TIDMDNA
RNS Number : 7578Q
Doric Nimrod Air One Limited
01 December 2016
DORIC NIMROD AIR ONE LIMITED (the "Company")
HALF-YEARLY FINANCIAL REPORT
The Board of the Company is pleased to announce its results for
the period from 1 April 2016 to 30 September 2016.
To view the Company's Half-yearly Financial Report please follow
the link below:
http://www.rns-pdf.londonstockexchange.com/rns/7578Q_-2016-12-1.pdf
In addition, to comply with DTR 4.2 please find below the full
text of the half yearly report. The report is also available on the
Company's website, http://www.dnairone.com
Enquiries:
For further information contact:
Administrative Enquiries:
JTC (Guernsey) Limited
Tel: +44 (0) 1481 702 400
SUMMARY INFORMATION
Admission to Trading Specialist Fund Segment of the London
Stock
Exchange's Main Market
----------------------------- ------------------------------------------
Ticker DNA
----------------------------- ------------------------------------------
Share Price 112.25 pence (as at 30 September 2016)
113.50 pence (as at 25 November 2016)
----------------------------- ------------------------------------------
Market Capitalisation GBP 47.65 million (as at 30 September
2016)
----------------------------- ------------------------------------------
Aircraft Registration Number A6-EDC
----------------------------- ------------------------------------------
Current/Future Anticipated Current dividends are 2.25p per quarter
Dividend per share (9p
per annum) and it is anticipated this
will continue until the aircraft lease
terminates in 2022.
----------------------------- ------------------------------------------
Dividend Payment Dates April, July, October, January
----------------------------- ------------------------------------------
Currency Sterling
----------------------------- ------------------------------------------
Launch Date/Price 13 December 2010 / 100p
----------------------------- ------------------------------------------
Incorporation and Domicile Guernsey
----------------------------- ------------------------------------------
Asset Manager Doric GmbH
----------------------------- ------------------------------------------
Corp & Shareholder Advisor Nimrod Capital LLP
----------------------------- ------------------------------------------
Administrator JTC (Guernsey) Limited
----------------------------- ------------------------------------------
Auditor Deloitte LLP
----------------------------- ------------------------------------------
Market Makers Shore Capital Limited
Winterflood Securities Limited Jefferies
International Limited Numis Securities
Limited
----------------------------- ------------------------------------------
SEDOL, ISIN B4MF389, GG00B4MF3899
----------------------------- ------------------------------------------
Year End 31 March
----------------------------- ------------------------------------------
Stocks & Shares ISA Eligible
----------------------------- ------------------------------------------
Website www.dnairone.com
----------------------------- ------------------------------------------
COMPANY OVERVIEW
Doric Nimrod Air One Limited (LSE Ticker: DNA) ("DNA" or the
"Company") is a Guernsey company incorporated on 8 October 2010.
Its shares were admitted to trading on the Specialist Fund Segment
("SFS") of the London Stock Exchange's Main Market ("LSE") on 13
December 2010.
The Company's total issued share capital currently consists of
42,450,000 Ordinary Preference Shares (the "Shares") which were
admitted to trading at an issue price of 100 pence per share. As at
25 November 2016, the latest practicable date prior to publication
of this report, the Shares are trading at 113.50 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 for USD 180m, which it
leased (the "Lease") for twelve years to Emirates Airline
("Emirates"), the national carrier owned by The Investment
Corporation of Dubai based in Dubai, United Arab Emirates.
Distribution Policy
The Company aims to provide its 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 receives 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. Emirates bears
all costs (including maintenance, repair and insurance) relating to
the aircraft during the lifetime of the Lease.
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 "Law") before the Directors may resolve to declare
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 the Company declared two interim dividends of
2.25 pence per Share. One interim dividend of 2.25 pence per Share
was declared after the reporting period. Further details of these
dividend payments can be found on page 23.
Return of Capital
If and when the Company is wound up (pursuant to a shareholder
resolution, including the liquidation resolution) the Company
intends to return to Shareholders the net capital proceeds upon the
eventual sale of the Asset subject to compliance with the Company's
Articles of Incorporation (the "Articles") and the applicable laws
(including any applicable requirements of the solvency test
contained in the Law).
Liquidation Resolution
Although the Company does not have a fixed life, the Articles
require that the Directors convene a general meeting of the Company
in June 2022, where an ordinary resolution will be put to the
Shareholders that the Company proceed to an orderly wind-up at the
end of the term of the Lease (the "Liquidation Resolution"). In the
event that the Liquidation Resolution is not passed, the Directors
will consider alternatives for the future of the Company and shall
propose such alternatives at a general meeting of the Members,
including re-leasing the Asset, or selling the Asset and
reinvesting the capital received from the sale of the Asset in
another aircraft or aircrafts.
CHAIRMAN'S STATEMENT
I am very pleased to present Shareholders with the Company's
half-yearly financial report, covering the period from 1 April 2016
until 30 September 2016 ("the Period").
I am glad to report that during the Period the Company has
performed as anticipated and has declared and paid quarterly
dividends of 2.25p per share, as expected, representing 9p per
share per year.
The Company owns one Airbus A380s, leased to Emirates. The lease
payments received by the Company from Emirates cover repayment of
the debt as well as income to pay operating expenses and dividends
to Shareholders. Emirates bears all costs (including maintenance,
repair and insurance) relating to the aircraft during the lifetime
of the leases.
The Company's Asset Manager, Doric GmbH, continues to monitor
the Lease and to report regularly to the Board. Nimrod Capital LLP,
the Company's Placing Agent as well as its Corporate and
Shareholder Advisory Agent, continues to liaise between the Board
and Shareholders, and to distribute quarterly fact sheets.
From January to August 2016 overall global air traffic passenger
demand, measured in revenue passenger kilometres (RPKs), expanded
by 5.4% compared to the same period in the year before and taking
into consideration that 2016 is a leap year. Traffic is being
shaped by a range of drivers, including fragile economic growth and
lower airfares. And the International Air Transport Association
(IATA) says that passenger traffic is set for another year of solid
growth.
