27 May 2022, 14:11

Source - LSE Regulatory

RNS Number : 1267N

Gama Aviation PLC

27 May 2022

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

27 May 2022

Gama Aviation Plc (AIM: GMAA)
("Gama Aviation" or the "Company" or "Group")

Audited Results for the year ended 31 December 2021

Improved financial performance following strategic refocus

The Company is pleased to present its results for the full year ended 31 December 2021. A copy of the Annual Report and Financial Statements will be available shortly on the Company's website at https://www.gamaaviation.com/investors/reports-and-presentations/.

Financial Highlights

· Revenues up 30% (25% at constant currency²) to $235.9m (2020: $182.0m)

· Gross Profit up 20% (16% at constant currency²) to $44.7m (2020: $37.3m)

· Gross Profit Margin slightly down by 1.5 percentage point ("ppt") (down 1.4ppts at constant currency) at 19.0% (2020: 20.5%)

· Adjusted EBIT loss reduced by 11% to $4.3m (2020: $4.8m), despite the prior year benefitting from COVID-19 related government support of $5.8m

· The Adjusted EBIT loss includes the Group's $1.5m share of associate losses (2020: $3.3m), and $3.2m (2020: Nil) of start-up costs relating to the strategic development, and commencement in H2, of two US base maintenance facilities. Adding back the $4.7m impact from these two items, the Group has delivered an Adjusted EBIT profit of $0.4m (2020: loss of $1.5m) from its mature and continuing operations

· Net cash inflow from operating activities of $5.2m (2020: $35.4m cash inflow). Reduction in the positive contribution from underlying working capital, which is in part due to reduced government support in the period, start-up losses following the commencement of base maintenance operations at Millville and Las Vegas and a repayment of deferred VAT from 2020 in 2021

· Liquidity remains strong with $10.2m (2020: $16.1m) of cash and $12.1m (2020: $24.7m) of its $50m revolving credit facilities (RCF) undrawn as at 31 December 2021

· The Group has commenced the process of refinancing and the Directors are confident that the RCF and term loan will be renewed, albeit at a higher finance cost

· Net debt, inclusive of $48.0m (2020: $46.1m) of lease obligations, increased to $104.9m (2020: $83.2m) resulting from the acquisition of Jet East and subsequent organic strategic investments

· As at 30 April 2022 cash balances were $14.2m (2020: $12.1m) in addition to RCF headroom of $20.3m (2020: $12.1m)

· The Board of Directors does not recommend a dividend be paid

Financial Summary

	Adjusted¹ $m		Statutory $m
	Dec-21	Restated³ Dec-20	Dec-21	Restated³ Dec-20
Revenue	235.9	182.0	235.9	197.5
Gross Profit	44.7	37.3	44.7	52.8
Gross Profit %	19.0%	20.5%	19.0%	26.7%
EBIT	(4.3)	(4.8)	(7.3)	(5.9)
Loss for the year	(6.3)	(8.6)	(8.8)	(14.6)
Loss per share (cents)	(8.7)	(13.6)	(12.7)	(23.1)

1 The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest International Financial Reporting Standards (IFRS) measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. The Adjusted Revenue and Adjusted Gross Profit APM are solely for the comparative

2 To aid comparability 2020 results have also been calculated on a constant currency basis using a constant foreign exchange rate of $1.38 to £1, being the cumulative average USD-GBP exchange rate for 2021, instead of the reported exchange rate of $1.28 to £1 for 2020. On a constant currency basis, 2020 Adjusted revenue is $189.3m, Adjusted Gross Profit is $38.7m, Gross Profit percentage is 20.4% and Adjusted EBIT remains at a loss of $4.8m. Refer to Note 6 of the notes to the financial statements for further details

3 The restatements to the 2020 income statement comprise a reclassification from cost of sales to administrative expenses, and various IFRS 16 adjustments resulting from an extensive review of Group lease commitments carried out in 2021. These result in a net reduction in losses before and after tax of $0.1m. The restatement also resulted in a $3.4m reduction in net debt at 31 December 2020. Details are in Note 2 of the notes to the financial statements

Strategic Highlights:

· Significant expansion of the Group's Business Aviation maintenance and repaid operations in the US through the acquisition of Jet East

· Targeted development of two new base maintenance facilities in the US to expand further the Group's maintenance operations in the world's largest business aviation market

· Secured term extensions on three key Special Mission contracts

· Recommenced development project at the Business Aviation Centre in Sharjah, UAE

· Secured successful tenderer status for the development of a second hangar in Jersey to more than double our facility's capacity ahead of increased demand

· Disposed of our shareholding interest in our non-core loss-making Hong Kong based associate, monetising $2.0m in cash from the sale

· Completed the re-alignment of our business operations along focused Strategic Business Units (SBUs)

Outlook

The Group remains firmly focused on the execution of the growth strategy that supported the financial improvement in 2021. We have invested significantly, both organically and inorganically, in our maintenance operations in the US, the world's largest private jet market.

Since the beginning of 2022, we have seen continued revenue momentum, particularly in the US, albeit offset by increased costs due to supply chain pressures and energy price inflation aggravated by the prolonged effects of the pandemic and the war in Ukraine. In this context, the Board is adopting a cautious approach to the remainder of the year, with a particular focus on delivering continuing operational improvements.

Notwithstanding this, we will continue to focus on delivering our growth strategy and consider that longer term, the Group is well placed for the future.

Commenting on the full year results, Marwan Khalek, Chief Executive said:

"Our 2021 results reflect the significant progress that the Group has made over the last couple of years in the face of unprecedented operational challenges and a difficult global economic environment. The significant revenue growth and improved financial performance delivered in 2021 serves to validate the effectiveness of our strategy and management actions to improve our operational and financial performance.

In 2022, our focus remains on delivering our growth strategy, with a particular emphasis on continuing operational improvement to help offset increased cost pressures resulting from the prolonged effect of the pandemic and energy price inflation. While we remain cautious about the immediate outlook in this environment, Gama Aviation remains financially and operationally resilient. As a result, I am confident that, beyond the current market challenges, we are well placed for future success."

END

Gama Aviation Plc +44 (0) 1252 553 029
Marwan Khalek, Chief Executive

Michael Williamson, Interim CFO

Camarco +44 (0) 20 3757 4992

Ginny Pulbrook

Geoffrey Pelham-Lane

WH Ireland +44 (0) 207 220 1666

James Joyce

Ben Good

Gama Aviation - Notes to Editors

Founded in 1983 with the simple purpose of providing aviation services that equip its customers with decisive advantage, Gama Aviation Plc (LSE AIM: GMAA) is a highly valued global partner to blue chip corporations, government agencies, healthcare trusts and private individuals.

The Group has three global divisions: Business Aviation (Aircraft Management, Charter, FBO & Maintenance), Special Mission (Air Ambulance & Rescue, National Security & Policing, Infrastructure & Survey, Energy & Offshore); and Technology & Outsourcing (Flight Operations, FBO, CAM software, Flight Planning, CAM & ARC services)

More details can be found at: http://www.gamaaviation.com/

Chief Executive Officer's statement

Introduction

The Group has adjusted and adapted well to this prolonged period of social and geopolitical uncertainty and the resulting economic impact. Through the execution of our strategy and the greater focus it promotes, I am pleased to report that the Group has delivered significant revenue growth and improved financial performance despite the many macro-economic challenges it continues to face.

During this period of continued uncertainty and instability, the response from our people has been nothing short of exemplary. They have embraced organisational change and understood the need to reduce costs, preserve cash and focus on excellent service and delivery to our client base. Our people's unwavering commitment, dedication and hard work are the foundations upon which we have adapted and reshaped our business to the new economic realities. I am very pleased to see evidence of their hard work, which has driven our recovery and the improved financial performance.

There is more to do, but I remain firmly of the belief that by maintaining our focus on the fundamentals critical to our business, we will continue to drive improvements in operational and financial performance. These fundamentals include focusing on; providing relevant services to our clients that deliver a decisive advantage; leveraging the Group's operational platform and cross selling opportunities to improve margins; and fostering our peoples' considerable energy, talent and skills; whilst contributing to society through our commitment to equality, diversity and sustainability.

Strategy overview

On 1 January 2021, the Group rolled out an evolved Group strategy and re-organised the business into three Strategic Business Units (SBUs); Business Aviation, Special Mission and Technology & Outsourcing. In parallel, the Group reorganised and strengthened its Leadership teams to support the execution of the strategy, the delivery of its strategic imperatives and the five-year business plan.

Business Aviation

In the Business Aviation SBU, the acquisition Jet East Aviation was completed in January 2021 effectively doubling the Group's maintenance and repair operations (MRO) in the USA (the world's largest business aviation market by volume and value). This was followed by organic investment in the development of two base maintenance locations, which became operational in H2. These two moves further cement our market position and provide a strong platform for organic growth in this strategically important market.

Alongside the development of the MRO network, Business Aviation's growth strategy is focused on the development of important business aviation airport infrastructure, such as Fixed Base Operations (FBOs), whose footprint derives predictable revenues and cross selling opportunities for maintenance, charter and aircraft management services.

Central to this is the development of a state-of-the-art Business Aviation Centre in Sharjah, UAE which was paused at the start of the pandemic. Following a diligent re-evaluation of the project's continuing viability, the Group has recommenced the development of these facilities, which remain central to growing our market share and leveraging the Group's operational scale in the Middle East.

The Business Aviation SBU has also secured successful tenderer status for the development of a second hangar in Jersey to more than double our facility's capacity.

In December 2021, the Group disposed of its shareholding interest in its non-core, loss-making, Hong Kong based associate, China Aircraft Services Limited (CASL), monetising $2.0m in cash from the sale.

Special Mission

The Special Mission SBU, has successfully secured term extensions on three long-term government contracts and continues to position the SBU for further organic growth in four defined market sectors. With a strong track record in delivery and a visible pipeline, coupled with a new Leadership team, the SBU is firmly focused on converting new opportunities and enhancing relationships with its existing client base.

The SBU also continues to deliver incremental improvements in its operational and financial performance through the active implementation of the Group's "Fix & Optimise" initiatives.

Technology & Outsource (T&O)

The T&O SBU made steady progress bringing a suite of world class, aviation focused, enterprise resource planning software as a service (SaaS) products to market. Notable successes have been achieved in the US and Europe, having strengthened the sales team and automated on-boarding processes. The products' native automation and Artificial Intelligence are assisting T&O's clients' removal of manual processes from their operations and maximising their profit potential through higher definition commercial data and greater situational awareness.

Aside of the SaaS services, the SBU continues to provide a variety of specialist outsource services to the military, airlines, lessors and business aviation operators. Critical to continued growth has been the addition of EASA Part-CAMO (a post Brexit requirement), achieved via the opening of a new operation in Poland. In turn, the Polish operation, combined with existing resources, has allowed T&O to secure third-party trip support and flight planning service contracts.

T&O will continue to attract further investment from the Group as it builds the data management infrastructure required to manage the increasingly complex interface of regulatory compliance and commercial situational awareness.

FY '21 Financial Performance

Through the execution of our strategy the Group grew its revenues to $235.9m, up by 25% (2020 at constant currency¹: $189.3m; 2020: $182.0m). The revenue growth was driven by the acquisition of Jet East in the US, the full year effect of various Special Mission contract wins and the general recovery of activity within the business aviation sector following the gradual easing of travel restrictions.

Consequently, the Group delivered a gross profit of $44.7m, up 16%, in absolute terms up $6.0m (2020 at constant currency¹: $38.7m; 2020: $37.3m). Gross profit margins were down slightly by 1.4bbps to 19% (2020 at constant currency¹: 20.4%; 2020: 20.5%).

The Adjusted EBIT loss for the year was reduced by 11% to $4.3m (2020: $4.8m), despite the prior year benefitting from COVID-19 government support of some $5.8m.

The 2021 financial performance has been impacted by the inclusion of the Group's $1.5m (2020: $3.3m) share of losses from its Hong Kong based associate, CASL, which has now been sold, and $3.2m (2020: nil) of start-up costs ($2.5m in costs of sale and $0.7m in overheads) relating to the strategic development, and commencement in H2 of two US base maintenance facilities.

Adding back the $2.5m impact on costs of sale associated with the development of the US base maintenance facilities, the gross profit for 2021 would increase by 22% to $47.2m (2020 at constant currency¹: $38.7m) in absolute terms, which equates to a gross profit margin of 20%, only 0.4bbps down on prior year (2020 at constant currency¹: 20.4%).

Notwithstanding the total $4.7m impact from these two items, the Group has delivered an Adjusted EBIT profit of $0.4m (2020: loss of $1.5m) from its mature and continuing operations.

The Group generated a net cash inflow from operating activities of $5.2m (2020: $35.4m). Whilst the 2021 cash inflows benefitted from the receipt of the remaining branding fees following the disposal of US Air Associate, working capital was absorbed into our US MRO business associated with the acquisition of Jet East and the development of the two base maintenance facilities referenced above. In addition, there was reduced government support in the period and a repayment of deferred VAT from 2020 in 2021.

¹ To aid comparability 2020 results have also been calculated on a constant currency basis. Refer to Note 6 of the notes to the financial statements for further details.

Credit Facilities

The Group currently benefits from two credit facilities provided by HSBC, a $50m RCF and a £20m term loan which mature in November 2022 and January 2023 respectively. Following initial engagement, HSBC have indicated their willingness to renew the facilities and have provided indicative terms which are currently under negotiation. Whilst the refinancing has not been concluded, the Board is confident that it will secure the facilities necessary to support its on-going

In parallel with its discussions with HSBC, the Company is actively pursuing alternative and/or additional credit facilities aimed specifically at meeting the Group's asset-based financing needs relating to aircraft, real estate and infrastructure projects.

Market updates will be provided when binding facilities are secured.

Dividend

The Board does not recommend a dividend for 2021 (2020: nil pence per share). The Company intends to restore the Company's distributable reserves when practicable which may involve extracting dividends from subsidiaries amongst other steps.

Social Value

I am particularly pleased with the progress that the Group is making with regard to its Social Value commitments. The pandemic years have created new challenges and we are responding to them by introducing hybrid working and supporting our people with mental health training as well as a range of advice via our WeCare support programme. At a societal level, our People Teams are focused on addressing the perennial issue of gender and ethnic diversity and inclusion within the aviation sector. I'm pleased to say their efforts are showing results, particularly in our UK apprentice program.

Finally, the Group is making progress with our Carbon Reduction Plan. Our 2021 Streamlined Energy and Carbon Report will show the second consecutive reduction since 2019 in the Group's scope 1,2 and 3 (excluding downstream) Greenhouse Gas emissions.

In all cases we recognise this is the start of our journey and that the Group has a long way still to go, but I am pleased with our collective progress.

Outlook

The Group remains firmly focused on the execution of our five year strategy that has supported the financial improvement seen in 2021. We have invested significantly, both organically and inorganically, in our maintenance operations in the US, the world's largest business aviation market.

Notwithstanding this, we will continue to focus on delivering our strategy and consider that longer term, the Group is well placed for the future.

/ GROUP OPERATIONAL PERFORMANCE REVIEW

Revenue

	Adjusted^{1, 2}		Statutory
USD'000s	2021	2020	2021	2020
Business Aviation	170,146	125,312	170,146	125,312
Special Mission	56,716	47,918	56,716	47,918
Technology & Outsourcing	5,297	5,023	5,297	5,023
Branding fees	3,750	3,750	3,750	19,250
Total	235,909	182,003	235,909	197,503

Gross Profit

	Adjusted^{1, 2}		Statutory
USD'000s	2021	Restated³ 2020	2021	Restated³ 2020
Business Aviation	19,702	17,425	19,702	17,425
Special Mission	17,075	12,534	17,075	12,534
Technology & Outsourcing	4,204	3,569	4,204	3,569
Branding fees	3,750	3,750	3,750	19,250
Total	44,731	37,278	44,731	52,778

EBIT

	Adjusted^{1, 2}		Statutory
USD'000s	2021	Restated³ 2020	2021	Restated³ 2020
Business Aviation	(8,764)	(3,702)	(12,392)	(16,322)
Special Mission	4,546	3,056	4,534	3,024
Technology & Outsourcing	47	605	(289)	256
Branding fees	3,691	3,733	3,691	19,233
Associates	(1,491)	(3,272)	-	(5,848)
Corporate⁴	(2,303)	(5,238)	(2,796)	(6,203)
Total	(4,274)	(4,818)	(7,252)	(5,860)

¹ The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest International Financial Reporting Standards (IFRS) measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. The Adjusted Revenue and Adjusted Gross Profit APM are solely for the comparative.

² To aid comparability 2020 results have also been calculated on a constant currency basis using a constant foreign exchange rate of $1.38 to £1, being the cumulative average USD-GBP exchange rate for 2021 instead of the reported exchange rate of $1.28 to £1 for 2020. On a constant currency basis, 2020 Adjusted revenue is $189.3m, Adjusted Gross Profit is $38.7m, Gross Profit percentage is 20.4% and Adjusted EBIT remains at a loss of $5.3m. Refer to Note 6 of the notes to the financial statements for further details.

³ The restatements to the 2020 income statement comprise a reclassification from cost of sales to administrative expenses and various IFRS 16 adjustments resulting from an extensive review of Group lease commitments carried out in 2021. These result in a net increase in EBIT loss and adjusted EBIT loss of $26k and $495k respectively as detailed in Note 2 of the notes to the financial statements.

⁴ Following the transitioning of the segmental reporting to reflect the realignment of the business along its SBUs, the Corporate cost recovery estimation methodology was also reviewed resulting in a revised level of Corporate charges to overhead within the SBUs in 2021. Accordingly, and as a result of this change in estimate, Corporate costs were reduced by $3.7m with an equivalent charge in the respective SBUs. Excluding this change in estimate, there was a $0.5m increase in corporate costs, which is primarily related to the adverse impact of foreign exchange of $0.4m. This change of Corporate cost recovery estimation methodology has not been applied to the 2020 comparators.

The SBU performance is explained in detail below.

/ BUSINESS AVIATION

Business Aviation is focused on the delivery of the following lines of business to clients principally in the top three regional business aviation markets: the US, Europe and the Middle East.

/ Management. The operational management of an aircraft (or fleet), and its crew, that the owner wishes to place on one of the Group's air operating certificates (AOCs)

/ Charter. The sale of available flight hours on aircraft to charter brokers or to direct clients worldwide

/ FBO. The management of our strategically positioned fixed base operations at airports in the UK, Channel Islands and Middle East

/ Maintenance (MRO). The delivery of comprehensive maintenance, repair and modification solutions that support business aviation aircraft operators and owners.

Business Aviation MRO in the US has a dedicated management team and is separately reviewed by the Group Chief Executive Officer who acts as the Chief Operating Decision Maker (CODM). Therefore, Business Aviation MRO US has been presented separately from Business Aviation excluding MRO US which falls under a separate management team and is separately reviewed by the CODM.

USD'000s	BA MRO US³		BA excluding MRO US		Total
	2021	Restated¹ 2020	2021	Restated¹ 2020	2021	Restated¹ 2020
Revenue	79,250	38,606	90,896	86,706	170,146	125,312
Gross Profit	9,035	8,474	10,667	8,951	19,702	17,425
GP %	11%	22%	12%	10%	12%	14%
Adjusted EBIT²	(7,971)	181	(793)	(3,883)	(8,764)	(3,702)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

² The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs also include organic and constant currency Revenue, Gross Profit and Adjusted EBIT

³ The Jet East business operations were merged with those of the Groups US MRO operations immediately following the acquisition on 15 January 2021. It is therefore not possible to assess and/or segregate the actual impact of the acquisition on the combined financial performance. Jet East's unaudited financial statement for 2020 shows annual revenues of $28.2m, Gross Profit of $0.2m and Adjusted EBIT of $1.4m.

Due to the gradual easing of travel restrictions and quarantine requirements in 2021 the Business Aviation SBU saw an increased level of activity across all its business lines, the impact of which can be summarised as follows:

In aircraft management, overall, we saw increased aircraft utilisation by our clients. This increased activity translated to some additional revenue but had little impact on gross profits due to the pass-through nature of these revenues. The gross profit in this business line was however negatively impacted by the loss of management fee revenues following the disposal of several managed aircraft by their owners. This impact was felt hardest in our Hong Kong base where very strict 21 days quarantine isolation requirements continued to severely limit travel appetite and there are no longer four Hong Kong based aircraft. The impact has been somewhat mitigated by gains elsewhere as well as some aircraft sales commissions.

Charter saw modest increases in demand resulting in increased activity and revenues, both in respect of in-fleet charter as well as charter brokerage but margins remained under pressure due to competitive pressures.

Increased activity resulted in significant increase in aircraft movements at our Sharjah and Jersey FBOs resulting in strong growth in revenues and gross profits during the year.

The US market saw a significant increase in aircraft activity through the second half of the year which has fuelled very strong demand for both our line maintenance and base maintenance services. This, together with the acquisition of Jet East and the organic development of two new base maintenance facilities, resulted in the US MRO business line delivering significant revenue growth. Gross profit was however, negatively impacted by the start-up costs that were incurred at the two new bases.

MRO demand and activity at our Bournemouth and other non-US bases, which are predominantly targeted at base maintenance, remained steady.

Overall, the Business Aviation SBU grew its organic and constant currency revenues by 8% to $170.1m (2020: $157.0m after rebasing for $28.2m related to Jet East and $3.5m constant currency). Gross profit was up 10% to $19.7m (2020: $18.0m after rebasing for $0.2m related to Jet East and $0.3m constant currency), which includes the near full year Gross Profit contribution from the acquired Jet East business.

Adjusted EBIT fell by $5.1m to an adjusted EBIT loss of $8.8m (2020: $3.7m loss) and on an organic and constant currency basis, there was a decrease of $3.4m after rebasing for the adverse impact of foreign exchange of $0.3m and rebasing the comparative for the acquisition of Jet East which contributed a loss of $1.4m. Within Business Aviation MRO US there was a $0.3m credit to the expected credit loss within administrative expenses following the settlement of a historic overdue receivable and within Business Aviation excluding MRO US there was a $0.2m charge to increase the expected credit loss allowance on receivables. Within Business Aviation MRO US, overhead increased due to investment in start-up locations and capability for increased activity levels as well as $2.3m of increased corporate overhead allocations in part due to the acquisition of Jet East and due to a revised estimate of corporate overhead by SBU across the Group. Within Business Aviation excluding MRO US, there was a $0.4m decrease in corporate overhead allocations, partially offset by additional overhead due to managerial changes following the introduction of the new reporting structure.

USD'000s	BA MRO US		BA excluding MRO US		Total
	2021	Restated* 2020	2021	Restated* 2020	2021	Restated* 2020
Adjusted EBIT¹	(7,971)	181	(793)	(3,883)	(8,764)	(3,702)
Exceptional items - transaction costs	(558)	(663)	-	(29)	(558)	(692)
Exceptional items - integration and business re-organisation costs	(413)	-	1,901	(202)	1,488	(202)
Exceptional items - other items	-	-	79	709	79	709
Exceptional items - Impairment of right-of-use assets	-	-	(1,911)	(6,544)	(1,911)	(6,544)
Exceptional items - Impairment of goodwill	-	-	-	(833)	-	(833)
Exceptional items - Impairment of assets under construction		-		(4,609)		(4,609)
Equity incentive plan	(1,821)	-	-	-	(1,821)	-
Share-based payments	58	(61)	(52)	(88)	6	(149)
Amortisation	(710)	-	(201)	(300)	(911)	(300)
EBIT	(11,415)	(543)	(977)	(15,779)	(12,392)	(16,322)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

EBIT improved from a loss of $16.3m in 2020 to a loss of $12.4m in 2021. In addition to the movements discussed above, there was $1.9m impairment of right of use assets at Sharjah Airport following a ten-year extension option which was exercised in the current period. The continued uncertainties in funding the Business Aviation Centre (BAC) mean that in our judgement the additional right-of-use asset must be immediately impaired. In the event that uncertainties in funding the project are resolved after the date of the reporting, the entire right of use asset and an asset under construction previously impaired, may be eligible for an impairment reversal. Following the acquisition of Jet East, the amortisation of acquired intangibles increased by $0.7m, Jet East severance costs of $0.4m were incurred, and a $1.8m charge for a long-term incentive plan has been recognised. The above were partially offset by $1.9m income upon release of lease and other related obligations at Fairoaks Airport, which had no equivalent right of use asset due to a historic impairment.

/ SPECIAL MISSION

The Special Mission SBU provides the mission expertise to assist governments and businesses in exploiting a variety of aviation assets (principally fixed wing and helicopters) within the following sectors:

/ Air Ambulance & Rescue. The delivery of fixed wing and rotary mission solutions to the governments of Scotland, Jersey and Guernsey as well as the circa 21 helicopter air ambulance charities operating within the UK

/ National Security & Law Enforcement. Providing "intelligence as a service" aviation platforms to the UK government to protect the national interest

/ Infrastructure & Survey. The monitoring of critical national infrastructure for the purposes of failure monitoring, environmental controls, mapping or other such studies

	2021	Restated¹ 2020
Revenue	56,716	47,918
Gross Profit	17,075	12,534
GP %	30%	26%
Adjusted EBIT²	4,546	3,056

¹ Restatements are detailed in Note 2 of the notes to the financial statements

The Special Mission SBU grew Revenue by 18% to $56.7m (2020: $47.9m) and Gross Profit by $4.5m to $17.1m (2020: $12.5m). On a constant currency basis, Revenue was 10% higher and Gross Profit was $3.7m higher after rebasing for the favourable impact of foreign exchange of $3.4m and $0.9m respectively. The growth in revenue includes the impact of increased flying hours and the related costs rechargeable to core customers, additional non-recurring projects undertaken for core customers, incremental work with core and ad-hoc customers and the full year effect of air ambulance service contracts for the Government of Jersey and the Government of Guernsey which were acquired in the middle of the prior year, as shown in Note 6 of the notes to the financial statements. Gross profit benefitted from the full year effect of the contracts referred to above, a reduction in one-off charges, insourcing of aviation assets, incremental work with core and ad-hoc customers, a change in the estimate of costs to complete contractual obligations and some changes in the mix of revenues between labour and parts. In the current year, both revenue and gross profit benefitted from modest improvements as a result of the fix and optimise agenda adopted by management.

