Focused For growth annual report & accounts 2010
t ravelzest plc a nnual r eport & a ccounts 2010
Travelzest plc
2350 Matheson Blvd. East
Mississauga
Ontario L4W 5G9
Canada
UK T el : 0844 335 6623
UK Fax : 020 7000 1200 
www.travelzestplc.com designed and produced by
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Company registration number 
04520457
Registered office
2nd Floor Delta Place 
27 Bath Road 
Cheltenham  
Gloucestershire  
United Kingdom 
GL53 7TH
Principal place of business 
2350 Matheson Boulevard East 
Mississauga 
Ontario 
Canada 
L4W 5G9 
0844 335 6623 
Executive Directors 
J G Carroll 
J C Fraser
Non-executive Directors 
R G Hall 
N J Jenkins 
M T J Molyneux (Chairman)
Company Secretary
R G Hall
Bankers
Barclays Bank plc 
Pall Mall Corporate Group 
80 Pall Mall 
London 
United Kingdom 
SW1A 1QA
Solicitors
DLA Piper UK LLP 
3 Noble Street 
London 
United Kingdom 
EC2V 7EE
Nominated Advisor
Investec Bank plc 
2 Gresham Street 
London  
United Kingdom 
EC2V 7QP
Broker
Merchant Securities Limited 
51-55 Gresham Street 
London 
United Kingdom 
EC2V 7HQ
Auditor
PricewaterhouseCoopers LLP 
10 Bricket Road 
St Albans 
Hertfordshire 
United Kingdom 
AL1 3JX
61
c ompany In Format Ion Business Profile The Year in r eview consolida Ted financial sT a Temen Ts com Pan Y f inancial sT a TemenTs Our vision    01
Highlights   02
At a glance   04
Chairman’s statement  06 
Chief Executive’s statement 08 
Governance:
Board of Directors 10
Directors’ report  12
Independent auditors’ report  50
Company balance sheet  51
Company statement of  
changes in equity  52
Company principal  
accounting policies  53
Notes to the Company  
financial statements   55
Company information 61
Independent auditors’ report  16
Principal accounting policies 17
Consolidated income  
statement   24
Consolidated statement of 
comprehensive income 25
Consolidated balance sheet 26
Consolidated cash flow  
statement  27
Consolidated statement of  
changes in equity 28
Notes to the consolidated  
financial statements  29
 · Pos T Turnaround grow Th 
In 2009 and 2010 management began a strategic exercise to reduce 
operating expenses by shifting from a brand-based to a functionally-
based organisation. This shift allowed for the consolidation of 
numerous systems and offices, more efficient strategies and 
management of resources and a lower cost base upon which to 
develop the Group. 
 · l eading marke T Brands 
The Group has various well recognised brands in the UK and  
North America. Its leading brand in Canada is itravel2000, which  
firmly holds a leading market position in the leisure travel sector.
 · e x Perienced managemen T Team 
Our team is comprised of travel professionals with great 
depth and experience in specialist travel products and online 
and offline retailing, together with non-travel professionals who 
provide new thinking to the Group.
 · c ohesive s YsT ems  
We have instilled improved management and control by significantly 
reducing the number of independent systems in the Group. 
 · e conomies of scale 
The Group handles over 300,000 passengers per year, over  
2 million room nights, to over 500 destinations. A unified 
contracting strategy has now been implemented in the Group,  
which will provide for improved margins and access to inventory.
 · sP ecialisT Brands  
We continue to develop various specialist agency and merchant  
brands that will allow us to create and manage our customer 
experience in a more informed and controlled manner.
Travel Zes T is an emerging Travel grou P  
wi Th cross conTinenT re Tail Brands 
and inTegra Ted Tour o Pera Tions To 
some of The mosT a TTrac Tive Travel 
desTina Tions in The world . 01
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Business Profile
Our visi On
o ur vision is To B e a highly P rofi Ta Ble, 
susT aina Ble high-grow Th Travel grou P 
offering Travellers The B esT availa Ble online 
and offline T ravel re Tail service and a range 
of s Pecialised holiday ex Periences. 
* For our companies, see ‘structure’ page 5
TO Pr Ovide Our Cus TOmers wi Th The h ighes T Quali Ty O f servi Ce P Ossible
•	 Consistent delivery
•	 Quality of product 
and service
•	 Exclusivities
inTegra Ted
Offerings
•	 Extensive knowledge
•	 Customer focused
•	 Product range
“Trus Ted  
adviser”
agen Cy *
OPera TiOns
•	 Specialist knowledge
•	 Unique offerings
•	 Purchasing power
“de s Tina TiOn 
ex PerT ise”
m erC han T
*
OPera TiOns 02
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Key operating margins
Gr oss	 pr ofit 	 %															 COS 	 %															 Underl ying 	 operating	 pr ofit 	 %
highligh Ts
we are deligh Ted  
By The grou P’s 
Bes T Performance 
on record
+15%
TOT al 	 
T r a n S a C T i O n	v a l U e
increased to £217.6 million 
(2009: £189.5 million)
+513%
C a S h	f r O m	 
Oper a T i On S
increased to £4.9 million  
(2009: £0.8 million)
+18%
G r OS S	 
pr O f i T
increased to £24.5 million  
(2009: £20.8 million  
re-presented)
•	 recor d	le v el	of	underl ying*	operating	pr ofit	incr eased	11%	
to £6.1 million (2009: £5.5 million)
•	 recor d	le v el	of	underl ying	operating	pr ofit	less	separatel y	
disclosed	items, 	which	incr eased	56%	to	£4.2	million	 
(2009: £2.7 million) 
•	 re v en ue	value	incr eased	14%	to	£43.8	million	(2009: 	 
£38.3	million)
•	 Separatel y	disclosed	items	decr eased	32%	to	£1.9	million 
(2009: £2.8 million)
•	 Basic 	 loss 	 per 	 shar e 	 of 	 8.80p 	 (2009: 	 1.52p 	 pr ofit 	 per 	 shar e), 	 
which was negatively affected primarily due to a charge of 
£11.3 	 million 	 f or 	 goodwill	impairment	
finan Cial highlighT s
T otal	transaction	value													Gr oss	pr ofit													Cash	fr om	operations
200
2007 2008 2009 2010
160
240
120
80
40
-40
0
20
10
30
40
50
0
-10
200
2007 2008 2009 2010
160
240
120
80
40
-40
0
20
10
30
40
50
0
-10
169.9
179.2
189.5
217.6
Key Financials
TTV £m % of revenue
2.8 (4.1) 0.7 4.2
GP & NOC £m
*	 Underl ying	operating	pr ofit	is	adjusted	f or	amor tisation	of	intangible	assets	and	
g oodwill	impairment, 	separatel y	disclosed	items	and	excludes	the	pr ofit	and	loss	
impact of options and warrants
20.6
22.4
20.8
24.5 03
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Business Profile
d esigned for 
grow Th and 
scala BiliT y 
9 4 
 
r e S e r v a Ti O n 	S y STe m S
p r o v i d i n g	e f fi c i e n t	p r o d u c t	
management and pricing 
4 1
 
a C CO U n Ti n G	S y STe m S
Central Controls Policies  
&	m a n a g e m e n t
7 3
 
U K	O f f i C e S
l au n c h	o f	C h e l t e n h a m	 
o f fi ce	p r o v i d e s	u n i fi e d	G r o u p	
management
•	 Unification	of	gr oup	strategies	and	operations	le v eraging	
resources and ideas across the Group
•	 Contin ued	str ong	perf ormance	fr om	the	Gr oup’ s	nor th	
american	operations
•	 launch	of	luxur y	brand	 T ra v elzest	holida ys	to	UK	 
market to promote all merchant product through one 
distribution	channel
•	 Consolidation	of	UK	Operations	
 – reduction	fr om	se v en	offices	to	thr ee , 	with	launch	of	
main	Cheltenham	hub	
 – Reduction of reservation and inventory management 
systems from seven to two
 – Reduction from four accounting systems to one 
integrated system
•	 i ndependent 	 r ecognition 	 fr om 	 industr y 	 obser v ers 	 of 	 the	
quality 	 of 	 ser vice 	 pr o vided 	 b y 	 T ra v elzest 	 Gr oup , 	 including:
 – itravel2000 named one of six “Funtastic” travel partners for 
2010 	 b y 	 Carnival 	 Cruise 	l ines 	 and 	 the 	 onl y 	 Canadian 	
partner in the group
 – itra v el2000 	 r ecognised 	 b y 	 Super 	 Clubs 	 as 	 Canada’ s 	 T op	
Producing agency in 2010 for the sixth year running
 – The 	 Cruise 	p r of essionals 	 ackno wledged 	 as 	 One 	 of 	 
the 	 W orld’ s 	 126 	 T op 	 T ra v el 	 Specialists 	 b y 	 the 	 elite 	 Conde 
n ast 	 T ra v eller 	 magazine	
OPera TiOnal highlighT s 04
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
a T a glan Ce
T r av e l z e s t 	 i s 	 a 	 d i v e r s e 	 g r o u p 	 o f 	 b r a n d s 	 t h a t 	 s e r v i c e s	
t h r e e 	 m a r ke t s , 	 t h e 	 U K , 	 U S a	 a n d 	 C a n a d a , 	 w i t h 	 C a n a d a 	
r e p r e s e n t i n g 	 8 8 % 	 o f 	 o u r 	 t o t a l 	 b o o k i n g s , 	 t h e 	 m a j o r i t y 	 o f	
w h i c h 	 a r e 	 g e n e r a t e d 	 t h r o u g h 	 o u r 	 m a r ke t 	 l e a d i n g 	 b r a n d	
i t r av e l 2 0 0 0 . 	 W e 	 c o n t i n u e 	 t o 	 d e v e l o p 	 o u r 	 l u x u r y 	 b r a n d s 	 a n d 	
o p e r a t i o n s 	 i n 	 t h e 	 U K 	 a n d 	n o r t h 	a m e r i c a 	 u n d e r 	 T r av e l z e s t	
h o l i d ay s 	 a n d 	 T h e 	 C r u i s e 	p r o f e s s i o n a l s , 	 a n d 	 t o 	 r e v i e w 	 n e w	
opportunities to develop a mid market offering in the UK.
T r av e l z e s t 	 c o n t i n u e s 	 t o 	 d e v e l o p 	 i t s 	 o n l i n e 	 c a p a b i l i t i e s ,	
w h i c h 	 c u r r e n t l y 	 r e p r e s e n t 	 3 8 % 	 o f 	 o u r 	 t o t a l 	 b o o k i n g s .	
W i t h 	 c o n s u m e r s 	 i n 	n o r t h 	a m e r i c a 	 a n d 	 t h e 	 U K 	 i n c r e a s i n g	
their shopping and purchasing of travel through the online 
c h a n n e l s , 	 T r av e l z e s t 	 i s 	 p o s i t i o n i n g 	 i t s 	 b r a n d s 	 a s 	 a n 	 a t t r a c t i v e	
choice for consumers.
Priorities for 2010–2011
• l aunch 	 of 	 T ra v elzest 	 h olida ys 	 into 	 n or th 	 a merican 	 mark et
• integration	of	ne w	pr oduct	into	distribution	channels
• Develop advanced online tools
• De v elop	the	 T ra v elzest	holida ys	brand	in	the	UK
• Office	consolidation	in	Canada
O nli ne	3 8 % O f fl i n e 	 6 2 %
Bookings by sales channel
marke Ts
U S 	 5%	 C a n a d a 	 8 8 %
U K 	 7 %
Bookings by region 
TravelZes T’s 
s Tra Tegy is T o 
develoP  a unified 
Travel grouP 05
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Business Profile
1 Strengthen retail offering with more product choice
2
Development of upper mid-market and luxury 
s e g m e n t	u n d e r	T r a v e l z e s t	h o l i d a y s	b r a n d
3
Reduce cost of post sale servicing through 
development of advanced online tools
4
Development of regional markets with new 
advertising and promotional campaigns
5
i n c r e a s e	c u s t o m e r	r e t e n t i o n	t h r o u g h	i m p r o v e d	 
service and expanded product awareness
O u r	U K	s t r a t e g y	i s	t o	c o n t i n u e	t o	d e v e l o p	t h e	T r a v e l z e s t	
h o l i d a y s	b r a n d ,	w h i c h	w a s	l a u n c h e d	i n	l a t e	2 0 1 0 .	T h e	s t r a t e g y	
f o r	T r a v e l z e s t	h o l i d a y s	i s	t o	b r i n g	t o g e t h e r	t h e	v a r i o u s	
m e r c h a n t	b r a n d s	i n	t h e	G r o u p	u n d e r	a	s i n g l e	d i s t r i b u t i o n	
p l a t f o r m .	W e	w i l l	a l s o	b e	i n t r o d u c i n g	a d d i t i o n a l	p r o d u c t s	
from third parties that meet our commitment to superior 
q u a l i t y	a n d	s e r v i c e ,	a n d	i n t r o d u c i n g	t h e	b r a n d	t o	t h e	n o r t h	
a m e r i c a n	m a r k e t	t o	f u r t h e r	d e v e l o p	o u r	l u x u r y	o f f e r i n g .
T h e 	 C r u i s e 	p r o f e s s i o n a l s 	 i s 	 o u r 	 s t r o n g e s t 	 l u x u r y 	 r e t a i l 	 b r a n d	
and we will continue to review opportunities to promote 
a n d 	 s e r v i c e 	 c o n s u m e r s 	 i n 	n o r t h 	a m e r i c a 	 a n d 	 U K 	 t h r o u g h	
n e w 	 d i s t r i b u t i o n 	 c a p a b i l i t i e s 	 a n d 	 p r o d u c t 	 o f f e r i n g s .
i t r av e l 2 0 0 0 	 c o n t i n u e s 	 t o 	 b e 	 T r av e l z e s t ’ s 	 s t r o n g e s t 	 a n d	
l a r g e s t 	 a s s e t 	 w i t h 	 t h e 	 b r a n d 	 r e p r e s e n t i n g 	 a 	 s u b s t a n t i a l	
p o r t i o n 	 o f 	 o u r 	 b o o k i n g 	 v o l u m e 	 a n d 	 r e v e n u e . 	 W e 	 w i l l	
c o n t i n u e 	 t o 	 d e v e l o p 	 t h e 	 i t r av e l 2 0 0 0 	 b r a n d 	 i n 	 C a n a d a	
a n d 	 e x p a n d 	 i t s 	 v i s i b i l i t y 	 i n 	 r e g i o n a l 	 m a r ke t s 	 t h r o u g h 	 n e w	
promotions and product offerings.
g r Ou P s Tra Tegy
Agencies
l u x u r y	 
Segment
Upper 
m i d 	m ar k e t	
Segment
m i d 	m a r k e t
Segment
Merchants
a f ri c a a s i a Europe
n o r t h	
a m eri c a
South 
a m eri c a
Cu b a C a r i b be an m i d	e a s t
 s TruCT ure
United Kingdom n o r t h	a m e r i c a 06
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
The	y ear	to	31	October	2010	was	the	
first	full	y ear	f or	 T ra v elzest	under	the	
executive leadership of Jonathan Carroll 
and Jack Fraser, who were appointed in 
ma y	2009. 	it	was	a	y ear	of	pr ogr ess	 
and improvement. 
The restructuring of the Group’s  
operations, which commenced in 2009, 
continued apace and this investment has 
begun	to	yield	benefits. 	 W e	simplified	
our operating structure and now have 
 an integrated and common approach  
to advertising, marketing, product 
purchase and support services. The  
aim	of	this	simplification	is	to	pr o vide	
better	management	of	our	businesses	
and share common skills and customer 
inf ormation	betw een	our	nor th	
american	and	UK	operations. 	
The consequence of this reorganisation 
is	that	 T ra v elzest	is	e v olving	fr om	a	gr oup	
of	independentl y	managed	businesses	
to	a	single , 	unified	entity	with	common	
controls, processes and governance. This 
giv es	gr eater	efficiency	and	will	pr o vide	
inf ormation	to	enable	us	to	manage	the	
Group effectively.
The Group sells overseas holidays and 
travel to clients who live mainly in the 
United	Kingdom	and	nor th	 america. 	
Our	model	pr o vides	us	with	a	div ersity	
of geography, currency, seasonality and 
distribution. 	 This	div ersity	is	a	str ength	in	
an industry where an excessive exposure 
to any of these risks is potentially very 
damaging. 	 The	po w er	of	 T ra v elzest’ s	
brands	and	the	r etailing	ability	of	our	
businesses, 	par ticularl y	those	in	Canada, 	
gives us attractive markets to exploit 
and	the	ability	to	cr eate	value	f or	
shar eholders. 	 T ra v elzest’ s	ambition	is	to	
be	our	customers’	adv ocate	in	finding	
them the most attractive holidays and 
the	best	experiences. 	
y our	Boar d	is	v er y	pleased	with	the	
progress made. We expect to see 
ad ditional	benefits	of	the	r eorganisation	
in	f or thcoming	y ears	and	belie v e	the	
Group is well positioned to prosper 
through the market and economic cycles 
which are a feature of the travel industry.
We are also in the process of discussing 
with	a	n umber	of	UK	and	Canadian	
banks	a	r efinancing	of	our	facilities	on	
more advantageous terms than those 
that	w e	cur r entl y	enjo y . 	Once	in	place , 	
this will put the Group in a yet stronger 
position to capitalise on the market 
opportunities that we foresee.
Results 
Total transaction value has grown  
15% 	 to 	 £217.6 	 million 	 fr om 	 £189.5	
million. 	r e v enue 	 incr eased 	 14% 	 to 	 
£43.8 	 million 	 fr om 	 £38.3 	 million. 	 
Gross 	 profit 	 impro ved 	 18% 	 to	 
£24.5 million from £20.8 million, and 
underl ying	operating	pr ofit	bef or e	
separately disclosed items increased  
11%	to	£6.1	million	fr om	£5.5	million. 	
as	par t	of	the	Gr oup	r estructuring	 
that	has	been	under tak en, 	y our	Boar d	
has decided to write-off the remaining 
goodwill 	 of 	 £11.3 	 million 	 r elating 	 to 	 our	
UK 	 businesses. 	 This 	 decision	was	tak en	
after reviewing the performance of the 
UK operations since they were acquired 
and	the	ability	of	the	UK	operations	to	
generate improved returns in the near 
future. 
Chairman’s s Ta Temen T
The year 
of P rogress  
and 
im Provemen T 07
The y ear in r eview Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
g rou P is well 
Posi Tioned  
To Pros Per The 	 basic 	 loss 	 per 	 shar e 	 of 	 8.80p	 
(2009: 	 1.52p 	 pr ofit 	 per 	 shar e) 	 is 	 
based 	 on 	 a 	 loss 	 of 	 £12,769,000	 
(2009: 	 pr ofit 	 of 	 £719,000) 	 and 	
145,136,110	(2009: 	47,231,425)	shar es 
of	2p , 	being	the	a v erage	n umber	of	
shares in issue during the year.
The Company ended the year with net 
debt	of	£8.8	million	(2009: 	£9.6	million).
a	description	of	the	perf ormance	of	the	
Group’s operations is given in the Chief 
Executive’s statement.
Acquisitions
The Board is dedicated to creating  
value for shareholders and we will 
continue to explore opportunities to 
acquir e	businesses, 	at	the	right	price , 	
which complement the Group’s strategy 
and operational structure.
People
i	thank	all	who	w ork	f or	the	 T ra v elzest	
group of companies for their dedication 
and	endea v our . 	ev er y	y ear	brings	its	
challenges in the travel industry and 
last year was no exception. We had a 
difficult	economic	en vir onment	on	both	
sides	of	the	 atlantic , 	compounded	b y	
the quite unforeseen disruption caused 
b y	the	icelandic	ash	cloud. 	 Thr oughout, 	
our	people	w ork ed	har d	and	selflessl y , 	
ser ving	our	clients	and	helping	build	a	
successful	 T ra v elzest.
