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Registered number: 13423778










EMBRACE TRAVEL GROUP LTD










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2023

 
EMBRACE TRAVEL GROUP LTD
 
 
COMPANY INFORMATION


Directors
C M Bartholomew 
D Curnock 
J T Sapak 




Registered number
13423778



Registered office
71-75, Shelton Street

London

WC2H 9JQ




Independent auditors
Xeinadin Audit Limited
 Chartered Accountants & Statutory Auditor

8th Floor

Becket House

36 Old Jewry

EC2R 8DD





 
EMBRACE TRAVEL GROUP LTD
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 9
Consolidated Profit and Loss Account
10
Consolidated Statement of Comprehensive Income
11
Consolidated Balance Sheet
12
Company Balance Sheet
13
Consolidated Statement of Changes in Equity
14 - 15
Company Statement of Changes in Equity
16 - 17
Consolidated Statement of Cash Flows
18 - 19
Consolidated Analysis of Net Debt
20
Notes to the Financial Statements
21 - 37


 
EMBRACE TRAVEL GROUP LTD
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

Introduction
 
The directors present the strategic report for the year ended 31 October 2023.

Fair review of the business
 
In the past fiscal year, the Group has incurred large one off costs enabling a review of the business as a whole and allowing us to strategically allocate considerable resources towards restructuring initiatives and substantial investments in Information Technology (IT) infrastructure. These expenditures are pivotal components of our long-term vision aimed at enhancing operational efficiency, fostering innovation, and fortifying our competitive position in the market.
The restructuring efforts undertaken reflect our commitment to optimizing organizational structures, streamlining processes, and aligning resources with evolving business priorities. Through prudent restructuring, we aim to enhance agility, responsiveness, and adaptability, ensuring our ability to navigate dynamic market landscapes effectively.
Simultaneously, our investment in IT underscores our dedication to technological advancement as a cornerstone of sustainable growth. These investments encompass the implementation of cutting-edge systems, software, and digital platforms designed to empower our workforce, elevate customer experiences, and drive operational excellence across all facets of our business.
By strategically allocating resources towards restructuring and IT investments, we are bolstering our capabilities to capitalize on emerging opportunities, mitigate risks, and deliver long-term value to our stakeholders. As we continue to execute our strategic roadmap, we remain steadfast in our commitment to driving innovation, fostering resilience, and achieving sustained growth in the years ahead.
We are pleased to announce the successful completion of the acquisition of Tribes Travel Ltd, a strategic addition to our portfolio that complements our existing business and enhances our capabilities. This acquisition marks a significant milestone in our growth journey and underscores our commitment to delivering value to our
stakeholders.
Tribes Travel Ltd brings to the Group a wealth of expertise, complementary products/services, and a talented team, all of which align seamlessly with our existing operations and strategic objectives. By integrating their strengths with ours, we are poised to unlock new opportunities, drive synergies, and strengthen our position in the market.
This acquisition not only expands our market reach but also diversifies our revenue streams, reducing dependency on any single product or market segment. Furthermore, it enables us to capitalize on emerging trends and meet evolving customer demands more comprehensively, thereby enhancing our competitiveness and resilience.

Page 1

 
EMBRACE TRAVEL GROUP LTD
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023

Principal risks and uncertainties
 
The Group finances its operations through a mixture of retained profits, cash and various items, such as trade debtors, trade creditors and deposits for holidays in advance.
The main risks to the group are liquidity risk and currency risk. The directors review and agree policies for managing each of these risks and they are summarised below:
Currency and liquidity risk:
The Group is exposed to transaction foreign exchange risk. Transaction exposure is mitigated by regular monitoring of currency markets and a combination of buying spot and using foreign currency contracts and options.
The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash and assets safely and profitably.

Financial key performance indicators
 
During the year the directors have initiated a number of Key Performance Indicators across all operations of the business so as to be able to properly monitor all activities and financial performance of the Group.
The main KPIs that are used to manage the business are as follows:
                                                                                                     2023                                 2022 
                                                                                                    £'000                                 £'000 
Turnover                                                                                    13,213                               13,591
Gross Profit Margin                                                                      2,404                                2,326
Net (Liabilities)/Assets                                                                  (275)                                    62  


This report was approved by the board on 30 July 2024 and signed on its behalf.



