HAECO Global Engine Support Ltd
Annual Report and Financial Statements
For the year ended 31 December 2023
Company registration number 13631334 (England and Wales)
HAECO Global Engine Support Ltd
Company Information
Directors
S Nieuwenhuijzen
(Appointed 1 May 2023)
C N Van Rooij
(Appointed 8 July 2024)
Y W Kwan
(Appointed 8 July 2024)
Company number
13631334
Registered office
Unit 2 And Unit 4
Lhr Portal Scylla Road
London Heathrow Airport
Hounslow
United Kingdom
TW6 3FE
Auditor
Moore Kingston Smith LLP
The Shipping Building
The Old Vinyl Factory
Blyth Road
Hayes
London
UB3 1HA
HAECO Global Engine Support Ltd
Contents
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Notes to the financial statements
13 - 27
HAECO Global Engine Support Ltd
Directors' Report
For the year ended 31 December 2023
Page 1

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company is providing global on-wing and off-wing engine repair and maintenance services.

Results and dividends

The results for the year are set out on page 9.

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:

S Nieuwenhuijzen
(Appointed 1 May 2023)
K D Kruger
(Appointed 1 May 2023 and resigned 8 July 2024)
J W Rhys
(Resigned 8 July 2024)
A J Barclay
(Resigned 1 May 2023)
J R Potter
(Resigned 1 May 2023)
C N Van Rooij
(Appointed 8 July 2024)
Y W Kwan
(Appointed 8 July 2024)
Auditor

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

Statement of disclosure to auditor

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

Going concern

The company made a loss for the year of £2,173,047 and had net current liabilities of £7,524,265 and net liabilities of £5,636,893 at the balance sheet date.

 

The company is financed by a loan made by a fellow group undertaking, and it has received confirmation that continued financial support will be provided, as required, for a period of at least 12 months from the date of approval of these financial statements. The fellow group undertaking has also confirmed it will not seek repayment of the loan until the company is able to repay it without compromising its ability to continue to trade and to meet its liabilities as they fall due.

HAECO Global Engine Support Ltd
Directors' Report (Continued)
For the year ended 31 December 2023
Page 2

Therefore the financial statements have been prepared on a going concern basis, which assumes the company will continue as a going concern for the foreseeable future, and specifically, as a minimum for a period of 12 months from the date of approval of these financial statements.

 

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

On behalf of the board
Y W Kwan
Director
4 March 2025
HAECO Global Engine Support Ltd
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 3

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

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.

HAECO Global Engine Support Ltd
Independent Auditor's Report
To the Member of HAECO Global Engine Support Ltd
Page 4

Qualified opinion

We have audited the financial statements of HAECO Global Engine Support Ltd (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice).

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

With respect to inventories having a carrying value of £747,070 the audit evidence to us was limited. Whilst we were able to observe the counting of £431,798 of physical inventory, we were not able to observe the counting of £315,272 of physical inventories held at 31 December 2023 due to inaccessibility of inventory listings for part of the warehouse. We were also unable to satisfy ourselves by alternative means concerning inventory quantities held at 31 December 2023 by using other audit procedures. Consequently, we were not able to determine whether any adjustment to this amount was 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.

Conclusions relating to going concern

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

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

HAECO Global Engine Support Ltd
Independent Auditor's Report (Continued)
To the Member of HAECO Global Engine Support Ltd
Page 5

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter referred to 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 matter referred to 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 Directors' Report.

 

In respect solely of the limitation on our work relating to inventories, described 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.

