Company registration number 08251749 (England and Wales)
SHORYU HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
SHORYU HOLDINGS LIMITED
COMPANY INFORMATION
Directors
K Tokumine
R O-T Blanco
H Tokumine
A Muci
T Awata
T Sugiyama
Company number
08251749
Registered office
Unit B
Premier Park Road
Park Royal
Middlesex
United Kingdom
NW10 7NZ
Auditor
Sobell Rhodes Audit Limited
The Kinetic Centre
Theobald Street
Elstree
Borehamwood
Hertfordshire
United Kingdom
WD6 4PJ
SHORYU HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 35
SHORYU HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

Fair review of the business

During the year ended 31 December 2022 the group recorded a net loss of £125,845 (2021: loss of £412,421) on a turnover of £15,549,097 (2021: £10,043,968). Included in the loss for the year relates to £192,057 on the disposal of subsidiary detailed in note 25 of these financial statements.

 

The group has net current liabilities of £1,354,558 (2021:£1,501,688) but overall net assets of £390,042 (2021: £518,395)

 

Included in creditors falling due within one year is a long-term Recovery Loan Scheme (RLS) bank loan of £611,743 (2021: £750,000) which has been reclassified to creditors due within one year due to a covenant breach at the year ended 31 December 2022. Post year end, the bank had informed the company that they are aware of potential future covenant breaches based on current and forecast trading performance. The letter of comfort provided for the year ended 31 December 2022 states the bank does not intend to take any immediate action as a result of the identified or potential future breach. However, in the letter, the bank reserves its rights in relation to the covenants. This has been disclosed in note 27 of the financial statements.

 

Included in amounts falling due within one year is £75,915 due to Toridoll Holdings Corporation, the Japanese parent company of Toridoll Holding Limited (a shareholder of Shoryu Holdings Limited) relating to loans for expansion purposes (total loan received: £840,000) which are repayable by 2026.

 

The directors are pleased to report that overall the group traded satisfactorily in 2022.

 

With the end of UK Government Covid Plan B restrictions in January 2022 followed by the removal of all legal restrictions in February marked the first full year of operations since the outbreak of the pandemic in March 2020. However the war in Ukraine (February 2022) resulting in downgrading of global growth, followed by supply shortages, tightening of Bank of England monetary policy in response to soaring inflation, series of industrial strike action, and high and volatile energy prices has led to a shallow recession, erosion of real disposable household income, low consumer confidence, and a rising cost burden for businesses which has generally set back the momentum of economic recovery from the pandemic.

 

In the year under review, notwithstanding the challenges presented post the pandemic, Shoryu’s like for like sales rose 66.3% compared to the previous year, showing a strong rebound from the pandemic. Whilst mature locations (Regent Street, Denman Street, Carnaby Street, Liverpool Street and Stratford) recorded a sales increase of 57.1% the emerging sites Covent Garden and Shoreditch recorded an increase of 95.3% and the out of London locations, Manchester and Oxford City recorded a 76.3% increase. Shoryu New Oxford Street site permanently closed on 5th of October 2021 and surrendered its lease on 3rd of March 2022. Like for like sales were 8.7% behind compared to pre-pandemic year 2019. Whist 2023 is forecasting to be 3.4% behind 2019 level, like for like sales Shoryu is on course to surpass pre-pandemic baseline sales in 2024.

 

The directors have taken into consideration post pandemic changes to city centre working, future trade union strike action, warmer than usual summer weather which are changing the footfall patterns. With the opening of Shoryu’s first franchise site in Kensington High Street (October 2022), Shoryu plans to expand both owned and franchising sites bringing high quality ramen, creating unique and engaging experiences to its’ growing customer base.

 

At the time of approval of these financial statements all Shoryu sites are open and trading except for New Oxford Street site which surrendered the lease to the landlord on 3 March 2022.

The group's key financial and other performance indicators during the year were as follows:

 

 

Unit

2022

2021

Turnover

£

15,549,097

10,043,968

Gross Profit

£

7,814,256

4,931,867

Gross Margin

%

50

49

Profit/(loss) after tax

£

(125,854)

(412,421)

SHORYU HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Principal risks and uncertainties

The directors recognise that within the businesses there is a number of risks which may affect the performance of the group. These risks are subject to regular review and where appropriate, processes established to minimise the level of exposure.

