Air Charter Scotland (Holdings) Limited - Limited company accounts 18.2

REGISTERED NUMBER: SC218170 (Scotland)

GROUP STRATEGIC REPORT, DIRECTOR'S REPORT AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018

FOR

AIR CHARTER SCOTLAND (HOLDINGS) LIMITED

Page

Company Information

1

Group Strategic Report

2

Director's Report

3

Report of the Independent Auditors

4

Consolidated Statement of Comprehensive Income

6

Consolidated Balance Sheet

7

Company Balance Sheet

8

Consolidated Statement of Changes in Equity

9

Company Statement of Changes in Equity

10

Consolidated Cash Flow Statement

11

Notes to the Consolidated Financial Statements

12

DIRECTOR:

G E McFarlane

SECRETARY:

A M Bisset

REGISTERED OFFICE:

3 Colvilles Place

Kelvin Industrial Estate

East Kilbride

Glasgow

G75 0PZ

REGISTERED NUMBER:

SC218170 (Scotland)

AUDITORS:

Consilium Audit Limited (Statutory Auditor)

169 West George Street

Glasgow

G2 2LB

The director presents his strategic report of the Company and the Group for the year ended 31 December 2018.

REVIEW OF BUSINESS

I aim to present a balanced and comprehensive review of the development and performance of our business during the year and its

position at the end of the year. My review is consistent with the size and non-complex nature of our business and is written in the

context of the risks and uncertainties we face.

As a private jet operator, the Group continues to manage different jet types on behalf of owners and provide a service to the

commercial world through 3rd party agents and continued direct customer contacts.

I consider that our key financial performance indicators are those that communicate the financial performance and strength of the

Group as a whole, these being turnover, gross margin and return on capital employed.

Overall, the Group is in a good financial position at the end of the period, in line with our expectations.

During the year under review revenue has increased by 25.1% to £18.0 million. Profitability remained stable in the year to

December 2018 with gross profit margin of 9.9% (2017: 9.9%).

Overall operating profit has increased to £308k (1.7%) from £261k (1.8%) and profit before tax decreased to £111k from £164k.

PRINCIPAL RISKS AND UNCERTAINTIES

As for many businesses of our size, the business environment in which the group operates continues to be challenging. The private

jet market continues to be highly competitive and margins are tight.The group face competition from similar operators within the

UK and abroad; the group continue to manage this within our business operations.

With these risks and uncertainties in mind, I am are aware that any plans for the future development of the business may be

subject to unforeseen future events outside of my control, but feel the steps the group have taken and investment made over the

last year put us in a stronger position to handle these challenges.

FINANCIAL RISK MANAGEMENT

The Group makes little use of financial instruments other than an operational bank account and so its exposure to price risk, credit

risk, liquidity risk and cash flow risk is not material for the assessment of the assets, liabilities, financial position and profit or loss of

the Group.

ON BEHALF OF THE BOARD:

G E McFarlane - Director

16 August 2019

The director presents his report with the financial statements of the Company and the Group for the year ended

31 December 2018.

PRINCIPAL ACTIVITY

The principal activity of the Group in the year under review was that of private jet operator.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2018.

DIRECTOR

G E McFarlane held office during the whole of the period from 1 January 2018 to the date of this report.

PURCHASE OF OWN SHARES

The Group purchased 43,836 of its £0.00001 shares on 27 September 2018 for a consideration of £336,183. At the time of the

purchase this represented 24.7% of the called up share capital and the total number of shares on issue after the transaction was

133,628.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Director's Report and the financial statements in

accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected

to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom

Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is

satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the

Group for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

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

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's and the

Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and

enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the

assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The director is responsible for the maintenance and integrity of the corporate and financial information included on the Company's

website.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of

which the Group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make

himself aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

AUDITORS

The auditors, Consilium Audit Limited (Statutory Auditor), will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

G E McFarlane - Director

16 August 2019

Opinion

We have audited the financial statements of Air Charter Scotland (Holdings) Limited (the 'Parent Company') and its subsidiaries (the

'Group') for the year ended 31 December 2018 which comprise the Consolidated Statement of Comprehensive Income,

Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of

Changes in Equity, Consolidated Cash Flow Statement 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 Group's and of the Parent Company affairs as at 31 December 2018 and of the Group's 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 Auditors' responsibilities for the audit of the financial statements

section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit

of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in

accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic

Report and the Director's Report, but does not include the financial statements and our Report of the Auditors 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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course

of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's 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 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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is responsible for assessing the Group's and the Parent 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 director either intends to liquidate the Group or the Parent Company or to cease operations, or has no

realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's

website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to

state to them in a Report of the Auditors 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.