Peter Thomson retired as a non-
ex ecutiv e	Dir ector	on	12	mar ch	2010. 	
Peter was always independent and 
challenging and we thank him for 
his service. We are fortunate that 
n igel 	 J enkins 	 joined 	 the 	 Board 	 on 	
12	 april	2010	as	a	non-ex ecutiv e	
Dir ector . 	nigel	is	steeped	in	the	tra v el	
industry having worked for, inter alia, 
first	Choice , 	and	ha ving	established	his	
o wn	successful	business, 	Unijet. 	he	is	
also	a	dir ector	of	 all	leisur e	Gr oup	plc .
Outlook
W e	ar e	cautiousl y	optimistic	about	 
our markets for the next 12 months. The 
UK economic climate is likely to remain 
difficult, 	with	consumer	confidence	
dented	b y	public	sector	e x p e n d i t u r e 	 c u t s . 	
h o w e v e r , 	 w e 	 a r e 	 m o r e 	 positiv e	about 	
the Canadian economy, which accounts 
f or	a	substantial	por tion	of	our	nor th	
american	activity . 	her e	w e	see	an	
impr o v ement	in	consumer	confidence , 	
which	w e	hope	will	be	translated	into	
ne w	business	f or	the	Gr oup . 	 as	e v er , 	the	
late	booking	mark et	is	impor tant	and	w e	
continue to focus marketing effort on 
this area.
Mark T J Molyneux 
Chairman
7	f ebruar y	2011 08
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
i	am	delighted	with	our	r esults	f or	
financial	y ear	2010. 	 W e	ha v e	o v er come	
some very challenging internal and 
external	obstacles	to	pr oduce	a	str ong	
perf ormance	f or	the	y ear	and	to	build	
an excellent platform for the future. 
The	past	tw o	y ears	ha v e	br ought	gr eat	
change	f or	 T ra v elzest	and	the	wa y	w e	
manage	our	business. 	 W e	ar e	no w	in	 
a position to capitalise on these changes 
and develop the Group in a more 
efficient	and	strategic	wa y .
in	the	past	y ear	w e	encounter ed	a	 
series of challenging market events. 
These motivated our team to work 
be y ond	the	normal	call	to	achie v e	
success. The events of particular note 
were the closure of many airports in 
Europe and one in Canada as a result of 
the	icelandic	ash	cloud, 	and	the	demise	
of	Skyser vice	 airlines	in	Canada. 	Both	
these events caused some of our clients 
enormous	disruption	and	pr oblems	
which we resolved for them. These 
issues were addressed while we were 
facing	a	difficult	economic	situation	
around the world that put enormous 
pressure on consumers choosing their 
travel holidays and destinations.
Group performance
The Group has produced record 
financial	r esults	with	transaction	value	
gr o wth	of	15%	to	£217.6	million. 	 This	is	
the	first	time	in	the	Compan y’ s	histor y	
that we have achieved a transaction level 
o v er	£200	million, 	despite	the	difficult	
trading environment all of which was 
achieved through organic growth. This 
organic	gr o wth	was	primaril y	driv en	b y	
our	nor th	 american	operations, 	which	
performed strongly. Revenue was up 
14%	to	£43.8	million, 	gr oss	pr ofit	up	
18%	to	£24.5	million, 	and	underl ying	
operating	pr ofit	up	11%	to	£6.1	million. 	
p erha ps	the	most	significant	financial	
achievement in the year was the increase 
in cash generated from operations, up 
513%	to	£4.9	million. 	 This	allo w ed	the 
Company to execute on its strategic 
plans	and	to	ser vice	its	debt	facilities 
as restructured in 2009. 
During the year we completed the 
largest part of the restructuring of 
the Group. The tasks involved were 
not trivial and their completion within 
the time frame we set was challenging. 
We have completed in one year the 
consolidation of nine reservation 
systems	to	f our , 	fiv e	accounting	
systems	to	one , 	and	10	offices	to	six. 	
The management of the organisation 
has	shifted	fr om	a	brand-based	to	
pr edominatel y	functionall y-based	
structure with common marketing, 
purchasing, accounting and human 
resource practices. These actions will 
enable	us	to	de v elop	and	manage	ne w	
strategies that will allow us to grow 
the	Gr oup	substantiall y . 	
The shared services structure provides 
the	ability	to	manage	the	Gr oup	mor e	
efficientl y	with	better	contr ol	o v er	our	
operations. 	it	also	pr o vides	a	le v el	of	
governance that gives the Board the 
confidence	that	our	team	is	perf orming	
and managing as expected.
North American Operations
Our 	 team 	 in 	n or th 	 a merica 	 perf ormed 	
exceptionall y 	 w ell 	 with 	 both 	 itra v el2000	
and The Cruise Professionals having a 
strong year. We continue to develop 
our product suite to offer more choice 
to 	 our 	n or th 	 a merican 	 customers 	 and 	
Chief exe CuTive’s s Ta TemenT 
we have overcome 
some very 
challenging 
oBs Tacles T o 
Produce a s Trong 
Performance  09
The y ear in r eview Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
will launch new products in 2011 that 
will	advance	this	strateg y . 	in	2011	w e	
will	r e vie w	our	distribution	channel	
ca pabilities 	 in 	 both 	 itra v el2000 	 and 	 The	
Cruise 	p r of essionals. 	 W e 	 belie v e 	 w e 	 can	
build 	 on 	 our 	 successes 	 and 	 de v elop 	 these	
channels further, enhancing our service 
and improving our conversion rate. 
W e	will	also	be	launching	our	ne w	
upper mid-market/luxury offer through 
T ra v elzest	holida ys	into	nor th	 america. 	
This will complement our current offer 
to	this	mark et	segment, 	which	books	
through The Cruise Professionals, and 
will also provide a more complete 
offering of land and air products.
United Kingdom Operations
Our	team	in	the	UK	underw ent	
considerable 	 change 	 in 	 2010, 	 with 	 the	
consolidation 	 of 	 fiv e 	 of 	 our 	 offices 	 into 	
one 	 ne w 	 integrated 	 office 	 in 	 Cheltenham. 	
With 	 eight 	 of 	 our 	 10 	 brands 	 in 	 the 	 UK	
no w 	 managed 	 b y 	 the 	 team 	 in 	 this 	 facility , 	
w e	ar e	seeing	ne w	strategies	being	
discussed on how to reinvigorate our 
offering to new and former customers. 
We have recently launched a new 
inventory and reservation system that 
will 	 ser vice 	 nine 	 of 	 the 	 10 	 brands 	 in 	 the	
UK, 	and	which	is	ca pable	of	expansion	
into 	 ne w 	 jurisdictions 	 and 	 cur r encies. 	 This	
is 	 a 	 cor e 	 strateg y 	 f or 	 our 	 distribution 	 in	
the UK as it allows us to promote and 
manage our complete suite of products 
fr om 	 our 	 legacy 	 se v en 	 mer chant 	 brands. 	
i t 	 also 	 allows 	 the 	 pr omotion 	 of 	 ne w 	
products from our integrated merchants 
or third party suppliers. 
Separately disclosed items
During the year the Group incurred 
separately disclosed costs totalling  
£1.9 million (2009: £2.8 million), a  
32%	r eduction	fr om	the	prior	y ear . 	 
These	ha v e	been	separatel y	disclosed	 
to	enable	a	better	understanding	of 
the results of the Group. 
Financing
We are currently reviewing our 
financing 	 needs 	 f or 	 the 	 next 	 three	
years 	 and 	 ha ve 	 begun 	 discussions 	 with	
several 	 banks 	 in 	 both 	 the 	 UK 	 and	
Canadian 	 markets 	 to 	 identify 	 the 	 best	
commercial 	 terms 	 a vailable . 	 Once 	 in	
place , 	 this 	 new 	 financing 	 will 	 put 	 the 	
Group in a yet stronger position to 
capitalise on the market opportunities 
that we foresee.
Summary
W e	ar e	excited	about	the	next	 
12 months and the opportunities  
our	ne w	structur e	pr esents. 	i	cannot	
over-emphasise our appreciation to the 
team that has stuck with us through  
the changes we have made and in the 
difficult	mark et	conditions. 	 W e	ar e	
extremely proud of their achievement 
 in such a short period. Jack Fraser  
and	i	thank	them	f or	their	dedication	
and	contribution. 	
We now have a team and structure 
focused for growth.
Jonathan Carroll 
Chief Executive
7	f ebruar y	2011
we now have 
a Team and 
s TrucTure Tha T 
is focused for 
growTh Separately 
disclosed items:
2010
£000s
2009
£000s
Shar e-based 	 pa yment 	 charge/(cr edit) 130 (557)
mo v e	and	other	ne w	pr oject	star t	up	costs 121 20
Corporate restructuring costs 84 1,187
Operational	companies’	r estructuring	costs 816 1,998
Placing fees – 127
ash	cloud	and	other	non-r eco v erable	costs 345 –
loss	on	disposal	of	tangible	and	intangible	assets 421 –
T otal 1,917 2,775 10
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Mark Molyneux
Chairman 
Mark Molyneux, was appointed to the 
Travelzest board as a non-executive 
director in October 2006. He is a 
Chartered Accountant and chairs 
two other companies which are 
Private Equity backed. Mark was until 
2006 a UK partner with Ernst and 
Y oung LLP accountancy ﬁrm where 
he held senior management roles. His 
initial specialisation was audit, mainly 
entrepreneurial companies, later moving 
into corporate ﬁnance with a focus on 
M&A, due diligence and restructuring.
Jonathan Carroll
Group Chief Executive
Jonathan Carroll was appointed to 
his current position as Group Chief 
Executive Ofﬁcer in May 2009. Prior 
to which Jonathan was President of 
itravel2000 which he was also a  
co-founder of in 1994. With Jonathan’s 
vision and leadership skills, he 
formed a team of dedicated travel 
professionals that set the standard in 
the Canadian market place. Jonathan is 
a strong believer in giving back to the 
community. Jonathan’s charity work 
extends into the community through his 
involvement and support of numerous 
charities. He is also a founding board 
member of the Lakeﬁeld College  
School Foundation, which also boasts 
his Royal Highness, the Duke of York 
as a Trustee. In 2006, Jonathan Carroll 
was awarded the prestigious Top 
40 Under 40 Award honouring the 
best and most accomplished young 
professionals in Canada.
Jack Fraser
Group Chief Operating Ofﬁcer & 
Finance Director
Jack Fraser was appointed as Group 
Chief Operating Ofﬁcer and Finance 
director in May 2009. Prior to this, 
Jack was Chief Financial Ofﬁcer and 
Head of Corporate Development 
for itravel2000 and led the sale of 
itravel2000 to Travelzest in 2006. Prior 
to joining itravel2000 in February 2005, 
Jack spent over 10 years with RBC 
Financial Group and BMO Financial 
Group primarily in the mid-market 
corporate ﬁnance groups. Jack also spent 
5 years in corporate development and 
senior operational roles with two early 
stage internet media companies, CMGi/
Activate located in Seattle (acquired 
by Loudeye/ Nokia Corp.) and Fastvibe 
located in T oronto (acquired by T elus 
Corp.). Jack also advises various early 
stage media and technology start-ups, 
and sits on the Board of directors for  
the Windsor International Airport. 
Governance: board of direc Tors 11
The y ear in r eview Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Richard Hall TD, MA, FCA 
n o n - e x e c u t i ve 	 D i r e c t o r 	 & 	 
Company Secretary
With	a	Cambridge	degr ee	in	engineering	
and	la w , 	richar d	qualified	as	a	char ter ed	
accountant in 1966 and carried out the 
duties of Finance Director and Company 
Secr etar y	f or	a	n umber	of	international	
companies	including	inmOS	
international	plc . 	he	was	latterl y	finance	
Dir ector	of	inf ormation	 T echnolog y	plc	
and	national	 T elecomm unications	plc , 	
both	of	which	companies	he	took	to	the	
main market. Since 1989, Richard has run 
his	o wn	consultancy	with	a	n umber	of	
non-executive directorships, including an 
aim	listed	compan y	off ering	corporate , 	
commer cial	and	financial	advice	to	major	
clients. 	he	joined	the	boar d	of	 vfB	
Gr oup	plc	in	2003	(vfB	Gr oup	name	
changed	to	 T ra v elzest	in	2005)	prior	to	
the	compan y	joining	the	OfeX	mark et	
(no w	plUS	mark et).
Nigel Jenkins 
n o n - e xec u ti ve 	D i re c t or
nigel	J enkins, 	has	been	in v olv ed	in	 
the 	 tra v el 	 industr y 	 for 	 35 	 y ears. 
a	f ounding	dir ector	of	Unijet	in	1981	
he	joined	first	Choice	holida ys	plC	
in	1998. 	nigel	led	the	r estructur e	and	
turnaround of their Canadian division 
bef or e	r eturning	to	the	UK	in	2004	to	
become	managing	Dir ector	of	their	
activity	holida y	Sector	and	a	member	 
of	their	Gr oup	management	Boar d. 	 
n igel 	 r etir ed 	 fr om 	f irst 	 Choice 	 in 	
October 	 2006. 	n igel 	 is 	 curr ently 	
non-executive Chairman of KBC PR & 
mark eting, 	and	non-ex ecutiv e	dir ector 
of	 all	leisur e	Gr oup	plc . 12
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
The	dir ectors	pr esent	their	r epor t	and	the	financial	statements	of	the	Gr oup	and	Compan y	f or	the	y ear	ended	31	October	2010.
Principal activities and business review
The principal activity of the Company during the year was that of a parent and holding company. The principal activity of the Group 
during the year was the provision of retail travel sales and tour operation. 
The 	 business 	 is 	 r e vie w ed 	 in 	 detail 	 in 	 the 	 Chairman’ s 	 and 	 Chief 	e x ecutiv e’ s 	 statements. 	m anagement 	 r e vie w 	 a 	 n umber 	 of 	 indicators 	 when	
assessing 	 the 	 perf ormance 	 of 	 the 	 Gr oup . 	 K e y 	 amongst 	 these 	 indicators 	 ar e 	 total 	 transaction 	 value, 	 r e v en ue 	 and 	 gr oss 	 pr ofit, 	 which 	 ar e	
discussed 	 in 	 the 	 Chairman’ s 	 and 	 Chief 	e x ecutiv e’ s 	 statement. 	 The 	 dir ectors 	 do 	 not 	 pr opose 	 a 	 dividend 	 in 	 r espect 	 of 	 the 	 y ear 	 (2009: 	n il).
Director changes and reappointment 
in	accor dance	with	the	Compan y’ s	 ar ticles	of	 association	J	G	Car r oll	will	r etir e	and, 	being	eligible , 	will	off er	himself	f or	r e-election	
at 	 the 	 for thcoming 	 a nnual 	 General 	m eeting. 	n	 J 	 J enkins 	 (appointed 	 12 	 a pril 	 2010) 	 will 	 be 	 formally 	 listed 	 for 	 election 	 at 	 the 	
f or thcoming	 ann ual	General	meeting. 	n	robb	and	p	 Thomson	r esigned	as	dir ectors	of	 T ra v elzest	plc	eff ectiv e	31	Jan uar y	2010	and	
12	mar ch	2010	r espectiv el y .
Directors’ interests
The	dir ectors	of	the	Compan y	who	w er e	in	office	at	the	date	of	signing	the	financial	statements, 	together	with	their	beneficial	
interest in the shares of the Company, were as follows: 
Class of 
share
At 4 January 
2011
At 31 October 
2009
J G Carroll* Or dinar y	2p – –
J C Fraser 	Or dinar y	2p 9,365,887 13,280,000
r	G	hall Or dinar y	2p 521,100 521,100
n	J	J enkins	(a ppointed	12	 april	2010) Or dinar y	2p 260,000 –
m	 T	J	mol yneux 	Or dinar y	2p 15,559,682 15,559,682
* 	 	 	 a s 	 at 	 4 	 Jan uar y 	 2011, 	 6615716 	 Canada 	i nc . 	 held 	 4,957,614 	 Or dinar y 	 2p 	 Shar es. 	 These 	 shar es 	 ar e 	 contr olled 	 b y 	 the 	e l y 	 T rust. 	 JG 	 Car r oll 	 was 	 a 	 beneficiar y 	 of 	 the 	e l y 	 T rust 	 at 	 31 	 October 	 2009. 	
This	is	a	discr etionar y	inter	viv os	trust	as	disclosed	in	the	shar eholder	cir cular	dated	5	 august	2009. 	During	the	cur r ent	financial	y ear , 	J	G	Car r oll	was	r emo v ed	as	a	beneficiar y	of	the	el y	
T rust	and	J	G	Car r oll	is	cur r entl y	disputing	his	r emo val. 	J	G	Car r oll	claims	a	22.5%	inter est	in	the	holdings	of	el y	 T rust. 	. 	
The following directors had interests in options to purchase shares in the Company:
Number held
Expiry date Exercise 
price
At 31 October
 2010
At 31 October
 2009
J G Carroll 10	f ebruar y	2020 8.25p 6,220,119 –
J G Carroll 30	J une	2020 18.5p 6,000,000 –
J C Fraser 19	October	2016 127p 78,740 78,740
J C Fraser 10	f ebruar y	2020 8.25p 6,220,119 –
J C Fraser 30	J une	2020 18.5p 6,000,000 –
m	 T	J	mol yneux 10	f ebruar y	2020 8.25p 4,146,746 –
gO vernan Ce: d ire CTOrs’ rePO r T 13
The y ear in r eview Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Directors’ indemnities
a s 	 permitted 	 by 	 the 	 a r ticles 	 of 	 a ssociation, 	 the 	 dir ectors 	 ha v e 	 the 	 benefit 	 of 	 an 	 indemnity 	 which 	 is 	 a 	 qualifying 	 third 	 par ty 	
indemnity	pr o vision	as	defined	b y	Section	234	of	the	Companies	 act	2006. 	 The	indemnity	was	in	f or ce	thr oughout	the	last	financial	
y ear	and	is	cur r entl y	in	f or ce . 	 The	Compan y	also	pur chased	and	maintained	thr oughout	the	financial	y ear	dir ectors’	and	officers’	
liability	insurance	in	r espect	of	itself	and	its	dir ectors.
Major shareholders
On 	 4 	 Jan uar y 	 2011 	 the 	 Compan y’ s 	 shar e 	 r egister 	 sho w ed 	 the 	 f ollo wing 	 inter ests 	 in 	 3 	 per cent 	 or 	 mor e 	 of 	 the 	 Compan y’ s 	 shar es:
Class of 
share 
Number Percentage 
of class
Gar tmor e	in v estment	management Or dinar y	2p 43,207,077 29.77%
mer chant	Securities	limited	(held	on	behalf	of	its	private	clients) Or dinar y	2p 20,750,792 14.30%
m	 T	J	mol yneux Or dinar y	2p 15,559,682 10.72%
a	Gar dner Or dinar y	2p 10,751,285 7.41%
J C Fraser Or dinar y	2p 9,365,887 6.45%
lDC	logistics	De v elopment	Corporation Or dinar y	2p 8,329,572 5.74%
Cr edit	 agricole	Cheuvr eux	international	limited Or dinar y	2p 6,944,000 4.78%
m	J	 T ull y Or dinar y	2p 5,432,000 3.74%
6615716	Canada	inc Or dinar y	2p 4,957,614 3.42%
no vum	Securities Or dinar y	2p 4,449,210 3.07%
Employment policy
The	Gr oup	is	committed	to	a	policy	of	r ecruitment	and	pr omotion	on	the	basis	of	a ptitude	and	ability	without	discrimination	 
of	an y	kind. 	 The	Gr oup	giv es	full	consideration	to	disabled	a pplicants	f or	emplo yment, 	ha ving	r egar d	to	their	par ticular	a ptitudes	 
and 	 abilities 	 and 	 the y 	 shar e 	 in 	 oppor tunities 	 for 	 training, 	 car eer 	 dev elopment 	 and 	 pr omotion. 	 The 	 Gr oup 	 also 	 giv es 	 full	
consideration	to	the	contin uing	emplo yment	and	training	of	emplo y ees	who	ha v e	become	disabled	while	emplo y ed	b y	the	Gr oup . 	it	
is	management’ s	policy	to	k eep	its	emplo y ees	inf ormed	on	matters	aff ecting	them	thr ough	r egular	briefings	and	consultations.
