Fivepals UK Limited - Limited company accounts 20.1

REGISTERED NUMBER: 09463575 (England and Wales)

Report of the Director and

Audited Financial Statements for the Year Ended 31 December 2020

for

Fivepals UK Limited

Page

Company Information

1

Report of the Director

2

Report of the Independent Auditors

3

Income Statement

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTOR:

J Effron

SECRETARY:

P R Sandringham

REGISTERED OFFICE:

The Old Courtyard

11 Lower Cookham Road

Maidenhead

Berkshire

SL6 8JN

REGISTERED NUMBER:

09463575 (England and Wales)

SENIOR STATUTORY AUDITOR:

PAUL LAIRD FCCA

AUDITORS:

Azets Audit Services

The Mill House

Boundary Road

Loudwater

High Wycombe

Buckinghamshire

The director presents his report with the financial statements of the company for the year ended 31 December 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of web-based task-tracking and concierge services to hotel chains and their guests.

DIRECTOR

J Effron held office during the whole of the period from 1 January 2020 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Report of the Director 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). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing 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;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he 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 auditors are aware of that information.

AUDITORS

The auditors, Azets Audit Services, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

P R Sandringham - Secretary

7 April 2021

Qualified Opinion

We have audited the financial statements of Fivepals UK Limited (the 'company') for the year ended 31 December 2020 which comprise the profit and loss account, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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, except for the incomplete disclosure of the information referred to in the basis for qualified opinion section of our report:

-

give a true and fair view of the state of the company's affairs as at 31 December 2020 and of its profit 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

As discussed in Note 1, the company has net liabilities of £227,995 as at 31 December 2020 and relies on the immediate and ultimate controlling parent companies for financial support to be considered a going concern. We were unable to obtain sufficient and appropriate audit evidence of the ultimate controlling parent's intention to provide the necessary financial support to the company. This situation indicates that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. The financial statements do not adequately disclose this matter.

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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

We draw attention to note 1 in the financial statements, which indicates that the company has net liabilities of £227,995 as at 31 December 2020 and relies on the immediate and ultimate controlling parent companies for financial support to be considered a going concern. The financial statements indicate that the company incurred a profit of £13,167 during the year ended 31 December 2020 (2019: loss £8,161) and, as at that date, the company's current liabilities exceeded its total assets by £227,995 (2019: net liabilities £241,162). As stated under the basis for qualified opinion above, these conditions, along with the other matters as set forth above indicate that a material uncertainty exists that 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 opinion has been modified in respect of this matter.

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-

the information given in the directors' report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and

-

the directors' report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Director.

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

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

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

-	certain disclosures of director's remuneration specified by law are not made; or

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

-	the director was not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Director.

Responsibilities of director

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

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 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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council's website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

-

Enquiry of management and those charged with governance around actual and potential litigation and claims as
well as actual, suspected and alleged fraud;

-

Reviewing minutes of meetings of those charged with governance;

-

Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on
the financial statements or the operations of the company through enquiry and inspection;

-

Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with
applicable laws and regulations;

-

Performing audit work over the risk of management bias and override of controls, including testing of journal
entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions
outside the normal course of business and reviewing accounting estimates for indicators of potential bias.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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 override of internal control.

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 Report of the Auditors.

Use of our report

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

PAUL LAIRD FCCA (Senior Statutory Auditor)

for and on behalf of Azets Audit Services

The Mill House

Boundary Road

Loudwater

High Wycombe

Buckinghamshire

13 April 2021

TURNOVER

237,442

303,175

Administrative expenses

249,169

311,336

(11,727

)

(8,161

)

Other operating income

24,894

-

OPERATING PROFIT/(LOSS) and

PROFIT/(LOSS) BEFORE TAXATION

13,167

(8,161

)

Tax on profit/(loss)

7

-

PROFIT/(LOSS) FOR THE FINANCIAL
YEAR

13,167

(8,161

)

PROFIT/(LOSS) FOR THE YEAR

13,167

(8,161

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

13,167

(8,161

)

