air partner annual report and accounts onsulting c & training division delivered 10% of group...

TRANSFORMING THE SKIES

Annual Report and Accounts 2017

Performance highlights

Acquisitions support long-term growth plans

• Underlyingprofitbeforetaxof£5.1m,anincreaseof17.2%

• CommercialJetsperformedstronglyinEuropeandUS

• RecordJetCardperformancewithutilisationup41%

• Consulting&Trainingdivisiondelivered10%ofGroupunderlyingprofitbeforetax

• Clearlong-termstrategyinplace

Gross transaction value

2.4%2017: £215.8m2016: £210.8m

Gross profit

16.3%2017: £31.7m2016: £27.3m

Underlying profit before tax

17.2%2017: £5.1m2016: £4.3m

Statutory profit before tax

38.6%2017: £4.3m2016: £3.1m

Underlying basic EPS

10.2%2017: 6.5p2016: 5.9p

Basic EPS

45.9%2017: 5.4p2016: 3.7p

Final dividend

6.0%2017: 3.6p2016: 3.4p

Total dividend

7.2%2017: 5.2p2016: 4.9p

Contents

Strategic report

01 Overview

04 Chairman’sstatement

05 Explaining our business

06 Groupataglance

08 Marketoverview

10 Businessmodelandstrategy

12 People

14 Technology

15 Expandingourservices

18 Principalrisksanduncertainties

23 2017 performance

24 ChiefExecutive’sreview

28 Financialreview

30 Keyperformanceindicators

32 Divisionalreviews

32 CommercialJets

34 PrivateJets

36 Freight

38 Consulting&Training

Corporate governance

42 Boardofdirectorsandseniormanagement

44 Chairman’sintroductiontogovernance

45 Corporategovernancereport

50 NominationCommitteereport

51 AuditandRiskCommitteereport

54 Directors’remunerationreport

66 Directors’report

69 Directors’responsibilitystatement

Financial statements

72 Independentauditor’sreport

80 Financialstatements

86 Notestothefinancialstatements

Strategic reportCorporate governance


1Air Partner plc | Annual Report and Accounts 2017

Wehaveexpandedbeyondourcorebusinessofbrokeringcharteredflightsforprivateandcommercialjetsandfreight.WehaveincorporatedaircraftremarketingandsafetyconsultancyandtrainingthroughouracquisitionsofCabotAviationandBainesSimmons,andhaverecentlyaddedthedynamicskillsofClockworkResearchwithitsinnovativeapproachtofatiguemanagement.TheGroupremainscommittedtoexpandingtherangeofservicesweoffertoourcustomersasweaimtofulfilourlong-termaims.Alongsidethis,wearereconfiguringandreinvigoratingourbrandaswellasinvestinginourinfrastructuretofacilitatethischange.

Attheheartofthisarepeople:ourcustomersandourstaff.Wecontinuetoattractandretainthebestpeople–thosecapableof,anddedicatedto,providingourcustomerswiththehighestlevelsofknowledge,expertiseandcustomerservice.Thiscreatesvaluebothforourshareholdersandourstakeholdersandgivespurposeanddistinctivenesstoourbrand.

Movinginto2017andbeyond,wearecreatingtheplatformsandtheinfrastructurethatareleadingtheGroupsteadilytowardsgreatervisibility,higherearningscapacityandtheabilitytocreatelong-termvalue.

AirPartnerisonajourney:anexcitingjourneyoftransformationtobecomeaworld-classaviationservicesgroup.Somethingtobereckonedwithintheworldofaviation.

Overview

2 Air Partner plc |AnnualReportandAccounts2017

Overview

Transforming the skies

Seldom,sinceourfoundationin1961,hastherebeenayearwithmorepoliticalupheavalandensuingeconomicuncertaintythan2016.Buttheskiesareincreasinglybusy,andourbalanceofservicesmeanswehavemuchtooffer.

2016certainlyqualifiesforthedescription‘interestingtimes’.Thechallengeswehaveallfacedthisyeararesufficientlywellknownnottohavetoitemisethemhere.YettheGrouphassteadfastlyprogressedinsuch‘interestingtimes’andissettocontinuetodoso.

AirPartner,withourbalanceofaircraftcharterandconsultingandtrainingservices,isinmanywaysconfiguredtocounter

theupsanddownsofworldevents.Economicuncertaintymayposechallengestoourstandardbrokingbusiness,butwecanbalancethatbymeetingout-of-the-ordinarycommercialrequirements,helpingsupportdisasterreliefand,ofcourse,offeringthesafetymanagementserviceswithoutwhichaeroplanescouldnotfly.Ourfocusonofferingcustomersarangeofservices,allovertheworld,ishelpingensurethatingoodtimesandbad,AirPartnerisindemand.

“�We’ve�had�a�great�year�–�being�part�of�a�plc�gives�us�greater�credibility.”��TONY WHITTY, Managing Director, Air Partner Remarketing (formerly Cabot Aviation)

“�2016�has�been�a�year�of�delivering�a�profitable�first�full�year�with�the�Group.”��JUSTIN SCARBOROUGH, Interim Managing Director, Baines Simmons

“�Most�of�our�people’s�raison�d’être�is�to�save�lives.”��BOB SIMMONS, Founder, Baines Simmons

“�We’re�developing�new�ways�of�delivering�excellent�experience�for�our�customers�–�and�repositioning�our�brand�to�highlight�our�strengths.”��JULIA TIMMS, Group Marketing Director

“�We’re�succeeding�in�maintaining�our�unique�culture�–�always�a�challenge�when�you’re�integrating�new�businesses,�but�essential�for�our�long-term�success.”��RACHEL THRIPP, Group Head of Human Resources

“�We�have�really�strengthened�the�IT�infrastructure�of�Air�Partner�this�year.”��LEE PYLE, Group Head of Technology



3Air Partner plc | Annual Report and Accounts 2017 3Air Partner plc |AnnualReportandAccounts2017

“�It’s�been�a�good�year,�and�the�strength�of�the�financial�contribution�from�our�newly�acquired�businesses�is�proving�our�strategy.”��MARK BRIFFA, Chief Executive Officer

“�A�highlight�of�2016,�was�flying�the�Hillary�Clinton�campaign�and�building�our�presence�in�the�US.”��RICHARD SMITH, Head of Product, Air Partner Broking

“�Our�broking�business�has�done�really�well�in�a�challenging�market�and�against�a�challenging�political�backdrop.”��NEIL MORRIS, Chief Financial Officer

4 Air Partner plc | Annual Report and Accounts 2017

Overview

Chairman’s statement

TheGrouphasaclearlong-termstrategytobecomeaworld-classglobalaviationservicesgroup.Greatprogresshasbeenmadesincewebeganthistransformationin2014,andtheperiodunderreviewhasbeennoexception.Indeed,ithasperhapsbeenthemostactiveandsuccessfulperiodwehaveexperiencedduringmy12yearsatAirPartner.

Iampleasedtoreportastrongperformancefortheyearended31January2017.Grossprofitroseby16.3%to£31.7m,underlyingprofitbeforetaxincreasedby17.2%to£5.1mandreportedprofitbeforetaxby38.6%to£4.3m.

AsIhavementionedinpriorreports,in2014wetookathoughtfulandcriticallookatourindustrytoevaluatenotonlyourownmarketposition,butthechallengesandopportunitiesthatlieahead.Aspartofthatprocess,weundertookanextensiveprogrammeofengagementwithourstaffandcustomerstounderstandnotonlytheirneeds,buttheirexpectationsofus.Nostonewasleftunturnedandwelookedfarintothefuturetoassesswhatwewantedtobe,wherewewantedtobe,andjustasimportantly,wherewedidnotwanttobe.

Weformedalong-termstrategythatplacesthecustomerfirstandhasthepowertotransformourbusinessmodel,reducingvolatilityandimprovingtheoverallqualityofourearnings.Thisyear,theresultsofthislong-termstrategyarebeginningtoemerge.

Maintaining a progressive dividendWeareproposingafinaldividendof3.6p,takingthefullyeardividendto5.2p,anincreaseof7.2%andequivalentto1.3timesdividendcover.Ourpolicyistotargetcoverbetween1.5and2.0timesunderlyingearningspershare.Coverthisyearisbelowthatrange,duetoa£0.4mprioryear,one-offadjustmentfortax.SubjecttoapprovalattheAGMon28June2017,weexpecttopaythefinaldividendon5Julytothoseshareholdersontheregisteratcloseofbusinesson9June.

Board changesDuringtheperiod,wecompletedthealignmentofourBoardtoreflectthedirectionofourlong-termstrategy.Accordingly,wewelcomedAmandaWillsCBE,ShaunSmithandRichardJacksontotheBoard,effective20April,1Mayand8September2016respectively.Havingoverseenthesechanges,weannouncedon2February2017thatIwouldbestandingdownasChairmanatthenextAGMon28June2017after12yearsasanon-executivedirector.Iamdelightedthat,followingaformalselectionprocess,PeterSaunders,ourcurrentSeniorIndependentDirector,willreplacemeasChairmaneffectivefromthatdate,subjecttohisre-electionattheAGM.PeterhasplayedanimportantroleinourtransformationandItrustwillcontinuetobothsupportandchallengetheExecutiveteamintheyearsahead.

Thank youAirPartnerisauniquecompany.Ourplcstatusisakeystrength:itofferscustomers,employeesandshareholders–indeed,allourstakeholders–reassurancethatweoperatetothehigheststandardsofgovernanceandethics,andaretransparentinallourfinancesandbusinessdealings.OverthepastfiveyearssinceIbecameChairman,ithasbeenmyprivilegetowitnessthedevelopmentofAirPartnerfromapurebrokingbusiness,tothevibrant,diverseaviationservicescompanyitistoday.Peopleareattheheartofourbusiness,anditremainsformetothankmycolleaguesontheBoardandacrossthewholeGroupfortheirsupportandhardwork,notonlyindeliveringagreatsetofresultsforourshareholdersthisyear,butalsoincreatingastrongplatformforgrowth.Iwishyoualleverysuccessinto2017andbeyond.

Richard Everitt Chairman



5Air Partner plc |AnnualReportandAccounts2017

Explainingour business


Explaining our business

Group at a glance

AirPartnerisaglobalaviationcharterspecialistandanexpertinsafetyconsultingandtraining.Ontheaircraftcharterside,clientsincludecorporatecustomers(suchassportsteamsandtouroperators),governmentsandhighnetworthindividuals,whorequireourskillsandexpertisetosolveoftencomplexaviationrequirements.

ForourConsulting&Trainingbusiness,clientsincludeairlines,defenceorganisationsandaviationauthoritiesglobally.

257 aviationprofessionals

24/7 service

20 countries

55 yearsofavaitionexperience

4 continents

Onlypubliclylistedaircharterbrokerandsafetyconsultancy




B ROK I NG 82%

CON S U LTI N G & TRAI N I NG 18%

COMMERCIAL JETS

PRIVATE JETSFR

EIGH

T

CLOCKW

ORK

RES

EAR

CH

57%

BA

INE

S S

IMM

ON

S100%

4%

39%

Broking

Commercial Jets 57%Aircraftcharter(20-500passengers)forgovernments,corporates,sportsandentertainmentteams,industrial,manufacturingcustomersandtouroperators.AlsoincludesAirPartnerRemarketingandshort-termaircraftleasingservices.

Private Jets 39%Smallaircraftandjetscharter(upto19passengers)forcorporates,highnetworthindividualsandgovernments,forbothbusinessandleisure.BespokeserviceandprepaidJetCardproductforaccesstoprivatejets.

Freight 4%Cargotransportaircraftcharterandpart-charterfromLearjetstothegiantAntonov225forregularandbespokerequirements,egemergencyaiddrops,time-criticaldoor-to-doorfreightdeliveryandon-boardcouriers.

Consulting & Training

Baines Simmons 100%World-leadingaviationsafetyconsultingandtrainingservicesinregulation,complianceandsafetymanagementforcivilanddefenceaviationorganisations.

Clockwork Research(acquired December 2016)Fatigueriskmanagementconsultingservicesprincipallyforaviationcustomers,aswellasothersafety-criticaloperatingenvironments,suchastheoilandgasandminingsectors.

Percentagesrepresentthatcompany’sorproduct’sproportionofthedivision’soverallgrossproft.ClockworkResearchwasacquiredjustbeforetheyearend,soitscontributionwasnegligible.



Market overview

Wehavebeeninaviationservicesformorethan55years.Themarket–bothaviationandthewidermarket–haschangedsignificantlyduringthattime.WithahistoryinaircraftbrokingcentredontheUK,ourvisionistobecomeaworld-classaviationservicesgroup.

A steadily growing global aviation marketIntheshortterm,theglobalaviationmarketcanbeadverselyaffectedbygeo-politicalissuesor‘actsofGod’,butthelonger-termtrendispositive.TheInternationalAirTransportAssociation(IATA)predictspassengertraffictoincreaseto7.2billionpassengersin2035,aneardoublingofthe3.8billionairtravellersin20161.

Whilethisassumptionisbasedontradeliberalisationgatheringpace,evenamorepessimisticassumptionbasedonincreasedprotectionismpredicts5.8billionpassengersin2035.Themessageisclear:theaviationmarketisgrowingandasitdoesso,thedemandforaviationserviceswillalsoincrease.Wearethereforeaddingnewservicelinestocomplementourcorebrokingoffering,strengtheningourcustomerpropositionandextendingourglobalreach.

Our unique position in the marketInanindustrywhereassetownershipiscommonplace,AirPartner’sstrategyisdifferent.Wedon’townaircraft–rather,ourmainassetsareourpeople,brandsandreputation(seeourbusinessmodelonpages10-11),andweaimtogrowonthisbasis.

Meetingourclients’needsisattheheartofeverythingwedo.Byofferingmoreservicesinthetwobroadcategoriesofbrokingandconsulting/training,notonlydoweincreasethechanceofretainingourcustomers,wehavetheopportunitytocross-sellservicestostrengthenourrelationshipsfurther.

EnvironmentOurowndirectcarbonfootprintisnegligible,howeverweareinvolvedinanindustrythatmakesasmallbutsignificantcontributiontoman-madecarbondioxideemissions.Accordingly,wehaveinvestigatedtheenvironmentalperformanceoftheaircrafttypesweofferand,uniquelyamongourcompetitors,wesharethisdatawithourcustomers,rightfromthestart,sotheycanfactorthisintotheirchoices.Unlikeotherproviderswhomay,oroftenmaynot,offerjustastandardcarbonoffsetschemebasedontheirownlimitedfleet(whichcouldbeill-suitedtothemissioninanycase),AirPartneroffersatotallybespokesolutioneverytime.Thenweoffertoneutralisethecalculatedimpactoftheseemissions.

The market for brokingAtAirPartner,brokingencompassescommercialjets,privatejets,freight,emergencyplanning(ourbespokedisasterresponseservice)andaircraftremarketing.Theglobalairchartermarketishighlyfragmented,withlowbarrierstoentryandlittleornoregulation.Otherthandirectcompetitors,therearealsocompetitorsofferingsimilarserviceswithadifferentbusinessmodel,particularlyintheprivatejetsector(egfractionalownership,charteroftheirownaircraftorcharterofaircraftundertheirmanagement).Othercompetitorsaimtousetechnologytocreateaseamlessend-to-endbookingprocess,seeingthisasanadvantage.

02

03

04

05

06

07

08

09

10

11

bn

2015

Optimistic

2020 2025 2030 2035

Base case

Pessimistic

Passenger traffic growth scenarios (Paxbillion)

1.Source:IATA.




Weaimtodifferentiateourselvesasfollows:• service:weofferourcustomersanunrivalledservice,

whetherthisbeaproductthatprovidesbetterservicelevels,suchasJetCard,oracompleteservicethatourcompetitorscannotoffer,suchasacharterservicewithasafetyauditofthecarrier

• reputation:inamarketwherecompetitorscomeandgo,our55-yearheritagedemonstratesstability,safety,qualityandfinancialperformance

• our people:inourexperience,technologycannotreplacepeople.Weinvestintechnologytoimprovethecustomerexperienceanddriveefficiencies,butthekeytooursuccessisagenuine24/7/365servicebyouraviationexpertsforcustomerswhowantabespoke,personalservice.

Materialgeopoliticaleventsand/ornaturaldisasterscancauseshort-termdownturnsindemandforaircraftcharter(forexample,9/11ortheEyjafjallajökullvolcaniceruption),althoughourEmergencyPlanningDivisionisoftencalledonatsuchtimes,forexample,providingaidtoadisasterzone,orarrangingtrooptransfersorevacuationsintimesofwar.Moreover,ourvisiontosupplyagreaterrangeofservicesacrossabroadergeographicareashouldhelpmitigatelocalchallenges.

The market for consulting and trainingThepaceofgrowthoftheaviationindustry,busierskies,morecompetition,demandsforhigherfleetutilisationandgreateroperationalcapabilityareoccurringagainstabackdropofzerotoleranceofaccidents.Thisisincreasingpressureonsafetyresultsandmanagement.Furthermore,theaviationsafetyworldhasevolvedoverthepastfiveyearsfromonewhereitseekstounderstandhowsafetymanagementsystems(SMS)worktosecuringeffectiveperformance.

Unlikebroking,consultingandtrainingservicesexistinahighlyregulatedenvironment,andoneinwhichregulationsareconstantlychanging.Indeed,itisthischangeandconstantdesiretoimprovestandardsthatunderpinsthebusinessmodelsofbothBainesSimmonsandClockworkResearch(seepage10).

Civil aviationIn2013,globalregulatorsbegantomovetowardsperformance-basedregulation(PBR).ThisisnowstandardpracticefortheInternationalCivilAviationOrganization(ICAO)andtheEuropeanAviationSafetyAgency(EASA).BymovingtoaPBRapproach,regulatorsareaimingtoembedarisk-basedapproachtosafety,whetherthisbeSMSorfatigueriskmanagement.ThismoveisprovidingopportunitiesforbothBainesSimmonsandClockworkResearchtotaketheirservicesbeyondtheUKandEuropetoAsia,AustraliaandNorthAmerica.

DefenceInthedefencemarket,bodiessuchastheEuropeanDefenceAgency(EDA)havecommittedtotheprinciplesofharmonisationofairworthinessrequirements.Throughitslong-termrelationshipwithvariousmilitaryauthoritiesaroundtheworld,BainesSimmonsiswellpositionedtobenefitfromtheopportunitiesthatwillarise.

Forecast of numbers and value of aircraft in operation2

Aeroplanes in service2015 to 2035

Demand by size2016 to2035

2015 2035New

aeroplanesValue($bn)

Largewidebody 740 700 530 220Mediumwidebody 1,640 3,690 3,470 1,250Smallwidebody 2,660 6,060 5,100 1,350Singleaisle 14,870 32,280 28,140 3,000Regionaljets 2,600 2,510 2,380 110Total 22,510 45,240 39,620 5,930

2.Source:Boeing.



Business model and strategy

Tocreatelong-term,sustainablevalueforshareholders,wearedevelopingatotalofferforcustomersintheairchartermarketwhowillchooseusbecauseweprovidethebestinquality,safetyandservice.Growthbyacquisitioniscoretoourstrategy.

What we offer Our customers

Aircraft charterAtthecoreofourbusinessmodel,providingtailoredservicesformanyyears,leveragingourrelationshipswiththemajorityofaircraftoperatorsandenablingustoselecttheaircraftappropriateforourcustomers’needs.Profitislargelygeneratedthroughcommissions,althoughsomefeeincomeisgeneratedthroughtheprovisionofprofessionalservicesor,inthecaseofourEmergencyPlanningDivision,subscriptions.

Charter customersCorporatecustomers(includingsportsteamsandtouroperators),governments,andhighnetworthindividuals,whorequireourskillsandexpertisetosolveoftencomplexaviationrequirements.Projectsrangefromone-offcharterstomuchlongerormorecomplicatedprojectsspanningmanymonthsormultiplerotations.

Aircraft remarketingAir Partner Remarketing(formerlyCabotAviation)providescomprehensiveremarketingprogrammesacrosstheglobeforalltypesofcommercialandcorporateaircraft.Projectsinvolvesellingorleasingaircraft;sellingaircraftwithleasesattachedorarrangingsaleandleasebacks;acquisitionmandatesforlessorsandairlines;wetleasing;consultancyandaircrafttechnicalservices.Profitislargelygeneratedthroughcommissionsattachedtomandatesaswellasthroughretainers.

Remarketing customersAwiderangeofinternationalcustomersdrawnfromtheairlineandfinancialservicessectors,includingbanks,lessorsandliquidators.

Consulting and trainingBaines Simmonsisaworldleaderinaviationsafetyconsulting,specialisinginaviationregulation,complianceandsafetymanagementandpartnering.Throughourbespokeconsultancyprogrammesandpracticaltrainingservices,wehelptobridgegapsofknowledge,competence,skillsandunderstandingbetweenregulatedorganisationsandtheiremployees,andregulatoryauthoritiesandtheirinspectors.OuroutsourcingoperationsaremostlycoveredbytheserviceweprovidetosupporttheIsleofManAircraftRegistry.

Clockwork ResearchacquiredinDecember2016,isaworld-leadingfatigueriskmanagementconsultancythatdeliversinnovativesolutionsforclientsacrossvarioussectorsoftheaviationindustry.ClockworkResearch’sapproachisbasedonascientificunderstandingoffatigueonsafety-criticaloperations.

Consulting and training customersCorecustomersincludedefence,commercialairlines,privatejetoperatorsandancillaryserviceproviderstotheaviationindustry(forexampleOEMs).

Strategic priorities > Readmoreonpage30

• Optimise our core Thissummarisesouraimtoachievemorewiththeresourceswecurrentlyemploy,whetherthisbetoincreaseefficienciesatanoperatinglevelortogrowgrossprofitthroughour‘CustomerFirst’initiative,asdescribedtotheright.

• Enhance and extend our offer AirPartner’saimistobecomeaglobalaviationservicesprovider.Tomitigatetheinherentrisksinourcorebrokingbusiness,wethereforehaveembarkedonastrategyofincreasingtherangeofservicestheGroupprovides.

• Creating value by putting our customers first During2015,webeganourCustomerFirstprogramme.Ultimately,itwillenableustoprovideanunrivalledcustomerexperience,enhancingourbrandanddifferentiatingus.Ourbrand,andpeoplestrategiesaimtoensurethatCustomerFirstisdeeplyembeddedineverythingwedo,whileourtechnologystrategywillprovidetheinfrastructuretorolloutthisapproachquicklytonewservices.




What differentiates us

Our peopleWhicheverpartofthebusinesstheyworkin,ourpeoplearetheoneswhodeliverthehigh-qualityexperienceourcustomersexpect.Sourcing,retainingandmotivatingourpeopleisthereforecriticaltomaintainingtheservicelevelsourcustomersdemand.Ourcommitmenttotraining,remunerationandclarityofrolesisessentialforoursuccess.

Our brandTheglobalaviationservicesmarketisbroad,fragmentedandcompetitive.Differentiatingourbrandsisthereforeessentialforourcurrentandfuturesuccess.Maintainingandenhancingbrandidentityrequiresaconsistentlyexcellentcustomerexperience–and,inthelongrun,weaimtobuildanunrivalledpropositionbyofferingthefullrangeofaviationservicesourcustomerswant.

Our technologyTechnologyiscoretoprovidinganenhancedcustomerexperienceandbuildingaglobalaviationservicesgroup.TofulfilourCustomerFirstethos,wemustinvestininfrastructurethatenablesustounderstandourcustomersandcross-sellourservices.And,asweincreasethenumberofservicesweprovide,thatinfrastructuremustbescalabletomanagecosts.

Our capital resourcesThestrengthofourbalancesheetdifferentiatesAirPartnerfromourcompetitors.Ithelpsussupportandretainkeycustomersbyprovidingcreditterms,whileenablingustoofferadditionalaviationservicesthroughjudiciousacquisitions.

Our plc statusAirPartneristheonlylistedcompanyinitssectorandthis,coupledwiththefactthebusinesshasexistedforover55years,providesourcustomerswithaleveloffinancialtransparencyandassurancethatourcompetitorscannotoffer.

>Readmoreonpage12 >Readmoreonpage14 >Readmoreonpage28

• Developing and retaining our people Teamworkisthecornerstoneofourbusiness.Weinvestinourpeopleandgivethemanenvironmentinwhichtheyfeelincluded,valued,empoweredandabletoreachtheirfullpotential.Havingateamofskilledandmotivatedbrokers,trainersandconsultantswiththeexperiencetodelivertheservicerequiredbyCustomerFirstiscriticaltoourongoingsuccess.Werecognisetheirdedicationbylinkingremunerationtoperformanceandactivelyencouragingpersonaldevelopmentbyofferingtrainingtobuildcapabilitiesandencouragetherightbehaviours.

• Maintain and enhance our brand identityWithatrackrecordofover55years,AirPartneriswell-knownintheaviationindustry.OurtransformationaljourneyfromabrokingbusinesstoanaviationservicesgrouphasmeanttheGrouphasextendedbeyondtheoriginalAirPartnerbrand.BainesSimmonsandClockworkResearcharebothwellrespectedbusinessesintheirownsector,andcollectivelyourbrandisstrongerthroughtheadditionofthesebusinesses.


Explaining our business: business model and strategy continued

People: the fuel of our business

Wearearelationship-basedbusinessandoursuccessdependsonourpeople.Wehavealwaysbeenaleanorganisationabletoadaptquicklytoreflectchangesintheindustry,andhavinganexperienced,motivatedandengagedteamiscritical.Aswegrowandofferourcustomersnewaviationservices,thisonlybecomesmoreimportant.

An open, progressive cultureAirPartnerisadevelopingbusiness.PartofthechallengeaswegrowandtakeonpeoplefromnewacquisitionsistointegrateeveryonesothattheyfeelpartoftheAirPartnerGroup.Keytothisisourpeople-centredculture.Ouraimistorunabusinessthatisequitableforall,regardlessofgender,race,nationality,disabilityoranyotherdifference,andtotreateveryonefairlyandwithrespect.Anumberofkeyelementsmakeourculturepeople-centred.Wehaveaflatstructure,enhancedbyagenuine‘open-door’policy.Proofofthisisthefactthatourheadquartersisentirelyopen-plan,withtheexceptionofourCEO’sandCFO’soffices.Andevenourmostseniorleadersmakesuretheyconnectwithemployeesonaday-to-daybasis.Weencouragetwo-wayconversation,supportedbyinitiativeslikeourengagementsurvey,ouremployeeforum,andtheCEO’sbreakfaststhroughouttheyear,opentoallemployees,which,whilenon-obligatory,areoftenwellattended.Weofferflexibleworkingandadvocateahealthylifestyle,throughinitiativessuchasprovidingfreshfruitandhealthysnacksforourteamandsubsidisinggymmemberships.

Recruitment and retentionPeopletendtostaywithAirPartnerforagoodlengthoftime.Theaveragestayisfiveyearsandsomeofourstaffhavebeenwithus,10,15or20yearsplus.Wehaveinitiativestoensurewearesuccessfulatretainingourkeypeople.Withourrecentacquisitions,wewanttoensurethatthiscontinues.

Wearekeentoensurethatpeopleremainengagedandchallengedintheirrolesandaimtoreachtheirfullpotential.Tounderscoretheimportanceofthis,weareworkingtowards‘engagement’asakeyperformanceindicator(KPI),measuredthroughourEmployeeEngagementsurvey,whichwecarryouteverytwoyears.ThemostrecentsurveywaslaunchedinFebruary2017,andwewillreportonourengagementscoreinnextyear’sannualreport.

Integrating new businessesSuccessfulintegrationisakeyandnecessaryobjectiveofanyacquisitionormerger.Integratingsmall,similarbusinessestendstobeeasier,becausethereisalreadyacommonwayofworking,andthisisreflectedinthesmoothintegrationofCabotAviation,nowAirPartnerRemarketing.Bringingonboardanentirelynewtypeofbusiness,aswedidwithBainesSimmons,ismorechallenging,but,asshownbytheprofitabilityofthebusinessthisyear,wearewellonthewaytosucceedinginwinningheartsandminds.Ourmostrecentacquisition,ClockworkResearch,has,likeCabotAviation,beenverystraightforward,andwelookforwardtoworkingmorecloselywithandlearningfromournewbusinessesastheyintegrateintotheGroup.

Equal opportunities and human rightsWearecommittedtoprovidingequalopportunitiesandensuringourstaffcanworkwithoutdiscrimination.Fullconsiderationisgiventoemployeeswithadisabilityandshouldanemployeebecomedisabledwhileworkingforus,wewouldmakeeveryefforttoenablethemtocontinuetoworkfortheGroup.Asat26April2017,AirPartnerhadsevendirectors,includingonewoman.Ofour257employees,138weremenand119women,andthreeofournineseniormanagerswerewomen.AirPartnerhasaresponsibilitytoconductbusinessinanethicalwayandaccordinglyhasinplaceinternalpoliciestosupportrecognisedhumanrightsprinciples.Theseincludepoliciesonnon-discrimination,healthandsafety,environmentalissues,andbriberyandcorruption.WemaintainazerotoleranceapproachtobriberyandcorruptionandaprogrammeofinternaltrainingisinplacetoensurethatallstaffareawareoftheGroup’spolicies.

“�I�have�been�with�Air�Partner�10�years,�and�the�business�has�grown�in�many�ways�but�we�have�maintained�the�core�values�that�have�always�been�central�to�Air�Partner.”

RACHEL THRIPP, Group HR Director




Employees by gender

Men

Women

2017:54%men,46%women2016:56%men,44%women

Thecomparativedifferstothatdisclosedinnote8,whichdisclosestheaveragenumberofFTEsfortheyear,ratherthanthenumberofemployeesattheyearendasdisclosedhere.

Employees by division

Broking

Consulting & Training

Employee turnover

CalculatedasthepercentageofemployeeswholeavetheGroupduringthefinancialyearandarereplacedbynewemployees.

25%

54%46%

82%

18%



Getting technology right

Havingthebestpossibletechnicalinfrastructureiskeytosupportingourambitiontoofferafullrangeofservicestoourcustomers,whilemaintaininganefficient,cost-effectivebusiness.

Ramping up our investment2016hasseenAirPartnerinvestingsignificantlyintechnologyasanecessarycounterparttoefficient,long-termgrowth.Duringtheyear,weappointedanewGroupHeadofTechnology,LeePyle,toleadanexpandedITteamtodeliverthetechnicalplatformweneedtounderpinthebusiness.

AcentralpartofthisworkwastoenhanceourcoreGroupITsystems,andduringtheyearweintroducedanupgradedfinancialsystemwhichwillmakethegatheringandreportingofdatafasterandmoreefficient.Wealsobeganthedevelopmentofanewcustomerrelationshipmanagement(CRM)system,settogolivelaterin2017.Thisisessentialtoenableustounderstandourcustomerbasebetteracrossthedivisions,especiallynowthatourCustomerFirstprogrammeiswellunderway.

Itisalsoakeyplatformforgrowth:weneedtobeabletointegrateouracquisitionseasilyintooursystems,andalsobeabletogetapictureofourcustomersacrossthewholeGroup.Thiswillenableustoidentifyopportunitiesforcross-selling,whichareanintegralpartofourstrategy.

Looking aheadWehavetwokeyaimsfor2017.First,weaimtointroduceCloudtechnologythatwill,amongotherfunctions,helpourcustomerserviceteamworkmoreflexibly,includingspendingmoretimeoutontheroadworkingmorecloselywithcustomers.Second,wearesignificantlyenhancingourdigitalcommunicationsplatformsinpartnershipwiththemarketingteam,whoseremithasbeentorefreshourbrandandraisetheprofileoftheGroup.Technologyisessentialtothesedevelopments,andbothteamshavebeenworkingcloselytogetheroverthepastyeartowardsthesharedgoalofastand-outbrandwithanagileandresponsivedigitalcapability.

“�Technology�is�a�key�platform�for�growth:�we�need�to�be�able�to�integrate�our�acquisitions�easily�into�our�systems.”

LEE PYLE, Group Head of Technology




Expanding our services

Inpursuitofourvisiontobecomeaglobalaviationservicescompany,we’rebroadeningouroffertoencompassafullrangeofaviationservices,andexpandingwhereweoperatetobecometrulyglobal.Indoingso,weaimtotakeourexistingcustomerswithus.

Weareextendingourproductrangeandourgeographicpresencethroughcarefullytargetedacquisitions,whichshouldintimeoffermutualbenefitstoourcorebrokingbusiness.Thekeytosuccessinthisareaisintegration,andtheacquisitionofCabotAviation,nowAirPartnerRemarketing,enabledustotestthewater.Asmallbusinessinasimilarfield,itprovedthemodel,whiletheacquisitionofBainesSimmonsaddedsafetyconsultingandtrainingtoouroffer.TheadditionofClockworkResearchattheendof2016,withthesafetybenefitsoffatigueriskmanagement,willhelpadddepthtotheconsultingandtrainingsideofthebusiness.

Eachnewacquisitionnotonlybroadensourproductoffering,itbroadensourgeographicreachaswell,sinceeachhastradingpartnersindifferentterritories.Inaddition,itgivesustheabilitytoofferatotalaviationservicetocustomers,whichbecomesincreasinglyattractiveacrossallmarkets.

Strong financesUnderpinningthisstrategyiscarefulfinancialmanagement.Capitalallocationiskey,andlowriskisofparamountimportance–everypoundwespendmustgeneratethehighestpossiblereturn.

“�Each�new�acquisition�helps�us�offer�a�total�aviation�service�to�customers.”�

MARK BRIFFA, Chief Executive Officer

Aspartofthat,weneedarobustintegrationplan,andwehavelearnedmanylessonsfromtheacquisitionsofCabotAviationandBainesSimmons,particularlytheimportanceofcommunicationandculture,whichwillhelpusintegrateClockworkResearch,andotherpotentialnewbusinesses.Wearepleasedthat,underthefirstfullyearofourmanagement,bothCabotAviationandBainesSimmonshavedeliveredprofitstotheGroup,andwelookforwardtoworkingcloselywiththeClockworkResearchteam.

Looking aheadTheGroupcontinuestoassessinvestmentopportunities,bothorganicandacquisitions,inlinewithourstatedstrategicobjectivetobecomeaworld-classglobalaviationservicesgroup.

Racing safelyOurCommercialJetsdivisionwaspresentedwithatypicalenquiryfromawell-knownautomotivecompany,comprisingthecustomer’srequiredflightroute,numberandprofileofpassengers.Atthispoint,ourGroupCharterteamidentifiedasynergyofsafetyculturebetweenAirPartnerandourclient.Asaresult,CommercialJetsliaisedwithBainesSimmonsandaskedthemtocarryoutanauditofthetwooperatorsthatourclientwouldbeusing.CommercialJetsandBainesSimmons:awinningcombination!



1 Air Partner Remarketing (Cabot Aviation) Providescomprehensiveremarketingservicesforalltypesofcommercialandcorporateaircrafttoawiderangeofinternationalclients.

Expanding our servicescontinued

Triple 777 successNotonlydidbeingpartofaplchelpCabotAviation(nowAirPartnerRemarketing)winthemandatefromKenyaAirwaystoremarketfourB777-200ERsbutAirPartner’slong-standingrelationshipwithamajorindependentAmericanoperatorfacilitatedthesuccessfulsaleofthreeoftheseaircrafttothiscarrier.

2 Baines Simmons Aworldleaderinaviationsafetyconsultingspecialisinginaviationregulation,complianceandsafetymanagement.

3 Clockwork Research Aleadingfatigueriskmanagementconsultancy.




1 Air Partner Remarketing (Cabot Aviation) – a sure first stepWithourfirstacquisition,inMay2015–aircraftremarketingspecialistCabotAviation–weweredealingwithanadhocbusinesswiththesameessentialqualityofearningsasouraircraftcharterdivisions.Itwasthereforeafairlysurestepwithwhichtotestourintegrationcapabilities,whilegivingusavaluablefootholdinnewterritories.CabothadaveryprofitablefirstfullyearaspartofAirPartner,andisnowbeingbroughtmorecloselyintothefoldasAirPartnerRemarketing.

Air Partner Remarketing (Cabot Aviation) – key facts• Foundedin1998• Oneoftheleadingspecialistaircraftremarketingbrokers

intheworld• Globalsalespresence• Actsasagentandbrokertoairlinesandairlineowners

2 Diversifying our offer with Baines SimmonsOurnextacquisition,inAugust2015,ofsafetyconsultingandtrainingexpertsBainesSimmons,wasafundamentalstepforwardinourstrategy,addingabrandnewareaofexpertisetotheAirPartneroffer.Assuch,theintegrationhastakenmoretimeandworkthanCabotAviation,butdespitethechallenges,BainesSimmonshasalsohadaprofitablefirstfullyearwiththeGroup.Ouraimtoachievemorebalancedearningsisthereforealreadytakingshape.

Baines Simmons – key facts• Foundedin2001• Leadingauthorityinaviationsafetyconsultancyforcivil

andmilitarymarkets• Specialisesinaviationregulation,complianceandsafety

management• Clientsinclude750+aviationorganisationsand40+

aviationauthorities• 46permanentemployees

3 Expanding our specialist skills with Clockwork ResearchWiththeacquisitionofClockworkResearch,weareinvestingfurtherinsafetymanagementandconsulting,andexpandingourofferalongsidethecoreconsultingandtrainingservicesofBainesSimmons.Co-founderDrAlexandraHolmesdiscussesjoiningAirPartner.

‘Considerable mutual benefit’‘We’vebeengoingfor12yearsandhavebuiltupaverygoodreputationamongthebigaviationoperators,’shesays.‘Whatweofferisalmostunique.Wedosometimescomeupagainstuniversitiesbuttheywouldn’t,forinstance,repeatedlygototheMaldivestocarryoutresearchandbuildabespokefatiguemanagementsystem.We’reveryhandsonandspendalotoftimewithclients,buildingrelationships.Wetendnottolosethem.

