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Registered number: 05770868









Scenic Tours (UK) Limited









Annual Report and Consolidated Financial Statements

For the year ended 31 December 2021

 
Scenic Tours (UK) Limited
 
 
Company Information


Directors
G M Moroney 
C J Downing (resigned 19 February 2022)
D Anastasi (appointed 9 December 2021)




Registered number
05770868



Registered office
4 Piccadilly Place

Manchester

M1 3BN




Independent auditors
Ernst & Young LLP

2 St Peter's Square

Manchester

M2 3DF




Bankers
NatWest Bank plc
11 Spring Gardens

Manchester

M2 1FB





 
Scenic Tours (UK) Limited
 

Contents



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 5
Independent Auditors' Report
 
6 - 9
Consolidated Statement of Comprehensive Income
 
10
Consolidated Statement of Financial Position
 
11
Company Statement of Financial Position
 
12
Consolidated Statement of Changes in Equity
 
13
Company Statement of Changes in Equity
 
14
Consolidated Statement of Cash Flows
 
15
Analysis of Net Debt
 
16
Notes to the Financial Statements
 
17 - 35


 
Scenic Tours (UK) Limited
 
 
Group Strategic Report
For the year ended 31 December 2021

Introduction
 
The directors present their Group Strategic Report for the year ended 31 December 2021.
The Group is in the business of selling river cruise tours which take place principally in Europe. The Group also sells land tours which take place principally in Australia, as well as luxury ocean cruises.

Business review
 
The UK Group continued to be significantly impacted in 2021 by the COVID-19 pandemic. The main focus during the first part of 2021 was servicing guests whose holidays had been impacted by the pandemic. 
During the summer we were able to recommence limited activities and send guests on four river vessels along the Rhine, Main and Danube rivers as well as two vessels on the Douro river in Portugal and one vessel in France.
The wider Scenic Group has continued to invest in future growth with the commissioning of additional vessels, further increasing the sales potential of the UK entity. A second ocean going vessel, Scenic Eclipse 2, was commissioned for the Scenic Ocean Brand. The Group also continued building works on the Emerald Azzurra which will be the first ocean going vessel for the Emerald fleet. The vessel has a maximum capacity of one hundred guests and was completed in March 2022. The size of the vessel makes it ideal for big groups and charters and it is almost sold out for Q2 and Q3 2022. The huge success of this vessel has spurred management to take a decision in 2022 to build a similar vessel which will be called the Emerald Sakara and she will be completed by June 2023. Within the river fleet the Group also completed most of the works on Emerald Luna and this vessel commenced sailing in April 2022 along the Rhine, Main and Danube rivers. This is the sixth vessel of the Emerald fleet that is deployed in this area and is the result of significant growth in demand for Emerald products mostly from the US and UK markets.
Following a difficult period, the UK market has shown a strong appetite for both river and ocean cruises, leading to encouraging growth in advance bookings.  
We continue to maintain a sufficient liquidity position and look forward to future growth in the luxury holiday market.
Directors' statement of compliance with duty to promote the success of the Group
The Companies Act 2006 (CA2006) sets out a number of general duties which Directors owe to the Company and Group.
New legislation has been introduced to help stakeholders better understand how the Directors have discharged their duty to promote the success of the Company and Group, while having regard to the matters set out in section 172(1)(a) to (f) of the CA2006 (s172 factors). In 2019 the Directors continued to exercise all their duties, while having regard to these and other factors as they reviewed and considered proposals from senior management and governed the Company on behalf of its shareholder through the Scenic Tours (UK) board.
Scenic Tours (UK) Limited is run by a management team. The management team meets regularly to review the business performance and report into a Group Executive Team. This team in turn reports to the Chairman and Owner. It is the job of the local management team to form relationships with business partners, conduct market research and engage with customers via social media, traditional marketing channels and in person. Knowledge gained from these interactions is then used to guide the companies decision making to enhance the long term reputation and profitability of the Company and Group. 

Page 1

 
Scenic Tours (UK) Limited
 

Group Strategic Report (continued)
For the year ended 31 December 2021

Financial key performance indicator
 
Key financial performance indicators for the group are noted below:


2021
£000
2020
£000
Movement
£000
Movement
%





Turnover
3,418
9,873
(6,455)
(65%)
Operating (loss)
(8,851)
(8,129)
(722)
9%
Cash and cash equivalents
2,647
1,853
794
43%





Principal risks and uncertainties
 
Operational Risk
Due to the nature of the Group's business, the main operational risks are linked primarily to pandemics such as COVID-19, weather conditions, acts of terrorism or political unrest in the destinations where the tours and river cruises operate. In order to mitigate the impact of the COVID-19 pandemic, the Group has taken steps to temporarily reduce its cost base. This has included significantly reducing marketing expenditure. The Group uses multiple suppliers to minimise the risk of disruption in the supply chain.
Legislative and compliance risk
The Group seeks to ensure its operations comply at all times with the latest legislative requirements. Furthermore, the Group ensures that it maintains compliance with all customer requirements so as to ensure successful long term relationships.
Competitive Risk
The Group is faced with normal competitive risks associated with UK and European operations. The Group holds a strong niche position in its own market place and competes with a variety of different competitors. Management manages the flow of business opportunities so as to adjust operational approach and strategy accordingly.
Liquidity Risk
The Group monitors and controls its working capital cycle requirements in accordance with its forecast cashflow process.


