Company registration number 08643888 (England and Wales)
DRAGONPASS INTERNATIONAL LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DRAGONPASS INTERNATIONAL LTD.
COMPANY INFORMATION
Directors
M I Koch
K Cai
J Zhu
A Harrison-Chinn
Y L R Tsang
Company number
08643888
Registered office
173A Ashley Road
Hale
Altrincham
Cheshire
WA15 9SD
Auditor
Alexander & Co LLP
Centurion House
129 Deansgate
Manchester
M3 3WR
DRAGONPASS INTERNATIONAL LTD.
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 27
DRAGONPASS INTERNATIONAL LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The group continued to enjoy sustainable growth in further product and inventory offerings leading to greater strategic importance with clients. The key catalyst for this growth was further development in scalable platform technologies leading to greater flexibility for our clients and suppliers. Revenue was up 146.0% from £57.95M in 2022 to £142.57M in 2023.

We continued expansion in the Middle East, successfully completing migrations for new clients, towards App based solutions whilst further investing in API technology to launch leading fintechs in Brazil and the UK. Going into 2024 APP and API technology remains a key focus for optimising supplier and client integrations into our platform to further expand our flexibility and inventory. 

Traditional existing markets have continued to flourish with the tail of post pandemic travel increases. We have introduced Fast track and dining as proof of concepts to more established client bases in these existing markets. These product areas will have further investment and focus in subsequent years as we capitalise on the synergies and current gap in global solutions for these products.

In our transition to a technology led organisation we have had to hire in the skills and expertise to accommodate our short- and medium-term ambitions. The team has increased from 37 in 2022 to 60 in 2023. There will be further investment in human capital in 2024 as we place more emphasis on creating robust, flexible, secure and scalable solutions. Expertise is also being brought in to automate operational processes and to improve the client and customer experience.

Despite still generating + £2.67m EBITDA, our profit margins have reduced due to investment in human capital and infrastructure.  Gross Margin is also down from 13.3% in 2022 to 7.8% in 2023 due to residual inflationary cost pressures caused from more energy price shocks and food prices to an increased labour market tightness. We foresee this starting to level out in 2024.  

Our continued growth and success are testament to the on-going support and hard work of our clients, partners and colleagues. For this we are eternally thankful and appreciative.

 

DRAGONPASS INTERNATIONAL LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Increasing geopolitical uncertainty and rising inflation were among the biggest risk factors affecting the business in 2023. Polarisation at both a global and local level inflamed pre-existing triggers to social unrest, most notably in Eastern Europe and the Middle East. To mitigate the geopolitical uncertainty, business growth was predominantly focused on accelerating existing ‘lower risk’ channels, through both regional growth and scaling both new and existing product sets.

In addition, on-going labour shortages, air route capacity and other sector supply factors have struggled to keep up with the increase in demand. This imbalance, worsened by global inflation, has increased prices and service issues (most notably capacity issues at lounges). The business has combated increased prices through further refining operational efficiencies and re-pricing where necessary. The further addition of alternative products to existing client portfolios has also allowed for a more holistic cross-subsidisation and mitigation of price spikes. The prebooking product has allowed our lounge partners to generate additional yield, helping to mitigate cost pressures, whilst guaranteeing customers space at the lounge during peak periods where demand outstrips supply (and often leads to rejection from the lounge or delay in entry).

Despite our maniacal focus towards IT security and robustness, it would be remiss not to include cyber security, system stability and regulations as a potential risk that every business faces. Over the course of 2023 we have conducted a gap analysis and sweeps of existing systems to better understand where we further need investment in 2024 for the evolving technological needs of our customers and clients’ aspirations.

This year has afforded the business healthy organic growth across multiple regions, creating a platform for further investment into new product and industry verticals for subsequent years. New products and solutions in 2023 have allowed our customers a better travel experience, whilst providing clients access to a wider suite of relevant offerings. More bespoke technological work was carried out for clients in 2023 from creating Multi-Factor Authentication solutions to building and enabling tiered pricing structures to offer better cost control. Bespoke work needs to be standardised into our platform to ensure the evolution of the business systems and best practice are not risking bespoke solutions becoming obsolete in the future.

