Registered number: 01283655
VIKING RIVER CRUISES UK LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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VIKING RIVER CRUISES UK LIMITED
COMPANY INFORMATION
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White Hart Associates (London) Limited
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Chartered Accountants and Statutory Auditors
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VIKING RIVER CRUISES UK LIMITED
CONTENTS
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Independent Auditors' Report
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Statement of Profit or Loss and Other Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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Detailed Profit and Loss Account and Summaries
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VIKING RIVER CRUISES UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The director presents her strategic report for the year ended 31 December 2023.
The Company is required by the Companies Act to set out in this report, a fair review of the business of the Company 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 Company. This review is prepared solely to provide additional information to shareholders to assess the Company'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 director considers 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. In addition, the Company is expecting growth in future years due to increased capacity as a result of the launch of new ships and new itineraries.
The Company has always benefitted from sales to geographically diverse locations, and as such would feel that its exposure to geographical disruption is minimised. The Company experiences significant repeat business, and also benefits from significant forward visibility on its cruise bookings, compared to more mass market tour operators.
The key performance indicators used by the directors to monitor the progress of the Company are set out below:
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Key performance indicators
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Gross profit as a percentage of revenue
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Profit on ordinary activities before taxation
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Profit on ordinary activities as a percentage of revenue
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Net cash (outflow)/inflow from operating activities
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Principal risks and uncertainties
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The following risk factors may affect the Company's operating results and its financial position. The risk factors described below are those which the director believes are potentially significant, but should not be regarded as a complete and comprehensive statement of all potential risk and uncertainties facing the Company. The director does not feel that the risks in 2024 will be much different to those that were prevalent in 2023.
Technology risk
The Company is heavily reliant on the uninterrupted operation of its IT systems and website. These systems are vulnerable to power loss, fire, computer viruses and other events. Loss of these systems would impair the ability of the Company to carry on its business effectively. The Company has made arrangements to mitigate this risk.
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VIKING RIVER CRUISES UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal risks and uncertainties (continued)
Economic conditions
The demand for holidays 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 director have continued to review the Company’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 Company is exposed to various regulators, including the Civil Aviation Authority ("CAA"), which issues an Air Travel Organisers Licence ("ATOL") and is required in order for the Company to operate. This licence is renewed in September each year 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 Company is also a member of the Association of British Travel Agents ("ABTA") and as such is obliged to maintain a high standard of service as governed by ABTA's code of conduct.
Credit risk
Due to the nature of the Company's business whereby individual customers are required to pay for their holiday in full before they are allowed to travel, credit risk is considered to be low. In the case of sales through travel agents and wholesalers whereby payment may be received after the travel date, ongoing business relationships mean that chasing debts is significantly easier and controls have been put in place to ensure that debts are chased when they are due.
Liquidity risk
The Company monitors its liquidity risk by closely monitoring the projected cash flows from operations. Risk management includes maintaining sufficient cash and the Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. Due to the dynamic and seasonal nature of the underlying business, the Company maintains sufficient cash for its daily operations via short term cash deposits at banks.
Interest rate risk
Interest rate risk is considered to be less of an issue for the Company as it is not reliant upon receiving interest in order to continue trading and also because it does not have any loans susceptible to changes in interest rates. The Company finances its operations through retained profits and customer deposits.
Market risk
The Company 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. In order to reduce this risk, the Company monitors the exchange rate and holds reasonable Euro and US dollar cash reserves - the main foreign currencies it trades in - to meet supplier commitments.
This report was approved by the board on 15 March 2024 and signed on its behalf.
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VIKING RIVER CRUISES UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The director presents her report and the financial statements for the year ended 31 December 2023.
Director's responsibilities statement
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The director is responsible for preparing the Strategic Report, Director's Report and the financial statements, in accordance with applicable law.
Company law requires the director to prepare financial statements for each financial year. Under that law she has elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the director must not approve the financial statements unless she is 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 the financial statements, the director is required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless she either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. She is responsible for such internal control as she determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and has general responsibility for taking such steps as are reasonably open to her to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The director is responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Director's Reports may differ from legislation in other jurisdictions.
