Registration number:
Air Kilroe Limited
for the Year Ended 31 March 2023
Air Kilroe Limited
Contents
Company Information |
|
Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Statement of Recognised Gains and Losses |
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Balance Sheet |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
Air Kilroe Limited
Company Information
Chairman |
Mr R J Lake OBE |
Directors |
Air Marshal C R Spink Mr K Earnden Mr A Vickers Mr S Dicken |
Company secretary |
Mr M C Hutchinson |
Registered office |
|
Auditors |
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Air Kilroe Limited
Strategic Report for the Year Ended 31 March 2023
The directors present their strategic report for the year ended 31 March 2023.
Principal activity
The principal activity of the company is that of a civil airline operator.
Fair review of the business
The results of the company for the year ended 31 March 2023 are as disclosed in the attached financial statements.
The company continues to provide scheduled airline services, charter and leasing of aircraft and crew, to domestic and European destinations for which it enjoys a good reputation for operational reliability. The company continues to be a major support and logistics provider to the oil industry, along with its charter and scheduled service operations.
Despite the difficult trading conditions in the aviation industry as a whole; due to the slow recovery of demand from the COVID-19 pandemic, the company has met these challenges head on and adapted accordingly.
Whilst Air Kilroe has concentrated on becoming ‘first-in-class’ in electric aircraft maintenance and support, and as travel psychologies have altered as a direct effect of the unprecedented pandemic leading to a diminution in point-to-point business travel, Air Kilroe has continued to enjoy the strong support of its parent company as the company has used 2022-23 to reposition itself as a greener organisation with future-proof capabilities.
During the year the company engaged in a number of safety and operational audits for which the UK civil aviation authority recognised Air Kilroe continued commitment to safety.
The company undertook an extensive audit to renew its IOSA accreditation for a further two years. The IOSA standard is an Internationally accepted (IATA) gold-standard, comparable on a world-wide basis with other major airlines. Air Kilroe is the only UK based regional airline that holds this certification. This gives Air Kilroe a competitive advantage over many other airlines and enables a wider range of work to be undertaken.
At the year end the company operated a mixed fleet of Jetstream 41, ERJ 135/145, ERJ190, and ATR-600 aircraft, which allows for considerable flexibility in matching demand to capacity in both the scheduled airline and charter markets.
The fleet strategy is continuously being assessed to increase our operational efficiencies.
The company’s directors monitor route revenue, direct operating costs and business profitability as the main key performance indicators, as the routes operated vary over time, as do the related direct operating costs. The performance of the business during the year can be seen in the profit and loss account.
Air Kilroe Limited
Strategic Report for the Year Ended 31 March 2023 (continued)
Principal risks and uncertainties
The key financial risks and uncertainties facing the company are set out below. The directors feel that the company has a good mix of business activities, and is well-balanced to handle the risks and uncertainties that it may face.
The directors believe the key areas of risk facing the company are:
Environmental and government legislation
There continues to be uncertainty in the airline industry regarding taxation levied on domestic travel, although the reduction of APD rate for domestic travel has been welcomed by the company. The directors believe that due to the use of fuel-efficient turbo-prop aircraft, Air Kilroe enjoys a competitive advantage over the rest of the industry in relation to environmental impact.
Fuel prices
During the year the fuel price increased substantially. As in previous years, the company continues to use fuel hedges to mitigate the risk where appropriate. At 31 March 2023, no fuel hedges were in place.
The price of oil continues to be a risk for the company. However, due to the fuel efficient nature of the turbo-prop aircraft used, the proportionate cost of fuel to other operating costs is lower than the industry average.
Currency movements
A large proportion of aircraft parts, leasing, fuel and other costs are priced in US dollars. The company matches some revenues and costs to reduce this risk. There is an exposure to US dollar movements above the natural hedge, and the company has in the past used forward contracts to manage this risk. At 31 March 2023, no currency hedges were in place.
Section 172(1) statement
The directors of the company have paid due regard to their responsibilities under Section 172(1) of the Companies Act 2006, in so much as producing budgets and forecasts which consider any long term consequences of any decision, and the potential impact on the community and the environment.