Key performance indicators

The group uses a range of financial and non-financial key performance indicators in order for the directors to monitor and measure the current and forecast performance of the business with respect to the budget and prior period. The directors consider the following key performance indicators to be the main focus of financial performance of the group: revenue, gross profit and EBITDA.

Revenue:

2023: £142.57M
2022: £57.95M

Gross profit :

2023: £11.04M
2022: £7.72M

EBITDA :

2023: £2.67M
2022: £3.57M

Future developments

The advancement in our technology and the technological aspirations of our clients and partners will see further investment allocated to our platform and IT security. The establishment of a scalable future-proofed platform will allow for further product and client diversification, with better access to more relevant customer engagement. With the growth in regions, further investment and headcount will be allocated to regions where more localised solutions are required to ensure regulatory and client needs are fulfilled adequately.

DRAGONPASS INTERNATIONAL LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Stakeholder Engagement and Corporate Governance

The Directors of the Group, as those of all UK companies, must act in accordance with a set of general duties. The Directors consider it’s shareholders, employees, customers, suppliers and local community to be its core stakeholder groups. The duties are detailed in section 172 of the UK Companies Act 2006, which is summarised as follows:

‘A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to the following areas:

 

Likely consequences of any decision in the long term

The Board recognises the challenges facing the business from the macro and microenvironment. The Board aim to meet monthly to discuss financial performance, forecasted outlook, future opportunities and key threats.

Employees

The Directors and senior management team have a key focus on employee engagement, assessing results from the main survey once a year, with temperature checks throughout the year to ensure the current strategy is achieving what it set out to. The company strives to be a responsible employer and review pay, benefits and working environment on a regular basis.

Business relationships

Our aim is to have a positive working relationship with all our partners and suppliers, this is predominantly lead through strong communication lines.

Community and the environment

The company and all employees are accountable to a strict Code of Conduct that defines how we operate as a business and how we present ourselves to our stakeholders, this ensures all employees behave appropriately when considering the company's economic, environment and social responsibilities.

The company has a zero-tolerance approach to modern slavery, anti-bribery, corruption and discrimination.

Maintaining a reputation for high standards of business conduct

The company operates a Performance Related Pay scheme (PRP) to link employee performance and reward to the company's core values.

The need to act fairly as between members of the company

The Directors recognise the strategic importance of key stakeholders including their suppliers, customers and others, and maintain regular dialogue and communications with all groups.

DRAGONPASS INTERNATIONAL LTD.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

On behalf of the board

A Harrison-Chinn
Director
26 September 2024
DRAGONPASS INTERNATIONAL LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

Principal activities

The principal activity of the company and group continued to be that of a travel and lifestyle benefits provider offering product and technology solutions to partners worldwide.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

M I Koch
K Cai
J Zhu
A Harrison-Chinn
Y L R Tsang
Energy and carbon report

Dragonpass International Limited has reported its current UK based annual energy usage and associated annual greenhouse gas emissions pursuant to the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 ("the 2018 Regulations").

2023
Energy consumption
kWh
Aggregate of energy consumption in the year
35,189
2023
Emissions of CO2 equivalent
tCO2e
Scope 2 - indirect emissions
- Electricity purchased
4.80
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
2.80
Total gross emissions
7.60
DRAGONPASS INTERNATIONAL LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

On behalf of the board
A Harrison-Chinn
Director
26 September 2024
DRAGONPASS INTERNATIONAL LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DRAGONPASS INTERNATIONAL LTD.
- 7 -
Opinion

We have audited the financial statements of DragonPass International Ltd. (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

DRAGONPASS INTERNATIONAL LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DRAGONPASS INTERNATIONAL LTD.
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Capability of the audit in detecting irregularities, including fraud

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

Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to breaches of the legal and regulatory framework that the company operates in. We considered the extent to which non-compliance might have a material effect on the financial statements. The key laws and regulations we considered in this context included UK Companies Act 2006, employment law, health and safety and tax legislation.

