peel airports directors' report & financial statements (2012)

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PEEL AIRPORTS LIMITED

DIRECTORS' REPORT & FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH 2012

COMPANY NUMBER 3385025

IIII~IIIIWI •A1F05EUZ•

A15 10/08/2012 #112 COMPANIES HOUSE

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Contents

Directors, ProfessiOnal Advtsers and Regtstered Office

Report of the Dtrectors

Statement ofdtrectors' responstb1ht1es m respect of the D•rectors' report and the financtal statements

Independent Audttor's Report

Group Profit and Loss Account

Group and Company Balance Sheets

Group Cash Flow Statement, Group Reconcthallon of Cash Flow to Movement m Net Debt

Group Statement of Total Recogntsed Gams and Losses and Reconcihatton of Movements m Group and Company Shareholders' Funds Notes to the Fmanctal Statements

Substdtary Undertakmgs

2

3

7

8

10

11

12

13

14

33

... PEEL AIRPORTS LIMITED

Directors, ProfessiOnal Advisers and Registered Office

Directors:

Secretary:

Registered Office

Registered Number:

Auditor:

Almt Rtkhy George Casey Glenn McCoy Peter Hosker Steven Underwood Cohn Campbell Jobn Duthte-Jackson Cratg Rtchmond Robert Hough

Elizabeth McDonald

Ltverpool John Lennon Atrport Ltverpool L24 lYD

3385025

KPMG LLP Chartered Accountants & Statutory Audttor Ltverpool Umted Kmgdom

2

... PEEL AIRPORTS LIMITED

Report of the Dire<:tors for the year ended 31st March 2012

The Directors subm1t the1r annual report together w1th the aud1ted financtal statements of the Group for the year ended 31 March 2012

Results, review of business and future developments.

The Peel Airports Group ("the Group") compnses the Company and 1ts subs1d1anes The prmc1pal actiVIties of the Group dunng the year were the ownership and operatiOn of three key regiOnal atrports, airport development and the provtsron of ancillary avtatlon servtces

Followmg the sale of 1ts stake m February 2012 of Durham Tees Valley A1rport, the Group entered mto an agreement w1th the new owners to provide key avtatiOn services

The Group contmues to mvest m 1ts assets at us two a1rports m the UK, Liverpool John Lennon Atrport and Robm Hood Doncaster Sheffield A1rport, w1th total cap1tal expenditure for the year bemg £3 6m

Revenues were denved from atrcraft and passenger handling charges and mcome from Its commerctal activities, parttcularly retatl and car parkmg as well as general avtat1on Overall passenger numbers for the contmumg busmess (LJLA and RHAS) for the year mcreased to 6,061,677 from 5,901,065 w1th represented an mcrease of2 7% on the prev10us year

The Group focuses on prov1dmg a htgh quahty, cost effective servtce to low cost and charter a1rhnes servmg the needs of the local commumttes The busmess ts focussed on tmprovmg the passenger expenence and Improvements m non-aero revenue ensunng that there contiDues to be adequate capac1ty to meet the demand m growth and creatmg the platform for profitable returns for the future Costs contiDued to be closely managed

Livervool John Lennon Airport fLJLAJ

For the financ1al year 11/12 overall passenger numbers grew to 5,216,088 compared to 5,012,348 m the prev1ous year, representmg an mcrease of 4% year on year The atrport made an operatmg profit (before fixed asset tmpatrment losses) of £3 7m (2011 £2 5m), w1th eammgs before IDterest, tax, deprec1atton and amort1sat10n ("EBITDA") of £11 4m (2011 £10 Jm)

Dunng the year the Group contmued to mvest m the mfrastructure at LJLA wtth work on several new retatl stores and food and beverage outlets bemg completed, th1s IDcluded the development of a new lands1de Starbucks, a JD Sports reta1l umt, Cla1re's Accessones and a complete refurbtshment of the Estuary restaurant to better serve customer needs In addttwn several other key umts mcludmg the World Duty Free outlet were re-developed dunng the year and the passenger amvals hall was expanded to better sutt the needs of passengers

Robin Hood Donca<ler Sheffleld Airport rDSAI

The financ1al year ended 31 March 2012 1s the seventh financ1al year ID wh1ch the a1rport has been operational Passenger traffic saw a shght dechne from 888,717 to 845,589 passengers The a1rport made an operatiDg loss of £3 4m compared to £3 ?m ID the prevtous year

The Company wtll contmue to closely manage tts costs and work wtth tts busmess partners to tmprove the operatiOnal effictency of the atrport and to attract new bus mess The Dtrectors beheve that the opportuntty for better access to the atrport afforded by the now approved F ARRS Lmk road proJect wtll asstst m attractmg new atrhnes to the atrport

Results and Financial Performance

The Group's results and financtal pos1tton are set out m the profit and loss account and balance sheets on pages 10 and 11

As shown m the profit and loss account turnover for the year totalled £46 2m compared to £42 3m ID the prev10us year There was a Group operattng loss of£ I I I m compared to £2 8m m the prev1ous year

Net hab1httes IDCreased by £22 Om from £30 ?m at 31 March 2011 to £52 7m at 31 March 2012 Th1s decrease was predonunantly as a result of the loss for the year

The net debt of the Group IDCreased from £196 ?m at 31 March 2011 to £215 2m at 31 March 2012, resultiDg mamly from new external and shareholder fundiDg

No d1v1dend can be declared (2011 same)

3

PEEL NRPORTS LIMITED

Report of the Directors (Continued)

Princtpal Risks and Uncertainties

The nsks and uncertamt1es descnbed below are constdered to have the most stgmficant effect on the Group's busmess financral results and prospective The hst ts not mtended to be exhaustive The Group cames out detailed nsk assessments to ensure that nsks are assessed and to the extent poss•ble mtttgated

The UK avratlon market contmues to show a reductiOn m mtemattonal traffic and a steep declme m the domestic market Thts market trend ts a dtrect result of the current economtc chmate, Significant reductiOn m dtsposable mcome bemg ava1lable for busmess travel and hohday spend

The cost of secunty prov1ston, ansmg from the need to protect our natiOnal atr borders, contmues to mcrease It should be highlighted that the cost resultmg from havmg these more stnngent secunty measures mamtamed at our arrports cannot m all cases be recovered from aut mes or passengers

Growmg regulatory costs and contmued taxatwn of the mdustry IS a dtsadvantage when competmg for bus mess wtth competitor atrports m the rest of the EU

Other risks and uncertainties:

• Contmued uncertamty m Eurozone over the future of the Euro and the economtc stabthty of certam member states

• Contmued Impact of double taxation from January 2012 (combmed effect of the EU Emtsston Tradmg Scheme - (ETS) and further mcrease m Atr Passenger Duty (APD) from I" Apnl 20 12)

• Contmued recess ton, weak consumer confidence and slow recovery of the UK economy

• Rtsmg av1at1on fuel cost and 1mpact on a1rlme costs, mcreasmg m fare levels

• Growmg cost pressure on the mdustry (economtc regulation, atrport pohcmg and secunty costs)

• More pronounced un-compettttveness ofUK avtatton market compared to European competitors

• Industry consoltdatton w1ll affect competitiveness across the UK's reg1onal atrports

The Group contmues to take an act1ve part m Government consultatiOns on UK avtatton regulatory and avtatwn pohcy matters thus ensunng the Group contmues to be well postttoned m the domestic and mtemattonal market whtlst at the same ttme protectmg tts strategic mterest and ensunng contmued growth

Going Concern

After makmg enqmres and recetvmg confirmatiOn of contmued financtal support from the company's shareholders Vantage Airport Group Limited and Peel Investments (PAH) Limited, the dtrectors have a reasonable expectation that the Company has adequate resources to contmue m operational extstence for the foreseeable future and therefore they contmue to adopt the gomg concern basts m prepanng the financtal statements Further detatlts gtven m note 1 to the accounts