Engagement with employees
Employees are consulted regularly to ensure the impact of any decisions made are considered, thus promoting fairness between the members of the company.
Engagement with suppliers, customers and other relationships
All business relationships are closely monitored by the directors, and as such the company maintains a reputation for high standards of business conduct.
Non-financial and sustainability information
Energy and carbon report
We have considered the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) when preparing this report. These recommendations encourage businesses to increase disclosure of climate-related information, with an emphasis on financial disclosure. Air Kilroe Limited supports these recommendations and are committed to disclosing the relevant information which can be found below.
Governance
During the year CO2 emissions relating to the operation of flights totalled 3,378 tonnes (2022: 4,394 tonnes). Once aggregated over the total number of flights this equates to 1.48 tonnes per flight operated which the directors consider to fuel efficient. These figures were obtained from the annual independently verified emissions report submitted for compliance with EU law.
Electricity and gas used at each of the company’s bases totalled 196,730kWh (tCO2: 51) as obtained from the metered usage (2022: 276,137Wh, 78 tCO2).
For the purpose of transport the company’s vehicle emissions for the year were 51.9 tonnes of CO2 (2022: 30.5 tCO2).
Air Kilroe Limited
Strategic Report for the Year Ended 31 March 2023 (continued)
Approved by the
.........................................
Chairman
Air Kilroe Limited
Directors' Report for the Year Ended 31 March 2023
The directors present their report and the financial statements for the year ended 31 March 2023.
Directors of the company
The directors who held office during the year were as follows:
Employment of disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of a member of staff becoming disabled every effort is made to ensure that their employment with the company continues and that appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.
Employee involvement
The company values the involvement of its employees and has continued its previous practice of keeping them informed on matters affecting them as employees and of the various factors affecting the performance of the company. This is achieved through formal and informal meetings and through the posting of company notices. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.
Air Kilroe Limited
Directors' Report for the Year Ended 31 March 2023 (continued)
Going concern
The financial statements have been prepared on the going concern basis. In adopting the going concern basis for preparing the financial statements, the Directors have prepared cash flow forecasts for a period of 14 months from the date of approval of these financial statements, which indicate, that taking account of reasonably possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period.
Aviation will still face an uncertain future with risks of a slow recovery. The industry depends significantly on airlines maintaining access to liquidity, including that enabled by governments. Eastern Airways has undertaken significant measures internally to preserve cash and liquidity, as well as operational efficiency and cost savings.
The consolidated Orient Industrial Holdings Limited group maintains a strong statement of financial position including a substantial cash balance and unencumbered aircraft. Eastern Airways has no debt re-financings due, and is in ongoing discussions with liquidity providers who recognise the strength of our balance sheet and business model should those facilities be required.
As at the date of sign off, the ultimate parent company, Orient Industrial Holdings Limited, has issued a letter of support stating that the group will offer working capital support as needed.
The Directors have concluded that the combination of these circumstances does not represent a material uncertainty that casts doubt upon the Company’s ability to continue as a going concern. Nevertheless, after making enquiries and considering the uncertainties described above, in light of the funding outlined and opportunities provided by the unencumbered asset base for further funding, the directors have a reasonable expectation that the Company has access to adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Reappointment of auditors
The auditors Bissell & Brown Midlands Ltd are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Approved by the
.........................................
Chairman
Air Kilroe Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Air Kilroe Limited
Independent Auditor's Report to the Members of Air Kilroe Limited
Opinion
We have audited the financial statements of Air Kilroe Limited (the 'company') for the year ended 31 March 2023, which comprise the Profit and Loss Account, Statement of Recognised Gains and Losses, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
We draw attention to the going concern accounting policy in note 2 of these financial statements, which refers to the funding situation of the company. Our opinion is not modified in respect of this matter.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and European regulatory principles, and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company.
