TIDMDNA
RNS Number : 8528T
Doric Nimrod Air One Limited
25 November 2013
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION
CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR
SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY
JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS
UNLAWFUL.
DORIC NIMROD AIR ONE LIMITED
Announcement of Half Yearly Financial Report
25 November 2013
Doric Nimrod Air One Limited (the "Company"), a
Guernsey-domiciled company, is pleased to present its Half-Yearly
Financial Report in respect of the period from 1 April 2013 to 30
September 2013.
Doric Nimrod Air One Limited
SUMMARY INFORMATION
Company Facts
Listing LSE and CISX
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Ticker DNA
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Share Price 118.5p (as at 30 September 2013)
118.5p (as at 21 November 2013)
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Market Capitalisation GBP 50 million (as at 30 September
2013)
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Aircraft Registration A6-EDC
Number
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Current/Future Anticipated Future dividends are expected to be
Dividend 2.25p per quarter per share (9p per
annum) until the aircraft lease terminates.
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Dividend Payment Dates April, July, October, January
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Currency GBP
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Launch Date/Price 13 December 2010 / 100p
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Incorporation Guernsey
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Asset Manager Doric GmbH
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Corp & Shareholder Advisor Nimrod Capital LLP
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Administrator Anson Fund Managers Ltd
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Auditor Deloitte LLP
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Market Makers Shore Capital Ltd/
Winterflood Securities Ltd/
Jefferies International Ltd/
Numis Securities Ltd
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SEDOL, ISIN B4MF389, GG00B4MF3899
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Year End 31 March
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Stocks & Shares ISA Eligible
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Website www.dnairone.com
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Company Overview
Doric Nimrod Air One Limited (LSE:DNA) ("DNA" or the "Company")
is a Guernsey company incorporated on 8 October 2010, and admitted
to the Official List of the Channel Islands Stock Exchange ("CISX")
and to trading on the Specialist Fund Market of the London Stock
Exchange ("SFM") on 13 December 2010.
The Company's total issued share capital currently consists of
42,450,000 Ordinary Preference Shares ("Shares") which were
admitted to trading at an issue price of 100 pence per Share. As at
21 November 2013, the latest practicable date prior to publication
of this report, the Shares are trading at 118.5 pence per
Share.
Investment Objectives and Policy
The Company's investment objective is to obtain income returns
and a capital return for its shareholders (the "Shareholders") by
acquiring, leasing and then selling a single aircraft. The Company
purchased one Airbus A380-861 Aircraft, manufacturers' serial
number 016 (the "Asset") in December 2010, in respect of which it
simultaneously entered into an operating Lease (the "Lease") with
Emirates Airlines ("Emirates"), a national carrier owned by The
Investment Corporation of Dubai based in Dubai, United Arab
Emirates.
Distribution Policy
The Company aims to provide its Shareholders (the
"Shareholders") with an attractive total return comprising income,
from distributions through the period of the Company's ownership of
the Asset, and capital, upon the sale of the Asset.
The Company will receive income from the lease rentals paid by
Emirates pursuant to the Lease. It is anticipated that income
distributions will be made quarterly, subject to compliance with
applicable laws and regulations. The Company currently targets a
distribution of 2.25 pence per Share per quarter.
There can be no guarantee that dividends will be paid to
Shareholders and, if dividends are paid, as to the timing and
amount of any such dividend. There can also be no guarantee that
the Company will, at all times, satisfy the solvency test required
to be satisfied pursuant to section 304 of the Companies (Guernsey)
Law 2008 (the "Guernsey Law") enabling the Directors to effect the
payment of dividends.
Performance Overview
All payments by Emirates, have to date been made in accordance
with the terms of the Lease.
During the period under review and in accordance with the
Distribution Policy DNA declared two interim dividends of 2.25
pence per Share and after the reporting period one dividend of 2.25
pence per Share.
Future dividend payments are anticipated to continue to be
declared and paid on a quarterly cycle and as per the Prospectus
are targeted at 2.25 pence per Ordinary Preference Share per
quarter subject to compliance with applicable laws and
regulations.
Doric Nimrod Air One Limited
CHAIRMAN'S STATEMENT
I am very pleased to present shareholders with the Company's
half yearly financial report, covering the period from 1 April 2013
until 30 September 2013.
Notwithstanding the continued uncertainty within the global
economy, and international markets, I am glad to report that the
Company has performed well. During the period, and in line with the
targeted distribution policy outlined in the Company's Prospectus,
the Company has declared two interim dividends of 2.25p per
Ordinary Preference Share, and a further dividend of 2.25 pence per
Ordinary Preference Share after the reporting period. Future
dividend payments are anticipated to be declared and paid on a
quarterly basis.
The Company's 42,450,000 shares were admitted to trading on the
Specialist Fund Market of the London Stock Exchange plc and listed
on the Channel Islands Stock Exchange on 13 December 2010. The
Company's investment objective is to obtain income returns and a
capital return for its shareholders by acquiring, leasing and then
selling a single aircraft. The Company purchased one Airbus
A380-861, aircraft manufacturer's serial number 016, which it
leased to Emirates Airlines, the national carrier owned by the
Investment Corporation of Dubai, based in Dubai, United Arab
Emirates.
A senior secured finance facility provided by Westpac, in the
amount of $122m provided the monies along with the placing proceeds
for the acquisition of the aircraft. On the purchase of the plane,
the Company entered into a lease with Emirates for an initial term
of 12 years in 2010, with fixed lease rentals for the duration. The
debt portion of the funding will be fully amortised over the
12-year term of the lease, with the aim of leaving the aircraft
unencumbered on the conclusion of the lease.
Both the aircraft and the lessee performed well over the period
in a market of growing passenger demand, particularly in the Asian
sub-continent. Emirates continues to report strong performance,
greatly aided by the airline's ability to adjust flight schedules
swiftly, and redeploy aircraft about the network, thus optimising
revenue and recently announced an order for 50 additional Airbus
A380 aircraft at the opening of the Dubai Airshow 2013.
The lease payments received by the Company from Emirates cover
repayment of the debt, as well as income to pay dividends to
shareholders. Emirates bears all costs (including maintenance,
repair and insurance) relating to the aircraft, during the lifetime
of the lease. The aircraft is equipped with four Engine Alliance
7200 power plants. During the period under review one of the
Company's engines has been replaced by the manufacturer Engine
Alliance, at no cost to the Company, following a previous problem
with the original engine. The Company's Asset Manager, Doric GmbH,
continues to monitor the lease and reports regularly to the Board.
Nimrod Capital LLP, the Company's Placing and Corporate and
Shareholder Advisory Agent, continues to liaise between the Board
and shareholders, which includes distribution of quarterly
factsheets and the interim management statements.
Foreign exchange has influenced the financial statements as,
under the requirements of International Financial Reporting
Standards, the items in the Statement of Financial Position are
translated into Sterling from US Dollars at varying foreign
exchange rates, either the year end rate or historic transaction
rate, which will inevitably produce foreign exchange differences
(profits for the period ended 30 September 2013). In reality those
lease rentals received in US Dollars are used to pay the loan
repayments due, also in US Dollars. Both US Dollars lease rentals
and loan repayments are fixed and are for similar sums and similar
timings. The matching of lease rentals to settle loan repayments
therefore mitigates risks caused by foreign exchange
fluctuations.
In addition to this the rental income is spread evenly over the
term of each of the leases, rather than the rentals being accounted
for as actually received into the Company's bank account.
Furthermore, interest on borrowings is recognised using the
effective interest rate method, resulting in higher charges in
earlier periods when the outstanding principal balances are
greater. The loan repayments are, in reality, constant over much of
the lease term, reducing in the final two years.
On behalf of the Board, I would like to thank all shareholders
for their continued support of the Company.
