Company registration number 09276634 (England and Wales)
TRAVCO CORPORATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
TRAVCO CORPORATION LIMITED
COMPANY INFORMATION
Directors
M S Allan
R D Allan
J R Feilder
Company number
09276634
Registered office
Travco House
92-94 Paul Street
London
EC2A 4UX
Auditors
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
Business address
Travco House
92-94 Paul Street
London
EC2A 4UX
TRAVCO CORPORATION LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 24
TRAVCO CORPORATION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -
The directors present the strategic report for the year ended 28 February 2023.
Review of the business
The results for the year were impacted by Covid-19 pandemic and the financial position at the year end were considered satisfactory by the directors due to the measures taken to ensure the going concern.
Corporate structure
The company's immediate parent undertaking is Travco Group Limited incorporated in England and Wales. The principal activity of the company is that of a global wholesaler of hotel accommodation for resale purposes.
S.172 statement
The information provided below is intended to explain how the directors considered the company's key stakeholders and the broader matters set out in s.172 of the Companies Act 2006 when performing their duties to promote the success of the company.
Company culture
The company culture focuses on the importance of strong financial and operational risk management controls, ensuring it complies with all applicable laws, regulations and ethical principals, locally, nationally and internationally.
The directors regularly assess/monitor the fulfilment of this culture at an operational level by requesting, receiving and analysing reports at various business levels, ensuring improvements can be made where necessary.
By protecting the reputation and economic viability of the company, the directors believe that enhancing this culture is for the long-term benefit of the company and interests of its stakeholders.
Long term strategy
The company's long term strategy is to grow revenues by adding new markets and increase profits through improving margins and optimising operational cost. This is to be achieved by providing high levels of service to customers whilst managing financial, operational, regulatory and legal risks and increasing efficiency at all levels.
To achieve these objectives, the directors consider it is essential to maintain adequate financial resources, through both internal operational mechanisms and access to external funding, to maintain stakeholder confidence at all times, to invest in information technology, to conduct a policy to promote exemplary customer services, to ensure staff are professionally trained and to ensure the company adheres to statutory regulations relating to information security.
Stakeholder relationships
The company's stakeholders are business customers (travel agents, OTA's, intermediaries), suppliers, staff and shareholders, the relationship with and interest of, are upper most in the directors' minds when making decisions to promote the company. The strategic goals and conduits to achieve them, as listed above, are specifically crafted by the directors to benefit stakeholders and foster better relationships with them.
Community and environment
The company does whatever it can within its resources to promote better community relations and foster good environmental credentials.
Principal risks and uncertainties
The management of the business and the execution of the company's strategies are subject to risks, the key risks being competition in the market place, operational risk and liquidity risk.
There continues to be uncertainties around the Covid-19 pandemic and the long term effects on the economy. The company reacts to the rapid changing environment to help manage the risk.
TRAVCO CORPORATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
Risk Management
Financial risk management
The company's principal financial instruments comprise bank balances, trade creditors, trade debtors and balances due from group and associated companies as well as individuals. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's trading activities.
The company's approach to managing other risks applicable to the financial instruments concerned is shown below.
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding. Balances are also held in foreign currencies in order for the company to trade with its suppliers and its customers.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring funds are available to meet amounts due.
In respect of balances due from group and associated companies, the directors are aware of the individual companies' finance requirements and had determined that these will only be repaid, in whole or in part, when sufficient funds are available.
Cyber security risk management
Travco utilises many of the most recommended companies to support cyber security and the company has implemented Crowd Strike virus protection across its network which protects the company from malicious software viruses and phishing via a technical attack. The company has IPS (intrusion prevention system) running on its main firewalls to protect its network from malicious attacks.
The company utilises Mimecast for email protection that filters out and tries to catch phishing emails that are aimed at obtaining customer/supplier and/or staff information for extortion. Further to this nearly all Travco systems/infrastructure can only be accessed from a computer within the domain, or accessed via a secure VPN connection for which the company uses SonicWall VPN solutions that require secure authenticated log-ins.