We considered the laws and regulations that have a direct impact on the financial statements of the Company, such as the Companies Act 2006 and UK tax legislation and equivalent local laws and regulations applicable to in-scope components.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Air Kilroe Limited
Independent Auditor's Report to the Members of Air Kilroe Limited (continued)
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 7], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Capability of the audit in detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK and European regulatory principles, and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company. |
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We also considered those laws and regulations that have a direct impact on the financial statements of the Company, such as the Companies Act 2006 and UK tax legislation and equivalent local laws and regulations applicable to in-scope components. |
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We have also evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements including the risk of override of controls and determined that the principal risks are related to management bias in accounting estimates and judgemental areas of the financial statements. |
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Audit procedures performed by the engagement team included: |
Air Kilroe Limited
Independent Auditor's Report to the Members of Air Kilroe Limited (continued)
• |
discussions with the Board of Directors and management, regarding consideration of known or suspected instances of non-compliance with laws and regulation and fraud |
• |
evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities; |
• |
reviewing relevant meeting minutes including those of the Board of Directors; |
• |
identifying and testing journal entries based on risk criteria; |
We designed our audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and testing transactions entered into outside of the normal course of the Company's business specifically in respect of acquisitions and disposals.
|
|
• |
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; |
• |
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control; |
• |
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. |
There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
......................................
For and on behalf of
Charter House
56 High Street
West Midlands
B72 1UJ
Air Kilroe Limited
Profit and Loss Account for the Year Ended 31 March 2023
Note |
2023 |
(As restated) |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Profit/(Loss) on disposal of fixed assets |
|
( |
|
Administrative expenses |
( |
( |
|
Other operating income |
- |
|
|
Operating profit |
213,739 |
565,686 |
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
|
( |
|
777 |
(183,887) |
||
Profit before tax |
|
|
|
Profit for the financial year |
|
|
The above results were derived from continuing operations.
Air Kilroe Limited
Statement of Recognised Gains and Losses for the Year Ended 31 March 2023
2023 |
(As restated) |
|
Profit for the year |
|
|
(Deficit)/surplus on revaluation of other assets |
( |
|
Total comprehensive income for the year |
( |
|
Air Kilroe Limited
(Registration number: 03038856)
Balance Sheet as at 31 March 2023
Note |
2023 |
(As restated) |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Memorabilia |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
- |
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current liabilities |
( |
( |
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Revaluation reserve |
|
|
|
Profit and loss account |
( |
( |
|
Total equity |
|
|
Approved and authorised by the
.........................................
Chairman
Air Kilroe Limited
Statement of Changes in Equity for the Year Ended 31 March 2023
Share capital |
Revaluation reserve |
Retained earnings |
Total |
|
At 1 April 2021 |
|
- |
|
|
Prior period adjustment |
- |
|
( |
|
At 1 April 2021 (As restated) |
|
|
( |
|
Profit for the year |
- |
- |
|
|
Other comprehensive income |
- |
|
- |
|
Total comprehensive income |
- |
|
|
|
At 31 March 2022 |
1 |
4,841,607 |
(246,737) |
4,594,871 |
Share capital |
Revaluation reserve |
Retained earnings |
Total |
|
At 1 April 2022 |
|
- |
|
|
Prior period adjustment |
- |
|
( |
|
At 1 April 2022 (As restated) |
|
|
( |
|
Profit for the year |
- |
- |
|
|
Other comprehensive income |
- |
( |
- |
( |
Total comprehensive income |
- |
( |
|
( |
At 31 March 2023 |
|
|
( |
|
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
General information |
The company is a private company limited by share capital, incorporated in England & Wales. The company's registration number is 03038856.
The address of its registered office is:
United Kingdom
The principal place of business is:
Schiphol House
Schiphol Way
Humberside Airport
Kirmington
North East Lincs
DN39 6YH
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £1.
Summary of disclosure exemptions
The Company’s parent undertaking, Orient Industrial Holdings Limited, includes the Company in its consolidated financial statements. The consolidated financial statements of Orient Industrial Holdings Limited are prepared in accordance with FRS 102 and are available to the public and may be obtained from the address given in note 24. In these financial statements, the company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:
• Reconciliation of the number of shares outstanding from the beginning to end of the period;
• Cash Flow Statement and related notes; and
• Key Management Personnel compensation.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Going concern
The financial statements have been prepared on the going concern basis. In adopting the going concern basis for preparing the financial statements, the Directors have prepared cash flow forecasts for a period of 14 months from the date of approval of these financial statements, which indicate, that taking account of reasonably possible downsides, the company will have sufficient funds to meet its liabilities as they fall due for that period.
