AnnuAl RepoRt
2013
Annual Report 2013
our Fleet
(AS AT 30 JUNE 2013)
Aircraft type
In operation ordered
options
Fokker 100
AtR 72-500
AtR 72-600
Airbus A320-200
Airbus A321-200
5
6
6
3
3
-
-
-
-
10
10
-
-
-
-
total
23
10
10
2
Contents
Chairman’s Statement
About Avation PLC
Company Overview
Board of Directors
Strategy
Report of the Directors
Directors’ Remuneration Report
Directors’ Responsibilities
Report of the Auditors
page
4
6
8
10
11
12
14
17
18
Financial Statements
Statement of Comprehensive Income
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
Top 20 Shareholders
page
19
20
22
23
24
26
27
29
30
86
3
Chairman’s Statement
On behalf of your Board of
Directors, I present to you the
audited financial statements for
Avation PLC and its subsidiaries
for the year ended 30th June
2013 and to inform you of the
progress that the Avation Group
has made.
The highlights are:
•
•
•
•
Earnings per share increased by 88% to 23.25 US cents;
Fleet value increased to US$347 million;
EBITDA increased by 46% to US$38.3 million;
Revenue increased by 22% to US$42.7 million;
• Dividends increased by 10% to 1.78 US cents per share;
• Consolidated net profit after tax increased by 110% to
US$10.5 million;
• Delivery of six new ATR 72-600 aircraft, an Airbus A321
and an Airbus A320;
• Number of aircraft in fleet increased to 23 from 15;
Your Board is pleased to report that in respect of the year
ended 30 June 2013 the consolidated net profit after tax
was US$10,515,901 (2012: US$5,009,457) on revenues of
US$42,739,991 (2012: US$35,001,218) with earnings per
share of 23.25 US cents (2012: 12.36 US cents). Total returns
comprise income from cash yield from aircraft lease payments
plus the net asset value (capital) realisable from the sale of the
aircraft after repayment of associated debt obligations.
In the period to 30 June 2013, the Group delivered six new
ATR 72-600 aircraft, acquired an Airbus A321 and, pursuant
to a finance lease, an Airbus A320. Avation is scheduled to
deliver eight ATR 72-600 before the end of FY2014 and an
additional two ATR 72-600 in the second half of calendar year
2014.
The Avation fleet of 23 aircraft has an average age and lease
term of 8.7 years and 5.7 years respectively with a current
customer base of airlines in Australia, Europe and North
America. The Company has also recently announced the
securing of Fiji Airways as a new airline customer for a new
aircraft in 2014.
Avation’s fleet is diverse, comprising the new ATR aircraft and
other aircraft including Airbus A321 and A320 along with a
small number of older aircraft. Avation targets continual fleet
renewal and financial management to ensure the retention of
asset values and maximisation of earnings.
As of June 30th, total assets increased by US$147,274,204
to US$394,383,300. Corresponding liabilities increased by
US$131,212,593 to US$296,146,941 resulting in net assets
at year end of US$98,236,359.
In the period to 30 June 2013, the Company secured
committed debt funding of over US$100 million covering
aircraft deliveries to January 2014 from traditional aircraft
financing banks and other institutional lenders. Debt facilities
are primarily asset based and matched to the leases in terms of
currency, term and loan servicing ensuring there is no “through
lease term” re-financing risk. The Company believes that it can
obtain access to the necessary debt for the future purchase of
aircraft. Access to funding nevertheless remains a risk, which
is common to all businesses that are capital intensive. Specific
aviation based industry risks are also present and include the
creditworthiness of client airlines.
4
Annual Report 2013 Chairman’s Statement
The Company has been significantly cash generative
this financial year. The EBITDA increased by 46% to
US$38,329,167. Purchasing aircraft typically requires a
mixture of senior debt, a junior debt tier and equity which may
be self generated. The directors seek to minimize the cost of
funds and hence may seek to refinance existing debt facilities.
The Company continues to evaluate the state of both debt and
equity along with choice of market for equity capital, in the
context of its ongoing requirements.
The Directors believe they have demonstrated that the
Group has a sustainable business model and are committed
to develop the Avation business as a differentiated aircraft
operating lease business to provide constant and defined
internal rates of return, cash yields and predictive capital
returns from investment in the narrow body and regional
aircraft market and more particularly in the Australian and
South East Asian sector.
Our business provides for continued and sustainable growth in
2014 and beyond. The outlook for calendar year 2014 is 43%
growth in the fleet contracted by way of committed deliveries.
to actively evaluate
Avation continues
further aircraft
acquisition investment opportunities. As a result, the Company
is well advanced with respect the funding of its 2014 deliveries
and is developing formalised capital funding programmes to
provide a diversified funding base with access to both debt
and equity markets.
Whilst the business is engaged in funding the continued
aggressive asset growth of the fleet, your Board overwhelmingly
recognises the importance of rewarding shareholders and is
recommending to shareholders a final dividend payment of
1.78 US cents per share. Accordingly, the Company hopes
to maintain a progressive dividend policy going forward. The
record date for this final dividend will be announced in the
meeting materials for the upcoming annual general meeting.
My colleagues and I are committed to continue working
tirelessly to build your Company into a respected, profitable,
diversified and cash generative aircraft leasing business. The
Board would like to thank you – the shareholders for your
continued support and goodwill and look forward to the future
with confidence in the successful development of Avation PLC.
Robert Jeffries Chatfield,
Chairman
Singapore
27th of August 2013
5
About Avation plC
Photo: Tom Bukowski
COMMERCIAL PASSENGER AIRCRAFT
LEASING SPECIALISTS
Avation PLC is a commercial passenger aircraft leasing
company that was incorporated in England and Wales in 2006
listed on the Main List of the London Stock Exchange (LSE:
AVAP).
Avation manages a fleet of 23 aircraft which it leases, through
its subsidiaries, to airlines including US Airways in the United
States, Thomas Cook in the UK and Virgin Australia. The
company’s fleet includes Airbus 320 family aircraft as well as
Fokker 100s and ATR 72s.
SPECIALIST MANAGEMENT TEAM
Avation’s management team has extensive experience in all
areas of the aviation industry and has the expertise to select
aircraft to bring under Avation’s management that will deliver
value to the company, performance to its customers and
returns to its shareholders.
STRONG GROWTH PLATFORM
Under
(ARAN)
the Australian Regional Airline Network
agreement, Avation has agreed to supply up to 20 ATR 72
aircraft to Virgin Australia Regional Airlines who will operate
the aircraft in eastern Australia. As of June 2013, Avation
is leasing 12 aircraft to Virgin Australia under the ARAN
agreement, giving the company room to expand its fleet with
guaranteed custom for its aircraft.
Ten further ATR 72 aircraft have been ordered, with three
expected to be delivered in 2013 and a further seven to be
delivered in 2014.
Avation’s management is also continuing to look to expand the
company’s fleet beyond the acquisition of ATR 72 aircraft and
will select aircraft that provide both customer satisfaction and
financial growth for the company.
FINANCIAL GROWTH
Coinciding with the expected delivery of the ATR 72s and
potential acquisitions of other aircraft, Avation will continue to
grow in terms of the size and quality of its managed fleet and
the financial returns it generates.
6
Annual Report 2013 7
Company overview
Group Structure
AVATION PLC
uK Co. no. 5872328
Registered Office:
Cheyne House, Crown Court, 61-63 Cheapside, london eC2V 6AX
Date Of Incorporation: england & Wales, 11 July 2006, admitted on lSe, on 6 october 2010
100% 62.07%
99.96%
100%
100%
100%
100%
100% 100% 100%
F100 PTY LTD
CAPITAL LEASE
AVIATION PLC
AVATION.NET
INC
MSN 429
LEASECO
LIMITED
AVATION EASTERN
FLEET PTE LTD
Registered Office:
Barringtons House
283 Rokeby Road
Subiaco WA 6008
Date of Incorporation:
Victoria, Australia,
15 november 2006
Registered Office:
Cheyne House,
Crown Court,
61-63 Cheapside,
london eC2V 6AX
Registered Office:
Corporation trust
Center
Registered Office:
Registered Office:
Cheyne House,
Crown Court,
510 thomson Road
#12-04 SlF Building
1209 orange Street
61-63 Cheapside,
Singapore 298135
Wimington uSA
london eC2V 6AX
Date Of Incorporation:
Date Of Incorporation:
Date Of Incorporation:
Date Of Incorporation:
Singapore,
england & Wales,
6 June 2007
Delaware, uSA,
18 January 2000
england & Wales,
11 December 2012
8 February 2011
100%
100% 100% 100% 100%
100% 100%
100% 100%
100%
MSN 1607
PTE LTD
CAPITAL LEASE
MALTA LIMITED
CAPITAL LEASE
AVIATION (S)
PTE LTD
AVATION.NET INC
SINGAPORE
BRANCH
Registered Office:
Registered Office:
Registered Office:
Registered Office:
510 thomson Road
Suite 2, tower Business
510 thomson Road
510 thomson Road
#12-04 SlF Building
Centre
#12-04 SlF Building
#12-04 SlF Building
Singapore 298135
Ground Floor, tower
Singapore 298135
Singapore 298135
Date Of Incorporation:
Singapore,
22 May 2013
Street, Swatar
Birkirkara BKR 4013
Malta
Date Of Incorporation:
Malta,
20 June 2008
Date Of Incorporation:
Date Of Incorporation:
Singapore,
Singapore,
30 november 2011
2 october 2007
MSN 429
LIMITED
Registered Office:
Cheyne House,
Crown Court,
61-63 Cheapside,
london eC2V 6AX
Date Of Incorporation:
england & Wales,
24 March 2010
AIRFRAME
LEASING (S)
PTE LTD
Registered Office:
510 thomson Road
#12-04 SlF Building
Singapore 298135
Date Of Incorporation:
Singapore,
12 May 2011
8
Annual Report 2013
100% 62.07%
99.96%
100%
100%
100%
100%
100% 100% 100%
AVATION EASTERN
FLEET II PTE LTD
AVATION EASTERN
FLEET III PTE LTD
AVATION EASTERN
FLEET IV PTE LTD
MSN 1922
PTE LTD
F100 FLEET
PTE LTD
Registered Office:
Registered Office:
Registered Office:
Registered Office:
Registered Office:
510 thomson Road
510 thomson Road
510 thomson Road
510 thomson Road
510 thomson Road
#12-04 SlF Building
#12-04 SlF Building
#12-04 SlF Building
#12-04 SlF Building
#12-04 SlF Building
Singapore 298135
Singapore 298135
Singapore 298135
Singapore 298135
Singapore 298135
Date Of Incorporation:
Date Of Incorporation:
Date Of Incorporation:
Date Of Incorporation:
Date Of Incorporation:
Singapore,
12 January 2012
Singapore,
18 February 2013
Singapore,
18 April 2013
Singapore,
26 March 2013
Singapore,
18 June 2013
100%
100% 100% 100% 100%
100% 100%
100% 100%
100%
AIRFRAME
LEASING (S) II
PTE LTD
AIRFRAME
LEASING (S) III
PTE LTD
AIRFRAME
LEASING (S) IV
PTE LTD
Registered Office:
Registered Office:
Registered Office:
510 thomson Road
510 thomson Road
510 thomson Road
#12-04 SlF Building
#12-04 SlF Building
#12-04 SlF Building
Singapore 298135
Singapore 298135
Singapore 298135
Date Of Incorporation:
Date Of Incorporation:
Date Of Incorporation:
Singapore,
13 January 2012
Singapore,
19 February 2013
Singapore,
18 April 2013
F100 LEASING
PTE LTD
Registered Office:
510 thomson Road
#12-04 SlF Building
Singapore 298135
Date Of Incorporation:
Singapore,
18 June 2013
9
Annual Report 2013
Board of Directors
Jeff Chatfield
Chairman
Bryant Mclarty
Non-Executive Director
Mr Chatfield
the Chairman
is
of Avation PLC and has been
establishing
in
instrumental
and growing the Company. Mr
Chatfield has managed and been a
director of a number of companies
involved in the airline industry,
data distribution, electronics,
investment, broadcasting
and manufacturing sectors. He has worked in a number of
successful start-up companies and is the author of a variety
of patents. He has Bachelor of Engineering and Master of
Engineering Science degrees from the University of Western
Australia. He is a member of the Australian Institute of
Company Directors and the Singapore Institute of Directors.
He was born in Perth, Australia and is a Permanent Resident
of Singapore.
of
Mr Mclarty was appointed a
Director of the company in 2007.
He has extensive managerial
experience in corporate strategy
and management, with a practical
the
knowledge
working
securities and equity markets. He
currently is Chairman of ASX listed, Australian biotechnology
company, PharmAust Limited. Mr Mclarty is also the Managing
Director of Mac Equity Partners, an Australian based company
providing specialised expertise in the areas of stockbroking
and strategic corporate services to wholesale clients. He
has held numerous managerial, executive and non-executive
director roles in private, public unlisted and listed companies.
Mr Mclarty is a member of the Australian Institute of Company
Directors and has also completed the AICD Company Directors
course.
Rod Mahoney
Executive Director
Mr Mahoney is the Chief Operating
Officer and an Executive Director of
the Company. Before this executive
appointment, he was a fleet
planning and aircraft procurement
consultant to the Company. He
has previously been a project
advisor to a variety of Asia-Pacific airlines, suppliers and other
aviation businesses, including Virgin Blue and V Australia and
also held various senior executive positions at Airbus for 23
years, largely within the sales divisions covering Europe and
Africa, China and the Pacific. He holds a Bachelor of Science
Degree in Aeronautical Engineering (BSc. Hons), a Masters in Air
Transport (MSc.) and a Masters of Applied Finance (MAppFin).
Mr Mahoney holds dual citizenship of the United Kingdom and
Australia and resides in Singapore. Mr Mahoney is a graduate
member of the Australian Institute of Company Directors and a
member of the Singapore Institute of Directors.
10
Strategy
Photo: Jean-Guy Aldegon
The Company’s strategy is to continue to expand the Group’s
aircraft leasing business by:
•
•
“Capitalising on continued growth in the aircraft leasing
market by acquiring additional aircraft:” the Company
intends to exploit the current growth in the aircraft leasing
market by acquiring additional aircraft. The Company
will adopt a flexible approach to the age and type of
aircraft it purchases and this will depend principally on the
requirements of its growing customer base. The Company
is continuously evaluating potential opportunities
for growth in its portfolio of aircraft, in particular by
maintaining communications with airlines, aircraft owners
and manufacturers.
“Leasing aircraft to both regional and international
airlines:” the Directors expect the Group’s customer base
to comprise both regional and global airline companies.
The Group’s customer base will not be restricted to a
particular geography or type of customer.
Aircraft Demand and the Global Commercial Aircraft
Fleet
Demand for new aircraft is derived from both traffic growth
and replacement of older equipment. Historically, demand
for growth has been driven by economic growth and market
maturity, market liberalization and the adoption of new business
models.
Aircraft replacement is related to the relative operating
economics of old and new aircraft, fuel prices, technological
improvements and the demand for conversions of passenger
aircraft to freighters.
Growth Drivers
The world fleet is expected to grow steadily as airlines continue
to develop service offerings to accommodate the world’s
rapidly growing demand for air travel. Key elements that are
currently driving growth in demand for both new and used
aircraft include:
• High rates of economic growth and increasing propensity
to travel in emerging markets;
•
•
Liberalisation of air service between and within countries;
and
Stimulation of traffic from growing Low Cost Carriers
offering lower fares.
Replacement Drivers
The requirement to replace older aircraft that are retired or
converted to freighter configuration also forms a substantial
driver of aircraft demand, particularly in large mature regions.
11
Report of the Directors
Photo: Peer Johnson
The directors have the pleasure in presenting their report and
financial statements for the financial year ended 30 June 2013.
Principal activities and business review
The principal activities of the Group are the holding of
investments, involved in the owning and leasing of aircraft. The
Company also owns and leases aircraft in its own right.
The principal risks and uncertainties affecting the Group’s
turnover are described in note 6.
The full business review including KPI’s can be found in the
Chairman’s statement on page 4. The Group has not sought to
review environmental matters nor social and community issues.
Results and dividends
The consolidated statement of comprehensive income for the
period is set out on page 20. The directors have proposed to
pay a 1.78 US cents final dividend.
