Registration number: 06076185
Annual Report and Financial Statements
Kayak Software (UK) Limited
For the year ended 31 December 2023
Kayak Software (UK) Limited
Company Information
Directors
Daniel Stephen Hafner
Peer Bueller
Susana Alves D'Emic
Registered number
06076185
Registered office
Alphabeta Building, 14-18 Finsbury Square
London
EC21 1AH
United Kingdom
Independent auditors
Deloitte LLP
Cambridge
United Kingdom
Kayak Software (UK) Limited
Contents
Page(s)
Strategic report
1 - 2
Directors' report
3 – 4
Directors' responsibilities statement
5
Independent auditors' report
6 – 10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14- 26
Kayak Software (UK) Limited
Strategic report
For the year ended 31 December 2023
Introduction
The directors present their strategic report and the audited financial statements of the Company for the year ended 31 December 2023.
Principal activities and business review
The Company results for the year ended in a profit, before taxation, amounting to £5.8m compared to a loss, before taxation, in 2022 amounting to £0.2m. The return to profit before tax was mainly due to an increase in turnover deriving from support services provided to Kayak Europe GmbH and Momondo A/S through the intercompany agreement.
The Company has increased its net asset position to £9.5m compared to £5.1m in 2022.
Principal risks and uncertainties
The healthy financial position and intercompany agreements in place ensures that the risks to stakeholders of the Company are minimised. The limited risks are as follows:
Economic uncertainty
There continues to be a challenging global economic climate. Despite inflation rates dropping significantly to 2% in May 2024, in line with the government's target inflation rate, interest rates remained at 5.25% in July 2024. This continues to put pressure on users and casts doubt around user behaviour and their discretionary spending. Furthermore, during July 2024 a new government was elected, and this brings further uncertainty around their planned budget and fiscal policies. The impact on the Company remains uncertain.
Future developments
The Company will continue operating as a commercial and support service entity to Kayak Europe GmbH and Momondo A/S. Booking Holdings Inc., the ultimate parent company, will continue to have ultimate control over the Company.
Financial key performance indicators
The Company receives service revenue based on an intercompany agreement with Kayak Europe GmbH and Momondo A/S. This is one of the strongest indicators of growth. For the financial performance of the Company in the year ended 31 December 2023 revenue increased by 101% to £14.1m (2022: £7.0m). The future target of this KPI is to increase revenue.
1
Kayak Software (UK) Limited
Strategic report (continued)
For the year ended 31 December 2023
Financial key performance indicators (continued)
Earnings before interest, tax, depreciation and amortisation (‘EBITDA') is a powerful indicator of profitability, thus selected as one of the Company's key performance indicators. EBITDA improved by 2850% from a negative margin of £0.2m in 2022 to a positive margin of £5.5m. The improvement was mainly due to an increase in turnover, whilst maintaining control over fixed costs. The future target is to maintain a positive EBITDA.
This report was approved by the board and signed on its behalf by:
.........................................
Peer Bueller
Director
Date: 2 August 2024
2
Kayak Software (UK) Limited
Directors' report
For the year ended 31 December 2023
The directors present their report and the audited financial statements for the year ended 31 December 2023.
Principal activity
The Company's principal activity is to provide commercial and support services to Kayak Europe GmbH and Momondo A/S which provide online price comparison services (often referred to as “meta-search”) that allow users to easily search and compare travel itineraries and prices.
Results and dividends
The profit for the year, after taxation, amounted to £4,532,087 (2022: loss £168,827).
No dividend was paid during the year (2022: £Nil). The board of directors do not intend to propose or pay any dividends post year end.
Directors
The directors who served during the year and up to the date of signing of the financial statements are:
Daniel Stephen Hafner
Peer Bueller
Susana Alves D'Emic
Future developments
Details of future developments can be found in the Strategic Report on page 1 and form part of this report.
Financial risk management objectives and policies
The directors have identified the following areas of risk:
Financial risk
The Company's international presence exposes it to a variety of financial risks that include the effects of changes in foreign currency exchange rates, credit risks and liquidity. The Company manages the impact of exchange rate fluctuations on transactions which are borne in foreign currencies to help mitigate the risk.
Credit risk
The Company's principal financial assets are bank balances and cash, and intercompany receivables. The Company's credit risk is primarily attributable to its intercompany receivables and the risk is assessed as low in relation to these.
Liquidity risk
The Company manages liquidity risks by continuously monitoring forecast and actual cashflows.
