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 
wwwtravelzestplccom designed and produced by
uncovering corporate charisma
brand  literature  online  reporting 
wwwfultondesigncouk
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
nonexecutive 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 
5155 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 brandbased 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 nontravel 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 300000 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 highgrow 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 £2176 million 
2009 £1895 million
513
c a s h	f r o m	 
oper a t i on s
increased to £49 million  
2009 £08 million
18
g r os s	 
pr o f i t
increased to £245 million  
2009 £208 million  
represented
•	 recor d	le v el	of	underl ying	operating	pr ofit	incr eased	11	
to £61 million 2009 £55 million
•	 recor d	le v el	of	underl ying	operating	pr ofit	less	separatel y	
disclosed	items 	which	incr eased	56	to	£42	million	 
2009 £27 million 
•	 re v en ue	value	incr eased	14	to	£438	million	2009 	 
£383	million
•	 separatel y	disclosed	items	decr eased	32	to	£19	million 
2009 £28 million
•	 basic 	 loss 	 per 	 shar e 	 of 	 880p 	 2009 	 152p 	 pr ofit 	 per 	 shar e 	 
which was negatively affected primarily due to a charge of 
£113 	 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
1699
1792
1895
2176
key financials
ttv £m  of revenue
28 41 07 42
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
206
224
208
245 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 midmarket 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 	 £2176 	 million 	 fr om 	 £1895	
million 	r e v enue 	 incr eased 	 14 	 to 	 
£438 	 million 	 fr om 	 £383 	 million 	 
gross 	 profit 	 impro ved 	 18 	 to	 
£245 million from £208 million and 
underl ying	operating	pr ofit	bef or e	
separately disclosed items increased  
11	to	£61	million	fr om	£55	million 	
as	par t	of	the	gr oup	r estructuring	 
that	has	been	under tak en 	y our	boar d	
has decided to writeoff the remaining 
goodwill 	 of 	 £113 	 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 	 880p	 
2009 	 152p 	 pr ofit 	 per 	 shar e 	 is 	 
based 	 on 	 a 	 loss 	 of 	 £12769000	 
2009 	 pr ofit 	 of 	 £719000 	 and 	
145136110	2009 	47231425	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	£88	million	2009 	£96	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	nonex 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	£2176	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	£438	million 	gr oss	pr ofit	up	
18	to	£245	million 	and	underl ying	
operating	pr ofit	up	11	to	£61	million 	
p erha ps	the	most	significant	financial	
achievement in the year was the increase 
in cash generated from operations up 
513	to	£49	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	brandbased	to	
pr edominatel y	functionall ybased	
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 midmarketluxury 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  
£19 million 2009 £28 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	
overemphasise 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 ebased 	 pa yment 	 chargecr edit 130 557
mo v e	and	other	ne w	pr oject	star t	up	costs 121 20
corporate restructuring costs 84 1187
operational	companies’	r estructuring	costs 816 1998
placing fees – 127
ash	cloud	and	other	nonr eco v erable	costs 345 –
loss	on	disposal	of	tangible	and	intangible	assets 421 –
t otal 1917 2775 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 nonexecutive 
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 
ma 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  
cofounder 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 midmarket 
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 startups 
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	
nonexecutive 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 	
nonexecutive chairman of kbc pr  
mark eting 	and	nonex 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 eelection	
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 9365887 13280000
r	g	hall or dinar y	2p 521100 521100
n	j	j enkins	a ppointed	12	 april	2010 or dinar y	2p 260000 –
m	 t	j	mol yneux 	or dinar y	2p 15559682 15559682
 	 	 	 a s 	 at 	 4 	 jan uar y 	 2011 	 6615716 	 canada 	i nc  	 held 	 4957614 	 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	225	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 825p 6220119 –
j g carroll 30	j une	2020 185p 6000000 –
j c fraser 19	october	2016 127p 78740 78740
j c fraser 10	f ebruar y	2020 825p 6220119 –
j c fraser 30	j une	2020 185p 6000000 –
m	 t	j	mol yneux 10	f ebruar y	2020 825p 4146746 –
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 43207077 2977
mer chant	securities	limited	held	on	behalf	of	its	private	clients or dinar y	2p 20750792 1430
m	 t	j	mol yneux or dinar y	2p 15559682 1072
a	gar dner or dinar y	2p 10751285 741
j c fraser or dinar y	2p 9365887 645
ldc	logistics	de v elopment	corporation or dinar y	2p 8329572 574
cr edit	 agricole	cheuvr eux	international	limited or dinar y	2p 6944000 478
