Registered number:
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
COMPANY INFORMATION
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BUSABA EATHAI LIMITED
CONTENTS
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BUSABA EATHAI LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The directors present their Strategic report together with the audited financial statements for the extended accounting period ended 20 September 2020.
The principal activity of the Company is the operation of modern Thai restaurants.
The period was significantly impacted by the Covid 19 pandemic with the government mandated closure of restaurants and restricted movement of people, especially in and around London. The focus of the business has been cash preservation which resulted in increasing creditor balances in the period. 225 (24%) full restaurant trading weeks were lost as a result of the impact of the pandemic in the reporting period. The company received £2.3m in government support from the Coronavirus Job Protection Scheme. During the period, the Group was restructured with the ordinary shares and preference shares in Busaba Eathai Holdings Limited acquired by Curry Acquisitions Limited. As a result of the restructuring and acquisition, the loan notes owed to Phoenix Equity Nominees on behalf of Phoenix Equity Partners 2006 Fund in the accounts of Busaba Eathai Cleanco Limited and Busaba Eathai Acquisitions Limited have been repaid for a nominal sum. Busaba Eathai Cleanco Limited converted the existing ordinary shares held by Busaba Eathai Acquisitions Limited to 29 “B” ordinary shares, and issued 28,971 “A” ordinary shares to Curry Acquisition Limited for a consideration of £240,000. As a consequence, Curry Acquisition Limited became the immediate parent company of Busaba Eathai Cleanco Limited, and Busaba Eathai Acquisitions Limited holding in Busaba Eathai Cleanco Limited was reduced to 0.1%. The ultimate controlling party of the Group is now TP2 Limited. At the close of the period under review the company operated 12 restaurants (of which, 7 were open and trading). The company continues to sublease premises at Manchester Printworks and St Albans, which is fully provided for in the accounts. During the period under review turnover fell 15% to £23.89m driven by the government mandated closure of restaurants and loss of 225 full restaurant trading weeks. Adjusted EBITDA* fell from £1.33m to a deficit of £2.70m. In the prior year, loss before tax was stated after adjustments made for the outcome of a review of the Company’s holding value of assets which resulted in the impairment of £1.1m against the book value of assets. Going forward, given the restructuring of the group that took place in May 2019 and the resulting reduction in loan note debt and the cash injection, the near-term objective for the directors is to further improve the business through continued focused on operating efficiency, the maintenance of a central cost appropriate to the scale of the business and the opportunistic growth of covers and sales through brand-wide and local marketing activities. *Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, impairment, profit/(loss) on disposal, pre opening costs and exceptional administrative expenditure.
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BUSABA EATHAI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The ongoing prevalence of Coronavirus and the resulting restrictions on people’s movements continues to materially impact the casual dining market but the directors believe that the change in ownership, supported by the availability of the credit facility and actions taken to reduce the cost base mean Busaba is in leaner position to benefit from any subsequent economic recovery.
The successful roll out of the vaccination programme and subsequent easing of restrictions from Spring 2021 has allowed for all restaurants to reopen with sales steadily growing with improved footfall, especially in Central London. The surrender of onerous leases and renegotiation of remaining rents as part of the CVA agreement post year end has significantly reduced restaurant overheads to result in more profitable business model. The UK’s exit from the European Union in 2021 and resident workers returning overseas during the pandemic could result in a smaller labour pool for restaurants as footfall increases. The directors continue to recognise Busaba as a great place to work to aid with any challenges in attracting and retaining great people.
This report was approved by the board
and signed on its behalf.
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BUSABA EATHAI LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The directors present their report and the financial statements for the period ended 20 September 202020 September 2020.
The directors are responsible for preparing the strategic report, the directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. 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 loss for the period, after taxation, amounted to £
6,497,521
(2019 -
loss
£
2,857,087
)
.
The directors do not recommend payment of a dividend for the period.
The directors who served during the period were:
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BUSABA EATHAI LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The Company operates an equal opportunities employment ethos, it also has in place a training programme to ensure that all staff are fully trained and up to date with statutory laws and requirements relating to food hygiene, health and safety, licensing and employment law.
Disabled employees
The Company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Company's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate. Indemnity cover Third party indemnity cover was in force for the directors during the period and since the period end. Supplier payment policy The policy of the Company is to agree terms of payment with suppliers as part of the overall terms applying to each transaction, ensure that suppliers are made aware of the terms of payment and then to abide by the terms of payment to the supplier. Going concern The directors have prepared cash flow forecasts which show the group is expected to be cash generative across the coming financial year at the operating level, and they forecast the group to operate within the loan facilities available to it. Therefore the financial statements are prepared on a going concern basis. Further details are given in note 2.2.
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BUSABA EATHAI LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
A summary of post balance sheet events are in note 27.
