2023 Annual Report (Updated)
ANNUAL REPORT 2023 Page 0
Annual Report
31 March 2023
ANNUAL REPORT 2023 Page 1
Contents to Consolidated
Financial Statements
Contents 1
Executive Chairman’s Report 2
Directors’ Report 9
Independent Auditors’ Report 10
Consolidated Statement of Profit or
Loss and Other Comprehensive Income 14
Consolidated Statement of Changes in Equity 15
Consolidated Statement of Financial Position 16
Consolidated Statement of Cash Flows 17
Notes to the Consolidated Financial Statements 18
Statutory Information and Corporate Governance 58
Company Directory 69
ANNUAL REPORT 2023 Page 2
CHAIRMAN’S REPORT FY23
AN ETHICAL BUSINESS WITH
COMMUNITY SPIRIT
Highlights of the FY23 year
• Franchised store sales up
24% at NZ$53.6m (£26.7m).
Group royalty income is
derived from these numbers.
• Recurring Group revenue up
15% at NZ$3.8m (£1.9m)
• Group revenues in the year
of NZ$6.6m (£3.4m)
• Period EBITDA of NZ$0.75m
(£0.38m).
• Net loss before tax of
NZ$3.3m (£1.7m), reflecting
the combined NZ$3.3m write
down of receivables and
impairment of goodwill and
intangible assets relating to
the Triple Two business.
• 84 Group sites in the UK
and Ireland as at 31 March
2023 up from 82 as at 31
March 2022
• An additional 6 stores have
been opened in the UK and
Ireland in the first quarter with
further store openings
planned.
• Cooks Coffee dual listed
on the AQUIS Growth market
in November 2022.
• Elena Garside appointed
as the first UK based
Non-executive Director.
ANNUAL REPORT 2023 Page 1
Cooks Coffee Company (CCC) continued to see strong growth across its franchised store estate
during the Period, with sales from its outlets in the UK up by 18% and up by 41% in Ireland
compared to FY22.
Like for like sales were up 13% in the UK and 29% in Ireland, reflecting in part the timing of the
removal of Covid restrictions in each country. The overall increase in sales from stores that
operated in the Period and the prior financial year was 17%.
However, Group revenues for the Period decreased 10% to NZ$6.6m (£3.4m), reflecting the
lower than anticipated one off revenue streams from the opening of new stores. New
store related non-recurring revenues declined 30% to NZ$2.86m (£1.4m) from FY22. This
corelates to the construction & fit out income that were delayed into FY24. The non-recurring
revenues in the previous financial year included income relating to the release of franchise
fees on hold over the Covid period as well as a significant number of new stores
opened by Triple Two. New store construction and fit out work is a feature of the Triple Two
model which operates an internal Construction company.
A number of planned store openings during the year were delayed until the current financial year
due to the effects of supply chain disruptions in Q3 and Q4 of FY23. These factors appear to be
easing in FY24 and with a strong pipeline of prospective franchisees we are expecting to see
good new store growth in the current financial year to build on our position as the fourth largest
coffee focused café chain in the UK.
OPERATIONAL BUSINESS PERFORMANCE
UK & IRELAND
84 Group sites in the UK and
Ireland as at 31 March 2023,
up from 82 as at 31 March
2022
Esquires Coffee UK store numbers
increased to 51 at 31 March from 47 at 31
March 2022, with 7 new stores opened
and 3 closed. FY23 store sales were up
15.6% on FY22.
The Triple Two network opened four new
stores during the financial year and closed
six with 18 Triple Two cafes operating at
the end of the financial year. Store sales
were up 30.1% on FY22.
In Ireland outlet numbers at the end of the
year were 15 and there is an encouraging
pipeline of new stores in development for
the balance of 2023 and beyond. Store
sales were up 41.2% on FY22 reflecting
the post Covid recovery. The new store in
the Tallaght shopping centre opened in
February 2023 and the store which
features the first digital ordering kiosks in
the network has traded strongly since
opening. Store number 16 opened in
O’Connell St in Dublin in the first week of
April in the refurbished Savoy Cinema
complex and in late June a new store in
Mary St. in the city opened.
GLOBAL
Cooks operating revenue in the global
segment was in line with the previous
financial year as the international
franchised markets continue to recover in
the Middle East and Saudi Arabia in
particular showing growth at an
accelerated rate.
ANNUAL REPORT 2023 Page 4
ESG
(ENVIRONMENTAL, SUSTAINABILITY
& GOVERNANCE)
We are proud to present our commitment to Environmental, Sustainability, and Governance
(ESG) in this annual report. We recognize the urgent need to address climate change and its
impact on our planet, and we are dedicated to building a family of ethical brands with a
strong community spirit. This chapter highlights our focus on ESG, the specific USPs that
differentiate us, and the steps we are taking to create a sustainable future.
OUR COMMITMENT TO ESG:
Ethical Practices
• We prioritise Fairtrade and Organic coffee, ensuring that our supply chain supports
sustainable farming practices and fair compensation for coffee farmers.
• We source and use ethical and renewable design materials whenever possible to
reduce waste and minimise our environmental footprint.
• Our commitment to using leading carbon-neutral coffee roasteries with direct links to
coffee farmers aligns with our goal of mitigating climate change and protecting natural
habitats and wildlife.
Community spirit
• Our franchise model empowers local entrepreneurs who own and operate their own
businesses, fostering a sense of community and supporting local economies.
• We embrace localised bespoke designs in our outlets, creating unique spaces that
reflect the culture and character of the communities we serve.
• We establish supply linkages with local producers, promoting sustainability and
supporting regional businesses.
We believe that our focus on ESG sets us apart from any other chain operators in the UK
and Ireland.
OUR USP’S INCLUDE:
Ethical standards
• By offering Fairtrade and Organic coffee, we assure our customers that they are
making an ethical choice when they choose Cooks.
ANNUAL REPORT 2023 Page 1
• By using recyclable cups and packaging materials in our stores we aim to reduce
waste and contribute to the circular economy.
• Through the Too Good to Go waste program actively participate in reducing food
waste by sharing excess products with local homeless charities –
• Our commitment to using ethical and renewable design materials reflects our
dedication to sustainability and reducing our environmental impact.
Certified Carbon Neutral Roastery
• Our direct links to coffee farmers enable us to protect natural habitats and wildlife,
preserving biodiversity while providing high-quality coffee to our customers.
• Our certified carbon-neutral roastery demonstrates our commitment to combating
climate change and reducing greenhouse gas emissions.
Steps Towards a Sustainable Future:
• We have established a Board sub-committee chaired by Elena Garside, who brings
considerable expertise in environmental sustainability and governance.
• This sub-committee will oversee and guide our ESG initiatives, ensuring an open and
transparent process to achieve our sustainability goals.
Goal Setting and Measurement:
• We will set specific goals and metrics to track our progress in areas such as waste
reduction, energy efficiency, and greenhouse gas emissions.
• Regular reporting on our ESG performance will demonstrate our commitment to
transparency and accountability.
MARKET POSITION
& POTENTIAL
Whilst the company is ranked as the 4
th
largest coffee
focused chain by outlet numbers, according to the
Allegra report of January 2023, the share of outlets in
the UK is less than 1% of the market of 9,780
branded café chains. Given that branded chains
represent approximately 30% of the total market
there is significant potential to grow the business in
the UK & Ireland. The major focus will continue to be
in market cities and towns along with suburban areas
where the company and its franchisees are part of
the local community.
In Ireland CCC has approximately 2.6% of the market
based on recent Allegra data reporting 654 branded
cafes in the Republic.
No 4
ANNUAL REPORT 2023 Page 0
The longer-term strategy will focus on
growing the store network and the
company will also look to grow via
synergistic acquisitions and through
vertical integration where this is provides
enhanced shareholder value. The Board
will continue to monitor the performance of
subsidiaries and swift action will be
considered to address under performance.
Cooks is committed to leading the way in
ESG, striving to build a sustainable future
while offering a unique and unmatched
experience to our customers. By focusing
on ethical practices, community spirit, and
environmental responsibility, we are
confident that we can make a positive
impact on our planet and set an example
for the industry. Our Board will ensure that
our ESG initiatives remain at the forefront
of our corporate strategy, delivering long-
term value for all stakeholders.
DUAL LISTING
The company listed on the AQUIS growth
market in November 2022 as part of the
strategy of building the business within
the UK & Ireland. We will continue to
monitor benefits of the dual listing and
discuss these with our brokers and
corporate advisors.
OPERATING METRICS – STORE
NUMBERS
There were 16 new stores added to the
network and 15 closures giving a net gain
of one for the year. Closures in most
cases were stores where the leases had
come up for review and it was logical not to renew for certain specific locations given the
changes in consumer behaviour in the post Covid market The store network is generally well
placed to take advantage of these changes with the primary focus in suburban locations
where the “working from home” trend is proving beneficial to the Cooks business model.
Store Numbers FY23Stores @ April 2022
Stores Opened
during the Year
Stores Closed during
the year
Stores Operational at
31st March 2023
ECUK477351
Triple Two204618
ECHI152215
Europe1001
Pakistan & Indonesia5115
Middle East212320
1091615110
ANNUAL REPORT 2023 Page 1
BALANCE SHEET
Total Equity in the Company reduced to NZ$1.4m
(£0.7m) reflecting the write down of receivables and the
non-cash impairment of goodwill related to the Triple
Two business.
Management assessed the Value in Use for the UK
Triple Two business unit and because of this
assessment impaired Goodwill by $2.5m (approximately
£1.2m). Main considerations for this impairment related
to reassessing the forecasts and the likely slower than
planned return to a higher growth environment.
CCC share capital increased by NZ$1.4m (£0.7m)
during the year, a combination of debt conversion and
cash, whilst borrowings decreased by NZ$0.7m (£0.4m)
PEOPLE
We have a great team of employees,
master franchisees, franchisees & key
business partners who contribute to the
performance of the business daily. To
ensure that we can continue to attract
and retain the best people we may
consider introducing a share ownership
scheme to ensure the alignment of
interests of management with
shareholders as we strive to build
shareholder value.
Along with all Directors I would like to
take this opportunity to acknowledge the
excellent work done by our dedicated
teams during the financial year.
ANNUAL REPORT 2023 Page 2
SUMMARY
The performance in FY23 has highlighted the difference in the
maturity and business model of the long-established Esquires brands
that have been operating for more than 20 years and which have
recurring income of approximately 85% of total revenues. In
comparison, to the newer Triple Two brand has capital related
income of approximately 90% of total revenues as it looks to build its
store network. With recurring revenue growth continuing to be
positive and generally above reported overall market growth and with
a strong new store pipeline the company is well placed to build the
business in a sustainable manner.
The Group has strong brands and an exciting pipeline of opportunities
as it continues its commitment to building a family of ethical brands with
community spirit. We look forward to making further progress and to an
improved financial performance in the current financial year.
Keith Jackson
Executive Chairman
ANNUAL REPORT 2023 Page 1
DIRECTOR’S REPORT
The directors of Cooks Coffee Company
Limited present to shareholders the Annual
Report and consolidated financial statements
for Cooks Coffee Company Limited and its
controlled entities (together the “Group”) for
the year ended 31 March 2023.
The directors are responsible for presenting
consolidated financial statements in
accordance with New Zealand law and
generally accepted accounting practice,
which give a true and fair view of the financial
position of the Group as at 31 March 2023
and their financial performance and cash
flows for the year ended on that date.
The directors consider that the consolidated
financial statements of the Group have been
prepared using appropriate accounting
policies, consistently applied and supported
by reasonable judgements and estimates and
that all relevant financial reporting and
accounting standards have been followed.
The directors believe that proper accounting
records have been kept which enable, with
reasonable accuracy, the determination of
the financial position of the Group and
facilitate compliance of the consolidated
financial statements with the Financial
Markets Conduct Act 2013.
The directors consider they have taken
adequate steps to safeguard the assets of
the Group and to prevent and detect fraud
and other irregularities.
The directors note that there were no material
changes in the nature of the business
undertaken by the Company in the past year.
Going Concern
The directors consider that using the going
concern assumption is appropriate having
reviewed cash flow projections of the
Group.
Greater detail of the going concern
assumptions and the cash generating
initiatives currently underway are detailed
in Note 4 of the consolidated financial
statements.
Donations & Audit Fees
The Group made no donations during the
past year. Amounts paid to William Buck
for audit and other services are shown in
Note 22 of the consolidated financial
statements.
Other Statutory Information
Additional information required by the
Companies Act 1993 is set out in the
Regulatory Disclosures and Shareholder
Information sections.
The directors present the consolidated
financial statements set out in pages 14 to
57, of Cooks Coffee Company Limited and
its controlled entities for the period 1 April
2022 to 31 March 2023.
The Board of Directors of Cooks Coffee
Company Limited authorised these
consolidated financial statements for issue
on 26 June 2023.
ANNUAL REPORT 2023 Page 10
Auckland | Level 4, 21 Queen Street, Auckland 1010, New Zealand
Tauranga | 145 Seventeenth Ave, Tauranga 3112, New Zealand
+64 9 366 5000
+64 7 927 1234
info@williambuck.co.nz
www.williambuck.com
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
*William Buck (NZ) Limited and William Buck Audit (NZ) Limited
Cooks Coffee Company Limited
Independent auditor’s report to the Shareholders
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Cooks Coffee Company Limited (the Company)
and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at
31 March 2023, and the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the
consolidated financial position of the Group as at 31 March 2023, and of its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with New Zealand
equivalents to International Financial Reporting Standards (NZ IFRS) and International Financial Reporting
Standards.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)).
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with Professional and Ethical Standard 1 International Code of Ethics for Assurance
Practitioners (including International Independence Standards) (New Zealand) issued by the New Zealand
Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International Independence Standards)
(IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Other than in our capacity as auditor we have no relationship with, or interests in, the Company or its
subsidiaries.
Material Uncertainty Related to Going Concern
We draw attention to Note 4 in the consolidated financial statements, which indicates that the Group
incurred a loss from continuing operations of $3,220,000 for the year ended 31 March 2023 and, as of that
date, the Group’s current liabilities exceeded its current assets by $6,263,000. These events or conditions,
along with other matters as set forth in Note 4, indicate that a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
ANNUAL REPORT 2023 Page 11
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related
to Going Concern section, we have determined the matters described below to be the key audit matters to
be communicated in our report.
INTANGIBLE ASSETS & GOODWILL
Area of focus - Refer also to Note 15 How our audit addressed it
The Group has significant intangible assets
relating to the Global franchise rights (excluding
a few countries) of Esquires Coffee. The Group
has assessed that the useful life of these
intangible assets to be indefinite.
The Group has significant intangible assets
relating to the franchise rights of Triple Two that
are amortised.