Charles Wilkinson
Doric Nimrod Air One Limited
INTERIM MANAGEMENT REPORT
from 1 April 2013 to 30 September 2013 (the "Period")
A description of important events that have incurred during the
Period, their impact on the performance of the Company as shown in
the financial statements and description on the principle risks and
uncertainties of the remaining six months of the annual financial
year is given within the Chairman's Statement and the Notes to the
Financial Statements contained on pages 18 to 36 and is
incorporated here by reference.
There were no material related party transactions which took
place in the period, other than those disclosed at Note 20 of the
Notes to the Financial Statements.
Going Concern
The Company's principal activities are set out within the
Company Overview on page 2. The financial position of the Company
is set out on pages 14 to 17 In addition, Note 17 to the financial
statements includes the Company's objectives, policies and
processes for managing its capital; its financial risk management
objectives and its exposures to credit risk and liquidity risk. The
Loan interest rate has been fixed and the fixed rental income under
the Operating Lease means that the rent should be sufficient to
repay the Loan and provide surplus income to pay for the Company's
expenses and permit payment of dividends.
After making reasonable enquiries, and as described above the
Directors have a reasonable expectation that the Company has
adequate resources to continue in its operational existence for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis of accounting in preparing these interim financial
statements.
Responsibility Statements
The Board of directors jointly and severally confirm that, to
the best of their knowledge:
(a) The financial statements, prepared in accordance with
International Financial Reporting Standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company; and
(b) This Interim Management Report includes or incorporates by reference:
a. An indication of important events that have occurred during
the Period, and their impact on the financial statements;
b. a description of the principal risks and uncertainties for
the remaining six months of the financial year; and
c. confirmation that there were no related party transactions in
the Period that have materially affected the financial position or
the performance of the Company during that period.
Charles Wilkinson
Chairman
Doric Nimrod Air One Limited (the "Company")
DIRECTORS
Charles Edmund Wilkinson - Chairman (Age 70)
Charles Wilkinson is a solicitor who retired from Lawrence
Graham LLP in March 2005. While at Lawrence Graham he specialised
in corporate finance and commercial law, latterly concentrating on
investment trust and fund work.
Charles is currently chairman of Doric Nimrod Air Three Limited,
Chairman of the Audit Committee of Doric Nimrod Air Two Limited,
and a director of Premier Energy and Water Trust PLC (a listed
investment trust), and of Landore Resources Ltd, a Guernsey based
mining exploration company.
Norbert Bannon (Age 64)
Norbert Bannon is a director of the Irish and UK regulated
subsidiaries of a major Canadian bank and is the Chairman of a GBP1
billion UK DB pension scheme and also chairs one of the largest DC
pension schemes in Ireland. He is Chairman of Doric Nimrod Air Two
Limited and Chairman of the Audit Committee of Doric Nimrod Air
Three Limited. He is a director of and advisor to a number of other
financial companies.
He has extensive experience in international finance having been
CEO of banks in Singapore and New York. He was Managing Director of
Ireland's largest venture capital company andwas Finance Director
and Chief Risk Officer of AIB Capital Markets plc. which he left in
in 2002. He has worked as a consultant to a number of international
companies.
He earned a degree in economics from Queen's University, studied
at Stanford Graduate School of Businessand is a Chartered
Accountant.
Geoffrey Alan Hall (Age 65)
Geoffrey Hall has extensive experience in asset management,
having previously been Chief Investment Officer of Allianz
Insurance plc, a major UK general insurance company and an
investment manager at HSBC Asset Management, County Investment
Management, and British Railways Pension Funds. Geoffrey is also
currently a director of Doric Nimrod Air Two Limited and Doric
Nimrod Air Three Limited.
Doric Nimrod Air One Limited (the "Company")
ASSET MANAGERS REPORT
On the invitation of the Directors of the Company, this
commentary has been provided by Doric GmbH as Asset Manager of the
Company in respect of the Period and is provided without any
warranty as to its accuracy and without any liability incurred on
the part of the Company or Doric GmbH. The commentary is not
intended to constitute, and should not be construed as, investment
advice. Potential investors in the Company should seek their own
independent financial advice and may not rely on this communication
in evaluating the merits of investing in the Company. The
commentary is provided as a source of information for shareholders
of the Company but is not attributable to the Company.
1. The Doric Nimrod Air One Airbus A380
The Airbus A380 with the manufacturer's serial number (MSN) 016
is registered in the United Arab Emirates under the registration
mark A6-EDC. For the period from original delivery of the aircraft
to Emirates in November 2008 until the end of August 2013, a total
of 2,574 flight cycles were registered. Total flight hours were
21,401. This equates to an average flight duration of approximately
eight hours and 20 minutes.
In September 2013 the Australian Transport Safety Bureau (ATSB)
released an investigation report, involving an engine formerly
owned by the Company. As previously reported, the engine (serial
number P550121) experienced an uncommanded in-flight shutdown
during climb out of Sydney on 11 November 2012 while it was
installed on another A380 of the Emirates fleet. A break-up and
dislodgement of some high pressure turbine (HPT) nozzles were
identified as the root cause. At that point in time, manufacturer
Engine Alliance (EA) was already aware of the issue in general and
an exchange program with redesigned nozzles was underway. Nozzle
exchange was planned for the next workshop visit of the Company's
former engine. After the incident, EA has intensified its efforts
to solve the issue with several measures, including enhanced real
time trend monitoring during flight and mandatory inspection
intervals for HPT nozzles. According to the ATSB, "the associated
risks to the safety of continued flight were relatively low". The
Company took ownership of a new engine (P550349) that EA agreed to
replace in exchange for the damaged one.
The A380 owned by the Company visited Auckland, Jeddah, London
Heathrow, Manchester, and Toronto during the third quarter of
2013.
Maintenance Status
Emirates maintains its A380 aircraft fleet based on a
maintenance programme according to which minor maintenance checks
are performed every 1,500 flight hours, and more significant
maintenance checks (C checks) at the earlier of 24 months or 12,000
flight hour intervals. The second C check of the aircraft took
place in the Emirates engineering facility at Dubai International
Airport in November 2012. The next heavy maintenance check will be
the 6-year check (which will include the third C check) scheduled
for November 2014.
Emirates bears all costs (including maintenance, repair and
insurance) relating to the aircraft during the lifetime of the
lease.
Inspections
The asset manager Doric inspected the aircraft during the
above-mentioned C check in November 2012. The aircraft's physical
condition was good and consistent with its age. After four years in
service at that time, the passenger cabin has undergone some
significant refurbishment work, including replacement of soft
furnishings and floor coverings.
Hairline Cracks
In late 2011, hairline cracks were detected in a small number of
L-shaped metal brackets (known as wing rib feet) within the wing
structure of some A380s. The aircraft remains fully airworthy and
the hairline cracks pose no risk to flight safety as affirmed by
the European Aviation Safety Agency (EASA) and Airbus.
As previously reported, EASA released its latest Airworthiness
Directive in May 2013, outlining which modifications need to be
made and the respective compliance terms. The wing rib feet
modification programme for Emirates' aircraft is essentially
managed by Airbus. All modification activities will be covered by
the applicable manufacturer's warranties. Emirates decided to
embody all modifications in one step. Airbus is confident that the
downtime required to incorporate the permanent fix might be reduced
from the originally planned eight weeks to six weeks. Subject to
changes in Emirates' timeline it is currently envisaged to
implement the final fix for MSN 016 from mid-January to mid-March
2014. The modification work on the A380 owned by the Company will
be completed by Ameco Beijing (Aircraft Maintenance and Engineering
Corporation). Some aircraft of Emirates' A380 fleet have already
been modified and returned to commercial service.