This report was approved by the board and signed on its behalf.


D Anastasi
Director

Date: 7 September 2022

Page 2

 
Scenic Tours (UK) Limited
 
 
 
Directors' Report
For the year ended 31 December 2021

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

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in FRS 102 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the company financial position and financial performance; 

state whether FRS 102 has been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

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

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' reports may differ from legislation in other jurisdictions.

Results and dividends

The loss for the year, after taxation, amounted to £8,841,525 (2020 -loss £9,006,795).

The directors do not recommend payment of a final dividend (2020 - £nil).

Directors

The directors who served during the year were:

G M Moroney 
C J Downing (resigned 19 February 2022)
D Anastasi (appointed 9 December 2021)

Page 3

 
Scenic Tours (UK) Limited
 
 
 
Directors' Report (continued)
For the year ended 31 December 2021


Future developments

Future developments in the Group's business are included in the Group Strategic Report.
Going concern
Scenic Tours (UK) Limited is a member of the wider Scenic group of companies headed up by the parent company SGH LLC (the “Parent”). 
At 31 December 2021, Scenic Tours (UK) Limited (the “Company”) and its subsidiary (together the “Group”) had net current liabilities of £26,362,314 (2020: £17,561,134) and net liabilities of £26,192,588 (2020: £17,351,063). The Group has incurred operating losses due to covid 19. The Directors have reviewed the cashflow requirements of the Company and the Group for the Going Concern period until 31 December 2023.   
The Directors are conscious that the cruise industry in general, and the Group in particular, are subject to significant uncertainty, principally arising from impact on customer travel patterns and the Group’s ability to operate, resulting from:-
• The remnants of the 2020-2022 COVID-19 pandemic, and the possible emergence of further COVID -19 variants
• The emerging situation in the Ukraine, and the range of possible outcomes, which could possibly impact neighbouring countries, and cause a decline in demand for our river cruises in that general geography.
As such the going concern assessment of the UK entity is dependent on support from the Parent, to the extent required. The Parent will provide financial support for a period until 31 December 2023 to enable the Company and the Group to meet its financial commitments and pay its liabilities as they fall due. The Company and the Group have received a letter of support conforming that support for a period until 31 December 2023.
Management has prepared cashflow forecasts throughout the Going Concern period until 31 December 2023, based on historical financial information, forecasts, as well as realistic assumptions to assess the financial situation. After the financial year end, liquidity levels were impacted by the Parent temporarily not being able to take new bookings and corresponding cash deposits whilst IT systems were down due to the cyber incident, described further in note 26 to these financial statements. The Ukraine invasion in February 2022 has also impacted our level of new bookings. As a result, the Parent’s cash levels have been negatively impacted during Q1 2022 and the base-case cashflow forecast indicates that the Parent will be operating with relatively low liquid cash balances during the going concern assessment period. As a result, the Parent is looking into options to obtain further financing and restore a liquidity buffer that could withstand any other geopolitical shocks and that would give us time to reduce spend and adapt to a new environment. 
The Company and the Group are dependent on its Parent support, which  is reliant on its lenders and on the successful outcome of discussions to raise further funds, if required. The Directors consider that this constitutes a material uncertainty which casts significant doubt on the ability of the Company and the Group to continue  as a going concern.
The Directors confirm that, after considering the matters set out above and based upon positive meetings held so far with prospective lenders and the significant value of unencumbered vessels owned by the Parent they have a reasonable expectation that the Parent has the ability to secure additional financing if and when required. 
The Directors have made an appropriate assessment of liquidity and going concern whilst approving these consolidated financial statements and have determined that there is reasonable expectation that the Company and the Group have adequate resources to continue operating for the period until 31 December 2023. For this reason, these consolidated financial statements have been prepared on a going concern basis. The financial statements do not contain the adjustments to carrying values of assets and liabilities, should the going concern assumption prove to be invalid.

