Registered number:
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
COMPANY INFORMATION
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IMAGINE ENTERPRISES LIMITED
CONTENTS
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IMAGINE ENTERPRISES LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their strategic report of the Company (Imagine Enterprises Limited) and the Group (Imagine Enterprises Limited and its subsidiaries) for the year ended 31 March 2023.
The Group is required by the Companies Act 2006 to set out in this report, a fair review of the business of the Group and the Company during the financial year ended 31 March 2023, the position of the Group and the Company at the end of the period and a description of the principal risks and uncertainties facing the Group. This review is prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed, and the business review should not be relied upon by any other party or for any other purpose.
The Group has seen a strong recovery since the lifting of travel restrictions towards the second half of 2021 following the COVID-19 pandemic, taking its highest number of bookings to date in the 2022/23 year. Additionally, the Australian federal cruise ban was lifted from 17 April 2022, allowing passengers to travel on cruises once again and kicking off a recovery in the Australian markets. During the period, the Group still saw some repercussions from the COVID-19 pandemic with cruise itinerary changes, flight schedule changes and some remaining travel restrictions in a handful of countries. As a result, the Group continued its proactive approach to customer trips during the COVID-19 pandemic, successfully rearranging the majority of trips that could not be taken to future travel dates and providing refunds where requested to provide the best possible care and service for existing clients. Management also continued its opportunistic approach by launching several successful chartered cruises and rail journeys during the year. Consequently, the directors are satisfied with the performance of the Group during the year. The Group responded to the pandemic by reducing its cost base. Management continue to take action in relation to discretionary expenditure and to minimise overheads where possible to aid recovery since the pandemic. The key performance indicators used by the directors to monitor the progress of the Group are set out below:-
The following risk factors may affect the Group's operating results and its financial position. The risk factors described below are those which the directors believe are potentially significant but should not be regarded as a complete and comprehensive statement of all potential risk and uncertainties facing the Group.
The demand for holidays is affected by local economic conditions. During 2022 and into 2023, the war in Ukraine and subsequent cost of living crisis has affected the cost of holiday arrangements and resulted in consumers having less discretionary spending available for holidays, however this has been compensated by the high level of pent up demand following the easing of travel restrictions after the COVID-19 pandemic. Changes to airline schedules also affected the Group's ability to deliver holidays as airlines struggled to provide enough capacity to meet demand in the months following the pandemic.
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IMAGINE ENTERPRISES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Principal risks and uncertainties (continued)
The Group is exposed to various regulators, including the Civil Aviation Authority ("CAA"), which issues an Air Travel Organisers Licence ("ATOL"), which is required in order for the Group to operate. This licence is renewed in September each year and is subject to assessments of fitness and financial criteria, the framework of which is available on the CAA website (www.caa.co.uk). The Group operates in a highly competitive market featuring innovation in the travel products and the methods by which it is marketed, as well as price pressures. The Group seeks to constantly invest in its brand to increase public awareness as well as offer a wide selection of products from a wide range of suppliers at competitive prices to maintain its market position. The Group also monitors competitor activity closely. The Group is exposed to foreign exchange rate risk when it purchases overseas holiday services in currencies other than British Pounds. Monetary assets and liabilities are translated at the exchange rate prevailing at the statement of financial position date. All exchange gains and losses so arising are taken to the income statement. The Group partially hedges this risk and where not hedged, the Group bears the risk associated with such foreign exchange movements. The Group has well established and close relationships with customers and suppliers and risk is spread by not placing over-reliance on any one supplier in any particular area. However, if a relationship were lost or damaged with a major supplier this could have a detrimental effect on the business. The management team meets regularly with suppliers to maintain good working relationships and to understand the supplier's financial position. The Group is heavily reliant on the uninterrupted operation of its IT systems and website. These systems are vulnerable to power loss, fire, computer viruses and other events. Loss of these systems would impair the ability of the Group to carry on its business effectively. The Group has made arrangements to mitigate this risk. The nature of the business exposes the Group to various commercial risks which may affect the trading performance of the Group. These include: - acts of terrorism, particularly in key tourist destinations - epidemics in key tourist destinations which threaten the health of tourists - wars or other international uncertainty which affects air travel - natural disasters in key tourist destinations - weather conditions, both in the UK and key tourist destinations - changes in customer behaviour and preferences - increase in government taxes These factors may affect the Group by causing potential customers to cancel or postpone travel plans, reducing the earnings potential of the Group. The Group seeks to minimise such risks by operating a flexible limited commitment business model with the ability to shift capacity amongst a variety of destinations where necessary. In the case of a global shut down of the cruise industry, as we experienced with the COVID-19 pandemic, the Group seeks to mitigate risk by aggressive cost cutting, while protecting its ability to effectively compete in the future.