Key performance indicators
Key performance indicators during the year as follows: | | |
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| | | |
| | | |
Earnings before interest, tax, depreciation, amortisation, inter-group dividends and bad debts (EBITDAIB) | | | |
Other performance indicators
The directors also consider the following non-financial KPI of the business in relation to the year ended 28 February 2023.
The total room nights booked have increased from 238,046 nights in the year ended 28 February 2022 to 900,255 nights in the current year to 28 February 2023. This is an increase of 280% in comparison to the previous financial year.
TRAVCO CORPORATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
Impact of Covid-19
The coronavirus pandemic which developed in 2020 had a significant impact on the global travel sector as many countries imposed travel restrictions on their citizens. As a result the company saw almost total collapse in demand for its services and an associated significant adverse impact on both cancellations and forward bookings has resulted in devastating effects on Travco's sales in year ended 28 February 2021. The company has seen recovery in the year to 28 February 2023 and almost 60% of the business is recovered in the latter half of the year. The company is collaborating with its hotels and travel partners (customers) to optimise margins and volumes, to sustain and improve its market share. The directors anticipate a sales recovery in 2023/2024 to be 70% of 2020 levels, with anticipated EBITDAB of approximately £6.5m.
The second half of 2022/2023 has seen significant improvement in turnover and cashflow. The company has managed to repay £500k of its CLBILS government-backed loan which was taken during coronavirus pandemic. The directors have considered the funding and liquidity position of the company to be appropriate to prepare the financial statements on the going concern basis.
J R Feilder
Director
28 November 2023
TRAVCO CORPORATION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 4 -
The directors present their annual report and financial statements for the year ended 28 February 2023.
Principal activities
The principal activity of the company continued to be that of a global wholesaler of hotel accommodation for resale purposes.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M S Allan
R D Allan
J R Feilder
Future developments
The directors have focused on technological advancements via its in-house reservation system by developing functionalities to support the product growth along with flexibility to meet technological requirements of clients.
Energy and carbon report
The company's only significant area of energy consumption and energy use is from the UK office.
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
197,806
205,912
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
0.21
0.31
0.21
0.31
Scope 2 - indirect emissions
- Electricity purchased
41.76
43.03
Scope 3 - other indirect emissions
Total gross emissions
41.97
43.34
Intensity ratio
Tonnes CO2e per full time employee
0.78
0.52
TRAVCO CORPORATION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 5 -
Quantification and reporting methodology
Energy consumption at the company's offices is based on meter readings provided by the energy supplier.
Emissions were calculated based on Government conversion factors 2023 for company reporting of greenhouse gas emissions.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per UK employee.
Measures taken to improve energy efficiency
The company's only significant area of energy consumption and energy use is from the UK office within which we have installed low wattage lamps which are turned off when staff are not present. Allowing Travco staff to work from home is now much more acceptable and prevalent so reducing the staff carbon footprint for commuting. Travco also encourages staff to participate in the UK Goverments Cycle to work scheme.”
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, Director's Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and UK Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK (FRS 102).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards, including FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditors are aware of that information.
On behalf of the board
J R Feilder
Director
28 November 2023
TRAVCO CORPORATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TRAVCO CORPORATION LIMITED
- 6 -
Opinion
We have audited the financial statements of Travco Corporation Limited (the 'company') for the year ended 28 February 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 28 February 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the company or to cease its operations, and as they have concluded that the company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements ("the going concern period").
We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for the going concern period.
In our evaluation of the directors' conclusions, we considered the inherent risks to the company's business model and analysed how those risks might affect the group's financial resources or ability to continue operations over the going concern period.
We have nothing to report in these respects.
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 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.
TRAVCO CORPORATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TRAVCO CORPORATION LIMITED
- 7 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 client partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify and recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors, key management personnel and from our commercial knowledge and experience.
we focused on specific laws and regulations which we considered may have a direct effect on the financial statements or the operations of the company including the Companies Act 2006, current taxation legislation, data protection, anti-bribery and money laundering, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management;
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
TRAVCO CORPORATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TRAVCO CORPORATION LIMITED
- 8 -
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
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;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statements disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, enquiring of management over health and safety.
