Financial Statements - British Airways
British Airways 2008/09 Annual Report and Accounts / 75OverviewFinancial statementsOur businessCorporate governanceFinancial statements
76 / British Airways 2008/09 Annual Report and AccountsIndependent auditor’s report to themembers of British Airways PlcWe have audited the Group and Parent Company financialstatements (the ‘financial statements’) of British Airways Plcfor the year ended March 31, 2009, which comprise the Groupconsolidated income statement, the Group and Parent Companybalance sheets, the Group and Parent Company cash flowstatements, the Group and Parent Company statements ofchanges in equity and the related notes 1 to 39. These financialstatements have been prepared under the accounting policies setout therein. We have also audited the information in the directors’remuneration report that is described as having been audited.This report is made solely to the Company’s members, as a body,in accordance with Section 235 of the Companies Act 1985.Our audit work has been undertaken so that we might state tothe Company’s members those matters we are required to state tothem in an auditor’s report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibilityto anyone other than the Company and the Company’s membersas a body, for our audit work, for this report, or for the opinionswe have formed.Respective responsibilities of directors and auditorsThe directors’ responsibilities for preparing the annual report,the directors’ remuneration report and the financial statements inaccordance with applicable United Kingdom law and InternationalFinancial Reporting Standards (IFRS) as adopted by the EuropeanUnion are set out in the statement of directors’ responsibilities.Our responsibility is to audit the financial statements and the partof the directors’ remuneration report to be audited in accordancewith relevant legal and regulatory requirements and InternationalStandards on Auditing (UK and Ireland).We report to you our opinion as to whether the financial statementsgive a true and fair view and whether the financial statements andthe part of the directors’ remuneration report to be audited havebeen properly prepared in accordance with the Companies Act1985 and, as regards the Group financial statements, Article 4 ofthe IAS Regulation. We also report to you whether in our opinionthe information given in the directors’ report and business reviewis consistent with the financial statements.In addition, we report to you if, in our opinion, the Company hasnot kept proper accounting records, if we have not received allthe information and explanations we require for our audit, or ifinformation specified by law regarding directors’ remunerationand other transactions is not disclosed.We review whether the corporate governance statement reflectsthe Company’s compliance with the nine provisions of the 2006Combined Code specified for our review by the Listing Rules ofthe Financial Services Authority, and we report if it does not. Weare not required to consider whether the Board’s statements oninternal control cover all risks and controls, or form an opinion onthe effectiveness of the Group’s corporate governance proceduresor its risk and control procedures.We read other information contained in the annual report andconsider whether it is consistent with the audited financialstatements. The other information comprises only the directors’report and business review, the unaudited part of the report ofthe Remuneration Committee, the Chairman’s statement, theChief Executive’s review, the Chief Financial Officer’s report andthe corporate governance statement. We consider the implicationsfor our report if we become aware of any apparent misstatementsor material inconsistencies with the financial statements. Ourresponsibilities do not extend to any other information.Basis of audit opinionWe conducted our audit in accordance with International Standardson Auditing (UK and Ireland) issued by the Auditing PracticesBoard. An audit includes examination, on a test basis, of evidencerelevant to the amounts and disclosures in the financial statementsand the part of the directors’ remuneration report to be audited.It also includes an assessment of the significant estimates andjudgements made by the directors in the preparation of the financialstatements, and of whether the accounting policies are appropriateto the Group’s and Company’s circumstances, consistently appliedand adequately disclosed.We planned and performed our audit so as to obtain all theinformation and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonableassurance that the financial statements and the part of thedirectors’ remuneration report to be audited are free from materialmisstatement, whether caused by fraud or other irregularity orerror. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financialstatements and the part of the report of the RemunerationCommittee to be audited.OpinionIn our opinion: The Group financial statements give a true and fair view, inaccordance with IFRS as adopted by the European Union, of thestate of the Group’s affairs as at March 31, 2009, and of its lossfor the year then ended; The Parent Company financial statements give a true and fairview, in accordance with IFRS as adopted by the EuropeanUnion as applied in accordance with the provisions of theCompanies Act 1985, of the state of the Parent Company’saffairs as at March 31, 2009; The financial statements and the part of the report of theRemuneration Committee to be audited have been properlyprepared in accordance with the Companies Act 1985 and,as regards the Group financial statements, Article 4 of the IASRegulation; and The information given in the directors’ report and businessreview is consistent with the financial statements.Ernst & Young LLPRegistered auditorLondonMay 21, 2009
British Airways 2008/09 Annual Report and Accounts / 77Group consolidated income statementFor the year ended March 31, 20092008RestatedTraffic revenuePassengerCargo7,8366737,600615Other revenue8,5094838,215543 millionNote38,9928,758Employee costs (excluding restructuring)RestructuringDepreciation, amortisation and impairmentAircraft operating lease costsFuel and oil costsEngineering and other aircraft costsLanding fees and en route chargesHandling charges, catering and other operating costsSelling costsCurrency differencesAccommodation, ground equipment and IT 92682,05545152897736165769,2127,88044Total expenditure on operations(Loss)/profit before oss)/profit after tax from continuing operationsLoss from discontinued operations (after tax)5–(2)(358)726Attributable to:Equity holders of the parentMinority 6pEarnings/(loss) per shareContinuing operations:BasicDiluted1313Discontinued p(0.2)p1313(32.6)p(32.6)p61.9p61.4pFinancial statements(Loss)/profit after taxCorporate governanceOperating (loss)/profitFuel derivative (losses)/gainsFinance costsFinance incomeNet financing (expense)/income relating to pensionsRetranslation charges on currency borrowingsProfit on sale of property, plant and equipment and investmentsShare of post-tax profits in associates accounted for using the equity methodNet charge relating to available-for-sale financial assetsOur businessRevenueOverviewGroup2009
78 / British Airways 2008/09 Annual Report and AccountsBalance sheetsAt March 31, 2009Group millionNon-current assetsProperty, plant and llLanding rightsSoftwareInvestments in subsidiariesInvestments in associatesAvailable-for-sale financial assetsEmployee benefit assetsDerivative financial instrumentsPrepayments and accrued incomeTotal non-current assetsCurrent assets and receivablesInventoriesTrade receivablesOther current assetsDerivative financial instrumentsOther current interest-bearing depositsCash and cash equivalentsTotal current assets and receivablesTotal assetsShareholders’ equityIssued share capitalShare premiumInvestment in own sharesOther reservesTotal shareholders’ equityMinority interestTotal equityNon-current liabilitiesInterest-bearing long-term borrowingsEmployee benefit obligationsProvisions for deferred taxOther provisionsDerivative financial instrumentsOther long-term liabilitiesTotal non-current liabilitiesCurrent liabilitiesCurrent portion of long-term borrowingsTrade and other payablesDerivative financial instrumentsCurrent tax payableShort-term provisionsTotal current liabilitiesTotal equity and liabilitiesWillie WalshKeith WilliamsMay 21, 811,938
British Airways 2008/09 Annual Report and Accounts / 79Cash flow statementsFor the year ended March 31, 2009 millionNoteCash flow from operating activitiesOperating (loss)/profitOperating loss from discontinued operationsDepreciation, amortisation and 15171051720211173458536356Net cash used in investing activities(257)(42)(252)(213)Cash flows from financing activitiesProceeds from long-term borrowingsRepayments of borrowingsPayment of finance lease liabilitiesExercise of share optionsDividends paidDistributions made to holders of perpetual )(411)1(58)172(57)(355)4Net cash used in financing activities(165)(262)(146)(236)Net decrease in cash and cash equivalentsNet foreign exchange differencesCash and cash equivalents at April 9433Cash and cash equivalents at March 3125Corporate governanceCash flow from investing activitiesPurchase of property, plant and equipmentPurchase of intangible assetsPurchase of shares in associated undertakingsProceeds from sale of other investmentsProceeds from sale of property, plant and equipmentInsurance recoveries for write-off of Boeing 777 aircraftPurchase of subsidiary (net of cash acquired)Cash inflow from disposal of subsidiary companyInterest receivedDividends receivedDecrease in other current interest-bearing deposits(165)694Net cash flow from operating activities2008Restated878(2)692(220)Cash generated from operationsInterest paidTaxationCompany2009Our businessOperating cash flow before working capital changesMovement in inventories, trade and other receivablesMovement in trade and other payables and provisionsPayments in respect of restructuringCash payment to NAPS pension schemePayment to DOJ in settlement of competition investigationOther non-cash movement2008RestatedOverviewGroup2009(14)Financial statements
