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Company No: 12346468 (England and Wales)

YELLOW PENCILS HOLDINGS LTD

Annual Report and Consolidated Financial Statements
For the financial year ended 31 December 2023

YELLOW PENCILS HOLDINGS LTD

Annual Report and Consolidated Financial Statements

For the financial year ended 31 December 2023

Contents

YELLOW PENCILS HOLDINGS LTD

COMPANY INFORMATION

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

COMPANY INFORMATION (continued)

For the financial year ended 31 December 2023
DIRECTOR Riccardo Lanza
REGISTERED OFFICE Stansted Park House Cupola
Rowland's Castle
Hants
PO9 6DX
United Kingdom
COMPANY NUMBER 12346468 (England and Wales)
AUDITOR Dixon Wilson Audit Services LLP
22 Chancery Lane
London
WC2A 1LS
YELLOW PENCILS HOLDINGS LTD

GROUP STRATEGIC REPORT

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

GROUP STRATEGIC REPORT (continued)

For the financial year ended 31 December 2023

The director presents their Strategic Report for the financial year ended 31 December 2023.

REVIEW OF THE BUSINESS

The principal activity of the group during the year was that of performing tour operations, with a secondary investment business.

In 2023 turnover decreased by £5.44m (2022: £38m increase), with an increase in gross margin percentage in the year. Gross profit increased by £1.4m (2022: £6.3m increase). Profit before tax increased by £0.55m (2022: £6.35m increase). Core permanent staff levels have increased to 11 (2022: 10) persons and we maintain freelance consultants in optimising fixed costs to allow flexibility.

Lanza & Baucina continued their trend of being in the top performers in Europe in this niche market.

The parent company received dividends and investment income from the subsidiary and other unlisted investments. The investments are held for capital growth.

PRINCIPAL RISKS AND UNCERTAINTIES AND STRATEGY

To minimize risk our billing is normally in advance before commencement of each stage. The nature of our business relies on the closeness to our clients and trust is a key element, further minimizing risk.

The director has considered the potential impact on the business operations of the company in response to the expected economic slowdown in growth, increased costs caused by inflation and the director will take the following steps to mitigate any associated risks:

·Review contractual terms and renegotiate payment terms where practical;
·Consider the size of contracts to nuance and maintain returns;
·Maintain cautious outlook on investment with surplus funds investment where possible.

KEY PERFORMANCE INDICATORS

The group uses a number of KPI's to measure its performance with previous years and that with the market in general. Group turnover is down 11.8% to £40.41m (2022: £45.9m), with UK business turnover percentage being up by 12.22% to 12.22% (2022: 0%). Cost of sales as a percentage of turnover fell by 6.1% to 76.9% (2022: 83.0%), with administrative expenses increasing as a percentage of Gross profit by 7.27% to 15.34% (2022: 7.27%).

FUTURE OUTLOOK

We look forward to maintaining our gross margins with similar returns in the coming year. We expect a similar level of group turnover and therefore a similar group profit in 2024, with investments held in Yellow Pencils Holdings Ltd expected to be held for long term growth in value.

ENVIRONMENT IMPACT

The group endeavours to source natural event spaces where possible and are considerate on sourcing client requests with sustainable products to maintain a neutral effect on the environment.

Approved by the Board of Directors and signed on its behalf by:

Riccardo Lanza
Director
Stansted Park House Cupola
Rowland's Castle
Hants
PO9 6DX
United Kingdom

29 November 2024

YELLOW PENCILS HOLDINGS LTD

DIRECTOR'S REPORT

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

DIRECTOR'S REPORT (continued)

For the financial year ended 31 December 2023

The director presents this annual report on the affairs of the company and the group, together with the financial statements and auditors’ report, for the financial year ended 31 December 2023.

DIVIDENDS

Ordinary dividends were declared amounting to £348,500 (2022: £Nil). The directors do not recommend payment of a final dividend.

DIRECTOR

The director, who served during the financial year and to the date of this report except as noted, was as follows:

Riccardo Lanza

Financial Instruments

*Objectives and policies*

The group's financial instruments include bank accounts for day-to-day working capital and other financial assets and liabilities arising from its operations such as trade debtors and trade creditors.