The principal activity of the Company in the year under review was that of a specialist tour operator.
The Company is a fully owned subsidiary of Viking River Cruises (Bermuda) Ltd, which is ultimately controlled by Viking Cruises Ltd, both of which are companies incorporated in Bermuda.
The profit for the year, after taxation, amounted to £2,557,725 (2022 - £1,728,181).
No dividends will be distributed for the year ended 31 December 2023.
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VIKING RIVER CRUISES UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The director who served during the year was:
Future developments and post year end events
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During 2024, the Company plans to operate as outlined in the principal activity note above. The Company's cruise capacity is well-positioned for future growth as affiliated group companies have ordered 18 new river vessels for delivery through 2026 and six new ocean ships for delivery through 2028. A portion of this increase in capacity is expected to the be allocated to the Company for sale to guests.
There have been no significant events affecting the Company since the year end.
Disclosure in the Strategic Report
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The director has provided commentary for the Review of Business and Analysis of Performance as well as the Principal Risks and Uncertainties in the Strategic Report in line with The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Disclosure of information to auditors
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The director at the time when this Director's Report is approved has confirmed that:
∙so far as she is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙she 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.
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 15 March 2024 and signed on its behalf.
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VIKING RIVER CRUISES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIKING RIVER CRUISES UK LIMITED
We have audited the financial statements of Viking River Cruises UK Limited for the year ended 31 December 2023 which comprise the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 15 - 25. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion the financial statements:
∙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 IFRSs as adopted by the United Kingdom; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the director's assessment of the Company's ability to continue to adopt the going concern basis of accounting included:
We have confirmed that the Company continues to receive the backing and support of its parent company and larger group. As part of this evaluation, we have also sought comfort that the group which the Company is a part of can continue as a going concern and has sufficient reserves to continue in business for the forseeable future. We have also confirmed that the director's assessment of the Company's ability to continue as a going concern covers a period of at least 12 months from the date of signing of these financial statements and that there have been no significant events that could affect the business since year-end.
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.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
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VIKING RIVER CRUISES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIKING RIVER CRUISES UK 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Director's Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Director's Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of director's remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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VIKING RIVER CRUISES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIKING RIVER CRUISES UK LIMITED (CONTINUED)
Responsibilities of directors
As explained more fully in the director's responsibilities statement on page 3, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 Company'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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VIKING RIVER CRUISES UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VIKING RIVER CRUISES UK LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements (continued)
- We review the Company'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.
M S Caldicott ACA FCCA CTA (Senior Statutory Auditor)
for and on behalf of
White Hart Associates (London) Limited
Chartered Accountants and Statutory Auditors
2nd Floor, Nucleus House
2 Lower Mortlake Road
Richmond
TW9 2JA
15 March 2024
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VIKING RIVER CRUISES UK LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Other comprehensive income:
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Total comprehensive income
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The notes on pages 15 to 46 form part of these financial statements.
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VIKING RIVER CRUISES UK LIMITED
REGISTERED NUMBER: 01283655
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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VIKING RIVER CRUISES UK LIMITED
REGISTERED NUMBER: 01283655
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
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Capital contribution from parent
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The financial statements on pages 1 to 46 were approved and authorised for issue by the board of director on 15 March 2024 and were signed on its behalf by:
The notes on pages 15 to 46 form part of these financial statements.
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VIKING RIVER CRUISES UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Capital contribution from parent
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Comprehensive income for the year
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Total comprehensive income for the year
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Movement on grant of share options in group companies
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Tax impact due to grant of share options
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Total contributions by and distributions to owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Movement on grant of share options in group companies
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Tax impact due to grant of share options
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Total contributions by and distributions to owners
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The notes on pages 15 to 46 form part of these financial statements.
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VIKING RIVER CRUISES UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
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Depreciation of property, plant and equipment
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Amortisation of intangible fixed assets
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Loss on sale of property, plant and equipment
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Movements in working capital:
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Increase in trade and other receivables
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Decrease in trade and other payables
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Increase in amounts owed to group companies
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Net cash (used in)/from operating activities
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Cash flows from investing activities
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Purchases of property, plant and equipment
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Proceeds from disposal of property, plant and equipment
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Net cash from investing activities
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Cash flows from financing activities
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Payment of lease liabilities
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Cash and cash equivalents at the end of the year
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The notes on pages 15 to 46 form part of these financial statements.