We also evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to the posting of inappropriate journal entries to manipulate financial results and potential management bias in accounting estimates.

As a result of the above, our audit procedures performed included:

DRAGONPASS INTERNATIONAL LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DRAGONPASS INTERNATIONAL LTD.
- 9 -

There are inherent limitations in the audit procedures described above. The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK).

We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors of DragonPass International Ltd.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Emma Ball (Senior Statutory Auditor)
For and on behalf of Alexander & Co LLP
26 September 2024
Chartered Accountants
Statutory Auditor
Centurion House
129 Deansgate
Manchester
M3 3WR
DRAGONPASS INTERNATIONAL LTD.
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
142,576,030
57,951,236
Cost of sales
(131,531,794)
(50,231,025)
Gross profit
11,044,236
7,720,211
Administrative expenses
(8,380,993)
(4,161,092)
Operating profit
4
2,663,243
3,559,119
Interest payable and similar expenses
8
(245)
-
0
Profit before taxation
2,662,998
3,559,119
Tax on profit
9
(636,115)
(552,755)
Profit for the financial year
2,026,883
3,006,364
Profit for the financial year is all attributable to the owners of the parent company.
DRAGONPASS INTERNATIONAL LTD.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
£
£
Profit for the year
2,026,883
3,006,364
Other comprehensive income
Currency translation loss taken to retained earnings
(6,459)
(681)
Total comprehensive income for the year
2,020,424
3,005,683
Total comprehensive income for the year is all attributable to the owners of the parent company.
DRAGONPASS INTERNATIONAL LTD.
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
31,120
20,281
Current assets
Debtors
12
31,038,558
12,942,368
Cash at bank and in hand
4,088,869
8,574,093
35,127,427
21,516,461
Creditors: amounts falling due within one year
13
(29,726,306)
(18,124,925)
Net current assets
5,401,121
3,391,536
Net assets
5,432,241
3,411,817
Capital and reserves
Called up share capital
15
10,000
10,000
Share premium account
609,102
609,102
Profit and loss reserves
4,813,139
2,792,715
Total equity
5,432,241
3,411,817
The financial statements were approved by the board of directors and authorised for issue on 26 September 2024 and are signed on its behalf by:
26 September 2024
A  Harrison-Chinn
Director
Company registration number 08643888 (England and Wales)
DRAGONPASS INTERNATIONAL LTD.
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
31,120
20,281
Current assets
Debtors
12
31,013,140
13,008,533
Cash at bank and in hand
4,080,623
8,472,652
35,093,763
21,481,185
Creditors: amounts falling due within one year
13
(29,651,720)
(18,079,883)
Net current assets
5,442,043
3,401,302
Net assets
5,473,163
3,421,583
Capital and reserves
Called up share capital
15
10,000
10,000
Share premium account
609,102
609,102
Profit and loss reserves
4,854,061
2,802,481
Total equity
5,473,163
3,421,583

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,051,580 (2022: £2,997,907)