Capital risk management
The Company manages its capital to ensure that it will be able to continue as a going concern. The capital structure of the Company consists of cash and cash equivalents and equity attributable to the equity holders of the parent, comprising issued share capital, reserves and retained earnings as disclosed in the statement of changes in equity.
3
Kayak Software (UK) Limited
Directors' report (continued)
For the year ended 31 December 2023
Qualifying third party indemnity provisions
Qualifying third party provisions (as defined in section 234 of the Companies Act 2006) were in force for the benefit of the directors during the year as well as at the date of approval of the financial statements.
Matters covered in the strategic report
The business review, key and other performance indicators, details of the Company's principal risks and uncertainties identified by directors and future developments are listed in the strategic report on page 1-2.
Going concern
The financial statements have been prepared on a going concern basis. After making appropriate enquiries, including those appropriate to assessing the impact of the global and local economic climate on the business, the directors have a reasonable expectation that the Company has adequate resources in order to be able to continue in operational existence for the foreseeable future, being a period of not less than 12 months from the date of approval of the financial statements.
The Company is one of the important operating entities outside of the US for Booking Holdings Inc. (“the group”) and therefore of strategic importance to the group and has secured a letter of support from Booking Holdings Inc., the ultimate parent company. The directors have assessed the cash flow forecasts of Booking Holdings Inc. and are satisfied that the Group has sufficient cash resources to support the Company for a period not less than 12 months from the date of approval of the financial statements.
Taking these considerations into account, the directors have a reasonable expectation that the Company has access to adequate resources to be able to continue in operational existence for the foreseeable future, being a period of not less than 12 months from the date of approval of the financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing these financial statements.
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'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's auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Auditors
The auditors, Deloitte LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf by:
.........................................
Peer Bueller
Director
2 August 2024
4
Kayak Software (UK) Limited
Directors' responsibilities statement
For the year ended 31 December 2023
The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 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 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 judgments and accounting estimates that are reasonable and prudent; 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
5
Kayak Software (UK) Limited
Independent Auditor's Report to the Members of Kayak Software (UK) Limited
Report on the audit of the financial statements
Opinion
In our opinion the financial statements of Kayak Software (UK) Limited (the ‘company'):
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
the statement of comprehensive income.
the statement of financial position.
the statement of changes in equity; and
the related notes 1 to 19.
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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report.
We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council's (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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
6
Kayak Software (UK) Limited
Independent Auditor's Report to the Members of Kayak Software (UK) Limited
Report on the audit of the financial statements (continued)
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
7
Kayak Software (UK) Limited
Independent Auditor's Report to the Members of Kayak Software (UK) Limited
Report on the audit of the financial statements (continued)
A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We considered the nature of the company's industry and its control environment, and reviewed the company's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company's business sector.
We obtained an understanding of the legal and regulatory frameworks that the company operates in, and identified the key laws and regulations that:
had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act, pensions legislation, tax legislation; and
do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. These included the company's operating licence, health and safety regulations, employment law and General data protection regulations.
We discussed among the audit engagement team including relevant internal specialists such as tax and IT specialists regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our procedures performed to address it are described below:
Revenue recognition
We presume a risk of material misstatement due to fraud related to revenue recognition and evaluate which types of revenue, revenue transactions or assertions give rise to such risks. We have pinpointed
8
Kayak Software (UK) Limited
Independent Auditor's Report to the Members of Kayak Software (UK) Limited
Report on the audit of the financial statements (continued)
the significant risk to the accuracy and completeness of transfer pricing revenue due to the complexity of the calculation of a profit split between the company and fellow subsidiaries.
Procedures performed.
Assessed the controls associated with the preparation and review of the transfer pricing.
Involved tax specialists in reviewing the reasonableness of the assumptions, judgements and methods used in transfer pricing.
Reviewed the accuracy and completeness of information used in the transfer pricing agreements between the company and other participants in the profit split arrangements.
Tested the mathematical accuracy of the profit split for the year and revenue calculation.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and
reading minutes of meetings of those charged with governance.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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 any material misstatements in the strategic report or the directors' report.
9
Kayak Software (UK) Limited
Independent Auditor's Report to the Members of Kayak Software (UK) Limited
Report on the audit of the financial statements (continued)
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report in respect of the following matters 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Julian Rae (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Cambridge, United Kingdom
2 August 2024
10
Kayak Software (UK) Limited
Statement of comprehensive income
For the year ended 31 December 2023
2023
2022
Note
£
£
Turnover
4
14,102,199
6,972,064
Cost of sales
7
(7,589,109)
(6,668,253)
Gross profit/(loss)
6,513,090
303,811
Administrative expenses
(1,017,091)
(554,387)
Operating profit/(loss)
5
5,495,999
(250,576)
Interest receivable and similar income
8
349,764
69,906
Interest payable and similar expenses
9
(48)
Profit/(loss) before taxation
5,845,763
(180,718)
Taxation
10
(1,313,676)
11,891
Profit/(loss) for the financial year
4,532,087
(168,827)
There was no other comprehensive income for 2023 (2022: £Nil).
