Air Charter Scotland (Holdings) Limited - Limited company accounts 20.1

REGISTERED NUMBER: SC218170 (Scotland)

Group Strategic Report,

Report of the Director and

Consolidated Financial Statements

for the Year Ended 31 December 2020

for

Air Charter Scotland (Holdings) Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTOR:

G E McFarlane

SECRETARY:

A M Bisset

REGISTERED OFFICE:

3 Colvilles Place, Kelvin Industrial Est

East Kilbride

Glasgow

G75 0PZ

REGISTERED NUMBER:

SC218170 (Scotland)

AUDITORS:

O'Haras Chartered Accountants, Statutory Auditors

Radleigh House

1 Golf Road

Clarkston

Glasgow

G76 7HU

The director presents his strategic report of the company and the group for the year ended 31 December 2020.

REVIEW OF BUSINESS

We aim to present a balanced comprehensive review of the development and performance of our business during the year and its position at the end of the year. Our 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 company 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.

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company, these being turnover, gross margin and return on capital employed.

Despite the challenges with Covid-19, the company overall is in good financial position at the end of the year, in line with our expectations.

During the year under review the main trading company's revenue decreased by 36% to £11.1 million. Profitability increased in the year to December 2020 with gross profit margin of 15.1% (2019: 11.3%).

Overall, the operating profit in the main trading company has increased from £117k (0.6%) to £675k (6%) and profit before tax increased from £147k to £649k.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors have assessed the main risk facing the company as being the competition from other companies within the industry. The directors believe that the reputation of the company and the quality of the service provided will mitigate this risk.

FINANCIAL RISK MANAGEMENT

The company 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 company.

COVID-19

Subsequent to the year end the company has been impacted by the COVID-19 virus. This has impacted revenue growth in the short term however the directors are of the opinion that this will bounce back in due course.

The directors have taken action to reduce the company's cost base to minimise the rate of cash utilisation in the business and have also received support from their bankers and the government furlough scheme.

The directors have prepared the financial projections covering a period of 12 months from the date of signing these financial statements. These show that on the basis of reasonable assumptions with regards to revenue, costs and cash flows, the company can continue to operate as a going concern, meeting liabilities as they fall due. On this basis the directors believe it is appropriate for these financial statements to be prepared on a going concern basis.

ON BEHALF OF THE BOARD:

G E McFarlane - Director

28 October 2021

The director presents his report with the financial statements of the company and the group for the year ended 31 December 2020.

DIVIDENDS

Interim dividends per share were paid as follows:

£200,000

- 31 March 2020

£200,000

- 30 September 2020

£325,000

- 31 December 2020

£725,000

The director recommends that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2020 will be £ 725,000 .

DIRECTOR

G E McFarlane held office during the whole of the period from 1 January 2020 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director 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.

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, O'Haras Chartered Accountants, Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

G E McFarlane - Director

28 October 2021

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 2020 which comprise the Consolidated Income Statement, Consolidated Other 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 Consolidated Cash Flow Statement, 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 2020 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

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 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 group's and the parent 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 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 the audit:

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

-	the Group Strategic Report and the Report of the Director 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 Report of the Director.

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.

We gained an understanding of the legal and regulatory framework applicable to the company and the aviation industry in which it operates. We made enquiries of management as to whether there were any known or suspected instances of non compliance with laws and regulations and reviewed Civil Aviation Authority audit reports for any indication of such matters.

We gained an understanding of management's internal controls designed to prevent and detect irregularities in their day-to-day operations.

We considered laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement components. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of relevant third parties.

We considered how fraud might occur in this company and designed our tests accordingly.

As in all audits, we also addressed the risk of management override of internal controls, including reviewing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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.

John O'Hara CA (Senior Statutory Auditor)

for and on behalf of O'Haras Chartered Accountants, Statutory Auditors

Radleigh House

1 Golf Road

Clarkston

Glasgow

G76 7HU

28 October 2021

TURNOVER

11,548,838

18,328,689

Cost of sales

10,049,807

16,279,483

GROSS PROFIT

1,499,031

2,049,206

Administrative expenses

1,731,986

1,638,210

(232,955

)

410,996

Other operating income

905,681

-

OPERATING PROFIT

4

672,726

410,996

Interest receivable and similar income

2,565

5,775

675,291

416,771

Interest payable and similar expenses

5

26,441

22,713

PROFIT BEFORE TAXATION

648,850

394,058

Tax on profit

6

128,148

85,925

PROFIT FOR THE FINANCIAL YEAR

520,702

308,133

Profit attributable to:

Owners of the parent

520,702

308,133

PROFIT FOR THE YEAR

520,702

308,133

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

520,702

308,133

Total comprehensive income attributable to:

Owners of the parent

510,008

308,133

Non-controlling interests

10,694

-

520,702

308,133

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

109,415

132,257

Investments

11

-

-

109,415

132,257

CURRENT ASSETS

Stocks

12

13,936

13,936

Debtors

13

2,540,441

2,069,043

Cash at bank

2,424,197

3,342,023

4,978,574

5,425,002

CREDITORS

Amounts falling due within one year

14

3,240,435

3,872,141

NET CURRENT ASSETS

1,738,139

1,552,861

TOTAL ASSETS LESS CURRENT LIABILITIES

1,847,554

1,685,118

CREDITORS

Amounts falling due after more than one year

15

(366,667

)