HAECO Global Engine Support Ltd
Independent Auditor's Report (Continued)
To the Member of HAECO Global Engine Support Ltd
Page 6
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

HAECO Global Engine Support Ltd
Independent Auditor's Report (Continued)
To the Member of HAECO Global Engine Support Ltd
Page 7

Explanation as to what extent the audit was considered capable of 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.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

HAECO Global Engine Support Ltd
Independent Auditor's Report (Continued)
To the Member of HAECO Global Engine Support Ltd
Page 8

Use of our report

This report is made solely to the company’s member 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 member, those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Jonathan Seymour (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
4 March 2025
Chartered Accountants
Statutory Auditor
The Shipping Building
The Old Vinyl Factory
Blyth Road
Hayes
London
UB3 1HA
HAECO Global Engine Support Ltd
Income Statement
For the year ended 31 December 2023
Page 9
Year
Period
ended
ended
31 December
31 December
2023
2022
as restated
Notes
£
£
Revenue
3
9,441,934
7,048,006
Cost of sales
(5,878,722)
(6,124,794)
Gross profit
3,563,212
923,212
Administrative expenses
(6,226,213)
(4,268,466)
Other operating income
676,996
375,172
Operating loss
4
(1,986,005)
(2,970,082)
Finance costs
8
(505,089)
(498,024)
Loss before taxation
(2,491,094)
(3,468,106)
Tax on loss
9
318,047
-
0
Loss for the financial year
(2,173,047)
(3,468,106)

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

HAECO Global Engine Support Ltd
Statement of Comprehensive Income
For the year ended 31 December 2023
Page 10
Year
Period
ended
ended
31 December
31 December
2023
2022
as restated
£
£
Loss for the year
(2,173,047)
(3,468,106)
Other comprehensive income:
Items that may be reclassified to profit or loss
Currency translation differences:
- Translation gain arising in the year
4,259
-
0
Total comprehensive loss for the year
(2,168,788)
(3,468,106)
HAECO Global Engine Support Ltd
Statement Of Financial Position
As at 31 December 2023
31 December 2023
Page 11
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
25,839,882
20,754,661
Current assets
Inventories
11
747,070
29,102
Trade and other receivables
12
3,752,714
2,419,414
Cash and cash equivalents
960,089
1,347,040
5,459,873
3,795,556
Current liabilities
13
(12,984,138)
(8,730,322)
Net current liabilities
(7,524,265)
(4,934,766)
Total assets less current liabilities
18,315,617
15,819,895
Non-current liabilities
13
(23,952,510)
(19,288,000)
Net liabilities
(5,636,893)
(3,468,105)
Equity
Called up share capital
17
1
1
Currency translation reserve
18
4,259
-
Retained earnings
(5,641,153)
(3,468,106)
Total equity
(5,636,893)
(3,468,105)
The financial statements were approved by the board of directors and authorised for issue on 4 March 2025 and are signed on its behalf by:
Y W Kwan
Director
Company Registration No. 13631334
HAECO Global Engine Support Ltd
Statement of Changes in Equity
For the year ended 31 December 2023
Page 12
Share capital
Currency translation reserve
Retained earnings
Total
Notes
£
£
£
£
For the period ended 31 December 2022:
Balance at 20 September 2021
-
-
-
0
-
Period ended 31 December 2022:
Total comprehensive loss for the period
-
-
(3,468,106)
(3,468,106)
Issue of share capital
17
1
-
-
1
Balance at 31 December 2022
1
-
(3,468,106)
(3,468,105)
Period ended 31 December 2023:
Loss for the period
-
-
(2,173,047)
(2,173,047)
Other comprehensive income:
Currency translation differences
-
4,259
-
0
4,259
Total comprehensive loss for the year
-
4,259
(2,173,047)
(2,168,788)
Balance at 31 December 2023
1
4,259
(5,641,153)
(5,636,893)
HAECO Global Engine Support Ltd
Notes to the Financial Statements
For the year ended 31 December 2023
Page 13
1
Accounting policies
Company information

HAECO Global Engine Support Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2 And Unit 4, Lhr Portal Scylla Road, London Heathrow Airport, Hounslow, United Kingdom, TW6 3FE. 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 Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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

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

The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements and, where relevant, equivalent disclosures have been made in the group accounts of the ultimate parent company, in accordance with FRS 101:

 

 

The financial statements of HAECO Global Engine Support Limited are consolidated into the financial statements of Swire Pacific Limited, a fellow group undertaking. Swire Pacific Limited is listed on the Hong Kong stock exchange. The consolidated statements of Swire Pacific Limited are available from the company's website.