Airport Economic Regulations

Liverpool Airport Limited ts subject to economic regulatiOns under the Airports Act 1986 which requtre the Airport to hold permiSSion from the Ctvll A vtatton Authonty to levy atrport charges

4

Report of the Directors (Contmued)

Shareholders

The Shareholders as at 31" March 2012

Vantage Atrport Group (UK) Ltmtted

Peel Investments (PAH) Ltmtted

The Board of Directors


Number of ordinary shares

45,994,654

24,766,351

Except as stated, the dtrectors who held office dunng the financtal year and thereafter were

Steven Underwood Amtt Rtkhy George Casey Nevtlle Wetr Glenn McCoy Col m Campbell John Duthte-Jackson Cratg Rtchmond Robert Hough

Employees

(restgned 31 May 2012)

(appomted 20 Apnl2011) (appomted 19 July 2012)

Percentage

65

35

The Group's employment strategy ts regularly revtewed and updated by the Board Thts strategy ts lmked to busmess needs and has been destgned to dehver the growth and development for our people Our employment pohctes are destgned to provtde equal opportumtles Irrespective of age, dtsab1hty, ethmctty, gender, gender reasstgnment, mantal status and civtl partnership, nattonahty, pregnancy and matemtty, race, rehgwn and behef and sexual onentatiOn

The Group has positive workmg relatwnshtps wtth the trade umons, m particular the GMB and Umte Umons The Group works m partnershtp wtth the trade umons to successfully resolve any confltct and works together to try and achaeve corporate obJeCtives and goals

The Group delivers a robust, wtde rangmg trammg program, by utthsmg a network of m-house subject matter experts All employees, whether part-time or full-time, temporary or permanent, are treated fatrly and equally We select employees for employment, promotiOn, trammg or other matters affectmg thetr employment on the basiS of aptttude and abihty A key at m of the busmess ts to promote w1thm and the Group's successiOn plans have been developed to asstst wtth mternal progresston All employees are ass1sted and encouraged to develop to thetr full potential so that the1r combmed talents and resources of the team are fully utihsed to maxtmtse the effictency of the orgamsatton

The Group 1s constantly lookmg for ways to ensure that employees are able to parttctpate and engage m the busmess ConsultatiOn takes place wtth employees or thetr representatives at all levels, wtth the atm of ensunng thetr v1ews are taken fully mto account when makmg strategic dectswns The Group has focussed on tmprovmg commumcattons wtth all employees, busmess bnefing are cascaded through the ongmatton to commumcate key busmess and operational tssues and mclude regular video bnefings provided by semor management whtch are accesstble to all employees

Environment and the Community

The Group has always been consctous that tt has a duty to balance the potenttal envtronmental Impacts of operatmg the auports with the soctal and economtc benefits an atrport bnngs to the regwn It serves The Group contmues to work hard to mmnruse the environmental tmpact of Its operatiOn at a local and global level, workmg to reduce the tmpact of not se on the local environment and our carbon emtsstons on the wtder envtronment Full constderatton 1s gtven to envtronmental 1ssues part1cularly when developmg new proJects, refurbtshmg extstmg properties and on poss1ble acquiSitions Destgn consultants are encouraged to promote good environmental performance with constderatton gtven to environmental nsk, energy consumption, the use of envtronmentally fnendly matenals and the avoidance of matenals hazardous to health

The Group has an obligatiOn under the Carbon Reduction Commitment (CRC) to record and report the overall C02 emtsstons from the atrports operatiOns ln the financtal year 20! l/!2 the total CRC ehgtble C02 emtsstons for PAL was 13,220 tonnes of whtch LAL and DSAL ts 9,049 and 4,! 71 tonnes respectively

5

------------------------


Report of the Directors (Contmued)

Charitable and political donations

Dunng the year the Group collected £18,303 through Com Co lntemattonal PLC (CCI) whtch went mamly to local and chtldren's chanttes m Ltverpool and South Yorkshtre The Group works closely wtth a number of schools and colleges covenng puptls and students rangmg from mfants to Umverstty undergraduates, dtscussmg the role of the atrport hnked to the vanous cumculums The Airport also operates a successful and growmg number of orgamsed a1rport tours, hostmg educational vtstts and a vanety of commumty groups from across the regwn and beyond

The chosen chanttes dunng thts penod were Zoe's Place, Clatterbndge Cancer Trust, Alder Hay lmagme Appeal and Clatre House at LPL, and Bluebell Wood Chtldren's Hosptce, Macmtllan, Sheffield Chtldren's Hospttal and the Yorkshire Atr Ambulance were the chosen chanttes at DSA

Creditor Payment Pohcy and Practice

It ts the Company's pohcy that payments to supphers are made m accordance wtth terms and condtttOns agreed between the Company and tts supphers, provtded that all tradmg terms and condtttons have been met

The Dtrectors of the Company, who held office durmg the year, or thereafter, had no mterest m the shares of the Group compames at any ttme dunng the year Each person who 1s a dtrector at the date of approval of th1s report confirms that

(a) so far as they are aware, there 1s no relevant aud1t mformatton ofwh1ch the Company's audttor are unaware, and

(b) they have taken all the steps that they ought to have taken as a dtrector to make themselves aware of any relevant audtt mformatton and to establish that the Company's audttor ts aware of that mformahon

Thts confirmation ts gtven and should be mterpreted m accordance wtth the provtstons of s418 of the Compames Act 2006

Pursuant to SectiOn 487 of the Compames Act 2006, the audttors wtll be deemed to be reappomted and KPMG LLP wtll therefore contmue m office

~~12-IA' Ehzabeth McDonald

Secretary

For and on behalf of the Board of Directors

[date)

6

Registered office Ltverpool John Lennon Atrport

Ltverpool L24 lYD


STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE DIRECTORS' REPORT AND THE FINANCIAL STATEMENTS

The dtrectors are responstble for prepanng the Annual Report and the financtal statements m accordance Wtth apphcable law and regulatiOns

Company law requtres the dtrectors to prepare financtal statements for each financtal year Under that law they have elected to

prepare the group and parent company financtal statements m accordance wtth UK Accountmg Standards and apphcable law (UK Generally Accepted Accountmg Practice)

Under company law the dtrectors must not approve the financ.al statements unless they are satisfied that they gtve a true and fatr vtew of the state of affatrs of the group and parent company and of thetr profit or loss for that penod In prepanng each of the group and parent company tinanctal statements, the dtrectors are reqmred to

select SUitable accountmg pohctes and then apply them conststently, make Judgements and estimates that are reasonable and prudent, state whether applicable UK Accountmg Standards have been followed, subject to any matenal departures dtsclosed and explamed m the financtal statements, prepare the financtal statements on the gomg concern basts unless tt IS mappropnate to presume that the group and the parent company w1ll contmue m busmess

The directors are responsible for keepmg adequate accountmg records that are suffictent to show and explmn the parent company's transactiOns and disclose with reasonable accuracy at any ttme the financial position of the parent company and enable them to ensure that tts financtal statements comply wtth the Compames Act 2006 They have general responstbthty for takmg such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other 1rregulanttes

7

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PEEL AIRPORTS LIMITED

We have audited the financial statements of Peel Airports Limited for the yedr ended 31st March 2012 set out on page• I 0 to 33 The financial reportmg framework that has been applied m their preparation "applicable law and UK Accounting Standards (UK

Generally Accepted Accountmg Prdctice)

This report IS made solely to the company's members, as a body, m accordance with Chapter 3 of Part 16 of the Compdme• Act 2006 Our audit work has been undertaken so that we might state to the company's members those matters we are requ~red to state to them m an audator's report and for no other purpose To the fullest extent permmed by law, we do not a< .. cept or as~ume

responsab1hty to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opmtons we have formed

