Paxport Group UK Limited |
Strategic Report |
|
The directors present their strategic report for the Year ended 31st December 2022. |
|
Review of the business |
Paxport Group UK Limited is a travel technology business focussed on the aggregation and distribution of airline content. During the last year, the business continued expand its product offering, updating and growing the number of connected airlines and air content providers, as well as evolving the overall end-to-end product offering to include brand new post-booking management capability. This connected product approach enables travel businesses to grow their connectivity options and increase revenue through cloud-based, flexible technology solutions. |
The company provides market leading airline distribution technology, with a focus on best-in-class search solutions, through to booking, ancillary, payment and servicing capabilities. The company's platform now handles over 55 million searches per day across over 60 million cached fares and by the end of 2022, provide access to over 75 airlines and consolidator partners through one singe API. |
The company made a profit before tax of £2,096,775 after receiving dividends from its wholly owned subsidiary of £1,930,000 (2021: loss of £1,375,724) in the year. The company primarily saw an increase in profitability due to the dividend receipt and increased commissions arising from a greater activity as a result of COVID-19 restrictions being lifted in the second half of 2021 Net assets grew from net liabilities in 2021 of £-929k to net assets in 2022 of £349k |
The directors foresee a long term growth phase of the business due to growth in the tourism industry. |
Principal risks and uncertainties |
The success of our business is dependent on our reputation to deliver a great service to our Clients. The healthy financial position to generate ongoing income ensure that the risks to stakeholders of Paxport Group UK Limited are minimised. The limited risks are explained below. |
General risks |
Reputational Risk is managed by promoting our business successes through its website, exhibitions and other communications to ensure our integrity and credibility is maintained. During 2022 we have engaged the services of an industry specific marketing consultant to promote our brand with a focus on security and integrity. |
IT/Security Risk is a risk we face as in all companies and individuals alike. We are minimising this risk by implementing industry best practices with regular reviews so we can continue to improve them. Also we only partner with reputable partners who have demonstrated they are best in class and use appropriate security. In addition we conduct regular internal audits to ensure we are achieving the best practices. |
Financial risk management objectives and policies |
Foreign currency risk |
Paxport Group UK Limited records its transactions and prepares its financial statements in pounds sterling. However, the company operates on other currencies and cash balances are held in Euros, US Dollars and other currencies. Fluctuations in exchange rates between Pound Sterling and both the Euro and US Dollar may result in realised and unrealised exchange movements. |
Interest rate risk |
Interest rate risk is the risk that the future cash flows of financial instruments will fluctuate because of changes in market interest rates. As all trade creditors are non interest bearing, they do not expose the company to interest rate risk. |
Liquidity risk |
The company has one long tern interest bearing loan liability with Barclays bank. . There is an intercompany loan account, however this is operated interest free. The liquidity risk is considered low. |
Credit risk |
The company's principal financial assets are bank balances and cash, trade and other receivables. The company's credit risk is primarily attributable to trade and other receivables. The amounts presented in the balance sheet are net of allowances attributable to trade and other receivables. An allowance for impairment is made where there is an identified loss event which, based on management judgment is evidence of a reduction in the recoverability of the receivable amount. |
Development and performance |
The directors foresee long term growth prospects in support for its services, in line with the growth anticipated in the travel industry and the resilience of its business model and service agreements with customers. |
Statement of engagement with stakeholders |
There is active engagement with all stakeholders of the company, from employees, suppliers, local authorities, and other stakeholders. |