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IMAGINE ENTERPRISES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The directors believe that they have acted at all times to promote the success of the Group for the benefit of its members as a whole. In doing so, the Board has considered the interests of a range of stakeholders impacted by the business, as well as having regard for the matters set out in s.172(1) of the Companies Act 2006, namely:
- the likely consequences of any decisions in the long term; - the interests of the Group's employees; - the need to foster the Group's business relationships with suppliers, customers and others; - the impact of the Group's operations on the community and the environment; - the desirability of the Group maintaining a reputation for high standards of business conduct; and - the need to act fairly as between members of the Group.
This report was approved by the board on 24 October 2023 and signed on its behalf.
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IMAGINE ENTERPRISES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their report and the financial statements for the year ended 31 March 2023.
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 for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have 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 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 Company's principal activity in the year was that of acting as a group holding company. It is the Company's subsidiaries which trade and operate as travel agents and tour operators specialising in cruising.
The profit for the year, after taxation, amounted to £9,626,036 (2022 - loss £10,381,863).
The directors do not recommend a final dividend for the year ended 31 March 2023.
The total distribution of dividends for the year ended 31 March 2023 was £Nil (2022 - £Nil).
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IMAGINE ENTERPRISES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The directors who served during the year were:
The Group's growth requires investment in cutting edge technology and the ability to deliver fast, innovative and effective search results for consumers in a market that has seen significant technological advances in recent years. During the year the Group made significant investment into software development.
The Group has a culture of continuous improvement through investment in people at all levels within the Group, looking to encourage and develop all members of staff to realise their full potential. Wherever possible, vacancies are filled from within the Group and adequate opportunities for internal promotion are created.
The Group is committed to pursuing equality and diversity in all of its employment activities including recruitment, training, career development and promotion and ensuring there is no bias or discrimination in the treatment of employees. Employees are consulted regularly about changes which may affect them through regular meetings, which are used to ensure that employees are kept up to date with the business performance of their employer and the financial and economic factors affecting the performance of the Group.
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IMAGINE ENTERPRISES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The Group's policies and procedures fully support our disabled colleagues. We take active measures to do so via: - A robust and reasonable adjustment policy; - disability-specific resources maintained by HR; and - processes to ensure that colleagues are fully supported. The Group is responsive to the needs of its employees. As such, should any employee of the Group become disabled during their time with us, we will actively retrain that employee and make reasonable adjustments to their working environment where possible, in order to keep the employee with the Group. It is the policy of the Group that the recruitment, training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Within the Group, the UK subsidiary, Imagine Cruising Limited, maintained branches in both Germany and the Emirate of Dubai, UAE, both of which have been wound down and closed during previous years. Additionally, one of the Group's Australian subsidiaries, Imagine Cruising (Pty) Limited, maintains a branch in New Zealand.
The Group's greenhouse gas emissions and energy consumption for the year are 13,718 kgCO2e and 159,915 kWh.
The Group has historically applied “GHG Reporting Protocol – Corporate Standard” methodology.
The Group is reporting as a large, unquoted Group. The operational control approach has been used to identify the boundaries, from which the Group has identified three scopes for reporting: - Scope 1 direct emissions issued from sources directly controlled by the Group, such as stationary combustion equipment for building heating - Scope 2 indirect emissions from electricity production, or from imported heat or vapor consumed in the buildings and equipment operation, provided by an external party - Scope 3 other indirect emissions issued from Group activities but controlled by external parties, principally staff mileage claims The Group is committed to minimising the negative impact that our actions have on the environment.
We continue to look at ways to minimise travel through continued use of video meeting technology, taking lessons from the pandemic as to how business can be conducted efficiently. We continue to advocate a hybrid working policy and local staff are encouraged to take up cycle-to-work schemes.
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IMAGINE ENTERPRISES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
The directors have disclosed additional performance data for the Group in the strategic report, which is included within this set of financial statements. This includes a review of the performance of the business and the key performance indicators, as well as the main risks faced by the business.