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VIKING RIVER CRUISES UK LIMITED
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Trade and other receivables
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Financial liabilities - leasing
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Functional and presentation
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Related party transactions
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Ultimate controlling party
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Employee benefit expenses
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Notes supporting the statement
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Finance income and expense
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Property, plant and equipment
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Events after the reporting date
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Foreign currency translation
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies
The Company prepares sensitised forecasts and budgets. Based on these, Company management and the director have a reasonable expectation that the Company 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. This is supported by the continued strong performance seen so far at the start of 2024, with the Company remaining well placed to meet and service the additional volume.
As a result, and with the Company continuing to receive the full support of its group and shareholders, the director believes that it is still appropriate to apply the going concern basis for the foreseeable future.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Revenue and expense recognition
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Revenue is measured based on the consideration specified in the Company's contracts with customers and revenue is recognised as the performance obligations are satisfied.
Nature of goods and services
Cruise and land revenue, net of discounts, includes revenue earned primarily from cruises and any other supporting activities, including air, land excursions, and cancellation revenues. The Company's performance obligations under these contracts are to provide a cruise vacation and other supporting activities in exchange for the invoiced ticket price. The Company engages third parties to fulfill obligations to customers for air travel and land and shore excursions, but retains the ultimate risks of fulfilment and generally has discretion to select the acceptable carrier and absorb the risk of cost fluctuations. The Company satisfies the performance obligations and recognises revenue pro-rata over the cruise period, except for land excursions which are recognised when the services are provided, which are either on the first or last day of the cruise, and cancellation revenues, which are recognised upon cancellation.
Payment Terms and Deferred Revenue
Payment terms and cancellation policies are broadly standard. A deposit for a future cruise is required at or soon after the time of booking to secure space on the vessel. The Company collects a majority of its deposits for bookings, and in some cases more than, a year in advance of the departure date with the remaining balances due prior to sailing. Deposits include the total amounts paid by customers prior to sailing, for which the Company is obligated to perform services. These deposits represent contract liabilities, which are recorded as deferred revenue and are recognised as revenue generally pro rata over the cruise period. Deferred revenue is a current liability as it relates to the Company's normal operating cycle.
Costs of sales
Expenses from the Company's cruise operations are recognised at the time the Company provides the services. The Company is usually required to make deposit payments to suppliers for the cost of cruises, flights and other related costs at or soon after the time of booking to secure these, with the remaining balances due prior to sailing. These deposit payments represent contract assets, which are recorded as prepayments and are recognised as cost of sales generally pro-rata over the cruise period. Prepayments are a current asset as they relate to the company's normal operating cycle.
Administrative expenses
Administration costs include marketing costs, employee costs, office expenses, professional services and other administrative costs. Marketing costs include media advertising, brochure production, direct mail costs, promotional expenses, search engine marketing and other costs that support the ongoing development of the Company's brand and customer database. Marketing costs are expensed as incurred. Office expenses include rent expense, utility costs, office supplies and telecommunication costs. Professional service fees include costs for accounting services, legal services and information technology consulting services. Other administrative costs include corporate insurance, postage and other sundry expenses. Employee costs, office expenses, professional service fees and other administrative expenses are expensed as incurred. Total administrative expenses for the years ended 31 December 2023 and 2022 were £9.0 million, and £7.6 million, respectively.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
∙fixed lease payments (including in-substance fixed payments), less any lease incentives;
The lease liability is included in the 'Leasing liabilities' line in the Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
∙a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the 'Property, Plant and Equipment' line, as applicable, in the Statement of Financial Position.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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The Company as a lessee (continued)
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The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 1.9.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.
In preparing the financial statements of the Company, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
∙exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
∙exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
∙exchange differences on monetary items receivable from or payable to foreign operations for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purposes of presenting these financial statements, the assets and liabilities of the Company's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
Finance costs are charged to the Statement of Profit and Loss and Other 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.