2. Market Overview
Between January and July of the current year, passenger demand,
measured in revenue passenger kilometres (RPKs), expanded by 4.8%
compared to the same period in the previous year. The industry
remains on a growth path, which started in the fourth quarter of
2012. In recent months the development of passenger markets were
positively influenced by the economic recovery of the Eurozone,
where an 18-month-long recession came to an end. At the same time,
economic growth in China has slowed with noticeable impact on air
traffic. During the course of the year, airlines have increased
their capacities carefully and available seat kilometres (ASKs)
showed a smaller growth rate than the revenue passenger kilometres.
Overall, the passenger load factor during the first seven months of
this year was 79.5% on average. This is an increase of 0.6%-points
compared to the same period the year before. According to the
latest traffic forecast released by the International Air Transport
Association (IATA) in September 2013, RPKs are expected to grow by
5.0% this year and 5.8% in 2014.
Regional growth patterns continue to be uneven. Between January
and July 2013 Middle East airlines increased their RPKs by 10.9%
compared to the previous year's period. The slowest growth was
again observed in North America with an increase in RPKs of 2.0%
compared to the same period in the previous year. Growth in Latin
America further lost ground and is in the meantime the third
slowest growing region worldwide just ahead of Europe.
After freight-tonne-kilometres (FTKs) had contracted in February
and March 2013, air freight markets have started to show signs of
renewed growth with slightly improving air freight volumes during
the last few months. Between January and July 2013 FTKs increased
by 0.2% compared to the same period the year before. Global
business confidence has slightly improved and a pickup in export
orders has been noticed. It remains to be seen if these
developments are sustainable since the signs of improving
macroeconomic conditions - in particular in the US and Europe -
need to translate into growing demand for Asian manufactured
products shipped by aircraft to these regions. In Asia Pacific,
which is pivotal for the further development of air freight demand,
FTKs have still been shrinking.
Expenses for jet fuel are expected to remain on a high level
during 2013 with an average price of USD 126.4 per barrel, a slight
relief compared to the previous forecast in June 2013 of USD 127.4
per barrel. The share of fuel costs would amount to 31% of
airlines' total operating costs. A decade ago, the share was 14%
and has more than doubled since then.
IATA released its latest industry outlook in September 2013
according to which global industry profits are expected to reach
USD 11.7 billion this year. This is slightly lower than IATA's June
2013 estimate of USD 12.7 billion after air transport markets and
airline profits improved slower than expected during the last few
months. For 2014 IATA expects net profits of USD 16.4 billion,
based on a global gross domestic product (GDP) growth rate of 2.7%.
GDP is highly correlated with the profit development in the
industry.
Source: IATA
3. Lessee - Emirates Key Financials and Outlook
As previously reported, Emirates announced its 25(th)
consecutive year of profit and company-wide growth for the
financial year ending 31 March 2013.
Revenue reached a record high of USD 19.9 billion, up by 17%
compared to the previous financial year, and continues to be well
balanced with no region contributing more than 30%. East Asia and
Australasia remained the highest revenue contributing region with
USD 5.7 billion, up 15% from 2011/2012. Europe (up 18% to USD 5.5
billion) and the Americas (up 24% to USD 2.3 billion) saw the most
significant growth, reflecting new destinations as well as
increased frequency and capacity to these regions.
The airline posted a net profit of USD 622 million, representing
an increase of 52% over last year's results. Although Emirates'
fuel bill increased by 15% to reach USD 7.6 billion, total
operating costs showed a smaller increase (+16%) than revenue
(+17%) in the financial year 2012/2013.
As of 31 March 2013 the balance sheet total amounted to USD 25.8
billion, an increase of 23% from the previous year. Total equity
increased by 7.3% to USD 6.3 billion with an equity ratio of 24.3%.
The current ratio was 1.12; therefore the airline would be able to
meet its current liabilities by liquidating all of its current
assets. Significant items on the liabilities side of the balance
sheet included finance leases in the amount of USD 7.4 billion and
revenues received in advance from passenger and freight sales (USD
2.9 billion). As of 31 March 2013 the carrier's cash balance
reached USD 6.7 billion.
Emirates continued with its growth plan and during the financial
year 2012/2013 saw the largest increase in capacity in the
airline's history, receiving 34 wide-body aircraft, including ten
Airbus A380s and four freighters. As of 31 August 2013 Emirates has
204 aircraft in operation, with firm orders for another 190
aircraft, including 54 A380s, 61 Boeing 777-300ER and 50 Airbus
A350-900 XWB. The airline operates the world's largest fleets of
Airbus A380s and Boeing 777-300ER.
As of September 2013 Emirates operates flights to 135
destinations in 77 countries on six continents. New routes launched
so far this year include Warsaw, Algiers, Tokyo Haneda and
Stockholm. Until the end of the calendar year, Emirates plans to
add another four destinations: Clark International Airport
(Philippines), Conakry (Guinea), Sialkot (Pakistan) and Kabul
(Afghanistan). At the beginning of 2014 Kiev (Ukraine) and Taipei
(Taiwan) will join the global network of the Dubai-based
carrier.
In September 2013 Emirates Group released its third Environment
Report for the financial year 2012/13 ending on 31 March 2013
according to which the fuel consumption per one hundred passenger
kilometres decreased by one percent to 4.07 litres. This is nearly
16% below the IATA industry average forecasted for 2012 and the
result of the relatively young fleet that Emirates is operating.
The airline's average fleet age is six years, half of the IATA
average. Since fuel consumption and carbon dioxide emissions are
closely correlated, Emirates fleet of modern and fuel efficient
aircraft, like the Airbus A380, has emitted nearly 17% less carbon
dioxide per passenger kilometre than the IATA average. Emirates
fleet's CO(2) emissions per one hundred passenger kilometres
decreased by one percent to 100.6 grams compared to the business
year before. For its efforts to reduce noise impact on surrounding
communities, Emirates was awarded with the "Fly Quiet" Award at San
Francisco Airport (SFO) in 2013 for the second time in a row, after
its Flight Operations Performance team had tested different
take-off and climb routes, the usage of longer runways and
favorable pathways to take advantage of headwinds. Just four years
ago, Emirates' noise footprint was ranked second to last among
airlines serving SFO.
Source: Emirates
4. Aircraft - A380
Emirates has a fleet of 36 A380s which currently serve 20
destinations worldwide: Amsterdam, Auckland, Bangkok, Beijing, Hong
Kong, Jeddah, Kuala Lumpur, London Heathrow, Manchester, Melbourne,
Moscow, Munich, New York JFK, Paris, Rome, Seoul, Shanghai,
Singapore, Sydney and Toronto.
On 1 August 2013 Emirates celebrated the fifth anniversary of
the first A380 joining its fleet. Since the inaugural flight to New
York that day, more than 18 million passengers flew aboard an
Emirates A380 on 20,000 round trips travelling 265 million
kilometres. The airline is using its flagship on short haul as well
as long haul routes: The longest non-stop route within the network
is Dubai to New York, covering 11,023 kilometres during a flight of
thirteen and a half hours. Between Hong Kong and Bangkok Emirates
is operating the shortest A380 route with a distance of 1,900
kilometres and an estimated flying time of roughly two and a half
hours. According to Tim Clark, the airline's President, "Emirates
has changed the face of air travel with this remarkable
aircraft".
Over the next few months, Emirates plans to extend its A380
route network to Brisbane (1 October 2013), Los Angeles (2 December
2013), Mauritius (16 December 2013), Zurich (1 January 2014) and
Barcelona (1 February 2014).
At the end of August 2013, the global A380 fleet consisted of
108 planes in service with another 153 still on order with new and
existing operators. The currently ten operators are Emirates (36
A380 aircraft), Singapore Airlines (19), Qantas (12), Deutsche
Lufthansa (10), Air France (8), Korean Airways (7), China Southern
Airlines (5), Malaysia Airlines (6), Thai Airways (4) and British
Airways (1). The British flag carrier commenced its commercial A380
service between London and Los Angeles on 24 September 2013. Qatar
Airways will become the eleventh airline to join the club of A380
operators when it takes delivery of this aircraft in 2014.