Financial key performance indicators |
For the year ending 31 December 2022 revenue increased from £2.0m to £6.0m as a result of the dividend from the subsidiary and increased activity in the tourism industry post the pandemic and a greater offering of the companies products. Net current liabilities reduced from £1,506k in the previous year to £261k in the current year. |
The business improved its financial position from Net liabilities of £928k in the previous year to net assets of £349k in the current year. Steps are in place to strengthen this position further in future years, but reducing the soft intercompany loan. |
Whilst these KPI's are helpful in measuring the Company's performance, and have been chosen amongst the most commonly used ones and provide a general indication of the company's general performance, it should be stressed that they are not exhaustive and that many additional performance measures are used to monitor progress. |
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This report was approved by the board on 1 November 2023 and signed on its behalf. |
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Mr Claes Mikael Wandt |
Director |
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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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, 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. |
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Conclusions relating to 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. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
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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 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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Opinions 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 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 strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. |
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Matters on which we are required to report by exception |
The extent to which 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 material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; - we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector; - we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company; - we assessed the extent of compliance with the laws and regulations identified through making enquiries of management; and - identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. To address the risk of fraud through management bias and override of controls, we: - performed analytical procedures to identify any unusual or unexpected relationships; - tested journal entries to identify unusual transactions; - assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; - investigated the rationale behind significant or unusual transactions. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. |
Other Matters |
The prior year's financial statements were not audited, because there was no requirement for this to be done. |
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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 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
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|
Paul Chamberlain |
(Senior Statutory Auditor) |
Elm House, Tanshire Park, |
for and on behalf of |
Shakleford Road, |
Chamberlains |
Elstead, |
Statutory Auditor |
Godalming |
1 November 2023 |
GU8 6LB |
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Investment property |
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Investment property is initially recognised at cost and then subsequently measured at fair value. Changes in value are recognised in profit or loss. |
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Investments |
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Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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Unaudited |
2 |
Analysis of turnover |
2022 |
|
2021 |
£ |
£ |
|
|
Rental income |
111,533 |
|
143,359 |
|
Services rendered |
3,754,158 |
|
1,859,305 |
|
Covid grants |
30,657 |
|
- |
|
Transfer pricing adjustment |
183,300 |
|
- |
|
|
|
|
|
|
4,079,648 |
|
2,002,664 |
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|
|
|
|
|
|
|
|
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By geographical market: |
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|
UK |
3,444,809 |
|
1,899,666 |
|
Europe |
222,571 |
|
82,116 |
|
Rest of world |
412,268 |
|
20,882 |
|
|
|
|
|
|
