2022
AMEDEO AIR FOUR PLUS LIMITED
Consolidated Annual Financial Report (audited)
For the year ended 31 March
2 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Contents
Page
3 STRATEGIC REPORT
3 • Summary Information
4 • Chairman’s Statement
6 • Asset Manager’s Report
10 • Environmental, Social and Governance Policy
12 • Business Model
16 • Board of Directors
18 • Corporate Information
CORPORATE GOVERNANCE
24 • Director’s Report
26 • Statement of Directors’ Responsibilities
27 • Directors’ Remuneration Report
28 • Corporate Governance Statement
32 • Audit Committee Report
36 • Independent Auditor’s Report
FINANCIAL STATEMENTS
41 • Consolidated Statement of Comprehensive Income
42 • Consolidated Statement of Financial Position
43 • Consolidated Statement of Cash Flows
44 • Consolidated Statement of Changes in Equity
45 • Notes to the Consolidated Financial Statements
77 KEY ADVISERS AND CONTACT INFORMATION
79 GLOSSARY
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 3
Overview
Strategic Report
Summary Information
Listing Specialist Fund Segment of the London Stock Exchange’s
Main Market
Ticker AA4
Share Price 30.40 pence (as at 31 March 2022)
34.00 pence (as at 22 July 2022)
Market Capitalisation GBP106 million (as at 31 March 2022)
GBP118 million (as at 22 July 2022)
Target Dividend The original target of 2.0625 pence per Share per quarter
(8.25 pence per annum) was suspended on 6 April
2020. A new target of 1.25 pence per share per quarter
(5.0 pence per annum) was announced by the Board on
4 January 2022
Dividend Payment Dates January, April, July, October
Reporting Currency Sterling
Launch Date / Share Price 13 May 2015 / 100 pence
Incorporation and Domicile Guernsey
Aircraft Registration Numbers A6-EEY, A6-EOB, A6-EOM, A6-EOQ, A6-EOV,
A6-EOX, A6-EPO, A6-EPQ, HS-THF, HS-THG, HS-THH, HS-THJ
Asset Manager Amedeo Limited
Corporate and Shareholder Advisor Liberum Capital Limited
Administrator JTC Fund Solutions (Guernsey) Limited
Auditor KPMG
SEDOL, ISIN, LEI BKY41C6, GG00BMZQ5R81 (Effective from
8 December 2021) and GG00BKY41C61 (Prior to
compulsory redemption on 8 December 2021),
21380056PDNOTWERG107
Year End 31 March 2022
Stocks & Shares ISA Eligible
Website www.aa4plus.com
4 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Chairman’s Statement
Financial Year 2021-22 2020-21 2019-20
Total Rental Income (GBP) 190,033,541 201,374,560 256,560,337
Net Asset Value Per Share (Pence) 90.34 71.80 98.43
Distributions Made (GBP)
1
4,341,418 11,346,419 52,985,622
Outstanding Shares 347,313,483 434,141,757 642,250,000
Outstanding Debt (GBP) 994,628,598 1,033,556,018 1,233,244,765
Change in Portfolio Residual Value
2
-16% -20% -16%
1 Interim dividends of 1.15 pence and 1.50 pence per Redeemable Ordinary Share in respect of the financial year ending 31 March 2021.
2 Based on appraisal assumptions used for each respective financial year. The 2021/22 financial year accounts for residual value at the end of the Thai lease
extension.
Thai Airways
Last financial year was about finalising the Thai Airways restructuring and determining the level of future dividends.
The Thai Airways restructuring, with the Bankruptcy Planners and our lenders, was completed in December 2021. This has
reset the leases with the airline as follows:
(i) Power by the Hour (PBH) rent payments until December 31, 2022. It should be noted that on average, during the prior
3 months, our Thai Airways aircraft have been flying more than 200 flight hours per month – which equates to over 60%
of pre-pandemic hours – and therefore the PBH rental payments have been sufficient to cover the quarterly interest
and expense. On certain Aircraft, the recent PBH income is generating revenue in excess of interest and expense with
overages being applied to repay loan principal.
(ii) Lease rentals are fixed from 1st January 2023 to original lease expiry. However the level of rental is approximately
45% below the previously agreed rent. In addition the Rehabilitation Plan provides that pre-petition unpaid rent in the
amount of $6.7m is payable by the airline in instalments starting in 2024. Such amounts are required to be paid to
lenders to reduce debt.
(iii) A committed 6 year extension of the lease, with future rental level to be agreed by reference to the then market rent
through an appraisal process.
(iv) New debt amortisation profile agreed with the Lenders, with a) an interest rate cap set for MSNs 123, 130, and 142
until the original expiry term when these three aircraft will be refinanced to match up with new extension term market
lease rentals, and b) a fixed interest rate swap in place for MSN 177 to the extension term expiry date in 2036.
(v) We were able to retain engine maintenance reserves with in cash in the amount of approximately $71.5 million, which
provide asset protection in the event of adverse credit events in the future. Such reserves remain pledged to the lenders
and are therefore restricted.
(vi) On the downside, the greatly reduced amortisation of debt caused by the rent reduction means there will be no
ongoing return to shareholders and with a fixed allowance for operating expenses which means whilst service providers
receive 100% of their fees the shareholders receive nothing since all surplus cash is applied to reduce debt.
(vii) Thai Airways has now announced plans to exit bankruptcy restructuring in 2024, in the meantime reports suggest they
will strengthen their balance sheet with new capital and debt for equity swaps. We expect the equity value we retained
in these aircraft at current market appraisals to be substantial.
Emirates
Moving on to Emirates, they continue to perform their obligations in full and on time as can be seen from the cash flow
figures in the grid above. However, values of both the A380 and the B777s have declined faster than other, in production
widebody aircraft, but, even taking into account value impairments of these aircraft, and rental impairment of the Thai
aircraft, we are profitable once more. But, we are in the curious position that one part of the portfolio has equity value (that
is, current and future values are appraised to be in excess of debt) but produces no income, whilst the remaining part has
little or no equity value (current and future values are below debt) but produces a valuable, albeit diminishing, income
stream.
The recent announcement by the Doric fund that it had sold msn 16 to Emirates for $30m has generated interest and we
have been considering its implications for the Company. We believe that for Emirates the net cost, after allowing for end of
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 5
Overview
Chairman’s Statement (continued)
lease return compensation and redelivery costs, which they were always obliged to fund, is much lower. Emirates has been
taking steps to bridge part of its 777 fleet by extending leases expiring this year up to about 2027 when they may be
replaced by the new 777X. Our first aircraft comes off lease in September 2026 and we cannot predict now what Emirates’
fleet plans will be at that time, so we will watch and see whether this is a one off event or if it heralds a change in residual
values for these aircraft.
Distributions
The board was very pleased to be able to reintroduce a regular dividend of 1.25p per quarter starting in January 2022 and
expects to be able to maintain this figure in the foreseeable future.
In the FY 2022, we were delighted to have been able to return to shareholders a total of £34,340,587 which comprised
£29,999,169 / 34.55p per share redemption in December 2021 and £4,341,418 / 1.25p per share dividend in January
2022.
We were able to negotiate reductions in expenses with some, but not all, of our suppliers.
In May the directors held a strategy day. It is undoubtedly the case that the original path in 2015 has been severely disrupted
by events and therefore it is a challenge to the board to adapt strategy to new circumstances.
Liberum Capital provided us with useful and detailed analysis of share performance and pricing over the fund’s history and
we held valuable discussions with them about differing shareholder expectations. We had outside third parties participate
in workshops on the wider aircraft investment and financing markets and how different players such as mainstream lessors,
private equity firms and investors were approaching the market post Covid, and what this might mean for the company
and shareholders.
The aviation market, where released from lockdowns and other restrictions, has recovered quickly and there is strong
appetite for assets even in an environment of rising interest rates, the war in Ukraine and increases in fuel prices. Although
slower to recover than domestic (largely US and EU) tourist markets, the demand for widebody aircraft has been springing
back, with almost 70 A380s in Emirates’ fleet currently in service, and the likes of Lufthansa, ANA, Qantas, and BA are starting
to bring back some of their A380s into revenue service. TSA and IATA International passenger numbers are inching closer
to 2019 volumes and capacity has been hindered partially by staff shortages in various markets. With the easing of testing
requirements across the Globe we are seeing a positive rebound in international travel.
Nevertheless, compared with our situation 12 months ago, the company is in a far better and stronger financial position.
Robin Hallam
Chairman
Date: 28 July 2022
6 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Asset Manager’s Report
On the invitation of the Directors of the Company, the following commentary has been provided by Amedeo Limited as
Asset Manager of the Company and is provided without any warranty as to its accuracy and without any liability incurred
on the part of the Company, its Directors and officers and service providers. The commentary is not intended to constitute,
and should not be construed as, investment advice. Potential investors in the Company should seek their own independent
financial advice and may not rely on this communication in evaluating the merits of an investment in the Company. The
commentary is provided as a source of information for shareholders of the Company but is not attribute to the Company.
AA4P PORTFOLIO UPDATE
As set out in the Company’s announcement on 16 December 2021, the Company is pleased to announce that it has
completed the lease amendment documentation with Thai Airways in respect of its 4x A350-900 aircraft. Under the
restructured leases, Thai Airways will pay rent on a power by the hour basis until December 2022. From January 2023, the
leases will switch to new fixed monthly rent. There is now an additional six-year lease extension agreed. The Company’s
A350s have seen an uptick in utilisation during the first half of the calendar year 2022, in line with expectations, and the
Company is looking forward to seeing its aircraft further serve international destinations for Thai Airways, who are looking to
expand operations ahead of the summer.
Emirates continues to keep up its positive performance and is now focusing on increasing flight frequencies to pre-pandemic
levels. Destinations such as India, Australia, and Saudi Arabia will see additional routes introduced to cater to growing
demand, and even more A380s will potentially return to service to support these endeavours. So far in 2022, the airline has
operated almost 70x A380s for passenger operations. With the lifting of COVID-19 related travel restrictions, Emirates faced
a busy end to Q1 2022, as an estimated 700,000 passengers travelled between its airport hub for spring break holidays
and for the closing of Expo 2022. Emirates has also announced plans to refurbish the cabins of sixty-seven A380s, fifteen
more than previously planned, to go along with fifty-three B777-300ERs, which indicate that the aircraft type are expected
to remain active in the fleet. As of May 2022, Emirates no longer operate leased aircraft in and out of Russia, which includes
the Company’s aircraft, due to restrictions imposed upon their insurance policy, however, they continue to operate their own
Aircraft into this jurisdiction.
AMEDEO’S ASSET INSPECTION REPORT TO AA4P
The utilisation figures below represent the totals for each aircraft from first flight to 31 March 2022
Lessee Model MSN REG
Delivery
Date
Lease Expiry
Date
Flight
Hours
Flight
Cycles
March
Flight
Hours
Emirates
A380-861 157 A6-EEY 04/09/2014 04/09/2026 24,461 3,914 257
A380-861 164 A6-EOB 03/11/2014 03/11/2026 24,052 3,872 298
A380-861 187 A6-EOM 03/08/2015 03/08/2027 26,250 2,568 218
A380-861 201 A6-EOQ 27/11/2015 27/11/2027 17,707 2,799 0
A380-861 206 A6-EOV 19/02/2016 19/02/2028 21,544 3,520 130
A380-861 208 A6-EOX 13/04/2016 13/04/2028 16,110 2,543 0
B777-300ER 42334 A6-EPO 28/07/2016 28/07/2028 21,712 5,392 399
B777-300ER 42336 A6-EPQ 19/08/2016 19/08/2028 21,074 4,888 355
Thai Airways
A350-900 123 HS-THF 13/07/2017 13/07/2035 14,074 2,503 205
A350-900 130 HS-THG 31/08/2017 31/08/2035 13,399 2,270 245
A350-900 142 HS-THH 22/09/2017 22/09/2035 12,958 2,179 180
A350-900 177 HS-THJ 26/01/2018 26/01/2036 11,070 1,850 216
Recent Technical Activity:
¾ No significant technical events have been reported by Emirates for this period.
¾ No significant technical events have been reported by Thai Airways for this period.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 7
Overview
Asset Manager’s Report (continued)
¾ Only MSN 201 & 208 remain grounded, as all other aircraft are in commercial service. MSN 201 and MSN 208 are in
the 2 Class configuration (c. 615 passengers) while all the rest are in 3 class (c. 519 passengers) configuration. Emirates
continues to reactive A380s in line with their strategic plans but have indicated that the 3 class configuration will return
first before the 2 class configuration aircraft.
¾ A notable event has occurred in respect of the publicly announced trade upon lease termination in December 2022 for
an A380 MSN 16 by DNA1. Emirates and DNA1 agreed that upon termination, Emirates would acquire the aircraft for
£25.30 million. Previously Emirates chose not to exercise an option to return in half-life condition and pay USD 12 million.
MSN 16 is a very early production aircraft, with resulting weight and performance limitations, and it was 18 months old at
initial delivery prior to the twelve year lease, having participated in the A380 test flying campaigns. The transacted price
was in line with our expectations, bearing in mind the specifics of the aircraft and underlying lease terms. While direct
comparisons and extrapolations are not appropriate, as specific return conditions between DNA1 and AA4P aircraft are
different, this trade gives further credence to the future value analysis we regularly prepare for the board.
¾ Emirates fleet last operated as per the dates listed below as of 31 March 2022:
• MSN 157: 29 March 2022
• MSN 164: 31 March 2022
• MSN 187: 31 March 2022
• MSN 201: 18 August 2020 (Positioning Flight from DXB – DWC)
• MSN 206: 31 March 2022
• MSN 208: 26 August 2020 (Positioning Flight from DXB – DWC)
• MSN 42334: 31 March 2022
• MSN 42336: 31 March 2022
¾ Thai Airways fleet last operated as per the dates listed below as of 31 March 2022:
• MSN 123: 31 March 2022
• MSN 130: 31 March 2022
• MSN 142: 29 March 2022
• MSN 177: 31 March 2022
Industry Update
The International Air Transport Association (IATA) announced passenger data for March 2022 demonstrating that the recovery
of air travel continues. Impacts from the conflict in Ukraine on air travel demand were quite limited overall while the
Omicron virus-related effects continued to be confined largely to Asian domestic markets.
Total traffic in March 2022 (measured in revenue passenger kilometres or RPKs) was up 76.0% compared to March 2021.
Although that was lower than the 115.9% rise in February year-over-year demand, volumes in March were the closest to
2019 pre-pandemic levels, at 41% below. March 2022 domestic traffic was up 11.7% compared to the year-ago period,
far below the 60.7% year-over-year improvement recorded in February. This largely was a result of the Omicron-related
lockdowns in China. March domestic RPKs were down 23.2% versus March 2019. International RPKs rose 285.3% versus
March 2021, exceeding the 259.2% gain experienced in February versus the year-earlier period. Most regions boosted their
performance compared to the prior month, led by carriers in Europe. March 2022 international RPKs were down 51.9%
compared to the same month in 2019. “With barriers to travel coming down in most places, we are seeing the long-
expected surge in pent-up demand finally being realised. Unfortunately, we are also seeing long delays at many airports
with insufficient resources to handle the growing numbers. This must be addressed urgently to avoid frustrating consumer
enthusiasm for air travel,” said Willie Walsh, IATA’s Director General.
8 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Asset Manager’s Report (continued)
EMIRATES GROUP
Full Year Financial Highlights
1
:
Despite recording a c. $1.1bn loss for the 2021-2022 financial year, Emirates operations were much improved following
the challenges that were faced in the previous year due to the COVID-19 pandemic. The carrier had recorded a loss of
c. $1.6bn loss during the H1 2021-22 but managed to improve to a profit of c. $0.5bn by the end of H2 2021-22, which
is an encouraging sign for next year’s performance. With significantly enhanced capacity deployment across most markets,
Emirates’ total revenue for the financial year increased 91% to AED 59.2 billion (US$ 16.1 billion). Currency fluctuations this
year impacted the airline’s profitability negatively by AED 348 million (US$ 95 million). Total operating costs increased by
30% from the last financial year. Cost of ownership (depreciation and amortisation) and fuel cost were the two biggest cost
components for the airline in 2021-22, followed by employee cost. Fuel accounted for 23% of operating costs compared
to 14% in 2020-21. The airline’s fuel bill more than doubled to AED 13.9 billion (US$ 3.8 billion) compared to the previous
year, driven by a higher uplift of 66% in line with capacity expansion and a higher average fuel price which was up by 75%.
During the 2021-22 financial year, Emirates received a further capital injection of $1.0 bn from the Government of Dubai,
with the airline holding c. $5.7bn in cash assets (up by 38%) as of 31 March 2022.
Operations:
In late January 2022, Emirates announced a resumption of passenger operations between Dubai and five African countries
including South Africa, Kenya, Ethiopia, Tanzania, and Zimbabwe by the end of the month. This includes double daily
services from Johannesburg and daily services from Cape Town and Durban to Dubai respectively. Following the resumption
of services to and from Casablanca in February 2022, Emirates has fully restored its pre-pandemic African network with
21 destinations across the continent.
From 1 April 2022, Emirates will re-introduce pre-pandemic flight frequencies to its destinations in India. The airline will
be operating 170 weekly flights to nine cities in the country. Emirates has also brought back its Airbus A380 on a daily
basis between Dubai and Mumbai in March 2022. From 1 May 2022, Emirates will add a second daily A380 flight from
Dubai to Melbourne in Australia, doubling the daily seat capacity to more than 1,000. Demand for international travel is
expected to increase following the re-opening of Australia’s borders. As of May, Emirates will also operate A380 services
twice daily to Sydney and a daily A380 service to Brisbane. In addition, the lessee will offer daily flights to Perth on a Boeing
777-300ER. Emirates has also confirmed that it will be commencing daily services to Tel Aviv (Israel) from 23 June 2022
with its three-class Boeing 777-300ER. From 1 July 2022, Emirates will be operating twice daily flights on its A380 aircraft to
Mauritius. Emirates currently operates daily flights to Mauritius on its Boeing 777-300ER aircraft. In line with rising demand,
the airline will be scaling up operations from daily to nine weekly flights between 09 April 2022 and the end of June 2022
and then moving up to double daily flights from July 2022. In March 2022 Emirates and Garuda Indonesia launched their
codeshare partnership which gives customers of Emirates and Indonesia’s national carrier seamless connectivity on 16 routes
between Indonesia, the Middle East and Europe. Emirates now has codeshare cooperation agreements in place with
23 airline partners. Emirates will refurbish more of its existing fleet than previously planned, its chief commercial officer said
on Tuesday, as the airline faces delays to deliveries of new Boeing jets and seeks assurances over concerns with the Airbus
A350s it ordered. The Gulf carrier is spending over a $1 billion to refurbish the fleet which includes installing a new premium
economy cabin. Emirates would now refurbish 67 A380s, up from 52 initially announced, while the 53 refurbished 777s
is unchanged. Emirates had always planned to refurbish some of its older jets, but now the airline plans to operate older
aircraft for longer as a “stop gap” to delivery delays.
Thai Airways International
2021 Financial Highlights
2
:
On June 15, 2021, the Central Bankruptcy Court issued an Order approving the rehabilitation plan of Thai Airways. Upon that
date, the airline initiated the process of implementing the rehabilitation plan. For the financial year ended 31 December
2021, Thai Airways reported a net profit of THB 55.1 billion (US$ 1.7 billion), which was the airlines first reported profit in five
years. The airline previously recorded a loss of THB 141.2 billion (US$ 4.4 billion) for 2020. The airline recorded revenues of
THB 90.0 billion (US$ 2.8 billion) which was an 85% increase compared to 2020. Expenses recorded were THB 28.2 billion
(US$ 0.9 billion), a reduction of 83% compared to THB 170.5 billion (US$ 5.3 billion) in 2020. This is largely attributed to
i) less fuel expenses due to travel restrictions, ii) reduced workforce as per restructuring terms, and iii) a reversal of previous
1
US$ Figures are converted at US$ 1 = AED 3.67
2
THB = US$ 0.031
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 9
Overview
Asset Manager’s Report (continued)
impairment by THB 20.0 billion (US$ 0.6 billion). By 31 December 2021, the airline had total assets of THB 161.2 billion
(US$ 5.0 billion), which includes cash and cash equivalents of THB 5.5 billion (US$ 0.2 billion) down 36% compared to
THB 8.7 billion (US$ 0.3 billion) recorded in 2020. The Total liabilities were THB 232.5 billion (US$ 7.2 billion), which is a
significant reduction compared to THB 338.0 billion (US$ 10.5 billion) recorded in 2020.
Operations:
The airline still has some way to go in terms of improving its operations. Revenue from passenger and baggage services
was THB 5.5 billion (US$ 0.2 billion), which was 84% less than figures recorded in 2020. However, revenue from freight
and mail services was THB 10.9 billion (US$ 0.3 billion), which was an improvement of 59% from 2020 performance.
Considering the challenges faced with passenger operations, such as travel restrictions and lack of Chinese tourism, the airline
is targeting freight and mail services as it gradually expands its passenger operations. Furthermore, it has been reported
that the airline will look to double its cargo flights to China and India from May as demand for Thai fruit exports rises. It is
reported that the airline managed an increase of passengers in average per day from 311 in October to 1,067 and 2,559
in November and December 2021, respectively. However due to Omicron concerns, which forced Thailand to cancel its Test
and Go scheme in December, the number of passengers in January and February 2022 reportedly dropped by 20% from
December 2021. Nonetheless as travel restrictions are easing worldwide, vaccination rates improving, and summer holidays
soon approaching, the Government has resumed the Test and Go scheme and Thai Airways will expand its operations
accordingly. The reopening of borders has also encouraged the airline to increase flight frequencies to London, Frankfurt,
Copenhagen, Zurich, Singapore, and Kuala Lumpur. The plans expand into the second quarter of 2022, whereby Thai
Airways has resumed flights to more destinations such as Melbourne and other Indian destinations. Despite challenges the
airline has faced in its operations, it should be noted that all four of the Company’s A350s are currently in revenue service
and utilized frequently as of the end of Q1 2022. Considering the age profile and efficiency of the aircraft type, these aircraft
have potential to actively serve Thai in its operations for many years to come.
10 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Environmental, Social And Governance Policy
Introduction
The Company recognises that shareholders and other stakeholders now have a growing interest in the ESG considerations
resulting from its business. Here we set out our current policy and approach to ensuring that the Company’s level of
engagement on ESG matters commensurate with the size, nature and complexity of the business.
This Company’s current policy is in its infancy as it strives to address today’s ESG considerations noting that it was incorporated
in 2015 with a business model designed to run for twelve years without interruption. Subsequent acquisitions of aircraft and
renegotiation of leases has pushed that end date out to 2036.