Policy on the payment of creditors
The 	 Gr oup 	 seeks 	 to 	 maintain 	 good 	 r elations 	 with 	 all 	 of 	 its 	 trading 	 par tners. 	i n 	 par ticular 	 it 	 is 	 the 	 Gr oup’ s 	 policy 	 to 	 abide 	 by 	 
the	terms	of	pa yment	agr eed	with	each	of	its	suppliers	subject	to	its	internal	cash	flo w	r equir ements. 	 as	the	Compan y	does	not	 
trade , 	no	inf ormation	has	been	pr o vided	about	the	Compan y’ s	cr editor	pa yment	policy . 	 The	Gr oup	has	cr editor	da ys	of	29	da ys	 
(2009: 59 days re-presented). 
Corporate governance
The Board is committed to high standards of corporate governance. 
On	31	October	2010	the	Boar d	comprised	the	non-ex ecutiv e	Chairman, 	tw o	independent	non-ex ecutiv e	dir ectors	and	tw o	
ex ecutiv e	dir ectors. 	 The	Boar d	structur e	ensur es	that	no	individual	or	member	of	the	gr oup	dominates	the	decision	making	pr ocess. 	
The Board meets formally eleven times a year and on such other occasions as are necessary. The Board receives appropriate and 
timel y	inf ormation, 	Boar d	and	committee	pa pers	normall y	being	sent	out	se v eral	da ys	bef or e	meetings	tak e	place . 	 all	dir ectors	ha v e	
access	to	the	advice	and	ser vices	of	the	Compan y	Secr etar y . 	 The	Boar d	delegates	specific	r esponsibilities	to	the	Boar d	committees	
detailed	belo w .
The	Compan y’ s	 ar ticles	of	 association	r equir e	that	at	the	 ann ual	General	meeting	an y	dir ector	then	in	office	who	has	been	
a ppointed	b y	the	Boar d	since	the	pr e vious	 ann ual	General	meeting	or	has	held	office	f or	thr ee	y ears	or	mor e	since	he	was	
a ppointed	or	last	r e-a ppointed	b y	the	Compan y	in	general	meeting, 	shall	r etir e	and	be	eligible	f or	r e-a ppointment. 14
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Corporate governance continued
The Board is content with the corporate policies and procedures for treasury, contract management, purchase orders, expenses, 
human resources, payroll, and accounting. 
Audit Committee
The	 audit	Committee , 	which	meets	up	to	thr ee	times	a	y ear , 	comprises	r	G	hall	(Chairman), 	m	 T	J	mol yneux	and	 
n	J	J enkins	(p	 Thomson	r esigned	12	mar ch	2010), 	of	whom	r	G	hall	and	n	J	J enkins	ar e	independent	non-ex ecutiv e	dir ectors.
The 	 committee’ s 	 terms 	 of 	 r ef er ence 	 include 	 monitoring 	 the 	 integrity 	 and 	 clarity 	 of 	 the 	 financial 	 statements 	 and 	 an y 	 f ormal 	
announcements 	 r elating 	 to 	 the 	 Gr oup’ s 	 financial 	 perf ormance 	 and 	 r e vie wing 	 an y 	 significant 	 financial 	 r epor ting 	 issues 	 and 	 judgements 	
which they contain; reviewing the consistency of, and any changes to, accounting policies, the application of appropriate accounting 
standar ds 	 and 	 the 	 methods 	 used 	 to 	 account 	 f or 	 significant 	 or 	 un usual 	 transactions; 	 r e vie wing 	 the 	 eff ectiv eness 	 of 	 the 	 Gr oup’ s 	 internal	
controls and risk management systems; making recommendations as to the appointment, terms of engagement and remuneration of 
the 	 external 	 auditors; 	 assessing 	 the 	 external 	 auditors’ 	 independence , 	 objectivity 	 and 	 eff ectiv eness; 	 a ppr o ving 	 the 	 ann ual 	 external 	 audit	
plan 	 and 	 r e vie wing 	 with 	 the 	 external 	 auditors 	 the 	 natur e , 	 scope 	 and 	 r esults 	 of 	 their 	 audit 	 and 	 an y 	 issues 	 raised 	 b y 	 them.
Remuneration Committee
The 	r em uneration 	 Committee 	 comprises 	n	 J 	 J enkins 	 ((Chairman) 	 ( p	 Thomson 	 r esigned 	 as 	 Chairman 	 12 	m ar ch 	 2010)), 	r	 G 	h all 	 and 	
m	 J 	 T 	m ol yneux, 	 of 	 whom 	r	 G 	h all 	 and 	n	 J 	 J enkins 	 ar e 	 independent 	 non-ex ecutiv e 	 dir ectors, 	 and 	 meets 	 as 	 necessar y . 	 The 	 committee	
is 	 r esponsible 	 f or 	 the 	 ex ecutiv e 	 dir ectors’ 	 r em uneration 	 and 	 other 	 benefits 	 and 	 terms 	 of 	 emplo yment, 	 including 	 perf ormance 	 r elated	
bon uses 	 and 	 shar e 	 options 	 (sa v e 	 as 	 to 	 an y 	 options 	 or 	 bon uses 	 granted 	 to 	m	 T 	 J 	m ol yneux, 	 when 	 he 	 will 	 not 	 par ticipate 	 in 	 the	
committee’s considerations).
Going concern
The	Gr oup’ s	business	activities, 	together	with	the	factors	lik el y	to	aff ect	its	futur e	de v elopment, 	perf ormance	and	position	ar e	set	
out	in	this	r epor t. 	 The	financial	position	of	the	Gr oup , 	its	cash	flo ws, 	liquidity	position	and	bor r o wing	facilities	ar e	described	in	the	
f ollo wing 	 financial 	 statements 	 and 	 notes 	 to 	 the 	 financial 	 statements. 	i n 	 ad dition 	 this 	 r epor t 	 includes 	 the 	 Gr oup’ s 	 objectiv es, 	 policies 	 and	
pr ocesses 	 f or 	 managing 	 its 	 ca pital; 	 its 	 financial 	 risk 	 management 	 objectiv es; 	 details 	 of 	 its 	 financial 	 instruments 	 and 	 hedging 	 activities; 	 and	
its exposures to credit risk and liquidity risk. The current economic conditions create uncertainty particularly over the level of demand 
f or 	 the 	 gr oup’ s 	 pr oducts, 	 which 	 ar e 	 also 	 sensitiv e 	 to 	 the 	 exchange 	 rate 	 betw een 	 sterling 	 and 	 operational 	 cur r encies. 	
The	dir ectors	ha v e	a	r easonable	expectation	that	the	Gr oup	has	adequate	r esour ces	to	contin ue	to	operate	f or	the	f or eseeable	
futur e . 	 The	Gr oup	is	cur r entl y	neg otiating	a	ne w	debt	ca pital	structur e	on	terms	mor e	fa v ourable	to	the	business.
Principal risks and uncertainties
The	natur e	of	the	industr y	that	the	Gr oup	operates	in	has	considerable	political, 	economic	and	en vir onmental	risks. 	 The	various	
en vir onmental	risks	such	as	hur ricanes, 	v olcanic	eruptions	or	an y	e v ent	that	causes	the	closur e	or	disruption	of	tra v el	ca pabilities	is	
an	unkno wn	risk	to	the	Gr oup . 	p olitical	and	economic	risks	ar e	difficult	to	pr edict	ho w e v er	management	has	the	ability	to	mitigate	
the	impact	of	these	risks	on	the	business.
Financial risk management objectives and policies
Details	of	the	Gr oup’ s	financial	risk	management	objectiv es	and	policies	ar e	detailed	in	note	27	to	the	Gr oup	financial	statements.
Political and charitable donations
The	Gr oup	made	no	political	donations	during	the	y ear	(2009: 	£nil). 	 The	Gr oup	mak es	various	donations	to	charitable	gr oups	
thr oughout 	 the 	 UK 	 and 	n or th 	 a merica 	 in 	 the 	 f orm 	 of 	 tra v el 	 contributions. 	 The 	 occur r ence 	 of 	 cash 	 contributions 	 is 	 limited 	 with 	 one	
item 	 of 	 significant 	 occur r ence 	 b y 	 itra v el2000 	 with 	 donations 	 made 	 to 	 the 	 One 	 X 	 One 	 organisation 	 totalling 	 £37,000 	 (2009: 	 £ n il). 	
gO vernan Ce: d ire CTOrs’ rePO r T
continued 15
The y ear in r eview Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Directors’ responsibilities
The	dir ectors	ar e	r esponsible	f or	pr eparing	the	 ann ual	repor t	and	the	financial	statements	in	accor dance	with	a pplicable	la w	 
and regulations.
Compan y	la w	r equir es	the	dir ectors	to	pr epar e	financial	statements	f or	each	financial	y ear . 	Under	that	la w	the	dir ectors	ha v e	
pr epar ed	the	Gr oup	financial	statements	in	accor dance	with	international	financial	repor ting	Standar ds	(‘ifrS’)	as	adopted	b y	the	
eur opean	Union, 	and	the	par ent	compan y	financial	statements	in	accor dance	with	United	Kingdom	Generall y	 accepted	 accounting	
practice	(United	Kingdom	 accounting	Standar ds	and	a pplicable	la w). 	Under	compan y	la w	the	dir ectors	m ust	not	a ppr o v e	the	
financial	statements	unless	the y	ar e	satisfied	that	the y	giv e	a	true	and	fair	vie w	of	the	state	of	affairs	of	the	gr oup	and	the	compan y	
and	of	the	pr ofit	or	loss	of	the	compan y	and	gr oup	f or	that	period. 	in	pr eparing	these	financial	statements, 	the	dir ectors	ar e	
required to:
•	 select	suitable	accounting	policies	and	then	a ppl y	them	consistentl y;
•	 mak e	judgements	and	accounting	estimates	that	ar e	r easonable	and	prudent;
•	 state	whether	ifrSs	as	adopted	b y	the	eur opean	Union	and	a pplicable	UK	 accounting	Standar ds	ha v e	been	f ollo w ed, 	subject 
to	an y	material	depar tur es	disclosed	and	explained	in	the	gr oup	and	par ent	compan y	financial	statements	r espectiv el y; 	and
•	 pr epar e	the	financial	statements	on	the	g oing	concern	basis	unless	it	is	ina ppr opriate	to	pr esume	that	the	compan y	will	
contin ue	in	business.
The	dir ectors	ar e	r esponsible	f or	k eeping	adequate	accounting	r ecor ds	that	ar e	sufficient	to	sho w	and	explain	the	Compan y’ s	
transactions	and	disclose	with	r easonable	accuracy	at	an y	time	the	financial	position	of	the	Compan y	and	enable	them	to	ensur e	
that	the	financial	statements	compl y	with	the	Companies	 act	2006. 	 The y	ar e	also	r esponsible	f or	saf eguar ding	the	assets	of	the	
Compan y	and	the	Gr oup	and	hence	f or	taking	r easonable	steps	f or	the	pr e v ention	and	detection	of	fraud	and	other	ir r egularities.
The	dir ectors	ar e	r esponsible	f or	the	maintenance	and	integrity	of	the	Compan y’ s	w ebsite . 	legislation	in	the	United	Kingdom	
g o v erning	the	pr eparation	and	dissemination	of	financial	statements	ma y	diff er	fr om	legislation	in	other	jurisdictions.
in	accor dance	with	Section	418, 	each	dir ector	in	office	at	the	date	the	dir ectors’	r epor t	is	a ppr o v ed, 	confirm	that:
(a) so far as the director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
(b)	he	has	tak en	all	the	steps	that	he	ought	to	ha v e	tak en	as	a	dir ector	in	or der	to	mak e	himself	a war e	of	an y	r ele vant	audit	
inf ormation	and	to	establish	that	the	Compan y’ s	auditors	ar e	a war e	of	that	inf ormation.
Auditors
The	auditors, 	price waterhouseCoopers	llp , 	ha v e	indicated	their	willingness	to	contin ue	in	office , 	and	a	r esolution	f or	their	 
r e-a ppointment	will	be	pr oposed	at	the	f or thcoming	 ann ual	General	meeting.
By	OrDer	Of	 The	BO arD
R G Hall
Director and Company Secretary 
7	f ebruar y	2011 16
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
We have audited the Group financial statements of 
T ravelzest 	 plc 	 f or 	 the 	 year 	 ended 	 31 	 October 	 2010	 
which comprise the Consolidated income statement,  
the Consolidated statement of comprehensive income,  
the 	 Consolidated 	 balance 	 sheet, 	 the 	 Consolidated 	 cash	 
flow statement, the Consolidated statement of changes 
in equity, the Group principal accounting policies and the 
notes to the financial statements. The financial reporting 
framework 	 that 	 has 	 been 	 a pplied 	 in 	 their 	 preparation	
is 	 a pplicable 	 law 	 and 	i nternational 	f inancial 	r epor ting 	
Standards 	 ( ifr Ss) 	 as 	 adopted 	 b y 	 the 	e uropean 	 Union.
Respective responsibilities of Directors and auditors
as	explained	mor e	full y	in	the	Dir ectors’	responsibilities	
Statement, 	the	dir ectors	ar e	r esponsible	f or	the	pr eparation	of	
the	financial	statements	and	f or	being	satisfied	that	the y	giv e	
a	true	and	fair	vie w . 	Our	r esponsibility	is	to	audit	the	financial	
statements	in	accor dance	with	a pplicable	la w	and	international	
Standar ds	on	 auditing	(UK	and	ir eland). 	 Those	standar ds	
r equir e	us	to	compl y	with	the	 auditing	practices	Boar d’ s	ethical	
Standar ds	f or	 auditors.
This 	 r epor t, 	 including 	 the 	 opinions, 	 has 	 been 	 pr epar ed 	 for	 
and 	 only 	 for 	 the 	 Compan y’ s 	 members 	 as 	 a 	 body 	 in 	 accor dance	
with 	 Chapter 	 3 	 of 	p ar t 	 16 	 of 	 the 	 Companies 	 a ct 	 2006 	 and 	 for 	
no other purpose. We do not, in giving these opinions, accept 
or 	 assume 	 r esponsibility 	 for 	 an y 	 other 	 purpose 	 or 	 to 	 an y	
other person to whom this report is shown or into whose 
hands 	 it 	 ma y 	 come 	 sa v e 	 wher e 	 expr essly 	 agr eed 	 by 	 our 	 prior	
consent in writing.
Scope of the audit of the financial statements
a n 	 audit 	 in v olv es 	 obtaining 	 e vidence 	 about 	 the 	 amounts 	
and 	 disclosur es 	 in 	 the 	 financial 	 statements 	 sufficient 	 to 	 giv e 	
r easonable 	 assurance 	 that 	 the 	 financial 	 statements 	 ar e 	 fr ee 	
fr om 	 material 	 misstatement, 	 whether 	 caused 	 b y 	 fraud 	 or 	 er r or . 	
This includes an assessment of: whether the accounting policies 
ar e 	 a ppr opriate 	 to 	 the 	 Gr oup’ s 	 cir cumstances 	 and 	 ha v e 	 been	
consistentl y 	 a pplied 	 and 	 adequatel y 	 disclosed; 	 the 	 r easonableness	
of 	 significant 	 accounting 	 estimates 	 made 	 b y 	 the 	 dir ectors; 	 and 	 the	
o v erall 	 pr esentation 	 of 	 the 	 financial 	 statements.
Opinion on financial statements 
in	our	opinion	the	Gr oup	financial	statements: 	
•	 give a true and fair view of the state of the Group’s affairs  
as	at	31	October	2010	and	of	its	loss	and	cash	flo ws	f or	 
the year then ended;
•	 ha v e	been	pr operl y	pr epar ed	in	accor dance	with	ifrSs	 
as	adopted	b y	the	eur opean	Union; 	and	
•	 ha v e	been	pr epar ed	in	accor dance	with	the	r equir ements 
of	the	Companies	 act	2006.
Opinion on other matter prescribed by the 
Companies Act 2006
in	our	opinion	the	inf ormation	giv en	in	the	Dir ectors’	repor t	
f or	the	financial	y ear	f or	which	the	Gr oup	financial	statements	
ar e	pr epar ed	is	consistent	with	the	Gr oup	financial	statements.
Matters on which we are required to report  
by exception
We have nothing to report in respect of the following matters 
wher e	the	Companies	 act	2006	r equir es	us	to	r epor t	to	y ou	if, 	
in our opinion: 
•	 cer tain	disclosur es	of	dir ectors’	r em uneration	specified	 
b y	la w	ar e	not	made; 	or	
•	 we have not received all the information and explanations 
we require for our audit. 
Other matter 
W e 	 ha v e 	 r epor ted 	 separatel y 	 on 	 the 	 par ent 	 compan y 	 financial 	
statements 	 of 	 T ra v elzest 	 plc 	 f or 	 the 	 y ear 	 ended 	 31 	 October 	 2010. 	
John Minards 
f or	and	on	behalf	of	price waterhouseCoopers	llp 
Char ter ed	 accountants	and	Statutor y	 auditors 
St	 albans
7	f ebruar y	2011
inde Penden T audi TOrs’ re POr T TO The members O f Travelzes T Pl C 17
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
PrinciP al accoun Ting P olicies
General information
Travelzest plc (the ‘Company’) and its subsidiaries (together, 
the ‘Group’) provide retail travel sales and merchant 
operation services.
The Company is a public limited Company, which is listed on 
the AIM, a market operated by the London Stock Exchange 
plc. The address of its registered office is 2nd Floor Delta 
Place, 27 Bath Road, Cheltenham, Gloucestershire, GL53 7TH, 
United Kingdom.
Basis of preparation
The consolidated financial statements of Travelzest plc have 
been prepared in accordance with IFRS as adopted by the 
European Union, IFRIC Interpretations and the Companies 
Act 2006 applicable to companies reporting under IFRS. The 
consolidated financial statements have been prepared under 
the historical cost convention as modified by financial assets 
and financial liabilities (including derivative instruments) at fair 
value through profit or loss. The financial statements have been 
prepared on a going concern basis.
Going concern
The directors have a reasonable expectation that the Group has 
sufficient resources to continue to operate for the foreseeable 
future. The Group is currently negotiating a new debt capital 
structure on terms more favourable to the business.
The principal accounting policies applied in the preparation 
of these consolidated financial statements are set out below. 
These policies have been consistently applied to all the years 
presented, unless otherwise stated.
Judgements and estimates
The preparation of the Group’s financial statements requires 
management to make judgements, estimates and assumptions 
that affect the application of accounting policies and the 
reported amounts of assets and liabilities, income and expenses. 
Actual results may differ from these estimates.
The following are critical judgements in applying the accounting 
policies of the Group that have the most significant effect on 
the financial statements:
Revenue
Management make critical judgements in determining when 
to recognise income. The recognition is based on whether 
companies within the Group are an agent (formerly travel 
agent) or merchant (formerly tour operator). Revenue is 
recognised when it can be measured reliably. Revenue and 
direct expenses relating to tours arranged by the Group’s 
merchant operators are taken to the income statement on 
the date of holiday departure. Revenue relating to agency 
commission receivable on third party leisure travel products 
is recognised when earned, which is on receipt of the full 
payment from the customer; and for business travel products 
is recognised when earned, which is upon booking from the 
customer as bookings are ticketed immediately and are non-
refundable. In all cases recognition occurs when it is probable 
that the economic benefits associated with the transaction will 
flow into the Group, and the costs incurred or to be incurred 
can be measured reliably. 
