Registered number:
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
COMPANY INFORMATION
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DESTINOLOGY LIMITED
CONTENTS
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DESTINOLOGY LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the 17 month period ended 31 December 2021. The prior period was for 18 month period ended 31 July 2020.
The Company was acquired on 20 October 2020 by Brooklyn Travel Limited. The Company changed its financial period in order to align its financial period end date with the Brooklyn Travel group companies following its acquisition by the Group. As part of the Brooklyn Travel Group, the Company operates with the strategic objective of growing a significant presence in the long-haul and high-end travel market. During the calendar year 2021 the business was very much re-modelled in terms of product, marketing and personnel. The business is now very well placed to capitalise on a multitude of growth opportunities. Total Transaction Value (“TTV”) for the period is £30,460,409 (2020: £65,182,010 as restated). Gross Profit for the period is £4,452,470 (2020: £5,895,815 as restated) and EBITDA is a profit of £5,198,939 (2020: loss of £5,060,433 as restated). Period on period comparison of trading performance serves no credible purpose as: (i) the comparatives include a pro-longed period during which Saga Plc operated the business as non-core with an associated operational and strategic vacuum; (ii) the comparatives and the 2021 financials include significant pre-sale write downs and adjustments in respect of pre-sale amounts owed to Saga Plc; and (iii) the Covid-19 pandemic significantly adversely impacted both the 2021 and the 2020 financials. During 2021 the appetite for travel was very much dependent upon the public perception of the Covid risk; when things improved the business benefitted from the pent-up demand for travel only for the Covid risk to increase and again choke off the demand. Towards the end of the period, the underlying trends were very much positive. With the improved Covid-19 outlook for the UK, and for those destinations to which the clients of the business generally travel, management is optimistic that the worst of the business impact of the pandemic is in the past. Whilst the travel industry has learned that it must remain pragmatic in dealing with the potential for Covid related travel restrictions management is nevertheless confident that 2022 will see an improved year over outturn relative to 2021.
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DESTINOLOGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
The Board meets regularly and evaluates the Company’s risk position. The principal risks and uncertainties facing the Company are detailed below.
The operational risk is primarily reliance on supply from tour operators, hoteliers, airlines, and changes in general economic and other business conditions which may adversely affect demand for tourism products. Liquidity risk – The Company maintains sufficient funds for operational liquidity. The Board considers liquidity risk at Board meetings through monitoring of cash levels and detailed cash flow forecasts. Funding to date has been obtained through operational activities and from parent company. Foreign currency risk – The Company incurs limited purchases denominated in foreign currencies. The Board considers foreign currency risk at Board meetings and directs an appropriate medium and longer term hedging strategy. Interest rate risk – To the extent that non-operational finance is required it is organised through the parent company and accordingly no interest rate risk arises. Management believe the Company can meet key business risks in respect of competition and employee retention. Travel risk – Restrictions, or a loss of confidence, in travel as a result of international heath issues such as Covid-19 (and in particular the continued issues surrounding the Covid-19 pandemic) pose a risk to the Company. When such issues arise, the Board actively monitor trends in the development of the particular issue, assess the likely impact on customer demand, and seek to maximise the offsetting impact of mitigating actions. Geopolitical risk – restrictions, or a loss of confidence, in travel as a result of geopolitical tensions pose a risk to the confidence of the travelling public with an associated adverse impact on the Company. When such issues arise, the Board actively monitor trends in the development of the particular issue, assess the likely impact on customer demand, and seek to maximise the offsetting impact of mitigating actions.
The financial indicators of the company are:
This report was approved by the board on 28 March 2022
and signed on its behalf.
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DESTINOLOGY LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the period ended 31 December 2021. The prior period was for 18 month period ended 31 July 2020.
The directors are responsible for preparing the Strategic report, the Directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the period, after taxation, amounted to £
3,887,730
(2020 -
loss
£
6,537,311
)
.
During the period the company paid a dividend of £Nil (2020: £Nil).