Page 4

 
Scenic Tours (UK) Limited
 
 
 
Directors' Report (continued)
For the year ended 31 December 2021

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

Cyber incident
On the 20th of February 2022 the Group was hit by a cyberattack which resulted in all users being locked out of core and accounting systems. The IT department of the Group is based in Australia and we engaged Australian lawyers and services of cybersecurity experts to provide advice and guide us through getting access back to our systems. To help us ensure that we are in full compliance with the laws of the various jurisdictions that the Group operates, we also engaged international lawyers. 
The hackers demanded a ransom payment to be made in exchange for unlocking access to our systems but the Group management has determined not to accede to this demand.
We have no evidence of any data exfiltration but we still took the precautionary measure of advising the relevant authorities in the UK and their feedback was that no further action was required unless we had evidence of any data breach.
Our vessel operations were not impacted by this breach. Our core systems were fully restored within three weeks of attack but it took a further two weeks until we could restore connection to our accounting systems. As a result we also had to postpone the completion of the audit of the financial statements for the year ended 31 December 2021. We also experienced some technical issues with getting our websites up and running and this were resolved at the beginning of May.
We are fully insured against the costs of the cyber attack and our insurers are settling the legal fees directly. There will be some other minor costs that we have incurred and which we will claim. We also have a business interruption policy in place and we will be submitting a claim once we collect all the relevant information.
Other
The UK MD left the company on 25th May 2022 and the company is in the latter stages of selecting a replacement. During the transitional period the senior management team continue to manage the UK business.
There have been no other significant events occurring after the reporting period which may affect either the Group and Company's operations or results of those operations or the Group and Company's state of affairs. 

Auditors

The auditorsErnst & Young LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
 
This report was approved by the board and signed on its behalf.
 


D Anastasi
Director
Date: 7 September 2022

Page 5

 
Scenic Tours (UK) Limited
 
 
 
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited
 

Opinion


We have audited the financial statements of Scenic Tours (UK) Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2021, which comprise the group Statement of comprehensive income, the group and company Statements of financial position, the group and parent Statement of changes in equity, the group Statement of cash flows and the related notes 1 to 27, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2021 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Material uncertainty related to going concern


We draw attention to note 2.4 in the financial statements, which refers to the directors’ assessment of going concern in light of the impact of the ongoing effects of COVID-19 and the situation in Ukraine on the Group.  The possible emergence of covid 19 variants and situation in Ukraine could impact the customers travels pattern and may result in decline in demand for cruises.


Although the Group has received a letter of parental support from its parent company, SGH LLC, and the Groups’ directors have considered the financial position of SGH LLC and concluded that it has the ability to provide that support. However, there is a material uncertainty around this support as SGH LLC has dependency on its lenders and on successfully obtaining further funds.
As stated in note 2.4, these events or conditions, along with the other matters as set forth in note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the Company's ability to continue as a going concern. 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. Our opinion is not modified in respect of this matter.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group’s ability to continue as a going concern.


Page 6

 
Scenic Tours (UK) Limited
 
 
 
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited (continued)


Other information


The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon.  The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this 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 there is 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 the other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.


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


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
Scenic Tours (UK) Limited
 
 
 
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited (continued)


Auditors' responsibilities for the audit of the financial statements
 

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


Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud.  The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. 
Our approach was as follows:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and    determined that the most significant are those that relate to the reporting framework (FRS 102 and Companies Act    2006) and the relevant direct and indirect tax compliance regulations in the United Kingdom.  
• We understood how Scenic Tours (UK) Limited (‘the parent company’) and its subsidiaries (the ‘group’) are    complying with those frameworks by making enquiries of management to understand how the Company maintains    and communicates its policies and procedures in these areas, and corroborated this by reviewing supporting     documentation and minutes of meetings of those charged with governance.  
• We assessed the susceptibility of the Company’s and the group’s financial statements to material misstatement,    including how fraud might occur by considering the risk of management override and accounting for customer    deposits for future tours, refunds and future travel credits to be fraud risks. For the risk on customer deposits, we    tested a sample of transactions to a lower testing threshold back to source documentation in the period around the    year end. In addition, we considered the risk of management override by sampling from the entire population of    journals, identifying specific transactions which did not meet our expectations based on specific criteria and    investigated these to gain an understanding and then agree back to source documentation.
• Based on this understanding we designed our audit procedures to identify noncompliance with such laws and    regulations. Our procedures involved verifying that material transactions were recorded in compliance with     requirements of the relevant accounting standards and UK legislation.


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.


Page 8

 
Scenic Tours (UK) Limited
 
 
 
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited (continued)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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.



