Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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SUNSHINE CRUISE HOLIDAYS LIMITED
COMPANY INFORMATION
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SUNSHINE CRUISE HOLIDAYS LIMITED
CONTENTS
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SUNSHINE CRUISE HOLIDAYS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their strategic report of the Company and the Group for the year ended 31 December 2023.
The Group is required by the Companies Act to set out in this report, a fair review of the business of the Group during the financial year ended 31 December 2023, and its position at the end of the year along with a description of the principal risks and uncertainties facing the Group. This review is prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed, and the business review should not be relied upon by any other party or for any other purpose.
The directors consider the results to be satisfactory, especially given the ongoing cost of living crisis in the UK. However, consumer demand remained high despite this, leading to increased bookings and turnover for the year. As a result, the Group is expecting significant growth in future years due to increased capacity. The key performance indicators used by the directors to monitor the progress of the Group are set out below:-
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SUNSHINE CRUISE HOLIDAYS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The management of the business and the execution of the Group's strategy are subject to a number of risks. The key business risks and uncertainties affecting the Group are considered below.
- Economic uncertainty - The demand for cruises is affected by local economic conditions. During 2023, the ongoing cost of living crisis has affected the cost of holiday arrangements and resulted in consumers having less discretionary spending available for travel. However, this has been compensated by the high level of pent up demand for cruise holidays during the year. This, combined with consumer unease in relation to the current economic environment, has meant that Company’s management and the directors have continued to review the Group’s financial position, as well as forecasts, and plan mitigation actions in order to neutralise the potential financial impact on trading performance. - Regulatory risk - The Group is exposed to various regulators, including the Civil Aviation Authority ("CAA") which issues an Air Travel Organisers Licence ("ATOL") which is required in order for the Group to operate. This license is renewed in September each year, with the next renewal being in September 2024, and is subject to assessments of fitness and financial criteria, the framework of which is available on the CAA's website (www.caa.co.uk). The Group operates a trust account to provide full consumer protection for UK ATOL bookings, which is independently and professionally managed by PT Trustees Limited ("PTT"). - Supplier failure - The Group is reliant on its suppliers to ensure all elements of the holidays it sells are provided to its customers where the Group has acted as a tour organiser. In the event that a supplier is unable to fill its contractual obligations the Group is liable to provide a suitable alternative or a full refund to the customer. The Group mitigates against this risk by spreading its business over a number of selected suppliers. - Competition - The Group operates in a competitive market particularly around price and product availability. This results in downward pressure on ticket prices and margins. This risk is mitigated by seeking out opportunities to differentiate its product offering by packaging cruises with other holiday elements. The nature of the business exposes the Group to various commercial risks which may affect the trading performance of the Group. These include: - acts of terrorism, particularly in key tourist destinations - epidemics in key tourist destinations which threaten the health of tourists - wars or other international uncertainty which affects air travel - natural disasters in key tourist destinations - weather conditions, both in the UK and key tourist destinations - changes in customer behaviour and preferences - increase in government taxes These factors may affect the Group by causing potential customers to cancel or postpone travel plans, reducing the earnings potential of the Group. The Group seeks to minimise such risks by operating a flexible limited commitment business model with the ability to shift capacity amongst a variety of destinations where necessary.
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SUNSHINE CRUISE HOLIDAYS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group's operations expose it to limited financial risks that include liquidity risk, price risk and foreign exchange rate risk. Given the size of the Group, the responsibility of monitoring financial risk management is managed by the board of directors.
- Liquidity risk - The nature of the Group's tour operator business is that expenditure on sales and marketing activities to generate bookings takes place many months prior to the date of departure of the holiday, at which point the Group earns its revenue, and also that the pattern of bookings and departures varies throughout the year. The Group does not borrow externally, and maintains a mixture of cash deposits and inter-company trading balances to ensure that it has sufficient funds available for operations. - Price risk - The Group is exposed to price risk through competitor activities in the cruise markets in which the Group operates. Competitor prices are monitored frequently and appropriate remedial action is taken. Where possible the Group seeks to differentiate its product offering in order to avoid direct price competition. - Foreign exchange risk - The Group is exposed to foreign exchange rate risk when it purchases overseas holiday services in currencies other than British Pounds. Monetary assets and liabilities are translated at the exchange rate prevailing at the statement of financial position date. All exchange gains and losses so arising are taken to the income statement. The Group operates a policy of hedge accounting and, accordingly, bears little risk associated with such foreign exchange movements.
