Company registration number 05080620 (England and Wales)
EXECUJET (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
EXECUJET (UK) LIMITED
COMPANY INFORMATION
Directors
Mr D Van Den Langenbergh
Mr G Galanopoulos
Mr R Fisch
(Appointed 22 March 2023)
Secretary
Mr A G Medlock
(Appointed 1 September 2022)
Company number
05080620
Registered office
The Officer's Mess - Room Wf27
Royston Road
Duxford
Cambridge
England
CB22 4QH
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
EXECUJET (UK) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of financial position
9 - 10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 38
EXECUJET (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

 

During 2022, the company's principal activity was the management of aircraft in the business aviation sector. Additional revenues are also generated in the form of arrangement fees arising from the use of managed aircraft in charter activities, income from aircraft acceptance and registration service fees. During 2022, the company's aircraft management sector was discontinued. See "Fair review of the business" for further detail.

Fair review of the business

The company's key financial and other performance indicators for the year ended December 2022 are detailed in the income statement.

 

During 2022, the company’s foothold in the aircraft management sector was discontinued with all the aircraft remaining under the company’s management leaving the business. As a result, the company underwent a considerable restructure. It essentially became a back-office function supporting various entities within the Luxaviation Group, largely Denmark, whilst continuing with its investment property and arranging the sub-charter of aircraft owned by either group entities or third parties.

 

The company’s operating loss of £1,517k (2021 profit: £241k) reflected the changes in aircraft management together with sizeable restructure costs as the company downsized.

 

In November 2022, the staff remaining in the business transferred employment to a number of other Luxaviation Group entities, with the majority transferring to London Executive Aviation Limited via TUPE.

 

 

EXECUJET (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Principal risks and uncertainties

The directors recognise that within the business there are a number of risks which may affect the performance of the company. These risks are subject to regular review and, where appropriate, processes are established to minimise the level of exposure. The risks discussed below are relevant to the principal activities throughout 2022, however during 2022, the company's aircraft management sector was discontinued. See "Fair review of the business" and "Future developments" for further detail.

 

Competitive risk

The company manages the competitive risk by offering competitive rates and offering a high level of customer service.

 

Economic risk

An economic downturn could lead to one or more customers going into insolvency and thus creating a potential cash flow/liquidity issue. To mitigate this risk ExecuJet has taken a number of measures, for example: aircraft management customers are contractually obliged to make a down payment of one to three months of operational costs. The monthly spend is closely monitored and in the event of reaching the predefined threshold the aircraft is grounded in order not to incur any further liabilities. The company undertakes regular and effective credit control measures. The company reviews performance on a monthly basis.

 

Financial risk

The key financial risk relates to cash flow risk and is that, in the current climate, the proceeds from company's financial assets may not be sufficient to fund the obligations from its liabilities. The most important components of financial risks are foreign currency risk, credit risk, liquidity risk, and price risk.

 

Foreign currency risk

A number of the revenue contracts are held in currencies other than GBP. At the end of the year the total outstanding debtors denominated in Euros, US Dollars and Swiss Francs were £1,714k, £475k and £609k respectively. This may result in a foreign exchange gain or loss on settlement. The foreign exchange risk is mitigated by way of a natural hedge, and a significant portion of the expenditure related to the aircraft is also held in foreign currencies.

 

Credit risk

Company policies are aimed at minimising such losses. Aircraft management customers are required to deposit amounts equivalent to one to three months operational costs. Payments for charter are largely on non-credit basis. The company has not suffered unduly from bad debt during challenging trading times.

 

Liquidity risk

The company retains appropriate cash and facilities to ensure it has sufficient available funds for operations and to finance its capital commitments.

 

Price risk

The company is exposed to rising fuel prices, which is mitigated through bulk fuel purchasing within the Luxaviation Group.

Future developments

During 2023 the company’s trading became limited to a small amount of sub-charter work and its continued involvement in the properties leased. In 2024, the company has surrendered the leases on both the Newmarket and Fulbourn properties, including the sub-lease. The company will remain open without trading until such time that appropriate steps can be taken for the company to enter into voluntary liquidation. As at the date of approving the financial statements, the directors are uncertain of the timeframe on this matter.

 

 

By order of the board

Anthony Medlock
Secretary
30 September 2024
EXECUJET (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of the management of aircraft in the business aviation sector.

Results and dividends

The results for the year are set out on page 8.

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

Directors

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

Mr D Van Den Langenbergh
Mrs K Fabry
(Resigned 25 March 2022)
Mr G Galanopoulos
Mr R Fisch
(Appointed 22 March 2023)
Post reporting date events

During 2023 the company’s trading became limited to a small amount of sub-charter work and its continued involvement in the properties leased. In 2024, the company has surrendered the leases on both the Newmarket and Fulbourn properties, including the sub-lease. The company will remain open without trading until such time that appropriate steps can be taken for the company to enter into voluntary liquidation. As at the date of approving the financial statements, the directors are uncertain of the timeframe on this matter.