Respective responsibilities of directors and auditor

As explamed more fully 10 the Dtrcdors' Respon.,abihtaes Statement .;;et out on page 7, the directors arc responsible for the preparation of the financtal statements and for bemg satisfied that they g1vc a true and fau v1cw Our re.;;pon~Jh!l1ty '"to audit, and

express an oJ1mton on, the findnc~al statement~ m accordam,c w1th apphc.tble law and lnternauonal Standard~i on Aud1tmg (UK

and Ireland) Those standards require us to comply with the Auditing Practices Board's (APB'•) EthiCdl Stdndards for Auditors

Scope of the audit of the financial statements

A descnptton ot the scope of an .tudJt of financial stdtementli IS provided on the APB's webslte at

www frc org uk/apb/scope/pnvatc cfm

Opinion on financial statements

In our opmwn the financial statementli

• gi vc a true and fair view of the state of the group's and of the parent company's affairs "' dt 11 •t March 20 12 and of the group's lo" for the year then ended,

• have been properly prepared m accordance with UK Generally Accepted A"countmg Pr.tct1ce, and

• have been prepared In accordance with the reqUirements of the Compame• Act 2006

Opinion on other matter prescribed by the Companies Act 2006

In our opmwn the mformation given m the Directors' Report for the finanCidl year for which the financial statements arc prepared

IS consistent with the financial statements

8

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PEEL AIRPORTS LIMITED (contznued)

Matters on which we are required to report by exception

We have nothmg to report m respect of the followmg matters where the Compames Act 2006 requtres us to report to you tf, m our

optmon

• adequate accountmg records have not been kept by the parent company, or returns adequate for our audtt have not been recetved from branches not vtsited by us, or

• the parent company financtal statements are not m agreement wtth the accountmg records and returns, or

• certam dtsclosures of dtrectors' remuneration specified by law are not made, or

• we have not recetved all the m formatiOn and explanatiOns we reqUire for our audtt

rYf(o~. HP Jones (Senior Statutory Auditor) for and on behalf of KPMG L.L.P, Statutory Auditor Chartered Accountants 8 Pnnces Parade Ltverpool L3 IQH

9

•


Group Profit and Loss Account jar the year ended 31st March 2012

Note 2012 2011 Dis- Dts-

Continuing continued Total ContlDUing contmued Total £000 £000 £000 £000 £000 £000

Turnover 2 41,704 4,513 46,217 36,564 5,692 42,256 Cost of sales (20,699) (3,920) (24,619) (20,517) (4,759) (25,276)

Gross profit 21,005 593 21,598 16,047 933 16,980 Ftxed asset 1mpamnent /1 (1,383) (1,383) (360) (360) lmpamnent loss on mcrease of stake m substdtary 14 (8,867) (8,867)

Other adm1mstrattve expenses (21,466) (950) (22,416) (17,164) (2,290) ( 19,454)

Total administratJve expenses (31,716) (950) (32,666) (17,524) (2,290) (19,814)

Group operating loss (10,711) (357) (11,068) (1,477) (1,357) (2,834) Share of operatmg profit m assoctate 13 14 2 (Loss) I profit on dtsposal of substdtanes 14 (342) 73 Loss on dtsposal of fixed assets 3 (454)

Loss on ordmary achvthes before 3 (11,396) (3,213) interest and taxation Other mterest recetvable and Slmtlar mcome 4 25 18 Interest payable and similar charges 5 (17,834) (14,342) Other finance mcome 6 196 382

Loss on ordinary activities before taxatiOn (29,009) (17,155) Tax on loss on ordmary activities 7 84 (5,802)

Loss on ordmary activities after taxation (28,925) (22,957) Manonty Interests 22 550 412

Loss for the financial year 21 (28,375) (22,545)

Movements m reserves are shown m note 21

Dtscontmued operations relate to the dtsposal of a substdrary undertakmg m the current year as dtsclosed m note 14

The accompanymg notes form an mtegral part of these financaal statements

10


Balance Sheets as at 31st March 2012

Holding Holding Group Group Company Company

2012 2011 2012 2011

Note £'000 £'000 £'000 £'000

Fixed assets lntangoble assets

Goodwoll 10 1,029 I ,141 Tangoble assets

Investment properties 11 19,232 20,615 Other fixed assets 12 172,481 179,113

Investments 13 288 274 34,891 34,891

193,030 201,143 34,891 34,891

Current assets Stocks 15 136 155 Debtors 16 6,795 8,407 56,580 56,573 Cash at bank and on hand 6,316 4,519 1,427 100

13,247 13,081 58,007 56,673 Creditors (amounts fa1hng due wothon one year) 17 (15,654) (51,493) (481) (187)

Net current (llabtllties)/assets (2,407) (38,412) 57,526 56,486

Total assets less current llabihties 190,623 162,731 92,417 91,377 Creditors (amounts fallmg due after more than one year) 18 (243,361) ( 193,586) (109,252) (92,879)

Net liabilities excluding penston habthty (52,738) (30,855) (16,835) ( 1,502) Pension habthty 23 174

Net llabthtles including pension liability (52,738) (30,681) (16,835) (I ,502)

Capttal and reserves Called-up share capttal 20 70,761 70,761 70,761 70,761 RevaluatiOn reserve 21 1,136 1,293 Profit and loss account 21 (124,635) (94,418) (87,596) (72,263)

(52,738) (22,364) (16,835) (1,502) Equtty m1nonty Interests 22 (8,317)

Equtty (52,738) (30,681) (16,835) (I ,502)

y the board of d ectors on ,.~ Jv\"1 ?al...._

Company Registration No 3385025

The accompanymg notes form an mtegral part of these financral statements

11


Group Cash Flow Statement for the year ended 31st March 2012

Cash mflow from operatmg activities Returns on m vestments and serv1cmg of finance Capttal expenditure and financtal mvestment

Cash outflow before management of liquid resources and financing Fmancmg D1sposa1s (Decrease) /Increase in cash in the year

Note

24(a) 24(b) 24(c)

24(d) 24(e)

31st March 2012 £'000 3,211

(7,503) (3,554) (7,846) 6,948 (305)

(1,203)

Group Reconciliation of Cash Flow to Movement in Net Debt for the year ended 31st March 2012

Note 31st March 2012 £'000

Movement m cash m the year 24(!) 1,797

Movement m overdrafts 24(!) (3,000) Net movement m debt due wtthm one year 24(!) 35,116 Net movement m debt due after more than one year 24(!) (52,413)

Change in net debt in the year ( 18,500)

Net debt at 31st March 2011/3lst March 2010 (196,731)

Net debt at 31st March 2012/3lst March 2011 24(!) (215,231)

The accompanymg notes form an mtegral part of these financml statements

12

31st March 2011 £'000 5,247

(7,559) (10,709) (13,021) 17,157

( 115) 4,021

31st March 2011 £'000 2,500 1,521

189,187 (163,717)

29,491 (226,222) (196,731)


Group Statement of Total Recognised Gains and Losses for the year ended 31st March 2012

Note Loss for the financtal year

Other recogmsed gains and losses Reahsed dunng the year on dtsposal of substdtary undertakmg Capttal contnbutton (watver of mtercompany loan with Peel Investments (PAH) Ltmtted)

Actuanal (loss) I gam relatmg to the pens10n fund 23

Total recognised net gains and losses for the financial year

31st March 2012 £'000

(28,375)

(1,999) (1,999)

(30,374)

Reconciliation of Movements in Group Shareholders' Funds for the year ended 31st March 2012

Loss for the financtal year Other recogmsed gams and losses for the financtal year Net (decrease) I increase in shareholders' funds

Shareholders' deficit at 1st Aprtl2011/lst April 2010 Shareholders' deficit at 31st March 2012/31st March 2011

31st March 2012 £'000

(28,375) (I ,999)

(30,374)