There are inherent limitations in our audit procedures described above. Auditing standards also limit the audit procedures required to identifying 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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
...............................................................................
28 November 2023
Cemal Soydaner (Senior Statutory Auditor)
For and on behalf of Charterhouse (Audit) Limited
Statutory Auditor
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
TRAVCO CORPORATION LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
103,100,585
25,045,529
Cost of sales
(91,337,870)
(22,531,837)
Gross profit
11,762,715
2,513,692
Administrative expenses
(12,843,352)
(9,331,836)
Other operating income
851,709
878,954
Operating loss
4
(228,928)
(5,939,190)
Interest receivable and similar income
8
36,729
2,163
Interest payable and similar expenses
9
(22,305)
(23,466)
Loss before taxation
(214,504)
(5,960,493)
Taxation
10
(536,155)
Loss for the financial year
(750,659)
(5,960,493)
Earnings before interest, tax, depreciation, amortisation, inter-group dividends and bad debts (EBITDAIB)
3,425,897
(2,154,276)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.
TRAVCO CORPORATION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 10 -
2023
2022
£
£
Loss for the year
(750,659)
(5,960,493)
Other comprehensive income
-
-
Total comprehensive income for the year
(750,659)
(5,960,493)
TRAVCO CORPORATION LIMITED
BALANCE SHEET
AS AT 28 FEBRUARY 2023
28 February 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
25,015,664
28,589,331
Tangible assets
12
52,424
27,154
Investments
13
3,026
3,026
25,071,114
28,619,511
Current assets
Debtors
15
28,840,207
23,464,929
Cash at bank and in hand
9,972,323
2,161,551
38,812,530
25,626,480
Creditors: amounts falling due within one year
16
(20,012,295)
(9,623,983)
Net current assets
18,800,235
16,002,497
Net assets
43,871,349
44,622,008
Capital and reserves
Called up share capital
19
36,261,353
36,261,353
Profit and loss reserves
7,609,996
8,360,655
Total equity
43,871,349
44,622,008
The financial statements were approved by the board of directors and authorised for issue on 28 November 2023 and are signed on its behalf by:
J R Feilder
Director
Company Registration No. 09276634
TRAVCO CORPORATION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 March 2021
36,261,353
14,321,148
50,582,501
Year ended 28 February 2022:
Loss and total comprehensive income for the year
-
(5,960,493)
(5,960,493)
Balance at 28 February 2022
36,261,353
8,360,655
44,622,008
Year ended 28 February 2023:
Loss and total comprehensive income for the year
-
(750,659)
(750,659)
Balance at 28 February 2023
36,261,353
7,609,996
43,871,349
TRAVCO CORPORATION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
24
7,149,409
(554,338)
Interest paid
(22,305)
(23,466)
Income taxes paid
(58,482)
Net cash inflow/(outflow) from operating activities
7,068,622
(577,804)
Investing activities
Purchase of tangible fixed assets
(58,153)
(14,472)
Interest received
36,729
2,163
Net cash used in investing activities
(21,424)
(12,309)
Financing activities
Increase in / (repayment of) bank loans
(500,000)
500,000
Net cash (used in)/generated from financing activities
(500,000)
500,000
Net increase/(decrease) in cash and cash equivalents
6,547,198
(90,113)
Cash and cash equivalents at beginning of year
1,725,339
1,815,452
Cash and cash equivalents at end of year
8,272,537
1,725,339
Relating to:
Cash at bank and in hand
9,972,323
2,161,551
Bank overdrafts included in creditors payable within one year
(1,699,786)
(436,212)
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 14 -
1
Accounting policies
Company information
Travco Corporation Limited is a private company limited by shares incorporated in England and Wales. The registered office and business address is Travco House, 92-94 Paul Street, London, EC2A 4UX.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Travco Corporation Limited is a wholly owned subsidiary of Travco Group Limited and the results of Travco Corporation Limited are included in the consolidated financial statements of Travco Group Limited.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover, which arises globally from the company's principal activity, represents fair value of consideration received from wholesale tour operator after deduction of trade discounts and value added tax.