This report was approved by the board on 9 July 2024 and signed on its behalf.
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SUNSHINE CRUISE HOLIDAYS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
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.
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 2006. They 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.
The loss for the year, after taxation, amounted to £1,523,376 (2022 - loss £1,248,796).
The total distribution of dividends for the year ended 31 December 2023 was £Nil (2022: £Nil). The directors do not recomend a final dividend.
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SUNSHINE CRUISE HOLIDAYS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The director who served during the year was:
The Group constantly reviews opportunities to expand profitable distribution of cruise holidays, including new overseas markets, marketing channels, partnerships, or products. Such opportunities are commercially sensitive and will be communicated at the appropriate time.
The directors have disclosed additional performance data for the Group in the strategic report which is included within this set of financial statements. This includes a review of the performance of the business and the key performance indicators, as well as the main risks faced by the business.
There have been no significant events affecting the Group since the year end.
During 2024, the Group will continue to operate as outlined in the principal activity note above.
The auditors, White Hart Associates (London) Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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SUNSHINE CRUISE HOLIDAYS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUNSHINE CRUISE HOLIDAYS LIMITED
We have audited the financial statements of Sunshine Cruise Holidays Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Group Income Statement, the Group Statement of Comprehensive Income, the Group and parent Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and parent Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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.
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SUNSHINE CRUISE HOLIDAYS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUNSHINE CRUISE HOLIDAYS LIMITED (CONTINUED)
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2.3 to the financial statements concerning the Group's ability to continue as a going concern.
As explained in note 2.3, the recovery period following the pandemic has been economically challenging for the cruise industry and the Group, despite strong pent up consumer demand to recommence travelling. The cost-of-living crisis, rising costs and inflation have continued to affect the Group’s immediate and projected trading, profitability and liquidity. These economic impacts on the cruise industry and the losses sustained by the Group could jeopardise the Group's ability to continue as a going concern in the medium term. To mitigate this risk, the ultimate parent company, Dreamlines GmbH, raised financial support from shareholders along with substantial German Government-backed subsidies in previous years, however no such grants were received in 2023 and the parent company recommenced recharging appropriate percentages of shared centralised resources. The parent company has only been recompensed for these cross charges in accordance with the Permitted Payments Schedule (“PPS”) agreed with the Civil Aviation Authority (“CAA”), which maintains the required liquidity coverage for the ring-fenced regulated Group. The Group is subject to a ring-fencing arrangement with the CAA, meaning that any funds that flow out of the Group to other members of the group, including the parent company, must be part of the PPS agreed in advance or with the acquiescence of the CAA prior to payment. Dreamlines GmbH has provided financial support to the Group throughout the challenges faced in recent years and has confirmed that no further cash will exit the ring-fenced Group until after 31 December 2024 and then subsequently only providing there is no breach of the ring-fencing agreement. In the period from 1 January 2024 to the date of signing this report, cross charged overheads totalling £1.2m have been paid to Dreamlines GmbH. No further recharged costs will be paid before the end of the 2024 financial year. Dreamlines GmbH have signed a letter of comfort reflecting this and are committed to providing support to the Group as needed for at least the next 12 months. The financial statements have therefore been prepared on a going concern basis. 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. Our evaluation of the directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included obtaining and testing the Group's budgets and forecasts for the years ended 31 December 2024 and 31 December 2025, including reviewing the key assumptions behind these from the latest available information, both internal and external; reviewing the continuing steps taken by management to manage liquidity, control current costs, utilise government assistance and raise further finance, reviewing the Group's continued compliance and correspondence with its key regulator, the Civil Aviation Authority (CAA) and assessing any threat to the continuation of its Air Travel Organisers Licence (ATOL); reviewing the minutes of the regular Board meetings and performing an overall assessment of the Group's internal finance function and controls.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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SUNSHINE CRUISE HOLIDAYS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUNSHINE CRUISE HOLIDAYS LIMITED (CONTINUED)
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.