(22,364)

(52,738)

Reconc1hatwn of Movements in Company Shareholders' Funds for the year ended 31st March 2012

(Loss)/profit for the financ1al year Other recogntsed gams and losses for the financtal year Net (decrease)/increase in shareholders' funds

Shareholders' deficit at I April201111 Apri12010 Shareholders' deficit at 31st March 2012/31st March 2011

The accompanymg notes form an mtegral part of these financ1al statements

13

---------- ----

31st March 2012 £'000

(15,333)

(15,333) (1,502)

(16,835)

31st March 2011 £'000

(22,545)

(lOS)

51,510 416

51,821 29,276

31st March 2011 £'000

(22,545) 51,821 29,276

(51,640)

(22,364)

31st March 2011 £'000

5,175 51,510

56,685 (58,187)

( 1,502)


Notes to the Financial Statements

l. Accounting Policies

The prmctpal accountmg pohctes are summansed below The pohctes have been apphed conststently throughout the year and the precedmg year

Basts of preparahon

The financtal statements have been prepared on the gomg concern basts under the htstoncal cost conventton as mod1fied to mclude the revaluatiOn of fixed asset mvestment properttes and m accordance with applicable Umted Kmgdom law and accountmg standards.

Going Concern

The financial statements have been prepared on the gomg concern basts whtch the Duectors beheve to be appropnate for the followmg reasons The Dtrectors have recetved confirmation that shareholders Vantage Atrport Group Ltm1ted and Peel Investments (PAH) Llmtted, wtll contmue to provide the necessary level of support to enable It to contmue to operate for at least 12 months from the date of these financtal statements Takmg thts mto account the Dtrectors have a reasonable expectation that the group and parent company has adequate resources to contmue m operatiOnal extstence for the foreseeable future by meeting tts habthttes as they fall due for payment As With any company placmg reliance on other group entitles for financial support, the Dtrectors acknowledge that there can be no certamty that thts support wtll conlmue although, at the date of approval of these ftnanctal statements, they have no reason to beheve that tt wtll not do so

Based on thts undertakmg the dtrectors beheve that 1t remams appropnate to prepare the flnanctal statements on a gmng concern basis The financtal statements do not mclude any adjustments that would result from the basis of preparation bemg mappropnate

Basts of consolidation

The Group financial statements consolidate the financial statements of the Company and 1ts subs1d1ary undertakmgs made up to 31 March each year

All substdtanes are consolidated under acqutsltton accountmg prmctples Results of subs1dial)' undertakmgs acqmred or dtsposed of dunng the year are mcluded from the date of acqutsitton or to the date of d1sposal to the extent of group ownershtp

Intra-group turnover and profits are ehmmated on consolidatiOn

As pernutted by Seclton 408 of the Compames Act 2006, a separate profit and loss account for the holdmg company ts not presented (2012 loss of £15,333,000 (201/ profit of £5,175,000))

Acqutstttons and Dlsposals

Goodwill ansmg on the acqmsttton of subsidiary undertakmgs, representmg any excess of the fa1r value of the cons1deratton gtven over the fair value of the tdenttfiable assets and habthtles acqmred, ts capttahsed as an mtangible asset and wntten off to the profit and loss account on a stratght hoe basis over Its useful economic hfe, up to a maxtmum of twenty years Prov1ston ts made for any tmpaarment

14


Notes to the Fmancial Statements (contmued)

I. Accounting Policies (contmued)

Investment Properties

Investment properttes are rncluded m the balance sheet at thetr open market value and, m accordance with Statement of Standard Accountmg Practice No 19, are not deprectated or amortised unless they relate to properties wtth an unexptred hfe of20 years or less Thts departure from the reqmrements of the statutory accountmg pohctes IS necessary for the financtal statements to gtve a true and fatr vtew m accordance wtth applicable Umted Kmgdom accountmg standards Deprectatwn ts only one of many factors reflected m the valuatiOn and the amount whtch mtght otherw1se have been shown cannot be separately tdentlfied or quantified

Surpluses or deficits ansmg from revaluatwn are transferred to the unreahsed revaluatiOn reserve, except that a defictt wh1ch ts expected to be permanent and wh1ch 1s m excess of any prev1ously recogmsed surplus over cost relatmg to the same property, or the reversal of such a deficit, ts charged (or credtted) to the profit and loss account Realised revaluation surpluses representmg the dtfference between htstoncal cost and the asset's carrymg value are reclassified by way of a transfer to profit and loss account reserve m the year m wh1ch the property d1sposal occurs

Properttes m the course of development or practically completed but not substantially let are mcluded m the balance sheet at cost subject to provaswns tf the dtrectors constder tt prudent havmg regard to the prevathng market cond1ttons Cost mcludes mterest and dtrectly attnbutable overheads wh1lst the property ts m the course of development

Reclasstficattons between mvestment properttes, other fixed assets and stocks are made at the lower of net book value and net realisable value

Investment property sales are accounted for on the basts of uncond1t10nal exchange

Other F1xed Assets

Other fixed assets are stated at cost less deprectatton Deprectatwn ts provtded at rates calculated to wnte off the cost, less estimated restdual value of each asset over tts expected useful hfe, as follows

Land Freehold Bu1ldmgs Runway, Car Park & Runway L1ghtmg F1xed Plant F1xtures F1ttmgs & Tools & EqUipment Motor Veh1cles Assets In the Course of Construction

No deprec1atton LO to 50 years 5 to L 00 years 7 to 50 years 5 to LO years 5 to 20 years No depreciation

Properttes m the course of development or practically completed but not substantially let are mcluded m the balance sheet at cost subject to provtstons tf the Dtrectors constder tt prudent havmg regard to the prevathng market condtttons Cost mcludes mterest and d~rectly attnbutable overheads wh1lst the property 1s m the course of development

The carrymg amounts of the Company's assets are rev1ewed for trnpatrment when events or changes tn circumstances tndtcate that the carrymg amount of the fixed asset may not be recoverable If any such mdtcatwn extsts, the asset's recoverable amount 1s estimated

An tmpatrment loss ts recogmsed whenever the carrymg amount of an asset or tts mcome-generatmg umt exceeds tts recoverable amount Impairment losses are recogmsed m the profit and loss account unless tt anses on a prevwusly revalued fixed asset

The recoverable amount of fixed assets 1s the greater of the1r net realisable value and value m use In assessmg value m use, the expected future cash flows are dtscounted to thetr present value usmg a pre-tax dtscount rate that reflects current market assessments of the rate of return expected on an equa\ly nsky mvestment For an asset that does not generate largely mdependent mcome streams, the recoverable amount ts determmed for the mcome-generatmg umt to wh1ch the asset belongs

15

• PEEL AIRPORTS LIMITED

Notes to the Financial Statements (contmued)

l. Accounting Policies (contmued)

Fixed Asset Investments

F1xed asset mvestments m substdtary undertakmgs are stated at cost less provision for tmpatrment Cost represents the aggregate cash constderahon, costs mcurred and etther the fatr or the nommal value of shares Issued

Stocks

Stocks are stated at the lower of cost, mcludmg attnbutable overheads and cap1tahsed mterest, to the Group or estmmted net realisable value

Taxation

Corporation tax payable IS provtded on taxable profits at the current rate

Deferred tax ts recogmsed m respect of all tlmmg differences that have ongmated but not reversed at the balance sheet date where transactions or events that result m an obhgatton to pay more tax m the future or a nght to pay less tax m the future have occurred at the balance sheet date Timmg differences are differences between the Group's taxable profits and Its results as stated m the financ1al statements that anse from the mclus1on of gams and losses m tax assessments m penods d1fferent from those m wh1ch they are recogntsed m the financial statements