‘Weweren’tlookingtosellnecessarily,butcouldseethattherewasamuchlargerneedforourservicewiththeincreasingawarenessofperformancesafetyandhealth.JoiningAirPartnerwillhelpusgrowandmeetthatneed.Therearehugeopportunitiesand,alongwithBainesSimmonsandothercomplementaryacquisitions,wewillhelpmovetheGroupintoadifferentspace.We’relookingforwardtoworkingwithAirPartner’sexistingclientsandalsointroducingthemtoours–weseeconsiderablemutualbenefit.

‘MyteamhasreallyembracedbecomingpartofAirPartner,whichhasmadetheintegrationprocessreallystraightforward.’

Clockwork Research – key facts• Foundedin2005• Recognisedleaderinfatigueriskmanagementsystems• Clientsinaviation,oilandgasandmining;government

departmentsandindustrybodies• CoreteamofscientistsbasedintheUKsupportedby

consultantsintheUS,Europe,MiddleEastandAustralia• Fivepeople



Principal risks and uncertainties

TheBoardhascarriedoutarobustassessmentoftheprincipalrisksfacingtheGroupincludingthosethatwouldthreatenitsbusinessmodel,futureperformance,solvencyorliquidity.

Risk management processTheBoarddefinestheriskappetiteandmonitorsthemanagementofsignificantriskstoensurethatthenatureandextentofthesignificantriskstakenbytheCompanyarealignedwiththeoverallgoalsandstrategicobjectives.Ourriskappetiteinfluencesthecultureofourbusinessandhowweoperate,andisreflectedinourmanagementstructure.TheOperatingBoardsupportstheBoardinmonitoringtheexposuresthroughregularreviewsanditsgeneraloversightoftheday-to-dayrunningofthebusiness.

Annual risk analysisWeidentifiedandassessednewandexistingrisksoverthecourseoftheyearastheGroup’soverallriskprofilecontinuedtoevolve.TheBoardandtheOperatingBoardperformedfurtheranalysistoprioritisetheserisks,withafocusonthoseconsideredtoposethegreatestrisktoachievingourobjectives.

Duringtheyear,therehasbeenachangetoourlegalandregulatoryrisksfollowingthepotentialuncertaintiesarisingfromBrexitandtheUSPresidentialelection.However,bothofthesepoliticaleventscouldpresentopportunities,andwearecontinuingtoevaluatethesituation.

Our principal risks and uncertaintiesTheprincipalrisktotheGroup’sbusinessstemsfromthegeneraleconomicconditionsinwhichourclientsoperate,affectingtheirwillingnessandabilitytocharterorcontractconsultingservices.Adhocchartersarelikelytocontinuetobeaffectedbyseriouseconomicinstabilityinthemajorworldmarkets.

ThepervasiverisktoAirPartner’scharteringbusinessisthefactthatleadtimesforadhocbookingsaremeasuredindaysorweeks,ratherthanmonths.Forwardbookingscanbeimpactedverysuddenlybychangesinfinancialmarkets,politicalinstabilityandnaturaleventsaffectingthemovementofpeopleorcargofromonecountrytoanother.Economicuncertaintyaffectscorporate,governmentandindividualclientsandaffectsthequalityofaircraftsupplyasoperatorsconsolidateorleavethemarket.

Contractually,thisriskismitigatedinthatwesellcapacityonaircraftownedandoperatedbyathirdparty,andcontractswithourcustomersarenormallyplacedasmirroredtransactions.

TheGroupdoesnothaveanycontractualarrangementswithanysignificantindividualorcompanywhichareessentialtocontinuationofthebusiness.

GeneralbusinessrisksfacedbytheGroup,suchasthosedisclosedwithinnote2,arethosefacedbybusinesseswithsimilarcharacteristics.ThoselistedherearetheprincipalrisksconsideredbytheBoardtohaveapotentiallymaterialimpactontheGroupnotachievingitslong-termstrategicobjectives.




Risk

Change in risk assessment

Strategic initiatives potentially impacted

Potential impact Controls/processes to mitigate

Market conditions/cost structureForwardvisibilityintoaircharterbookingsisoftenmeasuredindaysorweeks,ratherthanmonthsandcanbemateriallyaffectedbychangesinfinancialmarkets,politicalinstabilityandnaturaleventsaffectingthemovementofpeopleorcargofromonecountrytoanother.

Customers

Maintainingbrandvalue

Limitedvisibilityintofuturebookingsmayresultinacoststructurethatdoesnotalignwithmarketconditions.

ExtensionoftheofferingfollowingtheacquisitionofCabotAviationServicesandparticularlyBainesSimmonshasenhancedthestabilityofearningsbyaddingmorepredictablerevenuestreamstotheGroup.

Furtherdiversificationoftheclientbaseoftheaircraftcharteringbusinessacrossgovernmentsandnon-governmentalorganisations,commercialenterprisesandindividuals,aswellasacrossgeographicregions,allowsforsomesmoothingwhenthereareseasonalorsectorialchangesindemand.

Wecontinuetofocusonoverheadstoensuretheyareappropriatetothelevelofbusinessandappropriateactionistakenifnecessary.

Retaining, developing and expanding the Group’s customer baseThechallengeofretainingandexpandingcustomersinahighlycompetitiveenvironmentwithlowbarrierstoentry.

Customers TheGroup’sabilitytomaintainandgrowrevenuecouldbeadverselyaffected.

Roll-outoftheCustomerFirstprogrammewhichunderpinstheGroup’sstrategyforidentificationof,andmarketingto,potentialcustomerswhileelevatingthecustomerexperiencethroughimprovedprocesscapabilities.

Attraction, retention and motivation of staffThechallengeofattractingnewtalentandretainingexistingkeystaff.

Customers

Developingandretainingourpeople

Optimisingourcore

Extendingandenhancingouroffer

Lossofearnings. Investmentinrecruitmentandintalentmanagement,throughinternalandexternalcourses,especiallythroughalong-standingarrangementwithCranfieldUniversitytoimproveperformance.

ElementsofremunerationaretiedtoindividualandGroupperformance.

Regularreviewofremunerationandotherincentivestoensureweremainonparwithourcompetitors.



Risk




Financial counter party riskFinancialexposurefollowingpaymentsinadvanceofservicestooperators.

Customers Lossofearnings. Whenselectingwhichoperatortouse,weassessreputationandfinancialstrengthinordertomitigatetheriskofmakingpaymentstobusinessesthatmayfail.Inaddition,wherepossible,weusethird-partybankguaranteesinsteadofcashdeposits.

Non-financial counter party riskRelianceonthirdpartiesfordeliveryofservicestoendclients.

Operatorcompliancewithrelevantregulations.

Customers


FailureofaircraftoroperatorcharteredbyAirPartner.

Wealwayschoosehigh-qualityaircraftandcarriersforeverycharter.AirPartnermaintainsnon-ownedaircraftliabilityinsurancewhichcanalsobeextendedtoclients.Allflightsarewatchedinoperationbythein-houseoperationsteam.Inaddition,thereisbothaninternalauditandexternalauditprocess,thelatterperformedaspartoftheISOaccreditation.

Competitor riskTheriskoffallingbehindcompetitorsinproductdevelopment,standardsofserviceorcosteffectiveness.

Creatingvalue


Lossofcustomers. Roll-outoftheCustomerFirstprogrammeacrosstheGroupwillembedaunifiedandelevatedlevelofcustomerservicedeliverybyaligningoursalesandmarketingstrategywithservicedelivery.

Wealsoundertakeregularclientsurveystoensureweremainresponsivetocompetitoractivityandclientdemandswithinacceptablepricelevelsforthequalityandstandardsofserviceprovided.

Legal and regulatoryThechallengeofoperatinginmultiplejurisdictionssubjecttoalargenumberofdifferentandevolvinglawsandregulations,includingtaxandcivilaviationauthorityrequirements.

Customers


Non-compliancewithregulationscouldresultinlossofcustomersordamagetotheGroup’sbrand.

ManagementreviewspoliciesandprocessesatOperatingBoardlevel.Thebusinesshasarangeofpoliciestominimisetheserisks,andreviewsandupdatesthemonaregularbasis.

Principal risks and uncertaintiescontinued




Risk




Business growthChallengesinenhancingandextendingtheAirPartnerofferfollowingrecentacquisitions.

Customers

Extendingandenhancingouroffer

Maintainingcontroloverthestrategicandcommercialactivitiesofnewoperationsresultinginfinanciallossorreputationaldamage.

Wehaveadedicatedintegrationteamtoensurethatbenefitsarisingfromanacquisitionaremaximisedwhilemaintainingcontroloveroperations.

Reputational riskDamagetoAirPartner’sreputationfollowingincidentorinappropriateaction.

Customers


DamagetotheGroup’sbrandcouldresultinlossofclientsorimpairitsabilitytoexpandthecustomerbase.

Ourbrandvaluesofhonesty,truthandreliabilityaretreatedveryseriously.Discretioniskeytoourcustomerserviceanditsimportanceiscommunicatedtoallmembersoftheteam.

Business interruptionRelianceonsystemsforsourcingandbookingaircraftandclientmanagement.

Customers


Systemsfailurecouldresultinbusinessinterruption.

Businesscontinuityanddisasterrecoveryplansareinplacetomitigatethisrisk.




2017 performance


2017 performance

Chief Executive’s review

2016willbeayearthatmanywillrememberasoneofseismicandsurprisingchange,especiallyonthepoliticalfrontbothathomeandabroad.Onthequieterstageofaviation,ourskiesgetbusierandbusinessgetsmorechallenging,butAirPartnerhascompletedtheyearwithasetofresultstomakeusproudandgiveourshareholdersconfidenceinourstrategy.

Mark Briffa ChiefExecutiveOfficer

TheGrouphasmadegreatprogressduringtheyear,deliveringanunderlyingprofitbeforetaxof£5.1m,a17.2%increaseyear-on-year.Asever,theseresultsreflectthededicationanddriveofallourstaff,whocontinuetoputourcustomersfirst,providinganunrivalledanddifferentiatedserviceinoursector.

One Group, two divisionsTheGroupisstructuredintotwocomplementarydivisions:Broking,whichdeliversaircraftcharterandremarketingservices;andConsulting&Training,whichdeliversprofessionalservices,predominantlyintheaviationsafetysector.Bothdivisionsoperateinternationally,servicingahigh-qualitycustomerbase.Bothdivisionswillplayimportantrolesindeliveringourlong-termstrategytobecomeaworld-classglobalaviationservicesgroupwithabalancedbusinessmixbetweenthetwo.

Broking performanceOurBrokingdivisionhasperformedwellthisyear,achievingagrossprofitof£26.1mandanunderlyingoperatingprofitof£6.6mwhichcompareto£25.2mand£6.1mrespectivelyintheprioryear.Thismasksabetterunderlyingperformance,withsomesignificantnewbusinesswinsreplacingacontractweexpectednottoberenewedasweenteredtheyear.Thesewinswerearesultofsomeexcellentteamwork,creativityandinnovationbyourpeopledeliveringsolutionstosomeofourcustomers’mostcomplexandtechnicalneeds.OurCustomerFirstapproachisdelivering,andhelpingusmeasure,betterlevelsofserviceandpartnershipwithourmostvaluedcustomers.Asaresult,weareseeingincreasedcustomerloyalty,and,withagreaterportfolioofproducts,weareseeingthebreadthofouractivitywithvaluedcustomersexpand.

Duringtheyear,wetookstepstofurtherenhanceourPrivateJetandJetCardoffers,andweexpecttoevolveJetCardintheyearsaheadtoreflectthelifestyleneedsofourcustomers,inpartnershipwithCamper&NicholsonsInternational.Since1782,theyhavebeensynonymouswiththeworld’sleadingyachts,andtodayaregloballeadersinallluxuryyachtingactivities,specialisingintheircharter,sale,purchase,marketing,managementandconstruction.Thispartnership




Highlights of the year

£31.7mGrossprofit

£5.1mUnderlyingprofitbeforetax

6.5pUnderlyingEPS

5.2pDividendpershare

• Stand-outperformancefromCommercialJets

• Consulting&Trainingdivisionprofitableinfirstfullyearofownership

• RecordJetCardperformance

“�These�results�reflect�the�dedication�and�drive�of�all�our�staff,�who�continue�to�put�our�customers�first.”

providescustomerswithaone-stopshopforallluxuryairandsea-basedtravelneeds.OtherinitiativesareunderwaytofurtherenhanceJetCardandIhopetobeabletoreporttoyouinthefutureaboutsomeinnovativeworkwearedoingtomakeourcustomerexperiencetheverybestitcanbe.

AirPartnerremarketing–formerlyCabotAviation–alsocompletedsomesignificantprojectsintheyearandthepipelinefortheyearaheadlooksgood.

Theteam,underthestrongleadershipofTonyWhitty,isresponsibleforallremarketingactivityatAirPartnerglobally,andduringtheperiodwetookthedecisiontoconsolidateallourshort-termleasingactivitiesunderTony’swingsothatwecanleverageourexpertiseandunderstandingofthemarketplaceandservicethecustomerbetter.Theresultsfromboththerebrandingandthecombinationhavebeenoutstanding,andIbelievethelong-termoutlookforourremarketingoperationisexcellentasweworkwithmoreinternationalcustomersandaddscale.Remarketingwillbeabeneficiaryoforganicinvestmentandfocus,and,whilewewillnotrushanything,wehopetohaveasignificantlylargerremarketingbusinessinthreetofiveyearsthanwedotoday.

Consulting & Training performanceThisreportmarksthefirstfullyearofoperationfromourConsulting&Trainingdivision,withacontributionof£0.5m,equatingto10%ofourunderlyingprofits.Iamverypleasedwiththismaidenperformance,andexcitedthatthedivisioniswellpositionedforfuturesuccess.AlmostallofthiscomesfromBainesSimmons,ourleadingaviationsafetyconsultantsspecialisinginaviationregulation,complianceandsafetymanagement,whichhasperformedwellandisinastrongpositiontogrowanddevelopintheyearsahead.InDecember2016–sevenweeksbeforetheendofthefinancialyearand15monthsafterthecompletionoftheBainesSimmonsacquisition–weacquiredClockworkResearch,aleadingfatigueriskmanagementconsultancy.IntegrationofClockworkResearchwascarriedoutontimeandasplanned.SimilartoAirPartnerRemarketing,ClockworkResearchwillbeabeneficiaryoffutureorganicinvestmentandfocusaswe


2017 performance

assistthemtoscalethebusiness.AsweworkbettertogetheracrosstheGrouptodeliverwhatourcustomersneed,weexpectthedivision’scontributiontoourresultstoincreaseinfutureyearsaswebecomeamorebalancedbusiness.

A common platform for growthWehavemaintainedourcommitmenttoorganicinvestmentincoresystemsandcontrols.Ourtechnologyprogramme,ProjectConnect,beganin2014andgotusfittocompeteglobally.Itenabledourlatestupgrades,whichbeganinFebruaryandshouldbefinalisedbytheendof2017.Thescaleoftheprogrammecannotbeunderstatedasitputsinplaceasolidfoundationforfuturegrowthandisacoreenablertosuccessfullycarryingoutourlong-termstrategy.

WeareintroducingnewplatformsfromwhichwecansharedataacrosstheGroupandwhichhavetheabilitytoaccommodatetheneedsofanynewacquisitionsassoonastheycomeonboard.Thiswillgiveusgreaterconsistencyandflexibility.WeintroducedanewGroup-widefinancesystem,whichcameon-streaminFebruary,andwillbemovingallourcompaniesontoacommonCRMplatformduring2017.

Transforming the business mixOrganicgrowthandself-improvementareattheheartofourlong-termstrategy,andbyaligningourselvescloselywithourmostvaluedcustomers,wearebetterabletoidentifynotonlynewbusinessopportunitiesbutalsothestrategicgapsacrosstheGroup.Wehaveidentifiedtheservicesandcapabilitiesweneedtoaddorenhanceandalsoidentifiedthegeographieswhereweneedtodevelopapresenceoraddscale.Intheyearsahead,wewilladdressthesestrategicgapsbyeitherbuildingamarket-leadingpositionorganicallyoracquiringsuitablebusinessesandplatforms.

Itsoundsstraightforward–andasanidea,itis.Thechallengeliesinexecution.Werecognisethateveryacquisitioncarriesrisk–asitdoesrewardandopportunity.Wewilljudgeriskandrewardindetailbeforecommittingtoacquisitionsanddeployingourcapital.Weareabletoquicklyassessabusiness’sstrategicfitonvariouscriteria,butalongsidetheanalysisofitsfinancialstatements–theduediligenceof

financialtrackrecordandperformance,andtheassessmentoffutureeconomicreturnsallspeaktovalue–wespendahugeamountoftimegettingcomfortablewiththenon-financialcomponentsofabusiness,predominantlythepeopleandculture.

Themostimportantquestionweaskourselveswhenweevaluateapotentialacquisitionis‘IsthisanAirPartnercompany?’.Theacquiredbusinesswill,fromdayone,carryourbrandoranassociationwithourbrand,andindeedmayadoptourbrandinduecourse,soweneedtogetcomfortablewithalotmorethanjustthenumbers.Thestrategy,productorservice,capital,scale,customerbase,operatingethosandmethodologiesareallimportant,buttheyarebroughttolifebythepeopleandtheorganisation’sculture.Ifwecannottickalltheboxes–bothfinancialandnon-financial–andgetcomfortable,wewillnotpursuetheopportunity.

Theaviationindustryhasmanypassionateanddedicatedpeoplewhoaredeliveringgreatproductsandservices.Overtheyears,wehavehadtheprivilegetomeetgreatbusinessesandwehaveevaluatedmanyopportunities.Thereareplentyofacquisitionopportunities,butweareselective,lookingforcomplementarybusinesses.Innearlyeveryinstance,wearedealingdirectwiththeownersormanagers,andtheirdecisiontosellcanbetriggeredbyavarietyofbusinessorlifeevents.Inadvanceofthatdecision,wedevelopmutualtrustandourunderstandingofthebusiness.

Wearedelightedtohaveacquiredthreegreatbusinessesoverthepasttwoyears–CabotAviationandBainesSimmonsin2015andClockworkResearchin2016.Thesebusinessesareallrunbypassionateanddedicatedpeopleanddeliveranexceptionalservicetotheircustomers.Aswellasthefinancialcontribution,theybringnewservicesandcapabilitiestotheGroupwhichourcustomersandstaffvalue,intheprocessmakingusabetterandsmarterorganisation.

PreviousreportsintroducedtheacquisitionsofCabotAviationandBainesSimmonsandthisyearIampleasedtointroduceClockworkResearch.ClockworkResearchbringsnewservicesandcapabilityinthespecialistfieldoffatigueriskmanagement.

Chief Executive’s review continued

“�We�have�identified�the�services�and�capabilities�we�need�to�add�or�enhance,�and�the�geographies�where�we�need�to�add�scale.”




ClockworkResearchusessystemsmodelstomeasure,monitorandreducefatigueinpilotsandotherkeypersonnel,ensuringtheygetthenecessarysleeptocarryouttheirtaskseffectivelyandsafely.FoundedbyDrPaulJacksonandDrAlexandraHolmes,thebusinessisaleaderandinnovatorinitsfield.BothPaulandAlexarededicatedandpassionateabouthelpingcustomerstacklethechallengestheyface.

Great peopleAswegoforwardonourjourneyoftransformation,it’simportantthatwesharethesamevisionandthatallourpeopleunderstandit.Enhancingourbrandisasmuchaboutourinternalaudienceasitisabouttheexternal,andaccordinglyweareworkingtoarticulateourvisionandvaluesandenhanceourinternalcommunicationsbyengagingourstaffacrosstheorganisationmorefrequently.Wecandoalotbetter,butwearestartingfromastrongbase,witharichheritageandgloballyrecognisedbrand.Wehaveaclear,long-termstrategyandarebecominganexcitingplacetowork,withservicesandcapabilitiesthataddvalueandenableustocompetebeyondprice,andthatwilloffersteadycareerprogression.Weaimtorewardgoodperformanceandexceptionalbehaviour,and,aswegrow,akeyaimistoretainourexistingculturethatkeepspeopleatitsheart.

InJanuary2016,wehiredLeePyleasGroupHeadofTechnology.Underhisleadership,wearemakingaconsiderableinvestmentintechnologyinordertocreateasolidandsustainablebasisforgrowth.

InJune2016,wehiredJuliaTimmsasGroupMarketingDirector.Duringthelatterpartoftheyear,shesetinmotionanoverhauloftheAirPartnerbrand,whichwillbecometheumbrellabrandforallourproductofferings,includinganyfutureacquisitions.Thisisareallyimportantleveroftransformation,inthatitwillprojectaclear,unifiedidentitytotheworld,enhancingourabilitytocross-sellourservices.

Finally,inJanuary2017,weappointedDavidMcCown,whowasformerlyourVice-PresidentforBusinessDevelopmentfortheUnitedStates,asPresidentforourUSbusiness,akeyfocusfororganicgrowthfor2017andbeyond.

OutlookWe’reonajourneyoftransformation,and2016hasbeenanencouragingyearonanumberoffronts.Thepathaheadisexcitingbut,aswealwaysstate,intheworldofaviation,andmostespeciallyinthecharterindustry,wemustbecautiouswhenmanagingexpectations.Thecharterbusinesshasalwaysbeen,andwillcontinuetobe,avolatileindustry.Despitethis,overnearlysixdecades,wehavedevelopedourbusinessandadaptedtogrowandsucceed.

Weareconfidentwehaveasuccessfulandveryclearlong-termstrategy.Wemanageouroperationsforlong-termsuccess,aligningwhatwedowithourcustomersandaimingtoexceedtheirmostcomplexandtechnicalneeds.

Weaimtobecomeabalancedbusiness,withtwomarketleadingdivisions–BrokingandConsulting&Training–deliveringexceptionalserviceandvaluetocustomers,and,asaconsequence,high-qualityandincreasinglyvisibleearningstoourshareholders.Thiswilladdvaluetoourcustomersandstaffandbuildrealvaluetotheownersofourbusiness.

Brokingstillaccountsfor90%ofourprofits,butinthefutureweexpectourbusinessmixtoevolvesignificantly,drivenbyorganicgrowthandsuitableacquisitions.Ourorganicinvestmentsarerewardingusandwehavesomeexcitinginitiativesunderway.Ournewlyacquiredbusinesseshavedeliveredstrongoperationalperformanceandmadeanexcellentfirstfull-yearfinancialcontributiontotheGroup.Wewillcontinuetobuildrelationshipswiththeownersandmanagersofthemanysuitablebusinesseswehaveidentifiedaspotentialacquisitions,butwewillremainpatientandkeeptoourstrictevaluationcriteria.

“�We�aim�to�become�a�balanced�business,�with�two�market-leading�divisions�delivering�exceptional�service�and�value�to�our�customers�and�increasingly�visible�earnings�to�our�shareholders.”

Mark BriffaChiefExecutiveOfficer26April2017

28

2017 performance

Air Partner plc |AnnualReportandAccounts2017

Financial review

AirPartner’sfinancialtransparency,asaresultofbeingtheonlylistedcompanyinthissector,andbalancesheetstrengtharekeyinsupportingtwooftheGroup’smainstrategicfocuses:puttingourcustomersfirstandexpandingourserviceoffering.

A strong balance sheetInacrowdedmarketwithlowbarrierstoentry,weareabletouseourfinancialpositiontodifferentiateourservicestokeycustomersthroughourabilitytoofferfavourablecredittermsonlargeprojects,asevidencedbythemovementinworkingcapitalandnon-JetCardcashatthebalancesheetdate.Inaddition,wehaveexpandedourserviceofferingtopursuethestrategyofbecomingaglobalaviationservicescompanythroughtheacquisitionofcomplementarybusinessesusingcashordebt.Subsequenttothebalancesheetdate,theloanoutstandingat31January2017wasrefinancedthrougharevolvingcreditfacilityof£7.5mwhich,incombinationwithanoverdraftfacility,providestheGroupwith£9moffacilitiesinadditiontonon-JetCardcash.

Financial overviewRevenue:AirPartnerprimarilyusesgrossprofitasitskeyindicatorofbusinessperformancegiventhepotentialforrevenue,asdeterminedunderIFRS,tofluctuatedependingonthenumberofcontractsenactedintheyearwhereweactasprincipal,asopposedtoagent.Thereductioninrevenueof£7.4mto£42.5m(2016:£49.9m)isduetothenon-repeatofaspecificoilandgascontractwhichendedearlyin2017.

Underlying operating profit:underlyingoperatingprofitincreasedby16.6%to£5.1m(2016:£4.4m),withthemajorityoftheincreasebeingattributabletotheimprovedperformanceoftheConsulting&Trainingdivision.ExcludingtheimpactofAirPartnerRemarketing’sresultsfromtheCommercialJetssegment,ourlegacybusiness’sperformanceincreasedby£0.1m,or2.9%,onalike-for-likebasis.

Other items:otheritemscompriserestructuringcosts,amortisationofintangibleassetsarisingonacquisition,acquisition-relatedcostsandnon-cashacquisition-relatedcosts(beingtheIFRS2chargearisingontheshare-basedconsiderationforAirPartnerRemarketing).Theoverallreductionin‘otheritems’of£0.5mto£0.7m(2016:£1.2m)isdueto:• theloweramountincurredinrespectofrestructuringof

£0.2mfollowingthemajorrestructuringoftheOperatingBoardthattookplaceintheyearended31January2016

• loweracquisitionrelatedcostsof£0.1m,areductionof£0.3m,duetotheirbeingonlyoneacquisitionintheyear,thatofClockworkResearch.

Amortisationofintangiblesarisingfromacquisitionsof£0.3mandnon-cashacquisitionrelatedcostsof£0.1mwereconsistentwiththeprioryear.

Operating profit:operatingprofitincreasedby£1.2mto£4.4m(2016:£3.2m)duetoacombinationoftheincreasedtradingperformanceof£0.7matanunderlyingoperatingprofitlevelcombinedwithareductionin‘otheritems’of£0.5m.

Finance charges:theGroup’snetfinancechargeremainedat£0.1m,comprisinginterestontheGroup’sloanandinterestreceivableoncashbalances.

Neil Morris ChiefFinancialOfficer




“�In�a�crowded�market�with�low�barriers�to�entry,�we�are�able�to�use�our�financial�position�to�differentiate�our�services�to�key�customers�through�our�ability�to�offer�favourable�credit�terms�on�large�projects.”

TaxationTheGroup’sunderlyingeffectivetaxratefortheyearwas33%(2016:30%)andhasbeenaffectedbyanadjustmentinrespectofprioryearstotalling£0.4m.Withoutthisadjustment,theunderlyingtaxratewouldhavebeen25%.Thechangearoseprimarilyduetoanadjustmentinrespectofaresearchanddevelopmentclaimmadeintheyearended31January2015.

Thestatutoryeffectivetaxratefortheyearwas35%(2016:39%).Thelowerratebeingduetoareductioninamountsdisallowablefortaxpurposesincludedwithin‘otheritems’.

Financial positionJetCard cash:thereductionof£0.9misasaresultofrecordutilisationintheyearoutstrippingthepaceofnewcardsandrenewals.Subsequenttothebalancesheetdate,theGroupwillbeplacingallJetCardfundsintosegregatedaccountsasfurtherassurancetoourcustomers.

Non-JetCard cash net of borrowings:thenetdebtpositionhasimprovedasaresultoftheimprovedtradingpositionincreasingnetcashinflowfromoperatingactivitiesof£1.9m,lessoutflowsfortheinvestmentinClockworkResearchof£0.4m,dividendspaidof£2.5mandrepaymentofborrowingsof£0.5mbutbenefitingfromaforeignexchangegainof£1.6m.

Asnotedabove,theGroup’sbankloan,whichstoodat£3.0matthebalancesheetdate,wasrefinancedwithanewrevolvingcreditfacility,whichhastotalavailabilityof£7.5m,providedbyAirPartner’smainbankers.ThefacilityexpiresinFebruary2020.

Other net current assets and liabilities:withcashexcluded,theGroupisinanetcurrentliabilitiespositionasaresultofdeferredincome,particularlyinrespectoftheJetCardproductexceedingothercurrentassets.

Foreign exchangeWherepossible,theGroupusesnaturalhedgingtominimiseitsforeignexchangeexposure,forexamplematchingJetCarddepositsdenominatedineurosorUSdollarswiththerespectivedeferredincome.Inaddition,theGroupalsousesderivativefinancialinstrumentstohedgecertaintransactionsin

accordancewithitsinternalpolicy.Thefairvalueoftheseinstrumentsatthebalancesheetdatewasaliabilityof£9,000(2016:anassetof£36,000)andthelossrecognisedthroughtheincomestatementasaresultinthechangeinfairvaluewasachargeof£45,000(2016:againof£186,000).

WhileBrexithascausedadegreeofvolatilityincurrencymarketsduringtheyear,givenourgeographicalreach,withprofitsarisingintheUSindollars,andinEuropeineuros,theGroupasawholehasnotsufferedadverselyfinanciallyasaresultoftheleavevotetodate.InitsAircraftBrokingdivisionintheUK,themostlikelytohaveacurrencymismatchbetweenincomeandcosts,thebrokersareabletosourcealternativesupplierstohelpmitigateanyerosionofmarginandalsoapplytheGroup’sinternalpolicyonhedgingwhennecessary.Overall,theGroup’snetforeignexchangegainthroughtheincomestatementfortheyearwasalossof£20,000(2016:gainof£2,000).

Neil MorrisChiefFinancialOfficer26April2017

The Group’s financial position can be summarised as follows:

2017£’000

2016£’000

Property,plantandequipment 1,086 1,281

Goodwillandotherintangibleassets 8,743 8,384

Netdeferredtaxliability (192) (408)

Netcurrentliabilitiesexcludingcashandborrowings (11,541) (11,723)

JetCardcash 15,886 16,776

Non-JetCardcashnetofborrowings 972 (456)

Netassets 14,934 13,854


2017 performance

Key performance indicators

Wemonitorarangeoffinancialindicatorsthatreflecttheunderlyingstrengthofourbusiness.Thisyear,wehaveintroducedasetofstrategicindicatorstohelpusmeasureprogressagainstourstrategy.

Financial KPIs1,2,3

Gross transaction value£m

Thisrepresentsthetotalamountinvoicedtoourcustomers.

£215.8m

Non-JetCard cash£m

RepresentingcashexcludingJetCardcash.

£3.9m

Return on equity%

Returnonequityiscalculatedasoperatingprofitovernetassets.

29.5%

Underlying earnings per sharePence

BeingEPSderivedfromunderlyingoperatingprofit(whichexcludesotheritems).

6.5p

Dividends per sharePence

Asadjustedforthesharesplitwhichtookeffecton31January2017.

5.2p

Basic earnings per sharePence

BeingEPSderivedfromoperatingprofitincludingotheritems.

5.4p

Total cash£m

RepresentingJetCardcashandnon-JetCardcash.

£19.8m

Total shareholder return%

Iscalculatedasclosingsharepriceplusdividendslessopeningsharepricealldividedbyopeningshareprice.

50.4%

12 14 15 16 17

227.6211.5

192.1210.8 215.8

12 14 15 16 17

8.1

9.7

4.7

3.03.9

12 14 15 16 17

29.8 29.7

20.423.2

29.5

12 14 15 16 17

4.3

5.7 5.55.9

6.5

12 14 15 16 17

3.6

5.6

4.44.8

5.2

12 14 15 16 17

15.7

18.4 18.819.8 19.8

12 14 15 16 17

5.8 6.05.5

3.7

5.4

12 14 15 16 17

-39.8

120.9

-37.6

31.850.4




AhighpercentageoftheGroup’sbusinessisdrivenbytheshort-termneedsofourcustomers.Alongforward-orderbookisthereforeneitheravailablenorappropriatetouseasameasureofourlonger-termprospects.

Strategic KPIsWeareonajourneyoftransformationtobecomeaworld-classglobalaviationservicesgroup.Thisyear,weidentifiedfourKPIstomeasureourprogress:twofinancialandtwonon-financial.ThefinancialKPIsare:

• optimise:increaseingrossprofitfromlegacyAirPartnerbrokerbusiness

• enhance:thecontributionmadebytheGroup’snewacquisitionstooverallGroupunderlyingprofit.

Ourtwonon-financialKPIsmeasureourtwomostimportantassets–ourcustomersandourpeople:

• customers:netpromoterscore

• people:employeeturnover.

TheseKPIsmaybeamended,oraddedto,aswecontinuetotransform.

1. FinancialKPIsareforthelastfivefinancialperiods,beingthefinancialyearsended31July2012,theunauditedpro-formafinancialyearended31January2014andthefinancialyearsended31January2015,31January2016and31January2017.

2. AllfinancialKPIsarebasedontotalratherthanunderlyingmeasures,exceptforunderlyingprofitbeforetaxandunderlyingbasicearningspershare.

3. Detailedsegmentalreportingissetoutinnote4tothefinancialstatements.

Gross profit£m

Beingthemaindeterminantoftop-lineperformancewithinthebusiness.

£31.7m

Underlying profit before tax%

Beingthemainmeasureoffinancialperformanceusedwithinthebusiness.

£5.1m

ENHANCE

Acquisition contributionto underlying operating profit£m

Thismeasuredemonstratesthecontributiontoprofitsarisingfromourstrategyofintroducingnewservicelinestoourcustomers.

£0.7mCUSTOMERS

Net Promoter Score%

OurNetPromoterScoreiscalculatedbytakingthepercentageofcustomerswhoaredetractors(scoretheGroup’sservice0-6outof10)fromthosewhoarepromoters(scoretheGroup’sservicegreaterthan9outof10).

75%

PEOPLE

Employee turnover%

CalculatedasthepercentageofemployeeswholeavetheGroupduringthefinancialyearandarereplacedbynewemployees.

25%

OPTIMISE

Legacy business increase in gross profit£m

Giventheinherentvolatilityofaircraftchartergrossprofit,weimplementedourCustomerFirstprogrammetodrivecustomerloyalty.Thenetincreasefromyearend2016ismodestsincetheprioryearbenefitedfromaone-offcontract.

£0.3m12 14 15 16 17

21.823.4 22.0

27.3

31.7

12 14 15 16 17

3.2

4.1

2.6

4.3

5.1


2017 performance: divisional reviews

Intheworldofcommercialairlinecharter,successdependsonexperience,expertiseandreputationbuiltoverdecades.AirPartner’sCommercialJetsteamofferslogisticalexcellence,valueformoneyanddependability.

PerformanceTheperiodunderreviewsawCommercialJetsdeliverastrongperformanceinbothEuropeandtheUS.Grossprofitincreasedby5.0%to£14.7m(2016:£14.0m)andunderlyingoperatingprofitimprovedto£3.8m,anincreaseof30.3%(2016:£3.0m).ThiswasdrivenlargelybytheperformanceofAirPartnerRemarketing(formerlyCabotAviation)forafullyear,whilestrongperformancesbytouroperations,sportsandgovernmentclientsinEuropewasabletooffsetthedownturnintheoilandgasmarketintheUK.

IntheUS,despiteareducedflyingschedulefromakeycustomer,webenefitedfromthepresidentialelection,workingonthe‘HillaryforAmerica’campaign.

IntheUK,aone-offmajoroilandgascontractwhichoperatedthroughoutthepreviousfinancialyearcametoanend,butwecontinuedtomakegainsinthesportsmarket,particularlywithanumberofPremiershipfootballteams.

Emergency PlanningOurEmergencyPlanningproduct,wherebywemapoutevacuationcontingenciesforbluechipcompanieswithpersonnelstationedinvolatileregimes,isasubscription-basedserviceandprovidesarecurringincomestream.Thedivisiontypicallyservescompaniesoperatinginunstablepartsoftheglobebutalsoassistscharitieswithcivilemergencyevacuationanddisasterrelief.EmergencyPlanningmetexpectationsfortheyearand,giventheuncertaintiesinthegeopoliticalenvironment,webelievethisbusinessiswellplacedforfuturegrowth.

A strong year for Air Partner Remarketing (formerly Cabot Aviation)AirPartnerRemarketinghadaprofitableyearinitsfirstfullyearofownershipandgoesinto2017withastrongpipelineofmandates.KeysalessuccessesincludedthesaleofthreeKenyaB777stoaUSoperator.Duringtheyear,wealsomovedshort-termleasing(ACMI)intoAirPartnerRemarketingandasaresultithaditsstrongestyearoverthelastfive-yearperiod.TheintegrationofAirPartnerRemarketingintoourofficesatGatwickhasbeenverysmoothandsuccessful.

OurCommercialJetsteamservescustomers24/7

Commercial Jets IncludingAirPartnerRemarketing


£14.7mGrossprofit

£3.8mUnderlyingprofit

• StrongperformancesfromEuropeandtheUS

• AirPartnerRemarketingprofitableinfirstfullyearofownership




On the campaign trailHillaryClintonwithSimonMooreofAirPartner

Key fact: REMARKETING

3 777ssold

Key facts: COMMERCIAL JETS

7nationalfootballteams

35footballclubs


2017 performance: divisional reviewscontinued

Private Jets

Aspartofoneoftheworld’slargestsuppliersofaircraftcharter,ourPrivateJetsteamhastheexperience,relationshipsandaviationexpertisetotailorsolutionstomeetourcustomers’exactingneeds.

PerformanceOverall,PrivateJetshasfaredwellthisyear.Mixedresultsfromadhocbusiness,withcorporatecustomersflyinglessoften,wasoffsetbyJetCard,whichhadanotherrecordyear.Grossprofitincreasedby9.3%to£10.2mandunderlyingoperatingprofitroseby4.4%to£2.5m.WehadagreatstarttotheyearintheUK,thoughadhocflyingtailedoffsomewhatinthesecondhalfoftheyear,whileconversely,intheUS,wehadaslowstartandastrongfinish.2017alsosawstrongperformanceforPrivateJetsinEurope,especiallyinGermany.JetCardutilisationhasincreased41%on2016,afantasticachievement.Cardnumbershaveincreasedby13to222althoughJetCarddepositshavedecreasedto£15.9m(2016:£16.8m)reflectingthehigherutilisationintheyear.