All other finance costs are recognised in profit or loss in the period in which they are incurred.
Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Short-term and other long-term employee benefits
|
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
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 Profit and Loss and Other 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.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
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(iii) Current and deferred tax for the year
|
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Property, plant and equipment
|
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:
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Fixtures, fittings and equipment
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15% on cost / over 3 years
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Intangible assets acquired separately
|
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
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Cash and cash equivalents
|
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.
Financial assets include cash and cash equivalents, trade receivables, other receivables, loans and derivative financial instruments. Those relevant to the Company are trade and other receivables, which are recorded at their nominal amount less an allowance for any doubtful debts, and cash and cash equivalents which are also recorded at their nominal amount. These financial assets are classified as loans and receivables and so are carried at amortised cost. Gains and losses are recognised in the statement of profit or loss when the assets are derecognised or impaired, as well as through the amortisation process.
Financial liabilities include trade and other payables, accruals, finance debt and derivative instruments. Those relevant to the Company are trade and other payables and accruals which are stated at their nominal value. These financial liabilities are initially recognised at fair value and are then subsequently measured at amortised cost. Gains and losses arising on the repurchase, settlement or cancellation of liabilities are recognised in the statement of profit or loss.
Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
All regular purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Financial liabilities and equity instruments
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(i) Classification as debt or equity
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Debt and equity instruments issued by an entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by an entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.
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(iii) Financial liabilities
|
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at fair value through profit or loss ("FVTPL").
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Financial liabilities and equity instruments (continued)
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(iii) Financial liabilities (continued)
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Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Interest income is recognised in the Statement of Profit and Loss and Other Comprehensive Income using the effective interest method.
Viking River Cruises UK Limited (the 'Company') is a private company, limited by shares, incorporated in England and Wales. The Company's registered office and place of business is at Nelsons House, 83 Wimbledon Park Side, London, SW19 5LP. The Company's principal activity is that of a specialist tour operator.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 15 March 2024.
Details of the Company's accounting policies, including changes during the year, are included in note 1.
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
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Cost less accumulated amortisation
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Property, plant and equipment
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Cost less accumulated depreciation
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Capital contributions from parent
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3.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 January 2023
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The Company has not adopted any new accounting standards during the year.
IFRS 17 'Insurance Contracts' ("IFRS 17") was issued in May 2017 and introduces a single accounting model for the recognition of profits from insurance contracts for companies providing insurance services. IFRS 17 was effective for periods beginning on or after 1 January 2023, however because the Company does not act as an insurer, it does not expect the standard to have a significant impact on its financial statements.
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New standards, interpretations and amendments not yet effective
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The following standards and interpretations to published standards are not yet effective:
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New standard or interpretation
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Mandatory effective date (period beginning)
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IFRS S1 - General Requirements for Disclosure of Sustainability-related Financial Information
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Not yet endorsed for use in the EU or UK
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IFRS S2 - Climate-related Disclosures
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Not yet endorsed for use in the EU or UK
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
3.Basis of preparation (continued)
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ii) New standards, interpretations and amendments not yet effective (continued)
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IFRS S1 "General Requirements for Disclosure of Sustainability-related Financial Information" and IFRS S2 "Climate-related Disclosures" were issued in June 2023 and require entities to disclose information about their sustainability and climate related risks and opportunities. IFRS S1 and S2 are effective for periods beginning on or after 1 January 2024, however the implementation of this is subject to local regulation, which the UK Government is expected to decide upon by July 2024.
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Functional and presentation currency
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These financial statements are presented in British Pounds Sterling (GBP), which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.
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Accounting estimates and judgments
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5.1 Judgments
Amortisation rates
The directors have made judgements when determining the useful economic life of goodwill and other intangible assets. Amortisation is recognised so as to write off the value of the assets over the life that economic benefit is expected to flow.