m	j	 t ull y or dinar y	2p 5432000 374
6615716	canada	inc or dinar y	2p 4957614 342
no vum	securities or dinar y	2p 4449210 307
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 represented 
corporate governance
the board is committed to high standards of corporate governance 
on	31	october	2010	the	boar d	comprised	the	nonex ecutiv e	chairman 	tw o	independent	nonex 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 ea ppointed	b y	the	compan y	in	general	meeting 	shall	r etir e	and	be	eligible	f or	r ea 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	nonex 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 	 nonex 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 	 £37000 	 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 ea 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 cashgenerating 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 cashgenerating 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
sharebased payments
management uses valuation techniques in determining the fair 
values of sharebased payments at the date of grant it adopts 
the blackscholes pricing model approved and unapproved 
options schemes and it adopts the montecarlo 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 riskfree 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 
nontaxable 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 cashgenerating 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 cashgenerating 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 straightline 
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 startup 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 startup 
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 
shortterm 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 nonderivative 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 noncurrent assets the group’s loans 
and receivables comprise trade and other receivables and cash 
and cash equivalents in the balance sheet
availableforsale financial assets
availableforsale financial assets are nonderivatives that are 
either designated in this category or not classified in any of 
the other categories they are included in noncurrent 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 followup 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 nonfinancial asset or nonfinancial 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 nonfinancial 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 intragroup 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 
remeasured foreign exchange gains and losses resulting 
from the settlement of such transactions and from the 
translation at yearend 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’
nonmonetary items measured at historical cost are translated 
using the exchange rates at the date of transaction not 
retranslated nonmonetary items are measured at fair value 
are translated using the exchange rates at the date when the 
fair value was determined
sharebased payments
the group issues sharebased 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 blackscholes or montecarlo simulation 
pricing models these fair values are charged to the income 
statement on a straightline basis over the expected vesting 
periods of the instruments with a corresponding increase in 
equity reserves any waivers to sharebased 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 sharebased compensation the fair value of 
the cash bonus award is calculated using the montecarlo 
simulation pricing model at each reporting date the fair value 
is charged to the income statement with a corresponding 
entry to noncurrent 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 
deconsolidated 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
intercompany 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 longterm 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 decisionmaker 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 – sharebased 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 noncash 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 – sharebased payment group 
cashsettled sharebased 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
represented 
year to 
31 october 2009
£000s
t otal transaction value 1 217645 189456
revenue 1 43805 38349
cost of sales 19342 17506
gross profit 24463 20843
administrative expenses 32462 19550
operating lossprofit 2 7999 1293
analysed as
underlying operating profit 6099 5466
separately disclosed items 2 1917 2775
amortisation of intangible assets and goodwill impairment 2 12181 1398
7999 1293
finance income 5 9 105
finance costs 5 1919 1440
loss on ordinary activities before taxation 9909 42
income tax expensecredit 6 2860 761
lossprofit for the year 12769 719
basic lossearnings per share 7 880p 152p
fully diluted lossearnings per share 7 880p 152p
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
lossprofit for the year 12769 719
other comprehensive income
currency translation differences 578 2661
movement in cash flow hedge 292 198
other comprehensive income net of tax 286 2859