80 / British Airways 2008/09 Annual Report and AccountsStatements of changes in equityFor the year ended March 31, 2009GroupInvestmentin ownsharesOtherreserves(note miumAt April 1, 2008Adoption of IFRIC 13Adoption of IFRIC )235At April 1, 2008 (Restated)Loss for the yearExchange differences and other movementsNet movement on cash flow hedgesExercise of share optionsCost of share-based paymentPurchase of own sharesShare of other movements in reserves of associatesHeld-to-maturity investments marked-to-marketAvailable-for-sale financial assets – gains recycledto the income 38(988)200173,262(358)38(988) million2(1)(26)(5)Total income and expense for the yearNet dividends (note 14)Distributions made to holders of perpetual securitiesAt March 31, erreserves(note (56)(17)1,846For the year ended March 31, 2008GroupInvestmentin ownsharesIssuedcapitalSharepremiumAt April 1, 2007Adoption of IFRIC 13Adoption of IFRIC )199At April 1, 2007 (Restated)Profit for the yearExchange differences and other movementsNet movement on cash flow hedgesCost of share-based paymentTax effect of share-based paymentDeferred tax – rate change adjustmentShare of other movements in reserves of associatesNet fair value adjustment on available-for-salefinancial 7)6(2)200142,408726241193(7)6(2)(5)(5) millionTotal income and expense for the yearIssue of sharesDistributions made to holders of perpetual securitiesAt March 31, 2008 04(14)288937(10)Totalequity8644(14)3,262
British Airways 2008/09 Annual Report and Accounts / 81Otherreserves(note 35)IssuedcapitalSharepremiumAt April 1, 2008Adoption of IFRIC 13Adoption of IFRIC 14288937(10)1,344(135)2352,559(135)235At April 1, 2008 (Restated)Profit for the yearExercise of share optionsCost of share-based paymentPurchase of own sharesNet movement on cash flow hedges288937(10)1,444(389)(2)12,659(389) million2At March 31, r the year ended March 31, 2008Our businessTotal income and expense for the yearNet dividends (note tin ownsharesCompanyInvestmentin ownsharesOtherreserves(note 35)SharepremiumAt April 1, 2007Adoption of IFRIC 13Adoption of IFRIC 14288933(10)683(136)1991,894(136)199At April 1, 2007 (Restated)Profit for the yearCost of share-based paymentTax effect of share-based paymentsDeferred tax – rate change adjustmentNet movement on cash flow 9841,4442,659Total income and expense for the yearIssue of sharesAt March 31, 2008 (Restated)4288937(10)TotalequityCorporate governanceIssuedcapital millionFinancial statements
82 / British Airways 2008/09 Annual Report and AccountsNotes to the accounts1 Authorisation of financial statementsand compliance with IFRSsThe Group’s and Company’s financial statements for the yearended March 31, 2009, were authorised for issue by the Boardof Directors on May 21, 2009, and the balance sheets weresigned on the Board’s behalf by Willie Walsh and Keith Williams.British Airways Plc is a public limited company incorporated anddomiciled in England and Wales. The Company’s ordinary sharesare traded on the London Stock Exchange.The Group has prepared its consolidated financial statementsin accordance with International Financial Reporting Standards(IFRSs)* as adopted by the EU. IFRSs as adopted by the EU differin certain respects from IFRSs as issued by the InternationalAccounting Standards Board (IASB). However, the consolidatedfinancial statements for the periods presented would be nodifferent had the Group applied IFRSs as issued by the IASB.References to ‘IFRS’ hereafter should be construed as referencesto IFRSs as adopted by the EU. The principal accounting policiesadopted by the Group and by the Company are set out in note 2.The Company has taken advantage of the exemption providedunder Section 230 of the Companies Act 1985 not to publish itsindividual income statement and related notes.