Directors and their interests
The directors who served the Company during the period
together with their interests (including family interests) in the
shares of the Company and other group companies at the
beginning (or subsequent date of appointment) and end of the
period, were as follows:
The Company
Direct interest
(in name of director and nominee)
Deemed interest
Ordinary Shares of £0.01 each
30 June 2013
1 July 2012
30 June 2013
1 July 2012
Robert Jeffries Chatfield
Andrew Baudinette (resigned on 3 December 2012)
1
1
1
1
8,855,365
7,039,490
670,000
670,000
Bryant James Mclarty
Roderick Douglas Mahoney
117,300
158,138
117,300
110,000
-
-
-
-
12
Annual Report 2013 Report of the Directors
Significant Shareholdings
Creditors Payment Policy
Ordinary
shares
Percentage
The group’s current policy concerning the payment of trade
creditors is to:
Fitel Nominees Limited
8,009,352
16.40%
HSBC Client Holdings Nominee
(UK) Limited
6,034,384
12.36%
State Street Nominees Limited
3,188,237
Chase Nominees Limited
3,120,000
Lynchwood Nominees Limited
2,678,748
6.53%
6.39%
5.49%
Equal Opportunities Policy
It is the group’s policy to employ individuals with the necessary
qualifications without regard to sex, marital status, race, creed,
colour, nationality or religion. Full and fair consideration is given
to applications for employment made by disabled persons
having regard to their particular aptitudes and abilities.
The group recognises the great importance of the contribution
made by all employees and aims to keep them informed of
matters affecting them as employees and developments within
the group. Communication and consultation is achieved by a
variety of means both within individual companies or branches
and on a group-wide basis.
Directors’ Insurance
• settle the terms of payment with suppliers when agreeing
the terms of each transaction;
• ensure that suppliers are made aware of the terms of
payment by inclusion of the relevant terms in contracts; and
• pay in accordance with the group’s contractual and other
legal obligations.
On average, trade creditors at the year end represented 50
days’ purchases.
Statement as to disclosure of information to auditors
(a) So far as the directors are aware, there is no relevant audit
information of which the Company’s auditors are unaware,
and
(b) they have taken all the steps that they ought to have
taken as directors in order to make themselves aware
of any relevant audit information and to establish that the
Company’s auditors are aware of that information.
Auditors
Kingston Smith LLP have indicated their willingness to continue
in office and in accordance with s489 of the Companies Act
2006, a resolution proposing that they be reappointed as
auditors of the Company will be put to the Annual General
Meeting.
The group maintains insurance policies on behalf of all the
directors against liability arising from negligence, breach of
duty and breach of trust in relation to the group.
On behalf of the board
Combined code
The company has no requirement to comply with the Combined
Code.
Robert Jeffries Chatfield
Director
27th of August 2013
13
Directors’ Remuneration Report
Introduction
This report has been prepared in accordance with Part 15 Chapter 6 of the Companies Act 2006. As required a resolution to
approve the Directors’ remuneration will be proposed at the forthcoming Annual General Meeting of the Company at which the
financial statements will be approved. The vote will have advisory status, will be in respect of the remuneration policy and overall
remuneration packages and will not be specific to the individual levels of remuneration.
Remuneration (audited)
The components of remuneration are:
• Basic salary and benefits determined by the Remuneration Committee which are included in employment agreements and
reviewed annually;
• Bonuses based upon performance of the Company and the individual concerned; and
• Share options.
Individual Director’s remuneration from the group was as follows:
Group
Salaries
and fees
Bonuses
Expenses
allowances
Taxable
benefits
US$
US$
US$
US$
Total
2013
US$
Total
2012
US$
Executive directors
Robert Jeffries Chatfield
Roderick Douglas Mahoney
Non-executive directors
266,185
146,906
-
31,496
Andrew Baudinette (resigned on
3 December 2012)
102,538
Bryant James Mclarty
31,500
-
-
547,129
31,496
Service contracts
-
-
-
-
-
659
-
266,844
178,402
249,808
114,650
2,910
105,448
222,929
-
31,500
33,694
3,569
582,194
621,081
The employment contracts of the executive directors with the Company are terminated by either party with no less than four
weeks’ notice in writing to the other.
The service contracts of the directors are as follows:
Date of contract
Unexpired
term
Notice
period
Compensation payable on
early termination
Robert Jeffries Chatfield
29 April 2013
4 months
4 months
Roderick Douglas Mahoney
16 December 2011
Bryant James Mclarty
28 November 2007
4 weeks
1 month
4 weeks
1 month
-
-
-
14
Annual Report 2013 Directors’ Remuneration Report
Photo: Oliver Koslowski
Share options and warrants
The Group has an ownership-based compensation scheme for directors and senior management of the Group.
Each share warrant converts into one ordinary share of Avation PLC on exercise. No amounts are paid or are payable by the
recipient on receipt of the warrant. The warrants carry neither rights to dividends nor voting rights. Warrants may be exercised
at any time from the date of vesting to the date of their expiry. There are no performance conditions that need to be met before
warrants can be exercised.
Warrants are granted to the directors and senior management of the Group to gain:
• Improvement in share price
• Improvement in net profit
• Improvement in return to shareholders
The following share warrants issued to directors existed at the year end:
Director’s name
Date
granted
Warrant
price
Balance at
beginning
of year
Granted
during the
year
Exercised/
expired
during the
year
Balance at
end of year
Robert Jeffries Chatfield *
2 Dec 2010
67.5 p
Robert Jeffries Chatfield *
12 Dec 2011
110.5 p
Bryant James Mclarty
2 Dec 2010
67.5 p
Bryant James Mclarty
12 Dec 2011
110.5 p
200,000
400,000
50,000
200,000
-
-
-
-
(200,000)
-
-
400,000
(50,000)
-
-
200,000
* Robert Jeffries Chatfield was granted the share warrants via Epsom Assets Limited.
On 21 February 2013, Robert Jeffries Chatfield via Epsom Assets Limited exercised 60,510 warrants at the exercise price of
67.5p. The market price on that day of exercise was 86.0p.
On 11 March 2013, Bryant James Mclarty exercised 50,000 warrants, at the exercise price of 67.5p. The market price on that
day of exercise was 84.5p.
15
Directors’ Remuneration Report
Company’s performance
The graph below shows the total shareholder return on a holding of shares in the Company as against the average total shareholder
return of the companies comprising the FTSE100 index over the last five years. The FTSE 100 Index was selected because in the
opinion of the Board it is the most appropriate for the Company for the purposes of a benchmark.
On behalf of the Board
Robert Jeffries Chatfield
Director
27th August 2013
16
Annual Report 2013AvationFTSE 100Aug 08 Mar 09 Sep 09 Apr 10 Nov 10 May 11 Dec 11 Jun 12 Jan 13 Jul 13350300250200150100500 Directors’ Responsibilities
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Directors’
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 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 Group and the financial performance and cash flows of the
Group for that year. In preparing these financial statements, the
Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether in preparation of the Company and the Group
financial statements, the Company and the Group has
complied with IFRS as adopted by the European Union, and,
in respect of the Company as applied in accordance with
the provisions of the Companies Act 2006, subject to any
material departures disclosed and explained in the Group
financial statements;
• the Directors are required under the Standard Rules of
the London Stock Exchange to prepare Group financial
statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European
Union (“EU”) and have elected to prepare the Company
financial statements in accordance with IFRS as adopted
by the EU as applied in accordance with the provisions of
Companies Act 2006.
• prepare the accounts on the going concern basis unless it
is inappropriate to presume that the Company will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company
and the Group’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and the Group 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 the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of the financial
statements may differ from legislation in other jurisdictions.
17
Report of the Auditors
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AVATION PLC
We have audited the financial statements of Avation PLC for the
year ended 30 June 2013 which comprise the Consolidated
Statement of Comprehensive Income, the Company Statement
of Comprehensive Income, the Consolidated Balance Sheet, the
Company Balance Sheet, the Consolidated Statement of Changes
in Equity, the Company Statement of Changes in Equity, the
Consolidated Statement of Cash Flows, the Company Statement of
Cash Flows and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and as regards the Parent Company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
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 for no purpose other
than to draw to the attention of the Company’s members those
matters which we are required to include in an auditors’ report
addressed to them. To the fullest extent permitted by law, we do
not accept or assume responsibility to any party other than the
Company and Company’s members as a body, for our work, for
this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Responsibilities Statement
set out on page 17 the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give a
true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board’s
(APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to
the Group’s circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall presentation of
the financial statements. In addition, we read all the financial and
non-financial information in the Annual Report to identify material
inconsistencies with the audited financial statements. If we became
aware of any apparent material misstatements or inconsistencies
we consider the implications in our report.
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of
the Group’s and of the Parent Company’s affairs as at 30 June
2013 and of the Group’s profit for the year then ended;
• the Group’s financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
• the Parent Company financial statements have been prepared
properly in accordance with IFRS as adopted by the European
Union and as applied in accordance with the provisions of the
Companies Act 2006, and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006 and, as regards
the Group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion:
• the part of the Directors’ Remuneration Report to be audited
has been properly prepared in accordance with the Companies
Act 2006; and
• the information given in the Directors’ Report for the financial
year for which the financial statements are prepared is
consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where
the Companies Act 2006 requires us to report to you if, in our
opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Parent Company financial statements are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law
are not made; or
• we have not received all the information and explanations we
require for our audit.
Matthew Meadows (Senior Statutory Auditor)
for and on behalf of Kingston Smith LLP, Statutory Auditor
Devonshire House
60 Goswell Road
London
EC1M 7AD
3rd September 2013
18
Annual Report 2013 Financial Statements
For the financial year ended 30 June 2013
Registered number: 5872328 (england & Wales)
19
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Other operating expenses
Expenses
- Administrative expenses
- Finance expenses
Profit before taxation
Taxation
Note
2013
US$
2012
US$
8
42,739,991
35,001,218
(822,887)
(1,129,525)
41,917,104
33,871,693
9
1,846,538
120,079
10
(13,236,614)
(14,601,919)
(3,564,798)
(12,992,553)
(3,474,177)
(7,842,062)
13,969,677
8,073,614
(2,004,684)
(1,710,080)
11
13
14
Profit from continuing operations for the year
11,964,993
6,363,534
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Revaluation (loss) / gain on property, plant and equipment, net of tax
Items that may be reclassified subsequently to profit or loss:
Currency translation differences arising on consolidation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit attributable to:
Equity holders of the parent
Non-controlling interest
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interest
Earnings per share
- Basic – continuing and total operations
- Fully diluted – continuing and total operations
(1,780,368)
(1,780,368)
(5,569,535)
(5,569,535)
603
603
(1,779,765)
(1,007)
(1,007)
(5,570,542)
10,185,228
792,992
10,515,901
1,449,092
11,964,993
5,009,457
1,354,077
6,363,534
15
9,365,487
819,741
10,185,228
1,172,549
(379,557)
792,992
23.25 cents
23.25 cents
12.36 cents
12.31 cents
2020
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
COMPANY STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
COMPANY STATEMENT OF COMPREHENSIVE INCOME
Profit for the year
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Revaluation gains on property, plant and equipment, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
2013
US$
2012
US$
2,328,931
1,277,309
2,839,584
2,839,584
-
-
5,168,515
1,277,309
2121
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2013
ASSETS
Current assets:
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Total current assets
Non-current assets:
Trade and other receivables
Prepayments
Property, plant and equipment
Goodwill
Total non-current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Trade and other payables
Deferred lease income
Provision for taxation
Loans and borrowings
Short-term provisions
Total current liabilities
Non-current liabilities:
Trade and other payables
Deferred lease income
Loans and borrowings
Deferred tax liabilities
Total non-current liabilities
Equity attributable to shareholders:
Share capital
Treasury shares
Share premium
Assets revaluation reserve
Capital redemption reserve
Warrant reserve
Capital reserve
Foreign currency translation reserve
Retained earnings
Non-controlling interest
Note
30 June 2013
US$
30 June 2012
US$
1 July 2011
US$
16
17
18
16
17
20
21
22
23
24
25
22
23
24
26
27
27
19,623,244
6,337,909
1,094,380
438
27,055,971
9,094,470
9,021,165
465,183
14,316
18,595,134
9,012,916
12,116,192
-
3,117
21,132,225
9,300,261
8,442,671
347,200,389
2,384,008
367,327,329
8,437,828
3,829,823
213,862,303
2,384,008
228,513,962
-
-
135,621,485
2,384,008
138,005,493
394,383,300
247,109,096
159,137,718
12,088,802
207,132
986,556
24,243,718
3,757,081
41,283,289
5,073,257
91,379
519,083
19,553,681
2,969,169
28,206,569
9,088,610
1,381,260
239,205,865
5,187,917
254,863,652
6,064,744
731,037
123,988,798
5,943,200
136,727,779
878,137
(214,498)
29,809,334
10,158,496
11,564
103,565
2,530,212
(251)
37,949,162
81,225,721
17,010,638
98,236,359
779,618
-
23,047,234
11,309,284
11,564
192,946
2,530,212
(625)
28,113,618
65,983,851
16,190,897
82,174,748
5,376,057
-
62,067
15,802,427
4,564,855
25,805,406
1,508,902
-
44,996,626
7,724,794
54,230,322
720,917
-
17,365,391
15,145,567
11,564
119,143
-
-
23,742,715
57,105,297
21,996,693
79,101,990
Total liabilities and equity
394,383,300
247,109,096
159,137,718
Approved by the board and authorised for issue on 27th of August 2013
………………………….
Robert Jeffries Chatfield
Director
2222
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
COMPANY BALANCE SHEET
AS AT 30 JUNE 2013
ASSETS
Current assets:
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets:
Trade and other receivables
Investment in subsidiaries
Property, plant and equipment
Total non-current assets
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Trade and other payables
Provision for taxation
Loans and borrowings
Total current liabilities
Non-current liabilities:
Trade and other payables
Loan and borrowings
Deferred tax liabilities
Total non-current liabilities
Capital and reserves:
Share capital
Treasury shares
Share premium
Assets revaluation reserve
Capital redemption reserve
Warrant reserve
Retained earnings
Net equity
Total liabilities and equity
Note
30 June 2013
US$
30 June 2012
US$
1 July 2011
US$
16
16
19
20
22
24
22
24
26
27
27
3,406,322
19,096,712
22,503,034
1,182,305
10,356,165
11,538,470
5,302,540
9,549,503
14,852,043
9,264,244
5,239,692
20,171,641
34,675,577
8,437,828
5,239,530
8,191,670
21,869,028
-
2,605,218
8,643,420
11,248,638
57,178,611
33,407,498
26,100,681
3,840,760
-
1,415,411
5,256,171
1,273,107
-
2,108,683
3,381,790
1,157,398
-
2,006,050
3,163,448
2,071,487
12,054,807
366,533
14,492,827
2,650,604
675,346
315,043
3,640,993
-
2,784,028
221,592
3,005,620
878,137
(214,498)
29,809,334
2,873,147
11,564
103,565
3,968,364
37,429,613
779,618
-
23,047,234
33,563
11,564
192,946
2,319,790
26,384,715
720,917
-
17,365,391
33,563
11,564
119,143
1,681,035
19,931,613
57,178,611
33,407,498
26,100,681
Approved by the board and authorised for issue on 27th of August 2013
……………………………….
Robert Jeffries Chatfield
Director
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2525
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Share
capital
US$
Treasury
Share
US$
Share
premium
US$
Asset
Revaluation
Reserve
US$
Capital
redemption Warrant
Reserve
US$
Reserve
US$
Retained
earnings
US$
Total
US$
Company
Balance at 1 July 2012-
In previous presentational
currency (GBP)
Balance at 1 July 2012 -
In current presentational
currency (US$)
423,745
– 14,192,267
22,158
7,000
120,779
2,031,677
16,797,626
779,618
– 23,047,234
33,563
11,564
192,946
2,319,790
26,384,715
Profit for the year
Other comprehensive
income
Total comprehensive income
Dividend relating to 2012 paid
–
–
–
–
–
–
–
–
Purchase of treasury shares
–
(214,498)
–
–
–
–
–
Increase of issued share
capital
Share issue expenses
Warrant expenses
98,519
7,100,985
–
–
– (338,885)
–
–
–
2,839,584
2,839,584
–
–
–
–
–
–
–
–
–
–
–
–
2,328,931
–
2,328,931
2,839,584
–
2,328,931
5,168,515
–
(745,618)
(745,618)
–
–
(214,498)
–
(24,120)
–
7,175,384
–
–
–
(338,885)
–
(65,261)
65,261
–
Balance at 30 June 2013
878,137
(214,498) 29,809,334
2,873,147
11,564
103,565
3,968,364
37,429,613
Balance at 1 July 2011
720,917
– 17,365,391
33,563
11,564
119,143
1,681,035
19,931,613
Profit for the year
Other comprehensive
income
Total comprehensive income
Dividend relating to 2011 paid
Increase of issued share
capital
Share issue expenses
Warrant expenses
–
–
–
–
–
–
–
–
–
–
–
–
58,701
–
5,948,563
–
–
–
(266,720)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,277,309
–
1,277,309
–
–
1,277,309
1,277,309
–
(638,554)
(638,554)
–
(29,762)
–
5,977,502
–
–
–
(266,720)
–
103,565
–
103,565
Balance at 30 June 2012
779,618
– 23,047,234
33,563
11,564
192,946
2,319,790
26,384,715
The dividend paid during the year was for 1.04p (2012: 1p) per share.