total comprehensive income for the year 13055 2140 26
travelzest plc annual report  accounts for the year ending 31 october 2010
notes
31 october 2010
£000s
represented
31 october 2009
£000s
assets
noncurrent assets
deferred tax 14 – 1351
goodwill 8 29809 41129
intangible assets 9 2619 3202
property plant and equipment 10 1262 1435
33690 47117
current assets
inventories 18 64
trade and other receivables 11 7560 8174
derivative financial instruments 13 190 373
cash and cash equivalents 12 5850 5585
13618 14196
total assets 47308 61313
equity and liabilities
equity attributable to equity holders of the parent company
share capital 15 2903 2903
share premium account 31456 31524
merger reserve 2320 2320
translation and hedge reserve 5130 4844
retained earnings 12749 129
total equity 18800 31774
noncurrent liabilities
trade and other payables 18 622 6
borrowings 17 9733 13144
obligations under finance leases 17 273 347
deferred tax 14 484 871
11112 14368
current liabilities
trade and other payables 18 10031 11430
borrowings 17 4503 1596
obligations under finance leases 17 107 88
derivative financial instruments 19 1247 1691
current tax liabilities 18 1508 366
17396 15171
total liabilities 28508 29539
total equity and liabilities 47308 61313
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 4936 754
income taxes paid 754 42
net cash flow from operating activities 4182 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 1729 1500
interest paid 1748 1315
costsproceeds on issue of shares 68 4785
net cash used inprovided from financing activities 3545 1970
net decreaseincrease in cash and cash equivalents 61 2473
cash and cash equivalents
cash and cash equivalents at beginning of year 5585 5077
effect of foreign exchange rate changes 326 1965
net movement in cash and cash equivalents 61 2473
cash and cash equivalents at end of year 5850 5585
costs of £68000 2009 gross proceeds £5709000 less costs of £924000 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 13142 1985 16779 2320 291 29965
comprehensive income
profit for the year – – – – 719 719
other comprehensive 
income
movement in cash flow hedge – 198 – – – 198
foreign exchange movements – 2661 – – – 2661
total 
comprehensive income – 2859 – – 719 2140
transactions with owners
exchangeable shares 12524 – 12524 – – –
issue of shares 2285 – 3425 – – 5710
costs of share placing – – 1204 – – 1204
sharebased payments – – – – 557 557
transactions with owners 10239 – 14745 – 557 3949
at 1 november 2009 2903 4844 31524 2320 129 31774
comprehensive income
loss for the year – – – – 12769 12769
other comprehensive 
income
movement in cash flow hedge – 292 – – – 292
foreign exchange movements – 578 – – – 578
total 
comprehensive income – 286 – – 12769 13055
transactions with owners
issue of shares – – 68 – – 68
sharebased payments – – – – 149 149
transactions with owners – – 68 – 149 81
at 31 october 2010 2903 5130 31456 2320 12749 18800
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 20111 19153
agency operations 197534 170303
217645 189456
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 20111 19153 23694 19196 43805 38349
results
profit from operations before depreciation 232 918 7029 5062 7261 5980
depreciation 37 41 282 251 319 292
amortisation of intangible assets 
and goodwill impairment 11530 525 648 868 12178 1393
loss on disposal of tangible and intangible assets 411 – – – 411 –
profitloss for the group 11746 352 6099 3943 5647 4295
separately disclosed items 1496 2775
central costs 856 227
operating lossprofit 7999 1293
finance income 9 105
finance costs 1919 1440
loss before tax 9909 42
tax 2860 761
lossprofit for year 12769 719
  included within central costs is £6000 of depreciation £3000 of amortisation and £10000 of loss on disposal of tangible and intangible assets  
2009 £9000 £5000 and £nil respectively
during the year merchant operations spent £11000 on capital expenditures agency operations spent £672000 and central 
operations spent £24000 2009 £331000 £109000 and £6000 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
represented
2009 
£000s
2010
 
£000s
represented
2009 
£000s
2010 
£000s
represented
2009 
£000s
segment assets 2105 15614 40773 37500 42878 53114
unallocated 
corporate assets
– – – – 4430 8199
consolidated assets 2105 15614 40773 37500 47308 61313
segment liabilities 3619 4369 8391 7829 12010 12198
unallocated 
corporate liabilities – – – – 16498 17341
consolidated liabilities 3619 4369 8391 7829 28508 29539
net assets 18800 31774
group wide disclosures
the uk is the company’s country of domicile revenues from external customers and noncurrent assets are split geographically 
as follows
location revenue
year to  
31 october 2010
£000s
year to  
31 october 2009
£000s
united kingdom 21994 21391
north america formerly canada 21811 16958
group 43805 38349
location noncurrent assets
31 october 2010
£000s
 31 october 2009
£000s
united kingdom 332 12042
north america formerly canada 33358 33724
group 33690 45766
noncurrent assets include intangible assets and property plant and equipment and exclude deferred tax assets during the year 