The Company has adopted a policy to consider ESG where possible and applicable although recognising that this may be
constrained somewhat by the nature of the Company’s activities and the existing contracts it has already entered into.
The Company has granted “quiet enjoyment” of its aircraft to its lessees, Emirates and Thai Airways. Shareholders are invited
to review the environmental and sustainability criteria published by Emirates in their most recent annual report and the
statements made by Thai on their website.
The Company
The Company is a Guernsey company incorporated on 16 January 2015.
The Company is governed by its Board on behalf of the shareholders. All directors are independent and non-executive. The
Board has overall responsibility for the Company’s activities including all business decisions and the declaration of distributions.
The Company has delegated the following activities to its appointed service providers:
• arranging the financing, acquisition and disposal of aircraft and the management of such aircraft whilst owned by the
Group to its Asset Manager;
• arranging meetings with major shareholders and other shareholders as may reasonably be requested by the Company
to discuss proposed developments in relation to the Company and providing feedback to the Board to the Corporate
Broker;
• Company secretarial, administration and accounting services to the Secretary and Administrator; and
• share registration services to the Registrar.
The Company has no executive directors nor employees and for all purposes its business is deemed to be operating out of its
registered office which is also the office of the Company Secretary in Guernsey. The Board conducts the Company’s business
via a series of meetings held in Guernsey or via a video link.
Sometimes directors are required to travel in the fulfilment of their duties and, where circumstances allow, travel is kept to a
minimum. Where travel restrictions put in place as a result of the COVID-19 pandemic permit, the directors are required to
travel to Guernsey on at least a quarterly basis for Board meetings, to the UK to visit shareholders and service providers as
and when required and very occasionally, to the middle east or Asia to meet the Assets’ lessees.
The Company consequently has a limited physical footprint and therefore its environmental impact is low.
The Board of Directors
The Board recognises the importance of gender diversity and ethnic inclusion. The Board take such considerations into
account when searching for new directors. The Company’s service providers also engage a number of executive women
who are involved heavily in the affairs of the Company.
As a Guernsey incorporated company and under the DGTRs of the UK’s FCA the Company is not required to comply with
the UK Code but has instead chosen voluntarily to comply with the provisions of the AIC Code to the extent that they are
considered relevant.
The Board has adopted a comply or explain approach to the AIC Code.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 11
Overview
Environmental, Social And Governance Policy (continued)
The Board has considered and determined the following two additional policies:
• there are no relevant disclosures to be made with regard to modern slavery in relation to the Company’s own operations;
and
• the Board takes a zero-tolerance approach to bribery and corruption; and has procured from all service providers their
own similar undertaking.
Finally, the Board monitors potential conflicts of interest closely and has engaged with its service providers to request them
to do the same and to adopt appropriate policies to deal with such matters.
The Assets
The principal activity of the Group is to acquire, lease and then sell aircraft. The Group currently owns six A380-800 aircraft,
two 777-300ER aircraft and four A350-900 aircraft. The six A380s and the two Boeing 777 aircraft are leased to Emirates
and the four A350 aircraft are leased to Thai Airways.
The nature of the leases entered into with these lessees means the Company has no influence whatsoever in the use by
each lessee of the relevant aircraft; and each such lease is for a fixed term and is non-cancellable. The terms of each lease
were fixed when they were entered into and afford the lessees quiet enjoyment of the relevant aircraft for the duration of
the lease term; whilst ensuring each aircraft is maintained to the highest standard and remains as efficient as possible.
The Aviation Industry
The increased focus on climate change and greenhouse gas emissions, inevitably means that further focus has landed
on the aviation industry and its emissions profile. In this regard the Company is fortunate to have two responsible flag
carrying airlines as its lessees who each demonstrate on their websites a considerable amount of concern for their respective
businesses’ environmental and social impact. The following links to their websites explain this:
Emirates = https://www.emirates.com/english/about-us/
Thai Airways = https://www.thaiairways.com/en_GB/about_thai/company_profile/index.page
The ATAG reports that aircraft flights produced 895 million tons of carbon dioxide, or 2% of total “human-induced” carbon
dioxide emissions. Among transport sources of carbon dioxide, aviation is responsible for just 12%, with road emissions
comprising the vast majority at 74%.
The ATAG reports that previous to the pandemic, aircraft flights produced 915 million tons of carbon dioxide, or 2% of total
“human-induced” carbon dioxide emissions. Among transport sources of carbon dioxide, aviation is responsible for just 12%,
with road emissions comprising the vast majority at 74%.
ATAG aims that by 2050, global civil aviation operations will achieve net-zero carbon emissions. Airframe and engine
manufacturers can and will contribute significantly to this effort.
As an asset owner, the Group is fortunate that its choice of aircraft were among the most environmentally efficient jet aircraft
in service at the time of acquisition.
In the context of the aircraft the Group owns and their associated leases, the Board will continue to monitor the sustainability
efforts of the industry and the lessees and will continue to have regard to environmental concerns when considering changes
in the future to the Group’s existing contracts.
12 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Business Model
COMPANY OVERVIEW
The Company is a Guernsey company incorporated on 16 January 2015. The Company operates under the Law and the
DGTRs of the UK’s FCA.
All of the Company’s Shares have since 13 May 2015 been admitted to trading on the SFS.
The initial and six subsequent share raisings resulted in the issue and admission to trading on the SFS of 642,250,000
Shares issued at an average offer price of 102 pence. On 28 September 2020 the Company compulsorily redeemed
214,083,243 Shares on a one for three shares held basis as at 25 September 2020 paying a redemption price of 46 pence
per Share redeemed. A further compulsory redemption of 86,828,274 shares occurred on 8 December 2021 on a one for
five shares held basis as at 7 December 2021 for a redemption price of 34.55 pence per share redeemed.
As at 22 July 2022, the last practicable date prior to the publication of this report, the Company’s total issued share capital
was 347,313,483 Shares trading at 34.00 pence per Share giving the Company a market capitalisation of £118.09 million.
Investment Objective and Policy
Since launch the Company’s investment objective has been to obtain income returns and a capital return for its shareholders
by acquiring, leasing and then selling aircraft.
To pursue its investment objective, the Company sought to use the net proceeds of placings and/or other equity capital
raisings, together with debt facilities, to acquire aircraft which it leased to one of three major airlines. In February 2020 all
aircraft leased to Etihad Airways were disposed of and now the remaining aircraft are leased either to Emirates or Thai
Airways.
Given the COVID-19 crisis and the devastating affect it has had upon the long-haul air travel industry, plus the fact that one
of the Group’s lessees, Thai Airways is now under a rehabilitation plan, the Board considers it unlikely that in the near term
there will be any further expansion of the Company.
Investment Portfolio
As at the financial reporting date of 31 March 2022 the Company had twelve wholly-owned aircraft owning subsidiaries and
two Irish leasing subsidiaries, see note 1 for further details.
Distribution Policy
The Company aims to provide shareholders with a total return comprising income from distributions through the period of
the Group’s ownership of the Assets and a capital distribution upon the sale, or other disposition of the Assets.
Up until December 2019 the Group regularly received income in the form of lease payments and income distributions were
made to shareholders quarterly in accordance with the Company’s then target of a distribution to shareholders of 2.0625
pence per Share per quarter.
However, on 6 April 2020, as a result of the impact of COVID-19 on the airline industry, the Company announced that the
Board had resolved to temporarily suspend the payment of any kind of distribution to shareholders, as the Board’s priority
lay in preserving the long-term financial stability of the Company for the benefit of its shareholders and creditors. The Board
considered that maintaining the Company’s liquidity was vital and was prudent in doing so.
Whilst two dividends were declared and paid in October 2020 and January 2021, the Board took the decision to suspend
quarterly dividends until the rehabilitation of Thai Airways and the agreement with the Company’s lenders were complete.
On 1 December 2021 the Board announced its decision to recommence the payment of quarterly dividends from January
2022.
Details of dividends declared by the Board during the year under review are set out on page 59.
Return of Capital
Following the sale of an Asset the Board may, as it deems appropriate at its absolute discretion, either return to shareholders
all or part of the net capital proceeds of such sale (subject to satisfaction of the Statutory Solvency Test), or re-invest the
proceeds in accordance with the Company’s investment policy, subject to shareholder approval.
Following the sale in February 2020 of the two aircraft leased to Etihad Airways, on 23 September 2020 the Company
announced the return to shareholders of £98.5 million of the resultant proceeds by means of a compulsory redemption of
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 13
Overview
Business Model (continued)
one share for every three shares held as at 25 September 2020 for a payment of 46 pence per each share redeemed.
Accordingly, 214,083,243 Shares were redeemed and cancelled.
A further £30m was returned to shareholders through a compulsory redemption of 86,828,274 shares, announced on
8 December 2021 and made on a one in five shares held basis (shareholdings calculated as at close of business on
7 December 2021) for a redemption price of 34.55 pence per share redeemed.
The Asset Manager regularly monitors the market valuations of the Assets and, subject to any lease obligations, will consider
the most appropriate time for the sale of any one or more of the Assets. The Board will consider any recommendation from
the Asset Manager as to the sale of any Asset and proceed as the Board considers appropriate.
Liquidation Resolution
Although the Company does not have a fixed life, the Articles require that the Board convenes a Liquidation Proposal
Meeting in 2029 or such other date as shareholders may approve by ordinary resolution.
Stakeholders and Section 172
An intention of the AIC Code, to which the Company fully subscribes, is that the Board should understand the views of the
Company’s key stakeholders and describe in the annual report how their interests and the matters set out in section 172 of
the UK’s Companies Act 2006 have been considered in Board discussions and decision-making.
Such guidance says that the board has a duty to promote the success of their company for the benefit of the members as a
whole and, in doing so, have regard to:
a. the likely consequences of any decision in the long term;
b. the interests of the company’s employees;
c. the need to foster the company’s business relationships with suppliers, customers and others;
d. the impact of the company’s operations on the community and the environment;
e. the desirability of the company maintaining a reputation for high standards of business conduct; and
f. the need to act fairly between members of the company.
As an aircraft leasing company, the Company has no employees and all of the directors are non-executive, so the Board
considers that its key stakeholders are its lessees, lenders, shareholders and service providers.
The Company has continued to manage its relationship with the lessees in the knowledge that its recent difficulties have not
arisen due to default by lessees, cooperating with them with a view to overcoming such difficulties.
The Board’s engagement with shareholders is described in the section “Dialogue with Shareholders” on page 31. All
shareholders are treated equally and no shareholder receives preferential treatment. When making decisions of relevance
to shareholders, the Board considers first and foremost the likely consequences of their decisions in light of their duty to act
in the best interests of the Group in the longer term. The Board also considers what is likely to be in the best interests of
shareholders as a whole, but does not consider individual shareholders’ specific circumstances or desires when making its
decisions.
The Company engages third party service providers and, in addition to the regular reporting provided by these key service
providers, the Board undertakes a review of the performance of these key service providers on an annual basis. The services
provided by these key service providers are critical to the ongoing operational performance of the Group. The Board
believes that fostering constructive and collaborative relationships with the Company’s service providers will assist in their
promotion of the success of the Group for the benefit of all shareholders.
The Board considers the interests of all stakeholders and oversees the activities of the Asset Manager, as further explained
below.
As described in detail in the Company’s viability statement on page 22, the Board considers the prospects of the Group for
at least the duration of each lease whenever it considers the Group’s sustainability. All strategic decisions are therefore taken
with the long-term success of the Group in mind and the Board would take external advice whenever it considered that such
would be beneficial to its decision making process, primarily from its retained service providers (including legal counsel), but
also from other external consultants.
14 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Business Model (continued)
The Board recognises that ESG considerations can have a significant impact on investment activity in terms of raising funds,
identifying investment opportunities and long-term value creation for shareholders. Please see more information regarding
ESG in the report on pages 10 to 11.
The Board ascribes to the highest standards of business conduct and has policies in place to ensure compliance with all
applicable laws and regulations. In addition to the monitoring of the Company’s compliance with its own obligations, the
Board also monitors compliance by its key service providers with their own obligations. Each provider is required to have
in place suitable policies to ensure that they maintain high standards of business conduct, treat customers fairly and are
committed to ensuring that high standards of corporate governance are maintained.
The Board encourages openness and transparency with its service providers.
Management of the Group
The directors are responsible for managing the business affairs of the Group in accordance with the Company’s Articles and
have overall responsibility for the Group’s activities, including investment activity. The Group has delegated management
of the Assets to Amedeo Limited, a company incorporated in Ireland. The directors delegate secretarial and administrative
functions to JTC Fund Solutions (Guernsey) Limited which is a company incorporated in Guernsey and licensed by the GFSC
for the provision of administration services. Link Market Services (Guernsey) Limited is the Company’s Registrar, Transfer Agent
and Payment Agent. Liberum Capital Limited is the Company’s Corporate Broker.
Asset Manager, Agency Services and Liaison Agent
The Asset Manager has been appointed by the Company to provide asset management services to the Group. Pursuant to
the Asset Management Agreement dated 30 April 2015, the Asset Manager will: (i) monitor and, to the extent required
pursuant to the terms and conditions set out in each lease, administer each relevant lessee’s performance of its obligations
under the relevant lease (including such lessee’s obligations relating to the insurance of the Assets); (ii) as the Group’s
exclusive remarketing agent in respect of the Assets, use all reasonable endeavours to solicit offers to lease or sell each of the
Assets on the best terms reasonably obtainable having due regard to the then current market conditions (including current
industry and market practice); (iii) carry out mid-lease inspections of the Assets; (iv) provide the Group with information and
analysis with respect to each Asset, including a quarterly asset monitoring report which will include recent developments
and a forward looking statement including inspection results, events, any material information, significant changes, decisions
which have been or need to be made, events affecting distributions, and other major or pending events, issues or outcomes
as far as known to Amedeo; and (v) if requested by the Group, acting reasonably, provide a financial model that would
allow the Board to prepare or re-assess target distributions based on the Asset Manager’s view of projected cash flows and
liabilities.
The Asset Manager has further undertaken that it will dedicate sufficient time and resources as they reasonably believe is
sufficient from time to time to fulfil any contractual arrangements it enters into with the Group.
Amedeo Limited has also been appointed as Agency Services provider by the Company, pursuant to the Agency Agreement
dated 30 April 2015, to assist the Group, and act as the Group’s agent, in relation to the arrangement, negotiation, review,
and, following the approval and execution by the Group, the management of the acquisition of assets, the borrowings of
the Group relating to the acquisition of the assets (including any financing documentation), each lease and ensuring that
material agreements are consistent with market practice in the aviation industry.
Amedeo Services (UK) Limited has been appointed as Liaison and Administration Oversight Agent by the Company,
pursuant to the Liaison and Administration Oversight Agreement dated 30 April 2015, to: (i) co-ordinate the provision
of services by service providers to the Group under the Asset Management Agreement, the Agency Agreement and the
Administration Agreement; (ii) facilitate communication between the Group and its service providers in relation to the
services provided under the Administration Agreement, Asset Management Agreement and Agency Agreement; (iii) in
relation to the acquisition of any asset, monitor and review the timing or payments and any currency exchanges to be
effected in order to ensure payments are made in a timely maker; (iv) monitor the on-going budget of the Group and
the payment of recurring and certain non-recurring costs, fees and expenses, and (v) assist the Administrator in monitoring
the balances in the bank accounts of the Group and, where appropriate, provide the Administrator with any assistance it
might reasonably require with respect to making payments, transferring balances or entering into currency exchanges as
appropriate. Amedeo Services (UK) Limited is authorised and regulated by the FCA.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 15
Overview
Business Model (continued)
Amedeo is a recognised aircraft asset manager and principal investor in leasing transactions to customer airlines globally. The
aircraft portfolio currently managed by the Amedeo group, includes twenty-one aircraft under management. The volume
of assets under management is c. $5 billion, which include commercial airliners including A380, A350, A330 and Boeing
777. Amedeo is a member of the International Society of Transport Aircraft Trading (“ISTAT”).
Corporate Broker
Liberum Capital Limited were engaged by the Company on 15 March 2021 to act as the Company’s corporate broker. In
such a capacity, the Corporate Broker maintains a regular dialogue with shareholders in order to ensure that any significant
developments in relation to the Company are communicated appropriately to shareholders. The Corporate Broker also
provides shareholder feedback to the Company following shareholder meetings or interaction.
Liberum is a leading independent UK provider of investment banking, research, sales and trading. Liberum is authorised
and regulated by the FCA.
Secretary and Administrator
JTC Fund Solutions (Guernsey) Limited is an independent provider of institutional and private client services to clients in
numerous jurisdictions and is a member of the JTC Group. See the JTC Group’s website at www.jtcgroup.com.
JTC Fund Solutions (Guernsey) Limited is a Guernsey incorporated company, which is licensed by the GFSC. JTC Fund Solutions
(Guernsey) Limited provides administration and secretarial services to the Group pursuant to the Administration Agreement
dated 30 April 2015, as amended.
In such capacity, the Secretary is responsible for the general secretarial functions required by the Law and assists the Group
in its compliance with its continuing legal and regulatory obligations, as well as providing advice on good corporate
governance and best practice for a publicly traded company.
The Administrator is also responsible for the Group’s general administrative functions and for the preparation of half-yearly
(subject to a limited review by auditors) and audited annual financial reports, subject to the direction and oversight of the
Board.
Registrar
Link Market Services (Guernsey) Limited has been appointed as registrar, transfer agent and paying agent by the Company.
The Registrar performs the duties of a registrar, transfer agent and paying agent in relation to the Shares and the maintenance
of the Company’s Share register.
Review of Service Providers
The Board keeps under review the performance of the Asset Manager, Corporate Broker, the Secretary and Administrator and
the Registrar and the powers delegated to each service provider. In the opinion of the Board the continuing appointments
of the current service providers on the terms agreed is in the interest of the Company and its shareholders as a whole.
A full list of the Group’s service providers is set out on pages 14 and 15.
16 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Board of Directors
As at 31 March 2022, the Company had five directors, all of whom are independent and non-executive. All directors held
office throughout the period under review.
Robin Hallam (Chairman) (Independent non-executive)
Until 31 December 2015, Robin Hallam was a partner and co-head of Asset Finance at international law firm Hogan
Lovells International LLP. He became a partner in 1995 specialising in aircraft finance, particularly leasing, export credit and
structured financing. Between January and December 2016, Robin was a consultant at Hogan Lovells. He has represented
financial institutions, operating lessors, investors, airlines and export credit agencies. Robin holds a degree in law from Trinity
College, Cambridge, is a member of the International Society of Transport Aircraft Trading (“ISTAT”) and was ranked Band 1
for Asset Finance in Chambers UK 2015.
David Gelber (SID) (Independent non-executive)
David Gelber began his career with Citibank in London in 1974. Over the course of the next twenty years he held a variety
of trading roles in foreign exchange, fixed income and derivatives at Citibank, Chemical Bank and HSBC where he was
Chief Operating Officer of HSBC Global Markets. In 1994 he joined ICAP, an inter-dealer broker, as COO and oversaw
two mergers and a number of acquisitions. He is currently a non-executive director of Walker Crips PLC, a stock broker and
wealth manager; and a non-executive director of IPGL, a holding company with investments in numerous companies on
several of which he serves as a director (DDCAP an arranger of Sharia Compliant transactions, Tellimer Ltd an online research
platform for frontier markets, Veridium ID a biometric identification provider, Opportunity Network a B2B CEO platform and
Aviva Singapore Life Ltd, a entity recently formed from a merger of Singapore Life with the local operations of Aviva PLC).
David holds a BSc in Statistics and Law from the University of Jerusalem and an MSc in Computer Science from the University
of London.
Laurence Barron (Independent non-executive)
Having begun his career as a commercial lawyer in Paris and then in Tokyo, where he first became involved in aircraft
financing transactions, Laurence joined Airbus in 1982 as an in-house lawyer specialising in aircraft finance. He subsequently
moved to the business side when, in 1984, he was appointed Sales Finance Director North America, becoming Head of
Sales Finance in 1985, and then, in 1987, Vice President of Customer Finance. In 1994, he was asked to set up the Asset
Management Organisation within Airbus and that year became Vice President and Head of Asset Management. Airbus
Asset Management has full responsibility for all used aircraft transactions at Airbus and acts as an in-house leasing company
for the used Airbus aircraft owned or controlled by the Airbus group of companies. In 2001 he was promoted to Senior
Vice President of Airbus before assuming the role of President of Airbus China in 2004, with responsibility for Airbus’ overall
activities in the People’s Republic of China. In January 2013, Laurence was appointed Chairman of EADS China, now
rebranded Airbus China. Laurence retired from salaried Airbus employment at the end of April 2016 and was non-executive
Chairman of Airbus China until the end of 2017. He holds an LLB from Bristol University Law Faculty.
Steve Le Page (Chairman of the Audit Committee) (Independent non-executive)
Steve has served as a non-executive director on a number of boards since his retirement from his role as Senior Partner
(equivalent to Executive Chairman) of PwC in the Channel Islands in 2013. Throughout his thirty year career with that firm
he worked with many different types of financial organisation as both auditor and advisor, particularly with both listed and
unlisted investment companies. He is currently the Audit Committee Chair of four other London listed funds. Mr Le Page is a
Fellow of the Institute of Chartered Accountants in England and Wales and a Chartered Tax Advisor. He is a past president
of the Guernsey Society of Chartered and Certified Accountants and a past Chairman of the Guernsey International Business
Association. Steve was appointed as director and chairman of the Audit Committee on 27 July 2021.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 17
Overview
Board of Directors (continued)
Mary Gavigan (Independent non-executive)
Mary is a Fellow of the Institute of Chartered Accountants in England & Wales. She has specialised in the Financial Services
sector for over 25 years acting as consultant and advisor with a focus on restructuring and business transformation. She has
also held interim Chief Finance Officer roles during her career. Mary spent most of her career at KPMG. She is a Non-Executive
Director of STM Life Assurance PCC PLC and its sister company London & Colonial Assurance PCC PLC where she is Chair of the
Audit Committee as well as a member of the Risk Management Committee. Mary is also a Non-Executive Director of the
National Deposit Friendly Society Ltd where she is Chair of its Audit Committee and of its Remuneration Committee. Mary
is also a Non-Executive Director of TransRe London Limited and the Chair designate of the Audit & Risk committee. Mary’s
charity work includes being a Trustee of Epilepsy Research UK. Mary holds a BBS and MA from Trinity College Dublin. Mary
was appointed as director and a member of the Audit Committee on 27 July 2021.
John Le Prevost
John Le Prevost resigned as a director and Audit Committee Chair of the Company, for personal reasons, with effect from
21 June 2021.
18 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Corporate Information
Principal Risks and Uncertainties
The Board has undertaken a robust assessment of the principal risks facing the Group and has undertaken a detailed review
of the effectiveness of the risk management and internal control systems. The Board is comfortable that the risks are being
appropriately monitored and the documentation to support these processes undergoes review and enhancement at least
annually.
The risks set out below are those which are considered by the Board to be the material risks relating to the Company and
the Group.
Risk Explanation/Mitigation
Global Pandemic
COVID-19 spread globally and resulted in widespread restrictions on individuals socialising
and travelling which had a significant effect on the airline industry, in particular, international
business travel on which widebody aircraft operation is dependent. These restrictions are
now much reduced, but passenger traffic is not yet back to pre-pandemic levels, leaving a
reduced but still real risk to the Company’s income. Developments generally and in particular
with our lessees are monitored carefully.
Operational risk
There is a risk that the Group will not achieve its investment objective and that the value of a
shareholder’s investment could decline substantially or entirely as a consequence.
The Board is ultimately responsible for all operational aspects of performance, including cash
management, asset management and legal and regulatory obligations.
The Group has no employees and so the Company enters into legal agreements with
service providers to ensure that all operational functions are fulfilled. Failure by any service
provider to carry out its obligations to the Company in accordance with the terms of its
appointment could have a materially detrimental impact on the operation of the Group
and could adversely affect the ability of the Company to meet its investment objective.
This risk has been mitigated by the Company using well established, reputable and
experienced service providers. The Board assess service providers’ continued performance
on an annual basis.
Key Personnel at Asset
Manager
The ability of the Company to achieve its investment objective is significantly dependent
upon the expertise of certain key personnel at Amedeo Limited. The exact impact of the
departure of a key individual from Amedeo Limited on the ability of the Company to
achieve its investment objective cannot be determined and may depend on the ability of
Amedeo Limited to recruit a new individual of a similar level of experience and calibre.
There can be no guarantee that Amedeo Limited would be able to do so and this could
adversely affect the ability of the Company to meet its investment objective.
The service provision agreements in place seek to ensure that the level of service remains
continuous.
Investment risk
The Group will only enter into leases on terms which stipulate that the cost of repair and
maintenance of the Assets will be borne by the lessee. However, upon expiry or termination
of leases, the cost of repair and maintenance will fall upon the Group. Upon expiry of
leases, the Group may therefore bear higher costs and the terms of any subsequent leasing
arrangements may be adversely affected, which may reduce the distributions paid to the
shareholders from such point. Repair and maintenance issues may adversely affect the price
of the Assets upon sale. Further, if the Group were to dispose of the Assets at the end of the
lease terms, there is a risk that indicative values may not be realised on disposal. This could
affect the ability of the Company to meet its investment objective. Intervening bankruptcy or
other legal constraints may result in substantial renegotiation of long-term contracts on which
the Group relied to meet these objectives.
No new investments are currently envisaged.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 19
Overview
Corporate Information (continued)
Insurance risks
The lease for each Asset requires that the lessee insures the Asset and this is monitored by the
Asset Manager. However, inflation, changes in ordinances, environmental consideration and
other factors may make the insurance cover insufficient to repair or replace the Assets if they
are damaged or destroyed. If any insurance proceeds are insufficient to repair or replace the
Assets if they are damaged or destroyed, this may affect the ability of the Company to meet
its investment objective. If a lease is terminated, the Group will have to insure the relevant
Asset directly which will cause additional expenses to be incurred.
Return of the Assets at the
end of the Leases
At the end of each of the leases, the relevant Asset must, subject to certain conditions, be
redelivered in accordance with the relevant terms of the lease.
Any redelivery of an Asset in a condition other than contracted condition may impact
upon the amount that can be realised upon any subsequent sale or re-lease of such Asset,
including that it may create additional, unforeseen expenses, such as re-fitting, storage and
insurance costs, for the Group at that time.
The Asset Manager performs regular checks of the Assets and updates the Board of any
material developments.
Airline industry related risks
The airline industry is particularly sensitive to changes in economic conditions. Unfavourable
economic conditions can also impact the ability of airlines to raise fares to counteract increase
in fuel, labour and other costs.
The airline industry is also subject to other risks including competition between airlines,
dependency on rapidly evolving technology, inability to obtain additional equipment or
support for aircraft and engine suppliers, availability and price of fuel, staff and employee
related issued (including employee strikes), security concerns and the threat of terrorism,
airport capacity constraints, air traffic control inefficiencies, changes in or additional
governmental regulations relating to air travel and acts of God (including adverse weather,
natural disasters and pandemics). Please see the Asset Manager’s Report on page 6 for a
consideration of recently introduced sanctions.
There is also a risk that the behaviour of airline competitors could restrict the lessees’
activities in certain jurisdictions. Any of these risks could materially affect the ability of
the lessees to comply with payment obligations. Furthermore, the general downturn
in the airline industry has had an impact on attainable leasing rates in the event of any
termination or at expiry of the leases as well as on attainable sales revenue for the Assets.
The Asset Manager actively monitors the Company’s Assets, as well as the credit status of the
lessees. Routine maintenance checks and inspections are carried out to ensure the Assets are
kept at the required quality standards.
20 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Corporate Information (continued)
Valuation of Assets
The Group’s net asset value for accounting purposes is calculated in accordance with IFRS
and may not properly reflect the actual realisable value of the Assets at any particular point
of time.
The Board will consider valuations provided annually by Independent External Valuers (IEVs)
and shall, if there are indicators that would suggest a permanent diminution in book value
of one or more of the Assets, determined in consultation with the Administrator and the Asset
Manager, there will be made an appropriate adjustment for accounting purposes to the net
asset value and net asset value per Share of the Group.
Valuations (including valuations provided by any IEV), and in particular valuations of assets
for which market quotations are not readily available, are inherently uncertain. Valuations
may therefore fluctuate over short periods of time and may be based on estimates.
Valuations of an Asset (including valuations provided by any IEV) will not constitute a
guarantee of value and may not necessarily reflect the prices at which that Asset could be, or
could have been, purchased or sold at any given time, which may be subject to significant
volatility and uncertainty, and depend on various factors beyond the control of the Group,
Amedeo Limited and the IEV. Therefore, there can be no guarantee that the Assets could
ultimately be realised at the Group’s valuation. The “highest and best use” value has been
used for accounting purposes given that the aircraft are held for use in a leasing business.
The Group has a robust audit process to ensure that valuations accurately reflect the
requirements of IFRS. The IEV will be engaged on an annual basis to report on fair value for
accounting purposes only.
Borrowings and financing
risk
There is a risk that the Group is exposed to fluctuations in market interest rates and foreign
exchange rates.
This risk has been partially mitigated by ensuring that loan repayments are made from lease
rental revenues received in the matching currency and by fixing the interest rate on loans
and lease rentals. In the case of the four Thai Airways aircraft, the fixed lease rentals upon
completion of the PBH period are closely matched to the floating rate loan repayments,
which are also hedged.
The Asset Manager provides the Board with a quarterly report on the performance of the
lessees and of the Assets.
An expense budget is also reviewed on at least a quarterly basis to ensure that adequate
reserves are maintained to meet operational expenses.
Lessee risk
The Group’s airline lessees are responsible for all maintenance and safety checks. The
requirement for each airline lessee to service and maintain the aircraft are set out in the
lease agreements. There is a risk that airlines may not properly maintain aircraft which
may lead to an impairment of the aircraft’s value. In order to mitigate against this risk the
Group closely monitors each airline’s usage of aircraft and their compliance with agreed
maintenance schedules.
In certain cases, the Group requires lessees to pay maintenance reserve payments in order
to ensure that there is adequate funding at all times for proper maintenance of the aircraft.
The credit quality and risk of lease transactions with counterparty airlines is evaluated upon
conception of the transaction. In addition, ongoing updates as to the operational and
financial stability of the airlines are provided by the Company’s Asset Manager in its quarterly
reports to the Company. Downturns in the aviation industry on a systemic level could weaken
the financial stability of the Group’s lessees and result in the increased risk that they could
default on lease obligations. If lessees are not able to meet their obligations to the Group,
the Company’s own cash flows and financial results could be adversely affected.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 21
Overview
Corporate Information (continued)
Legal and Compliance Risks
The Group is required to comply with the Law, the obligations of a listing on the SFS, the DGTRs
and various other regulations. Any failure to comply with applicable laws and regulations or
to respond in a timely manner to changes could lead to criminal or civil proceedings.
The Company is a member of the AIC which is the trade body for closed-ended investment
companies. Amongst other things, the AIC keeps its member companies up-to-date with
legal and regulatory changes and provides guidance and advice on how to comply with
them.
The Board receives periodic updates from the Company’s external auditor, legal advisers
and other professionals.
Although responsibility ultimately lies with the Board, the Secretary also monitors and assists
the Board with compliance with its legal and regulatory obligations.
Impact of the United
Kingdom leaving the
European Union
The Group has no business with companies based in the European Union, and the aircraft
owned by the Group are leased to airlines based in the Middle East and Thailand.
Consequently, and as expected, the Group has not been impacted by the departure of the
United Kingdom from the European Union.
Emerging Risks
The Board has developed a risk matrix for the Company which is reviewed by the Board as it continually monitors emerging risk
areas relevant to the performance of the Group including those that would threaten its business model, future performance,
solvency and liquidity on an ongoing basis.
Additional risks and uncertainties of which the Board is presently unaware may also adversely affect its business, financial
condition, results of operations or the value of shares.
Internal Control and Financial Reporting
The Board is responsible for establishing and maintaining the Group’s system of risk management and internal controls, which
is reviewed fully for effectiveness on an annual basis. Internal controls are designed to meet the Group’s needs and the risks
to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of
failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against
misstatement and loss.
The key procedures which have been established to provide effective internal controls are as follows:
• The Board is responsible for the Group’s systems of risk management and internal controls and for reviewing their
effectiveness. The Board confirms that there is an on-going process for identifying, evaluating and monitoring the
significant risks faced by the Group. The internal controls, which are delegated to the applicable service providers as
appropriate, are designed to meet the Group’s particular needs and the risks to which it is exposed;
• the Board clearly defines the duties and responsibilities of their service providers. The appointment of agents and
advisers is conducted by the Board after consideration of the quality of the parties involved and the Board monitors their
on-going performance and contractual arrangements;
• the Board regularly reviews the performance of, and the contractual arrangements with, the Group’s agents, advisers
and service providers;
• cash transactions are approved by the Board or their delegates;
• the Board reviews financial information produced by the Administrator on a regular basis;
• the Board also specifies which matters are reserved for a decision by the Board and which matters may be delegated
to its service providers.
22 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Corporate Information (continued)
Going Concern
The Group’s principal activities are set out on page 24. The financial position of the Group is set out on page 42. In addition,
note 19 to the consolidated financial statements includes the Group’s objectives, policies and processes for managing its
capital, its financial risk management objectives and its exposures to credit risk and liquidity risk.
The Directors have prepared these financial statements for the year ended 31 March 2022 on the going concern basis.
In the prior year, the Lessee Thai Airways stopped paying the amounts due under the leases and also entered into a
bankruptcy protection process under Thai Law. These factors indicated material uncertainties around the Group’s ability to
operate as a going concern, as the ultimate outcome of the process and its impact on the Group could not be determined.
On 15 June 2021, the Central Bankruptcy Court issued an order to approve the business rehabilitation plan of Thai Airways
and upon this date the airline initiated its process of rehabilitation. Furthermore, the relevant leases and associated debt
have been restructured (as explained elsewhere in this document), considerably reducing the uncertainty around the Group’s
going concern status.
In their consideration of the appropriateness of the going concern basis, the Directors have taken account of the fact that
throughout the period of the COVID 19 pandemic the Group has received the lease payments due from Emirates Airlines,
the Groups principal lessee, in full and on time. Power by the hour receipts due under the restructured leases from Thai
Airlines have also been steadily increasing since the period started on 1 April 2021 and have been received on time. The
Russian invasion of Ukraine and the subsequent sanctions and economic fallout have, as expected, had little impact on the
Group. Cash flow modelling carried out has indicated that future lease receipts, based on current aircraft utilisation on aircraft
lease to Thai, can enable the Group to meet its obligations as they fall due for at least the next twelve months from the date
of signing these financial statements.
On the basis of (i) the Group’s current liquid assets, (ii) cash-flow projections, and (iii) the current improving landscape for
travel, the Directors believe that the going concern basis of accounting is appropriate.
Viability Statement
The directors confirm that they have carried out a robust assessment of the principal risks facing the Group, including those
that would threaten its business model, future performance, solvency or liquidity, and that are reported elsewhere in the
consolidated annual financial report.
The directors regularly consider the viability of the Company and the Group and are required by the Law to do so on every
occasion that any distribution is to be declared. When the directors consider the declaration of a distribution to shareholders
and under the Law they are required to consider the Company’s future solvency. In this context, and for their viability
assessment, the directors consider future cash flows for at least the next three years. A three year period has been selected
as it allows for reasonable estimation of future costs, including interest.
The Directors, in assessing the viability of the Group, have paid particular attention to the principal risks faced by the Group
as disclosed in this report, the Audit Committee report and the notes to the consolidated financial statements, reviewing the
risks faced and ensuring that any mitigation measures in place are functioning correctly.
In addition, the directors have considered a detailed cash flow forecast for the running costs of the Group, which is updated
regularly, on the assumption that Emirates continues to fulfil its current lease obligations and Thai Airways follows its obligations
according to the revised lease terms agreed with Amedeo. This assumption is considered to be reasonable as Emirates have
met their obligations to the Group in full and on time, and receipts from Thai under the power by the hour arrangements
agreed with effect from 15 December 2021 have been steadily increasing and received on time. The improving outlook for
long haul air travel should only improve the ability of the Group’s lessees to meet their obligations. The directors have also
considered current cash-flow projections under various scenarios (including worst case scenarios of default for Thai). Based on
all financial and other information available, including the cash flow forecast and cash flow scenario projections, the directors
believe that unencumbered cash held and future cash receipts will be sufficient to cover all forecast operating costs of the
Group for the three year period up to at least March 2025 and that the Group will therefore be able to meet its obligations
as they fall due during that period.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 23
Overview
Corporate Information (continued)
The directors believe that their assessment of the viability of the Group over the period chosen was sufficiently robust and as
a result of their review, the directors have a reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the period of their assessment.
24 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Directors’ Report
The directors present their consolidated annual financial report of the Group, for the financial year ended 31 March 2022.
Principal Activities and Business Review
these activities for the foreseeable future. A description of important events that have occurred during the financial year,
their impact on the financial statements and a description of the principal risks and uncertainties facing the Group, together
with an indication of important events that have occurred since the end of the financial year and are likely to affect the
Group’s future development are included in the Company Overview, the Chairman’s Statement, Asset Manager’s Report,
this Directors Report, the Principal Risks and Uncertainties on pages 18 to 23, Audit Committee Report and the notes to the
consolidated financial statements contained on pages 45 to 76 and are incorporated herein by reference.
All payments due from Thai were made in accordance with the terms of the respective amended leases.
Status
The Company is a Guernsey domiciled company with registered number 59675, the shares of which have been admitted
to trading on the SFS.
Directors
The directors in office are shown on pages 16 to 17. John Le Prevost resigned from the Board with effect from 21 June 2021.
Mary Gavigan and Steve Le Page were appointed to the Board of Directors effective 27 July 2021. Further details of the
directors’ responsibilities are given on page 26.
Management of Conflicts of Interest
The Company has established guidelines to ensure management of conflicts of interest. The Board has also communicated
their expectations to the Company’s service providers and each director.
The Board considers conflicts of interest at each Board meeting by reviewing a schedule of each directors other directorships
and other interests held. Each director and service provider is required to notify the Secretary of any potential, or actual,
conflict situations that would need to be considered by the Board.
Results and Dividends
The financial results of the Group for the financial year are set out on pages 41 to 76.
The Company declared and paid the following dividends during the financial year:
Announcement Date Payment Date Dividend per Share (pence)
4 January 2022 31 January 2022 1.25
On 1 December 2021 the Board announced its intention to reinstate a regular dividend and the first such dividend was
made in January of 2022. The second was made in April 2022 and a third dividend has been declared for payment in
August 2022.
Related Parties
There were no events or changes in the related parties during the financial year which had or could have had a material
impact on the financial position of the Group, other than those disclosed in note 26 to this consolidated annual financial
report.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 25
Overview
Directors’ Report (continued)
Substantial Shareholdings
As of the date of this report, the following shareholders had notified the Company that they held or controlled 5% or more
of the total voting rights of the Company in issue:
Holder
% of Total Voting
Rights
Number of
Shares
Royal London Asset Management 8.85 30,738,547
Mirabella Financial Services LLP 8.44 29,300,622
Newton Investment Management Limited 7.70 26,741,369
Weiss Asset Management LP 6.41 22,252,655
Metage Funds Limited 5.91 20,538,430
FS Wealth Management Ltd 5.17 17,960,827
Ameriprise Financial, Inc. 5.11 17,745,171
Disclosure of information to the auditor
The directors who held office at the date of approval of this report confirm in accordance with the provisions of Section 249
of the Law that, so far as they are each aware, there is no relevant audit information of which the Company’s auditor is
unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information.
Auditor
KPMG has expressed its willingness to continue in office as auditor and the Audit Committee has recommended their
reappointment. A resolution proposing its reappointment will be submitted at the forthcoming annual general meeting to
be held pursuant to section 199 of the Law.
The strategic report on pages 3 to 23 was approved by the Board on 28 July 2022 and is signed on their behalf by:
Robin Hallam
Director
26 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable
law and regulations. The Law requires directors to prepare financial statements for each financial year. Under the Law, they
have elected to prepare the Groups financial statements in accordance with IFRS.
The financial statements are required by Law to give a true and fair view of the state of affairs of the Group and of the profit
or loss of the Group for that period.
In preparing these financial statements, IAS1 requires that directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users
to understand the impact of particular transactions, other events and conditions on the entity’s financial position and
financial performance; and
• make an assessment of the Group’s ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to
ensure that the financial statements comply with the Law. They are also responsible for safeguarding the assets of the
Company and Group and for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The directors jointly and severally confirm that to the best of their knowledge:
• this management report (including the information incorporated by reference) includes a fair review of the development
and performance of the business and the position of the Group, together with a description of the principal risks and
uncertainties that the Group faces;
• the consolidated financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities,
financial position and Consolidated Statement of Comprehensive Income of the Group and the undertakings included
in the consolidation taken as a whole; and
• the consolidated annual financial report, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s performance, business model and strategy.
Robin Hallam
Director
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 27
Overview
Directors’ Remuneration Report
Overview
In accordance with the Company’s Articles, the directors shall determine the directors’ fees payable provided that the
aggregate amount of such fees paid in respect of services rendered to the Company shall not exceed £400,000 per annum.
Directors are also entitled to re-imbursement of out-of-pocket expenses incurred in connection with the performance of their
duties or in attending meetings of the Board or of any committees or general meetings.
Directors’ and Officers’ liability insurance cover is also maintained by the Company on behalf of the Directors.
Directors’ Remuneration
Fees paid to the non-executive directors in the 2022 and 2021 financial years were as follows:
2022 fees 2021 fees
Director
Regular
directors
fees
Additional
directors fees
in relation to
2022
Additional
directors fees
in relation to
2021
Regular
directors
fees
Robin Hallam (Chairman) £76,875 £25,000 £33,000 £76,875
John Le Prevost (Chairman of the Audit Committee)* £15,586 N/A £20,000 £69,187
David Gelber £61,690 £22,000 £28,000 £61,500
Laurence Barron £61,500 £22,000 £28,000 £61,500
Mary Gavigan** £41,780 N/A N/A N/A
Steve Le Page (Chairman of the Audit Committee)*** £47,002 N/A N/A N/A
*John Le Prevost resigned as a director of the Company with effect from 21 June 2021.
**Mary Gavigan appointed as director of the Company with effect from 27 July 2021.
***Steve Le Page appointed as director of the Company with effect from 27 July 2021.
All directors receive an annual fee and there are no share options or other performance related benefits available to them.
Further details of the directors’ fees are disclosed in note 7.
The terms and conditions of appointment of the non-executive directors are available for inspection at the Company’s
registered office by prior arrangement with the Secretary.
At the time of writing no director has a contract of service with the Group, nor are any such contracts proposed. There were
also no outstanding loans or guarantees between the Group and any director as at the year-end nor as at the date of this
report
Directors Interest in Shares
The interests in Shares of the Company held by persons discharging managerial responsibility, including persons closely
associated with them, are shown below:
Number of Shares
held as at
31 March 2022
Number of Shares
held as at the date
of this report
Robin Hallam 60,000 90,000
David Gelber 244,309 244,309
Laurence Barron — —
Mary Gavigan* — 62,709
Steve Le Page** 100,000 100,000
*Mary Gavigan appointed as director of the Company with effect from 27 July 2021.
**Steve Le Page appointed as director of the Company with effect from 27 July 2021.
28 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
Statement of Compliance with the AIC Code, as published in February 2019
The Company, and its wholly-owned subsidiaries, is committed to complying with the corporate governance obligations
which apply to Guernsey registered companies. As a Guernsey incorporated investment company and under the DGTRs of
the UK’s FCA the Company is not required to comply with the UK Code.
However, the Board places a high degree of importance on ensuring that high standards of corporate governance are
maintained and has considered the principles and provisions of the AIC Code, which addresses all of those set out in the
UK Code, as well as setting out additional principles and provisions on issues that are of specific relevance to investment
companies. The Board considers that reporting in accordance with the principles and provisions of the AIC Code provides
more relevant and comprehensive information to shareholders.
A copy of the AIC Code is available on the AIC website at www.theaic.co.uk/aic-code-of-corporate-governance-0.
For the reasons set out in the introduction to the AIC Code, the Board has considered that the role of the chief executive and
executive directors’ remuneration are not relevant to the position of the Company and has therefore not reported further in
respect of these matters.
Having reviewed the AIC Code, the Board considers that it has maintained procedures during the financial year under
review to ensure that it has complied with the AIC Code. Since the Board is comprised entirely of independent non-executive
directors, it has chosen not to form any committees other than an Audit Committee and a Dividend Committee, and the
responsibilities of all other committees envisaged by the AIC Code are fulfilled directly by the Board.
Board Composition
The Board comprises five directors, their biographies appear on pages 16 to 17 demonstrating the wide range of skills
and experience they each bring to the Board. All the directors are non-executive and, for the purpose of provision 13 of
the AIC Code, all considered to be independent, with the Chairman being independent on appointment. As part of their
examination of the independence of the Board, the Board has concluded that all directors remain independent under the
principles of the AIC Code.
Robin Hallam is the Chairman.
David Gelber is the SID. As the appointed SID, Mr Gelber provides a sounding board to the Chairman and serve as an
intermediary for shareholders. Mr Gelber also leads on the evaluation of the performance of the Chairman.
None of the directors have directorships or employments in any other public company nor do any of the directors hold cross-
directorships or have significant links with each other through involvement in any other companies or bodies.
Tenure
The Board notes that provision 23 of the AIC Code expects all directors to be subject to annual re-election. However, the
Company’s Articles require that all directors who held office at the two preceding annual general meetings of the Company
and did not retire from office at either of those meetings shall retire from office and shall be eligible for re-election at the
same meeting. The Board considers that the annual re-election of all the directors would be disruptive to the Company for
continuity purposes and therefore the directors will continue to be re-elected in accordance with the Company’s Articles.
Accordingly, at the forthcoming annual general meeting David Gelber will retire and, being eligible, offer himself for re-
election. Having considered the performance and contributions made by Mr Gelber, and having regard to his biography
on page 16 which demonstrate the key skills, experience and knowledge he brings to the Board, the Board believes that
he continues to perform effectively and with commitment to his role and, as such, the Board recommends his re-election.
The Board will consider the tenure of all directors, including the chairman, once any director has been appointed to the
Board for a continuous period of nine years.
Directors are able and encouraged to provide statements to the Board of their concerns and ensure that any items of
concern are recorded in the Board minutes. The Chairman also encourages all directors to present their view on matters in
an open forum.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 29
Overview
Corporate Governance Statement (continued)
Board Evaluation
In March 2022 the Board completed a self-evaluation and concluded that its performance was still adequate and professional
and that no corporate governance concerns existed. This conclusion was in line with that of the most recent external
performance evaluation in December 2020. The Board will consider appointing external facilitators again in future years.
Board Meetings
The Board meets in Guernsey at least four times per year to consider the business and affairs of the Group for the previous
quarter and the outlook for the coming quarter and beyond, at which meetings the directors review the Group’s assets and
all other important issues to ensure control is maintained. At two of these meetings the Board considers and, if deemed
appropriate, approves the Group’s financial statements.
Between these regular meetings the Board keeps in contact by email, telephone and video conference as well as meeting
to consider specific matters of a transactional nature. Additionally, the directors hold strategy meetings with relevant advisers
as appropriate.
The directors are kept fully informed by the Asset Manager, of all matters concerning the Assets and their financial
arrangements and by the Secretary of all matters that are relevant to the business of the Group and which should be brought
to the attention of the directors and / or shareholders. All directors have direct access to the Secretary who is responsible
for ensuring that Board procedures are followed and that there are effective information flows both within the Board and
between the Board and its Asset Manager.
The directors also have access to the advice and services of the Corporate Broker as required. The directors may also, in the
furtherance of their duties, take independent professional advice at the Group’s expense.
In the financial year under review the directors held thirteen Board meetings and two Audit Committee meetings in order
to carry out their duties. Director’s attendance at these meetings was as follows:
Director Board Audit Committee Dividend Committee
Robin Hallam* 13 of 13 N/A* N/A
David Gelber 13 of 13 2 of 2 N/A
John Le Prevost** 6 of 6 2 of 2 N/A
Laurence Barron 13 of 13 2 of 2 N/A
Mary Gavigan*** 6 of 6 1 of 1 N/A
Steve Le Page**** 6 of 6 1 of 1 1 of 1
*Robin Hallam is not as a member of the Audit Committee.
**John Le Prevost resigned from the Company effective 21 June 2021.
***Mary Gavigan appointed as director of the Company with effect from 27 July 2021.
****Steve Le Page appointed as director of the Company with effect from 27 July 2021.
No fixed time commitment for Board duties has been set in the director’s letters of appointment, as the Board considers
that the time required by directors may vary depending on the demands of the Group and any other events. Therefore,
it is required that each director allocates sufficient time to the Group to perform their duties effectively. It is also expected
that each director will attend all Board meetings and meetings of committees of which they are a member. The Chairman
has confirmed that he considers the performance of each director to be satisfactory and that each director demonstrates
continued commitment to their role.
The Board was equally satisfied during the year under review that the Chairman had the commitment to his role and the
time to make himself available at short notice when the need arose.
30 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Corporate Governance Statement (continued)
Board Committees
The Board has considered the establishment of a remuneration committee as set out in provision 37 of the AIC Code, a
management engagement committee as set out in provision 17 of the AIC Code, and a nomination committee as set out
in provision 22 of the AIC Code.
The Board has concluded that, given the small size of the exclusively non-executive and independent Board, the Company
has no requirement for these committees and instead, the full Board performs these functions.
The Board has established an Audit Committee and a Dividend Committee. Details of the activities of each of these
committees are set out below.
Audit Committee
As at the financial year end, the members of the Audit Committee were Laurence Barron, David Gelber, Mary Gavigan
and Steve Le Page. Following John’s resignation as director on 21 June 2021, David Gelber assumed chairmanship of the
Audit Committee until Steve’s appointments as a director and as chairman of the Audit Committee (both effective 27 July
2021). The Audit Committee has regard to the Guidance on Audit Committees published by the FRC in September 2012
and most recently updated in April 2016. The Audit Committee examines the effectiveness of the Group’s and its service
providers’ internal control systems as appropriate, the annual and half-yearly reports and financial statements, the auditor’s
remuneration and engagement, as well as the auditor’s independence.
The Audit Committee considers the nature, scope and results of the auditor’s work and reviews it annually prior to providing a
recommendation to the Board on the reappointment or removal of the auditor. When evaluating the external auditor, the
Audit Committee has regard to a variety of criteria including industry experience, independence, reasonableness of audit
plan, ability to deliver constructive criticism, effectiveness of communication with Board and the Group‘s service providers,
quality control procedures, effectiveness of audit process and added value beyond assurance.
Auditor independence is maintained through limiting non-audit services to specific audit-related work that falls within
defined categories; for example, the provision of advice on the application of IFRS or formal reports for any Stock Exchange
purpose. All engagements with the auditor are subject to pre-approval from the Audit Committee and fully disclosed within
the consolidated annual financial report for the relevant period. A new lead audit partner has been appointed this year
and will be appointed every five years and the Audit Committee ensures the auditor has appropriate internal mechanisms
in place to ensure its independence.
The Audit Committee has recommended to the Board that the re-appointment of KPMG as the Company’s external auditor
be proposed to shareholders at the 2022 annual general meeting. The Audit Committee will, if appropriate, consider
arranging for the external audit contract to be tendered in 2028 (being 10 years from the initial appointment) with the aim
of ensuring a high quality and effective audit.
The Audit Committee meets in Guernsey at least twice a year, shortly before the Board meets to consider the Group’s half-
yearly and annual financial reports, and reports to the Board with its deliberations and recommendations and also holds an
annual audit planning discussion with the auditor. The ultimate responsibility for reviewing and approving the half-yearly and
the annual financial report remains with the Board.
The Audit Committee also operates within clearly defined terms of reference based on the Institute of Chartered Secretaries
and Administrators recommended terms and provides a forum through which the Group’s external auditor reports to the
Board. The Audit Committee can request information from the Company’s service providers with the majority of information
being directly sourced from the Asset Manager, Secretary and Administrator and the external auditor. The terms of reference
of the Audit Committee are available on the Company’s website and on request from the Secretary.
Each year, for good governance, the full Board examines the Audit Committee’s performance and effectiveness, and
ensures that its tasks and processes remain appropriate. Key areas covered include the clarity of the committee’s role and
responsibilities, the balance of skills among its members and the effectiveness of reporting its work to the Board. The Board is
satisfied that all members of the Audit Committee have relevant financial experience and knowledge and ensure that such
knowledge remains up to date. Overall the Board considers that the Audit Committee has the right composition in terms of
expertise and has effectively undertaken its activities and reported them to the Board during the year.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 31
Overview
Corporate Governance Statement (continued)
During the financial year the Audit Committee met to consider the annual financial report for the year ended 31 March
2021 and the half-yearly financial report for the period ended 30 September 2021. The report from the Chairman of the
Audit Committee is on pages 32 to 35.
Dividend Committee
The Dividend Committee consists of any one director, who has been given full power and authority to consider and, if
thought suitable, declare and approve the payment of a dividend in accordance with the Company’s Distribution Policy as
set out on page 12; subject to no other director having raised an objection to the declaration of such a dividend.
Bribery
The directors have undertaken to operate the business in an honest and ethical manner and accordingly take a zero-
tolerance approach to bribery and corruption. The key components of this approach are implemented as follows:
• the Board is committed to acting professionally, fairly and with integrity in all its business dealings and relationships;
• the Group will implement and enforce effective procedures to counter bribery; and
• the Group requires all its service providers and advisers to adopt equivalent or similar principles.
Data Protection
The Group has implemented measures designed to ensure its compliance with the EU General Data Protection Regulation
(EU) 2016/679 and associated legislation in Guernsey and in other jurisdictions. The Company has also issued a privacy
notice explaining the data it holds, how the data is processed and its procedures etcetera. This notice is available for review
and download at the Company’s website.
Dialogue with Shareholders
All shareholders have the right to receive notice of, and attend, general meetings of the Company, at which one or more
members of the Board will be available to discuss issues affecting the Group.
The Company reports on the number of votes lodged on each resolution proposed at an AGM. This information is published
via a regulatory information service and on the Company’s website immediately following the AGM.
The primary responsibility for shareholder relations lies with the Board which has delegated this role to the Company’s
Corporate Broker. The Corporate Broker has met with the Company’s shareholders to discuss the Company and seek
feedback for the benefit of the Board and will continue to meet with shareholders on a periodic basis or when there is
significant information pertaining to the Company which needs to be discussed with shareholders. In addition, the directors
are available to enter into dialogue with shareholders by telephone or email and the Chairman is always willing to meet
shareholders, as the Company believes such communication to be important. Shareholders also have the opportunity to
address questions to the Chairman and the Audit Committee at the Company’s annual general meeting.
The Board reviews the Company’s Share register at every Board meeting to monitor the Company’s shareholder profile and
seeks to ensure that information is presented to shareholders in a fair, balanced and understandable manner. The Board
would also take action to address any shareholder concerns. The Company provides regular updates to shareholders through
factsheets and annual and half-yearly financial reports.
The directors contact details are given on page 77 and can also be found on the last page of each factsheet issued. The
directors can also be contacted by shareholders via correspondence sent to the Group’s registered office or via the Secretary
if they have any concerns.
32 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Audit Committee Report
Membership
Steve Le Page – Chairman of the Audit Committee
Laurence Barron – Non-executive Director
Mary Gavigan – Non-executive Director
David Gelber – Non-executive Director
Key Duties
The Audit Committee’s key duties are set out in the Committee’s terms of reference which are available on the Company’s
website; https://www.aa4plus.com.
Audit Committee Meetings
During the reporting period, the Audit Committee met three times. The Audit Committee reports to the Board on its activities
and on matters of particular relevance to the Board in the conduct of its work.
Financial Reporting and Significant Issues
The Audit Committee’s primary role in relation to financial reporting is to review, with its service providers and the external
auditor, the appropriateness of the half-yearly and annual financial reports, the significant financial reporting issues and
accounting policies and the disclosures in the financial statements. In carrying out this review the members of the Committee
takes into account their knowledge of the reporting requirements applicable, the activities of the Company and as a
consequence their expectations of the form and content of the financial reports.
The significant issues considered by the Audit Committee in relation to this consolidated annual financial report and how
these were addressed were as follows:
Significant issues for the year How the Audit Committee addressed these significant issues
Global Pandemic Risk
The global pandemic has had a profound
and negative impact on the operations and
performance of the Group and may directly or
indirectly affect some of the other risks mentioned
in this table
COVID-19 has spread globally and initially resulted in widespread
restrictions on individuals socialising and travelling, some of which are
still having a significant effect on the airline industry.
The Audit Committee has noted that to date the Board and the
Company’s key service providers have been able to continue to serve
the Group, Emirates Airlines, the main lessee of the Group, have met
all lease obligations on time to date. Thai Airways, the Group’s other
lessee, have agreed to restructure the Group’s leases with them, and
are so far performing their obligations under the new leases in a timely
manner.
The impact of COVID-19 has been considered carefully, but is now
considered to be of lower potential impact than in the previous year.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 33
Overview
Audit Committee Report (continued)
Significant issues for the year How the Audit Committee addressed these significant issues
Residual value of aircraft Assets
The Assets of the Group comprise six A380-800
aircraft, two B777-300ER aircraft and four A350-
900 aircraft. An annual review is required of the
residual value of the Assets as per IAS 16
Property,
Plant and Equipment
.
The Group believes that the use of forecast market values excluding
inflation best approximates residual value as required per IAS 16
Property, Plant and Equipment.
Updated investment valuations on this basis of all Assets as at the year-
end were commissioned and received from third party professional
appraisers and analysed by Amedeo and the Directors. The Audit
Committee believes that those valuations are appropriate for use in
preparing the financial statements.
Therefore, the residual value excluding inflation used in the accounts
is based on the average of these appraisals using values for the A380
aircraft with minimum return conditions plus monetary compensation
(per the lease contracts) as well as base values for the A350 and 777-
300ER aircraft at the end of the lease.
With respect to the A380s, the aircraft type faces a unique situation in
terms of its operator base and value offered to operations. Furthermore,
given the ongoing developments in the market and the lack of
historical data points, it has not been easy to value the aircraft type,
which is evident by the appraisers’ reports. An average of the three
independent appraisers is therefore used to determine the appropriate
residual value.
Going Concern and Viability
Should Emirates or Thai (collectively the ‘Lessees’)
default on the rental payments, it is unlikely the
Group will be able to meet its debt obligations
or, in the case of ongoing default, continue as a
going concern.
Under IFRS 9, The Group is required to assess on
a forward looking basis the expected credit losses
associated with its trade receivables carried at
amortised cost.
The Audit Committee receives regular reports, from the Asset Manager
which comment on the situation of both lessees.
Also, as mentioned above, both lessees are performing their obligations
under the existing lease contracts in a timely and complete manner.
Consequently, the Directors do not consider it necessary to establish any
provision for credit losses in these financial statements, as all debtors
are expected to settle in full. To the extent not recovered during the
restructuring of the leases with Thai Airways, credit losses provided for in
the prior year have been realised this year.
As set out in the going concern note 2 and in the viability statement
on page 22, the Committee and the Board are comfortable that the
Group is both a going concern and viable.
34 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Audit Committee Report (continued)
Significant issues for the year How the Audit Committee addressed these significant issues
Consideration of any triggers for impairment
IAS 36
Impairment of Assets
requires that a review
for impairment be carried out by the Group when
there is an indication of impairment of an asset
and if events or changes in circumstances indicate
that the carrying amount of an asset may not
be recoverable. The review will compare the
carrying amount of the asset with its recoverable
amount, which is the higher of its current market
value and its value in use.
During the prior year, the impact of the COVID 19 pandemic on residual
values of the Group’s assets and on the airline industry generally led to
very significant provisions for impairment being made in the annual
financial statements.
Whilst, as referred to above, the current situation of the industry
and of the Groups is much improved, it was felt to be appropriate
to perform another impairment test this year. This process utilised the
same methodology as last year and has resulted in small provisions for
impairment being made against the Group’s A350 assets.
Internal Controls
The Audit Committee has made due enquiry about the internal controls of the Group’s service providers, particularly those
relevant to financial reporting. The Audit Committee is satisfied with the controls currently implemented but will continue to
review them regularly. The Audit Committee has also asked to be informed of any in-house developments and improved
internal control procedures effected.
Internal audit
The Group has no employees and operates no systems of its own, relying instead on the employees and systems of its
external service providers. The Board has therefore taken the decision that it would not be of any material benefit for the
Group to appoint an internal auditor.
External Audit
The effectiveness of the external audit process is dependent on appropriate audit risk identification at the start of the audit
cycle. The Audit Committee received a detailed audit plan, identifying the external auditor’s assessment of the key financial
reporting risks. For the year the primary risks identified were in respect of valuation of the aircraft assets, depreciation and
management override of controls.
Using its collective skills, the Audit Committee evaluated the effectiveness of the audit process in addressing the matters
raised through the reporting it received from the external auditor at the start and at the conclusion of the audit.
In addition, the Audit Committee sought feedback from service providers on the effectiveness of the audit process.
For the year, the Audit Committee were satisfied that there had been appropriate focus on the primary areas of audit risk
and assessed the quality of the audit process to be good. The Audit Committee discussed their findings with the external
auditor and will consider if future external audits could be improved.
The Audit Committee holds meetings with the external auditor, and the Audit Committee Chair speaks regularly to the lead
partner, to provide additional opportunity for open dialogue and for feedback from the auditor. If felt necessary, Audit
Committee members would meet with the external auditor without the Administrator or Asset Manager being present.
Matters discussed include the residual valuation of aircraft, appropriateness of the impairment provisions, the auditor’s
assessment of business risks and management activity thereon, the transparency and openness of interactions with service
providers, the independence of their audit and how they have exercised professional scepticism.
Appointment and Independence
The Audit Committee considers the reappointment of the external auditor, including the rotation of the audit partner, each
year and also evaluates their independence on an on-going basis.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 35
Overview
Audit Committee Report (continued)
The Audit Committee has recommended to the Board the re-appointment of KPMG as the Group’s external auditor be
proposed for the year ending 31 March 2023. Accordingly a resolution proposing the re-appointment of KPMG as the
Group’s external auditor will be put to shareholders at the Company’s 2022 annual general meeting.
The Audit Committee will, if appropriate, consider arranging for the external audit contract to be tendered in 2028 (being
ten years from the initial appointment) with the aim of ensuring a high quality and effective audit.
Conclusion
The above report outlines the work of the Committee in respect of these financial statements and generally. The conclusion
of the Committee is that these financial statements, taken as a whole, are fair, balanced and understandable, and provide
the information necessary for shareholders to assess the Group’s performance, business model and strategy. Furthermore,
the Committee believes they show a true and fair view of the performance of the company for the year ended 31 March
2022 and of its financial position at that date.
Steve Le Page
Chairman of the Audit Committee
36 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Independent Auditor’s Report to the Shareholders of
Amedeo Air Four Plus Limited
1 Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Amedeo Air Four Plus (“the Company”) and its subsidiaries (“the Group”),
which comprise the consolidated statement of financial position as at 31 March 2022, the consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying financial statements
• give a true and fair view of the financial position of the Group as at 31 March 2022, and of its financial performance
and its cash flows for the year then ended;
• have been prepared in accordance with International Financial Reporting Standards (IFRS as issued by the International
Accounting Standards Board (IASB); and
• have been properly prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the
Auditors’ Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Guernsey together with the Financial Reporting Council (FRC)’s Ethical Standard as applied to listed entities and
we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 37
Overview
Independent Auditor’s Report to the Shareholders of
Amedeo Air Four Plus Limited (continued)
Valuation of PPE – Aircraft & related components £1,210 million (2021: £1,270 million)
Refer to page 51 (accounting policy), pages 54 to 57 (significant estimates) and page 60 (financial disclosures)
The key audit matter
At 31 March 2022, the carrying value of
the Group’s aircraft portfolio, including
related components amounted to
£1,215m million before aircraft
impairment calculations.
The Group applies the requirements
of IAS-36 Impairment of Assets (‘IAS-
36’) in order to determine whether it is
necessary to recognise an impairment
loss on any aircraft within their fleet.
There is a significant risk relating to
the valuation of aircraft given the
judgemental nature of the assumptions,
and the inputs to the impairment model
that require consideration by the Board
of Directors.
How the matter was addressed in our audit
In relation to the audit of the impairment assessment of aircraft, the engagement
team undertook the following core procedures, amongst others:
We obtained an understanding of and documented the key control around
the impairment assessment of aircraft and related components, testing the
effectiveness of the design and implementation of the control, including
consideration of approval by the Board of Directors.
We assessed the calculations used to determine the recoverable amount. We
note that the recoverable amount for x4 A350 aircraft resulted in impairment
triggers when comparing the current market values (deemed higher than value
in use) to net book values.
We discussed and challenged the key valuation inputs used in the calculation
with managements appraisers, BK, IBA and MBA and also confirmed their
independence and objectivity.
We challenged the appropriateness of material value in use assumptions,
namely the discount rate, residual values and future lease rentals in the current
lease cashflows until expiry.
We assessed the appropriateness of the discount rate, using the Group’s weighted
average cost of capital. We note the directors assessment upheld the use of the
prior year rate @7.5/6.5%. Our benchmarking exercise against relevant lessors
in the sector did not result in the Group having an outlier discount rate and was
within an acceptable range.
We used the independent appraiser reports to assess the residual values and
future lease rentals in the Thai discounted cashflow workings. We agree with the
values incorporated in the assessment.
We have discussed with the Servicer the monetary compensation of $25m for
the 6 A380’s at the end of the lease and end of lease payment of $15m for the
B777-300ER from Emirates. We have noted that these payments are specified
by the terms and conditions of the agreements with the lessees and that the
Asset Manager remains comfortable with the credit risk. We note no changes in
these terms during the financial year.
We evaluated whether the methodology, assumptions and data are indicative
of possible management bias. No instances of management bias were noted.
We evaluated sensitivities associated with the key assumptions, (namely discount
rate, non-receipt of contingent rent on Thai and residual values), in order to
determine whether the test outcome would result in materially different results.
We evaluated the (i) competence, capabilities and objectivity of AA4P’s external
experts employed by the Group to provide aircraft fair values less costs to disposal
and value in use (significant assumptions for value in use namely future lease
rates) and (ii) the appropriateness of their work as audit evidence. We obtained
the appraised reports from the independent valuers to validate the market
values, future base values and future lease rates for the recoverable amount
test and compared to internal data sources to determine they were reasonable.
38 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Independent Auditor’s Report to the Shareholders of
Amedeo Air Four Plus Limited (continued)
We have nothing to report on other matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to
report to you if, in our opinion:
• the Company has not kept proper accounting records; or
• the financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations, which to the best of our knowledge and belief are
necessary for the purpose of our audit.
Other Information
The Directors are responsible for the other information. The other information comprises the information included in the
summary information, chairman’s statement, asset manager report , environment social and governance policy, business
model company overview, biographies of Board of Directors, corporate information, Director’s report, Director’s remuneration
report, corporate governance statement, report of the audit committee, key advisors and contact information and glossary.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
2 Respective responsibilities and restrictions on use
Responsibilities of the Directors and Those Charged with Governance for the Financial Statements
The Directors are responsible for the preparation and fair presentation of the financial statements in accordance with IFRS,
and for such internal control as the Directors determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error, assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Further details relating to our work as auditor is set out in the Scope of Responsibilities Statement contained in the appendix
to this report, which is to be read as an integral part of our report.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 39
Overview
Independent Auditor’s Report to the Shareholders of
Amedeo Air Four Plus Limited (continued)
Our report is made solely to the Company’s shareholders, as a body, in accordance with section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s Shareholders those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than the Company’s Shareholders, as a body, for our audit
work, for this report, or for the opinions we have formed.
Niall Naughton
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
28 July 2022
1 Harbourmaster Place,
IFSC,
Dublin 1,
40 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Independent Auditor’s Report to the Shareholders of
Amedeo Air Four Plus Limited (continued)
Appendix to the Independent Auditor’s Report
Further information regarding the scope of our responsibilities as auditor
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Directors.
• Conclude on the appropriateness of the Director’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Financial
Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 41
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2022
Notes
1 Apr 2021 to
31 Mar 2022
GBP
1 Apr 2020 to
31 Mar 2021
GBP
INCOME
US Dollar based rent income 4 155,413,982 166,837,378
British Pound based rent income 4 34,619,559 34,537,182
EXPENSES
Operating expenses 6 (5,059,351 ) (19,898,131 )
Depreciation and amortisation of aircraft 10 (113,384,109 ) (137,167,102 )
Impairment of aircraft 10 (4,834,603 ) (152,115,323 )
Expected credit loss 13 (30,062,327 ) (28,854,971 )
(153,340,390 ) (338,035,527 )
Net profit/(loss) for the year before finance income, finance costs and
foreign exchange gains 36,693,151 (136,660,967 )
FINANCE INCOME
Gain on loan modifications 16 2,605,383 —
Finance income 11 24,515,446 8,233,554
FINANCE COSTS
Loss on extinguishment of loan 16 (1,452,426 ) —
Finance costs 12 (38,162,538 ) (43,953,810 )
(39,614,964 ) (43,953,810 )
Foreign exchange gains 477,174 318,899
Gain/(Loss) before tax 24,676,190 (172,062,324 )
Income tax credit 24 71,069 —
Income/(loss) for the year after tax 24,747,259 (172,062,324 )
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be reclassified subsequently to profit or loss
Translation adjustment on foreign operations 2f 11,663,077 (40,380,606 )
Total comprehensive gain/(loss) for the year 36,410,336 (212,442,930 )
Pence Pence
Gain/(Loss) per share for the year – basic and diluted 9 6.08 (32.17 )
In arriving at the results for the financial year, all amounts above relate to continuing operations.
The notes on pages 45 to 76 form an integral part of these consolidated financial statements.
42 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Consolidated Statement of Financial Position
as at 31 March 2022
Notes
31 Mar 2022
GBP
31 Mar 2021
GBP
NON-CURRENT ASSETS
Aircraft 10 1,209,709,751 1,270,311,830
Trade and other receivables 13 14,715,782 12,697,401
Derivatives at fair value through profit and loss 18 23,249,102 —
Deferred tax 24 74,193 —
CURRENT ASSETS
Accrued income 25 21,111,849 13,045,326
Short term investments 14 20,770,215 22,789,120
Trade and other receivables 13 1,579,769 132,632
Cash and cash equivalents 21 101,644,952 118,060,583
TOTAL ASSETS 1,392,855,613 1,437,036,892
CURRENT LIABILITIES
Payables 15 143,708 121,026
Deferred income 25 5,450,353 8,195,657
Maintenance provisions 22 139,534 —
Borrowings 16 81,721,825 97,081,633
NON-CURRENT LIABILITIES
Derivatives at fair value through profit and loss 18 — 4,939,122
Maintenance provisions 22 58,215,979 54,934,474
Borrowings 16 912,906,773 936,474,385
Deferred income 25 20,513,385 23,596,288
TOTAL LIABILITIES 1,079,091,557 1,125,342,585
TOTAL NET ASSETS 313,764,056 311,694,307
EQUITY
Share capital 17 520,983,612 550,982,781
Foreign currency translation reserve 30,620,605 18,957,528
Retained deficit (237,840,161 ) (258,246,002 )
Pence Pence
Net Asset Value Per Share based on 347,313,483 (2021: 434,141,757)
shares in issue 90.34 71.80
The financial statements were approved by the Board of Directors and authorised for issue on 28 July 2022 and are signed
on its behalf by:
Robin Hallam, Director
The notes on pages 45 to 76 form an integral part of these consolidated financial statements.
Financial
Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 43
Consolidated Statement of Cash Flows
ended 31 March 2022
Notes
1 Apr 2021 to
31 Mar 2022
GBP
1 Apr 2020 to
31 Mar 2021
GBP
OPERATING ACTIVITIES
Gain/(loss) for the year after tax 24,747,259 (172,062,324 )
Decrease in accrued income (3,054,716 ) (1,808,197 )
Decrease in deferred income (3,521,837 ) (3,785,427 )
Interest income (181,689 ) (388,810 )
Depreciation of aircraft 10 113,384,109 137,167,102
Expected credit loss 30,062,327 28,854,971
Impairment of aircraft 10 4,834,603 152,115,323
Taxation expense 24 (71,069 ) —
Loan interest payable 11 36,663,596 42,313,509
Fair value adjustments on financial assets (24,333,757 ) (7,844,744 )
Loan modifications (1,639,457 ) —
Decrease in payables (51,511 ) (12,323,190 )
Maintenance reserves received 719,470 1,520,757
Increase in receivables (31,137,532 ) (33,118,750 )
Foreign exchange movement (477,174 ) (318,899 )
Amortisation of debt arrangement costs 12 1,498,942 1,640,301
Taxation paid — (66,571 )
NET CASH FROM OPERATING ACTIVITIES 147,441,564 131,895,051
INVESTING ACTIVITIES
Investment in short term deposits 14 (20,770,215 ) (22,789,120 )
Withdrawal from short term deposits 14 22,789,120 7,737,776
Interest received 181,689 388,810
NET CASH FROM/(USED IN) INVESTING ACTIVITIES 2,200,594 (14,662,534 )
FINANCING ACTIVITIES
Dividends paid 8 (4,341,418 ) (11,346,419 )
Share redemption paid 17 (29,999,169 ) (98,478,292 )
Premium paid on derivatives acquired (3,647,627 ) —
Repayments of capital on senior loans 23 (85,570,355 ) (84,500,698 )
Payments of interest on senior loans 23 (25,768,010 ) (32,706,583 )
Payments of interest on junior loans 23 (10,089,604 ) (11,085,646 )
Security trustee and agency fees 12 (193,908 ) (200,044 )
NET CASH USED IN FINANCING ACTIVITIES (159,610,091 ) (238,317,682 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 118,060,583 247,911,207
Decrease in cash and cash equivalents (9,967,933 ) (121,085,165 )
Effects of foreign exchange rates (6,447,698 ) (8,765,459 )
CASH AND CASH EQUIVALENTS AT END OF YEAR 21 101,644,952 118,060,583
The notes on pages 45 to 76 form an integral part of these consolidated financial statements.
44 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Notes
Share
capital
GBP
Retained
(deficit)/
earnings
GBP
Foreign
currency
translation
reserve
GBP
Total
GBP
Balance as at 1 April 2021 550,982,781 (258,246,002 ) 18,957,528 311,694,307
Profit for the year — 24,747,259 — 24,747,259
Other comprehensive gain for
the year — — 11,663,077 11,663,077
Total comprehensive profit for
the year — 24,747,259 11,663,077 36,410,336
Transactions with owners of the
Company:
Share redemption 17 (29,999,169 ) — — (29,999,169 )
Dividends paid 8 — (4,341,418 ) — (4,341,418 )
Total transactions with owners
of the Company: (29,999,169 ) (4,341,418 ) — (34,340,587 )
Balance as at 31 March 2022 520,983,612 (237,840,161 ) 30,620,605 313,764,056
Notes
Share
capital
GBP
Retained
deficit
GBP
Foreign
currency
translation
reserve
GBP
Total
GBP
Balance as at 1 April 2020 647,638,697 (74,837,259 ) 59,338,134 632,139,572
Loss for the year — (172,062,324 ) — (172,062,324 )
Other comprehensive loss for the
year — — (40,380,606 ) (40,380,606 )
Total comprehensive loss for the
year — (172,062,324 ) (40,380,606 ) (212,442,930 )
Transactions with owners of the
Company:
Share redemption 17 (98,478,292 ) — — (98,478,292 )
Share capital raised in the period 1,822,376 — — 1,822,376
Dividends paid 8 — (11,346,419 ) — (11,346,419 )
Total transactions with owners of
the Company: (96,655,916 ) (11,346,419 ) — (108,002,335 )
Balance as at 31 March 2021 550,982,781 (258,246,002 ) 18,957,528 311,694,307
The notes on pages 45 to 76 form an integral part of these consolidated financial statements.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 45
Notes to the Consolidated Financial Statements
for the year ended 31 March 2022
1. GENERAL INFORMATION
The consolidated financial information incorporates the results of Amedeo Air Four Plus Limited (the “Company”), AA4P
Alpha Limited, AA4P Beta Limited, AA4P Gamma Limited, AA4P Delta Limited, AA4P Epsilon Limited, AA4P Zeta
Limited, AA4P Eta Limited, AA4P Theta Limited, AA4P Lambda Limited, AA4P Mu Limited, AA4P Nu Limited, AA4P
Leasing Ireland Limited, AA4P Leasing Ireland 2 Limited and AA4P Xi Limited (each a “Subsidiary” and together the
“Subsidiaries”) (together the Company and the Subsidiaries are known as the “Group”).
The Company was incorporated in Guernsey on 16 January 2015 with registered number 59675. Its share capital
consists of one class of redeemable ordinary shares (“Shares”). The Shares are admitted to trading on the SFS of the
London Stock Exchange’s Main Market. The Company and the Guernsey Subsidiaries are tax residents in Guernsey. AA4P
Leasing Ireland Limited and AA4P Leasing Ireland 2 Limited are Irish tax resident trading companies.
The Company’s investment objective is to obtain income returns and a capital return for its Shareholders by acquiring,
leasing and then selling aircraft.
Since the completion of its initial public offering on 13 May 2015, the Company has acquired eight Airbus A380, two
Boeing 777-300ER, four Airbus A350-900 and has sold two Airbus A380 aircraft. Eight of the remaining aircraft are
leased to Emirates and four aircraft are leased to Thai Airways. All aircraft are leased for a period of 12 years from each
respective delivery date, except the four aircraft leased to Thai Airways, where the lease agreements were extended by
72 months. In order to complete the purchase of these aircraft, subsidiaries of the Company entered into debt financing
arrangements which together with the equity proceeds were used to finance the acquisition of the aircraft.
Rental income received is used to pay loan interest and regular capital repayments of debt. US Dollar lease rentals and
loan repayments are furthermore fixed, some making use of interest rate swaps, at the outset of the Group’s acquisition
of an aircraft and are very similar in amount and timing save for the repayment of bullet and balloon repayments of
principal due on the final maturity of a loan to be paid out.
2. ACCOUNTING POLICIES
The significant accounting policies adopted by the Group are as follows:
(a) Basis of preparation
The consolidated financial information has been prepared in conformity with IFRS, which comprise standards and
interpretations approved by the International Accounting Standards Board (“IASB”) and applicable Guernsey law. The
financial information has been prepared on a historical cost basis except for financial assets and financial liabilities at fair
value through profit and loss.
The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of the
new and amended standards set out below.
Changes in accounting policies and disclosure
The following Standards or Interpretations have been adopted in the current year. Their adoption has not had a material
impact on the amounts reported in these consolidated financial statements and is not expected to have any impact on
future financial periods except where stated otherwise.
New and amended IFRS Standards that are effective for the current period
The following Standard and Interpretation issued by the International Accounting Standards Board (the “IASB”) and
International Financial Reporting Standards Interpretations Committee (“IFRIC”) has been adopted in the current year.
The adoption has not had any impact on the amounts reported in these financial statements and is not expected to
have any impact on future financial periods:
46 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(a) Basis of preparation (continued)
Annual Improvements to IFRS Standards 2018-2020
Annual Improvements to IFRS Standards 2018–2020 makes amendments to the following standards:
IFRS 1 ‘First-time Adoption of International Financial Reporting Standards’- Subsidiary as a first-time adopter. The
amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure cumulative translation differences
using the amounts reported by its parent, based on the parent’s date of transition to IFRSs.
IFRS 9 ‘Financial Instruments’- Fees in the ‘10 per cent’ test for derecognition of financial liabilities. The amendment
clarifies which fees an entity includes when it applies the ‘10 per cent’ test in paragraph B3.3.6 of IFRS 9 in assessing
whether to derecognise a financial liability. An entity includes only fees paid or received between the entity (the
borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.
IFRS 16 ‘Leases’- Lease incentives. The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the
example the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential
confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated
in that example.
IAS 41 ‘Agriculture’- Taxation in fair value measurements. The amendment removes the requirement in paragraph 22
of IAS 41 for entities to exclude taxation cash flows when measuring the fair value of a biological asset using a present
value technique. This will ensure consistency with the requirements in IFRS 13.
The amendments to IFRS 1, IFRS 9, and IAS 41 are all effective for annual periods beginning on or after January 1,
2022. Early application is permitted. The amendment to IFRS 16 only impacts an illustrative example, so no effective
date is stated. These standards do not have a material impact on the financial statements or performance of the Group.
New and amended IFRS Standards that are effective for the current period
IAS 16 – Property, Plant and Equipment
IAS 16 ‘Property, Plant and Equipment’ – Proceeds before Intended Use. The proposed amendment would prohibit
an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items
produced while bringing that asset to the location and condition necessary for it to be capable of operating in the
manner intended by management. The effective date is for annual periods beginning on or after 1 January 2022.
Early application is permitted. The standard is not expected to have a material impact on the financial statements or
performance of the Group.
IFRS 3 – Business Combinations
IFRS 3 ‘Business Combinations’- Amendments to IFRS 3 Business Combinations – Reference to the Conceptual Framework.
The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial
Statements, issued in 1989 (Framework), with a reference to the Conceptual Framework for Financial Reporting issued
in March 2018 (2018 Conceptual Framework) without significantly changing its requirements.
The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains
or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be
affected by replacing the reference to the Framework. The amendments are effective for annual reporting periods
beginning on or after 1 January 2022 and apply prospectively. Earlier application is permitted if, at the same time or
earlier, an entity also applies all of the amendments contained in the Amendments to References to the Conceptual
Framework in IFRS Standards (March 2018), which was issued at the same time as the 2018 Conceptual Framework.
The standard does not have a material impact on the financial statements or performance of the Group.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 47
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(a) Basis of preparation (continued)
New and Revised Standards in issue but not yet effective
IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’-changes in Onerous Contracts. Cost of Fulfilling a Contract
specifying that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate
directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour,
materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation
of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective
date is for annual periods beginning on or after 1 January 2022. The standard does not have a material impact on the
financial statements or performance of the Group.
Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17) is a narrow-scope
amendment to the transition requirements of IFRS 17 for entities that first apply IFRS 17 and IFRS 9 at the same time.
The amendment regards financial assets for which comparative information is presented on initial application of IFRS 17
and IFRS 9, but where this information has not been restated for IFRS 9. Under the amendment, an entity is permitted
to present comparative information about a financial asset as if the classification and measurement requirements of
IFRS 9 had been applied to that financial asset before. The option is available on an instrument-by-instrument basis. In
applying the classification overlay to a financial asset, an entity is not required to apply the impairment requirements
of IFRS 9. There are no changes to the transition requirements in IFRS 9. An entity that elects to apply the amendment
applies it when it first applies IFRS 17.
Classification of Liabilities as Current or Non-current, which amended IAS 1 Presentation of Financial Statements. The
amendments clarified how an entity classifies debt and other financial liabilities as current or non-current in particular
circumstances. The amendments are effective for annual reporting periods beginning on or after 1 January 2023, with
earlier application permitted.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2. In February 2021, the IASB issued
amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and
examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help
entities provide accounting policy disclosures that are more useful by: replacing the requirement for entities to disclose
their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies; and adding
guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The effective date is for annual periods beginning on or after 1 January 2023. The Group is in the process of assessing
the amendments to the standard but it is not expected to have a material impact on the financial statements or
performance of the Group.
Definition of Accounting Estimates – Amendments to IAS 8. In February 2021, the IASB issued amendments to IAS 8, in
which it introduces a new definition of ‘accounting estimates’. The amendments clarify the distinction between changes
in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop accounting estimates.
The amended standard clarifies that the effects on an accounting estimate of a change in an input or a change in a
measurement technique are changes in accounting estimates if they do not result from the correction of prior period
errors. The previous definition of a change in accounting estimate specified that changes in accounting estimates may
result from new information or new developments. Therefore, such changes are not corrections of errors. This aspect of
the definition was retained by the IASB. The effective date is for annual periods beginning on or after 1 January 2023.
The standard is not expected to have a material impact on the financial statements or performance of the Group as the
amendment is in line with current treatment by the Group.
Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction- Amendments to IAS 12. The amendments
narrowed the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 (recognition exemption) so that
it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary
differences.
48 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(b) Basis of consolidation
The consolidated financial information incorporates the results of the Company and the Subsidiaries. The Company owns
100% of all the shares in the Subsidiaries which grants it exposure to variable returns from the entities and the power to
affect those returns, granting it control in accordance with IFRS 10.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial information.
(c) Taxation
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or
loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not business combination and
that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and
jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition,
deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred
tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based
on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities
are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes
levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
The Company and the Guernsey Subsidiaries have been assessed for tax at the Guernsey standard rate of 0%. Since
AA4P Leasing Ireland Limited and AA4P Leasing Ireland 2 Limited are Irish tax resident trading companies, they will not
be subject to Guernsey tax, but their net lease rental income earned (after tax deductible expenditure) will be taxable
as trading income at 12.5% under Irish tax regulations. Please refer to note 24 for more information.
(d) Share capital
Shares are classified as equity. Incremental costs directly attributable to the issue of Shares are recognised as a deduction
from equity.
(e) Interest income and expenses
Interest income and expenses are accounted for on an effective interest rate basis.
(f) Foreign currency translation
The currency of the primary economic environment in which the Company operates (the functional currency) is Great
British Pounds (“GBP”) which is also the presentation currency. The Subsidiaries of the Company all have the same
functional currency being US Dollar (“USD”).
Transactions denominated in foreign currencies are translated into GBP at the rate of exchange ruling at the date of the
transaction.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 49
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(f) Foreign currency translation (continued)
Retranslation of subsidiaries:
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional
currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are
recognised in the Consolidated Statement of Comprehensive Income.
On consolidation the financial statements of foreign subsidiaries whose functional currency is not GBP are translated into
GBP as follows: statement of financial position items are translated into GBP at the period end exchange rate; statement
of income items are translated into GBP at the exchange rates applicable at the transaction dates or at the average
exchange rates at each respective quarter end, as long as this is not rendered inappropriate as a basis for translation
by major fluctuations in the exchange rate during the period; unrealised gains and losses arising from the translation
of the financial statements of foreign subsidiaries are recorded under “Translation adjustment on foreign operations” in
other comprehensive income to be reclassified to income. The cumulative gains and losses arising from the translation
of the financial statements of foreign subsidiaries are reclassified to profit and loss on disposal or liquidation of foreign
subsidiaries.
(g) Cash and cash equivalents
Cash at bank and short-term deposits which are held to maturity are carried at cost. Cash and cash equivalents are
defined as call deposits, short term deposits with a term of no more than three months from the start of the deposit
and highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes
in value.
(h) Segmental reporting
The Directors have overall responsibility for the Group’s activities, including investment activity and are therefore
considered the chief operating decision maker.
The Directors are of the opinion that the Group is engaged in a single segment of business, being acquiring, leasing and
selling aircraft (together the “Assets” and each an “Asset”). The Directors consider this appropriate due to the nature of
the revenue earned for the business as a whole from its aircraft, being lease income from lessees predominantly as a
result of passenger revenue earned by the airlines. However the Directors have chosen to disclose certain geographical
information as per note 27.
(i) Going concern
The Directors have prepared these financial statements for the year ended 31 March 2022 on the going concern basis.
In the prior year, the Lessee Thai Airways had stopped paying the amounts due under the leases and had also entered
into a bankruptcy protection process under Thai Law. These factors indicated material uncertainties around the Group’s
ability to operate as a going concern, as the ultimate outcome of the process and its impact on the Group could not
be determined. Thai Airways remains in bankruptcy protection, but the relevant leases and associated debt have been
restructured (as explained elsewhere in this document), considerably reducing the uncertainty around the Group’s going
concern status.
In their consideration of the appropriateness of the going concern basis, the Directors have taken account of the fact
that throughout the period of the COVID 19 pandemic the Group has received the lease payments due from Emirates
Airlines, the Groups principal lessee, in full and on time. Power by the hour receipts due under the restructured leases from
Thai Airlines have also been steadily increasing since they first became due in February 2021 and have been received
on time. The Russian invasion of Ukraine and the subsequent sanctions and economic fallout have, as expected, had
little impact on the Group. Cash flow modelling carried out has indicated that future lease receipts are very likely to
prove adequate to enable the Group to meet its obligations as they fall due for at least the next twelve months.
On the basis of (i) the Group’s current liquid assets, (ii) cash-flow projections, and (iii) the current improving landscape
for travel, the Directors believe that the going concern basis of accounting is appropriate.
50 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(j) Leasing and rental income
At inception or on modification 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 standalone prices.
If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration
in the contract. The Group makes an overall assessment of whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then
it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is
for the major part of the economic life of the asset. The leases relating to the Assets have been classified as operating
leases as the terms of the leases do not transfer substantially all the risks and rewards of ownership to the lessee. The
Assets are shown as non-current assets in the Consolidated Statement of Financial Position. Further details of the leases
are given in note 5.
Rental income and advance lease payments from operating leases are recognised on a straight-line basis over the
term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to
the carrying amount of the leased Asset and amortised on a straight-line basis over the lease term. The four A350-900
aircraft have variable lease rentals. PBH rent will be paid up until 31 December 2022 after which a fixed amount per
aircraft is payable up until the original expiry date of the lease agreements. The lease agreements were also extended
by 72 months. During the extended lease term an amount to be agreed in writing between the Lessee and the Lessor,
will be paid.
The Deferred and accrued income represents the difference between actual payments received in respect of the lease
income (including some received in full upfront) and the amount to be accounted for in the accounting records on a
straight line basis over the lease terms. The liability in relations to deferred income will reduce over time as the leases
continue and approach the end of the lease terms. For the four A350-900 aircraft, the deferred income was calculated
using a lease rate for the extended period determined by taking the average base lease rate from three appraisers.
