ACCOUNTS - Final Accounts

Analysis of the maturity of loans is given below:

RED SEA HOLIDAYS UK LIMITED - Company Information

Caseware UK (AP4) 2022.0.179 2022.0.179 2022-09-302022-09-30false82021-10-01trueNo description of principal activity6false 06418075 2021-10-01 2022-09-30 06418075 2020-10-01 2021-09-30 06418075 2022-09-30 06418075 2021-09-30 06418075 2020-10-01 06418075 5 2021-10-01 2022-09-30 06418075 5 2020-10-01 2021-09-30 06418075 d:Director3 2021-10-01 2022-09-30 06418075 e:Buildings e:ShortLeaseholdAssets 2021-10-01 2022-09-30 06418075 e:Buildings e:ShortLeaseholdAssets 2022-09-30 06418075 e:Buildings e:ShortLeaseholdAssets 2021-09-30 06418075 e:FurnitureFittings 2021-10-01 2022-09-30 06418075 e:FurnitureFittings 2022-09-30 06418075 e:FurnitureFittings 2021-09-30 06418075 e:FurnitureFittings e:OwnedOrFreeholdAssets 2021-10-01 2022-09-30 06418075 e:OfficeEquipment 2021-10-01 2022-09-30 06418075 e:OfficeEquipment 2022-09-30 06418075 e:OfficeEquipment 2021-09-30 06418075 e:OfficeEquipment e:OwnedOrFreeholdAssets 2021-10-01 2022-09-30 06418075 e:ComputerEquipment 2021-10-01 2022-09-30 06418075 e:ComputerEquipment 2022-09-30 06418075 e:ComputerEquipment 2021-09-30 06418075 e:ComputerEquipment e:OwnedOrFreeholdAssets 2021-10-01 2022-09-30 06418075 e:OtherPropertyPlantEquipment 2021-10-01 2022-09-30 06418075 e:OtherPropertyPlantEquipment 2022-09-30 06418075 e:OtherPropertyPlantEquipment 2021-09-30 06418075 e:OtherPropertyPlantEquipment e:OwnedOrFreeholdAssets 2021-10-01 2022-09-30 06418075 e:OwnedOrFreeholdAssets 2021-10-01 2022-09-30 06418075 e:CurrentFinancialInstruments 2022-09-30 06418075 e:CurrentFinancialInstruments 2021-09-30 06418075 e:Non-currentFinancialInstruments 2022-09-30 06418075 e:Non-currentFinancialInstruments 2021-09-30 06418075 e:CurrentFinancialInstruments e:WithinOneYear 2022-09-30 06418075 e:CurrentFinancialInstruments e:WithinOneYear 2021-09-30 06418075 e:Non-currentFinancialInstruments e:AfterOneYear 2022-09-30 06418075 e:Non-currentFinancialInstruments e:AfterOneYear 2021-09-30 06418075 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2022-09-30 06418075 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2021-09-30 06418075 e:Non-currentFinancialInstruments e:BetweenTwoFiveYears 2022-09-30 06418075 e:Non-currentFinancialInstruments e:BetweenTwoFiveYears 2021-09-30 06418075 e:ShareCapital 2022-09-30 06418075 e:ShareCapital 2021-09-30 06418075 e:ShareCapital 2020-10-01 06418075 e:RetainedEarningsAccumulatedLosses 2021-10-01 2022-09-30 06418075 e:RetainedEarningsAccumulatedLosses 2022-09-30 06418075 e:RetainedEarningsAccumulatedLosses 2020-10-01 2021-09-30 06418075 e:RetainedEarningsAccumulatedLosses 2021-09-30 06418075 e:RetainedEarningsAccumulatedLosses 2020-10-01 06418075 e:AcceleratedTaxDepreciationDeferredTax 2022-09-30 06418075 e:AcceleratedTaxDepreciationDeferredTax 2021-09-30 06418075 d:FRS102 2021-10-01 2022-09-30 06418075 d:Audited 2021-10-01 2022-09-30 06418075 d:FullAccounts 2021-10-01 2022-09-30 06418075 d:PrivateLimitedCompanyLtd 2021-10-01 2022-09-30 06418075 d:SmallCompaniesRegimeForAccounts 2021-10-01 2022-09-30 06418075 2 2021-10-01 2022-09-30 iso4217:GBP xbrli:pure

Registered number: 06418075

RED SEA HOLIDAYS UK LIMITED

FINANCIAL STATEMENTS

INFORMATION FOR FILING WITH THE REGISTRAR

FOR THE YEAR ENDED 30 SEPTEMBER 2022

RED SEA HOLIDAYS UK LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 30 SEPTEMBER 2022

Introduction

The directors present their strategic report for the year ended 30 September 2022.

