Eastern Airways International Limited - Period Ending 2021-03-31
Eastern Airways International Limited - Period Ending 2021-03-31
Registration number:
Eastern Airways International Limited
for the Year Ended 31 March 2021
Eastern Airways International Limited
Contents
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Company Information |
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Strategic Report |
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Director's Report |
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Statement of Director's 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 |
Eastern Airways International Limited
Company Information
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Director |
Mr R J Lake OBE |
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Company secretary |
Mr M C Hutchinson |
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Registered office |
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Bankers |
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Auditors |
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Eastern Airways International Limited
Strategic Report for the Year Ended 31 March 2021
The director presents his strategic report for the year ended 31 March 2021.
Principal activity
The principal activity of the company is that of a holding company for the investments in the Eastern Group of companies and the provision of aircraft for the use by other group companies.
Fair review of the business
The results of the company for the year ended 31 March 2021 are as disclosed in the attached financial statements.
The company continues to act as the holding company for the investments in the Eastern Group of companies and the income disclosed in the profit and loss account is in relation to its activity as a holding company.
On 10 May 2019 the company was purchased by Orient Industrial Holdings Limited from the previous owners Bristow Aviation Holdings Limited. Since the change in ownership the company’s performance has improved and at the balance sheet date the company holds significant cash reserves and is free from any financial covenants.
The company’s director believes that an analysis using key performance indicators for the company is not necessary or appropriate for an understanding of the development, performance or position of the business.
Principal risks and uncertainties
The key financial risks and uncertainties facing the company are disclosed below. The director feels the company has a good mix of business activities and is well-balanced to handle the risks and uncertainties that it may face.
The director believes 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. The director believes that due to its subsidiaries’ investment in fuel efficient turbo-prop aircraft the Eastern Group enjoys a competitive advantage over the rest of the industry. Eastern Airways has engaged in technical developments in order to improve its operational and technical efficiencies. Furthermore, Eastern Airways has undertaken developments and exploration into greener aviation solutions to help reduce emissions.
Section 172(1) statement
The director of the company has 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 environment.
Employees are consulted regularly to ensure the impact of any decisions made are considered thus promoting fairness between the members of the company.
All business relationships are closely monitored by the director and as such the company maintains a reputation for high standards of business conduct.
Approved by the
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Eastern Airways International Limited
Director's Report for the Year Ended 31 March 2021
The director presents his report and the financial statements for the year ended 31 March 2021.
Director of the company
The director who held office during the year was as follows:
Information included in the Strategic Report
Section 172(1) of the Companies Act 2006
The director of the company has 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 environment.
Employees are consulted regularly to ensure the impact of any decisions made are considered thus promoting fairness between the members of the company.
All business relationships are closely monitored by the director and as such the company maintains a reputation for high standards of business conduct.
Financial instruments
Objectives and policies
The key financial risks and uncertainties facing the company are disclosed below.
The director feels the company has a good mix of business activities and is well-balanced to handle the risks and uncertainties that it may face.
The director believes 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. The director believes that due to its subsidiaries’ investment in fuel efficient turbo-prop aircraft the Eastern Group enjoys a competitive advantage over the rest of the industry.
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 its various factors affecting the performance of the company. This 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.
Eastern Airways International Limited
Director's Report for the Year Ended 31 March 2021 (continued)
Environmental matters
Greenhouse gas emissions
The Company has not disclosed its current quantity of energy consumed, as this is less than 40,000 kWh per annum.
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 Director has 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.
The Company holds significant cash reserves and is free from financial covenants.
The uncertainty as to the future impact in the Company of the recent COVID-19 outbreak has been considered as part of the Company’s adoption of the going concern basis. Based on latest forecasts and projections taking into account available information and government guidelines, the use of the going concern basis is appropriate and conditions outlined below.
Due to the easing of the unprecedented level of travel restrictions imposed by governments in response to the COVID-19 pandemic and the softening of demand and load factors, Eastern Airways has undertaken significant investment and time trying to understand flight requirements and travel demand and recognises once travel restrictions have been fully removed that it would have to kick start the business.
Aviation faces an uncertain future with what could be a longer-term travel freeze and the risks of a slow recovery. The industry depends significantly on airlines maintaining access to liquidity, including that enabled by governments. Eastern Airways is undertaking 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 has no debt re-financings due and is in ongoing discussions with liquidity providers who recognize our strength of balance sheet and business model should those facilities be required.
The Director has 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 director has 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
The director has taken 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 company's auditors are aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditors are unaware.