Impairment
At the period end, the directors have considered whether there is any indication that intangible assets, property, plant and equipment are impaired and have conducted an impairment review in respect of those assets. Management have utilised discounted cashflow forecasts to calculate a value in use in respect of these assets and have concluded that no impairment indicators exist and therefore no impairment charge is required in the financial statements for the year ended 31 December 2023.
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5.2 Estimates and assumptions
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Use of estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised. The effect of the use of estimates in these financial statements is not material.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The following is an analysis of the Company's revenue for the year from continuing operations:
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Analysis of revenue by source market:
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Deferred revenue (contract liabilities)
Activity in the Company's deferred revenue for the years ended 31 December 2023 and 2022 is as follows:
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Payments on account at 1 January
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Increase due to cash received
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Payments on account at 31 December
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The Company recognised approximately £119 million and £94 million from contract liabilities in revenue during the years ended 31 December 2023 and 2022, respectively, which were derived from the majority of the Company's deferred revenue balances at the beginning of each year and the cash received during the years ended 31 December 2023 and 2022. Of the £49.6 million deferred revenue balance as at 31 December 2023, the Company expects 80% to be recognised in revenue over the next 12 months.
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Assets recognised from the costs to obtain a contract with a customer
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Prepaid commissions and prepaid credit card fees are incremental costs of obtaining contracts with customers that the Company recognises as assets, which are included within prepaid expenses in the statement of financial position.
Prepaid commissions increased to £321,416 as of 31 December 2023 from £320,970 as of 31 December 2022. Part of the Company's prepaid commissions as of 1 January 2023 were expensed and reported within costs of sales in the Statement of Profit and Loss and Other Comprehensive Income for the year ended 31 December 2023.
Prepaid credit card fees increased to £412,036 as of 31 December 2023 from £398,740 as of 31 December 2022. Part of the Company's prepaid credit card fees as of 1 January 2023 were expensed and reported within cost of sales in the Statement of Profit and Loss and Other Comprehensive Income for the year ended 31 December 2023.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's and Group's auditors for the audit of the Company's financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company if material.
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Employee benefit expenses
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Employee benefit expenses (including director) comprise:
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Defined contribution pension cost
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The monthly average number of persons, including the director, employed by the Company during the year was as follows:
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Company contributions to pension schemes
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During the year, retirement benefits were accruing to the following number of directors in respect of qualifying services:
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Defined contribution schemes
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Included in the director's emoluments figure above is the fair value expense recognised on the grant of share options for the benefit of the director from group companies totalling £73,763 (2022 - £74,460).
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The highest paid director's emoluments were as follows:
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Total emoluments and amounts receivable under long-term incentive schemes (excluding shares)
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Company contributions to pension schemes
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Finance income and expense
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Recognised in profit or loss
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Net finance income recognised in profit or loss
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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11.1 Income tax recognised in profit or loss
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Current tax on profits for the year
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Adjustments in respect of prior years
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Origination and reversal of timing differences
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
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Income tax expense (including income tax on associate, joint venture and discontinued operations)
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Profit before income taxes
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Tax using the Company's average domestic tax rate of 23.5% (2022:19%)
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Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
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Capital allowances for the year in excess of depreciation
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Adjustments to tax charge in respect of prior periods
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Movement in deferred taxation
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Changes in tax rates and factors affecting the future tax charges
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%.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Tax expense (continued)
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11.2 Current tax assets and liabilities
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Corporation tax repayable
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Tax expense (continued)
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11.3 Deferred tax balances
|
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The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:
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Recognised in profit or loss
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Recognised as capital contribution from parent
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Property, plant and equipment
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Group stock options and restricted stock units - profit/loss
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Group stock options and restricted stock units - equity
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Property, plant and equipment
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Group stock options and restricted stock units - profit/loss
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Group stock options and restricted stock units - equity
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Tax expense (continued)
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11.4 Unrecognised deductible temporary differences, unused tax losses and unused tax credits
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Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognised are attributable to the following:
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- tax losses (capital in nature)
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The above tax losses of a capital nature are only available to be utilised against future capital gains and as a result are not expected to be utilised in the next 12 months, therefore no deferred tax asset has been recognised at year-end.