The directors who served during the period were:
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DESTINOLOGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2021
The Company's policy is to consult and discuss with employees matters likely to affect employee's interests. Information on matters of concern to employees is given through information bulletins and face-to-face meetings with management. Information on the Company's performance is maintained through a regular newsletter and bi-annual conferences. The Performance and Development Review process ensure employees are made aware of their individual contribution to the business.
Management's review of developments and future prospects and principal risks and uncertainties are included in the Strategic Report.
The auditors, Simmons Gainsford LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on
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DESTINOLOGY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DESTINOLOGY LIMITED
We have audited the financial statements of Destinology Limited (the 'Company') for the period ended 31 December 2021, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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DESTINOLOGY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DESTINOLOGY LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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DESTINOLOGY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DESTINOLOGY LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered:
∙
the results of our enquiries of management and those charged with governance of their assessment of the
risks of fraud and irregularities;
∙
the nature of the Company, including its management structure and control systems (including the
opportunity for management to override such controls);
∙
management’s incentives and opportunities for fraudulent manipulation of the financial statements including
the Company’s remuneration and bonus policies and performance targets; and
∙
the industry and environment in which it operates.
We also considered UK tax and pension legislation and laws and regulations relating to employment and the
preparation and presentation of the financial statements such as the Companies Act 2006. Based on this understanding we identified the following matters as being of significance to the entity:
∙
laws and regulations considered to have a direct effect on the financial statements including UK financial
reporting standards, Company Law, tax and pension legislation, distributable profits legislation, CAA, ABTA and IATA regulations;
∙
the timing of the recognition of commercial income;
∙
management bias in selecting accounting policies and determining estimates; and
∙
recoverability of debtors.
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised:
∙
enquiries of management and those charged with governance as to whether the entity complies with such
laws and regulations;
∙
enquiries with the same concerning any actual or potential litigation or claims;
∙
discussion with the same regarding any known or suspected instances of non-compliance with laws and
regulation and fraud;
∙
assessment of matters reported to management and the result of the subsequent investigation;
obtaining an understanding of the relevant controls during the period;
∙
obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the period;
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DESTINOLOGY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DESTINOLOGY LIMITED (CONTINUED)
∙
review documentation relating to compliance with the regulations relating to health and safety including
health and safety certificates; and fire assessment reports;
∙
review documentation relating to compliance with the regulations relating to the CAA; ABTA; and IATA
including CAA and ABTA returns;
∙
challenging assumptions made by management in their specific accounting policies and estimates, in
particular in relation to booking cancellation provision;
∙
identifying and testing journal entries, in particular any journal entries posted with unusual account
combinations or crediting revenue;
∙
assessing the recovery of debtors in the period since the balance sheet date and challenging assumptions
made by management regarding the recovery of balances which remain outstanding;
∙
reviewing the financial statements for compliance with the relevant disclosure requirements;
∙
performing analytical procedures to identify any unusual or unexpected relationships or unexpected
movements in account balances which may be indicative of fraud;
∙
reviewing the correspondence with HMRC; and
∙
evaluating the underlying business reasons for any unusual transactions.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' report.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
14th Floor
33 Cavendish Square
W1G 0PW
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DESTINOLOGY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
REGISTERED NUMBER:
04293908
BALANCE SHEET
AS AT
31 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 13 to 32 form part of these financial statements.
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DESTINOLOGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 DECEMBER 2021
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DESTINOLOGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
31 JULY 2020
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Destinology Limited is a private company limited by shares and is incorporated in England and Wales, registration number 04293908. The address of the registered office is 42 High Street, Northwood, Middlesex, HA6 1BL.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). These financial statements were previously prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted for use in the European Union (EU). The management considered the change of accounting standards to Financial Reporting Standard 102 would align the Company's accounting policy with the group it's in. The change results in restatements being made to the comparatives in these financial statements, the impact of which is being explained in Note 27.