Changes in lease payments that result from the terms included in the original lease contract or in applicable law or
regulations are considered as part of the original lease terms and conditions of the lease. If there is no change in either
the scope of or the consideration of the lease, then the Company assumes that there is no lease modification.
Where an increase in scope occurs and the payment for this increase in scope is commensurate, any modification will
be considered a new lease, and any remaining prepayments and accruals are included in the accounting for the new
lease. If the new lease continues to be classified as operating, the future cash flows are recognised on a straight line (or
other systematic) basis, adjusted for any prepayments or accruals with the balance written down to zero at the end of
the lease. Where there is no lease modification, the existing accounting policy is followed.
(k) Maintenance provision liabilities
In many aircraft operating lease contracts, the lessee has the obligation to make periodic payments which are calculated
with reference to utilisation of airframes, engines and other major life-limited components during the lease. In most
lease contracts, upon presentation by the lessee of the invoices evidencing the completion of qualifying work on the
aircraft, the Group reimburses the lessee for the work, up to a maximum of the advances received with respect to such
work.
The Group records such amounts as maintenance provisions. Maintenance provisions not expected to be utilised within
one year are classified as non-current liabilities. The lessor shall reimburse to the lessee any unused portions of the
maintenance provision amounts. Upon redelivery of the aircraft leased to Emirates at the end of the lease, if the aircraft
does not meet the return condition set out, monetary compensation will be receivable and accounted for as lease
revenue. Where the aircraft has been maintained and meets the return conditions, this will not be due. Further details
are given in note 22.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 51
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(l) Property, plant and equipment – Aircraft
In line with IAS 16 Property Plant and Equipment, each Asset is initially recorded at cost, being the fair value of the
consideration paid. The cost of the Asset is made up of the purchase price of the Assets plus any costs directly attributable
to bringing it into working condition for its intended use. Costs incurred by the lessee in maintaining, repairing or
enhancing the aircraft are not recognised as they do not form part of the costs to the Group. Accumulated depreciation
and any recognised impairment losses are deducted from cost to calculate the carrying amount of the Asset.
(a) Depreciation
The Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental
to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating
lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of
the economic life of the asset. The leases relating to the Assets have been classified as operating leases as the terms of
the leases do not transfer substantially all the risks and rewards of ownership to the lessee.
Depreciation is recognised so as to write off the cost of each Asset less the estimated residual value over the lease term
of the Asset of twelve years and eighteen years for the Thai aircraft, using the straight line method. Residual values have
been arrived at by taking the average amount of three independent external valuers and after taking into account
disposition fees. The Directors consider that the use of forecast market values excluding inflation best approximates
residual value as required by IAS 16 Property, Plant and Equipment.
The depreciation method reflects the pattern of benefit consumption. The residual value is reviewed annually in March
and is an estimate of the amount the entity would receive today if the Asset were already of the age and condition
they will be in at the end of the lease. Due to a change in estimate of residual value for all aircraft and in useful life
for the Thai aircraft, in the current year, there has been a £697,558 net increase in the annual depreciation charge for
the current year. The net change in depreciation consist of a decrease of depreciation of £1,246,006 for the change
in residual values and useful lives of the Thai aircraft and an increase in depreciation of £1,943,563 for the remaining
aircraft. Further details of the change in estimate of residual values and the impact on depreciation for the current year
as a result are given in note 10.
Depreciation starts when the Asset is available for use.
(b) Impairment
At each audited reporting date, the Group reviews the carrying amounts of its Assets to determine whether there is any
indication that those Assets have suffered an impairment loss. If any such indication exists, the recoverable amount of
the Asset is estimated to determine the extent of the impairment loss (if any). Further details are given in note 3.
Recoverable amount is the higher of fair value less costs to sell and the value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the Asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an Asset is estimated to be less than its carrying amount, the carrying amount of the Asset
is reduced to its recoverable amount. An impairment loss is recognised immediately in the Consolidated Statement of
Comprehensive Income. Where an impairment loss subsequently reverses, the carrying amount of the Asset is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the Asset in prior years.
A reversal of an impairment loss is recognised immediately in Consolidated Statement of Comprehensive Income.
52 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(m) Financial assets and financial liabilities
(a) Classification
The Group classified its financial assets and financial liabilities in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income (“OCI”), or through
the Consolidated Statement of Comprehensive Income), and
• those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms
of the cash flows.
For assets measured at fair value, gains and losses will be recorded in the Consolidated Statement of Comprehensive
Income.
The interest rate swaps in the Group are measured at Fair Value through Profit or Loss (“FVTPL ”) as it is managed on
a fair value basis in accordance with a documented investment strategy. The interest rate swaps do not meet the SPPI
criterion (solely payments of principal and interest) and accordingly it will be mandatorily measured at FVTPL under IFRS
9. The Group does not classify any derivatives as hedges in a hedging relationship.
(b) Recognition/derecognition
A financial instrument is recognised when the Group becomes a party to the contractual provisions of the instrument.
Financial liabilities are derecognised if the Group’s obligations, specified in the contract, expire or are discharged or
cancelled.
Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire,
are extinguished, or if the Group transfers the financial assets to a third party and transfers all the risks and rewards of
ownership of the Asset, or if the Group does not retain control of the Asset and transfers substantially all the risk and
rewards of ownership of the Asset.
(c) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial
assets carried at FVTPL are expensed in the Consolidated Statement of Comprehensive Income.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.
Financial assets
Subsequent measurement of financial assets depends on the Group’s business model for managing the asset and the
cash flow characteristics of the asset. The Group classifies its financial assets into the following measurement category:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included
in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly
in the Consolidated Statement of Comprehensive Income and presented in other gains / (losses), together with foreign
exchange gains and losses. Provision for impairment losses are presented as a separate line item in the Consolidated
Statement of Comprehensive Income.
Financial assets currently measured at amortised cost are cash and cash equivalents, receivables and short term
investments. These instruments meet the solely principal and interest criterion and are held in a held-to-collect business
model. Accordingly, they will continue to be measured at amortised cost under IFRS 9.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 53
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(m) Financial assets and financial liabilities (continued)
(c) Measurement (continued)
Derivative instruments
Changes in the fair value of financial assets at FVTPL are recognised in the Consolidated Statement of Comprehensive
Income as applicable.
Financial assets and financial liabilities at FVTPL are initially recognised at fair value. Transaction costs are expensed in the
Consolidated Statement of Comprehensive Income. Subsequent to initial recognition, all financial assets and financial
liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the
fair value of the ‘financial assets or financial liabilities at fair value through profit or loss’ category are presented in the
Consolidated Statement of Comprehensive Income in the period in which they arise.
(d) Impairment
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost.
The Group measures loss allowances at an amount equal to lifetime ECL. Loss allowances for trade debtors and contract
assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment and including forward-looking information.
The impairment methodology applied depends on whether there has been a significant increase in credit risk.
As per IFRS 9, a receivable has a low credit risk if:
• It has a low risk of default;
• The borrower has a strong capacity to meet its contractual cash flow obligations in the near term; and
• Adverse changes in economic and business conditions in the longer term might, but will not necessarily, reduce the
ability of the borrower to fulfil its obligations.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows
that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset. The gross
carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect
of recovery.
For trade and other receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
Refer to note 13 for provision for impairment with respect to trade and other receivables.
(n) Non-derivative financial liabilities
Financial liabilities consist of payables, security deposits and borrowings. The classification of financial liabilities at initial
recognition will be at amortised cost to the extent it is not classified at FVTPL. All financial liabilities are initially measured
at fair value, net of transaction costs. All financial liabilities are recorded on the date on which the Group becomes party
to the contractual requirements of the financial liability.
Amortised cost: Interest expenses from financial liabilities is included in finance costs using the effective interest rate
method. Any gain or loss arising on derecognition is recognised directly in the Consolidated Statement of Comprehensive
Income and presented in other gains / (losses), together with foreign exchange gains and losses.
Financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest
expense recognised on an effective yield basis.
54 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
2. ACCOUNTING POLICIES (continued)
(n) Non-derivative financial liabilities (continued)
The effective interest method is a method of calculating the amortised cost of the financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability, to the net carrying amount on initial recognition.
Associated costs are subsequently amortised on an effective interest rate basis over the life of the loan and are shown
net on the face of the Consolidated Statement of Financial Position over the life of the lease.
In accordance with IFRS 9, when a debt instrument is restructured or refinanced and the terms have been substantially
modified, the transaction is accounted for as an extinguishment of the old debt instrument, and the recognition of a
new instrument at fair value. The difference between the fair value of the debt and the old debt at amortised cost is
recognised as a gain or loss in the Statement of Comprehensive Income. Costs or fees incurred as part of the modification
are recognised as part of the gain or loss on extinguishment.
If the exchange or modification is not accounted for as an extinguishment (i.e. because the modification is non-
substantial), then the amortised cost of the liability is recalculated by discounting the revised estimated future cash flows
at the instrument’s original effective interest rate. The adjustment to the new amortised costs is recognised as a catch up
gain or loss in the Statement of Comprehensive Income. Costs or fees incurred as part of the modification are added to
the liability and amortised over the term of the modified liability.
The Group derecognises financial liabilities when, and only when, the Group has transferred substantially all risks and
rewards of its obligations.
(o) Net Asset Value
In circumstances where the Directors are of the opinion that the NAV or NAV per Share, as calculated under prevailing
accounting standards, is not appropriate or could give rise to a misleading calculation, the Directors, in consultation with
the Administrator may determine, at their discretion, an alternative method for calculating a more useful value of the
Group and shares in the capital of the Company, which they consider more accurately reflects the value of the Group.
3. SIGNIFICANT JUDGEMENTS AND ESTIMATES
In the application of the Group’s accounting policies, which are described in note 2, the Directors are required to
make judgements, 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 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 and estimates that the Directors have made in the process of applying
the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial
information.
CRITICAL ACCOUNTING JUDGEMENTS
Depreciation
The depreciation method reflects the pattern of benefit consumption. The residual value is reviewed annually in March
and is an estimate of the amount the entity would receive today if the Asset were already of the age and condition
they will be in at the end of the lease. Due to a change in estimate of residual value for all aircraft and in useful life
for the Thai aircraft, in the current year, there has been a £697,558 net increase in the annual depreciation charge for
the current year. The net change in depreciation consist of a decrease of depreciation of £1,246,006 for the change
in residual values and useful lives of the Thai aircraft and an increase in depreciation of £1,943,563 for the Emirates
aircraft. Further details of the change in estimate of residual values and the impact on depreciation for the current year
as a result are given in note 10.
Depreciation starts when the Asset is available for use.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 55
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
3. SIGNIFICANT JUDGEMENTS AND ESTIMATES (continued)
CRITICAL ACCOUNTING JUDGEMENTS (continued)
Operating lease commitments – Group as lessor
The Group had entered into operating leases on twelve Assets as at the year end (2021: twelve) (see note 5). The
Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the
significant risks and rewards of ownership of these Assets and accounts for the contracts as operating leases.
KEY SOURCES OF ESTIMATION UNCERTAINTY
Residual value of Aircraft used in depreciation calculation
As described in note 2(l), the Group depreciates the Assets on a straight line basis over the term of the lease after
taking into consideration the estimated residual value. IAS 16 Property, Plant and Equipment requires residual value to
be determined as an estimate of the amount that the Group would currently obtain from disposal of the Asset, after
deducting the estimated costs of disposal, if it were of the age and condition expected at the end of the lease.
After consulting with the Asset Manager, the Directors have concluded that forecast values (determined annually from
three independent expert aircraft valuers) based on Minimum Return Conditions (“MRC”) for the A380 aircraft at the
end of the lease (excluding inflationary effects) best approximates residual value. Minimum return conditions refer to
the lease contracts whereby the aircraft is returned in a specified minimum life condition, which also includes estimated
monetary compensation from Emirates. This approach in our view remains relevant having considered a recent event,
which was the agreed and announced sale of MSN 16 by DNA1 to Emirates at lease end in December 2022, thereby
creating a relevant secondary market trade.
In estimating residual value at the 31 March 2022 audited annual year end (and 31 March 2021 year-end) for the
A350’s and Boeing 777-300ER aircraft, the Directors have made reference to forecast market values using base values
(excluding inflationary effects) for the aircraft obtained from three independent expert aircraft valuers. Base value is the
appraiser’s opinion of the underlying economic value of an aircraft, in an open, unrestricted, stable market environment
with a reasonable balance of supply and demand. Full consideration is assumed of its “highest and best use” given the
fact that the aircraft are held for use in a leasing business.
An asset’s base value is determined using the historical trend of values and in the projection of value trends and
presumes an arm’s-length, cash transaction between willing, able, and knowledgeable parties, acting prudently, with
an absence of duress and with a reasonable period of time available for marketing. In the appraisers’ valuations, the
base value of an aircraft excludes reconfiguration costs and assumes the physical condition is average for an asset of its
type and age and that all maintenance requirements and schedules have been met.
The estimation of residual value remains subject to uncertainty. If a reasonable possible change in residual value in USD
terms, had for instance, decreased by 20% with effect from the beginning of this period, the net profit for the period
would have increased and closing shareholders’ equity would have decreased and closing shareholders’ equity would
have decreased by approximately £10.76 million (31 March 2021: £13.09 million). An increase in residual value
by 20% would have had an equal but opposite effect. This reflects the range of estimates of residual value that the
Directors believe would be reasonable at this time.
Impairment
Factors that are considered important which could trigger an impairment review include, but are not limited to, significant
decline in the market value beyond that which would be expected from the passage of time or normal use, significant
changes in the technology and regulatory environments, evidence from internal reporting which indicates that the
economic performance of the asset is, or will be, worse than expected. The Directors considered the issue at length and
are of the opinion that an impairment review be undertaken.
56 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
3. SIGNIFICANT JUDGEMENTS AND ESTIMATES (continued)
KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)
As described in note 2(l), an impairment loss exists when the carrying value of an asset or cash generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The Directors review the
carrying amounts of the Assets at each audited reporting date and monitor the Assets for any indications of impairment
as required by IAS 16 Property, Plant and Equipment and IAS 36 Impairment of Assets.
In assessing value-in-use, the estimated future cash flows expected to be generated by the asset (ie the income streams
associated with the lease and the expected future market value of the aircraft at the end of the lease) are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset and the credit risk profile of the lessees.
In determining fair value less costs of disposal, recent market transactions are taken into account, if available. If no such
costs can be identified, an appropriate valuation model is used. Such a valuation reflects highest and best use given the
fact that the aircraft are held for use in a leasing business.
The Board together with the Asset Manager decided that it was necessary to conduct an impairment test in the current
year, as the below items resulted in pricing changes for the current portfolio of aircraft:
• Changing technologies, market innovation and changes to key production programs as well as the success and / or
failure as well as the timing of new aircraft model launches.
• Information regarding Airbus cancellation of the A380 programme in the prior year, and further updates on the
market for A380 aircraft, creating uncertainty as to the liquidity of the future market for sale or re-lease.
• The Group’s market capitalisation as at 31 March 2022 is lower than the Group’s Net Assets per the Statement of
Financial Position as at 31 March 2022 year end.
The assessment was performed by comparing the net book value of each aircraft to the higher of its fair value less costs
to sell and its value in use. For the A380 and 777-300ER aircraft value-in-use was used as the recoverable amounts.
Rental cash flows to the end of the contracts have been used in the calculation of value-in-use as the cash flows are
contractual. Any assumptions with regards issues in counterparty credit risk has been reflected in the discount rate
used to calculate the net present value of future cash flows. For the A350 aircraft, assumptions of the amended lease
agreements have been incorporated into the assumptions in relation to rental cash flow. In the current year for the
A350 aircraft, fair value less cost to sell was above the value in use, and was therefore used as the recoverable amount.
The current market value is determined by three independent professional appraisers. The appraisers’ valuations are
based on several assumptions regarding the technical and economic developments of the aircraft type as well as future
developments in the aviation industry as a whole.
The Group applies IFRS 13 in respect of disclosures about the degree of reliability of fair value measurements. This
requires the Group to classify for disclosure purposes fair value measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
The fair value hierarchy has the following levels:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 57
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
3. SIGNIFICANT JUDGEMENTS AND ESTIMATES (continued)
KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)
The Group classifies its fair value measurements as level 3. Factors that substantiate classification at level 3 include a lack
of conclusive comparable current market data for the A380 and A350 aircraft, the lack of publicly available secondary
market data for the B777-300ER aircraft, the nature of the operations of the Group being aircraft leasing as opposed to
an airline operating business, as well as the impact of COVID-19 on the business of airlines and aircraft values.
The Directors on the advice of the Asset Manager considered the following in their determination of the most appropriate
discounting rate, ranging from 6.5% to 7.5% (2021: 6.5% to 7.5%);
1. The discount rate should be a rate commensurate with what a normal market participant would consider to be the
risk inherent in the assets.
2. The risk profile of the A380 aircraft vs the B777 and A350 aircraft
3. The consideration of the credit risk profile for Emirates and Thai
The future sales value of the aircraft have been estimated with reference to the average of current Minimum Return
Conditions (“MRC”) values for the A380 aircraft and future base values for the B777 and A350 aircraft, from three
independent appraisers.
Based on the impairment review performed, an impairment loss of £4,834,603 was recognised in the current year
(31 March 2021: £152,115,323), with the impairment test resulting in an updated carrying value of the aircraft in total
of £1,209,709,751 at year end (31 March 2021: £1,270,311,830), as reflected in note 10.
The Directors have also considered that market capitalisation at year end of £105,583,299 (2021: £104,194,022) is
below Net Asset value of £315,246,260 (2021: £311,694,307) and have concluded that no further aircraft impairment
charge is necessary due to the fact impairment was performed using the inputs from competent aircraft appraisers
and market capitalisation also reflects psychology of market participants which is not relevant for aircraft impairment
assessment at year end.
Modification of borrowings
During the period, amended loan agreements have been signed for the loans held with the lenders of the Thai aircraft.
Based on the terms and conditions of the agreements, the effective date of the loan amendments is July 2021.
In addition to the quantitative tests as per IFRS 9, the Group also considers the new agreed loan terms in its assessment
of loan modifications.
The Group considers three of the modifications of the loans with respect to the Thai aircraft as being non-substantial. The
amortised cost of the liability is recalculated by discounting the revised estimated future cash flows at the instrument’s
original effective interest rate. The adjustment to the new amortised cost is recognised as a gain or loss in the Statement
of Comprehensive Income.
One loan modification has been considered a substantial modification and has been accounted for as an extinguishment
of the old debt instrument, and the recognition of a new instrument at fair value. The difference between the fair value
of the debt and the old debt at amortised cost is recognised as a gain or loss in the Statement of Comprehensive
Income.
The costs in relation to entering into the interest rate cap agreements have been recognised separately as part of the
cost of the derivatives.
The loans with respect to the Thai aircraft are reflected at amortised cost.
Rental income for extended period of A350-900 aircraft
For the four A350-900 aircraft, the deferred income was calculated using a lease rate for the extended period
determined by taking the average base lease rate from three appraisers.
58 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
4. RENTAL INCOME
1 Apr 2021 to
31 Mar 2022
GBP
1 Apr 2020 to
31 Mar 2021
GBP
US Dollar based rent income 148,775,786 161,184,363
Revenue earned but not yet received 2,951,201 1,717,063
Revenue received but not yet earned (393,744) (330,649)
151,333,243 162,570,777
Amortisation of advanced rental income (US Dollar) 4,080,739 4,266,601
155,413,982 166,837,378
British Pound based rent income 34,681,201 34,596,573
Revenue earned but not yet received 103,515 91,134
Revenue received but not yet earned (165,157) (150,525)
34,619,559 34,537,182
Total rental income 190,033,541 201,374,560
Rental income is derived from the leasing of the Assets. US Dollar based rent represents rent received in USD and British
Pound based rent represents rent received in “GBP”. Rental income received in USD is earned by the subsidiaries and
is consolidated by translating it into the presentation currency (GBP) at the average exchange rates at each respective
quarter end. An adjustment has been made to spread the actual total income receivable over the term of the lease on
an annual basis. In addition, advance rentals received have also been spread over the full term of the leases.
The contingent rent for the year ended 31 March 2022 is £4,295,294 per annum (31 March 2021: £414,614).
5. OPERATING LEASES
The amounts of lease receipts at the reporting date under non-cancellable operating leases are detailed below:
31 March 2022 31 March 2021
US Dollar based
rent income
Months
GBP
British Pound
based rent
income
Years
GBP
US Dollar based
rent income
Months
GBP
British Pound
based rent
income
Years
GBP
Year 1 120,529,109 26,388,318 151,088,737 34,668,972
Year 2 135,686,695 25,468,858 151,140,641 34,668,972
Year 3 135,686,695 25,468,858 151,140,641 34,668,972
Year 4 135,686,695 25,468,858 151,140,641 34,668,972
Year 5 135,686,695 25,468,858 151,140,641 34,668,972
Year 6 onwards 214,112,357 14,988,432 358,433,086 49,528,828
877,388,246 143,252,182 1,114,084,387 222,873,688
The twelve (2021: twelve) assets all have an initial lease term of twelve years with lease end dates ranging from
September 2026 to January 2036. During the period, amended lease agreements have been signed. The Thai aircraft
now have a lease term of eighteen years.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 59
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
6. OPERATING EXPENSES
1 April 2021 to
31 Mar 2022
GBP
1 April 2020 to
31 Mar 2021
GBP
Corporate and shareholder adviser fee 83,671 2,070,598
Asset management fee 2,885,336 4,431,409
Administration fees 434,783 460,961
Bank charges 8,007 12,982
Registrar’s fee 26,657 18,656
Audit fee 123,329 76,473
Directors’ remuneration 482,434 269,064
Directors’ and Officers’ insurance 248,381 85,320
Legal and professional expenses 613,283 1,011,871
Annual regulatory fees 18,638 23,492
Sundry costs 79,657 58,592
Nimrod agreement fee* — 11,272,375
Cash management fee 55,175 106,338
5,059,351 19,898,131
*On 18 February 2021, the Company announced that it had entered into an agreement with Nimrod to terminate Nimrod’s appointment as sole
corporate and shareholder advisor to the Company with effect from 31 January 2021 and settle outstanding matters between them (the Termination
Agreement).
7. DIRECTORS’ REMUNERATION
The directors’ fees are £61,500 per annum with the Chairman receiving an additional fee of £15,375 per annum and
the Chair of the Audit Committee an additional £7,688 per annum. During the period, additional fees of £178,000 in
aggregate were paid to relevant directors in respect of the substantial work undertaken by them during the past two
years.
