(152,492)

 

(148,030)

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

Advances from directors

 

 

20,149

 

16,250

Net proceed share issuance

 

 

200,000

 

-

Net cash inflow from financing activities

 

 

220,149

 

16,250

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

67,657

 

(131,780)

Cash and cash equivalents at beginning of period

 

 

421,255

 

553,035

Cash and cash equivalents at end of period

 

 

488,912

 

421,255

 

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

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2018

 

Year ended 31 December 2018

 

Share capital

 

Share premium

 

Retained earnings

 

Total

 

£

 

£

 

£

 

£

As at 1 January 2018

1,000,000

 

-

 

(617,414)

 

382,586

New issuance

200,000

 

5,000

 

-

 

205,000

Issuance cost

-

 

(5,000)

 

-

 

(5,000)

Proceed from share issue

200,000

 

-

 

-

 

200,000

Loss for the year

-

 

-

 

(166,863)

 

(166,863)

Total comprehensive loss for the year

-

 

-

 

(166,863)

 

(166,863)

As at 31 December 2018

1,200,000

 

-

 

(784,277)

 

415,723

 

 

 

Year ended 31 December 2017

 

Share capital

 

Retained earnings

 

Total

 

£

 

£

 

£

As at 1 January 2017

1,000,000

 

(488,095)

 

511,905

Loss for the year

-

 

(129,319)

 

(129,319)

Total comprehensive loss for the year

-

 

(129,319)

 

(129,319)

As at 31 December 2017

1,000,000

 

(617,414)

 

382,586

 

 

 

The notes to the financial statements form an integral part of the non-statutory financial statements

 

 

 

 

 

 

 

 

 

 

 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2018

 

 

1.   GENERAL INFORMATION

 

Vertu Capital Limited (the "Company") was incorporated in the Cayman Islands on 12 September 2014 as an exempted company with limited liability under the Companies Law. The registered office of the Company is at the offices of Offshore Incorporations (Cayman) Limited, Floor 4, Willow House, Cricket Square, PO Box 2804, Grand Cayman KY1-1112, Cayman Islands.

 

During the current financial year the Company incorporated a wholly owned subsidiary in the United Kingdom. These non-statutory financial statements comprise of financial information of the Company and its subsidiary (together referred to as the "Group").

 

 

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 non-statutory financial statements ("financial statement") have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union ("IFRS") and IFRIC interpretations applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified for financial assets carried at fair value.

 

The financial statements of the Group is presented in British Pound Sterling ("£").

 

Standards and interpretations issued but not yet applied

 

A number of new standards, amendments and interpretations are effective for annual periods beginning on or after 1 January 2018, and have not been early adopted in preparing these financial statements. The Group has considered the impact of these, including IFRS 9 and IFRS 15, and concluded that none of these are expected to have a significant effect on the financial position or results of the Group.

 

Comparative figures

 

Comparative figures are stated for year ended 31 December 2017.

 

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.

 

 

 

 

2.    Accounting policies (continued)

 

Going concern

 

The Group had cash surplus of £488,912, which the Directors believe will be sufficient to pay ongoing expenses and pre-acquisition activities 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 (see note 3).

 

These financial statements have been prepared on a going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.

 

Cash and cash equivalents

 

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

 

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 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.

 

 

 

2.    Accounting policies (continued)

 

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.

 

Financial assets

 

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them.

 

The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this classification at every reporting date.

 

As at the balance sheet date, the Group did not have any financial assets subsequently measured at fair value.

 

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.

 

Derecognition of financial liabilities

 

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

 

Operating segments

 

The directors are of the opinion that the business of the Company comprises a single activity, that of an investment Company. Consequently, all activities relate to this segment.

 

The subsidiary company has not started any operation to date.

 

 

 

 

 

3.   CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

The Company's nature of operations is to act as a special purpose acquisition Company. This significantly reduces the level of estimates and assumptions required. The Directors do not consider there to be any critical accounting estimates and judgements, other than in relation to going concern that require to be separately reported.

 

(a)  Going concern

 

As disclosed in note 2, the Directors have a reasonable expectation that the Group has adequate resources through its cash balances to continue in operational existence for the foreseeable future. For this reason, the Group continues to adopt the going concern basis in preparing the financial statements.

 

4.   LOSS BEFORE TAXATION

 

The loss before income tax is stated after charging:

 

 

Year ended

31 December 2018

 

Year ended

31 December 2017

 

£

 

£

 

 

 

 

Rental of premises

9,661

 

8,624

 

 

 

 

Auditors' remuneration:

 

 

 

Fees payable to the Company's auditor for the audit of the Company's annual accounts

 

10,500

 

 

10,000

 

 

5.   INCOME TAX EXPENSE

 

The Company is regarded as resident for the tax purposes in Cayman Islands.

 

No tax is applicable to the Company for the year ended 31 December 2018. No deferred income tax asset has been recognised in respect of the losses carried forward, due to the uncertainty as to whether the Company will generate sufficient future profits in the foreseeable future to prudently justify this.

 

6.   SUBSIDIARY

 

During the financial year the Company incorporated a wholly owned subsidiary company, Vertu Capital Holdings Limited with paid up capital of £1 comprising 100 shares of £0.01 each. The subsidiary company was incorporated in the United Kingdom on 30 November 2018.