David Holt (Senior Statutory Auditor)

for and on behalf of Consilium Audit Limited (Statutory Auditor)

169 West George Street

Glasgow

G2 2LB

16 August 2019

TURNOVER

3

18,048,577

14,427,157

Cost of sales

16,265,019

13,001,177

GROSS PROFIT

1,783,558

1,425,980

Administrative expenses

1,475,965

1,214,897

307,593

211,083

Other operating income

-

50,000

OPERATING PROFIT

5

307,593

261,083

Interest receivable and similar income

845

505

Interest payable and similar expenses

6

(198,276

)

(97,862

)

PROFIT BEFORE TAXATION

110,162

163,726

Tax on profit

7

19,151

19,103

PROFIT FOR THE FINANCIAL YEAR

91,011

144,623

OTHER COMPREHENSIVE INCOME

Purchase of own shares

(336,183

)

(140,000

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(336,183

)

(140,000

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(245,172

)

4,623

(Loss)/profit attributable to:

Owners of the parent

91,011

144,623

Total comprehensive income attributable to:

Owners of the parent

(245,172

)

4,623

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

1,977,241

2,082,707

Investments

11

-

-

1,977,241

2,082,707

CURRENT ASSETS

Stocks

12

6,074

6,890

Debtors

13

2,672,246

2,342,470

Cash at bank

1,538,715

2,176,056

4,217,035

4,525,416

CREDITORS

Amounts falling due within one year

14

4,279,641

4,342,528

NET CURRENT (LIABILITIES)/ASSETS

(62,606

)

182,888

TOTAL ASSETS LESS CURRENT LIABILITIES

1,914,635

2,265,595

CREDITORS

Amounts falling due after more than one year

15

(535,079

)

(637,009

)

PROVISIONS FOR LIABILITIES

18

(16,480

)

(20,338

)

NET ASSETS

1,363,076

1,608,248

CAPITAL AND RESERVES

Called up share capital

19

1

1

Share premium

20

1,233,691

1,233,691

Capital redemption reserve

20

1

1

Retained earnings

20

129,383

374,555

SHAREHOLDERS' FUNDS

1,363,076

1,608,248

The financial statements were approved by the director on 16 August 2019 and were signed by:

G E McFarlane - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

10,000

10,000

10,000

10,000

CURRENT ASSETS

Debtors

13

982,214

871,758

Cash at bank

303,729

429,258

1,285,943

1,301,016

NET CURRENT ASSETS

1,285,943

1,301,016

TOTAL ASSETS LESS CURRENT LIABILITIES

1,295,943

1,311,016

CAPITAL AND RESERVES

Called up share capital

19

1

1

Share premium

20

1,233,691

1,233,691

Capital redemption reserve

20

1

1

Retained earnings

20

62,250

77,323

SHAREHOLDERS' FUNDS

1,295,943

1,311,016

Company's profit for the financial year

321,110

149,316

The financial statements were approved by the director on 16 August 2019 and were signed by:

G E McFarlane - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 January 2017

1

369,932

1,233,691

1

1,603,625

Changes in equity

Total comprehensive income

-

144,623

-

-

144,623

Purchase of own shares

-

(140,000

)

-

-

(140,000

)

Balance at 31 December 2017

1

374,555

1,233,691

1

1,608,248

Changes in equity

Total comprehensive income

-

91,011

-

-

91,011

Purchase of own shares

-

(336,183

)

-

-

(336,183

)

Balance at 31 December 2018

1

129,383

1,233,691

1

1,363,076

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 January 2017

1

68,007

1,233,691

1

1,301,700

Changes in equity

Total comprehensive income

-

149,316

-

-

149,316

Purchase of own shares

-

(140,000

)

-

-

(140,000

)

Balance at 31 December 2017

1

77,323

1,233,691

1

1,311,016

Changes in equity

Total comprehensive income

-

321,110

-

-

321,110

Purchase of own shares

-

(336,183

)

-

-

(336,183

)

Balance at 31 December 2018

1

62,250

1,233,691

1

1,295,943

Cash flows from operating activities

Cash generated from operations

23

11,560

2,340,674

Interest element of hire purchase and finance lease rental payments paid

(198,276

)

(97,862

)

Tax paid

(33,888

)

(77,353

)

Net cash from operating activities

(220,604

)

2,165,459

Cash flows from investing activities

Purchase of tangible fixed assets

(3,725

)

(1,238,378

)

Interest received

845

505

Net cash from investing activities

(2,880

)

(1,237,873

)

Cash flows from financing activities

Capital repayments in year

(43,605

)