Approved by the
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Eastern Airways International Limited
Statement of Director's Responsibilities
The director acknowledges his responsibilities for preparing the Annual 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 of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Eastern Airways International Limited
Independent Auditor's Report to the Members of Eastern Airways International Limited
Opinion
We have audited the financial statements of Eastern Airways International Limited (the 'company') for the year ended 31 March 2021, 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 2021 and of its loss 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.
The impact of uncertainties due to the UK exiting the European Union
Uncertainties related to the effects of Brexit are relevant to understanding our audit of the financial statements. All audits assess and challenge the reasonableness of estimates made by the directors, such as recoverability of assets and related disclosures and the appropriateness of the going concern basis of preparation of the financial statements. All of these depend on assessments of the future economic environment and the company’s future prospects and performance.
Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. We applied a standardised firm-wide approach in response to that uncertainty when assessing the company’s future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.
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 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.
Eastern Airways International Limited
Independent Auditor's Report to the Members of Eastern Airways International Limited (continued)
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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and 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 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 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, 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 the director
As explained more fully in the Statement of Director's Responsibilities [set out on page 5], 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 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 director is 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 director either intends to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s 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.
Eastern Airways International Limited
Independent Auditor's Report to the Members of Eastern Airways International Limited (continued)
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 statement of the Company.
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.
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 judgmental areas of the financial statements.
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.
Audit procedures performed by the engagement team included:
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;
Designing 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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• 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.
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.
Eastern Airways International Limited
Independent Auditor's Report to the Members of Eastern Airways International Limited (continued)
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For and on behalf of
Charter House, 56 High Street
Sutton Coldfield
B72 1UJ
Eastern Airways International Limited
Profit and Loss Account for the Year Ended 31 March 2021
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Note |
2021 |
2020 |
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Turnover |
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Cost of sales |
( |
- |
|
|
Gross profit |
|
|
|
|
Administrative expenses |
(808) |
(244) |
|
|
Other (losses) / gains |
- |
12,000 |
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|
Other operating income |
- |
|
|
|
Operating (loss)/profit |
(303) |
74,684 |
|
|
Other interest receivable and similar income |
|
|
|
|
Amounts written off investments |
- |
( |
|
|
Interest payable and similar expenses |
( |
( |
|
|
55 |
(55,442) |
||
|
(Loss)/profit before tax |
( |
|
|
|
Tax on (loss)/profit |
- |
( |
|
|
(Loss)/profit for the financial year |
( |
|
The above results were derived from continuing operations.
Eastern Airways International Limited
Statement of Recognised Gains and Losses for the Year Ended 31 March 2021
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2021 |
2020 |
|
|
(Loss)/profit for the year |
( |
|
|
Total comprehensive income for the year |
( |
|
Eastern Airways International Limited
(Registration number: 04082547)
Balance Sheet as at 31 March 2021
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Note |
2021 |
2020 |
|
|
Fixed assets |
|||
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Tangible assets |
|
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|
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Investments |
|
|
|
|
|
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||
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Current assets |
|||
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Debtors |
|
|
|
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Investments |
- |
|
|
|
Cash at bank and in hand |
|
|
|
|
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||
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Net assets |
|
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Capital and reserves |
|||
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Called up share capital |
|
|
|
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Share premium reserve |
- |
|
|
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Other reserves |
- |
|
|
|
Profit and loss account |
|
( |
|
|
Total equity |
|
|
Approved and authorised by the
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Eastern Airways International Limited
Statement of Changes in Equity for the Year Ended 31 March 2021
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Share capital |
Share premium |
Merger reserve |
Profit and loss account |
Total |
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|
At 1 April 2020 |
|
|
|
( |
|
|
Loss for the year |
- |
- |
- |
( |
( |
|
Transfer of merger reserve |
- |
- |
( |
|
- |
|
Total comprehensive income |
- |
- |
( |
|
( |
|
Dividends |
- |
- |
- |
( |
( |
|
Cancellation of share capital |
(29,992) |
- |
- |
29,992 |
- |
|
Cancellation of share premium |
- |
( |
- |
|
- |
|
At 31 March 2021 |
|
- |
- |
|
|
|
Share capital |
Share premium |
Merger reserve |
Profit and loss account |
Total |
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At 1 April 2019 |
|
|
|
( |
( |
|
Profit for the year |
- |
- |
- |
|
|
|
Total comprehensive income |
- |
- |
- |
|
|
|
At 31 March 2020 |
|
|
|
( |
|
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021
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General information |
The company is a private company limited by share capital, incorporated in England & Wales. The company's registration number is 04082547.
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
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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 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.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £1,000.
Summary of disclosure exemptions
The Company's parent undertaking 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. 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 the end of the period.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
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Accounting policies (continued) |
- Cash Flow Statement and related notes.
- Key Management Personnel compensation.