Emirates has also continued to perform well flying more
passengers than ever before carrying 51.9 million people to 153
destinations in 80 countries on six continents during the last
financial year 2015/16. About 32% of Emirates' passengers were
carried by an A380. Passenger load factors remain high across the
fleet. At the same time Emirates received 29 new aircraft to cope
with its forecast increasing demand.
In economic reality, the Company has also performed well. Two
interim dividends were declared in the half-year and future
dividends are targeted to be declared and paid on a quarterly
basis. However, the financial statements do not, in the Board's
view, properly convey this economic reality due to the accounting
treatments for foreign exchange, rental income and finance
costs.
International Financial Reporting Standards require that
transactions denominated in US Dollars (including, most
importantly, the cost of the aircraft) are translated into Sterling
at the exchange rate ruling at the date of the transaction whilst
monetary items (principally the outstanding borrowings) are
translated at the rate prevailing on the reporting date. The result
is that the figures sometimes show very large mismatches which are
reported as unrealised foreign exchange differences.
The Asset Manager of the Company produces a factsheet on a
quarterly basis which includes an analysis of the asset value of
the Company. Due to the inaccuracies described above, the Board
recommends that Shareholders consider the asset value disclosed in
the quarterly factsheet as more indicative of the value of the
Company's assets.
On an on-going basis and assuming the lease and loan payments
are made as anticipated, such exchange differences do not reflect
the commercial substance of the situation in the sense that the key
transactions denominated in US Dollars are in fact closely matched.
Rental income received in US Dollars is used to pay loan repayments
due which are likewise denominated in US Dollars. US Dollar lease
rentals and loan repayments are furthermore fixed at the outset of
the Company's life and are very similar in amount and timing.
In addition to this, rental income receivable is credited evenly
to the Statement of Comprehensive Income over the planned life of
the Company. Conversely, the methodology for accounting for
interest cost means that the proportion of the loan repayments
which is treated as interest, and is debited to the Statement of
Comprehensive Income, varies over the course of the loan with a
higher proportion of interest expense recognised in earlier
periods, so that the differential between rental income and
interest cost (as reported in the Statement of Comprehensive
Income) reduces over the course of 12 years. In reality however the
amount of rental income is fixed so as to closely match the
interest and principal components of each loan repayment instalment
and allow for payments of operating costs and dividends.
On behalf of the Board, I would like to thank our service
providers for all their help and assistance and all Shareholders
for their continued support of the Company.
Charles Wilkinson Chairman
ASSET MANAGER'S REPORT
On the invitation of the Directors of the Company, the following
commentary has been provided by Doric GmbH as Asset Manager of the
Company and is provided without any warranty as to its accuracy and
without any liability incurred on the part of the Company, its
Directors and officers and service providers. The commentary is not
intended to constitute, and should not be construed as, investment
advice. Potential investors in the Company should seek their own
independent financial advice and may not rely on this communication
in evaluating the merits of an investment in the Company. The
commentary is provided as a source of information for shareholders
of the Company but is not attributable to the Company.
1. The Doric Nimrod Air One Airbus A380
The Airbus A380 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 2016, a total of 4,089 flight cycles were logged. Total
flight hours were 34,446. This equates to an average flight
duration of eight hours and 25 minutes.
The A380 owned by the Company visited Auckland, Brisbane,
Frankfurt, Jeddah, New York JFK, Sydney, and Toronto during the
first half of the 2016-17 financial year.
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 24 month or 12,000 flight hour
intervals, whichever occurs first. The last heavy maintenance
check, the 6-year check, was completed in December 2014.
Emirates bears all costs (including for maintenance, repairs and
insurance) relating to the aircraft during the lifetime of the
Lease.
The records audited by the asset manager, Doric, in May were
found to be in good order.
2. Market Overview
During the first seven months of 2016 passenger demand, measured
in revenue passenger kilometres (RPKs), increased by 6.0% compared
to the same period the year before. Adjusted for the extra day, as
2016 is a leap year, traffic grew by 5.5%. "Passenger demand has
broadly grown in line with the average of the past 10 years but the
industry faces some potential headwinds, including lingering
impacts from the series of terrorist attacks and the fragile
economic backdrop", said Alexandre de Juniac, IATA's (International
Air Transport Association) Director General and CEO. But entering
the peak travel months, July and August, RPK growth accelerated in
July with the fastest pace in five months and, according to IATA,
passenger traffic is set for another year of solid growth. In its
latest forecast released in June, it expects an RPK growth of 6.2%
in 2016.
At 79.9% passenger load factors have remained close to the
historic high - in a narrow band around 80% since February - as
airlines have slowed capacity growth in line with the moderation in
demand growth. IATA estimates an average worldwide passenger load
factor of 80.0% for the full year 2016.
A regional breakdown reveals that Middle East airlines,
including Emirates, continued to outperform the overall market
again this year. Between January and July RPKs increased by 10.9%
compared to the previous period. Asia/Pacific-based operators
ranked second with 8.7%, followed by Africa with 7.7%. Europe grew
by 3.7%. Latin American and North American market participants each
recorded 3.6% more RPKs.
Fuel is the single largest operating cost of airlines and has
significant effects on the industry's profitability. According to
its latest report released in June, IATA expects an average fuel
price of USD 55.6 per barrel in 2016. This would be 17% lower
compared to the previous year. It could drive the average share of
fuel costs in operating expenses down to less than 20% for the
first time since 2004. The industry-wide net profit could be
further boosted to an estimated USD 39.4 billion. The net profit
margin of 5.6% would be the highest for more than a decade. In 2015
the revised industry net profit reached USD 35.3 billion, compared
to a revised net profit of USD 13.7 billion the year before. The
profit development during this year will heavily depend on the oil
price level. IATA has based its calculations on an average crude
oil price of USD 45 per barrel. This includes a rising profile
during the course of the year to just above USD 50 per barrel by
the end of 2016.
(c) International Air Transport Association, 2016. Air Passenger
Market Analysis July 2015 / Air Passenger Market Analysis July 2016
/ Economic Performance of the Airline Industry, 2016 Mid-Year
Report / Press Release No. 45: July Passenger Demand Shows
Resilience. All Rights Reserved. Available on the IATA Economics
page.