Business review

The Company is required by the Companies Act 2006 to set out in this report, a fair review of the business of the Company during the financial year ended 30 September 2022, the position of the Company at the end of the period and a description of the principal risks and uncertainties facing the Company. This review is prepared solely to provide additional information to shareholders to assess the Company's strategies and the potential for those strategies to succeed, and the business review should not be relied upon by any other party or for any other purpose.
Despite the uncertainty in the market, as well as a 6-month closure in air travel to Egypt (first six months of the financial year), Red Sea Holidays achieved a turnover of £5,875,205 (2021: £209,178) with a reduced loss after tax of £434,488 (2021: £470,982).
Now that all restrictions relating to Covid have been removed, we have seen confidence dramatically increase from the start of 2023, with a significant increase in sales (+21%) and an increase in average revenues (+17%). Confidence in Egypt as a destination also continues to grow, with a planned 14% increase in UK flying by all major airlines. This reflects the increased demand for great value all-inclusive package holidays where Egypt, as a destination, leads the way. At a time when consumers require a tighter control of their holiday spend, the destination is emerging as a popular choice.
We are well placed to capitalise on the return in demand for holidays to Egypt and predict a significant bounce-back for Summer 2023/Winter 2023. However overall recovery in the wider leisure market is expected to take a number of years to return to pre-Covid levels.

Key performance indicators

		2022	2021
		£	£


Turnover	5,875,205	209,178
Gross profit	318,485	123,482
Gross profit margin	5.42%	59.03%
Loss on ordinary activities before tax	(429,898)	(471,298)
Net current assets	886,204	1,366,339
EBITDA	(407,278)	(463,358)

Page 1

RED SEA HOLIDAYS UK LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 30 SEPTEMBER 2022

Market environment and outlook

The market remained volatile for the UK Travel Industry, with Covid-19 continuing to impact international travel globally. Final restrictions were lifted in March 2022, which allowed the gradual resumption of overseas travel. Whilst this was welcome news, unfortunately no notice was given to allow the travel industry adequate time to plan and resume operations. Given the government backed furlough scheme came to an end 6 months prior to restrictions being lifted, a large number of employees throughout the industry were made redundant. Recruitment and training became and still is a major issue, however as an industry we continue to deliver the level of service our customers expect.
Throughout the summer, UK airlines were forced to cancel a large number of flights owing to airports' inability to service the planned number of aircraft. This had a significant detrimental effect on confidence which was already low, with late cancellations and continued disruption to travel plans. However, despite this, many customers continued to show resilience and confidence in the market and were determined to travel again.
Restrictions and confidence forced most travellers to postpone overseas travel until such time that the situation normalised. This has created a great deal of pent-up demand that we will see materialise over the next 12 months.

Principal risks and uncertainties

The following risk factors may affect the Company's operating results and its financial position. The risk factors described below are those which the directors believe are potentially significant but should not be regarded as a complete and comprehensive statement of all potential risk and uncertainties facing the Company.
- Regulatory risk: The Company is exposed to various regulators, including the Civil Aviation Authority ("CAA"), which issues an Air Travel Organisers Licence ("ATOL"), which is required in order for the Company to operate. This licence is renewed in March each year and is subject to assessments of fitness and financial criteria, the framework of which is available on the CAA website (www.caa.co.uk).
- Geo-political events and natural disasters: The nature of the business operation exposes the Company to a wide range of Geo-political natural disasters. To counter this the Company operate a flexible business model with the ability to shift capacity amongst a variety of destinations where necessary.
- Information technology: The Company is heavily reliant upon information technology. Investment is being made to ensure the Company has advanced and efficient systems in place, but there is a risk if there were a major failure - particularly if it were to affect selling systems. Procedures are in place to minimise the time a selling system is unavailable in the event of such failure.
- Financial risk: The Company operates in a sector that is exposed to the financial risk caused by the volatility of foreign currency exchange rates. The Company is directly exposed to movements in exchange rates as a large proportion of the travel components it sells are denominated in foreign currency. This risk is managed through the use of hedging.
- Economic conditions: The demand for holidays is affected by local economic conditions. The uncertainty created by firstly the COVID-19 pandemic and then the war in Ukraine, and the ensuing volatility in exchange rates and consumer confidence creates a fragile trading environment. Despite the negative impact upon the travel industry, the directors believe that the Company is able to quickly adapt to changes in the local market demand, however a further prolonged period of booking slowdown could adversely affect future financial results and liquidity.