As the consolidated financial statements of Orient Industrial Holdings Limited include the equivalent disclosures, the Company has also taken the exemptions under FRS 102 available in respect of the following disclosures:
- The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.
Name of parent of group
These financial statements are consolidated in the financial statements of Orient Industrial Holdings Limited.
The financial statements of Orient Industrial Holdings Limited may be obtained from the trading address shown in note 1 to these financial statements.
Changes in accounting estimate
Fixed assets
Aircrafts have changed from a valuation basis to a cost and depreciation basis. The rates of depreciation charged to the profit and loss account are shown below, under depreciation.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.
The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.
Foreign currency transactions and balances
Tax
The tax expense for the period comprises tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
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2 |
Accounting policies (continued) |
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
|
Asset class |
Depreciation method and rate |
|
Aircraft |
10% straight line to estimated residual value |
|
Aircraft engines |
Over the number of cycles flown |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
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.
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.
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.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
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2 |
Accounting policies (continued) |
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
|
Revenue |
The analysis of the company's turnover for the year by class of business is as follows:
|
2021 |
2020 |
|
|
Aircraft rental |
|
|
|
Other operating income |
The analysis of the company's other operating income for the year is as follows:
|
2021 |
2020 |
|
|
Miscellaneous other operating income |
- |
|
|
Exceptional income |
- |
28,239 |
|
- |
|
The exceptional income in 2020 was made up of £28,238,000 that was agreed to be written off by the Company's previous parent company, when it was taken over by its current parent company, Orient Industrial Holdings Limited on 19th May 2019. The remainder being £34,404,000 was the release of a provision against recoverable inter company loans.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Other gains and losses |
The analysis of the company's other gains and losses for the year is as follows:
|
2021 |
2020 |
|
|
Gain (loss) from disposals of investments |
- |
|
|
Operating (loss)/profit |
Arrived at after charging/(crediting)
|
2021 |
2020 |
|
|
Depreciation expense |
|
- |
|
Other interest receivable and similar income |
|
2021 |
2020 |
|
|
Interest income on bank deposits |
|
|
|
Other finance income |
|
- |
|
|
|
|
Interest payable and similar expenses |
|
2021 |
2020 |
|
|
Interest expense on other finance liabilities |
|
|
|
Staff costs |
The average number of persons employed by the company (including the director) during the year, analysed by category was as follows:
|
2021 |
2020 |
|
|
Administration and support |
|
|
|
|
|
|
Auditors' remuneration |
|
2021 |
2020 |
|
|
Audit of the financial statements |
|
- |
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Taxation |
Tax charged/(credited) in the income statement
|
2021 |
2020 |
|
|
Current taxation |
||
|
UK corporation tax |
- |
|
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2020 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2021 |
2020 |
|
|
(Loss)/profit before tax |
( |
|
|
Corporation tax at standard rate |
( |
|
|
Effect of revenues exempt from taxation |
- |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Tax increase from effect of capital allowances and depreciation |
|
- |
|
Tax decrease arising from group relief |
- |
( |
|
Total tax charge |
- |
|
|
Tangible assets |
|
Aircraft, engines and undercarriage |
Total |
|
|
Cost or valuation |
||
|
At 1 April 2020 |
|
|
|
Additions |
|
|
|
At 31 March 2021 |
|
|
|
Depreciation |
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|
Charge for the year |
|
|
|
At 31 March 2021 |
|
|
|
Carrying amount |
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|
At 31 March 2021 |
|
|
|
At 31 March 2020 |
|
|
An aircraft was sold on the 14th April 2021 which had a Net Book Value of $2,000,000 (£1,557,291) at the balance sheet date with the proceeds received of $2,000,000 (£1,446,541).
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Investments |
|
Investments |
Unlisted investments |
Subsidiaries |
Total |
|
Cost or valuation |
|||
|
At 1 April 2020 |
31 |
55,979 |
|
|
Provision |
|||
|
At 1 April 2020 |
- |
55,663 |
|
|
At 31 March 2021 |
- |
55,663 |
|
|
Carrying amount |
|||
|
At 31 March 2021 |
31 |
316 |
|
|
At 31 March 2020 |
31 |
316 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2021 |
2020 |
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|
Subsidiaries |
||||
|
|
See below |
Ordinary |
|
|
|
England |
||||
|
|
See below |
Ordinary |
|
|
|
England |
||||
|
|
See below |
Ordinary |
|
|
|
England |
||||
|
|
See below |
Ordinary |
|
|
|
England |
||||
|
|
See below |
Ordinary |
|
|
|
England |
||||
Eastern Airways (UK) Limited and Air Kilroe Limited were transferred from Eastern Airways (Europe) Limited during the year.