£337000 was spent on the purchase of intangible and tangible assets in the uk and £370000 in north america 2009 £337000  
and £109000 respectively 31
consolidated financial s tatements travelzest plc annual report  accounts for the year ending 31 october 2010
2 operating lossprofit
operating lossprofit is stated after chargingcrediting
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 1066 962
1704 1387
amortisation of intangible assets  goodwill impairment
amortisation of intangible assets 861 1398
goodwill impairment 11320 –
12181 1398
separately disclosed items
sharebased payment chargecredit see note 16 130 557
move and other new project start up costs 121 20
corporate restructuring costs 84 1187
operational companies’ restructuring costs 816 1998
placing fees – 127
ash cloud and other nonrecoverable costs 345 –
loss on disposal of tangible and intangible assets 421 –
1917 2775 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 10098 9769
social security costs 1009 837
sharebased payments 130 557
value of company pension contributions to money purchase schemes 3 136
11240 10185
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
nonexecutive 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 1090 1123
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
 nonexecutive directors are reimbursed for their travel expenses incurred related to corporate matters
in accordance with ifrs 2 sharebased payments sharebased charge relating to directors of £237000 2009 credit of £476000 
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 incomecosts
2010
£000s 
2009
£000s 
income from interest rate hedges – 73
bank interest income 9 32
finance income 9 105
bank interest expense 1870 1440
expense from interest rate hedges 49 –
finance costs 1919 1440
t otal 1910 1335
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 1927 413
adjustments in respect of prior years – 739
total current income tax 1927 326
origination and reversal of temporary differences 418 435
adjustments in respect of prior years 1351 –
total deferred tax 933 435
income tax expensecredit 2860 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 9909 42
expected income tax at 28 2009 28 2775 10
amortisation and impairment 3529 394
brought forward tax losses no longer recognised 1351 –
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 expensecredit 2860 761
no current or deferred tax has been charged or credited to other comprehensive income in 2010 2009 £nil deferred tax of 
£34000 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 880p 2009 152p profit per share is based on a loss of £12769000 2009 profit of £719000  
and 145136110 2009 47231425 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 antidilutive and therefore the dilutive loss  
per share is the same as the basic loss per share at 880p in 2009 there were no share optionswarrants that would constitute  
a dilutive calculation and therefore the dilutive profit per share was 152p
8 goodwill
£000s
historical cost
at 1 november 2008 44087
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 43229
additions –
disposals –
at 31 october 2010 43229
impairment loss
at 1 november 2008 2100
impairment loss –
at 31 october 2009 2100
impairment loss 11320
at 31 october 2010 13420
carrying amount at 31 october 2010 29809
carrying amount at 31 october 2009 41129
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 cashgenerating units
31 october 2010
£000s
31 october 2009
£000s
best of morocco limited – 1923
peng t ravel limited – 1284
fair’s fare limited – 5451
tapestry collection limited – 110
4358736 canada inc trading as itravel2000 23834 23834
travelzest holidays limited formerly wow house limited – 167
captivating cuba limited – 1290
jmb travel consultants limited – 295
the cruise professionals limited 5975 5975
holiday express uk limited – 800
29809 41129 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 £11320000 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 macroeconomic factors relevant to the specific businesses 
• customer base to which the businesses sell
• the group’s post tax weighted average cost of capital is 165
• 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 pretax discount rate for the cgu’s above had been 10 higher than 
management’s estimates for example 175 instead of 165 no additional impairment would have been recorded using an 
average growth in cash flows of 70 instead of 100 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 1782 1638 1785 5205
additions – 336 – 336
disposals – 83 – 83
foreign exchange adjustments – 611 303 914
at 1 november 2009 1782 2502 2088 6372
additions – 274 329 603 
disposals – 739 – 739 
foreign exchange adjustments – 42 162 204 
at 31 october 2010 1782 2079 2579 6440 
amortisation
at 1 november 2008 125 808 837 1770
charge for year 399 591 408 1398
disposals – 22 – 22
foreign exchange adjustments – 114 138 24
at 1 november 2009 524 1263 1383 3170
charge for year 269 357 235 861
disposals – 365 – 365
foreign exchange adjustments – 65 90 155
at 31 october 2010 793 1320 1708 3821
carrying amount at 31 october 2010 989 759 871 2619
carrying amount at 31 october 2009 1258 1239 705 3202
