AVIATION_PARK_GROUP_LIMIT - Accounts

The directors present their annual report and financial statements for the year ended 31 December 2021.

The principal activity of the company is the handling of passengers and aircraft at Chester Airport and the provision of hangar space, fuel and storage facilities for aircraft.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The auditor, DSG, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

As referred to in note 1.2, the directors have considered the ongoing Covid pandemic, reviewed financial budgets and forecasts prepared by management and obtained written confirmation of continuing support from related party creditors when assessing the going concern position of the company. The directors have a reasonable expectation that there are adequate resources to continue in operational existence for the foreseeable future, for a period of at least twelve months from the date of signing these financial statements. The directors therefore continue to adopt the going concern basis of accounting in preparing the financial statements.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

The directors are responsible 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 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 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.

We have audited the financial statements of Aviation Park Group Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 December 2021 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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the following matters in relation to which 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 remuneration specified by law are not made; or

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

•     the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

• Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, company law, tax and pensions legislation, and distributable profits legislation.

• Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements, including CAA regulations and European Aviation Standards and the Tenants and Landlords Act.

Audit procedures undertaken in response to the potential risk relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation claims; inspection of certificates of registration and licences; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.

There are no recognised gains and losses other than those passing through the profit and loss account.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

Aviation Park Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is International House, Flint Road, Saltney Ferry, Chester, CH4 0GZ.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include investment properties. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

As explained in the Directors Report, when assessing the going concern position of the company the directors have reviewed truefinancial budgets and forecasts prepared by management which take account of the potential effect of the ongoing Coronavirus pandemic, including taking advantage of and subsequent repayment, if applicable, of the Government's support packages including the Coronavirus Job Retention Scheme and Coronavirus Business Interruption Loan Scheme.

The company reported a profit after tax of £6,558 for the year and at the balance sheet date the company had net current liabilities of £3,891,070 and net assets of £5,460,998 compared to net current liabilities of £565,064 and net assets of £5,454,440 as at 31 December 2020. As a result of the company breaching one of its financial covenants with its bankers as at 31 December 2021, see note 14, the total bank loan of £3,494,106 is included within creditors due within one year. Also included in creditors due within one year are amounts due to its subsidiary undertaking, CCB Trading Group Limited, totalling £839,820 from whom written confirmation has been received which stipulates that this amount owed will not be called until such time that the company has settled other third party liabilities. The directors consider that the company will continue to be able to meet its liabilities as they fall due for a period of at least 12 months from the date of signing these accounts and therefore the directors have prepared these financial statements on a going concern basis.

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured.

Revenue comprises rents receivable, hangarage income, fuel sales, landing fees and other associated service charges.

Turnover on rental contracts is recognised on a straight line basis over the period of the rental agreement. Turnover from a contract to provide services is recognised with reference to stage of completion. The profit included is calculated on a reasonable and consistent basis to reflect the proportion of work carried out at the year end.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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

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

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

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

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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

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

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Investment property is valued annually by either professional valuers or the directors using a market value basis. This methodology involves a degree of judgement using guidance provided by RCIS.

All turnover arose within the United Kingdom.

Operating profit for the year ended 31 December 2021 is stated after charging an investment property revaluation deficit of £90,000.

The average monthly number of persons (including directors) employed by the company during the year was:

Directors' emoluments totalling £140,000 (2020: £130,835) have been recharged to group undertakings and participating interests during the year.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

In the Budget of 3 March 2021, the Chancellor of the Exchequer announced that the main rate of corporation tax would increase to 25%, with effect from 1 April 2023. This increase in rate was included within Finance Act 2021, which was substantively enacted on 24 May 2021. Accordingly, deferred tax balances as at 31 December 2021 are now calculated at this increased rate.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

The fair value of the investment property has been arrived at on an open market value basis by reference to a valuation report undertaken by Avison Young (UK) Limited dated 3 August 2022 in accordance with RICS Valuation - Global Standards 2017, the 'RICS Red Book'.

In the opinion of the directors there has not been a significant change in the market value of the property and this valuation is therefore appropriate as at 31 December 2021.

Details of the company's subsidiaries at 31 December 2021 are as follows:

Security for bank loans and overdrafts is detailed in note 16.

The company's loan agreement is subject to covenant clauses whereby the company is required to meet certain key financial ratios. The company did not fulfil the CFADS to debt service ratio as at 31 December 2021 as required. Due to this breach of covenant clause, the bank is contractually entitled to request for immediate repayment of the outstanding loan of £3,494,106 and as such the outstanding balance is presented as a current liability as at 31 December 2021. The bank have not requested early repayment of the loan and have issued a letter, dated 5 July 2022, which waives the stated event of covenant default.

Security for bank loans and overdrafts is detailed in note 16.

The bank loans are secured by way of a debenture dated 2 March 2007, a first legal charge over the investment property at International House, Saltney Ferry, Chester and an inter-company cross guarantee between Aviation Park Group Limited and CCB Trading Group Limited, Chester Airport Limited, NSS Special Access (UK) Limited, Spacerepair Limited, CCB Property Partnership LLP. Since the year end, on 21 March 2022, a further charge was registered in favour of the bank over the company's freehold property.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The merger reserve arose upon a restructuring of the group on 31 December 2010 when there were share for share exchanges in two other entities (Hawarden Air Services and CCB Trading Group Limited)..

Aviation Park Group Limited owns 100% of the issued share capital of CCB Trading Group Limited. true CCB Trading Group Limited in turn owns 100% of the share capital of Chester Airport Limited. The company has taken advantage of the exemptions available under FRS102 paragraph 33 not to disclose transactions and balances with wholly owned companies within the group.

C C Butt and CCB Trading Group Limited are the designated members of CCB Property Partnership LLP. The company invoiced sales and recharges of £279,446 (2020: £213,461) to and made purchases of £1,574 (2020: £30) from the LLP. Amounts owed by this LLP at the balance sheet date totalled £420,136 (2020: £12,108)

C C Butt owns 100% of the share capital of Spacerepair Limited. The company invoiced sales and recharges of £8,425 (2020: £12,295) to Spacerepair Limited during the year. Amounts owed by this company at the balance sheet date totalled £11 (2020: £6,696).

C C Butt owns 100% of the share capital of NSS Special Access (UK) Ltd. The company invoiced sales and recharges of £154,486 (2020: £153,416) to and made purchases of £8,749 (2020: £9,529) from NSS Special Access (UK) Ltd during the year. Amounts owed to this company at the balance sheet date totalled £360 (2020: owed by - £104,926).

C C Butt is a director of Palmers Scaffolding (UK) Limited. The company invoiced sales and recharges of £27,954 (2020: £7,606) to Palmers Scaffolding (UK) Limited during the year. Amounts included in trade debtors and owed to this company at the balance sheet date totalled £2,030 (2020: £5,285).

The company is controlled by C C Butt by virtue of his 98.5% shareholding in the company.