Aviation will still face an uncertain future with risks of a slow recovery. The industry depends significantly on airlines maintaining access to liquidity, including that enabled by governments. Eastern Airways has undertaken significant measures internally to preserve cash and liquidity, as well as operational efficiency and cost savings.
The consolidated Orient Industrial Holdings Limited group maintains a strong statement of financial position including a substantial cash balance and unencumbered aircraft. Eastern Airways has no debt re-financings due, and is in ongoing discussions with liquidity providers who recognise the strength of our balance sheet and business model should those facilities be required.
As at the date of sign off, the ultimate parent company, Orient Industrial Holdings Limited, has issued a letter of support stating that the group will offer working capital support as needed.
The Directors have concluded that the combination of these circumstances does not represent a material uncertainty that casts doubt upon the Company’s ability to continue as a going concern. Nevertheless, after making enquiries and considering the uncertainties described above, in light of the funding outlined and opportunities provided by the unencumbered asset base for further funding, the directors have a reasonable expectation that the Company has access to adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Changes in accounting policy
New standards, interpretations and amendments effective
The following have been applied for the first time from 1 April 2022 and have had an effect on the financial statements:
Aircraft accounting policy
The aircraft accounting policy has been changed from being valued at the lower of cost and net realisable value to be valued at Open Market Valuation at the Balance Sheet Date.
The change in accounting policy has been reflected in the comparative information of the financial statements to reflect as if the accounting policy had always been in place and to provide comparative numbers.
Relating to the current period disclosed in these financial statements | Relating to the prior period disclosed in these financial statements | Relating to periods before the prior period disclosed in these financial statements | |
Tangible assets | 2,690,000 | 2,950,000 | 2,180,000 |
Revaluation reserve | 4,071,000 | 4,842,000 | 4,026,000 |
Profit and loss reserve | (1,381,000) | (1,892,000) | (1,846,000) |
Administrative expenses | (511,000) | 46,000 | 1,846,000 |
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
The prior year adjustment relates solely to the effects of the change in accounting policy implemented during the year, and backdated to the previous year.
Key sources of estimation uncertainty
Useful economic lives and residual values of aircraft
In estimating the lives and expected residual values of its aircraft, the Company relies on its own and industry experience and other data available in the marketplace. The key reference points of the assumptions are the frequency of maintenance events and their cost in maintaining the airworthiness of the aircraft when considering the future remaining life of the assets. The Company evaluates these estimates and assumptions in each reporting period, and, when warranted, adjusts these depreciation rates accordingly. The useful lives used have been disclosed in note 2 and have remained consistent with the previous financial year.
Critical accounting judgements in applying the Company’s accounting policies.
There were no certain critical accounting judgements in applying the Company’s accounting policies during the year.
Revenue recognition
Turnover represents flown revenue from scheduled services and other activities net of Value Added Tax and Air Passenger Duty.
Ticket sales are recorded as current liabilities in a ‘forward sales’ account and are included in creditors, within deferred income, until recognised as revenue when transportation occurs. Unused tickets are recognised as revenue when the right to travel expires which is determined by the terms and conditions of the ticket.
All other revenue streams are recognised at the point of fulfilling the service or the date at which the right to receive consideration occurs.
Foreign currency transactions and balances
Tax
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. The following timing differences are not provided for: differences between accumulated depreciation and tax allowances for the cost of a fixed asset if and when all conditions for retaining the tax allowances have been met; and differences relating to investments in subsidiaries, to the extent that it is not probable that they will reverse in the foreseeable future and the reporting entity is able to control the reversal of the timing difference. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that is it probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Tangible assets
All tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses., apart from Aircraft which are valued at open market valuation
Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets.
The company assesses at each reporting date whether tangible fixed assets are impaired.
Leases in which the company assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Leased assets acquired by way of finance lease are initially stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, and are then held at cost less accumulated depreciation and less accumulated impairment losses. Lease payments are accounted for as described in note below.