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.
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.
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SUNSHINE CRUISE HOLIDAYS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUNSHINE CRUISE HOLIDAYS LIMITED (CONTINUED)
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:
- We exercise professional judgment and maintain professional scepticism throughout the audit; - We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the deliberate override of internal control; - We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control; - We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made; - We assess the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; - We review the scope of the Group's compliance with The Package and Linked Travel Arrangements Regulations 2018 ("PTRs") and sample test relevant documentation to assess this and the effectiveness of its control environment; - We request and review the minutes of management meetings, and assess any matters identified not already provided for or disclosed that may materially impact the financial statements;
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SUNSHINE CRUISE HOLIDAYS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUNSHINE CRUISE HOLIDAYS LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements (continued)
- We review the Group's relationships with related parties and other group companies, identifying and disclosing transactions during the year and balances at year-end with such parties; - We conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern.
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.
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 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.
for and on behalf of
Chartered Accountants and Statutory Auditors
2nd Floor, Nucleus House
2 Lower Mortlake Road
TW9 2JA
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SUNSHINE CRUISE HOLIDAYS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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SUNSHINE CRUISE HOLIDAYS LIMITED
REGISTERED NUMBER: 03931005
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 9 July 2024.
The notes on pages 18 to 41 form part of these financial statements.
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SUNSHINE CRUISE HOLIDAYS LIMITED
REGISTERED NUMBER: 03931005
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 18 to 41 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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SUNSHINE CRUISE HOLIDAYS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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SUNSHINE CRUISE HOLIDAYS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SUNSHINE CRUISE HOLIDAYS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
As disclosed in the Directors' Report, the principal activity of the Company and Group in the year under review was that of a travel provider, primarily selling cruise holidays, as both a travel agent and tour organiser.
The Company is a private company limited by shares and is incorporated in England. The address of the Company's principal place of business and registered office is: Office 310 Third Floor, Manchester Digital World 1 Lowry Plaza, The Quays Salford M50 3UB
2.Accounting policies
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
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 Statement of Financial Position, 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 Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2015.
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The recovery period following the pandemic has been economically challenging for the cruise industry and the Group, despite strong pent up consumer demand to recommence travelling. The cost-of-living crisis, rising costs and inflation have continued to affect the Group’s trading, profitability and liquidity. These issues, coupled with global economic instability, has necessitated that Group management and the directors continue to constantly review the Group’s financial position, as well as updating forecasts and taking action to mitigate their impact. This work has also enabled them to assess and plan for any potential impact of capital and liquidity requirements required by the Group's travel regulators.
The Group benefits from the support provided by the German parent company, who received significant grants over the last few years to cover fixed centralised costs. However, in 2023 no such grants were received by the parent company and they recommenced recharging appropriate percentages of shared centralised resources. The parent company has only been recompensed for these cross charges in accordance with the Permitted Payments Schedule (“PPS”) agreed with the Civil Aviation Authority (“CAA”), which maintains the required liquidity coverage for the ring-fenced regulated Group. The Group is subject to a ring-fencing arrangement with the CAA, meaning that any funds that flow out of the Group to other members of the group, including the parent company, must be part of the PPS agreed in advance or with the acquiescence of the CAA prior to payment. Management has reviewed the performance of the Group compared to budgets, which was largely in line with expectations. However, the projected EBITDA was not achieved due to the unanticipated increase in costs for 2023. The budgets, including cash flow and liquidity analyses, have been prepared for the 18 months to 31 December 2025. After this review, the Board of the parent company have considered and confirmed that no further cash will exit the ring-fenced Group until after 31 December 2024 and then subsequently only providing there is no breach of the ring-fencing agreement. In the period from 1 January 2024 to the date of signing this report, cross charged overheads totalling £1.2m have been paid to Dreamlines GmbH. No further recharged costs will be paid before the end of the 2024 financial year. Dreamlines GmbH have signed a letter of comfort reflecting this and are committed to providing support to the Group as needed for at least the next 12 months. As a result, Group management and the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being at least the following 12 months from the signing of these financial statements, and will take all reasonable commercial steps, including seeking further financing or support if required, to guarantee the Group’s ability to continue as a going concern. As a result, and with the Group continuing to receive the full support of its larger parent group, the directors believe that it is still appropriate to apply the going concern basis for the foreseeable future.