Adjusted EBIT increased by $1.5m to $4.5m (2020: $3.1m) due to the growth in Gross Profit referred to above, albeit this growth was partially offset by overhead growth of $3.0m, principally comprising a $0.9m increase in depreciation due to the full year effect of aircraft which entered into service at the middle of the prior year, a $1.4m increase in the allocation of Corporate overhead and $0.7m adverse impact of foreign exchange. Following the transitioning of current year reporting to reflect the realignment of the business along its SBUs a revised level of Corporate overhead was charged to the Special Mission SBU.

	2021	Restated¹ 2020
Adjusted EBIT²	4,546	3,056
Share-based payments	(12)	(32)
EBIT	4,534	3,024

¹Restatements are detailed in Note 2 of the notes to the financial statements

²The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs also include organic and constant currency Revenue, Gross Profit and Adjusted EBIT

EBIT increased from a profit of $3.0m in 2020 to a profit of $4.5m in 2021. In addition to the movements discussed above, EBIT includes share-based payment charges.

/ TECHNOLOGY & OUTSOURCING

The Technology & Outsourcing SBU is focused on the delivery of advisory, technology and outsource services to aviation customers who seek to gain a decisive advantage using real and near real time intelligence. The Technology & Outsourcing team provide:

/ Technology products via myairops^®. Flight and aircraft management, maintenance tracking, ground operations and crew scheduling and operations

/ Maintenance and Continuing Airworthiness Management (CAM). Comprehensive range of services from full CAM and Airworthiness Review Certificates (ARC) through to supplying the software for an organisation to manage the through-the-life maintenance of its aircraft

/ Trip planning & support. Providing third party services to aircraft operators who are seeking to outsource their flight operations tasks.

	2021	Restated¹ 2020
Revenue	5,297	5,023
Gross Profit	4,204	3,569
GP %	79%	71%
Adjusted EBIT¹	47	605

¹ Restatements are detailed in Note 2 of the notes to the financial statements

The Technology & Outsourcing segment grew Revenue by 5% to $5.3m (2020: $5.0m) and Gross Profit by $0.6m to $4.2m (2020: $3.6m). On a constant currency basis, revenue was 2% lower and gross profit was $0.3m higher after rebasing for the favourable impact of foreign exchange of $0.4m and $0.3m respectively, as shown in Note 6 of the notes to the financial statements. Maintenance and CAM traded in line with prior year revenue but with a modest reduction in gross profit ($0.1m) due to inflationary pressure on the cost of sales. Myairops^® was broadly in line with prior year revenue, with a modest reduction in revenue ($0.2m) related to trading with the Group's former US Air Associate, which benefitted the prior year and due to COVID effects on commercial airline operators impacting one myairops^® product. The revenue shortfall was more than offset by cost savings which increased gross profit by $0.2m. In addition, there was a $0.2m increase in gross profit on Military Airworthiness Reviews.

Adjusted EBIT fell by $0.5m to $0.1m (2020: $0.6m) with $0.4m of additional amortisation of the product development related to product launches and $0.4m of increased Corporate overhead offsetting improvements in gross profit. Following the transitioning of current year reporting to reflect the realignment of the business along its SBUs a revised level of Corporate overhead was charged to Technology & Outsourcing.

	2021	Restated¹ 2020
Adjusted EBIT²	47	605
Share-based payments	(47)	(35)
Amortisation	(289)	(314)
EBIT	(289)	256

¹ Restatements are detailed in Note 2 of the notes to the financial statements

EBIT fell from a profit of $0.2m in 2020 to a loss of $0.3m in 2021. In addition to the movements discussed above, EBIT included amortisation of $0.3m in respect of acquired intangible assets and $0.1m of share-based payment charges.

/ ASSOCIATE INVESTMENTS

	US Air Associate		CASL		Total
USD'000s	2021	2020	2021	2020	2021	2020
Adjusted EBIT¹	-	78	(1,491)	(3,350)	(1,491)	(3,272)
Adjustments:
Exceptional items - Impairment charge / (reversal)	-	-	1,491	(3,421)	1,491	(3,421)
Exceptional items - Impairments on non-current assets within share of results from equity accounted investments	-	-	-	(6,433)	-	(6,433)
Exceptional items - Profit on disposal of interest in associates	-	7,278	-	-	-	7,278
EBIT	-	7,356	-	(13,204)	-	(5,848)

¹ The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. APMs also include organic and constant currency Revenue, Gross Profit and Adjusted EBIT

As reported in the 2020 Annual Report and Accounts, the US Air Associate was sold on 2 March 2020; see Note 17 of the notes to the financial statements for further details. The $0.1m of Adjusted EBIT in the prior period represents the Group's share of results from the US Air Associate prior to disposal.

The Group's investment in China Aircraft Services Limited (CASL) was reclassified as "held for sale" effective end of May 2021 following a Board decision on the receipt of a $2m offer for its 20% shareholding in CASL. Since reclassification the asset was held at the fair value of $2m, until it was sold with full and final cash settlement of $2m received on 31 December 2021. Prior to reclassification as "held for sale", CASL suffered substantial losses due to vastly reduced commercial aviation volumes at Hong Kong airport, impacted by COVID-19. The Group's share of these amounted to $1.5m at the Adjusted EBIT level.

In the prior year, the disposal of the Group's equity interest in its US Air Associate resulted in a profit before taxation of $7.3m.

In the prior year, impairment charges of $9.9m were made against the equity accounted investment in CASL, reflecting the Group's assessment of its recoverable amount. This assessment was made based upon a credible offer of $2m received by another CASL shareholder for their 20% equity interest in CASL. Following the sale of the Group's equity interest in CASL, an impairment reversal equivalent to the Group's share of losses of $1.5m has been recognised in the current year.

Overall, all non-core associate investments have been sold and result in associate statutory EBIT improving from a loss of $5.8m in 2020 to nil in 2021.

/ Branding fees

	Total
USD'000s	2021	2020
Adjusted Revenue^{1, 2}	3,750	3,750
Adjusted Gross Profit^{1, 2}	3,750	3,750
GP %	100%	100%
Adjusted EBIT^{1, 2}	3,691	3,733
Adjustments
Exceptional items - Revenue and gross profit adjustments	-	15,500
EBIT	3,691	19,233

² Adjusted Revenue and Adjusted Gross Profit were only used for the comparative. 2021 Adjusted Revenue and Adjusted Gross Profit were the same as Revenue and Gross Profit

Revenue and Gross Profit from branding fees are in line with the prior year and ended on 2 March 2022. US Air statutory EBIT decreased from $19.2m in 2020 to $3.7m in 2021 due to $15.5m of accelerated branding fees on the disposal of the US Air Associate being reflected in the prior year, which did not recur in 2021.

/ FINANCE REVIEW

Financial summary

	Adjusted¹ $m		Statutory $m
	Dec-21	Restated¹ Dec-20	Dec-21	Restated¹ Dec-20
Revenue	235.9	182.0	236.1	197.5
Gross Profit	44.7	37.3	44.7	52.8
Gross Profit %	19.0%	20.5%	19.0%	26.7%
EBIT	(4.3)	(4.8)	(7.3)	(5.9)
(Loss)/ profit for the year	(6.3)	(8.6)	(8.8)	(14.6)
(Loss)/earnings per share (cents)	(8.7)	(13.6)	(12.7)	(23.1)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Restatement

The restatements to the 2020 income statement are limited to a reclassification from cost of sales to administrative expenses of $1.1m and various errors to the application of IFRS 16, Leases. During 2021 a detailed review was conducted of Group leases. New information came to light from this review indicating that errors had been made on the implementation of IFRS 16 (1 January 2019) and in subsequent recognition relating to the treatment of a number of initial lease obligations at implementation (impacting subsequent impairments), contractual rental increases, computational errors on foreign exchange, identification of lease-related payments and the length of lease used for ROU assets and liabilities and related leasehold improvements. 2020 opening balances, results for the year, other comprehensive income, balance sheet amounts and cashflows have been restated to correct these errors. The restatement has reduced the consolidated loss for 2020 by $0.1m, increased consolidated net assets at 31 December 2020 by $2.5m and resulted in a $1.7m increase in net cash generated by operations with an equivalent reduction in lease payments on the consolidated cash flow statement. Refer to Note 2 of the notes to the financial statements for further details.

Revenue Bridge

	$m
Revenue - 2020	197.5
Rebase for FX	7.3
Rebased Revenue - 2020	204.8
Branding fee	(15.5)
Business Aviation MRO US	40.7
Business Aviation excluding MRO US	0.7
Special Mission	5.3
Technology & Outsourcing	(0.1)
Revenue - 2021	235.9

· One-off accelerated branding fees of $15.5m benefitted the prior year

· Significant expansion of the Business Aviation's US maintenance operations via the acquisition of Jet East as well as revenue growth from new facilities and from the legacy US maintenance operations

· Business Aviation excluding MRO US benefits from a significant improvement in FBO activity levels and increased Charter activity which is partially offset by underperformance on maintenance operations

· Special Mission includes the impact of increased flying hours and the related costs rechargeable to customers, increased work with ad-hoc customers and the full year effect of air ambulance service contracts for the Government of Jersey and the Government of Guernsey which were acquired in the middle of the prior year, as shown in Note 6 of the notes to the financial statements

Adjusted EBIT² Bridge

	$m
Adjusted EBIT - 2020 Restated¹	(4.8)
Increase in gross profit	7.5
Increase in other administrative expenses	(10.3)
Decrease in impairment of financial assets	3.8
Increase in depreciation and amortisation	(2.3)
Increase due to reduced losses from equity accounted associates	1.8
Adjusted EBIT - 2021	(4.3)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

· The impact of the movement in FX rates at an Adjusted EBIT level is not significant; refer to Note 6 of the notes to the financial statements for further details

· The growth in Gross Profit is covered in further detail in the operational performance review

· Administrative expenses increased following the acquisition of Jet East ($8.3m) together with net growth across other business units and services lines

· A significant loss allowance for impairment of financial assets of $3.8m arose in the prior year and did not recur

· Depreciation and amortisation increased primarily due to the full year effect of aircraft bought in the middle of the prior year ($0.9m), higher year on year amortisation of the internally developed software asset within T&O ($0.4m) and the acquisition of Jet East ($0.5m)

· Losses from associates are down following the disposal of the US Air Associate and the investment in CASL

EBIT Bridge

	$m
EBIT - 2020 Restated¹	(5.9)
Items impacting Adjusted EBIT	0.5
Adjusting items
-items in other administrative expenses comprising:
- Decrease in exceptional transaction costs	0.2
- Decrease in exceptional integration and business re-organisation costs	0.1
- Decrease in exceptional legal costs	0.4
- Decrease in equity-settled share-based payment expense	0.3
- Increase in other long-term employee benefits	(1.8)
- Increase in other income	1.6
- Decrease in accelerated branding fees	(15.5)
- Increase in acquired intangible amortisation	(0.6)
- Decrease in profit on disposal of interest in associates	(7.3)
- Decrease in impairment reversal of financial assets	(0.6)
- Decrease in impairment of right-of-use asset	4.6


- Decrease in impairment of assets under construction	4.6
- Decrease in impairment of goodwill and intangible	0.8
- Decrease in impairment of non-current assets within associates	6.4
- Decrease in impairment of investment in associate	4.9

EBIT - 2021	(7.3)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

· Transaction cost of $0.5m (2020: $0.7m) relating to Jet East acquisition cost in both years

· Integration and business re-organisation costs in the current year included $0.4m of Jet East severance costs associated with integration, partially offset by $0.3m income upon release of a direct closure costs provision at Fairoaks Airport. In addition, $0.2m of redundancy costs incurred in the prior year did not recur.

· Lower legal costs in 2021 compared to 2020 in respect of legacy litigation matters

· $0.3m of reduced equity-settled shared-based payment charges following forfeitures, leavers and re-issues

· The $1.8m increase in other long-term employee benefits driven by a 2021 charge relating to a long-term incentive plan as part of the Jet East acquisition

· $1.6m other income upon release of lease obligation at Fairoaks Airport in the current year

· $15.5m of accelerated branding fees were recognised in the prior period as an Adjusting item following the disposal of the US Air Associate and the settlement of existing contractual arrangements (see Note 17 for further details on the disposal)

· Amortisation of acquired intangibles increased by $0.6m due to the acquisition of Jet East

· $7.3m profit before taxation on disposal of the US Air Associate was recognised in the prior year (see Note 17 for further details on the disposal)

· The prior year $0.6m impairment reversal of financial assets previously impaired through exceptional items did not recur

· In the current year, impairment of $1.9m to the additional right of use asset in relation to Sharjah and $1.5m impairment reversal of charges previous recognised in relation to CASL. Other movements in impairment are due to prior year items that did not recur and are shown in further detail in Note 6 of the notes to the financial statements

Impairments

As previously reported, the Group had secured a 25-year ground lease and had commenced the development of a Business Aviation Centre (BAC) at Sharjah International airport in the UAE.

With the project having been placed on hold in 2020 pending a review of the impact of the pandemic on its viability, the Group recognised a total impairment charge of $11.2m in its 2020 financial statements, $6.6m in respect of the right of use asset arising from the ground lease and $4.6m in respect of the carrying value of the assets under construction.

Following its decision to recommence the development of the BAC, the Company is now in the process of securing the necessary funding for the project. Whilst the Group is in advanced discussions with investors regarding the funding of this project, the Board considers that it would be inappropriate to reverse these impairments until the full funding has been contractually secured.

In parallel with its decision to recommence the development, the Group took the opportunity to negotiate a 10-year extension to the term of the ground lease, which significantly enhances the viability and value of the project. However, until the impairment charge taken in respect of the original lease is reversed, the Group is required to further impair the $1.9m asset in use value created by this lease extension.

The Board remains confident that the Group is making progress in securing the necessary funding, at which time all these impairments, which amount to $13.1m, may reverse.

Other than the above and following a diligent review of the carrying value of investments, I am pleased to report that the Board does not believe there is any need for any other impairments.

Finance expense

Net finance expense of $3.5m (2020 Restated: $2.3m) includes $0.6m (2020: $1.5m) of finance income largely arising from financial assets related to the disposal of the US Air Associate; refer to Note 8 for further details. As a result of early settlement of the deferred consideration on 20 July 2021 (refer to Note 17 for more details), and the timing of the disposal in 2020, finance income was lower in the current year. Foreign currency movements were a net loss of $0.4m (2020: $0.2m net gain).

Taxation

There is a statutory taxation credit for the year of $2.0m (2020: charge of $6.5m), which reflects the recognition of an increased deferred tax asset in the current year based on projected future taxable profits in a five-year Strategic Plan. Partially offsetting this recognition, an uncertain tax provision of $0.3m has been recognised based on a penalty issued. While the penalty has been disputed by the Group, at the time of reporting a remedy has not been granted. The adjusted taxation credit for the year is $1.5m (2020: charge of $1.5m); refer to Note 10 for further details.

EPS

Shares in issue increased to 63.7m (2020: 63.6m) following the issue of shares in the year. The average share price for the year ended 31 December 2021 was 39.2 pence, which is marginally higher than the exercise price of some outstanding options, however;, the effect of including these shares would reduce the loss per share and adjusted loss per share and therefore no dilutive earnings per share is shown. Basic Statutory EPS reflects reduced loss per share of 12.7 cents (2020 Restated: 23.1 cents).

Net debt and cash flow movements

	December 2021	Restated¹ December 2020
Adjusted EBIT²	(4.3)	(4.8)
Add: Adjusted depreciation & amortisation in cost of sales (Note 5)	6.5	11.1
Add: Adjusted depreciation & amortisation in administrative expenses (Note 5)	9.6	7.3
Adjusted EBITDA²	11.8	13.6
Less: Loan forgiveness (Note 27)	-	(4.8)
Less: non-cash lease credit recognised (Note 27)	(0.1)	(0.3)
Less: Share of losses/profits of associates (Note 27)	1.5	3.3
Adjusted EBITDA after excluding non-cash items²	13.2	11.8
Working capital:
Add: Working capital	(22.2)	9.4
Add: Capital portion of promissory note on disposal of US Air Associate	17.5	2.5
Add: Accelerated branding fee not recognised in Adjusted EBIT	-	15.5
Add: Exceptional items	(0.8)	(0.7)
Working capital	(5.5)	26.7

Cash generated by operations (Note 27)	7.7	38.5
Add: Tax (Note 27)	(2.5)	(3.1)
Net cash flow from operating activities (Note 27)	5.2	35.4

Lease payments	(9.6)	(17.7)
Capital expenditure	(5.9)	(27.8)
Acquisition of business, net of cash acquired	(8.2)	(1.5)
Proceeds on disposal of associate	2.0	9.9
Net interest received/(paid)	0.4	(0.3)
Net proceeds from borrowings	10.2	9.5
Net cash used in investing and financing activities	(11.1)	(27.9)

Increase/(decrease) in cash	(5.9)	7.5
Cash at the beginning of year	16.1	8.5
Effect of foreign exchange rates	-	0.1
Cash at end of the period	10.2	16.1
Borrowings	(67.1)	(53.2)
Obligations under leases	(48.0)	(46.1)
Net debt at the end of year²	(104.9)	(83.2)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

² The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest IFRS measure. APMs include Adjusted Revenue, Adjusted Gross Profit, Adjusted EBIT and Net debt. In reconciling from Adjusted EBIT to the net cash flow from operating activities, Adjusted EBITDA and Adjusted EBITDA excluding non-cash items are shown to aid understanding.

The reduction in the net cash inflow from operating activities has been driven by:

· Adjusted EBITDA lower by $1.8m at $11.8m (2020: $13.6m), offset by a net $3.2m reduction in non-cash income or expenses

· $0.1m of additional spend on exceptional items, primarily related to severance costs as part of the integration of Jet East and the closure of operations in Saudi Arabia, partially offset by reduced legal costs

· $15.5m of accelerated branding fees in the prior period not recognised within Adjusted EBIT but within working capital

· $17.5m capital portion of promissory note on disposal of US Air Associate received in the period

· Reduction in the positive contribution from underlying working capital, which is in part due to reduced government support in the period, start-up losses following the commencement of base maintenance operations at Millville and Las Vegas and a repayment of deferred VAT from 2020 in 2021

· Lease payments reduced by $8.1m on the prior period due to timing of aircraft lease payments, partially offset by the addition of Jet East lease payments of $0.8m

· Capital expenditure includes $2.6m of internally developed software arising from myairops software development and $3.3m tangible capex, of which $1.0m is in Business Aviation US for base maintenance expansion to fulfil demand from one of the world's largest private jet operators, $0.7m is replacement capex in Business Aviation US, and $0.6m is for an aircraft engine used as a back-up on a Special Mission contract

· Net cash payment on acquisition of Jet East of $8.2m, which includes $7.7m initial consideration less $0.1m cash acquired on acquisition and $0.6m of transaction costs

· $2.0m proceeds on disposal of the associate investment in CASL Associate. Refer to Note 17 for further details on the disposal

· Net interest received includes $0.65m interest received on the $20.0m US Air Associate promissory note prior to the accelerated repayment, $0.4m of interest received due to late customer payments and $0.7m of interest paid on borrowings

· Net proceeds from borrowings include $10m drawn on the RCF to fund the acquisition of Jet East, of which $2.65m was used to repay borrowing assumed on acquisition. The remaining net increase in the RCF was to manage the net working capital cash outflow

· Net debt increased by $20.5m to $105.8m (2020: $85.3m) primarily due to the acquisition of Jet East and investment in the further expansion of the Business Aviation US via start-up locations for base maintenance facilities and capability for anticipated increases in activity levels

Liquidity

The group liquidity remains with $10.2m (2020: $16.1m) of cash and $12.1m (2020: $24.7m) of its $50m RCF undrawn as at 31 December 2021.

Net debt, inclusive of $48.0m (2020: $46.1m) of lease obligations, increased to $104.9m (2020: $83.2m), resulting from the acquisition and subsequent organic strategic investments.

As at 30 April 2022 cash balances were $14.2m (2020: $12.1m) in addition to RCF headroom of $20.3m (2020: $12.1m).

Credit Facilities

Market updates will be provided when binding facilities are secured.

Dividend

Litigation

Following the litigation update provided in the Company's 2020 Annual Report and 2021 Interim release, the Company continues to pursue the recovery of its long-standing trade receivables both through enforcement actions in the UK and in other jurisdictions. The Company has made progress through court proceedings in the UK. It remains the Board's expectation that other than the provisions already made by the Company against these claims, no further provisions will be required.

Auditors

The auditors, PricewaterhouseCoopers LLP, have indicated that they do not intend to stand for re-election at the forthcoming Annual General Meeting and the Audit Committee has commenced a process to appoint another audit firm in due course.

/ CONSOLIDATED INCOME STATEMENT

/ FOR THE YEAR ENDED 31 DECEMBER 2021

		Year ended 31 December 2021			Year ended 31 December 2020 Restated²
	Note	Statutory result $'000	Adjusting items¹ $'000	Adjusted result¹ $'000	Statutory result $'000	Adjusting items¹ $'000	Adjusted result¹ $'000
Continuing operations:
Revenue	4	235,909	−	235,909	197,503	(15,500)	182,003
Cost of sales		(191,178)	−	(191,178)	(144,725)	-	(144,725)
Gross profit	4	44,731	−	44,731	52,778	(15,500)	37,278
- Other administrative expenses		(40,906)	3,047	(37,859)	(29,753)	2,075	(27,678)
- Impairment of right-of-use assets	23	(1,911)	1,911	−	(6,544)	6,544	-
- Impairment of acquired intangibles	6	−	−	−	(833)	833	-
- Impairment of assets under construction	6	−	−	−	(4,609)	4,609	-
- Depreciation and amortisation	5	(10,813)	1,200	(9,613)	(7,968)	614	(7,354)
- Impairment of financial assets	19	21	(63)	(42)	(3,083)	(709)	(3,792)
Total administrative expenses		(53,609)	6,095	(47,514)	(53,790)	13,966	(38,824)
Other income	6	1,626	(1,626)	−	-	-	-

Operating loss		(7,252)	4,469	(2,783)	(12)	(1,534)	(1,546)
Share of results from equity accounted investments	17	(1,491)	−	(1,491)	(9,705)	6,433	(3,272)
Reversal/(impairment) of equity accounted investments	17	1,491	(1,491)	−	(3,421)	3,421	-
Profit on disposal of interest in associates	17	−	−	−	7,278	(7,278)	-

Earnings before interest and taxation	4,5	(7,252)	2,978	(4,274)	(5,860)	1,042	(4,818)
Finance income	8	617	−	617	1,535	-	1,535
Finance expense	9	(4,110)	−	(4,110)	(3,817)	-	(3,817)
Loss before tax		(10,745)	2,978	(7,767)	(8,142)	1,042	(7,100)
Taxation	10	1,980	(471)	1,509	(6,496)	5,017	(1,479)
Loss for the year		(8,765)	2,507	(6,258)	(14,638)	6,059	(8,579)

Attributable to:
Owners of the Company		(8,062)	2,507	(5,555)	(15,123)	6,059	(8,624)
Non-controlling interests	26	(703)	−	(703)	45	-	45

EPS attributable to the equity holders of the parent
basic	11	(12.7c)	4.0c	(8.7c)	(23.1c)	9.5c	(13.6c)
diluted	11	(12.7c)	4.0c	(8.7c)	(23.1c)	9.5c	(13.6c)

¹ The Alternative Performance Measures (APMs) are defined in Note 6 of the notes to the financial statements and reconciled to the nearest IFRS measure.

² Restatements are detailed in Note 2 of the notes to the financial statements.

/ CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

/ FOR THE YEAR ENDED 31 DECEMBER 2021

	Note	Year ended 2021 $'000	Year ended 2020 Restated¹ $'000
Loss for the year		(8,765)	(14,638)
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		(307)	1,184
Share of other comprehensive income of associates	17	−	92
Other comprehensive income/(loss)		(307)	1,276
Total comprehensive loss for the year		(9,072)	(13,362)

Total comprehensive income/(loss) is attributable to:
Owners of the Company		(8,369)	(13,407)
Non-controlling interest		(703)	45
		(9,072)	(13,362)

¹ Restatements are detailed in Note 2 of the notes to the financial statements.