 

There are no other events after the reporting date concerning the company.

Auditor

In accordance with the company's articles, a resolution proposing that HW Fisher LLP be reappointed as auditor of the company will be put at a General Meeting.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of information on and exposure to financial risk and future developments in the business.

Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

By order of the board
Anthony Medlock
Secretary
30 September 2024
EXECUJET (UK) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -

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 UK-adopted International Accounting Standards (IAS) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

 

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.

EXECUJET (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EXECUJET (UK) LIMITED
- 5 -

Qualified opinion

We have audited the financial statements of Execujet (UK) Limited (the 'company') for the year ended 31 December 2022 which comprise the income statement, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 UK-adopted International Accounting Standards (IAS).

In our opinion, except for the effects of the matter described in the Basis for qualified opinion paragraph, the financial statements:

Basis for qualified opinion

The directors were unable to present reliable evidence to confirm:

 

We were therefore unable to obtain sufficient appropriate audit evidence about the accuracy and valuation of the trade receivables balance as at 31 December 2022. Consequently we were unable to determine whether any adjustments to these amounts were necessary.

 

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 qualified opinion.

Emphasis of matter - financial statements prepared on a basis other than going concern

We draw attention to note 1.2 to the financial statements, which explains that the company has ceased to trade and will remain open without trading until such time that appropriate steps can be taken for the company to enter into voluntary liquidation. Therefore, the directors do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly, the financial statements have been prepared on a basis other than going concern as described in note 1.2.

 

Our opinion is not modified in respect of this matter.

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.

 

As described in the Basis for qualified opinion section of our report, we were unable to obtain sufficient appropriate audit evidence in respect of trade receivables and going concern. We have concluded that where the other information refers to these amounts, or other balances that include these amounts, it may be materially misstated for the same reason.

EXECUJET (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EXECUJET (UK) LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matters described in the Basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

Except for the possible effects of the matters described in the Basis for qualified opinion section of our report, 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 strategic report or the directors' report.

 

Arising solely from the limitation of scope of our work referred to above:

 

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:

Responsibilities of directors

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.

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.

Detection of 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.

 

As part of our planning process:

 

EXECUJET (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EXECUJET (UK) LIMITED
- 7 -

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

 

 

Due to the significance of the matters described in the Basis for qualified opinion paragraph, we have been unable to form an opinion on whether the procedures listed above would lead to the detection of irregularities (including fraud). The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

Gilles Siow (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
11-15 William Road
Acre House
London
United Kingdom
NW1 3ER
30 September 2024
EXECUJET (UK) LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£'000
£'000
Revenue
4
10,816
22,155
Cost of sales
(10,318)
(20,909)
Gross profit
498
1,246
Other operating income
4
643
736
Administrative expenses
(2,658)
(1,741)
Operating (loss)/profit
6
(1,517)
241
Investment revenues
10
1
-
0
Finance costs
11
(193)
(218)
(Loss)/profit before taxation
(1,709)
23
Income tax expense
12
-
-
(Loss)/profit and total comprehensive income for the year
(1,709)
23

The income statement has been prepared on the basis that all operations are continuing operations.

EXECUJET (UK) LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
Notes
£'000
£'000
Non-current assets
Intangible assets
13
20
25
Property, plant and equipment
14
801
979
Investment property
15
2,937
3,316
3,758
4,320
Current assets
Trade and other receivables
16
4,763
10,614
Cash and cash equivalents
157
684
4,920
11,298
Total assets
8,678
15,618
Current liabilities
Trade and other payables
19
14,427
19,713
Lease liabilities
24
439
424
14,866
20,137
Net current liabilities
(9,946)
(8,839)
Non-current liabilities
Borrowings
20
480
-
0
Lease liabilities
24
3,483
3,923
3,963
3,923
Total liabilities
18,829
24,060
Net liabilities
(10,151)
(8,442)
EXECUJET (UK) LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2022
31 December 2022
2022
2021
Notes
£'000
£'000
- 10 -
Equity
Called up share capital
27
1
1
Retained earnings
(10,152)
(8,443)
Total equity
(10,151)
(8,442)
The financial statements were approved by the board of directors and authorised for issue on 30 September 2024 and are signed on its behalf by:
Mr G Galanopoulos
Director
Company registration number 05080620
EXECUJET (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Retained earnings
Total
£'000
£'000
£'000
Balance at 1 January 2021
1
(8,466)
(8,465)
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
23
23
Balance at 31 December 2021
1
(8,443)
(8,442)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(1,709)
(1,709)
Balance at 31 December 2022
1
(10,152)
(10,151)
EXECUJET (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
2022
2021
Notes
£'000
£'000
£'000
£'000
Cash flows from operating activities
Cash generated from operations
31
90
594
Interest paid
11
(20)
(17)
Net cash inflow from operating activities
70
577
Investing activities
Purchase of intangible assets
12
-
0
(27)
Purchase of property, plant and equipment
13
-
0
(11)
Interest received
10
1
-
0
Net cash generated from/(used in) investing activities
1
(38)
Financing activities
Payment of lease liabilities
22
(598)
(597)
Net cash used in financing activities
(598)
(597)
Net decrease in cash and cash equivalents
(527)
(58)
Cash and cash equivalents at beginning of year
684
742
Cash and cash equivalents at end of year
157
684
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information

Execujet (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Officer's Mess - Room Wf27, Royston Road, Duxford, Cambridge, England, CB22 4QH. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with UK-adopted International Accounting Standards (IAS), and with those parts of the Companies Act 2006 applicable to companies reporting under UK-adopted IAS.