*Price risk, credit risk, liquidity risk and cash flow risk*
The group manages its cash and borrowing requirements to ensure it has sufficient liquid resources to meet the operating needs of the business.
All customers who wish to trade on credit terms are subject to credit verification procedures. Receivable balances are monitored on an on-going basis and provision is made for doubtful debts where necessary.

AUDITOR

Each of the persons who is a director at the date of approval of this report confirms that:

* So far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
* The director has taken all the steps that they ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Dixon Wilson Audit Services LLP have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditors in the absence of an Annual General Meeting.



Approved by and signed by the director:

Riccardo Lanza
Director
Stansted Park House Cupola
Rowland's Castle
Hants
PO9 6DX
United Kingdom

29 November 2024

YELLOW PENCILS HOLDINGS LTD

DIRECTOR'S RESPONSIBILITIES STATEMENT

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

DIRECTOR'S RESPONSIBILITIES STATEMENT (continued)

For the financial year ended 31 December 2023

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Under company law the director must not approve the financial statements unless the director is satisfied that they give a true and fair view of the state of affairs of the company and group and of the profit or loss of the group for that financial period.

In preparing these financial statements, the director is required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgements and accounting estimates that are reasonable and prudent;
* State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
* Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business.

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

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF YELLOW PENCILS HOLDINGS LTD

For the financial year ended 31 December 2023

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF YELLOW PENCILS HOLDINGS LTD (continued)

For the financial year ended 31 December 2023

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Yellow Pencils Holdings Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the consolidated profit and loss account, consolidated statement of comprehensive income, consolidated balance sheet, company balance sheet, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cashflows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

- give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s profit for the year then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

- have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006

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

* the information given in the strategic report and the 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 have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

* the parent company financial statements are not in agreement with the accounting records and returns; or

* certain disclosures of directors’ remuneration specified by law are not made; or

* we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the director’s responsibilities statement set out on page 5, 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 group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or 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.

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 gained an understanding of the legal and regulatory framework applicable to the company and group by considering, amongst other things, the industry and jurisdictions in which it operates, and considered the risk of acts by the company and group that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the assessed level of risk, but recognised that 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.

We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, UK Company Law and UK tax legislation.

Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, enquiries of third parties and enquiries of component auditors.

As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by management that represented a risk of material misstatement due to fraud.

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud.

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 auditor’s report.

Other Matters

The corresponding information in respect of the year ended 31 December 2022 is unaudited.

Use of our report

This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Charlotte Milner (Senior Statutory Auditor)
For and on behalf of
Dixon Wilson Audit Services LLP
Statutory Auditor

22 Chancery Lane
London
WC2A 1LS

29 November 2024

YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED PROFIT AND LOSS ACCOUNT (continued)

For the financial year ended 31 December 2023
Note 2023 2022
£ £
Turnover 4 40,413,047 45,856,116
Cost of sales ( 31,083,253) ( 37,935,550)
Gross profit 9,329,794 7,920,566
Administrative expenses ( 1,431,507) ( 639,361)
Other operating income 5 0 508,111
Operating profit 7,898,287 7,789,316
Income from other fixed asset investments 6 2,167 0
Other non-operating income/(loss) 69,631 ( 215,824)
Profit before interest and taxation 7,970,085 7,573,492
Interest receivable and similar income 6 156,680 5,721
Interest payable and similar expenses 6 ( 844) ( 2,683)
Profit before taxation 7 8,125,921 7,576,530
Tax on profit 11 ( 1,907,809) ( 1,464,644)
Profit for the financial year 6,218,112 6,111,886
Profit for the year attributable to:
Owners of the parent 3,713,651 3,782,493
Non-controlling interests 2,504,461 2,329,393
6,218,112 6,111,886
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)

For the financial year ended 31 December 2023
2023 2022
£ £
Profit for the financial year 6,218,112 6,111,886
Other comprehensive income 0 0
Total comprehensive income 6,218,112 6,111,886
Total comprehensive income attributable to:
Owners of the parent 3,713,651 3,782,493
Non-controlling interests 2,504,461 2,329,393
6,218,112 6,111,886
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED BALANCE SHEET