Turnover derived from hotel bookings is recognised at the point at which the reservation commences, i.e. upon arrival.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years. This is based on the continuity of the business and future expectations.
1.5
Tangible fixed assets
Tangible fixed assets are measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
33% on cost
Fixtures and fittings
20% on cost
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 15 -
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.8
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the recoverable amount. The impairment loss is recognised in profit or loss.
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies, are recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 16 -
1.11
Taxation
The tax expense represents the sum of the tax currently payable.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.12
Retirement benefits
The Company operates a defined contribution plan. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate fund. Under defined contribution plans, the company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current period.
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.15
The Redeemable Preference shares are classified as equity in accordance with Section 22 (liabilities and equity) as they are redeemable at the option of the issuer and do not carry a right to a return.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Establishing useful economic lives for amortisation purposes of intangible fixed assets
Intangible fixed assets consist of goodwill. The annual amortisation charge depends on the estimated useful economic life of the asset. The directors regularly review the remaining useful life of the asset. Changes in asset useful economic life can have a significant impact on amortisation charge for the period. Detail of the useful economic life is included in accounting policies.
Establishing useful economic lives for depreciation purposes of tangible fixed assets
Tangible fixed assets, consisting primarily of plant and machinery, fixtures and fittings. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of asset and estimated residual values. The directors regularly review these asset useful lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation charges for the period. Detail of the useful economic lives is included in the accounting policies.
Provision for doubtful debts
The company makes an estimate of the recoverable value of the trade and other debtors. The company uses estimates based on historical experience determining the level of debts, which the company believes, will not be collected. These estimates include such factors as the current credit rating of the debtor, the aging profile of the debtors and historical experience. Any significant reduction in the level of customers that default on payments or other significant improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the operating results. The level of provision required is reviewed on an on-going basis and is disclosed in note 15.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Wholesale of hotel accommodation
103,100,585
25,045,529
2023
2022
£
£
Other revenue
Interest income
36,729
2,163
Grants received
-
550,914
In the opinion of the directors it would be seriously prejudicial to the interests of the company to disclose the geographical market breakdown of turnover in these financial statements.
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 18 -
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
109,928
(8,403)
Government grants
-
(550,914)
Depreciation of owned tangible fixed assets
32,883
68,899
Amortisation of intangible assets
3,573,667
3,573,667
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditors and associates:
£
£
For audit services
Audit of the financial statements of the company
31,725
35,500
For other services
All other non-audit services
7,875
25,904
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Selling and administration
154
165
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,288,962
3,204,550
Social security costs
660,775
320,085
Pension costs
268,713
220,375
6,218,450
3,745,010
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
360,000
Company pension contributions to defined contribution schemes
36,000
-
396,000
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
7
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
120,000
-
Company pension contributions to defined contribution schemes
12,000
-
Directors are also considered to be the only key management personnel.
