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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
CONTENTS
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A2K MIDCO LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their Strategic Report together with the audited financial statements for the year ended 31 December 2025.
The principal activity of the Group is the provision of stock and distribution of components to the commercial aviation industry. Sentry is a global company that serves nearly 700 customers in 85 countries. Our vision is to become the trusted global supplier of choice for aviation after-market spares.
The company continued its high-performance levels with the central tenet of customer excellence being our guiding principle. Throughout the year we have continued to support our key customers as well as develop new ones, minimised financial risk and exposure, whilst investing and implementing in our multi-faceted strategic plans and initiatives. The outstanding performance of these initiatives helped to increase turnover by 16.26% and record the highest revenue figure in the company’s history. With our future planned growth investments and the expected continued increase in flight activity levels means we enter 2026 with tremendous business momentum and anticipating another exciting and successful year.
The volume of commercial air traffic continues to increase with commercial flights in 2025 up 4% on 2024. The expectation is that aircraft activity and passenger load factors will continue to climb during 2026 and beyond.
The Company in 2026 will continue to be cash generative and profitable due to the low level of overheads and lean culture whilst also forging ahead with its longer-term strategic initiatives to support future growth.
The Company’s operations expose it to a variety of financial risks that include currency risk, credit risk and liquidity risk. The Company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and related finance costs.
Currency Risk The company conducts substantially all of its business in US Dollars, the currency that the international commercial aviation industry uses in order to set market prices for goods and services. For this reason, the company is exposed to risk from exchange rate fluctuations when converting US Dollars to Pounds Sterling, which it needs to defray certain administrative overhead expenses. The company mitigates the risk by operating various foreign currency bank accounts Credit & Liquidity Risk The Company actively maintains a mixture of long-term and short-term debt finance that ensures that the Company has sufficient available funds for the Company’s operation and future expansion plans. Working capital is monitored and managed to ensure that cash receivables from debtors is available within a timely manner that allows credit obligations to be met.
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A2K MIDCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors monitor the performance of the Group using the following key performance indicators (KPIs):
2025 2024 Sales increase 16.26% 19.7% Gross margin 40.23% 42.29% Employee growth 3.75% 29.03% Sales per employee $3,356,776 $2,995,560 Net profit per employee before tax $656,934 $685,528
As reported in the statement of comprehensive income, the Group achieved sales of $278,612,404 in the year (2024: $239,644,823), gross profit of $112,076,007 (2024: $101,334,357) and a pre-tax profit of $54,525,544 (2024: $54,842,232). Net assets decreased by $50,548,455 from $175,584,369 to $125,035,914.
Other future developments The Group plans further growth and will explore both organic and acquisitive routes to achieve this.
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A2K MIDCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
After due and careful consideration of the requirements set out in S172, and having regard to long-term consequences and the interests of stakeholders in relation to Board decision-making, the Directors, during the financial year ending December 31st, 2025, have acted in a way that they consider, in good faith, would be most likely to promote the success of the Group for the benefit of all of its stakeholders as a whole.
This statement sets out how the Board has acted in a way that promotes the success of the Group in achieving its vision to become the trusted global supplier of choice for commercial aviation after-market spares. When making decisions, the Board takes into account: a) the likely consequences of any decision in the long term:
∙The interests or concerns of, and impact on, our key stakeholders;
∙The impact of our decisions and operations on the communities in which we operate and the environment;
∙The need to maintain a reputation for high standards of business conduct.
b) the interests of the Group’s employees:
∙The Directors recognize that Sentry employees are fundamental and core to our business and the delivery of our strategic ambitions. The success of our business depends on attracting, retaining, developing and motivating talented employees.
∙The Group maintains an open dialogue with its employees, and they are recognised and valued by the Directors through a variety of ways to achieve effective engagement including:
°Regular town hall style all hands meetings, leadership, team and department meetings;
°Actively seeking employee feedback through employee network groups, Q&A sessions, and an open culture;
°The provision of learning and development opportunities for employees, covering hard and soft skills, as well as managing training and mental health.
c) the need to foster the Group’s business relationships with suppliers, customers and others, by ensuring all stakeholders are treated within the spirit and detail of the Sentry ethics policies and core values. It is important for all levels of the business to engage with stakeholder groups to gain a better understanding of their interests and concerns and the impact our decisions have on them. d) the impact of the Group’s operations on the community and the environment, including consideration of climate change through appropriate Energy Savings Opportunities. The Group’s corporate sustainability starts with a Group’s value system and a principles-based approach to doing business. This means operating in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. Sentry supports and adheres to the 10 principles of the UN Global compact. e) the ongoing requirement to maintain a high standard of business conduct:
∙The Group has a robust system of governance and risk management in place. The desirability of the company to maintain a reputation for high standards of business conduct, through the organisation’s values, culture and ethical standards, as set out in the Group’s business principles, which are published on its website. Our core values represent the foundation of our culture: be customer focused, obsess over service, quality in everything we do, be accountable, act innovatively, be passionate and integrity. They help us develop, grow and better serve our clients, talent and other stakeholders. All employees of the Group engage in regular training on ethics and are encouraged to report any concerns through a confidential framework of communication avenues.