 

The comparative financial statements for the year ended 31 December 2021 were the first financial statements of ExecuJet (UK) Limited prepared in accordance with UK-adopted IAS. The company transitioned from FRS 101 to UK-adopted IAS for all periods presented and the date of transition to UK-adopted IAS was 1 January 2020.

 

The transition to UK-adopted IAS has had no effect on the reported financial position or financial performance.

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 £'000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

At the year ended 31 December 2022, the company's truebalance sheet was in deficit by £10,151k.

 

During 2022, the company’s foothold in the aircraft management sector was discontinued with all the aircraft remaining under the company’s management leaving the business. As a result, the company underwent a considerable restructure. It essentially became a back-office function supporting various entities within the Luxaviation Group, largely Denmark, whilst continuing with its investment property and arranging the sub-charter of aircraft owned by either group entities or third parties.

 

During 2023 the company’s trading became limited to a small amount of sub-charter work and its continued involvement in the properties leased. In 2024, the company has surrendered the leases on both the Newmarket and Fulbourn properties, including the sub-lease. The company will remain open without trading until such time that appropriate steps can be taken for the company to enter into voluntary liquidation. As at the date of approving the financial statements, the directors are uncertain of the timeframe on this matter.

 

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, on the basis that the ultimate parent company, Luxaviation Holding Company SA, has confirmed its intention, if required, to provide financial support to enable the company to settle its liabilities as they fall due for at least 12 months from the date of signing the financial statements.

 

However, as the company is no longer trading and will ultimately enter into voluntary liquidation, the financial statements have been prepared on a basis other than going concern. Notwithstanding this, there are no material changes in the presentation or carrying values of the assets and liabilities, and no further liabilities need to be provided for as a result of the decision to liquidate the company.

1.3
Intangible assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

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

Computer software
5 years straight line
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.4
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

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

Leasehold improvements
5-10 years straight line
Office fixtures and fittings
5 years straight line
Plant and equipment
5 years straight line
Computer equipment
3 years straight line

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 recognised in the income statement.

1.5
Investment properties

Investment property, which comprises office space that is leased to a third party under a operating lease, is initially measured at cost and subsequently measured using the cost model, net of depreciation and any impairment losses. Investment properties are depreciated over the life of the lease with a useful economic life of 15 years.

1.6
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible 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).

1.7
Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and liability simultaneously.

Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon while the liability is outstanding.

1.8
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

1.9
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.

1.10
Employee benefits

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 inventories or non-current 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.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.12
Leases

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

When the company acts as a lessor, leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees, over the major part of the economic life of the asset. All other leases are classified as operating leases. If an arrangement contains lease and non-lease components, the company applies IFRS 15 to allocate the consideration in the contract. When the company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately, classifying the sub-lease with reference to the right-of-use asset arising from the head lease instead of the underlying asset.

 

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such basis.

1.13
Grants

Government grants, which include amounts received under the Coronavirus Job Retention Scheme, are recognised at the fair value of the grant received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. The income is recognised in other income on a systematic basis over the periods in which the associated costs are incurred, using the accrual model.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Critical accounting estimates and judgements

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements
Recoverability of Receivables

At the year-end, trade receivables net of provisions for doubtful debts total £1,420k (2021: £3,331k). Judgement has been taken as to whether these balances will be recovered in full. Where practicable the company offsets its receivable balances with outstanding payable balances where the balances share the same counter-party and when this treatment is agreed between both parties.

Agent or Principal

Under IFRS 15 'Revenue from Contracts with Customers', contracts with customers are reviewed to ensure the revenue associated with these has been correctly treated. The directors review each agreement individually to determine whether the company is acting as an Agent or Principal based on the terms of the agreement. An element of judgement exists as part of the conclusions as to the treatment of these types of contract and to account for these differently would mean revenue would differ materially.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
3
Adoption of new and revised standards and changes in accounting policies

In the current year a number of amendments to IFRSs issued by the International Accounting Standards Board (IASB)

and endorsed by the UK Endorsement Board became mandatorily effective for an accounting period that beings on or after 1 January 2022. The relevant amendments for the company are:

Standard, amendment or interpretation and effective date for accounting period beginning on or after
Description
Amendments to IAS 16 - Property Plant and Equipment - Proceeds before Intended Use
1 January 2022
The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss.
Amendments to IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract
1 January 2022
The amendments specify that the 'cost of fulfilling' a contract comprises the 'costs that relate directly to the contract'. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts.
Annual Improvements to IFRS Standards 2018-2020 - IFRS 9
1 January 2022
The amendment clarifies which fees an entity includes when it applies the ‘10 per cent' test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognise a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other's behalf.
Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
1 January 2021
The amendments introduce a practical expedient for modifications required by the reform, clarify that hedge accounting is not discontinued solely because of the IBOR reform, and introduce disclosures that allow users to understand the nature and extent of risks arising from the IBOR reform to which the entity is exposed to and how the entity manages those risks as well as the entity's progress in transitioning from IBORs to alternative benchmark rates, and how the entity is managing this transition. The company has borrowings which attract interest rates based on the LIBOR benchmark. LIBOR has been discontinued as of 31 December 2021 and has been replaced by the Sterling Overnight Index Average (SONIA) and this will therefore impact future periods.
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 19 -
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the UK):

Disclosure of Accounting Policies (Amendments to IAS 1)
1 January 2023
Changes requirements from disclosing ‘significant' to
‘material' accounting policies and provides explanations and guidance on how to identify material accounting policies.
Definition of Accounting Estimates (Amendments to IAS 8)
1 January 2023
Clarifies how to distinguish changes in accounting policies
from changes in accounting estimates.
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
1 January 2024
The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current.

Management anticipates that these new standards, interpretations and amendments will be adopted in the financial

statements as and when they are applicable and adoption of these new standards, interpretations and amendments will be reviewed for their impact on the financial statements prior to their initial application.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
4
Revenue

Revenue recognition policy

Revenue is recognised only when there is evidence of an arrangement and the company determines that the collection is considered probable. In determining whether the collection is probable the company considers a number of factors including the credit worthiness of the client and the contractual payment terms.

 

The company's principal activity is the management of aircraft in the business aviation sector. Additional revenues are generated in the form of arrangement fees arising from the use of managed aircraft in charter activities, income from aircraft acceptance and registration service fees and operating.

 

The types of revenues recognised are Management of aircraft, Charter activities and Sub-charter activities. The company enters into different types of contracts for each of the revenue streams. All contracts are non-long term and there is no need to capitalise them. There are no judgements made in evaluating when a customer obtains control of the services. All services are transferred at point in time.

 

Management of aircraft - the service is full aircraft management - this includes but is not limited to - continued airworthiness and maintenance operations, dispatch, safety and compliance support etc. All services are charged on the same pattern and therefore are treated as a fixed management fee. In addition, the company takes an advance payment. The customer is obliged to top up the advance payment when this no longer covers aircraft operations. If the customer fails to pay their monthly bills and does not have sufficient advanced payment, the company has the right to ground the aircraft - and therefore reduce their financial exposure. The company recognises the revenue on a monthly basis. Any costs incurred on behalf of the customer are recharged at zero margin. The company acts as a principal.

 

Charter activities - the service is a charter flight on a managed aircraft - this includes aircraft operating costs including crew, fuel and maintenance, air navigation, en route and approach charges, airport and handling fees, crew allowances, standard inflight catering and refreshments, newspapers and magazines, passenger and cargo insurances and passenger taxes, crew accommodation and transport. Charter flight price is a fixed fee payable in advance to the scheduled charter flight based on a fixed hourly rate or a fixed %. The company recognises the revenue when the flight is operated and is apportioned to any relevant period over which the flight operated at which time the performance obligation is considered to have been discharged. The company acts as either an agent or principal depending on the type of contract.

 

Sub-charter activities - the service is a charter flight on an aircraft purchased or sub-let from a third party operator. The company is responsible for fulfilling the promise to provide the specified charter services and receives the full consideration and bears all the costs in relation to the flight. Charter flight price is a fixed fee payable in advance to the scheduled charter flight. The company recognises the revenue when the flight is operated and is apportioned to any relevant period over which the flight operated at which time the performance obligation is considered to have been discharged. The company acts as a principal.

2022
2021
£'000
£'000
Revenue analysed by class of business
Management of aircraft
2,172
10,567
Charter activities
7,220
7,866
Sub-charter activities
1,424
3,722
10,816
22,155
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
4
Revenue
(Continued)
- 21 -
2022
2021
£'000
£'000
Revenue analysed by geographical market
United Kingdom
8,534
11,238
Europe
1,313
7,242
Rest of world
969
3,675
10,816
22,155
2022
2021
£'000
£'000
Other income
Grants received
-
72
Rental income
643
606
Income from group undertakings
-
58
643
736
5
Contracts with customers
Analysis of contract assets
2021
2022
as restated
£'000
£'000
As at 1 January 2022
2,113
495
Transfers in the period from contract assets to trade receivables
(2,113)
(495)
Excess of revenue recognised over cash (or rights to cash)
38
2,113
38
2,113

In the financial statements for the year ended 31 December 2021, closing contract assets were understated by £920k. This amount was correctly included within prepayments and accrued income in the Statement of Financial Position.