Impairment
An impairment loss is recognised for the amount by which 
the cash-generating unit’s carrying amount exceeds its 
recoverable amount. Determining whether goodwill is 
impaired requires an estimate of value in use of the cash-
generating units to which goodwill has been allocated. The 
value in use calculation requires the Group to estimate 
future cash flows from the cash-generating units and a 
suitable discount rate in order to calculate a fair value. 
In the process of measuring expected future cash flows, 
management makes assumptions about future gross 
profits. These assumptions relate to future events and 
circumstances. In most cases, determining the applicable 
discount rate involves estimating the appropriate adjustment 
to market risk and the appropriate adjustment to asset-
specific risk factors.
Share-based payments
Management uses valuation techniques in determining the fair 
values of share-based payments at the date of grant; it adopts 
the Black-Scholes pricing model approved and unapproved 
options schemes, and it adopts the Monte-Carlo Simulation 
pricing model for management incentive options. Significant 
inputs into the calculation include the market price at the date 
of grant and exercise prices. Furthermore, the calculation takes 
into account the future dividend yield, the share price volatility 
rate and risk-free interest rate.
Fair value of financial instruments
Management uses active market quotes to measure the fair 
value of derivative financial instrument hedges. The effectiveness 
of financial instrument hedges is assessed by considering the 
underlying liability to which the hedge relates. If the conditions 
for hedge accounting are no longer met and the previously 
designated hedged item is measured by means of the effective 
interest method, the necessary adjustment of the carrying 
amount of the underlying transaction has to be effected over 
its remaining term. The carrying value of derivative assets and 
liabilities is set out in Note 19.
Deferred tax assets
The assessment of the probability of future taxable income 
in which deferred tax assets can be utilised is based on the 
Group’s latest approved budget which is adjusted for significant 
non-taxable income and expenses and specific limits to the 
use of any unused tax loss or credit. If a positive forecast of 
taxable income indicates the probable use of a deferred tax 
asset, especially when it can be utilised without a time limit, that 
deferred tax asset is usually recognised in full. The carrying value 
of deferred tax assets and liabilities is set out in Note 14.
Litigation
Where the Group has an outstanding legal claim against it an 
appropriate accrual or provision is recognised in respect of the 
expected settlement. 18
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
PrinciP al accoun Ting P olicies 
continued
Business combinations
Business combinations are accounted for using the purchase 
method. The purchase method involves the recognition of the 
acquiree’s identifiable assets and liabilities, including contingent 
liabilities, regardless of whether they were recorded in the 
financial statements prior to acquisition. On initial recognition, 
the assets and liabilities of the acquired subsidiary are included 
in the consolidated financial statements at their fair values, 
which are also used as the basis for subsequent measurement in 
accordance with the Group’s accounting policies. Any deferred 
consideration in respect of the acquisition is held as a liability 
until payment is due and reflected in the initial carrying value 
of the subsidiary. Any subsequent changes to the amount of 
deferred consideration are recognised against the liability, 
and through the income statement. Goodwill is stated after 
separating out identifiable assets where applicable.
Goodwill and other intangible assets
Goodwill arising on acquisition represents any excess of 
the fair value of the consideration given over the fair value 
of the identifiable assets and liabilities acquired. Under IFRS, 
goodwill is not amortised. Goodwill is recognised as an asset, 
and is reviewed for impairment at least annually or whenever 
events or changes in circumstances indicate that the carrying 
amount may not be recoverable. Any impairment is recognised 
immediately in the Group’s income statement and is not 
subsequently reversed. The recoverable amount is the higher of 
an asset’s fair value less costs to sell and value in use.
Impairment tests for goodwill were conducted on the basis 
of cash-generating units. According to the IFRS rules, a cash-
generating unit is the smallest identifiable Group of assets that 
generates cash inflows from continuing use that are largely 
independent of the cash inflows from other assets or Groups of 
assets. Cash-generating units were established for the individual 
merchant operators, and for the agency businesses, in specific 
countries. The expected cash flows generated are discounted 
using rates that represent estimated weighted average cost of 
capital for the respective business. The approach, assumptions 
and results of the impairment test are set out in Note 8.
Goodwill arising on acquisitions before the date of transition to 
IFRS has been retained at previous UK GAAP amounts subject 
to being tested for impairment at that date. Goodwill written 
off to reserves under UK GAAP prior to 2006 has not been 
reinstated and is not included in determining any subsequent 
profit or loss on disposal. 
Gains and losses on the disposal of an entity include the 
carrying amount of goodwill relating to the entity sold.
Customer relationships acquired in a business combination are 
recognised at fair value at the acquisition date. The relationships 
have a finite useful life and are carried at cost less accumulated 
amortisation. Amortisation is calculated using the straight-line 
method over the expected life of the relationship. These have 
been classified as Other intangible assets.
Costs that are directly associated with the purchase and 
implementation of websites and unique software by the 
Group are recognised as intangible assets. Expenditures that 
enhance and extend the benefits of these items and lives are 
recognised as a capital improvement and added to the original 
cost of the website and software. Intangible assets are carried 
at cost less accumulated amortisation and impairment.
Other intangible assets are accounted for at cost whereby 
capitalised costs are amortised over their respective lives. 
Acquired computer software and website development are 
capitalised on the basis of costs incurred to acquire and install. 
The estimated useful economic life of these assets are as follows:
Other intangible assets – 1 to 6 years
Website development – 3 to 5 years
Computer software – 3 to 5 years
Property, plant and equipment
Property, plant and equipment are stated at cost, net of 
depreciation and any provision for impairment. 
Where costs are incurred as part of the start-up or 
commissioning of an item of property, plant or equipment, 
and that item is available for use but incapable of operating in 
the manner intended by management without such a start-up 
or commissioning period, then such costs are included within 
the cost of the item. Costs that are not directly attributable 
to bringing an asset to the location and condition necessary 
for it to be capable of operating in the manner intended by 
management are charged to the income statement as incurred.
Depreciation is provided at the following annual rates in order 
to write off each asset over its estimated useful life. 
Property improvements – 5 years
Office equipment and computer equipment – 3 to 5 years
Motor vehicles – 3 to 5 years
Gains and losses on disposals are determined by comparing 
the proceeds with the carrying amount and are recognised 
within administrative expenses in the income statement. When 
revalued assets are sold, the amounts included in other reserves 
are transferred to retained earnings.
Financial assets
i) Classification
The Group classifies its financial assets in the following 
categories: at fair value through profit or loss, loans and 
receivables, and available for sale. The classification depends 
on the purpose for which the financial assets were acquired. 
Management determines the classification of its financial assets 
at initial recognition.  19
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial 
assets held for trading. A financial asset is classified in this 
category if acquired principally for the purpose of selling in the 
short-term. Derivatives are also categorised as held for trading 
unless they are designated as hedges. Assets in this category are 
classified as current assets.
Loans and receivables
Loans and receivables are non-derivative financial assets with 
fixed or determinable payments that are not quoted in an 
active market. They are included in current assets, except for 
maturities greater than 12 months after the balance sheet date. 
These are classified as non-current assets. The Group’s loans 
and receivables comprise Trade and other receivables and cash 
and cash equivalents in the balance sheet.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are 
either designated in this category or not classified in any of 
the other categories. They are included in non-current assets 
unless management intends to dispose of the investment 
within 12 months of the balance sheet date.
ii) Recognition and measurement
The Group measures its financial assets initially at fair value. 
The subsequent measure depends on classification, for example 
trade and other receivables which are fixed price are carried 
at amortised cost (if applicable) using an effective interest 
method if the time value of money is significant. Due to the 
nature of the businesses, credit risk is deemed low, therefore 
amortisation or impairment is unlikely. 
Financial liabilities
The Group’s financial liabilities include borrowings, trade 
and other payables and derivative financial instruments. 
Financial liabilities are classified as financial liabilities 
measured at amortised cost or derivatives designated as 
hedging instruments. 
The Group determines the classification at initial recognition 
and measures initially at fair value. The subsequent 
measurement depends on classification, for example financial 
liabilities measured at amortised cost having been initially 
recognised at fair value (in case of borrowing, fair value of 
proceeds net of issue costs), are subsequently measured 
at amortised cost (if applicable) using an effective interest 
method taking into account discounts and issue costs. This 
category of financial liability includes borrowings and trade 
and other payables. 
Derivatives designated as hedging instruments are accounted 
for in accordance with the policy set out below. 
Derivative financial instruments and hedging
Derivative financial instruments are initially measured 
at the fair value attributable to them on the day of the 
conclusion of the agreement. The follow-up measurement 
is also effected at the fair value applicable at the respective 
balance sheet date. The method applied in recording profits 
and losses depends on whether the derivative financial 
instrument is classified as a hedge, and on the type of hedged 
item. As a matter of principle, the Group classifies derivative 
financial instruments either as fair value hedges to hedge 
exposure to changes in the fair value of assets or liabilities 
or as cash flow hedges to hedge exposure to risks of varying 
cash flows from highly probable future transactions. 
Upon inception of the transaction, the Group documents the 
hedging relationship between the hedge and the underlying 
item, the risk management goal and the strategy pursued 
in entering into the hedges. In addition, an assessment is 
made both at the beginning of the hedge relationship and 
on a continual basis as to whether the derivatives used for 
the hedge compensate for the changes in the fair values or 
cash flows of the underlying transactions in a highly effective 
manner. The Group currently has no fair value hedges in place. 
Changes in the fair values of derivative financial instruments 
not achieving the criteria for hedge accounting are directly 
recognised in the income statement.
Where a derivative financial instrument is designated as a 
hedge of the variability in cash flows arising from a recognised 
asset or liability, or a highly probable forecast transaction, the 
effective part of any gain or loss on the derivative financial 
instrument is recognised directly in the hedging reserve. Any 
ineffective portion of the hedge is recognised immediately in 
the income statement. 
When the forecast transaction subsequently results in the 
recognition of a non-financial asset or non-financial liability, 
the associated cumulative gain or loss is removed from the 
hedging reserve and is included in the initial cost or other 
carrying amount of the non-financial asset or liability. If 
a hedge of a forecast transaction subsequently results in 
the recognition of financial asset or financial liability, the 
associated gains and losses that were recognised directly in 
equity are reclassified into the income statement in the same 
period or periods during which the asset acquired or liability 
assumed affects profit or loss.
For cash flow hedges, the associated cumulative gain or 
loss is removed from equity and recognised in the income 
statement in the same period or periods during which the 
hedged forecast transaction affects in the income statement. 20
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
PrinciP al accoun Ting P olicies 
continued
Derivative financial instruments and hedging continued
Prospective hedge effectiveness is performed at the 
commencement of hedge accounting, and subsequently at 
each balance sheet date, through comparison of the critical 
terms of the hedged forecast transaction and the hedging 
instrument. Critical terms are the maturity, amount and 
currency of the cash flows relating to the hedging instrument 
and the forecast hedged transaction. Retrospective hedge 
effectiveness is performed at each reporting date principally 
using a dollar offset analysis, comparing the cumulative 
changes in the fair values of the forecast hedged transaction 
and the hedging instrument.
When a hedging instrument no longer meets the criteria 
for the hedge accounting, expires or is sold, terminated or 
exercised, or the entity revokes designation of the hedge 
relationship, hedge accounting is discontinued prospectively. 
If the hedged forecast transaction is still expected to occur, 
the cumulative gain or loss at that point remains in equity 
and is recognised in accordance with the above policy 
when the transaction occurs. If the hedged transaction is 
no longer expected to take place, the cumulative unrealised 
gain or loss is recognised in equity or recognised in the 
income statement immediately.
Total transaction value and revenue recognition
T otal transaction value, which is stated net of value added tax, 
does not represent the Company’s statutory revenue. Where 
companies within the Group act as agent or cash collector, 
total transaction value represents the price at which goods or 
services have been sold to the consumer and is recognised on 
the same time basis as statutory turnover. 
Revenue represents the aggregate amount of gross 
consideration receivable from inclusive tours, agency 
commissions receivable and other services supplied to 
customers in the ordinary course of business. Revenue and 
direct expenses relating to the inclusive tours arranged by 
the Group’s merchant leisure travel providers are taken to 
the income statement on holiday departure. Revenue relating 
to agency commission receivable on third party leisure travel 
products is recognised when earned, which is on receipt of the 
full payment from the customer. Revenue relating to agency 
receivable on third party business travel products is recognised 
when earned on date of booking, which by the terms of 
contracts is the date the invoice is raised and the customer 
becomes liable for payment under the terms of their contract. 
In all cases recognition occurs when it is probable that the 
economic benefits associated with the transaction will flow 
into the Group, the costs incurred or to be incurred can be 
measured reliably. Other revenue and associated expenses are 
taken to the income statement as earned or incurred. Revenue 
and expenses exclude intra-Group transactions.
Income statement presentation
Profit or loss from operations includes the results from 
operating activities of the Group. 
Separately disclosed items are those that are unusual because  
of their size, nature or incidence which the Group’s 
management consider should be disclosed separately to enable 
a full understanding of the Group’s results.
Tax
The tax expense for the period 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. In this case, 
the tax is also recognised in other comprehensive income or 
directly in equity, respectively. The current income tax charge is 
calculated on the basis of the tax laws enacted or substantively 
enacted at the balance sheet date in the countries where the 
Company and its subsidiaries operate and generate taxable 
income. Management periodically evaluates positions taken in 
tax returns with respect to situations in which applicable tax 
regulation is subject to interpretation. It establishes provisions 
where appropriate on the basis of amounts expected to be paid 
to the tax authorities.
Deferred income tax is recognised, using the liability method, on 
temporary differences arising between the tax bases of assets 
and liabilities and their carrying amounts in the consolidated 
financial statements. However, deferred tax liabilities are not 
recognised if they arise from the initial recognition of goodwill. 
Deferred income tax is not accounted for if it arises from initial 
recognition of an asset or liability in a transaction other than a 
business combination that at the time of the transaction affects 
neither accounting nor taxable profit or loss. Deferred income 
tax is determined using tax rates (and laws) that have been 
enacted or substantially enacted by the balance sheet date and 
are expected to apply when the related deferred income tax 
asset is realised or the deferred income tax liability is settled. 
Deferred income tax assets are recognised only to the extent 
that it is probable that future taxable profit will be available 
against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when 
there is a legally enforceable right to offset current tax assets 
against current tax liabilities and when the deferred income 
taxes assets and liabilities relate to income taxes levied by the 
same taxation authority on either the same taxable entity or 
different taxable entities where there is an intention to settle 
the balances on a net basis. 21
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Pensions
The Group pays contributions to publicly or privately administered 
pension plans on a mandatory, contractual or voluntary basis. The 
Group has no further payment obligations once the contributions 
have been paid. The contributions are recognised as employee 
benefit expense when they are due. Prepaid contributions are 
recognised as an asset to the extent that a cash refund or a 
reduction in the future payments is available.
Foreign currency
(a) Functional and presentation currency
In the Group’s financial statements, all assets, liabilities and 
transactions of the Group’s entities are translated into sterling, 
the functional currency of the parent Company. Average 
exchange rates are used to translate the income and expenses 
of all subsidiaries that have a functional currency other than 
sterling where there has been no significant fluctuation in 
the rate. The balance sheets of such entities are translated 
at period end exchange rates. On consolidation, exchange 
differences arising from the translation of the net investment 
in foreign operations, and of borrowings designated as hedges 
of such investments, are recognised in equity. 
(b) Transactions and balances
Foreign currency transactions are translated into the 
functional currency using the exchange rates prevailing at 
the dates of the transactions or valuation where items are 
re-measured. Foreign exchange gains and losses resulting 
from the settlement of such transactions and from the 
translation at year-end exchange rates of monetary assets and 
liabilities denominated in foreign currencies are recognised 
in the income statement, except when deferred in other 
comprehensive income as qualifying cash flow hedges and 
qualifying net investment hedges. The Group’s third party 
borrowings qualify as a hedge. Foreign exchange gains and 
losses that relate to cash and cash equivalents are presented 
in the income statement within ‘finance income or cost’. All 
other foreign exchange gains and losses are presented in the 
income statement within ‘administrative expenses’.
Non-monetary items measured at historical cost are translated 
using the exchange rates at the date of transaction (not 
retranslated). Non-monetary items are measured at fair value 
are translated using the exchange rates at the date when the 
fair value was determined.
Share-based payments
The Group issues share-based instruments to certain 
employees as part of their total remuneration at fair value. 
The fair values of these instruments are calculated at the date 
of grant, using the Black-Scholes or Monte-Carlo Simulation 
pricing models. These fair values are charged to the income 
statement on a straight-line basis over the expected vesting 
periods of the instruments, with a corresponding increase in 
equity reserves. Any waivers to share-based payments are 
treated as cancellations by the Group. When the options are 
exercised, the Company issues new shares. The proceeds 
received net of any directly attributable transaction costs are 
credited to share capital (nominal value) and share premium 
when the options are exercised.
The Group also issued a cash bonus award which is recorded 
as cash settled share-based compensation. The fair value of 
the cash bonus award is calculated using the Monte-Carlo 
Simulation pricing model at each reporting date. The fair value 
is charged to the income statement with a corresponding 
entry to non-current liabilities.
Basis of consolidation
Subsidiaries are all entities (including special purpose entities) 
over which the Group has the power to govern the financial 
and operating policies generally accompanying a shareholding 
of more than one half of the voting rights. The existence and 
effect of potential voting rights that are currently exercisable or 
convertible are considered when assessing whether the Group 
controls another entity. Subsidiaries are fully consolidated from 
the date on which control is transferred to the Group. They are 
de-consolidated from the date that control ceases.
The purchase method of accounting is used to account for 
the acquisition of subsidiaries by the Group. The cost of an 
acquisition is measured as the fair value of the assets given, 
equity instruments issued and liabilities incurred or assumed 
at the date of exchange, plus costs directly attributable to 
the acquisition. Identifiable assets acquired and liabilities and 
contingent liabilities assumed in a business combination are 
measured initially at their fair values at the acquisition date, 
irrespective of the extent of any minority interest. The excess of 
the cost of acquisition over the fair value of the Group’s share 
of the identifiable net assets acquired is recorded as goodwill. 
If the cost of acquisition is less than the fair value of the net 
assets of the subsidiary acquired, the difference is recognised 
directly in the income statement.
Inter-company transactions, balances and unrealised gains 
on transactions between Group companies are eliminated. 
Unrealised losses are also eliminated but considered to be 
an impairment indicator of the asset transferred. Accounting 
policies of subsidiaries have been changed where necessary to 
ensure consistency with the policies adopted by the Group.
Equity and reserves
Share capital presents the nominal value of shares that have been 
issued. Ordinary shares are classified as equity. Incremental costs 
directly attributable to the issue of shares and share awards are 
recognised as a deduction from equity, net of any tax effects.
Share premium includes any premiums received on the issue of 
share capital. Any transaction costs associated with the issuing 
of shares are deducted from the share premium, net of any 
related income tax benefits.
The translation and hedge reserve includes the effects of foreign 
currency translation differences arising on the translation of 
the Group’s foreign entities and the gains and loss on financial 
instruments designated as effective hedges are also included. 22
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
PrinciP al accoun Ting P olicies 
continued
Equity and reserves continued
The Company was entitled to the merger relief offered by section 
131 of the Companies Act 1985 in respect of the consideration 
received in excess of the nominal value of the equity shares issued 
in connection with the acquisition of Peng T ravel Limited, Fair’s Fare 
Limited and the settlement of outstanding consideration on the 
acquisition of Holiday Express Group Limited.
On acquisition, the investments in the Company’s immediate 
subsidiary companies were recorded in the Company’s balance 
sheet at the fair value of the assets acquired, with the difference 
between this and the nominal value of the shares issued being 
credited to a merger reserve.