As at 31 December 2023
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED BALANCE SHEET (continued)

As at 31 December 2023
Note 2023 2022
£ £
Fixed assets
Intangible assets 13 0 3,599
Tangible assets 14 1,177,098 1,217,196
Investments 15 1,701,859 1,351,226
2,878,957 2,572,021
Current assets
Debtors 16 3,936,445 2,086,208
Cash at bank and in hand 17 12,590,943 11,039,102
16,527,388 13,125,310
Creditors: amounts falling due within one year 18 ( 8,552,801) ( 9,133,654)
Net current assets 7,974,587 3,991,656
Total assets less current liabilities 10,853,544 6,563,677
Creditors: amounts falling due after more than one year 19 ( 20,548) ( 28,293)
Net assets 10,832,996 6,535,384
Capital and reserves 21
Called-up share capital 100 100
Profit and loss account 9,555,042 6,189,891
Equity attributable to owners of the parent company 9,555,142 6,189,991
Non-controlling interests 1,277,854 345,393
10,832,996 6,535,384

The financial statements of Yellow Pencils Holdings Ltd (registered number: 12346468) were approved and authorised for issue by the Board of Directors on 29 November 2024. They were signed on its behalf by:

Riccardo Lanza
Director
Stansted Park House Cupola
Rowland's Castle
Hants
PO9 6DX
United Kingdom

29 November 2024

YELLOW PENCILS HOLDINGS LTD

COMPANY BALANCE SHEET

As at 31 December 2023
YELLOW PENCILS HOLDINGS LTD

COMPANY BALANCE SHEET (continued)

As at 31 December 2023
Note 2023 2022
£ £
Restated - note 3
Fixed assets
Investments 15 2,075,918 2,015,777
2,075,918 2,015,777
Current assets
Debtors 16 1,355,774 2,015,774
Cash at bank and in hand 17 4,269,719 339,004
5,625,493 2,354,778
Creditors: amounts falling due within one year 18 ( 236,316) ( 271,194)
Net current assets 5,389,177 2,083,584
Total assets less current liabilities 7,465,095 4,099,361
Net assets 7,465,095 4,099,361
Capital and reserves 21
Called-up share capital 100 100
Profit and loss account 7,464,995 4,099,261
Total shareholder's funds 7,465,095 4,099,361

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements. The profit of the parent company was £3,714,234 (2022: £2,688,403).

The financial statements of Yellow Pencils Holdings Ltd (registered number: 12346468) were approved and authorised for issue by the Board of Directors on 29 November 2024. They were signed on its behalf by:

Riccardo Lanza
Director
Stansted Park House Cupola
Rowland's Castle
Hants
PO9 6DX
United Kingdom

29 November 2024

YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

For the financial year ended 31 December 2023
Called-up share capital Profit and loss account Equity attributable to owners of parent company Non-controlling interests Total
£ £ £ £ £
At 01 January 2022 100 2,407,398 2,407,498 ( 384,000) 2,023,498
Profit for the financial year 0 3,782,493 3,782,493 2,329,393 6,111,886
Total comprehensive income 0 3,782,493 3,782,493 2,329,393 6,111,886
0 0 0 0 0
Dividend paid 0 0 0 ( 1,600,000) ( 1,600,000)
At 31 December 2022 100 6,189,891 6,189,991 345,393 6,535,384
At 01 January 2023 100 6,189,891 6,189,991 345,393 6,535,384
Profit for the financial year 0 3,713,651 3,713,651 2,504,461 6,218,112
Total comprehensive income 0 3,713,651 3,713,651 2,504,461 6,218,112
Dividends paid on equity shares (note 12) 0 ( 348,500) ( 348,500) ( 1,572,000) ( 1,920,500)
At 31 December 2023 100 9,555,042 9,555,142 1,277,854 10,832,996
YELLOW PENCILS HOLDINGS LTD

COMPANY STATEMENT OF CHANGES IN EQUITY

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

COMPANY STATEMENT OF CHANGES IN EQUITY (continued)

For the financial year ended 31 December 2023
Called-up share capital Profit and loss account Total
£ £ £
At 01 January 2022 100 1,410,858 1,410,958
Profit for the financial year 0 2,688,403 2,688,403
Total comprehensive income 0 2,688,403 2,688,403
At 31 December 2022 (as restated) 100 4,099,261 4,099,361
At 01 January 2023 (as previously stated) 100 2,089,261 2,089,361
Prior year adjustment (note 3) 0 2,010,000 2,010,000
At 01 January 2023 (as restated) 100 4,099,261 4,099,361
Profit for the financial year 0 3,714,234 3,714,234
Total comprehensive income 0 3,714,234 3,714,234
Dividends paid on equity shares (note 12) 0 ( 348,500) ( 348,500)
At 31 December 2023 100 7,464,995 7,465,095
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED STATEMENT OF CASH FLOWS

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

For the financial year ended 31 December 2023
2023 2022
£ £
Operating profit 7,898,287 7,789,316
Adjustment for:
Depreciation and amortisation 50,819 65,492
Loss on sale of plant and equipment 1,034 0
Foreign exchange expense 0 ( 14,040)
Operating cash flows before movement in working capital 7,950,140 7,840,768
(Increase)/decrease in debtors ( 1,850,237) 1,535,970
(Decrease)/increase in creditors ( 938,691) 1,242,661
Cash generated by operations 5,161,212 10,619,399
Income taxes paid ( 1,813,650) ( 198,147)
Interest paid ( 843) ( 2,400)
Net cash flows from operating activities 3,346,719 10,418,852
Cash flows from investing activities
Purchase of plant and machinery ( 8,156) ( 13,651)
Interest received 156,570 1,347
Proceeds on disposal of listed investments 149,948 0
Purchase of fixed asset investments (430,951) (54,190)
Dividends from fixed asset investments 2,277 0
Net cash flows from investing activities ( 130,312) ( 66,494)
Cash flows from financing activities
Payment of finance leases obligations (7,331) (6,332)
Dividends paid (1,657,235) (1,057,783)
Net cash flows from financing activities ( 1,664,566) ( 1,064,115)
Net increase in cash and cash equivalents 1,551,841 9,288,243
Cash and cash equivalents at beginning of year 11,039,102 1,750,859
Cash and cash equivalents at end of year 12,590,943 11,039,102
Reconciliation to cash at bank and in hand:
Cash at bank and in hand at end of year 12,590,943 11,039,102
Cash and cash equivalents at end of year 12,590,943 11,039,102
YELLOW PENCILS HOLDINGS LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
YELLOW PENCILS HOLDINGS LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial year ended 31 December 2023
1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.

General information and basis of accounting

Yellow Pencils Holdings Ltd is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Group's registered office is Stansted Park House Cupola, Rowland's Castle, Hants, PO9 6DX, United Kingdom.

The principal activities are set out in the Strategic Report (page 2).

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Financial Reporting Standard 102 (FRS 102) applicable in the UK and Republic of Ireland issued by the Financial Reporting Council and the requirements of the Companies Act 2006.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

Going concern

The director has assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. The director has a reasonable expectation that the Group has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, he continues to adopt the going concern basis in preparing the financial statements.

Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company, Yellow Pencils Holdings, together with the entity controlled by the parent company (Its subsidiary). No Profit and Loss account is presented for the company as permitted by section 408 of the Companies Act. A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

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 group members.

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.

Change in accounting policies

In the current year, the following new and revised standards and interpretations have been adopted by the company and have had an effect on future periods.

At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:

Foreign currency

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, including commissions earned but excluding discounts, rebates, vale added tax and other sales taxes.

Revenue is recognised (and associated costs expensed) in the month in which the related event is held on the basis that there is no right to revenue until this point. Deferred and accrued income and costs are held on the balance sheet until the event is concluded.

Interest income

Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Dividend income

Dividend income from investments is recognised when the shareholders' rights to receive payment have been established (provided that it is probable that the economic benefits will flow to the group and the amount of revenue can be measured reliably).

Employee benefits

Short term 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.

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

Taxation

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 company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

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 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 when the company has a legal 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.