Tehseen Ali (Senior Statutory Auditor)
for and on behalf of
Ernst & Young LLP, Statutory Auditor
Manchester

7 September 2022
Page 9

 
Scenic Tours (UK) Limited
 
 
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021

2021
2020
Note
£
£

  

Turnover
 4 
3,417,925
9,873,139

Cost of sales
  
(2,331,707)
(7,854,363)

Exceptional cost of sales
 13 
-
(2,473,346)

Gross profit/(loss)
  
1,086,218
(454,570)

Administrative expenses
  
(10,047,158)
(7,914,030)

Exceptional administrative expenses
 13 
-
(126,046)

Other operating income
 5 
42,733
365,293

Exceptional other operating income
 13 
66,905
-

Operating loss
 6 
(8,851,302)
(8,129,353)

Interest receivable and similar income
 10 
106
2,009

Interest payable and similar expenses
 11 
-
(136)

Loss before taxation
  
(8,851,196)
(8,127,480)

Tax on loss
 12 
9,671
(879,315)

Loss for the financial year
  
(8,841,525)
(9,006,795)

  

Currency translation differences
  
-
(6,160)

Other comprehensive (loss) for the year
  
-
(6,160)

  

Total comprehensive (loss) for the year
  
(8,841,525)
(9,012,955)

There were no recognised gains and losses for 2021 or 2020 other than those included in the consolidated statement of comprehensive income.
All activities relate to continuing operations.

The notes on pages 17 to 35 form part of these financial statements.

Page 10

 
Scenic Tours (UK) Limited
Registered number: 05770868

Consolidated Statement of Financial Position
As at 31 December 2021

2021
2020
Note
£
£

  

Fixed assets
  

Tangible assets
 14 
197,055
247,071

Current assets
  

Stocks
 16 
339,360
371,516

Debtors: amounts falling due after more than one year
 17 
137,963
137,963

Debtors: amounts falling due within one year
 17 
22,765,809
11,096,474

Cash at bank and in hand
 18 
2,647,474
1,853,447

  
25,890,606
13,459,400

Creditors: amounts falling due within one year
 19 
(52,252,920)
(31,020,534)

Net current liabilities
  
 
 
(26,362,314)
 
 
(17,561,134)

Total assets less current liabilities
  
(26,165,259)
(17,314,063)

  

Provisions for liabilities
  

Deferred taxation
 20 
(27,329)
(37,000)

  

Net liabilities
  
(26,192,588)
(17,351,063)


Capital and reserves
  

Called up share capital 
 21 
558,812
558,812

Profit and loss account
 22 
(26,751,400)
(17,909,875)

Shareholders' deficit
  
(26,192,588)
(17,351,063)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

D Anastasi
Director

Date: 7 September 2022

The notes on pages 17 to 35 form part of these financial statements.

Page 11

 
Scenic Tours (UK) Limited
Registered number: 05770868

Company Statement of Financial Position
As at 31 December 2021

2021
2020
Note
£
£

Fixed assets
  

Tangible assets
 14 
197,055
247,071

Investments
 15 
2,000
2,000

  
199,055
249,071

Current assets
  

Stocks
 16 
339,360
371,516

Debtors: amounts falling due after more than one year
 17 
137,963
137,963

Debtors: amounts falling due within one year
 17 
22,670,639
11,026,024

Cash at bank and in hand
 18 
2,551,433
1,757,406

  
25,699,395
13,292,909

Creditors: amounts falling due within one year
 19 
(52,063,709)
(30,856,043)

Net current liabilities
  
 
 
(26,364,314)
 
 
(17,563,134)

Total assets less current liabilities
  
(26,165,259)
(17,314,063)

  

Provisions for liabilities
  

Deferred taxation
 20 
(27,329)
(37,000)

Net liabilities
  
(26,192,588)
(17,351,063)


Capital and reserves
  

Called up share capital 
 21 
558,812
558,812

Profit and loss account brought forward
  
(17,909,875)
(8,523,014)

Loss for the year
  
(8,841,525)
(9,380,701)

Other changes in the profit and loss account

  

-
(6,160)

Profit and loss account carried forward
  
(26,751,400)
(17,909,875)

Shareholders' deficit
  
(26,192,588)
(17,351,063)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

D Anastasi
Director

Date: 7 September 2022

The notes on pages 17 to 35 form part of these financial statements.

Page 12

 
Scenic Tours (UK) Limited
 

Consolidated Statement of Changes in Equity
For the year ended 31 December 2021


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£

At 1 January 2021
558,812
(17,909,875)
(17,351,063)
(17,351,063)


Comprehensive income for the year

Loss for the year
-
(8,841,525)
(8,841,525)
(8,841,525)


Other comprehensive income for the year
-
-
-
-


Total comprehensive income for the year
-
(8,841,525)
(8,841,525)
(8,841,525)


At 31 December 2021
558,812
(26,751,400)
(26,192,588)
(26,192,588)



Consolidated Statement of Changes in Equity
For the year ended 31 December 2020


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£

At 1 January 2020
558,812
(8,896,920)
(8,338,108)
(8,338,108)


Comprehensive income for the year

Loss for the year
-
(9,006,795)
(9,006,795)
(9,006,795)

Currency translation differences
-
(6,160)
(6,160)
(6,160)


Other comprehensive income for the year
-
(6,160)
(6,160)
(6,160)


Total comprehensive income for the year
-
(9,012,955)
(9,012,955)
(9,012,955)


At 31 December 2020
558,812
(17,909,875)
(17,351,063)
(17,351,063)


The notes on pages 17 to 35 form part of these financial statements.