 

Whilst a series of post pandemic crisis events including energy crisis, inflation crisis, war in Ukraine have slowed down the recovery from the pandemic both domestically and internationally, the major uncertainty feeders; Covid-19 pandemic, Brexit, and UK recession are losing their momentum as the markets become resilient and adopt to the new normal in the post pandemic era. The World Health Organisation in May 2023 announced that Covid-19 is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern and there are welcome signs of global economic recovery, and International Monetary Fund announcement that Britain is or no longer is heading for recession this year, the directors are in the view that the certainty levels are rapidly retuning within acceptable business and market risk levels.

As applicable to the hospitality sector, the company is exposed to the effects of both Brexit, post pandemic and macro-economic challenges facing the business. The directors are confident that the group is able to trade through any future downturn in the economy by regularly monitoring performance and continuous contingency planning on the back of its strong customer loyalty, reputation of the brand, the strategic locations of the trading outlets, and shareholders’ commitment.

 

Market conditions

 

With the expansion and consolidation of the UK ramen market in the years prior to the pandemic, and steady growth and popularity the group has successfully benefited from its competitive edge maintaining its focus on ingredients and ability to cater to a diverse customer profile. This has enabled maintaining a balanced sales spread during the day and week. The majority of sales continue to be dominated by dine-in customers.

Going concern

The group is exposed to financial risk through its financial assets and liabilities. The most important component of financial risk affecting the group is the liquidity risk. Tight working capital control together with detailed cash flow monitoring mitigate the liquidity risk.

 

Included in amounts falling due within one year is £75,915 due to Toridoll Holdings Corporation, the Japanese parent company of Toridoll Holding Limited (a shareholder of Shoryu Holdings Limited) relating to loans for expansion purposes (total loan received: £840,000) which are repayable by 2026.

 

Furthermore, at the year ended 31 December 2022, a covenant breach was noted off for the 5 year RLS bank loan which resulted in the loan being reclassified to creditors due within one year in the parent company's balance sheet. Post year end, the bank had issued a letter of comfort as a result. The letter of comfort provided for the year ended 31 December 2022 states the bank does not intend to take any immediate action as a result of the identified or potential future breach. However, in the letter, the bank reserves its rights in relation to the covenants.

 

The group has prepared a cash flow forecast until December 2024 under the current uncertain conditions. It is based on the key assumptions as set out in note 1.3 of the accounting policies.

 

In the event the restaurants were to severely disrupted in the future, the UK economy falls into a deep recession, further macro-economic disruptions, all of the financial support measures as noted were not agreed, then the group would need to seek financial support from its major shareholder, Toridoll Holdings Limited. Whilst there are no binding agreements, the shareholders of Toridoll Holdings Limited have historically been supportive of the group.

The directors are confident regarding the 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 within the forecast, a material uncertainty exists that may cast a significant doubt on the group's ability to continue as a going concern.

The financial statements do not include the adjustments that would result if the group were unable to continue as a going concern. The directors conclusion on the group being a going concern are set out in the accounting policies (Note 1.3).

SHORYU HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

On behalf of the board

K Tokumine
Director
13 October 2023
SHORYU HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the group is that of operation of restaurants and of the company is that of a holding company.

Results and dividends

The results for the year are set out on page 10.

No ordinary interim dividends were paid. The directors do not recommend payment of a dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

K Tokumine
R O-T Blanco
H Tokumine
A Muci
T Awata
T Sugiyama
Post reporting date events

In 2023, due to a covenant breach of the 5 year RLS loan noted off at the year ended 31 December 2022 the company's bankers issued a letter of comfort for the financial year ended 31 December 2022 stating that the bank does not intend to take any potential action as a result of current or potential breaches.

 

 

Further details are included in Note 28.

Auditor

The auditor, Sobell Rhodes Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

SHORYU HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
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 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
K Tokumine
Director
13 October 2023
SHORYU HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHORYU HOLDINGS LIMITED
- 6 -
Opinion

We have audited the financial statements of Shoryu Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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).

In our opinion the financial statements:

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, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty relating to going concern

In forming our opinion on the financial statements which is not modified, we have considered the adequacy of the disclosure in note 1.3 to the financial statements concerning the group’s and the company's ability to continue as a going concern. The directors have considered the impact of the recent post pandemic related issues together with the rise in inflationary pressures and all the macro-economic factors impacting the UK as part of the group’s going concern analysis.

 

The directors have modelled the impact of reduced sales and also mitigating actions available to the group to reduce costs. The projections reviewed indicates the group has adequate resources to continue in operational existence for a period of at least 12 months following the signing of the financial statements.