C M Bartholomew
Director

Page 2

 
EMBRACE TRAVEL GROUP LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

The directors present their report and the financial statements for the year ended 31 October 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Directors

The directors who served during the year were:

C M Bartholomew 
D Curnock 
J T Sapak 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post Balance Sheet Events

There have been no significant events affecting the Group since the year end.

Page 3

 
EMBRACE TRAVEL GROUP LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023

Auditors

The auditorsXeinadin Audit Limited
 Chartered Accountants & Statutory Auditor
will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 30 July 2024 and signed on its behalf.
 





C M Bartholomew
Director

Page 4

 
EMBRACE TRAVEL GROUP LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EMBRACE TRAVEL GROUP LTD
 

Opinion


We have audited the financial statements of Embrace Travel Group Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 October 2023, which comprise the Group Profit and Loss Account, the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 October 2023 and of the Group's 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.


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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 Group's or the parent 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.


Page 5

 
EMBRACE TRAVEL GROUP LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EMBRACE TRAVEL GROUP LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' Report thereon.  The directors are responsible for the other information contained within the Annual Report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.  If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.  If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion 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 Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.


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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and taken advantage of the small companies' exemptions in preparing the Directors' report and from the requirement to prepare a Group strategic report.


Page 6

 
EMBRACE TRAVEL GROUP LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EMBRACE TRAVEL GROUP LTD (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
EMBRACE TRAVEL GROUP LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EMBRACE TRAVEL GROUP LTD (CONTINUED)


Auditors' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

•Enquiry of management and those charged with governance around actual and potential litigation and claims; 

•Reviewing minutes of meetings of meetings of those charged with governance;

•Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias 

•Enquiry of management and those charged with governance to identify any instances of non-compliance with laws and regulations; 
 
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. 
Secondly, the Group is subject to many other laws and regulations where the consequence of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance the imposition of fines or litigation or the loss of the Group’s license to operate. We identified the following areas as those most likely to have such an effect: health and safety including data protection laws, anti-bribery, money laundering, employment law, ABTA and ATOL compliance recognising the nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 8

 
EMBRACE TRAVEL GROUP LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EMBRACE TRAVEL GROUP LTD (CONTINUED)


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Karanjit Gill FCCA (Senior Statutory Auditor)
  
for and on behalf of
Xeinadin Audit Limited
 Chartered Accountants & Statutory Auditor
 
8th Floor
Becket House
36 Old Jewry
EC2R 8DD

30 July 2024
Page 9

 
EMBRACE TRAVEL GROUP LTD
 
 
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2023

2023
2022
Note
£
£

  

Turnover
  
13,212,653
13,591,355

Cost of sales
  
(10,808,433)
(11,265,334)

Gross profit
  
2,404,220
2,326,021

Administrative expenses
  
(2,460,082)
(2,393,207)

Exceptional administrative expenses
  
(269,800)
-

Other operating income
 4 
9,857
524,899

Operating (loss)/profit
  
(315,805)
457,713

Interest receivable and similar income
 7 
33,971
33,484

Interest payable and similar expenses
 8 
(72,560)
(51,072)

(Loss)/profit before tax
  
(354,394)
440,125

Tax on (loss)/profit
 9 
17,523
(109,485)

(Loss)/profit for the financial year
  
(336,871)
330,640

(Loss)/profit for the year attributable to:
  

Owners of the parent
  
(336,871)
330,640

  
(336,871)
330,640

The notes on pages 21 to 37 form part of these financial statements.

Page 10

 
EMBRACE TRAVEL GROUP LTD
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023

2023
2022
Note
£
£


(Loss)/profit for the financial year

  

(336,871)
330,640

Other comprehensive income
  

Total comprehensive income for the year
  
(336,871)
330,640

(Loss)/profit for the year attributable to:
  


Owners of the parent Company
  
(336,871)
330,640

  
(336,871)
330,640

The notes on pages 21 to 37 form part of these financial statements.