/ CONSOLIDATED BALANCE SHEET

/ COMPANY NUMBER 07264678

/ AS AT 31 DECEMBER 2021

	Note	2021 $'000	2020 Restated¹ $'000	As at 1 January 2020 Restated¹ $'000
Non-current assets
Goodwill	13	22,236	22,490	21,750
Other intangible assets	14	15,654	10,329	10,148
Total intangible assets		37,890	32,819	31,898
Property, plant and equipment	15	53,489	54,669	35,324
Right-of-use assets	23	36,383	35,415	53,291
Investments accounted for using equity method	17	−	2,000	15,112
Trade and other receivables	19	291	13,030	4,221
Deferred tax asset	22	3,918	-	2,252
		131,971	137,933	142,098
Current assets
Assets held for sale	17	-	-	2,598
Inventories	18	8,915	5,978	7,271
Trade and other receivables	19	63,808	49,359	76,078
Current tax receivable	10	27	1,280	1,146
Cash and cash equivalents		10,243	16,136	8,463
		82,993	72,753	95,556
Total assets		214,964	210,686	237,654
Current liabilities
Trade and other payables	24	(39,342)	(38,085)	(51,624)
Current tax liabilities	10	(574)	(15)	−
Obligations under leases	23	(7,970)	(8,566)	(18,560)
Provisions	30	(772)	(679)	(521)
Borrowings	21	(40,175)	(1,000)	(848)
Deferred revenue	32	(8,880)	(12,676)	(2,707)
Deferred consideration	20	(290)	-	-
		(98,003)	(61,021)	(74,260)
Total assets less current liabilities		116,961	149,665	163,394
Non-current liabilities
Borrowings	21	(26,979)	(52,197)	(45,394)
Deferred revenue	33	(2)	(691)	(4,382)
Provisions	30	(348)	(774)	(594)
Obligations under leases	23	(40,032)	(37,573)	(43,084)
Deferred tax liabilities	22	−	(2,109)	(819)
Trade and other payables	24	(1,821)	-	-
Deferred consideration	20	(256)	-	-
		(69,438)	(93,344)	(94,273)
Total liabilities		(167,441)	(154,365)	(165,411)
Net assets		47,523	56,321	69,121
Shareholders' equity
Share capital	25	954	953	953
Share premium	25	63,502	63,473	63,473
Other reserves	25	34,997	35,360	34,798
Foreign exchange reserve		(24,722)	(24,415)	(25,691)
Accumulated losses		(27,301)	(19,846)	(5,163)
Total shareholders' equity		47,430	55,525	68,370
Non-controlling interest	26	93	796	751
Total equity		47,523	56,321	69,121

¹ Restatements are detailed in Note 2 of the notes to the financial statements

The financial statements were approved by the Board of Directors and authorised for issue on 27 May 2022 and are signed on their behalf by:

Marwan Khalek
Director

/ CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

/ FOR THE YEAR ENDED 31 DECEMBER 2021

	Share capital $'000	Share premium $'000	Other reserves $'000	Foreign exchange reserve $'000	Accumulated profit/(losses) $'000	Total shareholders' equity $'000	Non- controlling interest $'000	Total equity $'000
Balance at 1 January 2020, as reported	953	63,473	34,798	(29,179)	(5,062)	64,983	751	65,734
Restatement¹	-	-	-	3,488	(101)	3,387	-	3,387
Balance at 1 January 2020, restated	953	63,473	34,798	(25,691)	(5,163)	68,370	751	69,121
(Loss)/profit for the year, restated	-	-	-	-	(14,683)	(14,683)	45	(14,638)
Other comprehensive income, restated¹	-	-	-	1,276	-	1,276	-	1,276
Total comprehensive (loss)/profit for the year, restated¹	-	-	-	1,276	(14,683)	(13,407)	45	(13,362)
Cost of share-based payments (Note 31)	-	-	562	-	-	562	-	562
Balance at 31 December 2020, restated¹	953	63,473	35,360	(24,415)	(19,846)	55,525	796	56,321
Loss for the year	-	-	-	-	(8,062)	(8,062)	(703)	(8,765)
Other comprehensive expenditure	-	-	-	(307)	-	(307)	-	(307)
Total comprehensive loss for the year	-	-	-	(307)	(8,062)	(8,369)	(703)	(9,072)
Shares issued in the year	1	29	-	-	-	30	-	30
Cost of share-based payments (Note 31)	-	-	244	-	-	244	-	244
Transfer for lapsed options²	-	-	(607)	-	607	-	-	-
Balance at 31 December 2021	954	63,502	34,997	(24,722)	(27,301)	47,430	93	47,523

¹ Restatements are detailed in Note 2 of the notes to the financial statements

² Value of vested options forfeited by leavers as per Note 31

/ CONSOLIDATED CASH FLOW STATEMENT

/ FOR THE YEAR ENDED 31 DECEMBER 2021

	Note	Year ended 2021 $'000	Year ended 2020 Restated¹ $'000
Net cash generated by operating activities	27	5,225	35,344

Cash flows from investing activities
Purchases of property, plant and equipment	15	(3,379)	(25,298)
Purchases of intangibles	14	(2,604)	(2,521)
Proceeds on disposal of investments and assets held for sale	17	2,000	9,954
Interest received		1,061	430
Acquisition of business, net of cash acquired	12	(8,146)	(1,544)
Net cash used in investing activities		(11,068)	(18,979)

Cash flows from financing activities
Lease payments	23	(9,567)	(17,683)
Interest paid		(709)	(660)
Proceeds from borrowings	28	22,574	33,987
Repayment of borrowings	28	(12,361)	(24,471)
Net cash used in from financing activities		(63)	(8,827)

Net (decrease)/increase in cash and cash equivalents		(5,906)	7,538
Cash and cash equivalents at the beginning of year		16,136	8,463
Effect of foreign exchange rates		13	135
Cash and cash equivalents at the end of year		10,243	16,136

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Cash and cash equivalents comprise cash and bank balances. The carrying amount of these assets is approximately equal to their fair value.

/ NOTES TO THE FINANCIAL STATEMENTS

/ FOR THE YEAR ENDED 31 DECEMBER 2021

1. General information

Gama Aviation Plc (the "Company") is a public limited company (company number 07264678) whose shares are listed on the Alternative Investment Market ('AIM') of the London Stock Exchange under the ticker symbol GMAA and is incorporated and domiciled in England in the United Kingdom. The address of the registered office is 1^st Floor, 25 Templer Avenue, Farnborough, Hampshire, England, GU14 6FE.

2. Basis of preparation and significant accounting policies

Statement of compliance

These financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 ("IFRS") and the applicable legal requirements of the Companies Act 2006.

Basis of preparation

The audited results are derived from the full financial statements for the year ended 31 December 2021, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 ('IFRS') and the applicable legal requirements of the Companies Act 2006.

The audited results presented here are not the Group's statutory accounts for the years ended 31 December 2021 and 31 December 2020. The statutory accounts for the year ended 31 December 2021 will be delivered to the Registrar of Companies shortly. The statutory accounts for the year ended 31 December 2020 have been filed with the Registrar of Companies. The auditor's reports on the Group's statutory accounts for the years ended 31 December 2021 and 2020 are unqualified and do not contain statements under Section 498 of the Companies Act 2006.

The financial statements are prepared on a going concern basis under the historical cost convention. The preparation of Consolidated Financial Statements requires management to make judgements and estimates that affect the reported amounts of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Actual future outcomes could differ from those estimates.

Climate Change

In preparing the Consolidated Financial Statements the Group has informally considered the impact of climate change, particularly in the context of the disclosures included in our Corporate Social Responsibility report which are included as part of the full Annual Report. These considerations did not have a material impact on the financial reporting judgements and estimates, consistent with the assessment that climate change is not expected to have a significant impact on the Group's going concern assessment nor the long-term viability of the Group.

UK-adopted international accounting standards

On 31 December 2020 EU-adopted IFRS was brought into UK law and became UK-adopted international accounting standards, with future changes to IFRS being subject to endorsement by the UK Endorsement Board. The consolidated financial statements have transitioned to UK-adopted international accounting standards.

The financial statements have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable.

Adoption of new and amended standards adopted by the Group

The Group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2021:

· Amendments to IFRS 16 - COVID-19 Related Rent Concessions

· Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform Phase 2

The amendments listed above have not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for
31 December 2021 reporting periods and have not been early adopted by the Group. These amendments are
not expected to have a material impact.

Restatement

The 2020 figures have been restated to reflect the following:

· During 2021 a detailed review was conducted of Group leases. New information came to light from this review indicating that errors had been made on the implementation of IFRS 16 (1 January 2019) and in subsequent recognition relating to the treatment of a number of initial lease obligations at implementation (impacting subsequent impairments), contractual rental increases, computational errors on foreign exchange, identification of lease-related payments and the length of lease used for ROU assets and liabilities and related leasehold improvements. 2020 opening balances, results for the year, other comprehensive income, balance sheet amounts and cashflows have been restated to correct these errors.

· A similar review and reconciliation was also conducted of foreign exchange reserve balances and consolidation journals relating to investments in subsidiaries and associated impairments. An error was found in accounting for working capital and foreign exchange reserve balances in 2018 as a result of which group liabilities were overstated. This resulted in changes to 2020 opening balances and working capital movements.

· Reclassify of compliance and assurance costs previously included in cost of sales to administrative costs, aligning a previous inconsistency.

In addition, a 2020 revenue disclosure in Note 4 has been restated to reclassify revenue of $5,661k relating to the branding fee and other contracts as recognised over time rather than at a point in time following a review.

The above restatements have impacted the consolidated income statements, consolidated statements of comprehensive income, balance sheets and consolidated cash flow statements as follows:

	As previously reported $'000	IFRS 16 $'000	Investment and foreign exchange $'000	Compliance costs $'000	Restated $'000
2020 consolidated income statement:
Revenue	197,503	−	−	−	197,503
Cost of sales	(145,468)	(318)	−	1,061	(144,725)
Gross Profit	52,035	(318)	−	1,061	52,778
Adjusted administrative expenses	(37,586)	(177)	−	(1,061)	(38,824)
Adjusting items in administrative expenses¹	(14,435)	469	−	−	(13,966)
Administrative expenses	(52,021)	292	−	(1,061)	(52,790)
Operating profit/(loss)	14	(26)	−	−	(12)
Adjusted EBIT¹	(4,323)	(495)	−	−	(4,818)
EBIT	(5,834)	(26)	−	−	(5,860)
Finance income	1,535	−	−	−	1,535
Finance expense	(3,940)	123	−	−	(3,817)
Loss before tax	(8,239)	97	−	−	(8,142)
Tax	(6,496)	−	−	−	(6,496)
Loss after tax	(14,735)	97	−	−	(14,638)
Attributable to owners	(14,780)	97	−	−	(14,683)

2020 consolidated other comprehensive income:
Loss for the year	(14,735)	97	−	−	(14,638)
Exchange differences on translation of foreign operations	2,194	(1,010)	−	−	1,184
Share of other comprehensive income of associates	92	−	−	−	92
Other comprehensive income	2,286	(1,010)	−	−	1,276
Total comprehensive loss for the year	(12,449)	(913)	−	−	(13,362)
Attributable to owners	(12,494)	(913)	−	−	(13,407)

Consolidated balance sheet 1 January 2020:
Right-of-use assets	52,315	976	−	−	53,291
Trade and other receivables	72,956	−	3,122	−	76,078
Trade and other payables	(52,353)	729	−	−	(51,624)
Obligations under leases	(60,204)	(1,440)	−	−	(61,644)
Net assets and Total equity	65,734	265	3,122	−	69,121
Accumulated profit and loss reserve	(5,062)	(101)	−	−	(5,163)
Foreign exchange reserve	(29,179)	366	3,122	−	(25,691)
Total shareholders' equity	64,983	265	3,122	−	68,370
Net debt¹	(97,983)	(1,440)	−	−	(99,423)

Consolidated balance sheet 31 December 2020:
Property, plant and equipment	54,974	(305)	−	−	54,669
Right-of-use assets	38,022	(2,607)	−	−	35,415
Trade and other payables	(40,074)	(1,133)	3,122	−	(38,085)
Obligations under leases	(49,492)	3,353	−	−	(46,139)
Provisions for liabilities	(1,497)	44	−	−	(1,453)
Net assets and Total equity	53,847	(648)	3,122	−	56,321
Accumulated profit and loss reserve	(19,842)	(4)	−	−	(19,846)
Foreign exchange reserve	(26,893)	(644)	3,122	−	(24,415)
Total shareholders' equity	53,051	(648)	3,122	−	55,525
Net debt¹	(86,553)	3,353	−	−	(83,200)

2020 consolidated cash flow statement:
Net cash generated by operations	33,683	1,661	−	−	35,344
Lease payments	(16,022)	(1,661)	−	−	(17,683)

Finance costs	3,940	(123)	−	−	3,817
Depreciation of property, plant and equipment	4,809	(36)	−	−	4,773
Depreciation of right-of-use assets in administrative expenses	540	190	−	−	730
Depreciation of right-of-use assets in cost of sales	10,708	394	−	−	11,102
Impairment of right-of-use asset	7,013	(469)	−	−	6,544
Rent free credit	−	(259)	−	−	(259)
Decrease in payables	(12,050)	1,867	−	−	(10,183)

¹ Refer to Note 6 of the notes to the financial statements for details of alternative performance measures

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Operational Performance Review and Finance Review.

To support their assessment of going concern, the Directors have performed a detailed analysis of cash flow projections for the Group covering the period from the date of approval of the annual financial statements to 30 June 2023. The Directors have also considered the outlook for the business beyond 30 June 2023 based upon its five-year Strategic Plan. The analysis takes account of the following amongst other relevant considerations:

• The $50.0m committed revolving credit facility (RCF), of which $12.1m (2020: $24.7m) is undrawn at the reporting date and a £20.0m (2020: £20.0m) term loan;

• The one-off and non-recurring nature of the receipt in 2021 relating to the remaining balance of the US Air Associate disposal proceeds of $17.5m and the related tax payment of $3.1m;

• The acquisition of Jet East, which resulted in additional working capital consumption in 2021 due to operational inefficiencies at start-up locations;

• Cash at 31 December 2021 of $10.2m (2020: $16.1m) and cash at 28 February 2022 of $16.6m; and

• Working capital levels and the conversion of profits into cash flows

The borrowing facilities have no covenants and fall due for repayment on 14 November 2022 and 31 January 2023 respectively. The RCF is settled and drawn down on a cyclical basis. It falls due for repayment within twelve months of the reporting date and has been presented in current liabilities. The term loan falls due for repayment over twelve months from the reporting date and has been presented in non-current liabilities. The RCF and term loan are held in the Company.

The Company and Group is well advanced in its negotiations with HSBC regarding refinancing and the Directors are confident that these facilities will be renewed at the same levels, albeit based on draft term sheets at a higher finance cost. However, at the time of approving the Annual Report, the renewal of the facilities has not been concluded. Discussions with alternative potential lenders remain at too early a stage to be considered.

The key assumptions in the Board approved base case projections relate to revenue performance and working capital cash flows and the Directors have included what they consider to be a cautious level of revenue performance and working capital. A severe but plausible downside scenario has also been assessed, which reflects operating cash flows in the first half of 2022 remaining no better than 2021 operating cash flows after excluding significant one-off receipts and payments. In the Group's base case forecasts, the Group maintains a minimum of $26.8m headroom against its cash and available facilities (assuming renewal of existing facilities). In the Group's downside scenario, the Group maintains a minimum of $16.8m headroom against its cash and available facilities before accounting for any significant management action to improve cash flows via curtailing operating cost, deferring capital expenditure and exploring other financing arrangements for some of its fixed asset base.

Accordingly, the Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.

Therefore, after making appropriate enquiries and considering the uncertainties described above, the Directors consider that it is appropriate to adopt the going concern basis in preparing the Company and Group financial statements. However, as the renewal of borrowing facilities with HSBC has not been concluded at the time of approving the financial statements there is a risk that, if these facilities were not renewed at the proposed levels, and the Company and Group were not be able to secure equivalent levels of funding from alternative facilities, loans and asset-backed financing, the Company and the Group may not be able to meet its liabilities as they fall due.

As a result, there is a material uncertainty that may cast significant doubt about the Company and the Group's ability to continue as a going concern. The financial statements do not include any adjustments that would result if the Company or Group were unable to continue as a going concern.

Use of alternative performance measures (APMs)

The performance of the Group is assessed and discussed on an "adjusted" basis, using a variety of APMs, including Adjusted Revenue, Adjusted Gross Profit, Adjusted Earnings Before Interest and Tax (EBIT), Organic Revenue Growth and Net debt. The term "Adjusted" refers to the relevant measure being reported for continuing operations excluding "Adjusting items".

The Directors believe that adjusted profit and earnings per share measures provide additional and more consistent measures of underlying performance to shareholders by removing certain trading and non-trading items that are either not closely related to the Group's operating cash flows or non-recurring in nature. These and other APMs are used by the Directors for internal performance analysis and incentive compensation arrangements for employees. The term "Adjusted" is not defined under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures. Where applicable, segmental measures are calculated in accordance with Group measures.

The Group's Income Statement and segmental analysis separately identify trading results before Adjusting items. The Directors believe that presentation of the Group's results in this way is relevant to an understanding of the Group's financial performance, as Adjusting items are identified by virtue of their size, nature or incidence. This presentation is consistent with the way that financial performance is measured by management and reported to the Board and assists in providing a meaningful analysis of the trading results of the Group. In determining whether an event or transaction is treated as an Adjusting item, management consider quantitative as well as qualitative factors such as the frequency or predictability of occurrence.

The income statement items that are excluded from the Statutory results are referred to as Adjusting items. Adjusting items include exceptional items, amortisation of acquired intangibles, share-based payment charges and tax related to Adjusting items. These items are defined and explained in more detail as follows:

(a) Exceptional items

Within Adjusting items, exceptional items are items of income or expenditure that are not considered to reflect in year operational performance of the continuing business. These are recorded in accordance with the policy set out below:

· Transaction costs - arising on acquisitions, disposals, and debt refinancing

· Integration and business re-organisation - legal and professional fees and non-recurring operating costs arising from significant acquisition integration or business re-organisation activities. Non-recurring operating costs means those costs that are related to a specific integration or re-organisation event that will not be repeated because they are unique to the event and which are not expected to follow a consistent level of expense from one accounting period to the next

· Litigation - legal costs (which may be incurred in more than one accounting period) are treated as exceptional if they relate to specific commercial legal events that are not in the normal course of trading activity in respect of one-off or related series of cases and are not expected to follow a consistent level of expense from one accounting period to the next

· Impairment - arising from significant losses identified from impairment reviews

· Other items - other significant non-recurring items that are non-trading in nature

(b) Amortisation of acquired intangible assets

Exclusion of amortisation of acquired intangibles accounted for under IFRS 3 from the Group's results assists with the comparability of the Group's profitability with peer companies. In addition, charges for amortisation of acquired intangibles arise from the purchase consideration of a number of separate acquisitions. These acquisitions are portfolio investment decisions that took place at different times over several years, and so the associated amortisation does not reflect current operational performance.

The Group treats share-based payments as an Adjusting item because share-based payments are a significant non-cash charge driven by a valuation model that references Gama's share price and each new share award is subject to volatility when it is measured at the grant date.

(d) Other long-term employee benefits

Other long-term employee benefits agreed as part of the Jet East acquisition and contractually linked to ongoing employment as well as business performance are accrued over the period in which the related services are received and are recorded an Adjusting item.

(e) Tax related to Adjusting items

The elements of the overall Group tax charge relating to the above Adjusting items are also treated as Adjusting. These elements of the tax charge are calculated with reference to the specific tax treatment of each individual Adjusting item, taking into account its tax deductibility, the tax jurisdiction concerned, and any previously recognised tax assets or liabilities.

Significant accounting policies

The Group's significant accounting policies are set out below. These accounting policies have been applied consistently to all periods presented in these Consolidated Financial Statements.

(a) Revenue from contracts with customers

Revenue is measured based on the performance obligations and consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer or when it meets the performance obligations specified or implied in the contract. The Group has revenue from the following sources:

· Business Aviation:

o Managed aircraft contracts and specific air services

o Charter services

o Maintenance of aircraft

o Fixed base operations (FBO)

· Special Mission:

o Mission solutions and expertise with aviation assets

· Technology & Outsourcing (T&O):

o Airworthiness services

o Software solutions

· Branding fees

Managed aircraft contracts and specific air services

Services provided under managed aircraft contracts include flight training, cost management, flight planning and scheduling, crew management, maintenance oversight and regulatory compliance as separate performance obligations falling into one or more of the contract components identified below.

The services are contract based with costs such as fuel, insurance, crew and maintenance being recharged to the client. Specific air services provided under this heading include a variety of specific contracts with customers where one or more elements of fully managed services are provided.

The managed aircraft contracts have three components:

1. Pre-delivery services and services prior to aircraft's entry into service (if appropriate)

2. Management services

3. Variable fees based on flying hours and related rechargeable costs

Most specific services provided arise in components 1 and 3, whilst management services relate to overarching administrative services relating to ongoing regulatory compliance requirements, billed on a regular basis over the life of the contract. These components are distinct as the customer can benefit from the services on their own and the Group's promise to provide the service is separately identifiable from other promises in the contract. The three components are therefore deemed to be separate performance obligations and revenue is recognised based on the above performance obligations as follows:

1. Revenue is recognised once the service has been performed (at a point in time)

2. The customer simultaneously receives and consumes the benefits provided by the Group, therefore revenue is recognised over time

3. Variable flying hours revenue is recognised monthly based upon actual flight information and other relevant information held on the internal billing system (at a point in time). Rechargeable costs are recognised gross, as revenue and related cost of sales and are recognised at a point in time (for example, monthly) based upon either actual rechargeable costs or estimated costs to be recharged

The Group has considered whether it is acting as agent or principal in the context of its managed aircraft contracts and has concluded that it is the principal in relation to the entirety of these contracts. Rechargeable costs are recognised gross because the Group controls the services before they are transferred to customers and because they are linked to wider management services. For practical purposes, management services and rechargeable costs (and other variable fees based on flying hours) are itemised separately in billing to customers.

Charter services

Revenue from managed fleet and sub-contracted charter services are recognised once the charter service has been performed (at a point in time). The Group has considered whether it is acting as agent or principal in the context of its sub-contracted charter services and has concluded that it is the principal.

Maintenance of aircraft

The Group provides both base and line maintenance services. Base maintenance relates to the planned maintenance that is required by the aircraft manufacturer or component supplier. This work is complex, highly regulated and location specific. Line maintenance covers irregular maintenance activities, component failure or simple wear and tear. Both types of services are provided on a fee or contract basis.

Maintenance revenue is recognised over time in line with the performance of the related maintenance work as the Group's performance of maintenance services does not create assets with an alternative use and the Group has an enforceable right to payment for performance completed to date. In most cases work is carried out and billed to the customer in the same accounting period. However, for work ongoing at the end of an accounting period an assessment of the extent to which contracted work is completed is made and a corresponding amount of revenue is accrued. This assessment is made using the input method of labour hours expended and costs incurred.

Shorter duration ad-hoc maintenance revenues are recognised at a point in time in line with the performance obligation.

Fixed base operation

Within Business Aviation, the Group also provides fixed base operation activities in the US, Jersey, the UK and the Middle East. This includes hangar parking and apron parking space to customers. Revenue is recognised as the service is provided over time.

Mission solutions and expertise with aviation assets

Revenue includes fixed contract fees and variable fees such as revenue earned with reference to flying hours or other support services. Revenue is recognised primarily over time based on contractual rates as the related services are performed.

The Group undertakes certain equipment design and modification activities for some customers. Revenue is recognised over time in line with the performance of the related design and modification work for design projects because the Group's performance of its contractual obligations creates or enhances an asset that the customer controls as the asset is created or enhanced. Work that is completed but not yet billed under design and modification contracts at the end of an accounting period is accrued and a contract asset (accrued income) is recognised on the balance sheet, based upon the input method of measuring progress (cost and labour hours expended to date). The input method is considered to be the best estimate of the transfer of services. A contract liability (deferred revenue) is recognised on the balance sheet for revenues received in advance from the customer until the performance obligations are discharged.

Airworthiness services

T&O provides continuing airworthiness management (CAM) and airworthiness review certification (ARC) services for business aviation, military and commercial airline operators. Revenue includes fixed contract fees and variable fees such as revenue earned with reference to ad-hoc services. Revenue is recognised relating to services rendered using an accrual method and in accordance with the terms of the contracts pursuant to which such services are rendered. Revenue from aircraft services is recognised based on contractual rates as the related services are performed.

Software solutions

myairops^® has developed a suite of business aviation products deployed as "Software as a Service" (SaaS) and mobile app solutions for business aviation operators, flight support companies, FBOs and regional airports.

myairops^® revenue represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the value of the consideration earned. Where a contract has only been partially completed at the balance sheet date, revenue represents the value of the service provided to date based on a proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred revenue.

Branding fees

The Group receives a branding fee from Gama Aviation LLC. The Group recognises revenue over time as the customer simultaneously receives and consumes the benefits provided by the Group.

(b) Segmental reporting

An operating segment is a distinguishable component of the Group that is engaged in business activities from which it may earn revenues and incur expenses, and whose operating results are reviewed regularly by the Chief Operating Decision Maker (the Group Chief Executive) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Reportable segments are operating segments that either meet the thresholds and conditions set out in IFRS 8 or are considered by the Board to be appropriately designated as reportable segments under IFRS 8.

(c) Government grants

During the prior year the Group received a potentially forgivable loan under the Paycheck Protection Program (PPP), managed by the US Small Business Administration (SBA) under the auspices of the US Government Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Under IAS 20, a forgivable loan from government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan. The Group has adopted the income approach in relation to this loan which provides that government grants should be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grant is intended to compensate.

The Group applied to Citibank for a loan under the PPP in order to avoid significant pandemic-driven headcount reductions in its US workforce. $5,753k was received from Citibank on 12 May 2020 and was initially recognised as borrowings in current liabilities. $4,753k of these funds are considered by the Company to be eligible for forgiveness within the terms of the PPP and have therefore been recognised as income against the related expenses in the 2020 income statement, reducing the amount of borrowings at the period end to $1,000k. The utilisation of the grant is reflected against the related expenses in cost of sales and administrative expenses. Refer to Notes 3 and 21 for further details.

Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in Section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, borrowers are required to consider the required certification that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant." Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. Conscious of the significant uncertainty regarding the extent and duration of the global pandemic and its potential impact on the Group's activities and financial resources, the Group applied for the loan in good faith on the above basis, and the proceeds have been used to defray qualifying expenditures. The Group submitted the loan forgiveness application on 1 September 2021 and the Group awaits confirmation from the SBA. The Board has consulted with its outside legal advisors as to the eligibility for forgiveness of the loan. The Board believes it is appropriate under IAS 20 to continue to recognise the receipt of the loan and its anticipated partial forgiveness and that such treatment is necessary for these accounts to show a true, fair and balanced view of the Group's 2020 financial position given the impact of the global pandemic on its operations.

Other forms of government grants have been received by the Group, including under the UK Furlough scheme and under a Hong Kong payroll scheme. As noted elsewhere in these accounts, the nature of the Group's operations in the UK, and the long-term nature of its Special Mission contracts, provided a greater degree of resilience to the pandemic with a consequently lower need for government support. All other forms of government grants have been recognised on the income approach, reducing the costs for which the grant is intended to compensate.

In accordance with IAS 20, in the event that a government grant becomes repayable, this would be accounted for prospectively through the income statement.

(d) Leases

Definition of a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

· The contract involves the use of an identified asset - this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

· The Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

· The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if either:

· The Group has the right to operate the asset; or

· The Group designed the asset in a way that predetermines how and for what purpose it will be used

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

As a lessee

As a lessee, the Group leases many assets, including hangars, property, vehicles and IT equipment.
The Group recognises right-of-use assets and lease liabilities for most of these leases - i.e. these leases are on-balance sheet. Previously the Group leased aircraft.

Lease liabilities are measured at the present value of the remaining lease payments. Where leases commenced after the initial transition date, the lease payments are discounted using the interest rate implicit in the lease.
If that rate cannot be determined, the Group's incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. Where appropriate, lease liabilities are revalued at each reporting date using the spot exchange rate.

Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

The Group has tested its right-of-use assets for impairment at the reporting date and further details on impairments are shown in Note 23.

The Group depreciates right-of-use assets over the over the shorter of its useful economic life and the lease term on a straight-line basis unless the lease is expected to transfer ownership of the underlying asset to the Group, in which case the asset is depreciated to the end of the useful life of the asset.

Short-term leases are leases with a lease term of 12 months or less. Low-value leases are determined to be those with an initial discounted total obligation of less than $5k. Payments associated with short-term leases and low-value leases are recognised on a straight-line basis as an expense in the income statement.