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Property, plant and equipment
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Fixtures, fittings & equipment
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Property, plant and equipment (continued)
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Fixtures, fittings & equipment
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Accumulated depreciation and impairment
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Charge owned for the year
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Charged financed for the year
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Charge owned for the year
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Charged financed for the year
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12.1. Assets held under leases
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The net book value of owned and leased assets included as "Property, plant and equipment" in the Statement of Financial Position is as follows:
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Property, plant and equipment owned
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Right-of-use assets, excluding investment property
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Property, plant and equipment (continued)
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12.1 Assets held under leases (continued)
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Information about right-of-use assets is summarised below:
Net book value
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Depreciation charge for the year ended
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Accumulated amortisation and impairment
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Charge for the year - owned
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Charge for the year - owned
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Trade and other receivables
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Receivables from related parties
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Prepayments and accrued income
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Total current trade and other receivables
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Payables to related parties
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Tax and social security payables
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Total current trade and other payables
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Included above in amounts payable to related parties is the sum of £2,250,000 (2022 - £2,250,000) in respect of a loan that is subordinated to the Civil Aviation Authority and cannot be withdrawn or repaid without their prior written consent.
The Company had BSP outstanding cash sales due to be paid of £363,763 at 31 December 2023 (2022 - £335,898), shown within trade payables above, all of which were paid within January 2024. The Company did not have any unutilised overdraft or Revolving Credit Facilities at 31 December 2023.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Financial liabilities - leasing
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Total loans and borrowings
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The carrying value of loans and borrowings classified as financial liabilities, measured at amortised cost, approximates fair value.
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The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £116,935 (2022 - £94,734). Contributions totalling £22,226 (2022 - £19,040) were payable to the fund at the reporting date and are included in other payables.
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Ordinary shares of £1.00 each
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At 1 January and 31 December
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The ordinary shares of £1 each carry full voting rights, full dividend rights and full rights to participation in any capital distribution on winding up.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's reserves at 31 December 2023 can be analysed as follows:
Retained earnings
Retained earnings represents all current and prior period retained profits and losses, less any dividends paid to the Company's parent.
Capital contribution from parent
The capital contribution reserve from the Company's parent relates to restricted stock units and share options that have been granted by the Group in favour of employees of the Company.
On 7 December 2020, restricted stock units for a total of 5,552 shares were granted by the Group. On 17 November 2021, restricted stock units for a total of 561 shares were granted by the Group. On 1 December 2022, restricted stock units for a total of 612 shares were granted by the Group. On 1 December 2023, restricted stock units for a total of 457 shares were granted by the Group. For the portion of the restricted stock units that vest upon a liquidity event only, a fair value expense was recognised on the date they were granted in line with Group policy and International Financial Reporting Standards. For the portion of the restricted stock units that vest upon a liquidity event and 2 years of service, the fair value expense is recognised proportionately over 2 years.
There were, in addition to the above, options over 761 shares granted on 23 August 2019 by the Group. These stock options vest after 2 years of service and the fair value expense of the stock options was recognised proportionately over 2 years.
Each restricted stock unit and option provides the holder the right to acquire non-voting ordinary shares in Viking Holdings Ltd, a company incorporated in Bermuda, upon satisfaction of their vesting conditions. Restricted stock units have no exercise price and stock options have an exercise price based on the value of a non-voting ordinary share of Viking Holdings Ltd at the grant date. The total expense related to restricted stock units and stock options for the year ended 31 December 2023 came to £114,439 (2022 - £93,958).
None of the above restricted stock units or options have been exercised as of the date of these financial statements.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The Company leases one office building and also has two significant lease agreements in respect of office equipment. The office lease now operates on a rolling 1-year contract ending in 2024. The office equipment leases both have non-cancellable terms of 2 and 5 years ending in 2025 and 2026 respectively.
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Lease liabilities are due as follows:
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Contractual undiscounted cash flows due
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Between one year and five years
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Lease repayments during the year amounted to £29,153 (2022 - £33,400).
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The following amounts in respect of leases have been recognised in profit or loss:
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Interest expense on lease liabilities
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Expenses relating to short-term leases
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Related party transactions
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Details of transactions between the Company and its related parties are disclosed below.