In addition there is significant goodwill recorded
arising from the acquisition of Triple Two.
The group recorded an impairment of goodwill in
the year ended 31 March 2023 of $2.5 million.
Because of the significance to the financial
statements of these balances and the
judgements and assumptions which need to be
applied in determining recoverable amounts is
the reason why we have given specific audit
focus and attention to this area.
Our audit procedures included:
— Assessed the useful life of the assets
— Analysed the Group’s impairment assessment
— Performed stress testing of the key assumptions
— Obtained independent expert advice on the
methodology and discount rates applied
— Ensured appropriate disclosure has been included
in the financial statements
LEASES
Area of focus - Refer also to Note 21 How our audit addressed it
The Group applies NZ IFRS 16 Leases which
has a significant impact on the Group’s financial
statements. Accounting for leases requires
management judgement.
Lease liabilities represent 66% of total liabilities
of the Group at 31 March 2023 which is why we
have given specific audit focus and attention to
this area.
Our audit procedures included:
— Tested key transactions relating to leases of the
Group
— Tested for modifications to Lease agreements and
Incremental Borrowing Rate
— Tested for completeness that all leases were
included
— Ensured appropriate disclosure has been included
in the financial statements
ANNUAL REPORT 2023 Page 12
Information Other than the Consolidated Financial Statements and
Auditor’s Report Thereon
The directors are responsible for the other information in the Annual Report. The other information
comprises the Executive Chairman’s Report, the Directors Report, Statutory Information and Company
Directory, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. 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.
Directors’ Responsibilities
The directors are responsible on behalf of the Group for the preparation of consolidated financial
statements that give a true and fair view in accordance with New Zealand equivalents to International
Financial Reporting Standards, and for such internal control as the directors determine is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 (NZ) 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
consolidated financial statements.
A further description of our responsibilities for the audit of these financial statements is located at the
External Reporting Board (XRB) website at: Audit Report 1 » XRB. This description forms part of our
independent auditor’s report.
The engagement director on the audit resulting in this independent auditor’s report is Darren Wright.
ANNUAL REPORT 2023 Page 13
Restriction on Distribution and Use
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken
so that we might state to the Company’s shareholders those matters which 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 shareholders, as a body, for
our audit work, for this report or for the opinions we have formed.
William Buck Audit (NZ) Limited
Auckland
26 June 2023
ANNUAL REPORT 2023 Page 14
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 31 March 2023
31 March
31 March
2023
2022
Notes
$'000
$'000
Continuing operations
Revenue
5
6,613
7,372
Grant and other income
5
295
449
Release of liabilities
5
337
-
Raw materials and consumables used
(977)
(1,628)
Depreciation and amortisation
15,16,21
(850)
(581)
Impairment loss on receivables
11
(448)
(227)
Net foreign exchange (losses)/gains
(110)
(230)
Employee costs
6
(2,514)
(2,442)
Other expenses
7
(2,446)
(2,480)
Operating profit/(loss)
(100)
233
Interest Income
21
1,172
1,145
Finance costs
8,21
(1,908)
(2,026)
Reduction of contingent consideration payable
31
-
6,431
Impairment of goodwill
15
(2,497)
(5,983)
Profit/(Loss) before income tax
(3,333)
(200)
Income tax (expense)/credit
9
113
110
Profit/(Loss) for the year from continuing operations
(3,220)
(90)
Net loss for the year from discontinued operations
13.1
(96)
(348)
Net Profit/(Loss) for the year attributable to shareholders
(3,316)
(438)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Change in foreign currency translation reserve
883
(120)
Other comprehensive income after tax
883
(120)
Total comprehensive Profit/(Loss) for the year
attributable to shareholders
(2,433)
(558)
Total comprehensive Profit/(Loss) for the year
attributable to Shareholders of the parent arises
from:
- Continuing operations
(2,337)
(210)
- Discontinued operations
13.1
(96)
(348)
(2,433)
(558)
Loss per share:
Basic and diluted loss per share (New Zealand Cents)
from continuing and discontinued operations:
20.2
(5.97)
(0.07)
Basic and diluted loss per share (New Zealand Cents)
from continuing operations:
20.2
(5.80)
(0.01)
Basic and diluted loss per share (New Zealand Cents)
from discontinued operations:
20.2
(0.17)
(0.06)
This statement should be read in conjunction with the notes to the consolidated financial
statements.
ANNUAL REPORT 2023 Page 15
Consolidated Statement of Changes in Equity
For the year ended 31 March 2023
Share
Capital
Foreign
currency
translation
reserve
Share based
payment
reserve
Accumulated
Losses
Total
Equity
Notes
$'000
$'000
$'000
$'000
$'000
Balance at 1 April 2021
52,220
208
2,401
(56,550)
(1,721)
Comprehensive loss for the year
Profit/(Loss) for the year
-
-
-
(438)
(438)
Other comprehensive income
Items that may be subsequently reclassified to
profit or loss:
Change in foreign currency translation reserve
-
(120)
-
-
(120)
Total comprehensive income/(loss) for the year
-
(120)
-
(438)
(558)
Transactions with owners of the Company
Issue of ordinary shares
20.1
4,677
-
-
-
4,677
Total contributions by owners of the Company
4,677
-
-
-
4,677
Balance at 31 March 2022
56,897
88
2,401
(56,988)
2,398
Comprehensive loss for the year
Profit/(Loss) for the year
-
-
-
(3,316)
(3,316)
Other comprehensive income
Items that may be subsequently reclassified to
profit or loss:
Change in foreign currency translation reserve
-
883
-
-
883
Total comprehensive income/(loss) for the year
-
883
-
(3,316)
(2,433)
Transactions with owners of the Company
Issue of ordinary shares
20.1
1,448
-
-
-
1,448
Change in share based payment reserve
-
-
-
-
-
Total contributions by owners of the Company
1,448
-
-
-
1,448
Balance at 31 March 2023
58,345
971
2,401
(60,304)
1,413
Attributable to Equity holders of the Company
This statement should be read in conjunction with the notes to the consolidated financial
statements.
ANNUAL REPORT 2023 Page 16
Consolidated Statement of Financial Position
As at 31 March 2023
31 March31 March
20232022
Notes$'000$'000
Current Assets
Cash and cash equivalents104451,156
Trade and other receivables111,3231,244
Lease receivables21.12,1552,755
Other current assets11795588
Assets classified as held-for-sale1618
Current Assets4,7345,761
Non-Current Assets
Property, plant and equipment 16142150
Right-of-use assets21.11,6041,642
Lease receivables21.117,42716,488
Goodwill153,0725,457
Intangible assets156,8817,262
Other non-current financial assets1515
Non-current assets29,14131,014
Total Assets33,87536,775
Liabilities
Current Liabilities
Trade and other payables174,4404,518
Deferred revenue181,5072,335
Lease liabilities21.12,3822,920
Borrowings 192,1082,892
Other Liabilities19560565
Current liabilities10,99713,230
Non-Current Liabilities
Deferred Revenue18114257
Lease liabilities21.118,93218,226
Deferred tax liabilities91,0361,143
Borrowings 191,3831,521
Non-current liabilities21,46521,147
Total Liabilities32,46234,377
Net Assets/(Liabilities)1,4132,398
Equity
Share capital20.158,34556,897
Accumulated losses(60,304)(56,988)
Foreign currency translation reserve97188
Share based equity reserve20.32,4012,401
Total equity1,4132,398
Director Director
The consolidated financial statements were approved for issue for and on behalf of the Board
as at 26 June 2023.
This statement should be read in conjunction with the notes to the consolidated financial
statements.
ANNUAL REPORT 2023 Page 17
Consolidated Statement of Cash Flows
For the year ended 31 March 2023
31-Mar31-Mar
20232022
Notes$'000$'000
Operating activities
Cash was provided from:
Receipts from customers7,0706,363
Cash was applied to:
Interest cost(526)(381)
Payments to suppliers & employees(7,028)(6,614)
Net cash provided from/(applied to) operating activities23(484)(632)
Investing activities
Cash was applied to:
Purchase of property, plant and equipment(56)(124)
Acquisition of intangible assets-(91)
Net cash provided from/(applied to) investing activities(56)(215)
Financing activities
Cash was provided from:
Proceeds from borrowings100981
Proceeds from share issue587902
Cash was applied to:
Principal elements of lease payments(175)(165)
Repayment of borrowings(683)(608)
Net cash provided from/(applied to) financing activities(171)1,110
Net increase/(decrease) in cash and cash equivalents held(711)263
Cash & cash equivalents at beginning of the year1,156886
Effect of exchange rate changes on foreign currency balances-7
Cash & cash equivalents at end of the year104451,156
Composition of cash and cash equivalents:
Bank balances104451,156
This statement should be read in conjunction with the notes to the consolidated financial statements.
ANNUAL REPORT 2023 Page 18
1. Nature of operations
Cooks Coffee Company Limited (“CCC” or the “Company) and its controlled entities (the
“Group”) principal activity is the food and beverage industry with the primary focus being on
operating a network of cafes internationally via franchised operations.
2. General information and statement of compliance
Cooks Coffee Company Limited is the
Group’s ultimate parent company, is
incorporated and domiciled in New Zealand
and is listed on the Main board of the New
Zealand stock exchange and is listed on the
Aquis Stock Exchange in the United
Kingdom.
The address of its registered office is 96 St
Georges Bay Road, Parnell, Auckland, 1052,
New Zealand.
Cooks Coffee Company Limited is a
company registered under the Companies
Act 1993 and is an FMC reporting entity
under Part 7 of the Financial Markets
Conduct Act 2013. The consolidated
financial statements of the Group have been
prepared in accordance with the
requirements of Part 7 of the Financial
Markets Conduct Act 2013 and the NZX
Market Listing Rules.
The consolidated financial statements
comprise the Company, its controlled entities
and its associates (together the “Group”).
See Note 14.1.
For the purposes of complying with NZ
GAAP, the Group is a Tier 1 for-profit entity.
The Company’s consolidated financial
statements comply with New Zealand
Equivalents to International Financial
Reporting Standards (NZ IFRS). They
comply with the International Financial
Reporting Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB) and IFRIC interpretations.
The information in the consolidated financial
statements is presented in New Zealand
dollars which is the functional currency of the
ultimate parent company. Amounts in the
consolidated financial statements have been
rounded off to the nearest thousand, or in
certain cases, the nearest dollar unless
otherwise stated.
The consolidated financial statements for the
year ended 31 March 2023 (“FY23”) were
approved and authorised for issue by the
Board of Directors on 26 June 2023.
3. Summary of accounting policies
3.1. Going concern
The directors have prepared the consolidated financial statements on the going concern basis.
In doing so significant judgement has been applied. For further details of these assumptions
and associated material uncertainties refer to Note 4.
3.2. Overall considerations
The principal accounting policies applied in the preparation of these financial statements are
set out in the accompanying notes where an accounting policy choice is provided by NZ IFRS,
is new or has changed, is specific to the Group’s operations or is significant or material.
These policies have been consistently applied to all the years presented, unless otherwise
stated.
ANNUAL REPORT 2023 Page 19
The consolidated financial statements have been prepared using the historic cost basis with
the exception of certain financial assets and liabilities which are carried at fair value through
the profit or loss. The measurement bases are more fully described in the accounting policies
below.
COVID-19-Related Rent Concessions (Amendments to NZ IFRS 16)
Effective 1 June 2020, NZ IFRS 16 was
amended to provide a practical expedient
for lessees accounting for rent
concessions that arise as a direct
consequence of the COVID-19 pandemic
and satisfy the following criteria:
(a) The change in lease payments results
in revised consideration for the lease that
is substantially the same as, or less than,
the consideration for the lease
immediately preceding the change;
(b) The reduction is lease payments
affects only payments originally due on or
before 30 June 2022; and
(c) There are is no substantive change to
other terms and conditions of the lease.
Rent concessions that satisfy these criteria
may be accounted for in accordance with
the practical expedient, which means the
lessee does not assess whether the rent
concession meets the definition of a lease
modification. Lessees apply other
requirements in NZ IFRS 16 in accounting
for the concession.
Accounting for the rent concessions as
lease modifications would have resulted in
the Group remeasuring the lease liability
to reflect the revised consideration using a
revised discount rate, with the effect of the
change in the lease liability recorded
against the right-of-use asset. By applying
the practical expedient, the Group is not
required to determine a revised discount
rate and the effect of the change in the
lease liability is reflected in profit or loss in
the period in which the event or condition
that triggers the rent concession occurs.
The effect of applying the practical
expedient is disclosed in Note 21.1 for
Leases.
3.3. Changes in accounting policies
The accounting policies applied are consistent with those of the audited annual financial
statements for CCC for the year ended 31 March 2022.
3.4. Basis of consolidation
The Group consolidated financial statements consolidate those of the parent company and all its
controlled entities as of 31 March 2023. The Group controls an entity if it is exposed, or has
rights, to variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity.
All transactions and balances between Group companies are eliminated on consolidation,
including unrealised gains and losses on transactions between Group companies. Where
unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset
is also tested for impairment from a Group perspective. Amounts reported in the consolidated
financial statements of controlled entities have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of controlled entities acquired or disposed of
during the year are recognised from the effective date of acquisition, or up to the effective date
of disposal, as applicable.
ANNUAL REPORT 2023 Page 20
3.5. Foreign currency translation
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective
Group entity, using the exchange rates prevailing at the dates of the transactions (spot
exchange rate). Foreign exchange gains and losses resulting from the settlement of such
transactions and from the remeasurement of monetary items at year end exchange rates are
recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost
(translated using the exchange rates at the date of the transaction).
Foreign operations
In the Group consolidated financial statements, all assets, liabilities and transactions of Group
entities with a functional currency other than the NZD are translated into NZD upon
consolidation. The functional currencies of the entities in the Group have remained unchanged
during the reporting period.
On consolidation, assets and liabilities have been translated into NZD at the closing rate at the
reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity
have been treated as assets and liabilities of the foreign entity and translated into NZD at the
closing rate. Income and expenses have been translated into NZD at the average rate (the use
of average rates is appropriate only if rates do not fluctuate significantly) over the reporting
period. Exchange differences are charged/credited to other comprehensive income and
recognised in the currency translation reserve in equity. On disposal of a foreign operation the
cumulative translation differences recognised in equity are reclassified to profit or loss and
recognised as part of the gain or loss on disposal.
3.6. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the IRD. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis and, except for the
GST components of investing and financing activities, are disclosed as operating cash flows.
3.7. Revenue
Revenue arises mainly from the franchise rights and royalty arrangements that the Group has in
place with franchise holders. The Group also earns revenue from franchisees in the
establishment of their stores.