A net deferred tax asset 1s regarded as recoverable and therefore recogmsed only when. on the bas1s of all ava1lable evidence, 1t can be regarded as more hkely than not that there w1ll be su1table taxable profits from wh1ch the future reversal of the underlymg ttmmg differences can be deducted

Deferred tax 1s not recogmsed when fixed assets are revalued unless by the balance sheet date there 1s a bmdmg agreement to sell the revalued assets and the gam or loss expected to anse on sale has been recogmsed m the financial statements Deferred tax 1s measured on a non-discounted basts

Related Party Disclosures

The company has taken advantage of the exemptiOn m paragraph 3(c) of Fmanc1al Reportmg Standard No 8 "Related Party Transactwns" and has not d1sclosed deta1ls of transactions w1th fellow wholly owned undertakmgs w1thm the Peel Airports Limited group of compames

Turnover

Airport mcome represents the amounts receivable by the Group m respect of fac1httes and servtces provtded dunng each year, and ts recogrused as the facthttes and servtces are provtded

Property rental mcome and the appropnate allocation of rental premtums are accounted for on an accruals basts

Turnover excludes sales related taxes

Interest

Interest duectly attnbutable to both mvestment properties m the course of development and other fixed assets 1s mcluded m the cost thereof Interest ts capttahsed on a s1mple mterest basts wtthout allowmg for any tax rehef thereon

Leased Assets

Assets acqu1red under finance leases are capttahsed at a value equtvalent to the cost mcurred by the lessor and depreciated over the1r expected useful economic hves Fmance charges thereon are charged to the profit and loss account m the penod m which they accrue The capital element of the future lease payments 1s reflected w1thm creditors

Expenditure on operatmg leases 1s charged d1rectly to the profit and loss account

16

-----------------------------



1. Accounting Policies (contmued)

Pension Costs

The cost of the Group's money purchase pens10n arrangements are charged to the profit and loss account on the basts of contnbutiOns payable m respect of the accountmg penod

The Group also operates defined benefit schemes, which reqUire contnbut10ns to be made to separately admm1stered funds The scheme IS a multi-employer scheme and has been accounted for under the full requirements of FRS 17 "Retirement Benefits" as the Group ts able to tdenttfy tts share of the underlymg assets and habthttes m the scheme on a conststent and reasonable basts

Under FRS 17, defined benefit scheme assets are measured ustng market values Penston scheme hab•l•ttes are measured usmg the proJected umt method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability Any mcrease m the present value of liabilities of the Group's defined benefit pensiOn schemes expected to artse from employee servtce m the penod ts charged agamst operatmg profit The expected return on the schemes assets and the mcrease dunng the penod m the present value of the schemes hab1httes ansmg from the passage of tune are mcluded m other finance mcome Actuanal gams and losses are recogmsed m the Statement of Total Recogmsed Gams and Losses The Group recogmses an asset m respect of any surplus, bemg the excess of the value of the assets m the schemes over the present value of the schemes hab1ht1es, only to the extent that 1t IS able to recover the surplus, e1ther through reduced contnbuuons m the future or from refunds from the schemes

The defined benefit scheme was operated m a subs1dmry undertakmg wh1ch was disposed of dunng the year, and as such there 1s no penswn asset or hab1hty m respect of the scheme at the year end

Government Grants

Government grants recetved m respect of capital expenditure are cred1ted to a deferred mcome account and released to the profit and loss account over the useful economic hfe of the asset to wh1ch they relate

2. Turnover

The total turnover of the company for the year has been denved from Its pnnc1pal actiVIty wholly undertaken m the Umted Kmgdom

3. Notes to the profit and loss account

Loss on ordmary acttvtttes before mterest and taxatiOn IS stated after chargmg/( cred1tmg)

Depreciation on other fixed assets - owned assets Depreciation on other fixed assets - leased assets Impairment losses on revaluatton/wnte down of mvestment propertaes Impairment losses- other fixed assets Amortisation of goodwill Loss on sale of other fixed assets Hue of plant and machmery under operatmg leases Amort1sat10n of government grants Adjustment to past service cost on pensiOn (note 23)

Aud1tors' remuneratiOn Audit of these financml statements Audit of financtal statements of subsidiaries pursuant to legtslatlon Other serv1ces related to taxatwn Other serv1ces

17

31 March 2012 £'000

4,995 340

1,383

112

152 (1,527)

8 58

106 7

31 March 2011 £'000

4,756 314

360 112 454 164

(1,475) (I ,993)

8 42 35 13



4. Other Interest Receivable and Similar Income

Interest recetvable and stmtlar mcome On bank and other deposits

5. Interest Payable and Similar Charges

Interest payable and stmtlar charges On bank loans and overdrafts On loan from group compames Fmance lease and other mterest

6. Other finance income

Other finance mcome Expected return on pensiOn scheme assets Interest on pensiOn scheme habtlttLes

7. Tax on Loss on Ordinary Activities

Analys1s of charge m the perwd

UK corporatiOn tax

Adjustments m respect of pnor years Total current tax credtt Deferred tax

Ongmataon and reversal ofttmmg differences (note 19) Adjustments m respect of pnor years Deferred tax m respect of penston

Total deferred tax Total tax (cred1t) I charge on loss on ordmary aciiVIIIes

Factors affectmg the tax charge for the year

31 March 2012 £'000

25

31 March 2012 £'000

7,820 9,874

140 17 834

31 March 2012 £'000

1,003 (807) 196

31 March 2012 £'000

(84) (84)

(533) (567)

1,100

(84)

31 March 2011 £'000

18

31 March 2011 £'000

7,058 7,140

144 14 342

31 March 2011 £'000

1,490 (1,108)

382

31 March 2011 £'000

5,111

691

5,802

5,802

The current tax charge for the penod IS h1gher (20I I h1gher) than the standard rate of corporatiOn tax m the UK (26%. 20I I 28%) The differences are explamed below

18


Notes to the Fmanc1al Statements (contmued)

7. Tax on Loss on Ordinary Activities (contmued)

Current tax reconcliwtwn

Loss on ordmary acttvtttes before taxat1on

Current tax at 26% (2011 28%)

Effects of Capttal allowances m excess of deprectahon Other ttmmg dtfferences Net disallowable expenditure Movement m tax losses

Adjustments m respect of pnor years Total current tax

Factors that may affect future current and total tax charges

31 March 2012 £'000

(29,009) (7,542)

(1,115) (289)

6,436 2,510

(84) (84)

31 March 2011 £'000

(17,155) (4,803)

(1,420) (34) 256

6,001

The 2012 Budget on 21 March 2012 announced that the UK corporatton tax rate would reduce to 22% by 2014 A reduction m the rate from 26% to 25% (effective from I Apnl2012) was substantively enacted on 5 July 2011, and a further reductiOn to 24% (effecllve from I Apnl2012) was substantively enacted on 26 March 2012 It has not yet been possible to quantify the full anticipated effect of the announced further 2% rate reductton, although thts wtll further reduce the company's future current tax charge as the relevant legtslatton ts substanttvely enacted

The Group has available tradmg losses earned forward at 31st March 2012 of£35,133,000 (2011 £30.872.000)

The Chancellor has also proposed changes to further reduce the mam rate of UK corporatton tax by I% per annum to 22% by I Apnl2014 These reductions have not been substant1vely enacted the changes are not reflected m the above figures

8. Staff Costs

31 March 2012 31 March 2011 £'000 £'000

Staff costs (mcludmg directors) Wages and salanes 13,178 14,235 Socral secunty costs 1,304 1,448 Pension fund service cost (note 23) 248 298 Other ~enswn costs (note 23) 742 741

15,472 !6, 722

The average monthly number of persons employed by the Group durmg the penod, mclustve of executive dtrectors, was as follows

