Company Registration No. 06258931 (England and Wales)
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
COMPANY INFORMATION
Directors
J Parkhouse
C S Nunn on behalf of Capita Corporate Director Limited
C Ashburn
(Appointed 4 May 2022)
Secretary
Capita Group Secretary Limited
Company number
06258931
Registered office
65 Gresham Street
London
England
E2CV 7NQ
Auditor
KPMG LLP
1 Sovereign Square
Sovereign Street
Leeds
LS1 4DA
United Kingdom
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report to the members of Capita Travel & Events Holdings Limited
6 - 8
Income statement
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 20
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -

The Directors present their Strategic report and financial statements for the year ended 31 December 2021.

Review of the business

Capita Travel & Events Holdings Limited (“the Company”) is a wholly owned subsidiary ("indirectly held") of Capita plc. Capita plc along with its subsidiaries are hereafter referred to as “the Group”. The Company operates within the Group’s Portfolio division.

 

The principal activity of the Company is that of carrying on the business of a holding and investment Company. There have not been any significant changes in the Company's principal activities in the year under review. The Directors are not aware, at the date of this report, of any likely major changes in the Company's activities in the next year.

As shown in the Company's income statement on page 9, the Company has not reported any profit or loss for the year ended 31 December 2021 and 31 December 2020.

 

The balance sheet on page 10 of the financial statements shows the Company's financial position at the year end. Net assets have increased from £69,875,172 in 2020 to £69,875,178 in 2021.

 

The Company has not identified any key performance indicators due to the nature of its operations as a holding company and as described in the business review above.

Principal risks and uncertainties

 

The Company is subject to various risks and uncertainties during the ordinary course of its business, many of which result from factors outside of its control. The Company’s risk management framework provides reasonable (but cannot provide absolute) assurance that significant risks are identified and addressed. An active risk management process identifies, assesses, mitigates and reports on financial and compliance risk.

 

As a holding company, majority of Company’s assets consists of investments in subsidiary undertakings. Accordingly principal risks of the Company relate to its inability to recover the carrying value of its investments due to adverse conditions in markets where its subsidiaries operate.

 

The principal themes of risk for the Company are:

 

 

 

To mitigate the effect of these risks and uncertainties, the Company adopts a number of systems and procedures, including:

 

 

 

Capita plc, has also implemented appropriate controls and risk governance techniques across all of our businesses which are discussed in the Group’s annual report which doesn’t form part of this report.

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Section 172 statement
Capita plc's section 172 statement applies to both the Group and the Company to the extent it relates to the Company's activities. Common policies and practices are applied across the Group through divisional management teams and a common governance framework. The following disclosure describes how the Directors have regard to the matters set out in section 172(1a) to (f) and forms the Directors' statement as required under section 414CZA of the Companies Act 2006.

Further details of the Group's approach to each stakeholder are given in Capita plc's section 172 statement on page 40 and 41 of Capita plc's 2021 Annual Report.

Our People

 

Why they are important

They deliver our business strategy; they support the organisation to build a values-based culture; and they deliver our products and services ensuring client satisfaction.

What matters to them?

Flexible working, learning and development opportunities leading to career progression, fair pay and benefits as a reward for performance, two-way communication, and feedback.

How we engaged?

People surveys, regular all-employee communications, employee director participation in Board discussions, employee focus groups and network groups and workforce engagement on remuneration.

Topics of Engagement

Protection of employees during Covid-19, human resources policies during Covid-19, future ways of working as a result of Covid-19, and creating an inclusive workplace.

Outcomes and actions

Issue of Capita-specific Covid-19 guidance and regular updates; new and temporary HR policies; increased provision and support for employee wellbeing and flexible working; and simplification of property portfolio and office space.

Risks to shareholder relationship

Our ability to recruit due to the global economic bounce back, our ability to retain people, impacting the quality of service we can provide and our ability to change our culture and practices in line with our responsible business agenda.

Key Metrics

Employee net promoter score, people survey completion level.

Clients and Customers

 

Why they are important

They are recipients of Capita’s services; and Capita’s reputation depends on delighting them.

What matters to them?

High-quality service delivery; delivery of transformation projects within agreed timeframes; rapid response to support pandemic planning; and responsible and sustainable business credentials.

How we engaged?