4,079,648 |
|
2,002,664 |
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|
|
|
|
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Unaudited |
3 |
Operating profit |
2022 |
|
2021 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
1,527 |
|
- |
|
Amortisation of Research and development expenditure |
189,457 |
|
191,378 |
|
Auditors' remuneration for audit services |
14,000 |
|
- |
|
|
|
|
|
|
|
|
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Unaudited |
4 |
Staff costs |
2022 |
|
2021 |
£ |
£ |
|
|
Wages and salaries |
1,277,936 |
|
847,670 |
|
Social security costs |
148,991 |
|
100,063 |
|
Other pension costs |
29,913 |
|
22,467 |
|
|
|
|
|
|
1,456,840 |
|
970,200 |
|
|
|
|
|
|
|
|
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Average number of employees during the year |
Number |
Number |
|
|
Administration |
1 |
|
1 |
|
Development |
7 |
|
6 |
|
Distribution |
12 |
|
10 |
|
Marketing |
3 |
|
2 |
|
|
|
|
|
|
23 |
|
19 |
|
|
|
|
|
|
|
|
|
Unaudited |
5 |
Interest payable |
2022 |
|
2021 |
£ |
£ |
|
|
Bank loans and overdrafts |
15,389 |
|
16,190 |
|
|
|
|
|
|
|
|
|
Unaudited |
6 |
Taxation |
2022 |
|
2021 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
Adjustments in respect of previous periods (R&D tax credit) |
- |
|
(46,244) |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
(45,709) |
|
(11,431) |
|
Effect of increased tax rate on opening liability |
65,340 |
|
- |
|
|
|
|
|
|
19,631 |
|
(11,431) |
|
|
|
|
|
|
|
|
|
|
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Tax on profit/(loss) on ordinary activities |
19,631 |
|
(57,675) |
|
|
|
|
|
|
|
|
|
|
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Factors affecting tax charge for period |
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The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
Unaudited |
|
|
|
|
|
|
2022 |
|
2021 |
£ |
£ |
|
Profit/(loss) on ordinary activities before tax |
2,096,775 |
|
(1,375,724) |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
398,387 |
|
- |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
(433,417) |
|
- |
|
Capital allowances for period in excess of depreciation |
35,030 |
|
- |
|
R&D tax credit received in current period relating to previous period |
- |
|
(46,244) |
|
|
Current tax charge for period |
- |
|
(46,244) |
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
Intangible fixed assets |
£ |
|
Capitalised R&D expenditure: |
|
|
Cost |
|
At 1 January 2022 |
1,791,240 |
|
At 31 December 2022 |
1,791,240 |
|
|
|
|
|
|
|
|
|
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Amortisation |
|
At 1 January 2022 |
665,479 |
|
Provided during the year |
189,457 |
|
At 31 December 2022 |
854,936 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 December 2022 |
936,304 |
|
At 31 December 2021 |
1,125,761 |
|
|
|
|
|
|
|
|
|
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Capitalised R&D expenditure is being written off in equal annual instalments over its estimated economic life. |
|
|
8 |
Tangible fixed assets |
|
|
|
|
Plant and machinery |
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Fixtures, fittings, tools and equipment |
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Total |
|
|
|
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At cost |
|
At cost |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 January 2022 |
1,131,315 |
|
123,115 |
|
1,254,430 |
|
Additions |
22,900 |
|
- |
|
22,900 |
|
Disposals |
(1,131,315) |
|
(123,115) |
|
(1,254,430) |
|
At 31 December 2022 |
22,900 |
|
- |
|
22,900 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 January 2022 |
1,131,315 |
|
123,115 |
|
1,254,430 |
|
Charge for the year |
1,527 |
|
- |
|
1,527 |
|
On disposals |
(1,131,315) |
|
(123,115) |
|
(1,254,430) |
|
At 31 December 2022 |
1,527 |
|
- |
|
1,527 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 December 2022 |
21,373 |
|
- |
|
21,373 |
|
|
|
|
|
|
|
|
|
|
|
9 |
Investments |
Investments in |
subsidiary |
undertakings |
£ |
|
Cost |
|
At 1 January 2022 |
520,035 |
|
|
At 31 December 2022 |
520,035 |
Unaudited |
|
|
|
|
|
|
2022 |
|
2021 |
£ |
£ |
|
Dividends and other distributions from associates |
|
1,930,000 |
|
- |
|
Consolidated accounts are not prepared and the subsidiary is accounted for at cost. |
|
|
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The company holds 20% or more of the share capital of the following company: |
|
Capital and |
Profit (loss) |
|
Company |
Shares held |
reserves |
for the year |
|
|
Class |
% |
£ |
£ |
|
Pax2Pay Limited |
Ordinary |
100 |
|
1,727,424 |
|
1,392,746 |
|