Retained earnings include all current and prior period 
retained profits.
Brochure and advertising costs
The costs of brochure publication and advertising including 
web based advertising are charged to the income statement 
as incurred.
Operating lease agreements
In accordance with IAS 17 Leases, rentals applicable to 
operating leases where substantially all of the benefits and risks 
of ownership remain with the lessor are charged against profits 
on a straight line basis over the period of the lease. 
Finance lease agreements
The Group leases certain property, plant and equipment. 
Leases of property, plant and equipment where the Group 
has substantially all the risks and the rewards of ownership 
are classified as finance leases. Finance leases are capitalised 
at the lease’s commencement at the lower of the fair value 
of the leased property and the present value of the minimum 
lease payments.
Each lease payment is allocated between the liability and the 
finance charges so as to achieve a constant rate on the finance 
balance outstanding. The corresponding rental obligations, net 
of finance charges, are included in other long-term payables. The 
interest element of the finance cost is charged to the income 
statement over the period of the lease so as to produce a 
constant periodic rate of interest on the remaining balance of 
the liability for each period. 
The property, plant and equipment acquired under finance 
leases are depreciated over the shorter of the useful life of 
the asset and the lease term.
Segmental reporting
Operating segments are reported in a manner consistent with 
the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker is the executive 
management, who are responsible for allocating resources and 
assessing performance of the operating segments.
Cash and cash equivalents 
For the purpose of the cash flow statement, cash comprises 
cash in hand and deposits repayable on demand, less 
overdrafts payable on demand.
Highly liquid investments are disposable without curtailing or 
disrupting the business and are either readily convertible into 
known amounts of cash at or close to their carrying values or 
traded in an active market. These comprise term deposits of 
less than one year (other than cash).
Capital management policies and procedures
The Group’s capital management objectives are:
• to ensure the Group’s ability to continue as a going 
concern; and
• to provide an adequate return to shareholders
by pricing holidays effectively and considering the level 
of risk. The Group monitors capital on the basis of the 
carrying value of equity plus its facility loan, less cash and 
cash equivalents as presented in the face of the financial 
statements. The Group’s goal in capital management is 
to comply with its covenants arising under the Group’s 
current borrowing facility.
Impact of new International Financial Reporting 
Standards adopted in the year by the Group
The following amendments to standards and interpretations  
are required to be implemented for the financial year ended  
31 October 2010:
New Standard IFRS 8 – Operating Segments 
The new standard requires segmental information to be 
presented on the basis of how the chief operating decision 
maker manages the business. The implementation of the 
standard has resulted in additional disclosures being made 
within Note 1.
Revised IAS 1 – Presentation of financial 
statements
The IAS has amended the presentation of the income statement 
and statement of recognised income and expense. The adoption 
of this standard has impacted the presentation of the primary 
statements in the current year and a separate Consolidated 
statement of comprehensive income has been included within 
the financial statements.
Amendments to IFRS 7 – Financial Instruments: 
Disclosures
The implementation of the standard has resulted in additional 
disclosures being made within Note 27. 23
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Revised IFRS 3 – Business combinations and 
Revised IAS 27 – Consolidated and separate 
financial statements 
There has been no impact on adoption of these standards  
in the current financial year but management will consider  
the impact any potential business combinations made by the 
Group going forwards. 
New Financial Reporting Standard adopted in 
the year
The following amendments to existing International Financial 
Reporting Standards and new International Financial Reporting 
Standards have been adopted by the Group during the year 
with no impact:
•  Revised IFRS 1 – First time Adoption of IFRS
• Amendments to IFRS 1 – First time Adoption of IFRS and 
IAS 27 – Consolidated and Separate Financial Statements on 
the Cost of an Investment in a Subsidiary Jointly Controlled 
Entity or Associate
• Revised IAS 23 – Borrowing Costs
• Amendment to IAS 32 – Financial Instruments: Presentation 
and IAS 1: Presentation of Financial Statements on Puttable 
Financial Instruments and Obligations arising on Liquidation
• Amendments to IFRS 2 – Share-based Payment: Vesting 
Conditions and Cancellations
• Amendment to IAS 39 – Financial instruments: Recognition 
and measurement on Eligible hedged items 
• IFRIC 12 Service concession arrangements
• IFRIC 13 Customer loyalty programmes relating to  
IAS 18, Revenue
• IFRIC 14 (Amendment) “Prepayments of a minimum funding 
requirement”
• IFRIC 16 “Hedges of a net investment in a foreign 
operation”
• IFRIC 17 “Distributions of non-cash assets to owners”
• IFRIC 18 “Transfer of assets from customers”
New and Amended Standards adopted by the 
European Union but not yet adopted by the Group
The following new and amended standards and interpretations 
are required to be implemented for the financial years ended 
from 31 October 2011 onwards:
• Annual improvements 2009
• Amendments to IFRS 2 – Share-based Payment: Group 
Cash-settled Share-based Payment Transactions 
•  Amendments to IFRS 1 for additional exemptions
•  Amendments IAS 32 Financial instruments: Presentation on 
classification of rights issues
•  Amendment to IFRS 1, First time adoption on financial 
instrument disclosures
•  IFRIC 15 Arrangements for construction of real estates
•  IFRS 19 Extinguishing financial liabilities with equity instruments
Management is currently reviewing these new and amended 
standards and the impact on the Group’s financial statements.  24
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Notes
Year to 
31 October 2010
£000s
Re-presented* 
Year to 
31 October 2009
£000s
T otal transaction value 1 217,645 189,456
Revenue 1 43,805 38,349
Cost of sales (19,342) (17,506)
Gross profit 24,463 20,843
Administrative expenses (32,462) (19,550)
Operating (loss)/profit 2 (7,999) 1,293
Analysed as
Underlying operating profit 6,099 5,466
Separately disclosed items 2 (1,917) (2,775)
Amortisation of intangible assets and goodwill impairment 2 (12,181) (1,398)
(7,999) 1,293
Finance income 5 9 105
Finance costs 5 (1,919) (1,440)
Loss on ordinary activities before taxation (9,909) (42)
Income tax (expense)/credit 6 (2,860) 761
(Loss)/profit for the year (12,769) 719
Basic (loss)/earnings per share 7 (8.80)p 1.52p
Fully diluted (loss)/earnings per share 7 (8.80)p 1.52p
All results are from continuing operations.
* Refer to Note 25
c onsolida Ted income s Ta Temen T 25
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
c onsolida Ted s Ta Temen T of com Prehensive income
Year to 
31 October 2010
£000s
Year to 
31 October 2009
£000s
(Loss)/profit for the year (12,769) 719
Other comprehensive income
Currency translation differences (578) (2,661)
Movement in cash flow hedge 292 (198)
Other comprehensive income, net of tax (286) (2,859)
Total comprehensive income for the year (13,055) (2,140) 26
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Notes
31 October 2010
£000s
Re-presented*
31 October 2009
£000s
ASSETS
Non-current assets
Deferred tax 14 – 1,351
Goodwill 8 29,809 41,129
Intangible assets 9 2,619 3,202
Property, plant and equipment 10 1,262 1,435
33,690 47,117
Current assets
Inventories 18 64
Trade and other receivables 11 7,560 8,174
Derivative financial instruments 13 190 373
Cash and cash equivalents 12 5,850 5,585
13,618 14,196
Total assets 47,308 61,313
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent Company
Share capital 15 2,903 2,903
Share premium account 31,456 31,524
Merger reserve 2,320 2,320
Translation and hedge reserve (5,130) (4,844)
Retained earnings (12,749) (129)
Total equity 18,800 31,774
Non-current liabilities
Trade and other payables 18 622 6
Borrowings 17 9,733 13,144
Obligations under finance leases 17 273 347
Deferred tax 14 484 871
11,112 14,368
Current liabilities
Trade and other payables 18 10,031 11,430
Borrowings 17 4,503 1,596
Obligations under finance leases 17 107 88
Derivative financial instruments 19 1,247 1,691
Current tax liabilities 18 1,508 366
17,396 15,171
Total liabilities 28,508 29,539
Total equity and liabilities 47,308 61,313
*Refer to Note 25
 
The financial statements were approved by the Board of directors on 7 February 2011 and signed on its behalf by 
J G Carroll  J C Fraser
Director Director
c onsolida Ted balance shee T 27
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
c onsolida Ted cash flow s Ta TemenT
Notes
Year to
31 October 2010
£000s
Year to
31 October 2009
£000s
Cash flows from operating activities
Cash generated from operations 24 4,936 754
Income taxes paid (754) (42)
Net cash flow from operating activities 4,182 712
Cash flow from investing activities
Interest received 9 32
Acquisition of subsidiary – (11)
Purchases of property, plant and equipment and intangible assets (707) (446)
Disposal of property, plant and equipment and intangible assets – 216
Net cash used in investing activities (698) (209)
Cash flow used in financing activities
Repayment of borrowings (1,729) (1,500)
Interest paid (1,748) (1,315)
(Costs)/proceeds on issue of shares* (68) 4,785
Net cash (used in)/provided from financing activities (3,545) 1,970
Net (decrease)/increase in cash and cash equivalents (61) 2,473
Cash and cash equivalents
Cash and cash equivalents at beginning of year 5,585 5,077
Effect of foreign exchange rate changes 326 (1,965)
Net movement in cash and cash equivalents (61) 2,473
Cash and cash equivalents at end of year 5,850 5,585
*Costs of £68,000 (2009: gross proceeds £5,709,000 less costs of £924,000) 28
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Share 
capital
 
£000s
Translation 
& hedge 
reserve
£000s 
Share 
premium 
account 
£000s 
Merger 
reserve
£000s 
Profit and 
loss account
£000s
Total  
equity
£000s
At 1 November 2008 13,142 (1,985) 16,779 2,320 (291) 29,965
Comprehensive income
Profit for the year – – – – 719 719
Other comprehensive 
income
Movement in cash flow hedge – (198) – – – (198)
Foreign exchange movements – (2,661) – – – (2,661)
Total 
comprehensive income – (2,859) – – 719 (2,140)
Transactions with owners
Exchangeable shares (12,524) – 12,524 – – –
Issue of shares 2,285 – 3,425 – – 5,710
Costs of share placing – – (1,204) – – (1,204)
Share-based payments – – – – (557) (557)
Transactions with owners (10,239) – 14,745 – (557) 3,949
At 1 November 2009 2,903 (4,844) 31,524 2,320 (129) 31,774
Comprehensive income
Loss for the year – – – – (12,769) (12,769)
Other comprehensive 
income
Movement in cash flow hedge – 292 – – – 292
Foreign exchange movements – (578) – – – (578)
Total 
comprehensive income – (286) – – (12,769) (13,055)
Transactions with owners
Issue of shares – – (68) – – (68)
Share-based payments – – – – 149 149
Transactions with owners – – (68) – 149 81
At 31 October 2010 2,903 (5,130) 31,456 2,320 (12,749) 18,800
consolida Ted s Ta Temen T of changes in equi Ty 29
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
n o Tes T o The co nsolida Ted financial s Ta TemenT s 
1 Segment reporting
Management has determined the reportable operating segments based on the information which is reviewed by the executive 
management, which is considered to be the chief operating decision maker. The executive management considers the business 
from an operating division perspective. For management purposes, the Group is currently organised into two operating 
divisions: merchant operations and agency operations. Merchant operations revenue is primarily when the Group becomes 
principal on the transaction and defines the terms of the transaction with the consumer. Agency operations revenue is primarily 
when the Group passes on to the consumer the majority of the terms of sale from the ultimate supplier and earns a commission 
for completing the transaction. 
The segment information provided to the executive management for the year ended 31 October 2010 is as follows:
Total transaction value 2010
£000s 
2009
£000s 
Merchant Operations 20,111 19,153
Agency Operations 197,534 170,303
217,645 189,456
All revenues in 2010 and 2009 are in respect of external customers. The Group is not reliant on any one major customer (2009: none).
Business segments
Merchant Operations Agency Operations Total
Year to 31 October Year to 31 October Year to 31 October
2010
£000s
2009
£000s
2010
£000s
2009
£000s
2010
£000s
2009
£000s
Revenue 20,111 19,153 23,694 19,196 43,805 38,349
Results
Profit from operations before depreciation 232 918 7,029 5,062 7,261 5,980
Depreciation (37) (41) (282) (251) (319) (292)
Amortisation of intangible assets 
and goodwill impairment (11,530) (525) (648) (868) (12,178) (1,393)
Loss on disposal of tangible and intangible assets (411) – – – (411) –
Profit/(loss) for the Group (11,746) 352 6,099 3,943 (5,647) 4,295
Separately disclosed items (1,496) (2,775)
Central costs* (856) (227)
Operating (loss)/profit (7,999) 1,293
Finance income 9 105
Finance costs (1,919) (1,440)
Loss before tax (9,909) (42)
Tax (2,860) 761
(Loss)/profit for year (12,769) 719
*  Included within central costs is £6,000 of depreciation, £3,000 of amortisation and £10,000 of loss on disposal of tangible and intangible assets  
(2009: £9,000, £5,000 and £Nil respectively).
During the year merchant operations spent £11,000 on capital expenditures, agency operations spent £672,000, and central 
operations spent £24,000 (2009: £331,000, £109,000 and £6,000 respectively). 30
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
1 Segment reporting continued
Merchant Operations Agency Operations Total
31 October 31 October 31 October
2010
 
£000s
Re-presented
2009 
£000s
2010
 
£000s
Re-presented
2009 
£000s
2010 
£000s
Re-presented
2009 
£000s
Segment assets 2,105 15,614 40,773 37,500 42,878 53,114
Unallocated 
corporate assets
– – – – 4,430 8,199
Consolidated assets 2,105 15,614 40,773 37,500 47,308 61,313
Segment liabilities (3,619) (4,369) (8,391) (7,829) (12,010) (12,198)
Unallocated 
corporate liabilities – – – – (16,498) (17,341)
Consolidated liabilities (3,619) (4,369) (8,391) (7,829) (28,508) (29,539)
Net assets 18,800 31,774
Group wide disclosures
The UK is the Company’s country of domicile. Revenues from external customers and non-current assets are split geographically 
as follows:
Location Revenue
Year to  
31 October 2010
£000s
Year to  
31 October 2009
£000s
United Kingdom 21,994 21,391
North America (formerly Canada) 21,811 16,958
Group 43,805 38,349
Location Non-current assets
31 October 2010
£000s
 31 October 2009
£000s
United Kingdom 332 12,042
North America (formerly Canada) 33,358 33,724
Group 33,690 45,766
Non-current assets include intangible assets and property, plant and equipment and exclude deferred tax assets. During the year 
£337,000 was spent on the purchase of intangible and tangible assets in the UK and £370,000 in North America (2009: £337,000  
and £109,000 respectively). 31
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
2 Operating (loss)/profit
Operating (loss)/profit is stated after charging/(crediting):
2010 
£000s
2009 
£000s
Depreciation of owned fixed assets 215 222
Depreciation on finance leased assets 110 79
Net gain on foreign currency translation (205) (185)
Auditor’s remuneration 
Audit of the financial statements pursuant to legislation 52 34
Audit of Group subsidiaries pursuant to legislation 151 102
Other services relating to taxation 53 20
Other services provided pursuant to legislation 22 3
Operating lease costs
Office equipment 240 150
Property 1,066 962
1,704 1,387
Amortisation of intangible assets & goodwill impairment
Amortisation of intangible assets 861 1,398
Goodwill impairment 11,320 –
12,181 1,398
Separately disclosed items
Share-based payment charge/(credit) (see Note 16) 130 (557)
Move and other new project start up costs 121 20
Corporate restructuring costs 84 1,187
Operational companies’ restructuring costs 816 1,998
Placing fees – 127
Ash Cloud and other non-recoverable costs 345 –
Loss on disposal of tangible and intangible assets 421 –
1,917 2,775 32
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
3 Personnel costs
The aggregate payroll costs were:
2010
£000s
2009
£000s
Salaries 10,098 9,769
Social security costs 1,009 837
Share-based payments 130 (557)
Value of Company pension contributions to money purchase schemes 3 136
11,240 10,185
The average monthly headcount employed by the Group during the year was:
2010 
No.
2009 
No.
Administrative staff 176 177
Sales staff 147 144
323 321
4 Directors remuneration
Salaries 
and fees
1
£000s
Annual  
Bonus
£000s
Benefits
£000s
For the year 
ended 
31 October 
2010 
£000s
For the year 
ended 
31 October 
2009 
£000s
Executive directors
J G Carroll 309 155 27 491 254
J C Fraser
2
257 87 19 363 116
C G McKinlay (resigned 30 June 2009) – – – – 234
C A L Mottershead (resigned 15 July 2009) – – – – 302
N Robb (resigned 31 January 2010) 110 – – 110 123
Non-executive directors
3
R G Hall 31 – – 31 24
N J Jenkins (appointed 12 April 2010) 26 – – 26 –
M T J Molyneux 60 – 60 60
P Thomson (resigned 12 March 2010) 9 – – 9 10
T otal 802 242 46 1,090 1,123
1
 Payments made during the year converted to sterling. 
2
 In prior year J C Fraser was appointed as a director as of 12 May 2009. 
3
 Non-executive directors are reimbursed for their travel expenses incurred related to corporate matters.
In accordance with IFRS 2 Share-based payments, share-based charge relating to directors of £237,000 (2009: credit of £476,000). 
During the year no directors exercised their share options (2009: Nil). No directors (2009: £Nil) participated in money purchase 
pension schemes. 33
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
5 Finance income/(costs)
2010
£000s 
2009
£000s 
Income from interest rate hedges – 73
Bank interest income 9 32
Finance income 9 105
Bank interest expense (1,870) (1,440)
Expense from interest rate hedges (49) –
Finance costs (1,919) (1,440)
T otal (1,910) (1,335)
The expenses arising from other interest rate hedges relates to the ineffective element of a basis points swap. Income arising from 
interest rate hedges reflects the overall credit from effective Canadian dollar and sterling interest rate swaps.
6 Income tax expense
Tax expense comprises:
2010 
£000s
2009 
£000s
Current income taxes
UK corporation tax – –
Overseas taxation 1,927 413
Adjustments in respect of prior years – (739)
Total current income tax 1,927 (326)
Origination and reversal of temporary differences (418) (435)
Adjustments in respect of prior years 1,351 –
Total deferred tax 933 (435)
Income tax expense/(credit) 2,860 (761)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the standard rate of taxation in 
the UK of 28% as follows:
2010
£000s
2009
£000s
Loss on ordinary activities before taxation (9,909) (42)
Expected income tax at 28% (2009: 28%) (2,775) 10
Amortisation and impairment 3,529 394
Brought forward tax losses no longer recognised 1,351 –
Tax losses for which no deferred income tax was recognised 672 (104)
Overseas rates differences 77 (177)
Expenses not deductible for tax purposes 6 10
Share options – (155)
Effective tax expenses and income relating to other periods  – (739)
Income tax expense/(credit) 2,860 (761)
No current or deferred tax has been charged or credited to other comprehensive income in 2010 (2009: £Nil). Deferred tax of 
£34,000 has been credited to equity (2009: £Nil).
A number of changes to the UK Corporation tax system were announced in the June 2010 Budget Statement. The Finance (No 2) 
Act 2010, which was substantively enacted on 20 July 2010, includes legislation reducing the main rate of corporation tax from 28% to 
27% from 1 April 2011. Further reductions to the main rate are proposed to reduce the rate by 1% per annum to 24% by 1 April 2014. 
These further changes had not been substantively enacted at the balance sheet date and, therefore, are not included in these financial 
statements. The overall impact is not expected to be material to these financial statements. 34
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
7 Earnings per share
The basic loss per share of 8.80p (2009: 1.52p profit per share) is based on a loss of £12,769,000 (2009: profit of £719,000)  
and 145,136,110 (2009: 47,231,425) shares of 2p, being the average number of shares in issue during the year.