Page 13

 
Scenic Tours (UK) Limited
 

Company Statement of Changes in Equity
For the year ended 31 December 2021


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2021
558,812
(17,909,875)
(17,351,063)


Comprehensive income for the year

Loss for the year
-
(8,841,525)
(8,841,525)


At 31 December 2021
558,812
(26,751,400)
(26,192,588)



Company Statement of Changes in Equity
For the year ended 31 December 2020


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2020
558,812
(8,523,014)
(7,964,202)


Comprehensive income for the year

Loss for the year
-
(9,380,701)
(9,380,701)

Currency translation differences
-
(6,160)
(6,160)


At 31 December 2020
558,812
(17,909,875)
(17,351,063)


The notes on pages 17 to 35 form part of these financial statements.

Page 14

 
Scenic Tours (UK) Limited
 

Consolidated Statement of Cash Flows
For the year ended 31 December 2021

2021
2020
£
£

Cash flows from operating activities

Loss for the financial year
(8,841,525)
(9,006,795)

Adjustments for:

Amortisation of intangible assets
-
4,507

Depreciation of tangible assets
69,976
71,593

Interest paid
-
136

Interest received
(106)
(2,009)

Taxation charge
(9,671)
879,315

Decrease/(increase) in stocks
32,156
(74,734)

(Increase)/decrease in debtors
(283,100)
4,831,517

(Increase)/decrease in amounts owed by groups
(11,386,235)
31,968,721

Increase/(decrease) in creditors
17,645,672
(7,680,963)

Increase/(decrease) in amounts owed to groups
3,586,808
(23,231,892)

(Decrease)/increase in amounts owed to associates
(94)
-

Currency translation differences
-
(6,160)

Net cash generated from / (used in) operating activities

813,881
(2,246,764)


Cash flows from investing activities

Purchase of tangible fixed assets
(19,960)
(7,545)

Interest received
106
2,009

Net cash used in investing activities

(19,854)
(5,536)

Cash flows from financing activities

Interest paid
-
(136)

Net cash used in financing activities
-
(136)

Net increase/(decrease) in cash and cash equivalents
794,027
(2,252,436)

Cash and cash equivalents at beginning of year
1,853,447
4,105,883

Cash and cash equivalents at the end of year
2,647,474
1,853,447


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,647,474
1,853,447


Page 15

 
Scenic Tours (UK) Limited
 

Consolidated Analysis of Net Debt
For the year ended 31 December 2021




At 1 January 2021
Cash flows
At 31 December 2021
£

£

£

Cash at bank and in hand

1,853,447

794,027

2,647,474


1,853,447
794,027
2,647,474

The notes on pages 17 to 35 form part of these financial statements.

Page 16

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

1.


General information and statement of compliance

Scenic Tours (UK) Limited is a private company limited by shares and incorporated in England. The address of the
registered office is 4 Piccadilly Place, Manchester, M1 3BN.  The company's registered number is 05770868.
The nature of the Group’s operation and its principal activity is the sale of river cruises and land tours. The nature of the Company’s subsidiary operations and principal activities are detailed in note 15. 
The financial statements have been prepared in compliance with Financial Reporting Standard 102.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom 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 judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:

  
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase accounting method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Financial reporting standard 102 - reduced disclosure exemptions

The parent 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).

This information is included in the consolidated financial statements.

Page 17

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

2.Accounting policies (continued)