Customer First gives us an edgeTheprivatejetmarketisextremelycompetitivebutwebelieveourCustomerFirststrategy,whichdeliversanunrivalledlevelofservice,particularlyforJetCard,togetherwithourfinancialstability,transparencyandsecurity,meanswehaveauniqueproposition.Wehavesomeexcitinginitiativesunderwaywhichwebelievewillfurtherextendourservicesinthisareaanddeliverexceptionalservicestoourcustomers.Wecontinuetomonitortechnologyplatformsintheprivatejetspace,butwefundamentally

believe–andourcustomersseemtoagree–thatuntiltechnologicalcapabilitieshavefurtherdeveloped,complextravelschedulingisbetterhandledbypeopleratherthanmachines.

OurCustomerFirstprogrammeremainspivotaltoouroperationsandwebelieveitaccountsforalargeproportionofourcontinuingsuccess.Byputtingourcustomersfirst,wecontinuetoprovideanunrivalledservice,togetherwithavalueformoneyproposition.Thisformulaisprovingtobegoodforeveryonewhousesourservices,aswellasallourstakeholders.

AspartofourstrategytogrowintheUS,weinvestedinanewofficeinNewYork,withtheaimofgrowingourmarketsharebyhighlightingourproducts’flexibilityandserviceoffering.IncreasedtradeinUSdollarswill,webelieve,helptooffsettheBrexiteffectintheUK.

Developing our offerWehaveinvestedinsalesandhavemadegreaterin-roadsintoEuropewherewealreadyhaveasolidfoothold.Wehavealsostartedtoofferadditionalserviceslikecontrolledcateringandhavereceivedenthusiasticfeedbackfromourcustomerswho,inthisclass,areextremelydiscerningandusedtohighstandards.Furthermore,andasdiscussed,wewentintopartnershipwithCamper&Nicholsons,theluxuryyachtspecialists,inApril2017.

PeteTong,BritishDJ,disembarkingfromoneofourPrivateJetscharters


£10.2mGrossprofit


• OpenednewofficeinNewYork

• RecordJetCardutilisation

£15.9mJetCarddeposits




222 JetCardsKey facts: PRIVATE JETS



Freight

AirPartner’sFreightteamdeliversbespokeairfreightsolutionstomeetthemostdemandingschedules,reliablyandatthebestpossiblerates.

PerformanceAirPartnerisprimarilyapassengerbusiness,butweseeFreightasastrategic,protectiveofferingwhichallowsustoofferafullaviationservicetocustomers.Fromasmallbase,wecanaddvalue–agoodexamplebeingtheGermanautomotivebusiness.Theyear’sperformanceinthatparticularmarketwasbuoyant,andcomplementsourserviceofferingfromCommercialJetsintheautomotivesector.

However,overall,Freight’sperformancereflectedthehighprioryearcomparable,boostedbyonekeycontract,whichwasnotrenewed.Thedownturnintheoilandgasindustry,whereFreighthastraditionallybeeninvolvedwiththetransportationofheavypipesandotherdrillinggear,alsomeantalessbusyperiod,withgrossprofitof£1.1m(2016:£1.9m)andunderlyingoperatingprofitof£0.2m(2016:£0.8m).Thedivisionisalwayssubjecttotheunpredictabilityofjust-in-timelogistics,frommovingaircraftorautomotivesparestomobilisingatamoment’snoticetoassistindisasterrecovery.

OurFreightteamensuressecure,timecriticaldeliveryofcargoallovertheworld


£1.1mGrossprofit


• Challengingyearduetolossofkeycontract

• Remainsastrategicserviceofferingtoourcustomers




Key facts: FREIGHT

445Romanianartefacts

200,000 one-dayoldchicks



BainesSimmonsisaworld-leadingaviationsafetyconsultancywhichspecialisesinaviationregulation,complianceandsafetymanagement.ClockworkResearchisaleadingfatigueriskmanagementconsultancy.

PerformanceInitsfirstfullyearofoperation,ourConsulting&Trainingdivisiondeliveredagrossprofitof£5.7mandanunderlyingoperatingprofitof£0.5m,equivalentto10.3%oftheGrouptotal.BainesSimmonsdeliveredgoodresultsinitsfirstfullyearofownership,whileinDecember2016theacquisitionofClockworkResearchstrengthenedourConsulting&Trainingproposition.Overthecomingyear,wehaveanambitiousplanforthecontinuousdevelopmentofSMARRTMAP(SafetyManagementandRiskReductionToolMeasurementandPerformance)whichwillenhanceouroverallpropositionandwhichwillfurtherstrengthentherelationshipbetweenourconsultingandtrainingservices.

Integrating Baines SimmonsTheintroductionofCustomerFirstintoBainesSimmonshasestablishedstrongfoundationsforthefuture.Bystandardisingmanyofourprocesseswecanensuretheconsistenthigh-qualitydeliveryofourproductsandservices.Weconstantlyreviewtheseproductsandservicestoensuretheyarealignedtoourcustomers’needs.

TheintegrationofsharedGroupservicessuchasmarketing,finance,HRandITwaslargelycompletedduringtheyear.

BainesSimmonscontinuedtobenefitfromanumberoflargeandlong-termcustomerprogrammeswhichcutacrossbothconsultingandtrainingproductsandservices,whileourAviationSafetyAcademyexperienceditsbestevermonthlyperformanceinNovember.

Outsourced servicesInApril2016,weannouncedthatwehadbeensuccessfulinsecuringafurther10-yearcontracttoprovideaviationsupportservicestotheIsleofManAircraftRegistry(IOMAR).InJanuary2017,IOMARwasnamedBestGlobalAviationRegistryinWorldCommerceReviewMagazine’s2017awards.IOMARwillcelebrateits10-yearanniversaryinMay2017and,sincelaunch,almost950aircrafthavebeenregistered,highlightingthecontinuedsuccessoftheRegistrywhichisnowthesixthlargestprivate/corporateaircraftregistryintheworld.

Welcoming Clockwork ResearchClockworkResearch,withitssmartinnovationsinfatiguemanagement,isanaturalfitwithBainesSimmonsintermsofsafetycontrolandriskmanagement.

Itstrengthensourofferingandtheopportunitiesaregood.Headedupbyasmallteamofenterprisingacademics,ClockworkResearchisverywellrespectedbymajoroperatorsacrosstheworld.Thebusinessusessystemsmodelstoensurethatpilotsandotheressentialpersonnelaregettingthenecessarysleeptocarryouttheirtaskseffectivelyandsafely.Thepipelineoffutureprojectsisencouraging,andincludesalargeprojectwithafleetoperatorinAsiatocarryoutalarge-scaleresearchstudyandthenhelpthemtobuildafatiguemanagementsystem.Thisisafirstfortheregion.TheBainesSimmonsteamisdrivenbyour

passiontomaketheskiessaferforall

Consulting & Training (BainesSimmonsandClockworkResearch)


£5.7mGrossprofit


• AwardedIsleofManAircraftRegistrycontractfor10yearsinApril2016

• AcquisitionofClockworkResearchcompletedinDecember2016

• CustomerFirstprogrammerolledoutacrossBainesSimmons

635,000 milesflownbyconsultants




Key facts: BAINES SIMMONS

467 surveys

4 continents

Director’s approval statement

ThisStrategicreportwasreviewedandapprovedbytheBoardofdirectorson26April2017.

Neil MorrisChiefFinancialOfficer




Corporategovernance


Board of directors

Richard Everitt Independent non-executive Chairman ARC RC NC

RichardqualifiedasasolicitorandbecamedirectoratBAAplcbeforebeingappointedChiefExecutiveofNationalAirTrafficServicesin2001andchiefexecutiveofthePortofLondonAuthorityfrom2004to2014.HejoinedtheBoardasanon-executivedirectorin1995andbecameChairmanin2012.HewasappointedasacommissionerofBelfastHarbourandchairmanoftheDoverHarbourBoardin2016.RichardwillstanddownfromtheBoardaftertheAGMinJune.

Mark Briffa Chief Executive Officer

Markhasanextensiveknowledgeofaircharterbrokingandoftheaviationindustryworldwide,withnearly30years’experienceworkingwithintheaviationsector.BeforejoiningAirPartner,heheldcommercialrolesatAir2000andAllLeisure.HestartedhiscareerwithAirPartnerin1996asaCommercialJetsbrokerandjoinedtheBoardin2006asChiefOperatingOfficer,becomingChiefExecutiveOfficerinApril2010.

Neil Morris Chief Financial Officer

Neilisacharteredaccountant,havingtrainedatDeloitteLLPwherehespent11years,primarilyworkingintheaviationandtravelsector.PriortojoiningAirPartner,hewasgroupfinancedirectorofAllLeisureGroupplc,anAIMtradedtouroperator.HewasappointedChiefFinancialOfficerofAirPartnerinJune2014,havingheldthepositionofinterimChiefFinancialOfficerfromApril2014andGroupFinancialControllerpriortothat.

Peter Saunders Independent non-executive director/Chairman designate ARC RC

PeterjoinedtheBoardinSeptember2014andbecameChairmanoftheRemunerationCommitteeinMarch2015andSeniorIndependentDirectorinJune2016.Peterhasawealthofexperienceinmarketingandcustomerservice.HeisleaddirectorofGodivaChocolatierNV,non-executivedirectorofTotalWines&MoreandwasChiefExecutiveOfficerofBodyShopInternationalplcfrom2002to2008.PastboardexperienceincludesCanadianTireCorporation,JackWillsandSecondCup.AsreportedintheChairman’sstatementonpage4,PeterwillformallytakeoverasChairmanattheconclusionoftheAGMinJune.

Richard Jackson Independent non-executive director ARC RC

RichardjoinedtheBoardon8September2016.HeservedattheCivilAviationAuthorityfor11yearsasgroupdirectorofconsumerprotectionwherehewasinstrumentalintheintroductionofnewATOLregulations.RichardbeganhiscareerwiththeMODin1974beforejoiningthefinancialservicessector.Richardalsoactsasconsultanttoanumberofaviationandtravel-relatedclients.

Shaun Smith Independent non-executive director ARC RC NC

ShaunjoinedtheBoardon1May2016.HebeganhiscareerinretailmanagementandcorporatetreasuryatMarksandSpencerplc.HejoinedAgaRangemasterGroupplc(formerlyGlynwedInternationalplc)in1989,becominggrouptreasurerin1999andgroupfinancedirectorfrom2001to2015.Heisaqualifiedcorporatetreasurer,andhasaneconomicsdegree.ShaunisalsogroupfinancedirectorofNorcrosplc.HewasappointedChairmanoftheAuditandRiskCommitteeinJune2016.

Amanda Wills Independent non-executive director ARC RC NC

AmandajoinedtheBoardon20April2016.AmandabeganhercareerwithAirtoursplcandwasCEOofVirginHolidaysTravelGroupfrom2001to2014.Amandaiscurrentlynon-executivedirectorofeDreamsODIGEOS.A.,aglobalonlinetravelagency,andchairmanofUrbanologie.com,adigitalstart-upbusinesscateringforthehighnetworthandluxurysector.ShewasawardedaCBEintheQueen’s2015NewYearHonourslistforservicestotheBritishtravelindustryandtocharity.

ARCMemberoftheAuditandRiskCommittee

RCMemberoftheRemunerationCommittee

NCMemberoftheNominationCommittee




Senior management

Lee Pyle Group Head of Technology

Justin Scarborough Interim Managing Director, Baines Simmons

Sally Chandler Group Company Secretary

Tony Whitty Head of Aircraft Remarketing and ACMI

Julia Timms Group Marketing Director

Richard Smith Head of Product, Air Partner Broking

Rachel Thripp Group HR Director

Mark Briffa Chief Executive Officer

Neil Morris Chief Financial Officer

Seeopposite.

“�Our�plc�status�is�a�unique�strength,�offering�reassurance�to�our�stakeholders�that�we�operate�to�high�standards�of�governance�and�ethics.”

RICHARD EVERITT Chairman


Chairman’s introduction to governance

UK Corporate Governance Code

TheBoardsupportstheprinciplesandprovisionssetoutintheUKCorporateGovernanceCodeissuedbytheFinancialReportingCouncilinSeptember2014(theCode).OurdutyistomanagetheGroupinaccordancewiththeCode,andwebelievethat,throughouttheyear,theCompanyappliedthemainprinciplesoftheCode,andcompliedwithitsprovisions.WehavestructuredourcorporategovernancereportinlinewiththeCode’sprinciples,andyouwillfindtherelevantcompliancestatementshighlightedineachsection.

Leadership–seepage45

Effectiveness–seepage47,andtheNominationCommitteereportonpage50

Accountability–seepage48,andtheAuditandRiskCommitteereportonpage51

Remuneration–seetheDirectors’remunerationreportpages54to65

Relations with shareholders–seepage49

Dear Shareholder

Asannouncedon2February,IwillbesteppingdownafterfiveyearsasChairman.IamproudtohaveservedasyourChairman,guidingtheBoardandsupportingthemanagementteamduringbothtoughand,Iampleasedtosay,morebuoyanttimesinrecentyears.

Our focus this yearWehavebeenactiveontheacquisitionfrontandaconsiderableamountofoureffortasaBoardhasbeenspentscrutinisingproposalsandduediligencenecessarytoensurethatproposedacquisitionsmeetthehighstandardsourshareholdersexpect.IampleasedtowelcomeClockworkResearch,leadersinfatigueriskmanagement,totheGroup(seepage17).AnotherkeyareaoffocushasbeenIT.TheBoardhasapprovedinvestmentintechnologyplatformsthatwillsignificantlyenhanceourcurrentoperationswhilealsosettingupoursystemstoenableustointegrateouracquisitionsseamlessly.

A new programme of Board visitsWiththeexpandinggeographicalfootprintoftheGroup,forthefirsttimethisyearwedecidedtoholdtwoBoardmeetingsoutsidetheUK,oneinParisandoneinFortLauderdale,Florida.Visitingoursitesandmeetingourpeopleis

enormouslyvaluable;whatwelearnabouttheGroupinashortvisitisworthhoursoftimeintheboardroom.

Board changesDuringtheyear,wewelcomedShaunSmithandAmandaWillstotheBoardasindependentnon-executivedirectors.WealsosaidfarewelltoAndrewWoodatour2016AGMandPeterSaundersreplacedhimasourSeniorIndependentDirector.Laterintheyear,on8September2016,wewelcomedRichardJacksontotheBoard.RichardservedattheCivilAviationAuthorityfor11yearsasgroupdirectorofconsumerprotection,andwasinstrumentalintheintroductionofnewATOLregulationsandtheATOLProtectionContributionandoversawtherestructuringofanumberofmajortouroperators.RichardbeganhiscareerwiththeMinistryofDefencein1974beforejoiningthefinancialservicessector.Richardalsoactsasconsultanttoanumberofaviationandtravel-relatedclients.

FollowingmydecisiontostanddownasChairmanaftertheAGMinJune,theNominationCommitteeconductedaselectionprocessassetoutonpage50.IampleasedthatPeterSaunderswilltakeuptheroleasChairmanaftertheconclusionoftheAGMon28June.

WehaveonceagainundertakenaBoardperformanceevaluationexercise.BecauseofthechangesintheBoard’scompositionduringtheyear,wedecideditwasmoreappropriate,aswellascosteffective,tocarryoutaninternalevaluationratherthananexternallyfacilitatedexercise,asdiscussedonpage50.

IamconfidentthatIwillbeleavingAirPartnerwitharenewedBoardandarevitalisedseniormanagementteam.Ihaveeveryconfidencethattogethertheywillbringtofruitiontheexcitingtransformationjourneysetoutinthisreport.

Richard Everitt Chairman26April2017




Corporate governance report

Leadership


A. LeadershipA.1 The role of the BoardTheBoard’sroleistoprovideentrepreneurialleadershiptotheGroupwithinaframeworkofprudentandeffectivecontrolswhichenablesrisktobeassessedandmanaged.TheBoardsetstheGroup’sstrategicaimsandensuresthatthenecessaryresourcesareinplacetoachievethoseaims.TheBoardmetformallyeighttimesduringtheyear.ThereisaclearscheduleofmattersreservedfortheBoard,togetherwithdelegatedauthoritiesthroughouttheGroup.

A.2 Division of responsibilitiesTherolesoftheChairmanandtheChiefExecutiveOfficerareclearlydefined.TheChairman,RichardEveritt,isresponsiblefortheleadershipandeffectivenessoftheBoard.TheChiefExecutiveOfficer,MarkBriffa,isresponsibleforleadingtheday-to-daymanagementoftheGroupinlinewiththestrategysetbytheBoard.RolesandresponsibilitiesofkeyBoardmembersareavailableonlineatwww.airpartner.com.

A.3 The role of the ChairmanTheChairmansetstheagendasfortheBoardmeetings,managesthemeetingtimetableinconjunctionwiththeCompanySecretaryandpromotesopenandconstructivedebatebetweenexecutivedirectorsandnon-executivedirectorsduringmeetings.

A.4 The role of non-executive directorsTheChairmanactivelyinvitesthenon-executivedirectors’views.Theyscrutinisetheperformanceofmanagementagainstagreedgoalsandprovideobjectiveandconstructivechallengetotheexecutivedirectors.TheyattendanannualstrategydaywiththeOperatingBoardandhelpdevelopproposalsonstrategy.IfadirectorhadaconcernwhichcouldnotberesolvedabouttherunningoftheCompanyoraproposedaction,theywouldensurethattheirconcernswererecordedintheBoardminutes.Thenon-executivedirectorshavediscussionswithouttheexecutivedirectorspresent.

MarkBriffaandNeilMorrisarenotmembersoftheAuditandRiskCommitteeorRemunerationCommitteebutattendmeetingswhenappropriatebyinvitation.Otherseniorexecutivesareregularlyinvitedtoattendmeetingsforspecificitems.

Board meetingsThetablebelowshowstheattendancerecordofindividualdirectorsatBoardmeetingsandrelevantCommitteemeetings.

Numberofmeetings BoardAuditandRisk

CommitteeRemuneration

CommitteeNominationCommittee

Executive directors

MarkBriffa 8 – – –

NeilMorris 8 – – –

Non-executive directors

RichardEveritt 8 4 4 2

RichardJackson1 4 2 1 –

PeterSaunders 8 4 4 1

ShaunSmith1 5 2 2 2

AmandaWills1 7 3 3 2

AndrewWood2 3 1 1 –

1AmandaWills,ShaunSmithandRichardJacksonwereappointedasdirectorson20April2016,1May2016and8September2016respectivelyandthereforeonlyattendedmeetingsfromthedateoftheirappointments.

2AndrewWoodresignedasadirectoron29June2016.

Role of the BoardItistheBoard’sroletoensuretheeffectivedirectionandcontroloftheGroup’sbusinessforthelong-termbenefitofallshareholders.TheapplicationofstandardsofcorporategovernanceappropriatetotheGroup’ssize,profileandcircumstanceisanimportantpartofthatrole.

TheBoardsetsthestrategicaimsoftheGroupandrigorouslyreviewstradingperformanceagainststrategicinitiatives,andagainstfinancialtargetssetatthebeginningoftheyear.TheBoard’sactivitiesduringtheyearhaveincludedtheconsiderationofproposalsinlinewithitsacquisitionstrategyandtheapprovaloftheappointmentofnewmembersto

theBoard.TheBoardmeetsformallyatleastfivetimesayearwithadditionalmeetingsasnecessary.

AformalscheduleofmattersisreservedforBoarddecision,includingformulationanddevelopmentofstrategy,majoracquisitionsordisposals,significantbankborrowings,Board-levelappointments,theapprovaloffinancialreportsandprice-sensitivestatementsandoverallbusinessriskassessment.Acopyofthescheduleisavailableonlineatwww.airpartner.com.

TheBoardreceivesreportsateachmeetingfromtheChiefExecutiveOfficer,theChiefFinancialOfficerand,followingmeetingsofBoardcommittees,fromtheirrespectivechairmen.


Corporate governance report continued

Governance structure: Board and committees

Operating Board Responsibilities

MarkBriffa,ChairNeilMorrisLeePyleJustinScarboroughRichardSmithJuliaTimmsRachelThrippTonyWhitty

TheOperatingBoardhascollectiveresponsibilityforrunningtheGroup’sbusinessundertheleadershipoftheChiefExecutiveOfficer

•ImplementingtheGroup’sstrategyapprovedbytheBoard•RecommendingcapitalexpenditureandinvestmentbudgetsforBoardapproval•Monitoringfinancial,operationalandserviceperformance•AllocatingresourcesasagreedbytheBoard•Planninganddeliveringmajorprogrammes•Reviewingtheseniortalentbaseandsuccessionplans

Remuneration Committee

PeterSaunders,ChairRichardEverittRichardJacksonShaunSmithAmandaWills

Responsibilities

•DeterminingandagreeingwiththeBoardthepolicyforremunerationoftheChiefExecutiveOfficerandChiefFinancialOfficer

•Reviewingtheongoingappropriatenessandrelevanceoftheremunerationpolicyincomparisonwithindustrybenchmarksandlevelsofremunerationinthebusinessasawhole

•Approvingthedesignandtargetsofperformance-relatedpayandshareincentiveplansandawardsmadetoexecutivedirectorsandperformancetargetstobeused

Readmoreonpage54

Audit and Risk Committee

ShaunSmith,ChairRichardEverittRichardJacksonPeterSaundersAmandaWills

Responsibilities

•Reviewingfinancialreporting,focusingontheappropriatenessofaccountingpoliciesandjudgementsandinclusionofrelevantdisclosures

•Assessingtheeffectivenessofinternalcontrolsandriskmanagementsystemsandtheriskmanagementprocess

•Reviewingthescopeandeffectivenessofinternalauditprocesses

•Overseeingtherelationshipwiththeexternalauditorandtheeffectivenessoftheexternalauditprocess

Readmoreonpage51

Nomination Committee

RichardEveritt,ChairPeterSaunders

Responsibilities

•ConsideringthecompositionoftheBoardasawholeandtherangeofskills,knowledgeandexperienceofthedirectors

•Planningandcarryingoutappropriatesuccessionasdeemednecessary

•Reviewingthere-appointmentofnon-executivedirectorsattheexpirationofthetermsetoutintheirappointmentletters

Readmoreonpage50

Chief Executive

MarkBriffa

The Board Responsibilities

RichardEverittChairman

TheBoardcarriesultimateresponsibilityfortheeffectivedirectionandcontroloftheGroup’sbusinessandisaccountabletoshareholdersforthelong-termsuccessoftheGroup.Thisisachievedthrough:

•settingthestrategicobjectivesoftheGroup•approvingstrategicprojectsandGroupanddivisionalbudgets•ensuringthattheGrouphasaneffectiveriskmanagement•reviewingtradingperformanceagainstfinancialtargetssetatthestartofthe

financialyear.

Leadershipcontinued





B. EffectivenessB.1 The composition of the BoardWhenmakingappointmentstotheBoard,theBoardandtheNominationCommitteeconsiderthewiderangeofskills,knowledge,experienceandindependencerequiredtomaintainaneffectiveBoard.

B.2 Board appointmentsTheBoardisresponsiblefortheappointmentofexecutivedirectors.Successionplanningandtheappointmentofnewnon-executivedirectorstotheBoardisledbytheNominationCommittee.TheNominationCommitteereportisonpage50andgivesdetailsoftherecruitmentprocessandappointmentofRichardJacksonasindependentnon-executivedirectoron8September2016.AstheChairmanshouldnotchairthenominationcommitteewhenitisdealingwiththeappointmentofasuccessortothechairmanship,asub-committeeoftheNominationCommitteeconductedtheChairmansuccessionprocessandrecommendedtotheBoardthatPeterSaundersbeappointedasthenew

Chairman.TheBoardapprovedtherecommendationandtheappointmentofPeterSaundersasChairmanwilltakeeffectimmediatelyfollowingtheconclusionofthe2017AGMon28June.

B.3 CommitmentWhenappointed,directorsareinformedofthetimecommitmentexpectedfromthem.Acopyofthetermsandconditionsoftheappointmentofthenon-executivedirectorsisavailableforinspectionattheCompany’sregisteredofficeduringnormalbusinesshoursandattheAGM.

B.4 DevelopmentNewlyappointedBoardmembersreceiveafullandtailoredinduction.Followingthisinduction,meetingsarearrangedwithkeyexecutivesandmanagerswithinthebusinesstoprovideongoingeducationandinformationaboutthebusinessandeachnon-executivedirectorattendsoneOperatingBoardmeetingeachyear.AlldirectorsattendanannualStrategyDaywiththeOperatingBoardandotherseniormanagers.

B.5 Information and supportTheChairman,inconjunctionwiththeCompanySecretary,ensuresthatallBoardmembersreceiveaccurateandtimelyinformation.TheBoardensuresthatalldirectorshaveaccesstoindependentprofessionaladviceattheCompany’sexpensewheretheyjudgeitnecessarytodischargetheirresponsibilitiesasdirectors.AlldirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.

B.6 Board evaluationDuringtheyear,theBoardanditscommitteesundertookanevaluationoftheirperformance.Thenon-executivedirectorsareresponsibleforperformanceevaluationoftheChairmantakingintoaccounttheviewsoftheexecutivedirectors.

B.7 Re-election of the directors AlldirectorsaresubjecttoelectionbyshareholdersatthefirstAGMaftertheirappointmentandtoannualre-electionthereafter.

Composition of the BoardThecompositionoftheBoardisshownonpage42.

Board changesAsstatedinthe2016AnnualReport,AndrewWoodresignedasanon-executivedirectoroftheCompanyattheconclusionoftheAGMon29June2016.Duringtheyear,thefollowingappointmentsweremadetotheBoard:

• AmandaWillson20April2016• ShaunSmithon1May2016• RichardJacksonon8September2016.

FollowingAndrew’sretirementfromtheBoard,PeterSaunderswasappointedasSeniorIndependentDirectorandShaunSmithwasappointedChairmanoftheAuditandRiskCommittee.

After12yearsontheBoardandfiveyearsasChairman,RichardEveritthasdecidedtostepdownasChairmanandthereforewillnotstandforre-electionatthe2017AGM.Fulldetailsregardingtheprocesstoselecthissuccessortogetherwiththeappointmentofthenewnon-executivedirectorsaresetoutintheNominationCommitteereportonpage50.

Independence of non-executive directorsTheBoardconsidersallthenon-executivedirectorstobeindependent.Giventheirrelativelysmallshareholdings,theBoarddoesnotbelievethattheseimpactontheindependenceofRichardEveritt,PeterSaundersorShaunSmith.

Board performance evaluationTheCompanycontinueseachyeartoevaluatetheperformanceoftheBoardanditscommittees.BecauseofthechangesintheBoard’scompositionduringtheyear,itwasdecidedthatitwasmoreappropriate,aswellascosteffectiveandpragmatic,tocarryoutaninternalreviewratherthananexternallyfacilitatedevaluationexercise.ThereforetheBoard’seffectivenesswasassessedinternallybywayofaquestionnairecompletedbyBoardmembers.TheresponsestothequestionnaireswereevaluatedbytheChairmanandtheCompanySecretaryandareportwaspreparedfortheBoard.

TheBoardconfirmsitsbeliefthatalldirectorsbringsignificantvaluetothebusiness,areeffectiveinBoarddecisionmakingandshowtheappropriatelevelofcommitmenttotheirroles.

Election and re-election of directorsFollowinghisappointmenttotheBoardon8September2016,RichardJacksonwillstandforelectionatthisyear’sAGM.TheBoardrecommendstheelectionofRichardJacksonaslistedintheseparateNoticeofAnnualGeneralMeeting.

Inaccordancewithbestpractice,allotherdirectorswillresignatthe2017AGMandstandforre-election,withtheexceptionofRichardEverittwho,aspreviouslyexplained,isstandingdownfromtheBoard.

Effectiveness


Corporate governance report continued


C. AccountabilityC.1 Financial and business reportingTheBoardisresponsibleforpreparingfair,balancedandunderstandablefinancialinformation.Thestrategicreportissetoutonpages1to39inclusiveandthisprovidesinformationabouttheperformanceoftheGroup,thebusinessmodel,strategyandtherisksanduncertaintiesrelatingtotheGroup’sbusiness.

C.2 Risk management and internal control systemsTheBoardsetsoutthenatureandextentofthesignificantrisksandmaintainssoundriskmanagementandinternalcontrolsystems.FurtherinformationonriskmanagementandinternalcontrolsystemsissetoutintheAuditandRiskCommitteereportonpages51to53.

C.3 The role of the Audit and Risk CommitteeTheactivitiesoftheAuditandRiskCommittee,whichassiststheBoardwithitsresponsibilitiesformonitoringandreviewingtheeffectivenessofinternalcontrolandriskmanagementsystems,internalauditandtheexternalauditor,aresetoutintheAuditandRiskCommitteereportonpages51to53.ThetermsofreferenceoftheAuditandRiskCommitteeareavailableonlineatwww.airpartner.com.TheAuditandRiskCommitteeasawholehascompetencerelevanttothesectorinwhichtheCompanyoperates.

Risk management and internal controlDuringtheyear,thefullBoardwasresponsiblefortheGroup’ssystemofriskmanagementandinternalcontrolandforreviewingitseffectiveness,thoughreportsareprovidedinthefirstinstancetotheAuditandRiskCommitteebytheChiefFinancialOfficer.TheBoardhasestablishedanongoingprocessforidentifying,evaluatingandmanagingsignificantrisk.ThisprocessisreviewedregularlybytheBoard.

Thekeyinternalproceduresinplacefortheyearended31January2017anduptothedateofapprovaloftheAnnualReportareasfollows:

• adetailedandcomprehensiveannualbudgetisproducedandformallyapprovedbytheBoard

• theBoardmaintainsascheduleofkeymattersreservedforitsapproval,whichincludefinancingandchangestobankingarrangements,allsignificantcapitalexpenditureandallacquisitionsanddisposals

• boththeBoardandtheOperatingBoardreceivemonthlyfinancialreports,showingtheperformanceofeachdivisionandcountry,withrelevantcommentariestohighlightvariancefrombudgetorparticularareasofconcern

• businessperformancereportsarecirculatedtotheOperatingBoardonaweeklybasisforsalesbookings,andmonthlytomonitoroverallperformance

• clearlydefinedauthoritylimitsandcontrolsareinplaceovercontractsigninglimits,purchasingcommitmentsandtheextensionofcredittoclients;inparticular,brokersoperatewithinindividual,pre-setlimitsofauthorityandonlythosestaffwhohavesuccessfullycompletedasix-monthprobationaryperiodcansignchartercommitmentsonbehalfoftheGroup.Adherencetotheselimitsandcontrolsaretestedonanongoingbasisaspartoftheinternalauditprocess

• eachoftheGroup’smajorofficesisvisitedatleastonceayearbyaseniormemberofthefinanceteam

• theCompanyhasarobustriskmanagementprocessthatfollowsasequenceofriskidentification,assessmentofprobabilityandimpact,andassignsanownertomanagemitigationactivities.AriskregisterismonitoredbyseniormanagementandreportedtotheAuditandRiskCommittee.Theriskregisterandthemethodologyappliedisthesubjectofcontinuousreviewbyseniormanagementandupdatedtoreflectnewanddevelopingareaswhichmightimpactbusinessstrategy.TheAuditandRiskCommitteeactivelyreviewstheriskregisterandassessestheactionsbeingtakenbyseniormanagementtomonitorandmitigatetherisks.ThoseriskswhichareconsideredtobetheprincipalrisksoftheGrouparepresentedonpages18to21

• theGroupdoesnottradespeculativelyinderivatives.Otherthanforwardforeignexchangecontracts,theGroupdoesnotusecomplextreasuryinstrumentsinthenormalcourseofbusinessandanyspecificprojectsthatmayinvolvesuchinstrumentsrequireBoardapproval.

TheBoardconfirmsthatithascompliedwiththeCodewithregardtoitsresponsibilitiesrelatingtoriskmanagementandinternalcontrols.

ThedirectorsreviewedtheeffectivenessoftheGroup’sinternalcontrolandriskmanagementsystemsduringtheyear.Intheirreview,whichcoveredallmaterialcontrolsincludingfinancial,operationalandcompliancecontrols,thedirectorsconsideredthenatureoftheGroup’sbusiness,theriskstowhichthatparticularbusinessisexposed,thelikelihoodofsuchrisksoccurringandthecostsofprotectingagainstthem.However,suchasystemisdesignedtomanageratherthaneliminatetheriskoffailuretoachievebusinessobjectives,andcanonlyprovidereasonable,andnotabsolute,assurance.

WhistleblowingAwhistleblowingpolicyisinplaceacrosstheGrouptoenablemembersofstafftobringtotheattentionofanydirectorseriousmattersoffinancialmisconductwhichtheybelievewoulddamagetheperformanceorreputationoftheCompany.

Accountability





E. Relations with shareholdersE.1 Shareholder contactTheBoardvaluesopportunitiestomeetwithshareholdersandiskeptinformedofshareholderviews.

E.2 Annual General MeetingTheBoardwelcomestheopportunitytoengagewithshareholdersattheAnnualGeneralMeeting.AlldirectorsattendtheAGMandareavailabletoanswerquestionsbefore,duringandafterthemeeting.

TheBoardrecognisestheimportanceofeffectivecommunicationwithshareholders,analystsandthefinancialpressandiskeentogainanunderstandingoftheviewsofbothinstitutionalandprivateindividualshareholders.ThisisconductedprimarilythroughmeetingsoftheChiefExecutiveOfficerandChiefFinancialOfficerwithanalystsandsignificantshareholdersfollowingboththeinterimandpreliminaryannouncementsoftheresultsoftheGroup,andtheChairmanandSeniorIndependentDirectorareavailableifrequested.FeedbackofshareholdermeetingsisprovidedviatheGroup’scorporatestockbroker.

TheBoardexercisescaretoensurethatallinformation,includingthatwhichispotentiallypricesensitive,isreleasedtoallshareholdersatthesametime,inaccordancewithapplicablelegalandregulatoryrequirements.

Annual General MeetingTheCompanywelcomestheparticipationofshareholdersatitsAnnualGeneralMeeting.TheChairmenoftheBoardanditsCommitteeswillbeavailableattheAGMtoanswerquestionsthatmightarise.Duringtheyearunderreview,theAGMwasheldinJune2016andeachmemberoftheBoardattendedandwasavailabletotakequestions.AllshareholdersareentitledtovoteontheresolutionsputtotheAGMandallvotescastarecounted,whetherinpersonorbyproxy,bymeansofapolloneveryresolutionintheNoticeofAGM.Theresultsofthevotesontheresolutions,includingthenumberofvotesforandagainsteachresolutionandthenumberofsharesforwhichthevotewasdirectedtobewithheld,aregivenatthemeeting.TheyaremadepublicbymeansofanannouncementthroughaRegulatoryNewsServiceandpublishedontheCompany’swebsite.

The2017AGMwillbeheldat11amonWednesday28Juneat2CityPlace,BeehiveRingRoad,Gatwick,RH60PA.TheCompanyconfirmsthatitwillsendtheNoticeofAGMandrelateddocumentationtoshareholdersatleast20workingdaysbeforethemeeting,eitherbypost,tothoseshareholderswhopreferapapercopy,orbyemailtothoseshareholderswhohaveagreedthattheCompanycancommunicatewiththemelectronically.BoththeNoticeofAGMandtheProxyformareavailabletodownloadfromtheInvestorssectionontheCompany’swebsite.

Website informationAllshareholdersandpotentialshareholderscanaccessinvestor-relatedinformationontheshareprice,corporategovernance,annualreports,presentationstoinvestors,AGMdocumentation,regulatorynewsandotherinformationaboutAirPartnerintheInvestorssectionoftheCompany’swebsite,www.airpartner.com.Thissitealsoprovidescontactdetailsforanyinvestorrelatedqueries.

Relations with shareholders


Dear Shareholder

TheprincipalpurposeoftheNominationCommittee(theCommittee)istoleadtheprocessfortheappointmentofnewnon-executivedirectorstotheBoard.

MembershipwillvarybutthetermsofreferencefortheCommitteehavebeenagreedbytheBoardandareavailableonlineatwww.airpartner.com.TheCommitteeismadeupofthreedirectors,includingoneexecutivedirector.

Whenproposingappointmentsofnon-executivedirectors,theCommitteeconsiderstheindependence,skills,knowledgeandexperiencethatacandidatepossessescomparedtotheskillsetsandexperienceoftheBoardasitcurrentlystands.SelectionofcandidatesalsotakesintoconsiderationthebreadthofknowledgethattheBoardhasandthatitmayrequiretoprovideawell-balancedenvironmentwhichencouragesscrutinyandappropriatechallengeofexecutivemanagement.

Changes to non-executive rolesAssetoutinthe2016AnnualReport,theNominationCommitteemadeupofmyself,PeterSaundersandMarkBriffarecommendedtotheBoardthatAmandaWillsbeappointedasanon-executivedirector.AmandawasappointedtotheBoardwitheffectfrom20April2016.

FollowingAndrewWood’sdecisiontostepdownasanon-executivedirectorafterthe2016AGM,theCommitteealsosoughtanon-executivedirectorwiththeappropriateexpertisetoreplaceAndrewasChairmanoftheAuditandRiskCommittee.Followingconsultationwithitsadvisers,anumberofrecommendationswereputforwardandaftercarefulconsiderationofcandidatesagainstcriteriaandinterviewsbyeachmemberoftheCommitteeandtheChiefFinancialOfficer,theCommitteerecommendedtotheBoardthatShaunSmithbeappointedasanon-executivedirector.ShaunjoinedtheBoardon1May2016andwasappointedChairmanoftheAuditandRiskCommitteeon29June2016.