1.2
Going concern

The company made a loss for the year of £true2,173,047 and had net current liabilities of £7,524,265 and net liabilities of £5,636,893 at the balance sheet date.

 

The company is financed by a fellow group undertaking through a loan facility agreement, and it has received confirmation that continued financial support will be provided, as required, for a period of at least 12 months from the date of approval of these financial statements. The fellow group undertaking has also confirmed it will not seek repayment of the balance owed until the company is able to repay this without compromising its ability to continue to trade and to meet its liabilities as they fall due.

 

Therefore the financial statements have been prepared on a going concern basis, which assumes the company will continue as a going concern for the foreseeable future, and specifically, as a minimum for a period of 12 months from the date of approval of these financial statements.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 14
1.3
Revenue

Turnover represents the sale of services and products and is net of VAT. Turnover on long term contracts is recognised by reference to the value of work performed to date as a proportion of the total contract value. Profit on long-term contracts in progress is taken when a sale is recorded on part delivery of products or part performance of services, provided that the outcome of the contract can be assessed with reasonable certainty.

 

Provisions are made for any losses incurred or expected to be incurred on uncompleted contracts. Advance payments received from customers are shown as payments on account until there is a right to offset against the value of work undertaken.

1.4
Property, plant and equipment

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

 

Right-of-use assets are recognised at commencement of the lease and initially measured at the amount of the lease liability, plus any incremental costs of obtaining the lease and any lease payments made at or before the leased asset is available for use by the company.

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

Right of use asset leasehold property
Over the length of the lease
Leasehold improvements
5 years straight line
Plant and 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
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 15

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Inventories

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

1.7
Cash and cash equivalents

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

1.8
Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognised initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 16
Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

Impairment of financial assets

Financial assets, other than those measured at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

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.

1.9
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.

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 payable while the liability is outstanding.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 17
Derecognition of financial liabilities

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

1.10
Equity instruments

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

1.11
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.

1.12
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 year 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.

1.13
Retirement benefits

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

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.14
Leases

On commencement of a contract (or part of a contract) which gives the company the right to use an asset for a period of time in exchange for consideration, the company recognises a right-of-use asset and a lease liability unless the lease qualifies as a ''short-term'' lease or a ''low-value'' lease.

The lease liability is initially measured at the present value of the lease payments during the lease term discounted using the interest rate implicit in the lease, or the incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.

 

The lease term is non-cancellable period of the lease plus extension periods that the company is reasonably certain to exercise and termination periods that the company is reasonably certain not to exercise.

 

Lease payments include fixed payments, less any incentives receivable, variable lease payments dependent on an index or a rate (such as those linked to LIBOR) and any residual value guarantees. Variable lease payments are initially measured using the index or rate when the leased asset is available for use.

 

Termination penalties are included in the lease payments if the lease term has been adjusted because the company reasonably expects to exercise an option to terminate the lease.

The lease liability is subsequently increased for a constant periodic rate of interest on the remaining balance of the lease liability and reduced for lease payments.

 

Interest on the lease liability is recognised in the statement of comprehensive income.

1.15
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 year are included in profit or loss.

 

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

 

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

 

1.16

Reporting period

These financial statements are for the year ended 31 December 2023. The comparatives are for the period from 20 September 2021 to 31 December 2022.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 19
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.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements
Useful economic life of tangible fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residue values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 10 for the carrying amount of tangible fixed assets and note 1.4 for the useful economic lives for each class of asset.

Lease liabilities

In determining the lease term, the company assesses whether it is reasonably certain to exercise, or not to exercise, options to extend or terminate the lease. This assessment is made at the start of the lease and is re-assessed if significant events of changes in circumstances occur that are within the lessee's control.