2626
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Cash flows from operating activities:
Profit before taxation
Adjustments for:
Depreciation expense
Claim on maintenance reserve
Impairment loss on property plant and equipment
Amortisation of loan premium
Amortisation of interest expense on deposit collected
Loss on disposal of subsidiary
Warrant expense
Interest expense
Finance income
Interest income
Operating profit before working capital changes
Movement in working capital:
Trade and other receivables and prepayments
Inventories
Deferred lease income
Trade and other payables
Short-term provisions
Cash from operations
Interest paid
Interest received
Corporation tax paid
Net cash from operating activities
Cash flows from investing activities:
Cash inflow/(outflow) from disposal of a subsidiary
– See Note A
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities:
Net proceeds from issuance of ordinary shares
Dividends paid
Repurchase of treasury shares
Proceeds from borrowings
Repayment of borrowings
Capital element of finance lease repayments
Net cash used in financing activities
Effects of exchange rates on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2013
US$
2012
US$
13,969,677
8,073,614
11,366,937
1,860,732
8,945
904,658
570,267
-
-
11,517,628
(582,844)
(28,727)
39,587,273
(4,868,068)
13,878
765,976
3,044,789
(1,072,820)
37,471,028
(11,093,273)
28,727
(999,556)
25,406,926
10,299,139
1,991,753
1,569,532
356,827
6,663
627,565
103,535
7,478,572
(21,137)
(94,470)
30,391,593
(7,183,814)
(11,199)
822,416
8,250,757
(1,034,835)
31,234,918
(7,478,572)
94,470
(472,882)
23,377,934
1,125,032
(199,839)
(134,087,044)
(132,962,012)
(73,277,102)
(73,476,941)
6,836,498
(745,618)
(214,498)
140,263,472
(23,882,635)
(4,173,733)
118,083,486
374
10,528,774
9,094,470
19,623,244
3,076,471
(638,554)
-
67,569,065
(17,360,286)
(2,465,353)
50,181,343
(782)
81,554
9,012,916
9,094,470
2727
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Note A – Disposal of a subsidiary, Capital Lease Australian Portfolio One Pty. Ltd.:
The aggregate cash inflows arising from the disposal of Capital Lease Australian Portfolio One Pty.
Ltd. during the previous year were:
Cash
Trade and other receivables
Property, plant and equipment
Trade and other payables
Borrowings
Provisions
Income tax payable
Identifiable net assets disposed
Loss on disposal
Cash proceeds from disposal
Less: cash and cash equivalents in subsidiary disposed
Net cash inflow on disposal, received during the year ended 30 June 2013
US$
199,839
1,864,684
10,695,308
(4,004,378)
(3,735,866)
(2,552,604)
(514,547)
1,952,436
(627,565)
1,324,871
(199,839)
1,125,032
Cash and cash equivalents in the consolidated cash flow statement are denominated in the following
currencies:
Pounds Sterling
United States Dollars
Australian Dollars
Euro
Singapore Dollars
2013
US$
2,898,583
16,552,547
19,708
10,992
141,414
19,623,244
2012
US$
57,276
8,844,306
16,761
1,656
174,471
9,094,470
Interest earning balances
17,881,829
8,119,998
The rate of interest for the cash on interest earning accounts is at 1.0% to 4.5% (2012:1.0% to
4.5%) per annum. These approximate the weighted effective interest rate.
2828
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
COMPANY STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Cash flows from operating activities:
Profit before taxation
Adjustments for:
Dividend income
Depreciation
Warrant expense
Interest income
Interest expense
Operating cash flows before working capital changes
Movement in working capital:
Trade and other receivables
Trade and other payables
Cash used in operations
Interest received
Interest paid
Corporation tax paid
Net cash used in operating activities
Cash flows from investing activities:
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Investment in subsidiaries
Net cash from (used in) investing activities
Cash flows from financing activities:
Net proceeds from issuance of ordinary shares
Dividends paid
Repurchase of treasury shares
Capital element of finance lease repayments
Net cash from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2013
US$
2012
US$
2,393,473
1,377,865
-
444,025
-
(24,793)
339,434
3,152,139
(9,566,963)
1,965,622
(4,449,202)
24,793
(329,571)
-
(4,753,980)
6,978,357
(2,862,769)
(162)
4,115,426
6,836,498
(745,618)
(214,498)
(3,013,811)
2,862,571
2,224,017
1,182,305
3,406,322
(428,283)
453,636
103,565
(89,293)
303,293
1,720,783
(8,816,207)
2,749,459
(4,345,965)
89,293
(293,430)
(114)
(4,550,216)
-
(1,886)
(1)
(1,887)
3,076,471
(638,554)
-
(2,006,049)
431,868
(4,120,235)
5,302,540
1,182,305
Cash and cash equivalents in the cash flow statement are denominated in the following currencies:
Pounds Sterling
United States dollars
Singapore dollars
2013
US$
2,788,225
616,577
1,520
3,406,322
2012
US$
42,784
1,134,638
4,883
1,182,305
The rate of interest for the cash on interest earning accounts is at 1.0% (2012:1.0%) per annum.
These approximate the weighted effective interest rate.
2929
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
1
GENERAL
Avation PLC is a public limited company incorporated in England and Wales under the
Companies Act 2006 (Registration Number 05872328) and is listed as a Standard Listing
on the London Stock Exchange. The address of the registered office is given on page 1.
As disclosed in the Report of the Directors, the principal activities of the Company and its
subsidiaries are the holding of investments involved in owning and leasing of aircraft. The
Company also owns and leases aircraft in its own right.
2
STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with International Financial
Reporting Standards, International Accounting Standards and their interpretations issued
or adopted by the International Accounting Standards Board as adopted by use in the
European Union (“IFRS”).
3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PREPARATION – The financial statements have been prepared in
accordance with IFRS including standards and interpretations issued by the
International Accounting Standards Board (“IASB”), and have been prepared in
accordance with the historical cost convention, as modified by the revaluation of
aircraft.
The financial statements are presented in United States Dollars, rounded to the
nearest Dollar. The year end exchange rate for Pounds Sterling to United States
Dollars is 1.5216. There has been a change in accounting policy regarding the
change in presentational currency from Pounds Sterling to United States Dollars
which has been applied as disclosed in Note 34.
The preparation of financial statements in conformity with IFRS requires the use of
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the financial period. Although
these estimates are based on management’s best knowledge of current events and
actions, actual results may ultimately differ from those estimates.
The accounting policies set out below have been applied consistently throughout the
financial period presented in these financial statements and the accounting policies
have been applied consistently by the Company and its subsidiaries.
30
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(b) BASIS OF CONSOLIDATION - The consolidated financial statements comprise the
financial statements of Avation PLC and its subsidiaries as at 30 June 2013.
Subsidiaries are fully consolidated from the date of acquisition, being the date on
which the Group obtains control, and continue to be consolidated until the date that
such control ceases.
The financial statements of the subsidiaries are prepared for the same reporting
period as the parent company, using consistent accounting policies.
All intra-group balances, income and expenses and unrealised gains and losses
resulting from intra-group transactions are eliminated in full.
Losses within a subsidiary are attributed to the non-controlling interest even if that
results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is
accounted for as an equity transaction. If the Group loses control over a subsidiary, it:
• Derecognises the assets (including goodwill) and liabilities of the subsidiary
• Derecognises the carrying amount of any non-controlling interest
• Derecognises the cumulative translation differences, recorded in equity
• Recognises the fair value of the consideration received
• Recognises the fair value of any investment retained
• Recognises any surplus or deficit in profit or loss
• Reclassifies the parent’s share of components previously recognised in other
comprehensive income to profit or loss.
(c) BUSINESS COMBINATIONS
Business combinations from 1 July 2009
Business combinations are accounted for using the acquisition method. The cost of
an acquisition is measured as the aggregate of the consideration transferred,
measured at acquisition date fair value and the amount of any non-controlling interest
in the acquiree. For each business combination, the acquirer measures the non-
controlling interest in the acquiree either at fair value or at the proportionate share of
the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and
included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities
assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the
acquirer’s previously held equity interest in the acquiree is remeasured to fair value at
the acquisition date through profit or loss.
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
31
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
GENERAL
Any contingent consideration to be transferred by the acquirer will be recognised at
fair value at the acquisition date. Subsequent changes to the fair value of the
contingent consideration which is deemed to be an asset or liability will be recognised
Avation PLC is a public limited company incorporated in England and Wales under the
in accordance with IAS 39 either in profit or loss or as a change to other
Companies Act 2006 (Registration Number 05872328) and is listed as a Standard Listing
comprehensive income. If the contingent consideration is classified as equity, it is not
on the London Stock Exchange. The address of the registered office is given on page 1.
remeasured until it is finally settled within equity.
Business combinations prior to 1 July 2009
As disclosed in the Report of the Directors, the principal activities of the Company and its
subsidiaries are the holding of investments involved in owning and leasing of aircraft. The
Company also owns and leases aircraft in its own right.
In comparison to the above-mentioned requirements, the following differences applied:
STATEMENT OF COMPLIANCE
Business combinations were accounted for using the purchase method. Transaction
costs directly attributable to the acquisition formed part of the acquisition costs. The
non-controlling interest (formerly known as minority interest) was measured at the
proportionate share of the acquiree’s identifiable net assets.
These financial statements have been prepared in accordance with International Financial
Reporting Standards, International Accounting Standards and their interpretations issued
or adopted by the International Accounting Standards Board as adopted by use in the
Business combinations achieved in stages were accounted for as separate steps. Any
European Union (“IFRS”).
additional acquired share of interest did not affect previously recognised goodwill.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
When the Group acquired a business, embedded derivatives separated from the host
contract by the acquiree were not reassessed on acquisition unless the business
combination resulted in a change in the terms of the contract that significantly modified
(a) BASIS OF PREPARATION – The financial statements have been prepared in
the cash flows that otherwise would have been required under the contract.
accordance with IFRS including standards and interpretations issued by the
International Accounting Standards Board (“IASB”), and have been prepared in
Contingent consideration was recognised if, and only if, the Group had a present
accordance with the historical cost convention, as modified by the revaluation of
obligation, the economic outflow was more likely than not and a reliable estimate was
aircraft.
determinable. Subsequent adjustments to the contingent consideration were recognised
as part of goodwill
The financial statements are presented in United States Dollars, rounded to the
nearest Dollar. The year end exchange rate for Pounds Sterling to United States
(d) INTEREST IN JOINT VENTURE – A Joint venture is a contractual arrangement
Dollars is 1.5216. There has been a change in accounting policy regarding the
whereby the group and other parties undertake an economic activity that is subject to
change in presentational currency from Pounds Sterling to United States Dollars
joint control (ie when the strategic financial and operating policy decision relating to
which has been applied as disclosed in Note 34.
the activities of the joint venture require the unanimous consent of the parties sharing
control).
The preparation of financial statements in conformity with IFRS requires the use of
estimates and assumptions that affect the reported amounts of assets and liabilities and
When a group undertakes its activities under joint venture arrangements directly, the
disclosure of contingent assets and liabilities at the date of the financial statements and
group’s share of jointly controlled assets and any liabilities incurred jointly with other
the reported amounts of revenues and expenses during the financial period. Although
ventures are recognised in the financial statements of the relevant entity and
these estimates are based on management’s best knowledge of current events and
classified according to their nature. Liabilities and expenses incurred directly in
actions, actual results may ultimately differ from those estimates.
respect of interests in jointly controlled assets are accounted for on an accruals basis.
Income from the sale or use of the group’s share of the output of jointly controlled
The accounting policies set out below have been applied consistently throughout the
assets, and its share of joint venture expenses, are recognised when it is probable
financial period presented in these financial statements and the accounting policies
that the economic benefits associated with the transactions will flow to/from the group
have been applied consistently by the Company and its subsidiaries.
and their amount can be measured reliably.
(e) GOODWILL - Goodwill arising on the acquisition of a subsidiary represents the excess
of the cost of acquisition over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities of the subsidiary recognised at the date of
acquisition. Goodwill is initially recognised as an asset at cost and is subsequently
measured at cost less any accumulated impairment losses.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost,
being the excess of the cost of the business combination over the Group’s interest in
the net fair value of the identifiable assets, liabilities and contingent liabilities
recognised. If, after reassessment, the Group’s interest in the net fair value of the
acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the
business combination, the excess is recognised immediately in the profit or loss.
1
2
3
32
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
The interest of significant minority shareholders in the acquiree is initially measured at
the non-controlling interest’s proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s
cash-generating units expected to benefit from the synergies of the combination. Cash-
generating units to which goodwill has been allocated are tested for impairment
annually, or more frequently when there is an indication that the unit may be impaired. If
the recoverable amount of the cash-generating unit is less than the carrying amount of
the unit, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. An impairment loss recognised
for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
(f)
INVENTORIES – Inventories of consumable spare parts are stated at the lower of cost
or market value determined on a portfolio basis.
(g) PROPERTY, PLANT AND EQUIPMENT – All items of property, plant and equipment
are initially recorded at cost. Subsequent to recognition, Aircraft are stated in the
balance sheet at their revalued amounts, being the fair value at the date of
revaluation, less any accumulated depreciation and accumulated impairment losses.
Revaluations are performed with sufficient regularity such that the carrying amount
does not differ materially from that which would be determined using fair values at the
balance sheet date. However, these aircraft have been reviewed for impairment.
Revaluations have not been carried out in the period on the ATR fleet which is less
than two years old.
Any revaluation increase arising on the revaluation of such aircraft is credited to the
assets revaluation reserve, except to the extent that it reverses a revaluation
decrease for the same asset previously recognised in profit or loss, in which case the
increase is credited to profit or loss to the extent of the decrease previously charged.
A decrease in carrying amount arising on the revaluation of such aircraft is charged to
profit or loss to the extent that it exceeds the balance, if any, held in the assets
revaluation reserve relating to a previous revaluation of that asset.
Depreciation on revalued aircraft is charged to profit or loss. On the subsequent sale
or retirement of a revalued aircraft, the attributable revaluation surplus remaining in
the asset revaluation reserve is transferred directly to retained earnings.
33
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Depreciation is charged so as to write off the cost or valuation of assets less
residual values, over their estimated useful lives, using the straight-line method, on
the following bases:
Aircraft
Furniture and equipment
-
-
30 years
3 years
The residual values, useful lives and depreciation methods are revised and adjusted
if appropriate, at each reporting date. Residual value of aircraft are based on their
estimated scrap value.
Fully depreciated assets still in use are retained in the financial statements.
The gain or loss arising on the disposal or retirement of an item of property, plant
and equipment is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit or loss.
(h) IMPAIRMENT OF ASSETS - At each balance sheet date, the Group 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). When it is not possible to estimate the recoverable
amount of an individual asset, the group estimates the recoverable amount of the
cash-generating unit to which the asset belongs. 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. Impairment losses are recognised as an expense immediately.
When 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 only to the extent 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 as income immediately.
(i) PROVISIONS - Provisions are recognised when the Group has a present obligation
as a result of a past event, and it is probable that the Group will be required to settle
that obligation. Provisions are measured at the directors’ best estimate of the
expenditure required to settle the obligation at the balance sheet date, and are
discounted to present value where the effect is material. In respect of maintenance
rent, a corresponding provision
the expected
maintenance costs that will be drawn in accordance with the lease conditions and
lease term.
in accordance with
is made
(j) SHARE-BASED PAYMENTS – The cost of share based payment arrangement
whereby employees receive remuneration in the form of warrants, is recognised as
an employee benefit expense in the profit or loss. The total expense to be
apportioned over the vesting period of the benefit is determined by reference to the
fair value at date of grant. The assumption underlying the number of warrants
expected to vest are subsequently adjusted for the effects of non market-based
vesting conditions prevailing at the balance sheet date. Fair value is measured by
the use of the Binomial option pricing model and is based on a reasonable
expectation of the extent to which performance criteria will be met.