Rent free concessions granted during the COVID-19 pandemic have been credited to the income statement in the year they were granted, with a resulting reduction in the lease obligation.

As a lessor

The Group leases out property included within its right-of-use assets. The Group assessed the classification of the sub-lease contracts with reference to the right-of-use asset rather than the underlying asset, and concluded that they are operating leases under IFRS 16. The right-of-use assets recognised from the head leases are presented in leasehold property and depreciated over the life of the lease. The Group also leases out aircraft included within property, plant and equipment, on short leases. The Group recognises these leases as operating leases, with income generated included in revenue.

(e) Supplier volume rebates

The Group has supplier contracts for the provision of certain services, which attract volume rebates, the credit for which is initially recognised centrally and together with other central income and expenses allocated to the respective divisions as appropriate. The anticipated rebate receivable is accrued throughout the year based on the agreement terms.

(f) Business combinations

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the total of the acquisition date fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners and the equity issued by the Group.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control is accounted for as an equity transaction, being a disposal or acquisition of non-controlling interest.

(g) Goodwill

Goodwill arising on consolidation represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and acquisition date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

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.

(h) Intangible assets

Internally generated intangible assets are recognised only if they satisfy the IAS 38 criteria in that a separately identifiable asset is created from which future economic benefits are expected to flow and the cost can be measured reliably. The life of each asset is assessed individually. The Group has no indefinite life intangible assets.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Included in intangible assets acquired are part 145 approvals, licences and brand, customer relations, and computer software. Costs associated with the configuration and customisation of Software as a Service arrangements are capitalised as intangible assets only where control of the software exists.

A summary of the policies applied to the Group's acquired intangible assets is as follows:

· Part 145 approvals 20% per annum, straight line method

· Licences 10% per annum, straight line method

· Brands 20% per annum, straight line method

· Customer relations 10% per annum, straight line method

· Software 20%-33% per annum, or life of licence if shorter, straight line method

Amortisation rates shown above are the maximum for these intangible assets and in the current year there were no intangibles that had a shorter useful life.

The amortisation of internally generated software commences at the start of the year following.

Prior to the acquisition of Jet East, intangible assets relating to brands were amortised at 10% per annum.

The useful life of intangible assets is reviewed each financial year end and, if expectations differ from previous estimates, the change is accounted for as a change in an accounting estimate. The Group considered the impact of climate change and other factors before concluding that there was no change in useful life of intangible assets in the current year.

(i) Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is recognised so as to write-off the cost of assets less their residual values over their useful lives, using the straight line method, on the following bases:

· Leasehold improvements Life of lease and no residual value

· Right-of-use assets Life of lease and no residual value

· Aircraft and refurbishments The higher of 20 years (5% per annum) less the age of aircraft at purchase and 5 years (20% per annum). A 25% residual value (on the original cost) is in place where engines are on an engine maintenance programme as this is considered to support a residual value

· Helicopters 5% per annum and 25% residual value (on the original cost)

· Furniture, fixtures and equipment 20% to 33% per annum and no residual value

· Motor vehicles 20% per annum and no residual value

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

The residual value and useful life of property, plant and equipment is reviewed each financial year end and, if expectations differ from previous estimates, the change is accounted for as a change in an accounting estimate. The Group considered the impact of climate change and other factors before concluding that there was no change in residual value or useful life of property, plant and equipment in the current year.

(j) Assets held for sale

The Group classifies assets as held for sale if their carrying value will be recovered principally through sale rather than through continuing use. Such assets are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding finance costs and income tax expense.

The criteria for assets held for sale is regarded as only met when the sale is highly probable, and the asset is available for immediate sale in its present condition.

Property, plant and equipment, and intangible assets are not depreciated or amortised once classified as held for sale.

(k) Investments in associate and joint venture

An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries.

The Group's investments in its associates and joint venture are accounted for using the equity method of accounting. The investment is carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group's share of the net assets of the investment, less any impairment in the value of the investment. Losses in excess of the Group's interest in the investment (which includes any long-term interests that, in substance, form part of the Group's net investment) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the investment.

Where a Group company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group's interest in the relevant associate. Losses may provide evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment. The Group's share of the changes in the carrying value of the investments in associates is recognised in the income statement.

(l) Inventories

Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows:

· Raw materials and consumables: purchase cost on a first in, first out basis

· Work in progress: cost of direct materials and labour

· Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale

Inventories include Rotable stock. Rotable stock are inventory items that can be repeatedly and economically restored to their fully serviced condition, in which already-repaired equipment is exchanged for defective equipment, which in turn is repaired and kept for future exchange. These items have extensive life expectancy through repetitive overhaul process.

The Rotable stock could either be recognised as property, plant and equipment or inventory. In line with industry practice, the Group policy recognises Rotable stock as inventory. In addition, the cost of any refurbishment of Rotable stock is recognised in inventory.

The Group policy on recognising inventory at the lower of cost and net realisable value does this by providing for aged inventories on a sliding scale over the preceding eight years. As a result, inventory older than eight years is written off in full.

The significant estimation uncertainty to the valuation of inventory arises out of the wide range and nature of inventory held, each with different demand, inventory days and opportunity to utilise. While no specific inventory line has material estimation uncertainty in its valuation, there is risk across all lines in aggregation.

(m) Cash and cash equivalents

The Group's cash and cash equivalents in the statements of financial position comprise cash at bank and on hand and short-term deposits with a maturity of three months or less from inception, which are subject to an insignificant risk of changes in value.

For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management.

(n) Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Trade receivables and other receivables are subsequently measured at amortised cost less an expected credit loss allowance, determined as set out below in "Impairment of financial assets". Any write-down of these assets is expensed to the income statement.

Where there are sub-participation arrangements, sub-participation proceeds are offset against the financial asset provided that the sub-participation meets all pass-through conditions, namely, there is no recourse to the transferor, and the transferor does not retain any significant risks and rewards of ownership of the financial asset.

Impairment of financial assets

It is not necessary for a credit event to have occurred before credit losses are recognised. Instead, the Group accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date.

The impairment model applies to the Group's financial assets that are debt instruments measured at amortised costs as well as the Group's lease receivables, contract assets and issued financial guarantee contracts. The Group has applied the simplified approach to recognise lifetime expected credit losses for its trade receivables, accrued income and contracts assets as permitted by IFRS 9.

Expected credit losses are calculated with reference to average loss rates actually incurred in the three most recent reporting periods to which a country risk premium is added, based on the location of each business. The combined loss rate represents the maximum expected credit default risk, which is expressed as a percentage. The Group average combined loss rate is approximately 1%.

This percentage rate is then applied to the economic exposure which comprises of trade receivables, contract assets and accrued income, all of which is then reduced by any specific loss allowances, and any related trade and other payables with the debtor. A probability risk spread is used to apportion the loss rate across the ageing categories as follows:

· 80% of debt that is not yet due (i.e. the Group's average combined loss rate of 1% is discounted by 20%, meaning a 0.8% loss allowance would be made to debt not yet due)

· 85% of debt that is <30 days overdue

· 90% of debt that is 30-60 days overdue

· 95% of debt that is 60-90 days overdue

· 100% of debt that is >90 days overdue

Financial liabilities and equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Other financial liabilities

Other financial liabilities, including borrowings and payables, are initially measured at fair value and subsequently at amortised cost, net of transaction costs.

Derecognition of financial assets and financial liabilities

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(o) Provisions and contingent liabilities

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

A contingent liability is disclosed where the existence of the obligation will only be confirmed by future events, or where the amount of the obligation cannot be measured reliably.

(p) Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in US Dollars, which is the presentation currency for the consolidated financial statements. These financial statements are presented in
US Dollars because that is the currency of the primary economic environment in which the Group operates. The Company's functional currency is determined to be Pounds Sterling because this is the currency of the primary economic environment in which the Company operates.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at 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. Foreign currency fluctuations on monetary items that are financing in nature, being foreign currency borrowings, are presented in finance income or expenses. All other foreign currency fluctuations on monetary items are presented within Adjusted EBIT.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognised in other comprehensive income and accumulated in equity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate for each year end.

(q) Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense when employees have rendered the service entitling them to the contributions. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Group's obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.

(r) Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of 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 and associates, 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 and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply in the period when the liability is settled, or the asset is realised.

Deferred tax is charged or credited in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

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.

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in Note 2, the Directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors, including anticipated future events and market conditions, that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group's accounting policies

The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that management have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

(a) Sharjah operations

During 2017, the Group entered into a Build-Operate-Transfer and Service Concession agreement with Sharjah Airport Authority under which the Group is committed to construct a Business Aviation Centre (BAC) at Sharjah Airport. During 2020, the assets under construction and right-of-use assets associated with this project were impaired due to COVID-19 related delays, with $4,609k and $6,445k charged to the income statement respectively.

During 2021, as a result of improving conditions, a 10-year extension was signed to the agreement, and the Group contracted with a third party to start development at the site in 2022. At the date of signing the Annual Report and Accounts, the full funding for the project has not been secured, and the Directors have taken the decision to impair the new right-of-use asset relating to the extension ($1,911k). Should funding for the project become probable, then the Directors currently anticipate reversal of some or all of these impairments.

(b) Paycheck Protection Program (PPP) qualifying expenditure

During the prior year, the Group received funds under the PPP in the form of a loan arrangement from Citibank guaranteed by the US Government, which is specifically intended to help businesses maintain their US workforce during the COVID-19 pandemic. The Group made the application in good faith and in the belief that the PPP loan request was necessary and otherwise in accordance with the then applicable rules, to support its ongoing operations given the economic uncertainty caused by the pandemic. $5,753k funds were received on 12 May 2020 and were initially recognised as borrowings in current liabilities. $4,753k of these funds are considered by the Company to be eligible for forgiveness within the terms of the PPP and have therefore been recognised as income against the related expenses in the income statement, reducing the amount of borrowings at the period end to $1,000k. Confirmation of partial loan forgiveness is expected within 12 months from the balance sheet date as a result of submitting the loan forgiveness application on 1 September 2021. The Board has consulted with its outside legal advisors as to the eligibility for forgiveness of the loan. The Board believes it is appropriate under IAS 20 to recognise the receipt of the loan and its anticipated partial forgiveness and that such treatment is necessary for these accounts to show a true, fair and balanced view of the Group's results given the impact of the global pandemic on its operations. The total balance is material and, while a different outcome is considered highly unlikely, this balance is sensitive to a material change in judgement in the event the US Government assessed the forgiveness differently. Refer to Note 2, Note 21 and Note 35 for further details.

(c) Presentation of consideration received from the sale of its US Air Associate, Gama Aviation LLC

During the prior year, the Group received consideration of $33.0m for the sale of its US Air Associate, Gama Aviation LLC. Management exercised judgement in determining the allocation of consideration between the 24.5% equity interest considered to be $10.0m, the $15.5m settlement of the existing branding contract (accelerated branding fees) and the $7.5m of consideration allocated for the continued use of the Gama Aviation brand for up to two years after the date of disposal, which is consistent with the pre-existing level of branding fee of $3.75m per year (total $7.5m).

(d) Classification of items of cost or income as "Exceptional" (exclusion of items from Adjusted EBIT)

Management consider exceptional items to be those that do not contribute to the underlying performance of the Group as set out in the policy in Note 2 to the notes to the financial statements, Basis of preparation and significant accounting policies - Significant accounting policies - Use of alternative performance measures (APMs). This requires judgement as management and Group's view of what qualifies as exceptional items may differ from similar judgements made by others. Exceptional items are treated as Adjusting items to enable more relevant and reliable financial information to be presented. The exceptional items recorded in the income statement relate to accelerated branding fees, transaction costs; business integration and re-organisation costs; legal costs arising primarily from historical Hangar 8 activity; and other non-recurring items that management judge to be exceptional.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period, that may have a significant risk of causing a materially different outcome to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(a) Valuation review on non-current assets

The review of goodwill, other intangible assets, property, plant and equipment and right-of-use assets requires the use of estimates related to future profitability and the cash-generating ability of the related businesses or in the case of the investment in associates, the fair value less costs to sell. The estimates used may differ from the actual outcome. Details of the impairment reviews performed and further details of the estimates inherent within these reviews are set out in Notes 13, 14, 15 and 23.

(b) Loss allowances on financial assets

The loss allowance is calculated based on management's best estimate of the amounts which will be recovered from trade receivables. A proportion of the trade receivables balance is with individuals and overseas groups, for whom it is more difficult to establish a credit rating. Management are in regular communication with aged debtors and assess the likelihood of recoverability on a regular basis. The estimate of the loss allowance may vary from the actual amounts recovered if an individual becomes unable to pay. An analysis of the trade receivables balance and indications of credit concentration are provided in Note 19. A change in the enforceability of these liens would materially change the loss allowance on financial assets.

(c) Valuation of inventories

In measuring inventory at the lower of cost and net realisable values, the estimate of the net realisable value represents management's best estimate and it may vary from the actual realisation, notwithstanding the regular review and monitoring. An analysis of the inventories and an inventory obsolescence allowance is provided in Note 18. Inventory valuation is sensitive to management's assessment of ageing and obsolescence of certain line items. Refer to Note 18.

(d) Estimation of revenue and costs recognised in relation to long-term contracts

In determining the revenue and costs to be recognised on long-term contracts, management estimate costs to complete, the outcome of commercial discussions at the time of contract conclusions and during renegotiation periods, and the period over which to recognise any expected changes in consideration or costs on renegotiation.

(e) Other long-term employee benefits

The acquisition of Jet East also includes a long-term incentive plan accounted for under IAS 19 with payments contractually linked to the continuing employment of executives of Jet East as well as business performance of the combined Business Aviation MRO US business. A remuneration charge of $1,821k (2020: nil) has been recognised within Adjusting items and an accrual of $1,821k (2020: nil) is included within non-current trade and other payables. The period over which the services are received is three years and the incentive plan is estimated to result in a future cash outflow of $6,024k (2020: nil) after this three-year period.

For the long-term incentive plan to result in future payments, business performance must exceed a Board approved projection, the acquisition case. Executives can earn up to a maximum of 9% ownership in the Business Aviation MRO US equity subject to business performance in the 2023 financial year and the level of indebtedness of the combined Business Aviation MRO US business at that time. The long-term incentive plan is accounted for as remuneration for post-acquisition services and is not part of the business combination.

A Board approved five-year Strategic Plan has been used to estimate business performance in the 2023 financial year and the level of indebtedness of the combined Business Aviation MRO US business at that time.

The key source of estimation uncertainty at the reporting date, that may have a significant risk of causing a materially different outcome to the carrying amounts of the other long-term employee benefit accrual or the associated remuneration charge within the next financial year, relates to a change in forecast business performance. The Directors consider that the carrying amount of the other long-term employee benefit accrual at 31 December 2021 of $1,821k (2020: nil) represents the present value of the service cost.

A 10% increase in the business performance in 2023 would result in an additional payment of around $602k in 2024, an additional charge for the year ended 31 December 2021 of $182k and an additional accrual at 31 December 2021 of $182k. Business performance in Business Aviation MRO US is calculated as a multiple of EBITDA less cash and cash equivalents and less borrowings.

(f) Valuation of deferred tax assets

The Group has recognised deferred tax assets on both timing differences, principally acquisition intangibles, and on taxable losses. Refer to Note 22 for further details.

4. Segment information

Reportable segments are operating segments that either meet the thresholds and conditions set out in IFRS 8 for separate reporting or are considered by the Board to be appropriately aggregated into reportable segments under IFRS 8.

The Company has made significant progress in transitioning its current year reporting to reflect the recent realignment of the business along its Strategic Business Units (SBUs), which were announced in the strategy section of the 2020 Annual Report. As a result of the transition during the current year, the results were reviewed by the Group Chief Executive Officer, who acts as the Chief Operating Decision Maker (CODM) in the new SBU structure. The CODM reviews monthly internal reporting on a pre-IFRS 16 basis at the operating segment level. The impact on application of IFRS 16 is reviewed separately ahead of statutory reporting.

The Group has three global business units: Business Aviation (Aircraft Management, Charter, FBO & Maintenance), Special Mission (Air Ambulance & Rescue, National Security & Policing, Infrastructure & Survey, Energy & Offshore); and Technology & Outsourcing (Flight Operations, FBO, CAM software, Flight Planning, CAM & ARC services). The Group believes this will provide a direct line of sight for shareholders such that the SBU's activities in each market, its investment requirements and performance can be more easily assessed and understood.

The IFRS 8 operating segments within these global divisions are Special Mission, Business Aviation MRO US, Business Aviation excluding MRO US, Technology & Outsourcing, Associates, Corporate and Branding Fees. The operating segments, except T&O, met the quantitative thresholds to report separately under IFRS 8, however, T&O is presented separately as it is of strategic importance.

Reconciliation of segmental to overall Group performance is tabulated below:

					2021 $'000					2020 $'000 Restated¹
	Revenue	Gross Profit	Statutory EBIT	Adjusted EBIT	Adjusted EBIT pre-IFRS 16	Adjusted Revenue	Adjusted Gross Profit	Statutory EBIT	Adjusted EBIT	Adjusted EBIT pre-IFRS 16
BA MRO US	79,250	9,035	(11,415)	(7,971)	(8,599)	38,606	8,474	(543)	181	(250)
BA excluding MRO US²	90,896	10,667	(977)	(793)	(1,741)	86,706	8,951	(15,779)	(3,883)	(5,251)
Special Mission²	56,716	17,075	4,534	4,546	4,179	47,918	12,534	3,024	3,056	2,598
T&O²	5,297	4,204	(289)	47	41	5,023	3,569	256	605	490
Branding fee²	3,750	3,750	3,691	3,691	3,691	3,750	3,750	19,233	3,733	3,733
Associates	-	-	-	(1,491)	(1,491)	-	-	(5,848)	(3,272)	(3,272)
Corporate	-	-	(2,796)	(2,303)	(2,229)	-	-	(6,203)	(5,238)	(4,856)
Adjusted Result	235,909	44,731	(7,252)	(4,274)	(6,149)	182,003	37,278	(5,860)	(4,818)	(6,808)
Adjusting items (Note 6)	-	-	-	(2,978)	(2,978)	15,500	15,500	-	(1,042)	(1,042)
Application of IFRS 16 (Note 23)	-	-	-	-	1,875	-	-	-	-	1,990
Statutory Result	235,909	44,731	(7,252)	(7,252)	(7,252)	197,503	52,778	(5,860)	(5,860)	(5,860)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

² Special Mission and T&O operate in the Europe geography. The Branding fee derives from the US. BA excluding MRO US operates in Europe, Middle East and Asia.

An analysis of the Group's revenue is as follows:

	Year ended 2021 $'000	Year ended 2020 $'000
Sale of business aviation services	232,159	178,253
Branding fees	3,750	3,750
Total Adjusted Revenue	235,909	182,003
Accelerated branding fees	−	15,500
Statutory revenue	235,909	197,503

	2021 $'000	2020 Restated¹ $'000
BA MRO US	78,904	38,370
BA excluding MRO US	61,536	57,419
Special Mission	9,163	10,102
T&O	3,883	3,555
Branding fee	−	−
Adjusted revenue recognised at a point in time	153,486	109,446
BA MRO US	346	236
BA excluding MRO US	29,360	29,287
Special Mission	47,553	37,816
T&O	1,414	1,468
Branding fee	3,750	3,750
Adjusted revenue recognised over time	82,423	72.557
Total Adjusted revenue	235,909	182,003
Accelerated branding fees (revenue recognised at a point in time)	−	15,500
Statutory revenue	235,909	197,503

¹ Restatements re detailed in Note 2 of the notes to the financial statements

Revenue recognised over time relates to the following operating divisions:

· Special Mission has contract revenue for the maintenance of aircraft and provision of air ambulance services of $153,164k to be earned over the next eight years, and $47,553k of revenue has been recognised in the year

· Business Aviation, MRO US during the year earned revenue of $346k in relation to maintenance contracts with $346k contracted to be earned over the next year

· Within Technology & Outsourcing, myairops^® has $1,414k of contract revenue recognised during the year in relation to the provision of software services with $1,162k due over the next three years

· The Branding Fee of $3,750k has been recognised during the year, with the remaining $625k of Branding Fees recognised over the next year

Revenue totalling $48,760k (2020: $16,660k), which is in excess of 10% of Group revenue, has been recognised in 2021 in respect of a single customer, included within the Business Aviation MRO US reporting segment.

The Group has not separately disclosed revenue by destination country because this is not tracked internally and because management track revenue by SBU.

Geographic information

	2021 $'000	2020 Restated¹ $'000
Non-current assets
US	16,804	11,044
Europe	71,096	75,810
Asia	58	230
Middle East	144	219
Group	1,769	2,781
	89,872	90,084

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Non-current assets for this purpose consist of property, plant and equipment and right-of-use assets. Goodwill and Intangible assets are shown by SBU and thereby geographic region in Note 13 and Note 14. Refer to Note 19 for non-current trade and other receivables which relate solely to the Business Aviation MRO US SBU.

5. EBIT for the year

EBIT for the year has been arrived at after charging/(crediting):

	Year ended 2021 $'000	Year ended 2020 Restated¹ $'000
Amortisation of intangibles in Adjusted result (Note 14)	2,155	1,581
Amortisation of intangibles in Adjusting items (Note 14)	1,200	614
Depreciation of property, plant and equipment (Note 15)	6,441	4,783
Depreciation of right-of-use assets in administrative expenses (Note 23)	1,017	730
Depreciation of right-of-use assets in cost of sales (Note 23)	6,528	11,102
Net foreign exchange (gain)/loss on trading monetary items	(407)	350
Loss on disposal of property, plant and equipment (Note 15)	6	63
Impairment of other intangible assets (Note 14)	−	833
Impairment of right-of-use assets (Note 23)	1,911	6,544
Impairment of assets under construction (Note 15)	−	4,609
(Reversal)/impairment of equity accounted investments (Note 17)	(1,491)	3,421
Impairment of non-current assets within share of results of equity accounted investments (Note 17)	−	6,433
Profit on disposal of interest in associates (Note 17)	−	(7,278)
Accelerated branding fees (Note 6)	−	(15,500)
Cost of inventories recognised as an expense (Note 18)	16,071	14,682
Change in provision for inventory obsolescence	(404)	1,520
Staff costs (Note 7)	102,256	63,506
Impairment losses recognised on trade receivables (Note 19)	42	3,083
Recovery of previously impaired trade receivables (Note 19)	(63)	−
Auditors' remuneration:
Audit of the Company's financial statements	770	198
Audit of the financial statements of subsidiaries	828	667
Other support services	−	26
Other deal support services	−	141

¹ Restatements are detailed in Note 2 of the notes to the financial statements

6. Adjusted performance measures

The Adjusted result has been arrived at after the following Adjusting items:

	Year ended 2021 $'000	Year ended 2020 Restated¹ $'000
Adjusting items in revenue and Gross Profit:
Accelerated branding fees	−	(15,500)
Exceptional items:
- Transaction costs	558	692
- Integration and business re-organisation costs	140	202
- Lease derecognition (Note 23)	(1,626)	−
- Legal costs	287	619
- Other items	(79)	(709)
- Impairment of assets under construction (Note 15)	−	4,609
- Impairment of right-of-use assets (Note 23)	1,911	6,544
- Impairment of acquired intangibles (Note 14)	−	833
Total exceptional items	1,191	(2,710)
Other Adjusting items:
Equity-settled share-based payments expense (Note 31)	257	562
Other long-term employee benefits expense (Note 32)	1,821	−
Amortisation of acquired intangible assets (Note 14)	1,200	614
Adjusting items in Operating (loss)/profit	4,469	(1,534)
(Reversal)/impairment of equity accounted investments (Note 17)	(1,491)	3,421
Impairment of non-current assets within share of results of equity accounted investments (Note 17)	−	6,433
Profit on disposal of interest in associates (Note 17)	−	(7,278)
Adjusting items in loss before tax	2,978	1,042
Tax related to Adjusting items (Note 10)	(471)	5,017
Adjusting items in loss for the year	2,507	6,059

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Accelerated branding fees

Adjusted Revenue and Adjusted Gross Profit exclude accelerated branding fees of $nil (2020: $15,500k) and their presentation improves comparability. This has been presented separately in the segmental reporting. Refer to Note 17 for further details of disposal of the US Air Associate.

	2020
	Revenue $'000	Gross profit $'000
Adjusted Result	182,003	37,250
Accelerated branding fees	15,500	15,500
Statutory Result	197,503	52,750

Transaction costs

Transaction costs during the year comprise $558k (2020: $662k) in relation to the acquisition of Jet East (Note 12) and $nil (2020: $30k) in relation to the acquisition of air ambulance services to Jersey and Guernsey (Note 12).

Integration and business re-organisation costs

Integration and business re-organisation costs include:

· Severance costs of $416k in relation to the acquisition of Jet East;

· A net provision release of $276k relating to direct closure costs at the Fairoaks facility (2020: cost of $16k) (Note 30);

· In 2020, redundancy provision following the notice of closure the Group's Saudi Arabian operations of $173k and other closure related costs of $17k;

· In 2020, income on receipt of a credit for costs previously charged to exceptional integration and business re-organisation costs $4k

Other income

· A $1,626k credit (2020: $nil) for the derecognition of the Fairoaks lease release (Note 23).

Legal costs

Legal costs in the current and prior year principally relate to professional fees in relation to ongoing litigation in respect of legacy cases, mainly relating to the Group's collection of trade receivables acquired as part of the Hangar 8 reverse acquisition.

Other items

In the current year, other items comprise a credit of $63k relating to funds received from an overdue debtor against whom a litigation case has been pursued, a credit for $16k received for consultancy services for Sharjah Airport previously treated as an exceptional item. In the prior year, other items comprise $499k in income relating to part settlements on a legacy case, and a $210k release of an impairment allowance on trade receivables under the legal proceedings that had been provided for in full in the prior year through exceptional costs.

Equity-settled share-based payments

Equity-settled share-based payment charges of $257k (2020: $562k). See Note 31 for further details.

Other long-term employee benefits

Other long-term employee benefits remuneration charge of $1,821k (2020: nil). This long-term benefit relates to an incentive plan with payments contractually linked to the continuing employment of executives of Jet East as well as the business performance of the combined Business Aviation MRO US. See Note 32 for further details.