other intangible assets comprises the separately identifiable assets determined from the acquisition of the cruise professionals and 
relates to customer relations £1500000 order backlog £206000 and contractual agreements £76000 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 1018 783 27 2461
additions – 8 537 – 545
disposals – 116 211 – 327
foreign exchange adjustments 123 17 39 – 145
at 1 november 2009 756 893 1148 27 2824
additions 7 50 44 3 104 
disposals – 248 129 – 377 
foreign exchange adjustments 59 39 67 – 165 
at 31 october 2010 822 734 1130 30 2716
depreciation
at 1 november 2008 15 439 607 27 1088
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 1389
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 1454
net book value
at 31 october 2010 634 129 496 3 1262
at 31 october 2009 662 219 554 – 1435
the net book value of assets held under finance leases is £355000 2009 £356000 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 4948 4276
other receivables 1852 2077
prepayment and accrued income 760 1821
7560 8174
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 2924 2721
restricted cash 2926 2864
5850 5585
restricted cash consists of
2010 
£000s
2009 
£000s
trust accounts 926 864
loan pledge amount 2000 2000
2926 2864
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 £19000 all recognised 
to the consolidated income statement and relates to cash flows from november 2009 to october 2010 £171000 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 – 1351
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 liabilityasset 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 liabilityasset during the year was
2010 
£000s
2009 
£000s
deferred tax brought forward 480 776
income statement chargecredit 933 1256
tax charge directly to equity 34 –
exchange differences 65 –
net deferred tax liabilityasset 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
sharebased 
payment
£000s
total
£000s
at 1 november 2008 277 499 – 776
chargedcredited to the income statement 60 – 155 95
chargedcredited to equity – – – –
at 31 october 2009 217 499 155 871
chargedcredited to the income statement 117 240 61 418
chargedcredited 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 – – –
creditedcharged to the income statement 1351 – 1351
at 31 october 2009 1351 – 1351
chargedcredited to the income statement 1351 – 1351
at 31 october 2010 – – –
deferred income tax assets are recognised for loss carryforwards 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 £1926000 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
259550000 ordinary shares of £002 each 5191 5191
issued called up and fully paid
2010 2009
no £000s no £000s 
ordinary shares of £002 each 145136110 2903 145136110 2903
in the prior year and in accordance with the exchange rights agreement dated 13 october 2006 travelzest holdings inc  
a whollyowned indirect subsidiary of travelzest plc purchased the 10572614 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 114170000 issued new ordinary shares of 2p each at a premium of 3p raising £5710000 
the placing fees associated were £924000
all shares are equally entitled to receive dividends and the repayment of capital and represent one vote at shareholders’ meeting
16 sharebased 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 1457 136p – –
t erminated in year 1186 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 – – 28587 121p
outstanding at the end of the year 104 125p 28587 121p
exercisable at the end of year 104 125p – –
employee option scheme
the company issues longterm 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 blackscholes pricing model 
an amount of £105000 2009 credit of £557000 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 28587000 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 montecarlo 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 riskneutral 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 121 pence the exercise price ranges between 75 pence and 185 pence the expected 
volatility of approximately 85 the option life of 5 years the expected dividend yield of nil and the riskfree interest rate 
between 206 and 291
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 5247 130p 5247 130p
granted during the year – – – –
outstanding at the end of the year 5247 130p 5247 130p
exercisable at the end of year 5247 130p 5247 130p
the warrants outstanding at 31 october 2010 had a weighted average exercise price of £130 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 blackscholes 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 riskfree 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 riskfree interest rate was determined by the implied yield available on a zerocoupon 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 185 pence per ordinary share
the fair value of the cash bonus award was determined using the montecarlo 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 ie 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 8499 the cash bonus award life of 5 years the expected dividend yield of nil and the riskfree interest rate of 162  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 4503 9733 14236 1596 13144 14740