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
30,195
186
Other interest income
6,534
1,977
Total income
36,729
2,163
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
30,195
186
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
22,305
23,466
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
536,155
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
10
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(214,504)
(5,960,493)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(40,756)
(1,132,494)
Tax effect of expenses that are not deductible in determining taxable profit
540
11
Gains not taxable
(9,499)
Group relief
(348)
Depreciation
6,248
13,091
Amortisation
678,997
678,997
Capital allowances
(42,126)
(36,606)
Losses carried back
477,001
Losses brought forward
(56,901)
Taxation charge for the year
536,155
-
11
Intangible fixed assets
Goodwill
£
Cost
At 1 March 2022 and 28 February 2023
53,605,000
Amortisation and impairment
At 1 March 2022
25,015,669
Amortisation charged for the year
3,573,667
At 28 February 2023
28,589,336
Carrying amount
At 28 February 2023
25,015,664
At 28 February 2022
28,589,331
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 21 -
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 March 2022
1,612,352
533,099
2,145,451
Additions
57,390
763
58,153
At 28 February 2023
1,669,742
533,862
2,203,604
Depreciation and impairment
At 1 March 2022
1,609,214
509,083
2,118,297
Depreciation charged in the year
19,931
12,952
32,883
At 28 February 2023
1,629,145
522,035
2,151,180
Carrying amount
At 28 February 2023
40,597
11,827
52,424
At 28 February 2022
3,138
24,016
27,154
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
3,026
3,026
14
Subsidiaries
Details of the company's subsidiary at 28 February 2023 is as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Travco International Limited
1
Ordinary
100.00
Travco Canada Travel Limited
2
Ordinary
100.00
Registered office addresses:
1
Travco House, 92-94 Paul Street, London, EC2A 4UX
2
Suite 2300, 925 West Georgia Street Vancouver BC V6C 3L2, Canada
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Travco International Limited
711,281
(1,831)
Travco Canada Travel Limited
35,505
(825)
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 22 -
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,184,153
3,035,084
Amounts owed by group undertakings
20,389,832
20,167,541
Other debtors
835,387
58,966
Prepayments and accrued income
430,835
203,338
28,840,207
23,464,929
The fair value of trade and other receivables approximate to their carrying amounts. Trade debtors are stated after provisions for doubtful debts of £150,000 (2022: £200,000).
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
1,699,786
936,212
Trade creditors
15,466,878
7,874,464
Corporation tax
500,177
22,504
Other taxation and social security
40,263
2,373
Other creditors
1,782,375
711,627
Accruals and deferred income
522,816
76,803
20,012,295
9,623,983
17
Loans and overdrafts
2023
2022
£
£
Bank loans
500,000
Bank overdrafts
1,699,786
436,212
1,699,786
936,212
Payable within one year
1,699,786
936,212
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 23 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
268,713
220,375
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,020
4,020
4,020
4,020
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Redeemable Preference shares of £1 each
36,257,333
36,257,333
36,257,333
36,257,333
Preference shares classified as equity
36,257,333
36,257,333
Total equity share capital
36,261,353
36,261,353
The company has one class of ordinary shares which carry no right to fixed income.
The redeemable preference shares do not carry voting rights.
20
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
173,418
238,450
21
Financial commitments, guarantees and contingent liabilities
There is a debenture secured by way of a fixed and floating charge against the assets of the company and its fellow group undertakings. There are cross guarantees between the group companies in respect of this debenture.
TRAVCO CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 24 -
22
Related party transactions
Included in other debtors, is a balance of £822,548 (2022: £Nil) due from the directors. The maximum balance outstanding during the year was £822,548 (2022: £95,281) and during the year interest of £6,534 (2022: £1,977) was charged on this balance at HMRC's official rate.
23
Ultimate controlling party
The company's ultimate parent company is Travco Group Limited. The registered office is Travco House, 92-94 Paul Street, London, EC2A 4UX.
The company is ultimately controlled by the directors with no single party having an overall control.
24
Cash generated from/(absorbed by) operations
2023
2022
£
£
Loss for the year after tax
(750,659)
(5,960,493)
Adjustments for:
Taxation charged
536,155
Finance costs
22,305
23,466
Investment income
(36,729)
(2,163)
Amortisation and impairment of intangible assets
3,573,667
3,573,667
Depreciation and impairment of tangible fixed assets
32,883
68,899
Movements in working capital:
Increase in debtors
(5,375,278)
(876,130)
Increase in creditors
9,147,065
2,618,416
Cash generated from/(absorbed by) operations
7,149,409
(554,338)
25
Analysis of changes in net funds
1 March 2022
Cash flows
28 February 2023
£
£
£
Cash at bank and in hand
2,161,551
7,810,772
9,972,323
Bank overdrafts
(436,212)
(1,263,574)
(1,699,786)
1,725,339
6,547,198
8,272,537
Borrowings excluding overdrafts
(500,000)
500,000
-
1,225,339
7,047,198
8,272,537
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