Client meetings and surveys, Regular meetings with government and annual review with Cabinet Office and Created a senior client partner programme giving an experienced, single point of contact for key clients and customers

Topics of Engagement

Remote working on client services as a result of Covid-19, current service delivery, possible future services, co-creation of client value propositions.

Outcomes and actions

Feedback provided to business units to address any issues raised, client value

propositions team supporting divisions with co‑creation ideas; and senior client partner programme undertaking client-focused growth sprints to build

understanding of client issues and ideas to help address them.

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -

Section 172 Statement (Continued)

 

Risks to stakeholder relationship

Loss of business by not providing the services they want, damage to reputation by not delivering to their requirements

Key Metrics

Customer NPS; specific feedback on client engagements.

Supplier and Partners

 

Why they are important

They share our values and help us deliver our purpose; maintain high standards in our supply chain; and achieve social, economic and environmental benefits aligned to the Social Value Act.

What matters to them?

Payments made within agreed payment terms, clear and fair procurement process, building lasting commercial relationships, and working inclusively with all types of business.

How we engaged?

Supplier meetings throughout source to procure process, regular reviews with suppliers, supplier questionnaires and risk assessments.

Topics of Engagement

Supplier payments, sourcing requirements, supplier performance, and the Supplier Charter.

Outcomes and actions

Alignment of payments with agreed terms; supplier feedback on improvements to procurement process; improvement plans and innovation opportunities; and improved adherence to supplier charter.

Risks to stakeholder relationship

Environmental issues, commitment to tackling net zero, supply chain resilience

Key Metrics

% of supplier payments within agreed terms; supplier relationship management feedback score; SME spend allocation; and supplier diversity profile

Society

 

Why they are important

Capita is a provider of key services to government impacting a large proportion of the population.

What matters to them?

Social mobility, youth skills and jobs; digital inclusion; diversity and inclusion; climate change; business ethics and accreditations and benchmarking.

How we engaged?

Memberships of non-governmental organisations, charitable and community partnerships.

Topics of Engagement

Youth employment, tackling digital exclusion, workplace inequalities, and Climate change.

Outcomes and actions

 

Publication of net zero plan; real living wage accreditation; youth and employability programme; and commitments to tackle racism and enhance ethnic diversity.

Risks to stakeholder relationship

 

Lack of understanding of the issues important to them and insufficient communication or involvement in shaping and influencing strategies and plans.

Key Metrics

Percentage reduction in carbon footprint, amount of community investment, and responsible business report 2021: capita.com/responsible business.

 

On behalf of the board

J Parkhouse
Director
19 July 2022
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -

The Directors present their Directors' report and financial statements for the year ended 31 December 2021.

Results and dividends

The results for the year are set out on page 9.

The Company has not paid or proposed any interim or final dividend during the year (2020 £ £3,549,718 (interim)).

Directors

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

J Parkhouse
I S Sandhu
(Resigned 29 April 2022)
C S Nunn on behalf of Capita Corporate Director Limited
C Ashburn
(Appointed 4 May 2022)
G Broad
(Appointed 4 May 2022 and resigned 26 May 2022)
Political donations
The Company made no political donations and incurred no political expenditure during the year (2020: £nil).
Auditor
KPMG LLP, having indicated its willingness to continue in office, will be deemed to be reappointed as auditor under section 487(2) of the Companies Act 2006.
Statement of Directors' responsibilities in respect of the Strategic report, the Directors' report and the Financial statements

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 they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.

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:

 

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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

 

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
Statement of disclosure to auditor

So far as each person who was a Director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the Company's auditor is unaware. Having made enquiries of fellow Directors and the Company's auditor, each Director has taken all the steps he/she might reasonably be expected to take as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Qualifying third party indemnity provisions

The Company has granted an indemnity to the Directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors' report.

On behalf of the board
J Parkhouse
Director
19 July 2022
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
- 6 -
Opinion

We have audited the financial statements of Capita Travel & Events Holdings Limited (“the company”) for the year ended 31 December 2021 which comprise the Income Statement, Balance Sheet and Statement of Changes in Equity and related notes, including the accounting policies in note 1.