obligations under finance leases 107 273 380 88 347 435
4610 10006 14616 1684 13491 15175
interest on the liabilities to banks is payable at a variable rate which is set at 450 above libor on both denominated components 
of loan of which 100 has been fixed by means of an interest rate swap agreement at 40 the bank loan is secured on the assets  
of travelzest plc in november 2010 the fixed rate increases to 848 on the canadian denominated element of the loan
during the prior year the group renegotiated the existing facility of £14500000 of which £10000000 is now denominated in 
canadian dollars in may 2010 a repayment of £1729000 was made along with a further repayment of £2251000 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 £401000 2009 £687000 
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
represented
31 october 2009
 1 year
£000s
1 – 5 years
£000s
total
£000s
 1 year
£000s
1 – 5 years
£000s
total
£000s
trade payables 1525 – 1525 2821 – 2821
liabilities relating to social 
security and other taxes 72 – 72 54 – 54
other liabilities 8434 622 9056 8555 6 8561
10031 622 10653 11430 6 11436
deferred tax – 484 484 – 871 871
current tax liabilities 1508 – 1508 366 – 366
11539 1106 12645 11796 877 12673 43
consolidated financial s tatements travelzest plc annual report  accounts for the year ending 31 october 2010
19 derivative financial instruments
2010
 
£000s
represented
2009 
£000s
liabilities from derivative financial instruments 1247 1691
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 £262000 2009 £128000 
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 inflowsoutflows
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 1076 796 280 – –
31 october 2009 represented
projected cash inflowsoutflows
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 1338 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 £213000 
2009 £73000
20 contingent liabilities
vfb holidays limited has provided a bond to aitot for £nil 2009 £616700 and iata £195000 2009 £85000 and abtot for 
£540000 2009 £nil jmb travel consultants limited to abtot for £21000 2009 £23000 fair’s fare limited provide a bond to 
iata for £390000 2009 £395000 peng travel limited to abta £117000 2009 £137000 and 4358736 canada inc provided a 
bond in favour of the office of the protection of consumers for cad 150000 2009 cad 150000 
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 noncancellable 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 3019 298 2409 319
after more than 5 years 2380 – 2184 –
6227 517 5259 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 
40000 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 1850 per square foot in years 1 to 5 and cad 2350 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 800000 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 lossprofit 7999 1293
amortisation 861 1398
depreciation 325 301
change in inventories 46 31
change in operating receivables 149 1098
sharebased payments 130 557
change in operating payables 19 552
goodwill impairment 11320 –
loss on disposal of tangible and intangible fixed assets 421 –
4936 754
included within changes in operating payables in 2009 is £280000 relating to placing fees
25 representation of the 2009 consolidated income statement and 2009 consolidated balance sheet
the 2009 income statement has been represented to reclassify £1638000 costs in respect of agents’ commission from administrative 
expenses to cost of sales the 2009 consolidated balance sheet has been represented to reclassify £350000 derivative financial 
instruments from trade and other payables to derivative financial instruments and to reclassify £135000 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 £15 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 6800 – – 6800
cash and cash equivalents 5850 – – 5850
total 12650 190 – 12840
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 – – 14236 14236
trade and other payables exc 
statutory liabilities accrued
expenses and deferred income – – 1525 1525
obligations under finance leases – – 380 380
derivative financial instruments 1072 175 – 1247
total 1072 175 16141 17388 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 6353
–
– 6353
cash and cash equivalents 5585 – – 5585
total 11938 373 – 12311
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 – – 14740 14740
trade and other payables exc 
statutory liabilities accrued 
expenses and deferred income – – 2821 2821
obligations under finance leases – – 435 435
derivative financial instruments 1476 215 – 1691
total 1476 215 17996 19687
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 daytoday 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 1243 992
euros 14 96
us dollars 1242 349
other currencies 5 –
bank loans
canadian dollars 10602 10919
trade and other receivables
canadian dollars 4657 5193
us dollars 1067 485
trade and other payables
canadian dollars 4649 5725
us dollars 55 –
the group hedges its foreign currency exposures generally on a seasonal basis ie 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 11558 11507 11305 11177