 
2.4

Going concern

Scenic Tours (UK) Limited is a member of the wider Scenic group of companies headed up by the parent company SGH LLC (the “Parent”). 
At 31 December 2021, Scenic Tours (UK) Limited (the “Company”) and its subsidiary (together the “Group”) had net current liabilities of £26,362,314 (2020: £17,561,134) and net liabilities of £26,192,588 (2020: £17,351,063). The Group has incurred operating losses due to covid 19. The Directors have reviewed the cashflow requirements of the Company and the Group for the Going Concern period until 31 December 2023.   
The Directors are conscious that the cruise industry in general, and the Group in particular, are subject to significant uncertainty, principally arising from impact on customer travel patterns and the Group’s ability to operate, resulting from:-
• The remnants of the 2020-2022 COVID-19 pandemic, and the possible emergence of further COVID -19 variants
• The emerging situation in the Ukraine, and the range of possible outcomes, which could possibly impact neighbouring countries, and cause a decline in demand for our river cruises in that general geography.
As such the going concern assessment of the UK entity is dependent on support from the Parent, to the extent required. The Parent will provide financial support for a period until 31 December 2023 to enable the Company and the Group to meet its financial commitments and pay its liabilities as they fall due. The Company and the Group have received a letter of support conforming that support for a period until 31 December 2023.
Management has prepared cashflow forecasts throughout the Going Concern period until 31 December 2023, based on historical financial information, forecasts, as well as realistic assumptions to assess the financial situation. After the financial year end, liquidity levels were impacted by the Parent temporarily not being able to take new bookings and corresponding cash deposits whilst IT systems were down due to the cyber incident, described further in note 26 to these financial statements. The Ukraine invasion in February 2022 has also impacted our level of new bookings. As a result, the Parent’s cash levels have been negatively impacted during Q1 2022 and the base-case cashflow forecast indicates that the Parent will be operating with relatively low liquid cash balances during the going concern assessment period. As a result, the Parent is looking into options to obtain further financing and restore a liquidity buffer that could withstand any other geopolitical shocks and that would give us time to reduce spend and adapt to a new environment. 
The Company and the Group are dependent on its Parent support, which  is reliant on its lenders and on the successful outcome of discussions to raise further funds, if required. The Directors consider that this constitutes a material uncertainty which casts significant doubt on the ability of the Company and the Group to continue  as a going concern.
The Directors confirm that, after considering the matters set out above and based upon positive meetings held so far with prospective lenders and the significant value of unencumbered vessels owned by the Parent they have a reasonable expectation that the Parent has the ability to secure additional financing if and when required. 
The Directors have made an appropriate assessment of liquidity and going concern whilst approving these consolidated financial statements and have determined that there is reasonable expectation that the Company and the Group have adequate resources to continue operating for the period until 31 December 2023. For this reason, these consolidated financial statements have been prepared on a going concern basis. The financial statements do not contain the adjustments to carrying values of assets and liabilities, should the going concern assumption prove to be invalid.

Page 18

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable, that the economic benefits will flow to the Group, and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. 
The Group derives its revenue from the sale of group tours and river cruises. The river cruises that the Group sells are mainly based in Europe whereas the group tours are mainly based in Australia. The Group provides its services mostly to UK residents.  Revenue and related cost of sales are recognised upon the return of a tour or cruise.
 As at 31 December 2021, there were no tours or cruises that had not yet returned.

 
2.6

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
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.

 The estimated useful lives range as follows:

Website development
-
3
years

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Motor vehicles
-
5 years
Leasehold improvements
-
5 years
Office equipment
-
10 years
Computer equipment
-
3 years

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.

Page 19

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

2.Accounting policies (continued)

 
2.8

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.9

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment. 

  
2.10

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase price on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.11

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

  
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

Page 20

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

2.Accounting policies (continued)

 
2.13

Financial instruments

The Group only enters into basic financial instruments that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from other third parties and loans to related parties.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

  
2.14

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.15

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. 
Grants of a revenue nature are recognised in the Consolidated Statement of comprehensive income in the same period as the related expenditure.

Page 21

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

2.Accounting policies (continued)

 
2.16

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Foreign exchange gains and losses are presented in the statement of comprehensive income within 'administrative expenses'.

 
2.17

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.18

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.19

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Statement of financial position date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Statement of financial position date.

 
2.20

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 22

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

2.Accounting policies (continued)

 
2.21

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position 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 Statement of financial position.

 
2.22

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.23

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

Page 23

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates that effect amounts recognised for assets and liabilities at the reporting date and the amounts of revenues and expenses incurred during the reporting period. The overall impact of such estimates on the company’s financial results is considered by management to be immaterial. 


4.


Turnover

An analysis of turnover by class of business is as follows:


2021
2020
£
£

Sales of tours
3,417,925
9,873,139


Analysis of turnover by country of destination:

2021
2020
£
£

United Kingdom
3,417,925
9,593,942

Rest of Europe
-
279,197

3,417,925
9,873,139



5.


Other operating income

2021
2020
£
£

Government grants receivable
-
365,293

Sundry income
42,733
-

42,733
365,293


Page 24

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

6.


Operating loss

The operating loss is stated after charging/(crediting):

2021
2020
£
£

Depreciation of tangible fixed assets
69,976
71,593

Amortisation of intangible assets, including goodwill
-
(4,507)

Exchange differences
233,990
55,502

Defined contribution pension cost
49,576
50,488

Government grants
-
(365,293)


7.


Auditors' remuneration

2021
2020
£
£


Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
26,225
38,372


Fees payable to the Group's auditor and its associates in respect of:


All other assurance services
12,750
12,750


8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£


Wages and salaries
1,862,442
2,138,653
1,862,442
2,138,653

Social security costs
198,488
199,074
198,488
199,074

Cost of defined contribution scheme
49,576
50,488
49,576
50,488

2,110,506
2,388,215
2,110,506
2,388,215


Page 25

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

8.Employees (continued)

The average monthly number of employees, including the directors, during the year was as follows:



Group
Group
Company
Company
        2021
        2020
        2021
        2020
            No.
            No.
            No.
            No.