Impairment of acquired intangibles

The impairment charge of $833k on acquired intangible assets in the prior year originally recognised on acquisition of Gama Aviation Hutchison Holdings Limited (GAHH) which were impaired to nil. Refer to Note 14 for further details.

Impairment of assets under construction and right-of-use asset

As previously reported, the Group had secured a 25-year ground lease and had commenced the development of a BAC at Sharjah International airport in the UAE.

With the project having been placed on hold in 2020 pending a review of the impact of the pandemic on its viability, the Group recognised a total impairment charge of $11,153k in its 2020 financial statements, $6,544k in respect of the right of use asset arising from the ground lease and $4,609k in respect of the carrying value of the assets under construction. The impairment charge reduced the carrying amount to the recoverable amount of nil. Refer to Note 15 and Note 23 for further details.

Following its decision to recommence the development of the BAC the Company is now in the process of securing the necessary funding for the project. Whilst the Group is in advanced discussions with investors regarding the funding of this project, the Board considers that it would be inappropriate to reverse these impairments until the full funding has been contractually secured.

In parallel with its decision to recommence the development, the Group took the opportunity to negotiate a 10-year extension to the term of the ground lease, which significantly enhances the viability and value of the project. However, until the impairment charge taken in respect of the original lease is reversed, the Group is required to further impair the $1,911k asset in use value created by this lease extension.

The Board remains confident that the Group is making progress in securing the necessary funding, at which time all these impairments, which amount to $13,064k, may reverse.

Impairment of investment in associate and non-current assets in associate

In the current year, a credit of $1,491k has been recognised offsetting prior year impairment charges to ensure that the recoverable value of the CASL asset remained at the $2,000k consideration received on its sale in December 2021. In the prior year, impairment charges of $6,433k related to non-current assets in CASL and the remaining $3,421k was to reduce the carrying amount of the equity accounted investment to the recoverable amount of $2,000k. Taken together, impairment charges of $9,854k were recognised in the prior year in relation to associates. Refer to Note 17 for further details.

Adjusted EBIT pre-IFRS16

The CODM reviews monthly internal reporting on a pre-IFRS 16 basis at the operating segment level. The impact on application of IFRS 16 is reviewed separately ahead of statutory reporting.

Tax related to Adjusting items

In the current year, the tax on Adjusting items reflects the deferred tax on deductible items before any non-recognition of deferred tax. In the prior year, a significant tax charge of $5,017k was recognised for the tax consequences of the disposal of the US Air Associate and the related accelerated branding fee.

Organic and constant currency growth

Organic and constant currency growth in Revenue, Gross Profit and EBIT is a measure which seeks to reflect the performance of the Group that will contribute to long-term sustainable growth. As such, organic and constant currency growth excludes the impact of acquisitions or disposals, and the effect of foreign exchange movements. Constant currency growth has been calculated using a constant foreign exchange rate of $1.3756 to £1, being the cumulative average USD-GBP exchange rate for 2021, which has been used to restate Revenue, Gross Profit and EBIT for 2020. A reconciliation to Rebased Revenue, Gross Profit and Adjusted EBIT, the most directly comparable IFRS measures, which are used to calculate organic and constant growth, is set out below.

The prior year has been adjusted to include full year results of acquired businesses and no results for disposed businesses where the results include only part-year results in either current or prior periods. For 2020 this comprises the results of Jet East acquired on 15 January 2021, whilst the Jersey and Guernsey Air Ambulance business was acquired on 18 July 2020. The Jet East business has been fully integrated into the US operations.

												2020 $'000 Restated¹
	Adjusted Revenue	Rebase for FX	Rebase for organic growth	Rebased Adjusted Revenue	Adjusted Gross Profit	Rebase for FX	Rebase for organic growth	Rebased Adjusted Gross Profit	Adjusted EBIT	Rebase for FX	Rebase for organic growth	Rebased Adjusted EBIT
BA MRO US	38,606	-	28,198	66,804	8,474	-	220	8,694	181	-	(1,373)	(1,632)
BA excluding MRO US	86,706	3,496	-	90,202	8,951	316	-	9,267	(3,883)	(292)	-	(4,175)
Special Mission	47,918	3,439	3,544	54,901	12,534	869	956	14,359	3,056	185	642	3,883
T&O	5,023	361	-	5,384	3,569	257	-	3,826	605	35	-	640
Branding fee	3,750	-	-	3,750	3,750	-	-	3,750	3,733	-	-	3,733
Associates	-	-	-	-	-	-	-	-	(3,272)	-	-	(3,272)
Corporate	-	-	-	-	-	-	-	-	(5,238)	99	-	(5,139)
Adjusted Result	182,003	7,296	31,742	221,041	37,278	1,442	1,176	39,896	(4,818)	27	(731)	(5,522)

Net debt

A reconciliation of the IFRS financial statement line items that represent the Net debt APM is tabulated below.

	2021 $'000	2020 Restated¹ $'000
Cash	10,243	16,136
Borrowings	(67,154)	(53,197)
Net debt pre IFRS 16	(56,911)	(37,061)
Obligations under leases	(48,002)	(46,139)
Net debt	(104,913)	(83,200)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

7. Staff costs

The average monthly number of employees (including Executive Directors) was:

	Year ended 2021 Number	Year ended 2020 Number
Operations and administration	440	357
Pilots and cabin crew	131	108
Aircraft engineering	556	298
	1,127	763

Their aggregate remuneration comprised:

	Year ended 2021 $'000	Year ended 2020 $'000
Wages and salaries	91,184	56,614
Social security costs	5,894	4,506
Equity-settled share-based payments (Note 31)	257	562
Other long-term employee benefits (Note 32)	1,821	−
Pension costs	3,100	1,824
	102,256	63,506

Aggregate remuneration is stated after netting off government grants received including $41k (2020: $616k) under the UK Furlough scheme and $nil (2020: $148k) under a Hong Kong payroll scheme.

Details of Directors' remuneration are given in the Remuneration Report and refer to Note 31 for details of share option transactions approved during the year. The share-based payment costs relating to these Directors amounted to $150k (2020: $260k).

Retirement benefit schemes

The Group operates defined contribution retirement benefit schemes for all qualifying employees. The assets of the schemes are held separately from those of the Group in funds under the control of independent trustees. As at 31 December 2021, contributions of $257k (2020: $261k) due in respect of the current reporting period had not been paid over to the schemes.

8. Finance income

	Year ended 2021 $'000	Year ended 2020 $'000
Foreign currency translation on intercompany balances	−	405
Foreign currency translation on borrowings	56	-
Interest income on financial assets	561	1,130
Total finance income	617	1,535

Interest income on financial assets includes interest due to late customer payments of $432k (2020: $nil), $92k (2020: $964k) in respect of deferred consideration relating to the disposal of the US Air Associate (Note 17) and $37k (2020: $166k) of other interest on other financial assets. The decrease of $872k on the interest received on the deferred consideration for the US associate is due to an early repayment in July 2021.

9. Finance expense

	Year ended 2021 $'000	Year ended 2020 Restated¹ $'000
Foreign currency translation on intercompany balances	441	−
Foreign currency translation on borrowings	−	178
Interest on borrowings before capitalised interest	791	878
Capitalised interest (Note 15)	−	(179)
Discounting on provisions (Note 30)	17	42
Discounting on deferred consideration (Note 30)	13	-
Interest on lease liabilities (Note 23)	2,624	2,606
Amortisation of loan arrangement fees	180	168
Other similar charges payable	44	124
Total finance costs	4,110	3,817

¹ Restatements are detailed in Note 2 of the notes to the financial statements

10. Taxation

	Year ended 2021 $'000			Year ended 2020 $'000
	Statutory result	Adjusting items	Adjusted result	Statutory result	Adjusting items	Adjusted result
Corporation tax:
Current tax charge:
Current year (credit)/charge	4,292	(3,891)	401	3,016	(2,977)	39
Adjustment in respect of prior years	75	−	75	−	−	−
	4,367	(3,891)	476	3,016	(2,977)	39

Deferred tax charge:
Current year (credit)/charge	(6,105)	4,362	(1,743)	3,136	(2,040)	1,096
Adjustment in respect of prior years	(242)	−	(242)	344	-	344
Deferred tax (credit)/charge (Note 22)	(6,347)	4,362	(1,985)	3,480	(2,040)	1,440

Total tax (credit)/charge for the year	(1,980)	471	(1,509)	6,496	(5,017)	1,479

The tax charge for the year, based on the tax rate in the United Kingdom, can be reconciled to the profit per the income statement as follows:

	Year ended 2021 $'000			Year ended 2020 Restated¹ $'000
	Statutory result	Adjusting items	Adjusted result	Statutory result	Adjusting items	Adjusted result
Loss before tax	(10,745)	2,978	(7,767)	(8,142)	1,042	(7,540)
Tax at the corporation tax rate of 19% (2020: 19%)	(2,042)	566	(1,476)	(1,547)	199	(1,348)
Effects of:
Income not taxable - other forms of government support	-	-	-	(196)	-	(196)
Income not taxable - PPP loan forgiveness	-	-	-	(903)	-	(903)
Non-deductible - impairment of right-of-use asset	-	-	-	1,225	(1,225)	-
Non-deductible - impairment of assets under construction	-	-	-	876	(876)	-
Non-deductible - impairment of acquired intangibles	4	(4)	-	164	(164)	-
Non-deductible - impairment/ (impairment reversal) of equity accounted investments	(246)	246	-	1,872	(1,872)	-
Non-deductible - share of losses of CASL in adjusted result	246	-	246	637	-	637
Non-deductible - share-based payments	45	(45)	-	107	(107)	-
Other expenses not deductible/income not taxable	275	(60)	215	728	-	728
Fines for late filings⁴	328	-	328	-	-	-
Adjustment in respect of prior years	(167)	-	(167)	344	-	344
Tax rates in different jurisdictions	(371)	(137)	(508)	2,490	(842)	1,648
Deferred tax not recognised in the year³	(44)	(103)	(147)	32	(19)	13
De-recognition of deferred tax	-	-	-	667	(111)	556
Total tax (credit)/charge for the year	(1,980)	471	(1,509)	6,496	(5,017)	1,479

¹ Restatements are detailed in Note 2 of the notes to the financial statements
² The UK Finance Act 2021 enacted a change in the UK corporation tax rate from 19% to 25% from 1 April 2023
³ Prior year has been restated to include the effect of amortisation of acquired intangibles
⁴ Fines have been levied by some US states as a result of management's decision to change the timing of payments of the 2020 US tax, which included the profit on the disposal of the US Air Associate (see Note 17). Prior to the early receipt of the deferred consideration from Wheels Up in 2021, an election had been made to pay taxes in instalments. Once funds had been received, the election was changed to pay immediately, which triggered punitive late payment charges. Management have requested the US states provide relief for these fines and have had external advice that relief should be provided, but due to the backlog caused by COVID-19, the timing on any decision by the state authorities is uncertain. Management consider the penalty to be tax-geared and have therefore presented it within the total tax charge for the year
⁵ The Adjusting items reflects the tax effect of Adjusting items disclosed within the Adjusted Items column of the consolidated income statement and explained in further detail in Note 6

The adjustments in respect of prior year comprise an immaterial $75k current tax charge for property taxation in Jersey, a $184k deferred tax credit relating to the implementation of IFRS 16 in the US and the offset of deferred tax assets against the $57k UK deferred tax liability. In the prior year, the adjustment includes a $293k decrease in deferred tax asset relating to temporary timing differences on the assets held for sale in the prior year. This is an immaterial change to the prior year recognised in advance of the disposal in March 2020.

11. Earnings per share (EPS)

The calculation of earnings per share is based on the earnings attributable to the ordinary shareholders divided by the weighted average number of shares in issue during the period.

	Year ended 2021 $'000	Year ended 2020 Restated¹ $'000
Numerator
Statutory earnings:
Loss attributable to ordinary equity holders of the parent	(8,062)	(14,683)
Adjusted earnings:
Loss attributable to ordinary equity holders of the parent	(5,555)	(8,624)
Denominator
Weighted average number of shares used in basic EPS	63,660,183	63,636,279
Effect of dilutive share options	−	-
Weighted average number of shares used in diluted EPS	63,660,183	63,636,279
Earnings per share (cents)
Statutory earnings per share
Basic	(12.7)	(23.1)
Diluted	(12.7)	(23.1)
Adjusted earnings per share
Basic	(8.7)	(13.6)
Diluted	(8.7)	(13.6)

¹ Restatements are detailed in Note 2 of the notes to the financial statements

The average share price for the year ended 31 December 2021 was 39.2 pence, which is marginally higher than the exercise price of some outstanding options, however, the effect of including these shares would reduce the loss per share and adjusted loss per share and therefore no dilutive effect is shown.

The weighted average number of shares used in basic EPS has not been reduced by any shares held by the employee benefit trust. Refer to Note 25 for further details on the employee benefit trust.

12. Acquisitions

Jet East

On 15 January 2021, the Group acquired 100% of the issued share capital of Jet East from East Coast Aviation, LLC which will significantly expand its existing US aircraft maintenance operations.

The acquisition of Jet East has been transacted by the Group's wholly owned US subsidiary Gama Aviation Engineering Inc (GAEI) for $7.7m in cash, with a further $1.0m in deferred cash payable over two years and the assumption of Jet East debt. The transaction has been entirely funded from the Group's existing resources.

Details of the purchase consideration, the net assets acquired, and goodwill are as follows:

	$'000
Cash paid	7,700
Deferred consideration	533
Total consideration	8,233

Initial deferred consideration of $1.0m has been discounted at 2.5% to a present value of consideration and adjusted by $420k for net assets acquired. Additionally, a post-closing adjustment was made to increase trade receivables by $550k relating to an insurance claim made before the acquisition that has subsequently been received.

Recognised amounts of identifiable assets acquired and liabilities assumed are as follows:

	$'000 Fair value
Property, plant and equipment	2,560
Right-of-use assets	3,394
Trade and other receivables non-current	289
Inventories	1,410
Trade and other receivables current	5,910
Cash and cash equivalents	64
Trade and other payables	(3,682)
Intangible assets - Brand	1,181
Intangible assets - Customer relationships	5,021
Deferred tax asset in entity books	1,418
Deferred tax liability on consolidation intangibles	(1,736)
Enterprise value	15,829
Borrowings	(4,202)
Obligations under leases	(3,394)
Total consideration	8,233

The purchase price accounting has now been finalised following the twelve month measurement period permitted under IFRS 3 Business Combinations.

Acquisition costs of $558k were charged to the income statement within administration expenses in 2021 (2020: $662k), with total cash outflow relating to the acquisition as follows:

	$'000
Acquisition of subsidiary, net of cash acquired	7,588
Acquisition costs	558
Total cash paid	8,146

Of the $4,202k borrowings assumed on acquisition, $2,788k has been settled to date and $1,414k remained outstanding at 31 December 2021.

The acquisition has been accounted for as an asset deal in at the entity level and as a result the consideration over the tax value of the assets is tax deductible, leading to the recognition of a deferred tax asset in the local books.

Two significant identifiable intangible assets were identified separate from goodwill. An identifiable intangible asset relating to the brand of Jet East (and related trademarks, logos and domain names) has been identified as acquired as part of the transaction. The brand (including related trademarks, logos and domain names etc associated with the brand) is valued using the "relief from royalty" valuation method. There was also an identifiable intangible asset identified relating to the customer relationships acquired as part of the transaction. This intangible asset is valued using a "multi-period excess earnings" valuation method.

The acquisition of Jet East included a long-term incentive plan which is accounted for as remuneration for post-acquisition services and is not part of the business combination. See Note 32 for further details.

As the Jet East business has been integrated into the rest of the Group's operations in the US, it is impracticable to disclose the impact that the effect the acquisition had on the income statement for the year.

Jersey and Guernsey Air Ambulance business

On 18 July 2020, the Group acquired a business to provide air ambulance services for the Government of Jersey and the Government of Guernsey. Cash consideration of $1.5m was paid. The Group determined the acquisition to be a business as defined by IFRS 3 and the transaction has been accounted for as a business combination. The following table summarises the fair value of assets acquired, and the liabilities assumed at the acquisition date.

Recognised amounts of identifiable assets acquired and liabilities assumed.

	Note	$'000
Property, plant and equipment	15	1,070
Other receivables		116
Customer relationships (included within intangibles)	14	390
Deferred tax liability	22	(62)
Total consideration		1,514
Acquisition costs	6	30
Acquisition of business, including acquisition costs		1,544

13. Goodwill

	$'000
Cost
At 1 January 2020	46,520
Exchange differences	1,514
At 31 December 2020	48,034
Exchange differences	(520)
At 31 December 2021	47,514

Accumulated impairment losses
At 1 January 2020	24,770
Exchange differences	774
At 31 December 2020	25,544
Exchange differences	(266)
At 31 December 2021	25,278

Carrying amount
At 31 December 2021	22,236
At 31 December 2020	22,490

The recoverable amount of goodwill is allocated to the following cash-generating units (CGUs):

	2021 $'000	2020 Restated¹ $'000
Carrying amount
Business Aviation, MRO US	787	787
Business Aviation, excluding MRO US³	8,043	8,138
Special Mission²	11,119	11,251
Technology & Outsourcing²	2,287	2,313
	22,236	20,490

¹Restated following the change of organisational structure

² Special Mission and T&O operate in the Europe geography

³ Business Aviation, excluding MRO US operates in the Europe, Middle East and Asia geography however the goodwill relates exclusively to the Europe geography

When testing for impairment, recoverable amounts for all of the Group's CGUs are measured at their value in use (VIU) by discounting the future expected cash flows from the assets in the CGUs. The CGUs that have goodwill are Business Aviation MRO US; Business Aviation excluding MRO US; Special Mission and Technology & Outsourcing. The goodwill for 2020 has been restated to reflect the new organisation structure, and, where not directly attributable to a specific CGU, has been allocated based on the relative gross profit of contracts in the CGU. The key assumptions and estimates used for VIU calculations are as follows:

Future expected cash flows

VIU calculations are based on estimated post-tax cash flows for 2022 through 2026 as approved by the Board. For cash flows beyond the forecast period, a terminal growth rate has been applied to a standardised terminal cash flow. CGU specific operating assumptions are applicable to the forecast cash flows for the years through 2026 and relate to revenue forecasts, expected project outcomes, cash conversion, levels of capital expenditure and forecast operating margins in each of the operating units. The Group also considered the impact of Climate change in determining operating assumptions applicable to the forecast cash flows. The relative value ascribed to each assumption will vary between CGUs as the forecasts are built up from the underlying operating units within each CGU.

Terminal growth rate

Beyond the current year forecast period, a long-term terminal growth rate has been applied to calculate terminal values for all CGUs. In the prior year, the Group used the Real GDP Growth Rate as a proxy for long-term terminal growth rate of Gama Aviation Plc. In the current year, long-term CPI projections have been deemed a better estimate because this measure appears to be more stable than GDP growth rates and a better proxy for long-term terminal growth rate of the Group. CPI has been sourced by jurisdiction of the Group CGUs from 2020 to 2026. Using an average of 2021 through 2026 was not considered appropriate as all years are benefitting from an assumed recovery from the COVID-19 pandemic. Terminal growth rates are tabulated below.

	2021 %	2020 %
United Kingdom	2.3	2.3
European Union	3.5	n/a
United States	2.7	2.2
Asia	n/a	2.1
Middle East	1.5	1.0

Weighted average cost of capital (WACC)

A pre-tax discount rate is calculated by reference to the post-tax WACC of each CGU, adjusted to reflect the market and other systemic risks specific to each CGU and the territories in which they operate.

A pre-tax discount rate is calculated for each CGU. For the CGUs that have goodwill, the discount rates are tabulated below.

	2021 %	2020 Restated¹ %
Business Aviation, MRO US	16.2	13.4
Business Aviation, excluding MRO US	11.4	11.5
Special Mission	9.8	10.5
Technology & Outsourcing	10.8	13.4

¹Restated following the change of organisational structure

The discount rates in the current year have increased in Business Aviation MRO US due to the acquisition of Jet East, remained stable in Business Aviation excluding MRO US and decreased in T&O and Special Mission, which is driven by lower CGU specific risk premiums.

Sensitivity to changes in assumptions

The calculation of VIU is most sensitive to the discount rate, long-term growth rate and future expected cash flows used. The Group has performed sensitivity analyses across all CGUs which have goodwill, acquired intangible assets, right-of-use assets, property, plant and equipment, computer software and an allocation of corporate assets, using reasonably possible changes in the long-term growth rates and pre-tax discount rates.

No reasonably possible change in assumptions would diminish the recoverable amount below the carrying amount of assets in any CGU. No impairment has been recognised in any CGU in the current year.

14. Other intangible assets

	Commence operations $'000	Part 145 approvals $'000	Licences and brands¹ $'000	Customer relations² $'000	Computer software³ $'000	Total $'000
Cost
At 1 January 2020	1,481	3,442	1,605	15,479	7,334	29,341
Additions	-	-	-	-	2,521	2,521
Disposals	(1,481)	(3,442)	(1,605)	-	-	(6,528)
Recognised on acquisition (Note 12)	-	-	-	390	-	390
Foreign exchange differences	-	-	-	-	417	417
At 31 December 2020	-	-	-	15,869	10,272	26,141
Additions	-	-	-	-	2,604	2,604
Recognised on acquisition (Note 12)	-	-	1,181	5,021	-	6,202
Foreign exchange differences	-	-	-	(52)	(170)	(222)
At 31 December 2021	-	-	1,181	20,838	12,706	34,725

Amortisation and accumulated impairment losses
At 1 January 2020	1,481	3,442	1,549	12,204	517	19,193
Amortisation	-	-	55	559	1,581	2,195
Disposals	(1,481)	(3,442)	(1,605)	-	-	(6,528)
Impairment loss	-	-	-	833	-	833
Foreign exchange differences	-	-	1	1	117	119
At 31 December 2020	-	-	-	13,597	2,215	15,812
Amortisation	-	-	227	973	2,155	3,355
Foreign exchange differences	-	-	-	(28)	(68)	(96)
At 31 December 2021	-	-	227	14,542	4,302	19,071

Carrying amount
At 31 December 2021	-	-	954	6,296	8,404	15,654
At 31 December 2020	-	-	-	2,272	8,057	10,329

¹ Relates to the US geography

² Relates to the US and Europe geography which is separately disclosed below

³ Relates to the Europe geography

The carrying amount of customer relationships relate to:

· Technology & Outsourcing: $978k (2020: $1,276k);

· Business Aviation excluding MRO US: $780k (2020: $996k); and

· Business Aviation MRO US: $4,538k (2020: nil)

Licences and brands relate to Business Aviation US arising from the Jet East acquisition.

Computer software costs comprise internally developed software costs arising in the Group's myairops^® business as well as purchased software, such as operational and financial systems. The carrying value of internally developed software within this balance is $7,450k (2020: $6,729k).

In the prior year, the carrying amount of GAHH acquired intangible assets in Business Aviation excluding MRO US exceeded the recoverable amount due to uncertainties arising from the COVID-19 pandemic that resulted in the customer relationship no longer being active. An impairment charge of $833k was recognised in the year to impair the GAHH customer relationship intangible to the recoverable amount of nil.

Intangible assets are assessed for impairment in Note 13 together with other non-current assets.

Impairment review on internally developed computer software costs in myairops^®

In the current year, there were indicators of impairment on internally developed computer software costs in myairops^®, which is considered to be a stand-alone CGU. When testing for impairment, the recoverable amount of myairops^® is measured at VIU by discounting the future expected cash flows from myairops^® software. Refer to Note 13 for further details on the future expected cash flows, terminal growth rate and pre-tax discount rate used for the impairment review on myairops^®.

Sensitivity to changes in assumptions

The calculation of VIU is most sensitive to the discount rate, long-term growth rate and future expected cash flows used. The Group has performed a sensitivity analysis for myairops^® using reasonably possible changes in the long-term growth rates and pre-tax discount rates.

The sensitivity analysis in myairops^® showed the following:

• Operating cash flows would have to reduce by over $166k in each year of the forecast period before an impairment would arise

• A 1% decrease in the terminal growth rate would reduce headroom by $665k to $1,246k

• A 1% increase in the discount rate would reduce headroom by $2,213k to $303k

• A 1% decrease in the terminal growth rate and a 1% increase in the discount rate would result in an impairment of $200k

No impairment has been recognised in the current year because there is $1,911k of headroom over the carrying value of assets in the myairops^®.

15. Property, plant and equipment

	Helicopters $'000	Leasehold improvement $'000	Aircraft and refurbishments $'000	Fixtures, fittings and equipment $'000	Motor vehicles $'000	Asset under construction $'000	Total $'000
Cost
At 1 January 2020	-	15,302	9,142	9,516	2,735	12,914	49,609
Additions, restated¹	19,045	2,072	1,883	1,896	61	-	24,957
Acquisitions	-	-	819	251	-	-	1,070
Capitalised interest	-	-	-	-	-	179	179
Transfers	8,484	-	-	-	-	(8,484)	-
Disposals	-	(1,294)	(35)	(1,633)	(11)	-	(2,973)
Exchange differences	1,559	1,838	352	1,831	(12)	-	5,568
At 31 December 2020 as restated¹	29,088	17,918	12,161	11,861	2,773	4,609	78,410
Additions	-	1,230	627	1,463	50	-	3,370
Acquisitions	-	683	-	1,384	493	-	2,560
Disposals	-	(33)	-	(206)	(94)	-	(333)
Reclassification²	117	−	(117)	−	−	−	−
Exchange differences	(342)	(187)	(153)	(77)	(2)	-	(761)
At 31 December 2021	28,863	19,611	12,518	14,425	3,220	4,609	83,246
Accumulated depreciation
At 1 January 2020	-	5,077	2,252	5,571	1,385	-	14,285
Charge for the year, restated¹	679	897	957	1,787	453	-	4,773
Impairment	-	-	-	-	-	4,609	4,609
Disposals	-	(1,294)	(35)	(1,570)	(11)	-	(2,910)
Exchange differences	43	1,048	80	1,810	3	-	2,984
At 31 December 2020 as restated¹	722	5,728	3,254	7,598	1,830	4,609	23,741
Charge for the year	1,243	1,136	1,348	2,160	554	-	6,441
Disposals	-	(30)	-	(155)	(83)	-	(268)
Reclassification²	-	(25)	-	25	-	-	-
Exchange differences	(33)	3	(64)	(62)	(1)	-	(157)
At 31 December 2021	1,932	6,812	4,538	9,566	2,300	4,609	29,757

Carrying amount
At 31 December 2021	26,931	12,799	7,980	4,859	920	-	53,489
At 31 December 2020 (restated)	28,483	12,224	8,790	4,238	943	-	54,669

¹ Restatements are detailed in Note 2 to the notes to the financial statements
² Reclassifications relate to immaterial corrections in the categorisation of property, plant and equipment

During 2021, no borrowing costs were capitalised. During the year ended 31 December 2020, before the helicopters were brought into use, the Group capitalised borrowing costs of $179k.