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A2K MIDCO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
f) the need to act fairly as between members of the Group.
∙After weighing up all relevant factors, the Directors consider which course of action best enables delivery of our strategy in the long-term interests of the Group, taking into consideration the effect on stakeholders.
This report was approved by the board and signed on its behalf.
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A2K MIDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their report and the financial statements for the year ended 31 December 2025.
The Company is a holding company and has no trading activities.
The profit for the year, after taxation, amounted to $39,451,545 (2024 :$38,479,973).
Dividends paid during the year amounted to $90,000,000 (2024: $Nil).
The directors who served during the year were:
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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A2K MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors have assessed a period of more than 12 months from the anticipated date of approval of these financial statements including a review of forecasted trading performance, available headroom on working capital facilities and compliance with applicable covenants. This assessment includes consideration of the wider economic environment, including uncertainties associated with the Middle East oil crisis.
Based on these assessments, the directors have concluded at the time of approving the financial statements that there is no material uncertainty that may cast significant doubt about the Group’s ability to continue to trade. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The Group is planning continued growth, both organic and through possible acquisitions, by making use of its strong liquid position, supportive shareholders and the larger warehouse facilities at its headquarters.
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A2K MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Streamlined Energy & Carbon Reporting Disclosure (SECR)
This disclosure has been prepared in accordance with the Companies Directors' Report and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. The reporting boundary follows the operational control approach, covering UK operations for the reporting period under review.
The figures disclosed are based on actual consumption data and represent the organisation’s energy use and associated greenhouse gas (GHG) emissions during the reporting period.
Energy Consumption and Efficiency Total energy consumption for the period was 173,678 kWh (prior year: 132,480 kWh), comprising: Grid supplied electricity: 129,704 kWh (prior year: 92,940 kWh) On site solar electricity generation: 43,974 kWh (prior year: 39,543 kWh) Electricity generated from on site solar photovoltaic installations is consumed directly and has been treated as zero emission electricity for operational reporting purposes. Energy usage has been normalised against organisational size to aid comparability over time. Greenhouse Gas Emissions Greenhouse gas emissions have been calculated using UK Government GHG Conversion Factors, expressed in tonnes of carbon dioxide equivalent (tCO?e). Scope 1 Emissions There were no Scope 1 emissions reported during the period, as the organisation did not consume fossil fuels directly under operational control. Scope 2 Emissions (Electricity) Scope 2 emissions from purchased electricity totalled 25.03 tCO2e. These emissions relate solely to grid supplied electricity. Electricity generated from on site solar installations resulted in no associated Scope 2 emissions. Scope 3 Emissions (Selected categories) The organisation has reported selected Scope 3 emissions relating to waste generated in operations: Category Current Year Prior Year General waste (tCO2e) 5.25 7.6 Food waste (tCO2e) 0.01 0 Total Scope 3 (reported) 5.25 7.6 Recycled waste streams, including paper, mixed recycling, toner cartridges, and batteries, have been excluded from the Scope 3 total for conservatism, with no avoided emissions credits applied. Food waste arisings were minimal and resulted in immaterial emissions of approximately 0.01 tCO2e. Total Emissions Summary Emissions Category Current Year (tCO2e) Prior Year (tCO2e) Total emissions 30.28 38.897 Intensity Metric In compliance with SECR requirements, the organisation reports an emissions intensity ratio: Total emissions per employee: • Current year: 0.48 tCO1e per employee • Prior year: 0.65 tCO1e per employee The average number of employees during the reporting period was 63 (prior year: 59).
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A2K MIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
This metric has been selected as it provides a consistent and relevant measure of carbon efficiency for an office based organisation.
Energy Efficiency Actions The organisation continues to take steps to improve energy efficiency and reduce emissions, including: Investment in on site solar generation, reducing reliance on grid electricity and avoiding approximately 8.5 tCO2e during the reporting period. Ongoing waste segregation and recycling programmes, diverting over 7 tonnes of waste from landfill. Responsible recycling of toner cartridges and batteries through approved recycling schemes. Monitoring of energy consumption to identify opportunities for operational efficiency Further energy efficiency initiatives are under review as part of the organisation’s commitment to continuous environmental improvement. Methodology Statement Energy consumption data has been obtained from meter readings and system records. Emissions calculations have been performed using the UK Government’s greenhouse gas reporting conversion factors applicable to the reporting year. All data has been reviewed for internal consistency and reasonableness.
There have been no significant events affecting the Group since the year end.
The auditor, MHA Audit Services LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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A2K MIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A2K MIDCO LIMITED
We have audited the financial statements of A2K Midco Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2025, which comprise the Group Statement of comprehensive income, the Consolidated and Company Balance sheets, the Group and Company Statement of changes in equity, the Consolidated Statement of cash flows, and the related notes, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In 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 Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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A2K MIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A2K MIDCO LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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A2K MIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A2K MIDCO LIMITED (CONTINUED)
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 Group financial statements.