8. DIVIDENDS IN RESPECT OF SHARES
1 Apr 2021 to 31 Mar 2022 1 Apr 2020 to 31 Mar 2021
GBP
Pence per
Share GBP
Pence per
Share
First dividend 4,341,418 1.2500 4,923,918 1.1500
Second dividend — — 6,422,501 1.500
4,341,418 1.2500 11,346,419 2.6500
Refer to note 17 for the return of capital of shareholders.
9. EARNING/LOSS PER SHARE
Earnings/(Loss) per Share (“EPS”) is based on the profit for the year of £24,747,259 (2021: loss of £172,062,324) and
407,022,789 shares (2021: 534,917,899 shares) being the weighted average number of Shares in issue during the
year.
There are no dilutive instruments and therefore basic and diluted Earnings per Share are identical.
60 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
10. PROPERTY, PLANT AND EQUIPMENT – AIRCRAFT
Aircraft
31 Mar 2022
GBP
Aircraft
31 Mar 2021
GBP
COST
Aircraft purchases – opening balance 1,927,735,270 1,927,735,270
Acquisition costs – opening balance 8,364,798 8,364,798
Translation adjustment on foreign operations-opening balance 33,009,871 249,104,624
Cost at beginning of year 1,969,109,939 2,185,204,692
Disposals — —
Translation adjustment on foreign operations-current year 96,671,940 (216,094,753)
Cost as at year end 2,065,781,879 1,969,109,939
31 Mar 2022
GBP
31 Mar 2021
GBP
ACCUMULATED DEPRECIATION, IMPAIRMENT AND AMORTISATION
Opening balance 739,290,369 450,007,943
Translation adjustment on foreign operations-opening balance (40,492,260) 20,687,900
Accumulated depreciation and impairment at beginning of year 698,798,109
470,695,843
Depreciation for the current year based on previous year residual values 111,930,032 117,811,781
Amortisation of acquisition costs on aircraft 756,519 756,519
Adjustment due to change in useful life * (1,246,006) —
Adjustment due to change of residual value
1,943,563 18,598,802
Net depreciation charge on all aircraft for the year 113,384,109 137,167,102
Translation adjustment on foreign operations 38,980,769 (60,416,607)
Accumulated depreciation as at year end 851,162,987 547,446,337
Adjustment due to impairment 4,834,603 152,115,323
Translation adjustment on foreign operations 74,538 (763,551)
Accumulated depreciation and impairment as at year end 856,072,128 698,798,109
Carrying amount – opening balance 1,270,311,830 1,714,508,850
Carrying amount as at year end 1,209,709,751 1,270,311,830
* The adjustment due to a change in estimate consists of a change of residual value for all aircraft and in useful life for the Thai aircraft for the current year.
The net change in depreciation consist of a decrease of depreciation of £1,246,006 for the change in residual values and useful lives of the Thai aircraft
and an increase in depreciation of £1,943,563 for the remaining aircraft.
Financing of aircraft
In order to complete purchases of the aircraft, subsidiaries of the Company have entered into debt financing agreements
with a senior fully amortising loan and junior balloon loan (see note 16). The Company used the equity proceeds (see
note 17) in addition to the finance agreements to finance the acquisition of the aircraft. Subject to the below, rentals
under each lease are sufficient to pay the senior loan payment (being capital and interest and junior loan payments
due (being interest only). Both the rental and loan payments are in USD.
Exceptions to the above include senior loans with an outstanding balance (excluding interest and associated costs) of
£211,745,631 (31 March 2021: £289,893,510) at year end, which have balloon capital payments on maturity. Any
junior loan principal and senior loan capital due at maturity, is expected to be repaid at lease expiry out of the proceeds
of the sale, re-lease, refinancing or other disposition of the relevant Asset.
The Group’s aircraft with carrying values of £1,209,709,751 (31 March 2021: £1,270,311,830) are pledged as security
for the Group’s borrowings (see note 16).
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 61
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
10. PROPERTY, PLANT AND EQUIPMENT – AIRCRAFT (continued)
Sale of aircraft
The Group can sell the Assets during the term of the leases (with the lease attached and in accordance with the terms
of the transfer provisions contained therein). Under IAS 16 the direct costs attributed in negotiating and arranging the
operating leases have been added to the carrying amount of the leased Asset and recognised as an expense over the
lease term.
Impairment
Based on the impairment review performed, an impairment loss of £4,834,603 was recognised in the current year
(31 March 2021: £152,115,323), with the impairment test resulting in an updated carrying value of the aircraft in total
of £1,209,709,751 at year end (31 March 2021: £1,270,311,830).
The Board together with the Asset Manager decided that it was necessary to conduct an impairment test in the current
year, as the below items resulted in pricing changes for the current portfolio of aircraft:
• Changing technologies, market innovation and changes to key production programs as well as the success and / or
failure as well as the timing of new aircraft model launches.
• Information regarding Airbus cancellation of the A380 programme in the prior year, and further updates on the
market for A380 aircraft, creating uncertainty as to the liquidity of the future market for sale or re-lease.
• The Group’s market capitalisation as at 31 March 2022 is lower than the Group’s Net Assets per the Statement of
Financial Position as at 31 March 2022 year end.
The assessment was performed by comparing the net book value of each aircraft to the higher of its fair value less costs
to sell and its value in use. For the A380 and 777-300ER aircraft value-in-use was used as the recoverable amounts.
Rental cash flows to the end of the contracts have been used in the calculation of value-in-use as the cash flows are
contractual. Any assumptions with regards issues in counterparty credit risk has been reflected in the discount rate
used to calculate the net present value of future cash flows. For the A350 aircraft, assumptions of the amended lease
agreements have been incorporated into the assumptions in relation to rental cash flow. In the current year for the
A350 aircraft, fair value less cost to sell was above the value in use, and was therefore used as the recoverable amount.
The current market value is determined by three independent professional appraisers. The appraisers’ valuations are
based on several assumptions regarding the technical and economic developments of the aircraft type as well as future
developments in the aviation industry as a whole.
The Directors, on the advice of the Asset Manager considered the following in their determination of the most appropriate
discounting rate, ranging from 6.5% to 7.5%;
1. The discount rate should be a rate commensurate with what a normal market participant would consider to be the
risk inherent in the assets.
2. The risk profile of the A380 aircraft vs the B777 and A350 aircraft
3. The consideration of the credit risk profile for Emirates and Thai
The future sales value of the aircraft have been estimated with reference to the average of current Minimum Return
Conditions (“MRC”) values for the A380 aircraft and future base values for the B777 and A350 aircraft, from three
independent appraisers.
Refer to note 3 for further detail.
A 5% increase to the original discount rate used for the cash flow test would still result in a £4.83 million impairment
charge on the aircraft, driven by the differential between Net Book Value (“NBV”) and the appraised Current Market
Value (CMV”).
A 5% decrease to the original discount rates used for the cash flow test would result in a £0.93 million impairment
charge on the aircraft, driven by the differential between NBV and the appraised CMV.
62 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
10. PROPERTY, PLANT AND EQUIPMENT – AIRCRAFT (continued)
Change in estimate
The Group conducted a review on the aircraft held at 31 March 2022, which resulted in changes in the residual value
of the aircraft at the end of the lease. The Adjustment due to change in estimate of £697,558 (31 March 2021:
£18,598,802 ) will have the same impact on estimated depreciation in future years as in the current year if there is
no further revisions in residual values. The effect of these changes on depreciation are included in the reconciliation of
accumulated depreciation and amortisation table above where the depreciation before and after the residual value
adjustment is noted.
The estimation of residual value remains subject to uncertainty. If a reasonable possible change in residual value in
USD terms, had for instance, decreased by 20% with effect from the beginning of this period, the net profit for the
period would have increased and closing shareholders’ equity would have decreased by approximately £10.76 million
(31 arch 2021: £13.09 million). An increase in residual value by 20% would have had an equal but opposite effect.
This reflects the range of estimates of residual value that the Directors believe would be reasonable at this time.
11. FINANCE INCOME
1 April 2021 to
31 Mar 2022
GBP
1 April 2020 to
31 Mar 2021
GBP
Fair value gain on derivatives at fair value through profit and loss* 24,333,757 7,844,744
Bank interest received 181,689 388,810
24,515,446 8,233,554
* This is the movement in the fair value of the derivatives for the period.
12. FINANCE COSTS
1 April 2021 to
31 Mar 2022
GBP
1 April 2020 to
31 Mar 2021
GBP
Amortisation of debt arrangements costs 1,498,942* 1,640,301*
Interest payable on loan** 36,469,688* 42,113,465*
Security trustee and agency fees 193,908 200,044
38,162,538 43,953,810
*Included in Finance costs is interest on the amortised cost liability for the year of £37,968,630 (31 March 2021: ₤43,753,766).
** This amount includes £24,191 interest income (31 March 2021: £132,590 interest income) from the interest rate swaps.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 63
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
13. TRADE AND OTHER RECEIVABLES
31 Mar 2022
GBP
31 Mar 2021
GBP
Non-current
Trade receivables 15,836,005 12,697,401
Expected credit loss (1,120,223) —
14,715,782 12,697,401
Current
Prepayments 155,383 125,832
VAT receivable 6,609 6,800
Trade receivables 1,417,777 28,021,519
Expected credit loss — (28,021,519)
1,579,769 132,632
The above carrying value of receivables is deemed to be materially equivalent to fair value, given that they are short
term in nature.
* As at 31 March 2022 the expected lifetime losses on the rent receivables has been reassessed by the Group. Following the formal completion of new
lease arrangements with Thai Airways on 15 December 2021, the Group has written off amounts receivable under the previous lease arrangements due
to the non-payment of lease rentals by Thai Airways in amount of £28.9mil. Management completed a high-level analysis which considers both historical
and forward-looking qualitative and quantitative information, to assess the credit risk of the receivables from Thai Airways. The security deposits payable
were utilised in full against the lease rentals due by Thai Airways at the 31 March 2021 year end, with the remaining rental amounts due recognised as
receivable (discounted for the time value of money) at the period end in accordance with the Thai rehabilitation plan. These are included in the non-
current trade receivables at £3,973,496 and is expected to be repaid by the lessee between 2024 and 2027. The effect of the discount is recognized
as an expected credit loss of £1.1mil.
The amounts receivable from Thai Airways for prior periods were impaired in full in the Statement of Comprehensive
Income as they were considered not recoverable.
In all periods, the remaining trade receivables and receivables at amortised cost at period end are considered receivable,
with any identified impairment losses on such assets not considered significant. Information about the Group’s exposure
to credit risk and impairment loss for trade receivables is included in Note 19 c.
64 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
14. SHORT TERM INVESTMENTS
Bank
Fixed Rate
% Maturity date
31 Mar 2022
GBP
31 Mar 2021
GBP
Canadian Imperial Bank of Commerce 0.04 6 Jul 2021 — 2,177,939
Lloyds Bank PLC 0.22 14 Jul 2021 — 362,955
Societe Generale 0.21 27 Jul 2021 — 1,088,733
HSBC Bank PLC 0.25 6 Aug 2021 — 1,700,248
UBS AG 0.09 6 Aug 2021 — 850,252
Credit Agricole CIB 0.16 25 Aug 2021 — 2,176,479
Credit Agricole CIB 0.18 27 Aug 2021 — 704,478
Standard Chartered Bank 0.105 26 Oct 2021 — 150,092
Cooperatieve Rabobank U.A 0.25 12 Nov 2021 — 2,178,965
Standard Chartered Bank 0.31 22 Nov 2021 — 1,453,457
BNP Paribas London Branch 0.12 23 Nov 2021 — 1,004,560
Credit Suisse 0.14 30 Nov 2021 — 1,704,175
Toronto Dominion Bank 0.09 6 Dec 2021 — 1,706,415
Toronto Dominion Bank 0.20 13 Dec 2021 — 2,176,697
BNP Paribas London Branch 0.09 7 Jan 2022 — 751,651
Societe Generale 0.01 14 Jan 2022 — 1,700,704
ING Bank 0.13 7 Feb 2022 — 901,320
Nordea Bank AB 0.17 1 Jul 2022 1,797,738 —
Canadian Imperial Bank of Commerce 0.22 7 Jul 2022 2,205,417 —
Toronto Dominion Bank 0.15 11 Jul 2022 1,796,790 —
Standard Chartered Bank 0.17 13 Jul 2022 1,797,018 —
Toronto Dominion Bank 0.22 14 Jul 2022 456,192 —
Standard Chartered Bank 0.21 27 July 2022 1,139,898 —
Nordea Bank AB 1.02 28 Jul 2022 4,375,259 —
UBS AG 0.17 5 Aug 2022 1,695,155 —
Bank of Montreal 0.18 18 Aug 2022 996,791 —
Canadian Imperial Bank of Commerce 0.19 31 Aug 2022 896,786 —
Skandinaviska Enskilda Banken 0.2 2 Sep 2022 1,692,833 —
Canadian Imperial Bank of Commerce 1.27 16 Sep 2022 228,252 —
Standard Chartered Bank 0.24 23 Sep 2022 1,692,086 —
20,770,215 22,789,120
The above investments represent certificates of deposits maturing within 12 months and are held by HSBC Securities
Services in London under a custody agreement between Ravenscroft Cash Management and HSBC Bank plc for Global
Custody Services. Impairment losses on these investments are not considered significant as they are held with reputable
international banking institutions.
15. PAYABLES
31 Mar 2022
GBP
31 Mar 2021
GBP
Accrued administration fees 50,242 49,264
Accrued audit fee 90,996 70,501
Accrued registrar fee 1,906 1,025
Other accrued expenses 564 236
143,708 121,026
The above carrying value of payables is equivalent to the fair value due to their short term maturity period and nature
as repayable on demand.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 65
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
16. BORROWINGS
Borrowings
31 Mar 2022
GBP
31 Mar 2021
GBP
Bank loans 1,003,624,894 1,044,682,529
Unamortised arrangement fees (8,996,296) (11,126,511)
994,628,598 1,033,556,018
Consisting of:
Senior loans ($1,034,806,533 at 31 March 2022, $1,152,560,258
at 31 March 2021) 787,643,883 836,218,717
Junior loans ($271,936,519 at 31 March 2022, $271,990,002 at 31 March 2021) 206,984,715 197,337,301
994,628,598 1,033,556,018
Borrowings
Non-current portion 912,906,773 936,474,385
Current portion (senior loans only) 81,721,825 97,081,633
994,628,598 1,033,556,018
Due to the period of non-payment of lease rentals by Thai Airways, the Asset Manager arranged with the lenders with
respect to the Thai aircraft that debt service for the Group can be limited to interest only on a three monthly basis. In the
period July – August 2021 the loan agreements were amended for the Group’s change in repayment schedules to the
original loan agreements, as well as entry into interest rate cap agreements for three of the Thai aircraft and an interest
rate swap with respect to one of the Thai aircraft (see note 18).
During the variable rent period (Power By the Hour) interest only payments will be made for 2 years and will then
transition back to fixed repayments. Also refer to note 3 for Modification of borrowings. No breaches or defaults occurred
in the current or prior period.
Loans with an outstanding balance of £782,882,967 (31 March 2021: £743,558,620) have fixed interest rates over the
term of the loans. Of this total, loans with an outstanding balance of £330,462,610 (31 March 2021: £362,258,686),
although having variable rate interest, also have associated interest rate derivative contracts issued by the lenders
in effect fixing the loan interest over the terms of the loans. Loans with an outstanding amount of £211,745,631
(31 March 2021: £289,997,398) at year end are variable rate (LIBOR) with an interest rate cap entered into during
the current period and each senior loan has a balloon capital payment on maturity.
In August 2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS 9, IAS 39, IFRS 7,
IFRS 4 and IFRS 16. With publication of the phase two amendments, the IASB has completed its work in response to IBOR
reform. The amendments provide temporary reliefs which address the financial reporting effects when an interbank
offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include a
practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform,
to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest. Inherent
in allowing the use of this practical expedient is the requirement that the transition from an IBOR benchmark rate to
an RFR takes place on an economically equivalent basis with no value transfer having occurred. The Group expects to
be able to utilize the practical expedient in future reporting periods, and the impact of LIBOR reform is therefore not
expected to be material. The Group is monitoring the position, and will make a final determination after the US Dollar
LIBOR replacement is published in June 2023.
66 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
16. BORROWINGS (continued)
All loans are taken in USD. The Company uses a combination of fixed and variable debt loan instruments. Maturity dates
are set at 12 years from delivery date or otherwise to match the corresponding lease end date. The weighted average
rate for the Company’s Senior loan is 3.3% and 5.2% for the Company’s Junior Loan.
The aggregate face value of the Company’s loans is £1,517,734,815 and the current aggregate carrying value is
£994,628,598.
Transaction costs of arranging the loans have been deducted from the carrying amount of the loans and will be
amortised using EIR over their respective lives.
17. SHARE CAPITAL
The Share Capital of the Company is represented by an unlimited number of redeemable ordinary shares of no par
value.
Issued
31 March 2022
Ordinary
Shares
31 March 2021
Ordinary
Shares
Opening balance 434,141,757 642,250,000
Shares issued — 5,975,000
Shares redeemed (86,828,274) (214,083,243)
Total number of shares as at year end
347,313,483 434,141,757
Issued
31 March 2022
Ordinary
Shares
GBP
31 March 2021
Ordinary
Shares
GBP
Ordinary Shares
Opening balance 550,982,781 647,638,697
Shares issued — 1,822,376
Shares redeemed (29,999,169) (98,478,292)
Total share capital 520,983,612 550,982,781
As announced on 1 December 2021, the Board of directors of the Company resolved on that date to redeem one
ordinary share for every five existing ordinary shares of shareholders on the register of members as at close of business
on 7 December 2021 (the “Redemption Record Date”). Accordingly, 86,828,274 ordinary shares were redeemed and
have now been cancelled.
The redemption proceeds due on the redemptions of these ordinary shares were paid on 15 December 2021.
The Company’s total issued Share capital at 31 March 2022 was 347,313,483 Shares (2021: 434,141,757 Shares),
none of which were held in treasury.
Therefore the total number of voting rights in issue was 347,313,483 (2021: 434,141,757).
Members holding Shares are entitled to receive, and participate in the following: any dividends out of income attributable
to the Shares; other distributions of the Company available for such purposes and resolved to be distributed in respect of
any accounting period; or other income or right to participate therein.
On winding up of the Company, shareholders are entitled to the surplus assets attributable to the Share class remaining
after payment of all the creditors of the Company.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 67
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
18. FINANCIAL INSTRUMENTS
The Group’s main financial instruments comprise:
(a) Cash and cash equivalents that arise directly from the Group’s operations; and
(b) Debt secured on non-current assets.
(c) Interest rate swaps and interest rate caps.
(d) Short term investments.
(e) Accrued income.
(f) Trade receivables.
(g) Payables.
The Group’s objective is to obtain income returns and a capital return for its Shareholders by acquiring, leasing and then
selling aircraft.
The following table details the categories of financial assets and liabilities held by the Group at the reporting date:
Financial assets
31 Mar 2022
GBP
31 Mar 2021
GBP
Cash and cash equivalents 101,644,952 118,060,583
Short term investments
20,770,215 22,789,120
Derivatives at fair value through profit and loss 23,249,102 —
Accrued income 21,111,849 13,045,326
Trade receivables* 16,133,558 12,697,401
182,909,677 166,592,430
*This amount represents rent due but not yet received and net of provision for impairment (see note 13) and is included within Receivables on the
Statement of Financial Position.
Financial liabilities
Payables 143,708 121,026
Derivatives at fair value through profit and loss — 4,939,122
Debt payable (excluding unamortised arrangement fees) 1,003,624,894 1,044,682,529
1,003,768,602 1,049,742,677
Fair value of financial instruments
The Company applies IFRS 13, ‘Fair value measurement’ and this standard requires the Company to price its financial
assets and liabilities using the price in the bid-ask spread that is most representative of fair value for both financial
assets and financial liabilities. An active market is a market in which transactions for the asset or liability take place with
sufficient frequency and volume to provide pricing information on an ongoing basis.
The level of the fair value hierarchy of an instrument is determined considering the inputs that are significant to the entire
measurement of such instrument and the level of the fair value hierarchy within those inputs are categorised.
The hierarchy is broken down into three levels based on the observability of inputs as follows:
Level 1: Quoted price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3: Valuation techniques using significant unobservable inputs.
68 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
18. FINANCIAL INSTRUMENTS (continued)
The interest rate swaps and interest rate caps are considered to be level 2 in the Fair Value Hierarchy. The fair value of
interest rate swaps are derived based on the valuation as provided by the respective bank with which the swap is held
which are based on mark-to-market values. The following tables show the Company’s financial assets and liabilities as
at 31 March 2022 based on the hierarchy set out in IFRS:
31 March 2022
Quoted Prices
in active
markets for
identical assets
(Level 1)
2022
GBP
Significant
other
observable
inputs
(Level 2)
2022
GBP
Significant
unobservable
inputs
(Level 3)
2022
GBP
Total
2022
GBP
Assets
Derivatives at fair value through profit and loss
Interest rate swaps — 12,394,141 — 12,394,141
Interest rate caps — 10,854,961 — 10,854,961
— 23,249,102 — 23,249,102
31 March 2021
Quoted Prices
in active
markets for
identical assets
(Level 1)
2021
GBP
Significant
other
observable
inputs
(Level 2)
2021
GBP
Significant
unobservable
inputs
(Level 3)
2021
GBP
Total
2021
GBP
Liabilities
Derivatives at fair value through profit and loss
Interest rate swaps — (4,939,122) — (4,939,122)
Derivative financial instruments
The following table shows the Company’s derivative position as at 31 March 2022 with a comparative table as at
31 March 2021:
31 March 2022 31 March 2021
Derivatives at fair value through profit and loss – USD Interest Rate Swaps 12,394,141 (4,939,122)
Notional amount (GBP) 326,945,241 281,449,885
Derivatives at fair value through profit and loss – USD Interest Rate Caps 10,854,961 —
Notional amount (GBP) – from 1 January 2023 242,208,200 —
The maturity dates range from 13 April 2028 to 26 January 2036 (31 March 2021: 13 April 2028 to 21 August 2028).
During the period the Group entered into an additional Interest Rate Swap with the lenders with respect to one of the
Thai aircraft.
As referred to in note 16 Borrowings, in respect of the other Thai aircraft the Group entered into interest rate cap
agreements on 30 July 2021. The premium paid by the Group was £3,647,627 in total during the current period,
with the effective date of the interest rate caps being 1 January 2023. The maturity dates range from 13 July 2029 to
22 September 2029.
The increase in the fair value of the Interest Rate Swaps for the year of £24,333,757 (31 March 2021: increase of
£7,844,744) is reflected in Finance Income and Finance Costs in note 11 and 12. The notional amount amortises in line
with the underlying liability.