Deployment of the helicopters occurred on 1 June 2020 in support of a long-term contract. As a result, helicopters were transferred from assets under construction into the helicopters asset class within property, plant and equipment. They were brought into use and depreciated from 1 June 2020 having not been previously depreciated.

The assets under construction relating to the investment in the Sharjah Business Aviation Centre project were fully impaired in the year ended 31 December 2020. The impairment arose due to uncertainties arising in part from the ongoing COVID-19 pandemic. Total impairment costs of $4,609k were recognised during the prior year.

The acquisition of Jet East in the year included property plant and equipment valued at $2,560k. In the prior year the acquisition of an air ambulance business in the prior year included property, plant and equipment valued at $1,070k.

Critical management judgement

A critical management judgement at the reporting date relates to the determination of the recoverable amount of nil for the Sharjah BAC project. This is based on management's judgement that whilst the Group is in advanced discussions with investors regarding the funding of this project, the Board considers that it would be inappropriate to reverse impairments relating to the BAC project until the full funding has been contractually secured.

16. Subsidiaries and other related undertakings

Details of the Company's subsidiaries and other related undertakings held directly or indirectly at 31 December 2021 are as follows:

Name	Place of incorporation and operation	Proportion of voting and ownership interest 2021	Proportion of voting and ownership interest 2020	Nature of business	Registered address
Airops Software Limited¹	England and Wales	100%	100%	Aviation software	Head Office
Aravco Limited¹	England and Wales	100%	100%	Non-trading	Head Office
FlyerTech Limited¹	England and Wales	100%	100%	Airworthiness management	Head Office
Gama Aviation (Asset 2) Limited¹	England and Wales	100%	100%	Non-trading	Head Office
Gama Aviation (Engineering) Limited¹	England and Wales	100%	100%	Aviation design and engineering	Head Office
Gama Aviation (UK) Limited¹	England and Wales	100%	100%	Aviation management	Head Office
Gama (Engineering) Limited¹	England and Wales	100%	100%	Dormant	Head Office
Gama Group Limited	England and Wales	100%	100%	Holding company	Head Office
Gama Support Services Limited¹	England and Wales	100%	100%	Dormant	Head Office
Hangar 8 Management Limited	England and Wales	100%	100%	Non-trading	Head Office
International JetClub Limited	England and Wales	100%	100%	Non-trading	Head Office
Ronaldson Airmotive Limited¹	England and Wales	100%	100%	Dormant	Head Office
Gama Aviation (Beauport) Limited¹	Jersey	100%	100%	Aviation management	Jersey Office
Gama Aviation (Engineering) Jersey Limited¹	Jersey	100%	100%	Aviation design and engineering and FBO	Jersey Office
Gama Aviation FZC^1,4	SAIF Free Zone, United Arab Emirates	49%	49%	Aviation management	SAIF Suite Z-21. P.O. Box 122389, Sharjah, UAE
Gama Group Mena FZE	United Arab Emirates	100%	100%	Holding company	SAIF Office Q1-09-067/C, P.O. Box 122464, Sharjah, UAE
Gama Holdings FZC	United Arab Emirates	100%	100%	Dormant	SAIF Lounge P.O. Box 121954, Sharjah, UAE
Gama Support Services FZE¹	United Arab Emirates	100%	100%	Aviation design and engineering and FBO	SAIF Desk Q1-05-123/B, P.O. Box 122553, Sharjah, UAE
Gama International Saudi Arabia³	Kingdom of Saudi Arabia	nil³	nil³	Aviation management	6646 Abi Haitham Al Ansari, al Madina Square Center - Office 2 & 3, Muhammadiyah District, Jeddah 23624-3270, KSA
Gama Aviation SPV Limited (Plc)⁵	United Arab Emirates	100%	10%	Aviation management	2428 Res Co-work 03 Level 24, Al Sila Tower, Abu Dhabi Global Market Square, Al Maryah Island, Abu Dhabi, UAE
Gama Aviation (Engineering) Inc.¹	Delaware, USA	100%	100%	Aviation design and engineering	Delaware Office
Gama Aviation (Management) Inc.¹	Delaware, USA	100%	100%	Non-trading	Delaware Office
Gama Group Inc.	Delaware, USA	100%	100%	Holding company	Delaware Office
Jet East Aviation Corporation, LLC¹	Pennsylvania, USA	100%	-	Aviation design and engineering and FBO	Trenton Office
Lynk LLC¹	Ohio, USA	100%	-	Dormant	Trenton Office
Gama Aviation Engineering (HK) Limited¹	Hong Kong	100%	100%	Aviation design and engineering	Hong Kong Office
Gama Aviation Hutchison Holdings Limited¹	Hong Kong	100%	100%	Holding company	Hong Kong Office
Gama Aviation (HK) Limited¹	Hong Kong	100%	100%	Aviation management	Hong Kong Office
Gama Group (Asia) Limited	Hong Kong	100%	100%	Holding company	Hong Kong Office
Star-Gate Aviation (Proprietary) Limited	South Africa	100%	100%	Holder of South African AOC	151 Monument Road, Aston Manor 1619 South Africa
Hangar 8 Nigeria Limited²	Nigeria	100%	100%	Applicant of Nigerian AOC	⁷
Gama Aviation (Cayman) SEZC	Cayman Islands	100%	100%	Aviation Management	Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands
FlyerTech Europe Sp. Z.o.o.	Poland	100%	-	Airworthiness management	ul. Komitetu Obrony Robotnikow 62, 2nd Floor, 02-146 Warsaw, Poland, NIP: 7831827059
GB Aviation Holdings LLC⁶	Delaware, USA	50%	50%	Joint Venture - Holding company for aviation management and charter company	Delaware Office
Gama Hutchison Aviation Technical Service (Beijing) Limited¹	China	100%	100%	Non-trading	Room 250, 2nd Floor, Building 1, No. 56, Zhaoquanying Section, Changjin Road, Shunyi District, Beijing

The addresses for the specified offices are:

Head Office: 1st Floor 25 Templer Avenue, Farnborough, Hampshire, England, GU14 6FE

Jersey Office: Beauport House, L'Avenue De La Commune, St Peter, Jersey, JE3 7BY

Hong Kong Office: 7th Floor, 81 South Perimeter Road, Hong Kong International Airport, Lantau, Hong Kong

Delaware Office: Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808, USA

Trenton Office: 18 West Piper Ave, Trenton, New Jersey 08628, USA

¹ Indicates indirect holding.

² The consolidated financial statements include amounts relating to Hangar 8 Nigeria Limited, a company established in Lagos, Nigeria. The Group holds 11% of the share capital. Whilst the Group therefore does not have legal control of this entity, the Directors and officers comprise only management from the Group who have the ability to adopt, amend and control the operating and financial policies of the entity. Local regulations prevent the Group holding a legally controlling shareholding and therefore 89% of the share capital is held on behalf of the Group by Tinubu Investment Company Limited. Accordingly, the entity has been treated as a wholly owned subsidiary in these financial statements.

³ No non-controlling interest has been recognised as the Group has the full beneficial interest

⁴ Gama Aviation Plc holds a 49% shareholding in Gama Aviation FZC. The results of Gama Aviation FZC are fully consolidated within the financial statements because Gama Aviation Plc is exposed to variable returns from its involvement and has the ability to affect the returns through its power over these companies. Refer to Note 26 for further details.

⁵ Gama Group Mena FZE acquired 90% of the issued share capital on 17 February 2020.

⁶ GB Aviation Holdings LLC is the entity jointly held with Signature Aviation plc. The Company's sole asset was its 49% investment in Gama Aviation LLC, the Group's US Air Associate, which was disposed of in the prior year (refer to Note 17). The Group's ownership interest in Gama Aviation LLC was? 24.5%.

⁷ The registered office address of this company is available upon request at the Company's Head Office at the above address.

During the year ended 31 December 2021 the Company disposed of the following undertakings held directly or indirectly at 31 December 2020:

Name	Place of incorporation and operation	Proportion of voting and ownership interest 2021	Proportion of voting and ownership interest 2020	Method of disposal	Registered address
Aerstream Limited¹	England and Wales	-	100%	Dissolved	Head Office
Avialogistics Limited¹	England and Wales	-	100%	Dissolved	Head Office
Aviation Crewing Limited	England and Wales	-	100%	Dissolved	Head Office
Gama Aviation Group Limited¹	England and Wales	-	100%	Dissolved	Head Office
Gama Aviation (Training) Limited¹	England and Wales	-	100%	Dissolved	Head Office
GA 259034 Limited¹	England and Wales	-	100%	Dissolved	Head Office
GA FM54 Limited¹	England and Wales	-	100%	Dissolved	Head Office
Gama Leasing Limited¹	England and Wales	-	100%	Dissolved	Head Office
Hangar 8 AOC Limited	England and Wales	-	100%	Dissolved	Head Office
Hangar 8 Engineering Limited	England and Wales	-	100%	Dissolved	Head Office
Infinity Flight Crew Academy Limited	England and Wales	-	100%	Dissolved	Head Office
Aviation Beauport Holdings Limited¹	Jersey	-	100%	Dissolved	Jersey Office
Ferron Trading Limited¹	Jersey	-	100%	Dissolved	Jersey Office
Gama Aviation SA¹	Switzerland	-	100%	Liquidated	Boulevard Georges-Favon 43, 1204 Genève, Switzerland
Hangar 8 Mauritius Limited	Mauritius	-	100%	Struck off	²
China Aircraft Services Limited (CASL)	Hong Kong	-	20%	Sold	8th Floor, Main Building, Hangar and Workshop Complex, 81 South Perimeter Road, Hong Kong International Airport, Lantau, Hong Kong

¹ Indicates indirect holding.

² The registered office address of this company is available upon request at the Company's Head Office at the above address.

17. Investments accounted for using the equity method and disposal of investments

Details of the Group's investments accounted for using the equity method at 31 December 2021 are as follows:

Name		Investment	Place of incorporation and operation		Proportion of ownership interest		Proportion of voting power held
GB Aviation Holdings LLC¹	Associate			USA		50%	50%

Details of the Group's investments accounted for using the equity method at 31 December 2020 were as follows:

Name	Investment	Place of incorporation and operation	Proportion of ownership interest	Proportion of voting power held
GB Aviation Holdings LLC¹	Associate	USA	50%	50%
China Aircraft Services Limited	Associate	Hong Kong	20.0%	20.0%

¹ GB Aviation Holdings LLC is the entity jointly held with Signature Aviation Limited (previously Signature Aviation plc). The company's sole asset was its 49% investment in Gama Aviation LLC, the Group's US Air associate, which was disposed in the prior year, refer to Note 17. The Group's ownership interest in Gama Aviation LLC is 24.5%. The Group equity accounted for the consolidated results of GB Aviation Holdings LLC, which included its' sole undertaking and trading entity, Gama Aviation LLC.

The results of the equity accounted investments are as follows:

	Gama Aviation LLC		China Aircraft Services Limited
	Year ended 2021 $'000	Year ended 2020 $'000	Year ended 2021 $'000	Year ended 2020 $'000
Revenue	−	75,053	8,524	33,389
Expenditure	−	(74,732)	(16,079)	(50,432)
Impairment of property, plant and equipment	−	−	−	(16,433)
Impairment of right-of-use assets	−	−	−	(15,732)
Profit/(loss) before tax	−	321	(7,555)	(49,208)
Income tax (charge)/credit	−	(2)	99	292
Profit/(loss) after tax	−	319	(7,456)	(48,916)
Statutory result: Group's share of net profit/(loss)	−	78	(1,491)	(9,783)
Statutory result: Share of results from equity accounting	−	78	(1,491)	(9,783)
Less Adjusting items:
Group's share of impairment of property, plant and equipment	−	−	−	3,287
Group's share of impairment of right-of-use assets	−	−	−	3,146
Adjusted result: Share of results from equity accounting	−	78	(1,491)	(3,350)
Reversal of/(impairment) of equity accounted investments	−	−	1,491	(3,421)

Impairment is assessed by the recoverable amount which is the higher of the fair value less costs to sell and the VIU. The recoverable amount has been determined on the fair value less cost to sell.

China Aircraft Services Limited

In 2021, the share of results from the equity accounted investment in China Aircraft Services Limited represents the period ending 31 May 2021, this being the date the Board accepted in principle an offer of $2m for its 20% shareholding, and subsequently recognised the asset as held for sale at fair value. Adjusting items includes an impairment reversal, recognised in line with IAS 36, to the extent of the Group's share of losses of $1.5m such that the carrying amount of the investment directly before the sale was held at $2m. On 31 December 2021, the sale of the investment was agreed and $2m cash consideration received in full. As a result, assets held for sale at 31 December 2021 were nil.

In 2020, CASL suffered substantial losses, the Group's share of which amounted to $3,350k of Adjusted EBIT, due to vastly reduced commercial aviation volumes at Hong Kong airport, impacted by COVID-19. Impairment charges of $9,854k were recognised in Adjusting items. $6,433k related to an impairment on non-current assets in CASL which were presented outside Adjusted EBIT due to their size and irregular occurrence, and to enable better comparability year on year. The remaining impairment charge of $3,421k was to reduce the equity accounted investment in CASL from the carrying amount to its recoverable amount of $2,000k. Costs to sell are estimated to be nil.

The investments' values are as follows:

	China Aircraft Services Limited		Gama Aviation LLC
	Year ended 2021 $'000	Year ended 2020 $'000	Year ended 2021 $'000	Year ended 2020 $'000
At 1 January	2,000	15,112	-	-
Other comprehensive income	-	92	-	-
Share of net profit/(loss)	(1,491)	(9,783)	-	78
Dividends declared	-	-	-	-
Prior year dividend	-	-	-	-
Reversal of/(impairment)	1,491	(3,421)	-	-
Transfer to profit on sale	-	-	-	(78)
Disposal of investment	(2,000)	-	-	-
At 31 December	-	2,000	-	-

The summary financial positions of the equity accounted investments are as follows:

	China Aircraft Services Limited
		Year ended 2020 $'000
Total assets		63,284
Total liabilities		(46,014)
Net assets		17,270
Group's share of net assets		3,454
Goodwill		1,320
Impairment		(2,774)
At 31 December		2,000

At 31 December 2021, the equity accounted investment in China Aircraft Services Limited was disposed following the board's receipt of a $2m offer for its 20% share. The Group received the $2m cash consideration in full on the 31 December 2021.

	Year ended 2021 $'000
Proceeds on disposal	2,000
Less: Carrying amount of net assets sold	(2,000)
Profit on disposal of interest in associates	−

Gama Aviation LLC

On 2 March 2020, the Group announced the sale of its US Air Associate, Gama Aviation LLC (doing business as "Gama Aviation Signature") to Wheels Up Partners Holdings LLC ("Wheels Up"). Gama Aviation Signature was owned 49% by GB Aviation Holdings LLC, a joint venture between the Group and Signature Aviation plc, with the remaining 51% held by the Group's US partners.

Gama Aviation received consideration of $10.0m in return for its 24.5% equity interest. In addition, an amount of $23.0m was agreed related to licensing and other trading related considerations. $13.0m of the total agreed was received in cash at closing (including the full $10m associated to the equity sale), with the remaining $20.0m to be paid in cash, with interest of $2,774k, in eight equal six-month instalments over four years. At 31 December 2021 $nil (2020: $18,034k) deferred consideration was included within trade and other receivables.

On 14 July 2021, Wheels Up listed on the New York Stock Exchange, triggering a mandatory prepayment provision under the terms of the promissory note. On 20 July 2021, the Company received a combined payment of $15,250k, in cash from Wheels Up, representing the remaining amount due to the Company under the promissory note.

As a result of the early settlement of the deferred consideration, finance income recognised for the prior period to full settlement was reduced to $90k. Total interest of £1,054k was paid on the deferred consideration.

Included within deferred revenue at 31 December 2021 is licensing and other trading related considerations of $625k in current liabilities.

As part of the transaction, GB Aviation Holdings LLC licensed the continued use of the Gama Aviation Signature brand for up to two years, for which $7.5m of consideration has been allocated and is being recognised as revenue over the two-year period. In 2021, $3,750k (2020: $3,125k) has been recognised as revenue for this licensing component in the year ended 31 December 2021, in line with the $3.75m annual licence fee prior to disposal. In addition, an accelerated branding fee of $15,500k was recognised in Adjusting items in the prior year.

	Year ended 2020 $'000
Cash received	13,000
Fair value of deferred consideration	20,000
Total discounted consideration receivable at the transaction date	33,000
Less: Branding fees and other trading related considerations	(23,000)
Gross proceeds on disposal	10,000
Add: Closing working capital, cash and indebtedness adjustments	592
Add: Post closing adjustment	254
Less: Transaction costs	(892)
Proceeds on disposal of assets held for sale, net of transaction costs	9,954

Assets held for sale at 31 December 2019	2,598
Share of profit of equity accounted investments prior to disposal¹	78
Carrying amount of net assets sold	2,676

Profit on disposal of interest in associates, before taxation	7,278

¹ The equity accounting of Gama Aviation LLC was not discontinued after Gama Aviation LLC was held for sale at 31 December 2019 and prior to disposal on 2 March 2020. Had this been the case there would have been a $78k increase in share of losses of associates and a $78k increase in the profit on disposal of interest in associates. The impact of this reclassification, which has no impact on the statutory loss for the year, is considered immaterial.

18. Inventories

	2021 $'000	2020 $'000
Raw materials and consumables	8,911	5,922
Work in progress	4	56
	8,915	5,978

The Directors consider that the carrying value of inventories is approximately equal to their fair value. The cost of inventories recognised as an expense in the year was $16,071k (2020: $14,682k). Included within inventories is an inventory obsolescence allowance of $5,896k (2020: $5,048k) to measure inventories at the lower of cost or net realisable value.

Estimation uncertainty

The key source of estimation uncertainty at the reporting date, that may have a significant risk of causing a materially different outcome to the carrying amounts of inventories within the next financial year, relates to a change in the net realisable value due to change in customer demand or obsolescence of certain inventory lines. At 31 December 2021, the Board considers its assessment of net realisable value to be appropriate based on best information available. If the usage of inventory aged between two and six years decreased by 10%, thus increasing each respective provision by 10%, the loss for the year would increase by $528k.

19. Trade and other receivables

	2021 $'000	2020 $'000
Financial assets
Amounts receivable for the sale of services	40,559	30,792
Loss allowance	(5,682)	(6,954)
	34,877	23,838
Amounts due from associates	−	970
Financial asset at amortised cost	-	18,034
Accrued income¹	18,453	14,475
Financial assets	53,330	57,317

Non-financial assets
Prepayments¹	3,667	3,763
Other debtors	7,102	1,309
Total trade and other receivables	64,099	62,389

Current	63,808	49,359
Non-current	291	13,030
Total trade and other receivables	64,099	62,389

¹ Includes contract assets which are described in further detail below.

Amounts receivable for the sale of services

The average Days Sales Outstanding (DSO) is 62 days (2020: 62 days). Credit controls prior to granting credit and DSO are being actively monitored by management. Where appropriate, the Group assesses the potential customer's credit quality and requests payments on account, as a means of mitigating the risk of financial loss from defaults. Interest of $432k (2020: $nil) was charged on a late customer payment in the Middle East.

As there is no significant financing component to amounts receivable for the sale of services, a provision matrix has been used to calculate the expected credit losses for amounts receivable for the sale of services, contract assets and accrued income, which is permitted by IFRS 9. The Group carries an expected credit loss allowance of $5,682k (2020: $6,954k).

Amounts receivable for the sale of services include amounts (see below for aged analysis) which are past due at the reporting date but against which the Group has not recognised a specific loss allowance because there has not been a significant change in credit quality and the amounts are still considered recoverable. No loss allowance is carried other debtors.

Ageing of impaired amounts receivable for the sale of services

	2021 $'000	2020 $'000
Not yet due	11,062	8,590
Less than 30 days	10,558	3,676
30-60 days	2,558	2,448
61-90 days	2,236	1,467
91-120 days	2,565	2,104
Greater than 120 days	5,898	5,553
Total	34,877	23,838

Movement in the loss allowance

	2021 $'000	2020 $'000
At 1 January	6,954	3,896
Impairment (reversal)/losses recognised in income statement in Adjusted result	(21)	3,792
Impairment losses recognised in income statement in Adjusting items	-	(709)
Amounts written off as uncollectible	(1,197)	(171)
Foreign exchange translation gains and losses	(54)	146
At 31 December	5,682	6,954

The $1,197k write-off in the current year relates to the settlement of historic overdue receivables in Business Aviation. The impairment reversal in 2021 includes a settlement within Business Aviation MRO US, which resulted in a $269k credit to the impairment losses recognised in Adjusted EBIT, and a settlement within Business Aviation excluding MRO US, which resulted in a $233k charge to the impairment losses recognised in Adjusted EBIT.

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date.

Ageing of impairments on amounts receivable for the sale of services

	2021 $'000	2020 $'000
Not yet due	97	54
Less than 30 days	29	43
30-60 days	8	9
61-90 days	11	63
91-120 days	6	73
Greater than 120 days	5,531	6,712
Total	5,682	6,954

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

In the Business Aviation excluding MRO US SBU, the Group commonly obtains security in the form of contractual lien, parent company guarantee or a bank guarantee to support the trade receivables arising from aircraft management agreements. A similar contractual right of lien is contained within the General Terms and Conditions for MRO (Maintenance, Repair & Overhaul) services and is also commonly contained within the terms and conditions of individual MRO services proposals where for higher value work programmes stage payments are the norm, and where considered appropriate a requirement for full up-front payment is imposed. At the year end, trade receivables within the Business Aviation excluding MRO US SBU that are secured by contractual liens total $4,339k (2020: $3,452k). Additionally, in the US, liens can be filed to protect past due unpaid balances.

Refer to Note 35 regarding the receipt of a historic receivable after the balance sheet date.

Sensitivity analysis on loss allowance

The estimate of the loss allowance may vary from the actual amounts recovered if an individual becomes unable to pay or able to pay. There is a $5,682k loss allowance and if a portion of the impaired receivable balance was recovered there may be material credit to the income statement. Similarly, if the unimpaired receivable balance over 120 days of $7,224k was unable to be recovered, there may be a material charge to the income statement. However, as noted earlier, there are liens over the aircraft relating to unimpaired receivables over 120 days. If all remaining gross receivable balances were impaired by an additional 1% of the gross receivables balance, the expected credit loss would be increased by $406k.

Financial asset at amortised cost

Following the disposal of the US Air Associate, a financial asset measured at amortised cost was recognised for deferred consideration on the sale. At 31 December 2021, the carrying amount is $nil (2020: $18,034k).

Accrued income

Accrued income is expected to be billed within the next twelve months. The large increase year on year is primarily due to the acquisition of Jet East in the US at the start of 2021 and specific contracts in the UK.

Contract assets

As part of a Fleet Maintenance programme in the UK on a long-term contract, contract assets of $269k (2020: $579k) have been recognised in prepayments.

Contract assets arising from design and modification projects of $993k (2020: $1,419k) in the UK have been included within the accrued income.

As previously reported, the Group commenced all Helicopter Emergency Medical Services (HEMS) on behalf of the Scottish Ambulance Service on 1 June 2020 using its fleet of three Airbus H145 helicopters. In support of this long-term contract, contract assets of $1,065k (2020: $1,692k) are included within accrued income.

Total contract assets are $2,327k (2020: $3,690k).

20. Deferred consideration

The acquisition of Jet East included deferred consideration as described in Note 12.

	2021 $'000	2020 $'000
Deferred consideration recognised on acquisition, adjusted for discounting	533	−
Discount unwind on deferred consideration	13	−
	546	−

Due within one year	290	−
Due after more than one year	256	−
	546	−

21. Borrowings

	2021 $'000	2020 $'000
Secured borrowings at amortised cost
Bank borrowings	64,739	52,197
Unsecured borrowing at amortised cost
Repayable element of Paycheck Protection Program	1,000	1,000
Other loans	1,415	-
	67,154	53,197
Total borrowings
Repayable element of Paycheck Protection Program	1,000	1,000
Bank borrowings	37,760	-
Other loans	1,415	-
Amount due for settlement within 12 months	40,175	1,000

Bank borrowings	26,979	52,197
Amount due for settlement after 12 months	26,979	52,197

Analysis of borrowings by currency:

	Sterling $'000	US Dollars $'000	Total $'000
31 December 2021
Repayable element of Paycheck Protection Program	-	1,000	1,000
Bank borrowings	49,739	15,000	64,739
Other loans	-	1,415	1,415
	49,739	17,415	67,154
31 December 2020
Repayable element of Paycheck Protection Program	-	1,000	1,000
Bank borrowings	52,197	-	52,197
	52,197	1,000	53,197

During the prior year, the Group received funds under the Paycheck Protection Program in the form of a loan arrangement from Citibank guaranteed by the US Government, which was specifically intended to help businesses maintain their US workforce during the COVID-19 pandemic. The Group made the application in good faith and in the belief that the PPP loan request was necessary and otherwise in accordance with the then applicable rules, to support its ongoing operations given the economic uncertainty caused by the pandemic. $5,753k funds were received on 12 May 2020 and were initially recognised as borrowings in current liabilities. $4,753k of these funds are considered by the Company to be eligible for forgiveness within the terms of the PPP and were therefore recognised in 2020 as income against the related expenses in the income statement, reducing the amount of borrowings at the period end to a repayable element of $1,000k. Confirmation of partial loan forgiveness is expected within 12 months from the balance sheet date. Refer to Note 2 (c), Note 3 (b) and Note 35 for further details.

On other unsecured loans of $1,415k (2020: $nil), interest arose at an average of 6.6% during 2021 (2020: nil). Previously the Group held secured loans which were settled during 2020 that accrued interest at an average rate of 5.4% before settlement.