 

Due to the uncertainty as to how the factors disclosed in note 1.3 may impact upon the group’s projected cashflows, a material uncertainty exists that may cast a significant doubt on the group 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 group or company were unable to continue as a going concern.

 

In auditing the financial statements for the company and the group, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

 

SHORYU HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHORYU HOLDINGS LIMITED
- 7 -

Other information

The other information comprises the information included in the annual 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. 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 course of 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

SHORYU HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHORYU HOLDINGS LIMITED
- 8 -

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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

 

 

 

 

Based on this understanding we designed our audit procedures to detect irregularities including fraud which primarily consisted of the following:

  1. Identifying and testing of journal entries including large and unusual transactions to understand their rationale to review any instances of management override.

  2. For management override relating to revenue recognition we obtained an understanding of the control environment relating to sales, the EPOS systems and the accounting systems, the cash reconciliation and recording of sales journals and also enquired with those charged with governance on instances any known fraud.

  3. Enquiries of management and those charged with governance on instances any known fraud around actual and potential litigation claims and/or breaches in food and hygiene regulations.

  4. Enquiries of the tax engagement team that are independent of the audit team for instances of non-compliance.

The senior statutory auditor reviewed the experience and expertise of the audit engagement team to ensure that they had the appropriate competence and capabilities to identify any instances of fraud and non-compliance with the relevant laws and regulations.

The objective of our audit, in respect to fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risk of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

SHORYU HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHORYU HOLDINGS LIMITED
- 9 -

Use of our report

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 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.

Trusha Bhanderi (Senior Statutory Auditor)
For and on behalf of Sobell Rhodes Audit Limited
Statutory Auditor
The Kinetic Centre
Theobald Street
Elstree
United Kingdom
WD6 4PJ
13 October 2023
SHORYU HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
2022
2021
Notes
£
£
Turnover
3
15,549,097
10,043,968
Cost of sales
(7,734,841)
(5,112,101)
Gross profit
7,814,256
4,931,867
Administrative expenses
(7,614,909)
(6,052,285)
Other operating income
153,026
734,804
Operating profit/(loss)
4
352,373
(385,614)
Interest payable and similar expenses
8
(94,163)
(64,705)
Amounts written off investments
9
(106,842)
-
Profit/(loss) on disposal of operations
25
- Part disposal of interest in group undertaking
(192,057)
-
Loss before taxation
(40,689)
(450,319)
Tax on loss
10
(85,165)
37,898
Loss for the financial year
(125,854)
(412,421)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
SHORYU HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
11
145,013
306,301
Other intangible assets
11
7,059
9,411
Total intangible assets
152,072
315,712
Tangible assets
12
2,781,689
3,202,249
2,933,761
3,517,961
Current assets
Stocks
16
147,902
152,567
Debtors
17
1,366,734
1,007,126
Cash at bank and in hand
904,681
1,520,807
2,419,317
2,680,500
Creditors: amounts falling due within one year
18
(3,773,875)
(4,182,188)
Net current liabilities
(1,354,558)
(1,501,688)
Total assets less current liabilities
1,579,203
2,016,273
Creditors: amounts falling due after more than one year
19
(1,148,599)
(1,473,733)
Provisions for liabilities
Deferred tax liability
22
40,562
26,644
(40,562)
(26,644)
Net assets
390,042
515,896
Capital and reserves
Called up share capital
24
234,551
234,551
Share premium account
591,772
591,772
Profit and loss reserves
(436,281)
(310,427)
Total equity
390,042
515,896
The financial statements were approved by the board of directors and authorised for issue on 13 October 2023 and are signed on its behalf by:
13 October 2023
K Tokumine
Director
Company registration number 08251749 (England and Wales)
SHORYU HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 12 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
11
7,059
9,411
Investments
13
812,255
812,255
819,314
821,666
Current assets
Debtors
17
779,383
469,808
Cash at bank and in hand
100,247
914,636
879,630
1,384,444
Creditors: amounts falling due within one year
18
(961,448)
(1,063,832)
Net current (liabilities)/assets
(81,818)
320,612
Total assets less current liabilities
737,496
1,142,278
Creditors: amounts falling due after more than one year
19
(1,148,599)
(1,465,045)
Net liabilities
(411,103)
(322,767)
Capital and reserves
Called up share capital
24
234,551
234,551
Share premium account
591,772
591,772
Profit and loss reserves
(1,237,426)
(1,149,090)
Total equity
(411,103)
(322,767)

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £88,336 (2021 - £3,539 loss).