According to Airbus, the worldwide fleet has accumulated over
one million flight hours in more than 120,000 commercial flights.
The number of passengers flying aboard an Airbus A380 to date is 44
million.
Source: Airbus, Ascend, Emirates
Doric Nimrod Air One Limited (the "Company")
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 September 2013
1 Apr 2013 to 1 Apr 2012 to
Notes 30 Sep 2013 30 Sep 2012
GBP GBP
Income
A rent income 4 4,341,581 4,254,527
B rent income 4 2,260,370 2,255,738
Bank interest received 1,676 2,503
----------------------------- -------------------------------
6,603,627 6,512,768
Expenses
Operating expenses 5 (283,112) (266,321)
Depreciation of
Asset 9 (1,992,118) (1,915,699)
----------------------------- -------------------------------
(2,275,230) (2,182,020)
Net profit for the
period before finance
costs and
foreign exchange
losses 4,328,397 4,330,748
----------------------------- -------------------------------
Finance costs
Finance costs 10 (2,027,690) (1,960,238)
Unrealised foreign
exchange gain /
(loss) 3,733,008 633,416
----------------------------- -------------------------------
Profit for the period 6,033,715 3,003,926
----------------------------- -------------------------------
Other Comprehensive
Income - -
----------------------------- -------------------------------
Total Comprehensive
Income for the period 6,033,715 3,003,926
============================= ===============================
Pence Pence
Earnings per Share
for the period -
Basic and Diluted 8 14.21 7.08
----------------------------- -------------------------------
In arriving at the results for the financial period, all
amounts above relate to continuing operations.
The notes on pages 18 to 36 form an integral part of these
financial statements
Doric Nimrod Air One Limited (the "Company")
STATEMENT OF FINANCIAL POSITON
as at 30 September 2013
30 Sep 2013 31 Mar 2013
Notes GBP GBP
NON-CURRENT ASSETS
Aircraft 9 103,919,782 106,538,525
------------------------- ----------------------
CURRENT ASSETS
Cash and cash equivalents 4,315,020 4,580,076
Receivables 12 3,870 5,441
------------------------- ----------------------
4,318,890 4,585,517
TOTAL ASSETS 108,238,672 111,124,042
========================= ======================
CURRENT LIABILITIES
Borrowings 14 6,295,671 6,528,741
Deferred income 5,552,273 4,969,675
Payables - due within
one year 13 55,075 116,783
------------------------- ----------------------
11,903,019 11,615,199
NON-CURRENT LIABILITIES
Borrowings 14 53,166,413 60,463,068
------------------------- ----------------------
53,166,413 60,463,068
TOTAL LIABILITIES 65,069,432 72,078,267
========================= ======================
TOTAL NET ASSETS 43,169,240 39,045,775
------------------------- ----------------------
EQUITY
Share capital 15 39,016,728 39,016,728
Retained earnings 4,152,512 29,047
------------------------- ----------------------
43,169,240 39,045,775
------------------------- ----------------------
Pence Pence
Net asset value per Ordinary
Share based 9 101.69 91.98
on 42,450,000 shares in issue
The Financial Statements were approved by the Board of Directors
and authorised for issue on
2013 and are signed on its behalf by:
Director
The notes on pages 18 to 36 form an integral part
of these financial statements
Doric Nimrod Air One Limited (the "Company")
STATEMENT OF CASH FLOWS
for the period ended 30 September 2013
Period ended Period ended
30 Sep 2013 30 Sep 2012
GBP GBP
OPERATING ACTIVITIES
Profit for the period 6,033,715 3,003,926
Amortisation of advance
rental 428,271 432,521
Interest received (1,676) (2,503)
Depreciation of Aircraft 1,992,118 1,915,699
Loan interest 1,765,571 1,954,221
(Decrease) / Increase in
payables (61,708) 55,913
Decrease in receivables 1,571 5,520
Amortisation of debt arrangement
costs 262,119 6,017
Foreign exchange movement (3,733,008) (633,049)
NET CASH FLOW FROM OPERATING
ACTIVITIES 6,686,973 6,737,265
------------------------- -------------------------
INVESTING ACTIVITIES
Interest received 1,676 2,503
NET CASH FLOW FROM INVESTING
ACTIVITIES 1,676 2,503
------------------------- -------------------------
FINANCING ACTIVITIES
Dividends paid (1,910,250) (1,910,250)
Repayments of capital on
borrowings (3,175,468) (2,888,725)
Repayments of interest on
borrowings (1,808,924) (1,944,784)
NET CASH FLOW FROM
FINANCING ACTIVITIES (6,894,642) (6,743,759)
-------------------------------- -----------------------------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 4,580,076 4,484,057
Decrease in cash and
cash equivalents (205,993) (3,358)
Exchange rate adjustment (59,063) -
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 4,315,020 4,481,066
-------------------------------- -----------------------------
- -
The notes on pages 18 to 36 form an integral
part of these financial statements
Doric Nimrod Air One Limited (the "Company")
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 September 2013
Notes Share Revenue Total
Capital Reserve
GBP GBP GBP
Balance as at 1 April 2013 39,016,728 29,047 39,045,775
Total Comprehensive Income
for the period - 6,033,715 6,033,715
Dividends paid 7 - (1,910,250) (1,910,250)
----------------------- ----------------------- -------------------
Balance as at 30 September
2013 39,016,728 4,152,512 43,169,240
----------------------- ----------------------- -------------------
Notes Share Revenue Total
Capital Reserve
GBP GBP GBP
Balance as at 1 April
2012 39,016,728 5,229,236 44,245,964
Total Comprehensive Income
for the period - 3,003,926 3,003,926
Dividends paid 7 - (1,910,250) (1,910,250)
----------------------- ----------------------- -------------------
Balance as at 30 September
2012 39,016,728 6,322,912 45,339,640
----------------------- ----------------------- -------------------
Doric Nimrod Air One Limited (the "Company")
NOTES TO THE FINANCIAL STATEMENTS
for the period ended 30 September 2013
1 GENERAL INFORMATION
DNA was incorporated in Guernsey on 8 October 2010 with registered
number 52484. Its share capital consists of one class of Ordinary
Preference Shares and one class of Subordinated Administrative
Shares. The Company's Ordinary Preference Shares have been admitted
to trading on the Specialist Fund Market of the London Stock Exchange
("SFM") and are admitted to the Official List of the Channel Islands
Stock Exchange ("CISX").
The Company's investment objective is to obtain income returns
and a capital return for its Shareholders by acquiring, leasing
and then selling a single aircraft.
2 ACCOUNTING POLICIES
The significant accounting policies adopted by the Company are
as follows:
(a) Basis of Preparation
The financial statements have been prepared in conformity with
IFRS, as adopted by the European Union, which comprise standards
and interpretations approved by the International Accounting Standards
Board ("IASB") and International Financial Reporting Interpretations
Committee ("IFRIC") and applicable Guernsey law. The financial
statements have been prepared on a historical cost basis.
Changes in accounting policies and disclosure
The following Standards or Interpretations, which are expected
to affect the Company, have been issued but not yet adopted by
the Company. Other Standards or Interpretations issued by the IASB
and IFRIC are not expected to affect the Company.
IFRS 7 Financial Instruments: Disclosures - amendments requiring
disclosures about the initial application of IFRS9 effective for
annual periods beginning on or after 1 January 2015 (or otherwise
when IFRS 9 is first applied).
IFRS 9 Financial Instruments - accounting for financial liabilities
and derecognition effective for annual periods beginning on or
after 1 January 2015.
IFRS 9 Financial Instruments - Classification and Measurement (revised
November 2009) effective for annual periods beginning on or after
1 January 2013.
IFRS 13 Fair Value Measurement effective for annual periods beginning
on or after 1 January 2013.