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 69
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Group’s financial instruments are capital management risk, foreign currency risk, credit
risk, liquidity risk and interest rate risk. The Board regularly reviews and agrees policies for managing each of these risks
and these are summarised below:
(a) Capital management
The Group manages its capital to ensure its ability to continue as a going concern while maximising return to Shareholders
through the optimisation of debt and equity balances.
The capital structure of the Group consists of debt, which includes borrowings disclosed in note 16, cash and cash
equivalents and equity attributable to equity holders, comprising issued capital and retained earnings.
The Group’s Board of Directors reviews the capital structure on a bi-annual basis. Equity includes all capital and reserves
of the Company that are managed as capital.
On 4 January 2022, the directors of the Company declared an interim dividend of 1.25 pence per Redeemable
Ordinary Share in respect of the financial year ending 31 March 2022.
The Board decided to return to Shareholders £30 million on 1 December 2021 by way of a compulsory redemption
of one-fifth of the ordinary shares in the capital of the Company (being the redemption of approximately 86,828,274
Shares) at a redemption price of 34.55 pence per each redeemed share. Accordingly, 86,828,274 ordinary shares
were redeemed and have now been cancelled.
(b) Foreign currency risk
The Group endeavoured to mitigate the risk of foreign currency movements by matching its USD rentals with USD debt
to the extent necessary. The USD lease rentals should offset the USD payables on amortising debt on the loans, apart
from the loans with an outstanding balance of £211,745,631 (31 March 2021: £289,997,398) at year end which
have balloon capital payments on maturity (refer to note 16). The foreign exchange exposure in relation to the
bank loans (capital and interest) is thus largely hedged (as an economic hedge), apart from the foreign exchange
exposure unhedged in respect of the balloon capital portion of the loans with an outstanding balance of £211,745,631
(31 March 2021: £289,997,398) as at year end and the principal bullet repayment of the junior loans at maturity.
However the potential future value or the potential sale proceeds of the aircraft upon maturity of these junior and senior
loans, should reduce this foreign exchange risk.
Rental income received in USD is used to pay loan interest and regular capital repayments of debt (but excluding any
bullet or balloon repayment of principal), which are likewise denominated in US Dollars. USD lease rentals and loan
repayments are furthermore fixed at the outset of the Company’s life and are very similar in amount and timing save
for the repayment of bullet and balloon repayments of principal due on the final maturity of a loan to be paid out of
the proceeds of the sale, re-lease, refinancing or other disposition of the relevant aircraft.
70 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(b) Foreign currency risk (continued)
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date
are as follows:
31 Mar 2022
GBP
31 Mar 2021
GBP
Cash and cash equivalents (USD) – Asset 1,182,919 6,513,171
Cash and cash equivalents (GBP) – Asset 535,082 9,064,679
Short term investments (USD) – Asset 1,900,302 1,329,668
The USD/GBP exchange rate was 1.3138 at 31 March 2022 (1.3783 at 31 March 2021).
The following table details the Group’s sensitivity to a 10% (31 March 2021: 10%) appreciation in GBP against the US
dollar. 10% (31 March 2021: 10%) represents the Directors’ assessment of the reasonably possible change in foreign
exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and
adjusts their translation at the year-end for a 10% (31 March 2021: 10%) change in foreign currency rates. A positive
number below indicates an increase in profit and other equity where GBP strengthens 10% (31 March 2021: 10%)
against the USD. For a 10% weakening of the GBP against the USD, there would be a comparable but opposite impact
on the profit and other equity;
31 Mar 2022
GBP
31 Mar 2021
GBP
Consolidated Statement of Comprehensive Income 328,937 1,537,047
Change in value of assets 328,937 1,537,047
On the eventual sale of the Assets, the Group may be subject to foreign currency risk if the sale was made in a currency
other than USD. Transactions in similar assets are typically priced in USD.
(c) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group.
The credit risk on cash transactions are mitigated by transacting with counterparties that are regulated entities subject to
prudential supervision, or with high credit ratings assigned by international credit rating agencies.
The Group’s financial assets exposed to credit risk are as follows:
31 Mar 2022
GBP
31 Mar 2021
GBP
Cash and cash equivalents 101,644,952 118,060,583
Short term investments 20,770,215 22,789,120
Financial assets at fair value through profit and loss 23,249,102 —
Accrued income 21,111,849 13,045,326
Trade receivables 17,253,782 40,718,920
Expected credit loss (1,120,223) (28,021,519)
182,909,677 166,592,430
Surplus cash in the Group is held with Barclays, HSBC, Lloyds, RBSI and Bank of Ireland, which have credit ratings given
by Moody’s of A-1, P-1, P-1, P-1 and P-1 (31 March 2021: P-1, P-1, P-1, P-1 and P-2 ) respectively. Surplus cash in
the Subsidiaries is held in accounts with RBSI and Westpac, which have credit ratings given by Moody’s of P-1 and P-1
(31 March 2021: P-1 and P-1) respectively.
Short term investments relate to deposits held with Nordea Bank, Toronto Dominion Bank, UBS, Bank of Montreal, Lloyds,
Credit Suisse, Santander UK, Standard Chartered, HSBC, Cooperatieve Rabobank, BNP Paribas, Skandinaviska Enskilda,
Barclays and Canadian Imperial which all have the same credit rating given by Moody’s of P-1(31 March 2021: P-1).
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 71
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c) Credit Risk (continued)
The credit quality and risk of lease transactions with counterparty airlines is evaluated upon conception of the transaction.
In addition, ongoing updates as to the operational and financial stability of the airlines are provided by the Company’s
Asset Manager in its quarterly reports to the Company.
The COVID-19 pandemic has resulted in widespread restrictions on the ability of people to travel and such has had a
material negative effect on the airline sector, and by extension the aircraft leasing sector. The Group has received the
lease payments due from Emirates Airlines, the Groups principal lessee, in full and on time. Power by the hour lease
receipts from Thai Airlines have also been steadily increasing since they first became due in February 2021 and have
been received on time.
At the inception of each lease, the Company selected a lessee with a strong Statement of Financial Position and financial
outlook. The financial strength of Emirates and Thai Airways is regularly reviewed by the Directors and the Asset Manager.
In the case of materialisation of the risk related to the lessee counterparty creditworthiness and, the fixed rents receivable
under the leases may not be sufficient to meet the loan interest and regular capital repayments of debt scheduled
during the life of each loan and may not provide surplus income to pay for the Group’s expenses.
For the entities that have leases with Thai Airways, the Company has entered into amended lease agreements during
the year. PBH rent will be paid up until 31 December 2022 after which a fixed amount per aircraft is payable up until
the original expiry date of the lease agreements. The lease agreements were also extended by 72 months. During
the extended lease term an amount to be agreed in writing between the Lessee and the Lessor, will be paid. The
Company has arranged with the lenders an optimal solution that will facilitate servicing of the loan in line with the rent
received under the lease amendment documentation. The solution will allow for the Company to address its expenses
and its loan obligations with the income generated.
The Group’s most significant counterparties are Emirates and Thai Airways as lessees and providers of income. Both of
the Group’s lessees do not currently have a credit rating.
The Group has chosen to apply the simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. As at 31 March 2022 the expected lifetime losses on the rent
receivables has been reassessed by the Group. Apart from the receivables from Thai Airways, the remaining trade
receivables and receivables at amortised cost at period end have been settled after period end, with any identified
impairment losses on such assets not considered significant. The credit risk for Emirates has been assessed as low and no
impairment has been identified.
The Group has considered the effects of the expected credit loss on cash and is satisfied that no expected credit loss is
required as it is not considered material.
(d) Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in realising assets or otherwise raising funds to meet financial
commitments such as capital repayments of senior debt, as well as junior debt at the end of the lease. The Group’s main
financial commitments are its ongoing operating expenses and repayments on loans.
Ultimate responsibility for liquidity risk management rests with the Board of Directors.
Consideration will be given to any future use of accumulated rental income, if the Board considers that the Company
or any subsidiary will not be able to repay any balloon or bullet repayments of debt falling due through the sale,
refinancing or other disposition of an Asset.
72 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(d) Liquidity Risk (continued)
The table below details the residual contractual maturities of financial liabilities. The amounts below are contractual
undiscounted cash flows, including both the principal and interest payments, and will not agree directly to the amounts
recognised in the Statement of Financial Position:
31 March 2022
1-3
Months
GBP
3-12
Months
GBP
1-2
Years
GBP
2-5
Years
GBP
Over
5 Years
GBP
Total
GBP
Financial liabilities
Payables 143,708 — — — — 143,708
Borrowings 28,747,635 87,256,133 129,876,720 348,142,353 538,801,752 1,132,824,593
28,891,343 87,256,133 129,876,720 348,142,353 538,801,752 1,132,968,301
31 March 2021
1-3
Months
GBP
3-12
Months
GBP
1-2
Years
GBP
2-5
Years
GBP
Over
5 Years
GBP
Total
GBP
Financial
liabilities
Payables 121,026 — — — — 121,026
Derivatives at fair
value through profit
and loss — 2,273,332 2,629,017 1,254,890 (1,682,415) 4,474,824
Borrowings 33,391,205 100,095,307 133,819,517 404,518,729 549,348,769 1,221,173,527
33,512,231 102,368,639 136,448,534 405,773,619 547,666,354 1,225,769,377
(e) Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows. It is the risk that
fluctuations in market interest rates will result in a variation in deposit interest earned on bank deposits held by the Group
or on debt repayments.
The loans with an outstanding balance of £211,745,631 (31 March 2021: £289,997,398) as at year end entered into
in the current year are variable rate (with no associated interest rate swap contract issued by the lender to fix the loan
interest over the term of the loans) although the related rentals are also floating rate to match.
With the exception of the above-mentioned loans, the Group mitigates interest rate risk by fixing the interest rate
on the bank loans (as well as in respect of loans with an outstanding balance of £330,462,610 (31 March 2021:
£362,258,686 ) as at year end, which have an associated interest rate swap to fix the loan interest).
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 73
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(e) Interest Rate Risk (continued)
The following table details the Group’s exposure to interest rate risks:
31 March 2022
Variable
interest
GBP
Fixed
interest
GBP
Non-interest
Bearing
GBP
Total
GBP
Financial Assets
Short term investment — 20,770,215 — 20,770,215
Cash and cash equivalents and receivables 101,644,952 — 16,133,558 117,778,510
Total Financial Assets 101,644,952 20,770,215 16,133,558 138,548,725
Financial Liabilities
Accrued expenses and reserves — — 143,708 143,708
Security deposit liability — — — —
Borrowings 542,208,241 452,420,357 — 994,628,598
Total Financial Liabilities 542,208,241 452,420,357 143,708 994,772,306
Effect of derivatives held for risk management 569,027,249
Total interest sensitivity gap 128,463,960 (431,650,142)
31 March 2021
Variable
interest
GBP
Fixed
interest
GBP
Non-interest
Bearing
GBP
Total
GBP
Financial Assets
Short term investment — 22,789,120 — 22,789,120
Cash and cash equivalents and receivables 118,060,583 — 8,426,167 126,486,750
Total Financial Assets 118,060,583 22,789,120 8,426,167 149,275,870
Financial Liabilities
Accrued expenses and reserves — — 121,026 121,026
Security deposit liability — — — —
Borrowings 652,256,084 381,299,934 — 1,033,556,018
Total Financial Liabilities 652,256,084 381,299,934 121,026 1,033,677,044
Effect of derivatives held for risk management 281,449,885
Total interest sensitivity gap (252,745,616) (358,510,814)
If a reasonable possible change in interest rates had been 100 basis points (2021: 100 basis points) higher throughout
the period and all other variables were held constant, the Group’s net assets attributable to shareholders as at 31 March
2022 would have been £1,284,640 (31 March 2021: £2,527,456) greater due to an increase in the amount of
interest receivable on the bank balances.
If a reasonable possible change in interest rates had been 100 basis points (2021: 100 basis points) lower throughout
the period and all other variables were held constant, the Group’s net assets attributable to shareholders as at 31 March
2022 would have been £1,284,640 (31 March 2021: £2,527,456) lower due to a decrease in the amount of interest
receivable on the bank balances.
20. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, the Company has no ultimate controlling party as the Company does not have any
shareholder that holds greater than 10% of the issued share capital of the Company.
74 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
21. CASH AND CASH EQUIVALENTS
31 March 2022
GBP
31 March 2021
GBP
Bank balances 43,289,439 63,126,109
Notice accounts 58,355,513 54,934,474
101,644,952 118,060,583
The notice accounts are secured cash deposits in respect of the maintenance provisions.
22. MAINTENANCE PROVISIONS
31 March 2022
GBP
31 March 2021
GBP
Balance at 1 April 54,934,474 59,444,834
Billings 719,471 1,520,757
Translation adjustment on foreign operations 2,701,568 (6,031,117)
Balance at 31 March 58,355,513 54,934,474
The maintenance provision liabilities are held in relation to funds received as at the year-end for the timely and
faithful performance of the lessees’ obligations under the lease agreements for the four A350-900 aircraft. Amounts
accumulated in the maintenance provisions will be repaid only as re-imbursements for actual maintenance expenses
incurred by the lessee. Refer to note 2(k) for accounting policies adopted on the maintenance provisions.
The table below details the expected utilisation of maintenance provisions.
1-3 Months
GBP
3-12 Months
GBP
1-2 Years
GBP
2-5 Years
GBP
Over 5 Years
GBP
Total
GBP
31 March 2022 — 139,534 36,582,188 10,409,891 11,223,900 58,355,513
31 March 2021 — — 44,102,813 133,004 10,698,657 54,934,474
23. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
31 March 2022
Borrowings
GBP
Balance at 1 April 2021 1,033,556,018
Repayments of capital on senior loans (85,570,355)
Repayments of capital on junior loans —
Payments of interest on senior loans (25,768,010)
Payments of interest on junior loans (10,089,604)
Add back: payments of interest on senior loans 25,768,010
Add back: payments of interest on junior loans 10,089,604
Movement in interest accruals 612,074
Amortisation of debt arrangements costs 2,587,140
Loan modifications (2,727,655)
Translation adjustment on foreign operations 46,171,376
Balance at 31 March 2022 994,628,598
Notes to the Consolidated
Financial Statements
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 75
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
23. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES (continued)
31 March 2021
Borrowings
GBP
Balance at 1 April 2020 1,233,244,765
Repayments of capital on senior loans (84,500,698)
Repayments of capital on junior loans —
Payments of interest on senior loans (32,706,583)
Payments of interest on junior loans (11,085,646)
Add back: payments of interest on senior loans 32,706,583
Add back: payments of interest on junior loans 11,085,646
Movement in interest accruals (1,678,764)
Amortisation of debt arrangements costs 1,640,301
Translation adjustment on foreign operations (115,149,586)
Balance at 31 March 2021 1,033,556,018
24. TAX
Irish tax is charged at 12.5% on each of the AA4P Leasing Ireland Limited and AA4P Leasing Ireland 2 Limited subsidiaries.
The Company and the Guernsey Subsidiaries have been assessed for tax at the Guernsey standard rate of 0%. Since
AA4P Leasing Ireland Limited and AA4P Leasing Ireland 2 Limited are Irish tax resident trading companies, they will not
be subject to Guernsey tax, but their net lease rental income earned (after tax deductible expenditure) will be taxable
as trading income at 12.5% under Irish tax regulations.
No deferred tax asset has been raised on the tax losses of AA4P Leasing Ireland 2 Limited in the current period.
25. ACCRUED AND DEFERRED INCOME
The accrued and deferred income represents the difference between actual payments received in respect of the lease
income (including some received in full upfront) and the amount to be accounted for in the accounting records on a
straight line basis over the lease terms. The Directors considered the recoverability, including the accrued income relating
to the aircraft leased to Thai airways, and concluded that these are expected to be recovered in full and concluded no
impairment is required. The accrued and deferred income consists of the following:
31 March 2022
GBP
31 March 2021
GBP
Accrued income 21,111,849 13,045,326
Deferred income (25,963,738) (31,791,945)
76 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Notes to the Consolidated Financial Statements (continued)
for the year ended 31 March 2022
26. RELATED PARTY TRANSACTIONS AND SIGNIFICANT CONTRACTS
Significant contracts
Amedeo Limited (“Amedeo”) is the Group’s Asset Manager.
During the year, the Group incurred £2,873,772 (31 March 2021: £4,420,130) of fees with Amedeo, of which £
Nil (31 March 2021: £Nil) was outstanding to this related party at 31 March 2021. This fee is included under “Asset
management fee” in note 6.
Following the disposal of the “IPO Assets” (being collectively the first four assets purchased), the Company shall pay to
Amedeo disposition fees calculated as detailed in the prospectus, which can be found on the Group’s website. Fees
range from 1.75% to 3% of the sale value. The fee for the remaining eight aircraft is 3%.
Amedeo Services (UK) Limited (“Amedeo Services”) is the Group’s Liaison and Administration Oversight Agent (the
agent is appointed to assist with the purchase of the aircraft, the arrangement of suitable equity and debt finance and
the negotiation and documentation of the lease and financing contracts).
During the year, the Group incurred £11,564 (31 March 2021: £11,279) of fees with Amedeo Services. As at 31 March
2021 £Nil (31 March 2021: £Nil) was outstanding. This fee is included under “Asset management fee” in note 6.
JTC Registrars Limited (“JTCRL”) is the Company’s registrar, transfer agent and paying agent. During the year the Group
incurred £26,657 (31 March 2021: £18,656) of costs with JTCRL, of which £1,905 (31 March 2021: £1,025) was
outstanding as at 31 March 2022.
Related parties
The Board are considered to be key management personnel. Refer to the Board of Directors on pages 16 to 17. Refer
to Note 7 where Directors’ remuneration has been disclosed.
27. SEGMENT INFORMATION
The Directors are of the opinion that the Group is engaged in a single segment of business, being acquiring, leasing and
selling aircraft. The geographical analysis of the Group is based on the location of the lessee.
Geographical analysis
31 March 2022
Middle East
GBP
Asia Pacific
GBP
Total
GBP
Rental income 145,816,909 44,216,632 190,033,541
Net book value – aircraft 864,980,722 344,729,029 1,209,709,751
31 March 2021
Middle East
GBP
Asia Pacific
GBP
Total
GBP
Rental income 150,799,216 50,757,344 201,374,560
Net book value – aircraft 924,201,304 346,110,526 1,270,311,870
Revenue from the Group’s country of domicile, Guernsey, was £Nil (2021: £Nil).
28. SUBSEQUENT EVENTS
On 11 April 2022 the board announced an interim dividend of 1.125 pence per ordinary share. The dividend was paid
on 27 April 2022 to shareholder on register as at the close of business on 22 April 2022.
As of May 2022, Emirates will no longer operate lease aircraft in Russia, due to restrictions imposed upon their insurance
policy, but they may continue to operate aircraft they own. Thai Airways is not operating to Russia.
On 5 July 2022 the board announced an interim dividend of 1.25 pence per ordinary share. The dividend will be paid
on or around 5 August 2022 to shareholder on register as at the close of business on 15 July 2022.
There were no other material subsequent events since the year end and up to the date of approval of the consolidated
financial statements.
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 77
Key Advisers and Contact Information
Directors
Robin Hallam (Chairman)
David Gelber (Senior Independent Director)
Laurence Barron
Mary Gavigan
Steve Le Page
Contact details
Robin.Hallam@aa4plus.com
David.Gelber@aa4plus.com
Laurence.Barron@aa4plus.com
mary.gavigan@aa4plus.com
steve.lepage@aa4plus.com
Registered Office of the Company
Telephone: +44 (0)1481 702400
Asset Manager
Amedeo Limited
The Oval
Shelbourne Road
Ballsbridge
Dublin 4
Ireland
Liaison and Administration Oversight Agent
Amedeo Services (UK) Limited
29-30 Cornhill
London
England EC3V 3NF
Administrator and Secretary
JTC Fund Solutions (Guernsey) Limited
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey GY1 2HT
Telephone: +44 (0)1481 702400
Corporate Broker
Liberum Capital Limited
Ropemaker Place
25 Ropemaker Street
London, EC2Y 9LY
Telephone: +44 (0)20 3100 2000
Registrar, Paying Agent and Transfer Agent
Link Market Services (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey GY2 4LH
Telephone: +44 (0)371 664 0300
UK Transfer Agent
Link Market Services Limited
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds, LS1 4DL
Auditor
KPMG
1 Harbourmaster Place
IFSC
Dublin 1
D01 F6F5
Ireland
Advocates to the Company (as to Guernsey
law)
Carey Olsen
Carey House
Les Banques
St Peter Port
Guernsey GY1 4BZ
78 Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited)
Key Advisers and Contact Information (continued)
Solicitors to the Company (as to English law)
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London
England
EC2A 2EG
Solicitors to the Company (as to asset acquisition, financing
and leasing documentation)
Clifford Chance LLP
10 Upper Bank Street
London
England
E14 5JJ
Norton Rose Fulbright LLP
3 More London Riverside
London
England
SE1 2AQ
Amedeo Air Four Plus Limited Consolidated Annual Financial Report (audited) 79
GLOSSARY
DEFINED TERMS
The following list of defined terms is not intended to be an exhaustive list of definitions, but provide a list of the defined
terms used in this report.
Administrator JTC Fund Solutions (Guernsey) Limited
AIC The Association of Investment Companies
AIC Code The AIC Code of Corporate Governance
Articles The Company’s articles of incorporation
ASKs Available seat kilometres
Asset Manager Amedeo Limited
Asset(s) Aircraft owned by the Group
ATAG The Air Transport Group
Board Board of directors of the Company
Company Amedeo Air Four Plus Limited
Corporate Adviser Liberum Capital Limited
DGTRs The FCA’s Disclosure Guidance and Transparency Rules
ESG Environmental, social and governance
Etihad Etihad Airways PJSC
FCA Financial Conduct Authority
GFSC Guernsey Financial Services Commission
Group The Company and its wholly owned subsidiaries
IAS International Accounting Standard
IATA International Air Transport Association
IEV Independent Expert Valuers
IFRS International Financial Reporting Standards
ISTAT International Society of Transport Aircraft Trading
Law The Companies (Guernsey) Law, 2008, as amended
Registrar JTC Registrars Limited
RPKs Revenue passenger kilometres
Secretary JTC Fund Solutions (Guernsey) Limited
SFS Specialist Fund Segment of the London Stock Exchange’s Main Market
Shares Redeemable ordinary shares
SID Senior Independent Director
Thai Airways Thai Airways International Public Company Limited
UK Code The UK Corporate Governance Code, 2018