The financial statements were approved by the board of directors and authorised for issue on 13 October 2023 and are signed on its behalf by:
13 October 2023
K Tokumine
Director
Company registration number 08251749 (England and Wales)
SHORYU HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
234,551
591,772
101,994
928,317
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(412,421)
(412,421)
Balance at 31 December 2021
234,551
591,772
(310,427)
515,896
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(125,854)
(125,854)
Balance at 31 December 2022
234,551
591,772
(436,281)
390,042
SHORYU HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
234,551
591,772
(1,145,551)
(319,228)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(3,539)
(3,539)
Balance at 31 December 2021
234,551
591,772
(1,149,090)
(322,767)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(88,336)
(88,336)
Balance at 31 December 2022
234,551
591,772
(1,237,426)
(411,103)
SHORYU HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
422,912
186,999
Interest paid
(94,163)
(64,705)
Income taxes paid
(173,870)
(94,429)
Net cash inflow from operating activities
154,879
27,865
Investing activities
Proceeds of disposal of business
(192,057)
-
Proceeds on disposal of intangibles
90,744
-
Purchase of tangible fixed assets
(88,332)
(143,101)
Proceeds on disposal of tangible fixed assets
26,779
14,685
Proceeds on disposal of fixed asset investments
(106,842)
-
Net cash used in investing activities
(269,708)
(128,416)
Financing activities
Repayment of borrowings
10,469
10,439
Repayment of bank loans
(388,257)
604,167
Payment/(repayment) of finance leases obligations
(123,509)
(192,312)
Net cash (used in)/generated from financing activities
(501,297)
422,294
Net (decrease)/increase in cash and cash equivalents
(616,126)
321,743
Cash and cash equivalents at beginning of year
1,520,807
1,199,064
Cash and cash equivalents at end of year
904,681
1,520,807
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
1
Accounting policies
Company information

Shoryu Holdings Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is Unit B Premier Park, Premier Park Road, Park Royal, London, United Kingdom, NW10 7NZ.

 

The group consists of Shoryu Holdings Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value. The financial statements are prepared in sterling, which is the functional currency of the company and rounded to the nearest £1.

 

In these financial statements, the company has applied the exemptions available under FRS102 in respect of the following disclosures:

 

  1. Parent company’s profit and loss account – The company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit and loss account.

     

  2. Related party transaction notes - The company only discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with its parent or with members of the same group that are wholly owned.

 

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.2
Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Shoryu Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.3
Material uncertainty relating to going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the group's ability to continue as a going concern.

 

The group has net current liabilities of £1,354,558 (2021:£1,501,688) but overall net assets of £390,042 (2021: £518,395) and has made a net loss of £125,854 (2022: loss of £412,421). Included in the loss for the year relates to £192,057 on the disposal of subsidiary detailed in note 25 of these financial statements.

 

Included in creditors falling due within one year is a long-term Recovery Loan Scheme (RLS) bank loan of £611,743 (2021: £750,000) which has been reclassified to creditors due within one year due to a covenant breach at the year ended 31 December 2022. Post year end, the bank had issued a letter of comfort as a result. The letter of comfort provided for the year ended 31 December 2022 states the bank does not intend to take any immediate action as a result of the identified or potential future breach. However, as stated in the letter, the bank reserves its rights in relation to the covenants. This has been disclosed in note 28 of the financial statements.

 

Also included within creditors falling due within one year is a sum of £250,000 payable under CBILs loan (total loan received: £1,000,000).

 

Included in amounts falling due within one year is £75,915 due to Toridoll Holdings Corporation, the Japanese parent company of Toridoll Holding Limited (a shareholder of Shoryu Holdings Limited) relating to loans for expansion purposes (total loan received: £840,000) which are repayable by 2026.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -

Furthermore, included in the current liabilities is a trade debt owed to a connected party with a common director and shareholder of £343,449 (2021: £372,419) which is a key broker for the group. The directors are confident the company is able to repay the trade debt and has the ability to purchase the stocks directly from suppliers if need be.

 

The remaining creditors falling due within one year also includes HMRC VAT sum of £730,500 which has been paid post year end.

 

The group reported on their management accounts for the period to July 2023 draft EBITDA profit of £140,500 and a net loss before tax of £133,500.

 

In common with other 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.