IAS 1 Presentation of Financial Statements - amendments resulting
from Annual Improvements effective for annual periods beginning
on or after 1 January 2013.
2 ACCOUNTING POLICIES (continued)
(a) Basis of Preparation (continued)
IAS 16 Property, Plant & Equipment - amendments resulting from
Annual Improvements effective for annual periods beginning no or
after 1 January 2013.
IAS 32 Financial Instruments: Presentation - annual improvements
effective for annual periods beginning on or after 1 January 2013.
IAS 32 Financial Instruments: Presentation - amendments to application
guidance on the offsetting of financial assets and financial liabilities
effective for annual periods beginning on or after 1 January 2014.
IAS 34 Interim Financial Reporting - amendments resulting from
annual improvements for annual periods beginning no or after 1
January 2013.
The Directors have considered the above and are of the opinion
that the above Standards and Interpretations are not expected to
have an impact on the Company's financial statements except for
the presentation of additional disclosures and changes to the presentation
of components of the financial statements. These items will be
applied in the first financial period for which they are required.
(b) Taxation
The Company has been assessed for tax at the Guernsey standard
rate of 0%.
(c) Share capital
The shares are classified as equity. Incremental costs directly
attributable to the issue of Shares are recognised as a deduction
from equity.
(d) Expenses
All expenses are accounted for on an accruals basis.
(e) Interest Income
Interest income is accounted for on an accruals basis.
(f) Foreign currency translation
The currency of the primary economic environment in which the Company
operates (the functional currency) is Great British Pounds ("GBP")
which is also the presentation currency.
Transactions denominated in foreign currencies are translated into
GBP at the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
at the reporting date are translated into the functional currency
at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the Statement
of Comprehensive Income.
2 ACCOUNTING POLICIES (continued)
(g) Cash and cash equivalents
Cash at bank and short term deposits which are held to maturity are
carried at cost. Cash and cash equivalents are defined as call deposits,
short term deposits with a term of no more than 3 months from the start
of the deposit and highly liquid investments readily converted to known
amounts of cash and subject to insignificant risk of changes in value.
(h) Segmental Reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being acquiring, leasing and selling of one Airbus
A380-861 aircraft.
(i) Going concern
After making enquiries, the Directors have a reasonable expectation
that the Company has adequate resources to continue in operational existence
for the foreseeable future. The Directors believe the Company is well
placed to manage its business risks successfully despite the current
economic climate as the interest on the Company's loan has been fixed
and the fixed rental income under the operating lease means that the
rent should be sufficient to repay the loan and provide surplus income
to pay for the Company's expenses and permit payment of dividends. Accordingly,
the Directors have adopted the going concern basis in preparing the
financial information. Management is not aware of any material uncertainty
that may cast significant doubt upon the Company's ability to continue
as a going concern.
(j) Leasing and rental income
The Lease has been classified as an operating lease as the terms of
the lease do not transfer substantially all the risks and rewards of
ownership to the lessee. The Asset is shown as a non-current asset in
the Statement of Financial Position. Further details of the lease are
given in Note 11.
Rental income and advance lease payments from the operating lease is
recognised on a straight-line basis over the term of the lease. Initial
direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised
on a straight-line basis over the lease term.
(k) Property, plant and equipment - Aircraft
In line with IAS 16 Property Plant and Equipment, the Asset is initially
recorded at the fair value of the consideration paid. The cost of the
asset is made up of the purchase price of the Asset plus any costs directly
attributable to bringing it into working condition for its intended
use. Accumulated depreciation and any recognised impairment loss and
deducted from cost to calculate the carrying amount of the Asset.
2 ACCOUNTING POLICIES (continued)
(k) Property, plant and equipment - Aircraft (continued)
Depreciation is recognised so as to write off the cost of the Asset
less the estimated residual value of GBP69.2 million over the estimated
useful life of the Asset of 12 years, using the straight line method.
The depreciation method reflects the pattern of benefit consumption.
The residual value is reviewed annually and is the amount the Company
would receive currently if the asset were already of the age and condition
expected at the end of its useful life. Useful life is also reviewed
annually and for the purposes of the financial statements represents
the likely period of the Company's ownership of the asset. Depreciation
starts when the asset is available for use.
At each balance sheet date, the Company reviews the carrying amounts
of its Asset to determine whether there is any indication that the
asset has suffered any impairment loss. If any such indication exists,
the recoverable amount of the Asset is estimated to determine the extent
of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of
money and risks specific to the Asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of the Asset is estimated to be less than
its carrying amount, the carrying amount of the Asset is reduced to
its recoverable amount. An impairment loss is recognised immediately
in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount
of the Asset is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss
been recognised for the Asset in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss.
(l) Financial liabilities
Financial liabilities, including borrowings, are initially measured
at fair value, net of transaction costs. Financial liabilities are
subsequently measured at amortised cost using the effective interest
method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised
cost of the financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments through the expected
life of the financial liability, or, where appropriate, a shorter period,
to the net carrying amount on initial recognition.
The Company derecognises financial liabilities when, and only when,
the Company's obligations are discharged, cancelled or they expire.
2 ACCOUNTING POLICIES (continued)
(m) Net asset value
In circumstances where the Directors, as advised by the Asset Manager,
are of the opinion that the net asset value ("NAV") of NAV per Share,
as calculated under prevailing accounting standards, is not appropriate
or could give rise to a misleading calculation, the Directors, in
consultation with the Administrator and the Asset Manager may determine,
at their discretion, an alternative method for calculating the value
of the Company and shares in the capital of the Company, which they
consider more accurately reflects the value of the Company.
3 SIGNIFICANT JUDGEMENTS AND ESTIMATES
In the application of the Company's accounting policies, which are
described in note 2, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The following are the critical judgements and estimates that the Directors
have made in the process of applying the Company's accounting policies
and that have the most significant effect on the amounts recognised
in financial statements.
Residual value and useful life of Asset
As described in note 2 (k), the Company depreciates the Asset on a
straight line basis over the estimated useful life of the Asset and
taking into consideration the estimated residual value. In making
its judgement regarding residual value estimate the Directors considered
three independent valuations as well as other available aviation information.
The useful life of the Asset is estimated based on the expected period
for which the Company will own and lease the aircraft.
3 SIGNIFICANT JUDGEMENTS AND ESTIMATES (continued)
Operating lease commitments- Company
as lessor
The Company has entered into an operating lease on the Asset. The Company
has determined, based on an evaluation of the terms and conditions
of the arrangements, that it retains all the significant risks and
rewards of ownership of this asset and accounts for the contract as
an operating lease.
The Company has determined that the operating lease on the Asset is
for 12 years based on an initial term of 10 years followed by an extension
term of 2 years. Should the lessee choose to exit their respective
lease at the end of the initial term of 10 years, a penalty equal to
the remaining 2 years would be due.
Issue of initial shares
As described in note 15, Shares issued prior to the public Placing
were accounted for at the fair value of the Shares on the date of issue.
The Directors estimated the value of these Shares issued based on the
anticipated launch price and their assessment of the respective dates
of issue and the probability of a successful launch. The difference
between fair value and actual cash proceeds is shown as a movement
in reserves in the Statement of Changes in Equity.
Impairment
As described in note 2 (k), impairment exists when the carrying value
of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs to sell and its value
in use. The Directors monitor the assets for any indications of impairment
as required by IAS 16 Property, Plant and Equipment and IAS 36 Impairment
of Assets.
