Shoryu Franchise Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit B, Premier Park, Premier Park Road, London, United Kingdom, NW10 7NZ.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
A prior period error has been noted off detailed in note 6 of these financial statements.
The financial statements have been prepared on a going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
The company has net current liabilities of £133,681 (2021: £89,315) and has made a net loss of £44,366 (2021: £55,981). The loss due to start-up costs was expected to be incurred.
Included in the amounts falling due within one year is £150,900 due to the parent company. The parent company have provided assurance via a letter of support that it will not seek repayment of the amounts owed at least on or after 12 months from the audit report date or when the company is in a position to repay the liabilities as this is in the best interest of the group as a whole.
In common with similar businesses in the hospitality sector, challenging trading environment presented by unforeseen post pandemic events such as the energy crisis, interest rate crisis, change in city working patterns, warmer than usual temperatures etc. have significant impact on footfall and customer spend levels, which in turn has an impact on the overall group results. Whilst it is difficult to predict the longevity and future such occurrences, the directors have implemented measures for the business to mitigate their impact, adopt and sustain profitability and growth in the medium to long term.
The group has prepared cash flow forecast until December 2024, under the current economic conditions and based on the key assumption that the restaurants will remain open for the foreseeable future.
The forecasts incorporate profit improvement measures including controlling energy costs and securing favourable fixed prices, general cost efficiencies, and marketing campaigns to drive footfall.
In 2021, the parent company secured a 5 year CBILS (£1,000,000) and RLS (£750,000) bank loans under the government recovery loan schemes during the pandemic disruption period. At the year ended 31 December 2022, a covenant breach was noted off for the RLS bank loan which resulted in the loan being reclassified to creditors due within one year. Post year end, the bank had issued a letter of comfort for the year ended 31 December 2022. The comfort letter stated that the bank does not intend to take any immediate action as a result of any actual or potential breaches and that the bank currently expects but does not guarantee, to continue to provide the facility to the parent company as per the facility agreement.
In the event the restaurants were to severely disrupted in the future, the UK economy falls into a deep recession, all of the financial support measures as noted were not agreed, then the group would need to seek financial support from the shareholders'. The unexpected disruptions may result in further loan covenant breaches and potential call back of the RLS loan and or changes to the loan terms and financial support available to the group.
The directors are confident regarding the company’s and group's long-term prospects and profitability. It is however difficult to assess the impact of any other unexpected disruptions which may also result in further loan covenant breaches and potential changes to the loan terms and financial support available to the group.
Given the associated uncertainty above and therefore within the group's forecast, a material uncertainty exists that may cast a significant doubt on the group's and therefore the company's ability to continue as a going concern
The financial statements do not include the adjustments that would result if the company or group were unable to continue as a going concern.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
The average monthly number of persons (including directors) employed by the company during the year was:
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
The company's parent and ultimate parent is Shoryu Holdings Limited, incorporated in United Kingdom.
The parent of the largest group in which these financial statements are consolidated is Shoryu Holdings Limited, incorporated in United Kingdom and the consolidated financial statements can be available from Companies House using the company's registration number 08251749.
Accrued income:
Accrued income relating to 2021 was omitted and booked in 2022. The financial statements for the prior year have been restated as a result of this. The recognition of these events has resulted in the re-statement on the Balance Sheet and also the Profit and Loss account. The results are summarised below: