ITEM 1. DESCRIPTION OF BUSINESS
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or Other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
As used in this annual report, the terms "we", "us", "our", "Company" and "Victoria" mean Victoria Industries, Inc., "Company" means Victoria Industries, Inc., unless otherwise indicated.
All dollar amounts refer to US dollars unless otherwise indicated.
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to; those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors".
COMPANY OVERVIEW
Victoria Industries, Inc. was incorporated on January 25, 2000 under the laws of the State of Nevada.
On September 9, 2003, the Company filed a Preliminary Information Statement pursuant to Section 14(c) of the Act reporting on the following actions taken pursuant to the Nevada Revised Statutes Chapter 78, without a meeting of shareholders:
1. Amend the Company's Certificate of Incorporation to change the Company's name to "Victoria Industries, Inc"
2. To effectuate a 10-1 reverse stock split for all the Company's outstanding shares, effective December 19, 2003
On September 10, 2003, the Company filed a current report on Form 8-K under Item 5, Other Events and Regulation FD Disclosure announcing the formation of a wholly owned subsidiary, Victoria Resources, Inc. in the State of New York for the purpose of carrying on business in the resource sector.
On September 19, 2003, the Company filed a Definitive Information Statement pursuant to Section 14(c) of the Act in substantially the same form as the Preliminary Statement.
Also in 2003, the Company’s wholly owned subsidiary Victoria Resources, Inc. established two Russian operating subsidiaries, Victoria Siberian Wood (Victoria Sibwood) and Victoria Lumber. Victoria Sibwood was 51% owned by the Company's 100% subsidiary, Victoria Resources, Inc. and 49% owned by a third party, Tomlespromivest LLC, a Russian production entity a Russian lumber producer. Victoria Lumber is a wholly owned subsidiary of Victoria Resources, Inc. In 2004 the Company, due to unresolved disputes with Tomlespromivest LLC, has disposed of its' interest in Siberian Wood LLC in exchange for a long term note.
In April 2004 the Company’s wholly owned subsidiary Victoria Resources, Inc. established Coptent Trading Ltd., a Cypriot wholly owned subsidiary to conduct marketing and distribution of lumber to the Chinese market.
Effective from July 1, 2007 the Russian Federation significantly raised the export tariffs for logs and unprocessed lumber that was the main product sold by the Company to its Chinese customers. Another factor that contributed to the erosion of the Company’s competitive position was a sharp strengthening of the Russian Ruble against the US dollar by 8.5% in 2006 and 5.2% during 9 months of 2007. As a result, the Company’s business model became unviable and no deliveries took place in third quarter of 2007. During third quarter of 2007, the Company made multiple attempts to salvage the timber trading business by seeking more favorable pricing terms from its suppliers. However, all these attempts have proved unsuccessful. As a result of the above events, the Company believed that its log and unprocessed timber trading business did not have significant value and decided to dispose of and abandon the entire investment in Victoria Resources, Inc. After the decision was made to dispose of the business, and the transaction terms were negotiated, the disposed segment has been unable to collect its accounts receivable due to the inability of the Company to continue transacting its lumber trading business.
On November 30, 2007, Victoria Industries, Inc. (the “Company”) entered into a Share Exchange Agreement to sell the Company’s entire 100% interest in Victoria Resources, Inc. to certain stockholders of Victoria Industries, Inc. for 406,254 shares of Victoria Industries Inc. In addition, the purchasers have agreed to assume the outstanding loans of Victoria Industries, Inc. which had been incurred on behalf of the Russian timber trading operations. Upon consummation of the transaction, the Company did not have any on-going business operations and returned to the development stage and is currently seeking a suitable merger candidate.
The Company currently has a staff of two. In the event, we merge with another company we may need to recruit additional staff.
The principal executive office of the Company is situated at the following address: 551 Fifth Avenue, Suite 423, New York, NY 10017, USA.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
None.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders are an adverse party or have a material interest adverse to us.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the years ended December 31, 2009 and 2008.
PART II:
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
Victoria Industry’s common stock is listed on the OTC Bulletin Board exchange under the symbol «VIIN». Our common stock began quotation on the OTC Bulletin Board on January 12, 2001 and our CUSIP number is 77578R 100. The following quotations reflect the high and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The quotations prior to September 30, 2003 have been adjusted for the 10:1 reverse split that came into effect on December 19, 2003. The high and low bid prices of our common stock (obtained from Bloomberg) for the periods indicated below are as follows:
OTC Bulletin Board
Our common shares are issued in registered form. Pacific Stock Transfer, 5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 (Telephone: (702) 361-3033, facsimile (702) 732-7890) is the registrar and transfer agent for our common shares.
As of March 26, 2010 we had 10,558,836 shares of common stock outstanding and approximately 33 stockholders of record. This number of stockholders does not include stockholders who hold our securities in street name.
Dividend Policy
We have not declared or paid any dividends since inception. We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future. Although there are no restrictions that limit our ability to pay dividends on our common shares, we intend to retain future earnings for use in our operations and the expansion of our business.
ITEM 6.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OF PRINCIPAL CONDITION AND OPERATIONS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
OVERVIEW
Upon sale of Victoria Resources, Inc. we returned to a development stage company status. It is anticipated that we will require only nominal capital to maintain our corporate viability and the necessary funds will most likely be provided by our principal shareholder or our officers and directors in the immediate future. However, in the event we do not identify and complete an acquisition of an operating business and/or do not raise significant outside financing, there is substantial doubt about our ability to continue as a viable corporation.
Going Concern - These consolidated financial statements have been prepared on a going concern basis which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, these consolidated financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.
In order to continue as a going concern, the Company requires additional financing. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to continue as a going concern, it would likely be unable to realize the carrying value of the Company's assets reflected in the balances set out in the preparation of consolidated financial statements. The Company's limited revenue history, high concentration of credit risk in consequence of its dependence on a single major customer and limited funding raise substantial doubt about the Company's ability to continue as a going concern.
PLAN OF OPERATION
We have sought and we plan to continue investigating possible business opportunities with the intent to acquire or merge with one or more business ventures.
Indemnification of Directors, Officers and Others
Our by-laws contain provisions with respect to the indemnification of our officers and directors against all expenses (including, without limitation, attorneys' fees, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that the person is one of our officers or directors) incurred by an officer or director in defending any such proceeding to the maximum extent permitted by Nevada law.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
Future Dilution
Our statutory documents authorize the issuance of 75,000,000 common shares, each with a par value of $0.001. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our Company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such Additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.
Anti-takeover provisions
We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our Company, which may result in a change in our management and directors.
Reports to Security Holders
Under the securities laws of Nevada, we are not required to deliver an annual report to our shareholders but we intend to send an annual report to our shareholders.
ITEM 7.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. The Report of Independent Registered Public Accounting Firm, John A. Braden & Co, P.C., of the financial statements of Victoria Industries, Inc*, (the "Company") for the year ended December 31, 2009 is included herein immediately preceding the audited financial statements for the respective periods.
*Former name - Rolltech Inc., as filed in preliminary information statement on September 9, 2003, pursuant to Section 14(c) of the Act reporting the amendment to the Company's Certificate of Incorporation to change the Company's name to Victoria Industries, Inc.").
VICTORIA INDUSTRIES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2009
VICTORIA INDUSTRIES, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE DIRECTORS AND STOCKHOLDERS OF VICTORIA INDUSTRIES, INC.:
We have audited the accompanying balance sheets of Victoria Industries, Inc.. (A Development Stage Company) (“the Company”) as of December 31, 2009 and December 31, 2008, and the related statements of operations and comprehensive income (loss), changes in stockholders’ equity and cash flows for the years ended December 31, 2009 and 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Victoria Industries, Inc at December 31, 2009 and 2008, and the related results of their operations and cash flows for the years ended December 31, 2009 and 2008, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company incurred a net loss of $15,850 during the year ended December 31, 2009, and, as of December 31, 2009, the Company’s current liabilities exceeded its current assets by $98,246. These factors, among others, including the Company’s ability to find a suitable merger candidate raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
John A. Braden & Co, P.C.
Houston, Texas
March 26,
VICTORIA INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(Expressed in US Dollars)
The accompanying notes are an integral part of these financial statements
VICTORIA INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in US Dollars, except share amounts)
The accompanying notes are an integral part of these financial statements
VICTORIA INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(Expressed in US Dollars, except share amounts)
(1) Removal of previously recorded foreign currency translation adjustments associated with the Company’s Russian assets and operations
The accompanying notes are an integral part of these financial statements
VICTORIA INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Expressed in US Dollars)
The accompanying notes are an integral part of these financial statements
1. NATURE OF BUSINESS
Victoria Industries, Inc. was incorporated on January 25, 2000 under the laws of the State of Nevada. Until June 30, 2007, the Company was involved in lumber wholesaling and exporting business in the Russian Federation. Effective from July 1, 2007 the Russian Federation significantly raised the export tariffs for logs and unprocessed lumber that was the main product sold by the Company to its Chinese customers. Another factor that contributed to the erosion of the Company’s competitive position was a sharp strengthening of the Russian Ruble against the US dollar by 8.5% in 2006 and 5.2% during 9 months of 2007. As a result, the Company’s business model became unviable and no deliveries took place in third quarter of 2007. During third quarter of 2007, the Company made multiple attempts to salvage the timber trading business by seeking more favorable pricing terms from its suppliers. However, all these attempts have proved unsuccessful. As a result of the above events, the Company believed that its log and unprocessed timber trading business did not have significant value and decided to dispose of and abandon the entire investment in Victoria Resources, Inc. After the decision was made to dispose of the business, and the transaction terms were negotiated, the disposed segment has been unable to collect its accounts receivable due to the inability of the Company to continue transacting its lumber trading business.
On November 30, 2007, Victoria Industries, Inc. (the “Company”) entered into a Share Exchange Agreement to sell the Company’s entire 100% interest in Victoria Resources, Inc. to certain stockholders of Victoria Industries, Inc. for 406,254 shares of Victoria Industries Inc. In addition, the purchasers have agreed to assume the outstanding loans of Victoria Industries, Inc. which had been incurred on behalf of the Russian timber trading operations. Upon consummation of the transaction, the Company did not have any on-going business operations and returned to the development stage.
The principal executive office of the Company is situated at the following address: 551 Fifth Avenue, Suite 423, New York, NY 10017, USA.
The number of fulltime employees of the Company as at December 31, 2009 and December 31, 2008 amounted to 2 and 1 respectively.
2. PRESENTATION OF FINANCIAL STATEMENTS
Basis of Presentation
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”)
Use of Estimates and Assumptions - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Going concern - The Company returned to a development stage company upon sale of its operating subsidiary Victoria Resources, Inc. in 2007 and has been inactive since December 31, 2007. The ability of the Company to meet its obligations is dependent on being able to successfully acquire a new business activity. The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents - Cash include petty cash and cash held on current bank accounts. Cash equivalents include short-term investments with maturities of three months or less that are readily convertible to known amount of cash and which are subject to insignificant risk of changes in value.
Loss per Common Share - Earnings per share are computed in accordance with SFAS No. 128, "Earnings Per Share". Basic income per share is calculated by dividing the net income available to common stockholders by the weighted average number of shares outstanding during the year. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity. In a loss year, dilutive common equivalent shares are excluded from the loss per share calculation as the effect would be anti-dilutive. Basic and diluted earnings per share are the same for the years presented.
Comprehensive Income - Statement of SFAS 130, “Reporting Comprehensive Income,” establishes standards for reporting and displaying of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements.
4. FOUNDATION AND DISPOSAL OF SUBSIDIARIES
Victoria Resources, Inc. - 100%
In September 2003, the Company contributed $1,000 into the establishment of a wholly-owned subsidiary, Victoria Resources, Inc. in the State of New York for the purpose of pursuing opportunities in the lumber resource sector.
Victoria Lumber, LLC - 100%
In December 2003 the Company’s subsidiary, Victoria Resources, Inc., contributed $300,000 into the establishment of new 100% owned subsidiary, Victoria Lumber, LLC, based in Chelyabinsk, Ural region of the Russian Federation.
Victoria Lumber LLC, was established in order to focus on marketing and distribution of high-value added forestry products.
Coptent Trading Ltd - 100%
In April 2004 the Company’s subsidiary, Victoria Resources Inc contributed $10,095 into the establishment of new 100% owned subsidiary, Coptent Trading Ltd., registered in Cyprus. The subsidiary was established in order to provide better marketing and administration functions of lumber sales on the Chinese market.
Disposal of lumber trading business
On November 30, 2007, Victoria Industries, Inc. (the “Company”) entered into a Share Exchange Agreement to sell the Company’s entire 100% interest in Victoria Resources, Inc. together with subsidiaries to certain stockholders of Victoria Industries, Inc. for 406,254 shares of Victoria Industries, Inc. In addition, the purchasers have agreed to assume the outstanding loans of Victoria Industries, Inc. which had been incurred on behalf of Victoria Resources and related to the timber trading business.
5. ACCOUNTS PAYABLE
Accounts payable of $7,111 as of December 31, 2009 (2008: $Nil) represented unpaid professional expenses including the auditor and financial printer.
6. SHORT TERM BORROWINGS FROM RELATED PARTIES
Borrowings from related parties in a total amount of $91,135 as of December 31, 2009 (2008: $82,396) represented non-interest bearing borrowings from the Company’s shareholders payable on demand, which the Company borrowed in order to finance certain professional and administrative expenses.
7. COMMON STOCK
There are 75,000,000 common shares authorized by the Company’s Amended and Restated Certificate of Incorporation. There were 10,558,836 and 10,558,836 ordinary shares with a par value of $0.001 US dollar issued and outstanding as of December 31, 2009 and December 31, 2008.
The holders of ordinary shares have voting rights but no guarantee of dividends. Distributable profits are determined on the basis of profits reported in statutory financial statements of the Company’s entities. These profits differ from profits recorded under US GAAP.
No dividends were declared or paid during the periods ended December 31, 2009 and December 31, 2008.
8. RELATED PARTIES
Related parties include shareholders, affiliates and entities under common ownership, over which the Company has the ability to exercise a significant influence and/or control.
Transactions with related parties are performed on terms that may differ from those that would be available to unrelated parties.
For details of related party balances outstanding as of December 31, 2009 and December 31, 2008 see Note 6.
9. COMMITMENTS AND CONTINGENCIES
Litigation - The Company has been the subject of legal proceedings and adjudications from time to time, none of which has had, individually or in the aggregate, a material adverse impact on the Company. In accordance with the Share Exchange Agreement, the purchasers of Victoria Resources, Inc. agreed to hold the Company harmless of any and all claims relating to the Company’s lumber business whether existing prior to the disposal or arising afterwards.
New accounting pronouncements:
In June 2009 the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
ASC Topic 855, "Subsequent Events", ASC Topic 810, "Accounting for Transfers of Financial Assets", ASC Topic 105 "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- were recently issued. Above codifications have no current applicability to the Company or their effect on the financial statements would not have been significant.
Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2010-03 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.
ITEM 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 8A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2009. Based upon that evaluation, our Directors, Chief Executive and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective for reasons provided below.
Management’s Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s CEO and the company’s CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
As of December 31, 2009, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2009, as a result of the identification of the material weakness described below.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some person, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
The Company’s management has identified a material weakness in the effectiveness of internal control over financial reporting related to a shortage of resources in the accounting department required to present the financials in accordance with US GAAP including all disclosures on a timely basis.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities Exchange Commission that permit the company to provide only management’s report in this annual report.
Conclusion
The above identified material weakness did not result in material audit adjustments to our 2009 financial statements. Based on our current size and size of operations, we do not believe it is economically feasible to remediate this weakness. We cannot assure you that, as circumstances change, any additional material weakness will not be identified.
PART III
ITEM 9.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Directors and Executive Officers
All directors of our company hold office until the next annual meeting of the shareholders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.
Name
Position
Age
Date First Elected
or Appointed
Oleg Batratchenko
Chief Executive Officer, Director
February 2, 2009
Key Personnel
Mr. Oleg Batratchenko, Сhief Executive Officer and Chairman of the Board. In addition to his position with the Company, Mr. Batratchenko is involved in real estate development and asset management for Thor United Corporation where he worked since 2000. Since early 1995 until 2000, Mr. Batratchenko served as Vice President at Berkshire International Finance, Inc., a corporate finance and investment-banking boutique, while during 1997-2000 he was registered with a brokerage firm Phillip Louis Trading, Inc. During 1993-1994, Mr. Batratchenko worked as a Research Analyst with Safian Investment Research, Inc., a research and money management firm. Prior to that, Mr. Batratchenko worked as a Performance Analyst at Neuberger & Berman. A Wharton School of Business MBA with a focus in Finance graduate (1999), Mr. Batratchenko has an outstanding educational background, with one bachelor degree in Economics (Moscow State University - 1987) and two more International Political Economy master degrees (Moscow Institute of World Economy - 1990 and New York University - 1992).
Mr. Leon Golden, Chief Financial Officer of Victoria Industries, Inc. Mr. Golden is a certified public accountant with over 17 years of experience. For the past two years, Mr. Golden has had his own CPA practice in New York City, and prior to that he worked as a public accountant for another New York City CPA firm for fifteen years. Mr. Golden serves on the board of directors of ABDC (OTCBB-ABDV). Mr. Golden holds a B.S. degree in Accounting from Brooklyn College.
Code of Ethics
The Company has adopted its Code of Ethics and Business Conduct for Officers, Directors and Employees that applies to all of the officers, directors and employees of the Company.
Compliance with Section 16(b) of the Exchange Act
Based solely on our review of Forms 3, 4, and 5, and amendments thereto which have been furnished to us, we believe that during the year ended December 31, 2004 and 2003 all of our officers, directors, and beneficial owners of more than 10% of any class of equity securities, timely filed, reports required by Section 16(a) of the Exchange Act of 1934, as amended.
ITEM 10.
ITEM 10. EXECUTIVE COMPENSATION
During 2009 the Company did not pay our senior management any material salaries. Actual salaries were based on nominal rates. The Company has not entered into any definitive compensation agreements with its senior management. There were no stock options outstanding as at December 31, 2009.
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables sets forth, as of March 26, 2010 the number of and percent of our common stock beneficially owned by (a) all directors and nominees, naming them, (b) our executive officers, (c) our directors and executive officers as a group, without naming them, and (d) persons or groups known by us to own beneficially 5% or more of our common stock. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
ITEM 12.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as discussed above and below, there have been no transactions, or proposed transactions, which have materially affected or will materially affect us in which any director, executive officer or beneficial holder of more than 10% of the outstanding common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.
As at the date of this annual report, we do not have any policies in place with respect to whether we will enter into agreements with related parties in the future.
ITEM 13.
ITEM 13. EXHIBITS FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following Financial Statements pertaining to Victoria Industries are filed as part of this annual report:
Report of Independent Registered Public Accounting Firm - John A. Braden & Co., P.C. for the year ended December 31, 2009 and 2008
Balance Sheets as of December 31, 2009 and 2008
Statements of Changes in Stockholders' Equity for the years ended December 31, 2009 and 2008.
Statement of Operations and Comprehensive Loss for the years ended December 31, 2009, and December 31, 2008.
Statements of Cash Flows for the years ended December 31, 2009 and 2008.
Notes to the Financial Statements for the year ended December 31, 2009.
EXIBITS REQUIRED BY ITEM 601 OF REGULATION S-B
Articles of Incorporation and Corporate Charter of the Registrant* (incorporated by reference from our Registration Statement on Form 10-SB filed on October 4, 2000)
By-laws of the Registrant* (incorporated by reference from our Registration Statement on Form 10-SB filed on October 4, 2000)
Code of Ethics
Filed Herewith
Rule 13a-14(a) Certification of Chief Executive Officer
Filed Herewith
Rule 13a-14(a) Certification of Chief Financial Officer
Filed Herewith
Section 1350 Certification of Chief Executive Officer
Filed Herewith
Section 1350 Certification of Chief Financial Officer
Filed Herewith
* Previously filed as an exhibit to the Company's Form 10-SB filed on October 4,
* CERTAIN PARTS OF THIS DOCUMENT HAVE NOT BEEN DISCLOSED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY, SECURITIES AND EXCHANGE COMMISSION, AND IS SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24B-2 OF THE SECURITIES ACT OF 1934.
SUBSIDIARIES:
None
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
The Audit Fees for year 2009 of $12,500 were for services associated with the U.S. GAAP audits and reviews of the applicable quarterly reports and offering memoranda rendered for the Company by Independent Registered Public Accounting Firm - John A. Braden & Co. P.C.
AUDIT-RELATED FEES
During 2009 we did not pay any Audit-Related Fees.
TAX FEES
During 2009 we did not pay any tax fees.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Sarbanes-Oxley Act of 2002 required us to implement a pre-approval process for all engagements with our independent public accountants. In compliance with Sarbanes-Oxley requirements pertaining to auditor independence, our Audit Committee pre-approves the engagement terms and fees of John A. Braden & Co. P.C. for all audit and non-audit services, including tax services.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 26, 2010
Victoria Industries, Inc.
/S/ Oleg Batratchenko
Oleg Batratchenko
President and CEO