Page 2

RED SEA HOLIDAYS UK LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 30 SEPTEMBER 2022

This report was approved by the board on 14 March 2023 and signed on its behalf.

Peter Joseph Kearns

Director

Page 3

RED SEA HOLIDAYS UK LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED

UNDER SECTION 449 OF THE COMPANIES ACT 2006

Opinion

We have audited the financial statements of Red Sea Holidays UK Limited (the 'Company') for the year ended 30 September 2022, which comprise the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. 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 Company's affairs as at 30 September 2022 and of its loss for the year then ended;

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

∙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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2.2 to the financial statements concerning the Company's ability to continue as a going concern.
As explained in note 2.2, the Covid-19 pandemic had an unprecedented impact upon the global economy and especially upon the travel industry. These problematic trading conditions have negatively impacted the Company’s trade and current assets, as well as its immediate and projected cash flows. The directors' forecasts assume a trading recovery into profitability for the next accounting period, but should there be further economic disruption or travel restrictions, or if cash flows were further impacted by other significant geo-political events, additional funding would likely be needed to support the Company's operations. These conditions, along with other matters explained in note 2.2, could indicate the existence of a material uncertainty if they were come to pass, which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern.
We draw attention to note 2.2 of the financial statements as to the review and actions undertaken by the Board of Directors to ensure that the Company has adequate resources to continue trading for at least 12 months. The financial statements have therefore been prepared on a going concern basis.

Page 4

RED SEA HOLIDAYS UK LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)

UNDER SECTION 449 OF THE COMPANIES ACT 2006

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included, but was not limited to, obtaining and testing the Company's budgets and forecasts for the period ended 31 March 2024, including reviewing the key assumptions behind these from the latest available information, both internal and external; reviewing the continuing steps taken by management to manage liquidity, control current costs, utilise government assistance and raise further finance, including assessing the level and capacity of the on-going support from the Company's majority shareholder; reviewing the Company's continued compliance with its key regulators, the Civil Aviation Authority ("CAA") and the Association of British Travel Agents ("ABTA") and assessing any threat to the continuation of its CAA ATOL licence and ABTA membership; reviewing the minutes of the periodic Board meetings and performing an overall assessment of the Company's internal finance function and controls.

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

Other information

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

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Page 5

RED SEA HOLIDAYS UK LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)

UNDER SECTION 449 OF THE COMPANIES ACT 2006

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the 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:

∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

∙the financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of directors' remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit; or

∙the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Page 6

RED SEA HOLIDAYS UK LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)

UNDER SECTION 449 OF THE COMPANIES ACT 2006

Auditors' responsibilities for the audit of the financial statements

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

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

- We exercise professional judgment and maintain professional skepticism throughout the audit;
- We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the deliberate override of internal control;
- We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control;
- We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made;
- We assess the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
- We review the scope of the Company's compliance with its regulators, the Civil Aviation Authority ("CAA") and the Association of British Travel Agents ("ABTA"), and sample test relevant documentation to access this and the effectiveness of its control environment.
- We request and review the minutes of management meetings, and assess any matters identified not already provided for or disclosed that may materially impact the financial statements;
- We conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

Page 7

RED SEA HOLIDAYS UK LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RED SEA HOLIDAYS UK LIMITED (CONTINUED)

UNDER SECTION 449 OF THE COMPANIES ACT 2006

Other matters

The comparative figures disclosed in the financial statements were not audited.

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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

M S Caldicott ACA FCCA CTA (Senior Statutory Auditor)

for and on behalf of

White Hart Associates (London) Limited

Chartered Accountants and Statutory Auditors

2nd Floor, Nucleus House

2 Lower Mortlake Road

Richmond

TW9 2JA

14 March 2023

Page 8

RED SEA HOLIDAYS UK LIMITED

REGISTERED NUMBER: 06418075

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2022

		2022		2021
Note		£		£

Fixed assets
Tangible assets	4		27,167		3,597
			27,167		3,597
Current assets
Debtors: amounts falling due within one year	5	1,943,114		3,147,388
Cash at bank and in hand	6	665,910		662,777
		2,609,024		3,810,165
Creditors: amounts falling due within one year	7	(1,722,820)		(2,443,826)
Net current assets			886,204		1,366,339
Total assets less current liabilities			913,371		1,369,936
Creditors: amounts falling due after more than one year	8		(3,130,486)		(3,157,153)
Provisions for liabilities
Deferred tax	10	(4,664)		(74)
			(4,664)		(74)
Net liabilities			(2,221,779)		(1,787,291)

Capital and reserves
Called up share capital	30,100	30,100
Profit and loss account	(2,251,879)	(1,817,391)
	(2,221,779)	(1,787,291)

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.