Intangible assets

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Computer software 3 years straight line
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:

Land and buildings 50 years straight line
Leasehold improvements 5 years straight line
Vehicles 5 years straight line
Fixtures and fittings 3 years 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 credited or charged to profit or loss.

Leases

The group as lessee
Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower, the present value of the minimum lease payments as determined at the inception of the lease) and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the Profit and Loss Account over the period of the leases to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Impairment of assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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 group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

Trade and other debtors

Trade debtors are amounts due from customers for services provided in the ordinary course of business.

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts, except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts.

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 creditors: amounts falling due within one year.

Trade and other creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date.

Trade creditors are recognised at the transaction price and subsequently impaired where needed.

Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income where receivable.

Equity instruments
Equity instruments issued by the group are recorded at the fair value of cash or other resources received or receivable, net of direct issue costs. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Ordinary share capital

The ordinary share capital of the Group is presented as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

2. Critical accounting judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, which are described in note 1, the director is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimate is revised if the revision affects only that financial year, or in the financial year of the revision and future financial years if the revision affects both current and future financial years.

The director does not consider that any critical judgements have been made in the application of the group's accounting policies and no key sources of estimation uncertainty have been identified that have a significant risk of causing a material misstatement to the carrying amount of assets and liabilities within the financial year.

3. Prior year adjustment

The company’s financial statements have been restate to include dividend income from the subsidiary which had not been accrued for. This has resulted in retained earnings at the year end being increased by £2,010,000.

company

As previously reported Adjustment As restated
Year ended 31 December 2022 £ £ £
Dividend Income 390,000 2,010,000 2,400,000
4. Turnover

Turnover represents the fair value of goods/services provided to customers as well as commissions earned during the financial year excluding value added tax.

Breakdown by business class

An analysis of the group's turnover by class of business is set out below.

2023 2022
£ £
Event revenue and commissions receivable 40,413,047 45,856,116

Breakdown by geographical market:

An analysis of the group's turnover by geographical market is set out below.

2023 2022
£ £
United Kingdom 4,939,681 0
Rest of Europe 25,382,090 42,251,758
Rest of the world 10,091,276 3,604,358
40,413,047 45,856,116

An analysis of the group's turnover is as follows:

2023 2022
£ £
Commissions 40,413,047 45,856,116

5. Other operating income

2023 2022
£ £
Commission received 0 508,111

6. Finance income (net)

2023 2022
£ £
Income from other fixed asset investments 2,167 0
Interest receivable and similar income 156,680 5,721
Interest payable and similar expenses ( 844) ( 2,683)
158,003 3,038

7. Profit before taxation

Profit before taxation is stated after charging/(crediting):

2023 2022
£ £
Depreciation of tangible fixed assets (note 14) 47,220 47,224
Amortisation of intangible assets (note 13) 3,599 18,268
Operating lease rentals 5,235 0
Foreign exchange losses/(gains) 114,497 ( 390,865)
Loss on fair value movement of investments (note 15) 53,236 79,125
Fees payable to the company's auditor for the audit of the company's financial statements 36,888 39,409
(Loss) on disposal of tangible fixed assets ( 1,034) 0

8. Auditor's remuneration

An analysis of the auditor's remuneration is as follows:

2023 2022
£ £
Fees payable to the group’s auditor and its associates for the audit of the group's annual financial statements: 15,000 0
Total audit fees 15,000 0
Taxation compliance services 2,000 0
Other services 16,888 0
Total non-audit fees 18,888 0

9. Staff number and costs

Group Group
2023 2022
Number Number
The average monthly number of employees (including directors) was:
Lanza & Baucina Limited 11 10

Their aggregate remuneration comprised:

Group Group
2023 2022
£ £
Wages and salaries 617,667 522,879
Social security costs 81,385 59,067
Other retirement benefit costs 199,523 19,106
898,575 601,052

The parent company had no employees during the year (2022: 0).