canadian dollars 16169 16363 18012 17723
us dollars 15566 15988 15444 16445
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 £4948000 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 
represented
2009
£000s 
trade accounts receivable 4948 4276
other receivables 1852 2077
 6800 6353
derivatives designated as cash flow hedges
derivatives financial instruments 190 373
cash 5850 5585
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
represented
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 4503 9733 14236 1596 13144 14740
obligations under finance leases 107 273 380 88 347 435
t o third parties 1525 – 1525 2821 – 2821
other liabilities 8506 622 9128 8609 6 8615
14641 10628 25269 13114 13497 26611
derivatives designated as cash flow hedges
derivative financial instruments 1039 208 1247 871 820 1691
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 £03m 2009 decrease by £02m and equity would be decreased by £33m 2009 decreased by £38m a 10 weakening of 
sterling against all other currencies would result in a gain after tax of £04m 2009 gain of £02m and an increase in equity of 
£41m 2009 increase of £47m
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 £01m 2009 £01m
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 – 1072 – 1072
derivatives – cash flow hedges – 175 – 175
t otal liabilities – 1247 – 1247
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 – 1476 – 1476
derivatives – cash flow hedges – 215 – 215
t otal liabilities – 1691 – 1691
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 23810 25143
23827 25157
current assets
debtors c 20247 22265
deferred taxation g – 743
cash at bank 2702 2012
22949 25020
creditors amounts falling due within one year d 5666 2794
net current assets 17283 22226
total assets less current liabilities 41110 47383
creditors amounts falling due after more than one year e 9811 13144
 31299 34239
capital and reserves
calledup equity share capital i 2903 2903
share premium account j 31456 31524
merger reserve j 3357 3357
profit and loss account j 6417 3545
shareholders’ funds 31299 34239
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 3021 1533
issue of shares net of expenses 68 17241
conversion of exchangeable shares – 12735
sharebased payments 149 557
net reductionaddition to shareholders’ funds 2940 2416
opening shareholders’ funds 34239 31823
closing shareholders’ funds 31299 34239
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 
£3021000 2009 loss of £1533000
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
sharebased payments
the group issues sharebased 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 blackscholes or montecarlo simulation 
pricing models these fair values are charged to the income 
statement on a straightline basis over the expected vesting 
periods of the instruments with a corresponding increase 
in equity reserves any waivers to sharebased 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 sharebased compensation the fair value of 
the cash bonus award is calculated using the montecarlo 
simulation pricing model at each reporting date the fair value 
is charged to the income statement with a corresponding entry 
to noncurrent liabilities
directors
details of directors’ remuneration sharebased payments and 
pension entitlements in the current period and prior period are 
contained in note 4 to the consolidated financial statements 
details of sharebased 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 13198 11945 25143
impairment of investment in holiday express uk limited – 1298 1298
impairment of investment in travelzest holidays limited – 20 20
impairment of investment in travelzest holdings uk limited – 15 15
at 31 october 2010 13198 10612 23810
net book value
at 31 october 2010 13198 10612 23810
at 31 october 2009 13198 11945 25143
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 francobritannques 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 20176 22167
other debtors 55 8
prepayments and accrued income 16 90
 20247 22265
included within amounts owed by group companies are amounts due from travelzest plc’s overseas subsidiaries which bear interest 
of 848 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 4503 1596
trade creditors 249 217
social security  other taxes 10 19
corporation tax – 77
accruals and deferred income 904 885
5666 2794
e creditors amounts falling due after more than one year
2010
£000s 
2009
£000s 
bank loan 9733 13144
deferred tax 61 –
other creditors 17 –
9811 13144
f creditors – capital instruments
bank loans are repayable
2010
£000s
2009 
£000s
in one year or less or on demand 4503 1596
between one and two years 9733 4253
between two and five years – 8891
 14236 14740
interest is payable on bank loans
2010
£000s 
2009
£000s 
variable interest rate 14236 14740
interest on the liabilities to banks is payable at a variable rate which is set at 450 above libor on both denominated components 
of loan of which 100 has been fixed by means of an interest rate swap agreement at 40 the bank loan is secured on the assets of 
travelzest plc in november 2010 the fixed rate increases to 848 on the canadian denominated element of the loan