The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 14 March 2023.

Page 9

RED SEA HOLIDAYS UK LIMITED

REGISTERED NUMBER: 06418075

STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT 30 SEPTEMBER 2022

Peter Joseph Kearns

Director

The notes on pages 13 to 23 form part of these financial statements.

Page 10

RED SEA HOLIDAYS UK LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2022

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 October 2020	30,100	(1,346,409)	(1,316,309)
Comprehensive income for the year
Loss for the year	-	(470,982)	(470,982)

At 1 October 2021	30,100	(1,817,391)	(1,787,291)
Comprehensive income for the year
Loss for the year	-	(434,488)	(434,488)
At 30 September 2022	30,100	(2,251,879)	(2,221,779)

The notes on pages 13 to 23 form part of these financial statements.

Page 11

RED SEA HOLIDAYS UK LIMITED

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

			2022	2021
			£	£

Cash flows from operating activities
Loss for the financial year	(434,488)	(470,982)
Adjustments for:
Depreciation of tangible assets	8,526	3,060
Government grants	(5,334)	(102,240)
Interest paid	14,110	5,059
Interest received	(15)	(179)
Taxation charge	4,590	(316)
Decrease/(increase) in debtors	1,192,995	(93,373)
(Decrease)/increase in creditors	(727,674)	396,708
Corporation tax received	11,280	-
Net cash generated from operating activities	63,990	(262,263)

Cash flows from investing activities
Purchase of tangible fixed assets	(32,096)	(3,299)
Government grants received	5,334	102,240
Interest received	15	179
Net cash from investing activities	(26,747)	99,120
Cash flows from financing activities
Repayment of loans	(20,000)	-
Interest paid	(14,110)	(5,059)
Net cash used in financing activities	(34,110)	(5,059)
Net increase/(decrease) in cash and cash equivalents	3,133	(168,202)
Cash and cash equivalents at beginning of year	662,777	830,979
Cash and cash equivalents at the end of year	665,910	662,777

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	665,910	662,777
	665,910	662,777

The notes on pages 13 to 23 form part of these financial statements.

Page 12

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

1.	General information

Red Sea Holidays UK Limited (the 'company') is a private company limited by shares and is registered and incorporated in England and Wales. The registered office is 5 New Street Square, London, EC4A 3TW.
The company's principal activities are disclosed in the Directors Report.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

2.2

Going concern

The Covid-19 pandemic had an unprecedented impact upon the global economy and in particular upon the travel industry, causing many consumers to cancel, amend their travel arrangements or not travel at all, leaving companies with greatly reduced cash flows. The travel industry is experiencing the benefit of a post Covid-19 bounce back in travel, however there is still some customer unease in relation to the current economic environment with increasing energy costs and inflation. This has required the directors and management to continue to review the Company’s financial position, as well as its budgets and forecasts, and plan mitigation actions in order to neutralise, and ultimately recover from, the financial impact from the significant downturn in trading seen during the Covid-19 pandemic period. The major part of this has been the injection of an interest free loan from the principal shareholder and director, which has been subordinated to the Civil Aviation Authority ("CAA") and which cannot be repaid without their prior written consent. The shareholder/director has also confirmed he will provide additional support to the Company if required.
As a result of these reviews and forecasts, and specifically the continuing support of the principal shareholder/director, the Company's directors and management have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being at least the following 12 months from the signing of these financial statements. This is also supported by the strong performance seen so far in early 2023, which has seen a significant upside in demand. The Company has been well placed to meet and service the additional volume.
As a result, the directors believe that it is still appropriate to apply the going concern basis for the foreseeable future.

Page 13

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

2.4

Revenue and associated costs

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover represents customer bookings where the date of departure has taken place during the period or when all services have been satisfied in the period. The direct expenses relating to these bookings are recognised in line with the associated turnover on the same basis. Direct expenses include all accommodation and transport costs which are classified as “cost of sales” within the Statement of Comprehensive Income.
Transactions relating to customer bookings are recognised in the financial statements at the point the payment is received and recorded in advanced deposits. This treatment reflects the fact that customers retain the right to change or cancel their booking up to the date of departure. Transactions relating to customers’ bookings are reflected in turnover on the date of departure of travel.
Cancellation revenue is recognised at the point of cancellation.