Under NZ IFRS 15, revenue from Contracts with Customers is recognised either at a point in
time or over time, or when (or as) the Group satisfies performance obligations by transferring the
promised goods or services to its customers.
The transaction price for a contract excludes any amounts collected on behalf of third parties.
The Group recognises contract liabilities for consideration received in respect of unsatisfied
performance obligations and reports these amounts as deferred revenue in the statement of
financial position.
ANNUAL REPORT 2023 Page 21
Royalty income from Franchise or Master Franchise Agreements (MFAs)
The Group recognises royalty revenue derived from its Franchises and MFAs at a point in time,
based on sales by Franchisees that are reported back to Company on a monthly basis for sales
that occurred in that month.
Franchise fees
The Group recognises revenue derived from its Country & Regional franchise operations on a
straight-line basis over a period of time that the franchise agreement is in place, which is
generally 10 years. This is the period of time over which the performance obligation is satisfied
.
The Group recognises revenue derived from
the Franchise Agreements entered into by
Triple Two Coffee at the point in time as
opposed to over a period of time. Triple Two
Coffee is a recently acquired master
franchisor in the UK. The Group has
considered, on the balance of facts, there is
only one performance obligation for the
contracts entered into by Triple Two. The
transaction price is the Franchisee Fee
charged in these contracts, includes three
levels, and has associated revenue
recognition.
Types of Franchises Revenue recognition
Standard franchise license
When franchisee staff are trained
Franchise license with variable management
services such as site location or store design
When additional management services are
provided
Franchise license with fitout as a “turn-key”
When store is opened and operational
Inactive stores
Management review on a periodic basis the
contracts relating to inactive stores. These
are defined as franchisees as no longer
able to open those new stores. The four
specific areas to determine inactivity are 1)
the agreement was signed more than 24
months from date determining if inactive 2)
funds received in cash 3) non-refundable
monies per the contract and 4) a specific
review of that particular store that there are
no circumstances of transfer or
arrangement with subsequent deals relating
to that franchisee or store. These are then
recognised as revenue at that point in time.
Significant financing components
Using the practical expedient in NZ IFRS 15, the Group does not adjust the promised amount
of consideration for the effects of a significant financing component if it expects, at contract
inception, the period between the transfer of the promised good or service to the customer and
when the customer pays for that good or service will be one year or less.
Other revenue
Other revenue includes services to independent franchisees or other third parties received by
the Group. Other revenues are recognised when reliable estimates of the amounts due to the
Group are deemed to be highly probable.
Grant Income & government subsidy
The accounting policy adopted is to recognise the grant income in the period to which the
underlying furloughed staff costs relate. The amount of the grant income (i.e., subsidy) is based
on the difference between the actual hours a staff member worked compared to their contracted
hours for a certain period. Therefore, within the period of the claim, it is deemed that the
conditions have been met to make a claim for that payroll accounting period.
ANNUAL REPORT 2023 Page 22
3.8. Business Combinations and Goodwill
The Group applies the acquisition method in
accounting for business combinations under
IFRS 3.
The consideration transferred by the Group to
obtain control of a subsidiary is calculated as
the sum of the acquisition-date fair values of
assets transferred, liabilities incurred and the
equity interests issued by the Group, which
includes the fair value of any asset or liability
arising from a contingent consideration
arrangement.
Acquisition costs are expensed as incurred.
The Group recognises identifiable assets
acquired and liabilities assumed in a business
combination at their acquisition-date fair
values.
Goodwill is stated after separate recognition of
identifiable intangible assets. It is calculated as
the excess of the sum of
a) fair value of consideration transferred,
b) the recognised amount of any non-
controlling interest in the acquiree and
c) acquisition-date fair value of any existing
equity interest in the acquiree, over the
acquisition-date fair values of identifiable net
assets. If the fair values of identifiable net
assets exceed the sum calculated above, the
excess amount (ie gain on a bargain purchase)
is recognised in profit or loss immediately.
Please refer to Note 31 for further details on
the Goodwill recognised in the acquisition of
Triple Two Coffee.
3.9. Income taxes
Tax expense recognised in the statement of
profit or loss comprises the sum of deferred tax
and current tax not recognised in other
comprehensive income, or directly in equity.
Current income tax assets and/or liabilities
comprise those obligations to or claims from
Tax authorities relating to the current or prior
reporting periods, that are unpaid at the
reporting date. Current tax is payable on
taxable profit, which differs from profit or loss in
the consolidated financial statements.
Calculation of current tax is based on tax rates
and tax laws that have been enacted or
substantively enacted by the end of the
reporting period.
Deferred income taxes are calculated using the
liability method on temporary differences
between the carrying amounts of assets and
liabilities and their tax bases. However,
deferred tax is not provided on the initial
recognition of an asset or liability unless the
related transaction is a business combination
or affects tax or accounting profit. Deferred tax
on temporary differences associated with
investments in controlled entities is not
provided if reversal of these temporary
differences can be controlled by the Group and
it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are
calculated, without discounting, at tax rates
that are expected to apply to their respective
period of realisation, provided they are enacted
or substantively enacted by the end of the
reporting period.
Deferred tax assets are recognised to the
extent that it is probable that they will be able
to be utilised against future taxable income,
based on the Group’s forecast of future
operating results which is adjusted for
significant non-taxable income and expenses
and specific limits to the use of any unused tax
loss or credit. Deferred tax liabilities are always
provided for in full.
Deferred tax assets and liabilities are offset
only when the Group has a right and intention
to set off current tax assets and liabilities from
the same taxation authority.
Changes in deferred tax assets or liabilities are
recognised as a component of tax income or
expense in the statement of profit or loss,
except where they relate to items that are
recognised in other comprehensive income or
directly in equity, in which case the related
deferred tax is also recognised in other
comprehensive income or equity, respectively.
ANNUAL REPORT 2023 Page 23
3.10. Employment benefits
Defined contribution plans
The Group pays fixed contributions into independent entities in relation to several state plans
and insurance arrangements for individual employees. The Group has no legal or constructive
obligations to pay contributions in addition to its fixed contributions, which are recognised as
an expense in the period that relevant employee services are received.
Short-term employee benefits
Short-term employee benefits, including annual leave entitlement, are current liabilities
included in employee benefits, measured at the undiscounted amount that the Group expects
to pay as a result of the unused entitlement.
3.11. Impairment testing of other intangible assets, property, plant and equipment
For impairment assessment purposes,
assets are grouped at the lowest levels for
which there are largely independent cash
inflows (cash-generating units). As a result,
some assets are tested individually for
impairment and some are tested at cash-
generating unit level. All other individual
assets or cash-generating units are tested
for impairment whenever events or changes
in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for the
amount by which the asset’s or cash-
generating unit's carrying amount exceeds
its recoverable amount, which is the higher
of fair value less costs to sell and value-in-
use. Any reversal of an impairment loss will
be limited to what the carrying amount
would have been, net of depreciation or
amortisation, if no impairment had taken
place. To determine the value-in-use,
management estimates expected future
cash flows from each cash-generating unit
and determines a suitable interest rate in
order to calculate the present value of those
cash flows. The data used for impairment
testing procedures are directly linked to the
Group’s latest approved budget, adjusted
as necessary to exclude the effects of future
reorganisations and asset enhancements.
Discount factors are determined individually
for each cash-generating unit and reflect
management’s assessment of respective
risk profiles, such as market and asset-
specific risks factors.
Impairment losses for cash-generating units
is charged pro rata to the other assets in the
cash-generating unit. All assets are
subsequently reassessed for indications
that an impairment loss previously
recognised may no longer exist. An
impairment charge is reversed if the cash-
generating unit’s recoverable amount
exceeds its carrying amount.
3.12. Financial instruments
A financial instrument is recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets are derecognised when the Group’s contractual
rights to the cash flows from the financial assets expire or when the Group transfers the
financial asset to another party without retaining control or substantially all risks and rewards
of the asset. Ordinary purchases and sales of financial assets are accounted for at trade
date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial
liabilities are derecognised when the Group’s obligations specified in the contract expire or
are discharged or cancelled.
ANNUAL REPORT 2023 Page 24
Financial assets
Following NZ IFRS 9 treatment, the Group classifies its financial assets as those to be
measured at amortised cost (loans, trade receivables and lease receivables), and those to be
measured at fair value either through OCI or through profit or loss.
Financial assets that are stated at amortised cost are reviewed individually at balance date. In
relation to the impairment of financial assets, NZ IFRS 9 requires an expected credit loss
model (‘ECL’). The expected credit loss model requires the Group to account for expected
credit losses and changes in those expected credit losses at each reporting date to reflect
changes in credit risk since initial recognition of the financial assets i.e. a credit event does
not have to have occurred before credit losses are recognised. The Group has adopted the
simplified method for its ECL calculations. Refer to Note 28.2 Credit Risk.
Non-derivative financial instruments
Non-derivative financial instruments comprise trade receivables, other debtors, cash and
cash equivalents and loans and borrowings, which are initially recognised at fair value plus
transaction costs and subsequently measured at amortised cost.
Creditors and accruals are initially recognised at fair value and subsequently measured at
amortised cost.
Interest income and expense
Interest income and expenses are reported on an accrual basis using the effective interest
method.
3.13 Intangible assets
Recognition of intangible assets
Acquired intangible assets
Trademarks, global IP rights and rights
acquired in a business combination that
qualify for separate recognition are initially
recognised as intangible assets at their fair
values.
Subsequent measurement
Intangible assets not of an indefinite life are
accounted for using the cost model whereby
capitalised costs are amortised on a
straight-line basis over their estimated
useful lives, as these assets are considered
finite. Residual values and useful lives are
reviewed at each reporting date. In addition,
they are subject to impairment testing as
described in Note 3.11. As of 31 March
2023, the remaining useful life for
Trademark is 4 years and the useful life for
Franchise System is 10 years.
Intangible assets (Global IP rights) of an
indefinite life are tested for impairment
annually by comparing their carrying
amount with their recoverable amount. An
estimate of an assets recoverable amount
made in a preceding period may be used in
the impairment test for that asset in the
current period provided certain criteria are
met.
When an intangible asset is disposed of, the
gain or loss on disposal is determined as
the difference between the proceeds and
the carrying amount of the asset and is
recognised in profit or loss within other
income or other expenses.
ANNUAL REPORT 2023 Page 25
3.14 Property, plant and equipment
Property, plant and equipment (comprising
fittings and furniture, plant and equipment
and motor vehicles) are initially recognised
at acquisition cost or manufacturing cost,
including any costs directly attributable to
bringing the assets to the location and
condition necessary for them to be capable
of operating in the manner intended by the
Group’s management.
Property, plant and equipment are
subsequently measured using the cost
model: cost less subsequent depreciation
and impairment losses.
Depreciation is recognised on a straight-line
basis to write down the cost less estimated
residual value of property, plant and
equipment. The following useful lives are
applied:
• Computer equipment: 2 - 5 years
• Furniture and fittings: 3 - 12 years
• Plant and equipment: 3 - 12 years
• Motor vehicles: 5 - 8 years.
Material residual value estimates and
estimates of useful life are updated as
required, but at least annually.
Gains or losses arising on the disposal of
plant and equipment are determined as the
difference between the disposal proceeds
and the carrying amount of the assets and
are recognised in the statement of profit or
loss within other income or other expenses.
3.15 Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are
classified as held for sale if their carrying
amount will be recovered principally through
a sale transaction rather than through
continuing use and a sale is considered
highly probable. They are measured at the
lower of their carrying amount and fair value
less costs to sell, except for assets such as
deferred tax assets, assets arising from
employee benefits, financial assets and
investment property that are carried at fair
value and contractual rights under
insurance contracts, which are specifically
exempt from this requirement.
An impairment loss is recognised for any
initial or subsequent write-down of the asset
(or disposal group) to fair value less costs to
sell. A gain is recognised for any
subsequent increases in fair value less
costs to sell of an asset (or disposal group),
but not in excess of any cumulative
impairment loss previously recognised. A
gain or loss not previously recognised by
the date of the sale of the non-current asset
(or disposal group) is recognised at the date
of derecognition.
Non-current assets (including those that are
part of a disposal group) are not
depreciated or amortised while they are
classified as held for sale. Interest and other
expenses attributable to the liabilities of a
disposal group classified as held for sale
continue to be recognised
Non-current assets classified as held for
sale and the assets of a disposal group
classified as held for sale are presented
separately from the other assets in the
balance sheet. The liabilities of a disposal
group classified as held for sale are
presented separately from other liabilities in
the balance sheet.
A discontinued operation is a component of
the entity that has been disposed of or is
classified as held for sale and that
represents a separate major line of
business or geographical area of
operations, is part of a single co-ordinated
plan to dispose of such a line of business or
area of operations, or is a subsidiary
acquired exclusively with a view to resale.
The results of Group operations are
presented separately in the statement of
profit or loss.
ANNUAL REPORT 2023 Page 26
3.13. Equity, reserves and dividend payments
Share capital represents the
consideration received for shares that
have been issued. Any transaction costs
associated with the issuing of shares are
deducted from share capital, net of any
related income tax benefits.
Other components of equity include the
following:
• Foreign currency translation reserve
– comprises foreign currency
translation differences arising on the
translation of consolidated financial
statements of the Group's foreign
entities into NZD (see Note 3.6),
• Share based payment reserve,
• Accumulated losses include all
current and prior period results.
Dividend distributions payable to equity
shareholders are included in other
liabilities when the dividends have been
approved in a general meeting prior to
the reporting date.
All transactions with owners of the parent
are recorded separately within equity.
3.17 Significant management judgement in applying accounting policies and
estimation uncertainty
When preparing the consolidated financial statements, management undertakes a number of
judgements, estimates and assumptions about the recognition and measurement of assets,
liabilities, income and expenses as follows:
Intangible assets
Intangible assets are recognised on business combinations if they are separable from the
acquired entity or give rise to other contractual/legal rights under IFRS3. The amounts of
intangibles are estimated by using appropriate valuation techniques. The useful economic life
of externally acquired intangible assets are initially recognised at cost and subsequently
amortised on a straight-line basis over their useful economic lives. Please refer to Note 31 for
the intangible assets recognised from the acquisition of Triple Two Coffee.
Contingent consideration
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation
to pay contingent consideration that meets the definition of a financial instrument is classified
as equity, then it is not remeasured, and settlement is accounted for within equity. Otherwise,
other contingent consideration is remeasured at fair value at each reporting date and
subsequent changes in the fair value of the contingent consideration are recognised in profit or
loss.
The Group has measured its contingent consideration in relation to the earn-out provision for
Triple Two Coffee acquisition based on the budgeted EBITDA for the calendar years from 2020
to 2022 as approved by the management. Please refer to Note 31 for the contingent
consideration recognised from the acquisition of Triple Two Coffee.
ANNUAL REPORT 2023 Page 27
Impairment on Goodwill
The Group is required to test, at least on an annual basis, whether goodwill has suffered any
impairment. Impairment loss incurred when the carrying amount of the goodwill more than its
recoverable amount. The Group has determined the recoverable amount based on its value in
use, being the budgeted cashflow at the Cash Generating Unit (CGU) level. The Group has
determined the Goodwill at the CGU level, being the Triple Two Coffee Group as this is the
smallest identifiable group of assets that generates cash inflows that are largely independent
of the IP rights of the franchise system of Triple Two Coffee. Please refer to Note 15 for further
disclosure of the impairment on Goodwill.
Going concern
The considered view of the Board of Directors of the Company is that, after making enquiries,
we have a reasonable expectation that Cooks Coffee Company Limited (the Company) and
Group have access to adequate resources to continue operations for the foreseeable future.
For this reason, the Board of Directors considers the adoption of the going concern assumption
in preparing the consolidated financial statements for the FY23 to be appropriate. (See Note 4).
Deferred Costs
The Group estimates the amount of direct labour costs pertaining to pre-opened franchises and
in accordance with IFRS 15.
Leases
Extension and termination options
Extension and termination options are
included in a number of leases across the
Group. These terms are used to
maximise operational flexibility in terms of
managing contracts. The majority of
extension and termination options held
are exercisable only by the Group and not
by the respective lessor.
Critical judgements in determining the
lease term
In determining the lease term,
management considers all facts and
circumstances that create an economic
incentive to exercise an extension option,
or not exercise a termination option.
Extension options (or periods after
termination options) are only included in
the lease term if the lease is reasonably
certain to be extended (or not
terminated).
The assessment is reviewed if a
significant event or a significant change in
circumstances occurs which affects this
assessment and that is within the control
of the lessee.
Incremental borrowing rates
Lease liabilities are measured by
discounting the lease payments using the
interest rate implicit in the lease. If that
rate cannot be readily determined, which
is generally the case for leases in the
Group, the lessee’s incremental
borrowing rate is used, being the rate that
the individual lessee would have to pay to
borrow the funds necessary to obtain an
asset of similar value to the right-of-use
asset in a similar economic environment
with similar terms, security and
conditions.
To determine the incremental borrowing
rate, the Group:
• Uses a build-up approach that starts
with a risk-free interest rate, adjusted for
the credit risk spread of the lessee. The
credit risk spread is determined by
reference to recent third-party financing
received by the individual lessee, or
indicative quotes obtained from the
lessee’s primary lender.
• Make adjustments specific to the lease,
e.g. term, security, country and currency.
ANNUAL REPORT 2023 Page 28
Impairment testing of intangible assets
In assessing impairment, management estimates the recoverable amount of each asset or
cash-generating unit based on various valuation models as deemed appropriate. Estimation
uncertainty relates to assumptions and judgements used as disclosed in Note 15.
Carrying value of receivables
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue
and makes assumptions to allocate an overall expected credit loss rate for each group. In
making this judgement, the Group evaluates amongst other factors whether there is objective
evidence of significant financial difficulty of individual customers or customer groups, whether
there has been breach of contract such as default in payment terms, whether it has become
probable that the customer or other party will enter into bankruptcy or other financial
reorganisation, the disappearance of an active market for that customer because of financial
difficulties, and national or local economic conditions that could impact on the customer (see
Notes 11 and 28.2). Apart from historical collection rates, the Group also evaluates forward-
looking information that is available. The allowance for expected credit losses, as disclosed in
Note 28.2, is calculated based on the information available at the time of preparation. The
actual credit losses in future years may be higher or lower.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the
probability of the Group’s future taxable income against which the deferred tax assets can be
utilised. In addition, significant judgement is required in assessing the impact of any legal or
economic limits or uncertainties in various tax jurisdictions (See Note 9).
4. Going concern
The Group reported a loss for
continuing operations of
$3,220,000 (2022: $90,000) and
operating net cash
inflows/(outflows) of ($484,000)
(2022: ($632,000) for FY23.
As at 31 March 2023, the Group
has reported Net Assets of
$1,413,000 (2022: $2,398,000)
and current liabilities exceed
current assets by an amount of
$6,263,000 (2022: $7,469,000).
Included in current liabilities is
$806,000 of Deferred Revenue.
The deferred revenue is a non-
cash item and will be recognised in
revenue as the Group’s
franchisees open stores or when
the services are provided.
The ability of the Group to pay its debts as they fall due and to realise their assets and extinguish
their liabilities in the normal course of business at the amounts stated in the consolidated
financial statements and to continue trading has been considered by the Directors in the adoption
of the going concern assumption during the preparation of these financial statements.
ANNUAL REPORT 2023 Page 29
The Directors forecast that the Group can manage its cash flow requirements at levels
appropriate to meet its cash commitments for the foreseeable future being a period of at least 12
months from the date of authorisation of these consolidated financial statements. In reaching this
conclusion, the Directors have considered the achievability of the plans and assumptions
underlying those forecasts. The key assumptions include:
• Opening multiple new stores in the
United Kingdom & Ireland in FY24, with
six sites already opened in the first
quarter.
• The successful conclusion of existing
negotiations for new Esquires Regional
Developers.
• Improvement in economic activity in the
United Kingdom and Ireland and the
continued lift in store revenue levels.
• The Group has a Cash position of
$445,000 as at 31 March 2023.
• Budget for the FY24 projects a positive
cash inflow of $600,000.
• An allowance for the payment of related
party loans as well as institutional debt.
• The Group’s ability to successfully
conclude present discussions regarding
the roll-over of existing debt as well as
continued capital raises in both New
Zealand and the United Kingdom.
• The Group’s ability to raise debt or
equity funds to re-gear the balance
sheet as part of an overall restructuring
plan.
• The ability of related parties of Keith
Jackson to continue to provide funding
as required, and market conditions
which the Group operates in.
The Directors have reasonable expectation that the Group has sufficient headroom in its cash
resources and shareholder support to allow the Group to continue to operate for the
foreseeable future or alternatively it can manage its working capital requirements to create
additional required headroom.
Any significant departure from the above assumptions may create a material uncertainty over
the ability to continue as a going concern for the foreseeable future.
Whilst the Directors acknowledge that there are capital raising, credit, exchange and liquidity
risks in the global economic market in which the Group operates, they are confident that
additional capital or funding will be sourced by the Group. In particular, the Directors received
a confirmation from related parties of Keith Jackson, that they will continue to financially
support the Group for the foreseeable future. They note the Group has a track record of
obtaining financial support from cornerstone investors and related parties and, where
necessary, negotiating the deferment of debt repayments.
The Directors are also confident that operating cash flows will continue to improve because of
the recovery from the various government-imposed restrictions related to Covid-19,
restructuring activities that have been undertaken along with reductions in corporate office
costs, to reduce the extent of cash outflow and improve profitability.
The Directors continue to consider other opportunities to further improve the Group’s cash
position which include discussing collaborations with partners overseas, negotiations with
potential strategic equity partners, investigating new facility lines, ongoing discussions in the
UK and Ireland relating to potential acquisitions, rationalising the business wherever possible
to concentrate on core business activity and greater focus on improving existing core business
activities.
After considering all available information, the Directors have concluded that there are
reasonable grounds to believe that the forecasts and plans are achievable, the Group will be
ANNUAL REPORT 2023 Page 30
able to pay its debts as and when they become due and payable, there is sufficient headroom
in available cash resources, and the basis of preparation of the financial report on a going
concern basis is appropriate.
Should the Group be unable to continue as a going concern it may be required to realise its
assets and discharge its liabilities other than in the normal course of business and at amounts
different to those stated in the consolidated financial statements. The consolidated financial
statements do not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount of liabilities that might result should the Group be
unable to continue as a going concern and meets its debts as and when they fall due.
5.Revenue
The Group’s revenue is analysed as follows for each major category:
Continuing Operations
Discontinued Operations
31-Mar
31-Mar
31-Mar
31-Mar
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Recurring store franchise fees (royalties,
incentives etc)
3,756
3,271
-
(14)
New store construction & fitout income
1,533
1,780
-
257
Franchise fees
1,307
1,872
-
-
Sale of food & beverage
17
449
464
377
Group revenue
6,613
7,372
464
620
Franchise fees
Included in franchise fees is the amortisation of deferred revenue related to the
sale of country and regional franchises and store franchises. During FY23, the
Group’s franchisees opened 16 new stores (2022: 16).
Grant income
In FY23, there was grant income of $295,000 relating to the wage subsidy from the
Ireland Government due to Covid-19 pandemic. In FY22 there was grant income of
$449,000 relating to the wage subsidy from Governments due to Covid-19 pandemic
in the United Kingdom, Ireland, and New Zealand.
Release of liabilities
The Group has analysed trade payables with a view of debt that is no longer
payable and has released prior period expenses in FY2023. In addition, other
borrowings have been reviewed in detail, and amounts that are no longer payable
due to non-performance counterparties, have been released to the profit and loss
during FY2023.
31-Mar31-Mar
20232022
$'000$'000
Release of liabilities
Trade and other payables102-
Other liabilities235-
ANNUAL REPORT 2023 Page 31
6. Employee costs
Expenses recognised for employee costs are analysed below:
Continuing Operations
Discontinued Operations
31-Mar
31-Mar
31-Mar
31-Mar
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Wages, salaries
2,230
2,096
181
306
Defined contribution funds
65
44
3
3
Other staff costs
219
301
13
10
Employee remuneration
2,514
2,442
197
319
7. Other expenses
Expenses recognised as other costs are analysed below:
Continuing OperationsDiscontinued Operations
31-Mar31-Mar31-Mar31-Mar
2023202220232022
$'000$'000$'000$'000
Administration and other costs 560858199313
Directors fees 14492--
Selling, marketing and distribution costs 53748154
Management fees240240--
Professional and consulting services418387212
Travel costs547422--
Other expenses2,4462,480206329
8. Finance costs
Finance costs for the reporting periods consist of the following:
ANNUAL REPORT 2023 Page 32
9. Income Tax and Deferred Tax
The major components of tax expense and the reconciliation of the expected tax expense
/credit based on the domestic effective tax rate of Cooks Coffee Company Limited at 28%
and the reported tax expense/credit in profit or loss are as follows:
31-Mar31-Mar
20232022
$'000$'000
Profit/(Loss) before tax from continuing operations(3,333)(200)
Loss before tax from discontinuing operations(96)(348)
(3,429)(548)
Domestic tax rate for Cooks Coffee Company Limited28%28%
Expected tax expense (income)(960)(153)
Adjustment for tax-rate differences in foreign
jurisdictions5(61)
Adjustment for non-deductible expenses:
Relating to amortisation of intangible assets775-
Other non-deductible expenses245218
Actual tax expense (income)654
Tax expense (income) comprises:
Current tax expense (income)65(25)
Deferred tax expense (income):
- Origination and reversal of temporary differences-(14)
- Temporary difference relating to amortisation of
intellectual property on acquisition
112(129)
- Tax losses adjustment to prior period(134)75
- Tax Losses not recognised158107
- Unrecognised Tax Losses(314)(124)
Income tax expense (income)(113)(110)
Income tax expense (income) is attributable to:
Loss from continuing operations(113)(110)
Loss from discontinued operations- -
(113)(110)
The Group has computed tax losses within each jurisdiction since acquisition as follows:
31-Mar31-Mar
20232022
$'000$'000
Cash at bank and in hand denominated in:
NZD8222
EUR73101
GBP364833
Cash and cash equivalents4451,156
ANNUAL REPORT 2023 Page 33
At 31 March 2023, the Group has deferred tax liabilities relating to acquired Franchise System
in the UK amounting to $1.31m (FY22: $1.14m). The deferred tax liabilities are not expected to
crystallise within the next 12 months.
10. Cash and cash equivalents
Cash and cash equivalents consist of the following:
31-Mar
31-Mar
2023
2022
$'000
$'000
Cash at bank and in hand denominated in:
NZD
8
222
EUR
73
101
GBP
364
833
Cash and cash equivalents
445
1,156
There are no restrictions on the cash and cash equivalents.
The Group had no overdraft banking facilities as at 31 March 2023 (2022: $NIL).
11. Trade and other receivables and other current assets
Trade and other receivables are initially
recognised at the fair value of the amounts
to be received, plus transaction costs (if
any).
The Group has recognised expected credit
losses in the Statement of Profit or Loss
and Other Comprehensive Income by
applying the simplified impairment
approach, whereby upon initial
measurement of the trade receivables, the
Group considers all credit losses that are
expected to occur during the lifetime of the
receivable. The Group has reviewed the
historical ageing analysis of gross trade
receivables and considered forward
looking macro-economic factors, by
geographic region, to determine the
expected credit loss rate. This rate is
applied to outstanding gross trade
receivables as at 31 March 2023 to
calculate the allowance for expected credit
losses.
(a) Trade and other receivables consist of the following:
31-Mar31-Mar
20232022
$'000$'000
Trade and other receivables
Trade receivables1,5491,622
Less: provision for expected credit losses(226)(378)
Net trade and other receivables 1,3231,244
Movements in provision
Opening Balance(378)(151)
Bad Debts write-off--
Release/(Additional provision) for expected credit losses152(227)
Closing Balance(226)(378)
ANNUAL REPORT 2023 Page 34
31-Mar
31-Mar
2023
2022
$'000
$'000
Impairment loss on receivables comprises of:
Release/(Additional provision) for expected credit losses
152
(227)
Bad debts written off
(600)
-
Impairment loss on receivables
(448)
(227)
Debtors are reviewed each quarter and an assessment made of recoverability of all balances
90 days or older. Consideration is taken of any corresponding creditor balances, discussions
to date with the debtor, payment plans agreed and being honoured. Based on this review, a
provision for doubtful debts from 15% to 50% of the outstanding debt may be applied. At
subsequent quarterly debtor reviews further provisioning up to 25% a time will be applied
depending on an assessment of the likelihood of the debtor to clear the balance.
(b) As at 31 March the ageing of trade receivables is as follows:
31-Mar
31-Mar
2023
2022
$'000
$'000
Trade receivables
Current
283
53
31 to 60 days
151
103
61 to 90 days
220
221
> 90 days
895
1,245
Trade receivables
1,549
1,622
(c) Other current assets consist of the following:
31-Mar
31-Mar
2023
2022
$'000
$'000
Prepayments
208
304
Deferred Costs
186
254
Other short-term assets
401
30
Other current assets
795
588
Deferred Costs represent project costs capitalised against revenue that has not yet been
earned by Triple Two Coffee. Please refer to Note 12. Other short-term assets consist mainly
of sundry debtors and refundable deposits due within the next 12 months. Included in sundry
debtors is a $255k receivable from a related party with respect to issued capital not yet paid.