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 1.1 to the financial statements which indicates that the Company is reliant on its ultimate parent undertaking, Capita plc, in regard to its ability to continue as a going concern. The most recent financial statements of Capita plc include material uncertainties that may cast significant doubt on its ability to continue as a going concern. The reliance of the Company on Capita plc accordingly means that these events and conditions constitute a material uncertainty that may cast significant doubt on the Group’s and in turn, the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Going concern

The directors have prepared the financial statements on the going concern basis. As stated above, they have concluded that a material uncertainty related to going concern exists. Based on our financial statements audit work, we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

 

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included enquiring of directors and inspection of policy documentation as to the Capita Plc’s policies and procedures to prevent and detect fraud that apply to this group company as well as enquiring whether the directors have knowledge of any actual, suspected or alleged fraud.

As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because there are no revenue transactions. We did not identify any additional fraud risks.

We performed procedures including agreeing all accounting entries in the period to supporting documentation.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
- 7 -

Fraud and breaches of laws and regulations – ability to detect (continued)

 

Identifying and responding to risks of material misstatement related to compliance with laws and regulations

 

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors (as required by auditing standards), and discussed with the directors the policies and procedures regarding compliance with laws and regulations.

The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

This company, as a holding company, is not subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements.

Context of the ability of the audit to detect fraud or breaches of law or regulation

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Strategic report and directors’ report

The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.

Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report to you if, in our opinion:

We have nothing to report in these respects.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
- 8 -

Directors' responsibilities

 

As explained more fully in their statement set out on page 4, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Katharine L'Estrange (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditors
Chartered Accountants
1 Sovereign Square
Sovereign Street
Leeds
LS1 4DA
19 July 2022
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
INCOME STATEMENT   
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
£
£
Notes
Profit before taxation
-
-
Income tax credit
4
6
-
Total comprehensive income for the year
6
-
0

The income statement has been prepared on the basis that all operations are continuing operations.

There are no recognised gains and losses other than those passing through the income statement.
The notes on pages 12 to 20 form an integral part of these financial statements.
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
Non-current assets
Investments in subsidiaries
5
69,875,164
69,875,164
69,875,164
69,875,164
Current assets
Trade and other receivables
6
14
8
Total assets
69,875,178
69,875,172
Total liabilities
-
-
Net assets
69,875,178
69,875,172
Capital and reserves
Issued share capital
7
2
2
Retained earnings
69,875,176
69,875,170
Total equity
69,875,178
69,875,172
The notes on pages 12 to 20 form an integral part of these financial statements.
Approved by Board and authorised for issue on 19 July 2022
J Parkhouse
Director
Company Registration No. 06258931
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Issued share capital
Retained earnings
Total equity
£
£
£
At 1 January 2020
73,114,460
310,430
73,424,890
Reduction in shares and transfer to retained earnings
(73,114,458)
73,114,458
-
Equity dividends paid
-
(3,549,718)
(3,549,718)
At 31 December 2020
2
69,875,170
69,875,172
Total comprehensive income for the year
-
6
6
At 31 December 2021
2
69,875,176
69,875,178
Issued share capital
The balance classified as share capital is the nominal proceeds on issue of the Company's equity share capital, comprising 2 ordinary shares of 1 each.
Retained earnings
Net profits kept to accumulate in the company after dividends are paid and retained in the business as working capital.
The notes on pages 12 to 20 form an integral part of these financial statements.
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
1
Accounting policies
1.1
Basis of preparation

Capita Travel & Events Holdings Limited is a company incorporated and domiciled in the United Kingdom.

 

The financial statements are prepared under the historical cost basis except where stated otherwise and in accordance with applicable accounting standards.

 

In determining the appropriate basis of preparation for the annual report and financial statements for the year ended 31 December 2021, the Company’s Directors (“the Directors”) are required to consider whether the Company can continue in operational existence for the foreseeable future, being a period of at least 12 months following the approval of these financial statements. The Directors have concluded that it is appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, and sensitivities, as set out below.

 

Board assessment

Base case scenario

The financial forecasts used for the going concern assessment are derived from the 2022-2023 business plans (‘BP’) for the Company which have been subject to review and challenge by management and the Directors. The Directors have approved the projections. Under the base case scenario, completion of Capita plc’s group wide transformation programme has simplified and strengthened the business and facilitates further efficiency savings enabling sustainable growth in revenue, profit, and cash flow over the medium term.