Administrative staff
54
69
54
69



Director
2
2
2
2

56
71
56
71


9.


Directors' remuneration

2021
2020
£
£

Directors' emoluments
156,348
221,097

Company contributions to defined contribution pension schemes
6,190
5,991

162,538
227,088


During the year retirement benefits were accruing to 1 director (2020 -1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £156,348 (2020 -£221,097).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £6,190 (2020 -£5,991).


10.


Interest receivable

2021
2020
£
£


Other interest receivable
106
2,009


11.


Interest payable and similar expenses

2021
2020
£
£


Other interest payable
-
136

Page 26

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

12.


Taxation


2021
2020
£
£



Current tax on (losses)/profits for the year
-
-


Total current tax

-
-

Deferred tax


Reversal of deferred tax asset
-
879,315

Movement on deferred tax liability
(9,671)
-

Total deferred tax
(9,671)
879,315


Tax expense/(credit) on loss on ordinary activities
(9,671)
879,315

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2020 -higher than) the standard rate of corporation tax in the UK of 19% (2020 -19%). The differences are explained below:

2021
2020
£
£


Loss on ordinary activities before tax
(8,851,196)
(8,127,480)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 -19%)
(1,681,727)
(1,544,221)

Effects of:


Expenses not deductible for tax purposes
2,844
4,366

Unrelieved tax losses
1,671,518
1,599,996

Other differences leading to a decrease in the tax charge
(2,306)
(60,141)

Release brought-forward deferred tax asset
-
879,315

Total tax charge/(credit) for the year
(9,671)
879,315

Page 27

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021
 
12.Taxation (continued)


Factors that may affect future tax charges

Deferred taxes on the balance sheet have been measured at 19% (2020: 19%) which represents the future corporation tax rate that was enacted at the balance sheet date.
The main rate of corporation tax is due to increase to 25% in the tax year commencing 1 April 2023 for companies where profits exceed £250,000. A tapered rate will be introduced for profits above £50,000 up to £250,000. These changes were not substantively enacted at the balance sheet date and hence have not been reflected in the measurement of deferred tax balances at the period end. It is not anticipated that these changes will have a material impact on the company’s deferred tax balances. 


13.


Exceptional items

2021
2020
£
£


In relation to Covid-19 pandemic
(66,905)
2,574,990

Costs associated with transferring to a new business model in 2020
-
24,402

(66,905)
2,599,392

During the period the Company received £66,905 (2020: £nil) relating to commission from bookings previously suspended due to COVID-19.

Page 28

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

14.


Tangible fixed assets

Group and Company






Motor vehicles
Leasehold improvements
Office equipment
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2021
25,284
180,048
152,049
213,636
571,017


Additions
-
-
-
19,960
19,960



At 31 December 2021

25,284
180,048
152,049
233,596
590,977



Depreciation


At 1 January 2021
11,394
72,118
41,958
198,476
323,946


Charge for the year on owned assets
5,037
36,009
15,207
13,723
69,976



At 31 December 2021

16,431
108,127
57,165
212,199
393,922



Net book value



At 31 December 2021
8,853
71,921
94,884
21,397
197,055



At 31 December 2020
13,890
107,930
110,091
15,160
247,071

Page 29

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2021
2,000



At 31 December 2021
2,000






Net book value



At 31 December 2021
2,000



At 31 December 2020
2,000


Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Scenic Transport Limited
4 Piccadilly Place, Manchester, M1 3BN
Transport company
Ordinary
100%


16.


Stocks

Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Finished goods and goods for resale
339,360
371,516
339,360
371,516


An impairment gain of £5,930 (2020: loss £56,025) was recognised in cost of sales against stock during the year due to slow-moving and obsolete stock. 

Page 30

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

17.


Debtors

Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Due after more than one year

Other debtors
137,963
137,963
137,963
137,963


Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Due within one year

Amounts owed by group undertakings
20,842,589
9,456,354
20,754,885
9,393,370

Other debtors
941,924
471,804
934,458
464,338

Prepayments and accrued income
925,372
1,112,392
925,372
1,112,392

Tax recoverable
55,924
55,924
55,924
55,924

22,765,809
11,096,474
22,670,639
11,026,024


An impairment loss of £1,706 (2020: £8,982) was recognised in cost of sales against trade debtors during the year, due to slow and doubtful debts.


18.