34
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(k) LEASES – The Group leases aircraft to airlines under operating leases. Leases of
aircraft where the Group retains substantially all risks and rewards incidental to
ownership are classified as operating leases. Rental income from operating leases
(net of any incentives given to the lessees) is recognised in the profit or loss on a
straight-line basis over the lease term.
The Group leases aircraft for use in the business. Where the Group bears
substantially all the risk and rewards of ownership of the item, the lease is classified
as a finance lease and the item is capitalised within the appropriate class of
property, plant and equipment at the lower of the fair value of the leased item and
the minimum lease payments. Each lease payment is allocated between the
liability and finance charges so as to obtain a constant rate on the finance balance
outstanding. The outstanding capital element of the lease payments are included
within current and long-term payables as appropriate; the interest element of the
lease payments is charged to profit or loss over the period of the lease so as to
produce a constant periodic rate of interest on the remaining balance of the liability
for each period.
(l) REVENUE RECOGNITION – Revenue is measured at the fair value of the
consideration received or receivable and represents amounts receivable for goods
and services provided in the normal course of business, net of discounts and sales
related taxes.
(i)
(ii)
Aircraft rental income is recognised in the profit or loss on a straight line basis
over the terms of the lease. Lease incentives granted are recognised as an
integral part of the total rental income.
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying amount.
(iii)
Sales of goods are recognised when goods are delivered and title has
passed.
(iv) Dividend income from investments is recognised when the shareholders’ right
to receive payment have been established.
(v)
Licence fees received are recognised over the life of the licence agreement.
Ongoing royalties/commissions pursuant to the licence agreement are
recognised as earned.
(m) BORROWING COSTS - Borrowing costs directly attributable to the acquisition of
property, plant and equipment are added to the cost of the assets and amortised
over the life of the assets.
The loan facility fees added to the cost of the assets are amortised over 30 years,
which is the life of the assets.
All other borrowing costs are recognised in profit or loss in the period in which they
are incurred.
35
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(n) TAXATION - Taxation expense represents the sum of the tax currently payable and
deferred tax.
The tax currently payable is based on taxable profit for the financial period. Taxable
profit differs from profit as reported in profit or loss 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 Group’s liability for current
tax is calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised 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 (other than
in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on
investments in subsidiaries, except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet 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 realised. Deferred tax is charged or credited
to profit or loss, 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 there is a legally enforceable
right to set off current tax assets against current tax liabilities and when they relate
to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
With effect from 1 April 2011 the Company migrated its business to become
Singapore resident for tax purposes.
36
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(o) FOREIGN CURRENCIES - The Group’s consolidated financial statements and
Company financial statements are presented in United States dollars, which is the
presentational currency. The individual financial statements of each Group entity
are presented in the currency of the primary economic environment in which the
entity operates (its functional currency) and United States Dollars is the functional
currency of the each of the Group entity, including the parent company.
There has been a change in accounting policy and has been applied as disclosed
in Note 34.in Note 34.
In preparing the financial statements of the individual entities, transactions in
currencies other than the entity’s functional currency (foreign currencies) are
recorded at the rates of exchange prevailing on the dates of the transactions. At
each balance sheet date, monetary items denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Non-monetary items
carried at fair value that are denominated in foreign currencies are retranslated at
the rates prevailing on the date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried at
fair value are included in the profit or loss for the period except for differences
arising on the retranslation of non-monetary items in respect of which gains and
losses are recognised directly in equity. For such non-monetary items, any
exchange component of that gain or loss is also recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group’s foreign operations are expressed in United States dollars
using exchange rates prevailing on the balance sheet date. Income and expense
items are translated at the average exchange rates for the period, unless exchange
rates fluctuated significantly during that period, in which case the exchange rates at
the dates of the transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group’s translation reserve. Such
translation differences are recognised in profit or loss in the period in which the
foreign operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation
are treated as assets and liabilities of the foreign operation and translated at the
closing rate.
(p) FINANCIAL
INSTRUMENTS - Financial assets and
liabilities are
recognised on the Group’s balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
financial
(i)
Trade and other receivables – Trade and other receivables are measured at
initial recognition at fair value, and are subsequently measured at amortised
cost using the effective interest rate method. Appropriate allowances for
estimated irrecoverable amounts are recognised in profit or loss when there
is objective evidence that the asset is impaired. The allowance recognised is
measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the effective
interest rate computed at initial recognition.
37
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(ii)
(iii)
(iv)
(vi)
Cash and cash equivalents - Cash and cash equivalents comprise cash on
hand and call deposits which are subject to an insignificant risk of changes in
value.
Financial liabilities and equity - Financial liabilities and equity instruments
issued by the Group are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument is any contract that
evidences a residual interest in the assets of the Group after deducting all of
its liabilities. The accounting policies adopted for specific financial liabilities
and equity instruments are set out below.
Borrowings - Interest-bearing loans from banks and financial institutions are
initially measured at fair value, and are subsequently measured at amortised
cost, using the effective interest rate method. Any difference between the
proceeds (net of transaction costs) and the settlement or redemption of
borrowings is recognised over the term of the borrowings in accordance with
the Group’s accounting policy for borrowing costs (see above).
Trade and other payables - Trade payables are stated at their original
invoiced value, as the interest that would be recognised from discounting
future cash payments over the short payment period is not considered to be
material.
(vii)
Equity instruments - Equity instruments issued by the Company are recorded
at the proceeds received, net of direct issue costs.
38
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
4
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and assumptions concerning the future are made in the preparation of the
financial statements. They affect the application of the Group’s accounting policies,
reported amounts of assets, liabilities, income and expenses and disclosures made. They
are assessed on an ongoing basis and are based on experience and relevant factors,
including expectations of future events that are believed to be reasonable under the
circumstances.
The key assumptions concerning the future estimation uncertainty at the balance sheet
date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
(i)
Impairment of property, plant and equipment – aircraft
The Group periodically evaluates its aircraft for impairment. Factors that would
indicate potential impairment would include, but not be limited to, significant
decreases in the market value of aircraft, a significant adverse change in an
aircraft’s physical condition or a significant adverse change in cash-flow
associated with the use of the aircraft. The Group continues to record positive
cash flows from its aircraft
(ii)
Revaluation of property, plant and equipment – aircraft
the
financial year,
The Group regularly revalues its aircraft using independent valuers valuations.
During
its older aircraft using
independent valuers valuations and the carrying amount of the aircraft is
reduced to its recoverable value. Impairment losses were recognised as an
expense immediately.
the Group revalued
(iii)
Maintenance reserve claim
The Group provides for maintenance reserve claims for certain aircraft.
Management has relied on industry experience and information from aircraft
manufacturers and airlines to estimate the provision for the maintenance
reserve claims. These estimates can be subject to revisions depending on a
number of factors such as the timing of the planned maintenance, the utilisation
of the aircraft, changes to the manufacturer’s maintenance program or a
change in the estimated costs. Management evaluates its estimates and
assumptions and, when warranted, adjusts these assumptions which may
impact the maintenance reserve claim expense in the profit or loss.
39
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(iv)
Income taxes
Significant judgment is required in determining the capital allowances and
deductibility of certain expenses during the estimation of the provision for
income taxes. There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business.
The Group recognises liabilities for anticipated tax issues based on estimates
of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such
differences will impact the income tax and deferred income tax provisions in the
period in which the determination is made.
(v)
Consolidation of special purpose entity (“SPE”) – Avation Airframe Holdings
Pte. Ltd.
The directors have considered whether this company, which was set up during
the previous year and which forms part of a financing structure to facilitate the
acquisition of certain new aircraft, should be consolidated as a subsidiary
undertaking. Although the ultimate shareholder of the SPE is a trust, the
directors consider that Avation PLC has the power to control the day to day
activities of the SPE and indeed does so in practice through one of its wholly
owned subsidiary undertakings. Furthermore, Avation PLC is entitled to the
benefits and exposed to the risks of the activities of the SPE, which are entirely
consistent with the ongoing major operations of the Avation Group, and are
conducted on behalf of the Group according to the Group’s specific business
needs. Accordingly the directors consider that the SPE is controlled by the
Group and have consolidated it as a subsidiary in these financial statements.
The Group would cease to control the SPE in the event of a “Relevant Event”
as defined in the financing agreement, for example, a delay in payment of
interest. Were this to occur consolidation would cease at that point although the
Group has no intention, or anticipation, that any such event will occur.
40
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
5.
NEW STANDARDS AND INTERPRETATIONS NOT APPLIED AND STANDARDS IN EFFECT IN
2013
a) New standards and interpretations not applied
The IASB and IFRIC have issued the following standards and interpretations with an effective date
after the date of these financial statements.
The Group intends to apply these standards and interpretations when they become effective.
International Accounting Standards (IAS/IFRS)
Effective Date
(accounting periods
commencing after)
IAS 12 Income Taxes (Amendment) – Deferred Taxes : Recovery of Underlying
Assets
1 January 2013
IAS 19 Employee Benefits (Revised)
IAS 27 Separate Financial Statements
IAS 28 Investments in Associates and Joint Ventures
1 January 2013
1 January 2013
1 January 2013
IFRS 9 Financial Instruments – Classification and Measurement
1 January 2013
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interest with Other Entities
IFRS 13 Fair Value Measurement
Annual improvements to IFRS (2009-2011) cycle
1 January 2013
1 January 2013
1 January 2013
1 January 2013
Various
The Group, however, expects no impact from the adoption of the amendments on its financial position
or performance.
b) Standards in effect in 2013
The following new and amended standards, and interpretations are mandatory for the first time for
the financial year beginning 1 July 2012 and have been implemented by the group, but not currently
relevant to the group (although they may affect the accounting for future transactions and events):
• Amendment to IAS 1, Financial statement presentation’ regarding other comprehensive
income, effective date 1 July 2012
The following are mandatory for the first time for this financial year but not currently relevant to the
group (although they may affect the accounting for future transactions and events):
• Amendment to IAS 12, ‘Income taxes’ on deferred tax, effective date 1 January 2012
34
41
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
6.
FINANCIAL RISK MANAGEMENT
The main risks arising from the Group’s financial assets and liabilities are airline industry
risks, credit risk, interest rate risk, foreign exchange risk and liquidity risks.
(i)
Airline Industry Risks
The Group faces risks specific to the aviation sector, war, terrorism, and equipment
failure. These exposures are managed through the equipment of the airlines that
lease the Group’s assets to maintain insurance, adequate maintenance policies
and/or contribute to a maintenance reserve for the major maintenance on each
aircraft.
(ii) Credit risk
Credit risk refers to the risk that debtors will default on their obligations to repay the
amounts owing to the Group, resulting in a loss to the Group.
The Group has no significant concentrations of credit risk. The Group has adopted
relevant credit policy in extending credit terms to customers and in monitoring its
credit terms.
The credit policy spelt out clearly the guidelines on extending credit terms to
customers, including monitoring the process. This includes assessing customers’
credit standing and periodic review of their financial status to determine the credit
limits to be granted. The Company performs ongoing credit evaluation of its
customers’ financial condition and generally, requires no collateral from its
customers.
The maximum exposure to credit risk in the event that the counterparties fail to
perform their obligations as at the end of the financial period in relation to each
class of financial assets is the carrying amount of those assets as stated in the
balance sheet.
The Group currently has exposure to three airline customers across three
continents with regards to its aircraft leasing business and diversification will
continue as the Company grows its asset base.
42
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
The maximum exposure to credit risk for trade receivables at the reporting date by
geographical area is:
Australia
United Kingdom
Others
Group
2013
US$
2012
US$
3,945,275
-
588,975
4,534,250
906,297
187,000
2,391,644
3,484,941
(1) Financial assets that are neither past due nor impaired
Bank deposits that are neither past due or impaired are mainly deposits with
banks with high credit–ratings assigned by international credit-rating agencies.
Trade receivables that are neither past due nor impaired are substantially
companies with a good collection track record with the Group.
The Group’s trade receivable not past due include receivables amounting to
US$3,258,279 (2012: US$2,172,471).
(2) Financial assets that are past due and/or impaired
There is no class of financial assets that are past due and /or impaired except
for trade receivables.
The age analysis of trade receivables past due but not impaired is as follows:
Past due < 3 months
Past due 3 to 6 months
Past due over 6 months
Group
2013
US$
2012
US$
1,244,907
31,064
-
1,275,971
254,736
1,021,936
35,798
1,312,470
43
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(iii)
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on
interest bearing liabilities and assets.
The Group further seeks to reduce this risk by fixing interest rates on loans to match
the term of the underlying lease term of the asset.
The interest rate and terms of repayment of financial assets and financial liabilities
are disclosed in the respective notes to the financial statements.
(iv) Foreign currency risk
Foreign currency risk occurs as a result of the Group’s transactions that are not
denominated in its functional currencies. The Group’s foreign currency exposures
arose mainly from the exchange rate movements of the Pound Sterling and United
States dollar. These exposures are managed primarily by using natural hedges that
arise from offsetting assets and liabilities that are denominated in foreign currencies.
The Group does not utilise forward foreign currency contracts to hedge its exposure
to specific currency risks.
The Group’s currency exposure based on the information provided to key
management is as follows:
Group
2013
Pounds
Sterling
US$
United States
dollars
US$
Australian
Dollars
US$
Euro
US$
Singapore
Dollars
US$
Total
US$
Cash and cash equivalents
Trade and other receivables
Prepayments
Loans and borrowings
Deferred lease income
Other financial liabilities
Currency exposure
2,898,583
35,027
16,552,547
15,394,983
9,537,051
–
– (263,449,583)
– (1,588,392)
(45,263) (20,992,115)
2,888,347 (244,545,509)
19,708
18,630
–
–
–
(47,768)
(9,430)
10,992
6,735
–
–
–
(9,322)
8,405
141,414
182,795
–
–
–
(82,944)
241,265
19,623,244
15,638,170
9,537,051
(263,449,583)
(1,588,392)
(21,177,412)
(241,416,922)
57,276
385,611
8,844,306
16,927,409
–
4,295,006
– (143,542,479)
(822,416)
–
(10,222,396)
253,773 (124,520,570)
(189,114)
16,761
5,795
–
–
–
(11,279)
11,277
1,656
81,466
–
–
–
(8,194)
74,928
9,094,470
174,471
17,458,993
58,712
4,295,006
–
(143,542,479)
–
(822,416)
–
(707,018)
(11,138,001)
(473,835) (124,654,427)
2012
Cash and cash equivalents
Trade and other receivables
Prepayments
Loans and borrowings
Deferred lease income
Other financial liabilities
Currency exposure
44
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Company
2013
Pounds
Sterling
US$
United
States
dollars
US$
Cash and cash equivalents
Trade and other receivables
Loans and borrowings
Other financial liabilities
Currency exposure
2012
Cash and cash equivalents
Trade and other receivables
Loans and borrowings
Other financial liabilities
Currency exposure
2,788,225
616,577
838,120 27,368,533
– (13,470,218)
(5,637,524)
8,877,368
(109,159)
3,517,186
42,784
1,134,638
377,537 18,321,392
– (2,784,029)
(3,626,172)
307,739 13,045,829
(112,582)
Australian
Dollars
US$
–
4,573
–
(25,750)
(21,177)
Euro
US$
Singapore
Dollars
US$
Total
US$
–
88,767
–
(43,125)
45,642
1,520
60,963
–
(96,689)
(34,206)
3,406,322
28,360,956
(13,470,218)
(5,912,247)
12,384,813
–
5,795
–
(6,734)
(939)
–
80,878
–
4,883
8,391
–
(2,177) (176,046)
78,701 (162,772)
1,182,305
18,793,993
(2,784,029)
(3,923,711)
13,268,558
If the foreign currencies changes against the United States Dollars by 10% (2012: 10%) with all other
variables including tax rate being held constant, the effects arising from the net financial liability/asset
position will be as follows:
Increase/(Decrease)
Increase/(Decrease)
Group
GBP against US$
- strengthen
- weakened
AUD against US$
- strengthen
- weakened
Euro against US$
- strengthen
- weakened
SGD against US$
- strengthen
- weakened
2013
Profit
after tax
US$
288,835
(288,835)
(943)
943
840
(840)
24,126
(24,126)
2013
Equity
US$
–
–
–
–
–
–
–
–
2012
Profit
after tax
US$
25,377
(25,377)
1,128
(1,128)
7,493
(7,493)
(47,383)
47,383
2012
Equity
US$
–
–
–
–
–
–
–
–
45
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Company
Company
GBP against US$
- strengthen
- weakened
GBP against US$
- strengthen
- weakened
AUD against US$
- strengthen
- weakened
AUD against US$
- strengthen
- weakened
Euro against US$
- strengthen
- weakened
Euro against US$
- strengthen
- weakened
SGD against US$
- strengthen
- weakened
SGD against US$
- strengthen
- weakened
Increase/(Decrease)
Increase/(Decrease)
2013
2013
Profit after tax
Profit after tax
US$
US$
2013
Equity
US$
2013
Equity
US$
Increase/(Decrease)
Increase/(Decrease)
Profit after tax
Profit after tax
2012
2012
US$
US$
2012
Equity
US$
2012
Equity
US$
351,719
(351,719)
351,719
(351,719)
(2,118)
2,118
(2,118)
2,118
4,564
(4,564)
4,564
(4,564)
(3,421)
3,421
(3,421)
3,421
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
30,774
(30,774)
30,774
(30,774)
(94)
94
(94)
94
7,870
(7,870)
7,870
(7,870)
(16,277)
16,277
(16,277)
16,277
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(v)
Liquidity risk
(v)
Liquidity risk
In the management of liquidity risk, the Group monitors and maintains a level of cash and cash
equivalents deemed adequate by management to finance the Group’s operations and mitigate
the effects of fluctuations in cash flows. Short-term funding is obtained from bank loan facilities.