Atrport operational and mamtenance Admtntstratwn

19

31 March 2012 Number

333 70

403

31 March 2011 Number

366 64

430



9. Directors' Remuneration The dtrectors recetved total remuneration from the Group of £259,654 dunng the year (2011 £229,521) and £N1l pens1on contnbutwns were made by the Group on behalf of the d1rectors (20// £6,090) The h1ghest pa1d d~rector rece1ved total remuneratiOn from the group of £259,654 dunng the year (2011 £229,521) and penswn contnbutwns were made by the Group of £N1l (2011 £6,090) No other d1rectors were remunerated for the~r serv1ces to the group

10. Goodwill

Cost: At l Apnl20ll and 31 March 2012 Amortisation:

At l Apnl20ll Amortised m the year At l Apnl2012

Net Book Value:

At 31 March 2012

At 31 March 2011

11. Investment Properties

Cost or Valuation: At l Apnl20ll lmpamnent

At 31 March 2012

Professional Valuation: 31 March 2012 Cost: H1stoncal cost

At 31 March 2012

Valuations

Freehold £'000 6,340 (158)

6,182

6 182

5,047

Group £'000 2,250

1,109 112

1,221

1,029

l 141

Group Long

leasehold Total £'000 £'000

14,275 20,615 (1,225) (l ,383) 13,050 19,232

13 050 19 232

15,000 20,047

The Long leasehold property 1s a 125 year lease w1thm Liverpool A1rport Hotel Lmuted, wh1ch was valued on an open market ex1stmg use bas1s at 31 March 20 ll by A1tch1son Raffety At 31 March 2012 the property was valued by Peel Airports L1m1ted Group's RlCS qualified staff, resultmg m an 1mpa1rment of£1,225,000

Professwnal valuatwns were earned out on all other mvestment propertieS at 31 March 2009 by Kmg Sturge, lnternatwnal Property Consultants and Surveyors, on the bas1s of open market value Th1s was subsequently valued by Peel Airports L1m1ted Group's RI CS qualified staff, resultmg m an 1mpa1rment of£ 158,000

In both mstances, thts ts constdered to be a permanent change to the market value of the mvestment property and therefore has been charged to the profit and loss account m accordance w1th SSAP 19

ln the opm1on of the D1rectors, havmg consulted the Peel Airports Llmtted Group's RlCS qualified staff, the current open market value of such land and mvestment properties IS not matenally d1fferent from theu value mcorporated m the financaal statements

On an h1stoncal cost bas1s these would have been mcluded at an ongmal cost of £20,047,000 (2011 £20,047,000)

20



12. Other Fixed Assets

Land and Asset m Runways, buildings course of lightmgs & freehold constructJon car parks

£'000 £'000 £'000 Cost: At I Apnl2011 182,864 11,516 114,490

Add!tiODS 1,486 639 136 Disposal of subsidiary (25,875) (75) (21,952) Transfers 8,228 (12,080) 584

At 31 March 2012 166,703 93,258

Depreciation: At I Apnl2011 85,749 75 58,183 Charge for the financial year 2,129 1,239 Disposal of subs1d1ary (21,713) (75) (21,421)

At 31 March 2012 66,165 38,001

Net Book Value: At 31 March 2012 100,538 55,257

At 31 March 2011 97,115 11,441 56,307

At 31 March 2012, freehold land wh1ch IS not subJect to depreciatiOn amounts to £15,297,000 (2011

All other fixed assets at 31 March 2011 are held at depreciated h1stoncal cost to the Group

Land and bu1ldmgs mclude mterest m aggregate amountmg to £5,189,000 (2011 £5,/89,000)

Assets Held Under Fmance Leases

Other assets Total

£'000 £'000

65,425 374,295 1,293 3,554

(9,468) (57,370) 3,268

60,518 320,479

51,175 195,182 1,967 5,335

(9,310) (52,519) 43,832 147,998

16,686 172,481 14,250 179,113

£17.660,000)

The net book value at 31 March 2012 of assets held under finance leases amounted to £2,946,000 (2011 £3,338,000) and depreciation provided thereon durmg the penod totalled £340,000 (2011 £288,000)

21



13. Fixed Asset Investments

Cost: At begmnmg of year Addttwns Dtsposals (Note 14)

At end of year

Provisions: At begmnmg of year Released on dtsposal (Note 14)

At end of year

Net book value: At 31 March 2012 At 31 March 2011

Capitalisation of mter-company loan

Investment Investment in subsidiary m associate undertakings

£'000 £'000

71,924 24,285

(32,590) 63,619

37,305 (8,305) 29,000

34,619 34,619

272

272

272 272

Company

Total

£'000

72,196 24,285

(32,590)

63,891

37,305 (8,305)

29,000

34,891 34,891

On 10 February 2012, 34,216,420 shares of £0 01 each m Durham Tees Valley Atrport Ltmtted were tssued The constderatton for these shares was the release of the subStdtary Company's obhgatton to repay £24,285,000 of loans payable to Peel Atrports Ltmtted

Dtsposals of substdtary undertakings

On 10 February 2012, the subStdtary company, Durham Tees Valley Atrport Ltmtted was diSposed of to a Peel group company, Peellnvestments (PAH) Ltmtted The sales pnce was agreed at £1 Thts resulted m a loss on diSposal of £2,225,000 m the Peel Atrport Ltmtted Companys' profit and loss account, bemg the total cost of mvestment (net ofprovtstons) of Durham Tees Valley Atrport Ltmtted at the date of dtsposal Detatls of the loss on dtsposal recorded m the consohdated accounts are m note 14

Subsidiary Undertakings and Joint Assoctates

Detatis of mvestments of the Group m tts pnnctpai substdtary undertakmgs are gtven on page 33

Investment in assoctate At 1 Apni 201 I Share of results for the year

At 31 March 2012

22

Group

Total £'000

274 14

288



14. Loss on disposal of subsidiary

On 10 February 2012, mtercompany loans between Peel Airports Limited and Durham Tees Valley Airport Limited were converted to share capital ThiS mcreased Peel Airports Limited's holdmg m the subsidiary company from 75 0% to 89 3% This transaction Improved the net asset position of DTV A by £24 8m The Improvement was wholly funded by PAL, therefore a loss on mcrease of stake holdmg of £8,867,000 was recogmsed m the Group profit and loss account

The ordmary share capital of Durham Tees Valley Airport Limited, was disposed of on 10 February 2012, resultmg m a loss on disposal m the Group of £342,000 and m the Company of £2,225,000 The operatiOns of the busmess have been classified m the profit and loss account as a d1scontmued operation

Net assets disposed of

F 1xed assets Stocks Debtors Cash Creditors

ConsideratiOn received (£1) Disposal costs

Loss on dtsposal

2012 £'000

4,848 61

1,064 305

(6,254)

24 (-)

318

342

The Durham Tees Valley Airport Lmuted busmess disposed of dunng the year contnbuted an outflow of £2,100,000 (2011 £1,977,000 mflow) to the Group's net operatmg cash flows, received £150 (20JJ £17,825) m respect of net returns on mvestments and semcmg of finance, paid Nil (2011 £Nil) m respect of taxatiOn and utilised £289,000 (2010 £1,172,000) for capital expenditure

15. Stocks

Consumables

23

2012 £'000

136

Grou 2011

£'000

155

•,



16. Debtors

Groue Holding ComJ!an;y 2012 2011 2012 2011

£'000 £'000 £'000 £'000 Trade debtors 4,239 3,208 100 7 Amounts owed by fellow group undertakmgs 61 36 257 Amounts owed by subs1d1ary undertakmgs 56,377 56,309 Other debtors 275 167 24 PreQa~ments and accrued mcome 2,220 4,996 79

6,795 8,407 56,580 56,573

Subsequent to the year end, there has been a rev1s1on to the terms on amounts owed by substdmry undertakmgs Th1s has resulted m £50,000,000 of amounts owed by subs1d1ary undertakmgs not falhng due until 31st December 2017

17. Creditors (amounts falhng due wtthm one year)

Groul! Holding ComJ!an;y 2012 2011 2012 2011

£'000 £'000 £'000 £'000 Bank loans and overdrafts 3,000 Secured bank loans and overdrafts 35,000 Obhgat1ons under finance leases and htre purchase contracts 314 430 Debt fallmg due w1thm one year 3,314 35,430

Trade creditors 3,214 4,448 155 112 Amounts owed to fellow group undertakmgs 278 411 258 Other taxes and soctal secunty 425 598 Other credttors 137 564 Accruals and deferred mcome 6,778 8,567 68 75 Grants 1,508 1,475

15,654 51,493 481 187

The group uses denvatlves to manage tts exposure to mterest rate movements on lts bank borrowmgs

As at 31 March 2012 there were mterest rate swaps open w1th a fa1r value hab1hty of £9,140,473 (20ll £5,197,985) Th1s fa1r value has not been recogn1sed m the financ1al statements as the group has not adopted FRS 26 "Fmanc1al Instruments Recogmt10n and Measurement"

Deta1ls of secunty on the above borrowmgs are d1sclosed m note 18

24



18. Creditors (amounts falhng due after more than one year)

Bank loans and overdrafts Obligations under finance leases and h1re purchase contracts Shareholder loan notes Debt falhng due after more than one year Accruals and deferred mcome Grants

Deta1ls of secunty on the above borrowmgs are disclosed below

Analysis of Group Net Debt

Cred1tors (amounts fallmg due w1thm one year) Credttors (amounts falhng due after more than one year) Gross debt Cash at bank and m hand Groul! net debt

Repayment of Gross Debt

Finance leases: W1thm 1 year 1-2 years 2-5 years Over 5 years

Other debt: On demand 2-5 years

After five years - Secured bank loan and shareholder loan notes

Gross debt

Groul! 2012 2011

£'000 £'000 107,623 71,220

1,358 1,721 109,252 92,879 218,233 165,820

357 322 24,771 27,444

243,361 193,586

Holding Coml!an): 2012 2011

£'000 £'000

109,252 92,879

109,252 92,879

Grou 2012 2011

£'000 £'000 3,314 35,430

218,233 165,820 221,547 201,250

(6,316) (4,519) 215,231 196,731

Grou 2012 2011

£'000 £'000

314 430 556 330 802 979

412

1,672 2,151

35,000 35,000 35,000 35,000

184,875 164,099

219,875 199,099

221,547 201,250

The L1verpool A1rport L1m1ted bank loan of £72,623,000 (2011 £71,220,000) 1s secured by a debenture glVlng a fixed charge over all land and other fixed assets and a floatmg charge over all other assets of the company The loan bears mterest at LIBOR plus applicable margm Interest on £55 7m of the bank loan has been fixed under an Interest rate swap contract at a rate of 3 005% The swap agreement 1s m place unt1121 March 2015 The unut1hsed element of the £86,000,000 bank loan fac1hty as at 31 March 2012 IS £4,352,075 (2011 £14, 779,646) The bank loans are stated net of tssue costs of £2,223,000 (2011 £2,655,000) and a debt serv1ce reserve account of £2,289,000 (2011 £2,237,000) The 1ssue costs are bemg spread m accordance w1th FRS 4 over the term of the finance to wh1ch they relate

25

.,



18. Creditors (amounts fallmg due after more than one year) (contmued)

The secured bank loan of £35,000,000 IS secured by debentures giVIng a first legal charge over freehold land and mvestment properttes, other fixed assets and a floatmg charge over all other assets The mterest on the bank loan has been fixed under an mterest rate swap contract at a rate of 4 895% plus an applicable margm over the hfe of the loan The loan IS due for repayment no later than November 2016 There IS a bank guarantee m place With Barclays Bank Plc, which IS renewable annually

On the bas1s that the guarantee ts m force at the balance sheet date and that tt IS forecast to be m place for at least the next twelve months the loan ts classtfied as a credttor due m greater than one year

Shareholder loan notes are subordmated redeemable loan notes which have been Issued to the shareholders of Peel Airports Limited The loan notes are repayable m 2020 and bear mterest at I 0% per annum Any redemptiOn of the loan notes shall be made pro rata to the holdmgs of the note holders

Obhgattons under finance leases and htre purchase contracts are secured on the assets to whtch they relate

19. Deferred Tax

Deferred taxation m the financtal statements ts provtded/unprovtded as follows

2012 2012 2011 2011 Provided Unprovided Provided UnproVIded

£'000 £'000 £'000 £'000

Accelerated capttal allowances 223 (523) 223 (1,736) Short term t1mmg differences (223) (4,248) (223) (5,109) Losses (8,432) (9,874)

13,203 16,719

In accordance with FRS 19 no asset has been recognised for the potential deferred tax asset of£13,203,000 (2011 £16,719,000) m subs1d1ary compames ansmg from tax losses and other tlmtng d1fferences as the losses are not expected to be utthsed m the foreseeable future

20. Called-up Share Capital

Allotted, Called-up and Fully Paid Equity Share Capital 70,761,005 ordmary shares of£ I each

26

Group and Company

2012 £'000

70,761

Group and Company

2011 £'000

70,761



21. Reserves

At I Apnl2011 Realised dunng the year on dtsposal of mvestment properttes

Retamed loss for the year Actuanal loss relatmg to the pensiOn fund

31 March2012

At I Apnl2011 Retamed loss for the financtal year

At31 March2012

22. Minority Interests

At I Apnl2011 ProportiOn of loss on ordmary acttvtttes after taxation

Reahsed dunng the year on dtsposal of mmonty mterest

At31 March2012

23. Pension Fund

Defined Contrrbution Pension Scheme

Group

Profit Revaluation and loss

reserve account £'000 £'000 1,293 (94,418) (157) !57

(28,375) (1,999)

I ,136 (124,635)

Holding Company Profit

and loss account

£'000 (72,263) (15,333) (87,596)

Group £'000

(8,317) (550)

8,867

The group operates a defined contnbutwn pensiOn scheme The penston cost charge for the penod represents contnbutlon payable by the Group to the scheme and amounted to £479,000 (2011 £404,000)

Contnbuttons amountmg to £64,232 (2011 £63.290) were payable to the scheme and are tncluded m credttors

27



23. Pension Fund (contmued)

Defined Benefit Scheme

Durham Tees Valley Airport Limited IS admitted to a local government pension fund which IS a defined benefits pensiOn fund based on final pensiOnable pay and which IS closed to new entrants of that subSidiary undertakmg The assets of the schemes are held separately from those of the Group Durham Tees Valley Airport Limited was disposed of on 10 February 2012 The latest actuanal valuatiOn as at 31 March 20 I 0 has been adjusted to reflect the positiOn at 31st December 2011, by a qualified mdependent actuary (m accordance with FRS 17), pnor to the disposal of the subsidiary

2012 2011 2010

The major assumptions used by the actuary were: % % %

Rate of mcrease m salanes 4 50 5 00 4 35 Rate of mcrease m penston payment 2 20 2 70 3 60 Dtscount rate 4 70 5 50 5 50

RPI mcrease 3 00 3 50 3 60

CPI mcrease 2 20 2 70 N/A

Mortality assumptions:

Investtgatwns have been earned out wtthm the past three years mto the mortahty expenence of the Group's defined benefit schemes These mvesttgatwns concluded that the current mortality assumptions mclude suffictent allowance for future tmprovements m mortality rates The assumed hfe expectatiOns on rettrement at age 65 are·

2012 years

Retlrmg today Males 19 0 Females 23 I

Retmng m 20 years Males 210 Females 25 0

Amounts recogmsed m the profit and loss account m respect of these defined benefit schemes are as follows 2012

£'000

Current servtce cost Interest cost Expected rerum on scheme assets Past serv•ce cost

248 807

(1,003)