Severe but plausible downside

In addition to the base case, the Directors have also considered severe but plausible downside scenarios. The Directors have taken account of trading downside risks, which assume the Company is not successful in delivering the anticipated levels of revenue, profit, and cash flow growth. The downside scenario used for the going concern assessment also includes potential adverse financial impacts due to additional inflationary pressure which cannot be passed on the customers, not achieving targeted margins on new or major contracts, unforeseen operational issues leading the contract losses and cash outflows, and unexpected potential fines and losses linked to incidents such as data breaches and/or cyber-attacks.

Offsetting these risks the Directors have considered available mitigations within the direct control of the Company, including reductions to variable pay rises, setting aside any bonus payments and limiting discretionary spend.

 

Reliance on Capita plc (‘the Group’)

The Director’s assessment of going concern has considered the extent to which the Company is reliant on the Group. The Company is reliant on the Group in respect of the following:

 

Given the reliance the Company has on the Group, the Directors have considered the financial position of the ultimate parent undertaking as disclosed in its most recent consolidated financial statements, being for the year ended 31 December 2021.

 

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
1.1
Basis of preparation (continued)

Ultimate parent undertaking – Capita plc

The Capita plc Board (‘the Board’) concluded that it was appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, and sensitivities, when preparing the Group’s consolidated financial statements to 31 December 2021. These financial statements were approved by the Board on 9 March 2022 and are available on the Group’s website (www.capita.com/investors). Below is a summary of the position at 9 March 2022:

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of these financial statements, although those standards do not specify how far beyond twelve months a Board should consider. In its going concern assessment, the Board has considered the period from the date of approval of these financial statements to 31 August 2023, which is just less than eighteen months from the date of approval of the Group financial statements ('the going concern period') and which aligns with the expiry of the revolving credit facility (RCF). The Board has also considered any material committed outflows beyond this period in forming their assessment, including the extension of the RCF which is a key consideration.

The base case financial forecasts demonstrate liquidity headroom and compliance with all covenant measures throughout the going concern period to 31 August 2023.

The principal mitigation to the possibility of insufficient liquidity in the severe but plausible downside scenario is the continuation of the Board approved disposal programme which covers businesses that do not align with the Group’s longer-term strategy. The Group has a strong track record of executing major disposals. In 2021, the Board targeted to achieve £700m of disposal proceeds by 30 June 2022 and will exceed this target on the completion of the announced disposal of Trustmarque and Speciality Insurance businesses. The disposal programme continues, with further disposal processes launched in early 2022. The Board is confident that the disposal programme will be delivered, thereby introducing substantial net cash proceeds to the Group, albeit with a corresponding removal of consolidated profits and cash flows associated with the disposal businesses.

In addition to the ongoing disposal programme, the Group may seek to mitigate the liquidity risks which might arise in the downside scenario by seeking further sources of financing beyond its existing committed funding facilities. The Board has been successful in obtaining new and extended financing facilities in recent years and an immediate mitigating action includes the extension of the current RCF which currently expires on 31 August 2023.

 

Material uncertainties related to the Group:

The Board recognises that the disposal programme requires agreement from third parties and that major disposals may be subject to shareholder and, potentially, lender approval. Similarly, any new refinancing, including the extension of the RCF, requires agreement with lenders. Such agreements and approvals are outside the direct control of the Group. Therefore, given that some of the mitigating actions which might be taken to strengthen the Group's liquidity position in the severe but plausible downside scenario are outside the control of the Group, this gives rise to material uncertainties, as defined in accounting standards, relating to events and circumstances which may cast significant doubt about the Group’s ability to continue as a going concern and to continue in operation and discharge its liabilities in the normal course of business.

Reflecting the Board’s confidence in the benefits expected from the completion of the transformation programme and execution of the approved disposal programme coupled with the potential to obtain further financing beyond its existing committed funding facilities, the Group continues to adopt the going concern basis in preparing these financial statements. The Board has concluded that the Group will be able to continue in operation and meet their liabilities as they fall due over the period to 31 August 2023. Consequently, these financial statements do not include any adjustments that would be required if the going concern basis of preparation were to be inappropriate.

 

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.1
Basis of preparation (continued)
Conclusion
Although the Company has a reliance on the Group as detailed above, even in a severe but plausible downside for both the Company and the Group, the Directors are confident the Company will continue to have adequate financial resources to continue in operation and discharge its liabilities as they fall due over the period to 31 August 2023 (the “going concern period”). Consequently, the annual report and financial statements have been prepared on the going concern basis.  