Depreciation
Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since the last annual reporting date in the pattern by which the company expects to consume an asset’s future economic benefits.
Subsequent costs of periodic overhauls on these components are capitalised within tangible fixed assets and depreciated over the years benefiting from these enhancements.
Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of each part of an item of tangible fixed assets. The estimated useful lives are as follows:
Aircrafts are valued at open market value, and where the valuation is below original cost, the aircraft is impaired down to open market valuation.
Asset class |
Depreciation method and rate |
Aircraft rotables |
15% per annum from date of acquisition to estimated residual value of 20%. Previously 25% per annum from date of acquisition to estimated residual value of 20% |
Fixtures, fittings and equipment |
10-20% per annum |
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Maintenance costs
The costs of periodic overhauls on owned and finance leased aircraft are expenses to the profit and loss as incurred.
Provisions for periodic overhaul costs on aircraft held under operating leases are made with reference to the number of hours flown, or similar basis, over the lease period.
For certain operating leased aircraft, arrangements have been entered into with maintenance providers under which monthly payments are made on a flying hour, or similar basis. The group retains responsibility for the total costs of the maintenance overhaul of these aircraft, and where these costs exceed the monthly payment the group will incur additional costs. The additional costs are spread over the period to the shorter of the next overhaul, or end of the lease term, and are shown within tangible fixed assets.
Intangible assets
Intangible fixed assets are stated in the balance sheet at cost.
The profit or loss on sale of intangible fixed assets is recognised through the profit and loss account on the transaction date.
Memorabilia
Memorabilia are stated in the financial statements at their original cost amount. No depreciation is provided on memorabilia. It is the Company’s practice to maintain these assets in a continual state of sound repair. Accordingly, the Directors consider that the lives of these assets and residual values are such that their depreciation is insignificant.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Stocks
Stocks, including aircraft consumables are stated at lower of cost or net realisable value.
Stock is assessed by management on a periodic basis.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Leases
Leasing agreements which transfer to the company substantially all the benefits and risks of ownership of an asset are treated as if the asset had been purchased outright. The assets are included in tangible fixed assets and the capital element of the leasing commitments are shown as obligations under finance leases. The lease rentals are treated as consisting of capital and interest elements. The capital element is applied to reduce the outstanding obligations and the interest element is charged to the profit and loss account in proportion to the reducing capital element outstanding. Assets held under finance leases are depreciated over the shorter of the lease term and the useful lives of equivalent owned assets.
Annual rentals payable or receivable under operating leases are charged or credited to the profit and loss account on a straight line basis over the lease term, unless another systematic and more rational basis is appropriate.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Financial instruments
Classification
(a) they include no contractual obligations upon the company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the company; and
(b) where the instrument will or may be settled in the company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the company’s own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Basic financial instruments
Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.
Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.
Impairment excluding stocks
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. For financial instruments measured at cost less impairment an impairment is calculated as the difference between its carrying amount and the best estimate of the amount that the Company would receive for the asset if it were to be sold at the reporting date. Interest on the impaired asset continues to be recognised through the unwinding of the discount. Impairment losses are recognised in profit or loss. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Non-financial assets
The carrying amounts of the Company’s non-financial assets, other than stocks, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss.
An impairment loss is reversed if and only if the reasons for the impairment have ceased to apply.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Turnover |
The analysis of the company's Turnover for the year from continuing operations is as follows:
2023 |
2022 |
|
Sale of goods |
|
- |
Rendering of services |
|
|
|
|
The analysis of the company's Turnover for the year by market is as follows:
2023 |
2022 |
|
UK |
|
|
Europe |
|
|
|
|
Turnover within the British Isles comprises revenue from domestic flights. Turnover between the British Isles and Europe comprises revenue from inbound and outbound flights between the British Isles and Europe and Europe to Europe travel.
The activities of the company are managed and administered on a central basis within the British Isles. As a result it would not be possible to provide a meaningful analysis of the operating results and net assets of the company on a route by route basis. Consequently, the operating results and net assets of the company are not shown across the geographical areas defined.