The full amount was received subsequent to year end. See Notes 20.1 and 24.1.
12. Deferred Costs
Triple Two under their contract of service with their franchisees have staff working on specific
projects and contracts to expand their brand through these franchisees. The performance
obligation (under IFRS 15) is attributed to the opening of a store and/or specific obligations if
ANNUAL REPORT 2023 Page 35
shopfit income is not stipulated. The deferred costs are from the specific staff who work to
complete these performance obligations or contribute their time to the specific contracts.
Under this methodology, wage costs of personnel directly related to the services (and for
valuation purposes their salary) and direct costs has been capitalised in line with store openings
and contracts entered in to with various franchisees and has been recorded as deferred costs
in the Balance Sheet. This includes staff and project management, property design and
training.
13. Assets and liabilities classified as held-for-sale
and discontinued operations
There is 1 remaining site operated by the Group in the UK. The Group is negotiating the store
lease and intends to exit in FY24.
Financial performance and cash flow information of discontinued
operations
The financial performance and cash flow information presented are for the year ended FY23
and FY22.
31-Mar31-Mar
20232022
$'000$'000
Results of discontinued operation
Revenue464620
Other income--
Raw materials and consumables used(149)(183)
Depreciation and amortisation(3)(100)
Employee costs(198)(319)
Other expenses(205)(329)
Operating loss(91)(311)
Finance costs(3)(3)
Interest on bank and other borrowings(2)(34)
Loss before income tax(96)(348)
Income tax (expense)/credit-(100)
Loss for the year from discontinued operation(96)(448)
Cash flows used in discontinued operation
Net cash used in operating activities(90)(138)
Net cash used in investing activities--
Net cash used in financing activities--
Net cash flows for the year(90)(138)
ANNUAL REPORT 2023 Page 36
14. Interests in other entities
Interests in material subsidiaries
Country
Principal activity
2023
2022
Bishops Café Limited
England
100
100
Food and beverage
Esquires Coffee UK Limited
England
100
100
Food and beverage
Esquires Real Estate (UK) Limited
England
100
100
Store Lease Holding
Esquires Coffee Houses Ireland Limited
Ireland
100
100
Food and beverage
Esquires Coffee Houses Europe Limited
Ireland
100
100
Master Franchisor - Holding Master Franchise
Agreement
Triple Two Holdings Limited
UK
100
100
Holding Company
Triple Two Coffee Franchise Limited
UK
100
100
Master Franchisor - Holding Master Franchise
Agreement
TTC Contractors Limited
UK
100
100
Fit Out and Construction
% Holding
15. Intangible Assets
The Group acquired trademarks, Global Intellectual Property rights (“Global IP Rights”),
Franchise Rights and Goodwill through business acquisitions.
Trademarks
Global IP
Rights
Franchise
Rights
Total
$'000
$'000
$'000
$'000
Cost
Balance at 1 April 2021
93
3,245
4,950
8,288
Additions
-
-
91
91
Balance at 31 March 2022
93
3,245
5,041
8,379
Additions
-
-
-
-
Balance at 31 March 2023
93
3,245
5,041
8,379
Accumulated amortisation
Balance at 1 April 2021
(73)
(434)
(286)
(793)
Amortisation charge for the year
-
-
(324)
(324)
Balance at 31 March 2022
(73)
(434)
(610)
(1,117)
Amortisation charge for the year
-
-
(381)
(381)
Balance at 31 March 2023
(73)
(434)
(991)
(1,498)
Carrying amounts
At 31 March 2022
20
2,811
4,431
7,262
At 31 March 2023
20
2,811
4,050
6,881
Management assessed the recoverable amounts of the Group’s Global IP Rights asset using
‘value in use’ calculations to assess for any impairment.
Global IP rights were tested for impairment using discounted cash flow projections based on
management approved forecasts for a 2-year period.
ANNUAL REPORT 2023 Page 37
Key assumptions in the models were:
• FY24 reflects a full recovery to pre-Covid levels in UK and Ireland markets with the key
assumption being that there will be
• no more long-term lockdowns that will
impact on the ability of the franchise
store network to operate in a normal
manner. Store openings contribute to
one-off income and royalties and
marketing fees based off existing and
new stores (16 new stores in United
Kingdom and 2 in Ireland);
• FY25 year on year revenue growth that
relates to FY23 being a full year of
“normal trading” in core markets and the
benefits of the new store acquisition
program (20 new stores in United
Kingdom and 4 in Ireland);
• Long term growth rate of 2.0% per
annum from FY24 onwards;
• exchange rates of 0.60 (NZD/EURO)
and 0.51 (NZD/GBP); and
• a discount rate of 13.2% per annum.
Based on this work the recoverable amount
($4.8m) for Global IP rights was assessed by
management to be above its existing
carrying value with no impairment required.
Management’s assessment is that a change
in a key assumption would not impact the
carrying value to exceed the recoverable
amount.
Goodwill:
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment.
The carrying amount of Goodwill is allocated to Triple Two Coffee as the separate cash
generated unit (CGU). Recoverable amount is determined based on the “value in use”
calculations for Triple Two Coffee. The use of this method requires the estimation of future cash
flows for projected 2 years and the determination of a discount rate in order to calculate the
present value of the cash flows.
Goodwill
$'000
Cost
Balance at 1 April 202211,569
Additions-
Balance at 31 March 202311,569
Impairment(5,983)
FX Translation Adjustment(129)
Balance at 31 March 20225,457
Impairment(2,497)
FX Translation Adjustment112
Balance at 31 March 20233,072
Carrying amounts
At 31 March 20225,457
At 31 March 20233,072
ANNUAL REPORT 2023 Page 38
The key assumptions in the models were:
• 6 new franchisee stores opened in FY24 and
FY25, and 7 in FY26;
• FY24 reflects a full recovery to pre-
Covid levels in UK with the key
assumption being a lower number of
franchisees sold (than forecast in prior
years) as the business is restructured
to transition to a model with a lesser
reliance on non-recurring new store
revenue streams. Recurring revenue
streams such as royalties to represent
a stronger focus than in the past
especially as the business builds an
expanded network of stores;
• FY25 and FY26 builds on prior year new store
growth (increasing the royalty revenue stream)
but assumes a similar level of new franchisee
store growth as a key assumption;
• Long term growth rate of 2.0% per annum
from FY24 onwards;
• exchange rates of 0.51 (NZD/GBP); and
• a post-tax discount rate of 14.7% per annum.
Based on this work the recoverable amount for Goodwill was assessed by management to be
lower than its existing carrying value. This reflects a poorer trading result in FY23 due to a
lesser number of new store openings than originally forecast and a resulting revision to
forecasts to reflect more conservative new store opening numbers in FY24 – FY26 and the
operational improvements underway in the business. At 31 March 2023, the value in use of
the Triple Two Coffee CGU is $4,772,983 (£2,415,607).
16. Property, plant and equipment
Furniture &
Fittings
Plant &
Equipment
Computer
Equipment
Motor
VehiclesTotal
$'000$'000$'000$'000$'000
Cost
Balance at 1 April 20213124014723441
Additions19-6339121
Disposals(15)(36)-(6)(57)
Balance at 31 March 20223520421056505
Balance at 1 April 20223520421056505
Additions121923256
Disposals(34)(99)(31)(44)(208)
Balance at 31 March 20231312420214353
Accumulated depreciation
Balance at 1 April 2021(36)(212)(115)(2)(365)
Depreciation(3)(5)(18)(10)(36)
Disposals11287-46
Balance at 31 March 2022(28)(189)(126)(12)(355)
Balance at 1 April 2022(28)(189)(126)(12)(355)
Depreciation(1)(18)(26)(4)(49)
Disposals271144210193
Balance at 31 March 2023(2)(93)(110)(6)(211)
Carrying amounts
At 31 March 20227158444150
At 31 March 20231131928142
ANNUAL REPORT 2023 Page 39
17. Trade and other payables
Trade and other payables recognised are all short-term and consist of the following:
31-Mar
31-Mar
2023
2022
Trade and other payables
$'000
$'000
- Trade payables
3,138
2,323
- Related party payables
441
723
- Other payables
861
1,472
Trade and other payables
4,440
4,518
Trade payables
Within Terms
895
496
Overdue
2,243
1,827
Trade payables
3,138
2,323
The carrying value of trade and other payables classified as financial liabilities measured at
amortised cost approximates fair value. Refer to Note 28.1 on foreign currency risk.
18. Deferred revenue
Below is the breakdown of the current and non-current deferred revenue as presented in
the Balance Sheet.
$'000
$'000
$'000
Opening balance as of 1 April 2021
6,728
228
6,956
Additions/(Decreases) during the year
(1,066)
-
(1,066)
Recognised as:
Franchise fees during the year
(1,872)
(58)
(1,930)
New store construction & fitout income
during the year
(1,368)
-
(1,368)
Closing balance as of 31 March 2022
2,422
170
2,592
- Current
2,277
58
2,335
- Non Current
145
112
257
$'000
$'000
$'000
Opening balance as of 1 April 2022
2,422
170
2,592
Additions/(Decreases) during the year
1,480
-
1,480
Recognised as:
Franchise fees during the year
(1,307)
(130)
(1,437)
New store construction & fitout income
during the year
(1,014)
-
(1,014)
Closing balance as of 31 March 2023
1,581
40
1,621
- Current
1,497
10
1,507
- Non Current
84
30
114
Total
Global
Franchising &
Design
UK & Ireland
Franchising
UK & Ireland
Franchising
Global
Franchising &
Design
Total
ANNUAL REPORT 2023 Page 40
As part of the revenue recognition policy of inactive stores (refer Note 3.7), $841,000 (2022:
$779,000) was recognised in the profit and loss during the year. $1,581,000 (2022:
$2,422,000) remains outstanding as currently unsatisfied performance obligations.
19. Borrowings and other liabilities
Current
Non-Current
Current
Non-Current
2023
2023
2022
2022
$'000
$'000
$'000
$'000
Borrowings
Finance Loans
1,242
350
2,017
468
Related Party Loans*
866
1,033
875
1,053
2,108
1,383
2,892
1,521
Other liabilities
Hire Purchase
-
-
3
-
Payable for acquisition of Triple Two Coffee
560
-
562
-
560
-
565
-
Borrowings and other liabilities
2,668
1,383
3,457
1,521
* Further information relating to related party loans and other related party liabilities are set
out in Note 24.
During the 2022 year $2,000,000 (Nikau Trust) and $63,000 (Weihai Station) of related
party debt was converted to share capital.
Fair value
The fair value of current borrowings approximates to the carrying amount and the impact of
discounting is not significant.
20. Equity
20.1 Share Capital
The share capital of Cooks Coffee Company Limited consists of issued ordinary shares. All
shares are equally eligible to receive dividends and the repayment of capital. The shares have
no par value.
Movements of share capital31-Mar-2331-Mar-22
Number of Shares issued:No. of SharesNo. of Shares
Ordinary shares opening balance53,059,495627,833,831
Ordinary shares issued7,666,854103,317,794
Ordinary shares consolidation-(678,092,130)
Total ordinary shares authorised at 31 March60,726,34953,059,495
Movements of share capital31-Mar-2331-Mar-22
Value of Shares issued:$'000$'000
Ordinary shares opening balance56,89752,220
Ordinary shares issued less share issue expenses1,4484,677
Total ordinary shares authorised at period end58,34556,897
ANNUAL REPORT 2023 Page 41
During the year ended FY23, the company issued 7,666,854 new shares (2022: 53,059,495)
bringing the total issued shares to 60,726,349. The company now has 59,519,349 quoted shares
and 1,207,000 non-voting shares on issues. There were no shares cancelled during FY23
(FY22: Nil).
During the FY22 year, Esquires UK purchased the shares from the existing Triple Two Coffee
Group shareholders for $879,000. This does not form part of share capital, but forms part of other
reserves within the consolidated group.
20.2 Loss per share
The calculation of basic and diluted loss per share for the year ended FY23 was based on the
weighted average number of ordinary shares on issue. The calculation of diluted earnings per
share for the year ended FY23 was based on the weighted average number of ordinary
shares.
31-Mar-23
31-Mar-22
Weighted average ordinary shares issued
55,526,579
631,060,729
Weighted average potentially dilutive options issued
-
-
Basic and diluted loss per share (New Zealand Cents)
from continuing and discontinued operations:
(5.97)
(0.07)
Basic and diluted loss per share (New Zealand Cents)
from continuing operations:
(5.80)
(0.01)
Basic and diluted loss per share (New Zealand Cents)
from discontinued operations:
(0.17)
(0.06)
Net tangible assets per share (New Zealand Cents)
(12.36)
(17.30)
The weighted average numbers of shares are calculated below:
Weighted average number of shares31-Mar-2331-Mar-22
Number of Shares issued:No. of SharesNo. of Shares
Ordinary shares opening balance53,059,495602,412,181
Ordinary shares issued2,467,08428,648,549
Ordinary shares bought back on-market and cancelled--
Total ordinary shares authorised at 31 March55,526,579631,060,729
Due to the share consolidation, a retrospective adjustment to the loss per share is outlined below
based on the ordinary shares at 31 March 2022 being 53,059,495.
ANNUAL REPORT 2023 Page 42
31-Mar-23
31-Mar-22
Ordinary shares issued
60,726,349
53,059,495
Basic and diluted loss per share (New Zealand Cents)
from continuing and discontinued operations:
(5.46)
(0.83)
Basic and diluted loss per share (New Zealand Cents)
from continuing operations:
(5.30)
(0.17)
Basic and diluted loss per share (New Zealand Cents)
from discontinued operations:
(0.16)
(0.66)
Net tangible assets per share (New Zealand Cents)
(12.36)
(17.30)
20.3 Share based payment reserve
Movement in Share based payment reserve
31-Mar
31-Mar
2023
2022
$'000
$'000
Esquires Coffee Ireland Limited share-based payment
Opening balance
2,401
2,401
Amount expensed during current vesting period
-
-
Adjustment on best available estimate
-
-
Closing balance
2401
2,401
• No earn-out payment has been made as at 31 March 2023.
• The earn-out payment will be settled by the issue of Cooks shares.
20.4 Shares held by ESOP / Treasury shares
There were 3,888,837 shares held on trust
at 31 March 2023 (3,388,837 at 31 March
2022).
The shares held by the ESOP are expected
to be issued under share option contracts.
The shares are held for the intention of
share conversions to be executed in FY24.
Consideration paid/received for the
purchase/sale of treasury shares is
recognised directly in equity.
21 Leases
The Group leases stores and office premises from various third-party landlords and
subsequently re-lease them to the franchisees under separate lease contracts. This lease
arrangement is limited to the franchises in the UK and Ireland only. Lease contracts are
typically made for fixed periods of 5 to 10 years but may have extension options. Lease terms
are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants, but leased assets may not be
used as security for borrowing purposes.
ANNUAL REPORT 2023 Page 43
Right-of-Use Assets
The right-of-use asset is initially measured at cost, and subsequently at cost less any
accumulated depreciation and impairment losses and adjusted for certain
remeasurements of the lease liability.
Costs included in the measurement of the right-of-use asset comprise the following:
• the amount of the initial measurement
of lease liability;
• any lease payments made at or before
the commencement date, less any
lease incentives received;
• any initial direct costs incurred by the
lessee; and
• an estimate of the restoration costs to be
incurred by the lessee, recognised and
measured applying NZ IAS 37 Provisions,
Contingent Liabilities and Contingent
Assets.
Lease Liabilities
The lease liability is initially measured at the present value of the future lease payments over
the lease term that are not paid at the commencement date, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the lessee's incremental
borrowing rate, being the rate that the lessee would have to pay to borrow over a similar term,
and with a similar security, the funds necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment.
Generally, the Group uses the lessee's incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments (including in-substance
fixed payments), less any lease
incentives receivable;
• variable lease payment that are based
on an index or a discount rate;
• amounts expected to be payable by the
lessee under residual value guarantees;
• the exercise price of a purchase option if
the lessee is reasonably certain to
exercise that option; and
• payments of penalties for terminating the
lease, if the lease term reflects the
lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate
cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in
a similar economic environment with similar terms and conditions.
The lease liability is subsequently increased by the interest cost on the lease liability and
decreased by lease payments made. It is remeasured when there is a change in future lease
payments arising from:
• A change in an index or a discount rate;
• A change in the estimate of the amount
expected to be payable under a residual
value guarantee;
• Changes in the assessment of whether a
purchase or extension option is
reasonably certain to be exercised or a
Depreciation is charged so as to write off the cost of assets, over the lease term using
the straight-line method.
ANNUAL REPORT 2023 Page 44
termination option is reasonably certain
not to be exercised; or
• A lease modification that is not
accounted for as a separate lease.
The Group has applied judgement to determine the lease term for some lease contracts in
which it is a lessee that include renewal options. The assessment of whether the Group is
reasonably certain to exercise such options impacts the lease term, which significantly affects
the amount of lease liabilities and right-of-use assets recognised.
As a result of the Covid-19 pandemic, the International Accounting Standards Board (IASB) has
introduced a narrow -scope amendments to IFRS16 to offer relief to lessees in accounting for
lease modifications that arise as a direct result of Covid-19. The practical expedient applies only to
rent concessions occurring as a direct consequence of the Covid-19 pandemic and only if all of the
following conditions are met:
a. The change in lease payments results in
revised consideration for the lease that is
substantially the same as, or less than,
the consideration for the lease
immediately preceding the change.
b. Any reduction in lease payments affects
only payments originally due on or
before 30 June 2022.
c. There is no substantive change to other
terms and conditions of the lease.
Finance Lease Receivables
Where the sublease is classified as a finance lease, the Group recognises the assets held
under a finance lease in its statement of financial position and present them as a finance lease
receivable at an amount equal to the net investment in the lease.
The net investment in the lease is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the interest rate
implicit in the lease, or in the case of a sublease, if the interest rate implicit in the sublease
cannot be readily determined, the discount rate used for the head lease (adjusted for any initial
direct costs associated with the sublease).
Lease payments included in the measurement of net investment comprise the following:
• fixed payments (including in-substance
fixed payments), less any lease
incentives payable;
• variable lease payment that are based
on an index or a rate;
• any residual value guarantees provided
to the lessor;
• the exercise price of a purchase option
if the lessee is reasonably certain to
exercise that option; and
• payments of penalties for terminating
the lease, if the lease term reflects the
lessee exercising that option.
The finance lease receivable is subsequently increased by the interest income on the finance
lease receivable and decreased by lease payment received. It is remeasured when there is a
lease modification that is not accounted for as a separate lease.
ANNUAL REPORT 2023 Page 45
21.1 Amounts recognised in the Statement of Financial Position
The Statement of Financial Position shows the following amounts relating to leases:
Right-of-use assets
31-Mar31-Mar
20232022
$'000$'000
Property
Cost2,8111,663
Less: Accumulated depreciation(1,169)(948)
Net book value as at 1 April 1,642715
Additions6561,321
Remeasurement of lease liability7-
Movement in FX593
Depreciation expense(423)(221)
Disposal(337)(176)
Net book value as at 31 March1,6041,642
Cost3,1962,811
Less: Accumulated depreciation(1,592)(1,169)
Net book value as at 31 March1,6041,642
The right-of-use assets relate to the one (FY22: three) corporate-operated stores which are
expected to be franchised in the UK.
Lease liabilities Lease liabilities
31-Mar
31-Mar
2022
2022
$'000
$'000
Current
2,382
2,920
Non-current
18,932
18,226
Total lease liabilities
21,314
21,146
The finance lease payable to the landlords that are fall due at the end of reporting period are
$2.2m (2022: $2.2m) which is the same as the finance lease receivables and are recorded in
the payable (refer Note 17).
Finance lease receivables
31-Mar31-Mar
20232022
$'000$'000
Current2,1552,755
Non-current17,42716,488
Total finance lease receivables19,58219,243
ANNUAL REPORT 2023 Page 46
The average effective Incremental Borrowing Rate in FY23 is 5.7% per annum (2022: 5.7% per
annum).
21.2 Amounts recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income
The Consolidated Statement of Profit or Loss and Other Comprehensive Income shows the
following amounts relating to leases:
31-Mar
31-Mar
2023
2022
$'000
$'000
As a lessee:
Interest expense on lease liabilities
1,307
1,183
Depreciation expense on right-of-use assets (included in
depreciation and amortisation)
423
221
Income from subleasing right-of-use assets:
Interest income from subleases classified as finance
leases
1,172
1,145
The total cash outflow for leases to franchisee landlords in 2023 was $372,000 (2022 was
$372,000).
21.3 Maturity analysis of lease payments
Lease liabilities as the lessee:
.
ANNUAL REPORT 2023 Page 47
Finance lease arrangements as the lessor:
31-Mar
31-Mar
2023
2022
$'000
$'000
Year 1
3,346
3,874
Year 2
3,193
3,232
Year 3
3,226
3,396
Year 4
3,023
3,033
Year 5
2,520
2,786
Onwards
11,344
8,254
Lease payments
26,652
24,575
Unguaranteed residual values
-
-
Gross investment in the lease
26,652
24,575
Less: unearned finance income
(7,070)
(5,332)
Present value of minimum lease payments receivable
19,582
19,243
Net investment in the lease
19,582
19,243
22 Fees paid to auditor
The Auditor of the Group for 31 March 2023 is William Buck Audit (NZ) Ltd. The auditor for UK
firms is Rouse Partners LLP.
31-Mar31-Mar
20232022
$'000$'000
Audit of financial statements
- Statutory Audit120122
- Overseas firms118231
Total fees paid to auditor238353
ANNUAL REPORT 2023 Page 48
23. Reconciliation of cash flows from operating activities
31-Mar
31-Mar
2023
2022
$'000
$'000
Profit/(Loss) after tax
(3,316)
(438)
Add non-cash items:
Deferred tax
Depreciation
469
200
Amortisation of intangible assets
381
381
Impairment loss on receivables
448
227
Net foreign exchange gains/(losses)
110
230
Revaluation of contingent consideration payable
-
(6,431)
Impairment of goodwill
2,497
5,983
Release of liabilities
(337)
-
Add/(Less) movements in assets/liabilities:
(736)
(784)
Net cash flow applied to operating activities
(484)
(632)
24 Related party transactions
The Group’s related parties include the directors and senior management personnel of the
Group and any associated parties as described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and
no guarantees were given or received.
• Keith Jackson is a director of Cooks
Investment Holdings Limited, Jackson &
Associates Limited, Ascension Capital
and Weihai Station Limited and a
trustee of Nikau Trust.
• Mike Hutcheson is a director of Image
Centre Limited and Lighthouse Ventures
Holdings Limited.
• Paul Elliott is a director of Elliott Capital
Advisors Limited.
• Michael Ambrose is a director of
Ashville Consultancy Limited.
• Peihuan Wang is a director of Jiajiayue
Holding Group Limited and Weihai
Station Limited.
• Elena Garside is a director of Garside &
Garside Ltd.
• Tony McVerry is a director of Esquires
Coffee Houses Ireland Limited.
• Aiden Keegan is a director of Esquires
Coffee UK Limited.
• Graham Hodgetts was a director of
Triple Two Coffee Holdings Limited who
resigned in May .
• Sezan Walker is a director of Triple Two
Coffee Holdings Limited.
• David Hodgetts is a director of Triple
Two Coffee Holdings Limited.
• Alistair Tillen was a director of Triple
Two Coffee Holdings Limited who
resigned in May.
ANNUAL REPORT 2023 Page 49
Number of shares held by directors and other related parties:
31-Mar
31-Mar
2023
2022
Keith Jackson (including associated parties)
13,066,049
11,675,660
Jiajiayue Holding Group
10,591,374
10,591,374
Yunnan Metropolitan Construction Investment Group Co Ltd
6,714,643
6,714,643
Crown KJ Nominees Limited
4,086,769
-
Graham Hodgetts
3,587,760
3,547,910
CCC Employee Share Trust
3,388,837
3,388,837
Alistair Tillen
1,353,621
1,337,681
David Hodgetts
819,996
808,041
Sezan Walker
816,606
804,646
Michael Ambrose
700,000
333,333
Paul Elliott
226,296
226,296
Mike Hutcheson
88,020
88,020
Maretha McVerry
38,246
38,246
Lighthouse Ventures Holdings Limited
30,369
30,369
Aiden Keegan
14,166
14,166
24.1 Transactions with related parties
The following transactions occurred with related parties during the year:
31-Mar
31-Mar
2023
2022
$'000
$'000
Purchases of goods and services
Purchase of management services
240
240
Interest paid to related parties
314
300
Other transactions
Related party receivables
255
-
Subscriptions for new ordinary shares
500
-
Funding loans advanced by related parties
39
(662)
The above values are exclusive of GST or VAT if any. The sum of $255k receivable at the end of
the financial year, included in other current assets, was due from Jiajiayue Holding Group with
respect to issued capital not yet paid. The $255k was received in full subsequent to year end.
See Notes 11.1 and 20.1.
Related party, Jackson & Associates Limited, converted $500k of outstanding receivables owing
into equity. See Note 20.1.
24.2 Balances outstanding with related parties
ANNUAL REPORT 2023 Page 50
31-Mar
31-Mar
2023
2022
$'000
$'000
Outstanding balances arising from purchases of goods
and services
Entities controlled by key management personnel
441
723
Loans to related parties
Balance beginning of the year
1,875
4,410
Loans advanced
39
(662)
Loans converted to equity
-
(2,000)
Net foreign exchange effects
(1)
(23)
Interest charged
243
450
Interest paid
(314)
(300)
Balance end of period
1,842
1,875
Other liabilities to related parties
Balance beginning of the year
562
562
Net foreign exchange effects
(2)
-
Balance end of period
560
562
Other receivables from related parties
Issued capital not yet received
255
-
The above values are inclusive of GST or VAT if any.
In FY22, the reduction in loans advanced relates to Nikau Trust converting $2,000,000 of loans
into equity at 3.0 cents per share pre the 15:1 share consolidation or the equivalent of NZ$0.45
cents per share..
Related party loans and liabilities either have no interest or carry interest rates ranging from
10% - 15% pa. They have terms of either being on-call or subordinated debt and with an
option of conversion to equity if mutually agreed. There is no security for these related party
loans and liabilities, though one of the related parties has provided personal property as
security to one of the third-party loans owed by the company.
24.3 Transactions with directors and senior management personnel
Key management of the Group are the executive members of Cooks Coffee Company Limited’s
Board of Directors and senior management. Directors and senior management personnel
payments (exclusive of GST if any) made during the year includes the following expenses:
31-Mar31-Mar
20232022
$'000$'000
Directors' fees14492
Short-term employee benefits1,010515
Share based payments29-
1,183607
25 Segment reporting
ANNUAL REPORT 2023 Page 51
The Group’s reportable segments are business units deriving Royalties and Product Sales to
Franchisees in geographical locations. New Zealand segment represents head office
operation for the Group.
The Group has also separated operating segments for the business activities intended
to be sold.
Segment information for the reporting period is as follows:
Continuing operations
31/03/2023
Global
franchising
& retail
UK & IRE
franchising
New
Zealand
Total
Global operational splits
$'000
$'000
$'000
$'000
Revenue
237
6,376
-
6,613
Grant and other income
-
295
-
295
Release of liabilities
-
-
337
337
Raw materials and consumables used
-
(977)
-
(977)
Depreciation and amortisation
-
(847)
(3)
(850)
Impairment loss on receivables
(124)
(324)
-
(448)
Net foreign exchange (losses)/gains
(9)
(23)
(78)
(110)
Employee costs
-
(2,295)
(219)
(2,514)
Other expenses
(16)
(1,242)
(1,188)
(2,446)
Operating (loss)/profit
88
963
(1,151)
(100)
Finance costs, net
(1)
(164)
(571)
(736)
Impairment of goodwill
-
(2,497)
-
(2,497)
Profit/(Loss) before income tax
87
(1,698)
(1,722)
(3,333)
Income tax (expense)/credit
-
113
-
113
Profit/(Loss) for the year from continuing
operations
87
(1,585)
(1,722)
(3,220)
Non-current assets
Intangible assets
42
5,358
1,481
6,881
Property, plant and equipment
84
58
-
142
Right of use assets
-
1,604
-
1,604
Goodwill
-
3,072
-
3,072
ANNUAL REPORT 2023 Page 52
Discontinued operations
31/03/2023
UK retail
Total
Global operational splits
$'000
$'000
Revenue
464
464
Raw materials and consumables used
(149)
(149)
Depreciation and amortisation
(3)
(3)
Employee costs
(198)
(198)
Other expenses
(205)
(205)
Operating (loss)
(91)
(91)
Finance costs, net
(3)
(3)
Interest on bank and other borrowings
(2)
(2)
Loss before income tax
(96)
(96)
Income tax (expense)/credit
-
-
Loss for the year from discontinued operations
(96)
(96)
Non-current assets
Property, plant and equipment
14
14
Assets held for Sale
7
7
Continuing operations
31/03/2022
Global
franchising
& retail
UK & IRE
franchising
New
ZealandTotal
Global operational splits$'000$'000$'000$'000
Revenue2557,11517,372
Grant and other income-449-449
Raw materials and consumables used-(1,628)-(1,628)
Depreciation and amortisation(1)(577)(3)(581)
Impairment Loss(123)(104)-(227)
Net foreign exchange (losses)/gains(4)(171)(55)(230)
Employee costs(64)(2,060)(378)(2,502)
Other expenses(42)(1,684)(694)(2,420)
Operating (loss)/profit211,339(1,128)233
Finance costs, net(15)10(875)(881)
Reduction of contingent consideration payable-6,431-6,431
Impairment of goodwill-(5,983)-(5,983)
Profit/(Loss) before income tax61,797(2,003)(200)
Income tax (expense)/credit-110-110
Profit/(Loss) for the year from continuing
operations61,907(2,003)(90)
Non-current assets
Intangible assets425,7401,4817,263
Property, plant and equipment 11463150
Right of use assets-1,641-1,641
Goodwill-5,457-5,457
ANNUAL REPORT 2023 Page 53
Discontinued operations
31/03/2022
UK retail
Total
Global operational splits
$'000
$'000
Revenue
620
620
Raw materials and consumables used
(183)
(183)
Depreciation and amortisation
(100)
(100)
Employee costs
(319)
(319)
Other expenses
(329)
(329)
Operating (loss)
(311)
(311)
Finance costs, net
(3)
(3)
Interest on bank and other borrowings
(34)
(34)
Loss before income tax
(348)
(348)
Income tax (expense)/credit
-
-
Loss for the year from discontinued
operations
(348)
(348)
Non-current assets
Property, plant and equipment
6
6
Assets held for Sale
18
18
26 Contingencies
Contingent Liabilities
There were no contingent liabilities as at 31
March 2023 (2022: $nil).
27 Capital commitments
There were no capital commitments as at
31 March 2023 (2022: $nil).
28 Financial risk management
Due to the broad range of the Group’s
activities, there is exposure to a variety of
financial risks:
• Market risk (including currency risk and
interest rate risk);
• Credit risk; and
• Liquidity risk
The Group’s risk management programme
focuses on minimising the potential adverse
effects of these risks. The Group’s business
is primarily denominated in foreign
currencies. The Group holds New Zealand
dollars and other currencies to settle
transactions in the normal course of
business.
ANNUAL REPORT 2023 Page 54
28.1 Market risk
Foreign Currency Risk
The Group operates internationally and is
exposed to foreign currency risk arising
from various currency exposures. Although
the NZD remains the main currency for
corporate funding and Group reporting, the
transactions denominated in NZD is
diminishing as the growth in the overseas
market outweighs the operations in the New
Zealand market, especially with the
purchase of Triple Two business in the UK.
As disclosed in Note 25 Segment
Reporting, there was no revenue generated
from the New Zealand segment which is
denominated in of the total group revenue
of $6.6 million. This indicates that the
Group’s exposure to foreign currency risk
has increased considerably.
A significant amount of the Group’s
transactions are carried out other than in
New Zealand Dollars. The Group has debt
or liabilities denominated in foreign
currency which is not hedged. Exposures to
currency exchange rates arise from the
Group’s overseas company holdings
(Ireland and United Kingdom), and foreign
currency denominated income for New
Zealand domiciled companies (royalties,
store openings, design and other franchise
fees, product sales). These are primarily
denominated in European currency (EURO)
and Pound Sterling (GBP).
As disclosed in Note 25 Segmental
Reporting, global franchising and retail and
UK & Ireland franchising are all primarily
transacted in foreign currency.
Management has performed a sensitivity
analysis for any potential foreign currency
risk faced by the group. Based on the
current year results, in the event that the
NZD weakens against GBP and GBP/NZD
exchange rate decreases by 5%, the impact
on the group result is the profit will be
increased by $5,259. If the GBP/NZD
exchange rate increase by 5%, the group
profit will be reduced by $4,888.
In the event that the NZD weakens against
the Euro and EURO/NZD exchange rate
increases or decreases by 5%, there would
be an impact of less than $1,000 on the
Group profit result for the current year.
28.2 Credit Risk
Credit risk is managed on a Group basis. The Group generally trades with franchises and
banking counterparties who are well established. Receivables balances are managed by and
reported regularly to senior management according to the Company’s credit management
policies and procedures. The amount outstanding at the reporting date represents the
maximum exposure to credit risk.
Trade receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on the
days past due.
The expected loss rates are based on the payment profiles of sales over a period of 24
months before 31 March 2023 and the corresponding historical credit losses experienced
within this period. The historical loss rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the customers to settle the
receivables. The Group has evaluated available forward-looking information and has
concluded that there is no indication that historical loss rates should be adjusted. For FY23
ANNUAL REPORT 2023 Page 55
management had decided to make an additional provision for expected credit losses of
$122,850 for Bahrain and Kuwait royalties. The provision for impairment of other receivables
has increased from $378,000 in 2022 to $703,000 in 2023 as shown on Note 11 (a).
Lease receivables
The Group applies the IFRS 9 simplified
approach to measuring expected credit
losses which uses a lifetime expected loss
allowance for all lease receivables.
To measure the expected credit losses,
lease receivables have been grouped
based on shared credit risk characteristics.
The expected loss rates are based on the
historical credit losses experienced for each
credit risk group within a period of 24
months before 31 March 2023. The
historical loss rates are adjusted to reflect
current and forward-looking information on
macroeconomic factors affecting the ability
of the customers to settle the receivables.
The Group has evaluated available forward-
looking information and has concluded that
there is no indication that historical loss
rates should be adjusted.
28.3 Liquidity Risk
The Group maintains regular forecasts of liquidity based on expected cash flows. The table
below analyses the Group’s financial liabilities into relevant groups based on the remaining
period at the reporting date to the end of the contractual date. The amounts disclosed are the
contractual undiscounted cash flows.
At 31 March 2023
Less than
1 year
Between 1
and 5 years
Over
5 years
Carrying
Amount
$'000$'000$'000$'000
Trade payables3,138--3,138
Related party payables441--441
Other payables 1,473--1,473
Short term finance loans2,583352-2,935
Related party loans8661,033-1,899
Lease Liabilities2,9209,3719,56121,314
11,42110,7569,56131,200
For further details in relation to the liquidity risk refer to Note 4.
28.4 Capital risk management
The Group’s objectives when managing
capital is to safeguard the Group’s ability to
continue as a going concern in order to
provide returns to shareholders and benefits
to other stakeholders and to maintain an
optimal capital structure. The Group
currently monitors capital based on cash
requirements and, in order to maintain or
adjust the capital structure, generally issues
new shares to investors through share
issues. The Group and the Company have
not been subject to any externally imposed
capital requirements during the period.
The Group is currently in need of additional
capital injections to be able to execute its
strategy. It is planning to obtain injections in
FY24 in addition to that raised and debt
conversions in FY23. For further details of
this refer to Note 4.
ANNUAL REPORT 2023 Page 56
29 Financial instruments by category
31-Mar
31-Mar
2023
2022
$'000
$'000
Financial assets at amortised cost
Cash and cash equivalents
445
1,156
Trade and other receivables
1,323
1,244
Lease receivables
19,582
19,243
21,350
21,643
Financial liabilities at amortised cost
Trade payables
3,138
2,323
Borrowings and other liabilities
4,051
4,979
Lease liability
21,314
21,146
Related party payables
441
723
28,944
29,171
30 Fair value measurement
The table below analyses financial instruments carried at fair value, by valuation method.
The different levels have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level
2).
• Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (Level 3).
31-Mar31-Mar
20232022
Financial liabilities at fair value through profit or loss$'000$'000
Contingent consideration
Level 3
Opening balance-6,431
Fair Value
Reduction of contingent consideration payable-(6,431)
Closing balance--
The only financial instrument measured at fair value was Contingent Consideration of $Nil
at 31 March 23 (31 March 22: $Nil).
ANNUAL REPORT 2023 Page 57
31 Business Combination
TRIPLE TWO ACQUISITION
i) Contingent consideration
The Group acquired Triple Two Coffee in June 2020.
There was an earn out provision in the sale and purchase agreement which provided the
opportunity for the vendors to increase their consideration by improving on the
performance of the business over a two-year period from acquisition date and ending on
31 December 2022.
At the end of FY22, management reviewed the profit levels in line with the sale and
purchase agreement and determined, in agreement with the vendors, that based on
performance to date and projections to the end of the earn-out period, no additional
consideration was expected to be paid by CCC (and which has subsequently crystalised
and been confirmed with the earn-out period having now ended).
This resulted in a $6.3m write off to the P&L last year and no further consideration liability
on the Balance Sheet at 31 March 2022.
32 Post-reporting date events
On 22 June 2023, the Company acquired and cancelled all the shares held by the ESOP.
Following the acquisition and cancellation, the Company will have 56,130,511 quoted shares
on issue.
There are no other post-reporting date events to be disclosed.
ANNUAL REPORT 2023 Page 58
STATUTORY INFORMATION
AND CORPORATE GOVERNANCE
Directors Relevant Interests in Company Securities as at 31 March 2023
SUBSTANTIAL PRODUCT HOLDERS
The following information is provided in compliance with section 293 of the Financial Markets
Conduct Act 2013 and is stated as at 31 March 2023. The total number of voting financial
products of Cooks Coffee Company Limited at that date was 59,519,349 and ordinary shares
are the only such product on issue.
Substantial Security Holder Shares Held
Graeme Keith Jackson, Patricia Frances Jackson & Philip Mack
Picot
11,551,757
Jackson & Associates Limited 1,512,792
Michael Ambrose 700,000
Paul Valentine Mark Elliott 226,296
Mike Hutcheson 88,020
Total Number of Shares Held:
14,078,865
Director Dealings in Company Securities
There have been the following transactions in respect of Cooks Coffee Company Limited
(CCC or Company) securities by directors of the Company (Directors) in the 12 months ending
31 March 2023:
Director Dealings
Mr. Graeme
Keith
Jackson
Mr. Graeme Keith Jackson is the beneficial holder of 11,551,757 ordinary
shares in the Company currently held by Graeme Keith Jackson, Patricia
Frances Jackson & Philip Mack Picot.
ANNUAL REPORT 2023 Page 59
Mr. Michael
Ambrose
Mr. Michael Ambrose is the beneficial holder of 700,000 ordinary shares in the
Company currently held by Michael John Ambrose & Russell Kelvin David
Rodgers
Interests Register
CCC has D&O insurance which ensures that generally, Directors and officers will incur no
monetary loss as a result of actions undertaken by them. CCC has entered an indemnity in favour
of its Directors for the purposes of Section 162 of the Companies Act 1993.
Use of Company Information
The Board received no notices from Directors wishing to use Company information received in
their capacity as Directors which would not have been ordinarily available.
Other Director Interests
Other directorships held during the FY23 held by CCC Directors:
Graeme Keith Jackson
Arana Holdings Limited Cooks Investment Holdings Limited
Ascension Capital Limited Dairy Farm Investments Limited
Weihai Holding Limited Dairy Farm Investments (Ruawhata) Limited
Jackson & Associates Limited Nikau Trust
Michael George Rae Hutcheson
2 Life Limited Image Centre Publishing Limited
Eschool Holdings Limited Patiki Farm Limited
Eschool Limited Raye Blumenthal Freedman Trust
Attain Limited Hunch Limited
Hotfoot Retail Services Limited Tangible Media Limited
Graeme Dingle Endowment Fund The Lighthouse Ideas Company Limited
Image Centre Holdings Limited Tradewinds Investment Trust
Michael George Ambrose
Minoce Investments Limited Garra International Limited
Chateau Marlborough Hotel 2014 Limited Australian Lobster Company (GP) Limited
Deep Creek Fruits GP Limited Deltop Holdings Limited
Arvida Group Limited FLC Trustee Limited
Southern Fruits International GP Limited Lobster Management GP Limited
Melrose Equities Limited Australia Quota Holdings GP Limited
Almonte Holdings Limited Silverstream lifestyle Retirement Village Limited
Ashville Consultancy Limited Senior Move Managers Limited
Chateau Marlborough Holdings 2014 Limited Fiordland Lobster Company Limited
Paul Valentine Mark Elliott
Agribusiness Investments NZ Limited Elliott Capital Advisors Limited
Agribusiness Solutions NZ Limited Revive Finance Limited
Ignite Finance Limited Restore Finance Limited
Ignite Solutions Limited Ignite Nominees Limited
ANNUAL REPORT 2023 Page 60
Peihuan Wang
Shanghai Shiban Supply Chain Co. Ltd Spar China Group LTD.
Jiajiayue Group Limited. (China) Weihai Station Limited
Jiajiayue Holding Group Limited (CHINA)
Elena Garside
Garside & Garside Ltd
Spread of Quoted Security Holders as at 31 March 2023:
20 Largest Holdings of Equity Securities as at 31 March 2023:
Range
Number
%
Number
%
1 - 1,000
305
50.25
40,143
0.06
1,001 - 5,000
137
22.57
302,645
0.50
5,001 - 10,000
32
5.27
236,833
0.39
10,001 - 50,000
70
11.53
1,572,071
2.59
50,001 - 100,000
21
3.46
1,487,878
2.45
100,001 and over
42
6.92
57,086,779
94.01
Total
607
100.00
60,726,349
100.00
Shareholders
Shares
ANNUAL REPORT 2023 Page 61
EMPLOYEE REMUNERATION
During the accounting period, the following number of CCC’s employees/independent contractors
(not being a director) received remuneration and other benefits in that person’s capacity as
employee/independent contractor of CCC, the value of which exceeded $100,000 per annum:
DIRECTOR REMUNERATION AND OTHER BENEFITS
During the accounting period, the Directors of the Company received the following remuneration:
Donations
No donations were made in the 12-month financial period ended 31 March 2023.
Remuneration ranges
Number of
employees
Number of
employees
For CCC Group:
2023
2022
100,000 – 109,999
1
1
110,000 – 119,999
2
2
130,000 – 139,999
1
-
140,000 – 149,999
2
-
180,000 – 189,999
1
1
220,000 – 229,999
1
-
240,000 – 249,999
1
-
260,000 – 269,999
2
-
Name
Directors’ Fees
Executive
Salary
Share based
payments
Mike Hutcheson
39,600
-
-
Graeme Keith Jackson
-
210,000
-
Paul Elliott
40,000
-
-
Michael Ambrose
40,000
Elena Garside
24,294
-
-
ANNUAL REPORT 2023 Page 62
Cooks Coffee Company Limited (CCC) believes in the benefit of good corporate governance and
the value it provides for shareholders and other stakeholders. CCC is committed to ensuring that
the company meets best practice corporate governance principles, to the extent that it is
appropriate for the nature of CCC’s operations.