52

Valuation at 2011

years

18 9 23 0

20 9 24 9

20il £'000

298 1,108

(I ,490) (1,933) (2,017)

In July 2010, the government announced tts mtentwn that future revaluation pensiOn mcrease orders would be measured by the Consumer Pnces Index, rather than the Retatl Pnces Index and the trustees announced a change m benefit to reflect thts The Impact of this change has been reflected m the actuanal assumptiOns apphed at 31 March 2011 and a gam of £1,933,000 was recogmsed as a result

Actuarial gams and losses have been reported m the statement of total recogmsed gams and losses

The actual return on scheme assets was £360,000 (20/ I £/,610.000) The cumulative amount of actuanal gams and losses recognised m the STRGL smce adoption of FRSI7 IS £1,080,000 net loss (20JJ £9/9,000 net gam)

28

h

'




The amount mcluded m the balance sheet ansmg from the Group's obhgattons m respect of 1ts defined benefit retirement benefit schemes ts as follows

Present value of defined benefit obhgahons Fatr value of scheme assets

Defictt m scheme Related deferred tax asset

(Ltab1hty) I asset recogmsed m the balance sheet

Movements m the present value of defined benefit obligations were as follows

At I Apnl Servtce cost Interest cost Contnbut10ns from scheme members Actuanal loss I (gam) Benefits pa1d Past servtce cost D1sposal of subs1d1ary

At 31 March

29

2012 £'000

2012 £'000

19,819 248 807

82 1,902 (736)

(8) (22,114)

20ll £'000

(19,819) 20,054

235

(61)

174

20ll £'000

22,383 298

1,108 109

(597) (1,538) (1,933)

(I!)

19,819




Movements m the fatr value of scheme assets were as follows

At I Apnl Expected return on scheme assets Actuanal (loss) I gam Contnbutlons from the sponsormg compames Contnbutrons from scheme members Benefits patd Dtsposal of substdtary

At 31 March

2012 2011 £'000 £'000

20,054 1,003 (799) 263

82 (744)

(19,859)

19,439 1,490

152 413 109

(1,549)

20,054

The analysts of the scheme assets and the expected rate of return at the balance sheet date were as follows

Equtty Instruments Index-hnked gtlts Corporate bonds Property Cash

The five-year htstory of expenence adjustments IS as follows 2012

£'000

Present value of defined benefit obhgatwns

Fatr value of scheme assets

Surp1us/(Defictt) m the scheme

Expenence adJustments on scheme habJlittes Amount

Expenence adJustments on scheme assets Amount

30

2011 £'000

(19,819)

20,054

235

767

152

2010 £'000

(22,383)

19,439

(2,944)

4,354

Fatr value of assets 2012

%

2009 £'000

(15,627)

14,028

(I ,599)

698

(3,884)

2011 %

8400 600 2 00 400 400

10000

2008 £'000

(17,081)

16,995

(86)

(587)

(1,712)

~, . PEEL NRPORTS LIMITED


24. Notes to the Group Cash Flow Statement

(a) Cash flow from operating activities Group operatmg loss Non-cash adJustments - non-cash movements on pensiOn - deprectatlon and amounts wntten offtangtble fixed assets - other non-cash movements m fixed assets

grant release - amorttsatton of goodwtll - goodwtlltmpamnent- mcrease m stake Movement m stocks Movement m debtors Movement m credttors

(b) Returns on investments and servicing of finance Interest recetved Interest patd Fmance lease mterest patd

(c) Capital expenditure and financial investment Payments to acqutre tangtble fixed assets Recetpts from sales of tangtble fixed assets

(d) Fmancing New loans Grants ( repatd) I recetved Repayment of finance lease credttor

(e) Dtsposals

Cash dtsposed of w1th substdtanes

(I) Analysis of Movement m Group Net Debt

Cash at bank (accesstble wtthm 24 hours)

Overdrafts Debt due wtthm one year (excludmg overdrafts) Debt due after more than one year

Net debt

31

31 March 2012 £'000

(11,068)

(15) 6,718

(1,337) (1,527)

112 8,867

(42) 548 955

3,211

25 (7,388)

(140) (7,503)

(3,554)

(3,554)

7,471 (44)

(479) 6,948

(305)

1 April Cash 2011 flow

£'000 £'000

4,519 1,797

(3,000) (35,430) 116

(165,820) (7,107)

(196,731) (8,194)

31 March 2011 £'000

(2,834)

(2,048) 5,430

837 (1,475)

112

288 2,990 1,947 5,247

18 (7,433)

(144)

(7,559)

(10,776) 67

(10,709)

16,564 987

(394) 17,157

(liS)

Other 31 March non cash 2012 changes £'000

£'000

6,316

(3,000) 35,000 (314)

(45,306) (218,233)

( 10,306) (215,231)

'I •



25. Financial commitments

2012 2011 £'000 £'000

Operatmg leases whtch exptre

Wtthm one year 83 109 Between one and two years 82 38 Between two and five years 5

165 152

26. Contingent Liabilities

At 31 March 2012, there ts a contmgent habthty m respect of the Durham Tees Valley Atrport Ltmtted defined benefit pensiOn scheme of £Ntl (201 1 £338,000)

27. Related Parties

Dunng the year the company entered mto the followmg transactions wtth fellow substdmry compames of the group The transactions were pnced on an arm's length basts

Durham Tees Valley Atrport Ltmtted Vantage Atrport Group (Cyprus) Ltmtted Vantage Atrport Group Ltmtted Peel Investments (PAH) Ltmtted Peel Adverttsmg Ltmtted Peel Electnctty Servtces Ltmtted Peel Utilities Servtces Ltmtted Peel Letsure Operations No l Ltmtted Peel Management Ltmtted Peel Conunumcattons Ltmtted RHADS Hotels Ltmtted Peel Holdmgs (Land & Properttes) Ltmtted Peel Land & Property Investments Ltmtted Peel Land & Property Ports No3 Ltmtted Peel Water Servtces Ltm1ted Peel Investments (North) Ltmtted

32

Sales of Goods/

Services £'000

130 285

50

11 221

(Purchase) of Goods/

Services £'000

(1,376) (6,390) (3,456)

(28) (446)

(98) (3)

(49) (45)

(2) (6)

(4) (2)

(25)

Balances Recetvable/

(payable) £'000

112 (229)

(10,588) (5,713)

(105) (63)

15 (184)

( 15) (I) (3) 17

(5)

(30)

f



28. Ultimate Holding Company

The largest group of compames, of whiCh the company ts a member, whtch produces consolidated accounts ts Vantage Atrport Group Ltmtted (formerly YVR Atrports Servtees Ltmtted) (regtstered number 0819480), a company mcorporated m Canada, whose regtstered office ts 2900- 550 Burrard Street, Vancouver, BC V6C OA3

The smallest group of compames, of whtch the company ts a member, that produces consolidated accounts, ts Peel Atrports Ltmited, a company mcorporated m England Its Group accounts are available from the Company Secretary, Ltverpool Atrport, Ltverpool, L24 l YD

Subsidtary Undertakings

The pnnctpal tradmg subSidtary undertakmgs as at 31 March 2012, all of whtch were wholly owned unless otherwtse stated were as follows

Incorporated

England & Wales England & Wales

England & Wales

Company

Ltverpool Atrport Ltmtted* Doncaster Sheffield Atrport Ltmtted*

Ltverpool Atrport Hotel Ltmtted**

• l 00% owned by Peel Atrports Ltmtted

•• l 00% owned by Ltverpool Atrport Ltmtted

Principal activities

Operator of a regtonal atrport Operator of a regtonal atrport and property mvestment Property mvestment

A fullltst of substdtary undertakmgs wtll accompany the next Annual Return to be filed wtth the Regtstrar of Compames

33

peel airports directors' report & financial statements (2012)

Documents