3. Lessee - Emirates Key Financials
In the financial year 2015/16 ending on 31 March 2016 Emirates
made its highest profit ever with USD 1.9 billion - an increase of
56% compared to the previous period. The profit margin of 8.4% is
the greatest since 2010/11. At the same time, the 28th consecutive
year of profit provided a number of global and operational
challenges to the company. The rise of the US dollar against
currencies in most of Emirates' key markets only had a USD 1.1
billion impact on the airline's bottom line. As a result of this
and fare adjustments following the reduction in fuel prices there
was a 4% drop in revenue to USD 23.2 billion. During the financial
year, the airline had to deal with weak consumer confidence in a
slow global economic environment, terror threats and geopolitical
instability in many regions it serves. Nevertheless, the company
was able to maintain its strategy of a diversified revenue base
which limited the carrier's exposure to single geographical
regions.
The airline's operating costs were significantly influenced by
the drop in oil prices with a 39% lower average fuel price compared
to the previous period. As Emirates remained largely unhedged on
jet fuel prices, this significantly paid off. Fuel costs remained
the largest component in operating costs, but significantly
decreased by 9 percentage points to 26%. Total operating costs
decreased by 8% over the 2014/15 financial year.
As of 31 March 2016, the balance sheet total amounted to USD
32.5 billion, an increase of 7% compared to the beginning of the
financial year. Total equity increased by 14.6% to USD
8.8 billion with an equity ratio of 27.2%. The current ratio
stood at 0.82, meaning the airline
would be able to meet about four-fifths of its current
liabilities by liquidating all its current assets. Significant
items on the liabilities side of the balance sheet included current
and non- current borrowings and lease liabilities in the amount of
USD 13.7 billion. As of 31 March 2016, the carrier's cash balance
was USD 5.4 billion, up by USD 846 million compared to the
beginning of the financial year.
New destinations, larger aircraft deployment and increased
frequencies to existing destinations boosted the transport
capacities for passengers (measured in ASKs) by 12.8% compared to
the previous financial year. Passenger demand (in RPKs) grew by
8.4%, resulting in a passenger load factor of 76.5%. The economy
class seat factor stood at 79.2%. About 32% of the 51.9 million
passengers carried in the 2015/16 financial year travelled aboard
an A380. Premium and overall seat factors for Emirates' flagship
aircraft outperformed the network.
During the financial year 2015/16 Emirates added eight new
passenger destinations to its network and added services and
capacity to another 34 cities on its existing route network across
Africa, Asia, Europe, the Middle East and North America. The
increasing number of A380 aircraft joining the fleet allowed the
airline to introduce superjumbo services to a further four
destinations during the course of the 2015 calendar year. At the
same time A380 services to nine existing routes were increased.
This means one out of every four destinations on the carrier's
passenger network is served by an A380.
During the first six months of 2016 Emirates' aircraft travelled
432 million kilometres on over 96,000 flights.
In July Emirates was named the "World's Best Airline 2016" at
the Skytrax World Airline Awards. The ranking is based on the
largest airline passenger satisfaction survey in the industry, with
a total of 19.2 million completed surveys covering 280 airlines.
After 2001, 2002 and 2013 this is the fourth time the top accolade
was awarded to Emirates in the 15- year history of this contest.
Furthermore, the airline received the "World's Best Inflight
Entertainment" award for a record 12th consecutive year, and the
"Best Airline in the Middle East" award.
Source: Ascend, Emirates
4. Aircraft - A380
By mid-September 2016 Emirates operated a fleet of 83 A380s
which currently serve 41 destinations from its Dubai hub:
Amsterdam, Auckland, Bangkok, Barcelona, Beijing, Birmingham,
Brisbane, Copenhagen, Dallas, Dusseldorf, Frankfurt, Hong Kong,
Houston, Jeddah, Kuala Lumpur, Kuwait, London Gatwick, London
Heathrow, Los Angeles, Madrid, Manchester, Mauritius, Melbourne,
Milan, Mumbai, Munich, New York JFK, Paris, Perth, Prague, Rome,
San Francisco, Seoul, Shanghai, Singapore, Sydney, Taipei, Toronto,
Vienna, Washington, and Zurich. During the summer Emirates
announced a number of expansions to its A380 operations. This
includes a second daily A380 services to Los Angeles (since July 1)
and Milan (from October 1) and a third daily A380 services to
Munich (since June 20) and Manchester (from January 1, 2017).
Furthermore, Guangzhou (China) is scheduled to become an A380
destination on October 1, 2016. Johannesburg (South Africa) will
complement Emirates' global list of A380 destinations from February
1, 2017. Already
this year the operator will deploy the A380 on its non-stop
service between Dubai and Auckland (New Zealand), which was
introduced only a few months ago, currently flown by a Boeing
777-200LR and which is reported to be the longest sector served by
a commercial carrier. Also from October 30, 2016 another New
Zealand city, Christchurch, will be served by an A380, eliminating
the current en-route stop in Bangkok.
By mid-September 2016 the global A380 fleet consisted of 195
commercially operated planes in service. The thirteen operators are
Emirates (83), Singapore Airlines (19), Deutsche Lufthansa (14),
Qantas (12), British Airways (12), Air France (10), Korean
Airways
(10), Etihad Airways (8) Malaysia Airlines (6), Qatar Airways
(6), Thai Airways (6), China Southern Airlines (5), and Asiana (4).
The number of undelivered A380 orders stood at 126.
For a long time Emirates has been known as the strongest
supporter of a re-engined A380 and prepared to order up to 200 of
the so-called A380neo. Speaking in front of aviation professionals
in June, Airbus' CEO Fabrice Bregier ruled out an A380neo in the
near future. In May Emirates' President Tim Clark had indicated
that Emirates might purchase up to 60 additional aircraft of the
current version, if Airbus were not prepared to launch an A380neo.
With regard to the airline's retirement plans for in-service A380s
Clark said that extending leases beyond their current duration
would be an option.
In July 2016 A380 manufacturer Airbus revealed plans to cut A380
production to one aircraft per month from 2018 onwards. According
to Airbus CEO, Fabrice Brégier, the company remains committed to
the superjumbo and will continue to invest in the jet. "The A380 is
here to stay", Brégier was quoted in the press. The adjusted
production rate allows Airbus to keep "all [its] options open" for
the emergence of future A380 demand.