As the Group made a loss during the year, the impact of potential ordinary shares is anti-dilutive and therefore the dilutive loss  
per share is the same as the basic loss per share at 8.80p. In 2009, there were no share options/warrants that would constitute  
a dilutive calculation and therefore the dilutive profit per share was 1.52p.
8 Goodwill
£000s
Historical cost
At 1 November 2008 44,087
Additions 93
Reduction to deferred consideration Peng Travel Limited (41)
Reduction to deferred consideration Tapestry Collection Limited (160)
Reduction to deferred consideration The Cruise Professionals Limited (750)
At 31 October 2009 43,229
Additions –
Disposals –
At 31 October 2010 43,229
Impairment loss
At 1 November 2008 (2,100)
Impairment loss –
At 31 October 2009 (2,100)
Impairment loss (11,320)
At 31 October 2010 (13,420)
Carrying amount at 31 October 2010 29,809
Carrying amount at 31 October 2009 41,129
Annually or more frequently if events or a change in the economic environment indicate a risk of impairment, the Group assesses 
the recoverable amount of goodwill allocated to the businesses listed below (determined by reference to the value in use of the 
continuing operations of the related businesses) as required by IAS 36: Impairment of assets. IAS 36 requires that impairment tests 
are carried at the level where independent cash flows arose at which the Group’s management measures returns on operations.
Goodwill is allocated to the following cash-generating units:
31 October 2010
£000s
31 October 2009
£000s
Best of Morocco Limited – 1,923
Peng T ravel Limited – 1,284
Fair’s Fare Limited – 5,451
Tapestry Collection Limited – 110
4358736 Canada Inc. (trading as itravel2000) 23,834 23,834
Travelzest Holidays Limited (formerly Wow House Limited) – 167
Captivating Cuba Limited – 1,290
JMB Travel Consultants Limited – 295
The Cruise Professionals Limited 5,975 5,975
Holiday Express (UK) Limited – 800
29,809 41,129 35
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
For the year ended 31 October 2010 management has undertaken a detailed review of the carrying value of these investments both 
at a consolidated and company level and have determined that an impairment charge of £11,320,000 is required to write off 100% 
of the UK goodwill. A full list of the subsidiaries of the Group has been included at Note B to the company financial statements.
In making estimates of future profit and cash flows, the growth rate assumptions that have been applied to each businesses’ current 
year profits are deemed to be appropriate by management.
Growth rate estimates by their nature will include assumptions which have been considered in detail by management. In making 
assumptions, management has taken into account the following factors:
• Cash flow projections based on the Group’s latest approved four year budget plan which are sensitised to consider the impact 
of current trends in consumer demand;
• Historic results;
• Cash flows are discounted using the Group’s weighted average cost of capital, adjusted as appropriate for business specific 
factors of sector risk, business size and other macro-economic factors relevant to the specific businesses; 
• Customer base to which the businesses sell;
• The Group’s post tax weighted average cost of capital is 16.5%;
• An average growth rate of 10% over the next four years in Canada and 5% in the UK has been used for the cash generating 
units above; 
• A terminal value multiple of 6 times cash flow has been applied to all segments; and 
• The impact of business downturn and changes in interest rates in growth rate assumptions.
If the estimated cost of capital used in determining the pre-tax discount rate for the CGU’s above had been 1.0% higher than 
Management’s estimates (for example 17.5% instead of 16.5%) no additional impairment would have been recorded. Using an 
average growth in cash flows of 7.0% instead of 10.0% in Canada also does not lead to an impairment being recorded. 36
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
9 Intangible assets
Other intangible 
assets
£000s
Website 
development 
£000s
Computer 
software 
£000s
Total 
£000s
At 1 November 2008 
Opening net book amount 1,782 1,638 1,785 5,205
Additions – 336 – 336
Disposals – (83) – (83)
Foreign exchange adjustments – 611 303 914
At 1 November 2009 1,782 2,502 2,088 6,372
Additions – 274 329 603 
Disposals – (739) – (739) 
Foreign exchange adjustments – 42 162 204 
At 31 October 2010 1,782 2,079 2,579 6,440 
Amortisation
At 1 November 2008 125 808 837 1,770
Charge for year 399 591 408 1,398
Disposals – (22) – (22)
Foreign exchange adjustments – (114) 138 24
At 1 November 2009 524 1,263 1,383 3,170
Charge for year 269 357 235 861
Disposals – (365) – (365)
Foreign exchange adjustments – 65 90 155
At 31 October 2010 793 1,320 1,708 3,821
Carrying amount at 31 October 2010 989 759 871 2,619
Carrying amount at 31 October 2009 1,258 1,239 705 3,202
Other intangible assets comprises the separately identifiable assets determined from the acquisition of The Cruise Professionals and 
relates to customer relations (£1,500,000), order backlog (£206,000) and contractual agreements (£76,000) with residual lives of 
between one and six years. Amortisation of intangible assets is recognised within administrative expenses in the income statement. 37
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
10 Property, plant and equipment
Property 
improvements 
£000s
Computer 
equipment 
£000s
Office 
Equipment 
£000s
Motor 
Vehicles 
£000s
Total 
£000s
At 1 November 2008 633 1,018 783 27 2,461
Additions – 8 537 – 545
Disposals – (116) (211) – (327)
Foreign exchange adjustments 123 (17) 39 – 145
At 1 November 2009 756 893 1,148 27 2,824
Additions 7 50 44 3 104 
Disposals – (248) (129) – (377) 
Foreign exchange adjustments 59 39 67 – 165 
At 31 October 2010 822 734 1,130 30 2,716
Depreciation
At 1 November 2008 15 439 607 27 1,088
Charge for year 75 `142 84 – 301
Disposals – (14) (158) – (172)
Foreign exchange adjustments 4 107 61 – 172
At 1 November 2009 94 674 594 27 1,389
Charge for year 87 85 153 – 325
Disposals – (194) (136) – (330)
Foreign exchange adjustments 7 40 23 – 70
At 31 October 2010 188 605 634 27 1,454
Net book value
At 31 October 2010 634 129 496 3 1,262
At 31 October 2009 662 219 554 – 1,435
The net book value of assets held under finance leases is £355,000 (2009: £356,000). These are included within office equipment. 
Depreciation has been charged to administrative expenses. 
11 Trade and other receivables
2010
£000s
2009
£000s
Trade accounts receivable 4,948 4,276
Other receivables 1,852 2,077
Prepayment and accrued income 760 1,821
7,560 8,174
Other receivables primarily relate to commissions due from tour operators. There are no overdue amounts included in the values 
above and no amounts are considered to be impaired (2009: £Nil). 38
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
n o Tes T o The consolida Ted financial s Ta TemenT s 
continued
12 Cash and cash equivalents
2010 
£000s
2009 
£000s
Cash and cash equivalents 2,924 2,721
Restricted cash 2,926 2,864
5,850 5,585
Restricted cash consists of:
2010 
£000s
2009 
£000s
Trust accounts 926 864
Loan pledge amount 2,000 2,000
2,926 2,864
13 Derivative financial instruments
2010 
£000s
2009 
£000s
Receivables from derivative financial instruments 190 373
Derivative financial instruments, all with a remaining term of less than year, primarily serve to hedge future operative business; all 
instruments are outlined in Note 27. The fair value of the financial derivatives has been determined by relevant valuations obtained 
from Group bankers based on observable market data and comprises a total gain on forward contracts of £19,000 all recognised 
to the consolidated income statement and relates to cash flows from November 2009 to October 2010. £171,000 relates to the 
fair value of a derivative associated with the Let It Snow campaign in Canada. The derivative entered into is to fully mitigate the 
cash flow risk associated with a specific weather event occurring on 1 January 2011 and the resulting rebate that would be due to 
qualifying customers of itravel2000. The table in Note 19 indicates when the cash flows are expected to occur.
14 Deferred tax 
The analysis of deferred tax assets and deferred tax liabilities is as follows:
2010 
£000s
2009 
£000s
Deferred tax assets
T o be recovered after more than 12 months – 1,351
T o be recovered within 12 months – –
Deferred tax liabilities
T o be recovered after more than 12 months (173) (311)
T o be recovered within 12 months (311) (560)
Net deferred tax (liability)/asset (484) 480 39
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
The movement in the deferred taxation (liability)/asset during the year was:
2010 
£000s
2009 
£000s
Deferred tax brought forward 480 (776)
Income statement (charge)/credit (933) 1,256
Tax charge directly to equity 34 –
Exchange differences (65) –
Net deferred tax (liability)/asset (484) 480
The UK tax rate will reduce from 28% to 27% with effect from 1 April 2011. Deferred tax has been provided at 27%.  
The movement in deferred income tax assets and liabilities during the year without taking into account offsetting of balances  
within the same jurisdiction is as follows:
Deferred tax liabilities
Accelerated tax 
depreciation
£000s
Recognised 
in business 
combinations
£000s
Share-based 
payment
£000s
Total
£000s
At 1 November 2008 (277) (499) – (776)
(Charged)/credited to the income statement 60 – (155) (95)
(Charged)/credited to equity – – – –
At 31 October 2009 (217) (499) (155) (871)
(Charged)/credited to the income statement 117 240 61 418
(Charged)/credited to equity – – 34 34
Exchange differences (20) (45) – (65)
At 31 October 2010 (120) (304) (60) (484)
Deferred tax assets
Tax losses
£000s
Other
£000s
Total
£000s
At 1 November 2008 – – –
Credited/(charged) to the income statement 1,351 – 1,351
At 31 October 2009 1,351 – 1,351
(Charged)/credited to the income statement (1,351) – (1,351)
At 31 October 2010 – – –
Deferred income tax assets are recognised for loss carry-forwards to the extent that the realisation of the related tax benefit 
through taxable profits is probable. The Group has unrecognised deferred income tax assets of £1,926,000 (2009: £Nil).  40
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
15 Group equity
Authorised share capital:
2010
£000s
2009
£000s
259,550,000 ordinary shares of £0.02 each 5,191 5,191
Issued, called up and fully paid:
2010 2009
No. £000s No. £000s 
Ordinary shares of £0.02 each 145,136,110 2,903 145,136,110 2,903
In the prior year and in accordance with the Exchange Rights Agreement dated 13 October 2006, Travelzest Holdings Inc.,  
a wholly-owned indirect subsidiary of Travelzest plc, purchased the 10,572,614 Class A shares in 0763756 BC Limited from 6615716 
Canada Inc. The shares are issued at 120p. The exchangeable shares were originally issued as part consideration of the acquisition of 
itravel2000 in October 2006.
In September 2009, the Company issued 114,170,000 issued new ordinary shares of 2p each at a premium of 3p raising £5,710,000. 
The placing fees associated were £924,000.
All shares are equally entitled to receive dividends and the repayment of capital and represent one vote at shareholders’ meeting.
16 Share-based payments 
Share options
Employee Option Scheme Management Incentive Plan
Number of share 
options
000s
Weighted average 
exercise price
Number of share 
options
000s
Weighted average 
exercise price
2009
Outstanding at the beginning of the year 1,457 136p – –
T erminated in year (1,186) 138p – –
Granted during the year – – – –
Outstanding at the end of the year 271 129p – –
Exercisable at the end of year 261 130p – –
2010
Outstanding at the beginning of the year 271 129p – –
T erminated in year (167) 97p – –
Granted during the year – – 28,587 12.1p
Outstanding at the end of the year 104 125p 28,587 12.1p
Exercisable at the end of year 104 125p – –
Employee Option Scheme
The Company issues long-term incentive stock options to certain employees under an approved and unapproved option scheme. 
Both schemes have similar terms that include a minimum vesting period of 3 years from the date of grant and active employment  
in the Group. 
The fair value of options granted were determined using the Black-Scholes pricing model. 
An amount of £105,000 (2009: credit of £557,000) relating to share options not vested held by employees who have left in the year 
has been credited to the income statement. 41
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Management Incentive Plan
The Company detailed in the Shareholder Circular issued 5 August 2009 the creation of a Management Incentive Plan which was 
agreed by shareholders at the General Meeting of 28 August 2009. In 2010, 28,587,000 options were granted. No options were 
granted in the prior year. The incentive options have a market exercise price and vest in the event of a sale of the entire issued 
share capital of the Company for an amount valuing the Company at least 15 pence per Ordinary Share. The options have good 
leaver and bad leaver terms, and all share options must be exercised within 10 years of the date of grant.
The fair value of options granted has been determined using the Monte-Carlo Simulation which is a generally accepted statistical 
technique used, in this instance, to simulate a range of possible future stock prices for the Company. The method uses geometric 
Brownian motion based upon a risk-neutral framework. The model projects stock prices on a daily basis assuming 250 trading 
days per year. The significant inputs into the calculation for share options granted during the year were the weighted average 
share price factored into the model of 12.1 pence, the exercise price ranges between 7.5 pence and 18.5 pence, the expected 
volatility of approximately 85% the option life of 5 years, the expected dividend yield of Nil, and the risk-free interest rate 
between 2.06% and 2.91%.
Warrants 
Details of the share warrants outstanding during the year are as follows:
2010 2009
Number of 
share options
000s 
Weighted average 
exercise price
Number of
share options
000s 
Weighted average 
exercise price
Outstanding at the beginning of the year 5,247 130p 5,247 130p
Granted during the year – – – –
Outstanding at the end of the year 5,247 130p 5,247 130p
Exercisable at the end of year 5,247 130p 5,247 130p
The warrants outstanding at 31 October 2010 had a weighted average exercise price of £1.30 and a weighted average contractual 
life of 6 years. The subscription rights attached to each warrant in issue must be exercised within 10 years of the date of grant.
The fair value of warrants granted were determined using the Black-Scholes pricing model. Significant inputs into the calculation 
include the market price at the date of grant and exercise prices. Furthermore, the calculation takes into account the future 
dividend yield, the share price volatility rate and risk-free interest rate. The underlying expected share price volatility was 
determined by reference to historical data. The Company expects the volatility of its share price to reduce as it matures.  
The risk-free interest rate was determined by the implied yield available on a zero-coupon government bond.
Cash Bonus Award
During the year, the Independent Board members approved a cash bonus award to J G Carroll, J C Fraser and M T J Molyneux. 
The bonus is not payable until a sale of the entire issued share capital of the Company at the time of grant, for an amount valuing 
the Company at least 15 pence per Ordinary Share. The bonus has good leaver and bad leaver terms similar to the Management 
Incentive Plan and has a graduated payout between 15 pence and 18.5 pence per Ordinary Share.
The fair value of the cash bonus award was determined using the Monte-Carlo Simulation. One of the provisions of the cash bonus 
award is around the performance of the Company’s stock price which is a market condition (i.e. trading above 15 pence). The expense 
recognised is based upon the fair value determined above the 15 pence value regardless of the stock price at the time of the change of 
control. The other significant inputs into the calculation for the cash bonus award granted during the year were the expected volatility 
of 84.99% the cash bonus award life of 5 years, the expected dividend yield of Nil, and the risk-free interest rate of 1.62%.  42
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
17 Financial liabilities
31 October 2010 31 October 2009
< 1 year
£000s
1 – 5 years
£000s
Total
£000s
< 1 year
£000s
1 – 5 years
£000s
Total
£000s
Liabilities to banks 4,503 9,733 14,236 1,596 13,144 14,740
Obligations under finance leases 107 273 380 88 347 435
4,610 10,006 14,616 1,684 13,491 15,175
Interest on the liabilities to banks is payable at a variable rate, which is set at 4.50% above LIBOR on both denominated components 
of loan of which 100% has been fixed by means of an interest rate swap agreement at 4.0%. The bank loan is secured on the assets  
of Travelzest plc. In November 2010, the fixed rate increases to 8.48% on the Canadian denominated element of the loan.
During the prior year, the Group renegotiated the existing facility of £14,500,000 of which £10,000,000 is now denominated in 
Canadian dollars. In May 2010 a repayment of £1,729,000 was made, along with a further repayment of £2,251,000 in November 2010. 
Repayments are due every six months thereafter with a balloon payment in May 2012. The loan is presented net of the arrangement 
fee of £401,000 (2009: £687,000). 
The Group is currently reviewing new facilities that will amend the term and structure of the current facility to more 
commercially beneficial terms. 
Finance lease liabilities primarily relate to technology infrastructure in Canada. Group obligations under finance leases are 
payable as follows:
Principal
 
£000s
Interest
£000s
Minimum lease 
payments
£000s
One year 107 28 135
One to five years 273 30 303
Total 380 58 438
18 Trade and other payables
31 October 2010
Re-presented
31 October 2009
< 1 year
£000s
1 – 5 years
£000s
Total
£000s
< 1 year
£000s
1 – 5 years
£000s
Total
£000s
Trade payables 1,525 – 1,525 2,821 – 2,821
Liabilities relating to social 
security and other taxes 72 – 72 54 – 54
Other liabilities 8,434 622 9,056 8,555 6 8,561
10,031 622 10,653 11,430 6 11,436
Deferred tax – 484 484 – 871 871
Current tax liabilities 1,508 – 1,508 366 – 366
11,539 1,106 12,645 11,796 877 12,673 43
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
19 Derivative financial instruments
2010
 
£000s
Re-presented
2009 
£000s
Liabilities from derivative financial instruments 1,247 1,691
Derivative financial instruments, all with a remaining term of more than one year, primarily serve to hedge future operative business. All 
instruments are outlined in Note 27. The fair value of the financial derivatives has been determined by relevant active market valuations. 
During the prior year, interest swaps denominated in sterling and Canadian dollar that were aligned to the restated facility in 
June 2009 were terminated and new interest swaps matching the amounts of the loan denominated in Canadian dollar and sterling.  
An element of the future cash flows relating to the former sterling interest swaps no longer exists and has been released from the 
cash flow hedge reserve to the income statement to the value of £262,000 (2009: £128,000). 
All financial instruments have been designated as hedging instruments as cash flow hedges in accordance with IAS 39, except for the 
Canadian dollar denominated interest rate swap which is an ineffective economic hedge. The following table indicates the periods in 
which the cash flows associated with the derivatives which as a cash flow hedge are expected to occur.
31 October 2010 Projected cash inflows/(outflows)
Fair value of 
instrument 
£000s
< 1 year 
£000s
1 – 2 years 
£000s
2 – 5 years
£000s 
>5 years 
£000s
Derivative financial assets
Weather derivative 171 171 – – –
Foreign exchange forward contracts 19 19 – – –
Derivative financial liabilities
Weather derivative (171) (171) – – –
Interest rate swaps (1,076) (796) (280) – –
31 October 2009 Re-presented
Projected cash inflows/(outflows)
Fair value of 
instrument 
£000s
< 1 year 
£000s
1 – 2 years 
£000s
2 – 5 years
£000s 
>5 years 
£000s
Derivative financial assets
Weather derivative 350 350 – – –
Foreign exchange forward contracts 23 23 – – –
Derivative financial liabilities
Weather derivative (350) (350) – – –
Interest rate swaps (1,338) (532) (606) (200) –
Foreign exchange forward contracts (3) (3) – – –
During the year effectiveness relating to the cash flow hedges has been recognised in the income statement amounting to £213,000 
(2009: £73,000).
20 Contingent liabilities
VFB Holidays Limited has provided a bond to AITOT for £Nil (2009: £616,700) and IATA £195,000 (2009: £85,000) and ABTOT for 
£540,000 (2009: £Nil), JMB Travel Consultants Limited to ABTOT for £21,000 (2009: £23,000), Fair’s Fare Limited provide a bond to 
IATA for £390,000 (2009: £395,000), Peng Travel Limited to ABTA £117,000 (2009: £137,000), and 4358736 Canada Inc. provided a 
bond in favour of the Office of the Protection of Consumers for CAD $150,000 (2009: CAD $150,000). 