during the prior year the group renegotiated the existing facility of £14500000 of which £10000000 is now denominated in 
canadian dollars in may 2010 a repayment of £1729000 was made along with a further repayment of £2251000 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 £401000 2009 £687000
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 provisionasset during the year was
2010
£000s 
2009
£000s 
deferred tax assetliability brought forward 743 –
chargedcredited to the profit and loss account 838 743
creditedcharged to equity 34 –
deferred tax liabilityasset 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 
sharebased payment 61 –
other shortterm 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 
259550000 ordinary shares of £002 each 5191 5191
issued called up and fully paid
2010 2009
no £000s no £000s 
ordinary shares of £002 each 145136110 2903 145136110 2903
in the prior year and in accordance with the exchange rights agreement dated 13 october 2006 travelzest holdings inc  
a whollyowned indirect subsidiary of travelzest plc purchased the 10572614 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 114170000 ordinary shares of 2p each at a premium of 3p raising £5710000 the placing 
fees associated were £924000
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 31524 3357 3545
loss for the year – – 3021
issue of shares net of expenses 68 – –
sharebased payments – – 149
at 31 october 2010 31456 3357 6417
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 £3021000 2009 loss of £1533000
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 sharebased 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 1457 136p – –
t erminated in year 1186 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 – – 28587 121p
outstanding at the end of the year 104 125p 28587 121p
exercisable at the end of year 104 125p – –
employee option scheme
the company issues longterm 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 blackscholes pricing model 
an amount of £105000 2009 credit of £557000 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 28587000 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 montecarlo 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 riskneutral 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 121 pence the exercise price ranges between 75 pence and 185 pence the expected 
volatility of approximately 85 the option life of 5 years the expected dividend yield of nil and the riskfree interest rate 
between 206 and 291 
59
travelzest plc annual report  accounts for the year ending 31 october 2010
59
company financial statements m sharebased 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 5247 130p 5247 130p
granted during the year – – – –
outstanding at the end of the year 5247 130p 5247 130p
exercisable at the end of year 5247 130p 5247 130p
the warrants outstanding at 31 october 2010 had a weighted average exercise price of £130 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 blackscholes 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 riskfree 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 riskfree interest rate was determined by the implied yield available on a zerocoupon 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 185 pence per ordinary share
the fair value of the cash bonus award was determined using the montecarlo 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 ie 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 8499 the cash bonus award life of 5 years the expected dividend yield of nil and the riskfree interest rate of 162 
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 1076 1338
1057 1318
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 £15 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  online  reporting 
wwwfultondesigncouk
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
nonexecutive 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 
5155 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 brandbased 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 nontravel 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 300000 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 
wwwtravelzestplccom


Summary:
 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 	 £2176 	 million 	 fr om 	 £1895	
million 	r e v enue 	 incr eased 	 14 	 to 	 
£438 	 million 	 fr om 	 £383 	 million 	 
gross 	 profit 	 impro ved 	 18 	 to	 
£245 million from £208 million and 
underl ying	operating	pr ofit	bef or e	
separately disclosed items increased  
11	to	£61	million	fr om	£55	million 	
as	par t	of	the	gr oup	r estructuring	 
that	has	been	under tak en 	y our	boar d	
has decided to writeoff the remaining 
goodwill 	 of 	 £113 	 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 	 880p	 
2009 	 152p 	 pr ofit 	 per 	 shar e 	 is 	 
based 	 on 	 a 	 loss 	 of 	 £12769000	 
2009 	 pr ofit 	 of 	 £719000 	 and 	
145136110	2009 	47231425	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	£88	million	2009 	£96	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	nonex 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