4 RENTAL INCOME
1 Apr 2013 to 1 Apr 2012 to
30 Sep 2013 30 Sep 2012
GBP GBP
A rent income 4,869,406 4,781,970
Revenue received but not yet
earned (527,825) (527,443)
----------------------- ---------------------
4,341,581 4,254,527
----------------------- ---------------------
B rent income 2,160,816 2,160,816
Revenue earned but not yet received 99,554 94,922
----------------------- ---------------------
2,260,370 2,255,738
----------------------- ---------------------
Total rental income 6,601,951 6,510,265
----------------------- ---------------------
4 RENTAL INCOME (continued)
Rental income is derived from the leasing of the Asset. Rent
is split into A rent, which is received in US Dollars ("USD")
and B rent, which is received in GBP. Rental income received
in USD is translated into the functional currency (GBP) at the
date of the transaction.
A and B rental income receivable will decrease / increase respectively,
10 years from the start of each lease. An adjustment has been
made to spread the actual total income receivable over the term
of lease. In addition, advance rentals have also been spread
over the full term of the leases.
5 OPERATING EXPENSES
1 Apr 2013 1 Apr 2012
to to
30 Sep
Note 30 Sep 2013 2012
GBP GBP
Shareholder Adviser fee 52,275 50,563
Asset management fee 130,688 127,813
Administration fees 30,534 30,577
Accountancy fees 5,242 5,112
Registrars fee 4,521 4,386
Audit fee 12,400 10,000
Directors' remuneration 6 26,500 26,500
Directors' and Officers'
insurance 4,031 4,020
Legal & professional expenses 3,550 1,279
Annual fees 2,461 750
Sundry costs 5,070 3,545
Other operating expenses 5,840 1,776
------------------------- ------------------------
283,112 266,321
------------------------- ------------------------
6 DIRECTORS' REMUNERATION
Under their terms of appointment, each Director is paid a fee
of GBP15,000 per annum by the Company, except for the Chairman,
who receives GBP20,000 per annum. The Chairman of the audit committee
also receives an extra GBP3,000 per annum.
7 DIVIDENDS IN RESPECT OF EQUITY SHARES
30 Sep 2013
GBP Pence per
share
First interim payment 955,125 2.25
Second interim payment 955,125 2.25
---------------------- ------------------------
1,910,250 4.50
---------------------- ------------------------
31 March 2013
GBP Pence per
share
First interim payment 955,125 2.25
Second interim payment 955,125 2.25
Third interim payment 955,125 2.25
Fourth interim payment 955,125 2.25
---------------------- ------------------------
3,820,500 9.00
---------------------- ------------------------
8 EARNINGS PER SHARE
Earnings per Share ('EPS') is based on the net gain for the period attributable
to Shareholders of GBP6,033,715 (30 Sep 2012: GBP3,003,926 ) and 42,450,000
(30 Sep 2012: 42,450,000 ) Shares being the weighted average number
of Shares in issue during the period. There are no dilutive instruments
and therefore basic and diluted earnings per Share are identical.
9 PROPERTY, PLANT AND EQUIPMENT - AIRCRAFT
Aircraft
COST GBP
As at 1 Apr 2013 115,159,172
Reanalysis to loan costs (626,625)
----------------------
As at 30 Sep 2013 114,532,547
======================
ACCUMULATED DEPRECIATION
As at 1 Apr 2013 8,620,647
Charge for the period 1,992,118
----------------------
As at 30 Sep 2013 10,612,765
======================
CARRYING AMOUNT
As at 31 Mar 2013 106,538,525
======================
As at 30 Sep 2013 103,919,782
======================
The Company cannot sell the Asset during the term of the Lease without
terminating the Lease or Special Termination Events (as defined by
the Lease) occurring. If at the end of the Lease the Company makes
the choice to sell the Asset rather than leasing it out again, Emirates
will be given first refusal to purchase the Asset at an independently
appraised market value.
Under IAS 17 the direct costs attributed in negotiating and arranging
the operating Lease have been added to the carrying amount of the
Asset and will be recognised as an expense over the lease term.
10 FINANCE COSTS
1 Apr 2013 to 1 Apr 2012 to
30 Sep 2013 30 Sep 2012
GBP GBP
Amortisation of debt arrangement
costs 262,119 6,017
Loan interest 1,765,571 1,954,221
---------------------- ----------------------
2,027,690 1,960,238
---------------------- ----------------------
11 OPERATING LEASES
The amounts of minimum lease payments at the reporting date under
non cancellable operating leases
are detailed below:
After 5
30 September 2013 Next 12 2 to 5 years Total
months years
GBP GBP GBP GBP
Asset- A rental payments 9,431,633 37,726,657 25,291,279 72,449,569
Asset- B rental payments 4,321,632 17,286,528 19,564,656 41,172,816
------------- ------------- ------------------- -----------------
13,753,265 55,013,185 44,855,935 113,622,385
------------- ------------- ------------------- -----------------
2 to 5 After 5
31 March 2013 Next 12 years years Total
months
GBP GBP GBP GBP
Asset- A rental payments 10,048,056 40,192,454 31,112,305 81,352,815
Asset- B rental payments 4,321,632 17,286,528 20,360,298 41,968,458
------------- ------------- ------------------- -----------------
14,369,688 57,478,982 51,472,603 123,321,273
------------- ------------- ------------------- -----------------
The Lease is for an Airbus A380-861 Aircraft. The term of the
lease is for 12 years ending November 2022. The initial lease
is for 10 years ending November 2020, with an extension period
of 2 years ending November 2022, in which rental payments reduce.
The present value of the remaining rentals in the extension period
must be paid even if the option is not taken.
At the end of the lease term the lessee has the right to exercise
an option to purchase the Asset if the Company chooses to sell
the Asset. If a purchase option event occurs the Company and
the lessee will be required to arrange for a current market value
appraisal of the Asset to be carried out by three independent
appraisers. The purchase price will be equal to the average valuation
of those three appraisals.
12 RECEIVABLES
30 Sep 2013 31 Mar 2013
GBP GBP
Prepayments 3,848 5,419
Sundry debtors 22 22
3,870 5,441
--------------------------- -------------------------
The above carrying value of receivables is equivalent to its fair value.
PAYABLES (amounts falling due within
13 one year)
30 Sep 2013 31 Mar 2013
GBP GBP
Accrued administration fees 5,899 6,129
Accrued audit fee 13,800 16,400
Accrued management fees 30,317 91,482
Other accrued expenses 5,059 2,772
55,075 116,783
--------------------------- -------------------------
The above carrying value of payables is equivalent to its fair value.
14 BORROWINGS
TOTAL TOTAL
30 Sep 2013 31 Mar 2013
GBP GBP
Bank loan 59,878,192 67,043,411
Transaction costs (416,108) (51,602)
59,462,084 66,991,809
--------------------------- -------------------------
Amount due for settlement within
12 months 6,295,671 6,528,741
=========================== =========================
Amount due for settlement after
12 months 53,166,413 60,463,068
=========================== =========================
The loan was arranged with Westpac Banking Corporation ("Westpac")
for USD 122,000,000 and runs for 12 years until December 2022, and
has an effective interest rate of 5.4950%, which is the same as the
contractual fixed interest rate.
14 BORROWINGS (continued)
The loan is secured on the Asset. No breaches or defaults occurred
in the period. Transaction costs of arranging the loan have been
deducted from the carrying amount of the loan and will be amortised
over its lives.
In the Directors' opinion, the above carrying value of the bank
loan is appropriate to its fair value.
15 SHARE CAPITAL
The Share Capital of the Company is represented by an unlimited
number of shares of no par value being issued or reclassified by
the Company as Ordinary Preference Shares or Subordinated Administrative
Shares.