Registered address: The Landing, 125 Redcliff Street, Bristol BS1 6HU |
|
Principal business: supplier of online travel software |
Unaudited |
10 |
Debtors |
2022 |
|
2021 |
£ |
£ |
|
|
Trade debtors |
519,869 |
|
464,319 |
|
Amounts owed by group undertakings and undertakings in which the company has a participating interest |
|
1,930,000 |
|
594,461 |
|
Prepayments and accrued income |
171,231 |
|
140,058 |
|
Other debtors |
56,289 |
|
29,224 |
|
|
|
|
|
|
2,677,389 |
|
1,228,062 |
|
|
|
|
|
|
|
|
|
Unaudited |
11 |
Creditors: amounts falling due within one year |
2022 |
|
2021 |
£ |
£ |
|
|
Bank loans |
221,099 |
|
180,000 |
|
Trade creditors |
265,481 |
|
314,224 |
|
Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
1,947,288 |
|
2,046,499 |
|
Other taxes and social security costs |
247,304 |
|
426,621 |
|
Other creditors |
497,598 |
|
355,176 |
|
|
|
|
|
|
3,178,770 |
|
3,322,520 |
|
|
|
|
|
|
|
|
|
Unaudited |
12 |
Creditors: amounts falling due after one year |
2022 |
|
2021 |
£ |
£ |
|
|
Bank loans |
641,667 |
|
861,667 |
|
Barclays Security Trustee Limited holds a debenture in respect of the bank loans, secured by a fixed and floating charge over all the assets of the company. |
|
13 |
Deferred taxation |
2022 |
|
2021 |
£ |
£ |
|
|
Accelerated capital allowances |
226,542 |
|
206,911 |
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
2022 |
|
2021 |
£ |
£ |
|
|
At 1 January |
206,911 |
|
218,342 |
|
Charged/(credited) to the profit and loss account |
19,631 |
|
(11,431) |
|
|
At 31 December |
226,542 |
|
206,911 |
|
|
|
|
|
|
|
|
|
|
|
14 |
Share capital |
Nominal |
|
2022 |
|
2022 |
|
2021 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
A Ordinary Shares. One vote per share |
£0.001 |
|
35,000 |
|
35 |
|
35 |
|
D Ordinary Shares Allotted, no right to attend meetings, vote or dividends. |
£0.001 |
|
1,384 |
|
1 |
|
1 |
|
|
|
|
|
|
36 |
|
36 |
|
|
|
|
|
|
|
|
|
|
15 |
Other reserves |
2022 |
|
2021 |
|
Capital Redemption reserve |
£ |
£ |
|
|
At 1 January |
46 |
|
46 |
|
|
At 31 December |
46 |
|
46 |
|
|
|
|
|
|
|
|
|
Unaudited |
16 |
Profit and loss account |
2022 |
|
2021 |
£ |
£ |
|
|
At 1 January |
(928,621) |
|
389,428 |
|
Profit/(loss) for the financial year |
2,077,144 |
|
(1,318,049) |
|
Dividends |
(800,000) |
|
- |
|
|
At 31 December |
348,523 |
|
(928,621) |
|
|
|
|
|
|
|
|
|
Unaudited |
17 |
Dividends |
2022 |
|
2021 |
£ |
£ |
|
|
Dividends on ordinary shares (note 16) |
800,000 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
18 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
236,298 |
|
256,041 |
|
- |
|
- |
|
within two to five years |
212,669 |
|
486,479 |
|
- |
|
- |
|
|
448,967 |
|
742,520 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
19 |
Related party transactions |
|
|
The company operates an intercompany account with group companies. Shared costs are allocated between the companies. At 31 December 2022 the company was owed £1,930,000 by Pax2Pay Limited (2021: £171,907). Also as at 31 December 2022 the company owed £394,293 to Paxport Group AB (2021: £422,544 due from Paxport Group UK), £698,732 to Paxport AB (2021:£810,840) and £854,262 to Pax2Pay limited (2021: £1,235,659). |
|
|
20 |
Controlling party |
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The company is controlled by Paxport Group AB by virtue of its majority shareholding. Paxport Group AB is also the ultimate parent company, incorporated in Sweden, whose principal place of business and registered office is, and whose financial statements can be obtained at Box 55954, 102, 16, Stockholm, Sweden and this is the smallest and largest group in which the results of the company are consolidated |
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21 |
Presentation currency |
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The financial statements are presented in Sterling. |
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22 |
Legal form of entity and country of incorporation |
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Paxport Group UK Limited is a private company limited by shares and incorporated in England. |
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23 |
Principal place of business |
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The address of the company's principal place of business and registered office is: |
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The Landing, 125 Redcliff Street |
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Bristol |
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Avon |
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BS1 6HU |