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:
∙Enquiry of management and those charged with governance around actual and potential litigation and claims;
∙A review of legal and professional expense nominal accounts for any indications of non-compliance with laws and regulations;
∙Performing audit work over the risk of management override of controls, including testing of large and otherwise unusual journal entries and other adjustments for appropriateness;
∙Reviewing minutes of meetings of those charged with governance; and
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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A2K MIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF A2K MIDCO LIMITED (CONTINUED)
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.
for and on behalf of
Statutory Auditor
Birmingham, United Kingdom
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542).
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A2K MIDCO LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
REGISTERED NUMBER: 12272205
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 43 form part of these financial statements.
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A2K MIDCO LIMITED
REGISTERED NUMBER: 12272205
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2025
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was $90,000,000 (2024: $Nil).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 43 form part of these financial statements.
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A2K MIDCO LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
A2K Midco Limited is a private company limited by shares and incorporated in England and Wales under the Companies Act 2006. Its registered office and principal place of business is located at 3 Caxton Way, Watford Business Park, Watford, Hertfordshire, United Kingdom, WD18 8UA.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The presentational and functional currency of these financial statements is USD. Values are rounded to the nearest dollar. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). The following principal accounting policies have been applied:
The Parent Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Sentry Group Holdings Limited as at 31 December 2025 and these financial statements may be obtained from 3 Caxton Way, Watford Business Park, Watford, WD18 8UA.
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The directors have assessed a period of more than 12 months from the anticipated date of approval of these financial statements including a review of forecasted trading performance, available headroom on working capital facilities and compliance with applicable covenants. This assessment includes consideration of the wider economic environment, including uncertainties associated with the Middle East oil crisis.
Based on these assessments, the directors have concluded at the time of approving the financial statements that there is no material uncertainty that may cast significant doubt about the Group’s ability to continue to trade. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Functional and presentation currency
Transactions and balances
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Sale of goods Revenue in respect of parts supplied both as outright sales and on exchange is recognised on delivery to the customer. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on despatch of the goods), the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Rendering of services Revenue for services supplied, such as repair charges, exchange charges and outright sales charges are recognised on completion of the services. All such services are short term in nature. Revenue received from ancillary services is recognised when the right to receive payment is established, which is normally at the date of the transaction.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument. 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 settle the liability simultaneously. Basic financial assets Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments. Other financial assets Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment. Impairment of financial assets Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Other financial instruments Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss. Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is Derecognition of financial instruments Derecognition of financial assets Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained. Derecognition of financial liabilities Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated statement of comprehensive income over its useful economic life of 10 years. Other intangible assets Other intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses. Other intangible assets are amortised on a straight line basis to the Consolidated statement of comprehensive income over its useful economic life of 10 years.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The cost of stocks of aircraft parts is based on the cost of purchase on a first in first out basis. The cost of aircraft parts which can be repaired and reused is based on the cost of purchase of the original aircraft part. When an item of stock is issued in exchange for a used part reused item is refurbished and entered into the stock pool. The cost of refurbishment is expensed. Slow moving stock is not discounted as the Group anticipates that it can always be sold for at least its carrying value. At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit of loss. The assessment is based on a review of all parts held to ensure they are still used by aircraft currently in service.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Critical accounting estimates and judgments The following are the critical accounting estimates and judgments that have had the most significant effect on amounts recognised in the financial statements. Stock The Group writes down stock to net realisable value based on an estimate on the realisability of stock. Write-downs of stock are recorded where events or changes in circumstances indicate that the balances may not be realised. The identification of write-downs requires the use of judgment and estimates. Where the expectation is different from the original estimate or judgment, such difference will impact the carrying value of stock and write-downs of stock in the periods in which such estimates or judgments have been changed. Impairment of trade debtors The Group reviews trade debtors balances for impairment and this is performed on a regular basis. Those balances which are considered to be recoverable remain in trade debtors and those which are not, are impaired and the impairment loss is recorded in the profit or loss. In making this judgment, the Group evaluates, among other factors, customer's financial health and short-term business outlook including factors such as the general economic environment as it affects the industry. Tangible fixed assets The Group applies judgment in determining the appropriate classification, useful lives, depreciation methodology and residual values of certain high value aviation assets, primarily Auxiliary Power Units (“APUs”) and Landing Gear assemblies. During the year, management reassessed the economic use of these assets and concluded that, when deployed in leasing and exchange activities, they are held for use in the supply of services over more than one accounting period and are therefore appropriately classified as property, plant and equipment rather than inventory. Depreciation is calculated using usage based methodologies reflecting expected daily utilisation or hours/cycles operated, subject to asset specific minimum residual values. These judgments require estimates of utilisation patterns, holding periods, future overhaul costs and recoverable end of life values. Actual usage, market conditions or overhaul costs may differ from management’s estimates and assumptions, and any changes in these estimates would result in an adjustment to the carrying value of the assets and the depreciation charge in the period in which such estimates are revised.
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Analysis of turnover by country of destination:
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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A2K MIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
11.Taxation (continued)
There are no factors affecting future tax charges.
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