In August 2016 Australian flag carrier Qantas disclosed that the
airline is unlikely to take delivery of the final eight A380s it
has on order with Airbus. The airline's CEO Alan Joyce is very
happy with the current network accommodating 12 A380s but is
struggling to find routes for another eight aircraft. Deliveries
have been repeatedly deferred in recent years as a cost- saving
measure.
In September 2016 Singapore Airlines (SIA) announced that they
had decided not to exercise their option to extend the lease on
their first Airbus A380 delivered in 2007 at the current rental.
The initial lease term expires in October 2017. No decisions have
been made so far on a further four A380 aircraft which were
delivered to SIA on similar operating lease terms in 2008. This
statement comes only days after Malaysia Airlines' (MAS)
reaffirmation to market its six A380s in the near future, as its
new focus is more on Asian flights requiring lower capacity
aircraft, like the 25 Boeing 737 MAX ordered back in July this
year. CEO Peter Bellew said MAS is in talks with carriers in China
and other Association of Southeast Asia Nations countries who might
be interested in leasing or buying superjumbos. In his view there
are a number of airlines in the region "keen to dip their toe in
the water". Already in June last year MAS announced plans to remove
a number of aircraft from its fleet, including two of its six A380
aircraft, as part of its restructuring plans.
Source: aero.de, Airbus, Ascend, Bloomberg, CAPA, Emirates
DIRECTORS
Charles Edmund Wilkinson - Chairman (Age 73)
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. He is resident in Guernsey.
Norbert Bannon (Age 67)
Norbert Bannon is chairman of a large UK DB pension fund, a
major Irish DC pension scheme and is a Director of and advisor to a
number of other financial companies. He is Chairman of Doric Nimrod
Air Two Limited and Chairman of the Audit Committee of Doric Nimrod
Air Three Limited. He has extensive experience in international
finance having been CEO of banks in Singapore and New York. He was
CEO of Ireland's largest venture capital company and was Finance
Director and Chief Risk Officer at a leading investment bank in
Ireland. He has worked as a consultant on risk issues
internationally.
He earned a degree in economics from Queen's University, studied
at Stanford Graduate School of Business and is a Chartered
Accountant.
Geoffrey Alan Hall (Age 67)
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.
Geoffrey earned his masters degree in Geography at the
University of London. He is an associate of the CFA Society of the
UK.
John Le Prevost (Age 64)
John Le Prevost is the Chief Executive Officer of Anson Group
Limited and Chairman of Anson Registrars Limited (the Company's
Registrar). He has spent over 30 years working in offshore trusts
and investment business during which time he was Managing Director
of County NatWest Investment Management (Channel Islands) Limited,
Royal Bank of Canada's mutual fund company in Guernsey and Republic
National Bank of New York's international trust company. John is a
Director of Guaranteed Investment Products I PCC Limited,
Guernsey's largest protected cell company. He is a Director of a
number of other companies associated with Anson Group's business as
well as being a trustee of the Guernsey Sailing Trust. John is also
currently a Director of Doric Nimrod Air Two Limited, Doric Nimrod
Air Three Limited and Amedeo Air Four Plus Limited. He is resident
in Guernsey.
INTERIM MANAGEMENT REPORT
A description of important events which have occurred during the
Period, their impact on the performance of the Company as shown in
the financial statements and a description of the principal risks
and uncertainties facing the Company are given in the Chairman's
Statement, Asset Managers Report, and the Notes to the financial
statements contained on pages 17 to 33 and are 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.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company are
unchanged from those disclosed in the Company's annual financial
report for the year ended 31 March 2016.
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 13 to 33. 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 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 financial
statements.
Responsibility Statement
The Directors jointly and severally confirm that to the best of
their knowledge:
(a) The financial statements, prepared in accordance with IFRS
give a fair, balanced and understandable view of the assets,
liabilities, financial position and profits of the Company and
performance of the Company;
(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.
Signed on behalf of the Board of Directors of the Company on 30
November 2016
Charles Wilkinson John Le Prevost
Chairman Director
STATEMENT OF COMPREHENSIVE INCOME
For the period from 01 April 2016 to 30 September 2016
1 Apr 2016 1 Apr 2015
to to
Notes 30 Sep 2016 30 Sep 2015
GBP GBP
INCOME
A rent income 4 4,942,607 4,397,295
B rent income 4 2,260,370 2,260,370
Bank interest received - 1,531
------------------------ ----------------------
7,202,977 6,659,196
EXPENSES
Operating expenses 5 (298,891) (294,960)
Depreciation of Asset 9 (2,033,265) (1,894,767)
------------------------ ----------------------
(2,332,156) (2,189,727)
Net profit for the period before
finance costs and foreign exchange
(losses) / gains 4,870,821 4,469,469
------------------------ ----------------------
Finance costs 10 (1,483,899) (1,470,343)
Net profit for the period after finance
costs before foreign exchange (losses)
/ gains 3,386,922 2,999,126
Unrealised foreign exchange (loss)
/ gain (5,609,317) 1,153,653
------------------------ ----------------------
(Loss) / profit for the period (2,222,395) 4,152,779
------------------------ ----------------------
Other Comprehensive Income - -
------------------------ ----------------------
Total Comprehensive (Loss) / Income
for the period (2,222,395) 4,152,779
======================== ======================
Pence Pence
(Loss) / Earnings per Share for the
period - Basic and Diluted 8 (5.24) 9.78
In arriving at the results for the financial period, all amounts
above relate to continuing operations.
The notes on pages 17 to 33 form an integral part of these
financial statements.