The other principal features of the Group's bank borrowings are as follows:

· Bank borrowings in 2021 of $64,666k (2020: $52,197k) comprise drawdowns from an RCF and a term loan (the "Loan"), both secured with HSBC

· The RCF, which is presented in current liabilities, is settled and drawn down on a cyclical basis. The facility matures on 14 November 2022

· A letter of awareness has been provided by CK Hutchison Holdings Ltd (CKHH) to HSBC, which has an indirect shareholding of 29.8% in the Group, that CKHH's current intention, while any amount is outstanding under the facility, is not to reduce its shareholding in the Group below 25.0% without consent from the lender or discharge of the facility. No legal implications are imposed on CKHH. In addition, on 20 April 2022 an updated letter confirms that CKHH has no current intention to withdraw the current letter of awareness before the facilities are due for renewal; and that CKHH currently has no intention not to facilitate renewal of the Group's facilities with HSBC through a comparable arrangement, provided the Group continues to meet its ongoing reporting obligations and such other conditions as may be agreed between the parties

· The RCF is $50,000k, and $12,068k (2020: $24,749k) was undrawn at the end of the reporting period

· During 2020, the Group completed the purchase of three Airbus H145 helicopters, which came into use on 1 June 2020 in support of a long-term contract. The purchase was funded through a £20m term loan which matures in January 2023

· The Loan and the RCF (collectively the "Facilities") are subject to customary banking security arrangements

· During the prior year, the Group issued a debenture as security against the Loan and RCF

2021	Interest	Maturity	Facility '000	Drawn (Local currency) '000	Drawn (Presentation currency) $'000
RCF	See below	14 November 2022	USD 50,000	GBP 17,000	22,932
				USD 15,000	15,000
Term loan	See below	31 January 2023	GBP 20,000	GBP 20,000	26,979
Bank borrowing before arrangement fees					64,911
Capitalised loan arrangement fees					(175)
Bank borrowings					64,739

2020	Interest	Maturity	Facility '000	Drawn (Local currency) '000	Drawn (Presentation currency) $'000
RCF	LIBOR + 0.94%	14 November 2022	USD 50,000	GBP 18,500	25,251
Term loan	LIBOR + 1.12%	31 January 2023	GBP 20,000	GBP 20,000	27,298
Bank borrowing before arrangement fees					52,549
Capitalised loan arrangement fees					(352)
Bank borrowings					52,197

Following the global financial crisis in 2008, the reform and replacement of benchmark interest rates such as GBP LIBOR and other inter-bank offered rates (IBORs) became a priority for global regulators. As a result, LIBOR was wound down during 2021, and the lender for the RCF and term loans removed the reference to LIBOR, with interest instead being derived from SONIA, the Bank of England Bank Rate and a spread adjustment.

22. Deferred tax

The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting period.

	Acquired intangibles $'000	Fixed asset and other temporary differences $'000	Deferred consideration on US air associate temporary differences $'000	Tax losses $'000	Total $'000
At 1 January 2020	-	(157)	-	1,590	1,433
Acquisitions	(62)	-	-	-	(62)
Credit/(charge) in year (Note 10)	5	62	(2,986)	(561)	(3,480)
Exchange differences	-	(23)	-	23	-
At 31 December 2020	(57)	(118)	(2,986)	1,052	(2,109)
Acquisitions	(1,736)	1,418	-	-	(318)
Charge/(credit) in year (Note 10)	203	(1,261)	3,147	4,258	6,347
Exchange differences	-	(2)	-	-	(2)
At 31 December 2021	(1,590)	37	161	5,310	3,918

Acquired intangibles represent the value of the deferred tax liability which arises on the fair value of acquired intangibles. The liability is valued at the tax rate applicable to the jurisdiction where the intangibles are located.

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax balances for financial reporting purposes:

	2021 $'000	2020 $'000
Deferred tax asset due after more than one year	3,918	-
Deferred tax liability	-	(2,109)
Net deferred tax asset/(liability)	3,918	(2,109)

Estimation uncertainty

The Group has recognised deferred tax assets on both timing differences, principally acquisition intangibles, and on taxable losses. In recognising these assets, management have reviewed the future expected profitability of the business in each tax jurisdiction and the ability to utilise existing taxable losses.

The deferred tax asset at 31 December 2021 includes an amount of $1,328k arising on the acquisition of Jet East during the year. The initial valuation of the asset on acquisition ($1,418k) equated to the tax value of the consideration paid in excess of the fair value of assets acquired, which is tax deductible in the US over 15 years and adjusts future taxable profits and losses.

The Group has the following tax losses:

	2021 Recognised $'000	2020 Recognised $'000	2021 Unrecognised $'000	2020 Unrecognised $'000	2021 Total $'000	2020 Total $'000
UK¹	2,222	2,321	27,059	29,184	29,281	31,505
US federal	16,806	1,464	−	-	16,806	1,464
US state	20,418	5,064	−	-	20,418	5,064
Poland	−	-	75	-	75	-
HK	−	-	5,139	5,095	5,139	5,095
Tax losses	39,446	8,849	32,273	34,279	71,719	43,128

¹ Tax losses relating to dissolved companies have been surrendered in the year (see Note 16)

The above losses represent the following value at tax rates applicable at the balance sheet date:

	2021 Recognised $'000	2020 Recognised $'000	2021 Unrecognised $'000	2020 Unrecognised $'000	2021 Total $'000	2020 Total $'000
UK	555	441	6,765	5,545	7,320	5,986
US	4,754	611	−	-	4,754	611
Poland	−	-	14	-	14	-
HK	−	-	848	968	848	968
Potential tax benefit of tax losses	5,310	1,052	7,627	6,513	12,937	7,565

Losses in the UK, US and Hong Kong can be carried forward indefinitely. Tax losses in Poland can be carried forward for 5 years.

In the UK, expected changes to borrowing rates reduce future taxable profits, reducing the value of taxable losses that have been recognised. In the US, management have concluded that the losses, including those relating to unwinding of the asset on the Jet East acquisition, are recoverable against expected future taxable income. In Poland the entity is a start up and until the business is established, future profits are uncertain hence the asset has not been recognised. In Hong Kong, management have not recognised deferred tax assets on losses as the current business is not operating.

Temporary differences of $26,291k (2020: $26,233k) have arisen as a result of the translation of the financial statements of the Group's subsidiaries. However, a deferred tax liability has not been recognised as the liability will only crystallise in the event of disposal of the subsidiary, and no such disposal is expected in the foreseeable future. As a result, there is no deferred tax charge in other comprehensive income in relation to the translation of the Group's subsidiaries into the presentation currency of US Dollars.

At 31 December 2020, future profitable projections were impacted by the ongoing COVID-19 pandemic and as a result deferred tax balances of $485k were written off during 2020.

23. Obligations under leases

The Group leases many assets including property, aircraft, vehicles, fixtures, fittings and equipment. Information about leases for which the Group is a lessee is presented below.

Restatement

During 2021, a review was conducted on Group leases. This found errors on the implementation of IFRS 16 (1 January 2019) and subsequent recognition relating to the treatment of contractual rental increases, initial balances held at implementation (impacting subsequent impairments), completeness, computational errors on foreign exchange, identification of payments and the length of lease used. 2020 figures have been restated to correct these errors.

The restatement has impacted the consolidated income statements, consolidated statements of comprehensive income, balance sheets and consolidated cash flow statements, as shown in Note 2.

Right-of-use assets

	Leasehold property $'000	Fixtures, fittings and equipment $'000	Aircraft $'000	Vehicles $'000	Total $'000
Cost
At 1 January 2020 as reported	51,596	72	19,118	205	70,991
Restatement¹	940	-	-	9	949
At 1 January 2020 as restated	52,536	72	19,118	214	71,940
Additions as reported	6,846	-	-	-	6,846
Restatement¹	(3,399)	-	-	113	(3,286)
Additions as restated	3,447	-	-	113	3,560
Derecognition as reported	(2,539)	-	(19,417)	-	(21,956)
Restatement¹	1,592	(55)	-	(23)	1,514
Derecognition as restated	(947)	(55)	(19,417)	(23)	(20,442)
Exchange differences as reported	1,595	2	299	8	1,904
Restatement¹	(193)	(3)	-	5	(191)
Exchange differences restated	1,402	(1)	299	13	1, 713
At 31 December 2020 restated	56,438	16	-	317	56,771
Additions	7,265	123	-	164	7,552
Disposals	(2,862)	(10)	-	(161)	(3,033)
Acquisition	3,387	7	-	-	3,394
Exchange differences	(385)	-	-	(1)	(386)
At 31 December 2021	63,843	136	-	319	64,298

Accumulated depreciation and impairment
At 1 January 2020 as reported	8,270	46	10,285	75	18,676
Restatement¹	10	2	(37)	(2)	(27)
At 1 January 2020 as restated	8,280	48	10,248	73	18,649
Charge for the year - admin expenses as reported	521	19	-	-	540
Restatement¹	190	-	-	-	190
Charge for the year - admin expenses as restated	711	19	-	-	730
Charge for the year - cost of sales as reported	5,582	-	5,052	74	10,708
Restatement¹	368	-	-	26	394
Charge for the year - cost of sales as restated	5,950	-	5,052	100	11,102
Impairment as reported	7,013	-	-	-	7,013
Restatement¹	(469)	-	-	-	(469)
Impairment as restated	6,544	-	-	-	6,544
Derecognition as reported	(2,539)	-	(15,574)	-	(18,113)
Restatement¹	1,775	(55)	1	(23)	1,628
Derecognition as restated	(764)	(55)	(15,573)	(23)	(16,415)
Exchange differences as reported	691	4	237	7	939
Restatement¹	(224)	(5)	36	-	(193)
Exchange differences as restated	467	(1)	273	7	746
At 31 December 2020 as restated	21,188	11	-	157	21,356
Charge for the year - admin expenses	955	15	-	47	1,017
Charge for the year - cost of sales	6,426	2	-	79	6,507
Impairment	1,911	-	-	-	1,911
Disposals	(2,603)	(10)	-	(161)	(2,774)
Exchange differences	(101)	-	-	(1)	(102)
At 31 December 2021	27,776	18	-	121	27,915

Carrying amount
At 31 December 2021	36,067	118	-	198	36,383
At 31 December 2020 restated¹	35,250	5	-	160	35,415
At 1 January 2020 restated¹	44,256	24	8,870	141	53,291

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Obligations under leases

	Leasehold property $'000	Fixtures, fittings and equipment $'000	Aircraft $'000	Vehicles $'000	Total $'000
At 1 January 2020 as reported	47,817	20	12,228	139	60,204
Restatement¹	1,599	4	(207)	44	1,440
At 1 January 2020 as restated	49,416	24	12,021	183	61,644
Additions as reported	6,846	-	-	-	6,846
Restatement¹	(3,656)	-	-	113	(3,543)
Additions as restated	3,190	-	-	113	3,303
Finance expense as reported	2,592	-	147	4	2,743
Restatement¹	(139)	-	-	2	(137)
Finance expense as restated	2,453	-	147	6	2,606
Lease payments as reported	(8,094)	(13)	(7,878)	(44)	(16,029)
Restatement¹	(1,616)	(8)	-	(30)	(1,654)
Lease payments as restated	(9,710)	(21)	(7,878)	(74)	(17,683)
Derecognition as reported	-	-	(4,083)	-	(4,083)
Restatement¹	(184)	-	-	-	(184)
Derecognition as restated	(184)	-	(4,083)	-	(4,267)
Rent free credit as restated	(259)	-	-	-	(259)
Exchange differences as reported	264	(9)	(414)	(37)	(196)
Restatement¹	729	9	207	46	991
Exchange differences as restated	993	-	(207)	9	795
At 31 December 2020 restated	45,899	3	-	237	46,139
Additions	7,265	123	-	164	7,552
Disposals	(259)	-	-	-	(259)
Acquisitions	3,387	7	-	-	3,394
Finance expense	2,614	3	-	7	2,624
Derecognition	(1,626)	-	-	-	(1,626)
Lease payments	(9,447)	(19)	-	(107)	(9,573)
Rent free credit	(110)	-	-	-	(110)
Exchange differences	(144)	-	-	5	(139)
At 31 December 2021	47,579	117	-	306	48,002

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Following the surrender of the lease at Fairoaks airport a $1,626k profit has been recognised in derecognition of remaining lease liabilities. This amount is recognised within other income.

	2021 $'000	2020 Restated¹ $'000
Maturity analysis - contractual undiscounted cash flows:
Less than one year	8,101	8,762
One to five years	22,307	22,030
More than five years	56,760	37,030
Total undiscounted lease liabilities at 31 December	87,168	67,822

Lease liabilities included in the statement of financial position at 31 December:
Current	7,970	8,566
Non-current	40,032	37,573
Total lease liabilities at 31 December	48,002	46,139
¹ Restatements are detailed in Note 2 of the notes to the financial statements.

Amounts recognised in income statement

The consolidated income statement shows the following amounts relating to leases:

	2021 $'000	2020 Restated¹ $'000
Depreciation charge of right-of-use assets
Leasehold property	7,381	6,661
Fixtures, fittings and equipment	17	19
Aircraft	-	5,052
Vehicles	126	100
Total depreciation charge of right-of-use-assets	7,524	11,832
Interest expense (included in finance cost)	2,624	2,606
Expenses relating to short-term leases of twelve months or less	1,370	740
Impairment of right-of-use assets	1,911	6,544
Profit on derecognition of leases	(1,626)	(240)
Rent free credit²	(110)	(259)

¹Restatements are detailed in Note 2 of the notes to the financial statements
²The rent free credit arose on the Sharjah lease as the landlord gave the Group Covid-19 related concessions. No other concessions have been received by the Group.

There are no expenses relating to low value assets or expenses relating to variable lease payments. An impairment loss of $1,911k has been recognised in 2021 in relation to the right-of-use leased asset at Sharjah Airport (2020: impairment of $6,544k restated) as the lease was extended in 2021 but funding for the project has not yet been finalised.

Average incremental borrowing rates applied across the Group were:

	2021 %	2020 %
Leasehold property	5.7	5.5
Vehicles	4.9	3.9
Fixtures, fittings and equipment	6.8	4.6

Property leases with a remaining lease term of more than ten years have been adjusted to reflect the additional security afforded by the leased asset on the cost of borrowing. An asset specific adjustment of 0.69% has been applied to the rates of these leases.

In June 2017, the Group entered into a non-cancellable Build-Operate-Transfer and Service Concession agreement with Sharjah Airport Authority under which the Group is committed to construct a BAC at Sharjah Airport. The agreement now runs from June 2017 until June 2052 following the exercise of the ten-year extension option during the year. The lease liability has been discounted at an incremental borrowing rate of 7.3% (2020: 7.3%). The Sharjah BAC includes a $9,850k (2020: $7,964k restated) obligation under leases at 31 December 2021 following the formalisation of the ten year lease extension.

Critical management judgement

A critical management judgement at the reporting date, relates to the determination of the recoverable amount of nil for the Sharjah BAC project. This is based on the Management's judgement that whilst the Group is in advanced discussions with investors regarding the funding of this project, the Board considers that it would be inappropriate to reverse impairments relating to the BAC project until the full funding has been contractually secured.

24. Trade and other payables

	2021 $'000	2020 Restated¹ $'000
Financial liabilities
Trade and other payables	15,470	11,484
Accruals	15,482	10,864
Amounts due to associates	−	1,046
	30,952	23,394
Non-financial liabilities
Other long-term employee benefits accrual	1,821	−
Other taxation and social security	1,591	5,002
Income received in advance	6,799	6,689
	10,211	11,691

Total trade and other payables	41,163	35,085

¹ Restatements are detailed in Note 2 of the notes to the financial statements

Current	39,342	35,085
Non-current	1,821	−
Total trade and other payables	41,163	35,085

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average Days Payables Outstanding (DPO) is 30 days (2020: 29 days).

No interest is charged on the trade payables. The Group has financial risk management policies in place that target settlement within agreed credit terms. The Directors consider that the carrying amount of trade payables approximates to their fair value.

Income received in advance relates to advance payments for operating expenses incurred by the Group on managed aircraft prior to these expenses being billed to the customer. The outstanding performance obligations are expected to be fulfilled within the next twelve months. Income received in advance represents a contract liability. See Note 33 for other contract liabilities.

See Note 32 for further details on the other long-term employee benefits accrual.

25. Issued capital and reserves

	Number	£'000	$'000
Ordinary shares: authorised, issued and fully paid
At 1 January 2020	63,636,279	636	953
At 31 December 2020	63,636,279	636	953
Shares issued	50,000	1	1
At 31 December 2021	63,686,279	637	954

Share capital represents the amount subscribed for share capital at nominal value. The Company has one class of ordinary shares with a nominal value of £0.01 and no right to fixed income.

	$'000
Share premium
At 1 January 2020	63,473
At 31 December 2020	63,473
Shares issued	29
At 31 December 2020	63,502

Share premium represents the amount subscribed for share capital in excess of nominal value, net of historic placement fees of £1,526k or $1,987k (2020: £1,526k or $1,987k).

Other reserves

	Merger relief reserve $'000	Reverse takeover reserve $'000	Other reserve $'000	Share-based payment reserve $'000	Total $'000
At 1 January 2020	108,595	(95,828)	20,336	1,695	34,798
Share-based payment expense (Note 31)	-	-	-	562	562
Balance at 31 December 2020	108,595	(95,828)	20,336	2,257	35,360
Share-based payment expense for share options (Note 31)	-	-	-	244	244
Transfer for lapsed options	-	-	-	(607)	(607)
Balance at 31 December 2021	108,595	(95,828)	20,336	1,894	34,997

The merger relief reserve represents differences between the fair value of the consideration transferred and the nominal value of the shares. In 2015, this occurred as a result of the reverse takeover. The reserve was increased in 2016 upon the acquisition of Aviation Beauport Limited when shares were included as part of the consideration.

The reverse takeover reserve represents the balance of the amount attributable to equity after adjusting the accounting acquirer's capital to reflect the capital structure of the legal parent in a reverse takeover.

Other reserve is the result of the application of merger accounting to reflect the combination of the results of Gama Aviation (Holdings) Jersey Limited with those of Gama Holding FZC, following the share for share exchange transacted on 16 December 2014.

The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 31 for further details of these plans.

There is an employee benefit trust that is affiliated with the Group. However, the Group does not have control of this trust and, as a result, the trust is not consolidated and no own share reserve is recognised. At the end of the reporting period, there are 219,310 (2020: 219,310) shares which are held in the employee benefit trust. The fair value of these shares at 31 December 2021 was £95k (2020: £84k).

26. Non-controlling interest

	$'000
Balance at 1 January 2020	751
Total comprehensive income attributable to minority interests	45
Balance at 31 December 2020	796
Total comprehensive income attributable to minority interests	(703)
Balance at 31 December 2021	93

The non-controlling interest in the current and prior year relates to a 49% shareholding in Gama Aviation FZC, which is consolidated as there is an 80% profit sharing ratio attributable to the Group. As a result, a 20% non‑controlling interest has been recognised in the current and prior year. In addition, the Group has a call option on the remaining shareholding.

Set out below is summarised financial information for Gama Aviation FZC, before intercompany eliminations:

	2021 $'000	2020 $'000
Current assets	14,454	14,362
Current liabilities	(14,022)	(10,416)
Current net assets	432	3,946
Non-current assets	32	32
Net assets	464	3,978
Accumulated NCI	93	796

	2021 $'000	2020 $'000
Revenue	28,081	18,418
(Loss)/profit for the year	(3,514)	227
Other comprehensive income	−	−
Total comprehensive income	(3,514)	227

27. Net cash generated by operating activities

	2021 $'000	2020 Restated¹ $'000
Loss before tax	(10,745)	(8,142)
Adjustments for:
Finance income (Note 8)	(617)	(1,535)
Finance costs (Note 9)	4,110	3,817
Depreciation of property, plant and equipment (Note 15)	6,441	4,773
Depreciation of right-of-use assets in administrative expenses (Note 23)	1,017	730
Depreciation of right-of-use assets in cost of sales (Note 23)	6,507	11,102
Amortisation of intangible assets (Note 14)	3,355	2,195
Impairment of right-of-use assets (Note 23)	1,911	6,544
Impairment of property, plant and equipment (Note 6)	−	4,609
Impairment of non-current assets within share of results from equity accounted investments (Note 6)	−	6,433
Impairment of other intangible assets (Note 14)	−	833
Lease credit recognised (Note 23)	(110)	(259)
Non-cash lease settlement (Note 23)	(1,626)	−
Loss on disposal of property, plant and equipment (Note 15)	6	63
Share of loss/(profit) of associates (Note 17)	1,491	3,272
Profit on disposal of interest in associate (Note 17)	−	(7,278)
(Reversal)/impairment of equity accounted investment in associate (Note 6)	(1,491)	3,421
Utilisation of PPP loan (Note 28)	−	(4,753)
Share-based payment (Note 31)	257	562
Operating cash inflow before movements in working capital	10,506	26,387

Unrealised foreign exchange movements	(656)	843
Increase in gross inventories	(1,567)	(80)
Increase in inventory obsolescence (Note 18)	18	1,520
Decrease in gross receivables³	6,229	10,161
(Decrease)/increase in loss allowance for receivables (Note 19)	(1,255)	3,083
Decrease in payables and deferred consideration	(19)	(10,183)
(Decrease)/increase in deferred revenue	(4,847)	6,365
(Decrease)/increase in provisions	(685)	333
Working capital movements	(2,782)	12,042

Cash generated by operations²	7,724	38,429
Taxes paid on operating activities⁴	(3,289)	(3,085)
Tax refunds received	790	−
Net cash generated by operating activities	5,225	35,344

¹ Restatements are detailed in Note 2 of the notes to the financial statements

² Included within cash generated by operations is cash outflows on exceptional items of $832k in the year (2020: $0.7m)

³ Included within decrease in gross receivables is $17,500k (2020: $2,500k) relating to branding fees agreed on the sale of the US Air Associate

⁴ Taxes paid on operating activities includes $3,129k (2020: $3,067k) relating to the sale of the US Air Associate

28. Changes in liabilities arising from financing activities

Changes in liabilities arising from financing activities are tabulated below.

	Borrowings		Obligations under leases		Total $'000
	Long-term $'000	Short-term $'000	Long-term $'000	Short-term $'000	Total $'000
At 1 January 2020, as reported	45,394	848	43,838	16,366	106,446
Restatement¹	-	-	(754)	2,194	1,440
At 1 January 2020, as restated	45,394	848	43,084	18,560	107,886
Cash flows:
Repayments	(23,623)	(848)	-	-	(24,471)
Proceeds	28,234	5,753	-	-	33,987
Lease payments	-	-	-	(17,683)	(17,683)
Non-cash:
Rent free credit	-	-	-	(259)		(259)
Lease additions¹	-	-	2,717	586	3,303
Assumed loan forgiveness	-	(4,753)	-	-		(4,753)
Interest on lease liabilities	-	-	2,307	299	2,606
Foreign currency translation on borrowings in profit or loss (Note 9)	178	-	-	-	178
Derecognition	-	-	(2,517)	(1,750)		(4,267)
Exchange differences¹	1,872	-	549	246	2,667
Arrangement fee movement on new facility	(26)	-	-	-	(26)
Amortisation of arrangement fees	168	-	-	-		168
Reclassification	-	-	(8,566)	8,566	-
At 31 December 2020, as restated	52,197	1,000	37,573	8,566	99,336
Cash flows:
Repayments	(9,573)	(2,788)	-	-	(12,361)
Proceeds	-	22,574	-	-	22,574
Lease payments	-	-	-	(9,573)	(9,573)
Non-cash:
Rent free credit	-	-	-	(110)		(110)
Disposal	-	-	(259)	-		(259)
Acquisition	-	4,202	1,818	1,576		7,596
Interest on lease liabilities	-	-	2,373	251	2,624
Lease additions	-	-	6,978	574	7,552
Derecognition	-	-	(1,060)	(566)	(1,626)
Foreign currency translation on borrowings in profit or loss (Note 9)	(24)	-	-	-	(24)
Exchange differences	(531)	(83)	(114)	(25)	(753)
Arrangement fee movement	180	-	-	-	180
Reclassification	(15,270)	15,270	(7,285)	7,285	-
At 31 December 2021	26,979	40,175	40,032	7,970	115,156

¹ Restatements are detailed in Note 2 of the notes to the financial statements.

29. Contingent liabilities

The Group had a material contingent liability at 31 December 2021 in respect ofa subsidiary of the Group, Gama Support Services FZE (GSSF), which entered into a Build Operate & Transfer Agreement ("BOT") and a Concession Agreement with Sharjah Airport Authority (SAA) on 1 July 2017. Under the BOT, GSSF agreed to procure the design and construction of the buildings and other structures comprising a BAC and hangars at Sharjah Airport, UAE and to use reasonable endeavours to ensure that the completion of the construction occurs by the construction completion date as envisaged under the BOT. The prospects for which were initially frustrated by the COVID-19 pandemic and financing of the BAC, which resulted in related assets under construction and right-of-use assets being impaired in the prior year. A 10-year extension to the Sharjah lease was signed in June 2021 and the related right-of-use asset has been impaired in the current year. Whilst the Group is in advanced discussions with investors regarding the funding of this project, the Board considers that it would be inappropriate to reverse impairments relating to the BAC project until the full funding has been contractually secured.

GSSF has until June 2023 to complete and satisfy its construction obligations. SAA may terminate the BOT if there is a breach of any material obligations under the BOT which remain unremedied. In the event GSSF fails to comply with its construction obligations under the BOT, SAA will have the right to seek compensation for any damage or loss it sustains. It is not possible to estimate the potential contingent liability.

30. Provisions for liabilities

	Closure Provision $'000	Dilapidations Provision $'000	Employees' End of Service provision $'000	Integration provision $'000	Total $'000
At 1 January 2021	665	332	500	-	1,497
Restatement¹	-	(44)	-	-	(44)
At 1 January 2021, as restated	665	288	500	-	1,453
(Credit)/charge to the income statement during the year	(276)	14	348	416	502
Utilised during the year	(384)	-	(110)	(358)	(852)
Foreign exchange	4	(4)	-	-	-
Discounting (Note 9)	-	17	-	-	17
At 31 December	9	315	738	58	1,120

¹Restatements are detailed in Note 2 of the notes to the financial statements

	2021 $'000	2020 Restated¹ $'000
Current	772	679
Non-current	348	774
Total	1,120	1,453

¹Restatements are detailed in Note 2 of the notes to the financial statements

The dilapidations provision relates to leases entered into during 2020.