In the management of liquidity risk, the Group monitors and maintains a level of cash and cash
equivalents deemed adequate by management to finance the Group’s operations and mitigate
the effects of fluctuations in cash flows. Short-term funding is obtained from bank loan facilities.
The table below analyses the maturity profile of the financial liabilities of the Group and the
Company based on contractual undiscounted cash flows.
The table below analyses the maturity profile of the financial liabilities of the Group and the
Company based on contractual undiscounted cash flows.
Less than 1
year
US$
Less than 1
year
US$
Between
1 and 2
years
US$
Between
1 and 2
years
US$
Between
2 and 5
years
US$
Between
2 and 5
years
US$
Over 5 years
Over 5 years
US$
US$
Group
2013
Group
2013
Trade and other
Trade and other
payables
payables
Deferred lease income
Deferred lease income
Loans and borrowings
Loans and borrowings
12,088,802
207,132
37,226,802
49,522,736
12,088,802
207,132
37,226,802
49,522,736
–
207,132
76,988,555
77,195,687
–
207,132
76,988,555
77,195,687
–
569,836
76,306,940
76,876,776
–
569,836
76,306,940
76,876,776
9,088,610
604,292
119,298,930
128,991,832
9,088,610
604,292
119,298,930
128,991,832
2012
2012
Trade and other
Trade and other
payables
payables
Deferred lease income
Deferred lease income
Loans and borrowings
Loans and borrowings
5,073,257
91,379
24,829,489
29,994,125
5,073,257
91,379
24,829,489
29,994,125
–
97,950
15,996,884
16,094,834
–
97,950
15,996,884
16,094,834
–
293,844
43,612,984
43,906,828
–
293,844
43,612,984
43,906,828
6,064,744
339,243
83,211,529
89,615,516
6,064,744
339,243
83,211,529
89,615,516
46
39
39
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Less than 1
year
US$
Between
1 and 2
years
US$
Between
2 and 5
years
US$
Over 5 years
US$
3,840,760
1,992,615
5,833,375
–
1,992,615
1,992,615
2,071,487
11,645,742
13,717,229
1,273,107
2,849,997
4,123,104
2,650,604
–
2,650,604
–
–
–
–
–
–
–
–
–
Company
2013
Trade and other
payables
Loans and borrowings
2012
Trade and other
payables
Loans and borrowings
(vi) Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue
as a going concern and to maintain a suitable capital structure so as to fund growth and
maximise shareholder value. In order to maintain or achieve an optimal capital structure, the
Group may adjust the amount of dividend payment, return capital to shareholders, issue new
shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.
Management monitors capital based on a gearing ratio. The gearing ratio is calculated as net
debt divided by total capital. Net debt is calculated as borrowings plus trade and other
payables less cash and cash equivalents.
Group
Company
2013
US$
2012
US$
2013
US$
2012
US$
Net debt
Total equity
Total capital
265,003,751 145,586,010 15,976,143
82,174,748 37,429,613
227,760,758 53,405,756
98,236,359
363,240,110
5,525,435
26,384,715
31,910,150
Gearing ratio
73%
64%
30%
17%
The Group and the Company are in compliance with all externally imposed capital requirements
for the financial years ended 30 June 2013 and 30 June 2012.
(vii) Fair value of financial assets and financial liabilities
The fair values of financial assets and financial liabilities reported in the balance sheet
approximate the carrying amount of those assets and liabilities.
40
47
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
7
RELATED PARTY TRANSACTIONS
Related parties are entities with common direct or indirect shareholders and/or directors. Parties are
considered to be related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial and operating decisions.
Some of the Company and Group’s transactions and arrangements are with related parties and the
effect of these on the basis determined between the parties is reflected in these financial statements.
The balances are unsecured, interest-free and without fixed repayment terms.
(a) Compensation of directors and key management personnel
The remuneration of directors and key management’s remuneration includes fees, salary, bonus,
commission and other emoluments (including benefits-in-kind) based on the cost incurred by the
Company and the Group, and where the Company or Group did not incur any costs, the value of the
benefits. The key management’s remuneration is as follows:
Group
Company
2013
US$
2012
US$
2013
US$
2012
US$
Key management of the Group
- Directors’ fee paid to directors of the Company
- Directors’ fee paid to directors of subsidiaries
- Superannuation paid for a director of subsidiaries
- Salaries paid to directors of the Company
81,983
471,045
20,600
306,433
240,211
512,185
40,484
184,915
81,983
–
–
41,643
125,561
–
–
–
The amount above includes remuneration in respect of the highest paid director as follows:
Aggregate emoluments
Group
2013
US$
2012
US$
266,844
249,808
No contributions were made on behalf of any directors to money purchase pension schemes.
48
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(b) Significant related party transactions:
Related Party
Nature of
Relationship
Description of
Transaction
Group
Income/
(Expense)
US$
Company
Income/
(Expense)
US$
Sales of goods
2013
2012
411,403
313,724
Maintenance
rent
Rental income
Service fee
income
Interest income
Interest
expense paid
Sales of goods
Interest income
2013
2012
1,993,142
2,003,097
2013 23,456,496
2012 19,775,453
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
12,510
57,367
526
67,942
–
(4,491)
–
1,477
14,312
19,471
–
–
–
–
–
–
–
–
526
67,942
–
–
–
–
14,312
19,471
Virgin Australia
Regional Airlines
Pty. Ltd. (formerly
known as Skywest
Airlines (Australia)
Pty. Ltd.)
A director of
the Company
was also a
director of
Virgin
Australia
Regional
Airlines Pty.
Ltd.
CaptiveVision
Capital Limited
A director of
the Company
was also a
director of
CaptiveVision
Capital Limited
Takeoff Asset
Management Pte.
Ltd. (formerly known
Takeoff Services
Pte. Ltd.)
F11305 Pte. Ltd.
A director of
the Company
is also a
director of
Takeoff Asset
Management
Pte. Ltd.
A director of
the Company
was also a
director of
F11305 Pte.
Ltd.
Service fee paid
2013
2012
–
(255,421)
–
(255,421)
Sales of goods
2013
2012
–
15,000
–
–
Rental income
2013
2012
314,176
361,503
314,176
361,503
49
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Related Party
Nature of
Relationship
Description of
Transaction
Group
Company
Income/(Expense) Income/(Expense)
US$
US$
Skywest Airlines
(Singapore) Pte. Ltd.
A director of the
Company was
also a director of
Skywest Airlines
(Singapore) Pte.
Ltd.
Sales of goods
2013
2012
Service fee income 2013
2012
1,524
7,369
4,914
119,165
2013
–
Disposed of 100%
interest in Capital
Lease Australian
Portfolio One Pty.
Ltd.
Service fee paid
2012
2013
2012
Consulting fee paid 2013
2012
Expenses rebilled
paid
Interest income
Service fee paid
2013
2012
2013
2012
2013
2012
1,324,871
–
(3,220)
(309,058)
(373,191)
(147,516)
(52,068)
998
767
–
(16,099)
–
(16,099)
Service fee paid
2013
(7,048)
(7,048)
Advance fee paid
Interest expense
paid
Interest expense
paid
2012
2013
2012
2013
2012
2013
2012
(19,306)
(19,306)
–
(76,366)
–
(51,366)
(205,388)
(199,939)
(141,394)
(110,769)
(24,842)
–
–
–
–
–
–
–
–
(3,220)
(231,120)
(30,365)
(35,365)
(25,827)
–
–
–
–
–
–
Giant Mix Investments
Ltd.
Loeb Aron & Company
Ltd.
Fleet Solution Consulting
Pte. Ltd.
An ex-director of
the Company is a
director of Giant
Mix Investments
Ltd.
A director of a
subsidiary
company is a
director of Loeb
Aron & Company
Ltd.
A director of a
subsidiary
company is a
director of Fleet
Solution
Consulting Pte.
Ltd.
Epsom Assets Limited A director of the
Company is also
a director of
Epsom Assets
Limited
Director
Director of a
subsidiary
company
Interest expense
paid
2013
2012
(58,094)
–
50
43
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(c) Significant related party balances:
Related Party
Nature of
Relationship
Description of
Transaction
Group
Amount owed by
related parties/(to
related parties)
US$
Company
Amount owed by
related parties/(to
related parties)
US$
Virgin Australia Regional
Airlines Pty. Ltd. (formerly
known as Skywest
Airlines (Australia) Pty.
Ltd.)
A director of the
Company was
also a director of
Virgin Australia
Regional Airlines
Pty. Ltd.
CaptiveVision Capital
Limited
Capital Lease Australian
Portfolio One Pty. Ltd.
A director of the
Company was
also a director of
CaptiveVision
Capital Limited
A director of the
Company was
also a director of
Capital Lease
Australian
Portfolio One Pty.
Ltd.
Trade Receivables 2013
2012
–
2,829,670
Accrued income
Deferred income
2013
2012
2013
2012
Deposit collected -
non-current
2013
2012
–
161,640
–
(1,377,395)
–
(3,984,140)
–
–
–
–
–
–
–
–
Non-trade
receivables
2013
2012
–
168,393
–
168,393
Non-trade
receivables
2013
2012
–
315
–
315
Takeoff Asset
Management Pte. Ltd.
(formerly known Takeoff
Services Pte. Ltd.)
A director of the
Company is also
a director of
Takeoff Asset
Management Pte.
Ltd.
Interest bearing
loan receivables.
The loan is
unsecured,
repayable upon
demand. Interest is
charged at 5% per
annum.
2013
2012
232,554
331,686
232,554
331,686
F11305 Pte. Ltd.
A director of the
Company was
also a director of
F11305 Pte. Ltd.
Interest receivables 2013
2012
Trade Receivables 2013
2012
Deferred income
Deposit collected -
non-current
2013
2012
2013
2012
34,345
20,036
–
31,373
–
(14,641)
–
(70,741)
34,345
20,036
–
31,373
–
(14,641)
–
(70,741)
51
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Related Party
Nature of
Relationship
Description of
Transaction
Group
Amount owed by
related parties/(to
related parties)
Company
Amount owed
by related
parties/(to
related parties)
US$
–
–
US$
–
4,207,602
–
(456,497)
–
(114,707)
Skywest Airlines
(Singapore) Pte. Ltd.
A director of the
Company was
also a director
of Skywest
Airlines
(Singapore) Pte.
Ltd.
Non-trade
receivables
Non-trade
payables
2013
2012
2013
2012
Skywest Airlines Pte.
Ltd. (formerly known as
Skywest Airlines Ltd)
A director of the
Company was
also a director
of Skywest
Airlines Pte.
Ltd.
Giant Mix Investments
Ltd.
An ex-director
of the Company
is a director of
Giant Mix
Investments
Ltd.
Non-trade
payables
2013
2012
–
(63,707)
–
(643)
Advances
2013
2012
–
30,839
Fleet Solution
Consulting Pte. Ltd.
A director of a
subsidiary
company is a
director of Fleet
Solution
Consulting Pte.
Ltd.
Interest bearing
loan. The loan is
unsecured,
repayable upon
demand. Interest
is charged at
9.75% per
annum.
2013
2012
(1,200,000)
–
2013
2012
(1,000,000)
–
Interest bearing
loan. The loan is
unsecured,
repayable upon
demand. Interest
is charged at
10% per annum.
–
–
–
–
–
–
Interest payables 2013
2012
(17,194)
–
(9,863)
–
2013
2012
(2,000,000)
(2,009,863)
(2,000,000)
(2,009,863)
Interest bearing
loan - non-
current The loan
is unsecured,
repayable by
October 2014.
Interest is
charged at 10%
per annum.
52
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Group
Amount owed by
related
parties/(to
related parties)
US$
Company
Amount owed
by related
parties/(to
related parties)
US$
2013
2012
(3,000,000)
–
Related Party
Nature of
Relationship
Description of
Transaction
Epsom Assets
Limited
A director of
the Company
is also a
director of
Epsom Assets
Limited
Interest bearing
loan. The loan is
unsecured,
repayable upon
demand. Interest
is charged at
9.75% per
annum.
Director
Director of a
subsidiary
company
(12,021)
–
(800,000)
–
Interest payables 2013
2012
2013
2012
Interest bearing
loan. The loan is
unsecured,
repayable upon
demand. Interest
is charged at
9.75% per
annum.
Interest payables 2013
2012
(6,050)
–
–
–
–
–
–
–
–
–
5353
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
(d) Significant transactions and balances between the Company and its subsidiaries:
Subsidiaries
Description of Transaction
US$
Income/(Expense)
Amount owed
by
subsidiaries/(to
subsidiaries)
US$
F100 Pty. Ltd.
Trade receivables
Non-trade receivables
Non-trade payables
Management and service fee
income
MSN 429 Leaseco
Limited.
Non-trade receivables
Sale of aircraft
MSN 429 Limited
Trade receivables
Non-trade receivables
Non-trade payables
Deferred income
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
Deposit collected - non-current 2013
2012
Rental income
Capital Lease Aviation
PLC
Non-trade receivables
Dividend income
Capital Lease Aviation
(S) Pte. Ltd.
Trade payables
2013
2012
2013
2012
2013
2012
2013
2012
–
–
–
–
–
–
455,720
–
–
347,057
(243,785)
–
655,720
316,782
–
–
–
–
695,484
–
6,978,357
–
–
–
–
–
–
–
–
–
–
–
1,250,956
2,230,612
–
–
–
187,000
–
138
(803,033)
–
–
(187,000)
–
(570,000)
–
–
–
–
1,626
428,281
–
428,281
–
–
–
–
(55,258)
(55,055)
54
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Subsidiaries
Description of Transaction
US$
Income/(Expense)
Amount owed
by
subsidiaries/(to
subsidiaries)
US$
Avation.net Inc
Non-trade receivables
Interest bearing loan receivables.
The loan is unsecured, repayable
upon demand. Interest is charged
at 1% per month.
Interest receivables
Non-trade payables
Interest income
Service fee expense
Avation Airframe
Holding Pte. Ltd.
Non-trade receivables
Avation Eastern Fleet
Pte. Ltd.
Non-trade receivables
Non-trade payables
Avation Eastern Fleet II
Pte. Ltd.
Non-trade receivables
Avation Eastern Fleet
III Pte. Ltd.
Non-trade receivables
Avation Eastern Fleet
IV Pte. Ltd.
Non-trade receivables
Airframe Leasing (S)
Pte. Ltd.
Non-trade receivables
Airframe Leasing (S) II
Pte. Ltd.