Laterintheyear,theNominationCommitteemadeupofmyself,PeterSaundersandMarkBriffamadeadecisiontoseekafurthernon-executivedirectorwithexpertiseintheaviationsectortoassisttheBoardinitsacquisitionstrategy.TheCommitteeconsultedwithitsadviserstoobtainrecommendationsforsuitablecandidates.AfterconsiderationofcandidatesagainstcriteriaandinterviewswitheachmemberoftheCommitteeandthewiderBoard,theCommitteerecommendedtotheBoardthatRichardJacksonbeappointedasanon-executivedirector.RichardwasappointedtotheBoardon8September2016.

Chairman successionAsannouncedon2February,IwillstanddownfromtheBoardaftertheAGMinJune2017.TheNominationCommitteeappointedasub-committeetoconductaprocesstoselectanewChairman.Itcomprisedourindependentnon-executivedirectorsShaunSmithandAmandaWills,whoappointedexternalsearchconsultants,RidgewayPartners,tosupportthem.Thesub-committeepreparedadetailedspecificationfortheroleofChairman,specifyingtheskills,knowledge,experienceandattributesrequired.Theythenconductedarobustprocessinvolvingdiscussionswithexistingdirectorsandadvisers,followedbyinterviewswiththepotentialcandidates.RidgewayPartnersalsocarriedoutdetailedresearchintothecandidatesandmaderecommendationstothesub-committee.Thedecision-makingprocessdidnotinvolvemyself,PeterSaunderswhowasacandidate,ortheChiefExecutiveOfficer,MarkBriffaashewillreporttothenewChairman.

Followingthisprocess,theCommitteerecommendedtotheBoardthatPeterSaundersbeappointedasChairmanandtheBoardapprovedtherecommendationon26April2017.

Peterhasbeenanon-executivedirectoroftheCompanysinceSeptember2014,ChairmanoftheRemunerationCommitteesinceMarch2015andSeniorIndependentDirectorsinceJune2016.HewilltakeuptheroleofChairmanimmediatelyaftertheAGMon28June2017.

DiversityTheCompanyisateammadeupofpeoplewithabroadrangeofbackgrounds.OurpolicyistoensurethatthebestcandidateisselectedtojointheBoard;thispolicywillremaininplacegoingforwardandtheBoarddoesnotintendtoadoptaquotasystemwithprescriptive,quantitativetargets.Instructionstoanyexternaladviserconductingasearchforappropriatecandidatesrequirethemtosearchforcandidatesfromasmanydifferentbackgroundsaspossible.

Richard Everitt Chairman26April2017

Nomination Committee report




Dear Shareholder

TheAuditandRiskCommittee(theCommittee)supportstheBoardinmaintainingsoundinternalcontrolandriskmanagementprocedures.Itisresponsibleforensuringthatappropriatecorporatereporting,riskmanagementandinternalcontrolsystemsareappliedthroughouttheGroupandreportsregularlytotheBoard.

TheCommittee’sprincipaldutiesaretomonitortheintegrityoftheCompany’sfinancialstatements,toreviewtheconsistencyof,andanychangesto,accountingpoliciesandstandards,toreviewonbehalfoftheBoardtheeffectivenessofauditproceduresandtheworkoftheinternalandexternalauditorandtomonitoronbehalfoftheBoardthesystemsforriskmanagementandinternalfinancialcontrol.TheBoardasawholeisresponsibleforinternalcontrolandriskmanagement.TheCommitteeisrequiredtoreportitsfindingstotheBoard,makinganynecessaryrecommendationsforactionorimprovements.

TheCommitteereviewedandreviseditstermsofreferenceduringtheyearunderreview.ItstermsofreferencecanbefoundontheCompany’swebsitewww.airpartner.com.

Robust review of riskTheCommitteeactsonbehalfoftheBoardtoreviewtheeffectivenessoftheinternalcontrolsystemandriskmanagementprocessesonaregularandongoingbasis.

TheCommitteeundertookthisreviewprocessthroughouttheyearandsubsequenttothebalancesheetdatetoincludethedateofapprovalofthisAnnualReport.

Ateachmeeting,theCommitteereceivesanupdatefromtheCFOonanymaterialmatterstogetherwithareportfromtheGroup’sinternalauditprocess.Theexternalauditor,DeloitteLLP,presentsitsfindingstotheCommitteetwiceayear,specificallyafterthehalf-yearreviewandfollowingtheyear-endauditprocess.IssuesreviewedbytheCommitteearedetailedbelow.

MembershipTheCommitteeismadeupofthenon-executivedirectors:

ShaunSmith(Chairman)RichardEverittRichardJacksonPeterSaundersAmandaWills

ShaunSmithwasappointedtotheCommitteeonhisappointmentasanon-executivedirectoron1May2016andappointedasChairmanoftheCommitteeon29June2016whentheformerCommitteeChairman,AndrewWoodsteppeddownasanon-executivedirector.RichardJacksonjoinedtheCommitteeafterhisappointmentasanon-executivedirectoron8September2016.

TheBoardissatisfiedthatCommitteemembershavetheappropriatelevelofexpertisetofulfilitsTermsofReference.TheChairman,ShaunSmith,aqualifiedCorporateTreasurerwithanHonoursdegreeinEconomics,isconsideredtohaverecentandrelevantfinancialexperience.TheCommitteeasawholeisconsideredtohavecompetencerelevanttotheaviationandtravelsector.Biographiesofthenon-executivedirectorsaresetoutonpage42.

Althoughnotmembers,theexternalauditor,DeloitteLLP(Deloitte),theChiefExecutiveOfficerandtheChiefFinancialOfficerarenotifiedofallmeetingsandmayattendbyinvitation.Ateachmeeting,theCommitteehastheopportunitytotalktotheexternalauditorwithouttheCEOortheCFObeingpresent.Deloitteattendedallmeetingsduringtheyear.

MeetingsTheattendanceofdirectorsatthemeetingsoftheCommitteeissetoutonpage45.TheCommitteemetfourtimesduringtheyear.

Inadditiontoreviewingtheinterimandannualresultsannouncementsinadvanceofpublicationandplanningfortheannualstatutoryaudit,theCommitteehasfocusedontheprocessforriskmanagementandcontinuestoreviewinternalcontroldevelopments.

Significant issues related to the financial statementsThesignificantaccountingandauditmattersconsideredbytheCommitteeanddiscussedwiththeexternalauditorduringtheyearandinrelationtothe31January2017yearendwere:

Roll-out of new contract approval policyAsaresultofthechangeinrevenuerecognitionpolicyadoptedinthefinancialyearended31January2016,theGrouphasundertakenafullreviewofitscontractapprovalpolicyresultinginthelaunchofanewpolicyduringtheyeartoensurecontractsthatareprincipalinnaturecanbeidentifiedbymanagement.Giventhisnewpolicywasadoptedduringthefinancialyear,managementhavealsoappliedaretrospectivereviewprocesstoensuresuchcontractsarecaptured.

Revenue recognitionDuringthepreviousyear,thedirectorsreviewedtheGroup’srevenuerecognitionmethodologywiththeconclusionbeingthatitwasmoreappropriatetorecognisethemajorityoftheGroup’scontractsonanagencybasis.Thenewcontractapprovalpolicy,asdescribedabove,wasintroducedasawayofensuringanycontractsthatareprincipalinnaturearecapturedappropriatelybymanagement.

Audit and Risk Committee report


The completeness of provisions against operator prepayments ItisAirPartner’spolicytonegotiatecontracttermswithaircraftoperatorswhichminimisedepositpaymentsandalignthefinalflightpaymentwiththeflightdateascloselyaspossible.Inaddition,AirPartner’sinternalqualitycontrolfunctionassessesaircraftoperatorspriortoselectiontoensurethatonlyoperatorsofthehighestqualityareused.Furthertoensuringthecompletenessoftheprovisionsagainstpre-payments,theCommitteesoughttoensurethatthecontrolprocedurespertainingtotheauthorisationofpaymentstooperatorswerecompliedwithviatheinternalauditprocess.

Completeness of operator accrualsWhenrevenuesandcostsforairchartercontractsareinitiallyrecognised,estimatesmayneedtobemadeinordertoaccrueitemsofincomeandexpenditurethathavenotbeeninvoiced.Theseestimatesmaydifferfromtheactualoutcome.JudgementisexercisedwhenassessingthelevelofprovisionsnecessaryandtheCommitteerequiresthatprudentbutreasonablediscretionisexercisedonmattersofjudgement.TheCommitteedeterminedthatthelevelofaccrualswasreasonablefollowingadetailedreviewofthecontrolsandthelevelofaccrualsinrelationtotradingactivityintheperiodbeforeyearend.

Finalisation of purchase price allocation relating to the acquisition of Baines Simmons LimitedDuringthepreviousfinancialyear,theGroupacquiredBainesSimmonsLimited.Thereissignificantjudgementrequiredinthevaluationoftheintangibles,andaccordinglytheinitialrecognitionwasmadeonaprovisionalbasis.Thepurchasepriceallocationwasrevisedduringtheyear,whichresultedinachangetothevaluesofintangiblesandgoodwillrecognised.Athird-partyspecialistwasengagedtoperformboththeinitialandsubsequentpurchasepriceallocation.

The valuation of goodwill and intangible assets created through acquisitionsDuringtheyear,therewasapotentialindicatorofimpairmentintheconsultingandtrainingcashgeneratingunit(CGU)ofBainesSimmonsLimited.Havingperformedafullimpairmentreviewexercise,itwastheviewofmanagementthatnoimpairmentofthegoodwillorotherintangiblesrelatedtothisCGU.Therewerenoissuesarisingfromanyotherimpairmentreviewperformedinrespectofothergoodwillorintangibleassets.

External auditDeloittewasappointedastheGroup’sexternalauditorin2011.TheGroup’scurrentauditengagementpartnerwasappointedduringtheperiodended31January2014,withthenextpartnerrotationbeingdueafter31January2018.Thetimingofacompetitivetenderwillcontinuetobeassessedonanannualbasis,consideringtheresultsoftheannualeffectivenessreview.

Priortotheauditbeingconducted,theCommitteeconsideredthecontentandscopeofauditworkandtheauditfees

proposedbyDeloitteanddiscussedchangesinaccountingpoliciesandnewdevelopmentswithinthebusinesswhichmightaffectfinancialreportinggoingforward.AformalreportreceivedfromDeloitte,inrespectoftheauditandmattersarisingfromthereportwasdiscussedpriortotheBoard’sapprovalofthefinancialstatements.

TheCommitteeisawareoftheneedtosafeguardtheauditor’sobjectivityandindependenceandtheissueisdiscussedannuallybytheCommitteeandperiodicallywiththeauditengagementpartnerfromDeloitte.Inadditiontothis,policiesontheawardofnon-auditworktotheexternalauditorexist.Duringtheyearended31January2017,feesof£26,000werepaidtoDeloitteinrespectofnon-auditservices.Ofthisamount,£22,000wasinrespectofaudit-relatedassuranceservices.

InassessingtheeffectivenessoftheexternalauditprocessbytheCommittee,theauditorswereaskedtoarticulatethestepsthattheyhavetakentoensureobjectivityandindependence.Thisyear,theCommitteereviewedandchallengedtheexternalauditplantoensurethathavingidentifiedpotentialareasofrisks,Deloittewouldemployeffectiveauditprocedurestoexaminethem.TheCommitteemonitorstheauditors’performance,behaviourandeffectivenessduringtheexerciseoftheirduties,whichinformstheCommittee’sdecisiontorecommendreappointmentonanannualbasis.

External auditor effectivenessTheCommitteereviewstheeffectivenessoftheexternalauditorwiththeCFOattheendofeachauditperiod.TheCommitteehasbeguntheprocessofformallyassessingDeloitte’seffectivenessbyaskingmembersoftheCommittee,theCFOandindividualswhohaveworkedwithDeloitteduringtheyearunderreviewtoprovidetheirfeedback.

DeloittehasindicateditswillingnesstocontinueinofficeandtheCommitteehasrecommendedDeloitte’sappointmenttotheBoard.AresolutiontoreappointDeloittewillbeproposedatthe2017AGM.

Internal auditDuringtheyearended31January2017,theresponsibilitiesoftheinternalauditrolewereextendedtoincludeauditsrelatingtotheGroup’sISOcertification.

ThefindingsoftheinternalauditworkprogrammearepresentedtotheCommitteeforreview.TheinternalauditfunctionisnotfullyindependentofmanagementasitiscurrentlystaffedbyseniormembersoftheGroupfinancefunction.Althoughnotindependent,theseniormembersoftheGroupfinancefunctionwhoundertaketheworkareconsideredappropriatelyqualifiedtoundertakethiswork.

Nosignificantdeficienciesinthesystemofinternalcontrolswereidentifiedfollowingtheinternalauditreview.

Audit and Risk Committee report continued




Internal audit effectivenessTheCodeandtheCommittee’stermsofreferencerequiretheCommitteetomonitorandreviewtheeffectivenessoftheCompany’sinternalauditprocesses.TheCommitteeissatisfiedthattheinternalauditfunctionfulfilleditsobjectivesfortheyear.

WhistleblowingTheCommitteereviewedtheGroup’swhistleblowingpolicy,knownastheConcernatWorkPolicy,whichisinplacetoenablemembersofstafftoraiseconcernsaboutpossibleimproprietiesinmattersoffinancialreportingorothermatterswhichtheybelievewoulddamagetheperformanceorreputationoftheCompany.

Fair, balanced and understandableTheBoardsoughtadvicefromtheCommitteethattheinformationpresentedinthisAnnualReport,whentakenasawhole,isfair,balancedandunderstandableandcontainstheinformationnecessaryforshareholderstoassesstheGroup’sperformance,businessmodelandstrategy.

ThestepstakenbytheCommittee,oronitsbehalf,toprovidethisadvicetotheBoardincludedsettingupacommitteeofseniorindividualswithintheGrouptodrafttheAnnualReport,witheachoftheseindividualshavingresponsibilityfortheproductionofcertainsectionsofthedocument.

TheBoardrequestedthattheCommitteeadviseonwhetheritbelievestheAnnualReportandAccounts,takenasawhole,isfair,balancedandunderstandableandprovidestheinformationnecessaryforshareholderstoassesstheCompany’spositionandperformance,businessmodelandstrategy.TheCommitteehasadvisedtheBoardaccordingly.

Discharge of responsibilitiesDuringtheyear,theCommitteehascontinueditsdetailedscrutinyoftheappropriatenessoftheGroup’ssystemofriskmanagementandinternalcontrols,andtherobustnessandintegrityoftheGroup’sfinancialreporting,alongwithboththeinternalandexternalauditprocesses.

TheCommitteehasdevotedsignificanttimetoreviewingtheseareas,whichareintegraltotheGroup’scoremanagementandfinancialprocesses,aswellasengagingregularlywithmanagement.

TheCommitteehas,wherenecessary,takeninitiativeinrequestinginformationinordertoprovidetheappropriateconstructivechallengeforitsrole.Duringthecourseoftheyear,theinformationthattheCommitteehasreceivedhasbeentimelyandclearandhasenabledtheCommitteetodischargeitsdutieseffectively.

ApprovalOnbehalfoftheAuditandRiskCommittee.

Shaun Smith ChairmanoftheAuditandRiskCommittee26April2017

Compliance statements

Viability statementInaccordancewithprovisionC.2.2oftheCode,theBoardaddressedtheprospectsoftheCompanyoveraperiodlongerthanthe12monthsrequiredbythegoingconcernprovision.TheBoardconductedthisreviewforaperiodofthreeyears,whichwasselectedforthefollowingreasons:

•theGroup’sstrategicplancoversathree-yearperiod

•thevariabilityofearningsmeansthatforecastingbeyondthreeyearsismoresubjective,hencetheBoardbelievesathree-yearperiodisthemostappropriate.

Thethree-yearstrategicplanconsiderstheGroup’scashflows,forecastedunderlyingprofit,covenantcomplianceandinvestmentsintechnology.Thesemetricsaresubjecttosensitivityanalysiswhichinvolvesconsiderationofdownsidescenarios.Wherepossible,thisanalysisiscarriedouttoevaluatethepotentialimpactoftheGroup’sprincipalrisks.

Thethree-yearplanisunderpinnedbyregularBoardbriefingsprovidedbythebusinessunitheadsandthediscussionofanynewstrategicinitiativesundertakenbytheBoardinitsnormalcourseofbusiness.

Basedontheresultsofthisanalysis,theBoardhasareasonableexpectationthattheCompanywillbeabletocontinueinoperationandmeetitsliabilitiesastheyfalldueoverthethree-yearperiodoftheassessment.

Going concernHavingconsideredtheGroup’scurrentfinancialposition,thefactorsaffectingitscostbase,thestateoftheaircharterandaviationconsultancymarketasawholeandforecastsforaperiodofnotlessthan12monthsfromthedateofapprovalofthesefinancialstatements,thedirectorsaresatisfiedthattheGroupandCompanyhaveadequateresourcestocontinueinbusinessfortheforeseeablefutureandthattheCompanyisagoingconcern.Therefore,thedirectorshavecontinuedtoadoptthegoingconcernbasisinthepreparationofthefinancialstatements.

“�Going�forward,�we�will�support,�on�behalf�of�shareholders,�

the�ongoing�development�and�effective�governance�of�a�remuneration�framework�appropriate�

for�our�Group”PETER SAUNDERSChairman of the Remuneration Committee


Dear Shareholder

OnbehalfoftheRemunerationCommittee(theCommittee),IampleasedtopresenttheDirectors’remunerationreportfortheyearended31January2017.Duringtheyear,IwaspleasedtowelcomenewBoardmembers,AmandaWills,ShaunSmithandRichardJacksontotheCommittee.Goingforward,wewillsupport,onbehalfofshareholders,theongoingdevelopmentandeffectivegovernanceofaremunerationframeworkappropriateforourGroup.

Ihavesetoutinmystatementthefollowinginformation:

• theCommittee’sphilosophyforremuneration• howtheCommitteereflectsemployeeremuneration

arrangementsinconsideringexecutiveremuneration• thekeyactivitiesundertakenbytheCommitteeduring

theyear• thekeyareasoffocusfortheCommitteeduring2017/18

andbeyond.

Our remuneration philosophyTheGroup’stotalremunerationpackagesaredesignedtobecompetitivetoattract,retainandmotivatehigh-qualityindividualsthroughoutthebusiness.OurpackagesaimtorecruittalentedexecutivesandseniormanagerscapableofeffectivelydeliveringontheGroup’sstrategyanddrivingbusinessoutcomesthroughtheirteams,therebyenhancinglong-termshareholdervalue.

Theprinciplesofourremunerationpolicyareto:

• ensureoverallremunerationismarketcompetitivetoattractandretaintheleadershipandtalentrequiredtodrivethebusinessforthebenefitofallstakeholders

• adoptasimple,transparentandcost-effectiveapproachtoremunerationwhichisclearandunderstandableforbusinessleaders,shareholdersandthewiderteam

• aligncompensationtoperformanceandincorporateabalanceoffixedandvariableremuneration

• designincentiveplanswhichreinforcebothshort-andlong-termbehaviours,promotelong-termdevelopmentandsupportthestrategicplansofthebusiness

• ensureremunerationpackagesmotivateandincentiviseexecutivedirectors,managementandthebroaderteamtodeliveronstretchingperformancetargets.

TheCompanyemploysanumberofpeopleinavarietyofroles,frombrokersandadministrationsupportstafftoconsultants,seniormanagementanddirectorsacrossarangeofgeographies.Therewardstructureforourpeopleisbuiltaroundasetofcommonrewardprinciplesonaframeworkalteredtosuittheneedsoftheeachbusinessarea.Rewardpackagesdiffer,takingintoaccountanumberoffactorsincludingseniority,role,impactonthebusiness,localpractice,customandlegislation.

TheremunerationpolicyfortheexecutivedirectorsreflectstheoverallremunerationphilosophyandprinciplesofthewiderGroup.Whendeterminingremunerationpolicyandarrangementsforexecutivedirectors,theRemunerationCommitteeconsidersthewiderpayandemploymentconditionselsewhereintheGrouptoensurepaystructuresfromdirectortoseniormanagementarealignedandappropriate.

Whenconsideringsalaryincreasesfortheexecutivedirectors,theCommitteeconsidersthegenerallevelofsalaryincreaseacrosstheGroup.Typically,salaryincreaseswillbealignedwiththosereceivedelsewhereintheGroupunlesstheRemunerationCommitteeconsidersthatspecificcircumstancesrequireadifferentlevelofincreaseforexecutivedirectors.

Key remuneration activities during the yearFollowingshareholderapprovalatour2016AGM,therevisedpolicyandLongTermIncentivePlan(LTIP)wereimplemented.Detailsofhowthepolicywasappliedduringtheyeararesetoutonpages60to65.

Inmy2016report,IstatedthattheCompanyintendedinduecoursetointroduceaCompany-wideshareplan.TheCommitteeundertookathoroughreviewofpossibleoptionsforanall-employeeshareplan,theobjectivebeingtoimplementaGroupplanthatwouldbenefitandincentivisebothUKandinternationalemployees.Proposalsandcostsweresoughtfromthreeseparatemarket-leadingshareplanproviders.Thereviewhighlightedthat,althoughaUKplanset-upwouldbestraightforwardandcosteffective,thesetupandannualmaintenancecostsofimplementingoverseasplansinsixjurisdictionswereprohibitive,especiallygiventherelativelysmallnumberofemployeesinthosecountries.Afterdiscussion,theCommitteeconcludedthatitwouldnotbepossibletointroduceaGroup-wideschemethatofferedanequivalentbenefitforallGroupemployeesandtherefore

Annual statement by the Chairman of the Remuneration Committee

Directors’ remuneration report




decidednottoproceedwiththeimplementationofaGroupshareplanatthistime.Itwasagreedthattheshareplanenvironmentshouldbekeptunderreviewandthatifthepositionchanged,theCommitteewouldconsiderthisagaininthefuture.Theintroductionofsuchaplanwouldrequireshareholderapproval.

OtherkeyactivitiesundertakenbytheCommitteeduringtheyearwere:

• annualbenchmarkingofexecutiveremunerationtoensureitremainsappropriatetopromotethelong-termsuccessoftheCompany

• settingbonustargetsfollowingtheapprovalofthefinancialbudget

• determiningtheextenttowhichtheperformancemeasuresinrespectoftheincentiveplanhavebeenachieved

• approvingtheKeyResultsAreasfortheCEOandCFOfor2017/18.

Focus for 2017/18 and beyondDuringthecurrentyear,theCommitteewillcontinuetoreviewexecutiveandGroup-wideremunerationtoensureitremainsappropriatetopromotethelong-termsuccessoftheCompany.

Compliance statementThisreportcomplieswiththeCompaniesAct2006,Schedule8oftheLargeandMedium-sizedCompaniesandGroups(AccountsandReports)(Amendment)Regulations2013andtheListingRulesandappliesthemainprinciplesrelatingtoremunerationwhicharesetoutintheUKCorporateGovernanceCode.

RecommendationPositivevotesof99.84%infavouroftheDirectors’remunerationreportandtheDirectors’remunerationpolicyreportwerereceivedfromshareholdersatthe2016AGM,providingastrongendorsementforourremunerationstrategy.Iwillbeavailable,togetherwithmyfellowCommitteemembers,atourAGMinJune2017toansweranyquestionsorreceiveyourfeedbackwithregardtoourpolicyandhowwehaveimplementedit.

OnbehalfoftheCommittee,IlookforwardtoreceivingyoursupportattheAGM.

Peter Saunders ChairmanoftheRemunerationCommittee26April2017


D. RemunerationD.1 Setting levels of remunerationTheRemunerationCommitteesetslevelsofremunerationtopromotethelong-termsuccessoftheCompanyandstructuresexecutiveremunerationsoastolinkrewardstocorporateandindividualperformance.

D.2 ProcedureThecompositionoftheRemunerationCommitteeanditsactivitiesandapproachtosettingtheremunerationpolicyfortheexecutivedirectorsandrecommendationsandmonitoringofthelevelandstructureofremunerationforseniormanagementcanbefoundintheAnnualstatementoftheChairmanoftheRemunerationCommitteesetoutonpages54to55.TheBoarddeterminestheremunerationofthenon-executivedirectorswithinthelimitssetintheCompany’sArticlesofAssociation.

Theinformationcontainedinthefollowingpartsofthisreporthasbeenaudited:thetablecontainingthesingletotalfigureofremunerationfordirectorsandaccompanyingnotes,pensionentitlementsandincentiveawardsmadeduringtheyearonpage60anddirectors’beneficialinterestsinsharesonpage63.

Theinformationsetoutonpages60to65ofthisreportincludes,asindicated,theauditabledisclosuresreferredtointheAuditors’reportonpages72to79asspecifiedbytheUKListingAuthorityandtheLargeandMedium-sizedCompaniesandGroups(AccountsandReports)(Amendment)Regulations2013(theRegulations).

AsrequiredbytheRegulations,therestofthisreportisdividedintotwosections:

• thedirectors’remunerationpolicytablewhichsetsouttheelementsoftheCompany’spolicyondirectorremuneration

• theannualreportonremunerationwhichsetsoutpaymentsmadetotheDirectorswhichwillbeputtoshareholdervoteatthe2017AGM.


Remuneration policy report

Directors’ remuneration report continued

Remuneration policy table – executive directors

Remunerationelement

Purposeandlinktoremunerationpolicy

Keyfeaturesandoperation

Maximumpotentialvalue

Performancemetrics

Provisionforclawbackorwithholdingofpayment

Base salary Supportstherecruitmentandretentionofexecutivedirectorsofthecalibrerequiredtofulfiltherolewithoutpayingmorethanisnecessary.

Rewardsexecutivesfortheperformanceoftheirrole.

Reflectstheindividual’sskills,experienceandrolewithintheGroup.

Paidincash.

Normallyreviewedannuallytotakeeffecton1Augustbutexceptionallymaytakeplaceatothertimesoftheyear.

Indeterminingbasesalaries,theCommitteeconsiders:

•paylevelsatcompaniesofasimilarsizeandcomplexity

•externalmarketconditions

•payandconditionselsewhereintheGroup

•personalperformance.

TheCommittee’spolicyistosetbasesalaryatanappropriateleveltakingintoaccountthefactorsoutlinedinthistable;thereisnomaximumvalue.TheCommitteeconsidersindividualsalariesattheappropriateCommitteemeetingeachyear.

N/A None

Pension Providesfundstoallowexecutivestosaveforretirement.

Providesamarketcompetitiveretirementbenefit.

Incentivisesandencouragesretention.

Indeterminingpensionarrangements,theCommitteetakesintoaccountrelevantmarketpractice.

Theschemeisdefinedcontribution.

Asalarysacrificeschemeisinoperationforexecutivedirectors.

ExecutivedirectorsmayelectwiththeCommittee’sconsenttoreceivesomeoralloftheCompany’spensioncontributionasacashalternative.

Bonusesarenon-pensionable.

BoththeCEOandCFOreceiveacompanycontributionof12.0%ofbasicsalary.

N/A None

Benefits in kind

Providesamarketcompetitivelevelofbenefitstoexecutivedirectors.

Executivedirectorscanreceivelifeassurance,healthinsurance,carallowance,incomeprotection,criticalillnesscoverandsportscluborgymmembership.

Thereisnomaximumvalue.

N/A None

Extractsfromtheremunerationpolicythatwasapprovedbyshareholdersatthe2016AGMaresetoutbelowtoenablethereportedremunerationtobeassessedinthecontextoftherelevantaspectsofthepolicy.Thecurrentintentionisthatthispolicywilloperateuntilthe2019AGM.TheoriginalRemunerationpolicyreportfortheyearended31January2016ispublishedinitsentiretyintheCompany’sAnnualReportfortheyearwhichisavailableatwww.airpartner.com.




Remunerationelement

Purposeandlinktoremunerationpolicy

Keyfeaturesandoperation

Maximumpotentialvalue

Performancemetrics

Provisionforclawbackorwithholdingofpayment

Relocation/ expatriate assistance

ProvidesassistancetoexecutivedirectorswhoarerequiredtoworkawayfromtheirhomelocationtoenabletheCompanytorecruitthebestpersonfortherole.

Assistancewillinclude(butisnotlimitedto)facilitatingormeetingthecostsofobtainingvisasorworkpermitsforexecutivedirectorsandtheirimmediatefamily,removalandotherrelocationcosts,housepurchaseorrentalcosts,limitedamountoftravelcosts,taxequalisationarrangements.

Thereareanumberofvariablesaffectingtheamountthatmaybepayable,buttheRemunerationCommitteewouldpaynomorethanitjudgedreasonablynecessary.Themaximumamountpayableshallnotexceed£50,000perindividualinanyfinancialyear.

N/A None

Annual bonus Rewardsandincentivisestheachievementofannualfinancialobjectiveswhicharealignedwithkeystrategicgoalsandsupporttheenhancementofshareholdervalue.

Paidincashfollowingannouncementoffinancialyearresults.

Bonusesarenon-pensionable.

MaybepaidinsharesattheCommittee’sdiscretion.

Maximumopportunitytoachieve:

•CEO:150%ofbasesalary

•CFO:100%ofbasesalary

Bonusaccruesfromthresholdlevelsofperformance.

BothCEOandCFObonuspaymentbasedon:

•personalobjectives:30%basedonperformancetowardsKeyResultsAreas(KRA)definedatthebeginningofeachfinancialyear

•Companyperformance:70%basedonfinancialmetrics.

Bonusisusuallynotpaidtoagoodleavershouldtheyleavebeforethepaymentdateofsaidbonus.

From2016,arrangementsinplaceunderwhichamountspaidoutinbonuscanbeclawedbackfromexecutivedirectorsindefinedcircumstances.

Long Term Incentive Plan (LTIP)

IncentivisesexecutivestoachievetheCompany’slong-termstrategyandcreatesustainableshareholdervalue.

Enhancesshareholdervaluebymotivatinggrowthinearningsandmaintenanceofanefficientandsustainablelevelofreturnofcapital.

Alignswithshareholderintereststhroughthedeliveryofshares.

AwardsvestafterthreeyearsbasedonGroupfinancialtargets.

Awardsareintheformofnil-costoptionsandmustbeexercisedwithinfouryearsofvesting.

25%ofawardsvestatthresholdlevelsofperformance.Forperformanceabovethreshold,awardsvestonastraight-linebasisuptoamaximumof100%.

Maximumplanawardof150%ofbasesalarytobeusedinexceptionalcircumstances.

Usualawardlevelswillbe:

•CEO:100%-150%ofbasesalary

•CFO:75%-100%ofbasesalary.

TheCommitteewillreviewtheappropriatenessofperformancemeasuresonanannualbasisandsetchallengingtargetsconsistentwiththebusinessstrategy.TheCommitteehastheabilitytoselectappropriateperformanceconditioncriteria,mixandtargetseachyear.Inthepast,thesehavebeenEPSandTSRbasedtargetsandtheCommitteeexpectsthistocontinue.FurtherdetailofthespecificmeasuresthattheRemunerationCommitteeintendstoapplytoawardsmadeintheyearending31January2017aresetoutintheannualreportsectionofthisreport.

Aspertherulesofthescheme,awardswilllapseiftheexecutiveleavesbeforetheendoftheperformanceperiod.

TheRemunerationCommitteehasdiscretionincertaincircumstances(forexampledeath,seriousillness,redundancy)topermitanawardtovestbeforetheendoftheperformanceperiod.

Containsprovisionsunderwhichamountspaidoutcanbeclawedbackfromexecutivedirectorsindefinedcircumstances.

Containsa‘malus’provision.

Shareholding guideline

IncentivisesexecutivestoachievetheCompany’slong-termstrategyandcreatesustainableshareholdervalue.

Alignswithshareholderinterests.

Targetvaluetobeachievedoverfiveyears:

•CEO–100%ofsalary

•CFO–50%ofsalary.

Untiltheguidelinehasbeenachieved,executivesmustretainatleasthalfvestedLTIPawardsbeyondthoseneedingtobesoldtopaytax.

N/A N/A N/A



Remuneration policy table – non-executive directors TheCompanyintendstohaveatleasttwoindependentnon-executivedirectorsontheBoardatanytime,inadditiontotheChairman.TheBoardconsiderseachofthenon-executivedirectorstobeindependent.

Thenon-executivedirectors’remuneration(includingthatoftheChairman)reflectstheanticipatedtimecommitmenttofulfiltheirduties.Non-executivedirectorsdonotreceivebenefits,bonuses,long-termincentiveawards,apensionorcompensationonterminationoftheirappointments.

ThefollowingtablesetsoutasummaryoftheCompany’sremunerationpolicyfornon-executivedirectors:

Remuneration policy report continued

Remunerationelement Purposeandlinktoremunerationpolicy Keyfeaturesandoperation(includingmaximumlevels)

Fees Feesfornon-executivedirectorsaresetatanappropriateleveltorecruitandretaindirectorsofasufficientcalibrewithoutpayingmorethanisnecessarytodoso.Feesaresettakingintoaccountthefollowingfactors:thetimecommitmentrequiredtofulfiltherole,typicalpracticeatothercompaniesofasimilarsize,andsalarylevelsofemployeesthroughouttheGroup.

Thenon-executivedirectorfeespolicyis:•topayabasicfeeformembershipoftheBoard•topayadditionalfeesforchairmanshipoftheBoardandchairmanship

ofacommitteetotakeintoaccounttheadditionalresponsibilitiesandtimecommitmentoftheseroles.

Feesarereviewedatappropriatelevelsatappropriateintervals(normallyonceeveryyear)bytheBoardwithreferencetoindividualexperience,theexternalmarketandtheexpectedtimecommitmentrequiredofthedirector.TheCompany’scurrentmaximumfeesareasfollows:•basicfee–£30,000•additionalfeeforBoardChairman–£30,000•additionalfeeforCommitteeChairman–£5,000.

Illustration of application of remuneration policyThreescenariosofexecutivedirectors’remunerationareillustratedbelow:

ChiefExecutiveOfficer ChiefFinancialOfficer

Maximum performance(Fixedpayplusfullvestingofallperformancerelatedpay.)

FixedremunerationPerformancebonuspay-outequivalentto150%ofbasesalary.

FixedremunerationPerformancebonuspay-outequivalentto100%ofbasesalary.

At expectation performance (Fixedpayplusshort-andlong-termperformancerelatedpayvestingatthelevelsreasonablyexpected.)

FixedremunerationPerformancebonuspay-outequivalentto78.5%ofbasesalary.

FixedremunerationPerformancebonuspay-outequivalentto54.75%ofbasesalary.

Below threshold performance(Onlyfixedpay(salary,benefitsinkindandpension)ispayableandnoshort-orlong-termperformance-relatedpayaccrues.)

FixedremunerationNoperformancebonuspay-out.

FixedremunerationNoperformancebonuspay-out.




• Salary,benefitsinkindandpension(aspertheremunerationpolicy)areshownasestimatedcashcostortaxablevaluetotheindividual.

• TheCompany’sbonusschemesoperatesothatamountsinrespectofthecurrentfinancialperiodareonlypaidinthefollowingfinancialyear,afterthecompletionoftheauditandBoardapprovaloftheaccounts.Thechartreflectsthebonusamountearnedintheperiodbutnotnecessarilypaidatyearend.

Thechartbelowsetsoutanillustrationofthepotentialvalueofthecurrentcomponentsoftheexecutivedirectors’remunerationfortheyearended31January2017,showingtheproportionoftotalremunerationmadeupofeachcomponentandthevalueofeachcomponent.

Chief Executive Officer £’000

Annual bonus Fixed pay

Chief Financial Officer £’000

Annual bonus Fixed pay

In line with expectations

In line with expectations

Minimum performance

Minimum performance

Maximum Maximum

100%

£286

£465

£714

£290

£257

100%62%

71%40%

63%

38%

29%

60%

37%

£182

• Bonusatbelowthresholdperformancereflectsapositionwherenoneofthepersonalorcorporatemetricswasachievedatthresholdlevel;expectationreflectsmetricsachievedattargetlevelandmaximumreflectsthepositionwhereeverymetricisachievedatstretchuptotheamountofbonuscap.Pleaserefertothetablein‘Annualbonus(audited)’onpage61foranillustrationofthecriteriathathavebeenappliedtothethreescenariospresentedinthistable.


Thissectionofthereportsetsouttheannualreportonremunerationfortheyearended31January2017.

Remuneration Committee structureTheCommitteeisconstitutedasaformalsub-committeeoftheBoardwithitsowndefinedtermsofreference.Itsprimaryroleistoreviewandsettheremunerationpolicyfortheexecutivedirectors,withinthecontextofsalariesandbenefitspaidacrosstheGroupasawhole,andmakingdiscretionaryperformance-relatedawardstotheexecutivedirectors.ThefullBoardagreestheremunerationoftheChairmanandnon-executivedirectorsontheprinciplethatnoindividualshouldbeabletodeterminetheirownremuneration.

Remuneration Committee membershipThemembersoftheCommitteeduringtheyearuntilthedateofthisreportwere:

PeterSaunders(Chairman)RichardEverittRichardJackson(appointed8September2016)ShaunSmith(appointed1May2016)AmandaWills(appointed20April2016)AndrewWood(resigned29June2016)


Annual report on remuneration

Inaddition,theChiefExecutiveOfficer,ChiefFinancialOfficerandGroupHeadofHumanResourcesareinvitedfromtimetotimetoattendmeetingsoftheCommittee.Noindividualsareinvolvedindecisionsrelatingtotheirownremuneration.TheCommitteemetformallyfourtimesduringtheyear.ThetermsofreferencefortheCommitteecanbeviewedontheCompany’swebsite.

Advisers to the CommitteeTheCommitteecananddidobtaininformationandadviceduringtheperiodunderreviewfromtheGroupHeadofHumanResources,RachelThripp,theCompanySecretary,SallyChandler,andtheexecutivedirectors,NeilMorrisandMarkBriffa,andmayseekadvicefromanyotheremployeesasrequired.