STATEMENT OF FINANCIAL POSITION
As at 30 September 2016
30 Sep 2016 31 Mar 2016
Notes GBP GBP
NON-CURRENT ASSETS
Aircraft 9 92,229,628 94,262,893
CURRENT ASSETS
Cash and cash equivalents 4,382,997 4,213,957
Receivables 12 5,746 12,479
4,388,743 4,226,436
--------------------- -------------------
TOTAL ASSETS 96,618,371 98,489,329
--------------------- -------------------
CURRENT LIABILITIES
Borrowings 14 9,276,802 8,151,040
Deferred income 9,758,088 8,321,357
Payables - due within one year 13 53,620 56,032
19,088,510 16,528,429
NON-CURRENT LIABILITIES
Borrowings 14 40,154,558 40,452,952
40,154,558 40,452,952
--------------------- -------------------
TOTAL LIABILITIES 59,243,068 56,981,381
--------------------- -------------------
TOTAL NET ASSETS 37,375,303 41,507,948
--------------------- -------------------
EQUITY
Share capital 15 39,016,728 39,016,728
Retained earnings (1,641,425) 2,491,220
37,375,303 41,507,948
--------------------- -------------------
Pence Pence
Net asset value per Ordinary Preference Share
based
on 42,450,000 (Mar 2016: 42,450,000) shares
in issue 88.05 97.78
The financial statements were approved by the Board of Directors
and authorised for issue on
30 November 2016 and are signed on its behalf by:
Charles Wilkinson John Le Prevost
Director Director
The notes on pages 17 to 33 form an integral part of these
financial statements.
STATEMENT OF CASH FLOWS
For the period from 01 April 2016 to 30
September 2016
1 Apr 2016 to 1 Apr 2015 to
30 Sep 2016 30 Sep 2015
GBP GBP
OPERATING ACTIVITIES
(Loss) / profit for the period (2,222,395) 4,152,779
Movement in deferred income 1,436,731 428,400
Interest received - (1,531)
Depreciation of Asset 2,033,265 1,894,767
Loan interest 1,453,539 1,422,734
Decrease in payables (2,412) (16,361)
Decrease in receivables 6,733 13,075
Amortisation of debt arrangement costs 30,360 47,609
Foreign exchange movement 5,609,317 (1,153,653)
--------------------- --------------------
NET CASH FROM OPERATING ACTIVITIES 8,345,138 6,787,819
--------------------- --------------------
INVESTING ACTIVITIES
Interest received - 1,531
--------------------- --------------------
NET CASH FROM INVESTING ACTIVITIES - 1,531
--------------------- --------------------
FINANCING ACTIVITIES
Dividends paid (1,910,250) (1,910,250)
Repayments of capital on borrowings (4,250,166) (3,516,336)
Repayments of interest on borrowings (1,406,110) (1,431,133)
--------------------- --------------------
NET CASH USED IN FINANCING ACTIVITIES (7,566,526) (6,857,719)
--------------------- --------------------
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 4,213,957 4,371,633
Increase / (decrease) in cash and cash
equivalents 778,612 (68,368)
Effects of foreign exchange rates (609,572) (55,498)
--------------------- --------------------
CASH AND CASH EQUIVALENTS AT OF
PERIOD 4,382,997 4,247,767
--------------------- --------------------
The notes on pages 17 to 33 form an integral part of these
financial statements.
STATEMENT OF CHANGES IN EQUITY
For the period from 01 April 2016 to 30 September 2016
Notes Share Retained Total
Capital Earnings
GBP GBP GBP
Balance as at 1 April 2016 39,016,728 2,491,220 41,507,948
Total Comprehensive Loss for the
period - (2,222,395) (2,222,395)
Dividends paid 7 - (1,910,250) (1,910,250)
------------------- ------------------ ----------------
Balance as at 30 September
2016 39,016,728 (1,641,425) 37,375,303
------------------- ------------------ ----------------
Notes Share Retained Total
Capital Earnings
GBP GBP GBP
Balance as at 1 April 2015 39,016,728 2,043,428 41,060,156
Total Comprehensive Income for
the period - 4,152,779 4,152,779
Dividends paid 7 - (1,910,250) (1,910,250)
------------------- ------------------ ----------------
Balance as at 30 September
2015 39,016,728 4,285,957 43,302,685
------------------- ------------------ ----------------
The notes on pages 17 to 33 form an integral part of these
financial statements.
NOTES TO THE FINANCIAL STATEMENTS
For the period from 01 April 2016 to 30 September 2016
1 GENERAL INFORMATION
Doric Nimrod Air One Limited (the "Company") 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 SFS of the
LSE. The Company delisted from Channel Islands Securities Exchange
("CISEA") on the 5 September 2014.
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
the International Accounting Standard 34 Interim Financial
Reporting as adopted by the European Union, and applicable Guernsey
law. The financial statements have been prepared on a historical
cost basis.
This report is to be read in conjunction with the annual report
for the year ended 31 March 2016 which are prepared in accordance
with the International Financial Reporting Standards adopted by the
European Union and any public announcements made by the Company
during the interim reporting period.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period,
except for the adoption of new and amended standards as set out
below:
Changes in accounting policies and disclosure
The following Standards or Interpretations have been adopted in
the current period. Their adoption has not had any impact on the
amounts reported in these financial statements and is not expected
to have any impact on future financial periods:
IFRS 7 Financial Instruments: Disclosures - amendments resulting
from September 2014 Annual Improvements effective for annual
periods beginning on or after 1 January 2016.
IAS 1 Presentation of Financial Statements - amendments
resulting from the disclosure initiative effective for annual
periods beginning on or after 1 January 2016.
IAS 16 Property, Plant and Equipment - amendments regarding the
clarification of acceptable methods of depreciation and
amortisation and amendments bringing bearer plants into the scope
of IAS 16 effective for annual periods beginning on or after 1
January 2016.
IAS 34 Interim Financial Reporting - amendments resulting from
September 2014 annual improvements for annual periods beginning on
or after 1 January 2016.
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
International Accounting Standards Board ("IASB") and International
Financial Reporting Standards Interpretations Committee ("IFRIC")
are not expected to affect the Company.
IFRS 9 Financial Instruments - finalised version, incorporating
requirements for classification and measurement, impairment,
general hedge accounting and derecognition. There is no mandatory
effective date, however the IASB has tentatively proposed that this
will be effective for accounting periods commencing on or after 1
January 2018 (EU endorsement is outstanding).
IFRS 15 Revenue from contracts with customers - deals with
revenue recognition and establishes principles for reporting useful
information to users of financial statements about the nature,
amount, timing and uncertainty of revenue and cash flows arising
from an entity's contracts with customers. Revenue is recognised
when a customer obtains control of a good or service and thus has
the ability to direct the use and obtain the benefits from the good
or service. The standard replaces IAS 18 'Revenue' and IAS 11
'Construction contracts', related interpretations and is endorsed
by the EU. The standard is effective for a period beginning on or
after 1 January 2018.