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21.1 Trading transactions
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During the year, the Company entered into the following trading transactions with related parties:
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Use of cruise ships, reimbursed advertising costs and intercompany expenses
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Viking Ocean Cruises II Ltd
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21.Related party transactions (continued)
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21.1 Trading transactions (continued)
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The following balances were outstanding at the end of the reporting period:
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Amounts owed by related parties
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Amounts owed to related parties
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Viking Ocean Cruises II Ltd
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No expense has been recognised in the current or prior year for bad or doubtful debts in respect of the amounts owed by related parties.
None of the transactions above incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash or by an intercompany offset agreement.
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21.2 Loans from related parties
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Viking River Tours Ltd (incorporated in Bermuda) has provided the Company with loans which incur interest at 5% per annum (£112,500 - see note 10) and were provided to ensure that the Company met its bonding requirements. These loans are subordinated to the Civil Aviation Authority and cannot be withdrawn or repaid without their prior written consent.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
Ultimate controlling party
|
The whole of the Company's issued share capital is owned by Viking River Cruises (Bermuda) Ltd, a company registered in Bermuda. Viking River Cruises (Bermuda) Ltd is a wholly owned subsidiary of Viking River Cruises Ltd, another company incorporated in Bermuda, which is itself a subsidiary of Viking Cruises Ltd, another company incorporated in Bermuda. Viking Cruises Ltd is a wholly owned subsidiary of Viking Holdings Ltd (previously named MISA Investments Limited), a company incorporated in Bermuda and which is the ultimate holding company.
The ultimate controlling party is considered to be Mr Torstein Hagen, by virtue of his majority ownership of the issued share capital of the ultimate holding company.
The financial statements will be consolidated into the parent company's financial statements and copies can be obtained from Viking River Cruises Ltd, Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda.
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Notes supporting the statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
|
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Cash and cash equivalents in the statement of cash flows
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Included within cash at bank and in hand above is restricted cash of £23,222,511 (2022 - £22,970,447) provided as security for the benefit of the Company's bond insurance obligors in respect of Civil Aviation Authority and Association of British Travel Agents bonds.
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At 31 December 2023, there were cash-backed bonds provided by Wells Fargo Bank, secured against cash by credit guarantees in the normal course of business, to the company's bond insurance obligors in respect of Civil Aviation Authority ('CAA') and Association of British Travel Agents ('ABTA') bonds amounting to £22,885,330 (2022 - £22,869,941).
In respect of the CAA ATOL bond, a fixed charge dated 25 September 2017 in favour of Wells Fargo Bank, National Association, secured over present and future assets of the Company, was registered at Companies House on 3 October 2017. Similar fixed charges dated 25 September 2018, 27 September 2021, 27 September 2022 and 21 September 2023 in favour of Wells Fargo Bank, National Association, secured over present and future assets of the company, were registered at Companies House on 4 October 2018, 11 October 2021, 10 October 2022 and 22 September 2023 respectively. In addition to these charges, restricted cash of £23,222,511 is being held by Wells Fargo Bank at 31 December 2023 (2022 - £22,970,447) as security for the provision of the Company's bonds.
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VIKING RIVER CRUISES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The Company's capital management objectives are to ensure the Company's ability to continue as a going concern, so it can provide returns to shareholders and benefits to other stakeholders.
This is achieved by pricing products commensurably with the level of risk and ensuring sufficient bank and other facilities are in place, and collecting customer deposits in a timely manner.
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The Company is not subject to any externally imposed capital requirements.
|
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Events after the reporting date
|
During 2024, the Company plans to operate as outlined in the principal activity note. The Company's cruise capacity is well-positioned for future growth as affiliated group companies have ordered 18 new river vessels for delivery through 2026 and six new ocean ships for delivery through 2028. A portion of this increase in capacity is expected to the be allocated to the Company for sale to guests.
There have been no significant events affecting the Company since the year end.
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Foreign currency translation
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Arising from operating activities
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Fair value movements in derivatives
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Total foreign exchange (losses)/gains
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