However, as the Group's financial statements have identified material uncertainties giving rise to significant doubt over the Group's ability to continue as a going concern, given the Company's reliance on the Group as set out above, this in turn gives rise to a material uncertainty relating to events and circumstances which may cast significant doubt about the Company's ability to continue as a going concern and, therefore, that the Company may be unable to continue in operation and discharge its liabilities in the normal course of business. The financial statements do not include any adjustments which would be required if the going concern basis of preparation were to be deemed inappropriate.
1.2
Compliance with accounting standards

The Company has applied FRS101 – Reduced Disclosure Framework in the preparation of its financial statements. The Company has prepared and presented these financial statements by applying the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies

Act 2006.

 

The Company's ultimate parent undertaking, Capita plc, includes the Company in its consolidated statements. The consolidated financial statements are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and with UK-adopted International Financial Reporting Standards (IFRSs) and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority. These are available to the public and may be obtained from Capita plc’s website on https://www.capita.com/investors.

 

In these financial statements, the Company has applied the disclosure exemptions available under FRS 101 in respect

of the following disclosures:

- A cash flow statement and related notes;

- Comparative period movements for share capital, tangible fixed assets and intangible assets;

- Disclosures in respect of transactions with wholly owned subsidiaries;

- Disclosures in respect of capital management;

- The effects of new but not yet effective IFRSs; and

- Disclosures in respect of the compensation of key management personnel.

 

Since the consolidated financial statements of Capita plc include equivalent disclosures, the company has also taken

the disclosure exemptions under FRS 101 available in respect of the following disclosure:

 

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.3
Financial Instruments

 

Investments and other financial assets

The Company classifies its financial assets in the following measurement categories:

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

 

Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade date (that is, the date on which the Company commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantial all the risks and rewards of ownership.

 

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset

not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of

the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

 

Impairment
The Company assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Company applies the simplified approach permitted by IFRS 9, resulting in trade  recognised and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit losses.
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less loss  allowance.
1.4
Income Tax

 

Tax on the profit or loss for year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity or other comprehensive income.

 

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

 

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

1.5
Investments in subsidiaries

All investments in subsidiaries are initially recorded at their cost. Subsequently they are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable .

CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
1.6

Group accounts

The financial statements present information about the company as an individual undertaking and not about its group. The company has not prepared group accounts as it is exempt from the requirement to do so by section 400 of the Companies Act 2006 as it is a subsidiary undertaking of Capita plc, a company incorporated in England and Wales, and is included in the consolidated accounts of that company.

2
Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires the Directors to make judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported income and expense during the reported periods. Although these judgements and assumptions are based on the Directors' best knowledge of the amount, events or actions, actual results may differ.

 

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

 

 

 

3
Operating loss for the year
Audit fees are borne by the ultimate parent undertaking, Capita plc. The audit fee for the current period was £3,600 (2020: £3,000).The Company has taken advantage of the exemption provided by regulations 6(2)(b) of The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 not to provide information in respect of fees for other (non-audit) services as this information is required to be given in the company accounts of the ultimate parent undertaking, which it is required to prepare in accordance with the Companies Act 2006.
4
Income tax
2021
2020
£
£
Current income tax
UK corporation tax
-
-
Adjustments in respect of prior years
(6)
-
Total tax credit reported in the income statement
(6)
-
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
4
Income tax
(Continued)
- 17 -

The reconciliation between tax credit and the accounting profit multiplied by the UK corporation tax rate for the years ended 31 December 2021 and 2020 is as follows:

2021
2020
Profit before tax
-
-
Loss before tax multiplied by standard rate of corporation tax in the UK at 19% (2020: 19%)
-
-
Effects of -
Adjustments in respect of current tax of prior periods
(6)
-
Total adjustments
(6)
-
Total tax credit reported in the income statement
(6)
-
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
5
Investment in subsidiaries
£
Cost
At 1 January 2021
69,875,164
At 31 December 2021
69,875,164
Impairment
At 1 January 2021
-
Charge for the year
-
At 31 December 2021
-
Net book value
At 31 December 2021
69,875,164
At 31 December 2020
69,875,164
List of investments directly and indirectly held are as follows:
Direct investments
Country of incorporation
Ownership (%)
Nature
Agiito Limited (previously known as Capita Travel and Events Limited)*
United Kingdom
100
Travel agency
Evolvi Rail Systems Limited*
United Kingdom
100
System supplier of rail industry
Indirect investments
Country of incorporation
Ownership (%)
Nature
BSI Group Limited*
United Kingdom
100
Other service activities
Booking Services International Limited*
United Kingdom
100
Travel agency
* The registered office address is 65 Gresham Street, London, England, EC2V 7NQ
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
5
Investment in subsidiaries
(Continued)
- 19 -
The Company performs an impairment testing at the balance sheet date comparing the carrying value of subsidiaries held by the Company with their recoverable amount, determined via a discounted cash flow model. The financial projections for 2022-2026 were used to derive the cash flow forecasts for the purpose of the impairment testing. This recoverable amount has been adjusted for cash and other debt like items, including working capital and long-term intercompany balances.Using this approach, investments are held at their recoverable amounts, being the higher of their value in use and fair value less costs of disposal. Using this approach, the Company has not recognised any impairment during the year.
Sensitivity
The impairment testing as described is reliant on the accuracy of management's forecasts and the assumptions that underlie them; and on the selection of the discount and growth rates to be applied. To gauge the sensitivity of the result to a change in any one, or combination of the assumptions that underlie the model, a number of scenarios were developed to identify the range of reasonably possible alternatives and measure which investments are the most susceptible to an impairment should the assumptions used be varied. This sensitivity analysis is only applicable to those investments which have not already been fully impaired.

The table below shows the additional impairment required (with all other variables being equal) by: an increase in discount rate of 1%; or a decrease in the long-term growth rate of 1% for each of the investments; or by the severe but plausible downsides applied to the base case projection for assessing going concern and viability, without mitigations, and from all of the scenarios together.
Subsidiary
1% increase in discount rate £
1% decrease in long-term growth rate £
Severe but plausible downside £
Combination sensitivity £
Agiito Limited (previously known as Capita Travel and Events Limited)
-
-
-
98,179
Evolvi Rail Systems Limited
-
-
-
-
At 31 December 2021, no impairment (2020: nil) has arisen from the impairment testing performed. Under the combination sensitivity, an impairment of £98,179 has been identified in relation to Agiito Limited (previously known as Capita Travel and Events Limited).
Management continue to monitor closely the performance of all investments in subsidiaries and consider the impact of any changes to the key assumptions. Given the performance of certain subsidiaries has been affected by the continued recovery from Covid-19, there is a greater range of potential future outcomes.
The business of the Company's direct subsidiary - Capita Travel and Events Limited has been impacted by the new variant of COVID -19 (omicron) and railway strikes across United Kingdom in 2022. Given the level of judgement and estimation involved in assessing future cash flows, it is reasonably possible that outcomes within the next financial year may be different from management's assumptions and require a material adjustment to the carrying value of investments. The Directors have considered severe but plausible downside scenarios, recognising the uncertainty in the sector which makes forecasting more difficult. In addition to the above scenarios, a sensitivity analysis has been performed on management's base case assumptions and missing the business plan by 48% in combination with other factors (combination sensitivity) in 2022 in the travel business could lead to impairment of £4,157,834.
CAPITA TRAVEL & EVENTS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
6
Trade and other receivables
Current
2021
2020
£
£
Amounts due from parent undertaking
14
8
14
8
7
Issued share capital
2021
2020
2021
2020
Numbers
Numbers
£
£
Allotted, called up and fully paid
Ordinary shares of £1 each
At 1 January
2
73,114,460
2
73,114,460
Reduction in shares
-
(73,114,458)
-
(73,114,458)
At 31 December
2
2
2
2
8
Employees

There were no employees during the year apart from the Directors (2020: none)

The Directors have not provided qualifying services to the Company and are paid by other companies within the Capita Group. Such remuneration has not been allocated to the Company. In addition to the above, the Directors of the Company were reimbursed for the expenses incurred by them whilst performing business responsibilities.

9
Controlling party

The Company's controlling parent undertaking is Capita Holdings Limited, a company incorporated in England and Wales.

 

The Company's ultimate parent undertaking is Capita plc, a company incorporated in England and Wales. The financial statements of Capita plc are available from the registered office at 65 Gresham Street, London, England, EC2V 7NQ.

10
Events after the reporting date

There are no significant events which have occurred after the reporting date.

 

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