Barclays Bank plc holds an unlimited debenture over the assets of the Company, including the shares in subsidiary companies in 
respect of loans made to the holding company. Barclays Bank plc holds an unlimited debenture over the assets of the Company and 
UK subsidiaries in respect of ancillary facilities.  44
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
n o Tes T o The consolida Ted financial s Ta TemenT s 
continued
21 Commitments under operating leases
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
2010 2009
Land and buildings
£000s 
Other items
£000s 
Land and buildings
£000s 
Other items
£000s 
Within 1 year 828 219 666 176
Within 2 to 5 years 3,019 298 2,409 319
After more than 5 years 2,380 – 2,184 –
6,227 517 5,259 495
22 Other financial commitments
The Group had the following capital commitments at the year end:
2010
£000s
2009
£000s 
Website development – 15
23 Related party transactions
Key management is considered the Board of directors. Refer to Note 4 for directors remuneration. 
J G Carroll is a shareholder through Coote Street Capital LP and J C Fraser is a direct shareholder and director, in 2149201 
Ontario Inc. S Carroll and E Carroll, brother and father respectively of J G Carroll, are also shareholders in 2149201 Ontario Inc. 
through Coote Street Capital LP and S Carroll is also a director in 2149201 Ontario Inc. In 2008, this company entered into a 
property lease agreement (as landlord) with 4358376 Canada Inc., carrying on business as itravel2000 (as tenant). The property 
is located at 2350 Matheson Boulevard East, Mississauga, Ontario, Canada, and the lease is for the entire building (approximately 
40,000 square feet) and lands (approximately 140 parking spaces). The term of the lease is 10 years from 1 October 2008 to 
30 September 2018 with market competitive net rate of CAD $18.50 per square foot in years 1 to 5, and CAD $23.50 per  
square foot in years 6 to 10. All operating and maintenance costs are to the tenant’s account. A leasehold improvement allowance  
of up to CAD $800,000 was included as part of the lease inducement by the landlord. 45
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
24 Notes to the statement of cash flows
The cash flow statement showed the flow of cash and cash equivalents on the basis of a separate presentation of cash inflows and 
outflows from operating, investing and financing activities.
Reconciliation of operating profit to net cash inflow from operating activities
2010
£000s
2009
£000s
Operating (loss)/profit (7,999) 1,293
Amortisation 861 1,398
Depreciation 325 301
Change in inventories 46 (31)
Change in operating receivables (149) (1,098)
Share-based payments 130 (557)
Change in operating payables (19) (552)
Goodwill impairment 11,320 –
Loss on disposal of tangible and intangible fixed assets 421 –
4,936 754
Included within changes in operating payables in 2009 is £280,000 relating to placing fees.
25 Re-presentation of the 2009 consolidated income statement and 2009 consolidated balance sheet
The 2009 income statement has been re-presented to reclassify £1,638,000 costs in respect of agents’ commission from administrative 
expenses to cost of sales. The 2009 consolidated balance sheet has been re-presented to reclassify £350,000 derivative financial 
instruments from trade and other payables to derivative financial instruments and to reclassify £135,000 accrued liabilities from 
derivative financial instruments (current assets) to accrued liabilities.
26 Post balance sheet events
Post 31 October 2010 the Company secured a seasonal overdraft facility of £1.5 million from its primary bank with standard terms 
that fall within the current facility. There have been no other significant post balance sheets events since 31 October 2010.
27 Financial risk management objectives and policies
Financial instruments by category
31 October 2010
Loans and 
receivables
£000s
Assets at fair 
value through the 
profit and loss
£000s
Derivatives used 
for hedging
£000s
Total
£000s
Assets as per balance sheet
Derivative financial instruments – 190 – 190
Trade and other receivables exc.  
corporation tax, prepayments and  
accrued income 6,800 – – 6,800
Cash and cash equivalents 5,850 – – 5,850
Total 12,650 190 – 12,840
31 October 2010
Liabilities at fair 
value through the 
profit and loss
£000s
Derivatives used 
for hedging
£000s
Other financial 
liabilities at 
amortised cost
£000s
Total
£000s
Liabilities as per balance sheet
Borrowings – – 14,236 14,236
Trade and other payables exc. 
statutory liabilities, accrued
expenses and deferred income – – 1,525 1,525
Obligations under finance leases – – 380 380
Derivative financial instruments 1,072 175 – 1,247
Total 1,072 175 16,141 17,388 46
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
27 Financial risk management objectives and policies continued
31 October 2009
Loans and 
receivables
£000s
Assets at fair 
value through the 
profit and loss
£000s
Derivatives used 
for hedging
£000s
Total
£000s
Assets as per balance sheet
Derivative financial instruments – 373 – 373
Trade and other receivables exc.  
corporation tax, prepayments and  
accrued income 6,353
–
– 6,353
Cash and cash equivalents 5,585 – – 5,585
Total 11,938 373 – 12,311
31 October 2009
Liabilities at fair 
value through the 
profit and loss
£000s
Derivatives used 
for hedging
£000s
Other financial 
liabilities at 
amortised cost
£000s
Total
£000s
Liabilities as per balance sheet
Borrowings – – 14,740 14,740
Trade and other payables exc. 
statutory liabilities, accrued 
expenses and deferred income – – 2,821 2,821
Obligations under finance leases – – 435 435
Derivative financial instruments 1,476 215 – 1,691
Total 1,476 215 17,996 19,687
The Board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework 
and to ensure that the Group has adequate policies, procedures and controls to successfully manage the financial risks that it faces. 
These form part of the Group’s overall Risk Management Framework.
Incorporated within the framework’s terms of reference are the determination of all treasury policies and the monitoring of 
the effectiveness of those polices. Group Treasury implements and agrees policies on a day-to-day basis. The procedures also 
stipulate the levels of authority applied to dealing and to approving the types of hedging financial instrument used to manage 
these exposures. Transactions are only undertaken to hedge underlying exposures. Financial instruments are not traded, nor are 
speculative positions taken.
The Treasury position of the Group, including liquidity and foreign exchange hedging exposure, is managed centrally in accordance 
with polices appropriate to cover specific risks faced by each business unit, and is the responsibility of the Financial director. 
Management conducts regular reviews of financial risks with business unit management teams. Reports and forecasts are submitted 
monthly to the Board.
In line with its established policy, the Group has monitored throughout the year its counterparty exposure with individual financial 
institutions. Such counterparty risk can arise by way of cash deposited or derivative instruments traded.
The Group uses various financial instruments. These include loans and cash together with various items, such as trade debtors and 
trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the 
Group’s operations and group acquisitions. As a matter of principle, all hedging transactions of the Group were based on appropriately 
recognised or future underlying items. The hedging transactions by the Group companies were based on the risk profile and hedge 
schedule of the respective company. The existence of these financial instruments exposes the Group to a number of financial risks, 
market risk (in respect of foreign currency rate risk and interest rate risk), liquidity risk (in respect of the Group’s ability to meet its 
liabilities) and credit risk (in respect of recovery amounts owing to the Group). The directors review and agree policies for managing 
each of these risks and they are summarised below. These policies have remained unchanged from previous years. 47
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Currency risk
The Group publishes its consolidated financial statements in sterling and as a result, it is subject to foreign currency exchange 
translation risk in respect of the translation of the results and underlying assets of its foreign operations into sterling. In relation  
to translation risk, as far as possible the assets held in the foreign currency are matched to an appropriate level of borrowings in 
the same currency. T ransaction exposures, including those associated with forecast transactions, are hedged when known, principally 
using forward currency contracts. T ransaction exposures primarily comprise accommodation and other costs of overseas holidays 
payable in currencies other than sterling. 
The table below shows the extent to which the Group had financial assets and liabilities at the year end in currencies other than sterling:
2010
£000s
2009
£000s
Cash at bank and in hand
Canadian dollars 1,243 992
Euros 14 96
US dollars 1,242 349
Other currencies 5 –
Bank Loans
Canadian dollars 10,602 10,919
Trade and other receivables
Canadian dollars 4,657 5,193
US dollars 1,067 485
Trade and other payables
Canadian dollars 4,649 5,725
US dollars 55 –
The Group hedges its foreign currency exposures generally on a seasonal basis, i.e. winter and summer seasons. At the start of the 
season the Group will have hedged some of its foreign currency exposure for that season, using predominantly forward exchange 
contracts, most with a maturity of less than one year from the reporting date. 
At the year end the Group had the following forward exchange contracts:
2010 2009
Total sterling 
commitment
£000s
Fair value of 
forward element 
of contract 
£000s
Total sterling 
commitment
£000s
Fair value of 
forward element 
of contract
£000s
Euro 700 19 253 23
US dollars – – 184 (2)
Moroccan Dirham – – 50 (1)
The following significant exchange rates to the Group’s Sterling presentation currency are illustrative of the rates applied during the 
current year and prior year:
2010 2009
Average rate Spot rate Average rate Spot rate
Euro 1.1558 1.1507 1.1305 1.1177
Canadian dollars 1.6169 1.6363 1.8012 1.7723
US dollars 1.5566 1.5988 1.5444 1.6445
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. 
Trade and other receivables exposures are managed locally in the operating businesses where they arise; there is no concentration 
of credit risk with respect to trade and other receivables due to a majority of holidays being paid for in advance. The maximum 
exposure to credit risk is £4,948,000 as outlined in Note 11.
In addition, the Group makes prepayments for hotel accommodation. Whilst such prepayments do not meet the definition of a 
financial asset under IAS39, such prepayments give rise to a risk similar to credit risk due to the inherent risk of the Group not 
recovering the prepayment through full delivery of the related goods and services. 48
n o Tes T o The con solida Ted financial s Ta TemenT s 
continued
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
27 Financial risk management objectives and policies continued
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach is to 
ensure that it will have sufficient liquidity to meets it liabilities when due, under both normal and stressed circumstances.
The Group’s liquidity peaks in July and August during the European summer holiday season and December through February during 
the North American holiday season, with the liquidity low points in April and November.
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash 
assets safely and profitably. The Group’s financial assets are highlighted below:
2010
£000s 
Re-presented
2009
£000s 
Trade accounts receivable 4,948 4,276
Other receivables 1,852 2,077
 6,800 6,353
Derivatives designated as cash flow hedges
Derivatives financial instruments 190 373
Cash 5,850 5,585
The Board remains satisfied with the Group’s funding and liquidity position. Further information on the borrowings of the Group is 
given in Note 17 to the accounts. The table below provides details of the Group’s undiscounted financial liabilities at year end:
31 October 2010
Re-presented
31 October 2009
< 1 year
£000s
1 – 5 
years
£000s
Total
£000s
< 1 year
£000s
1 – 5 
years
£000s
Total
£000s
Financial liabilities measured at  
amortised cost
Liabilities to banks 4,503 9,733 14,236 1,596 13,144 14,740
Obligations under finance leases 107 273 380 88 347 435
T o third parties 1,525 – 1,525 2,821 – 2,821
Other liabilities 8,506 622 9,128 8,609 6 8,615
14,641 10,628 25,269 13,114 13,497 26,611
Derivatives designated as cash flow hedges
Derivative financial instruments 1,039 208 1,247 871 820 1,691
Interest rate risk
The Group finances its operations through retained profits. Acquisitions are financed through a combination of share capital, loan notes 
and bank borrowings. The Group exposure to interest rate fluctuations on its borrowings is managed by the use of interest rate swaps. 
Details of interest rates on borrowings are given in Note 17 to the accounts.
Sensitivity analysis
The sensitivity analysis is for illustrative purposes only and should be considered a projection of likely future events and gains or losses.
The sensitivity analysis includes the following assumptions:
• Change in market interest rates only affect interest income or expense of variable financial instruments;
• Change in market interest rates only affect interest income or expense in relation to financial instruments with fixed interest 
rates are recognised at fair value;
•  Change in market interest rates affect the fair value of derivative financial instruments designated as hedging instruments; and
•  All foreign currency hedges are expected to be highly effective. 49
consolidated Financial s tatements Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
Currency risk
Under these assumptions, with a 10% strengthening of sterling against all other currencies, profit after tax would be decreased 
by £0.3m (2009: decrease by £0.2m) and equity would be decreased by £3.3m (2009: decreased by £3.8m). A 10% weakening of 
Sterling against all other currencies would result in a gain after tax of £0.4m (2009: gain of £0.2m) and an increase in equity of 
£4.1m (2009: increase of £4.7m).
Interest rate risk
Under these assumptions, with a 1% (100 basis point) difference in market interest rates, loss after tax would have reduced or 
increased by £0.1m (2009: £0.1m).
Fair value estimation
Effective 1 January 2009, the Group has adopted the amendment to IFRS 7 for financial instruments that are measured in the balance 
sheet at fair value. This requires the disclosure of fair value measurements by level of the following fair value measurement hierarchy.
• Quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices)  
or indirectly (derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The following table presents the Group’s assets and liabilities that are measured at fair value at 31 October 2010:
Level 1
£000s
Level 2
£000s
Level 3
£000s
Total
£000s
Financial assets at fair value through 
profit and loss – 190 – 190
T otal assets – 190 – 190
Financial liabilities at fair value through 
profit and loss – 1,072 – 1,072
Derivatives – cash flow hedges – 175 – 175
T otal liabilities – 1,247 – 1,247
The following table presents the Group’s assets and liabilities that are measured at fair value at 31 October 2009:
Level 1
£000s
Level 2
£000s
Level 3
£000s
Total
£000s
Financial assets at fair value through
profit and loss 373 373
T otal assets – 373 – 373
Financial liabilities at fair value through 
profit and loss – 1,476 – 1,476
Derivatives – cash flow hedges – 215 – 215
T otal liabilities – 1,691 – 1,691
The fair value of interest rate swaps and forward foreign currency contracts is calculated as the present value of the estimated 
future cash flows based on observable yield curves. 50
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
50
We have audited the parent company financial statements of 
Travelzest plc for the year ended 31 October 2010 which 
comprise the Company balance sheet, the Company statement 
of changes in shareholders’ funds, the Company principal 
accounting policies and the related notes. The financial 
reporting framework that has been applied in their preparation 
is applicable law and United Kingdom Accounting Standards 
(United Kingdom Generally Accepted Accounting Practice).
Respective responsibilities of directors  
and auditors
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. Our responsibility is to audit the financial 
statements in accordance with applicable law and International 
Standards on Auditing (UK and Ireland). Those standards 
require us to comply with the Auditing Practices Board’s Ethical 
Standards for Auditors.
This report, including the opinions, has been prepared for 
and only for the company’s members as a body in accordance 
with Chapter 3 of Part 16 of the Companies Act 2006 and 
for no other purpose. We do not, in giving these opinions, 
accept or assume responsibility for any other purpose or 
to any other person to whom this report is shown or into 
whose hands it may come save where expressly agreed by 
our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to 
the parent company’s circumstances and have been consistently 
applied and adequately disclosed; the reasonableness of significant 
accounting estimates made by the directors; and the overall 
presentation of the financial statements.
Opinion on financial statements 
In our opinion the parent company financial statements: 
• give a true and fair view of the state of the company’s affairs 
as at 31 October 2010;
• 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.
Opinion on other matter prescribed by the 
Companies Act 2006
In our opinion the information given in the Directors’ Report 
for the financial year for which the parent company financial 
statements are prepared is consistent with the parent company 
financial statements. 
Matters on which we are required to  
report by exception
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 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.
Other matter 
We have reported separately on the Group financial statements 
of Travelzest plc for the year ended 31 October 2010.
John Minards
For and on behalf of PricewaterhouseCoopers LLP 
Chartered Accountants and Statutory Auditors 
St Albans
7 February 2011
inde Penden T audi Tors’ re Por T To T he members of Travelzes T Plc 51
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
51
company Financial statements
com Pany b alance s hee T 
Notes
31 October 2010
£000s
31 October 2009 
£000s
Fixed assets
Tangible fixed assets A 17 14
Investments B 23,810 25,143
23,827 25,157
Current assets
Debtors C 20,247 22,265
Deferred taxation G – 743
Cash at bank 2,702 2,012
22,949 25,020
Creditors: amounts falling due within one year D (5,666) (2,794)
Net current assets 17,283 22,226
Total assets less current liabilities 41,110 47,383
Creditors: amounts falling due after more than one year E (9,811) (13,144)
 31,299 34,239
Capital and reserves
Called-up equity share capital I 2,903 2,903
Share premium account J 31,456 31,524
Merger reserve J 3,357 3,357
Profit and loss account J (6,417) (3,545)
Shareholders’ funds 31,299 34,239
These financial statements were approved by the directors on 7 February 2011 and are signed on their behalf by:
J G Carroll J C Fraser
Director Director
Company registered number: 04520457
  52
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
52
2010 
£000s
2009 
£000s
Loss for the financial year (3,021) (1,533)
Issue of shares (net of expenses) (68) 17,241
Conversion of exchangeable shares – (12,735)
Share-based payments 149 (557)
Net (reduction)/addition to shareholders’ funds (2,940) 2,416
Opening shareholders’ funds 34,239 31,823
Closing shareholders’ funds 31,299 34,239
com Pany sT a Temen T of c hanges in e qui Ty 53
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
53
company Financial statements
c om Pany P rinciP al accoun Ting P olicies 
Basis of preparation
The financial statements of the Company have been  
prepared under the historical cost convention, and in 
accordance with UK GAAP and the accounting policies  
have been applied consistently. The financial statements are 
prepared in accordance with the Companies Act 2006.
Accounting convention
The financial statements are prepared on a going concern basis, 
which assumes that the Company will continue in operational 
existence for the foreseeable future.
As a consolidated profit and loss account is published, a 
separate profit and loss account for the parent company is 
omitted from the Group financial statements by virtue of 
section 408 of the Companies Act 2006. The loss dealt with 
in the accounts of the parent company under UK GAAP is 
£3,021,000 (2009: loss of £1,533,000).
Under Financial Reporting Standard No 1 (revised), the 
Company is exempt from the requirement to prepare a 
cash flow statement as its cash flows are included within the 
published consolidated cash flow statement of Travelzest plc.
The Company has taken advantage of the exemption contained 
within Financial Reporting Standard No 8 and has not therefore 
disclosed transactions or balances with wholly owned entities 
that form part of the Group.
The Company has taken advantage of the exemption contained 
within Financial Reporting Standard No 29 and has not 
provided the required financial instruments disclosure on the 
basis that the Group’s consolidated financial statements include 
consolidated IFRS 7 disclosures which are compliant with the 
requirements of FRS 29.
Merger relief
The Company was entitled to the merger relief offered  
by section 131 of the Companies Act 1985 in respect of  
the consideration received in excess of the nominal value  
of the equity shares issued in connection with the acquisition  
of Peng Travel Limited, Fair’s Fare Limited and the settlement  
of outstanding consideration on the acquisition of Holiday 
Express Group Limited.
On acquisition, the investments in the Company’s immediate 
subsidiary companies were recorded in the Company’s balance 
sheet at the fair value of the assets acquired, with the difference 
between this and the nominal value of the shares issued being 
credited to a merger reserve.
Investments 
Investments held as fixed assets are stated at cost less provision 
for any permanent diminution in value. Such provisions are 
charged to the profit and loss account. The directors will carry 
out an impairment review if there are events or circumstances 
which indicate that the carrying value of the investment may 
not be recoverable. Where loans made to Group undertakings 
are not expected by the director’s to be repaid in the 
foreseeable future these are treated as equity in nature and are 
classified within fixed asset investments.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Cost 
includes the original purchase price of the asset and the costs 
attributable to bringing the asset to its working condition for 
its intended use. Depreciation is provided at rates calculated to 
write off the cost of fixed assets, less their estimated residual 
value, over their expected useful lives on a straight line basis:
Office equipment and computer equipment – 3 to 5 years
Operating lease agreements
Rentals applicable to land and building operating leases where 
substantially all of the benefits and risks of ownership remain 
with the lessor are charged against profits on a straight line 
basis over the period of the lease.