 

The company uses judgement to assess whether the interest rate implicit in the lease is readily determinable. When the interest rate implicit in the lease is not readily determinable, the company estimates the incremental borrowing rate based on its external borrowing secured against similar assets, adjusted for the term of the lease.

Impairment of right-of-use asset

The impairment assessment of the right-of-use asset – leasehold property involves management judgment and estimation. The carrying amount of the asset is reviewed for impairment whenever events or changes in circumstances indicate that the recoverable amount may be lower than the carrying value. This assessment requires estimating future cash flows, discount rates, and market conditions, which are inherently uncertain. Any changes in these assumptions could materially impact the impairment evaluation and the resulting financial statements.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 20
3
Revenue
2023
2022
restated
£
£
Revenue analysed by class of business
Labour revenue
4,206,202
3,129,557
Material revenue
1,086,352
34,425
Facility fee
4,116,541
3,836,395
Other revenue
32,839
47,629
9,441,934
7,048,006
2023
2022
restated
£
£
Revenue analysed by geographical market
United Kingdom
8,836,668
7,048,006
Bahrain
302,521
-
Qatar
302,745
-
9,441,934
7,048,006
4
Operating loss
2023
2022
£
£
Operating loss for the period is stated after charging/(crediting):
Exchange gains
(1,179)
(2,905)
Depreciation of property, plant and equipment
1,697,289
1,514,903
Cost of inventories recognised as an expense
1,926,692
135,039
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
62,750
38,000
For other services
Tax services
6,050
5,500
Other services
12,835
3,875
Total non-audit fees
18,885
9,375
HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 21
6
Employees

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

2023
2022
Number
Number
Production
36
26
Administration and support
26
13
Total
62
39

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,812,423
3,973,132
Social security costs
496,860
415,626
Pension costs
277,211
231,959
5,586,494
4,620,717
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
257,793
164,292
Company pension contributions to defined contribution schemes
27,831
18,785
285,624
183,077

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022: 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
133,760
109,125
Company pension contributions to defined contribution schemes
13,920
12,285
HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 22
8
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1
24
Interest on lease liabilities
505,088
498,000
Total finance costs
505,089
498,024
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on loss for the current year
(318,047)
-

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

2023
2022
£
£
Loss before taxation
(2,491,094)
(3,468,106)
Expected tax credit based on a corporation tax rate of 23.52% (2022: 19.00%)
(585,919)
(658,940)
Effect of expenses not deductible in determining taxable profit
1,569
5,839
Group relief
(318,047)
318,047
Fixed assets differences
(678)
(11,752)
Remeasurement of deferred tax for changes in tax rates
(35,901)
(109,517)
Movement in deferred tax not recognised
620,929
456,323
Taxation credit for the year
(318,047)
-
HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 23
10
Property, plant and equipment
Right of use asset leasehold property
Leasehold improvements
Plant and equipment
Total
£
£
£
£
Cost
At 1 January 2023
22,086,000
7,340
176,224
22,269,564
Additions
-
0
-
0
247,621
247,621
Disposals
-
0
-
0
(48,111)
(48,111)
Other movements
6,583,000
-
0
-
0
6,583,000
At 31 December 2023
28,669,000
7,340
375,734
29,052,074
Accumulated depreciation and impairment
At 1 January 2023
1,488,000
1,101
25,802
1,514,903
Charge for the year
1,600,000
1,468
95,821
1,697,289
At 31 December 2023
3,088,000
2,569
121,623
3,212,192
Carrying amount
At 31 December 2023
Owned assets
-
4,771
111,451
116,222
Right-of-use assets
25,581,000
-
142,660
25,723,660
At 31 December 2023
25,581,000
4,771
254,111
25,839,882
At 31 December 2022
Owned assets
-
6,239
150,422
156,661
Right-of-use assets
20,598,000
-
-
20,598,000
At 31 December 2022
20,598,000
6,239
150,422
20,754,661
HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
10
Property, plant and equipment
(Continued)
Page 24
Right-of-use assets
Land and buildings
Plant and equipment
Total
£
£
£
Net carrying value at 20 September 2021
-
-
-
Additions
22,086,000
-
22,086,000
Depreciation charge
(1,488,000)
-
(1,488,000)
Net carrying value at 31 December 2022
20,598,000
-
20,598,000
Additions
-
195,679
195,679
Other movements
6,583,000
-
6,583,000
Depreciation charge
(1,600,000)
(53,019)
(1,653,019)
Net carrying value at 31 December 2023
25,581,000
142,660
25,723,660