Non-trade payables
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
–
–
—
—
–
–
–
–
–
–
9,955
1,250
(30,913)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
239,524
106,512
35,000
200,000
35,000
200,000
11,218
1,250
(9,118)
–
–
–
–
–
13,825,510
7,033,657
–
1,063,546
(33,803)
–
675,130
405,053
1,476,862
–
1,115,542
–
4,704
1,572
(695,737)
(398,427)
55
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Subsidiaries
Description of Transaction
US$
Income/(Expense)
Amount owed
by
subsidiaries/(to
subsidiaries)
US$
Airframe Leasing (S) III
Pte. Ltd.
Non-trade receivables
Airframe Leasing (S) IV
Pte. Ltd.
Non-trade receivables
MSN 1922 Pte. Ltd.
Non-trade payables
Deferred income
Rental income
MSN 1607 Pte. Ltd.
Non-trade receivables
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
–
–
–
–
–
–
–
–
423,400
–
–
–
1,666
–
316
–
(326,367)
–
(98,600)
–
–
–
474
–
56
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
8
REVENUE
Rental income
Maintenance rent revenue
Management and service income
Sales of finished goods
9
OTHER INCOME
Interest income
Foreign currency exchange adjustment gain
Software licence repurchase by aircraft manufacturer
Finance income from the discounting of non-current deposits to present
value
Others
10 OTHER OPERATING EXPENSES
Claim on maintenance reserve expense
Depreciation of property, plant and equipment
Impairment loss on property plant and equipment
Loss on disposal of a subsidiary (1)
Foreign currency exchange adjustment loss
Group
2013
US$
2012
US$
39,513,196 31,356,956
2,003,097
325,515
1,315,650
42,739,991 35,001,218
1,993,142
381,409
852,244
Group
2013
US$
2012
US$
28,727
34,079
1,075,420
582,844
125,468
1,846,538
94,470
-
-
21,137
4,472
120,079
Group
2013
US$
2012
US$
1,860,732
1,991,753
11,366,937 10,299,139
1,569,532
627,565
113,930
13,236,614 14,601,919
8,945
-
-
(1) On 28 June 2012, the Company disposed of its 100% interest in Capital Lease Australian
Portfolio One Pty. Ltd. for a cash consideration of US$1,324,871. The carrying amounts of
identifiable net assets disposed of were US$1,952,436 at 28 June 2012, resulting in a loss on
disposal of US$627,565.
11
FINANCE EXPENSES
Interest expense on borrowings
Amortisation of loan premium
Amortisation of deferred lease expense
Group
2013
US$
2012
US$
11,517,628
904,658
570,267
12,992,553
7,478,572
356,827
6,663
7,842,062
50
5757
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
12
STAFF COSTS
Directors’ fee paid to directors of the Company
Directors’ fee paid to directors of the subsidiaries
Wages and salaries
Employer’s contribution
superannuation
superannuation
Warrant expense
to defined contribution plans
including
Group
2013
US$
2012
US$
81,983
471,045
652,613
240,211
512,185
184,915
20,600
-
1,226,241
40,484
103,565
1,081,360
13
PROFIT BEFORE TAXATION
Profit before taxation for the year is stated after charging / (crediting) the following:
2013
US$
2012
US$
1,860,732
1,991,753
11,104,963 10,299,139
-
34,079
41,844
48,691
-
10,651
31,678
44,349
3,564
10,454
Claim on maintenance reserve expense – Group
Depreciation of property, plant and equipment – Group
Foreign currency exchange adjustment gain – Group
Auditors’ remuneration for audit services
- Company
- Subsidiaries
Auditors’ remuneration for non-audit services
- Corporate taxation – Company
- Corporate taxation – Subsidiaries
58
51
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
14
TAXATION
Current tax expense
- United Kingdom
- Overseas
(Over)/Under provision in prior years tax expense
- United Kingdom
- Overseas
Deferred tax expense – United Kingdom
Deferred tax expense – overseas
Under provision in prior years deferred tax expense - overseas
Other tax – overseas – current
Group
2013
US$
2012
US$
42,657
1,405,792
91,873
1,321,033
-
4,699
25,575
524,903
-
1,058
2,004,684
2,088
(9,725)
10,942
263,297
12,180
18,392
1,710,080
The standard rate of current tax for the period based on the Singapore standard rate of corporation
tax is 17% (2012: 17%). The current tax expense for the period is less than 17% (2012: 17%) for the
reasons set out in the following reconciliation:
Profit before income tax
Tax calculated at tax rate of 17% (2012: 17%)
Effects of:
Under provision in prior years tax expense – Overseas
Non-taxable items
Capital allowances and other temporary differences
Different tax rates of other countries
Adjustment to tax charge in respect of previous periods
Total income tax expense
Group
2013
US$
2012
US$
13,969,677
2,374,845
8,073,614
1,372,514
5,517
151,862
(1,462,506)
383,430
-
1,453,148
-
(139,999)
(829,062)
1,009,453
(7,637)
1,405,269
52
5959
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
15
EARNINGS PER SHARE
(a)
Basic earnings per share (“EPS”)
EPS is calculated by dividing the net profit attributable to members of the
Company by the weighted average number of ordinary shares in issue during
the financial year.
Group
2013
US$
2012
US$
Net profit attributable to equity holders of the Company
10,515,901
5,009,457
Weighted average number of ordinary shares
45,236,493 40,515,436
Basic earnings per share
23.25 cents 12.36 cents
(b)
Diluted earnings per share
For the purpose of calculating diluted earnings per share, profit attributable to equity
holders of the Company and the weighted average number of ordinary shares
outstanding are adjusted for the effects of all dilutive potential ordinary shares. The
Company has one category of dilutive potential ordinary shares; warrants.
For warrants, the weighted average number of shares on issue has been adjusted as
if all dilutive share options were exercised. The number of shares that could have
been issued upon the exercise of all dilutive share option less the number of shares
that could have been issued at fair value (determined as the Company’s average
share price for the financial year) for the same total proceeds is added to the
denominator as the number of shares issued for no consideration. None of the
warrants in existence are dilutive as their exercise price is greater that the weighted
average share price. No adjustment is made to the net profit.
Diluted earnings per share attributable to equity holders of the Company is
calculated as follows:
Group
2013
US$
2012
US$
Net profit attributable to equity holders of the Company
10,515,901
5,009,457
Weighted average number of ordinary shares
Adjustment for:
- Warrants
Weighted average number of ordinary shares
45,236,493 40,515,436
165,337
45,236,493 40,680,773
-
Diluted earnings per share
23.25 cents 12.31 cents
60
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
16
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Trade receivables - subsidiaries
(See Note 7d)
Trade receivables – related party
(See Note 7c)
Non-trade receivables
Non-trade receivables -subsidiaries
(See Note 7d)
Non-trade receivables – related
parties (See Note 7c)
Interest bearing loan receivable -
subsidiaries (See Note 7d)
Interest receivable – subsidiaries
(See Note 7d)
Interest bearing loan receivable –
related party (See Note 7c)
Interest receivable – related party
(See Note 7c)
Prepaid expense
Advances – related party (See
Note 7c)
Accrued income
Accrued income – related party
(See Note 7c)
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
4,534,250
623,898
195,965
–
–
–
455,720
187,000
–
99,743
2,861,043
27,414
–
35,343
31,373
15,698
–
–
–
–
– 18,036,838
9,385,816
4,376,310
–
168,708
–
–
35,000
200,000
11,218
1,250
232,554
331,686
232,554
331,686
34,345
1,288,586
–
148,431
20,036
588,299
30,839
–
–
6,337,909
161,640
9,021,165
–
19,096,712
34,345
59,729
20,036
14,598
–
–
–
–
–
10,356,165
Non-current
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
Deposit for aircraft
9,300,261
8,437,828
9,264,244
8,437,828
The amounts due from subsidiaries and related parties are unsecured, interest-free and payable on
demand unless otherwise stated.
The average credit period generally granted to non-related trade receivables customers is 30 to 60
days. In respect to leased aircraft, rent is due in advance in accordance with the leases.
54
61
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
The trade and other receivables are denominated in the following currencies:
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
Pounds Sterling
United States dollars
Australian dollars
Euro
Singapore dollars
35,027
15,394,983
18,630
6,735
182,795
15,638,170
385,611
377,537
838,120
16,927,409 27,368,533 18,321,392
5,795
80,878
8,391
17,458,993 28,360,956 18,793,993
5,795
81,466
58,712
4,573
88,767
60,963
17
PREPAYMENTS
Prepayments represent loan premiums on amounts due to outside parties and are
amortised over 10 years.
18
INVENTORIES
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
Finished goods, at cost
438
14,316
–
–
The cost of inventories recognised as an expense and included in the cost of sales amounts
to US$822,887 (2012: US$1,129,526).
19
INVESTMENT IN SUBSIDIARIES
Unquoted equity shares, at cost
Quoted equity shares, at cost
Company
2013
US$
2012
US$
2,505,319
2,734,373
5,239,692
2,505,157
2,734,373
5,239,530
Quoted equity shares, at market value
15,828,404
16,015,998
In the opinion of management, no impairment in the value of the investment in subsidiaries
is necessary.
62
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Details of the subsidiaries are as follows:
Name of Company
Principal
activities
Country of
Incorporation/
operations
The subsidiaries held directly by the Company:
Company’s
cost of investment
2012
2013
US$
US$
Group’s effective
equity interest
2013
%
2012
%
Avation.net Inc (a)
Procurement United States
2,505,066
2,505,066
99.96
99.96
of America
Capital Lease Aviation
PLC (b)
Leasing of
aircraft
United Kingdom
2,734,373
2,734,373
62.07
62.07
F100 Pty. Ltd. (c)
MSN 429 Limited (b)
Leasing of
aircraft
Leasing of
aircraft
Australia
United Kingdom
Avation Eastern Fleet
Pte. Ltd. (e)
Leasing of
aircraft
Singapore
Avation Eastern Fleet
II Pte. Ltd. (a)
Leasing of
aircraft
Singapore
Avation Airframe
Holding Pte. Ltd. (e)
Leasing of
aircraft
Singapore
Avation Eastern Fleet
III Pte. Ltd. (e)
Leasing of
aircraft
Singapore
Avation Eastern Fleet
IV Pte. Ltd. (e)
Leasing of
aircraft
Singapore
MSN 1922 Pte. Ltd.
(e)
Leasing of
aircraft
Singapore
MSN 429 Leaseco
Limited (b)
Leasing of
aircraft
United Kingdom/
Singapore
F100 Fleet Pte. Ltd.
(f)
Leasing of
aircraft
Singapore
10
(g)
78
1
-
1
1
1
160
1
10
100.00
100.00
2
(g)
100.00
78
100.00
100.00
1
100.00
100.00
-
-
-
-
-
-
-
-
100.00
100.00
100.00
100.00
100.00
-
-
-
-
-
56
63
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Name of
Company
Principal
activities
Country of
Incorporation/
operations
Company’s
cost of investment
2013
US$
2012
US$
Group’s effective
equity interest
2012
2013
%
%
The subsidiaries held by Capital Lease Aviation PLC:
Capital Lease
Malta Ltd (d)
Leasing of
aircraft
Malta
–
–
62.07
62.07
Capital Lease (S)
Pte. Ltd. (a)
Leasing of
aircraft
MSN 1607 Pte. Ltd.
(f)
Leasing of
aircraft
Singapore
–
–
62.07
62.07
Singapore
–
–
62.07
--
The subsidiary held by Avation Eastern Fleet Pte. Ltd.:
Airframe Leasing
(S) Pte. Ltd. (e)
Leasing of
aircraft
Singapore
–
–
100.00
100.00
The subsidiary held by Avation Eastern Fleet II Pte. Ltd.:
Airframe Leasing
(S) II Pte. Ltd. (a)
Leasing of
aircraft
Singapore
–
–
100.00
100.00
The subsidiary held by Avation Eastern Fleet III Pte. Ltd.:
Airframe Leasing
(S) III Pte. Ltd. (e)
Leasing of
aircraft
Singapore
–
–
100.00
The subsidiary held by Avation Eastern Fleet IV Pte. Ltd.:
Airframe Leasing
(S) IV Pte. Ltd. (e)
Leasing of
aircraft
Singapore
–
–
100.00
--
--
The subsidiary held by MSN 429 Leaseco Limited:
MSN 429 Limited
(b)
Leasing of
aircraft
United Kingdom
–
(g)
100.00
--
The subsidiary held by F100 Fleet Pte. Ltd.:
F100 Leasing Pte.
Ltd. (f)
Leasing of
aircraft
Singapore
–
–
100.00
--
(a) Audited by Jasmine Chua and Associates, Singapore
(b) Audited by Kingston Smith LLP, London, United Kingdom
(c) Audited by Moore Stephens, Perth, Australia
(d) Audited by Nexia BT, Malta
(e) Audited by Ernst & Young LLP, Singapore
(f) Audited by Kingston Smith LLP, London, United Kingdom for consolidation purposes
(g) MSN 429 Limited was held directly by Avation PLC in 2012 and the shareholding was
transferred to MSN 429 Leaseco Limited in 2013.
64
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
20
PROPERTY, PLANT AND EQUIPMENT
Group
2013
Cost or valuation:
At beginning of year
Additions
Revaluation surplus
At end of year
Representing:
Cost
Valuation
Accumulated depreciation:
At beginning of year
Depreciation for the year
Increase in revaluation
Impairment loss
At end of year
Net book value:
At beginning of year
At end of year
Furniture and
equipment
US$
14,922
5,198
-
20,120
20,120
-
20,120
7,529
4,882
-
-
12,411
Aircraft
US$
243,234,348
147,781,846
3,595,484
394,611,678
Total
US$
243,249,270
147,787,044
3,595,484
394,631,798
217,015,882
177,595,796
394,611,678
217,036,002
177,595,796
394,631,798
29,379,438
11,362,055
(26,646)
6,704,151
47,418,998
29,386,967
11,366,937
(26,646)
6,704,151
47,431,409
7,393
7,709
213,854,910
347,192,680
213,862,303
347,200,389
65
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Group
2012
Cost or valuation:
At beginning of year
Additions
Disposal of subsidiary
At end of year
Representing:
Cost
Valuation
Accumulated depreciation:
At beginning of year
Depreciation for the year
Impairment loss
Disposal of subsidiary
At end of year
Net book value:
At beginning of year
At end of year
Company
2013
Cost or valuation:
At beginning of year
Additions
Disposal
Revaluation surplus
At end of year
Representing:
Cost
Valuation
Accumulated depreciation:
At beginning of year
Depreciation for the year
Disposal
Increase in revaluation surplus
At end of year
Net book value:
At beginning of year
At end of year
Furniture and
equipment
US$
12,076
2,846
–
14,922
14,922
–
14,922
3,557
3,972
–
–
7,529
Aircraft
US$
Total
US$
156,671,886
108,274,256
(21,711,794)
243,234,348
156,683,962
108,277,102
(21,711,794)
243,249,270
108,274,256
134,960,092
243,234,348
108,289,178
134,960,092
243,249,270
21,058,920
10,295,167
8,792,880
(10,767,529)
29,379,438
21,062,477
10,299,139
8,792,880
(10,767,529)
29,386,967
8,519
7,393
135,612,966
213,854,910
135,621,485
213,862,303
Furniture and
equipment
US$
1,886
1,953
-
-
3,839
3,839
-
3,839
419
1,280
-
-
1,699
1,467
2,140
Aircraft
US$
Total
US$
9,077,560
16,560,816
(7,999,120)
2,812,938
20,452,194
9,079,446
16,562,769
(7,999,120)
2,812,938
20,456,033
-
20,452,194
20,452,194
3,839
20,452,194
20,456,033
887,357
442,745
(1,020,763)
(26,646)
282,693
887,776
444,025
(1,020,763)
(26,646)
284,392
8,190,203
20,169,501
8,191,670
20,171,641
66
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Company
2012
Cost or valuation:
At beginning of year
Additions
At end of year
Representing:
Cost
Valuation
Accumulated depreciation:
At beginning of year
Depreciation for the year
At end of year
Net book value:
At beginning of year
At end of year
Assets held on trust
Furniture and
equipment
US$
–
1,886
1,886
1,886
–
1,886
–
419
419
Aircraft
US$
9,077,560
–
9,077,560
Total
US$
9,077,560
1,886
9,079,446
–
9,077,560
9,077,560
1,886
9,077,560
9,079,446
434,140
453,217
887,357
434,140
453,636
887,776
–
1,467
8,643,420
8,190,203
8,643,420
8,191,670
On 25 March 2008, the subsidiary, Capital Lease Aviation PLC acquired the right, title and
interest in the aircraft held on trust by Wilmington Trust Company (“Wilmington”), a US
trust company. As the aircraft is registered in the US, legal title to the aircraft is held by
Wilmington and Capital Lease Aviation PLC is the beneficial owner. The aircraft is leased
by Wilmington to a US airline.