Page 11

 
EMBRACE TRAVEL GROUP LTD
REGISTERED NUMBER: 13423778

CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
738,655
(4,469)

Tangible assets
 13 
38,517
70,924

  
777,172
66,455

Current assets
  

Debtors: amounts falling due within one year
 15 
3,057,730
1,960,072

Cash at bank and in hand
 16 
1,608,323
1,622,650

  
4,666,053
3,582,722

Creditors: amounts falling due within one year
 17 
(5,105,136)
(3,309,197)

Net current (liabilities)/assets
  
 
 
(439,083)
 
 
273,525

Total assets less current liabilities
  
338,089
339,980

Creditors: amounts falling due after more than one year
 18 
(613,313)
(278,333)

Net (liabilities)/assets
  
(275,224)
61,647


Capital and reserves
  

Called up share capital 
 21 
120
120

Profit and loss account
 22 
(275,344)
61,527

  
(275,224)
61,647


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 July 2024.




C M Bartholomew
Director

The notes on pages 21 to 37 form part of these financial statements.

Page 12

 
EMBRACE TRAVEL GROUP LTD
REGISTERED NUMBER: 13423778

COMPANY BALANCE SHEET
AS AT 31 OCTOBER 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 14 
1
1

  
1
1

Current assets
  

Debtors: amounts falling due after more than one year
 15 
250,000
250,000

Debtors: amounts falling due within one year
 15 
119
25,119

  
250,119
275,119

Creditors: amounts falling due within one year
  
-
(25,000)

Net current assets
  
 
 
250,119
 
 
250,119

Total assets less current liabilities
  
250,120
250,120

  

Creditors: amounts falling due after more than one year
 18 
(250,000)
(250,000)

  

Net assets
  
120
120


Capital and reserves
  

Called up share capital 
 21 
120
120

  
120
120


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 July 2024.


C M Bartholomew
Director

The notes on pages 21 to 37 form part of these financial statements.

Page 13

 
EMBRACE TRAVEL GROUP LTD
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 November 2022
120
61,527
61,647


Comprehensive income for the year

Loss for the year

-
(336,871)
(336,871)
Total comprehensive income for the year
-
(336,871)
(336,871)


Total transactions with owners
-
-
-


At 31 October 2023
120
(275,344)
(275,224)


The notes on pages 21 to 37 form part of these financial statements.

Page 14

 
EMBRACE TRAVEL GROUP LTD
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£


Comprehensive income for the period

Profit for the period

-
330,640
330,640

Transfer on acquisition of subsidiary
-
(269,113)
(269,113)
Total comprehensive income for the period
-
61,527
61,527


Contributions by and distributions to owners

Shares issued during the period
120
-
120


Total transactions with owners
120
-
120


At 31 October 2022
120
61,527
61,647


The notes on pages 21 to 37 form part of these financial statements.

Page 15

 
EMBRACE TRAVEL GROUP LTD
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023


Called up share capital
Total equity

£
£

At 1 November 2022
120
120
Total comprehensive income for the year
-
-


Total transactions with owners
-
-


At 31 October 2023
120
120


The notes on pages 21 to 37 form part of these financial statements.

Page 16

 
EMBRACE TRAVEL GROUP LTD
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022


Called up share capital
Total equity

£
£


Contributions by and distributions to owners

Shares issued during the period
120
120


Total transactions with owners
120
120


At 31 October 2022
120
120


The notes on pages 21 to 37 form part of these financial statements.

Page 17

 
EMBRACE TRAVEL GROUP LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023

2023
2022
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(336,871)
330,640

Adjustments for:

Amortisation of intangible assets
62,165
22,041

Depreciation of tangible assets
33,259
635,319

Loss on disposal of tangible assets
(78,653)
-

Interest paid
72,560
51,072

Interest received
(33,971)
(33,484)

Taxation charge
(17,523)
109,485

(Increase) in debtors
(1,122,658)
(1,935,072)

Decrease/(increase) in amounts owed by groups
25,000
(25,000)

Increase in creditors
1,701,912
3,670,617

Increase in amounts owed to groups
320,000
25,000

Other operating income
-
(524,899)

Corporation tax received
136,549
-

Net cash generated from operating activities

761,769
2,325,719


Cash flows from investing activities

Purchase of intangible fixed assets
(703,846)
(17,572)

Purchase of tangible fixed assets
(236)
(706,243)

Purchase of fixed asset investments
(23,405)
-

Interest received
33,971
33,484

Net cash from investing activities

(693,516)
(690,331)