* For the purposes of these statements, IFRS also includes International AccountingStandards (IASs).2 Summary of significant accountingpoliciesBasis of preparationThe basis of preparation and accounting policies set out in thisReport and Accounts have been prepared in accordance withthe recognition and measurement criteria of IFRS as issued bythe IASB and with those of the Standing Interpretations issued bythe International Financial Reporting Interpretations Committee(IFRIC) of the IASB.The financial statements for the prior period includereclassifications that were made to conform to the current periodpresentation. The amendments have no material impact on thefinancial statements.These financial statements have been prepared on a historical costconvention except for certain financial assets and liabilities,including derivative financial instruments and available-for-salefinancial assets that are measured at fair value. The carrying valueof recognised assets and liabilities that are subject to fair valuehedges are adjusted to record changes in the fair valuesattributable to the risks that are being hedged.The Group’s and Company’s financial statements are presented inpounds sterling and all values are rounded to the nearest millionpounds ( million), except where indicated otherwise.Basis of consolidationThe Group accounts include the accounts of the Company andits subsidiaries, each made up to March 31, together with theattributable share of results and reserves of associates, adjustedwhere appropriate to conform with the Group’s accounting policies.Subsidiaries are entities controlled by the Group. Control existswhen the Group has the power either directly or indirectly togovern the financial and operating policies of the entity so as toobtain benefit from its activities. Subsidiaries are consolidatedfrom the date of their acquisition, which is the date on which theGroup obtains control, and continue to be consolidated until thedate that such control ceases.All intra-group account balances, including intra-group profits, havebeen eliminated in preparing the consolidated financial statements.Minority interests represent the portion of profit or loss and netassets in subsidiaries that are not held by the Group and arepresented separately within equity in the consolidated balance sheet.RevenuePassenger and cargo revenue is recognised when the transportationservice is provided. Passenger tickets net of discounts are recordedas current liabilities in the ‘sales in advance of carriage’ accountuntil recognised as revenue. Unused tickets are recognised asrevenue using estimates regarding the timing of recognition basedon the terms and conditions of the ticket and historical trends.Other revenue is recognised at the time the service is provided.Commission costs are recognised at the same time as the revenueto which they relate and are charged to operating expenditure.Revenue recognition – mileage programmesThe Group operates two principal loyalty programmes. The airline’sfrequent flyer programme operates through the airline’s ‘ExecutiveClub’ and allows frequent travellers to accumulate ‘BA Miles’mileage credits that entitle them to a choice of various awards,primarily free travel. The fair value attributed to the awardedmileage credits is deferred as a liability and recognised as revenueon redemption of the miles by the participants to whom the milesare issued. The accounting policy for mileage revenue recognitionwas amended during the year in line with the adoption of IFRIC13. Refer to ‘Impact of new International Financial ReportingStandards’ note in this section for impact of the change in policy.In addition, ‘BA Miles’ are sold to commercial partners to use inpromotional activity. The fair value of the miles sold is deferredand recognised as revenue on redemption of the miles by theparticipants to w
76 / British Airways 2008/09 Annual Report and Accounts Independent auditor’s report to the members of British Airways Plc We have audited the Group and Parent Company financial statements (the ‘financial statements’) of British Airways Plc for the year ended March 31, 2009, which comprise the Group
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Statements of Financial Position 104 Statements of Profit or Loss 106 Statements of Comprehensive Income 107 Statements of Changes in Equity 108 . kulula.com, as well as under the British Airways livery, as part of a licence agreement with British Airways PLC. kulula.com is the market leader in affordable, easily accessible air travel and .
Overview of the Financial Statements The Village's basic financial statements are comprised of three components: 1) entity-wide financial statements; 2) fund financial statements; and 3) notes to the basic financial statements. This report also contains supplementary information in addition to the basic financial statements themselves.
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British Airways Plc (‘British Airways’, ‘BA’, ‘the airline’ or ‘the Group’) is the UK’s largest international scheduled airline and one of the world’s leading global airlines. The Group’s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
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