Assets held under finance lease
During the financial year, the Group acquired aircraft with an aggregated cost of
US$16,560,816 (2012: US$37,000,000) and the Company acquired aircraft with an
aggregated cost of US$16,560,816 (2012: US$Nil) by means of finance leases
respectively.
The carrying amount of aircraft held under finance leases at the end of the reporting
period was US$54,768,779 (2012: US$43,664,897).
Assets pledged as security
In addition to assets held under finance leases, the Group’s aircraft with carrying values
of US$ 261,655,019 (2012: US$170,972,560) are mortgaged to secure the Group’s
borrowings (Note 24).
The Group’s property, plant and equipment include borrowing costs from bank loans
specifically used for purchase of aircraft. During the financial year, the borrowing costs
capitalised as cost of property, plant and equipment amount to US$210,000 (2012: US$Nil).
The Group’s older aircraft were revalued either at January 2013 or June 2013 by
independent valuers, on the basis of lease encumbered value and the carrying value of the
aircraft is reduced to its recoverable value. Impairment losses were recognised as an
expense immediately.
67
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
If the aircraft were measured using the cost model, the carrying amounts would be as
follows:
Cost
Accumulated depreciation
Net carrying value
21 GOODWILL ON CONSOLIDATION
Cost:
Balance at beginning and at end of year
Impairment test of goodwill
Group
2013
US$
2012
US$
374,204,306
(35,200,649)
339,003,657
226,422,460
(22,219,075)
204,203,385
Group
2013
US$
2012
US$
2,384,008
2,384,008
Goodwill is allocated to the cash generating unit ("CGU") Avation.net Inc which is in the
procurement business.
The recoverable amount of Avation.net Inc has been determined based on a value-in-use
calculation using cash flow projections from financial budgets approved by management
covering the next financial year.
Management believes that no reasonably possible change in any of the above key
assumptions would cause the carrying value of the CGU to materially exceed its
recoverable amount.
68
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
22
TRADE AND OTHER PAYABLES
Current
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
Trade payables
Trade payables – subsidiaries (See
Note 7d)
Non-trade payables
Non-trade payables - subsidiaries (See
Note 7d)
Non-trade payables - related parties
(See Note 7c)
Interest bearing loan – related parties
(See Note 7c)
Interest payable – related parties (See
Note 7c)
Deferred income
Deferred income – subsidiaries (See
Note 7d)
Deferred income – related parties (See
Note 7c)
Accrued expenses
1,532,786
660,252
1,467,964
444,484
–
334,138
–
487,326
55,258
–
55,055
–
–
–
6,000,000
35,265
3,426,841
–
2,111,843
398,427
520,204
–
–
750,000
–
–
9,863
14,641
115,350
–
–
–
–
–
98,600
187,000
–
759,772
12,088,802
1,392,036
1,263,439
5,073,257
–
82,591
3,840,760
14,641
58,150
1,273,107
Non-current
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
Deposits collected
Deposit collected – subsidiary (See
Note 7d)
Deposit collected - related party (See
Note 7c)
Interest bearing loan – related party
(See Note 7c)
7,088,610
–
–
–
–
4,054,881
71,487
–
–
–
570,000
70,741
2,000,000
9,088,610
2,009,863
6,064,744
2,000,000
2,071,487
2,009,863
2,650,604
The amount due to subsidiaries and related parties are unsecured, interest free and without fixed
repayment terms unless otherwise stated.
The average credit period taken to settle non-related party trade payables is approximately 60 days.
The deposits collected were from customers in respect of aircraft lease commitments, and have been
discounted to their present value at a current pre-tax rate that reflect the risks specific to these
deposits. These deposits will be refunded at the end of the lease terms.
62
69
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
The trade and other payables are denominated in the following currencies:
Pound sterling
United states dollars
Australian dollars
Euro
Singapore dollars
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
45,263
20,992,115
47,768
9,322
82,944
21,177,412
189,114
10,222,396
11,279
8,194
707,018
11,138,001
109,159
5,637,524
25,750
43,125
96,689
5,912,247
112,582
3,626,172
6,734
2,177
176,046
3,923,711
23 DEFERRED LEASE INCOME
The deferred lease income is the difference between the present value and the principal
amount of the deposits received from a customer. The deferred lease income is amortised
through the statement of comprehensive income on a straight line basis over the lease
term.
70
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
24
LOAN AND BORROWINGS
Secured borrowing I
Secured borrowing II
Secured borrowing III
Secured borrowings IV
Secured borrowings V
Secured borrowings VI
Secured borrowings VII
Secured borrowings VIII
Junior Secured borrowings VIII
Secured borrowings IX
Junior Secured borrowings IX
Secured borrowings X
Junior Secured borrowings X
Secured borrowings XI
Junior Secured borrowings XI
Secured borrowings XII
Junior Secured borrowings XII
Secured borrowings XIII
Junior Secured borrowings XIII
Secured borrowings XIV
Junior Secured borrowings XIV
Secured borrowings XV
Junior Secured borrowings XV
Secured borrowings XVI
Junior Secured borrowings XVI
Secured borrowings XVII
Junior Secured borrowings XVII
Secured borrowings XVIII
Secured borrowings XIX
Obligations under finance lease
Total
Less: current portion of
loan borrowings
Maturity
Group
Company
2013
US$
2012
US$
2013
US$
2012
US$
2013
2012
2013
2013
2015
2015
2013
2021
2021
2021
2021
2021
2021
2021
2021
2022
2022
2022
2022
2022
2022
2022
2022
2023
2023
2023
2023
2014
2018
–
–
61,994
–
13,413,580
14,265,625
199,488
13,992,973
1,452,374
13,971,988
1,466,544
14,465,556
1,485,223
14,375,678
1,461,781
16,113,572
1,389,385
16,059,469
1,381,587
16,461,482
1,383,914
16,370,627
1,373,429
14,719,145
1,311,076
15,090,579
1,331,522
6,000,000
17,000,000
46,850,992
263,449,583
1,067,487
292,627
779,136
2,518,182
15,820,988
16,703,125
1,351,040
15,341,083
1,348,056
15,318,230
1,363,111
15,834,975
1,382,958
15,736,579
1,360,177
–
–
–
–
–
–
–
–
–
–
–
–
–
–
37,324,725
143,542,479
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,470,218
13,470,218
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,784,029
2,784,029
(24,243,718)
239,205,865
(19,553,681)
123,988,798
(1,415,411)
12,054,807
(2,108,683)
675,346
64
71
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Obligations under finance lease
Future minimum lease payments
due:
Within one year
After more than one year but
within 5 years
More than 5 years
Less: Finance charges
Present value of minimum lease
payments
The present value of minimum
lease payments is analysed as
follows:
Within one year
After more than one year but
within 5 years
More than 5 years
Balance at end of year
Group
2013
US$
2012
US$
Company
2013
US$
2012
US$
6,468,612
6,675,996
1,992,612
2,199,996
31,542,346
33,001,700
71,012,658
(24,161,666
)
46,850,992
18,585,528
37,477,700
62,739,224
(25,414,499)
13,638,346
–
15,630,958
(2,160,740)
681,528
–
2,881,524
(97,495)
37,324,725
13,470,218
2,784,029
2,694,958
3,268,605
1,415,411
2,108,683
18,635,952
25,520,082
46,850,992
6,716,586
27,339,534
37,324,725
12,054,807
–
13,470,218
675,346
–
2,784,029
72
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
1) Secured borrowing I is secured by fixed and floating charges over all aircraft
purchased by its subsidiary, F100 Pty. Ltd. (“F100”). The borrowing has been repaid
during the year.
2) Secured borrowing II is secured by fixed and floating charges over all aircraft
purchased by its subsidiary, F100 Pty. Ltd. The borrowing has been repaid during
the year.
3) Secured borrowing III is secured by fixed and floating charges over all aircraft
purchased by its subsidiary, F100 Pty. Ltd.
4) Secured borrowing IV is secured by the aircraft of its subsidiary, Capital Lease
Aviation PLC (“CLA”) and a charge over CLA’s bank account into which lease
payments relating to the aircraft are received. The borrowing has been repaid during
the year.
5) Secured borrowing V is secured by the aircraft of its subsidiary, Capital Lease Malta
Ltd (“CLM”), a charge over the shares in CLM and a charge over CLM’s bank
accounts into which lease payments relating to the aircraft are received.
6) Secured borrowing VI is secured by the aircraft of its subsidiary, CLM, a charge over
the shares in CLM and a charge over the shares in CLM and a charge over CLM’s
bank accounts into which lease payments relating to the aircraft are received.
7) Secured borrowing VII is secured by fixed and floating charges over all aircraft
purchased by its subsidiary, F100 Pty. Ltd.
8) Secured borrowing VIII – XV, the Group entered into Type A loan facilities with an
institution to partially finance the purchase of aircraft. The loans are secured by the
following:
(a) Aircraft mortgages in respect of the aircraft purchased with the proceeds of Type
A loan Loan Facilities (the “Aircraft”)
(b) Security assignments of the Group’s right under the leases and other contractual
documents relating to the Aircraft
(c) A charge over the bank accounts into which lease payments relating to the
Aircraft are received;
(d) A charge over the entire issued share capital of Avation Eastern Fleet Pte. Ltd. (a
subsidiary)
Each advance under a Type A Loan Facility is a separate 10 year loan whose term
matches the term of the lease of the Aircraft purchased with the proceeds of such
loan. The security given by the Group in respect of each such loan is for a term also
matching the term of the loan and lease of the corresponding Aircraft.
The Group may not deal with any Aircraft nor the associated assets and rights
relating to each such Aircraft without the consent of the institution under the Type A
Loan Facility, save to the extent that such transaction would enable the Group to
repay the loan relating to the Aircraft.
The above charges also apply to junior secured borrowing VIII – XV but such lenders’
rights under the security are sub-ordinated to and rank behind those of the lender
under the Type A Loan Facility.
73
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
1) Secured borrowing XVI, the Group entered into Type B Loan Facilities with a
financial institution to partially finance the purchase of aircraft. The loans are
secured by the following:
(a) Aircraft mortgages in respect of the aircraft purchased with the proceeds of
Type B Loan Facilities (the “Aircraft”)
(b) Security assignments of the Group’s right under the leases and other
contractual documents relating to the Aircraft
(c) A charge over its bank accounts into which lease payments relating to the
Aircraft are received;
(d) A charge over the entire issued share capital of Airframe Leasing (S) III Pte.
Ltd. (a subsidiary)
Each advance under the Type B Loan Facility is a separate 10 year loan whose
term matches the term of the lease of the Aircraft purchased with the proceeds of
such loan. The security given by the Group in respect of each such loan is for a
term also matching the term of the loan and lease of the corresponding Aircraft.
The Group may not deal with any Aircraft nor the associated assets and rights
relating to each such Aircraft without the consent of the financial institution under
the Type B Loan Facility, save to the extent that such transaction would enable the
Group to repay the loan relating to the Aircraft.
The above charges also the junior secured borrowing XVI but such lenders’ rights
under the security are sub-ordinated to and rank behind those of the lender under
the Type B Loan Facility.
10) The Group entered into Type C Loan Facilities with an institution to partially finance
the purchase of aircraft. Secured borrowing XVII is secured by the following:
(a) Aircraft mortgages in respect of the aircraft purchased with the proceeds of
Type C Loan Facilities (the “Aircraft”)
(b) Security assignments of the Group’s right under the leases and other
contractual documents relating to the Aircraft
(c) A charge over its bank accounts into which lease payments relating to the
Aircraft are received;
(d) A charge over the entire issued share capital of Airframe Leasing (S) IV Pte.
Ltd. (a subsidiary)
Each advance under the Type C Loan Facility is a separate 10 year loan whose
term matches the term of the lease of the Aircraft purchased with the proceeds of
such loan. The security given by the Group in respect of each such loan is for a
term also matching the term of the loan and lease of the corresponding Aircraft.
The Group may not deal with any Aircraft nor the associated assets and rights
relating to each such Aircraft without the consent of the institution under the Type C
Loan Facility, save to the extent that such transaction would enable the Group to
repay the loan relating to the Aircraft.
The above charges also apply to junior secured borrowing XVII but such lenders’
rights under the security are sub-ordinated to and rank behind those of the lender
under the Type C Loan Facility.
11) Secured borrowing XVIII is secured by a first priority mortgage on the aircraft of its
subsidiary, MSN 429 Leaseco Limited, security assignments of the subsidiary’s
rights under the leases and other contractual documents relating to the aircraft.
74
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
12) Secured borrowing XIX is secured by a first ranking mortgage on the aircraft of its
subsidiary, MSN 1607 Pte. Ltd., security assignments in favour of the lender of the
subsidiary’ rights under the leases and other contractual documents relating to the
aircraft and a charge over its bank accounts into which lease payments relating to
the Aircraft are received.
The average interest rates for the outside party borrowings range from 3.24% to 8.25% per
annum (2012: 4% to 9.90% per annum).
All the loans are denominated in United States Dollars. The carrying amounts of the
borrowings approximate their fair values.
25
SHORT-TERM PROVISIONS
Group
2013
US$
2012
US$
Maintenance reserve claim
3,757,081
2,969,169
Group
2013
US$
2012
US$
Movement in provision for maintenance provisions claim is as follows:
Balance at beginning of financial year
Provision made during the financial year
Provision used during the financial year
Disposal of a subsidiary
Balance at end of financial year
2,969,169
1,860,732
(1,072,820)
–
3,757,081
4,564,855
2,976,564
(2,019,646)
(2,552,604)
2,969,169
A provision of US$1,860,732 (2012: US$2,976,564) was made during the year ended 30
June 2013. This provision is based on maintaining a sufficient balance to match expected
drawdowns of reserves over the lease period of the aircraft.
There were drawdowns totalling US$1,072,820 (2012: US$2,019,646) on the reserves for
the year ended 30 June 2013.