The auditors, WMT LLP, will be proposed for reappointment in accordance with
section 489 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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BUSABA EATHAI LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BUSABA EATHAI LIMITED
We have audited the financial statements of BUSABA EATHAI LIMITED (the 'Company') for the period ended 20 September 2020, which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We draw attention to note 2.3 in the financial statements, which indicates that due to the loss making position of the Company and its negative balance sheet position, together with the uncertainty of the ongoing COVID-19 pandemic. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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BUSABA EATHAI LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BUSABA EATHAI LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
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 auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 auditors' report.
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BUSABA EATHAI LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BUSABA EATHAI LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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 auditors' 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.
for and on behalf of
Verulam Point, Station Way
Hertfordshire
AL1 5HE
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BUSABA EATHAI LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
REGISTERED NUMBER:
04956194
BALANCE SHEET
AS AT
20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
REGISTERED NUMBER:
04956194
BALANCE SHEET
(CONTINUED)
AS AT
20 SEPTEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 13 to 33 form part of these financial statements.
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BUSABA EATHAI LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
Busaba Eathai Limited is a private company limited by shares, incorporated in England and Wales under the Companies Act. The address of the registered office is given on the Company Information page and the nature of the Company’s operations and its principal activities are set out in the Strategic report.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Curry Acquisitions Limited as at 31 May 2020 and these financial statements may be obtained from 42-48 Great Portland Street, London, W1W 7NB.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
During the period the Company made a loss of £6,497,521 and the Statement of Financial Position
showed a deficit of £24,095,011, due to long term liabilities amounting to £19,839,638. The directors have prepared projected forecasts and cash flows for a period of 12 months from the date of signing these accounts. Trading conditions in the casual dining sector have and are continuing to be challenging in 2020 and going into 2021. These include further challenges due to the Covid 19 pandemic and the resulting restrictions on opening and trading. The group is expected to return to being cash generative at the operating level across the coming financial year after opening restrictions have eased and following the actions taken by management last year to close loss making units, and implement cost reduction measures. The directors have therefore concluded, taking into account the sensitivity analyses performed, that it is appropriate to prepare the financial statements on a going concern basis, as they forecast the group to operate within the loan facilities available to it.
The Company is a parent Company that is also a subsidiary included in the consolidated financial
statements of its immediate parent undertaking established under the law of an EEA state and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
Grants of a revenue nature are recognised in the statement of comprehensive income in the same period as the related expenditure.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the balance sheet. Company's property portfolio. The need for provisions for onerous leases against loss-making stores is assessed when the directors consider there are no longer reasonable prospects of the property becoming profitable. These provisions are recognised on a lease by lease basis. The determination of the onerous lease provision requires management to make judgements and estimates about the ultimate cost to the Company, including the nature, timings and cost of exiting a lease. The actual costs and timing of cash flows are dependent on future events and market conditions. Any difference between management estimates and actual costs is accounted for in the period when such determination is made.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
2.
Accounting policies (continued)
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
Company's accounting policies. Estimates and assumptions used in the preparation of the financial statements are continually reviewed and revised as necessary.
Analysis of turnover by country of destination:
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
There are no factors that may affect future tax charges.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
14.
Tangible fixed assets (continued)
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The bank loans were secured by way of debentures and a floating charge over the assets of the company.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The loans are secured by way of debentures and a floating charge over the assets of the company. These loans were reassigned during the year.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
22.
Share capital (continued)
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The Company has a contingent liability in respect of a property lease. This lease is in respect of an
undeveloped commercial property that has been assigned to a third party. Under the terms of the assignment, the Company remains liable for the lease obligations in the event of the assignee's default. The remaining term under the lease is approximately 11 years. Whilst the Company has not been notified of any obligations under the lease not being met by the assignee, the current annual rent obligations before any mitigating activities is approximately £220,000. No provision has been made in respect of this contingent liability.
The Company operates a defined contributions pension scheme. The assets of the scheme are held
separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £166,123 (2019: £101,372). Contributions totalling £115,631 (2019: £33,370) were payable to the fund at the reporting date.
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BUSABA EATHAI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 20 SEPTEMBER 2020
The Directors have considered the effect on the value of the assets and liabilities of the Company since the balance sheet date, as well as actual and expected future income and expenditure, cash flow requirements and the Company’s ability to continue as a going concern. They have taken steps to protect the workforce and the business, including its cash flow, so as to be able to maintain liquidity given on going impacts of the pandemic. The management team have been able to mitigate the risks by taking advantage of support available such as furloughing employees, obtaining business support grants and covid business rates relief on restaurants. Post period end, the Company’s creditors approved a Company Voluntary Arrangement (CVA) which will result in the write off of non critical suppliers debts and the renegotiation of operating leases including rent free periods and surrender of onerous leases. This has provided further financial support to the business through the effects of the pandemic.
The Company's immediate parent is Busaba Eathai Cleanco Limited. The ultimate controlling company is TP2 Limited. The ultimate controlling party is T. Poole.
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