During 2023, the Group will continue to operate as outlined in the principal activity note above. Business continues to grow following the COVID-19 pandemic, with demand for holidays having recovered to pre-pandemic levels and the Group has positioned itself to be able to capitalise on the significant pent-up demand from consumers for cruise holidays.
There have been no significant events affecting the Group since the year end, except for the continued effects of the cost of living crisis, which has had a significant impact upon the national economy, as described in note 2.3.
The auditors, White Hart Associates (London) Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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IMAGINE ENTERPRISES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IMAGINE ENTERPRISES LIMITED
We have audited the financial statements of Imagine Enterprises Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2023, which comprise the Group Income Statement, the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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IMAGINE ENTERPRISES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IMAGINE ENTERPRISES LIMITED (CONTINUED)
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2.3 to the financial statements concerning the Group’s ability to continue as a going concern.
As explained in note 2.3, the COVID-19 pandemic and the recent war in Ukraine have had an unprecedented impact upon the global economy and especially upon the travel industry. These problematic trading conditions negatively impacted the Group’s trade and the Group’s current assets. We draw attention to note 2.3 of the financial statements as to the review and actions undertaken by the Board of Directors to ensure that the Group has adequate resources to continue trading for at least 12 months. The financial statements have therefore been prepared on a going concern basis.
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 evaluation of the directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included obtaining and testing the Group's budgets and forecasts for the years ended 31 March 2024 and 31 March 2025, including reviewing the key assumptions behind these from the latest available information, both internal and external; reviewing the continuing steps taken by management to manage liquidity, control current costs, utilise government assistance and raise further finance; reviewing the Group's continued compliance and correspondence with its key regulator, the Civil Aviation Authority (CAA) and assessing any threat to the continuation of its Air Travel Organisers Licence (ATOL); reviewing the minutes of the regular Board meetings and performing an overall assessment of the Group's internal finance function and controls.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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IMAGINE ENTERPRISES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IMAGINE ENTERPRISES LIMITED (CONTINUED)
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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IMAGINE ENTERPRISES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IMAGINE ENTERPRISES LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- We exercise professional judgment and maintain professional skepticism throughout the audit;
- We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the deliberate override of internal control; - We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control; - We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made; - We assess the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; - We review the scope of the Group's compliance with The Package and Linked Travel Arrangements Regulations 2018 (“PTRs”) and sample test relevant documentation to assess this and the effectiveness of its control environment; - We request and review the minutes of management meetings, and assess any matters identified not already provided for or disclosed that may materially impact the financial statements; - We review the Group's relationships with related parties, identifying and disclosing transactions during the year and balances at year-end with such parties; - We conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern.
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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IMAGINE ENTERPRISES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IMAGINE ENTERPRISES 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
Chartered Accountants and Statutory Auditors
2nd Floor, Nucleus House
2 Lower Mortlake Road
TW9 2JA
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IMAGINE ENTERPRISES LIMITED
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
REGISTERED NUMBER: 06802961
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 21 to 46 form part of these financial statements.
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IMAGINE ENTERPRISES LIMITED
REGISTERED NUMBER: 06802961
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 21 to 46 form part of these financial statements.
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IMAGINE ENTERPRISES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
As disclosed in the Directors' Report, the principal activity of the Group in the year under review continued to be that of travel agents and tour operators specialising in cruising.
The Company's principal activity in the year was that of acting as a group holding company. It is the Company's subsidiaries which trade and operate as travel agents and tour operators specialising in cruising. The Company is a private company limited by shares and is incorporated in England. The address of the company's principal place of business, being different to the registered office stated on the Company Information page, is: Portland House Interface Business Park Bincknoll Lane Royal Wootton Bassett SN4 8SY
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Income Statement in these financial statements.
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 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 Income Statement from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2015.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
The COVID-19 pandemic had an unprecedented impact upon the global economy and in particular upon the travel industry, causing many consumers to cancel, amend their travel arrangements or not travel at all. The travel industry is experiencing the benefit of a post COVID-19 bounce back in travel and supplier capacity has been gradually recovering back to pre-pandemic levels. This, combined with consumer unease in relation to the current economic environment, with increasing energy costs and inflation, has meant that Group management and the directors have continued to review the Group’s financial position, as well as forecasts and plan mitigation actions in order to neutralise the financial impact from the significant downturn in trading seen during the COVID-19 pandemic period.
