Registered number: 11188295
DUFFEL TECHNOLOGY LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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DUFFEL TECHNOLOGY LTD
REGISTERED NUMBER:11188295
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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DUFFEL TECHNOLOGY LTD
REGISTERED NUMBER:11188295
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STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2022
The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The Company has opted not to file the Statement of Comprehensive Income in accordance with provisions applicable to companies subject to the small companies regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 14 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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Comprehensive loss for the year
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Comprehensive loss for the year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Duffel Technology Ltd is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 11188295). The address of the registered office is 3rd Floor 100 Clifton Street, London, EC2A 4TP.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The Company, and the Group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and Group are considered eligible for the exemption to prepare consolidated accounts.
The financial statements have been prepared on a going concern basis. The Company has net current liabilities of £22,041,807 (2021 - £11,322,348).
The business has experienced consistent volume growth throughout 2022 as travel restrictions began easing and this is continuing into 2024 with most restrictions being removed entirely.
Duffel Technology Inc, ('the parent company') has confirmed that loan amounts owed to them at the statement of financial position date amounting to £30,979,891 (2021 - £14,176,749) will be repayable only when the Company has sufficient available funds to do so. Notwithstanding the above, in line with the overall strategy and operations of the group, the parent company has confirmed in writing that it will continue to provide further financial support to the Company for the foreseeable future and at least 12 months from approval of the financial statements. The Company has drawn up budgets and cashflows which show that with the financial support from the parent company it has sufficient cash reserves to continue as a going concern and pay its liabilities as they fall due for the foreseeable future.
Having assessed this in the context of the overall group and parent company's position, alongside the written confirmation of on-going financial support, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future being at least the next 12 months from signing of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Turnover relates to service fees earned from customers. The cost of flights booked on the Company's system is recharged on to the customer, and consequently in line with the Company's role as an agent to the transaction.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument.
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Company’s cash management.
Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Statement of Financial Position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Judgements in applying accounting policies and key sources of estimation uncertainty
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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 judgements, estimates and assumptions are evaluated at each reporting date and are based on historical experience as adjusted for current market conditions and other factors. Management makes estimates and assumptions concerning the future in preparing the financial statements and the actual results will not always reflect the accounting estimates made. The estimates and assumptions that had a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities of the Company are outlined below.
The Company reviews the valuation of its investments on an annual basis. Having completed this review, the directors' judgement was that these balances were impaired and therefore they calculated an estimate of the year end position. Based on an estimate of the recoverable amount, the carrying value of the investments were impaired by £1,012,296 (2021 - £Nil) reducing the carrying value to £1,447,064 (2021 - £450,338). These impairments relate directly to the France and Australia subsidiaries. The directors determined the recoverable value using a discounted cash flow for each of the subsidiaries. This looked at multiple scenarios with sensitivity analysis performed on the expected EBITDA discounted to calculate the expected present value. The recoverable value determined was based on a scenario of 12% growth in revenue year on year.
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The average monthly number of employees, including directors, during the year was 78 (2021 - 54).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Investments in subsidiary companies
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The additions relate to an increase in share capital in Duffel Travel France & Duffel Travel Australia Pty Ltd. The subsequent impairment also relates to these subsidiaries, as detailed in note 3.
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The following were subsidiary undertakings of the Company:
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Duffel Travel Ireland Limited
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70 Sir John Rogerson's Quay, Dublin 2, Republic of Ireland
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128 Rue la Boétie, 75008 Paris, France
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1967 Wehrle Drive, Suite 1-086, Buffalo, NY, 14221, United States of America
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Duffel Travel Australia Pty Ltd
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Suite 1, Level 18, 227 Elizabeth St., Sydney NSW, 2000, Australia
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Amounts owed by group undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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The amounts owed to group undertakings are interest-free, unsecured and repayable on demand.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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During the year, the Company met the eligibility criteria to grant options under the Enterprise Management Incentive (“EMI”) scheme. It was agreed by Management that all previously granted options to UK employees, previously granted as Non Tax Favoured options, should be cancelled and replaced with EMI options. This was approved by the Board of Directors and completed within the year. The terms of the options remained the same including;
- The number of options to be granted
- The vesting schedule
- The exercise price
These options issued under the Parent Company's scheme continued to have an exercise price of $0.50 per share, and were dependent on the individual's continued employment with the Company.
All options re-issued had two-part vesting conditions: 25% of the options shall vest on the first anniversary of the relevant Vesting Commencement Date and the remaining 75% of the Shares shall vest in 36 equal monthly instalments following the first anniversary of the Vesting Commencement Date. The Vesting Commencement Date for each individual was the date of their first day of employment with the Company and varied for dates throughout the financial year.
Additionally within the year, the Parent Company decided to launch a regrant scheme to employees who met certain criteria related to tenure within the Group. These options were granted as EMI options and the only difference to the above grants related to the vesting conditions: as the 1 year cliff was removed and these options vested evenly over 48 equal monthly instalments and also the Vesting Commencement Date was the date of the 2nd and/or 3rd anniversary of the original date of employment.
No share-based payment charge has been recognised in the year as the shares are considered to hold a small fair value such that any expense would not be material to the financial statements (2021 - £Nil).
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The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £163,048 (2021 - £112,695). Contributions totalling £22,256 (2021 - £25,915) were payable to the fund at the reporting date.
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Commitments under operating leases
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At 31 December the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Related party transactions
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The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
Key management personnel
Key management are those persons having authority and responsibility for planning, controlling and directing the activities of the Company, and includes the directors. Total key management personnel remuneration was £199,138 (2021 - £231,000).
At the year end, the directors owed the Company £18,038 (2021 - £8,037). The loan is interest free and repayable on demand.
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The immediate and ultimate parent undertaking is Duffel Technology Inc., a company incorporated in the United States of America. The registered office address is 651 North Broad Street, Suite 206, Middletown, DE 19709 Delaware, United States of America.
The directors consider there to be no ultimate controlling party.
The auditor's report on the financial statements for the year ended 31 December 2022 was unqualified and the auditor drew attention by way of emphasis to note 2.3 which notes the reliance on financial support from the Company's parent.
The audit report was signed on 14 March 2024 by Chetan Mistry (Senior Statutory Auditor) on behalf of CLA Evelyn Partners Limited.
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