 

Analysis of contract liabilities
2022
2021
£'000
£'000
As at 1 January 2022
1,076
152
Amounts included in contract liabilities that was recognised as revenue during the period
(1,076)
(152)
Cash received in advance of performance and not recognised as revenue during the period
176
1,076
176
1,076

There are no performance obligations that are expected to be satisfied after more than one year.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
6
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses/(gains)
919
(324)
Government grants
-
(72)
Depreciation of property, plant and equipment
178
236
Depreciation of investment property
379
400
Amortisation of intangible assets
5
8
7
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
28
26
8
Employees

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

2022
2021
Number
Number
Finance and administration
19
30
Crew
6
21
Total
25
51

Their aggregate remuneration comprised:

2022
2021
£'000
£'000
Wages and salaries
244
386
Social security costs
138
318
Pension costs
57
119
439
823
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
9
Directors' remuneration
2022
2021
£'000
£'000
Remuneration for qualifying services
25
114
Company pension contributions to defined contribution schemes
1
6
26
120

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 2).

10
Investment income
2022
2021
£'000
£'000
Interest income
Financial instruments measured at amortised cost:
Other interest income on financial assets
1
-
0
Income above relates to assets held at amortised cost, unless stated otherwise.
11
Finance costs
2022
2021
£'000
£'000
Interest on lease liabilities
173
201
Interest on group loans
20
17
Total interest expense
193
218
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
12
Income tax expense
2022
2021
£'000
£'000

The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:

2022
2021
£'000
£'000
(Loss)/profit before taxation
(1,709)
23
Expected tax (credit)/charge based on a corporation tax rate of 19.00% (2021: 19.00%)
(325)
4
Effect of expenses not deductible in determining taxable profit
2
-
0
Utilisation of tax losses not previously recognised
-
0
(4)
Adjustment in respect of prior years
(1)
-
0
Effect of change in UK corporation tax rate
(99)
-
0
Group relief
300
-
0
Depreciation in excess of capital allowances
1
-
0
Chargeable gains/(losses)
(288)
-
0
Movement in deferred tax not recognised
410
-
0
Taxation charge for the year
-
-

Factors that may affect future tax charges

Changes to the UK corporation tax rates were substantially enacted as part of the 2021 Budget on 3 March 2021. This included an increase to the main rate from 19% to 25% from April 2023. The company will be taxed at a rate of 25% unless its profits are low enough to qualify for a lower rate of tax, the lowest being 19%.

 

Where applicable, deferred taxes at the balance sheet date have been measured using tax rates between 19% and 25% to reflect the rate at which the timing differences are likely to unwind and are reflected in the financial statements.

13
Intangible assets
Software
£'000
Cost
At 1 January 2021
175
Additions
27
At 31 December 2021
202
At 31 December 2022
202
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
13
Intangible assets
Software
£'000
(Continued)
- 25 -
Amortisation and impairment
At 1 January 2021
169
Charge for the year
8
At 31 December 2021
177
Charge for the year
5
At 31 December 2022
182
Carrying amount
At 31 December 2022
20
At 31 December 2021
25
At 31 December 2020
6

 

 

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
14
Property, plant and equipment
Leasehold improvements
Plant and equipment
Office fixtures and fittings
Computer equipment
Right-of-use assets
Total
£'000
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January 2021
522
6
341
259
674
1,802
Additions
-
0
1
7
3
128
139
Disposals
-
0
-
0
-
0
(1)
-
0
(1)
At 31 December 2021
522
7
348
261
802
1,940
Disposals
-
0
-
0
-
0
(1)
-
0
(1)
At 31 December 2022
522
7
348
260
802
1,939
Accumulated depreciation and impairment
At 1 January 2021
229
6
178
212
101
726
Charge for the year
59
1
71
33
72
236
Eliminated on disposal
-
0
-
0
-
0
(1)
-
0
(1)
At 31 December 2021
288
7
249
244
173
961
Charge for the year
58
-
0
35
13
72
178
Eliminated on disposal
-
0
-
0
-
0
(1)
-
0
(1)
At 31 December 2022
346
7
284
256
245
1,138
Carrying amount
At 31 December 2022
176
-
64
4
557
801
At 31 December 2021
234
-
99
17
629
979
At 31 December 2020
293
-
163
47
573
1,076

Included in right-of-use assets are leasehold land and buildings of £552k (2021: £616k) and equipment of £5k (2021: £13k).

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
15
Investment property
Investment property
£'000
Cost
At 1 January 2021, 31 December 2021 and 31 December 2022
4,452
Accumulated depreciation
At 1 January 2021
736
Charge for the year
400
At 31 December 2021
1,136
Charge for the year
379
At 31 December 2022
1,515
Carrying value
At 31 December 2022
2,937
At 31 December 2021
3,316
At 31 December 2020
3,716

The company leases properties at Capital Park, Fulbourn and Newmarket (see note 24). The Fulbourn property meets the definition of an investment property and is accounted for as such in accordance with IFRS 16 and IAS 40.