 

The directors are of the opinion that the group post pandemic trading results have stabilised and the business will continually adopt to the new challenges being presented. The long-term survival of the group is broadly dependent upon factors such as the effectiveness of the containment measures of future global health emergencies success of Bank of England monetary policy in controlling inflation and future economic growth.

 

In the eventuality of future disruptions that might result in further covenant breaches and if the banks’ support becomes unavailable, although the bank has been very supportive in the past and notwithstanding any presumptions, the company will consider options such as restructuring or refinancing the bank loans.

In the event the restaurants were to severely disrupted in the future, the UK economy falls into a deep recession, further macro-economic disruptions, all of the financial support measures as noted were not agreed, then the group would need to seek financial support from its major shareholder, Toridoll Holdings Limited. Whilst there are no binding agreements, the shareholders of Toridoll Holdings Limited have historically been supportive of the group.

The directors are confident regarding the 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 forecast, a material uncertainty exists that may cast a significant doubt on the group's and the company's ability to continue as a going concern.

 

The financial statements do not include the adjustments that would result if the group and the company were unable to continue as a going concern.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.4
Turnover

Turnover includes revenues earned from the sale of food and drinks from the operations of restaurants and franchise fees.

 

Turnover represents net invoiced sales of food and drinks, excluding value added tax and tips. Turnover is recognised when payment is rendered at the time of sale, and is all recognised in the United Kingdom.

 

Franchise fees are provided in the normal course of business and is shown net of VAT and other sales related taxes. Franchise fees are generally calculated as a percentage of gross sales income and is recognised in line with the franchisee's product sales in accordance with the relevant agreement.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Trademarks, licenses and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Patents & licences
Over 10 years
1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

 

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Over the remaining period of the lease
Fixtures, fittings and equipment
25% reducing balance
Motor vehicles
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the stocks to their present location and condition. Cost is calculated using the first-in, first-out formula. Provision is made for damaged, obsolete and slow-moving stock where appropriate.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

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.

1.13
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years 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 end date.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 22 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

 

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

1.17
Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

 

In line with the recent amendments to FRS 102, the company has early adopted the amendments affecting accounting periods commencing on or after 1 January 2021 and recognised any changes in lease payments, arising from qualifying rent concessions, through the income statement on a systematic basis over the periods the change in lease payments is intended to compensate.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 23 -
1.18
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

 

The company recognises an unconditional government grant related to Coronavirus Job Retention Scheme as other income when the grant becomes receivable. Such grants are recognised on an accrual basis in line with when the expenses would have been incurred.

 

The company recognises small business grants as other income when the grant becomes receivable.

1.19

Comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements
Going concern

As indicated in Note 1.3, it is the directors' assessment that the group continues to be a going concern, however, a material uncertainty does exist as a result of the impact of the future operations due post pandemic macro-economic factors.

 

Accordingly, the assets and liabilities have been valued on the basis that the group will continue in business.

 

If this presumption is proven to be mistaken, the carrying value of assets and liabilities would need to be reappraised to reflect the impact of cessation.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment of the group's assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability.

The directors’ have determined whether there are indicators of impairment of the group’s tangible and intangible fixed assets and the company’s investment in subsidiaries and intercompany debtor balances.

Factors taken into consideration in reaching such a decision include economic viability and expected future financial performance of the group’s cash generating units (CGUs). Where there are indicators of impairment, the group estimates the value of the CGUs using discounted cash flows to calculate the CGUs’ value in use. Due the repercussions of post pandemic events there is significant uncertainty in estimating the group’s future cash flows and a change in the outcome of this estimation could have an impact on impairment adjustments required. There have been no material indicators of impairments identified during the current financial year.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
- 24 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Valuation of stocks

The group establishes a provision for stocks in order to provide against obsolete, or damaged items and this is reviewed on an annual basis.

3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Sale of food and drinks
15,473,694
10,027,497
Franchise income
75,403
16,471
15,549,097
10,043,968
4
Operating profit/(loss)
2022
2021
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Government grants
(37,108)
(734,804)
Depreciation of owned tangible fixed assets
466,609
465,123
Depreciation of tangible fixed assets held under finance leases
24,051
62,511
Profit on disposal of tangible fixed assets
(8,547)
(2,496)
Amortisation of intangible assets
72,896
89,649
Operating lease charges
1,317,641
1,057,866

Operating lease rentals for the group are shown net of £Nil of rent concessions (2021: £365,454).