The notes on pages 14 to 26 form an integral part of these financial statements.
11
Kayak Software (UK) Limited
Statement of financial position
As at 31 December 2023
2023
2022
Note
£
£
Fixed assets
Tangible assets
11
41,973
66,912
Current assets
Debtors: amounts falling due within one year
12
13,784,618
8,262,203
Cash at bank and in hand
13
100,000
100,001
13,884,618
8,362,204
Creditors: amounts falling due within one year
14
(4,404,881)
(3,362,707)
Net current assets
9,479,737
4,999,497
Total assets less current liabilities
9,521,710
5,066,409
Net assets
9,521,710
5,066,409
Capital and reserves
Called up share capital
15
1
1
Profit and loss account
16
9,521,709
5,066,408
Total equity
9,521,710
5,066,409
The financial statements were approved and authorised for issue by the board on
2 August 2024
02 August 2024
and signed on its behalf by:
.........................................
Peer Bueller
Director
Registered number: 06076185
The notes on pages 14 to 26 form an integral part of these financial statements.
12
Kayak Software (UK) Limited
Statement of changes in equity
For the year ended 31 December 2023
Called up share capital
Profit and loss account
Total equity
£
£
£
5,130,987
At 1 January 2022
1
5,130,988
Comprehensive expense for the year
Loss for the year
-
(168,827)
(168,827)
Total comprehensive expense for the year
-
(168,827)
(168,827)
Share based payment
-
104,248
104,248
At 1 January 2023
1
5,066,408
5,066,409
Comprehensive income for the year
Profit for the year
-
4,532,087
4,532,087
Total comprehensive income for the year
-
4,532,087
4,532,087
Share based payment
-
(76,786)
(76,786)
At 31 December 2023
1
9,521,709
9,521,710
The notes on pages 14 to 26 form an integral part of these financial statements.
13
Kayak Software (UK) Limited
Notes to the financial statements
For the year ended 31 December 2023
General information
1
The Company is a private limited company limited by shares, registered in England and Wales and incorporated in the United Kingdom under the Companies Act 2006. The address of its registered office is Alphabeta Building, 14-18 Finsbury Square, London, EC2A 1AH, United Kingdom.
The Company's principal activity is to provide commercial and support services to Kayak Europe GmbH and Momondo A/S which provide online price comparison services (often referred to as “meta-search”) that allow users to easily search and compare travel itineraries and prices. The Company receives service revenue based on an intercompany agreement with Kayak Europe GmbH and Momondo A/S.
Accounting policies
2
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 Republic of Ireland” and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
2.2 Financial reporting standard 102 - reduced disclosure exemptions
The Company meets the criteria to be a qualifying entity under FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and therefore, has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:
• the requirements of Section 7 Statement of Cash Flows;
• the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
• the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
• the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
• the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23; and
• the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Booking Holdings Inc. as at 31
December 2023, and these financial statements may be obtained from 800 Connecticut Avenue, Norwalk, Connecticut, 06854, United States.
14
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
2.3 Going concern
The financial statements have been prepared on a going concern basis. After making appropriate enquiries, including those appropriate to assessing the impact of the global and local economic climate on the business, the directors have a reasonable expectation that the Company has adequate resources in order to be able to continue in operational existence for the foreseeable future, being a period of not less than 12 months from the date of approval of the financial statements.
The Company is one of the important operating entities outside of the US for Booking Holdings Inc. (“the group”) and therefore of strategic importance to the group and has secured a letter of support from Booking Holdings Inc., the ultimate parent company. The directors have assessed the cash flow forecasts of Booking Holdings Inc. and are satisfied that the Group has sufficient cash resources to support the Company for a period not less than 12 months from the date of approval of the financial statements.
Taking these considerations into account, the directors have a reasonable expectation that the Company has access to adequate resources to be able to continue in operational existence for the foreseeable future, being a period of not less than 12 months from the date of approval of the financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing these financial statements.
2.4 Revenue
Service revenue relates to intercompany amounts due from the intercompany agreements between the company, Kayak EU GmbH and Momondo A/S. The arrangement ensures that the Company is appropriately remunerated for commercial and support services it provides for the operation of the travel business in Europe. Revenue is recognised in the statement of comprehensive income when earned.