Cash flows from financing activities

Issue of ordinary shares
-
1

New secured loans
-
38,333

Repayment of loans
(10,020)
-

Interest paid
(72,560)
(51,072)

Net cash used in financing activities
(82,580)
(12,738)

Net (decrease)/increase in cash and cash equivalents
(14,327)
1,622,650

Cash and cash equivalents at beginning of year
1,622,650
-

Cash and cash equivalents at the end of year
1,608,323
1,622,650


Cash and cash equivalents at the end of year comprise:
Page 18

 
EMBRACE TRAVEL GROUP LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023


2023
2022

£
£


Cash at bank and in hand
1,608,323
1,622,650

1,608,323
1,622,650


The notes on pages 21 to 37 form part of these financial statements.

Page 19

 
EMBRACE TRAVEL GROUP LTD
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 OCTOBER 2023




At 1 November 2022
Cash flows
At 31 October 2023
£

£

£

Cash at bank and in hand

1,622,650

(14,327)

1,608,323

Debt due after 1 year

(28,333)

10,020

(18,313)

Debt due within 1 year

(10,000)

-

(10,000)


1,584,317
(4,307)
1,580,010

The notes on pages 21 to 37 form part of these financial statements.

Page 20

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

1.


General information

Embrace Travel Group Ltd is a private limited company domiciled and incorporated in England and Wales. The registered head office and principal place of business is located at 71-75 Shelton Street, London, Greater London, United Kingdom, WC2H 9JQ
The principal activity of the group continued to be providing Tour Operator Services.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements.

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Going concern

The financial statements have been prepared on a going concern basis which the directors believe to
be appropriate for the following reasons.
The directors have prepared forecasts taking into account their assessment of the performance of the business and are confident that the Group will be able to continue to meet their liabilities as they fall due for a period of not less than 12 months from the date these accounts are signed.
The directors consider it appropriate to prepare the financial statements on a going concern basis.

Page 21

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

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.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.5

Revenue

Turnover is recognised at the fair value of the consdieration received or receivable for services provided in the normal course of business, and is shown net of VAT and commissions. Revenue is recognised on the departure date. 

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 22

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 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 balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.12

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

Page 23

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)

 
2.13

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Profit and Loss Account over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the revaluation model, intangible assets shall be carried at a revalued amount, being its fair value at the date of revaluation less any subsequent accumulated amortisation and subsequent impairment losses - provided that the fair value can be determined by reference to an active market.
Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the balance sheet date.

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:

Intellectual Property
-
3
years
Goodwill
-
10
years

 
2.14

Tangible fixed assets

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:

Long-term leasehold property
-
Fixtures and fittings
-
Office equipment
-
10%
Computer equipment
-
20%

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.

Page 24

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated Profit and Loss Account for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

 
2.16

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.18

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.19

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Profit and Loss Account.

Page 25

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

2.Accounting policies (continued)

 
2.20

Hedge accounting

The Group uses variable to fixed interest rate swaps to manage its exposure to fair value risk on its enter user text. These derivatives are measured at fair value at each balance sheet date.

To the extent the cash flow hedge is effective, movements in fair value are recognised in other comprehensive income and presented in a separate cash flow hedge reserve. Any ineffective portions of those movements are recognised in profit or loss for the year.

Gains and losses on the hedging instruments and the hedged items are recognised in profit or loss for the year. When a hedged item is an unrecognised firm commitment, the cumulative hedging gain or loss on the hedged item is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 a continuing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. 


4.


Other operating income

2023
2022
£
£

Other operating income
9,857
524,899

9,857
524,899



5.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
15,400
14,000

Fees payable for non-audit services
5,100
-

Page 26

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

6.


Employees

Staff costs were as follows:


Group
Group
2023
2022
£
£


Wages and salaries
572,446
450,873

Social security costs
37,182
29,123

Cost of defined contribution scheme
22,541
9,514

632,169
489,510


The average monthly number of employees, during the year was as follows:


        2023
        2022
            No.
            No.







Staff
16
14



Directors
3
4

19
18

The directors of the company did not receive any remuneration during the year.

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL)

7.