 

ExecuJet initially occupied these premises when it employed considerably more staff. As some of the operations were transferred to other areas within the Luxaviation Group, largely outside the UK, it was then decided to sub-let these premises. The remaining staff performing back-office functions for Switzerland, Denmark, Germany and Spain transferred to premises in Newmarket.

 

A rent review was last conducted in January 2021 to ascertain a fair value market price, however no valuation of the investment property has been carried out. As the premises became surplus to requirements it was sublet at cost. With the rent review conducted in 2021, the directors believed that it was at fair value at the time and no other calculations were needed. The directors do not have the expertise to reliably measure the fair value of the investment property, and therefore it is held at cost.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
16
Trade and other receivables
2022
2021
£'000
£'000
Trade receivables
1,495
3,406
Provision for bad and doubtful debts
(75)
(75)
1,420
3,331
VAT recoverable
8
138
Amounts owed by fellow group undertakings
2,993
3,942
Other receivables
67
458
Prepayments and accrued income
275
2,745
4,763
10,614

Trade receivable disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

17
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

Ageing of past due but not impaired trade receivables
2022
2021
£'000
£'000
Not past due
237
725
Past due up to 31 days
241
1,478
Past due 32-61 days
70
441
Past due 62-92 days
11
101
Past due Over 92 days
936
661
1,495
3,406

No significant receivable balances are impaired at the reporting end date.

Movement in the allowances for doubtful debt
2022
2021
£'000
£'000
Balance at 1 January 2022
75
75
Balance at 31 December 2022
75
75
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 29 -
18
Cash and cash equivalents
2022
2021
£'000
£'000
Cash and cash equivalents per balance sheet
157
684
Cash and cash equivalents per cash flow statement
157
684
The above cash is held with reputable banks.
19
Trade and other payables
2022
2021
£'000
£'000
Trade payables
1,177
2,815
Amounts owed to fellow group undertakings
11,942
11,629
Accruals and deferred income
482
1,977
Social security and other taxation
-
0
116
Other payables
826
3,176
14,427
19,713
20
Borrowings
2022
2021
£'000
£'000
Borrowings held at amortised cost:
Loans from fellow group undertakings
480
-

Borrowings relate to a loan with an outstanding balance of £480k (2021: £409k - classified as a current liability within amounts owed to fellow group undertakings) owed to a related group company. The interest rate on the group loan is the weighted cost of interest plus 50 basis points as per Swiss tax regulations. As at 31 December 2022, the loan period was extended for a further 3 years.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
21
Financial instruments

Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the company becomes a party to the contractual provisions of the instrument.

 

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

 

Classification and subsequent measurement

Financial assets

(a) Classification

 

On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt investment; FVOCI equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

 

A financial asset is measured at amortised cost if it meets both of the following conditions:

 

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets.

 

(b) Subsequent measurement and gains and losses

 

Financial assets at FVTPL - these assets (other than derivatives designated as hedging instruments) are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. Financial assets at amortised cost - These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Financial instruments
(Continued)
- 31 -

Impairment

The company recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost, debt investments measured at FVOCI and contract assets (as defined in IFRS 15).

 

The company measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances for which credit risk (i.e the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition which are measured as 12-month ECL.

 

Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL. Trade receivables and contract assets with significant financing component are measured using the general model described above.

 

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the company's historical experience and informed credit assessment and including forward-looking information.

 

The company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

 

The company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the company in full, without recourse by the company to actions such as realising security (if any is held); or the financial asset is more than 90 days past due.

 

The maximum period considered when estimating ECL's is the maximum contractual period over which the company is exposed to credit risk.

 

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

 

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

 

Credit-impaired financial assets

At each reporting date, the company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 

Write-offs

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.

 

Qualitative disclosures

Through the company's operations, it is exposed to the following financial risks:

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Financial instruments
(Continued)
- 32 -

Market risk

The business aviation market largely depends on general economic growth factors and stability within the countries the company operates within. The war in Ukraine has had an impact on many industries. See note 23 for further information.

 

Fuel price risk

The war on Ukraine has had a huge impact on global markets, due to the inability of Ukraine to trade and unprecedented international sanctions imposed on Russia. This has put inflationary pressures on prices and resulted in significant volatility.

 

The main impact on the company is that of rising fuel prices. Fuel prices increasing can impact margins; however, the company has reflected these additional costs through its product pricing.

 

Foreign exchange risk

The company is exposed to foreign exchange risk on sales and operational costs in relation with customers and suppliers based around the world, through sales and purchases in currencies other than the functional currency. See note 23 for further information.

 

The company has foreign exchange risk when translating profit and loss and other comprehensive income and balance sheet items into the functional currency. Sales and operational costs generally offset the foreign exchange risk the company is exposed to. The company aims to settle expenses in the local currency where possible.