2.5 Foreign currency translation
Functional and presentation currency
The Company's functional and presentational currency is GBP as this is the currency in the jurisdiction in which the company principally operates in.
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
15
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
2.5 Foreign currency translation (continued)
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within 'administrative expenses'.
2.6 Interest income
Interest income is recognised in the statement of comprehensive income using the effective interest method.
2.7 Pensions
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 the statement of comprehensive income 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.
2.8 Interest payable
Finance costs are charged to the statement of comprehensive income 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 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 reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the statement of financial position 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; and
• Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
16
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
2.9 Current and deferred taxation (continued)
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 reporting date.
2.10 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.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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:
Computer and servers
1-3 years
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 the statement of comprehensive income.
2.11 Debtors
Short term and long 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.
2.12 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.
17
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
2.13 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.
2.14 Holiday pay accrual
A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the statement of financial position date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the statement of financial position date.
2.15 Financial instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially measured at transaction price (including transaction costs) and are subsequently measured at amortised cost.
2.16 Share based payments
Equity-settled-share-based payment transactions are measured at fair value at the date of grant. The fair value is expensed on a straight-line basis over the vesting period. This is based on the Company's estimate of the shares or share options that will eventually vest which considers all vesting conditions and non-market performance conditions, with adjustments being made where new information indicates the number of shares or share options expected to vest differs from previous estimates.
Fair value is determined using an appropriate pricing model. All market conditions and non-vesting conditions are taken into account when estimating the fair value of the shares or share options. As long as all other vesting conditions are satisfied, no adjustment is made irrespective of whether market or non-vesting conditions are met.
The Company reimburses Booking Holdings Inc., via Kayak Software Corporation., for the share-based payments provided to employees. Share based payments are reimbursed based on its fair value at the date of vesting and is netted off against share-based payments charge in the statement of changes in equity.
18
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
2.17 Operating leases: the Company as lessee
Rentals paid under operating leases are charged to the statement of comprehensive incomes 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.
3
Critical accounting judgments and key sources of estimation uncertainty
In the application of accounting policies described in Note 2, the directors are required to make judgments, estimates and assumptions about the carrying amounts 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 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 change takes place 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.
During the year no critical judgements, estimates or assumptions that have had significant impact on the carrying value of the assets and liabilities have been recognised in the financial statements.
19
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
4
Turnover
An analysis of turnover by class of business is as follows:
2023
2022
£
£
Services provided to other group companies
14,102,199
6,972,064
14,102,199
6,972,064
The whole of the turnover is attributable to the principal activity of the Company wholly undertaken in the United Kingdom.
5
Operating profit/(loss)
The operating loss is stated after charging/(crediting):
2023
2022
£
£
Exchange differences
38,512
(213,009)
Operating lease expense
177,061
107,256
Share-based payments
557,848
372,061
Depreciation
36,940
34,079
6
Auditors' remuneration
2023
2022
£
£
Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
75,000
81,250
No fees have been incurred for the provision of non-audit services (2022: £nil).
20
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
Employees
7
Staff costs were as follows:
2023
2022
£
£
Wages and salaries
5,714,448
6,418,964
Social security costs
758,398
913,709
195,407
Cost of defined contribution scheme
256,436
7,589,109
6,668,253
The average monthly number of employees, including the directors, during the year was as follows and calculated in line with the Companies Act 2006 requirements:
2023
2022
No.
No.
Commercial
26
26
Marketing
6
5
Technology
11
11
Corporate
18
14
61
56
The highest paid director received remuneration of £Nil (2022: £Nil). The directors have received emoluments through other group companies and no remuneration was directly attributable to the Company.
During the year, no director (2022: none) participated in the defined contribution pension scheme.