The board of CCC is responsible for establishing and implementing the company’s corporate
governance frameworks and is committed to fulfilling this role in accordance with best practice
having regard to applicable laws, the NZX Corporate Governance Code and the Financial Markets
Authority Corporate Governance – Principles and Guidelines.
CCC has implemented policies and processes to establish, shape and maintain appropriate
governance standards and behaviours throughout CCC that aligns with the NZX Corporate
Governance Code dated 17 June 2022 (Code). CCC has elected not to report against the
updated NZX Corporate Governance Code dated 1 April 2023.
CCC’s approach to applying the recommendations outlined in the Code is set out below. This
statement is set out in the order of the principles detailed in the Code and explains how CCC is
applying the Code’s recommendations. CCC is in compliance with the Code, with the exception
of recommendations 2.8 and 6.1 for the reasons explained below.
Principle 1 – Code of ethical behaviour
“Directors should set high standards of ethical behaviour, model this behaviour and hold
management accountable for these standards being followed throughout the organisation.”
Code of Ethics
The Board Charter, Code of Ethics and Code
of Conduct establish the standards of ethical
behaviour expected of Directors and staff. The
Board expects Directors, management and
staff to personally subscribe to these values
and use them as a guide to make decisions.
The Audit and Risk Committee has
responsibility for monitoring compliance with
internal processes, including compliance with
the Code of Ethics.
Directors are expected to ensure the potential
for conflicts of interests is minimised by
restricting involvement in other businesses or
in private capacities that could lead to a
conflict. In considering matters affecting the
Company, Directors are required to disclose
any actual or potential conflicts. Where a
conflict or potential conflict is disclosed, the
Director takes no further part in receipt of
information or participation in discussions on
that matter. The Board maintains an interests’
register and it is reviewed at each board
meeting.
Should any member of staff have concerns
regarding practices that may conflict with the
Code of Conduct they are able to raise the
matter with the Chair, as appropriate, on a
confidential basis. Directors would raise any
concerns regarding compliance with the Code
of Ethics with the Chair. The Chair of the
Board and the Chair of the Audit and Risk
Committee note there have been no financial
matters raised in this respect in the 2023
financial year.
CORPORATE GOVERNANCE STATEMENT
ANNUAL REPORT 2023 Page 63
Financial Product Trading
Directors, officers, employees and contractors are restricted in their trading of Cooks Coffee
Company securities and must comply with the Financial Products Trading Policy and Guidelines
which is available on the Website.
Principle 2 – Board composition and performance
“To ensure an effective board, there should be a balance of independence, skills,
knowledge, experience and perspectives.”
Board Charter
The Board of Directors of the Company is
elected by the shareholders to supervise the
management of the Company. The Board
establishes the Company's objectives, overall
policy framework within which the business of
the Company is conducted and confirms
strategies for achieving these objectives. The
Board also monitors performance and ensures
that procedures are in place to provide effective
internal financial control.
The Board is responsible for guiding the
corporate strategy and direction of the
Company and has overall responsibility for
decision making. The Board has delegated
responsibility for implementing the Board’s
strategy and for managing the operations of the
Company to the Chairman.
CCC’s board operates under a written charter
which defines the respective functions and
responsibilities of the board, focusing on the
values, principles and practices that provide the
corporate governance framework. The charter
complies with the relevant recommendations in
the Code and is reviewed annually.
The board uses committees to address certain matters that require detailed consideration. The
board retains ultimate responsibility for the function of its committees and determines their
responsibilities.
Nomination and appointment of directors
In accordance with CCC’s constitution and NZX Listing Rules, the directors are required to retire
by rotation and may offer themselves for re-election by shareholders each year. Procedures for the
appointment and removal of directors are also governed by the Board Charter. CCC does not
maintain a separate nomination committee, given the current size and nature of CCC’s business,
director nominations and appointments are the responsibility of the full board.
Written Agreements with directors
CCC intends to enter written agreements with any newly appointed directors establishing the terms
of their appointment.
Director Information and Independence
The Board currently comprises of five Directors including the Chairman & Chief Executive Officer,
Keith Jackson. The Board met five times during the year on a formal basis. The Audit and Finance
Committee meetings are held outside these meetings on a regular basis as required.
The board considers guidance provided under the NZX Listing Rules in determining the
independence of directors. Director independence is considered annually. Directors are required
to inform the board as soon as practicable if they think their status as an independent director has
(or may have) changed.
ANNUAL REPORT 2023 Page 64
The directors that the board considers are independent and information in respect of directors’
ownership interests is contained in this annual report.
Diversity
Cooks recognises the wide-ranging benefits that diversity brings to an organisation and its
workplaces. Cooks’ endeavours to ensure diversity at all levels of the organisation to ensure a
balance of skills and perspectives are available in the service of our shareholders and customers.
To this end, the Board is committed to fostering a culture that embraces diversity.
The Board also has the responsibility of monitoring and promoting the diversity of staff and
associated corporate culture, including requiring that recruitment and selection processes at all
levels are appropriately structured so that a diverse range of candidates are considered and to
avoid conscious and unconscious biases that might discriminate against certain candidates.
The gender balance of the Group’s Directors, officers and all employees were as follows:
As at 31 March 2023 As at 31 March 2022
Directors Officers Employees Directors Officers Employees
Female 1 - 19 - - 13
Male 5 1 12 6 1 13
Total 6 1 31 6 1 26
Director Training
All directors are responsible for ensuring they remain current in understanding their duties as
directors. Where necessary, CCC will support directors to help develop and maintain directors’
skills and knowledge relevant to performing their role.
Separation of the Chair and Managing Director
Due to the size and nature of CCC and its cash flow requirements CCC does not comply with 2.8
of the Code, the chair of the board and managing director are not separate people.
Principle 3 – Board Committees
“The board should use committees where this will enhance its effectiveness in key areas,
while still retaining board responsibility.”
Given the small scale of the company and board, the board currently has one standing committee,
the Audit and Risk committee. This committee operates under a specific charter which is approved
by the Board and will be reviewed annually. Any recommendations made by these committees
are recommendations to the board.
ANNUAL REPORT 2023 Page 65
Directors
Name Status Current/Resigned
Sub-committee
membership
Attendance*
Keith
Jackson
Chairman & CEO
Executive
Appointed 18/8/08 Audit & Finance 11
Paul Elliott
Non-Executive
Independent
Appointed 30/5/19 Audit & Finance 10
Mike
Hutcheson
Non-Executive
Independent
Appointed 3/10/13 Audit & Finance 10
Michael
Ambrose
Non-Executive
Independent
Appointed 29/11/21 Audit & Finance 11
Peihuan
Wang
Non-Executive
Independent
Appointed 29/4/16 - 3
Alex Qiang
Kui
Non-Executive
Independent
Appointed 27/2/19
Resigned 27/09/22
-
1
Elena
Garside
Non-Executive
Independent
Appointed 7/11/22 -
2
Audit and Risk Committee
The Audit and Risk Committee Charter sets out the objectives of the Audit and Risk Committee
which are to provide assistance to the board in fulfilling its responsibilities in relation to the
company’s financial reporting, internal control’s structure, risk management systems and the
external audit function.
The audit committee currently comprises Paul Elliott (as Chair), Keith Jackson, Mike Hutcheson
and Michael Ambrose. Paul Elliott, Mike Hutcheson and Michael Ambrose are considered
Independent Directors for the purposes of NZX Listing Rule 2.1.1. All members of the Audit and
Risk Committee have appropriate financial experience and an understanding of the industry in
which CCC operates.
The Audit and Risk Committee focusses on audit and risk management and specifically addresses
responsibilities relative to financial reporting and regulatory compliance. The Audit and Risk
Committee is accountable for ensuring the performance and independence of the external auditor,
including that CCC provides for 5-yearly rotation of either the external auditor or the lead audit
partner.
The committee provides a forum for the effective communication between the board and external
auditors. The responsibilities of the committee include:
• reviewing the appointment of the external auditor, the annual audit plan, and addressing any
recommendations from the audit;
• reviewing any financial information to be issued to the public; and
• ensuring that appropriate financial systems and internal controls are in place.
The Audit and Risk Committee may have in attendance the Managing Director and/or others
including the external auditor as required from time to time.
ANNUAL REPORT 2023 Page 66
Takeover Response Protocol
The board has protocols in place that set out the procedure to be followed if there is a takeover
offer for CCC. This procedure is set out in the board charter.
Principle 4 – Reporting and Disclosure
“The board should demand integrity in financial and non-financial reporting, and in the
timeliness and balance of corporate disclosures.”
Continuous Disclosure
The board focusses on providing accurate, adequate and timely information both to existing
shareholders and the market generally. This enables all investors to make informed decisions
about CCC.
CCC, as a company listed on the NZX Main Board, has an obligation to comply with the disclosure
requirements under the NZX Listing Rules, and the Financial Markets Conduct Act 2013. CCC
has a Continuous Disclosure Policy designed to ensure this occurs. CCC recognises that these
requirements aim to provide equal access for all investors or potential investors to material price-
sensitive information concerning issuers or their financial products. This in turn promotes
confidence in the market. The Continuous Disclosure Policy outlines the obligations for CCC in
satisfying the disclosure requirements. CCC’s Disclosure Officer (currently the Chair) is
responsible for ensuring compliance with the NZX continuous disclosure requirements and
overseeing and co-ordinating disclosure to the exchange.
Financial Reporting
The Board monitors:
• available cash in the Company to ensure there are sufficient funds available to satisfy debts as
they fall due; and
• the continued support of the Company’s principal creditors, to ensure their continued support of
the Company and continued intention to not call up amounts owing to them.
The Board is committed to keeping the market
and its shareholders informed of all material
information relating to the Company through
meeting the obligations imposed under the
Listing Rules and relevant legislation such as
the Financial Markets Conduct Act 2013.
CCC seeks to make disclosures in a timely
and balanced way to ensure transparency in
the market and equality of information for
investors. The Company also recognises the
benefits of providing other releases that
broaden the market’s knowledge of the
Company’s business and financial
performance and seeks, where appropriate, to
use communications that achieve this
objective.
The website is a key channel for the
distribution of Cooks’ information and is
updated after documents are disclosed on the
NZX.
The Chair of the Board and the CEO are
responsible for the day to day management of
ensuring these obligations are met. The
Board will review compliance with the
continuous disclosure obligations at every
board meeting.
ANNUAL REPORT 2023 Page 67
Principle 5 – Remuneration
“The remuneration of directors and executives should be transparent, fair and reasonable.”
Directors’ Remuneration
The Remuneration Committee makes recommendations to the board on remuneration matters in
keeping with the Remuneration Policy which outlines the key principles that influence CCC’s
remuneration practices. The committee is also responsible for making recommendations to the
board on the remuneration of the Chair. Directors’ fees are determined by the board on the
recommendation of the committee within the aggregate director remuneration pool approved by
shareholders.
Details of remuneration paid to directors are disclosed in this annual report.
Principle 6 –Risk Management
“Directors should have a sound understanding of the material risks faced by the issuer and
how to manage them. The Board should regularly verify that the issuer has appropriate
processes that identify and manage potential and material risks.”
The board considers its material risks are any
decision to realise or make new investments
and to carefully manage cash flow. The
Managing Director reports regularly to the full
board on these key risks, and operating
expenses are kept to a bare minimum.
Key risk management tools used by CCC
include the Audit and Risk Committee function
and outsourcing certain functions to service
providers (such as legal and audit). CCC also
maintains insurance policies that is considers
adequate to meet insurable risks. The board of
CCC will continue to regularly consider any
potential risks and its risk management
processes and adapt these should the nature
and size of the business change in the future.
While CCC is comfortable this approach to risk
is sufficient, it does not comply with
recommendation 6.1 of the Code as it does not
have a formal risk management framework.
Health and Safety
The board does not consider it necessary to maintain a specific health and safety committee. The
full board of CCC recognise the importance of health and safety considerations, and will continue
to assess any risks, management and performance in this regard in the future.
Principle 7 – Auditors
“The board should ensure the quality and independence of the external audit process.”
The Audit and Risk Committee makes recommendations to the board on the appointment of the
external auditor as set out in Audit and Risk Committee Charter. The committee also monitors the
independence and effectiveness of the external auditor and reviews and approves any non-audit
services performed by the external auditor.
ANNUAL REPORT 2023 Page 68
Principle 8 – Shareholder rights and relations
“The board should respect the rights of shareholders and foster constructive relationships
with shareholders that encourage them to engage with the issuer.”
Information for Shareholders
The Company aims to ensure that shareholders are informed of all major developments affecting
the Company affairs. Information is communicated to shareholders in the Annual Report, Interim
Report, and regular NZX announcements, including major share transactions, acquisitions, store
expansion and new franchises and any personnel changes of significance.
The company website provides an overview of the business and information about CCC. This
information includes details of investments, latest news, investor information, key corporate
governance information, and copies of significant NZX announcements. The website also provides
profiles of the directors and the senior executive team. Copies of previous annual reports, financial
statements, and results presentations are available on the website.
Shareholders have the right to vote on major decisions of the company in accordance with
requirements set out in the Companies Act 1993 and the NZX Listing Rules.
Communicating with Shareholders
CCC endeavours to communicate regularly with its shareholders through its market updates and
other investor communications. The company receives questions from time to time from
shareholders and has processes in place to ensure shareholder communications are responded
to in a timely and accurate manner. CCC’s website sets out appropriate contact details for
communications from shareholders, including the phone number and email address of the Chair,
Keith Jackson. CCC provides the opportunity for shareholders to receive and send
communications by post or electronically.
CCC sends the annual shareholders notice of meeting and publishes it on the company website
as soon as possible and at least 28 days before the meeting each year.
ANNUAL REPORT 2023 Page 69
DIRECTORY
Company number: 2089337
Year of incorporation: 2008
Registered office: Level 1, 96 St Georges Bay Road,
Parnell,
Auckland, 1052
Nature of business: Food & beverage industry
Directors: Graeme Keith Jackson
Michael George Ambrose
Michael George Rae Hutcheson
Peihuan Wang
Paul Valentine Mark Elliott
Elena Garside (Appointed 2 Nov 2022)
Alex Qiang Kui (Resigned 27 Sep 2022)
Solicitors: Chapman Tripp, Auckland
Bankers: ANZ Bank, Auckland
Auditors: William Buck Audit (NZ) Limited
Share registry: Link Market Services Limited
Auckland
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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