 

Included in the group amount for government grants, includes furlough claim amounting to £Nil (2021: £363,618) and small business grants amounting to £37,108 (2021: £362,006).

 

Included in the government grant for the group is Coronavirus Business Interruption loan interest of £Nil (2021: £9,180).

 

During the year, the group obtained business rates relief of £104,740 (2021: £342,591).

5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
20,500
24,000
Audit of the financial statements of the company's subsidiaries
110,045
112,119
130,545
136,119
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Management staff
11
13
-
-
Kitchen
101
84
-
-
Floor
112
72
-
-
Total
224
169
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
4,476,980
3,266,686
-
0
-
0
Social security costs
439,223
270,461
-
-
Pension costs
74,920
54,540
-
0
-
0
4,991,123
3,591,687
-
0
-
0
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services paid from subsidiary company
83,860
77,187
Pension contributions to defined contribution schemes paid from subsidiary company
1,321
1,319
85,181
78,506
8
Interest payable and similar expenses
2022
2021
£
£
Other interest on financial liabilities
76,401
43,048
Interest on finance leases and hire purchase contracts
14,496
21,657
Other interest
3,266
-
Total finance costs
94,163
64,705
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
9
Amounts written off investments
2022
2021
£
£
Amounts written off current loans
(106,842)
-
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
75,502
-
0
Adjustments in respect of prior periods
(4,255)
-
0
Total current tax
71,247
-
0
Deferred tax
Origination and reversal of timing differences
13,918
(37,898)
Total tax charge/(credit)
85,165
(37,898)

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
Loss before taxation
(40,689)
(450,319)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(7,731)
(85,561)
Tax effect of expenses that are not deductible in determining taxable profit
20,240
32,605
Tax effect of income not taxable in determining taxable profit
(369)
-
0
Unutilised tax losses carried forward
-
0
47,558
Adjustments in respect of prior years
(4,255)
-
0
Permanent capital allowances in excess of depreciation
63,362
46,937
Other permanent differences
13,918
(75,042)
Effect of tax losses
-
0
(4,395)
Taxation charge/(credit)
85,165
(37,898)
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
11
Intangible fixed assets
Group
Goodwill
Patents & licences
Total
£
£
£
Cost
At 1 January 2022
872,966
24,907
897,873
Disposals
(167,528)
-
0
(167,528)
At 31 December 2022
705,438
24,907
730,345
Amortisation and impairment
At 1 January 2022
566,665
15,496
582,161
Amortisation charged for the year
70,544
2,352
72,896
Disposals
(76,784)
-
0
(76,784)
At 31 December 2022
560,425
17,848
578,273
Carrying amount
At 31 December 2022
145,013
7,059
152,072
At 31 December 2021
306,301
9,411
315,712
Company
Patents & licences
£
Cost
At 1 January 2022 and 31 December 2022
24,907
Amortisation and impairment
At 1 January 2022
15,496
Amortisation charged for the year
2,352
At 31 December 2022
17,848
Carrying amount
At 31 December 2022
7,059
At 31 December 2021
9,411
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
12
Tangible fixed assets
Group
Leasehold land and buildings
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
4,374,577
2,066,402
57,566
6,498,545
Additions
2,255
86,077
-
0
88,332
Disposals
-
0
(29,087)
(53,538)
(82,625)
At 31 December 2022
4,376,832
2,123,392
4,028
6,504,252
Depreciation and impairment
At 1 January 2022
1,821,829
1,425,346
49,121
3,296,296
Depreciation charged in the year
310,966
178,245
1,449
490,660
Eliminated in respect of disposals
-
0
(17,472)
(46,921)
(64,393)
At 31 December 2022
2,132,795
1,586,119
3,649
3,722,563
Carrying amount
At 31 December 2022
2,244,037
537,273
379
2,781,689
At 31 December 2021
2,552,748
641,056
8,445
3,202,249
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.

The net carrying value of tangible fixed assets for the group includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2022
2021
2022
2021
£
£
£
£
Fixtures, fittings and equipment
29,958
12,927
-
0
-
0
Leasehold land and buildings
134,768
583,266
-
-
164,726
596,193
-
-

Included within the net book value of land and buildings for the group above is £2,552,748 (2020: £2,872,487) in respect of short leasehold improvements on land and buildings.