IFRS 16 Leases - specifies how an IFRS reporter will recognise,
measure, present and disclose leases. The standard provides a
single lessee accounting model, requiring lessees to recognise
assets and liabilities for all leases unless the lease term is 12
months or less or the underlying asset has a low value. Lessors
continue to classify leases as operating or finance, with IFRS 16's
approach to lessor accounting substantially unchanged from its
predecessor, IAS 17 (EU endorsement is outstanding) and is
effective for annual periods beginning on or after 1 January
2019.
IAS 7 Statement of Cash Flows - amendments resulting from the
disclosure initiative effective for annual periods beginning on or
after 1 January 2017 (EU endorsement is outstanding).
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
Ordinary Preference Shares (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" or "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.
(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
convertible to known amounts of cash and subject to insignificant
risk of changes in value.
(h) 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 rents 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. The Board is not aware of any material
uncertainty that may cast significant doubt upon the Company's
ability to continue as a going concern.
(i) Leasing and Rental Income
The lease relating to the Asset 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 are 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 in profit or loss on a straight-line basis
over the lease term.
(j) 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. Costs incurred by the lessee in
maintaining, repairing or enhancing the aircraft are not recognised
as they do not form part of the costs to the Company. Accumulated
depreciation and any recognised impairment loss are deducted from
cost to calculate the carrying amount of the Asset.
Depreciation is recognised so as to write off the cost of the
Asset less the estimated residual value of
GBP67.1 million over the estimated useful life of the Asset of
12 years, using the straight line method. Residual values have been
arrived at by taking into account disposition fees. 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 statement of financial position date, the Company
reviews the carrying amounts of the 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 the 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.
(k) Financial Liabilities
Financial liabilities consist of payables and borrowings. The
classification of financial liabilities at initial recognition
depends on the purpose for which the financial liability was issued
and its characteristics. All financial liabilities are initially
measured at fair value, net of transaction costs. All financial
liabilities are recorded on the date on which the Company becomes
party to the contractual requirements of the financial liability.
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.
(l) Net Asset Value
In circumstances where the Directors, as advised by the Asset
Manager, are of the opinion that the net asset value ("NAV") or NAV
per Share, as calculated under prevailing accounting standards, is
not appropriate or could give rise to a misleading calculation, the
Directors, in consultation with the Administrator 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 the Asset
As described in Note 2 (j), 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. IAS 16
Property, Plant and Equipment requires residual value to be
determined as an estimate of the amount that the Company would
currently obtain from the disposal of the asset, after deducting
the estimated costs of disposal, if the Asset were of the age and
condition expected at the end of its useful life. However, there
are currently no aircraft of a similar type of sufficient age for
the Directors to make a direct market comparison in making this
estimation. After consulting with the Asset Manager, the Directors
have concluded that a forecast market value for the aircraft at the
end of its useful life (including inflationary effects) best
approximates residual value. In estimating residual value, the
Directors have made reference to forecast market values for the
aircraft obtained from 3 independent expert aircraft valuers. The
estimation of residual value remains subject to inherent
uncertainty. If the estimate of residual value had been decreased
by 20% with effect from the beginning of this period, the net
profit for the period and closing shareholders' equity would have
been decreased by approximately GBP0.87 million. An increase in
residual value by 20% would have been an equal but opposite effect.
This reflects the range of estimates of residual value that the
Directors believe would be reasonable at this time. The estimated
useful life of the Asset is based on the expected period for which
the Company will own and lease the aircraft.
Operating Lease Commitments - Company as Lessor
The Company has entered into a 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 without an extension option.
Impairment
As described in Note 2 (j), 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 Asset for any
indications of impairment as required by IAS 16 Property, Plant and
Equipment and IAS 36 Intangible Assets.
At the year end the Directors reviewed the carrying value of the
Asset and concluded that there was no indication of an
impairment.
4 RENTAL INCOME
1 Apr 2016 1 Apr 2015
to to
30 Sep 2016 30 Sep 2015
GBP GBP
A rent income 6,478,892 4,925,249
Revenue received but not yet earned (1,536,285) (527,954)
------------------ -----------------
4,942,607 4,397,295
B rent income 2,160,816 2,160,816
Revenue earned but not yet received 99,554 99,554
-------------------- -----------------
2,260,370 2,260,370
Total rental income 7,202,977 6,657,665
------------------ ---------------
Rental income is derived from the leasing of the Asset. Rent is
split into A rent, which is received in US Dollars ("USD" or "$")
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 the lease. An adjustment
has been made to spread the actual total income receivable evenly
over the term of the lease.
5 OPERATING EXPENSES
1 Apr 2016 to 1 Apr 2015
30 Sep 2016 to
GBP 30 Sep 2015
Management fee 55,884 GBP
54,654
Asset management fee 145,115 141,929
Administration fees 30,426 30,626
Accountancy fees 5,345 5,345
Registrars fee 4,909 5,438
Audit fee 10,050 10,000
Directors' remuneration 34,000 34,000
Directors' and Officers'
insurance 4,020 4,031
Legal & professional
expenses 238 942
Annual fees 2,707 3,008
Sundry costs 4,369 3,162
Other operating expenses 1,828 1,825
---------------------------- ------------------------
298,891 294,960
---------------------------- ------------------------
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 DIVIDS IN RESPECT OF EQUITY SHARES
01 Apr 2016 to
30 Sep 2016
GBP Pence per
share
First interim dividend 955,125 2.25
Second interim dividend 955,125 2.25
------------------- -------------------
1,910,250 4.50
------------------- -------------------
01 Apr 2015 to
30 Sep 2015
GBP Pence per
share
First interim dividend 955,125 2.25
Second interim dividend 955,125 2.25
------------------- -------------------
1,910,250 4.50
------------------- -------------------
8 (LOSS) / EARNINGS PER SHARE
(Loss) / Earnings per Share ('LPS' / 'EPS') is based on the net
loss for the period attributable to Shareholders of GBP2,222,395
(30 Sep 2015: profit for the period of GBP4,152,779) and 42,450,000
Shares (30 Sep 2015: 42,450,000) being the weighted average number
of Shares in issue during the period. There are no dilutive
instruments and therefore basic and diluted (loss) / earnings per
Share are identical.