Interest receivable

2023
2022
£
£


Interest receivable from group companies
25,000
25,000

Other interest receivable
8,971
8,484

33,971
33,484

Page 27

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

8.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
852
1,072

Other loan interest payable
-
25,000

Loans from group undertakings
65,585
25,000

Other interest payable
6,123
-

72,560
51,072


9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
(17,703)
-

Adjustments in respect of previous periods
180
-


(17,523)
-


Total current tax
(17,523)
-

Deferred tax


Origination and reversal of timing differences
-
109,485

Total deferred tax
-
109,485


Tax on (loss)/profit
(17,523)
109,485
Page 28

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
 
9.Taxation (continued)


Factors affecting tax charge for the year/period

The tax assessed for the year/period is the same as (2022 - the same as) the standard rate of corporation tax in the UK of 25% (2022 - 19%) as set out below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(354,394)
440,125


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
(88,599)
83,624

Effects of:


Expenses not deductible for tax purposes
5,453
1,720

Remeasurement of deferred tax for changes in tax rates
(9,758)
26,276

Adjustment for impact of amortisation on consolidation
16
(2,135)

Unrelieved tax losses carried forward
75,365
-

Total tax charge for the year/period
(17,523)
109,485


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


10.


Exceptional items

2023
2022
£
£


Consultancy
73,500
-

Accountancy fees
110,675
-

Legal and professional fees
80,000
-

Recruitment fees
5,625
-

269,800
-

Exceptional items above have been stated separately which have an effect on profit or loss.

Page 29

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

11.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements. The profit after tax of the parent Company for the year/period was £ (2022 - £NIL).


12.


Intangible assets

Group and Company





Patents
Computer software
Goodwill
Total

£
£
£
£



Cost


At 1 November 2022
99,961
-
(82,389)
17,572


Additions
85,534
-
618,312
703,846


Disposals
-
-
82,389
82,389


On acquisition of subsidiaries
-
22,789
-
22,789



At 31 October 2023

185,495
22,789
618,312
826,596



Amortisation


At 1 November 2022
25,777
-
(3,736)
22,041


Charge for the year on owned assets
52,937
9,227
-
62,164


On disposals
-
-
3,736
3,736



At 31 October 2023

78,714
9,227
-
87,941



Net book value



At 31 October 2023
106,781
13,562
618,312
738,655



At 31 October 2022
74,184
-
(78,653)
(4,469)



Page 30

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

13.


Tangible fixed assets

Group






Long-term leasehold property
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 November 2022
17,962
3,564
135,801
570,442
727,769


Additions
-
-
236
-
236


Acquisition of subsidiary
-
-
-
616
616



At 31 October 2023

17,962
3,564
136,037
571,058
728,621



Depreciation


At 1 November 2022
17,962
3,564
108,348
526,971
656,845


Charge for the year on owned assets
-
-
6,275
26,984
33,259



At 31 October 2023

17,962
3,564
114,623
553,955
690,104



Net book value



At 31 October 2023
-
-
21,414
17,103
38,517



At 31 October 2022
-
-
27,453
43,471
70,924


14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 November 2022
1



At 31 October 2023
1




Page 31

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

Direct subsidiary undertaking


The following was a direct subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

ETG BidCo1 Ltd
71-75 Shelton Street, London, Greater London, United Kingdom, WC2H 9JQ
Ordinary
100%

The aggregate of the share capital and reserves as at 31 October 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking was as follows:

Name
Profit/(Loss)

ETG BidCo1 Ltd
1


Indirect subsidiary undertakings


The following were indirect subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Atkins Travel Limited
11 Haviland House, 17 Cobham Road, Ferndown Industrial Estate, Wimborne, Dorset, England, BH21 7PE
Ordinary
100%
Prestige Flights Limited
As above
Ordinary
100%
Prestige Holidays Limited
As above
Ordinary
100%
Tribes Travel Limited
As above
Ordinary
100%

The aggregate of the share capital and reserves as at 31 October 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Atkins Travel Limited
(198,519)
(338,700)

Prestige Flights Limited
100
-

Prestige Holidays Limited
2
-

Tribes Travel Limited
614,770
34,146

Page 32

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

15.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Amounts owed by group undertakings
-
-
250,000
250,000

-
-
250,000
250,000


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
50
-
-
-

Amounts owed by group undertakings
-
25,000
-
25,000

Other debtors
624,060
936,094
-
-

Called up share capital not paid
119
119
119
119

Prepayments and accrued income
2,068,243
633,601
-
-

Deferred taxation
365,258
365,258
-
-

3,057,730
1,960,072
119
25,119



16.