13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
812,255
812,255
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Fixed asset investments
(Continued)
- 29 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
812,255
Carrying amount
At 31 December 2022
812,255
At 31 December 2021
812,255
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Shoryu Ramen Limited
As indicated in the note below
Operation of restaurants
Ordinary
100.00
Shoryu Carnaby Street Limited
As indicated in the note below
Operation of restaurants
Ordinary
100.00
Shoryu Liverpool Street Limited
As indicated in the note below
Operation of restaurants
Ordinary
100.00
Shoryu Stratford Limited
As indicated in the note below
Operation of restaurants
Ordinary
100.00
Shoryu Franchise Limited
As indicated in the note below
Operations of licensed restaurants
Ordinary
100.00

Registered office addresses for all the subsidiaries above is:

Unit B, Premier Park, Premier Park Road, London, United Kingdom, NW10 7NZ

All of the above subsidiaries are included in the consolidation. Controls are established via share ownership by the Company, directly or indirectly through the subsidiaries,

15
Financial instruments
Group
Company
2022
2021
2022
2021
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,084,960
743,526
n/a
n/a
Carrying amount of financial liabilities
Measured at amortised cost
4,148,987
4,977,222
n/a
n/a
16
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Finished goods and goods for resale
147,902
152,567
-
0
-
0
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
17
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
57,657
-
0
-
0
-
0
Corporation tax recoverable
-
0
6,435
-
0
-
0
Amounts owed by group undertakings
105,792
47,126
778,666
469,808
Other debtors
921,511
746,931
-
0
-
0
Prepayments and accrued income
281,774
206,634
717
-
0
1,366,734
1,007,126
779,383
469,808
18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans
20
861,743
1,000,000
861,743
1,000,000
Obligations under finance leases
21
35,753
150,574
-
0
-
0
Other borrowings
20
76,915
-
0
76,915
-
0
Trade creditors
591,330
922,758
-
0
42,831
Amounts owed to group undertakings
343,979
372,418
-
0
-
0
Corporation tax payable
76,570
185,628
-
0
-
0
Other taxation and social security
696,917
493,071
389
-
Other creditors
14,700
16,832
-
0
-
0
Accruals and deferred income
1,075,968
1,040,907
22,401
21,001
3,773,875
4,182,188
961,448
1,063,832

Included in creditors falling due within one year is a long-term Recovery Loan Scheme (RLS) bank loan of £611,743 (2021: £750,000) which has been reclassified to creditors due within one year due to a covenant breach at the year ended 31 December 2022.

19
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
20
354,167
604,167
354,167
604,167
Obligations under finance leases
21
-
0
8,688
-
0
-
0
Other borrowings
20
794,432
860,878
794,432
860,878
1,148,599
1,473,733
1,148,599
1,465,045
SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 31 -
20
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans
1,215,910
1,604,167
1,215,910
1,604,167
Loans from related parties
871,347
860,878
871,347
860,878
2,087,257
2,465,045
2,087,257
2,465,045
Payable within one year
938,658
1,000,000
938,658
1,000,000
Payable after one year
1,148,599
1,465,045
1,148,599
1,465,045

Group

 

Bank Borrowings

In 2021, the company borrowed £1,000,000 from its bankers through the Coronavirus Business Interruption Loan. The loan term is 4 years and is repayable in monthly installments. The loan attracts a nominal interest rate of 2.5% per annum.

 

In 2021, the company borrowed £750,000 from its bankers through the Recovery Loan Scheme. The loan term is 5 years and is repayable in monthly installments. The loan attracts a nominal interest rate of 4.4% per annum. At the year end, a covenant breach occurred which has resulted in the loan amount being reclassified to creditors due within one year.

 

The group was party to a multilateral cross guarantee and debenture dated 3 June 2015 given by subsidiary companies of Shoryu Holdings Limited to secure group borrowings. A limited guarantee has been given by two of the directors'. A personal guarantee has been given by one of the director's against the £750,000 loan. Limited guarantees have been given by Secretary of State for the Department for Business, Energy and Industrial Strate against the Coronavirus Business Interruption Loan and the Recovery Loan Scheme.

Company

 

Bank Borrowings

In 2021, the company borrowed £1,000,000 from its bankers through the Coronavirus Business Interruption Loan. The loan term is 4 years and is repayable in monthly installments. The loan attracts a nominal interest rate of 2.5% per annum.

 

In 2021, the company borrowed £750,000 from its bankers through the Recovery Loan Scheme. The loan term is 5 years and is repayable in monthly installments. The loan attracts a nominal interest rate of 4.4% per annum.