10. Director's remuneration

2023 2022
£ £
Director's emoluments 41,001 28,875
Company contributions to money purchase pension schemes 166,665 0
207,666 28,875

Remuneration of the highest paid director

2023 2022
£ £
Remuneration 13,667 9,625
Pension scheme payments 100,000 0
113,667 9,625

11. Tax on profit

2023 2022
£ £
Current tax on profit
UK corporation tax 1,907,809 1,464,644
Total current tax 1,907,809 1,464,644
Total tax on profit 1,907,809 1,464,644
Tax reconciliation

The tax assessed for the year is lower than (2022: higher than) the standard rate of corporation tax in the UK:

2023 2022
£ £
Profit before taxation 8,125,921 7,576,530
Tax on profit at standard UK corporation tax rate of 23.50% (2022: 19.00%) 1,909,591 1,439,541
Effects of:
Expenses not deductible for tax purposes 21,441 17,337
Income not taxable in determining taxable profit ( 33,525) 0
Effect of change in corporation tax rate 1,662 0
Permanent capital allowances in excess of depreciation 8,608 2,078
Depreciation on assets not qualifying for tax allowances 0 5,688
Interest income from transparent investment funds 32 0
Total tax charge for year 1,907,809 1,464,644

12. Dividends on equity shares

2023 2022
£ £
Amounts recognised as distributions to equity holders in the financial year:
Final dividend for the financial year ended 31 December 2023 of £112.50 (2022: £Nil) per ordinary share 348,500 0

13. Intangible assets

Group

Computer software Total
£ £
Cost
At 01 January 2023 55,358 55,358
At 31 December 2023 55,358 55,358
Accumulated amortisation
At 01 January 2023 51,759 51,759
Charge for the financial year 3,599 3,599
At 31 December 2023 55,358 55,358
Net book value
At 31 December 2023 0 0
At 31 December 2022 3,599 3,599

Amortisation of intangible fixed assets is included in administrative expenses.

The parent company holds no intangible assets at the year end (2022: Nil).

14. Tangible assets

Group

Land and
buildings
Leasehold improve-
ments
Vehicles Fixtures and fittings Total
£ £ £ £ £
Cost
At 01 January 2023 1,451,368 149,544 40,808 98,107 1,739,827
Additions 0 0 0 8,156 8,156
Disposals 0 0 0 ( 11,685) ( 11,685)
At 31 December 2023 1,451,368 149,544 40,808 94,578 1,736,298
Accumulated depreciation
At 01 January 2023 280,597 147,865 11,562 82,607 522,631
Charge for the financial year 29,027 915 8,162 9,116 47,220
Disposals 0 0 0 ( 10,651) ( 10,651)
At 31 December 2023 309,624 148,780 19,724 81,072 559,200
Net book value
At 31 December 2023 1,141,744 764 21,084 13,506 1,177,098
At 31 December 2022 1,170,771 1,679 29,246 15,500 1,217,196
Leased assets included above:
Net book value
At 31 December 2023 0 0 21,084 0 21,084
At 31 December 2022 0 0 29,246 0 29,246

The parent company holds no fixed assets at the year end (2022: Nil).

15. Fixed asset investments

Group

Listed investments Other investments Total
£ £ £
Cost or valuation before impairment
At 01 January 2023 454,025 897,201 1,351,226
Additions 150,000 280,951 430,951
Disposals 0 ( 90,951) ( 90,951)
Movement in fair value 140,492 ( 53,236) 87,256
Provision for diminution in value 0 ( 76,623) ( 76,623)
At 31 December 2023 744,517 957,342 1,701,859
Carrying value at 31 December 2023 744,517 957,342 1,701,859
Carrying value at 31 December 2022 454,025 897,201 1,351,226

Company

Investments in subsidiaries Other investments Total
£ £ £
Cost or valuation before impairment
At 01 January 2023 1,224,213 791,564 2,015,777
Additions 0 280,951 280,951
Disposals 0 ( 90,951) ( 90,951)
Movement in fair value 0 ( 53,236) ( 53,236)
Provision for diminution in value 0 ( 76,623) ( 76,623)
At 31 December 2023 1,224,213 851,705 2,075,918
Carrying value at 31 December 2023 1,224,213 851,705 2,075,918
Carrying value at 31 December 2022 1,224,213 791,564 2,015,777

Investments in subsidiaries

The company had the following subsidiary undertaking:

Name of entity Registered office Principal activity Class of
shares
Ownership
31.12.2023
Ownership
31.12.2022
Held
Lanza & Baucina Limited 10 The Village, 101 Amies Street, London, SW11 2JW Tour operator activities Ordinary A & B Shares 60.00% 60.00% Direct

Yellow Pencils Holdings Limited holds both Ordinary class A and B ordinary shares. These shares rank equally in all aspects except for dividend rights attached to them.