(52,343

)

Amount withdrawn by directors

-

(23,957

)

Amounts repaid by connected companies

(34,069

)

6,711

Purchase of own shares

(336,183

)

(140,000

)

Net cash from financing activities

(413,857

)

(209,589

)

(Decrease)/increase in cash and cash equivalents

(637,341

)

717,997

Cash and cash equivalents at beginning of year

24

2,176,056

1,458,059

Cash and cash equivalents at end of year

24

1,538,715

2,176,056

1.	STATUTORY INFORMATION

Air Charter Scotland (Holdings) Limited is a private company, limited by shares, registered in Scotland. The Company's

registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial

Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements

have been prepared under the historical cost convention.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all group undertakings.

Group accounting policies are consistently applied across all group companies. The results of companies acquired or

disposed of are included in the Consolidated Statement of Comprehensive Income published, a seperate Statement of

Comprehensive Income for the parent company is omitted from the group financial statements by virtue of section 408 of

the Companies Act 2006.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. In preparing

the financial statements the directors have made the following judgements:

-

Determine whether leases entered into by the Group as a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

-

Determine whether there are indicators of impairment of the Group's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.

-

Determine whether any bad debt provision is required via review of trade debtors, with debts provided for on a specific basis. Factors considered include customer payment history and agreed credit terms.

Turnover

The turnover shown in the Consolidated Statement of Comprehensive Income represents the value of all services delivered

at a selling price exclusive of Value Added Tax. Sales are recognised at the point at which the Group has fulfilled its

contractual obligations.

Intangible fixed assets and amortisation

Patents and licences are valued at cost less accumulated amortisation.

Amortisation is calculated to write off the cost, less estimated residual value, in equal annual instalments over their

estimated useful life of 10 years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each

asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Aircraft

-

4% on cost

Fixtures, fittings & equipment

-

10% to 33.3% on cost

Motor vehicles

-

25% reducing balance

Tangible fixed assets are stated at cost less depreciation. Cost represents purchase price together with any incidental costs

of acquisition.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving

items. Cost represents the purchase price of goods.

Financial instruments

The Group has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial instruments are classified and accounted for as financial assets, financial liabilities or equity instruments,

according to the substance of the contractual arrangement.

Financial instruments which are assets are stated at cost less any provision for impairment. Financial liabilities are stated at

principal capital amounts outstanding at the period end. Issue costs relating to financial liabilities are deducted from the

outstanding balance and are amortised over the period to the due date for repayment of the financial liability.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its

liabilities. A financial liability is any contractual arrangement for an entity to deliver cash to the holder of the associated

financial instrument.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of

Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly

in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively

enacted by the balance sheet date.

Deferred tax

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

date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in

which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been

enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be

recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

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 transaction.

Exchange differences are taken into account in arriving at the operating result.

Leasing commitments

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.

Assets held under hire purchase agreements and finance leases are capitalised and disclosed under tangible fixed assets at

their fair value, and are depreciated in accordance with the above depreciation policies.

Future instalments payable under such agreements, net of finance charges, are included within creditors. Rentals payable

are apportioned between the capital element, which reduces the outstanding obligation included within creditors, and the

finance element, which is charged to the Consolidated Statement of Comprehensive Income in the year in which they

become payable.

Pension costs and other post-retirement benefits

The Group contributes to a defined contribution pension scheme for certain employees. The assets of the scheme are held

separately in an independently administered fund. Contributions payable are charged to the Consolidated Statement of

Comprehensive Income in the period to which they relate.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid

investments with original maturities of three months or less and bank overdrafts. Bank overdrafts, when applicable, are

shown within borrowings in current liabilities.

3.

TURNOVER

Turnover and profit before taxation are related to the one principal activity of the Group and arises solely in the UK.

4.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

2,729,914

2,132,100

Social security costs

257,919

218,513

Other pension costs

25,609

17,601

3,013,442

2,368,214

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

2018

2017

Crew

30

28

Cabin crew

4

4

Head office staff

17

16

Management

4

4

55

52

2018

2017

£

£

Director's remuneration

81,269

79,529

The Company considers key management to be the directors of the Company. The key management remuneration for the

year is as disclosed above.

5.	OPERATING PROFIT

The operating profit is stated after charging:

2018

2017

£

£

Other operating leases

54,716

53,591

Depreciation - owned assets

27,467

42,832

Depreciation - assets on hire purchase contracts and finance leases

81,724

36,721

Auditors' remuneration

16,050

13,800

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2018

2017

£

£

Hire purchase interest

448

879

Finance lease interest

197,828

96,983

198,276

97,862