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Brooklyn Travel Holdings Limited as at 31 December 2021 and these financial statements may be obtained from 42 High Street, Northwood, Middlesex, United Kingdom, HA6 1BL.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
The financial statements have been prepared on the Going Concern basis. Management has prepared detailed financial projections that stretch out for 21 months beyond the date of signing of these accounts that support the Going Concern basis of preparation. In these projections assumptions have been made as to when the negative impact on travel bookings of the Covid-19 Pandemic will begin to recede and when the generally perceived pent-up demand for travel will flow through to a booking level that would be regarded as normal. In this regard account has been taken of the successful and rapidly rolled out Covid-19 vaccination, and associated booster, programme in the UK and in destination countries. Management is conscious that Covid-19 may continue to have an impact on the business for some time to come but, during the course of the past 17 months (post acquisition), has taken the necessary action to ensure that headroom is available in the financial projections should the trading assumptions therein prove to be insufficiently conservative. The relevant headroom has been generated through Governmental Assistance in the form of the Government Job Retention Scheme and individual location grants and strict controls on discretionary spend. On a group level, in the period ended 31 December 2020, the parent company received a Coronavirus Large Business Interruption Loan and drew down on a Revolving Credit Facility. The financial projections prepared to support the Going Concern basis do not show the need for further financial support such as that noted above though, should the Covid-19 Pandemic significantly impact the general economy over the next 12 months, it is likely that some or all such support can be accessed in some form together with access to shareholder funds.
Functional and presentation currency
Transactions and balances
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
The Company acts as Principal in organising a client’s holiday with the related total transaction value accounted for as revenue. All revenue in relation to organising client's holiday is recognised on booking date in the current period. Revenue was previously recognised on a departure date basis until the acquisition of the Company by the Brooklyn Travel Holdings Limited group on 20 October 2020. A prior year adjustment has been posted to restate the comparative figures in order to align the revenue recognition policy of the prior period to that of this period's. The impact of the prior year adjustment is explained in Note 21. Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance sheet.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Analysis of turnover by country of departure:
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
9.
Taxation (continued)
In the March 2021 Budget, it was announced that the Corporation Tax rate will increase to 25% for larger companies from 1 April 2023. A marginal rate will also be applied from this date where profits are between £50,000 and £250,000. The deferred tax asset has been calculated based on the current tax rate of 19%.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Page 27
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
17.
Deferred taxation (continued)
Capital contribution reserve
Profit and loss account
Page 28
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
The Company was acquired by the Brooklyn Travel Limited group in October 2020. In order to align the Company's revenue recognition policy with the group's policy in on sale of tours without supply-side commitments as a principal, management changed the Company's recognition of revenue from a departure date basis to booking date basis on the acquisition date. This has resulted in a restatement in prior period comparatives and the effect is a decrease of £5,131,959 in deferred income; a decrease of £2,173,721 in prepayments; an increase in trade debtors of £3,143,394; an increase in trade creditors of 5,243,685; an increase in other creditors of £806,558; an increase of £8,275,353 in turnover; and an increase of £8,223,964 in cost of sales. The effect of the adjustment is a decrease of £51,389 in the net loss and an increase of £51,389 in the reserves in the comparative period.
It was impracticable for management to obtain the information required for adjusting the opening reserves for the comparative period. Management had no control of such information while the underlying transactions were made during the Company's ownership of its former parent company.
The Company, together with its fellow group companies, has provided a guarantee over its assets to the Civil Aviation Authority to meet any future obligations and liabilities incurred by the group companies as ATOL license holders.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund.
The pension cost charge respresents contributions payable by the Company to the fund and amounted to £120,977 (2020: £187,241). Contributions totalling £19,346 (2020: £Nil) were payable to the fund at the balance sheet date and are included in creditors.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
The Company was a wholly owned subsidiary of Saga plc until 20 October 2020, on which date its 100% shareholding was acquired by Brooklyn Travel Limited.
The indirect parent undertaking of the Company is Brooklyn Travel Holdings Limited, which is the largest and smallest group to consolidate the Company's results. Both Companies have their registered office at 42 High Street, Northwood, Middlesex, United Kingdom, HA6 1BL. The parent undertaking of Brooklyn Travel Holdings Limited is Zachary Asset Holdings Limited, a company incorporated in Jersey. The ultimate controlling party of the group is the Haller family.
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DESTINOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
27.
First time adoption of FRS 102 (continued)
Explanation of changes to previously reported profit and equity:
Page 32
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