The financial statements were approved by the board of directors and authorised for issue on 26 September 2024 and are signed on its behalf by:
26 September 2024
A  Harrison-Chinn
Director
Company registration number 08643888 (England and Wales)
DRAGONPASS INTERNATIONAL LTD.
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
10,000
609,102
(212,968)
406,134
Year ended 31 December 2022:
Profit for the year
-
-
3,006,364
3,006,364
Other comprehensive income:
Currency translation differences
-
-
(681)
(681)
Total comprehensive income
-
-
3,005,683
3,005,683
Balance at 31 December 2022
10,000
609,102
2,792,715
3,411,817
Year ended 31 December 2023:
Profit for the year
-
-
2,026,883
2,026,883
Other comprehensive income:
Currency translation differences
-
-
(6,459)
(6,459)
Total comprehensive income
-
-
2,020,424
2,020,424
Balance at 31 December 2023
10,000
609,102
4,813,139
5,432,241
DRAGONPASS INTERNATIONAL LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
10,000
609,102
(195,426)
423,676
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,997,907
2,997,907
Balance at 31 December 2022
10,000
609,102
2,802,481
3,421,583
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
2,051,580
2,051,580
Balance at 31 December 2023
10,000
609,102
4,854,061
5,473,163
DRAGONPASS INTERNATIONAL LTD.
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(3,694,967)
6,494,049
Interest paid
(245)
-
0
Income taxes paid
(749,429)
(11,210)
Net cash (outflow)/inflow from operating activities
(4,444,641)
6,482,839
Investing activities
Purchase of tangible fixed assets
(25,937)
(19,795)
Repayment of loans
(14,646)
13,259
Net cash used in investing activities
(40,583)
(6,536)
Net (decrease)/increase in cash and cash equivalents
(4,485,224)
6,476,303
Cash and cash equivalents at beginning of year
8,574,093
2,097,790
Cash and cash equivalents at end of year
4,088,869
8,574,093
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

DragonPass International Ltd. (“the company”) is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is 173A Ashley Road, Hale, Altrincham, Cheshire, WA15 9SD.

 

The group consists of DragonPass International Ltd. and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company DragonPass International Ltd. together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.4
Going concern

During the period, the group made a profit after tax of £2,026,883 and at the year end had net current assets of £5,401,121 and net assets of £5,432,241. Therefore the directors have prepared the accounts on a going concern basis.

1.5
Turnover

Turnover represents amounts receivable for services net of VAT. Recognition of turnover varies based upon the sales stream the income relates to.

 

Turnover associated with airport lounges is recognised based on end-customer usage. In other smaller but closely related income streams, turnover is recognised at the point of purchase in accordance with customer contracts.

 

Platform fees are invoiced upon agreement with the customer and turnover is apportioned according to the period in which the work is conducted, or over the period covered by the contract

 

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
25% straight line
Computer equipment
33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date 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 is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The main estimate that poses a risk to the carrying amounts of assets and liabilities within the next year is as follows: for promotions and lounge visits where the costs have not yet been finalised, an accrual is made to take account of the expected costs.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is 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.

3
Turnover
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover
(Continued)
- 21 -

 

The group operates different classes of business in a number of geographical markets. No analysis of turnover by class or market has been disclosed in these accounts, as in the opinion of the directors to do so would compromise the competitive position of the group.

4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
130,978
(574,773)
Depreciation of owned tangible fixed assets
15,098
8,742
Research and development costs
266,311
277,142
Operating lease charges
69,612
40,714
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
45,000
22,000
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Sales
12
9
12
9
Operations
22
12
22
12
Product
18
11
18
11
Finance
6
3
6
3
Directors
2
2
2
2
Total
60
37
60
37
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 22 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
4,322,478
2,448,984
4,322,478
2,448,984
Social security costs
527,327
253,871
527,327
253,871
Pension costs
159,020
56,815
159,020
56,815
5,008,825
2,759,670
5,008,825
2,759,670
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
507,799
326,182
Company pension contributions to defined contribution schemes
3,963
2,422
511,762
328,604
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
257,799
167,283

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022: 1).