Page 14

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

2.6

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 15

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold property improvements	-	20-25%
Fixtures and fittings	-	25%
Office equipment	-	25%
Computer equipment	-	33%
Computer software	-	33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 16

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

Page 17

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

2.Accounting policies (continued)

2.17

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.

Employees

The average monthly number of employees, including directors, during the year was 6 (2021 - 8).

Page 18


		RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2022

	4.	Tangible fixed assets

	Leasehold property improvements	Fixtures and fittings	Office equipment	Computer equipment	Computer software	Total
	£	£	£	£	£	£
Cost or valuation
At 1 October 2021	30,707	18,537	2,441	23,113	43,552	118,350
Additions	-	-	-	-	32,096	32,096
At 30 September 2022	30,707	18,537	2,441	23,113	75,648	150,446
Depreciation
At 1 October 2021	30,707	18,503	2,393	19,650	43,501	114,754
Charge for the year on owned assets	-	34	35	2,164	6,292	8,525
At 30 September 2022	30,707	18,537	2,428	21,814	49,793	123,279
Net book value
At 30 September 2022	-	-	13	1,299	25,855	27,167
At 30 September 2021	-	34	49	3,463	51	3,597

Page 19

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

Debtors

					2022	2021
					£	£


Trade debtors	17,939	(681)
Other debtors	24,848	17,685
Prepayments and accrued income	1,900,327	3,130,384
	1,943,114	3,147,388

Included in prepayments and accrued income above is the sum of £1,853,856 (2021: £3,044,563) which relates to advance supplier payments for bookings departing from 1 October 2022 onwards.

6.	Cash and cash equivalents
		2022	2021
		£	£

Cash at bank and in hand	665,910	662,777
	665,910	662,777

Restricted funds: Included in cash at bank is the sum of £554,191 (2021: £642,744) held in an independent professionally administered Civil Aviation Authority (“CAA”) ATOL Trust Account. A proportion of consumer collected funds from the sale of ATOL protected flight package bookings are deposited into the trust and are restricted until released to the company by the trustee based upon a set of predetermined rules agreed with the CAA.

7.	Creditors: Amounts falling due within one year
		2022	2021
		£	£

Bank loans (CBILS)	26,667	20,000
Trade creditors	488,752	570,693
Other taxation and social security	161,950	209,710
Other creditors	129,353	492,814
Accruals and deferred income	916,098	1,150,609
	1,722,820	2,443,826

Included in accruals and deferred income above is the sum of £884,531 (2021: £1,136,737) which relates to advance customer receipts for bookings departing from 1 October 2022 onwards.

Page 20

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

8.	Creditors: Amounts falling due after more than one year
		2022	2021
		£	£

Bank loans (CBILS)	73,333	100,000
Other creditors	3,057,153	3,057,153
	3,130,486	3,157,153

The full amount shown as other creditors above, which relates to a loan from a director, is subject to subordinated undertakings in favour of the Civil Aviation Authority ("CAA") and cannot be repaid without their prior written consent (see note 14).

Amounts falling due within one year
Bank loans (CBILS)	26,667	20,000
	26,667	20,000
Amounts falling due 1-2 years
Bank loans (CBILS)	26,667	26,667
	26,667	26,667
Amounts falling due 2-5 years
Bank loans (CBILS)	46,666	73,333
	46,666	73,333

	100,000	120,000

The above loan is a bank loan from the Company's bankers, Barclays Bank Plc, amounting to £120,000, drawn down in June 2020 and supported by the Coronavirus Business Interruption Loan Scheme (CBILS). The loan is for a term of 5 and a half years with no capital repayments or interest payable for the first 12 months. An interest rate of 2.5% per annum applies thereafter.

Page 21

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

10.	Deferred taxation

		2022
		£

	At beginning of year	(74)
	Charged to profit or loss	(4,590)
	At end of year	(4,664)

The provision for deferred taxation is made up as follows:
	2022	2021
	£	£

	Accelerated capital allowances	(4,664)	(74)
		(4,664)	(74)

11.	Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £15,744 (2021: £15,944). Contributions totalling £Nil (2021: £Nil) were payable to the fund at the reporting date.

Page 22

RED SEA HOLIDAYS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

12.	Related party transactions
	Mohamed Abd-Elfattah, a director and principal shareholder, has provided the company with an interest free loan of £3,057,153 (2021: £3,057,153). The loan cannot be repaid without obtaining written consent from the Civil Aviation Authority ("CAA") and is classified as due more than one year in the statement of financial position.

13.	Controlling party

Mohamed Abd-Elfattah, a director of the company, controls the company as a result of directly controlling 75% of the issued share capital of the company.

Page 23