Itmayalsoobtain,attheexpenseoftheCompany,anynecessarylegalorprofessionaladvice,uptoapredeterminedlimit.In2015/16,theCommitteesoughtadviceonexecutiveremunerationfromanindependentremunerationadviserasdetailedintheAnnualstatementoftheChairmanoftheRemunerationCommitteeonpages54and55.h2glenfernLimitedcontinuestoprovideadvicetotheCommitteeonexecutiveremunerationasrequired.h2glenfernvoluntarily

Directors’ remuneration for the year ended 31 January 2017 (audited)Thefollowingtableprovidesdetailsofthedirectors’remunerationfortheyearended31January2017,togetherwiththeirremunerationfortheyearended31January2016:

Salary Taxablebenefits BonusGainonvestingofshareoption Pension Total

(Audited)2017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’000

Executive directors

MarkBriffa 250 230 20 19 188 246 178 – 16 75 652 570

NeilMorris1 155 152 13 13 59 78 – – 36 32 263 275

Non-executive directors

RichardEveritt 60 60 – – – – – – – – 60 60

AndrewWood2 15 35 – – – – – – – – 15 35

PeterSaunders3 35 34 – – – – – – – – 35 34

AmandaWills4 23 – – – – – – – – – 23 –

ShaunSmith5 25 – – – – – – – – – 25 –

RichardJackson6 12 – – – – – – – – – 12 –

GrahameChilton2 – 4 – – – – – – – – – 4

Total 575 515 33 32 247 324 178 – 52 107 1,085 978

1. Fortheyearended31January2017,NeilMorrissurrendered£14,000outofhisbonustobepaidaspensioncontribution.2. GrahameChiltonandAndrewWoodresignedfromtheBoardon16March2015and29June2016respectively.3. PeterSaunderswasappointedasChairmanoftheRemunerationCommitteeon16March2015.

ExpensesreimbursedtoPeter,includingairfarestoBoardmeetings,amountedto£28,000intheyearto31January2017.4. AmandaWillswasappointedtotheBoardon20April2016.5. ShaunSmithwasappointedtotheBoardon1May2016andasChairmanoftheAuditandRiskCommitteeon29June2016.6. RichardJacksonwasappointedtotheBoardon8September2016.




operatesinaccordancewiththeCodeofConductoftheRemunerationConsultants’GroupinrelationtoexecutiveremunerationconsultingintheUnitedKingdomandhasconfirmedthatithasadheredtotheRemunerationConsultantGroup’sCodeofConductthroughouttheyearforallremunerationservicesprovidedtotheGroup.TheCommitteehasthereforesatisfieditselfthatalladviceprovidedbyh2glenfernwasobjectiveandindependent.Afeeof£20,040waspayabletoh2glenfernintheyearunderreview.h2glenferndoesnotprovideservicestotheGroupotherthanremunerationadvice.

Taxablebenefits–executivedirectorsreceiveabenefitspackageincludingacarallowance,lifeassurance,subsidisedgymmembershipandhometelephoneandinternetfacility.ThecarallowancepayabletotheCEOandCFOincludedintheaboveamountwas£15,000and£10,000respectively(2016:£15,000and£10,000).

Bonus–themaximumbonusfortheperiodfortheCEOandCFOwascappedat150%ofthefinancialelementofthebonus,whichequatestoamaximumof150%ofsalaryand100%ofsalaryrespectively.

LTIP–awardsundertherevisedAirPartnerShareIncentivePlan2012followingapprovalatthe2016AGMwasmadetobothexecutivedirectorsintheperiodunderreviewandaresubjecttoperformanceandcontinuedserviceconditions.

Pension-relatedbenefit–bothexecutivedirectorsaremembersoftheAirPartnerPensionScheme(adefinedcontributionscheme)andreceiveapensioncontributionof12%ofbasesalary.ExecutivedirectorsmayelectwiththeCommittee’sconsenttoreceivesomeoralloftheCompany’spensioncontributionasacashalternative.

Annual bonus (audited)Asnotedabove,thebonuspaymentsforboththeCEOandCFOarebasedonthefollowingweighting:70%onachievementoftheGroup’sunderlyingprofitbeforetaxtargetand30%attributabletopersonalobjectives,whichonlybecomepayableshouldtheGroupachieve65%orhigherofitsunderlyingprofitbeforetaxtarget.Forreference,theunderlyingprofitbeforetaxtargetforthefinancialyearended31January2016was£3.8mandforthefinancialyearended31January2015was£4.8m,thethresholdsfor2017were£5.0mand£5.5mrespectively.

Inrespectofthepersonalobjectiveelement,theexecutivedirectorsreceivefourtofiveobjectiveseachyearagainstwhichtheywillreceiveascoreof0(unacceptableperformance)to4(excellentperformance).AlthougheveryeffortismadetoensurethatpersonalobjectivesareSMART,thereislikelytobeadegreeofsubjectivitytothescoresattributedagainsteachobjective.

AstheGroupachieveditsunderlyingprofitbeforetaxtargetandsurpassedthe65%underpinlevelofthepaymentofthepersonalobjectiveelement,bonuseswerepayabletotheexecutivedirectorsfortheperiodending31January2017.

Mark Briffa

Weightingas%ofbonus

%achievedin2017

Totalbonusearned

Personalobjectives 30% 88% 65,625Financialtarget 70% 70% 122,500

Total bonus achieved 100% 188,125

Neil Morris

Weightingas%ofbonus

%achievedin2017

Totalbonusearned

Personalobjectives 30% 63% 20,278Financialtarget 70% 70% 52,994

Total bonus achieved 100% 73,272

Thespecificperformancetargetsfortheannualbonusforthecurrentandpreviousyearareconsideredtobecommerciallysensitiveandaccordinglyarenotdisclosed.

Payment table of employee wages and other company metrics

2016-2017 2015-2016 %variance

Totalemployeepaycomparedtopriorperiod(£m) 18,453 15,291 20.68Profitbeforetax(£m)1 4,348 3,137 38.92

Total dividends paid (pence) 24.93 22.73 9.68

1.TheRemunerationCommitteeconsidersprofitbeforetaxtobeakeymeasureoftheGroup’sperformance,thereforeitisshownabove.


Performance graph and CEO remuneration tableTohelpinvestorstomeasuretheCompany’scomparativeperformance,thegraphbelowshowsthechangeinthetotalshareholderreturnoftheCompanyforeachofthepasteightfinancialyearscomparedwiththeFTSEAllShareIndex.


Annual report on remuneration continued

31 Jan2009

31 Jan2010

31 Jan2011

31 Jan2012

31 Jan2013

31 Jan2014

31 Jan2015

31 Jan2016

31 Jan2017

0

50

100

150

200

250

300

350

Air Partner FTSE All Share

Air Partner and FTSE All Share Index total return (rebased)£’000

TheCompanyisnotcurrentlyaconstituentmemberoftheFTSEAllShareIndex,buttheIndexhasbeenselectedasanappropriatecomparatorbecauseitiseasilyaccessiblebyinvestorsandcoverstheperformanceofabroadrangeofcompanies,includingaviation,transportandluxuryretailbusinesses.

ThetablebelowsetsoutthedetailsforthedirectorundertakingtheroleofChiefExecutiveOfficer:

Year

CEOsinglefigureoftotalremuneration

£‘000

Annualbonuspay-outagainstmaximum

%

Long-termincentivevestingratesagainst

maximumopportunity%

2017 652 50.1 65.5

2016 570 73.9 –

2015 271 – –

2014 – 18months 656 92.8 66.7

2012 249 16.8 –

2011 369 100.0 –

2010 215 15.0 –

ThetablebelowshowsthepercentagechangeinremunerationofthedirectorundertakingtheroleofChiefExecutiveOfficerandtheGroup’sUKemployeesasawholebetweentheyearended31January2017,onanannualisedbasis,and31January2016.

AllUKemployeesemployedbytheGroupinbothJanuary2016andJanuary2017werechosenasthemostappropriatecomparatorgroupasthisincludesseniormanagementandexcludesinternationalemployeeswhoareondifferentpaystructures.

% Salary Benefits Annualbonus

CEO 8.74 4.00 -24.60

AveragepaybasedonalloftheGroup’sUKemployees 5.86 2.24 -20.99




Long-Term Incentive Plan (LTIP) (audited)

Directors’ beneficial interests in shares (audited) Thedirectorswhoheldofficeduringtheyearhadthefollowingbeneficialinterestsinordinarysharesof1peachintheCompany,fullypaidup,atthebeginningoftheyearandendoftheyear:

31 Jan 17 31 Jan16

MABriffa 262,230 33,061

RLEveritt 25,000 5,000

PSaunders 25,000 –

SSmith 11,635 –

ARWood(resigned29June2016) 50,000 10,000

Therewerenochangesinthedirectors’beneficialinterestsinsharesbetween31January2016and26April2017(beingthelatestpracticabledatepriortothepublicationofthisreport).Nodirectorhasanon-beneficialinterestinthesharesoftheCompany.

Share options Non-executivedirectorsarenoteligibletoparticipateintheCompany’sshareoptionscheme.Detailsoftheoptionsheldbyexecutivedirectorsatthebeginningandendoftheyearareasfollows:

Shareoptions(audited) Numberofoptions

Name31 January

2016 Granted Exercised Expired Lapsed31January

2017Exercise

priceEarliestdate

ofexercise Expirydate

MABriffa 200,000 – – – 200,000 – 158.5p1 21Nov2009 21Nov2016

50,000 – – – – 50,000 176.8p2 24Jan2011 24Jan2018

200,000 – – – – 200,000 109.0p2 27Nov2011 27Nov2018

25,000 – – – – 25,000 78.5p2 26Oct2013 26 Oct2020

475,000 – – – 200,000 275,000

1.astheperformancecriteriafortheseshareoptionswerenotmet,theoptionshavelapsed.2.optionvestedbutnotexercised.

Shareoptions(audited) Numberofoptions

NameDateof

grant31 January

2016 Granted Exercised Expired Lapsed31January

2017Exercise

priceEarliestdate

ofexercise Expirydate

MABriffa 22Oct2013 279,200 – 182,875 – 96,325 – 0.0p 22Oct2016 22Oct2020

3 Jun2015 435,485 – – – – 435,485 0.0p 04Jun2018 04Jun2025

29June2016 – 552,080 – – – 552,080 0.0p 29Jun2019 29Jun2026

Total 714,685 552,080 182,875 – 96,325 987,565

NJMorris 3 Jun 2015 193,550 – – – – 193,550 0.0p 04Jun2018 04Jun2025

29June2016 – 113,730 – – – 113,730 0.0p 29Jun2019 29 Jun2026

Total 193,550 113,730 – – – 307,280

ThenumberofshareoptionsawardedundertheLTIPwasdeterminedbyusingtheclosingpriceofanAirPartnerplcshareonthedayprecedingthedateofgrantasascertainedbytheOfficialListwhichwas502.5pon21October2013,387.5pon2June2015and339.63pon28June2016.

ThefacevalueofawardsmadetoMarkBriffaandNeilMorrison3June2015are£340,000and£151,000.Thisiscalculatedbasedonaclosingsharepriceof£3.89on3June2015.Pricesquotedarepre-sharesplit.

TheawardsgrantedaresubjecttotheachievementofperformanceandemploymentconditionsasspecifiedbytheRemunerationCommittee.



Vestingofthegrantsissubjecttoacombinationof50%earningspershare(EPS)and50%totalshareholderreturn(TSR)relatedtargets:

EPS:• 100%vestifperformancegreaterthanRPI+20%perannum• 25%vestifperformanceequaltoRPI+15%perannum.

TSR:• 100%vestifperformancegreaterthan75thpercentile• 25%ifperformanceequalto50thpercentile.

Betweenthesetargetlevels,shareoptionswillvestonastraight-linebasisandshareswillvest,subjecttoachievementoftheseperformanceconditions,on3June2018.

TheadjustedunderlyingEPSforthebaseyearending31January2015hasbeencalculatedas19.5pexcludingtheimpactofone-offtaxcredits.

ThefacevalueofawardsmadetoMarkBriffaandNeilMorrison29June2016are£408,539and£84,157.Thisiscalculatedbasedonaclosingsharepriceof370pon29June2016.ThenumberofLTIPsawardedwasdeterminedfromtheclosingsharepricethedaypriortogrant(339.63ppershare)andtheexecutivedirectors’salariesatthedateofgrant.

TheawardsgrantedaresubjecttotheachievementofperformanceandemploymentconditionsasspecifiedbytheRemunerationCommittee.

EPSTwo-thirdsoftheaward(66.67%oftheaward)willbesubjecttoanearningspershare(EPS)compoundannualgrowthtargetwhichwillbeinadditiontoanyincreaseintheConsumerPricesIndex(CPI),asfollows:

EPSgrowth %ofawardvesting

BelowCPI+5%pa Nil

CPI+5%pa 25%

CPI+10%paorabove 100%

ForintermediateperformancebetweenCPI+5%paandCPI+10%pavestingwilloccuronastraight-linebasis.

TSRTheremainingone-thirdoftheaward(33.33%oftheaward)willbesubjecttoanabsolutetotalshareholderreturn(TSR)performanceconditionasfollows:

EPSgrowth %ofawardvesting

Below9%pareturns Nil

9%pareturns 25%

16%pareturnsorabove 100%

Forintermediateperformancebetween9%pareturnsand16%pareturns,vestingwilloccuronastraight-linebasis.

TheadjustedunderlyingEPSforthebaseyearending31January2016hasbeencalculatedas24.6p.

Themarketpricepershareat31January2017was108p(540p)(31January2016:77p(385p))andrangedbetween66p(330p)and108p(540p)duringtheyear.Theaveragepriceduringtheyearended31January2017was86p(430p)(31January2016:76p(380p)pershare).Pricesshowninbracketsarepre-sharesplit.

Share award vestingTheshareawardundertheLTIPgrantedtoMarkBriffaon22October2013(the2013award)vestedon3October2016.Thevestingcoveredtheperformanceperiodfrom1August2013to31July2016.

The2013awardwassubjecttoaperformanceconditionwithanEPSelementandaTSRelement.

TheCompany’sbroker,LiberumCapitalconfirmedtotheCommitteethatwereAirPartnerintheFTSESmallCapIndex,itwouldhaveranked52ndoverthemeasurementperiodandthatasthescheduleoftherulesoftheLTIPstatedthattherewouldbeconditionalvestingwheretheperformancewasbetweenthe50thand75thpercentilerankings,thisresultedin31%oftheTSRelementbeingachievedwithAirPartnerrankingas52nd.TheCommitteethereforeagreedthat31%oftheTSRelementoftheaward,being50%ofthetotalaward,wouldvest.

TheRemunerationCommitteesatisfieditselfthattherecordedEPSgrowthandTSRrankingwasagenuinereflectionoftheunderlyingbusinessperformanceoftheGroup,andapprovedthevestingofthe2013awardatthecalculatedpercentagessetoutbelow:

Performancecriterion Achieved %ofawardtovest

EPSgrowth GrowthgreaterthanRPI+10% 100%

TSR 52ndpercentileagainsttheFTSESmallCapIndex

31%

Themeasurementperiodwasnon-coterminoustoAirPartner’saccountingreferencedate.

Annual report on remuneration continued




Followingsuchvesting,MarkBriffaexercisedoptionsandacquiredsharesandsharesweresurrenderedforcashtopaythePAYE/NICliabilitiesrelatedtotheoptionexerciseassetoutbelow:

2013awardSharesvested

inaward

Sharessurrendered

forcashtosatisfytax/NIliabilities

Sharesretained

MarkBriffa 36,575 17,190 19,385

Shareholder votingAtthe2016AGM,theresultsofthevotesontheDirectors’remunerationreportwere:

Directors’remunerationreport Directors’remunerationpolicy

Numberofvotes

%ofvotescast

Numberofvotes

%ofvotescast

For(includingdiscretionary) 4,037,578 99.84 4,037,578 99.84

Against 6,614 0.16 6,614 0.16

Voteswithheld 12,528 – 12,528 –

Application of the policy for 2016/17

Fixed payDetailsofthefixedpayoftheexecutivedirectorsforthecurrentyeararesetoutinthetablebelow:

Basicsalary£’000

Carallowance

£’000Total

£’000

CEO 250 15 265

CFO 155 10 165

PensionTheCompanypensioncontributionfortheexecutivedirectorswillremainthesameinthecurrentfinancialyear.ExecutivedirectorsmayelectwiththeCommittee’sconsenttoreceivesomeoralloftheCompany’spensioncontributionasacashalternative.

Annual bonusTheRemunerationCommitteehassetstretchingtargetsforbothGroupfinancialperformanceandpersonalobjectivesundertheannualbonusplan.Detailonthetargetsisconsideredcommerciallysensitiveandforthisreasonisnotdisclosedduringthecurrentfinancialyear.

Theperformancemeasuresandweightingsforthefinancialyearending31January2018areasfollows:

Aspercentageofmaximumbonusopportunity

Measures CEO CFO

Underlyingprofitbeforetax 70% 70%

Personalobjectives 30% 30%

TheDirectors’remunerationreportwasapprovedbytheBoardon26April2017andissignedonitsbehalfby:

Peter Saunders ChairmanoftheRemunerationCommittee


Thedirectorspresenttheirreportsandtheauditedfinancialstatementsfortheyearended31January2017.

Statutory information contained elsewhere in the Annual ReportInformationrequiredtobepartoftheDirectors’reportcanbefoundelsewhereinthisdocument,asindicated,isincorporatedintothisreportbyreference:

• ResultsanddividendintheChairman’sstatementonpage4• CorporategovernanceandtheGroup’sfinancialrisk

managementobjectivesandpoliciesintheCorporategovernancestatementonpages45to49

• Detailsofthesalaries,bonuses,benefitsandshareinterestsofdirectorsintheDirectors’remunerationreportonpage60

• Directors’responsibilitystatementsonpage69• EmployeerelationsandequalopportunitiesinOurPeople

onpages12and13.

Likelyfutureeventsandallpost-balancesheeteventsaredisclosedwithintheStrategicreportonpages1to39.

Management reportTheStrategicreportonpages1to39andthisDirectors’report,withitsinclusionsasindicatedabove,formtheManagementreportasrequiredbyDTR4.1.5R.

Directors and directors’ interestsThenamesofthedirectorsoftheCompanyareshownonpage42andchangestodirectorshipsduringthereportingperiodareshownonpage45.BiographicaldetailsofthecurrentdirectorsoftheCompanyareshownonpage42.Detailsofdirectors’interestsinthesharesoftheCompanyareshownonpage63.Thisinformationisincorporatedintothisreportbyreference.

Directors’ indemnities and insuranceTheCompanyhasmadequalifyingthird-partyindemnityprovisionsforthebenefitofitsdirectorsthatremaininforceatthedateofthisreport.Incertaincircumstances,theCompanycanindemnifydirectors,inaccordancewithitsArticlesofAssociation,againstcostsincurredinthedefenceoflegalproceedingsbroughtagainstthembyvirtueoftheiroffice.Directors’andofficers’liabilityinsurancecoverremainsinplacetoprotectalldirectorsandseniormanagers.

Directors’ conflict of interestNodirectorhad,duringtheyear,anybeneficialinterestinanycontractsignificanttotheCompany’sbusiness,otherthanacontractofemployment.TheCompanyhasproceduresinplaceformanagingconflictsofinterest.Shouldadirectorbecomeawarethatthey,ortheirconnectedparties,haveaninterestinanexistingorproposedtransactionwiththeCompany,theyarerequiredtonotifytheBoardinwritingoratthenextBoardmeeting.

Articles of AssociationAnyamendmenttotheCompany’sarticlesofassociationmayonlybemadebypassingaspecialresolutionoftheshareholdersoftheCompany.

Substantial shareholdingsAsat26April2017,theCompanywasawareofsubstantialinterestsintheCompany’ssharesorhadbeennotifiedofinterestsinvotingrightsunderChapter5oftheDisclosureandTransparencyRules,asfollows:

ShareholderNumber

ofshares %heldNature

ofholding

SchroderInvestmentManagement 8,783,915 16.82 Indirect

AberforthPartnersLLP 6,754,630 12.94 Indirect

SanfordDeLandAssetManagement 3,500,000 6.70 Indirect

BlackRock 2,159,980 4.14 Indirect

Theinterestsshownmayincludesharesheldunderdiscretionarymanagementagreementsforwhichthemanagermaynotexercisevotingrights.

Share split, share capital structure, buying back and shareholder rightsOn25January2017,theCompany’sshareholdersapproveda5to1splitoftheCompany’sshares,whichreducedthenominalvalueoftheordinarysharesto1peach.Thesharesplitbecameeffectiveon31January2017.

TheauthorisedsharecapitaloftheCompanyis£750,000dividedinto75,000,000ordinarysharesof1penceeach.TheCompanyhasoneclassofordinaryshareswhichhaveequalrightstodividendsandcapitalandtovoteatgeneralmeetingsoftheCompany,assetoutintheCompany’sArticlesofAssociation.Thenumberofordinarysharesof1penceeachissuedandfullypaidat31January2017was52,217,565(2016,beforesharesplit:10,443,513ordinarysharesof5peach).Otherthaninrespectofthesharesplit,nonewshareshavebeenissuedduringtheyear.Noshareswereboughtbackduringtheyear.

Optionsoutstandingunderallemployeeshareschemesamountedto6.12%oftheCompany’sissuedsharecapitalasat31January2017.Thisincludesoptionsgrantedwhichhavenotyetvested.Inaddition,optionsrepresenting8.99%oftheissuedsharecapitalhavebeenexercisedwithinthe10yearspreceding31January2017.Nomorethan10%oftheissuedsharecapitalinanyrolling10-yearperiodmaycurrentlybetakenupbyemployeeshareschemesbywayofdilutionwithanyexcess(uptoafurther10%oftheissuedsharecapital)beingacquiredbypurchaseinthemarketviatheAirPartnerEmployeeBenefitTrust(theTrust).UndertheArticlesof

Directors’ report




Association,theCompanyhasauthoritytoissue75,000,000ordinaryshares.Resolutionstorenewtheauthoritiesgiventodirectorstoallotshares,todis-applycertainpre-emptionrightsandtomakemarketpurchasesoftheCompany’sownshares,allsubjecttoappropriatelimits,willbeputtotheAnnualGeneralMeeting(AGM)toreplacetheauthoritiesgrantedin2016.

TheTrustholdsordinarysharesintheCompanyinordertosatisfyoptionsundertheGroup’sshareoptionschemes.At31January2017,thenumberofordinarysharesheldbytheTrustwas341,820.SharesheldbytheTrustabstainfromvotingandarenotentitledtoreceivedividends.Afurther413,640sharesareheldbytheTrustinanomineecapacityfortwobeneficiariesoftheTrust.

Therearenospecificrestrictionsonthesizeofaholdingnoronthetransferofshares,whicharebothgovernedbythegeneralprovisionsoftheArticlesofAssociationandprevailinglegislation.ThedirectorsarenotawareofanyagreementsbetweenholdersoftheCompany’ssharesthatmayresultinrestrictionsonthetransferofsecuritiesoronvotingrights.

NopersonhasanyspecialrightsofcontrolovertheCompany’ssharecapitalandallissuedsharesarefullypaid.

Noindividualorcorporateentityhastherighttoappointadirector.TheappointmentandreplacementofdirectorsisgovernedbytheArticlesofAssociation,theUKCorporateGovernanceCode,theCompaniesAct2006andrelatedlegislation.

Change of control – significant contractsThereareanumberofcommercialagreementsthattakeeffect,alterorterminateuponachangeofcontroloftheCompany;noneisconsideredtobesignificantintermsofitspotentialimpactonthebusinessoftheGroupasawhole.

TheCompanydoesnothaveagreementswithanydirectororemployeethatwouldprovidecompensationforlossofofficeoremploymentresultingfromatakeover,exceptthatprovisionsoftheCompany’sshareschemesandplansmaycauseoptionsandawardsgrantedtoemployeesundersuchschemesandplanstovestonatakeover.

Branches TheCompanyanditssubsidiarieshaveanestablishedbranchinAustria.

Greenhouse gas emissions

2017Global tonnes

of CO2e

2016Globaltonnes

ofCO2e

Vehicles 18 16

Electricity 387 307

Total 405 323

WehavereportedonalloftheemissionsourcesrequiredundertheLargeandMedium-SizedCompaniesandGroups(AccountsandReports)Regulations2008asamendedinAugust2013.Thereportingboundaryusedforcollationoftheabovedataisconsistentwiththatusedforconsolidationpurposesinthefinancialstatements.WehaveusedtheGHGProtocolCorporateAccountingandReportingStandard(revisededition),datagatheredtofulfilourrequirementsundertheCRCEnergyEfficiencyscheme,andemissionfactorsfromtheUKGovernment’sGHGConversionFactorsforCompanyReporting2014tocalculatetheabovedisclosures.

GiventheGroup’soperations,CO2eemissionsarerestrictedtoofficeuseandtheoperationofasmallnumberofvehicles.Inthecaseofoffices,occupationiswithinamulti-occupiedbuildingforalloftheGroup’ssubsidiarieswithoutseparatemeteringforindividualusagebyeachtenant.Accordingly,anestimatehasbeenused.


Political contributionsTherewerenopoliticalcontributionsduringtheyear(2016:£nil).

Directors’ statementsAsrequiredundertheCompaniesAct2006,theUKCorporateGovernanceCode2014andtheDisclosureandTransparencyRules(DTRs),variousstatementshavebeenmadebytheBoardassetoutonpages44and55andareincorporatedintothisreportbyreference.

Independent auditorDeloitteLLPhasconfirmedthatitiswillingtobereappointedasauditorforthefinancialyearending31January2017.

InaccordancewithSection489oftheCompaniesAct2006,aresolutionproposingtheappointmentofastatutoryauditorwillbeproposedatthe2017AGM.

Annual General MeetingThe2017AGMwillbeheldat11amonWednesday28Juneat2CityPlace,BeehiveRingRoad,Gatwick,RH60PA.TheCompanyconfirmsthatitwillsendtheNoticeofAGMandrelateddocumentationtoshareholdersatleast20workingdaysbeforethemeeting,eitherbypost,tothoseshareholderswhopreferapapercopy,orbyemailtothoseshareholderswhohaveagreedthattheCompanycancommunicatewiththemelectronically.

BoththeNoticeofAGMandtheProxyformareavailabletodownloadfromtheInvestorssectionontheCompany’swebsite.

TheDirectors’reportwasapprovedbytheBoardon26April2017andissignedonitsbehalfby:

Sally Chandler CompanySecretaryAirPartnerplc

Directors’ report continued




ThedirectorsareresponsibleforpreparingtheStrategicreportincorporatingthebusinessreview,theDirectors’report,theDirectors’remunerationreportandtheGroupandParentCompanyfinancialstatements.ThedirectorsarerequiredtopreparefinancialstatementsfortheGroupinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedforuseintheEuropeanUnionandhavealsoelectedtopreparefinancialstatementsfortheCompanyinaccordancewithIFRSasadoptedforuseintheEuropeanUnion.CompanylawrequiresthedirectorstopreparesuchfinancialstatementsinaccordancewithIFRSandtheCompaniesAct2006andArticle4oftheIASRegulation.

InternationalAccountingStandard1requiresthatfinancialstatementspresentfairlyforeachfinancialyeartheGroup’sandCompany’sfinancialposition,financialperformanceandcashflows.Thisrequiresthefairpresentationoftheeffectsoftransactions,othereventsandconditionsinaccordancewiththedefinitionsandrecognitioncriteriaforassets,liabilities,incomeandexpensessetoutintheInternationalAccountingStandardsBoard’s‘FrameworkforthePreparationandPresentationofFinancialStatements’.Invirtuallyallcircumstances,afairpresentationwillbeachievedbycompliancewithallapplicableIFRS.

Directorsarealsorequiredto:

• selectsuitableaccountingpoliciesandapplythemconsistently

• makejudgementsandestimatesthatarereasonableandprudent

• statewhetherapplicableaccountingstandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements

• presentinformation,includingaccountingpolicies,inamannerthatprovidesrelevant,reliable,comparableandunderstandableinformation

• provideadditionaldisclosureswhencompliancewithspecificrequirementsinIFRSisinsufficienttoenableuserstounderstandtheimpactofparticulartransactions,othereventsandconditionsontheentity’sfinancialpositionandfinancialperformance

• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheCompanywillcontinueinbusiness.

ThedirectorsareresponsibleforkeepingadequateaccountingrecordswhichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandoftheCompany,forsafeguardingtheassets,fortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities,andforthepreparationofaDirectors’reportandDirectors’remunerationreportwhichcomplywiththerequirementsoftheCompaniesAct2006.

ThedirectorsareresponsibleforthemaintenanceandintegrityoftheGroupwebsite.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationofthefinancialstatementsmaydifferfromlegislationinotherjurisdictions.

Directors’ statement of responsibility for financial statementsEachofthedirectorsservingatthedateofapprovaloftheaccountsconfirmsthat,tothebestofhis/herknowledgeandbelief:

• thefinancialstatements,whichhavebeenpreparedinaccordancewithIFRSasadoptedbytheEuropeanUnion,giveatrueandfairviewoftheassets,liabilities,financialpositionandfinancialperformanceoftheGroupandCompany

• theStrategicreportandtheDirectors’reportgiveafairreviewoftheGroup,togetherwithadescriptionoftheprincipalrisksanduncertaintiesthattheGroupfaces.

Directors’ statement of responsibility for disclosure of information to auditorAsrequiredbysection418oftheCompaniesAct2006,eachdirectorservingatthedateofapprovalofthefinancialstatementsconfirmsthat:

• tothebestofhis/herknowledgeandbelief,thereisnoinformationrelevanttothepreparationoftheirreportsofwhichtheCompany’sauditorisunaware

• eachdirectorhastakenallthestepsadirectormightreasonablybeexpectedtohavetakentobeawareofrelevantauditinformationandtoestablishthattheCompany’sauditorisawareofthatinformation.

Wordsandphrasesusedinthisconfirmationshouldbeinterpretedinaccordancewithsection418oftheCompaniesAct2006.

TheDirectors’statementswereapprovedbytheBoardon26April2017andaresignedonitsbehalfby:

Sally Chandler CompanySecretaryAirPartnerplc

Directors’ responsibility statement


Financialstatements


Summary of our audit approach

Key risks Thekeyrisksthatweidentifiedinthecurrentyearwere:

1Revenuerecognition:classificationaseitheragentorprincipal

2Completenessofprovisionsagainstoperatorprepayments

3Completenessofoperatoraccruals

4FinalisationofpurchasepriceallocationrelatingtotheacquisitionofBainesSimmons

5ImpairmentofgoodwillandintangibleassetsrelatingtotheBainesSimmonsconsultingandtrainingcash-generatingunit.

Withinthisreport,anynewrisksareidentifiedwith andanyriskswhicharethesameastheprioryearareidentifiedwith .

Materiality Ourchosenmaterialityof£410,000(2016:£285,000)represents8.1%(2016:6.6%)ofunderlyingprofitbeforetax,1.3%(2016:1.0%)ofgrossprofitand2.7%(2016:2.1%)ofnetassets.

Underlyingprofitbeforetaxisdefinedbymanagementinnote2.

Scoping Ourglobaltestingapproachisacombinationoffullscope,specifiedauditproceduresanddefinedprocedures.Wehavemadechangestoourscopingdecisionsmadeintheprioryearforseveralglobalentitiestoreflecttheircurrentsignificance.

Significant changes in our approach

WeidentifiedanadditionalkeyriskinthecurrentyearrelatingtotheriskofimpairmentoftheBainesSimmonsconsultingandtrainingcash-generatingunit.WehavenotreportedontherevenuerecognitionofJetCardandotherdeferredincomeasthisriskdidn’thaveasignificanteffectontheallocationofresourcesintheauditinthecurrentyear.

Independent auditor’s report to the members of Air Partner plc

Opinion on financial statements of Air Partner plcInouropinion:

• thefinancialstatementsgiveatrueandfairviewofthestateoftheGroup’sandoftheParentCompany’saffairsasat31January2017andoftheGroup’sprofitfortheyearthenended

• theGroupfinancialstatementshavebeenproperlypreparedinaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnion

• theParentCompanyfinancialstatementshavebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnionandasappliedinaccordancewiththeprovisionsoftheCompaniesAct2006

• thefinancialstatementshavebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006and,asregardstheGroupfinancialstatements,Article4oftheIASRegulation.

Thefinancialstatementsthatwehaveauditedcomprise:

• theConsolidatedIncomeStatement• theConsolidatedStatementofComprehensiveIncome• theConsolidatedandCompanyStatementsofFinancialPosition• theConsolidatedandCompanyCashFlowStatements• theConsolidatedandCompanyStatementsofChangesinEquity• therelatednotes1to38.

ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandIFRSsasadoptedbytheEuropeanUnionand,asregardstheParentCompanyfinancialstatements,asappliedinaccordancewiththeprovisionsoftheCompaniesAct2006.




Separate opinion in relation to IFRSs as issued by the IASB

Asexplainedinnote1totheGroupfinancialstatements,inadditiontocomplyingwithitslegalobligationtoapplyIFRSsasadoptedbytheEuropeanUnion,theGrouphasalsoappliedIFRSsasissuedbytheInternationalAccountingStandardsBoard(IASB).

InouropiniontheGroupfinancialstatementscomplywithIFRSsasissuedbytheIASB.

Going concern and the directors’ assessment of the principal risks that would threaten the solvency or liquidity of the Group

AsrequiredbytheListingRuleswehavereviewedthedirectors’statementregardingtheappropriatenessofthegoingconcernbasisofaccountingcontainedwithinnote2tothefinancialstatementsandthedirectors’statementonthelonger-termviabilityoftheGroupcontainedwithintheAuditandRiskCommitteereportonpage51.

Wearerequiredtostatewhetherwehaveanythingmaterialtoaddordrawattentiontoinrelationto:

• thedirectors’confirmationonpage53thattheyhavecarriedoutarobustassessmentoftheprincipalrisksfacingtheGroup,includingthosethatwouldthreatenitsbusinessmodel,futureperformance,solvencyorliquidity

• thedisclosuresonpages18-21thatdescribethoserisksandexplainhowtheyarebeingmanagedormitigated

• thedirectors’statementinnote2tothefinancialstatementsaboutwhethertheyconsidereditappropriatetoadoptthegoingconcernbasisofaccountinginpreparingthemandtheiridentificationofanymaterialuncertaintiestotheGroup’sabilitytocontinuetodosooveraperiodofatleast12monthsfromthedateofapprovalofthefinancialstatements

• thedirectors’explanationonpage53astohowtheyhaveassessedtheprospectsoftheGroup,overwhatperiodtheyhavedonesoandwhytheyconsiderthatperiodtobeappropriate,andtheirstatementastowhethertheyhaveareasonableexpectationthattheGroupwillbeabletocontinueinoperationandmeetitsliabilitiesastheyfalldueovertheperiodoftheirassessment,includinganyrelateddisclosuresdrawingattentiontoanynecessaryqualificationsorassumptions.

We confirm that we have nothing material to add or draw attention to in respect of these matters.

We agreed with the directors’ adoption of the going concern basis of accounting and we did not identify any such material uncertainties. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to continue as a going concern.

Independence

WearerequiredtocomplywiththeFinancialReportingCouncil’sEthicalStandardsforAuditorsandconfirmthatweareindependentoftheGroupandwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththosestandards.

We confirm that we are independent of the Group and we have fulfilled our other ethical responsibilities in accordance with those standards. We also confirm we have not provided any of the prohibited non-audit services referred to in those standards.

Our assessment of risks of material misstatement

Theassessedrisksofmaterialmisstatementdescribedonpages74to76arethosethathadthegreatesteffectonourauditstrategy,theallocationofresourcesintheauditanddirectingtheeffortsoftheengagementteam.


1. Revenue recognition: classification as either agent or principal

Risk description AirPartnerplcprovidesaircharterservicestocustomersusingoperatoraircrafttosupplytheflight.Therecognitionofrevenueaseither‘agent’or‘principal’isdeterminedbytheapplicationofthecriteriasetoutinIAS18‘Revenue’.Underthisstandard,anentityisactingasprincipalwhenithasexposuretothesignificantrisksandrewardsassociatedwiththerenderingofservices.

ManagementmustapplytheirjudgementtoconsideriftheCompanyisactingastheprincipalortheagentineachcontractwiththeendcustomerwhereAirPartner’sstandardtermsandconditionsaremodified(orindeednotusedasabasisforthecontract).

Thereisariskthatrevenueisrecognisedincorrectlyeitheras‘gross’revenuewhenthebusinessisnotexposedto‘principal’risk,orbookedas‘net’or‘agency’revenuewhenthebalanceofriskpointstotheCompanybeingthe‘principal’inthearrangement.

Totalgrosstransactionvalue(GTV)was£215.8mintheyearended31January2017(2016:£210.8m).GTVrepresentsthetotalvalueofinvoicesraisedtocustomers.

TheGroup’srevenuerecognitionaccountingpolicyisincludedonpage92ofthenotestothefinancialstatements.ThisisdiscussedbytheAuditandRiskCommitteeonpage51.

How the scope of our audit responded to the risk

Inordertoaddressthisrisk:

• wetestedthedesignandimplementationofmanagement’scontrolsovertheclassificationofrevenue• weobtainedandreviewedAirPartner’sstandardcontracttermsandthosecontractswheremanagement

concludedthattheywereprincipalagainsttheIAS18criteriatoassesswhetherthecorrectapplicationofIAS18recognitionwasapplied

• wealsoselectedasampleofrecordedrevenueamounts,obtainedandreviewedthecustomercontractinordertoassesswhetherthecorrectapplicationofIAS18revenueclassificationhadbeenapplied

• weperformedfocusedtestingonafurthersampleofcontractswhichmanagementhasclassifiedasagentarrangementsbyselectingasampleofthosewhichhadsimilarcharacteristics(industry,size,margin)tocustomercontractswhereAirPartnerwasclassifiedasprincipal.Fortheseweevaluatedmanagement’sassessmentonwhetherAirPartnerisanagentusingthecriteriaofIAS18.