Additionally, they have also performed a sensitivity analysis on the Group's budgets and forecasts to assess the financial impact of any potential further slowdown in trading from the reforecast and its impact on the liquidity of the business. This sensitivity analysis shows that the Group has enough liquidity and cash to trade through a further slowdown, as evidenced by deferred income maintaining strong levels of £78.5m for future travel arrangements. Group management and the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being at least the following 12 months from the signing of these financial statements. This is supported by the strong performance seen so far in the first half of 2023, which has seen a significant upside in demand. The Group has been well placed to meet and service the additional volume. The Group is part of a much larger group, with the 52% shareholder being dnata, which is one of the world’s largest air services providers and is owned by The Investment Corporation of Dubai, a Government of Dubai entity. The Group therefore benefits from the guaranteed financial support of its shareholders. The directors have considered profitability, cash flows and the financial support in detail for a period of over 12 months from the date of these financial statements and believe that it is still appropriate to apply the going concern basis for the foreseeable future. Turnover is recognised on a departure date basis. A small portion of turnover, relating to agency bookings, is recognised on a booking date basis, due to the risks and rewards inherent in the booking remaining with the tour operator. Trade debtors still represent gross amounts receivable and trade creditors still represent gross amounts payable in respect of travel and holiday arrangements.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
The resulting gain or loss on derivative forward foreign currency contracts is recognised immediately in the Income Statement, to match the related gain or loss on trade creditors payable in foreign currencies. These contracts are entered into to minimise the Group's exposure to foreign exchange risk between the prices agreed when a customer booking is made and when the supplier is paid. The Group does not currently apply hedge accounting for foreign exchange derivatives. The total gain or loss on trading derivatives is classified as a current asset or liability respectively. At 31 March 2023 the Group had contracted to buy £12,849,075 (2022: £3,335,018) of foreign currencies in future months.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Consolidated Income Statement in the same period as the related expenditure.
Functional and presentation currency
Transactions and balances
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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 reporting 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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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
a) Critical judgments in applying the Group's accounting policies The directors believe that there are no critical judgments involved in applying the Group's accounting policies that warrant disclosure. b) Key accounting estimates and assumptions The directors believe that there are no key accounting estimates and assumptions involved in applying the Group's accounting policies that warrant disclosure.
Analysis of turnover by source market:
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 30
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 31
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
12.Taxation (continued)
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2021 (on 11 March 2021). These include increases to the main rate of tax from 19% to 25% from 1 April 2023 for profits exceeding £50,000. Deferred taxes at the Statement of Financial Position date have been measured using the rates that will be applicable in the periods to which they relate.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 35
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 36
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 37
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Subsidiary undertakings (continued)
Page 38
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 39
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 40
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
20.Deferred taxation (continued)
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Foreign exchange reserve
Profit and loss account
The Group is a member of the Association of British Travel Agents (ABTA). The Group provides ABTA with a travel bond which at 31 March 2023 amounted to £4,172,327.
The Group operates a defined contributions 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 £476,910 (2022 - £324,816). Contributions totalling £30,946 (2022 - £Nil) were payable to the fund at the reporting date and are included in creditors.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
During the year, the Group had a loan account bearing interest at a rate of 5% per annum with one of the directors, R J Deller. Advances totalled £190,419 (2022: £105,420) and credits totalled £453,195 (2022: £Nil). This loan has no fixed repayment date and so the closing balance owing to the Group at the year end from R J Deller, included within other debtors due within one year, was £3,590,191 (2022: £3,852,967). Following the year-end, on 16 August 2023, the loan was repaid in full.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 44
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
There have been no significant events affecting the Group since the year end, except for the continued effects of the cost of living crisis, which has had a significant impact upon the national economy, as described in note 2.3.
In the opinion of the directors, there is no ultimate controlling party.
dnata, a company incorporated and domiciled in the Emirate of Dubai, UAE whose registered office address is situated at dnata Travel Centre, Sheikh Zayed Road, PO Box 1515, Dubai, UAE, owned 52% of the issued share capital of Imagine Enterprises Limited at year-end. Copies of the financial statements of dnata can be obtained from The Emirates Group website at www.theemiratesgroup.com/annualreport.
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IMAGINE ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 46
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