Pension costs
The Group pays contributions to publicly or privately 
administered pension plans on a mandatory, contractual 
or voluntary basis. The group has no further payment 
obligations once the contributions have been paid. The 
contributions are recognised as employee benefit expense 
when they are due. Prepaid contributions are recognised as 
an asset to the extent that a cash refund or a reduction in 
the future payments is available.
Deferred taxation
Deferred tax is recognised in respect of all timing differences 
that have originated but not reversed at the balance sheet date, 
where transactions or events that result in an obligation to pay 
more tax in the future or a right to pay less tax in the future 
have occurred at the balance sheet date. A net deferred tax 
asset is recognised as recoverable and therefore recognised 
only when, on the basis of all available evidence, it can be 
regarded as more likely than not that there will be suitable 
taxable profits against which to recover carried forward tax 
losses and from which the future reversal of underlying timing 
differences can be deducted. Deferred tax is measured at the 
average tax rates that are expected to apply in the periods in 
which the timing differences are expected to reverse, based 
on tax rates and laws that have been enacted or substantively 
enacted by the balance sheet date. Deferred tax is measured  
on an undiscounted basis. 54
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
54
Foreign currencies
Monetary assets and liabilities in foreign currencies are 
translated into sterling at the rates of exchange ruling at  
the balance sheet date. Transactions in foreign currencies  
are translated into sterling at the rate of exchange ruling  
at the date of the transaction. Exchange differences are  
taken into account in arriving at the operating profit.
Financial instruments
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 entity after 
deducting all of its financial liabilities.
Where the contractual obligations of financial instruments 
(including share capital) are equivalent to a similar debt 
instrument, those financial instruments are classified as financial 
liabilities. Financial liabilities are presented as such in the balance 
sheet. Finance costs and gains or losses relating to financial 
liabilities are included in the profit and loss account. Finance 
costs are calculated so as to produce a constant rate of return 
on the outstanding liability.
Share-based payments
The Group issues share-based instruments to certain 
employees as part of their total remuneration at fair value. 
The fair values of these instruments are calculated at the date 
of grant, using the Black-Scholes or Monte-Carlo Simulation 
pricing models. These fair values are charged to the income 
statement on a straight-line basis over the expected vesting 
periods of the instruments, with a corresponding increase 
in equity reserves. Any waivers to share-based payments are 
treated as cancellations by the Group. When the options 
are exercised, the company issues new shares. The proceeds 
received net of any directly attributable transaction costs are 
credited to share capital (nominal value) and share premium 
when the options are exercised. 
The Group also issued a cash bonus award which is recorded 
as cash settled share-based compensation. The fair value of 
the cash bonus award is calculated using the Monte-Carlo 
Simulation pricing model at each reporting date. The fair value 
is charged to the income statement with a corresponding entry 
to non-current liabilities.
Directors
Details of directors’ remuneration, share-based payments and 
pension entitlements in the current period and prior period are 
contained in Note 4 to the consolidated financial statements. 
Details of share-based payments are also contained in Note 16 
to the consolidated financial statements.
c om Pany P rinciP al accoun Ting P olicies 
continued A Tangible fixed assets
Office 
equipment
£000s
Computer 
equipment
£000s
Total
£000s 
Cost
At 1 November 2009 8 37 45
Additions – 24 24
At 31 October 2010 8 61 69
Depreciation
At 1 November 2009 8 23 31
Charge for the year – 11 11
Disposals – 10 10
At 31 October 2010 8 44 52
Net book value
At 31 October 2010 – 17 17
At 31 October 2009 – 14 14
B Fixed asset investments
Long term 
loans to Group 
undertakings
£000s
Equity interests 
in subsidiary 
undertakings
£000s
Total
£000s 
Cost
At 1 November 2009 13,198 11,945 25,143
Impairment of investment in Holiday Express (UK) Limited – (1,298) (1,298)
Impairment of investment in Travelzest Holidays Limited – (20) (20)
Impairment of investment in Travelzest Holdings (UK) Limited – (15) (15)
At 31 October 2010 13,198 10,612 23,810
Net book value
At 31 October 2010 13,198 10,612 23,810
At 31 October 2009 13,198 11,945 25,143
The directors believe that the carrying value of the investments is supported by their underlying net assets or future discounted cash flows. 
On 1 November 2009, the Company amalgamated the below subsidiaries together with 4358736 Canada Inc. remaining as the 
surviving corporation.
Country of 
registration
Class of share 
capital held
Proportion held 
by Company
Nature of 
business
Travelzest Holdings Inc Canada Ordinary 100% Holding company
0763756 BC Limited Canada Ordinary 100% Holding company
4358736 Canada Inc. (trading as itravel2000) Canada Common 100% Agents
55
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
55
company Financial statements
n o Tes T o The com Pany financial s Ta TemenT s  B Fixed asset investments continued
At 31 October 2010, the Company held more than 20% of the allotted share capital of the following trading and holding companies:
Country of 
registration
Class of share 
capital held
Proportion held 
by Company
Nature of 
business
Holiday Express (UK) Limited England & Wales Ordinary 100% Agents
Travelzest Canco Limited England & Wales Ordinary 100% Holding company
Travelzest Holidays Limited  
(formerly Wow House Limited) England & Wales Ordinary 100% Agents
Travelzest Holdings (UK) Limited England & Wales Ordinary 100% Holding company
The shareholdings above also represent the proportion of voting rights held. All subsidiaries have been included in the consolidated 
accounts. The Company also indirectly owns the following companies: 
Country of 
registration
Class of share 
capital held
Proportion held 
by Group
Nature of 
business
VFB Holidays Limited  
(formerly Travelzest Retail (UK) Limited)
England & Wales Ordinary 100% Merchant
Vacances Franco-Britannques Limited England & Wales Ordinary 100% Merchant
4358736 Canada Inc.  
(trading as itravel2000)
Canada Common 100% Agents
The Cruise Professionals Limited Canada Common 100% Agents
7500106 Canada Inc. (trading as T ravelcash) Canada Common 100% Payment Programs
Best of Morocco Limited England & Wales Ordinary 100% Merchant
Peng T ravel Limited England & Wales Ordinary 100% Merchant
Montpelier Collection Limited England & Wales Ordinary 100% Holding company
Fair’s Fare Limited England & Wales Ordinary 100% Agents
Tapestry Collection Limited England & Wales Ordinary 100% Merchant
Captivating Cuba Limited England & Wales Ordinary 100% Merchant
JMB Travel Consultants Limited England & Wales Ordinary 100% Merchant
C Debtors
2010
£000s 
2009
£000s 
Amounts owed by Group companies 20,176 22,167
Other debtors 55 8
Prepayments and accrued income 16 90
 20,247 22,265
Included within amounts owed by Group companies are amounts due from Travelzest plc’s overseas subsidiaries which bear interest 
of 8.48%, all other amounts are interest free. Voluntary repayments can be made at any time.
56
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
56
noTes T o The com Pany financial s Ta TemenT s
continued D Creditors: amounts falling due within one year
2010
£000s 
2009 
£000s
Bank loans 4,503 1,596
Trade creditors 249 217
Social security & other taxes 10 19
Corporation tax – 77
Accruals and deferred income 904 885
5,666 2,794
E Creditors: amounts falling due after more than one year
2010
£000s 
2009
£000s 
Bank loan 9,733 13,144
Deferred tax 61 –
Other creditors 17 –
9,811 13,144
F Creditors – capital instruments
Bank loans are repayable:
2010
£000s
2009 
£000s
In one year or less or on demand 4,503 1,596
Between one and two years 9,733 4,253
Between two and five years – 8,891
 14,236 14,740
Interest is payable on bank loans:
2010
£000s 
2009
£000s 
Variable interest rate 14,236 14,740
Interest on the liabilities to banks is payable at a variable rate, which is set at 4.50% above LIBOR on both denominated components 
of loan of which 100% has been fixed by means of an interest rate swap agreement at 4.0%. The bank loan is secured on the assets of 
Travelzest plc. In November 2010, the fixed rate increases to 8.48% on the Canadian denominated element of the loan.
During the prior year, the Group renegotiated the existing facility of £14,500,000 of which £10,000,000 is now denominated in 
Canadian dollars. In May 2010, a repayment of £1,729,000 was made along with a further repayment of £2,251,000 in November 2010. 
Repayments are due every six months thereafter with a balloon payment in May 2012. The loan is presented net of the arrangement 
fee of £401,000 (2009: £687,000).
The Group is currently reviewing new facilities that will amend the term and structure of the current facility to more commercially 
beneficial terms.
57
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
57
company Financial statements G Deferred taxation
The movement in the deferred taxation provision/(asset) during the year was:
2010
£000s 
2009
£000s 
Deferred tax (asset)/liability brought forward (743) –
Charged/(credited) to the profit and loss account 838 (743)
(Credited)/charged to equity (34) –
Deferred tax liability/(asset) carried forward and (Note E) 61 (743)
With effect from 1 April 2011 the tax rate will reduce from 28% to 27%. Deferred tax has been provided for at 27%. The provision 
for deferred taxation consists of the tax effect of timing differences in respect of:
2010
£000s 
2009
£000s 
Share-based payment 61 –
Other short-term timing differences – (743)
H Commitments under operating leases
At 31 October 2010, the Company had no annual commitments under non cancellable operating leases. 
I Share capital
Authorised share capital:
2010 
£000s 
2009 
£000s 
259,550,000 ordinary shares of £0.02 each 5,191 5,191
Issued, called up and fully paid:
2010 2009
No. £000s No. £000s 
Ordinary shares of £0.02 each 145,136,110 2,903 145,136,110 2,903
In the prior year, and in accordance with the Exchange Rights Agreement dated 13 October 2006, Travelzest Holdings Inc.,  
a wholly-owned indirect subsidiary of Travelzest plc, purchased the 10,572,614 Class A shares in 0763756 BC Limited from 6615716 
Canada Inc. The shares are issued at 120p. The exchangeable shares were originally issued as part consideration of  
the acquisition of itravel2000 in October 2006.
In September 2009, the Company issued 114,170,000 ordinary shares of 2p each at a premium of 3p raising £5,710,000. The placing 
fees associated were £924,000.
All shares are equally entitled to receive dividends and the repayment of capital and represent one vote at shareholders’ meeting.
J Reserves
Share premium 
account
£000s
Merger 
reserve 
£000s
Profit and loss 
account
£000s
At 1 November 2009 31,524 3,357 (3,545)
Loss for the year – – (3,021)
Issue of shares (net of expenses) (68) – –
Share-based payments – – 149
At 31 October 2010 31,456 3,357 (6,417)
n o Tes T o The com Pany financial s Ta TemenT s 
continued
58
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
58 K Loss attributable to the shareholders of the parent company
The loss dealt with in the accounts of the parent company was £3,021,000 (2009: loss of £1,533,000).
L Contingent liabilities
Barclays Bank plc holds an unlimited debenture over the assets of the holding company, including the shares in subsidiary companies 
in respect of loans made to the holding company. Barclays Bank plc holds an unlimited debenture over the assets of the Company 
and UK subsidiaries in respect of ancillary facilities.
M Share-based payments
Share options
Employee Option Scheme Management Incentive Plan
Number of share 
options 
000s
Weighted average 
exercise price
Number of share 
options 
000s
Weighted average 
exercise price
2009
Outstanding at the beginning of the year 1,457 136p – –
T erminated in year (1,186) 138p – –
Granted during the year – – – –
Outstanding at the end of the year 271 129p – –
Exercisable at the end of year 261 130p – –
2010
Outstanding at the beginning of the year 271 129p – –
T erminated in year (167) 97p – –
Granted during the year – – 28,587 12.1p
Outstanding at the end of the year 104 125p 28,587 12.1p
Exercisable at the end of year 104 125p – –
Employee Option Scheme
The Company issues long-term incentive stock options to certain employees under an approved and unapproved option scheme. 
Both schemes have similar terms that include a minimum vesting period of 3 years from the date of grant and active employment  
in the Group. 
The fair value of options granted were determined using the Black-Scholes pricing model. 
An amount of £105,000 (2009: credit of £557,000) relating to share options not vested held by employees who have left in the year  
has been credited to the income statement. 
Management Incentive Plan
The Company detailed in the Shareholder Circular issued 5 August 2009 the creation of a Management Incentive Plan which was 
agreed by shareholders at the General Meeting of 28 August 2009. In 2010, 28,587,000 options were granted. No options were 
granted in the prior year. The incentive options have a market exercise price and vest in the event of a sale of the entire issued 
share capital of the Company for an amount valuing the Company at least 15 pence per Ordinary Share. The options have good 
leaver and bad leaver terms, and all share options must be exercised within 10 years of the date of grant.
The fair value of options granted has been determined using the Monte-Carlo Simulation which is a generally accepted statistical 
technique used, in this instance, to simulate a range of possible future stock prices for the Company. The method uses geometric 
Brownian motion based upon a risk-neutral framework. The model projects stock prices on a daily basis assuming 250 trading 
days per year. The significant inputs into the calculation for share options granted during the year were the weighted average 
share price factored into the model of 12.1 pence, the exercise price ranges between 7.5 pence and 18.5 pence, the expected 
volatility of approximately 85% the option life of 5 years, the expected dividend yield of Nil, and the risk-free interest rate 
between 2.06% and 2.91%. 
59
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
59
company Financial statements M Share-based payments continued
Warrants 
Details of the share warrants outstanding during the year are as follows:
2010 2009
Number of share 
warrants
000s
Weighted average 
exercise price
Number of share 
warrants
000s
Weighted average 
exercise price
Outstanding at the beginning of the year 5,247 130p 5,247 130p
Granted during the year – – – –
Outstanding at the end of the year 5,247 130p 5,247 130p
Exercisable at the end of year 5,247 130p 5,247 130p
The warrants outstanding at 31 October 2010 had a weighted average exercise price of £1.30 and a weighted average contractual 
life of 6 years. The subscription rights attached to each warrant in issue must be exercised within 10 years of the date of grant.
The fair value of warrants granted were determined using the Black-Scholes pricing model. Significant inputs into the calculation 
include the market price at the date of grant and exercise prices. Furthermore, the calculation takes into account the future 
dividend yield, the share price volatility rate and risk-free interest rate. The underlying expected share price volatility was 
determined by reference to historical data. The Company expects the volatility of its share price to reduce as it matures.  
The risk-free interest rate was determined by the implied yield available on a zero-coupon government bond.
Cash Bonus Award
During the year, the Independent Board members approved a cash bonus award to J G Carroll, J C Fraser and M T J Molyneux. 
The bonus is not payable until a sale of the entire issued share capital of the Company at the time of grant, for an amount valuing 
the Company at least 15 pence per Ordinary Share. The bonus has good leaver and bad leaver terms similar to the Management 
Incentive Plan and has a graduated payout between 15 pence and 18.5 pence per Ordinary Share.
The fair value of the cash bonus award was determined using the Monte-Carlo Simulation. One of the provisions of the cash bonus 
award is around the performance of the Company’s stock price which is a market condition (i.e. trading above 15 pence). The expense 
recognised is based upon the fair value determined above the 15 pence value regardless of the stock price at the time of the change of 
control. The other significant inputs into the calculation for the cash bonus award granted during the year were the expected volatility 
of 84.99% the cash bonus award life of 5 years, the expected dividend yield of Nil, and the risk-free interest rate of 1.62%. 
N Financial instruments
The fair value of the Company’s financial instruments are set out below:
2010 
£000s
2009 
£000s
Derivative financial assets – forward foreign currency contracts 19 23
Derivative financial liabilities – forward foreign contracts – (3)
Derivative financial liabilities – interest rate swaps (1,076) (1,338)
(1,057) (1,318)
Further information on the forward contracts and the interest rate swaps has been given in Note 27 to the consolidated 
financial statements.
O Post balance sheet events
Post 31 October 2010 the Company secured a seasonal overdraft facility of £1.5 million from its primary bank with standard terms 
that fall within the current facility. There have been no other significant post balance sheets events since 31 October 2010.
60
Travelzest plc Annual Report & Accounts for the year ending 31 October 2010
60
n o Tes T o The com Pany financial s Ta TemenT s 
continued designed and produced by
UNCOVERING CORPORATE CHARISMA
Brand | Literature | On-line | Reporting 
www.fulton-design.co.uk
Company registration number 
04520457
Registered office
2nd Floor Delta Place 
27 Bath Road 
Cheltenham  
Gloucestershire  
United Kingdom 
GL53 7TH
Principal place of business 
2350 Matheson Boulevard East 
Mississauga 
Ontario 
Canada 
L4W 5G9 
0844 335 6623 
Executive Directors 
J G Carroll 
J C Fraser
Non-executive Directors 
R G Hall 
N J Jenkins 
M T J Molyneux (Chairman)
Company Secretary
R G Hall
Bankers
Barclays Bank plc 
Pall Mall Corporate Group 
80 Pall Mall 
London 
United Kingdom 
SW1A 1QA
Solicitors
DLA Piper UK LLP 
3 Noble Street 
London 
United Kingdom 
EC2V 7EE
Nominated Advisor
Investec Bank plc 
2 Gresham Street 
London  
United Kingdom 
EC2V 7QP
Broker
Merchant Securities Limited 
51-55 Gresham Street 
London 
United Kingdom 
EC2V 7HQ
Auditor
PricewaterhouseCoopers LLP 
10 Bricket Road 
St Albans 
Hertfordshire 
United Kingdom 
AL1 3JX
61
c ompany In Format Ion Business Profile The Year in r eview consolida Ted financial sT a Temen Ts com Pan Y f inancial sT a TemenTs Our vision    01
Highlights   02
At a glance   04
Chairman’s statement  06 
Chief Executive’s statement 08 
Governance:
Board of Directors 10
Directors’ report  12
Independent auditors’ report  50
Company balance sheet  51
Company statement of  
changes in equity  52
Company principal  
accounting policies  53
Notes to the Company  
financial statements   55
Company information 61
Independent auditors’ report  16
Principal accounting policies 17
Consolidated income  
statement   24
Consolidated statement of 
comprehensive income 25
Consolidated balance sheet 26
Consolidated cash flow  
statement  27
Consolidated statement of  
changes in equity 28
Notes to the consolidated  
financial statements  29
 · Pos T Turnaround grow Th 
In 2009 and 2010 management began a strategic exercise to reduce 
operating expenses by shifting from a brand-based to a functionally-
based organisation. This shift allowed for the consolidation of 
numerous systems and offices, more efficient strategies and 
management of resources and a lower cost base upon which to 
develop the Group. 
 · l eading marke T Brands 
The Group has various well recognised brands in the UK and  
North America. Its leading brand in Canada is itravel2000, which  
firmly holds a leading market position in the leisure travel sector.
 · e x Perienced managemen T Team 
Our team is comprised of travel professionals with great 
depth and experience in specialist travel products and online 
and offline retailing, together with non-travel professionals who 
provide new thinking to the Group.
 · c ohesive s YsT ems  
We have instilled improved management and control by significantly 
reducing the number of independent systems in the Group. 
 · e conomies of scale 
The Group handles over 300,000 passengers per year, over  
2 million room nights, to over 500 destinations. A unified 
contracting strategy has now been implemented in the Group,  
which will provide for improved margins and access to inventory.
 · sP ecialisT Brands  
We continue to develop various specialist agency and merchant  
brands that will allow us to create and manage our customer 
experience in a more informed and controlled manner.
Travel Zes T is an emerging Travel grou P  
wi Th cross conTinenT re Tail Brands 
and inTegra Ted Tour o Pera Tions To 
some of The mosT a TTrac Tive Travel 
desTina Tions in The world . Focused For growth annual report & accounts 2010
t ravelzest plc a nnual r eport & a ccounts 2010
Travelzest plc
2350 Matheson Blvd. East
Mississauga
Ontario L4W 5G9
Canada
UK T el : 0844 335 6623
UK Fax : 020 7000 1200 
www.travelzestplc.com