Other operating income |
The analysis of the company's other operating income for the year is as follows:
2023 |
2022 |
|
JRS government grant income |
- |
|
Other gains and losses |
The analysis of the company's other gains and losses for the year is as follows:
2023 |
2022 |
|
Gain on disposal of intangible assets |
|
|
Operating profit |
Arrived at after charging/(crediting)
2023 |
(As restated) |
|
Depreciation expense |
( |
|
Write-down of stocks to net realisable value |
- |
( |
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Other interest receivable and similar income |
2023 |
2022 |
|
Interest income on bank deposits |
|
|
Interest payable and similar expenses |
2023 |
2022 |
|
Interest expense on other finance liabilities |
- |
|
Foreign exchange losses |
( |
( |
( |
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Redundancy costs |
|
- |
Other employee expense |
- |
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Administration and support |
|
|
Other departments |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
37,400 |
39,292 |
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Auditors' remuneration |
2023 |
2022 |
|
Audit of the financial statements |
|
|
Taxation |
Tax charged/(credited) in the profit and loss account
2023 |
2022 |
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2023 |
(As restated) |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Tax decrease from effect of capital allowances and depreciation |
( |
( |
Tax increase from effect of unrelieved tax losses carried forward |
|
|
Total tax charge/(credit) |
- |
- |
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Tangible assets |
Aircraft, engines and undercarriage |
Aircraft rotables |
Total |
|
Cost or valuation |
|||
At 1 April 2022 |
|
|
|
Revaluations |
( |
- |
( |
Additions |
- |
|
|
Disposals |
- |
( |
( |
At 31 March 2023 |
|
|
|
Depreciation |
|||
At 1 April 2022 |
- |
|
|
Charge for the year |
- |
( |
( |
Eliminated on disposal |
- |
( |
( |
At 31 March 2023 |
- |
|
|
Carrying amount |
|||
At 31 March 2023 |
|
|
|
At 31 March 2022 |
|
|
|
Depreciation charge is negative due to the re-assessment of the depreciation policy, from 4 years to 7 years, and the change of the residual value from 15% to 20%.
Memorabilia |
2023 |
2022 |
|
Memorabilia |
|
|
Associates |
£ |
Cost |
|
At 1 April 2022 |
|
Provision |
|
At 31 March 2023 |
- |
Carrying amount |
|
At 31 March 2023 |
|
At 31 March 2022 |
|
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Stocks |
2023 |
2022 |
|
Aircraft consumables |
|
|
Debtors |
Current |
2023 |
2022 |
Trade debtors |
|
|
Cash and cash equivalents |
2023 |
2022 |
|
Cash at bank |
- |
|
Short-term deposits |
- |
|
- |
|
Creditors |
Note |
2023 |
2022 |
|
Due within one year |
|||
Trade creditors |
|
|
|
Amounts due to related parties |
|
|
|
Social security and other taxes |
- |
|
|
Other payables |
- |
|
|
Accrued expenses |
|
|
|
|
|
||
Due after one year |
|||
Trade creditors |
|
|
Provisions for liabilities |
|
The company has an unrecognised deferred tax asset of £6,511,921 (2021: £5,817,980) in the year which is made up of gross tax losses of £5,490,082 (2021: £3,825,448) and other balances amounting to £1,021,839 (2021: £1,992,532). The company does not expect to recover the tax assets in the short term.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
1 |
|
1 |
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions: |
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
2023 |
2022 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Accounting estimates and judgements |
Key sources of estimation uncertainty
Key sources of estimation uncertainty
There are no key sources of estimation uncertainty at the end of the reporting period that have any significant risk or would result in a material adjustment.
Critical accounting judgements in applying the Company's accounting policies
There were no critical accounting judgements in applying the Company's accounting policies during the year.
Air Kilroe Limited
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Related party transactions |
The company is exempt from disclosing transactions with other wholly owned group companies under Section 33.1A of FRS 102.
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is
Contingent liabilities |
The company is part of a group VAT scheme and is jointly liable for any group VAT liability, at the balance sheet date the group/company had no liability.
Limitation of auditors liability |
The company has approved the auditors' limitation of liability, which has been set at £2,000,000 within the letter of engagement dated 1st June 2023. This approval has been confirmed in the letter of representation.