The registered office of all of the above companies is:-
Charter House
56 High Street
Sutton Coldfield
West Midlands
B72 1UJ
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
13 |
Investments (continued) |
Eastern Airways Share Plan Limited was dissolved on 4th May 2021. The value of the investment was impaired and shown within the accounts last year.
|
Subsidiaries |
|
Eastern Airways Share Plan Limited The principal activity of Eastern Airways Share Plan Limited is |
|
Easternhill Estates Limited The principal activity of Easternhill Estates Limited is |
|
Eastern Airways (Europe) Limited The principal activity of Eastern Airways (Europe) Limited is |
|
Air Kilroe Limited The principal activity of Air Kilroe Limited is |
|
Eastern Airways (UK) Limited The principal activity of Eastern Airways (UK) Limited is |
|
Debtors |
|
Note |
2021 |
2020 |
|
|
Amounts owed by related parties |
|
|
|
|
Other debtors |
|
|
|
|
|
|
|
Current asset investments |
|
2021 |
2020 |
|
|
Other investments |
- |
|
The current asset investment relates to an aircraft held for sale, which has been sold after the year end. The current asset investment is held at the lower of cost and net realisable value.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Creditors |
|
Note |
2021 |
2020 |
|
|
Due within one year |
|||
|
Trade creditors |
|
- |
|
|
Amounts due to related parties |
|
|
|
|
Other payables |
|
|
|
|
Accrued expenses |
|
|
|
|
Corporation tax liability |
- |
50 |
|
|
|
|
Included in other payables is an amount of £500,000 relating to 50% of an aircraft. The Company has retained control of the aircraft and are being charged a small management charge from the purchase. As the substance of the transaction is sale and leaseback, the company has taken the true and fair override and treated the proceeds as a loan.
|
Provisions for liabilities |
The company has an unrecognised deferred tax asset of £131,274 in the year. The company does not expect to recover the tax assets in the short term.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Share capital |
Allotted, called up and fully paid shares
|
2021 |
2020 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
1,000,000 |
|
30,991,417 |
|
|
- |
- |
|
602 |
|
|
- |
- |
|
402 |
|
|
- |
- |
|
2 |
|
|
|
|
|
|
Rights, preferences and restrictions
|
Ordinary shares have the following rights, preferences and restrictions: |
On the 1st September 2020, the company passed a special resolution under chapter 2 of Part 13 of the Companies Act 2006 to cancel and extinguish £29,992,423 of the issued share capital in the company.
|
Reserves |
The changes to each component of equity resulting from items of other comprehensive income for the current year were as follows:
|
Merger |
Total |
|
|
Other comprehensive income |
844 |
844 |
The merger reserve has been transferred to the profit and loss reserve on the basis that the underlying investment to which it related as had all assets impaired, therefore the merger reserve is being treated as a unrealised loss against the merger reserve.
|
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 amount due was £158,450 (2020: £258,161).
Santander UK Plc holds cash in a security account in relation to guarantees provided by the group.
Eastern Airways International Limited
Notes to the Financial Statements for the Year Ended 31 March 2021 (continued)
|
Accounting estimates and judgments |
Critical accounting judgments in applying the Company's accounting policies
There were no critical accounting judgments in applying the Company's accounting policies during the year.
Key sources of estimation uncertainty
Recoverability of amounts due from group and related undertakings
The Group and Company have significant amounts due from group undertakings of £11,157,000 (2020: £9,673,000) and amounts due to group undertakings £12,180,000 (2020: £11,636,000). These balances are financial assets carried at amortised cost. They are assessed by the directors at each reporting date to determine whether there is objective evidence that the asset is impaired, who consider the financial performance, position and prospects of the subsidiaries and related undertakings. If there are indicators of impairment, the impairment loss is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's effective interest rate.
|
Related party transactions |
Summary of transactions with entities with joint control or significant interest
The company is exempt from disclosing transactions with other wholly owned group companies under Section 33.1A of FRS 102.
During the year, the Company raised sales invoices totalling £500,000 (2020: a credit note for fees of £127,000) from a 100% connected party, and purchases of £9,000 (2020: £Nil). As at the year end 31 March 2021 there is a creditor balance of £503,000 (2020: a debtor balance of £84,000) in relation to 100% connected parties.
During the year, the Company made a profit on the disposal of a subsidiary totalling £Nil (2020: £12,000,000) and waived an intergroup loan creditor balance, as part of the deal, of £Nil (2020: £28,238,000).
|
Parent and ultimate parent undertaking |
The ultimate parent is
These financial statements are available upon request from Schiphol House, Humberside Airport, Kirmington DN39 6YH