Interest receivable
8
2023
2022
£
£
Interest receivable from group companies
331,922
63,376
6,530
17,842
Other interest receivable
349,764
69,906
9
Interest payable and similar expenses
2023
2022
£
£
Bank interest payable
48
-
48
21
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
10
Taxation
2023
2022
£
£
Corporation tax
Group relief payable/(receivable)
1,126,702
-
Total current tax
1,126,702
-
Deferred tax
Origination and reversal of timing differences
9,949
203,347
Adjustments in respect of prior periods
(16,373)
(21,840)
Total deferred tax
186,974
(11,891)
Taxation
1,313,676
(11,891)
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2022: higher than) the standard rate of corporation tax in the UK of 23.52% (2022: 19%). The differences are reconciled below:
2023
2022
£
£
Profit/(loss) before tax
5,845,765
(180,718)
Profit/(loss) multiplied by standard rate of corporation tax in the UK of 23.52% (2022: 19%)
1,374,924
(34,336)
Effects of:
Expenses not deductible for tax purposes
132,266
6,137
Income not taxable for tax purposes
(111)
-
Other permanent differences
(149,268)
-
Capital allowances for year in excess of depreciation
(144)
(4,029)
Group relief surrendered/(claimed)
36,059
Timing differences not recognised in computation
(39,682)
-
Short term timing difference leading to an (decrease)/increase in taxation
(16,373)
(21,840)
Deferred tax not recognised
-
-
Remeasurement of deferred tax for changes in tax rates
12,033
2,388
Share scheme differences
31
3,730
Total taxation for the year
1,313,676
(11,891)
22
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
10 Taxation (continued)
Factors affecting tax charge for the year (continued)
As at 31 December 2023, the company has no trading losses available to offset against future trading profits of £nil (2022: £887,530). The UK Government announced as part of the Finance Act 2021, which received Royal Assent on 10 June 2021, that the main rate of corporation tax rate would be increased from 19% to 25% from 1 April 2023. This rate increase was reflected in the calculation of current tax in the current year and continues to be reflected in the calculation of deferred tax at the balance sheet date.
11
Tangible fixed assets
Computer
and servers
£
Cost or valuation
At 1 January 2023
105,871
Additions
12,415
Disposals
(7,675)
At 31 December 2023
110,611
Depreciation
At 1 January 2023
38,959
Charge for the year
35,998
Eliminated on disposal
(6,319)
At 31 December 2023
68,638
Net book value
At 31 December 2022
66,912
At 31 December 2023
41,973
23
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
12
Debtors
2023
2022
Note
£
£
Trade debtors
342
342
Amounts owed by other group companies
12,651,073
7,706,063
Other debtors
32,586
45,854
Prepayments
16,570
61,180
Income tax asset
952,044
129,789
132,003
318,975
Deferred tax assets
17
13,784,618
8,262,203
The amount due from other group companies includes a balance of £10,392,599 (2022: £5,710,938) due from a sister company. These amounts are unsecured and payable on demand, apart from £0.4m (2022: £0.3m) which is long term in nature.
The sister Company is entitled to receive interest equivalent to SONIA + 0.95. The loan will mature on 1 October 2024.
13
Cash and cash equivalents
2023
2022
£
£
Cash at bank and in hand
100,000
100,001
100,000
100,001
14
Creditors: Amounts falling due within one year
2023
2022
£
£
Amounts due to parent company
221
14,493
Amounts owed to other group companies
3,041,567
1,835,470
Other taxation and social security
374,401
271,264
Accruals
988,691
1,227,338
Other payables
14,142
4,404,881
3,362,707
Amounts owed to related parties are interest free, unsecured and payable on demand.
24
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
15
Share capital
2023
2022
£
£
Authorised
1,000 (2022: 1,000) ordinary shares of £1.000 each
1,000
1,000
Allotted, called up and fully paid
1 (2022: 1) ordinary share of £1.000
1
1
16
Reserves
Profit and loss account
The reserve balance consists of profit and loss reserve available to ordinary shareholders.
17
Deferred taxation
2023
2022
£
£
At beginning of year
318,975
307,084
Charged to the profit or loss
(186,972)
11,891
At end of year
132,003
318,975
The deferred tax asset is made up as follows:
2023
2022
£
£
Fixed asset timing differences
31,924
33,321
Short term timing differences
100,079
63,772
Losses and other deductions
-
221,882
132,003
318,975
The deferred tax asset expected to reverse in 2024 is £132,003, which primarily relates to deferred tax recognised on short term timing differences.
As at 31 December 2023, the Company has unutilised tax losses of £nil (2022: £887,530).
25
Kayak Software (UK) Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
18
Pension commitments
The Company operates a defined contribution plan, the amount recognised in the profit and loss account during the year amounted to £256,436 (2022: £195,407).
19
Controlling party
The Company's immediate parent is Kayak Software Corporation, (registered office at Brandywine Plaza 1521 Concord Pike, Suite 201, Wilmington Delaware, 19803, United States). The Company's ultimate parent undertaking and controlling party is Booking Holdings Inc., a company incorporated in the United States of America, whose principal and registered office is, and whose financial statements can be obtained at 800 Connecticut Avenue, Norwalk, Connecticut, 06854, United States. This is both the smallest and largest group in which the results of the Company are consolidated.
26
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