 

The company was party to a multilateral cross guarantee and debenture dated 3 June 2015 given by subsidiary companies of Shoryu Holdings Limited to secure group borrowings. A limited guarantee has been given by two of the directors'. A personal guarantee has been given by one of the director's against the £750,000 loan. Limited guarantees have been given by Secretary of State for the Department for Business, Energy and Industrial Strate against the Coronavirus Business Interruption Loan and the Recovery Loan Scheme.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 32 -
21
Finance lease obligations
Group
Company
2022
2021
2022
2021
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
35,753
150,574
-
0
-
0
In two to five years
-
0
8,688
-
0
-
0
35,753
159,262
-
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 to 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
40,562
26,644
The company has no deferred tax assets or liabilities.
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
26,644
-
Charge to profit or loss
13,918
-
Liability at 31 December 2022
40,562
-
23
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
74,920
54,540

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
24
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
234,551
234,551
234,551
234,551
25
Disposals

On 1 January 2022 the group disposed off its 100% holding in Shoryu New Oxford Street Limited. Included in the financial statements is a loss of £192,057 arising from the disposal of the company's interests in Shoryu New Oxford Street Limited up to the date of its disposal and after its elimination from the consolidation.

 

26
Financial commitments, guarantees and contingent liabilities

The company was party to a multilateral cross guarantee and debenture dated 3 June 2015 given by subsidiary companies of Shoryu Holdings Limited to secure group borrowings.

27
Operating lease commitments
Lessee

After the year end one of the the group's subsidiary company is in the process of surrendering its operating lease and therefore the lease commitments below have been amended to reflect the revised commitments.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating rental leases, which fall due as follows:

Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
1,301,025
1,133,295
-
-
Between two and five years
4,635,867
4,420,187
-
-
In over five years
4,288,614
4,862,916
-
-
10,225,506
10,416,398
-
-
28
Events after the reporting date

In 2023, due to a covenant breach of the RLS loan noted off at the year ended 31 December 2022 the company's bankers issued a letter of comfort for the financial year ended 31 December 2022 breach stating that the bank does not intend to take any immediate action as a result of the identified or potential future breach. However, as stated in the letter, the bank reserves its rights in relation to the covenants. This has been further detailed in the accounting policies note 1.3 of the financial statements.

 

The directors have determined that this event is an unadjusting subsequent event. Accordingly, the financial position and results of operations as of and for the year ended 31 December 2022 have not been adjusted to reflect it's impact.

 

The directors' conclusions on the group being a going concern are set out in the accounting policies (note 1.3).

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 34 -
29
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchases
Purchases
2022
2021
£
£
Group
Entities with control, joint control or significant influence over the group
4,370,853
2,851,371
Management fees
Rental and other expenses
2022
2021
2022
2021
£
£
£
£
Group
Entities with control, joint control or significant influence over the company
662,703
433,008
152,843
152,843

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2022
2021
£
£
Group
Entities with control, joint control or significant influence over the group
343,489
372,419
Company
Entities with control, joint control or significant influence over the company
871,346
860,878

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2022
2021
Balance
Balance
£
£
Group
Other related parties
65,282
42,602
30
Directors' transactions

Limited guarantee has been given by the director on 13/07/2021 for £150,000. Another limited guarantee has been given by the director and one of the shareholder's of the company on 25/06/2015 for £100,000.

SHORYU HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 35 -
31
Cash generated from group operations
2022
2021
£
£
Loss for the year after tax
(125,854)
(412,421)
Adjustments for:
Taxation charged/(credited)
85,165
(37,898)
Finance costs
94,163
64,705
Gain on disposal of tangible fixed assets
(8,547)
(2,496)
Loss on disposal of business
192,057
-
Amortisation and impairment of intangible assets
72,896
89,649
Depreciation and impairment of tangible fixed assets
490,660
527,634
Other gains and losses
106,842
-
Movements in working capital:
Decrease/(increase) in stocks
4,665
(27,786)
(Increase)/decrease in debtors
(366,043)
3,789
Decrease in creditors
(123,092)
(18,177)
Cash generated from operations
422,912
186,999
32
Analysis of changes in net debt - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
1,520,807
(616,126)
904,681
Borrowings excluding overdrafts
(2,465,045)
377,788
(2,087,257)
Obligations under finance leases
(159,262)
123,509
(35,753)
(1,103,500)
(114,829)
(1,218,329)
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