Key management personnel
Management have assessed other staff members who are not directors as key management personnel. Total remuneration for key management personnel, including directors, is as follows:
2023
2022
£
£
Remuneration for qualifying services
854,426
529,904
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
245
-
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
612,474
541,545
Foreign current tax on profits for the current period
23,641
11,210
Total current tax
636,115
552,755

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
2,662,998
3,559,119
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
665,750
676,233
Tax effect of expenses that are not deductible in determining taxable profit
1,992
29,359
Tax effect of utilisation of tax losses not previously recognised
-
0
(160,814)
Unutilised tax losses carried forward
4,092
-
0
Effect of change in corporation tax rate
(41,226)
-
Double tax relief
3,090
-
0
Capital allowances in excess of depreciation
(2,949)
(3,233)
Overseas tax
5,366
11,210
Taxation charge
636,115
552,755
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
10
Tangible fixed assets
Group
Fixtures and fittings
£
Cost
At 1 January 2023
52,752
Additions
25,937
At 31 December 2023
78,689
Depreciation and impairment
At 1 January 2023
32,471
Depreciation charged in the year
15,098
At 31 December 2023
47,569
Carrying amount
At 31 December 2023
31,120
At 31 December 2022
20,281
Company
Fixtures and fittings
£
Cost
At 1 January 2023
52,752
Additions
25,937
At 31 December 2023
78,689
Depreciation and impairment
At 1 January 2023
32,471
Depreciation charged in the year
15,098
At 31 December 2023
47,569
Carrying amount
At 31 December 2023
31,120
At 31 December 2022
20,281
11
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Dragonpass South Africa (PTY) Limited
32 Scoat Avenue,  Lakeside, Lethabong, Gauteng, 1609
No par value
100.00
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
12
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
17,263,797
7,134,086
17,263,797
7,134,086
Amounts owed by group undertakings
16,699
6,868
5,951
90,450
Other debtors
92,513
114,779
77,843
97,362
Prepayments and accrued income
13,665,549
5,686,635
13,665,549
5,686,635
31,038,558
12,942,368
31,013,140
13,008,533
13
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
17,294
97,470
17,294
87,450
Amounts owed to group undertakings
23,035,099
12,927,790
23,020,788
12,913,142
Corporation tax payable
428,231
541,545
424,974
541,545
Other taxation and social security
211,336
82,726
211,336
82,726
Deferred income
3,639,848
2,141,165
3,639,848
2,141,165
Other creditors
23,670
8,787
15,015
8,787
Accruals and deferred income
2,370,828
2,325,442
2,322,465
2,305,068
29,726,306
18,124,925
29,651,720
18,079,883
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
159,020
56,815

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

15
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
16
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
8,438
33,750
8,438
33,750
Between two and five years
-
8,438
-
8,438
8,438
42,188
8,438
42,188
17
Directors' transactions

The directors' loan balance, included in other debtors, totalled £54,509 (2022: £54,863). This loan is interest free and repayable on demand.

18
Controlling party

The immediate parent undertaking is DragonPass Global Limited, a company incorporated in Hong Kong. The company's registered office and address for obtaining accounts is Unit 10A, 12/F., Wing Tuck Commercial Centre, 177 Wing Lok Street, Sheung Wan, Hong Kong.

 

The ultimate parent undertaking is DragonPass Company Limited, a company incorporated in China. The company's registered office and address for obtaining accounts is 10/F, Yueneng Building, 45 Tianhe Rd., Yuexiu District, Guangzhou, China 510075.

19
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption available whereby it has not disclosed transactions with other companies that are wholly owned within the group.
DRAGONPASS INTERNATIONAL LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
20
Cash (absorbed by)/generated from group operations
2023
2022
£
£
Profit for the year after tax
2,026,883
3,006,364
Adjustments for:
Taxation charged
636,115
552,755
Finance costs
245
-
0
Depreciation and impairment of tangible fixed assets
15,098
8,742
Foreign exchange on SOCIE movements
(6,459)
(681)
Movements in working capital:
Increase in debtors
(18,081,544)
(9,781,634)
Increase in creditors
10,216,012
10,583,188
Increase in deferred income
1,498,683
2,125,315
Cash (absorbed by)/generated from operations
(3,694,967)
6,494,049
21
Analysis of changes in net funds - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
8,574,093
(4,485,224)
4,088,869
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