Issued Subordinated Ordinary
Administrative Preference
Shares Shares
Shares issued at incorporation - 1
Shares issued 11 October
2010 - 4,000,000
Shares issued 1 December
2010 - 1,000,000
Shares redeemed 1 December
2010 - (2,175,001)
Shares issued 6 December
2010 2 -
Shares issued in Placing - 39,625,000
----------------------- ------------------------------
Issued share capital as at 30
September 2013 2 42,450,000
----------------------- ------------------------------
15 SHARE CAPITAL (continued)
Issued
GBP
Ordinary Preference Shares
1,825,000 Shares issued prior to Placing-
Fair value 91,260
1,000,000 Shares issued prior to Placing-
Fair value 250,010
39,625,000 Shares issued in Placing 39,625,000
Share issue costs (949,544)
-----------------------------
Issued share capital as at 30 September
2013 39,016,726
Subordinated Administrative
Shares
Shares issued 6 December 2010 2
-----------------------------
Total share capital as at 30 September
2013 39,016,728
=============================
Members holding Ordinary Preference Shares are entitled to receive,
and participate in, any dividends out of income; other distributions
of the Company available for such purposes and resolved to be
distributed in respect of any accounting period; or other income
or right to participate therein.
On a winding up, members are entitled to the surplus assets
remaining after payment of all the creditors of the Company.
Members have the right to receive notice of and to attend, speak
and vote at general meetings of the Company.
The holders of Subordinated Administrative Shares are not entitled
to receive, and participate in, any dividends out of income;
other distributions of the Company available for such purposes
and resolved to be distributed in respect of any accounting
period; or other income or right to participate therein. On
a winding up, holders are entitled to a return of capital paid
up on them after the Ordinary Preference Shares have received
a return of their capital paid up but ahead of the return of
all additional capital to the holders of Ordinary Preference
Shares.
Holders of Subordinated Administrative Shares shall not have
the right to receive notice of and shall have no right to attend,
speak and vote at general meetings of the Company, except for
the Liquidation Proposal Meeting (general meeting convened six
months before the end term of the Lease where the Liquidation
Resolution will be proposed) or if there are no Ordinary Preference
Shares in existence.
A fair value adjustment arose on the issue of 1,825,000 and
1,000,000 Ordinary Preference Shares issued prior to placing
for which the consideration was GBP10 and GBP10 respectively.
The fair value adjustment of GBP341,250 was adjusted through
reserves in the period to 30 September 2011.
The Ordinary Preference Shares are not puttable instruments
as the holder does not have the right to put the Shares back
to the Company for cash or another financial instrument.
16 FINANCIAL INSTRUMENTS
The Company's main financial instruments comprise:
Cash and cash equivalents that arise directly from the Company's operations;
(a) and
(b) Loan secured on non current asset
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's objective is to obtain income and returns and a capital
return for its Shareholders by acquiring, leasing and then selling
a single aircraft.
The following table details the categories of financial assets and
liabilities held by the Company at the reporting date:
30 Sep 2013 31 Mar 2013
GBP GBP
Financial assets
Cash and cash equivalents 4,315,020 4,580,076
Receivables 22 22
--------------------- ---------------------------
Loans and receivables at amortised
cost 4,315,042 4,580,098
--------------------- ---------------------------
Financial liabilities
Accrued expenses 55,075 116,783
Loans payable 59,462,084 66,991,809
--------------------- ---------------------------
Financial liabilities measured
at amortised cost 59,517,159 67,108,592
--------------------- ---------------------------
The main risks arising from the Company's financial instruments are
capital management risk, foreign currency risk, credit risk, liquidity
risk and interest rate risk. The Board regularly review and agrees
policies for managing each of these risks and these are summarised
below:
(a) Capital management
The Company manages its capital to ensure that the Company will be
able to continue as a going concern while maximising the return to
Shareholders through the optimisation of the debt and equity balance.
The Company is not subject to any externally imposed capital requirements.
The capital structure of the Company consists of debt, which includes
the borrowings disclosed in note 14, cash and cash equivalents and
equity attributable to equity holders, comprising issued capital and
retained earnings.
The Company's Board of Directors reviews the capital structure on
a bi-annual basis.
Equity includes all capital and reserves of the Company that are managed
as capital.
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(b) Foreign currency risk
The Company's accounting policy under IFRS requires the use of GBP
historic cost of the Asset and the value of the USD loan as translated
at the spot exchange rate on every balance sheet date. In addition,
USD operating lease receivables are not immediately recognised in
the balance sheet and are accrued over the period of the lease. The
Directors consider that this introduces artificial variance due to
the movement over time of foreign exchange rates. In actuality, the
USD operating lease receivables should offset the USD payables on
amortising loans. The foreign exchange exposure in relation to the
loan is thus largely naturally hedged.
Lease rentals (as detailed in Notes 4 and 11) are received in USD
and GBP. Those lease rentals received in USD are used to pay the loan
repayments due, also in USD. Both USD lease rentals and loan repayments
are fixed and are for similar sums and similar timings. The matching
of lease rentals to settle loan repayments therefore mitigates risks
caused by foreign exchange fluctuations.
The carrying amounts of the Company's foreign currency denominated
monetary assets and liabilities at the reporting date are as follows:
30 Sep 2013 31 Mar 2013
GBP GBP
Bank loan (USD) - liabilities (59,878,192) (67,043,411)
Cash and cash equivalents (USD)
- assets 2,201,733 2,375,888
======================== ===================
The following table details the Company's sensitivity to a 15 per
cent appreciation in GBP against USD. 15 per cent represents the Directors'
assessment of the reasonably possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the period
end for a 15 per cent change in foreign currency rates. A positive
number below indicates an increase in profit and other equity where
GBP strengthens 15 per cent against USD. For a 15 per cent weakening
of the Sterling against USD, there would be a comparable impact on
the profit and other equity.
USD impact
GBP
Profit or loss 7,321,954
Assets (461,337)
Liabilities 7,783,291
========================
On the eventual sale of the Asset, the Company may be subject to foreign
currency risk if the sale was made in a currency other than GBP. Transactions
in similar assets are typically priced in USD.
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(c) Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to
the Company.
The credit risk on cash transactions are mitigated by transacting
with counterparties that are regulated entities subject to prudential
supervision, or with high credit ratings assigned by international
credit rating agencies.
The Company's financial assets exposed to credit risk are as
follows:
31 Mar
30 Sep 2013 2013
GBP GBP
Receivables 22 22
Cash and cash equivalents 4,315,020 4,580,076
4,315,042 4,580,098
--------------------------- -------------------------
Surplus cash is held in accounts with Barclays Wealth Intermediaries,
Guernsey and Westpac Banking Corporation, which have credit ratings
given by Moody's of A3 and Aa2 respectively.
There is a contractual credit risk arising from the possibility
that the lessee may default on the lease payments. This risk
is mitigated, as under the terms of the lease agreements between
the lessee and the Company, any non payment of the lease rentals
constitutes a Special Termination Event, under which the lease
terminates and the Company may either choose to sell the Asset
or lease it to the another party.
At the inception of each lease, the Company selected a lessee
with a strong balance sheet and financial outlook. The financial
strength of Emirates is regularly reviewed by the Board and the
Asset Manager.
(d) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty
in realising assets or otherwise raising funds to meet financial
commitments. The Company's main financial commitments are its
ongoing operating expenses and loan repayments to Westpac.
Ultimate responsibility for liquidity risk management rests with
the Board of Directors, which established an appropriate liquidity
management framework at the incorporation of the Company, through
the timings of lease rentals and loan repayments. The Company
manages liquidity risk by maintaining adequate reserves, banking
facilities and borrowing facilities, by monitoring forecast and
actual cash flows, and by matching profiles of financial assets
and liabilities.
Liquidity
Risk
(d) (continued)
The table below details the residual contractual maturities of
financial liabilities. The amounts below are contractual undiscounted
cash flows, including both principal and interest payments, and
will not agree directly to the amounts recognised in the statement
of financial position.