 

Credit risk

The credit risk refers to the risk that counterparty will default on its contractual obligation, resulting in financial loss from defaults. The company's main credit risk arises through sales made to customers (trade receivables), and other receivables. See note 17 for further information.

 

Liquidity risk

The company needs to have enough liquidity reserves to meet its existing liabilities and future cash requirement, as well as for unforeseen events. See note 22 for further information.

 

Interest rate risk

The company is exposed to interest rate risk on interest payments relating to its loans and finance leases. The interest rates the company is liable to is based on SONIA and bank rates. The company does not hedge interest rates.

 

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

 

Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

 

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

 

 

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

 

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company's obligations are discharged, cancelled, or they expire.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
22
Liquidity risk

The company needs to have enough liquidity reserves to meet its existing liabilities and future cash requirement, as well as for unforeseen events.

The following are the contractual maturities of non-derivative financial liabilities, including estimated interest payments and excluding the effect of netting agreements:

 

Less than 1 year
1-2 years
2-5 years
More than 5 years
Total
£'000
£'000
£'000
£'000
£'000
At 31 December 2021
Trade and other payables
17,620
-
-
-
17,620
Leases
424
439
1,258
2,226
4,347
18,044
439
1,258
2,226
21,967
At 31 December 2022
Trade and other payables
13,945
-
-
-
13,945
Borrowings
-
-
480
-
480
Leases
439
426
1,384
1,673
3,922
14,384
426
1,864
1,673
18,347
23
Market risk
Market risk management

Market risk is the risk that changes in market prices - e.g. foreign exchange rates, interest rates and equity prices - will affect the Group's income of the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
23
Market risk
(Continued)
- 34 -
Foreign exchange risk
The carrying amount of assets/(liabilities) disaggregated by currency are as follows:
31 December 2021
Sterling
Swiss Franc
Euro
US Dollar
Total
£'000
£'000
£'000
£'000
£'000
Cash and cash equivalents
134
28
453
69
684
Trade receivables
932
49
1,863
562
3,406
Amounts owed from group companies
1,703
403
1,198
638
3,942
Trade payables
(1,048)
(237)
(951)
(579)
(2,815)
Amounts owed to group companies
(942)
(109)
(4,870)
(5,708)
(11,629)
Net exposure
779
134
(2,307)
(5,018)
(6,412)
31 December 2022
Sterling
Swiss Franc
Euro
US Dollar
Total
£'000
£'000
£'000
£'000
£'000
Cash and cash equivalents
57
-
-
100
157
Trade receivables
444
161
553
337
1,495
Amounts owed from group companies
1,246
448
1,161
138
2,993
Trade payables
(318)
(145)
(272)
(442)
(1,177)
Amounts owed to group companies
(1,393)
(103)
(5,093)
(5,833)
(12,422)
Net exposure
36
361
(3,651)
(5,700)
(8,954)

Foreign exchange risk sensitivity analysis

Whilst the company takes steps to minimise its exposure to foreign exchange risk, changes in foreign exchange rates will have an impact on profit.

 

The company is exposed to movements between the US dollar and Sterling. The effect of a 5% strengthening in the US dollar against Sterling at the reporting date on the US dollar denominated balances at the year end would, all other variables being held constant, have resulted in an increase in the net loss for the year of £343k. A 5% weakening in the exchange rate would, on the same basis, have resulted in a decrease in the net loss by £343k.

 

The company is also exposed to movements between the Euro and Sterling. The effect of a 5% strengthening in the Euro against Sterling at the reporting date on the Euro denominated balances at the year end would, all other variables being held constant, have resulted in an increase in the net loss the year of £206k. A 5% weakening in the exchange rate would, on the same basis, have resulted in a decrease in the net loss by £206k.

 

The company is also exposed to movements between the Swiss Francs and Sterling. The effect of a 5% strengthening in the Swiss Franc against Sterling at the reporting date on the Swiss Franc denominated balances at the year end would, all other variables being held constant, have resulted in a decrease in the net loss the year of £20k. A 5% weakening in the exchange rate would, on the same basis, have resulted in an increase in the net loss by £20k.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 35 -
24
Lease liabilities
2022
2021
Maturity analysis
£'000
£'000
Within one year
439
424
In two to five years
1,810
1,697
In over five years
1,673
2,226
Total undiscounted liabilities
3,922
4,347
2022
2021
Movement in lease liabilities
£'000
£'000
At beginning of period
4,347
4,615
Additions during the year
-
128
Interest expense
173
201
Repayments during the period
(598)
(597)
Lease liabilities at end of period
3,922
4,347

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2022
2021
£'000
£'000
Current liabilities
439
424
Non-current liabilities
3,483
3,923
3,922
4,347
2022
2021
Amounts recognised in profit or loss include the following:
£'000
£'000
Interest on lease liabilities
173
201
EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
24
Lease liabilities
(Continued)
- 36 -

The company has no short-term or low-value leases and therefore no expenditure has been recognised in profit or loss for these.