Other movements of £6,583,000 relates to the effect of the renegotiation of the lease of the right of use asset. Following a renegotiation of the lease payments for the leasehold property in July 2023, the amounts were revised from December 2022 which gave rise to an increase in the value of the right of use asset.

11
Inventories
2023
2022
£
£
Aircraft parts and materials
747,070
29,102
12
Trade and other receivables
2023
2022
£
£
Trade receivables
2,105,192
2,014,882
Provision for bad and doubtful debts
(107,000)
(107,000)
1,998,192
1,907,882
Amounts owed by fellow group undertakings
318,047
-
0
Other receivables
15,699
616
Prepayments and accrued income
1,420,776
510,916
3,752,714
2,419,414
HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 25
13
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Trade and other payables
14
10,900,287
7,192,101
-
0
-
0
Taxation and social security
477,089
362,184
-
-
Lease liabilities
15
1,606,762
1,176,037
23,952,510
19,288,000
12,984,138
8,730,322
23,952,510
19,288,000
14
Trade and other payables
2023
2022
£
£
Trade payables
1,804,039
473,865
Amounts owed to fellow group undertakings
8,419,610
5,601,466
Accruals and deferred income
596,956
1,095,643
Other payables
79,682
21,127
10,900,287
7,192,101

As at 31 December 2023, loans payable to group undertakings are unsecured and interest free. On 31 May 2024, part of the intercompany loan was converted into a 10 year loan facility at an interest rate of 9.73% per annum.

15
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
1,606,762
1,176,037
In two to five years
23,952,510
19,288,000
Total undiscounted liabilities
25,559,272
20,464,037
2023
2022
£
£
Current liabilities
1,606,762
1,176,037
Non-current liabilities
23,952,510
19,288,000
25,559,272
20,464,037
HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
15
Lease liabilities
(Continued)
Page 26
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
505,088
498,000
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
277,211
231,959

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.

At the balance sheet date, included in current liabilities was £52,326 (2022: £39,672) payable in respect of defined contributions.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
18
Currency translation reserve
2023
2022
£
£
At the beginning of the year
-
-
Translation gain arising in the year
4,259
-
0
At the end of the year
4,259
-
19
Related party transactions

The company has taken advantage of the exemption under FRS 101 from the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group.

HAECO Global Engine Support Ltd
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 27
20
Controlling party

The immediate parent company is Hong Kong Aircraft Engineering Company Limited, a company incorporated in Hong Kong.

 

The ultimate parent company is John Swire & Sons Limited, a company incorporated in England and Wales.

21
Prior period adjustment

There was a prior year adjustment for £375,172 to reclassify salaries recharged from turnover to other income.

Changes to the statement of financial position
At 31 December 2022
Previously reported
Adjustment
As restated
£
£
£
Net assets
(3,468,105)
-
(3,468,105)
Capital and reserves
Total equity
(3,468,105)
-
(3,468,105)
Changes to the income statement
Period ended 31 December 2022
Previously reported
Adjustment
As restated
£
£
£
Revenue
7,423,178
(375,172)
7,048,006
Other operating income
-
375,172
375,172
Loss for the financial period
(3,468,106)
-
(3,468,106)
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
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