-

PROVISIONS FOR LIABILITIES

18

(13,399

)

(13,909

)

NET ASSETS

1,467,488

1,671,209

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

222,523

437,516

SHAREHOLDERS' FUNDS

1,456,216

1,671,209

NON-CONTROLLING INTERESTS

21

11,272

-

TOTAL EQUITY

1,467,488

1,671,209

The financial statements were approved by the director and authorised for issue on 28 October 2021 and were signed by:

G E McFarlane - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

10,496

10,000

10,496

10,000

CURRENT ASSETS

Debtors

13

1,261,496

-

Cash at bank

2,043

1,705,481

1,263,539

1,705,481

CREDITORS

Amounts falling due within one year

14

12,692

236,492

NET CURRENT ASSETS

1,250,847

1,468,989

TOTAL ASSETS LESS CURRENT LIABILITIES

1,261,343

1,478,989

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

27,650

245,296

SHAREHOLDERS' FUNDS

1,261,343

1,478,989

Company's profit for the financial year

507,354

183,046

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

The financial statements were approved by the director and authorised for issue on 28 October 2021 and were signed by:

G E McFarlane - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2019

1

129,383

1,233,691

Changes in equity

Total comprehensive income

-

308,133

-

Balance at 31 December 2019

1

437,516

1,233,691

Changes in equity

Dividends

-

(725,000

)

-

Total comprehensive income

-

510,007

-

Balance at 31 December 2020

1

222,523

1,233,691

Capital

redemption

Non-controlling

Total

reserve

Total

interests

equity

£

£

£

£

Balance at 1 January 2019

1

1,363,076

-

1,363,076

Changes in equity

Total comprehensive income

-

308,133

-

308,133

Balance at 31 December 2019

1

1,671,209

-

1,671,209

Changes in equity

Dividends

-

(725,000

)

-

(725,000

)

Total comprehensive income

-

510,007

10,694

520,701

Balance at 31 December 2020

1

1,456,216

10,694

1,466,910

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 January 2019

1

62,250

1,233,691

1

1,295,943

Changes in equity

Total comprehensive income

-

183,046

-

-

183,046

Balance at 31 December 2019

1

245,296

1,233,691

1

1,478,989

Changes in equity

Dividends

-

(725,000

)

-

-

(725,000

)

Total comprehensive income

-

507,354

-

-

507,354

Balance at 31 December 2020

1

27,650

1,233,691

1

1,261,343

Cash flows from operating activities

Cash generated from operations

1

102,921

592,398

Interest paid

(5,750

)

-

Interest element of hire purchase payments paid

(314

)

(22,713

)

Finance costs paid

(20,377

)

-

Government grants

520,505

-

Tax paid

(71,215

)

(21,700

)

Net cash from operating activities

525,770

547,985

Cash flows from investing activities

Purchase of tangible fixed assets

(5,420

)

(36,589

)

Purchase of fixed asset investments

-

(46,246

)

Sale of tangible fixed assets

1,086

1,365,974

Interest received

2,565

5,775

Net cash from investing activities

(1,769

)

1,288,914

Cash flows from financing activities

New loans in year

400,000

-

Capital repayments in year

(1,269

)

(56,210

)

Amount introduced by directors

-

23,957

Amounts paid to connected companies

(1,115,558

)

(1,338

)

Equity dividends paid

(725,000

)

-

Net cash from financing activities

(1,441,827

)

(33,591

)

(Decrease)/increase in cash and cash equivalents

(917,826

)

1,803,308

Cash and cash equivalents at beginning of year

2

3,342,023

1,538,715

Cash and cash equivalents at end of year

2

2,424,197

3,342,023

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31/12/20

31/12/19

£

£

Profit before taxation

648,850

394,058

Depreciation charges

27,176

54,400

Profit on disposal of fixed assets

-

(140,681

)

Impairment of goodwill

-

107,299

Government grants

(520,505

)

-

Finance costs

26,441

22,713

Finance income

(2,565

)

(5,775

)

179,397

432,014

Increase in stocks

-

(7,862

)

Decrease in trade and other debtors

644,737

715,503

Decrease in trade and other creditors

(721,213

)

(547,257

)

Cash generated from operations

102,921

592,398

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

2,424,197

3,342,023

Year ended 31 December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

3,342,023

1,538,715

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.20

Cash flow

At 31.12.20

£

£

£

Net cash

Cash at bank

3,342,023

(917,826

)

2,424,197

3,342,023

(917,826

)

2,424,197

Debt

Finance leases

(1,269

)

1,269

-

Debts falling due within 1 year

-

(33,333

)

(33,333

)

Debts falling due after 1 year

-

(366,667

)

(366,667

)

(1,269

)

(398,731

)

(400,000

)

Total

3,340,754

(1,316,557

)

2,024,197

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 General Information page.

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.

Going concern

The directors are satisfied that the Company will have access to sufficient funds to ensure that all liabilities will be met as they fall due over a period of at least 12 months from the approval date of these financial statements. Consequently, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Revenue

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 assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Patents and licences are being amortised evenly over their estimated useful life of ten years.

Tangible fixed assets

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

Depreciation is provided at annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Inventories

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

Taxation

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