9 PROPERTY, PLANT AND EQUIPMENT - AIRCRAFT
COST Aircraft
As at 1 Apr 2016 GBP
114,532,547
----------------
As at 30 Sep 2016 114,532,547
----------------
ACCUMULATED DEPRECIATION
As at 1 Apr 2016 20,269,654
Charge for the period 2,033,265
----------------
As at 30 Sep 2016 22,302,919
----------------
CARRYING AMOUNT
As at 31 Mar 2016 94,262,893
----------------
As at 30 Sep 2016 92,229,628
----------------
The cost in USD and the exchange rates at acquisition
for the aircraft was as follows:
Cost in USD 178,549,805
GBP/USD exchange rate 1.5502
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 Leases the direct costs attributed in negotiating
and arranging the 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 2016 1 Apr 2015
to to
30 Sep 2016 30 Sep 2015
GBP GBP
Amortisation of debt arrangement
costs 30,360 47,609
Loan interest 1,453,539 1,422,734
------------ -----------------
1,483,899 1,470,343
------------ -----------------
11 OPERATING LEASES
The amounts of minimum future lease receipts at the reporting
date under non cancellable operating leases are detailed below:
30 September 2016 After 5
Next 12 1 to 5 years Total
months years
GBP GBP GBP GBP
Aircraft - A rental
payments 11,768,501 39,315,696 4,010,318 55,094,514
Aircraft - B rental
payments 4,321,632 18,425,592 5,460,696 28,207,920
------------ ------------ ------------------ --------------
16,090,133 57,741,288 9,471,014 83,302,434
------------ ------------ ------------------ --------------
31 March 2016 1 to 5 After 5
Next 12 years years Total
months
GBP GBP GBP GBP
Aircraft- A rental
payments 10,631,008 39,019,682 5,434,036 55,084,726
Aircraft - B rental
payments 4,321,632 17,856,060 8,191,044 30,368,736
------------ ------------ ------------------ --------------
14,952,640 56,875,742 13,625,080 85,453,462
------------ ------------ ------------------ --------------
The operating lease is for an Airbus A380-861 Aircraft. The term
of the lease is for 12 years ending November 2022 with reduced
rental payments in the last two years and no extension option.
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 2016 31 Mar 2016
GBP GBP
Prepayments 5,735 12,468
Sundry debtors 11 11
5,746 12,479
----------------------- --------------------
The above carrying value of receivables is equivalent to its
fair value.
13 PAYABLES (amounts falling due within one year)
30 Sep 2016 31 Mar 2016
GBP GBP
Accrued administration
fees 5,943 6,005
Accrued audit fee 11,050 13,600
Accrued management fees 27,942 27,942
Other accrued expenses 8,685 8,485
53,620 56,032
--------------------- ------------------
The above carrying value of payables is equivalent to its fair
value.
14 BORROWINGS
TOTAL TOTAL
30 Sep 2016 31 Mar 2016
GBP GBP
Bank loan 49,807,127 49,010,119
Transaction
costs (375,767) (406,127)
49,431,360 48,603,992
------------------- -----------------
Current portion 9,276,802 8,151,040
=================== =================
Non-current
portion 40,154,558 40,452,952
=================== =================
Notwithstanding the fact that GBP4 million capital has been
repaid during the period, as per the Cash Flow Statement, the value
of the borrowings has risen due to the 10% decline in the GBP/USD
exchange rate from 31 March 2016 to 30 September 2016.
The amounts below detail the future contractual undiscounted
cashflows in respect of the loan, including both the principal and
interest payments, and will not agree directly to the amounts
recognised in the Statement of Financial Position:
Amount due for settlement within 12
months 11,839,276 10,694,923
------------------- ----------------
Amount due for settlement after 12 months 45,447,145 46,401,805
------------------- ----------------
The loan was arranged with Westpac Banking Corporation
("Westpac") for USD 122,000,000, 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. 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
life.
In the Directors' opinion, the above carrying value of the bank
loan is approximate 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 ("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 shares as at 30 September
2016 & 31 March 2016 2 42,450,000
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 2016
& 31 March 2016 39,016,726
Subordinated Administrative Shares
Shares issued 6 December 2010 2
---------------------
Total Share Capital as at 30 September 2016
& 31 March 2016 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.
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:
(a) Cash and cash equivalents that arise directly from the
Company's operations; and
(b) Loan secured on non-current asset.
17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's objective is to obtain income 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 2016 31 Mar 2016
GBP GBP
Financial assets
Cash and cash equivalents 4,382,997 4,213,957
Receivables (excluding prepayments) 11 11
----------------------- --------------------
Financial assets at amortised cost 4,383,008 4,213,968
--------------------
Financial liabilities
Payables 53,620 56,032
Loans payable 49,431,360 48,603,992
----------------------- --------------------
Financial liabilities measured at amortised
cost 49,484,980 48,660,024
----------------------- --------------------
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 reviews
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.
(b) Foreign Currency Risk
The Company's accounting policy under IFRS requires the use of a
GBP historic cost of the Asset and the value of the USD loan as
translated at the spot exchange rate on every statement of
financial position date. In addition, USD operating lease
receivables are not immediately recognised in the statement of
financial position 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 2016 31 Mar 2016
GBP GBP
Bank loan (USD) - liabilities (49,807,127) (49,010,119)
Cash and cash equivalents (USD) -
assets 2,534,723 2,321,704
================== ===============
The following table details the Company's sensitivity to a 25
per cent (31 March 2016: 15 per cent) appreciation of GBP against
USD. 25 per cent (31 March 2016: 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 25 per cent (31 March 2016: 15
per cent) change in foreign currency rates. A positive number below
indicates an increase in profit and equity where GBP strengthens 25
per cent (31 March 2016: 15 per cent) against USD. For a 25 per
cent (31 March 2016: 15 per cent) weakening of GBP against USD,
there would be a comparable but opposite impact on the profit and
equity.
USD impact
GBP
Profit or loss 9,454,481
Assets (506,945)
Liabilities 9,961,425
=================
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.