CURRENT ASSETS

Debtors

8

10,743

19,194

Cash in hand

16,560

6,722

27,303

25,916

CREDITORS

Amounts falling due within one year

9

255,298

267,078

NET CURRENT LIABILITIES

(227,995

)

(241,162

)

TOTAL ASSETS LESS CURRENT
LIABILITIES

(227,995

)

(241,162

)

CAPITAL AND RESERVES

Called up share capital

10

1,000

Retained earnings

11

(228,995

)

(242,162

)

SHAREHOLDERS' FUNDS

(227,995

)

(241,162

)

The financial statements were approved by the director and authorised for issue on 7 April 2021 and were signed by:

J Effron - Director

Called up

share

Retained

Total

capital

earnings

equity

£

Balance at 1 January 2019

1,000

(234,001

)

(233,001

)

Changes in equity

Deficit for the year

-

(8,161

)

(8,161

)

Total comprehensive income

-

(8,161

)

(8,161

)

Balance at 31 December 2019

1,000

(242,162

)

(241,162

)

Changes in equity

Profit for the year

-

13,167

Total comprehensive income

-

13,167

Balance at 31 December 2020

1,000

(228,995

)

(227,995

)

1.	GOING CONCERN

The company has net liabilities of £227,995 as at 31 December 2020 (2019: net liabilities £241,162). The Financial Statements have been prepared on the going concern basis as the director considers that adequate support from the parent company and ultimate parent company will be provided in order for the company to meet its ongoing financial commitments as they fall due for at least 12 months from the date of approval of the Financial Statements.

The COVID-19 pandemic and the ensuing economic shutdown has not had a significant impact on the company's operations. In response to the COVID-19 pandemic, the Directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from the impact of COVID-19. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.

Based on these assessments and having regard to the resources available to the entity, the Directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the accounts.

2.	STATUTORY INFORMATION

Fivepals UK Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and
11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirement of paragraph 33.7.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover comprises of a monthly fee pursuant to a transfer pricing agreement with the parent company whereby revenue is recognised as related to expensed items over the period necessary to match the revenue on a systematic basis to the costs it is intended to compensate.

Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

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

Basic financial instruments

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditor are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

4.	EMPLOYEES AND DIRECTORS

31.12.20

31.12.19

£

Wages and salaries

192,521

219,173

Social security costs

14,558

24,183

Other pension costs

5,725

4,419

212,804

247,775

The average number of employees during the year was as follows:

31.12.20

31.12.19

Sales & Marketing

2

31.12.20

31.12.19

£

Director's remuneration

-

5.	OPERATING PROFIT/(LOSS)

The operating profit (2019 - operating loss) is stated after charging:

31.12.20

31.12.19

£

Foreign exchange differences

-

12,465

6.	AUDITORS' REMUNERATION

31.12.20

31.12.19

£

Fees payable to the company's auditors for the audit of the company's
financial statements

5,750

3,500

7.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 31 December 2020 nor for the year ended 31 December 2019.

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.20

31.12.19

£

Amounts owed by group undertakings

10,583

18,660

VAT

160

534

10,743

19,194

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.20

31.12.19

£

Trade creditors

962

690

Amounts owed to group undertakings

245,135

245,137

Social security and other taxes

1,066

9,204

Pension Fund

(115

)

1,937

Accrued expenses

8,250

10,110

255,298

267,078

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.20

31.12.19

value:

£

1,000

Ordinary shares

1

1,000

11.

RESERVES

Retained

earnings

£

At 1 January 2020

(242,162

)

Profit for the year

13,167

At 31 December 2020

(228,995

)

12.	ULTIMATE CONTROLLING PARTY

The controlling party is Fivepals Inc.

The ultimate controlling party is Expedia Inc.

The principal office address: 104 West 27th Street, 6th Floor, New York, NY 10001, USA.

The ultimate controlling party address: 333, 108th Avenue Bellevue, Washington, WA 98004, USA