Key observations Fromtheworkperformedabove,wearesatisfiedthatrevenuerecognitionhasbeenappropriatelyappliedinaccordancewithIAS18.

2. Completeness of provisions against operator prepayments

Risk description TheGroupentersintosalescontractswithcustomersforaircraftcharterandentersintopurchasecontracts‘back-to-back’.TheGroupisrequiredtoprepayoperatorsforflightswhichoccurinthefuture.Attheyearend,thevalueofGroupprepaymentswas£5.2m(2016:£7.0m)whichincludesoperatorprepayments.AlthoughtheGroupmatchesthepurchasecontractwiththecustomerreceipt,thereisacreditriskincaseswheresuppliersdefaultbeforetheflighttakesoffandthatmoniesprepaidtosuppliersarenotrecoverable.Incertaincases,AirPartnermaystillfulfiltheflightforthecustomer.Thereisarisktheseprepaymentsneedtobeprovidedfor.ThisisdiscussedbytheAuditandRiskCommitteeonpage52.



• wecheckedtheaccuracyofthelistingofprepaidoperatorcostsasat31January2017byagreeingasamplethroughtosignedcontracts

• wereviewedprepaidoperatorcoststoidentifythosewhichhadahigherchanceofirrecoverability• wetracedasampleofprepaymentsthroughtopost-yearendflightrecordstocheckthattheoperatorhad

suppliedtheflight• forthoseflightsinoursamplethathadnotyettakenoffatthedateofourtestingwereviewedtheoperator’s

businesshistorywiththeGroupforevidenceofdisputeandslowpaymentaswellasthird-partyevidenceoftheirfinancialposition

• werequesteddetailsfromtheGroup’sexternallegaladviserstoidentifylegaldisputeswithoperators.

Key observations Fromtheworkperformedabove,wearesatisfiedthatoperatorprepaymentsarevaluedappropriately.

Independent auditor’s report to the members of Air Partner plccontinued




3. Completeness of operator accruals

Risk description FlightsandrelatedservicesarepurchasedfromalargenumberofdifferentsuppliersandthenatureoftheGroup’sproductsandservicesisthattheyarebespokeandtailoredtotheclient’srequirements.Asaresult,theprocessofmatchingcostsandassociatedrevenuesinordertoappropriatelyaccountonanaccrualsbasisrequiresestimationoffuturecosts.Theriskofcompletenessisconsideredsignificantas:

• supplierssubmitinvoiceswithdifferingtimescales,oftensignificantlylaterthanthedateoftheserviceprovision

• certainemployeeshaveelementsoftheirremunerationbaseduponacommissioncalculatedwithreferencetogrossprofitonflightservices.

Thesefactorsresultinaheightenedriskofunder-accrualofcosts.ThisisdiscussedbytheAuditandRiskCommitteeonpage52.



• wetestedasampleofpurchaseinvoicesandpaymentsmadeafter31January2017.Weagreedthesetoevidencesupportingthedateofflightsorservicedeliveryandconsideredwhether,wherethiswasbeforetheyearend,anaccrualhadbeenrecorded

• weperformedanalyticalproceduresongrossmarginforthecomponentsinourscopetohighlightinstanceswherecostsmaynothavebeenrecorded.Ifweidentifiedanunexpectedmargin,wecarriedoutmorefocusedtestingonthecompletenessofaccruals

• wereviewedsignificantaccrualamountsagainstamountsrecordedatthepriorperiodendtohighlightanypotentialriskofunder-accrual.

Key observations Fromtheworkperformedabove,wedidnotidentifyanyincompleteaccrualswhichrequiredreportingtotheAuditandRiskCommittee.

4. Finalisation of purchase price allocation relating to the acquisition of Baines Simmons

Risk description Duringtheyearended31January2016,AirPartneracquiredBainesSimmonsLimited.Inthecurrentyear,managementfinalisedtheBainesSimmonsacquisitionaccounting,inaccordancewithIFRS3(revised)BusinessCombinations.Goodwillis£1.7m(2016:£2.8m)andintangiblesare£4.0m(2016:£2.7m).Seenote33wherethefinalisedallocationhasbeendisclosed.

Thereissignificantjudgementrequiredinthevaluationsofthegoodwillandintangibleassetsandmanagementhasusedavaluationexperttoassistinthisprocess.Wehaveidentifiedthefinalisationofthepurchasepriceallocationasthesignificantriskintheacquisitionaccounting.

Wehavepinpointedtherisktomanagement’sfinalisationofthepurchasepriceallocationbetweencash-generatingunits(CGUs)andtherelatedgoodwillandintangibleassets.ThemainassumptionsusedinallocatingthisbetweentheCGUsarerevenuegrowth,theallocationofoverheadsandthediscountrateappliedtoeach.

TheGroup’saccountingpolicyisincludedonpage89ofthenotestothefinancialstatements.ThisisdiscussedbytheAuditandRiskCommitteeonpage52.



• wecheckedtheaccuracyoftheschedulessupportingthevaluationofgoodwillandintangibleassetsacquired• wechallengedtheinputsandassumptionslistedaboveusedinthevaluation.Thisincludedinvolving

internalspecialiststobenchmarkthediscountrateandchallengethemethodologyused• wealsoassessedthereasonablenessofcashflowforecaststhroughcomparisontohistoricalresultsand

otherknowledgegainedfromouraudit• weassessedwhethertheaccountingjournalspostedinrelationtothetransactionwereinaccordance

withIFRS3• weconsideredthecompetencyofmanagement’sexpert.

Key observations Fromtheworkperformedabove,weconcludedthattheassumptionsusedintheallocationswereappropriate.



5. Impairment of goodwill and intangible assets relating to the Baines Simmons consulting and training cash-generating unit (CGU)

Risk description ManagementisrequiredtotestGroupgoodwillbalancesannuallyforimpairment.Theassessmentofthecarryingvalueofgoodwillandintangiblesinvolvesjudgementinrelationtoforecastingfuturecashflowsandissensitivetogrowthratesandthediscountrateappliedtofuturecashflows.

Managementhasassessedthefuturecashflowsofthecashgeneratingunitandconcludedthatitisnotimpaired.WehaveconsideredtheCompany’sforecastperformanceandpinpointedourriskspecificallytotherevenueandgrossprofitgrowthratesanddiscountrateappliedwithintheBainesSimmonsconsultingandtrainingCGU.Asat31January2017,goodwillandintangibleassetsrelatingtothisCGUtotal£1.6m(2016:£3.2m).

TheGroup’sgoodwillandintangibleassetsaccountingpoliciesareincludedonpage87ofthenotestothefinancialstatements.ThisisdiscussedbytheAuditandRiskCommitteeonpage52.



• wecheckedtheaccuracyoftheschedulessupportingthecashflowmodel• wechallengedtheappropriatenessofthekeyassumptionsofcashflowgrowth,revenueandgrossprofit

growthratesusinghistoricalperformance,historicalforecastingaccuracy,knowledgeofthebusinessandsensitivityanalysis

• wechallengedthediscountfactorused,usingourinternalspecialists,toassesstheappropriatenessforthisbusiness,bycomparisontoexternaldataandviasensitivityanalysis

• wealsotestedthecompletenessofdirectandoverheadcostsviapost-yearendpaymenttestingandtheoccurrenceofrevenuefor2017.

Key observations Fromtheworkperformedabove,weconcludedthattheinputsandassumptionsappliedinthevaluationmodelwereappropriate.

Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

Our application of materiality

Wedefinematerialityasthemagnitudeofmisstatementinthefinancialstatementsthatmakesitprobablethattheeconomicdecisionsofareasonablyknowledgeablepersonwouldbechangedorinfluenced.Weusematerialitybothinplanningthescopeofourauditworkandinevaluatingtheresultsofourwork.

Basedonourprofessionaljudgement,wedeterminedmaterialityforthefinancialstatementsasawholeasfollows:

Group materiality £410,000(2016:£285,000)

Basis for determining materiality

Weusedacombinationofunderlyingprofitbeforetax,grossprofitandnetassetstodeterminemateriality.

Ourchosenmaterialityrepresents8.1%(2016:6.6%)ofunderlyingprofitbeforetax,1.3%(2016:1.0%)ofgrossprofitand2.7%(2016:2.1%)ofnetassets.

Rationale for the benchmark applied

Indeterminingourmaterialitybenchmarkweconsideredtheperformanceindicatorsmostapplicabletotheusersofthefinancialstatements,thenatureofthebusinessandcomparativeauditreportsforlistedentities.Grossprofitandunderlyingprofitbeforetaxarethekeymeasuresusedbyanalystsinpresentingbusinessperformancetousersofthefinancialstatements.However,asprofit-basedmeasuresdonotfullyrepresentthesizeofthebalancesheet,wehavealsoconsiderednetassetsindeterminingmateriality.Inmakingthisdetermination,weconsideredtheprofitmetricsofboththeprioryearandthecurrentyearbecauseofthevariation.Underlyingprofitisdefinedbymanagementonpage91.

WeagreedwiththeAuditandRiskCommitteethatwewouldreporttotheCommitteeallauditdifferencesinexcessof£20,500(2016:£5,700),aswellasdifferencesbelowthatthresholdthat,inourview,warrantedreportingonqualitativegrounds.WealsoreporttotheAuditandRiskCommitteeondisclosuremattersthatweidentifiedwhenassessingtheoverallpresentationofthefinancialstatements.




An overview of the scope of our audit

OurauditwasscopedbyobtaininganunderstandingoftheGroupanditsenvironment,includinginternalcontrol,howtheGroupisorganised,theconsolidationprocess,theperformanceandfinancialpositionofeachcomponentasaproportionofthetotalfortheGroupandassessingtherisksofmaterialmisstatementthroughouttheGroup.Basedonthatassessment,wefocusedourGroupauditscopeprimarilyontheGroupoperationsintheUK,France,theUSandGermany.

TheUKandFranceweresubjecttoafullaudit,whiletheUSandGermanyweresubjecttospecifiedauditproceduresincludingfullauditproceduresonsignificantrisks.OurtestingintheUSandGermanywasbasedonourassessmentoftherisksofmaterialmisstatementandofthematerialityoftheGroup’soperationsatthoselocationsincludinganauditofaccountbalancesrelatingtothesignificantrisksareasapplicabletothoselocations.

TheGroupauditengagementteamvisitedalloverseascomponentauditteamsaspartofouroversightoftheirwork.WevisitedeachoftheoverseaslocationssetoutaboveinorderforaseniormemberoftheGroupauditengagementteamtoupdateourunderstandingoftheoperations,risksandcontrolenvironmentsofeachcomponentaswellastoreviewthecomponentauditors’workingpapers.TheGroupauditengagementteamperformedtheauditoftheUKbusinessandproceduresontheUSbusinesswithouttheinvolvementofacomponentteam.

Forallotherlocations,wehaveperformedanalyticalreviewproceduresatGrouplevel.Attheparententitylevelwealsotestedtheconsolidationprocess.Thechangesinscopethisyeararethatweperformed:

• specifiedauditproceduresonrevenueandcostofsalesforBainesSimmonsLimited• analyticalreviewproceduresforItaly,ratherthanspecifiedauditprocedures• analyticalreviewproceduresforthenewlyacquiredsubsidiaryClockworkResearchLimited.

TheGroupauditengagementteamhasobtainedanunderstandingoftheGroup,includingtheconsolidationprocessandGroup-widecontrols,toconfirmourconclusionthattherewerenosignificantrisksofmaterialmisstatementoftheaggregatedfinancialinformationoftheremainingcomponentsnotsubjecttoauditorauditofspecifiedaccountbalances.TheGroupresultsaresplitasfollows:

51%42%

7%

Gross profit

47%46%

7%

Statutory profit before tax

78%

16%

6%

New assets

Fullauditscope Specifiedauditprocedures Analyticalreviewprocedures

Thematerialityusedineachlocationwhereweperformedanauditorspecifiedauditproceduresrangedfrom£213,000to£340,000(2016:£128,000to£228,000).



Opinion on other matters prescribed by the Companies Act 2006

Inouropinion,basedontheworkundertakeninthecourseoftheaudit:

• thepartoftheDirectors’remunerationreporttobeauditedhasbeenproperlypreparedinaccordancewiththeCompaniesAct2006• theinformationgivenintheStrategicreportandtheDirectors’reportforthefinancialyearforwhichthefinancialstatementsareprepared

isconsistentwiththefinancialstatements• theStrategicreportandtheDirectors’reporthavebeenpreparedinaccordancewithapplicablelegalrequirements.

InthelightoftheknowledgeandunderstandingoftheCompanyanditsenvironmentobtainedinthecourseoftheaudit,wehavenotidentifiedanymaterialmisstatementsintheStrategicreportandtheDirectors’report.

Matters on which we are required to report by exception

Adequacy�of�explanations�received�and�accounting�records

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit,or• adequateaccountingrecordshavenotbeenkeptbytheParentCompany,orreturns

adequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus,or• theParentCompanyfinancialstatementsarenotinagreementwiththeaccounting

recordsandreturns.

We have nothing to report in respect of these matters.

Directors’�remuneration

UndertheCompaniesAct2006wearealsorequiredtoreportifinouropinioncertaindisclosuresofdirectors’remunerationhavenotbeenmadeorthepartoftheDirectors’remunerationreporttobeauditedisnotinagreementwiththeaccountingrecordsandreturns.

We have nothing to report arising from these matters.

Corporate�governance�statement

UndertheListingRuleswearealsorequiredtoreviewpartoftheCorporategovernancestatementrelatingtotheCompany’scompliancewithcertainprovisionsoftheUKCorporateGovernanceCode.

We have nothing to report arising from our review.

Our�duty�to�read�other�information�in�the�annual�report

UnderInternationalStandardsonAuditing(UKandIreland),wearerequiredtoreporttoyouif,inouropinion,informationintheannualreportis:

• materiallyinconsistentwiththeinformationintheauditedfinancialstatements,or• apparentlymateriallyincorrectbasedon,ormateriallyinconsistentwith,our

knowledgeoftheGroupacquiredinthecourseofperformingouraudit,or• otherwisemisleading.

Inparticular,wearerequiredtoconsiderwhetherwehaveidentifiedanyinconsistenciesbetweenourknowledgeacquiredduringtheauditandthedirectors’statementthattheyconsidertheannualreportisfair,balancedandunderstandableandwhethertheannualreportappropriatelydisclosesthosemattersthatwecommunicatedtotheAuditandRiskCommitteewhichweconsidershouldhavebeendisclosed.

We confirm that we have not identified any such inconsistencies or misleading statements.




Respective responsibilities of directors and auditor

AsexplainedmorefullyintheDirectors’responsibilitiesstatement,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).WealsocomplywithInternationalStandardonQualityControl1(UKandIreland).Ourauditmethodologyandtoolsaimtoensurethatourqualitycontrolproceduresareeffective,understoodandapplied.Ourqualitycontrolsandsystemsincludeourdedicatedprofessionalstandardsreviewteamandindependentpartnerreviews.

ThisreportismadesolelytotheCompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Scope of the audit of the financial statements

Anauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.Thisincludesanassessmentof:whethertheaccountingpoliciesareappropriatetotheGroup’sandtheParentCompany’scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.Inaddition,wereadallthefinancialandnon-financialinformationintheannualreporttoidentifymaterialinconsistencieswiththeauditedfinancialstatementsandtoidentifyanyinformationthatisapparentlymateriallyincorrectbasedon,ormateriallyinconsistentwith,theknowledgeacquiredbyusinthecourseofperformingtheaudit.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Robert Knight FCA (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor Crawley,UnitedKingdom

26April2017


Consolidated income statementfortheyearended31January2017


Year ended 31 January 2017 Yearended31January2016

Continuing operations NoteUnderlying*

£’000Other items

£’000Total

£’000Underlying*

£’000Otheritems

£’000Total

£’000

Gross transaction value (GTV) 2 215,829 – 215,829 210,752 – 210,752

Revenue 3 42,538 – 42,538 49,942 – 49,942

Gross profit 4 31,707 – 31,707 27,269 – 27,269Administrativeexpenses (26,593) (709) (27,302) (22,883) (1,178) (24,061)

Operating profit 5,114 (709) 4,405 4,386 (1,178) 3,208

Financeincome 9 39 – 39 10 – 10Financeexpense 9 (96) – (96) (81) – (81)

Profit before tax 5,057 (709) 4,348 4,315 (1,178) 3,137Taxation 10 (1,654) 153 (1,501) (1,311) 81 (1,230)

Profit for the year from continuing operations 3,403 (556) 2,847 3,004 (1,097) 1,907

Discontinued operationsProfitfortheyearfromdiscontinuedoperations 11 – – – 387 – 387

Profit for the year 3,403 (556) 2,847 3,391 (1,097) 2,294

Attributable to:OwnersoftheParentCompany 3,403 (556) 2,847 3,391 (1,097) 2,294

Earnings/(loss) per share:Continuing operationsBasic 13 6.5p (1.1)p 5.4p 5.9p (2.2)p 3.7pDiluted 13 6.4p (1.1)p 5.3p 5.8p (2.2)p 3.6p

Discontinued operationsBasic 13 – – – 0.8p – 0.8pDiluted 13 – – – 0.8p – 0.8p

Continuing and discontinued operationsBasic 13 6.5p (1.1)p 5.4p 6.7p (2.2)p 4.5pDiluted 13 6.4p (1.1)p 5.3p 6.6p (2.2)p 4.4p

*Beforeotheritems(seenote7)

Year ended 31 January

2017£’000

Yearended31January

2016£’000

Profitfortheyear 2,847 2,294Other comprehensive income – items that may subsequently be reclassified to profit or loss:Exchangedifferencesontranslationofforeignoperations 346 (29)

Total comprehensive income for the year 3,193 2,265

Attributable to:OwnersoftheParentCompany 3,193 2,265

Consolidated statement of comprehensive incomefortheyearended31January2017




Consolidated statement of changes in equity fortheyearended31January2017

Sharecapital£’000

Sharepremiumaccount

£’000

Mergerreserve

£’000

Ownshares

reserve£’000

Translationreserve

£’000

Shareoption

reserve£’000

Retainedearnings

£’000

Totalequity£’000

Opening equity as at 1 February 2015 513 4,518 – (1,051) 1,093 1,485 6,753 13,311Profitfortheyear – – – – – – 2,294 2,294Exchangedifferencesontranslationofforeignoperations – – – – (29) – – (29)

Total comprehensive income for the year – – – – (29) – 2,294 2,265Issueofshares 9 296 295 (300) – – – 300Shareoptionmovementintheyear – – – – – 223 – 223Deferredtaxonshare-basedpaymenttransactions(note26) – – – – – – 18 18Shareoptionsexercisedduringtheyear – – – 152 – – (84) 68Dividendspaid(note12) – – – – – – (2,331) (2,331)

Closing equity as at 31 January 2016 522 4,814 295 (1,199) 1,064 1,708 6,650 13,854


Sharepremiumaccount

£’000

Mergerreserve

£’000

Ownshares

reserve£’000

Translationreserve

£’000

Shareoption

reserve£’000

Retainedearnings

£’000

Totalequity£’000

Opening equity as at 1 February 2016 522 4,814 295 (1,199) 1,064 1,708 6,650 13,854Profitfortheyear – – – – – – 2,847 2,847Exchangedifferencesontranslationofforeignoperations – – – – 346 – – 346

Total comprehensive income for the year – – – – 346 – 2,847 3,193Shareoptionmovementfortheyear – – – – – 369 – 369Issueofshares – (59) 59 60 – (60) – –Deferredtaxonshare-basedpaymenttransactions(note26) – – – – – – (66) (66)Shareoptionsexercisedduringtheyear – – – 467 – – (286) 181Remeasurementsofpost-employmentbenefitobligations – – – – – – (23) (23)Dividendspaid(note12) – – – – – – (2,574) (2,574)

Closing equity as at 31 January 2017 522 4,755 354 (672) 1,410 2,017 6,548 14,934


Financial statementscontinued

Company statement of changes in equity fortheyearended31January2017


Sharepremiumaccount

£’000

Mergerreserve

£’000

Ownshares

reserve£’000

Shareoption

reserve£’000

Retainedearnings

£’000

Totalequity£’000

Opening equity as at 1 February 2015 513 4,518 – (1,051) 1,485 4,549 10,014Profitfortheyear – – – – – 5,636 5,636

Total comprehensive income for the period – – – – – 5,636 5,636Issueofshares 9 296 295 (300) – – 300Shareoptionmovementfortheyear – – – – 223 – 223

Deferredtaxonshare-basedpaymenttransactions(note26) – – – – – 18 18Shareoptionsexercisedduringtheyear – – – 152 – (84) 68Dividendspaid(note12) – – – – – (2,331) (2,331)

Closing equity as at 31 January 2016 522 4,814 295 (1,199) 1,708 7,788 13,928


Sharepremiumaccount

£’000

Mergerreserve

£’000

Ownshares

reserve£’000

Shareoption

reserve£’000

Retainedearnings

£’000

Totalequity£’000

Opening equity as at 1 February 2016 522 4,814 295 (1,199) 1,708 7,788 13,928Profitfortheyear – – – – – 1,154 1,154

Total comprehensive income for the year – – – – – 1,154 1,154Issueofshares – (59) 59 60 (60) – –Shareoptionmovementfortheyear – – – – 369 – 369

Deferredtaxonshare-basedpaymenttransactions(note26) – – – – – (37) (37)Shareoptionsexercisedduringtheyear – – – 467 – (320) 147Dividendspaid(note12) – – – – – (2,574) (2,574)

Closing equity as at 31 January 2017 522 4,755 354 (672) 2,017 6,011 12,987

Merger reserveThemergerreserverepresentsthefairvalueoftheconsiderationgiveninexcessofthenominalvalueoftheordinarysharesissuedinanacquisitionpartlymadebytheissueofshares.

Own sharesTheownsharesreserverepresentsthecostofsharesinAirPartnerplcpurchasedinthemarketandheldbytheAirPartnerEmployeeBenefitTrusttosatisfyoptionsundertheGroup’sshareoptionschemes(seenote31).

Translation reserveThetranslationreserverepresentstheaccumulatedexchangedifferencesarisingfromtheimpactofthetranslationofsubsidiarieswithafunctionalcurrencyotherthanpoundssterling.

Share option reserveTheshareoptionreserverelatestotheaccumulatedcostsassociatedwiththeoutstandingshareoptionsissuedtostaffbutnotexercised.




Consolidated statement of financial positionasat31January2017

Note

31 January2017

£’000

31January2016

£’000

AssetsNon-current assetsGoodwill 14 3,787 3,346Otherintangibleassets 15 4,956 5,038Property,plantandequipment 16 1,086 1,281Deferredtaxassets 26 533 143

Total non-current assets 10,362 9,808

Current assetsTradeandotherreceivables 18 25,405 23,708Currenttaxassets 506 438Restricted�bank�balances 1,965 2,840Other�cash�and�cash�equivalents 17,830 16,951Totalcashandcashequivalents 19,795 19,791Derivativefinancialinstruments 24 – 36

Total current assets 45,706 43,973

Total assets 56,068 53,781

Current liabilitiesTradeandotherpayables 20 (4,359) (3,911)Currenttaxliabilities (1,071) (133)Otherliabilities 21 (4,463) (5,633)Borrowings 19 (514) (514)Deferredincome (27,350) (25,807)Provisions 23 – (421)Derivativefinancialinstruments 24 (9) –

Total current liabilities (37,766) (36,419)

Net current assets 7,940 7,554

Long-term liabilitiesBorrowings 19 (2,443) (2,957)Deferredconsideration 22 (200) –Deferredtaxliability 26 (725) (551)

Total long-term liabilities (3,368) (3,508)

Total liabilities (41,134) (39,927)

Net assets 14,934 13,854

EquitySharecapital 28 522 522Sharepremiumaccount 29 4,755 4,814Mergerreserve 30 354 295Ownsharesreserve 31 (672) (1,199)Translationreserve 1,410 1,064Shareoptionreserve 2,017 1,708Retainedearnings 6,548 6,650

Total equity 14,934 13,854

ThesefinancialstatementswereapprovedandauthorisedforissuebytheBoardon26April2017andweresignedonitsbehalfby:

M A Briffa Director N J Morris Director


Company statement of financial positionasat31January2017

Financial statements continued

Note

31 January2017

£’000

31January2016

£’000

AssetsNon-current assetsIntangibleassets 15 1,039 992Property,plantandequipment 16 726 897Investments 17 9,350 8,587Deferredtaxassets 26 24 75

Total non-current assets 11,139 10,551

Current assetsTradeandotherreceivables 18 13,539 15,483Currenttaxassets 208 337Restricted�bank�balances 1,965 2,840Other�cash�and�cash�equivalents 12,237 12,146Totalcashandcashequivalents 14,202 14,986Derivativefinancialinstruments 24 – 36

Total current assets 27,949 30,842

Total assets 39,088 41,393

Current liabilitiesTradeandotherpayables 20 (1,677) (1,462)Currenttaxliabilities (80) –Otherliabilities 21 (5,170) (5,460)Borrowings 19 (514) (514)Deferredincome (16,008) (16,906)Provisions 23 – (166)Derivativefinancialinstruments 24 (9) –

Total current liabilities (23,458) (24,508)

Net current assets 4,491 6,334

Long-term liabilitiesBorrowings 19 (2,443) (2,957)Deferredconsideration (200) –

Total long-term liabilities (2,643) (2,957)

Total liabilities (26,101) (27,465)

Net assets 12,987 13,928

EquitySharecapital 28 522 513Sharepremiumaccount 29 4,755 4,518Mergerreserve 30 354 –Ownsharesreserve 31 (672) (1,051)Shareoptionreserve 2,017 1,485Retainedearnings 6,011 4,549

Total equity 12,987 10,014

ThesefinancialstatementswereapprovedandauthorisedforissuebytheBoardon26April2017andweresignedonitsbehalfby:

M A Briffa Director N J Morris DirectorAir Partner plc Registeredno.00980675




Group Company

Note

Year ended

31 January2017

£’000

Yearended

31January2016

£’000

Year ended

31 January2017

£’000

Yearended

31January2016

£’000

Net cash inflow from operating activities 34 1,874 5,785 1,926 387

Investing activitiesContinuingoperations–Interestreceived 39 10 34 3–Dividendsreceivedfromsubsidiaries – – – 3,277

–Purchasesofproperty,plantandequipment 16 (96) (118) (53) (69)–Purchasesofintangibleassets 15 (173) (153) (173) (153)–Acquisitionofsubsidiaries 32 (362) (5,902) (469) (514)

Net cash generated (used in)/by investing activities (592) (6,163) (661) 2,544

Financing activitiesContinuingoperations–Dividendspaid (2,574) (2,331) (2,574) (2,331)–Proceedsonexerciseofshareoptions 181 68 147 68–Newbankloansraised – 3,600 – 3,600

–Repaymentsofborrowings (514) (129) (514) (129)Net cash (used in)/generated by financing activities (2,907) 1,208 (2,941) 1,208Net (decrease)/increase in cash and cash equivalents (1,625) 830 (1,676) 4,139Openingcashandcashequivalents 19,791 18,794 14,986 10,729Effectofchangesinforeignexchangerates 1,629 167 892 118

Closing cash and cash equivalents 19,795 19,791 14,202 14,986

JetCard cashTheclosingcashandcashequivalentsbalancecanbefurtheranalysedinto‘JetCardcash’(beingrestrictedandunrestrictedcashreceivedbytheGroupandCompanyinrespectofitsJetCardproduct)and‘non-JetCardcash’asfollows:

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

JetCardcashrestrictedinitsuse 1,965 2,840 1,965 2,840JetCardcashunrestrictedinitsuse 13,901 13,936 10,568 10,303

TotalJetCardcash 15,866 16,776 12,533 13,143Non-JetCardcash 3,929 3,015 1,669 1,843

Cash and cash equivalents 19,795 19,791 14,202 14,986

Consolidated and company statement of cash flowsfortheyearended31January2017


1 General informationAirPartnerplc(‘theCompany’)isacompanyincorporatedanddomiciledinEnglandandWalesunderregistrationnumber00980675.Theaddressoftheregisteredofficeis2CityPlace,BeehiveRingRoad,Gatwick,WestSussexRH60PA.ThenatureoftheGroup’soperationsanditsprincipalactivitiesaresetoutintheStrategicreportonpages1to39.

2 Accounting policies a) Basis of preparation of financial statementsThefinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedforuseintheEuropeanUnioninaccordancewithEUlaw(IASregulationEC1606/2002)andthosepartsoftheCompaniesAct2006applicabletocompaniesreportingunderIFRS.

Thefinancialstatementsarepresentedinsterling,beingthecurrencyoftheprimaryeconomicenvironmentinwhichtheGroupoperates.Unlessotherwisestated,figuresareroundedtothenearestthousand.Theyarepreparedonthehistoricalcostbasis,exceptfortherevaluationofcertainfinancialinstrumentswhicharestatedatfairvalue.

Theaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyear,exceptasdescribedinthefollowingsections.

Adoption of new and revised standardsThefollowingnewandrevisedstandardsandinterpretationshavebeenadoptedinthecurrentyear:

• IFRS11(amendments)AccountingforacquisitionsofinterestinJointOperations;effectiveforperiodsbeginningonorafter1January2016

• IAS16(amendments)Property,PlantandEquipmentandIAS38IntangibleAssets:Amendmentsregardingtheclarificationofacceptablemethodsofdepreciationandamortisation;effectiveforperiodsbeginningonorafter1January2016

• IAS16andIAS41(amendments)Property,PlantandEquipment:AmendmentstobringbearerplantsintothescopeofIAS16ratherthanIAS41;effectiveforperiodsbeginningonorafter1January2016

• IAS27(amendments)SeparateFinancialStatements;Amendmentsreinstatingtheequitymethod;effectiveforperiodsbeginningonorafter1January2016

• IAS1(amendments)Disclosureinitiative;effectiveforperiodsbeginningonorafter1January2016• IFRS10Consolidatedfinancialstatements,IFRS12DisclosureofinterestsinotherentitiesandIAS28Investmentinassociates;

applyingtheconsolidationexceptionforinvestmententities;effectiveforperiodsbeginningonorafter1January2016.

Adoptionoftheabovehashadnoimpactonthedisclosuresorontheamountsrecognisedintheconsolidatedfinancialstatements.

Annual Improvements 2012-2014 cycleTheAnnualImprovementscycleprovidesastreamlinedprocessfordealingefficientlywithacollectionofamendmentstoIFRSs.Theprimaryobjectiveoftheprocessistoenhancethequalityofstandards,byamendingexistingIFRSstoclarifyguidanceandwording,ortocorrectforrelativelyminorunintendedconsequences,conflictsoroversights.

AdoptionoftheAnnualImprovements2012-2014cyclehashadnoimpactonthedisclosuresorontheamountsrecognisedintheconsolidatedfinancialstatements.

New standards, amendments and interpretations in issue but not yet effectiveThefollowingstandards,amendmentsandinterpretationstoexistingstandardshavebeenpublished–theyarenotmandatoryforthecurrentaccountingperiod,andhavenotbeenearlyadoptedbytheGroup:

• IAS12Incometaxes:clarifyrecognitionofdeferredtaxassetsforunrealisedlosses;effectiveforperiodsbeginningonorafter1January2017

• AnnualImprovementstoIFRSstandards2014-2016cycle;effectiveforperiodsbeginningonorafter1January2017• IAS7Statementofcashflows:clarifydisclosurerequirements;effectiveforperiodsbeginningonorafter1January2017• IFRS9(2014)FinancialInstruments;effectiveforperiodsbeginningonorafter1January2018• IFRS2Share-basedpayment:classificationandmeasurementofshare-basedpaymenttransactions;effectiveforperiods

beginningonorafter1January2018• IAS40InvestmentProperty:transfersofinvestmentproperty;effectiveforperiodsbeginningonorafter1January2018• IFRS16Leases;effectiveforperiodsbeginningonorafter1January2019• IFRS15RevenuefromContractswithCustomers;effectiveforperiodsbeginningonorafter1January2018.

Notes to the financial statementsfortheyearended31January2017




2 Accounting policies continuedTherearenostandardsandinterpretationsinissuebutnotyetadoptedwhich,intheopinionofthedirectors,willhaveamaterialeffectonthereportedincomeornetassetsoftheGrouporCompany.

b) Basis of consolidationTheconsolidatedfinancialstatementsincorporatethefinancialstatementsoftheCompanyandentitiescontrolledbytheCompany(itssubsidiaries)madeupto31Januaryeachyear.ControlisachievedwheretheCompanyhasthepowertogovernthefinancialandoperatingpoliciesofaninvesteeentitysoastoobtainbenefitsfromitsactivities.

Theresultsofsubsidiariesacquiredordisposedofduringtheyearareincludedintheconsolidatedincomestatementfromtheeffectivedateofacquisitionoruptotheeffectivedateofdisposal,asappropriate.Wherenecessary,adjustmentsaremadetothefinancialstatementsofsubsidiariestobringtheaccountingpoliciesusedintolinewiththoseusedbytheGroup.Allintra-Grouptransactions,balances,incomeandexpensesareeliminatedonconsolidation.

c) Critical accounting estimates and judgementsThepreparationoffinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffecttheapplicationofpoliciesandreportedamountsofassetsandliabilities,incomeandexpenses.Theseestimatesandassociatedassumptionsarebasedonhistoricalexperienceandvariousotherfactorsbelievedtobereasonableunderthecircumstances.Actualresultscoulddifferfromtheseestimates.Theseunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisediftherevisionaffectsonlythatperiod;orintheperiodoftherevisionandfutureperiodsifthesearealsoaffected.

Impairment of goodwillManagementconductsannualimpairmentreviewsofthecarryingvalueofgoodwillinrelationtoacquiredsubsidiaries.

Accruals related to air charter contractsWhenrevenuesandcostsforairchartercontractsareinitiallyrecognised,estimatesmayneedtobemadeinordertoaccrueitemsofincomeandexpenditurethathavenotbeeninvoicedbutareexpectedtocrystallise.Theseestimatesmaynotreflecttheultimateoutcome.

Valuation of acquisition goodwill and intangiblesAnintangibleresourceacquiredwithasubsidiaryundertakingisrecognisedasanintangibleassetifitisseparablefromtheacquiredbusinessorarisesfromcontractualorlegalrights,anditisexpectedtogeneratefutureeconomicbenefitsanditsfairvaluecanbemeasuredreliably.Theidentificationofintangibleassetsacquiredaspartofbusinesscombinationsrequiresjudgement.Foreachbusinesscombinationthebalanceofgoodwilltootherintangibleassetsisreviewedforappropriateness.Acquiredintangibleassets,comprisingbrands,customerrelationships,othermandatesandtrainingmaterials,areamortisedthroughtheConsolidatedincomestatementonastraight-linebasisovertheirestimatedeconomiclivesofbetweenoneand20years.Significantjudgementisrequiredindeterminingthefairvalueandeconomiclivesofacquiredintangibleassets.Externalvaluationsareobtainedforsignificantacquisitions.Detailsoftheintangibleassetsrecognisedonacquisitionduringtheyeararedisclosedinnote32.

d) Going concernTheGroup’sbusinessactivities,togetherwiththefactorslikelytoaffectitsfuturedevelopment,performanceandpositionaresetoutintheStrategicreportonpages1to39.ThefinancialpositionoftheGroup,itscashflows,liquiditypositionandborrowingfacilitiesaredescribedintheStrategicReportonpages1to39.Inaddition,note24tothefinancialstatementsincludestheGroup’sobjectives,policiesandprocessesformanagingitscapitalrisk;detailsofitsfinancialinstrumentsandhedgingactivities;anditsexposurestointerestraterisk,creditrisk,liquidityriskandforeigncurrencyrisk.

TheGrouphasconsiderablecashresourcesandlittledebt.Asaconsequence,thedirectorsbelievethattheGroupiswellplacedtomanageitsbusinessriskssuccessfullydespitethecurrentuncertaineconomicoutlook.

ThedirectorshaveareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Thustheycontinuetoadoptthegoingconcernbasisofaccountinginpreparingtheannualfinancialstatements.


Notes to the financial statements continuedfortheyearended31January2017

2 Accounting policies continuede) Foreign currencyi) Foreign currency transactionsTransactionsinforeigncurrenciesaretranslatedattheforeignexchangerateprevailingatthetimeofthetransaction.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesatthereportingdatearetranslatedtothefunctionalcurrencyoftheentityattheforeignexchangeraterulingatthatdate.Foreignexchangedifferencesarisingontranslationarerecognisedintheincomestatement.Non-monetaryassetsandliabilitiesthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusingtheexchangerateatthedateofthetransaction.

ii) Financial statements of foreign operations Theassetsandliabilitiesofforeignoperationsaretranslatedatexchangeratesprevailingatthereportingdate.Incomeandexpensesaretranslatedattheaverageratefortheperiod.ExchangedifferencesarisingareclassifiedasequityandtransferredtotheGroup’stranslationreserve.

f) GoodwillGoodwillarisinginabusinesscombinationisrecognisedasanassetatthedatethatcontrolisacquired(theacquisitiondate).Goodwillismeasuredastheexcessofthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquireeandthefairvalueoftheacquirer’spreviouslyheldequityinterest(ifany)intheentityoverthenetoftheacquisitiondateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.

Goodwilldenominatedincurrenciesotherthansterlingisrevaluedattherateofexchangerulingatbalancesheetdate.

If,afterreassessment,theGroup’sinterestinthefairvalueoftheacquiree’sidentifiablenetassetsexceedsthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquireeandthefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquiree(ifany),theexcessisrecognisedimmediatelyinprofitorlossasabargainpurchasegain.