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Turnover relating to sales of holidays where the Group is acting as a tour organiser is recognised on the date of departure of the holiday. Turnover relating to sales of holidays where the Group is acting as a travel agent is recognised on the date of booking of the holiday. Turnover relating to other services is recognised when the service has been provided. Additionally, the Group's subsidiary in Australia recognises turnover 8 weeks prior to the holiday's departure date, as this is the point that the booking becomes unconditional and no cancellation refunds are offered, in accordance with their terms and conditions. Trade debtors still represent gross amounts receivable and trade creditors still represent gross amounts payable in respect of travel and holiday arrangements.
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
In order to provide the user of the financial statements with a measure of the gross value of business, the gross value of all sales transactions is shown as a memorandum item at the top of the statement of comprehensive income.
Gross retail turnover does not represent statutory turnover in accordance with Section 23 of FRS 102. Where the Group acts as an agent, gross retail turnover represents the price at which products or services have been sold, inclusive of any service fees but excluding commissions paid to third party distributors and any associated sales taxes. In cases where the Group does act as principal, gross retail turnover represents the price at which products or services are sold, net of any value added taxes. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Page 21
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
All borrowing costs are recognised in the Consolidated Income Statement in the year in which they are incurred.
Page 22
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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:
At each reporting date the Group 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:
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 23
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Page 24
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Page 25
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other 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.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate. In such cases, the financial asset or liability is measured initially at the present value of future cash flows, discounted at a market rate of interest for a similar debt instrument, and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising a gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
Page 26
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group designates certain derivatives as either:
- Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); - Hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge); or - Hedges of a net investment in a foreign operation (net investment hedge). The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is recognised after more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised in the period in which the estimates are revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Page 27
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by source market:
Page 28
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 29
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 30
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2021 (on 11 March 2021). These include increases to the main rate of tax from 19% to 25% from 1 April 2023 for profits exceeding £50,000. Deferred taxes at the Statement of Financial Position date have been measured using the rates that will be applicable in the periods to which they relate. Due to the change occurring during the financial year, the effective tax rate applied for the year was an average of 23.50%.
Page 31
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 32
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
13.Intangible assets (continued)
Page 33
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 34
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
14.Tangible fixed assets (continued)
Page 35
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 36
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 37
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Included in the above is a loan from the Group's ultimate parent company, Dreamlines GmbH totalling £3,457,975 (2022: £3,457,975), which is subject to a subordinated undertaking in favour of the Civil Aviation Authority, in relation to the Company's ATOL licence and cannot be repaid without the Civil Aviation Authority's prior written consent. This loan carries an interest rate of 6% per annum.
There is also a loan due from Cruise 1st Australia PTY Limited to the Company in the sum of £167,825 (2022: £167,825), which is subject to a subordinated undertaking in favour of ABTA in relation to the Company's ABTA membership and cannot be repaid before 30 September 2024. This loan carries an interest rate of 6% per annum.
Page 38
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 39
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Foreign exchange reserve
Other reserves
Profit and loss account
At 31 December 2023, there were contingent liabilities outstanding in respect of counter indemnities given by the Group, in the normal course of business, to the Group's bond insurance obligors in respect of ABTA, IATA and CAA travel bonds amounting to £558,125 (2022 - £1,050,175).
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 £154,179 (2022 - £130,312). Contributions totalling £12,302 (2022 - £30,003) were payable to the fund at the reporting date and are included in creditors.
Page 40
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SUNSHINE CRUISE HOLIDAYS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group's immediate and ultimate holding company is Dreamlines GmbH, a company registered in Germany which owns all of the issued share capital of the Company. Copies of the financial statements of Dreamlines GmbH can be obtained from Burchardstraße 14, 20095 Hamburg, Germany.
Page 41
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