75
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
26 DEFERRED TAX LIABILITIES
Recognised deferred tax assets and liabilities are attributable to the following:
Group
Property, plant and equipment
Other items
Tax losses carried forward
Tax (assets)/ liabilities
Set off tax
Net tax (assets)/ liabilities
Property, plant and equipment
Other items
Tax losses carried forward
Tax assets
Set off tax
Net tax (assets)/ liabilities
Assets
2013
US$
Liabilities
2013
US$
Assets
2012
US$
–
–
–
–
–
–
–
–
–
–
–
–
5,197,011
(9,094)
–
5,187,917
–
5,187,917
Liabilities
2012
US$
5,268,872
644,964
29,364
5,943,200
–
5,943,200
Net
2013
US$
5,197,011
(9,094)
–
5,187,917
–
5,187,917
Net
2012
US$
5,268,872
644,964
29,364
5,943,200
–
5,943,200
Movement in temporary differences during the financial year:
Group
Balance
1 July
2012
US$
Recognised
in profit
and loss
US$
Recognised
in equity
US$
Balance
30 June
2013
US$
Property, plant and equipment
Other items
Tax losses carried forward
5,268,872
644,964
29,364
5,943,200
1,220,582
(654,058)
(29,364)
537,160
(1,292,443)
–
–
(1,292,443)
5,197,011
(9,094)
–
5,187,917
Movement in temporary differences during the last financial year:
Group
Balance
1 July
2011
US$
Recognised
in profit
and loss
US$
Recognised
in equity
US$
Balance
30 June
2012
US$
Property, plant and equipment 5,562,765
1,080,785
Other items
(152,091)
Tax losses carried forward
6,491,459
134,648
(435,821)
181,455
(119,718)
(428,541)
–
–
(428,541)
5,268,872
644,964
29,364
5,943,200
76
69
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Recognised deferred tax assets and liabilities are attributable to the following:
Company
Property, plant and equipment
Other items
Tax losses carried forward
Tax assets
Set off tax
Net tax (assets)/ liabilities
Property, plant and equipment
Other items
Tax losses carried forward
Tax assets
Set off tax
Net tax (assets)/ liabilities
Assets
2013
US$
Liabilities
2013
US$
Net
2013
US$
Assets
2012
US$
–
–
–
–
–
–
–
–
–
–
–
–
366,533
366,533
–
–
–
–
366,533
366,533
–
–
366,533
366,533
Liabilities
2012
US$
Net
2012
US$
315,043
315,043
–
–
–
–
315,043
315,043
–
–
315,043
315,043
Movement in temporary differences during the financial year:
Company
Balance
1 July 2012
US$
Recognised
in profit and
loss
US$
Recognised
in equity
US$
Balance
30 June 2013
US$
Property, plant and equipment
315,043
51,490
--
366,533
Movement in temporary differences during the last financial year:
Company
Balance
1 July 2011
US$
Recognised
in profit and
loss
US$
Recognised
in equity
US$
Balance
30 June 2012
US$
Property, plant and equipment
221,592
93,451
–
315,043
70
77
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
27
SHARE CAPITAL AND TREASURY SHARES
a)
Share capital
Allotted, called up and fully paid
ordinary shares of 1 penny each:
At 1 July
Issue of shares
At 30 June
2013
2012
No of
shares
US$
No of
shares
US$
42,374,463
6,448,497
48,822,960
779,618 38,607,220
3,767,243
878,137 42,374,463
98,519
720,917
58,701
779,618
The holders of ordinary shares (except for treasury shares) are entitled to receive dividends as and
when declared by the Company. All ordinary shares carry one vote per share without restrictions.
a) On 5 July 2012, the Company issued 2,000,000 ordinary shares of 1 penny each at 100 pence
following a private placement exercise raising gross proceeds of US$3,129,200.
b) On 21 February 2013, the Company issued 60,510 ordinary shares of 1 penny each at 67.50
pence following the exercise of warrants by a warrant holder raising gross proceeds of
US$62,769.
c) On 11 March 2013, the Company issued 50,000 ordinary shares of 1 penny each at 67.50
pence following the exercise of warrants by a warrant holder raising gross proceeds of
US$50,335.
d) On 24 May 2013, the company issued 4,337,987 ordinary share of 1 penny each at 60 pence
following an open offer raising gross proceeds of US$3,933,079.
b)
Treasury shares
2013
2012
No of
treasury
shares
No of
treasury
shares
US$
US$
At 1 July
Acquired during the year
At 30 June
–
150,000
150,000
–
214,498
214,498
–
–
–
–
–
–
On 9 January 2013, the Company acquired 150,000 of its shares at a price of 88 pence per
ordinary share representing approximately 0.34% of the Company’s issued ordinary share capital at
that time. The total amount paid to acquire the shares was US$214,498 and this was presented as
a component within shareholders’ equity.
78
71
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
28
SHARE-BASED PAYMENTS
Share options and warrants
The Group has an ownership-based compensation scheme for directors and senior management of
the Group.
Each share warrant converts into one ordinary share of Avation PLC on exercise. No amounts are
paid or are payable by the recipient on receipt of the warrant. The warrants carry neither rights to
dividends nor voting rights. Warrants may be exercised at any time from the date of vesting to the
date of their expiry.
Warrants are granted to the directors and senior management of the Group to gain:
•
•
•
Improvement in share price
Improvement in net profit
Improvement in return to shareholders
The following share-based payment arrangements were in existence during the current reporting
period:
Warrant series
signed on
Balance at Granted Exercised
during
beginning
the year
of year
during
the year
Expired/
Cancelled
Balance at
end of
year
Expiry
date
Exercise
price
Fair value
at grant
date
(1) 02 Dec 2010
(2) 14 Dec 2011
475,000 –
–
800,000
(110,510)
–
(364,490)
–
– 1 Dec 2012
67.5 p
800,000 11 Dec 2013 110.5 p
13.63 p
8.17 p
The weighted average fair value of the warrants granted during the last financial year was 8.17
pence. The value of the warrants granted during the last financial year was US$103,565.
The warrants were priced using the Binomial option pricing model. Where relevant, the expected
life used in the model has been adjusted based on the management’s best estimate for the
effects of non-transferability, exercise restrictions (including the probability of meeting market
conditions attached to the option), and behavioural considerations. Expected volatility is based on
the historical share price volatility over the past four months.
Inputs into the model
Grant date share price
Exercise price
Expected volatility
Warrant life
Dividend yield
Risk free interest rate
Warrant series signed on
14 December 2011
110.5 pence
110.5 pence
20%
2 years
0.91%
0.35%
The Company issued a total of 800,000 warrants during the last financial year at 110.5 pence
when the then market price was 110.5 pence.
72
79
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
29
CAPITAL COMMITMENTS
Capital expenditure contracted for at the balance sheet date but not recognised in the
financial statements are as follows:
Group
2013
US$
2012
US$
Property, plant and equipment
175,229,908
155,231,420
The above capital commitments represent amounts due under contracts entered into by
the group to purchase aircraft after exercising options. The company has paid deposits
towards the cost of these aircraft which are included in trade and other receivables.
In addition to the aircraft which the group has committed to purchasing, the group holds
options to purchase an additional 10 aircraft at agreed prices. The options are held in
the balance sheet at cost as it is not possible to place a reliable estimate on their fair
values. Uncertainties exist over the finance to exercise the options and the market price
of the aircraft at the time of delivery, given aircraft are non-financial assets with no
indexed market and long lead times. There is no open market on which to trade the
options and the Group has no history of exercising options and selling the asset shortly
after, accordingly it is not considered appropriate to recognise any potential gain on
these options arising from potential increases in aircraft values over and above the
option price.
30 OPERATING LEASES
a)
Leases as Lessor
The Group and the Company lease out their aircraft held under operating leases. The future
minimum lease payments under non-cancellable leases are as follows:
Group
2013
US$
2012
US$
Within one year
In the second to fifth years inclusive
More than five years
46,841,352
138,519,513
114,490,041
29,523,884
71,577,536
58,099,805
80
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
b)
Contingencies
The Company’s subsidiary, F100 Pty. Ltd. receives maintenance rent from the lease
of its aircraft in addition to the base rent. Lessees may be entitled to be reimbursed
for specific long term maintenance items (“maintenance rent activities”) that they may
incur during the term of the lease. The lessees must not be in default of the lease and
must satisfy certain conditions before they can claim. Furthermore, the lessees must
provide invoices and supporting documentation as satisfactory evidence to F100 Pty.
Ltd. that the maintenance rent activity has been carried out necessarily.
The amount of the claim for any one maintenance rent activity is limited to the total
amount of the maintenance rent received for that specific maintenance rent activity to
date under the lease for that aircraft.
The carrying out of each specific maintenance activity is dependent on the number of
cycles and flying hours conducted by the aircraft.
Consequently, F100 Pty. Ltd. have a contingent liability which is conditional on the
volume of cycles and flying hours of the aircraft, upon the actual cost of maintenance
rent activity, the lessee making a valid claim with the required documents in the
required time frame, and there being an unclaimed balance against the specific
maintenance rent activity for that aircraft.
Any unclaimed balance that F100 Pty. Ltd. holds at the end of the lease is not
refundable to the lessees.
During the financial year ended 30 June 2013, the Group had received US$1,993,142
(2012: US$2,003,097) in maintenance rent.
to manufacturers’
The future claims against the maintenance reserves funds can be estimated
according
typical aircraft usage.
Unforeseen events may occur however, which creates some uncertainty for the
Group in calculating the final future claimable amount and the timing of such claims
from the maintenance reserve funds.
recommendations and
The Company’s subsidiary, MSN 1607 Pte. Ltd. has acquired an aircraft during the year
together with a contingent liability to pay amounts to the lessee dependent upon the
return condition of the aircraft at the end of the lease term. It would only become
payable by the subsidiary to the lessee in the event that the aircraft is returned at lease-
end/redelivery at the end of the lease in April 2018 in a full life condition. Management
is of the view that the return condition of the aircraft will be at half life condition. A
reliable estimate of the future payment obligation at half life condition cannot be made
and hence a provision not made.
81
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
31
SEGMENT INFORMATION
a)
Segment reporting policy
A segment is a distinguishable component of the Group within a particular economic
environment (geographical segment) and to a particular industry (business segment) which
is subject to risks and rewards that are different from those of other segments.
The primary format, business segments, is based on the Group’s management and internal
reporting structure. In presenting information on the basis of business segments, segment
revenue and segment assets are based on the nature of the products or services provided
by the Group, information for geographical segments is based on the geographical areas
where the customers are located.
Inter-segment pricing is determined on an arm’s length basis. Segment results, assets and
liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly of corporate assets
and liabilities or profit or losses items that are not directly attributable to a segment or those
that cannot be allocated on a reasonable basis. Common expenses were allocated based
on revenue from the Group.
Segment capital expenditure is the total cost incurred during the period to acquire segment
assets that are expected to be used for more than one year.
b)
Primary reporting segment – business segments
During the year ended 30 June 2013, the Group was organised into two main business
segments which are aircraft leasing and business procurement.
Other operations of the Group mainly comprise investment holding which does not
constitute a separate reportable segment. There are no inter-segment transactions
recorded during the financial period.
The business procurement segment does not meet the quantitative thresholds and is not
separately disclosed.
82
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
c)
Second reporting segment – geographical segments
The following table provides an analysis of the revenues by geographical market, irrespective of the
origin of the goods:
Revenue
US$
31,464,032
1,560,000
9,000,000
275,000
–
46,466
394,493
42,739,991
Revenue
US$
22,678,216
2,224,663
9,000,000
–
141,731
956,608
35,001,218
Group
Financial year ended 30 June 2013
Australia
United States
Denmark
Germany
Malta
United Kingdom
Other
Group
Financial year ended 30 June 2012
Australia
United States
Denmark
Malta
United Kingdom
Other
Group
Financial year ended 30 June 2013
Australia
Denmark
Germany
United States
Group
Financial year ended 30 June 2012
Australia
Denmark
United States
Capital
expenditure
and valuation
movements
US$
128,897,926
22,479,404
5,198
151,382,528
Capital
expenditure
and valuation
movements
US$
108,274,256
Total
assets
US$
–
–
–
–
258,760,998
8,197,159
60,667,000
23,194,344
1,163,056
20,114,934
22,285,809
394,383,300
Total
assets
US$
–
–
–
–
141,951,757
8,841,444
65,092,000
935,955
18,295,803
11,992,137
247,109,096
2,846
108,277,102
Net book value
Aircraft
US$
255,939,738
60,667,000
22,388,817
8,197,125
347,192,680
Net book value
Aircraft
US$
139,921,910
65,092,000
8,841,000
213,854,910
83
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
During the year, certain customers accounted for greater than 10% of the Group’s total revenues.
There is one customer that accounts for US$31,411,894 (73%) of the Group’s total revenues.
These revenues were based in the Australia operating segment. There is one customer that
accounts for US$9,000,000 (21%) of the Group’s total revenue. These revenues were based in the
Denmark segment.
32 CONTINGENT LIABILITIES
Group
2013
US$
2012
US$
Guarantees
216,598,591
106,217,754
The maximum estimated amount the Group could become liable is as shown above.
33 ULTIMATE HOLDING COMPANY
No party controls the Company.
34 CHANGES IN ACCOUNTING POLICIES
Items included in the financial statements of the Company for the financial period ended 30 June
2012 were measured and presented using the Pound Sterling (£). During the current financial
period ended 30 June 2013, United States Dollars (US$) was adopted as the Company’s
presentational currency.
The Company determined that using US$ as its presentational currency best reflected the
economic substance of the underlying events and circumstances relevant to the Company as it is
the functional currency of the Group.
This change of accounting policy requires items in the financial statements, including comparative
figures to be measured and presented in US$.
In year 2012, the foreign translation reserve was £2.5m arose from translating subsidiaries whose
presentational currency was US$ in to £, and now the Group accounts are presented in US$ that
this reserve has been eliminated.
84
77
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
financial effects arising
The
re-measurement process are adjusted
retrospectively against the accumulated profits of an earlier period reported in the
financial statements. A summary of the significant accounts for the year ended 30 June
2012 and 1 July 2011 financial statements before and after restatement is as follows:
from
the
Group
As reported
As re-stated
30 June 2012 30 June 2012 1 July 2011
£
US$
US$
Group
As re-stated As reported
1 July 2011
£
Current assets
Non-current assets
Total assets
18,595,134
228,513,962
247,109,096
11,901,503
146,230,400
158,131,903
21,132,225
138,005,493
159,137,718
13,171,112
86,220,731
99,391,843
Current liabilities
Non-current liabilities
Capital and reserves
28,206,569
136,727,779
82,174,748
247,109,096
18,056,674
87,554,173
52,521,056
158,131,903
25,805,406
54,230,322
79,101,990
159,137,718
16,085,904
33,845,341
49,460,598
99,391,843
Total profits
6,363,534
4,161,210
7,362,878
5,056,726
Earnings per share
- Basic
- Fully diluted
12.36 cents 8.16 pence
8.13 pence
12.31 cents
16.77 cents 11.95 pence
16,61 cents 11.84 pence
Company
As re-stated
As reported
30 June 2012 30 June 2012 1 July 2011
£
US$
US$
Company
As re-stated As reported
1 July 2011
£
Current assets
Non-current assets
Total assets
11,538,470
21,869,028
33,407,498
7,389,232
13,905,790
21,295,022
14,852,043
11,248,638
26,100,681
9,272,137
7,094,954
16,367,091
Current liabilities
Non-current liabilities
Capital and reserves
3,381,790
3,640,993
26,384,715
33,407,498
2,165,704
2,331,692
16,797,626
21,295,022
3,163,448
3,005,620
19,931,613
26,100,681
1,972,273
1,876,409
12,518,409
16,367,091
Total profits
1,277,309
963,896
1,370,916
1,288,382
As required by IAS1, the Company and the Group have disclosed the changes in their
balance sheet arising from the prior year adjustments due to the change in accounting
policy.
AVATION PLC
REGISTERED NUMBER: 05872328 (ENGLAND & WALES)
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
35
APPROVAL OF FINANCIAL STATEMENTS
The financial statements of the Company and the consolidated financial statements of the
Group for the financial period ended 30 June 2013 were authorised for issue by the Board
of Directors on 23 August 2013.
85
Register of top 20 Shareholders
(AS AT 05 SEPTEMBER 2013)
Name of Shareholder
Fitel Nominees Limited
HSBC Client Holdings Nominee (UK) Limited
State Street Nominees Limited
Chase Nominees Limited
Apollo Nominees Ltd
HSBC Global Custody Nominee (UK) Limited
Credit Suisse Securities (Europe) Limited
Fitel Nominees Limited
Lynchwood Nominees Limited
Loeb Aron & Company Ltd
Fitel Nominees Limited
Fitel Nominees Limited
HSBC Global Custody Nominee (UK) Limited
W H Ireland Nominees Limited
The Corporation Of Lloyds
Barclayshare Nominees Limited
Hargreave Hale Nominees Limited
L R Nominees Limited
Jim Nominees Limited
HSBC Client Holdings Nominee (UK) Limited
Holding
(Number of shares)
9,009,352
8,788,140
3,188,237
3,120,000
2,036,756
1,646,250
1,583,244
1,356,967
1,305,772
920,000
824,450
676,519
582,859
541,836
480,922
478,957
440,000
404,682
367,210
362,700
86
ATR-72 aircraft under construction at the Avions de Transport Régional plant at Toulouse Airport at Blagnac, France
AnnuAl RepoRt 2013
DIRECTORS:
Robert Jeffries Chatfield
AUDITORS:
Kingston Smith LLP
Andrew Baudinette (resigned on 3 December 2012)
Devonshire House
Bryant James Mclarty
Roderick Douglas Mahoney
60 Goswell Road
London EC1M 7AD
COMPANy SECRETARIES:
REGISTRARS:
Siobhan Mary Macgroarty Cool
Computershare Investor Services PLC
Duncan Gerard Stephen Scott
Jason Francis Gollogly
REGISTERED OFFICE:
5th Floor Cheyne House
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
SOLICITORS:
Speechly Bircham LLP
Crown Court 61-63 Cheapside
6 New Street Square
London EC2V 6AX
PRINCIPAL PLACE OF BUSINESS:
510 Thomson Road
#12-04 SLF Building
Singapore 298135
London EC4A 3LX
United Kingdom
BANKERS:
Citibank NA
8 Marina View
#17-00 Asia Square Tower 1
Singapore 018960
Reuters/BBG
L I S T E D
S T A N D A R D
SHARES
Index:
LSE
FTSE Sector:
Industrial Transportation
FTSE Sub Sector: Transportation Services
AVAP.LN
AVAP