Goodwillisnotamortisedbutisreviewedforimpairmentatleastannually.Forthepurposeofimpairmenttesting,goodwillisallocatedtoeachoftheGroup’scash-generatingunitsexpectedtobenefitfromthesynergiesofthecombination.Cash-generatingunitstowhichgoodwillhasbeenallocatedaretestedforimpairmentannually,ormorefrequentlywhenthereisanindicationthattheunitmaybeimpaired.Iftherecoverableamountofthecash-generatingunitislessthanthecarryingamountoftheunit,theimpairmentlossisallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtotheunitandthentotheotherassetsoftheunitprorataonthebasisofthecarryingamountofeachassetintheunit.Animpairmentlossrecognisedforgoodwillisnotreversedinasubsequentperiod.

Ondisposalofasubsidiary,theattributableamountofgoodwillisincludedinthedeterminationoftheprofitorlossondisposal.

g) Intangible assets Internally generated assets InternallygeneratedintangibleassetsdevelopedbytheGrouparerecognisedonlyifallofthefollowingconditionsaremet:

• anassetiscreatedthatcanbeidentified• itisprobablethattheassetcreatedwillgeneratefutureeconomicbenefits• thedevelopmentcostoftheassetcanbemeasuredreliably.

Otherresearchexpenditureiswrittenoffintheperiodinwhichitisincurred.

Amortisationischargedtotheincomestatementsoastowriteoffthecostofassetslesstheirresidualvaluesovertheirestimatedusefullives,whichinthecaseofsoftwareis10%-20%perannumonastraight-linebasis.Thecarryingvalueofintangibleassetswithafinitelifeisreviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.




2 Accounting policies continuedOther intangible assetsIntangibleassetsarisingonacquisitionarestatedatfairvaluelessaccumulatedamortisationandanyimpairmentlosses.Amortisationofthecarryingvalueofintangibleassetsarisingonacquisitionischargedtotheincomestatementovertheestimatedusefullife,whichisasfollows:

Brands 10%perannumonastraight-linebasis

Mandates/orderbook 100%perannum

Customerrelationships 5%-16.7%perannumonastraight-linebasis

Trainingmaterials 10%perannumonastraight-linebasis

Thecarryingvalueofintangibleassetswithafinitelifeisreviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.

h) Property, plant and equipmentItemsofproperty,plantandequipmentarestatedatcostlessaccumulateddepreciationandanyimpairmentlosses.

Depreciationischargedtotheincomestatementsoastowriteoffthecostofassetslesstheirresidualvaluesovertheirestimatedusefullives,asfollows:

Shortleaseholdproperty overthelifeoftheleaseonastraight-linebasis

Leaseholdimprovements overthelifeoftheleaseonastraight-linebasis

Fixturesandequipment 10%-33%perannumonastraight-linebasis

Motorvehicles 25%reducingbalance

i) Impairment of tangible and intangible assets excluding goodwillAteachbalancesheetdate,theGroupreviewsthecarryingamountsofitstangibleandintangibleassetstodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedtodeterminetheextentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfromotherassets,theGroupestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.Anintangibleassetwithanindefiniteusefullifeistestedforimpairmentatleastannuallyandwheneverthereisanindicationthattheassetmaybeimpaired.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesoffuturecashflowshavenotbeenadjusted.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,thecarryingamountoftheasset(orcash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentlossisrecognisedimmediatelyinprofitorloss,unlesstherelevantassetiscarriedatarevaluedamount,inwhichcasetheimpairmentlossistreatedasarevaluationdecrease.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(orcash-generatingunit)isincreasedtotherevisedestimateofitsrecoverableamount,butsothattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheasset(orcash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognisedimmediatelyinprofitorloss,unlesstherelevantassetiscarriedatarevaluedamount,inwhichcasethereversaloftheimpairmentlossistreatedasarevaluationincrease.

j) Assets in disposal groups classified as held for saleNon-currentassetsanddisposalgroupsareclassifiedasheldforsaleonlyiftheyareavailableforimmediatesaleintheirpresentconditionandasaleishighlyprobableandexpectedtobecompletedwithinoneyearfromthedateofclassification.Suchassetsaremeasuredatthelowerofcarryingamountandfairvaluelesscoststosellandarenotdepreciatedoramortised.



2 Accounting policies continuedk) Financial instrumentsFinancial assetsTheGroupclassifiesitsfinancialassetsinthefollowingcategories:atfairvaluethroughprofitorloss,andloansandreceivables.Theclassificationdependsonthepurposeforwhichthefinancialassetswereacquired.Managementdeterminestheclassificationofitsfinancialassetsatinitialrecognition.

Purchasesandsalesoffinancialassetsarerecognisedonthetradedate–thedateonwhichtheGroupcommitstopurchaseorselltheasset.Financialassetsareinitiallyrecognisedatfairvalueplustransactioncosts,exceptforfinancialassetsheldatfairvaluethroughprofitorlosswhichareinitiallyrecognisedatfairvalue,andtransactioncostsareexpensedintheincomestatement.FinancialassetsarederecognisedwhentherightstoreceivecashflowshaveexpiredorhavebeentransferredandtheGrouphastransferredsubstantiallyallrisksandrewardsofownership.

Financial assets at fair value through profit or lossFinancialassetsatfairvaluethroughprofitorlossarefinancialassetsheldfortrading.Afinancialassetisclassifiedinthiscategoryifacquiredprincipallyforthepurposeofsellingintheshortterm.Derivativesarealsocategorisedasheldfortradingunlesstheyaredesignatedashedges.Assetsinthiscategoryareclassifiedascurrentassetsiftheyareexpectedtobesettledwithin12months;otherwise,theyareclassifiedasnon-current.Financialassetsatfairvaluethroughprofitorlossareinitiallyrecognisedatfairvalueatthedatethecontractisenteredinto,andsubsequentlygainsorlossesarisingfromchangesintheirfairvaluearepresentedintheincomestatementwithinadministrativeexpensesintheperiodinwhichtheyarise.TheGroup’sfinancialassetsatfairvaluethroughprofitorlosscomprisederivativefinancialinstruments.

Derivative financial instrumentsTheGroupentersintoderivativefinancialinstruments,includingforeignexchangeforwardcontracts,tomanageitsexposuretoforeignexchangeraterisk.Derivativesnotdesignatedintoaneffectivehedgerelationshipareclassifiedasafinancialassetorafinancialliability.TheGrouphasnotdesignatedanyderivativesashedgingitemsandthereforedoesnotapplyhedgeaccounting.

Loans and receivablesLoansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptformaturitiesgreaterthan12monthsattheendofthereportingperiod.Theseareclassifiedasnon-currentassets.Loansandreceivablesaresubsequentlycarriedatamortisedcostusingtheeffectiveinterestmethod.TheGroup’sloansandreceivablescomprisetradereceivables,otherreceivables,accruedincomeandcashandcashequivalentsinthebalancesheet.

Trade receivablesTradereceivablesareamountsduefromcustomersforservicesperformedintheordinarycourseofbusiness.Ifcollectionisexpectedinoneyearorless,theyareclassifiedascurrentassets.Ifnot,theyarepresentedasnon-currentassets.

Other receivablesOtherreceivablesareotheramountscontractuallyduefromthirdparties,forexampledepositsreceivableforleasedassets.

Accrued incomeAccruedincomeisrevenuethathasbeencontractedandrecognisedinaccordancewiththeGroup’saccountingpolicies,butnotyetinvoiced.

Cash and cash equivalents Cashandcashequivalentscomprisecashbalancesandcalldepositswithanoriginalmaturityofthreemonthsorless.Thecarryingamountoftheseassetsapproximatestheirfairvalue.




2 Accounting policies continuedFinancial liabilitiesTheGroupclassifiesitsfinancialliabilitiesinthefollowingcategories:atfairvaluethroughprofitorloss,andatamortisedcost.Theclassificationdependsonthepurposeforwhichthefinancialliabilitieswereacquired.Managementdeterminestheclassificationofitsfinancialliabilitiesatinitialrecognition.FinancialliabilitiesarerecognisedwhentheGroupbecomesapartytothecontractualagreementoftheinstrument.

Financial liabilities at fair value through profit or lossFinancialliabilitiesatfairvaluethroughprofitorlossarefinancialliabilitiesheldfortrading.Afinancialliabilityisclassifiedinthiscategoryifacquiredprincipallyforthepurposeofsellingintheshortterm.Derivativesarealsocategorisedasheldfortradingunlesstheyaredesignatedashedges.Liabilitiesinthiscategoryareclassifiedascurrentliabilitiesiftheyareexpectedtobesettledwithin12months;otherwise,theyareclassifiedasnon-current.Financialliabilitiesatfairvaluethroughprofitorlossareinitiallyrecognisedatfairvalueatthedatethecontractisenteredinto,andsubsequentlygainsorlossesarisingfromchangesintheirfairvaluearepresentedintheincomestatementwithinadministrativeexpensesintheperiodinwhichtheyarise.TheGroup’sfinancialliabilitiesatfairvaluethroughprofitorlosscomprisederivativefinancialinstruments.

Financial liabilities at amortised costTheGroup’sfinancialliabilitiesatamortisedcostcomprisetradepayables,otherpayables,accruedcostsandborrowings.Theyareinitiallymeasuredatfairvalue,netoftransactioncosts,andaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

Trade payablesTradepayablesareobligationstopayforgoodsorservicesthathavebeenacquiredintheordinarycourseofbusinessfromsuppliers.Tradepayablesareclassifiedascurrentliabilitiesifpaymentisduewithinoneyearorless.Ifnot,theyarepresentedasnon-currentliabilities.

Other payablesOtherpayablesthatarefinancialliabilitiesatamortisedcostarecertaincustomerdepositswhicharecontractuallyrefundabletocustomersondemand.

Accrued costsAccruedcostsarecoststhathavebeencontractedandrecognisedinaccordancewiththeGroup’saccountingpolicies,butforwhichinvoiceshavenotyetbeenreceivedorpaymentsmade,asapplicable.

BorrowingsBorrowingsconsistofaninterest-bearingbankloanwhichisrecordedatfairvalue.

Offsetting financial instrumentsFinancialassetsandliabilitiesareoffsetandthenetamountreportedinthebalancesheetwhenthereisalegallyenforceablerighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasisorrealisetheassetandsettletheliabilitysimultaneously.

Other itemsThedirectorsbelievethattheunderlyingprofitandearningspersharemeasuresprovideadditionalusefulinformationforshareholdersontheunderlyingperformanceofthebusiness.Thesemeasuresareconsistentwithhowunderlyingbusinessperformanceismeasuredinternally.TheunderlyingprofitbeforetaxmeasureisnotarecognisedprofitmeasureunderIFRSandmaynotbedirectlycomparablewithadjustedprofitmeasuresusedbyothercompanies.Theadjustmentsmadetoreportedprofitbeforetaxaretoexcludethefollowing:

• restructuringcosts• significantandone-offimpairmentchargesandprovisionsthatdistortunderlyingtrading• costsrelatingtostrategychangesthatarenotconsiderednormaloperatingcostsoftheunderlyingbusiness• acquisitioncosts• amortisationofintangibleassetsrecognisedonacquisition• acquisitionconsiderationclassifiedasanemployeecostunderIFRS3BusinessCombinations.



2 Accounting policies continuedEquity instruments issued by the GroupAnequityinstrumentisacontractthatevidencesaresidualinterestintheassetofanentityafterdeductingallitsliabilities.Equityinstrumentsarerecordedattheproceedsreceived,netofdirectissuecosts.TheGroup’sequityinstrumentscomprisesharecapitalinthebalancesheet.

l) ProvisionsProvisionsarerecognisedwhentheGrouphasapresentobligationasaresultofapastevent,anditisprobablethattheGroupwillberequiredtosettlethatobligation.Provisionsaremeasuredatthedirectors’bestestimateoftheexpenditurerequiredtosettletheobligationatthereportingdate,andarediscountedtopresentvalue.

ArestructuringprovisionisrecognisedwhentheGrouphasdevelopedadetailedformalplanfortherestructuringandhasraisedavalidexpectationinthoseaffectedthatitwillcarryouttherestructuringbystartingtoimplementtheplanorannouncingitsmainfeaturestothoseaffectedbyit.

m) RevenueRevenuesarederivedfromaircraftcharteringservices,aircraftremarketingservices,aircraftinspectionservicesandtheprovisionoftrainingandsafetyconsultingservices.InlinewithIAS18Revenue,whereacontracthasbeendeterminedasprincipal,thefullamountoftheinvoiceisrecognisedasrevenue.WhereAirPartnerisnotactingasprincipal,revenueisrecognisedonanagencybasisandonlygrossmarginisreportedasrevenue.Revenueismeasuredasthefairvalueoftheconsiderationreceivedfortheprovisionofgoodsandservicestothird-partycustomersandisstatedexclusiveofvalueaddedtaxandisonlyrecognisedwherethereisacontractualrighttoreceiveconsiderationforworkundertaken,theamountcanbemeasuredreliablyanditisprobablethatfutureeconomicbenefitswillflow.

Aircraft chartering servicesAmountsreceivableinrespectofaircraftcharteringservicesarerecognisedasrevenuewhentheeconomicbenefitsaredeemedtohavepassedtothecustomer,whichisgenerallytheflightdate.IninstanceswheretheGroupisactingasagent,thenetamountreceivablebytheGroupisrecognisedasrevenue.IninstanceswheretheGroupisactingasprincipal,thefullamountofthecontractisrecognisedasrevenue.

Aircraft remarketing servicesAirPartnerRemarketing’s(formerlyCabotAviation)principalactivityisthatofanaircraftremarketingbroker.Feesearnedinrespectoftheseservicesarerecognisedwhentheybecomepayableinaccordancewiththetermsofthecontractwiththecustomer.

Aircraft inspection servicesAircraftregisteredwiththeIsleofManAircraftRegistry,whichismanagedbyBainesSimmonsLimited,requireanannualinspection.Amountsreceivableinrespectofsuchinspectionsarerecognisedasrevenueoncetheaircrafthasbeeninspected.

Provision of aviation-related training and safety consulting servicesBainesSimmonsLimitedprovidesaviation-relatedspecialisttrainingandconsultancyservices.Revenueisrecognisedbyreferencetothestageofcompletionofthecontractdeterminedbythevalueoftheservicesprovidedatbalancesheetdateasaproportionofthetotalvalueoftheassignment.Amountsinrespectofunbilledservicesprovidedtoclientsarerecognisedasrevenueatbalancesheetdate.

n) Segmental reportingOperatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecisionmaker.Thechiefoperatingdecisionmaker,whoisresponsibleforresourceallocationandassessingperformanceoftheoperatingsegments,isconsideredtobetheBoard.Thenatureoftheoperatingsegmentsissetoutinnote4.

o) Share-based paymentsFromtimetotime,theGroupwillgrantoptionstoemployeestosubscribeforordinarysharesintheCompany.Thefairvalueofoptionsgrantedisrecognisedasanemployeeexpensewithacorrespondingincreaseinequity.ThefairvalueismeasuredatgrantdateusingtheMonteCarlomethodandspreadovertheperiodduringwhichemployeesbecomeunconditionallyentitledtotheoptions,basedonmanagement’sestimateofthenumberofoptionswhichwillultimatelyvest,adjustingateachreportingdatefortheeffectofnon-marketbasedvestingconditions.




2 Accounting policies continuedp) Retirement benefit costsPaymentstodefinedcontributionretirementbenefitschemesarechargedasanexpenseintheperiodinwhichtheemployeesrenderservice.Paymentsmadetostate-managedretirementbenefitschemesaredealtwithaspaymentstodefinedcontributionschemeswheretheGroup’sobligationsundertheschemesareequivalenttothosearisinginadefinedcontributionretirementbenefitscheme.

q) TaxationThetaxexpenserepresentscurrentanddeferredtax.Taxisrecognisedintheincomestatementexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequity,inwhichcaseitisrecognisedinequity.

Currenttaxistheexpectedtaxpayableonthetaxableincomefortheyear,usingtaxratesenactedorsubstantivelyenactedatthereportingdate,andanyadjustmentstothetaxpayableinrespectofpreviousyears.

Deferredtaxisthetaxexpectedtobepayableorrecoverableondifferencesbetweenthecarryingamountofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationoftaxableprofitandisaccountedforusingthebalancesheetliabilitymethod.Deferredtaxliabilitiesarerecognisedforalltemporarydifferencesanddeferredtaxassetsarerecognisedtotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilised.Suchassetsandliabilitiesarenotrecognisedifthetemporarydifferencesarisefromgoodwillorfromtheinitialrecognition(otherthaninabusinesscombination)ofotherassetsandliabilitiesinatransactionthataffectsneitherthetaxableprofitnortheaccountingprofit.

Deferredtaxiscalculatedatthetaxratesthatareenactedorsubstantivelyenactedatthereportingdate.

r) Gross transaction valueGrosstransactionvalue(GTV)representsthetotalvalueinvoicedtoclientsandisstatedexclusiveofvalueaddedtax.

s) LeasingLeasesareclassifiedasfinanceleaseswheneverthetermsoftheleasetransferall,orsubstantiallyall,oftherisksandrewardsofownershiptothelessee.Allotherleasesareclassifiedasoperatingleases.Rentalincomeorexpenditurefromoperatingleasesisrecognisedonastraight-linebasisovertheleaseterm.

t) Dividends FinaldividendsonordinarysharesarerecognisedasaliabilityintheperiodinwhichthedividendsareapprovedbytheCompany’sshareholders.Dividendsarerecognisedasaliabilityintheperiodinwhichtheyareapproved.

3 RevenueAnanalysisoftheGroup’srevenueisasfollows:

Continuing operations2017

£’0002016

£’000

Aircraftbroking 35,992 47,289Aircraftremarketing 760 273Aircraftinspection 1,469 627Safetyconsultingandtraining 4,317 1,753

42,538 49,942

IncludedinrevenuearisingfromtheUKisrevenueofapproximately£8,375,000(2016:£21,963,000)whicharosefromsalestotheGroup’slargestcustomer(2016:twolargestcustomers).Noothersinglecustomercontributedmorethan10%totheGroup’srevenuein2017or2016.



4 Segmental analysisTheservicesprovidedbytheGroupconsistofcharteringdifferenttypesofaircraftandrelatedaviationservices.

TheGrouphasfoursegments:CommercialJets,PrivateJets,FreightandConsulting&Training.AirPartnerRemarketing’s(formerlyCabotAviation)resultsareaggregatedintoCommercialJets.OverheadswiththeexceptionofcorporatecostsareallocatedtotheGroup’ssegmentsinrelationtooperatingactivities.

Salestransactionsbetweenoperatingsegmentsarecarriedoutonanarm’slengthbasis.Allresults,assetsandliabilitiesreviewedbytheBoard(whichisthechiefoperatingdecisionmaker)arepreparedonabasisconsistentwiththosethatarereportedinthefinancialstatements.

TheBoarddoesnotreviewrevenue,assetsandliabilitiesatsegmentallevel,thereforetheseitemsarenotdisclosed.

Thesegmentalinformation,asprovidedtotheBoardonamonthlybasis,isasfollows:

Year ended31 January 2017

Continuing operations

CommercialJets

£’000

PrivateJets

£’000Freight

£’000

Consulting&Training

£’000

Corporatecosts£’000

Total£’000

Segmentalgrossprofit 14,704 10,236 1,113 5,654 – 31,707

Depreciationandamortisation (249) (162) – (62) – (473)

Underlyingoperatingprofit 3,848 2,491 233 527 (1,985) 5,114

Otheritems(seenote7) (182) – – (399) (128) (709)

Segmentresult 3,666 2,491 233 128 (2,113) 4,405

Financeincome 39Financeexpense (96)

Profitbeforetax 4,348Tax (1,501)

Profitfortheyear 2,847

Year ended31 January 2016

Continuing operations

CommercialJets

£’000

PrivateJets

£’000Freight

£’000

Consulting&Training

£’000

Corporatecosts£’000

Total£’000

Segmentalgrossprofit 14,005 9,361 1,857 2,046 – 27,269

Depreciationandamortisation (339) (186) – (6) – (531)

Impairmentlosses (361) – – (29) – (390)

Underlyingoperatingprofit 2,952 2,387 767 (99) (1,621) 4,386

Otheritems(seenote7) (436) (261) (44) (437) – (1,178)

Segmentresult 2,516 2,126 723 (536) (1,621) 3,208

Financeincome 10Financeexpense (81)

Profitbeforetax 3,137Tax (1,230)

Profitaftertax 1,907Discontinuedoperations 387

Profitfortheyear 2,294

TheCompanyisdomiciledintheUKbutduetothenatureoftheGroup’soperations,asignificantamountofgrossprofitisderivedfromoverseascountries.TheGroupreviewsgrossprofitbaseduponlocationoftheassetsusedtogeneratethatgrossprofit.ApartfromtheUK,nosinglecountryisdeemedtohavematerialnon-currentassetlevelsotherthangoodwillinrelationtotheFrenchoperationof£956,000.




4 Segmental analysis continuedTheBoardalsoreviewsinformationonageographicalbasisbasedonpartsoftheworldwhichareconsideredtobekeytooperationalactivities.Asaresult,thefollowingadditionalinformationisprovidedshowingageographicalsplitoftheUK,Europe,theUSandtheRestoftheWorld:

Continuing operationsUK

£’000Europe

£’000US

£’000

RestoftheWorld£’000

Total£’000

Year ended 31 January 2017Grossprofit 18,812 8,930 3,771 194 31,707Non-currentassets(excludingdeferredtaxassets) 8,696 1,090 39 4 9,829

Year ended 31 January 2016Grossprofit 16,486 7,353 3,187 243 27,269Non-currentassets(excludingdeferredtaxassets) 8,616 995 48 6 9,665

Europecanbefurtheranalysedas:

Continuing operationsFrance£’000

Germany£’000

Italy£’000

Other£’000

Total£’000

Year ended 31 January 2017Grossprofit 3,047 2,547 1,854 1,482 8,930

Year ended 31 January 2016Grossprofit 2,730 2,306 1,491 826 7,353

5 Operating profit Operatingprofitfortheyearhasbeenarrivedataftercharging/(crediting)thefollowing:


£’0002016

£’000

Netforeignexchangeloss/(gain) 20 (2)Changeinthefairvalueofderivativefinancialinstruments 45 (186)Depreciationofproperty,plantandequipment 347 304Amortisationofintangiblefixedassets–acquired 305 216Amortisationofintangiblefixedassets–other 128 225Impairmentoftradereceivables 34 390Operatingleaserentals–landandbuildings 283 494Operatingleaserentals–other 66 99Staffcosts(seenote8) 18,453 15,291



6 Auditor’s remunerationFeespayabletotheprincipalauditoranditsnetworkfirmsforauditandotherservicesaredisclosedbelow:

2017£’000

2016£’000

The analysis of auditor’s remuneration is as follows:FeespayabletotheCompany’sauditorfortheauditoftheCompany’sannualfinancialstatements 143 146FeespayabletotheCompany’sauditoranditsassociatesfortheauditofsubsidiariespursuanttolegislation(includingthatofcountriesandterritoriesoutsidetheUK) 65 51

Total audit fees 208 197

2017£’000

2016£’000

Fees payable to the Company’s auditor and its associates for other services to the Group:Taxservices – 22Auditrelatedassuranceservices 22 21Othernon-auditservices 4 –

Total non-audit fees 26 43

7 Other items


£’0002016

£’000

Restructuringcosts (183) (419)Amortisationofpurchasedintangibles (304) (242)Acquisitioncosts (128) (419)Non-cashacquisitionrelatedcosts (94) (98)

(709) (1,178)Taxeffectofotheritems 153 81

Otheritemsaftertaxation (556) (1,097)

Restructuringcostsrelatetochangestothemanagementstructurefollowingtheacquisitionsmadeduringtheprioryear.




8 Staff costsTheaveragenumberofpeopleemployedbytheGroup(includingdirectors)duringtheyear,analysedbycategorywasasfollows:


Number2016

Number

Operations 179 140Administration 78 89

257 229

Theaggregatepayrollcostscomprised:


£’0002016

£’000

Wagesandsalaries 15,537 12,730Socialsecuritycosts 2,219 1,956

Pensioncosts 506 480Share-basedpayments 191 125

18,453 15,291

TheGroupcontributestopersonalpensionplansofcertainemployeesandthiscostischargedtotheincomestatementintheperiodinwhichitisincurred.

Fulldisclosureofdirectors’emoluments,shareoptionsanddirectors’pensionentitlementswhichformpartoftheirremunerationpackages,andtheirinterestsintheCompany’ssharecapitalaredisclosedintheDirectors’remunerationreport.

9 Finance income and expense


£’0002016

£’000

Finance incomeInterestonbankdeposits 39 10


£’0002016

£’000

Finance expenseInterestonloansandbankoverdrafts 96 74Unwindingofdiscountonprovisions – 7

96 81



10 Taxation

Continuing operations Discontinued operations Total

2017£’000

2016£’000

2017£’000

2016£’000

2017£’000

2016£’000

Current tax:UKcorporationtax 528 561 – 98 528 659Foreigntax 822 488 – – 822 488Currenttaxadjustmentsinrespectofprioryears(UK) 376 12 – – 376 12 Currenttaxadjustmentsinrespectofprioryears(Overseas) 66 333 – – 66 333

1,792 1,394 – 98 1,792 1,492Deferred tax (see note 26) (291) (164) – – (291) (164)

Total tax 1,501 1,230 – 98 1,501 1,328

Of which:Taxonunderlyingprofit 1,654 1,311 – 98 1,654 1,409Taxonotheritems(seenote7) (153) (81) – – (153) (81)

1,501 1,230 – 98 1,501 1,328

CorporationtaxintheUKwascalculatedat20%(2016:20.16%)oftheestimatedassessableprofitfortheperiod.Taxationforotherjurisdictionswascalculatedattheratesprevailingintherespectivejurisdictions.

Thechargefortheperiodcanbereconciledtotheprofitpertheconsolidatedincomestatementasfollows:

2017£’000

2016£’000

Profitfromcontinuingoperationsbeforetax 4,348 3,163Profitfromdiscontinuedoperationsbeforetax – 485

Accountingprofitbeforetax 4,348 3,648

TaxattheUKcorporationtaxrateof20%(2016:20.16%) 870 735EffectofchangetoUKcorporationtaxrate(2016:21%from1February2015to31March2015) (41) (61)Taxeffectofitemsthatarenotrecognisedindeterminingtaxableprofit 64 205Taxeffectofdifferenttaxratesofsubsidiariesoperatinginotherjurisdictions 212 139Currenttaxadjustmentsinrespectofprioryears 442 303Deferredtaxnotrecognised 22 7Optionsdeductions (68) –

Total tax charge 1,501 1,328

TheUKcorporationtaxratedecreasedfrom21%to20%from1April2016.Theimpactonthetaxchargeisshownabove.

FurtherreductionstotheUKcorporationtaxratehavebeenannounced.Areductionto19%effectivefrom1April2017andto17%on1April2020wassubstantivelyenactedon16October2016andthedeferredtaxbalancehasbeenadjustedtoreflectthischange(seenote26).




11 Discontinued operationsInMarch2010,AirPartnerPrivateJetsLimitedwasclosed.Aclaimagainstthecompanywasfiledbyformeremployeesofthatbusinessonthegroundsthatcontractualundertakingscouldnolongerbefulfilled.Thelastdatefortheclaimstobepursuedwas16March2016.Asnofurtheractionshavebeentakenbytheclaimants,theclaimshavelapsed.Asaresult,theprovisionwasderecognisedinthepreviousfinancialyear.

2017£’000

2016£’000

Revenue – –Costofsales – –

Gross profit – –Administrativeexpenses – 485

Profit before tax – 485Taxation – (98)

Net profit attributable to discontinued operations – 387

Therewerenocashflowsattributabletodiscontinuedoperationsintheyearended31January2017(2016:£nil).

12 Dividends

2017£’000

2016£’000

Amounts recognised as distributions to owners of the Parent CompanyFinaldividendfortheyearended31January2016of16.9pencepershare 1,741 1,578

(Finaldividendtheyearended31January2015of15.4pence)Interimdividendfortheyearended31January2017of8.03pencepershare 833 753(Interimdividendfortheyearended31January2016of7.33pence)

2,574 2,331

AlldividendsabovewerepriortotheCompany’sshareholdersapprovinga5to1splitoftheCompany’sshares,whichreducedthenominalvalueoftheordinarysharesto1penceeach.Thesharesplitbecameeffectiveon31January2017.

Thedirectorsproposeafinaldividendfortheyearended31January2017of3.6pencepershare,subjecttoshareholderapprovalattheAnnualGeneralMeetingtobeheldon28June2017.

TheAirPartnerEmployeeBenefitTrust,whichheld341,820ordinarysharesof1peachat31January2017(2016:159,236ordinarysharesof5peach)representing0.65%(2016:1.6%)oftheCompany’sissuedsharecapitalisnotentitledtoreceivedividends.Afurther413,640ordinarysharesof1peach(2016:100,910ordinarysharesof5peach)sharesareheldbytheTrustinanomineecapacityfortwo(2016:two)beneficiariesoftheTrust.



13 Earnings per shareThecalculationofthebasicanddilutedearningspershareisbasedonthefollowingdata:

Continuing and discontinued operations2017

£’0002016

£’000

EarningsforthecalculationofbasicanddilutedearningspershareProfitattributabletoownersoftheParentCompany 2,847 2,294Adjustmenttoexcludeotheritems 556 1,097

UnderlyingprofitattributabletoownersoftheParentCompany 3,403 3,391

Number of shares2017

Number2016

Number

Weightedaveragenumberofordinarysharesforthecalculationofbasicearningspershare 52,361,659 50,606,225Effectofdilutivepotentialordinaryshares:shareoptions 1,133,083 275,720

Weightedaveragenumberofordinarysharesforthecalculationofdilutedearningspershare 53,494,742 50,881,945

From continuing operations2017

£’0002016

£’000

EarningsProfitattributabletoownersoftheParentCompany 2,847 2,294Adjustmenttoexcludeprofitfortheyearfromdiscontinuedoperations – (387)Adjustmenttoexcludeotheritems 556 1,097

Underlyingearningsforthecalculationofbasicanddilutedearningspershare 3,403 3,004

From discontinued operations2017

£’0002016

£’000

EarningsEarningsforthecalculationofdiscontinuedbasicanddilutedearningspershare – 387

On25January2017,theCompany’sshareholdersapproveda5to1splitoftheCompany’sshares,whichreducedthenominalvalueoftheordinarysharesto1penceeach.Thesharesplitbecameeffectiveon31January2017.AsaresulttheprioryearnumberofsharesandEPScalculationshavebeenrestatedtoshowcomparablenumbers.

Thedenominatorsusedarethesameasthoseaboveforbothbasicanddilutedearningspersharefromcontinuinganddiscontinuedoperations.

Thecalculationofunderlyingearningspershare(beforeotheritems)isincludedasthedirectorsbelieveitprovidesabetterunderstandingoftheunderlyingperformanceoftheGroup.Otheritemsaredisclosedinnote7.




14 Goodwill

Group £’000

CostAt1February2015 838Recognisedonacquisitionofsubsidiaries 2,498Foreigncurrencyadjustments 10

At31January2016 3,346Recognisedonacquisitionofsubsidiaries(note32) 333Foreigncurrencyadjustments 108

At31January2017 3,787

Provision for impairmentAt1February2015,31January2016and31January2017 –

Net book valueAt31January2017 3,787


At1February2015 838

Goodwillacquiredinabusinesscombinationisallocated,atacquisition,tothecashgeneratingunits(CGUs),orgroupofunitsthatareexpectedtobenefitfromthatbusinesscombination.Beforerecognitionofimpairmentlosses,thecarryingamountofgoodwillhasbeenallocatedasfollows:

2017£’000

2016£’000

AirPartnerInternationalS.A.S. 956 848BainesSimmonsLimited(Consulting&Training) 1,072 1,072BainesSimmonsLimited(ManagedServices) 639 639CabotAviationServicesLimited 787 787ClockworkResearchLimited 333 –

3,787 3,346

TheGrouptestsgoodwillannuallyforimpairment,ormorefrequentlyifthereareindicationsthatgoodwillmightbeimpaired.

Forthepurposeofimpairmenttesting,therecoverableamountofthecashgeneratingunitwasmeasuredonthebasisofitsvalueinuse,byapplyingcashflowprojectionsbasedonfinancialforecastscoveringathree-yearperiod.Thekeyassumptionsforthevalueinusecalculationwerethoseregardingthediscountrates,growthratesandexpectedchangestosellingpricesanddirectcostsduringtheforecastperiod.Theestimatedgrowthrateswerebasedonpastperformanceandexpectationoffuturechangesinthemarket.Thegrowthrateusedtoextrapolatecashflowprojectionsbeyondtheperiodcoveredbythefinancialforecastswas2%(2016:2%).Thepre-taxrateusedtodiscounttheforecastcashflowsrangedfrom10.76%-13%(2016:13%).

Thedirectorsdonotbelievethatthereareanyreasonablypossiblechangestothekeyassumptionsthatwouldresultinamaterialimpairmentofgoodwill.



15 Other intangible assets

GroupBrands

£’000

Othermandates

£’000

Customerrelationships

£’000

Trainingmaterials

£’000Software

£’000Total

£’000

CostAt1February2015 – – – – 1,921 1,921Additions – – – – 153 153Acquiredonacquisitionofsubsidiaries 158 171 3,540 414 – 4,283

At31January2016 158 171 3,540 414 2,074 6,357

Additions – – – – 173 173Acquiredonacquisitionofsubsidiaries(note32) – – 174 – – 174Foreigncurrencyadjustments – – – – 4 4

At31January2017 158 171 3,714 414 2,251 6,708

Amortisation and impairmentAt1February2015 – – – – 855 855Chargefortheyear 7 123 91 19 225 465Foreigncurrencyadjustments – – – – (1) (1)

At31January2016 7 123 91 19 1,079 1,319Chargefortheyear 16 47 200 42 128 433

At31January2017 23 170 291 61 1,207 1,752

Net book valueAt31January2017 135 1 3,423 353 1,044 4,956

At31January2016 151 48 3,449 395 995 5,038

At1February2015 – – – – 1,066 1,066

Customerrelationshipshavearemainingamortisationperiodofbetween2.9yearsand18.5years.

CompanySoftware

£’000

CostAt1February2015 1,905Additions 153

At31January2016 2,058Additions 173


Amortisation and impairmentAt1February2015 842Chargefortheyear 224

At31January2016 1,066Chargefortheyear 126


Net book valueAt31January2017 1,039

At31January2016 992

At1February2015 1,063

Otherintangibleassetscomprisesoftwareandassetsacquiredonacquisitionsincludingtrainingmaterials,customerrelationships,mandatestoremarketaircraftandbrands.




16 Property, plant and equipment

Group

Shortleaseholdpropertyand

leaseholdimprovements

£’000

Fixturesandequipment

£’000

Motorvehicles

£’000Total

£’000

CostAt1February2015 769 2,427 – 3,196Additions 47 34 37 118Acquiredonacquisitionofsubsidiaries 40 151 – 191Foreigncurrencyadjustments 2 3 – 5

At31January2016 858 2,615 37 3,510Additions – 77 19 96Acquiredonacquisitionofsubsidiaries(note32) – 5 30 35Foreigncurrencyadjustments 12 45 – 57

At31January2017 870 2,742 86 3,698

Depreciation and impairmentAt1February2015 242 1,681 – 1,923Chargefortheyear 92 210 2 304Foreigncurrencyadjustments 1 1 – 2

At31January2016 335 1,892 2 2,229Chargefortheyear 94 242 11 347Foreigncurrencyadjustments 4 32 – 36

At31January2017 433 2,166 13 2,612

Net book valueAt31January2017 437 576 73 1,086

At31January2016 523 723 35 1,281

At1February2015 527 746 – 1,273



16 Property, plant and equipmentcontinued

Company

Shortleaseholdpropertyand

leaseholdimprovements

£’000

Fixturesandequipment

£’000

Motorvehicles

£’000Total

£’000

CostAt1February2015 714 1,524 – 2,238Additions 20 12 37 69

At31January2016 734 1,536 37 2,307Additions – 34 19 53

At31January2017 734 1,570 56 2,360

DepreciationAt1February2015 231 975 – 1,206Chargefortheyear 72 130 2 204

At31January2016 303 1,105 2 1,410Chargefortheyear 72 141 11 224

At31January2017 375 1,246 13 1,634

Net book valueAt31January2017 359 324 43 726

At31January2016 431 431 35 897

At1February2015 483 549 – 1,032




17 Investments

Company

Investmentsinsharesof

subsidiaries£’000

Capitalcontributions

tosubsidiaries£’000

Total£’000

CostAt1February2015 1,179 1,582 2,761Additions 814 5,650 6,464Additions–Groupshare-basedpayments – 98 98

At31January2016 1,993 7,330 9,323

Additions 669 – 669Additions–Groupshare-basedpayments – 94 94

At31January2017 2,662 7,424 10,086

Amounts provided

At31January2016and31January2017 101 635 736

Net book valueAt31January2017 2,561 6,789 9,350

At31January2016 1,892 6,695 8,587

At1February2015 1,078 947 2,025

Intheyearended31January2016,AirPartnerplcmadeacapitalcontributionof£5,650,000toAirPartnerConsultingLimitedforthepurchaseofBainesSimmonsLimited.

