Registered number:
For the year ended
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Scenic Tours (UK) Limited
Company Information
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Scenic Tours (UK) Limited
Contents
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Scenic Tours (UK) Limited
Group Strategic Report
For the year ended 31 December 2021
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.
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.
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Scenic Tours (UK) Limited
Group Strategic Report (continued)
For the year ended 31 December 2021
Key financial performance indicators for the group are noted below:
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.
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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.
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 2006. They 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.
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).
The directors who served during the year were:
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Scenic Tours (UK) Limited
Directors' Report (continued)
For the year ended 31 December 2021
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.
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Scenic Tours (UK) Limited
Directors' Report (continued)
For the year ended 31 December 2021
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.
The auditors, Ernst & Young LLP, will 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.
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Scenic Tours (UK) Limited
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited
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 policies. The 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).
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.
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.
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Scenic Tours (UK) Limited
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited (continued)
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.
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.
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.
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Scenic Tours (UK) Limited
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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.
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Scenic Tours (UK) Limited
Independent Auditors' Report to the Members of Scenic Tours (UK) Limited (continued)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
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Scenic Tours (UK) Limited
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Registered number: 05770868
Consolidated Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 35 form part of these financial statements.
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Scenic Tours (UK) Limited
Registered number: 05770868
Company Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 35 form part of these financial statements.
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Scenic Tours (UK) Limited
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
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Scenic Tours (UK) Limited
Company Statement of Changes in Equity
For the year ended 31 December 2021
Company Statement of Changes in Equity
For the year ended 31 December 2020
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Scenic Tours (UK) Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Consolidated Analysis of Net Debt
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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
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:
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.
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.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2.Accounting policies (continued)
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.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2.Accounting policies (continued)
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.
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:
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2.Accounting policies (continued)
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.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2.Accounting policies (continued)
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.
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.
Grants of a revenue nature are recognised in the Consolidated Statement of comprehensive income in the same period as the related expenditure.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
2.Accounting policies (continued)
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.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
Analysis of turnover by country of destination:
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
8.Employees (continued)
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
12.Taxation (continued)
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.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
20.Deferred taxation (continued)
Profit and loss account
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.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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.
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Scenic Tours (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2021
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.
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.
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