Cash and cash equivalents

Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Cash at bank and in hand
2,647,474
1,853,447
2,551,433
1,757,406


Page 31

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

19.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Trade creditors
842,443
456,200
842,443
456,200

Amounts owed to group undertakings
10,595,282
7,008,474
10,438,755
6,876,667

Amounts owed to associates
10,719
10,813
10,719
10,813

Other taxation and social security
123,785
48,754
123,785
48,754

Other creditors
48,344
48,344
48,344
48,344

Accruals and deferred income
40,632,347
23,447,949
40,599,663
23,415,265

52,252,920
31,020,534
52,063,709
30,856,043


Amounts owed to group undertakings by the Scenic Tours (UK) Limited Group include a loan balance of £126,942 (2020: £149,868) which is part of an Intercompany Loan Facility with a subsidiary of the wider Group and is repayable on demand.  In the prior period, the interest rate to the Intercompany Loan Facility was calculated as the aggregate of:
- The effective facility interest rate (nominal External Bank Facility Interest Rate increased for the impact of any lump sum discount applied by the External Bank on the principal amount as well as on any intercompany guarantee fees due); and
- The Loan Origination margin of 50 basis points calculated on the Outstanding Loan.
During 2020, the loan interest agreement was suspended by the Group to which Scenic Tours (UK) limited and its subsidiary are members of.
No amounts are owed by the Company as part of the Intercompany Loan Facility.


20.


Deferred taxation


Group



2021


£






Net deferred tax asset at beginning of year
(37,000)


Movement in deferred tax liability
9,671



Deferred tax liability at end of year
(27,329)

Page 32

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021
 
20.Deferred taxation (continued)

Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Accelerated capital allowances
(27,329)
(37,000)
(27,329)
(37,000)


At 31 December 2021, the Group had carried forward tax losses of £26,138,038 (2020: £17,339,760). A deferred tax asset totalling £nil (2020: £nil) has been recognised in relation to these losses.


21.


Share capital

2021
2020
£
£
Allotted, called up and fully paid



558,812 (2020 -558,812) Ordinary shares of £1.00 each
558,812
558,812



22.


Reserves

Profit and loss account

The profit and loss account includes all current and prior period retained profit and losses. 


23.


Pension commitments

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £49,576 (2020: £50,488). No contributions (2020: £nil) were payable to the fund at the balance sheet date.

Page 33

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

24.


Commitments under operating leases

At 31 December 2021 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Other

Not later than 1 year
26,580
26,704
26,580
26,704

Later than 1 year and not later than 5 years
12,663
36,081
12,663
36,081

39,243
62,785
39,243
62,785
Group
Group
Company
Company
2021
2020
2021
2020
£
£
£
£

Land and buildings

Not later than 1 year
229,938
229,938
229,938
229,938

Later than 1 year and not later than 5 years
210,777
416,408
210,777
416,408

440,715
646,346
440,715
646,346



25.


Related party transactions

In preparing these consolidated financial statements, the directors have taken advantage of the exemptions available under Section 33 Related Party Disclosures paragraph 33.7 as permitted by FRS 102 Financial Reporting Standards applicable in the UK and Republic of Ireland, and have not disclosed transactions entered into between wholly owned group undertakings.
Purchases totalling £NIL (2020: £NIL) were made during the year from companies under common control and which are not wholly owned group undertakings. Balances totalling £10,719 (2020: £10,813) were outstanding at the year end within Creditors.
Key management personnel compensation totalled £162,538 (2020: £227,088).
Balances with fellow group undertakings are disclosed in note 17 and note 19.

Page 34

 
Scenic Tours (UK) Limited
 
 
 
Notes to the Financial Statements
For the year ended 31 December 2021

26.


Post balance sheet events

Cyber incident
On the 20th of February 2022 the Group was hit by a cyberattack which resulted in all users being locked out of core and accounting systems. The IT department of the Group is based in Australia and we engaged Australian lawyers and services of cybersecurity experts to provide advice and guide us through getting access back to our systems. To help us ensure that we are in full compliance with the laws of the various jurisdictions that the Group operates, we also engaged international lawyers. 
The hackers demanded a ransom payment to be made in exchange for unlocking access to our systems but the Group management has determined not to accede to this demand.
We have no evidence of any data exfiltration but we still took the precautionary measure of advising the relevant authorities in the UK and their feedback was that no further action was required unless we had evidence of any data breach.
Our vessel operations were not impacted by this breach. Our core systems were fully restored within three weeks of attack but it took a further two weeks until we could restore connection to our accounting systems. As a result we also had to postpone the completion of the audit of the financial statements for the year ended 31 December 2021. We also experienced some technical issues with getting our websites up and running and this were resolved at the beginning of May.
We are fully insured against the costs of the cyber attack and our insurers are settling the legal fees directly. There will be some other minor costs that we have incurred and which we will claim. We also have a business interruption policy in place and we will be submitting a claim once we collect all the relevant information.


27.


Controlling party

The company's immediate parent undertaking is SGH LLC, a company incorporated in the United States of America. The ultimate controlling party is Mr G M Moroney.
The parent company and other senior parent companies do not produce consolidated financial statements available for public use.

Page 35