(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:
30 Sep 2016 31 Mar 2016
GBP GBP
Receivables (excluding prepayments) 11 11
Cash and cash equivalents 4,382,997 4,213,957
4,383,008 4,213,968
----------------------- --------------------
Surplus cash is held in accounts with Barclays and Westpac
Banking Corporation, which have credit ratings given by Moody's of
A2 (negative) and Aa2 (negative) 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 another party.
At the inception of the 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.
The table below details the residual contractual maturities of
financial liabilities, including estimated interest payments. 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 Sep 2016 1-3 months 3-12 months 1-2 years 2-5 years over 5 years
GBP GBP GBP GBP GBP
Financial
liabilities
Payables -
due
within one
year 53,620 - - - -
Loans
payable 2,959,819 8,879,457 11,839,276 29,251,933 4,355,936
3,013,439 8,879,457 11,839,276 29,251,933 4,355,936
-------------- -------------------- ------------------- ------------------------ ----------------------
31 Mar 2016 1-3 months 3-12 months 1-2 years 2-5 years over 5 years
GBP GBP GBP GBP GBP
Financial
liabilities
Payables -
due
within one
year 56,032 - - - -
Loans
payable 2,673,731 8,021,192 10,694,923 30,198,019 5,508,863
2,729,763 8,021,192 10,694,923 30,198,019 5,508,863
-------------- -------------------- ------------------- ------------------------ ----------------------
(e) Interest Rate Risk
Interest rate risk arises from the possibility that changes in
interest rates will affect future cash flows. It is the risk that
fluctuations in market interest rates will result in a 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 rate refinancing period:
30 September Variable Fixed Non-interest
2016 interest interest Bearing
GBP GBP GBP Total
GBP
Financial
assets
Receivables - - 5,746 5,746
Cash and cash
equivalents 4,382,997 - - 4,382,997
---------------------- --------------------- ------------------------------ -------------------
Total
financial
assets 4,382,997 - 5,746 4,388,743
---------------------- --------------------- ------------------------------ -------------------
Financial
liabilities
Payables - - 53,620 53,620
Loans payable - 49,431,360 - 49,431,360
---------------------- --------------------- ------------------------------ -------------------
Total financial
liabilities - 49,431,360 53,620 49,484,980
---------------------- --------------------- ------------------------------ -------------------
Total interest
sensitivity
gap 4,382,997 49,431,360
---------------------- ---------------------
31 March 2016 Variable Fixed Non-interest Total
interest interest Bearing GBP
GBP GBP GBP
Financial assets
Receivables - - 12,479 12,479
Cash and cash
equivalents 4,213,957 - - 4,213,957
---------------------- --------------------- ------------------------------ -------------------
Total financial
assets 4,213,957 - 12,479 4,226,436
---------------------- --------------------- ------------------------------ -------------------
Financial
liabilities
Payables - - 56,032 56,032
Loans payable - 48,603,992 - 48,603,992
---------------------- --------------------- ------------------------------ -------------------
Total financial
liabilities - 48,603,992 56,032 48,660,024
---------------------- --------------------- ------------------------------ -------------------
Total interest
sensitivity
gap 4,213,957 48,603,992
---------------------- ---------------------
If interest rates had been 50 basis points higher throughout the
period and all other variables were held constant, the Company's
profit for the period and net assets attributable to Shareholders
as at 30 September 2016 would have been GBP10,957 (31 March 2016:
GBP21,070) 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 profit for the period
and net assets attributable to Shareholders as at 30 September 2016
would have been GBP10,957 (31 March 2016: GBP21,070) 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 12 October 2016, a further dividend of 2.25 pence per
Ordinary Preference Share was declared and this was paid on 28
October 2016.
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 GBP55,884 (30 September
2015: GBP54,654) of expenses with Nimrod, of which GBP27,942 (31
March 2016: GBP27,942) was outstanding to this related party at 30
September 2016.
Doric GmbH ("Doric") is 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 and 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 GBP140,079 (30 September
2015: GBP136,635) of expenses with Doric, of which GBPnil (31 March
2016: GBPnil) was outstanding to this related party at 30 September
2016.
John Le Prevost is a director of Anson Registrars Limited
("ARL"), the Company's registrar, transfer agent and paying agent.
During the period GBP4,909 (30 September 2015: GBP5,438) of costs
were incurred with ARL, of which GBP620 (31 March 2016: GBP570) was
outstanding as at 30 September 2016.
ADVISERS AND CONTACT INFORMATION
KEY INFORMATION
Specialist Fund Segment of the
Exchange London Stock
Exchange's Main Market
Ticker DNA2
Listing Date 13 December 2010
Fiscal Year End 31 March
Base Currency GBP
ISIN GG00B4MF3899
SEDOL B4MF389
Guernsey - Registration number
Country of Incorporation 52484
MANAGEMENT AND ADMINISTRATION
Registered Office Company Secretary and Administrator
Doric Nimrod Air One Limited JTC (Guernsey) Limited
Ground Floor Ground Floor
Dorey Court Dorey Court
Admiral Park Admiral Park
St Peter Port St Peter Port
Guernsey GY1 2HT Guernsey GY1 2HT
Asset Manager Liaison Agent
Doric GmbH Amedeo Services (UK) Limited
Berliner Strasse 114 29-30 Cornhill
63065 Offenbach am Main London, England
Germany EC3V 3NF
Placing and Corporate and Shareholder
Advisory Agent Lease and Debt Arranger
Doric Asset Finance GmbH & Co.
Nimrod Capital LLP KG
3 St Helen's Place Berliner Strasse 114
London 63065 Offenbach am Main
EC3A 6AB Germany
Solicitors to the Company (as Advocates to the Company (as
to English Law) to Guernsey Law)
Herbert Smith LLP Carey Olsen
Exchange House Carey House
Primrose Street Les Banques
London EC2A 2EG St Peter Port
Guernsey GY1 4HP
Registrar Auditor
Anson Registrars Limited Deloitte LLP
PO Box 426 Regency Court
Anson House Glategny Esplanade
Havilland Street St Peter Port
St Peter Port Guernsey GY1 3HW
Guernsey GY1 3WX
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRBDDBDGBGLB
(END) Dow Jones Newswires
December 01, 2016 12:24 ET (17:24 GMT)
Doric Nimrod Air One (LSE:DNA)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Doric Nimrod Air One (LSE:DNA)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024