 

Both directors of the subsidiary company are also directors in the Company.

 

 

 

7.   OTHER RECEIVABLES

 

 

As at

31 December 2018

 

As at

31 December 2017

 

£

 

£

 

 

 

 

Prepayments

6,795

 

6,563

 

 

8.   LOSS PER SHARE

 

Basic loss per ordinary share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. There are currently no dilutive potential ordinary shares.

 

Loss per share attributed to ordinary shareholders

 

Year ended

31 December 2018

 

Year ended

31 December 2017

Loss (£)

(166,863)

 

(129,319)

Weighted average number of shares (Unit)

115,782,192

 

100,000,000

Per-share amount (Pence)

(0.14)

 

(0.13)

 

 

9.   SHARE CAPITAL & SHARE PREMIUM

 

 

Number of shares

 

Share capital

 

Share premium

 

 

 

£

 

£

Allotted, called up and fully paid

 

 

 

 

 

100,000,000 ordinary shares of £0.01 each

100,000,000

 

1,000,000

 

-

As at 31 December 2017

100,000,000

 

1,000,000

 

-

19,999,999 ordinary shares of £0.01 each

19,999,999

 

200,000

 

5,000

Share issue cost

 

 

-

 

(5,000)

As at 31 December 2018

119,999,999

 

1,200,000

 

-

 

On 26 March 2018, the Company issued 19,999,999 new ordinary shares at a price of 1.025 pence per share raising gross cash proceeds of £205,000 before expenses.

 

 

 

 

10. DIRECTORS EMOLUMENTS

 

Directors fee for the period

Year ended

31 December 2018

 

Year ended

31 December 2017

 

£

 

£

William Du Kiat Wai

5,000

 

5,000

Shunita Maghji

5,000

 

5,000

Simon James Retter

25,000

 

37,500

Mark Jonathan Mortlock Simmonds

16,398

 

-

 

51,398

 

47,500

 

During the year, there was no staff costs as no staff was employed by the Company, other than the directors.

 

 

11. CAPITAL MANAGEMENT POLICY

 

The Company's objectives when managing capital are to safeguard the Company and 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 borrowings and equity attributable to equity holders of the Company, comprising issued share capital and reserves.

 

 

12. FINANCIAL RISK MANAGEMENT

 

The Group uses a limited number of financial instruments, comprising cash, short-term deposits, bank loans and overdrafts and various items such as trade receivables and payables, which arise directly from operations. The Group does not trade in financial instruments.

 

Financial risk factors

The Group's activities expose it to a variety of financial risks: currency risk, credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

 

a) Currency risk

The Group does not have foreign operations and its exposure to foreign exchange risk is limited to the transactions and balances that are denominated in currencies other than Pounds Sterling.

 

b) Credit risk

The Group's credit risk is primarily attributable to deposits with banks. The Group manages its deposits with banks or financial institutions by monitoring credit ratings and limiting the aggregate risk to any individual counterparty. The Group does not have any major concentrations of credit risk related to any individual customer or counterparty.

 

 

c) Liquidity risk

The Group ensures it has adequate resource to discharge all its liabilities. The directors have considered the liquidity risk as part of their going concern assessment. (See note 2).

 

d) Cash flow interest rate risk

The Group has no significant interest-bearing liabilities and assets. The Group monitors the interest rate on its interest bearing assets closely to ensure favourable rates are secured.

 

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.

 

13. FINANCIAL INSTRUMENTS

 

The Group's principal financial instruments comprise cash and cash equivalents, trade and other receivables and trade and other payable. The Group'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 Group does not use financial instruments for speculative purposes.

 

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

 

 

As at

31 December 2018

 

As at

31 December 2017

 

£

 

£

 

 

 

 

Financial assets

 

 

 

Cash and cash equivalents

488,912

 

421,255

 

--------------------

 

--------------------

Total financial assets

488,912

 

421,255

 

==============

 

==============

 

 

 

 

Financial liabilities measured at amortised cost

 

 

 

Amount owing to directors

36,399

 

16,250

Other payables

43,585

 

28,982

 

--------------------

 

--------------------

Total financial liabilities

79,984

 

45,232

 

==============

 

==============

 

There are no financial assets that are either past due or impaired.

 

 

 

 

14. PENSION COMMITMENT

 

The Company has no pension commitments at the end of the period.

 

 

15. OPERATING LEASES

 

There Group's future minimum lease payments under non-cancellable operating leases are as follows:

 

As at

31 December 2018

 

As at

31 December 2017

Land & buildings

£

 

£

Leases which expire:

 

 

 

Not later than one year

9,101

 

8,676

Later than one year and not later than five years

-

 

-

 

==============

 

==============

 

 

16. RELATED PARTY TRANSACTIONS

 

Key management are considered to be the directors and the key management personnel compensation has been disclosed in note 9.

 

During the year ended on 31 December 2018, transactions with the directors amounted to £51,398 (2017: £47,500). As at balance sheet date, an amount of £36,399 (2017: £16,250) was due to the directors. The balance is interest free and repayable on demand.

 

 

17. CONTROL

 

The Directors consider there is no ultimate controlling party.

 

 

18. SUBSEQUENT EVENTS

 

There are no subsequent events requiring disclosure in these non-statutory financial statements.

 

 

 

 


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