The closure provision at 31 December 2021 comprises $9k relating to the reduction of business activities in Saudi Arabia. At 31 December 2020, the closure provision included $486k relating to the cessation of the Group's business activities at Fairoaks Airport and $173k in redundancy provisions relating to the reduction of business activities in Saudi Arabia. Actual closure costs incurred relating to the cessation of the Group's activities at Fairoaks Airport amounted to $276k (Note 6).

Provision for employees' end of service indemnity is made in accordance with the UAE labour laws and is based on current remuneration and cumulative years of service at the reporting date.

The integration provision, of which $58k remains at 31 December 2021 (2020: $nil), relates to severance costs following the acquisition of Jet East during the year. This is expected to be paid in 2022.

31. Share-based payments

Equity-settled share option schemes

Share options are awarded to employees under three plans:

· Gama Aviation Plc Company Share Option Plan 2018 (CSOP)

· Gama Aviation Plc Additional Share Option Plan 2018 (ASOP)

· Gama Aviation Plc Long-Term Incentive Plan 2021 (LTIP)

The plans are designed to provide long-term incentives for employees to deliver long-term shareholder returns. Participation in the plan is at the Board's discretion, and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Performance conditions may be specified under any of the schemes. No options granted to date under the CSOP and ASOP have performance conditions. Under the LTIP, options that have been awarded are subject to a performance condition based on the Company's average share price over the 30 days following release of the Company's results for the year ending 31 December 2023. However, these conditions may be varied or waived.

Options are granted under the plans for no consideration and carry no dividend or voting rights.

The normal vesting period for all schemes is three years, however, options were granted to Directors over 155,000 shares on 29 March 2021 where they vested immediately (the "Director ASOP Awards"). If options remain unexercised after a period of ten years from the grant date, the options expire. If an employee leaves employment of the Group due to injury, ill health, disability, retirement, redundancy or where the employee's employer ceases to be part of the Group, a proportion of options are forfeited 90 days after leaving, being the proportion of the original shares granted that relate to the period after leaving and prior to vesting, with the remaining options being forfeited six months after leaving. Options are forfeited 90 days after leaving if the employee leaves the Group before the options vest for any other reason.

When exercisable, each option is convertible into one ordinary share at most 30 days after the valid exercise of an option.

Under the CSOP and ASOP, the exercise price of options is based on the weighted average price at which the Company's shares are traded on the Alternative Investment Market of the London Stock Exchange during the week up to and including the date of the grant. Under the LTIP, the exercise price is 1.0 pence.

Set out below are summaries of options granted under the plans:

	2021		2020
	Average exercise price per share option (pence)	Number of options '000	Average exercise price per share option (pence)	Number of options '000
At 1 January	165.3	3,301	161.6	3,747
Granted during the year	29.1	4,136	-	-
Exercised during the year¹	1.0	(25)	-	-
Surrendered during the year	164.9	(2,276)	-	-
Forfeited during the year	135.4	(1,119)	134.3	(446)
At 31 December	34.6	4,017	165.3	3,301
Vested and exercisable at 31 December	87.9	226	183.1	1,503

¹ The weighted average share price at the date of exercise of options exercised during the year was 40.5 pence (2020: not applicable).

Included in the above, on 29 March 2021 options over a total of 2,276,000 shares previously granted to Directors and other employees were agreed to be surrendered by those employees (the "Surrendered Awards"). In their place, the Company agreed to grant options over a total of 1,138,000 shares, at 68.8 pence, to Directors and other employees on 29 March 2021 (the "Replacement Awards").

No options expired during 2020 or 2021.

Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Grant date	Expiry date	Exercise price (pence)	Share options 31 December 2021 '000	Share options 31 December 2020 '000
9 August 2016	8 August 2026	155.0	-	670
22 June 2018	21 June 2028	205.5	33	843
22 June 2018	21 June 2028	205.5	63	921
17 June 2019	16 June 2029	91.5	86	867
26 March 2021	25 March 2031	39.0	965	-
29 March 2021	28 March 2031	68.8	1,046	-
29 March 2021	28 March 2031	1.0	1,694	-
29 March 2021	28 March 2031	1.0	130	-
TOTAL			4,017	3,301
Weighted average remaining contractual life of options outstanding at end of period			9.14 years	7.36 years

The estimated fair values of the awards under the CSOP and ASOP have been established using a Black Scholes model. This model uses a number of inputs, including expected dividends, expected share price volatility and the expected period to exercise.

The estimated fair values of the awards under the LTIP have been established using a Monte Carlo model. This model uses a number of inputs, including expected dividends, expected share price volatility and the expected period to exercise, and it factors the likelihood of the market-based performance condition being met at the grant date.

The inputs into the models and assessed fair value at grant date of options granted during the year ended 31 December 2021 are as follows:

	CSOP/ASOP Awards 26 March 2021	Replacement Awards 29 March 2021	LTIP Awards 29 March 2021	Director ASOP Awards 29 March 2021
Share price, pence¹	39.0	39.0	39.0	39.0
Exercise price, pence²	39.0	68.8	1.0	1.0
Expected share price volatility	47.2%	47.2%	56.2%	N/A
Expected life, years	6.5 years	6.5 years	3 years	0 years
Risk-free rate	0.46%	0.52%	0.13%	N/A
Expected dividend yields	0%	0%	0%	0%
Fair value per share granted, pence²	18.0	12.0	11.0	38.0
Total fair value at date of grant (£'000)	184	See below	200	59
Total fair value at date of grant ($'000)¹	256	See below	277	82

¹Previous period disclosures have been represented from USD cents to GBP pence throughout.

²The GBP expense has been translated to USD based on the exchange rate prevailing at the time of grant.

Expected volatility was determined by calculating the historical volatility of the Group's share price over a historical 6.5-year period prior to grant for the ASOP and CSOP, with the exception of the Director ASOP Awards.

The Replacement Awards have been accounted for under modification accounting, whereby the original fair value expense for the Surrendered Awards has continued to be recognised over the original vesting period and an additional incremental expense has been recognised over the vesting period of the Replacement Awards.

Shares issued to Director

On 19 January 2021, Daniel Ruback, an Executive Director of the Company, was issued a total of 25,000 ordinary shares of 1 penny each in the capital of the Company at nil cost, in accordance with the terms of his Service Agreement. The shares had a grant date fair value of 44.5 pence based on the open market price at that date.

Expenses arising from equity-settled share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expense were as follows:

	2021 $'000	2020 $'000
Options issued under equity-settled share employee option schemes plan	244	562
Shares issued to Director	13	-
	257	562

Refer to Note 35 regarding the effect of a Director resigning after 31 December 2021.

32. Other long-term employee benefits

The acquisition of Jet East also includes a long-term incentive plan, accounted for in accordance with IAS 19, with payments contractually linked to the continuing employment of executives of Jet East as well as the business performance of the combined Business Aviation MRO US business. A remuneration charge of $1,821k (2020: $nil) has been recognised within Adjusting items and an accrual of $1,821k (2020: $nil) is included within non-current trade and other payables. The period over which the services are received is three years and the incentive plan is estimated to result in a future cash outflow of $6,024k (2020: $nil) after this three-year period.

Estimation uncertainty

A 10% increase in the business performance in 2023 would result in an additional payment of around $602k in 2024, an additional charge for year ended 31 December 2021 of $182k and an additional accrual at 31 December 2021 of $182k. Business performance in Business Aviation MRO US is calculated as a multiple of EBITDA less cash and cash equivalents and less borrowings.

33. Deferred revenue

	2021 $'000	2020 $'000
Deferred revenue	8,882	13,367

Current	8,880	12,676
Non-current	2	691
Total	8,882	13,367

The deferred revenue arises in respect of management fees, maintenance contracts and SaaS contracts invoiced in advance, nearly all of which are expected to be settled in the next twelve months. Deferred revenue also arises on licensing revenue connected to the disposal of the US Air Associate, with $nil (2020: $625k) recognised as non-current and $625k (2020: $3,750k) recognised as current. See Note 17 for further details on licensing revenue. Deferred revenue represents a contract liability.

Deferred revenue has decreased year on year, primarily due to $3,750k of US Air Associate licensing revenue being unwound as noted above.

Contract liabilities

Deferred revenue of $8,882k (2020: $13,367k) is a contract liability and so too is income received in advance, as shown in Note 24, of $6,799k (2020: $6,689k). Total contract liabilities are $15,681k (2020: $20,056k).

34. Financial instruments

Financial assets and liabilities as defined by IFRS 9 and their estimated fair values are as follows:

At 31 December 2021	Financial assets at amortised cost $'000	Financial liabilities at amortised cost $'000	Book value total $'000	Fair value total $'000
Financial assets
Cash and cash equivalents	10,243	-	10,243	10,243
Trade and other receivables (Note 19)	53,330	-	53,330	53,330

Financial liabilities
Trade and other payables (Note 24)	-	(30,952)	(30,952)	(30,952)
Borrowing (Note 21)	-	(67,154)	(67,154)	(67,154)
Lease obligation (Note 23)	-	(48,002)	(48,002)	(48,002)
Net financial assets/(liabilities)	63,573	(146,108)	(82,535)	(82,535)

At 31 December 2020 (restated¹)	Financial assets at amortised cost $'000	Financial liabilities at amortised cost $'000	Book value total $'000	Fair value total $'000
Financial assets
Cash and cash equivalents	16,136	-	16,136	16,136
Trade and other receivables (Note 19)	57,317	-	57,317	57,317

Financial liabilities
Trade and other payables (Note 24)	-	(23,394)	(23,394)	(23,394)
Borrowings (Note 21)	-	(53,197)	(53,197)	(53,197)
Lease obligation (Note 23)	-	(46,139)	(46,139)	(46,139)
Net financial assets/(liabilities)	73,453	(122,730)	(49,277)	(49,277)

¹Restatements are detailed in Note 2 of the notes to the financial statements

The fair value of cash and cash equivalents, trade and other receivables, and trade and other payables approximate their carrying amounts due to the short-term maturities of these instruments. The fair value of lease obligations is calculated using the incremental borrowing rate.

Financial risk management objectives

The Group is exposed to financial risks in respect of:

· Capital risk;

· Foreign currency;

· Interest rates;

· Liquidity risk; and

· Credit risk

A description of each risk, together with the policy for managing risk, is given below.

34.1 Capital risk management

The Group manages its capital to ensure that the Company and its subsidiaries will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balances.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in Note 21 and obligations under leases disclosed in Note 23, cash and cash equivalents and equity, comprising issued capital, reserves and accumulated profit as disclosed in the consolidated statement of changes in equity and in Note 25.

The Board of Directors reviews the capital structure on a regular basis. As part of this review, the Committee considers the cost of capital and the risks associated with each class of capital, against the purpose for which the debt is intended.

A combination of leases and borrowing are taken out to fund assets utilised by the Group. Borrowings are also secured to support the ongoing operations and future growth of the Group.

34.2 Market risk

The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. There has been no change to the Group's exposure to market risks or the manner in which these risks are managed and measured.

34.2.1 Foreign currency risk management

The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. In particular, the Group is exposed to Sterling and Euro exchange rate fluctuations. The Group seeks to reduce foreign exchange exposures arising from transactions in various currencies through a policy of matching, as far as possible, receipts and payments across the Group in each individual currency.

The table below summarises the FX exposure on the net monetary position of entities against their respective functional currency, expressed in each group's presentational currency:

	GBP $'000	USD $'000	EUR $'000	AED³ $'000	HKD $'000	Other $'000	Total $'000
At 31 December 2021
Borrowings
Entities with functional currency USD	−	(2,414)	−	−	−	−	(2,414)
Entities with functional currency GBP	(49,666)	(15,074)	−	−	−	−	(64,740)
Entities with functional currency PLN⁴	−	−	−	−	−	−	−
Total borrowings	(49,666)	(17,488)	−	−	−	−	(67,154)

Obligations under leases
Entities with functional currency USD	−	(12,284)	−	(9,850)	−	−	(22,134)
Entities with functional currency GBP	(25,809)	−	−	−	−	−	(25,809)
Entities with functional currency PLN	−	−	−	−	−	(59)	(59)
Total obligations under leases	(25,809)	(12,284)	−	(9,850)	−	(59)	(48,002)

Cash
Entities with functional currency USD	2	5,148	−	67	1	23	5,241
Entities with functional currency GBP	3,861	988	132	1	−	3	4,985
Entities with functional currency PLN	−	−	−	−	−	17	17
Total cash	3,863	6,136	132	68	1	43	10,243

Net trade financial assets¹
Entities with functional currency USD	(182)	13,848	100	(789)	(14)	(66)	12,897
Entities with functional currency GBP	3,115	4,657	1,756	-	-	(22)	9,506
Entities with functional currency PLN	-	-	-	-	-	(25)	(25)
Total net trade financial assets	2,933	18,505	1,856	(789)	(14)	(113)	22,378

Net exposure
Net monetary in USD entities	(181)	-	100	(731)	(12)	(42)	(866)
Net monetary in GBP entities	-	(9,428)	1,887	1	-	(19)	(7,559)
Net monetary in PLN entities	-	-	-	-	-	-	-
Total net exposure	(181)	(9,428)	1,987	(730)	(12)	(61)	(8,425)

At 31 December 2020, restated²
Net monetary in USD entities	(71)	−	(6)	(8)	385	(10)	290
Net monetary in GBP entities	−	8,075	468	−	−	42	8,585
	(71)	8,075	462	(8)	385	32	8,875

¹ Net trade financial assets per Note 19 of $53,330k and financial liabilities per Note 24 of $30,952k

² Restatements are detailed in Note 2 of the notes to the financial statements

³ United Arab Emirates Dirham

⁴ Polish Zloty

Foreign currency sensitivity analysis

The following table details the Group's sensitivity to a 10 per cent change in the relevant foreign currencies. This percentage has been determined based on the average market volatility in exchange rates in the previous 24 months. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 10 per cent change in foreign currency:

	GBP $'000	USD $'000	EUR $'000	AED $'000	HKD $'000	Other $'000	Total $'000
At 31 December 2021
Total effect on profit/(loss) of depreciation in foreign currency exchange rates	18	943	(199)	73	1	6	842

At 31 December 2020 Restated¹
Total effect on profit/(loss) of depreciation in foreign currency exchange rates	7	(808)	(46)	1	(39)	(3)	(888)

¹Restatements are detailed in Note 2 of the notes to the financial statements

34.2.2 Interest rate risk management

The Group is exposed to interest rate risk as it finances fixed asset purchases using floating interest rates.

The Group's exposure to interest rates on financial liabilities is detailed in section 34.3 Liquidity risk management section. The Group's exposure to interest rates on financial assets has been assessed by management as insignificant.

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the balance sheet date. For floating rate liabilities, the analysis is prepared based on the average liability held by the Group over the year. A 1 per cent increase or decrease represents management's assessment of the reasonably possible change in interest rates.

If interest rates had been 1% basis points higher and all other variables were held constant, the Group's loss for the year ended 31 December 2021 would increase by $647k (2020: $522k). The Company's sensitivity to interest rates has increased during the current year due to the increase in the value of loans held.

34.3 Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities wherever possible. There has been no change to the Group's exposure to liquidity risks or the manner in which these risks are managed and measured during the year. Further details are provided in the Strategic Report.

The maturity profile of the financial liabilities is summarised below. The 2020 figures have been restated to remove income received in advance since there are no cash out flows associated with this balance. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.

	Weighted average effective interest rate %	Less than 1 year $'000	2-5 years $'000	After more than 5 years $'000	Total $'000
At 31 December 2021
Trade and other payables	n/a	30,952	-	-	30,952
Lease liabilities (Note 23)	¹	8,101	22,307	56,760	87,168
Bank borrowings	1.1%	40,175	26,979	-	67,154
At 31 December 2020, restated²
Trade and other payables (Note 24)²	n/a	23,394	-	-	23,394
Lease liabilities (Note 23)²	¹	8,762	22,030	37,030	67,822
Bank borrowings	1.1%	1,000	52,197	-	53,197

¹ Refer to Note 23, which provides the incremental borrowing rate for each category of lease

² Restatements are detailed in Note 2 of the notes to the financial statements

34.4 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group endeavours to only deal with creditworthy counterparties and requesting payments on account, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group's exposure is continuously monitored.

Financial assets, including trade receivables, consist of many customers, coming from diverse backgrounds and geographical areas. Ongoing review of the financial condition of the counterparty and ageing of financial assets is performed. Further details are in Note 19.

The carrying amount of financial assets recorded in the financial statements represents the Group's maximum exposure to credit risk. There has been no change to the manner in which credit risks are managed and measured during the year.

35. Events after the balance sheet date

The following events occurred after the reporting date:

Resignation of Director

On 10 January 2022, the Group announced that Daniel Ruback, Group CFO, tendered his resignation as Director of the Group in order to pursue other opportunities outside the Group. Daniel remained with the business until 8 April 2022. The Board has appointed Michael Williamson as interim CFO pending the appointment of a permanent replacement.

The cost of Daniel Ruback's unvested share options outstanding has been reversed during 2021, as this event is an adjusting event.

Paycheck Protection Program qualifying expenditure

On 11 April 2022, the SBA requested further information for its review of the forgiveness application on qualifying expenditure under the PPP loan arrangement. The Board has since consulted with its outside legal advisors as to the eligibility for forgiveness of the loan. The Board believes it is appropriate under IAS 20 to recognise the receipt of the loan and its anticipated partial forgiveness and that such treatment is necessary for these accounts to show a true, fair and balanced view of the Group's results given the impact of the global pandemic on its operations. The total balance is material and, while a different outcome is considered highly unlikely, this balance is sensitive to a material change in judgement in the event the US Government assessed the forgiveness differently. Refer to Note 2, Note 3 and Note 21 for further details. This event is a non-adjusting event.

Receipt of long-standing accounts receivable balance

On 21 April 2022, the Group received $3,448k cash in settlement of part of a long-standing accounts receivable balance that had been secured under a lien. The expected credit loss allowance at 31 December 2021 is not impacted by this part settlement. This event is a non-adjusting event.

Adjustments to deferred consideration

The Group agreed a further adjustment to the deferred consideration payable in respect of the acquisition of Jet East with seller after the reporting date. The adjustment is valued at $230k and will reduce the deferred consideration balance outstanding and result in income in the income statement as an Adjusting item. This event is a non-adjusting event.

36. Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its associates are disclosed below.

The Company and its subsidiaries have a policy requiring full disclosure to, and pre-approval by, the Board of transactions contemplated with related parties.

List of related parties, including associates:

The following list is presented in accordance with the objectives of IAS
24 Related Party Disclosures and all relationships are disclosed according to their substance rather than their legal form.

· Oneti Lebanon Sarl - is a company that is majority owned and controlled by Mr G A Khalek, brother of
Mr M A Khalek (Chief Executive Officer). Mr M A Khalek holds 30% of the shares in Oneti Lebanon Sarl according to the corporate register in Lebanon, however the beneficial ownership of these shares was transferred to Mr G Khalek in 2008;

· Mr G Khalek - the brother of Mr M A Khalek;

· Cedar Trading Investment Corporation - is a company beneficially owned by Mr G A Khalek;

· Oneti SAL - a company that is majority owned and controlled by Mr G A Khalek;

· Gladwall Limited - is a company where Mr M A Khalek is the sole Director;

· Mr M A Khalek - has significant influence over the Company through his position as Chief Executive Officer and his ownership interest >20%;

· EBAA - is the European trade association in which Mr M A Khalek serves on the Board of Governors;

· Air Arabia/Felix Trading Company LLC - Felix Trading Company LLC ("Felix") has a significant ownership interest in Gama Aviation FZE, which is controlled by the Group (see Note 16). The principals of Felix also have significant ownership interest in Air Arabia, which is a client of the Group;

· Gama Aviation SPV - is a company registered in Abu Dhabi Global Market - a related party through potential ownership and control rights via the terms of a loan agreement and because the Group has significant influence over its operations (but not control);

· Mr Canning Fok- is an Executive Director of CK Hutchison Holdings, a company which has an indirect shareholding of 29.8% in the Company; and

· CK Hutchison Holdings - has an indirect shareholding of 29.8% in the Company

Associates

· GB Aviation Holdings LLC - is a joint venture in which the Group owns a 50% membership interest;

· Gama Aviation LLC - was an associate in which GB Aviation Holdings LLC owned a 49% member interest before disposal in March 2020 (Note 17); and

· China Aircraft Services Limited - was an associate in which the Group owned a 20% equity interest prior to sale in 2021

Trading transactions

During the year, Group companies entered into the following transactions with related parties who are not members of the Group:

	Sale of services		Purchase of services
	2021 $'000	2020 $'000	2021 $'000	2020 $'000
China Aircraft Services Limited	564	1,993	1,377	2,950
Air Arabia/Felix Trading Company LLC	198	25	158	151
Gama Aviation LLC (branding fee)¹	-	625	-	-
Gama Aviation LLC (other trading balances)²	-	1,552	-	561
Mr Canning Fok	1,275	1,646	-	-
M Khalek	37	23	-	-

¹ In the prior year branding fees are for the two months prior to disposal

² For ease of understanding, the branding fee and other trading balances have been separated in the summary table above

The following amounts were outstanding at the balance sheet date for related parties at that date:

	Amounts owed by related parties		Amounts owed to related parties
	2021 $'000	2020 $'000	2021 $'000	2020 $'000
Air Arabia/Felix Trading Company LLC	198	204	127	182
China Aircraft Services Limited	-	970	-	1,046
Mr Canning Fok	12	138	101	-
GB Aviation Holdings LLC	-	40	-	-

Material transactions with related parties

Gama Aviation LLC

During the prior year, Gama Aviation LLC paid $3.75m (of which $0.625m was prior to disposal and $3.125m was post disposal) in cash to the Group in accordance with the branding agreement and a further $15.5m accelerated branding fee as part of the disposal of the associate (Note 17).

Merritt Property LLC

As reported in the 2018 Annual Report, in January 2017 the Group entered into a Termination Agreement (the "Agreement") with Gama Aviation LLC. The Agreement brought the previous branding agreement between the Group and Gama Aviation LLC to a close at the same time as the Group entered into a new branding agreement with GB Aviation Holdings LLC.

The Termination Agreement made provision for a final payment from Merritt Property LLC (which was a 39% owner of Gama Aviation LLC at the time) to the Group of $1.0m in lieu of branding fees forgone.

During the prior year, the Group received cash consideration of $1.0m to settle the full amount due.

Mr Canning Fok

During the year, within the Business Aviation SBU, sales of services of $1,275k (2020: $1,646k) were made to Mr Canning Fok.

Remuneration of key management personnel

The remuneration of the Executive Directors of the Group, who are also the key management personnel of the Group, are set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. As all the key management personnel are remunerated in Pounds Sterling, the disclosure has been presented in that currency.

	2021 £'000	2020 £'000
Short-term employee benefits	1,229	1,410
Post-employment benefits	168	181
Total	1,397	1,591

Details of Directors' remuneration are given in the Remuneration Report in the full Annual Report and Accounts.

Ultimate controlling party

The Company's ordinary shares are publicly traded on the AIM of the London Stock Exchange. There is no single controlling party.

37. Capital Commitments

In June 2017, as described in Note 29 above, a subsidiary company entered into a non-cancellable Build Operate-Transfer and Service Concession agreement with Sharjah Airport Authority under which it is committed to construct a Business Aviation Centre ("BAC") at Sharjah Airport. At 31 December 2021 the Group had other outstanding contracted commitments of nil (2020: $nil).

As part of the commitment to voluntary carbon offsetting, the Group has the intention to purchase verified emission reductions for 2,723 tonnes of CO₂e during 2022 (2021: 3,210 tonnes). At the reporting date this has not been contracted.

38. Dividends

The Board does not recommend a dividend for 2021 (2020: nil).

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END

FR BXGDURGDDGDR

Audited Results for the year ended 31 December 21

Revenue

Gross Profit

EBIT

/ BUSINESS AVIATION

/ SPECIAL MISSION

/ TECHNOLOGY & OUTSOURCING

/ ASSOCIATE INVESTMENTS

/ Branding fees

Financial summary

Restatement

Revenue Bridge

Adjusted EBIT2 Bridge

EBIT Bridge

Finance expense

Taxation

EPS

Net debt and cash flow movements

Dividend

Litigation

Auditors

1. General information

2. Basis of preparation and significant accounting policies

Statement of compliance

Basis of preparation

UK-adopted international accounting standards

Adoption of new and amended standards adopted by the Group

New standards and interpretations not yet adopted

Restatement

Going concern

Use of alternative performance measures (APMs)

Significant accounting policies

(a) Revenue from contracts with customers

(b) Segmental reporting

(c) Government grants

(d) Leases

Definition of a lease

(e) Supplier volume rebates

(f) Business combinations

(g) Goodwill

(h) Intangible assets

(i) Property, plant and equipment

(j) Assets held for sale

(k) Investments in associate and joint venture

(l) Inventories

(m) Cash and cash equivalents

(n) Financial instruments

(o) Provisions and contingent liabilities

Critical judgements in applying the Group's accounting policies

(a) Sharjah operations

(b) Paycheck Protection Program (PPP) qualifying expenditure

(c) Presentation of consideration received from the sale of its US Air Associate, Gama Aviation LLC

(d) Classification of items of cost or income as "Exceptional" (exclusion of items from Adjusted EBIT)

Key sources of estimation uncertainty

(a) Valuation review on non-current assets

(b) Loss allowances on financial assets

(c) Valuation of inventories

(d) Estimation of revenue and costs recognised in relation to long-term contracts

(e) Other long-term employee benefits

(f) Valuation of deferred tax assets

4. Segment information

Geographic information

5. EBIT for the year

6. Adjusted performance measures

Accelerated branding fees

Transaction costs

Integration and business re-organisation costs

Other income

Legal costs

Other items

Equity-settled share-based payments

Other long-term employee benefits

Impairment of acquired intangibles

Impairment of assets under construction and right-of-use asset

Impairment of investment in associate and non-current assets in associate

Tax related to Adjusting items

Organic and constant currency growth

Net debt

7. Staff costs

Retirement benefit schemes

Adjusted EBIT² Bridge

¹ Restatements are detailed in Note 2 of the notes to the financial statements

¹ Restatements are detailed in Note 2 of the notes to the financial statements

See Note 32 for further details on the other long-term employee benefits accrual.

25. Issued capital and reserves

¹Restatements are detailed in Note 2 of the notes to the financial statements