TheCompanytestsitsinvestmentsforimpairmentifthereareindicationsthattheinvestmentsmaybeimpaired.Therecoverableamountofeachinvestmentwasmeasuredonthebasisofitsvalueinuse,byapplyingcashflowprojectionsbasedonthefinancialforecastscoveringathree-yearperiod.Thekeyassumptionsforthevalueinusecalculationforeachsubsidiarywerethoseregardingthediscountrates,growthratesandexpectedchangestosellingpricesanddirectcostsduringtheperiod.Theestimatedgrowthrateswerebasedonpastperformanceandexpectationoffuturechangesinthemarket.Thegrowthrateusedtoextrapolatecashflowprojectionsbeyondtheperiodcoveredbythefinancialforecastswas2%(2016:2%).Thepre-taxrateusedtodiscounttheforecastcashflowswas13%(2016:13%).ThedirectorsdonotbelievethatthereareanyreasonablypossiblechangestothekeyassumptionsthatwouldresultinafurtherimpairmentoftheCompany’sinvestments.



17 InvestmentscontinuedThefollowingisalistofthesubsidiariesofwhichAirPartnerplc,incorporatedinEnglandandWales,isthebeneficialowner:

Name PrincipalactivityCountryof

incorporationCompany

numberCompany

address

AirPartnerInternationalS.A.S. Aircharterbroking France B398335489 AAirPartnerInternationalGmbH Aircharterbroking Germany HRB 28279 BAirPartner,Inc. Aircharterbroking US 65-0770487 CAirPartner(Switzerland)AG Aircharterbroking Switzerland CH-020.3.022.925.4 DAirPartnerTravelManagementCompanyLimited Travelagency EnglandandWales 03767092 E

AirPartnerSrl Aircharterbroking Italy MI-1811083 FAirPartnerHavacilikveTasimacilikLimitedSirketi Aircharterbroking Turkey 720099 GCabotAviationServicesLimited Aircraftremarketing EnglandandWales 03874833 E

AirPartnerConsultingLimited Holdingcompany EnglandandWales 02070950 EBainesSimmonsLimited Aviationsafetyconsultants EnglandandWales 04295495 EAviationComplianceLimited Aviationsafetyconsultants EnglandandWales 06545827 EClockworkResearchLimited Aviationsafetyconsultants EnglandandWales 05477740 EAirPartnerJetCharterandSalesPrivateLimited Dormant India U63000DL2012FTC234664 HBusinessJetsLimited Dormant EnglandandWales 04146214 EAirPartnerGroupLimited Dormant EnglandandWales 03685545 EAirPartnerInvestmentsLimited Dormant EnglandandWales 06727735 EAirPartnerEnclaveLimited Dormant EnglandandWales 06671502 EAirPartnerNordic AirCharterBroking Sweden 556724-5369 I

Alloftheaboveare100%ownedbyAirPartnerplc,exceptforAirPartnerHavacilikveTasimacilikLimitedSirketiwhere40%isheldbyasubsidiaryundertaking,andAirPartnerJetCharterandSalesPrivateLimitedwhichis99.99%heldbyonesubsidiarycompanyand0.01%heldbyanothersubsidiarycompany.AirPartnerplc’sholdingsareintheordinarysharecapitalofallthesubsidiariesandtherearenootherclassesofshares.

Registeredcompanyaddressesareasfollows:

A 89 RueduFaubourg,Saint-Honoré,75008 Paris,FranceB Technologiepark,HS 56,Friedrich-Ebert-Str.75, 51429BergischGladbach,GermanyC 1100LeeWagenerBlvd,Suite328,FortLauderdale,FL33315,USD Postfach8722, 8036Zurich,SwitzerlandE 2CityPlace,BeehiveRingRoad,Gatwick,WestSussex,RH60PA,UK

F ViaValtellina67, 20159Milano,ItalyG YenibosnaMerkezmah.Degirmenbahcecad.IstwestKonutlarıNo:17A1BBlokD:23Istanbul,TurkeyH MaulseriHouse,7,KapasheraEstate,NewDelhi-110037, IndiaI CeridRedovisningsbyraAB,Svanegatan10, 22224Lund,Skane,Malmö,Sweden

Intheopinionofthedirectors,therecoverableamountoftheCompany’ssubsidiaryundertakingsisconsideredtobeinexcessofthecarryingvalue.




18 Trade and other receivables

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Grosstradereceivables 19,189 16,318 7,263 8,558Allowanceforbadanddoubtfuldebts (322) (809) – (135)

Tradereceivables 18,867 15,509 7,263 8,423AmountsowedbyGroupundertakings – – 3,498 1,505Socialsecurityandothertaxes 1,045 1,018 699 726

Otherreceivables 278 172 69 49Prepaymentsandaccruedincome 5,215 7,009 2,010 4,780

25,405 23,708 13,539 15,483

Thedirectorsconsiderthatthecarryingamountoftradeandotherreceivablesapproximatestheirfairvalue.

Alltradeandotherreceivableshavebeenreviewedforindicatorsofimpairment.Themovementinimpairedreceivablesintheyearisshownbelow:

Group£’000

Company£’000

At31January2015 385 128Acquiredonacquisition 61 –Chargefortheyear 390 –Receivableswrittenoffduringtheyear (60) (10)Foreigncurrencyadjustments 33 17

At31January2016 809 135Chargefortheyear 34 (2)Receivableswrittenoffduringtheyear (580) (133)Foreigncurrencyadjustments 59 –

At31January2017 322 –

Oftheamountsimpairedduringtheperiod,£34,000(2016:£386,000)wasforanamountpastduebylessthanoneyearwiththeremainderbeingalloverduebymorethanoneyear.

Inaddition,someoftheunimpairedtradereceivableswerepastdueatthereportingdate.Theageingoffinancialassetswasasfollows:

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Neitherpastduenorimpaired 11,361 10,346 4,773 5,803Ageingofpastduebutnotimpaired:–Bynotmorethan3months 6,598 4,459 2,087 2,431–Bymorethan3monthsbutnotmorethan6months 701 146 229 (32)–Bymorethan6monthsbutnotmorethan1year 83 227 6 3–Bymorethan1year 124 331 168 218

18,867 15,509 7,263 8,423


19 Borrowings

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Securedbankloans 2,957 3,471 2,957 3,471

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Amountdueforsettlementwithin12months 514 514 514 514Amountdueforsettlementafter12months 2,443 2,957 2,443 2,957

2,957 3,471 2,957 3,471

Allborrowingsareinsterling.

TheGroup’sborrowingsconsistsofabankloanof£2.96m(2016:£3.47m)fromtheCompanybankers.Theloanwastakenouton12August2016.Repaymentscommencedon12November2016andwillcontinueuntil12August2020.TheloanissecuredbyafloatingchargeovertheCompany’sassets.Theloancarriesinterestat2.5%aboveLIBOR.

Subsequenttothebalancesheetdate,thesecuredbankloanof£2.96mwasrefinancedusinganewrevolvingcreditfacilityprovidedbytheGroup’smainbanker.Thefacilityisfor£7.5m,expiringinFebruary2020,andcarriesaninterestrateof2.5%aboveLIBOR.

20 Trade and other payables

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Tradepayables 3,601 3,182 1,473 1,333Othertaxationandsocialsecuritypayable 758 729 204 129

4,359 3,911 1,677 1,462

Thedirectorsconsiderthatthecarryingamountoftradeandotherpayablesapproximatestheirfairvalue.





21 Other liabilities

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Accruals 3,662 4,980 1,548 2,772Otherliabilities 801 653 51 –AmountsowedtoGroupundertakings – – 3,571 2,688

4,463 5,633 5,170 5,460

Thedirectorsconsiderthatthecarryingamountofotherliabilitiesapproximatestheirfairvalue.

22 Other long-term liabilities

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

DeferredconsiderationinrespectofClockworkResearchLimited(note32) 200 – 200 –

23 Provisions

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Restructuringcosts – 421 – 166

Group Company

Restructuring£’000

Total£’000

Restructuring£’000

Total£’000

At1February2016 421 421 166 166Utilisationofprovision (421) (421) (166) (166)

At31January2017 – – – –

Aprovisionof£421,000wascreatedintheyearended31January2016inrelationtothepotentialcostsofreorganisingtheleadershipteamintotheOperatingBoardandthiswasfullyutilisedduringtheyear.



24 Financial instrumentsTheobjectivesoftheGroup’streasuryactivitiesaretomanagefinancialrisk,minimiseadverseeffectsoffluctuationsinthefinancialmarketsonthevalueoftheGroup’sfinancialassetsandliabilities,andtoensurethattheworkingcapitalrequirementsfittheneedsoftheongoingbusiness.

TheGrouphasvariousfinancialinstrumentssuchascash,tradereceivables,tradepayablesandborrowingsthatarisedirectlyfromitsoperations,alongwithforwardcurrencycontractsundertakentominimiseriskonfuturebusiness.

a) Interest rate riskTheGroup’spolicyistomanageinterestrateriskandtomaximiseitsreturnfromitscashbalances.TheGroup’smaininterestrateriskisrelatedtovariableratesoncashheldatthebank.Certaincashbalancesaredepositsonfixedinterestterms,butareneverlodgedformorethanthreemonthstoensurethattheGroupdoesnotsufferundulyfromtheriskofinterestratevariation.

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Cashheldatyearendonfixedinterestrates 4,415 4,290 3,317 2,156Cashheldatyearendonvariableinterestrates 15,380 15,501 10,885 12,830

19,795 19,791 14,202 14,986

Thefollowingtableillustratesthesensitivityofcashheldonvariableinterestratesonprofitbeforetaxfortheyeartoareasonablypossiblechangeininterestrates,witheffectfromthebeginningoftheyear.Therewasnoadditionalimpactonshareholders’equity.Thesechangesareconsideredtobereasonablypossiblebasedonobservationofcurrentmarketconditions.Theraterangeonwhichinterestwasreceivableduringtheyearwas0.0%to1.0%(2016:0.0%to1.0%).

Effectonprofitbeforetax

100basispointsincrease 100basispointsdecrease

Group2017

£’0002016

£’0002017

£’0002016

£’000

Cashheldatyearendonvariableinterestrates 154 155 (154) (155)



Company2017

£’0002016

£’0002017

£’0002016

£’000

Cashheldatyearendonvariableinterestrates 109 128 (109) (128)

TheGroupisfurtherexposedtointerestrateriskduetovariableinterestowedonitsborrowings,£2,957,000,linkedtoLIBOR.

Thefollowingtableillustratesthesensitivityofborrowingsonvariableinterestratesonprofitbeforetaxfortheyeartoareasonablypossiblechangeininterestrates,witheffectfromthebeginningoftheyear.Therewasnoadditionalimpactonshareholders’equity.Thesechangesareconsideredtobereasonablypossiblebasedonobservationofcurrentmarketconditions.Therateatwhichinterestwaspayableduringtheyearwas3.09%(2016:3.09%).



Group and Company2017

£’0002016

£’0002017

£’0002016

£’000

Borrowingsonvariableinterestrates 30 35 (30) (35)




24 Financial instruments continuedb) Credit riskThecarryingamountoffinancialassetsrecognisedatthereportingdate,assummarisedbelow,representstheGroup’smaximumexposuretocreditrisk:

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Cashandcashequivalents 19,795 19,791 14,202 14,986Tradeandotherreceivables 20,035 17,651 7,488 10,163

39,830 37,442 21,690 25,149

TheGroupconstantlymonitorsdefaultsofcustomersandothercounterpartiesandincorporatesthisinformationintoitscreditriskcontrols.ItistheGroup’spolicythatallcounterpartieswhowishtotradeoncredittermsaresubjecttoanexternalcreditverificationprocess.

Thedirectorsconsiderthatalloftheabovefinancialassetsthatarenotimpairedforeachofthereportingdatesunderreviewareofgoodcreditquality,includingthosethatarepastdue.

TheGrouphasnosignificantconcentrationofcreditrisktocommercialcustomers,ascreditriskispredominantlygovernmentbased.

Thecreditriskonliquidfundsandderivativefinancialinstrumentsislimitedbecausethecounterpartiesarebankswithhighcreditratingsassignedbyinternationalcreditratingagencies.

Refertonote18fordetailsofimpairmentlossesforfinancialinstruments.

c) Liquidity riskTheGroupfacesliquidityrisksinpayingoperatorsbeforeaflightoccursorbeforepaymentisreceivedfromtheclient.TheGroupaimstomitigateliquidityriskby,wherepossible,makingpaymentstooperatorsonlyoncepaymentfromtheclienthasbeenreceived.

TheGroupmanagescashwithinitsoperationsandensuresthatcashcollectionisefficientlymanaged.Anyexcesscashisplacedonlow-risk,short-terminterest-bearingdepositsordistributedtoshareholdersthroughdividends,althoughtheGroupretainsenoughworkingcapitalinthebusinesstoensurethatthebusinessoperationscanrunsmoothly.

Asat31January2017,theGroupandCompany’sfinancialliabilitieshadcontractualmaturitieswhicharesummarisedbelow:

Current Non-current

Within6months 6to12months 1to5years Morethan5years

Group2017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’000

Tradeandotherpayables 23,386 22,353 257 257 2,443 2,957 – –Derivativefinancialinstruments 9 – – – – – – –

23,395 22,353 257 257 2,443 2,957 – –

Current Non-current

Within6months 6to12months 1to5years Morethan5years

Company2017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’0002017

£’0002016

£’000

Tradeandotherpayables 19,382 17,353 257 257 2,443 2,957 – –Derivativefinancialinstruments 9 – – – – – – –

19,391 17,353 257 257 2,443 2,957 – –


24 Financial instruments continuedd) Foreign currency riskTheGrouphasinvestedinforeignoperationsoutsidetheUKandalsobuysandsellsgoodsandservicesdenominatedincurrenciesotherthansterling.AsaresultthevalueoftheGroup’snon-sterlingrevenue,purchases,financialassetsandliabilitiesandcashflowscanbeaffectedbymovementsinexchangeratesingeneralandinUSDollarandEuroratesinparticular.TheGroup’spolicyonforeigncurrencyriskisnottoenterintoforwardcontractsuntilafirmcontracthasbeensigned.

TheGroupconsidersusingderivativeswhereappropriatetohedgeitsexposuretofluctuationsinforeignexchangerates.ThepurposeistomanagethecurrencyrisksarisingfromtheGroupoperations.ItistheGroup’spolicythatnotradinginfinancialinstrumentswillbeundertaken.

Foreigncurrencydenominatedfinancialassetsandliabilities,translatedintosterlingattheclosingrate,areasfollows:

2017£’000

2016£’000

Group Eur € US $ GBP £ Other Eur€ US$ GBP£ Other

Financialassets 19,231 5,213 14,593 793 15,628 4,714 16,825 275Financialliabilities (15,549) (3,349) (4,180) (39) (15,397) (3,176) (3,750) (53)

Short-term exposure 3,682 1,864 10,413 754 231 1,538 13,075 222

Financialassets – – – – – – – –Financialliabilities – – (2,443) – – – (2,957) –

Long-term exposure – – (2,443) – – – (2,957) –

3,682 1,864 7,970 754 231 1,538 10,118 222

2017£’000

2016£’000

Company Eur€ US $ GBP £ Other Eur€ US$ GBP£ Other

Financialassets 8,468 2,404 19,185 801 10,027 2,058 14,176 395Financialliabilities (11,873) (2,520) (3,484) (144) (13,271) (34) (4,059) (173)

Short-term exposure (3,405) (116) 15,701 657 (3,244) 2,024 10,117 222

Financialassets – – – – – – – –Financialliabilities – – (2,443) – – – (2,957) –

Long-term exposure – – (2,443) – – – (2,957) –

(3,405) (116) 13,258 657 (3,244) 2,024 7,160 222





24 Financial instruments continuedd) Foreign currency riskcontinuedThefollowingtabledemonstratesthesensitivityoffinancialinstrumentstoareasonablypossiblechangeintheeuroandUSdollarexchangerates,withallothervariablesheldconstant,onprofitbeforetaxandequity.Itassumesa10%changeofthesterling/euroexchangeratefortheyearended31January2017(2016:10%).A10%changeisalsoassumedforthesterling/USdollarexchangerate(2016:10%).Bothofthesepercentageshavebeendeterminedbasedontheaveragemarketvolatilityinexchangeratesintheprevious12months.ThesensitivityisbasedontheGroup’sforeigncurrencyfinancialinstrumentsheldateachreportingdateandalsotakesintoaccountforwardexchangecontractsthatoffseteffectsfromchangesincurrencyexchangerates.

IfsterlinghadstrengthenedagainsttheeuroandUSdollarby10%(2016:10%)and10%(2016:10%)respectively,theimpactwouldhavebeenasfollows:

2017£’000

2016£’000

Group Eur € US $ Total Eur€ US$ Total

Financialassets (1,923) (521) (2,444) (1,563) (471) (2,034)Financialliabilities 1,555 335 1,890 1,540 318 1,858

Effectonprofitbeforetax (368) (186) (554) (23) (153) (176)

2017 2016

Company Eur € US $ Total Eur€ US$ Total

Financialassets (847) (240) (1,087) (1,003) (206) (1,209)Financialliabilities 1,187 252 1,439 1,327 3 1,330

Effectonprofitbeforetax 340 12 352 324 (203) 121

IfsterlinghadweakenedagainsttheeuroandUSdollarby10%(2016:10%)and10%(2016:10%)respectively,theimpactwouldhavebeenasfollows:

2017 2016

Group Eur € US $ Total Eur€ US$ Total

Financialassets 1,923 521 2,444 1,563 471 2,034Financialliabilities (1,555) (335) (1,890) (1,540) (318) (1,858)

Effectonprofitbeforetax 368 186 554 23 153 176

2017 2016

Company Eur € US $ Total Eur€ US$ Total

Financialassets 847 240 1,087 1,003 206 1,209Financialliabilities (1,187) (252) (1,439) (1,327) (3) (1,330)

Effectonprofitbeforetax (340) (12) (352) (324) 203 (121)


24 Financial instruments continuede) Forward contractsTheGrouputilisescurrencyderivativestohedgesignificantfuturetransactionsandcashflows.TheGroupisapartytoforeigncurrencyforwardcontractsinthemanagementofitsexchangerateexposures.TheinstrumentspurchasedareprimarilydenominatedinthecurrenciesoftheGroup’sprincipalmarkets.

Derivativesthatdonotqualifyforhedgeaccountingareaccountedforastradinginstruments,andanychangeintheirfairvaluedeterminedasthemark-to-marketvalueatbalancesheetdateisrecognisedintheincomestatement.Noderivativesqualifiedforhedgeaccountingduringtheyear(2016:none).

Atthereportingdate,thetotalnotionalamountofoutstandingforwardforeignexchangecontractsthattheGrouphadcommittedareasbelowandtheirrelatedfairvaluewasasfollows(termsnotexceedingthreemonthsfrom31January2017):


£’0002016

£’000

Forwardforeignexchangecontracts–notionalamount 682 537Financial(liability)/asset (9) 36

Changesinthefairvalueofderivativefinancialinstrumentsamountingto£45,000havebeenchargedtotheincomestatementintheperiod(2016:creditof£186,000).

Thesederivativefinancialinstrumentsarenottradedinactivemarkets.Theirfairvaluehasbeendeterminedbyusingvaluationtechniqueswhichmaximisetheuseofobservablemarketdata,namelythecontractexchangerateandthebank’sforwardrate.Thederivativesarethereforecategorisedaslevel2usingthefairvaluehierarchy.

f) Capital risk managementTheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcerninordertoprovidereturnsforshareholdersandbenefitsforotherstakeholders.

TheGroup’sprimarytoolinmanagingriskiscashflowanalysis.Inadditiontostrategiccashflowmanagement,theGroupperformsdetailedweeklycashflowmodelling.

ThescheduleofmattersreservedforBoarddecisionincludesapprovalofanyfinancialinstrumentsorbankborrowingsinexcessof£2,000,000.

ThecapitalstructureoftheGroupconsistsofnetdebt(borrowingsandotherlong-termliabilitiesdisclosedinnote19afterdeductingnon-JetCardcashandbankbalances)andequityoftheGroup(comprisingissuedcapital,reserves,andretainedearningsdisclosedinnotes28to31).

TheGroupisnotsubjecttoanyexternallyimposedcapitalrequirements.TheGroup’sgearingratioatyearendisasfollows:

2017£’000

2016£’000

Debt 2,957 3,471Cashandcashequivalents 3,929 3,015

Netcash/(debt) 972 (456)

Equity 14,934 13,880

Netdebttoequityratio (6.51%) 3.29%

Debtisdefinedaslong-andshort-termborrowingsandotherlong-termliabilitiesasdetailedinnote19.

EquityincludesallsharecapitalandreservesoftheGroupthataremanagedascapital.





24 Financial instruments continuedg) Financial assets by category

Group2017

£’0002016

£’000

Cashandbankbalances 19,795 19,791Financialassetsheldatfairvaluethroughprofitorloss – 36Loansandreceivables 20,985 17,651Currentassetswhicharenotfinancialassets 4,926 6,495

Totalcurrentassets 45,706 43,973

Company2017

£’0002016

£’000

Cashandbankbalances 14,202 14,986Financialassetsheldatfairvaluethroughprofitorloss – 36Loansandreceivables 7,488 10,163Currentassetswhicharenotfinancialassets 6,259 5,657

Totalcurrentassets 27,949 30,842

h) Financial liabilities by category

Group2017

£’0002016

£’000

Financialliabilitiesheldatfairvaluethroughprofitorloss (9) –Financialliabilitiesmeasuredatamortisedcost (7,577) (8,676)Currentliabilitieswhicharenotfinancialliabilities (30,180) (27,743)

Totalcurrentliabilities (37,766) (36,419)

Company2017

£’0002016

£’000

Financialliabilitiesheldatfairvaluethroughprofitorloss (9) –Financialliabilitiesmeasuredatamortisedcost (6,906) (7,307)Currentliabilitieswhicharenotfinancialliabilities (16,543) (17,201)

Totalcurrentliabilities (23,458) (24,508)


£’0002016

£’000

Financialliabilitiesmeasuredatamortisedcost (2,643) (2,957)

Totallong-termliabilities (2,643) (2,957)

Thedirectorsconsiderthatthecarryingamountofthefinancialassetsandliabilitiesapproximatestheirfairvalue.


25 Share-based paymentsTheCompanyoperatesashareoptionschemeunderwhichoptionsmaybegrantedtocertainstaffoftheGrouptosubscribeforordinarysharesintheCompany.Theschemerulescovergrantsunderanapprovedandanunapprovedsectionofthescheme.Thevestingperiodisthreeyears.Withcertainexceptions,optionsareforfeitedifanemployeeleavestheGroupandoutstandingoptionsexpireiftheyremainunexercisedafteraperiodof6.8to10yearsfromthedateofgrant.

Detailsoftheshareoptionsoutstandingduringtheyearareasfollows:

2017 2016

Numberof shareoptions

Weightedaverageexercise

price(pence)

Numberofshareoptions

Weightedaverageexercise

price(pence)

Outstandingasatstartofyear 785,060 301.7 702,136 371.9

Outstandingasatstartofyearfollowing5:1sharesplit 3,925,300 60.3 – –Grantedduringtheyear 918,290 0.0 246,717 29.2Forfeited/lapsedduringtheyear (1,168,980) 74.9 (133,793) 286.3 Exercisedduringtheyear (683,026) 30.4 (30,000) 284.1

Outstandingatyearend 2,991,584 32.2 785,060 301.7

Exercisableatyearend 1,187,044 105.4 403,775 282.2

Theweightedaverageremainingcontractuallifeofshareoptionsoutstandingattheyearendwas4.83years(2016:4.14years).

Theexercisepricesofshareoptionsoutstandingatyearendrangedfromnilpenceto177pence(2016:nilpenceto1,316pence).

Thetotalchargefortheyearrelatingtoemployeeshare-basedpaymentplanswas£493,000.

Inthecurrentyear,optionsweregrantedon29June2016.Theestimatedfairvaluesoftheoptionsgrantedonthosedatesis£458,000.InputsintotheMonteCarlomodelwereasfollows:

29June2016options

Weightedaverageshareprice 370pWeightedaverageexerciseprice 0.0pExpectedvolatility 43.76%Expectedlife 3 yearsRisk-freerate 0.12%Expecteddividendyields 6.48%

ExpectedvolatilitywasdeterminedbycalculatingthehistoricalvolatilityoftheGroup’ssharepriceoverthepreviousthreeyears.





26 Deferred tax Deferredtaxhasbeencalculatedat17%(2016:18%)inrespectofUKcompaniesandattheprevailingtaxratesfortheoverseassubsidiaries.ThefollowingarethemajordeferredtaxliabilitiesandassetsrecognisedbytheGroupandtheCompanywithmovementsthereonduringthecurrentandpriorreportingperiods.

Group

IFRS3intangibles

£’000

Netaccelerated

taxdepreciation

£’000Taxlosses

£’000

Share-basedpayment

£’000

Othertemporary

differences£’000

Total£’000

At1February2015 – (84) 130 138 115 299Arisingonacquisitionofsubsidiaries (857) (30) – – – (887)Exchangedifferences – (3) – – 19 16Credit/(charge)totheincomestatement 132 63 (128) – 79 146Creditdirecttoequity – – – 18 – 18

At31January2016 (725) (54) 2 156 213 (408)Arisingonacquisitionofsubsidiaries (35) – – – – (35)Exchangedifferences – – – – (40) (40)Credit/(charge)totheincomestatement 94 (23) (2) – 288 357Creditdirecttoequity – – – (66) – (66)

At31January2017 (666) (77) – 90 461 (192)

Company

Netaccelerated

taxdepreciation

£’000

Share-basedpayment

£’000Total

£’000

At1February2015 (93) 138 45Chargetotheincomestatement 12 – 12Creditdirecttoequity – 18 18

At31January2016 (81) 156 75Chargetotheincomestatement 20 – 20Chargedirecttoequity – (71) (71)

At31January2017 (61) 85 24

DeferredtaxassetsandliabilitiesareoffsetwheretheGrouphasalegallyenforceablerighttodoso.Thefollowingistheanalysisofthedeferredtaxbalancesforfinancialreportingpurposes:

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Deferredtaxliabilities (725) (551) – –Deferredtaxassets 533 143 24 75

(192) (408) 24 75

Atthebalancesheetdate,theGrouphadundistributedearningsinrespectofoverseassubsidiariesthatwouldbesubjecttooverseaswithholdingtaxesonremissiontotheUK.NoliabilityhasbeenrecognisedinrespectoftheseearningsbecausetheGroupisinapositiontocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatsuchdifferenceswillnotreverseintheforeseeablefuture.

Atthebalancesheetdate,theGrouphadunusedtaxlossestotalling£167,000(2016:£232,000)forwhichnodeferredtaxassetwasrecognised,asitisnotconsideredprobablethattherewillbefuturetaxableprofitsavailable.


27 Employee benefitsIntheUK,theCompanyoperatesadefinedcontributionretirementbenefitschemeforallqualifyingemployees.TheassetsoftheschemeareheldinindividualpersonalpensionschemeswhicharefullytransferableiftheemployeeleavestheCompany.

SimilarschemesoperateacrosstherestoftheGroupdependingonlocalregulationsandindividualsocialcontributionlevels.Theamountofexpenserelatedtosuchpensioncontributionsisdisclosedinnote8.

Inothersubsidiaries,theemployeesaremembersofstate-managedretirementfundsoperatedbyrespectivegovernments,withcontributionspayablebeingaspecifiedpercentageofpayrollcosts.TheonlyobligationoftheGroupwithrespecttotheretirementbenefitschemeistomakethespecifiedcontributions.Thetotalcostchargedtoincomeof£506,000(2016:£480,000)representscontributionspayabletothesevariousschemesbytheGroup.Asatthebalancesheetdate,£67,000(2016:£129,000)wasaccruedinrespectofsuchschemes.

28 Share capital

2017£’000

2016£’000

Authorised75,000,000ordinarysharesof1penceeach 750 –

15,000,000ordinarysharesof5penceeach – 750

Issued and fully paid52,217,565ordinarysharesof1penceeach 522 –

10,443,513ordinarysharesof5penceeach – 522

On25January2017,theCompany’sshareholdersapproveda5to1splitoftheCompany’sshares,whichreducedthenominalvalueoftheordinarysharesto1penceeach.Thesharesplitbecameeffectiveon31January2017.

TheCompanyhasoneclassofordinaryshareswhichcarriesnorighttofixedincomeandentitlesholderstoonevotepershareatgeneralmeetingsoftheCompany.

181,820sharesof5penceeachwereissuedintheyearended31January2016aspartoftheacquisitionconsiderationforCabotAviationServicesLimited.

29 Share premium

Group andCompany

£’000

Balanceat1February2016 4,814Issueofshares (59)

Balanceat31January2017 4,755





30 Merger reserve

Group andCompany

£’000

Balanceat1February2016 295Issueofshares 59

Balanceat31January2017 354

ThemergerreserverepresentsthefairvalueoftheconsiderationgiveninexcessofthenominalvalueoftheordinarysharesissuedaspartoftheacquisitionconsiderationforCabotAviationServicesLimited.

31 Own shares reserve

Group andCompany

£’000

Balanceat1February2016 (1,199)

Issueofshares 60Disposedonexerciseofoptions 467

Balanceat31January2017 (672)

TheownsharesreserverepresentsthecostofsharesinAirPartnerplcpurchasedinthemarketandheldbytheAirPartnerEmployeeBenefitTrust,whichwasestablishedtosatisfythefutureexerciseofoptionsundertheGroup’sshareoptionsschemes(seenote25).ThenumberofordinarysharesheldbytheAirPartnerEmployeeBenefitTrustat31January2017was341,820ordinarysharesof1penceeach(2016:159,236ordinarysharesof5penceeach).Afurther413,640ordinarysharesof1penceeach(2016:100,910ordinarysharesof5penceeach)areheldbytheTrustinanomineecapacityfortwobeneficiaries(2016:two)oftheTrust.



32 Acquisition of subsidiariesOn12December2016,AirPartnerplcacquired100%oftheissuedsharecapitalofClockworkResearchLimited,obtainingcontrolofthecompanyonthatdate.ClockworkResearchLimitedisaleadingfatigueriskmanagementconsultant.TheacquisitionofClockworkResearchLimitedaddssignificantspecialistconsultingexpertiseandknowledgetotheGroup.

Theprovisionalamountsrecognisedinrespectoftheidentifiableassetsacquiredandliabilitiesassumedaresetoutinthetablebelow.

Clockwork Research Limited

£’000

Fair values of assets acquired

Financialassets 325

Property,plantandequipment 35

Intangibleassets–customerrelationships 174

Deferredtaxonintangibleassets (35)Financialliabilities (163)

Goodwill 333

Totalconsideration 669

Satisfied byCash 469

Deferredconsideration 200

Totalconsideration 669

Net cash outflow arising on acquisition

Cashconsideration 469Lesscashandcashequivalentsacquired (107)

Netcashoutflow 362

Deferredconsiderationofupto£200,000ispayabledependingonearningsperformanceinthe12-monthperiodsending31March2017and31March2018.Thedirectorsconsideritlikelythattheperformanceconditionswillbemetandhavethereforerecognisedthemaximumamountspayable.

Nogoodwillisdeductiblefortaxpurposes.

Clockwork Research LimitedThegoodwillof£333,000arisingfromtheacquisitionisattributabletothevalueoftheassembledworkforceandtheabilityoftheseniorstafftogeneratefuturebusiness.

Acquisitionrelatedcosts(includedinOtheritems)amountedto£55,000.

ClockworkResearchLimitedcontributedrevenueof£70,000andlossesaftertaxof£3,000beingtheresultsfortheperiodbetweenthedateofacquisitionand31January2017.

IftheacquisitionofClockworkResearchLimitedhadbeencompletedonthefirstdayofthefinancialyear,Grouprevenuesfortheperiodwouldhavebeen£43,000,000andGroupprofitaftertaxwouldhavebeen£2,955,000.




33 Prior year acquisitionsOn18August2015,AirPartnerplcacquired100%oftheissuedsharecapitalofBainesSimmonsLimited,obtainingcontrolofthecompanyonthatdate.BainesSimmonsLimitedisaleadingaviationsafetyconsultant.BainesSimmonsLimitedwillenableAirPartnertoextendtheGroup’sserviceandproductcapabilitieswithofferingscomplementarytoitsexistingcharterbusiness.

Contingentconsiderationofupto£600,000ispayabletothevendorsofBainesSimmonsLimiteddependingontheperformanceto31January2018.Asthedirectorsdonotconsideritlikelythattheminimumperformancethresholdwillbemet,noamountshavebeenrecognisedinrespectofthis.

At31January2016,thepurchasepriceallocationwasprovisional:theaccountinginrespectoftheacquisitionofBainesSimmonsLimitedhassincebeenfinalised.Thisresultedinadjustmenttothevalueofintangiblesrecognisedonacquisition,anincreaseincustomerrelationshipsof£1.6m,anddecreasesinthevalueofthebrandof£0.04mandtrainingmaterialsof£0.2m.

TheamountsrecognisedinrespectoftheidentifiableassetsacquiredandliabilitiesassumedontheacquisitionofBainesSimmonsLimitedaresetoutinthetablebelow.

Baines Simmons Limited

£’000

Fair values of assets acquired

Financialassets 1,490Property,plantandequipment 191

Intangibleassets–brands 158

Intangibleassets–customerrelationships 3,448

Intangibleassets–trainingmaterials 415

Deferredtaxonintangibleassets (780)Financialliabilities (983)

3,939Goodwill 1,711

Totalconsideration 5,650

Satisfied byCash 5,650

Net cash outflow arising on acquisition

Cashconsideration 5,650Lesscashandcashequivalentsacquired (350)

Netcashoutflow 5,300


34 Net cash inflow from operating activities

Group Company

2017£’000

2016£’000

2017£’000

2016£’000

Profit for the year

Continuingoperations 2,847 1,933 1,168 5,285Discontinuedoperations – 387 – 387

2,847 2,320 1,168 5,672Adjustmentsfor:Dividendsreceived – – – (3,277)Financeincome (39) (10) (34) (3)Financeexpense 96 81 – 28Incometax 1,501 1,328 791 640Depreciationandamortisation 780 745 350 428Fairvaluemovementonderivativefinancialinstruments 45 (186) 45 (186)Shareoptioncostforperiod 369 223 369 223Decreaseinprovisions (421) (91) (166) (312)Foreignexchangedifferences (938) (140) (892) (118)

Operating cash flows before movements in working capital 4,240 4,270 1,631 3,095Changeinreceivables (481) (1,377) 1,944 (3,193)Changeinpayables (867) 3,901 (1,067) 1,054

Cash generated from operations 3,009 6,794 2,508 956Incometaxespaid (922) (928) (582) (541)Interestpaid (96) (81) – (28)

Net cash inflow from operating activities 1,874 5,785 1,926 387

35 Operating lease arrangements

The Group as lessee

2017Land andbuildings

£’000

2016Landandbuildings

£’000

2017Other£’000

2016Other£’000

2017Total

£’000

2016Total

£’000

Minimumleasepaymentsunderoperatingleasesrecognisedascostsfortheperiod 454 494 68 99 522 593

Atthereportingdate,theGrouphadoutstandingcommitmentsforfutureminimumleasepaymentsundernon-cancellableoperatingleases,whichfalldueasfollows:

The Group as lessee

2017Land andbuildings

£’000

2016Landandbuildings

£’000

2017Other£’000

2016Other£’000

2017Total

£’000

2016Total

£’000

Withinoneyear 428 457 65 66 493 523Inthesecondtofifthyearinclusive 1,565 1,411 135 108 1,700 1,519Afterfiveyears – 119 – 5 – 124

1,993 1,987 200 179 2,193 2,166

OperatingleasepaymentsrepresentrentalspayablebytheGroupforcertainofficeproperties,motorvehiclesandofficeequipmentituses.Leasesarenegotiatedinisolation,dependentonthetradingconditionsinthecountry/regionconcerned.





36 Profit for the financial yearTheGroupfinancialstatementsdonotincludeaseparateincomestatementforAirPartnerplc(theparentundertaking)aspermittedbySection408oftheCompaniesAct2006.TheParentCompanyprofitaftertaxforthefinancialyearwas£1,154,000(2016:£5,636,000)includingdividendsfromsubsidiarycompaniesof£nil(2016:£3,277,000).TheParentCompanyhasnootheritemsofcomprehensiveincome.

37 Related party transactionsTheCompanyhadthefollowingtransactionswithrelatedpartiesintheordinarycourseofbusinessduringtheyearunderreview.

Trading transactions2017

£’0002016

£’000

Subsidiaries

Salestosubsidiaries – 31

Purchasesfromsubsidiaries (23) (33)

Amountsowedbysubsidiariesatperiodend 3,498 1,505Amountsowedtosubsidiariesatperiodend (3,571) (2,688)

Outstandingbalancesthatrelatetotradingbalancesareplacedoninter-companyaccountswithnospecificcreditperiod.

Compensation of key management personnel (being the Board of directors)2017

£’0002016

£’000

Short-termemployeebenefits 985 871Post-employmentbenefits 52 107

1,037 978

Inadditiontotheaboveamounts,keymanagementpersonnelwhowerealsoshareholdersreceived£10,000ofdividendsinrespectoftheirshareholdingsintheyearended31January2017(2016:£11,000).

Boardofdirectors’remunerationinaccordancewithSchedule5oftheAccountingRegulationswasasfollows:

Aggregate directors’ remuneration2017

£’0002016

£’000

Emoluments 863 871Companycontributionstomoneypurchasepensioncontributions 52 107

915 978

Two(2016:two)directorsaremembersofmoneypurchasepensionschemes.

FurtherinformationabouttheremunerationofindividualdirectorsisprovidedintheauditedpartoftheDirectors’remunerationreportonpages60to63.

38 Contingent liabilitiesTheGrouphadissuedthefollowingguaranteesattheyearend.

Description Currency2017

£’0002016

£’000

Dubaiemployeerights Sterling – 17

Inaddition,theCompany’sbankersholdafreeandfloatingchargeovertheCompany’sassets.Thereisalsocontingentconsiderationofupto£600,000payabletothevendorsofBainesSimmonsLimiteddependingontheperformanceto31January2018.

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