30 September over 5
2013 1-3 months 3-12 months 1-2 years 2-5 years years
GBP GBP GBP GBP GBP
Financial
liabilities
Payables -
due within
one year 55,075 - - - -
Loans payable 2,372,098 7,116,293 9,488,391 28,465,172 26,934,467
----------------- ----------------------- --------------------------
2,427,173 7,116,293 9,488,391 28,465,172 26,934,467
----------------- ----------------------- ------------------------------ --------------------------- --------------------------
31 March over 5
2013 1-3 months 3-12 months 1-2 years 2-5 years years
GBP GBP GBP GBP GBP
Financial
liabilities
Payables -
due within
one year 116,783 - - - -
Loans payable 2,527,136 7,582,724 10,108,543 30,325,629 33,749,149
----------------- ----------------------- --------------------------
2,643,919 7,582,724 10,108,543 30,325,629 33,749,149
----------------- ----------------------- ------------------------------ --------------------------- --------------------------
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest
(e) rate risk
Interest rate risk arises from the possibility that changes in
interest rates will affect future cash flows. It is the risk that
fluctuations in market interest rates will result in a reduction
in deposit interest earned on bank deposits held by the Company.
The Company mitigates interest rate risk by fixing the interest
rate on the loan and the lease rentals.
The following table details the Company's exposure to interest
rate risks, by interest refinancing period:
30
September Fixed
2013 Less than interest Non-interest Total
1 month Bearing
GBP GBP GBP GBP
Financial
assets
Receivables - - 3,870 3,870
Cash and cash
equivalents 4,315,020 - - 4,315,020
Total financial
assets 4,315,020 - 3,870 4,318,890
----------------------- ----------------------- ------------------------------ ----------------------
Financial
liabilities
Accrued expenses - - 55,075 55,075
Loans payable - 59,462,084 - 59,462,084
Total financial
liabilities - 59,462,084 55,075 59,517,159
----------------------- ----------------------- ------------------------------ ----------------------
Total interest
sensitivity
gap 4,315,020 59,462,084
----------------------- -----------------------
31 March Fixed
2013 Less than interest Non-interest Total
1 month Bearing
GBP GBP GBP GBP
Financial
assets
Receivables - - 5,441 5,441
Cash and cash
equivalents 4,580,076 - - 4,580,076
Total financial
assets 4,580,076 - 5,441 4,585,517
----------------------- ----------------------- ------------------------------ ----------------------
Financial
liabilities
Accrued expenses - - 116,783 116,783
Loans payable - 66,991,809 - 66,991,809
Total financial
liabilities - 66,991,809 116,783 67,108,592
----------------------- ----------------------- ------------------------------ ----------------------
Total interest
sensitivity
gap 4,580,076 66,991,809
----------------------- -----------------------
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(e) Interest rate risk (continued)
If interest rates had been 50 basis points higher and all other
variables were held constant, the Company's net assets attributable
to shareholders as at 30 September 2013 would have been GBP10,788
(31 March 2013: GBP22,900) greater due to an increase in the
amount of interest receivable on the bank balances.
If interest rates had been 50 basis points lower and all other
variables were held constant, the Company's net assets attributable
to shareholders as at 30 September 2013 would have been GBP10,788
(31 March 2013: GBP22,900) lower due to an decrease in the amount
of interest receivable on the bank balances.
18 ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, the Company has no ultimate
controlling party.
19 SUBSEQUENT EVENTS
On 1 October 2013, a further dividend of 2.25 pence per Ordinary
Preference Share was declared and this was paid on 18 October
2013.
20 RELATED PARTIES
Nimrod Capital LLP ("Nimrod") is the Company's Placing Agent
and Corporate and Shareholder Adviser. In consideration for Nimrod
acting as placing agent in the Share placing, the Company agreed
to pay Nimrod, on admission to trading of the Shares, a placing
commission equal to 0.43 per cent of the initial gross proceeds
of the placing. The Company pays to Nimrod for its services as
Corporate and Shareholder Adviser a fee of GBP100,000 per annum
(adjusted annually for inflation from 2012 onwards, at 2.25 per
cent. per annum) payable quarterly in arrears.
During the period, the Company incurred GBP52,498 (30 September
2012: GBP51,165) of expenses with Nimrod, of which GBPnil (31
March 2013: GBP26,138) was outstanding to this related party
at 30 September 2013.
Until 12 March 2012 Doric Asset Finance Limited ("DAFL") was
the Company's Asset Manager. DAFL received a fee on admission
to trading of the Shares equal to 1.14 per cent of the initial
gross proceeds of the placing and issue of the Company's bank
loan. From 12 March 2012, Doric GmbH ("Doric") has been the Company's
Asset Manager. The Company pays Doric a management and advisory
fee of GBP250,000 per annum (adjusted annually for inflation
from 2012 onwards, at 2.25 per cent. per annum), payable quarterly
in arrears. Doric will also receive a fee for its sales and remarketing
services upon disposition of the Asset and subsequent winding
up of the Company ("the Disposition Fee"). This will be payable
by the Company out of the proceeds of sale and will follow an
incentivised structure. Doric will not be entitled to the Disposition
Fee (but for the avoidance of doubt will be entitled to reimbursement
for properly incurred costs and expenses) if Shareholders do
not recover 100 pence per share net of all costs, fees and expenses
upon the winding up of the Company. If Shareholders receive between
100 pence per share and 150 pence per share (inclusive) (in each
case net of all cost, fees and expense) upon the winding up of
the Company, Doric should receive a Disposition Fee of 2 per
cent. of the realised value of the Asset. If Shareholders receive
more than 150 pence per share (net of all costs, fees and expenses)
Doric should receive 3 per cent. of the Realised Value of the
Asset.
During the period, the Company incurred GBP131,109 (30 September
2012: GBP127,812) of expenses with Doric, of which GBPnil (31
March 2013: GBP65,344) was outstanding to this related party
at 30 September 2013.
Doric Nimrod Air One Limited
ADVISORS & CONTACT INFORMATION
Key Information
Exchange
Ticker
Listing Date
Fiscal Year End
Base Currency
ISIN
SEDOL
Country of Incorporation
Management and Administration
Registered Office
Doric Nimrod Air One Limited
Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey GY1 EJ
Asset Manager
Doric GmbH
BerlingerStrasse 114
Offenbach
63065 Germany
Placing and Corporate and Shareholder Advisory Agent
Nimrod Capital LLP
3 St Helen's Place
London
EC3A 6AB
Solicitors to the Company (as to English Law)
Herbert Smith LLP
Exchange House
Primrose Street
London EC2A 2HS
Specialist Fund Market of the LSE/ CISX
DNA
13 December 2010
31 March
GBP
GG00B4MF3899
B4MF389
Guernsey - Registration number 52484
Company Secretary and Administrator
Anson Fund Managers Limited
P.O. Box 405, Anson Place
Mill Court
La Charroterie
St Peter Port
Guernsey GY1 3GF
Registrar
Anson Registrars Limited
PO Box 426, Anson Place
Mill Court, La Charroterie
St Peter Port, Guernsey GY1 3WX
Advocates to the Company (as to Guernsey Law)
Mourant Ozannes
1 Le Marchant Street
St Peter Port, Guernsey
GY1 4HP
Auditor
Deloitte LLP
Regency Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 3HW
Liaison Agent
Doric Partners LLP
5 Royal Exchange Building
London
EC3V 3NL
Liaison Agent
Doric Lease Corp Partners LLP
5 Royal Exchange Building
London
EC3V 3NL
Contact Details
Company
Doric Nimrod Air One Limited
Anson Place, Mill Court,
La Charroterie, St Peter Port,
Guernsey GY1 1EJ
Tel: +44 (0) 1481 722260
Website: www.dnairone.com
Corporate & Shareholder Advisor
Nimrod Capital LLP
3 St. Helen's Place
London EC3A 6AB
Tel: +44 (0) 20 3355 6855
Website: www.nimrodcapital.com
END OF ANNOUNCEMENT
E&OE - in transmission.
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The company news service from the London Stock Exchange
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