 

The company leases properties at Capital Park, Fulbourn and Newmarket as well as some office equipment under agreements of between 10 to 15 years for property leases, and 5 years for equipment leases. If the leases are renewed or extended, the terms of the leases are renegotiated.

 

The company sometimes negotiates a break clause in its property leases, however the company's lease liabilities at the end of the period reflect the full term of the lease, as the company is not reasonably certain that the break clause will be exercised.

 

The Fulbourn property meets the definition of an investment property and is accounted for as such in accordance with IFRS 16 and IAS 40. The company also received income from subletting this property to a third party as an operating lease.

 

From the second quarter of 2022, the repayments on the Fulbourn facilities increased to £509,850 per annum, and this increase has also been passed on to the sublease from the same period.

 

As at 31 December 2022 there were no leases that had not commenced to which the company was committed.

 

The fair value of the company's lease obligations is approximately equal to their carrying amount.

25
Capital risk management

The company’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maintain an optimal capital structure. The capital structure of the company comprises working capital and equity consisting of issued share capital, reserves and retained losses.

 

The company ensures that it retains sufficient working capital to meet its bank commitments and third-party supplier obligations. It achieves this by only paying monies to the Luxaviation Group when cashflow permits. This has resulted in increased balances on the inter-company creditors.

 

The company is not subject to any externally imposed capital requirements.

26
Retirement benefit schemes
2022
2021
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
57
119

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

27
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
1,000 ordinary shares of £1 each
1,000
1,000
1
1

 

 

 

 

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 37 -
28
Other leasing information
Lessor

The operating leases represent leases of Capital Park, Fulbourn to third parties. The sub-lease is an operating lease and the company, being a lessor, receives rental income accordingly.

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2022
2021
£'000
£'000
Within one year
506
493
One to two years
147
493
Two to three years
-
144
Total undiscounted lease payments receivable
653
1,130
2022
2021
Amounts recognised in profit or loss include the following:
£'000
£'000
Income from subleasing right-of-use assets
643
606

The client has recognised a right-of-use asset in relation to a property accounted for as a finance lease under IFRS 16. This property also meets the definition of an investment property, which has been reflected in the accounts under the cost model.

 

The company then sub-leases this property to another entity. However, the sublease term does not represent the majority of the economic useful life of the head lease. Therefore, the company accounts for the sub-lease as an operating lease in accordance with IFRS 16.

29
Related party transactions
Remuneration of key management personnel

The compensation of key management personnel is the same as disclosed in Note 9.

Other information

As at 31 December 2022, the company owed £12,442k (2021: £11,629k) to entities in the Luxaviation Group and was owed £2,993k (2021: £3,942k). Of these balances the company owed £6,023kk (2021: £5,544k) to the parent company, Luxaviation Europe SA, and was owed £502k (2021: £454k). The company earned revenue of £101k (2021: £2,564k) and incurred cost of sales expenditure of £1,717k (2021: £4,188k) and administrative expenditure of £231k (2021: £110k) from entities within the Luxaviation Group. There was £nil revenue, cost of sales expenditure and administrative expenditure in relation to the parent company, Luxaviation Europe SA (2021: £nil).

30
Controlling party

The immediate parent company and controlling party is Luxaviation Europe SA, 4a, rue Albert Borschette, 1246 Luxembourg, a company incorporated and registered in Luxembourg.

 

The smallest and largest group into which the company's accounts are consolidated is that headed by Luxaviation Holding Company SA, 4a rue Albert Borschette, 1246 Luxembourg, the company's ultimate parent company.

 

The consolidated financial statements of Luxavaition Holding Company SA are not available to the public.

EXECUJET (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 38 -
31
Cash generated from operations
2022
2021
£'000
£'000
(Loss)/profit for the year before income tax
(1,709)
23
Adjustments for:
Finance costs
193
218
Investment income
(1)
-
0
Amortisation and impairment of intangible assets
5
8
Depreciation and impairment of property, plant and equipment
178
236
Depreciation of investment properties
379
400
Movements in working capital:
Decrease/(increase) in trade and other receivables
5,851
(5,068)
(Decrease)/increase in trade and other payables
(4,806)
4,777
Cash generated from operations
90
594
32
Analysis of changes in net debt
1 January 2022
Cash flows
New finance leases
Other non-cash changes
31 December 2022
£'000
£'000
£'000
£'000
£'000
Cash at bank and in hand
684
(527)
-
-
157
Borrowings excluding overdrafts
-
-
-
(480)
(480)
Obligations under finance leases
(4,347)
598
-
(173)
(3,922)
(3,663)
71
-
(653)
(4,245)
1 January 2021
Cash flows
New finance leases
Other non-cash changes
31 December 2021
Prior year:
£'000
£'000
£'000
£'000
£'000
Cash at bank and in hand
742
(58)
-
-
684
Obligations under finance leases
(4,615)
597
(128)
(201)
(4,347)
(3,873)
539
(128)
(201)
(3,663)
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