16. Debtors

Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Trade debtors 2,326,108 1,580,580 0 0
Other debtors 40,645 22,424 1,350,000 2,010,000
Prepayments and accrued income 1,569,692 483,204 5,774 5,774
3,936,445 2,086,208 1,355,774 2,015,774

17. Cash and cash equivalents

Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Cash at bank and in hand 12,590,943 11,039,102 4,269,719 339,004

18. Creditors: amounts falling due within one year

Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Obligations under finance leases and hire purchase contracts 5,866 5,452 0 0
Director loans (note 22) 566,799 518,517 209,751 209,751
Trade creditors 1,363,401 2,774,499 0 0
Payroll taxes payable 25,665 0 0 0
Taxation and social security 1,558,962 1,481,779 5,865 61,443
VAT 34,338 0 0 0
Accruals and deferred income 4,220,598 3,795,573 20,700 0
Other creditors 777,172 557,834 0 0
8,552,801 9,133,654 236,316 271,194

The group has one outstanding charge over the property known as Apartment 10, 101 Amies Street, London, SW11 2JW. This is secured by fixed and floating charges over the assets of Lanza & Baucina Limited.

19. Creditors: amounts falling due after more than one year

Group Group
2023 2022
£ £
Obligations under finance leases and hire purchase contracts 20,548 28,293

Net obligations under hire purchase contracts are secured against the assets to which they relate.

Finance leases
Group Group
2023 2022
£ £
Between one and two years 0 0
Between two and five years 20,548 28,293
After five years 0 0
20,548 28,293
On demand or within one year 5,866 5,452
26,414 33,745
Director loans
Group Group
2023 2022
£ £
Between one and two years 0 0
Between two and five years 0 0
After five years 0 0
0 0
On demand or within one year 566,799 518,517
566,799 518,517
Total borrowings including finance leases
Group Group
2023 2022
£ £
Between two and five years 20,548 28,293
On demand or within one year 572,665 523,969
593,213 552,262

20. Financial instruments

The carrying values of the group’s financial assets and liabilities are summarised by category below:

Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Financial assets
Measured at fair value through profit or loss
Investments in listed equity instruments (note 15) 744,517 454,025 0 0
Debt instruments measured at amortised cost
Loans receivable (note 15) 851,705 0 851,705 0
Measured at cost less impairment
Unlisted investments 105,637 897,201 0 791,564
Measured at undiscounted amount receivable
Trade debtors (note 16) 2,326,108 1,580,580 0 0
Other debtors (note 16) 40,645 22,424 1,350,000 2,010,000
4,068,612 2,954,230 2,201,705 2,801,564
Financial liabilities
Measured at amortised cost
Bank loans and other loans ( 83,516) ( 28,293) 0 0
Obligations under finance leases 0 ( 5,452) 0 0
Measured at undiscounted amount payable
Trade creditors (note 18) ( 1,363,401) ( 2,774,499) 0 0
Other payables (note 18) ( 715,175) ( 557,834) 0 0
Amounts owed to director (note 18) ( 566,799) ( 518,517) ( 209,751) ( 209,751)
(2,728,891) (3,884,595) (209,751) (209,751)

21. Called-up share capital and reserves

2023 2022
£ £
Allotted, called-up and fully-paid
100 Ordinary shares of £ 1.00 each 100 100
Presented as follows:
Called-up share capital presented as equity 100 100

The Company's other reserves are as follows:

The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.

22. Related party transactions

During the year, dividends amounting to £5,329,275 (2022: £4,000,000) were declared to the shareholders in Lanza & Baucina Limited., of which £1,350,000 (2022: £2,010,000) was due to the parent company at the year end.

At the balance sheet date, £566,799 was due to directors (2022: £518,517).

23. Controlling party

The ultimate controlling party was Mr R V Lanza , a director and shareholder of the Company.