Cash and cash equivalents

Group
Group
2023
2022
£
£

Cash at bank and in hand
1,608,323
1,622,650

1,608,323
1,622,650


Cash and cash equivalents comprise amounts held in Escrow totalling £1,031,439 (2022: £1,244,941).. Amounts held in Escrow are segregated monies received and held in a separate CAA Approved Escrow account. These amounts are held as a financial guarantee for the company’s travel licenses and for the protection of monies collected from passengers.

Page 33

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans
10,000
10,000
-
-

Trade creditors
1,566,827
1,551,796
-
-

Amounts owed to related parties
-
25,000
-
25,000

Corporation tax
119,026
-
-
-

Other taxation and social security
82,004
12,962
-
-

Other creditors
450,743
47,739
-
-

Accruals and deferred income
2,876,536
1,661,700
-
-

5,105,136
3,309,197
-
25,000


Included within accruals and deferred income is £1,685,200 (2022: £1,647,173) of advance receipts from customers in relation to bookings departing after the balance sheet date.


18.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans
18,313
28,333
-
-

Amounts owed to related parties
345,000
-
-
-

Other creditors
250,000
250,000
250,000
250,000

613,313
278,333
250,000
250,000


Other creditors represents £250,000 (2022: £250,000) which is payable to Jason John Robert Hacker, the director.

Bank Loan represents the Bounce Bank Loan received. The loan is payable by August 2026 and carries an interest of 2.5% per annum.

Page 34

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

19.


Loans


Analysis of the maturity of loans is given below:


Group
Group
2023
2022
£
£

Amounts falling due within one year

Bank loans
10,000
10,000


10,000
10,000

Amounts falling due 1-2 years

Bank loans
10,000
10,000


10,000
10,000

Amounts falling due 2-5 years

Bank loans
8,313
18,333


8,313
18,333


28,313
38,333



20.


Deferred taxation


Group



2023


£






At beginning of year
365,258



At end of year
365,258

Group
Group
2023
2022
£
£

Accelerated capital allowances
365,258
365,258

365,258
365,258

Page 35

 
EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

21.


Share capital

2023
2022
£
£
Allotted, called up and partly paid



120,000 (2022 - 120,000) Ordinary shares of £0.0010 each
120
120



22.


Reserves

Profit and loss account

Includes all current and prior period retained profit and losses.


23.


Contingent liabilities

The Group currently holds an Air Travel Organisers' License ('ATOL') issued by the Civil Aviation Authority ('CAA'), is a member of the Association of British Travel Agents Limited ('ABTA').
In order to offer air inclusive package holidays, the Group  requires the annual renewal by the CAA of its ATOL license. The CAA grants this license based on meeting agreed financial criteria and renews this in March (effective 1st April) each year. The Group has complied with these requirements in previous
years. The directors are expecting the ATOL licence to be renewed in March 2024.
As at 31 October 2023, there were no contingent liabilities in place in the normal course of business.


24.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £22,541 (2022: £9,514). Contributions totalling £12,191 (2022: £4,612 to the fund) were payable from the fund at the reporting date and are included in debtors.


25.


Commitments under operating leases

At 31 October 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£
£

Not later than 1 year
33,966
39,830

Later than 1 year and not later than 5 years
130,000
140,262

Later than 5 years
121,875
138,125

285,841
318,217
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EMBRACE TRAVEL GROUP LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023

26.


Related party transactions

During the year the Group entered into the following transactions with related parties:
Loan of £250,000 (2022: £250,000) was received from the director Jason John Robert Hacker to provide for necessary working capital as required, this amount was then loaned to the subsidiary (ETG BidCo1 Ltd) and then further loaned from ETG BidCo1 Ltd to Atkins Travel Ltd as working capital was required by the Civil Aviation Authority (CAA). This loan has been sub-ordinated with CAA. At the end of the financial year, loan balance of £250,000 is payable.
At the year end the Group owed £315,000 (2022: £nil) to Embrace Steel Group Ltd.


27.


Post balance sheet events

As at the date of signing this report, management have confirmed they are in the process of finalisation on an acquisition of another company.

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