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 and to trading on the Channel Islands Stock Exchange (“CISX”) and the Specialist Fund Market of the London Stock Exchange (“SFM”) on 13 December 2010. On 20 December 2013 the Royal Court of Guernsey approved the scheme of arrangement (“the scheme”) between CISX and The Channel Islands Securities Exchange (“CISE”). In accordance with the scheme, the business of CISX has been acquired by CISE.  All securities that were listed on the Official List of CISX have been transferred and are now listed on the Official List of CISE.

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 25 July 2014, the latest practicable date prior to publication of this report, the Shares are trading at 114.125 pence.

Investment Objectives and Policy

The Company’s investment objective is to deliver an income return and a capital return for its shareholders (the “Shareholders”) by acquiring leasing and then remarketing a single aircraft. The Company purchased one Airbus A380-861 Aircraft, manufacturers’ serial number 016 (the “Asset”) in December 2010, which it leased (the “Lease”) to Emirates Airlines (“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. The Lease payments received by the Company from Emirates cover repayment of the debt and all interest, 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.

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.

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 (“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.

In accordance with the Distribution Policy the Company declared four dividends of 2.25 pence per Ordinary Preference Share during the financial year to 31 March 2014 and two dividends of 2.25 pence per Ordinary Preference Share after the reporting period.

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 relevant laws (including any applicable requirements of the solvency test contained therein).

Liquidation Resolution

Although the Company does not have a fixed life, the articles of incorporation (the “Articles”) require that the directors convene a general meeting of the Company six months before the end of the term of the Lease where an ordinary resolution will be proposed that the Company proceed to an orderly wind-up at the end of the term of the Lease and the directors will consider (and if necessary, propose to Shareholders) alternatives for the future of the Company, including re-leasing the Asset, or selling the Asset and reinvesting the capital received from the sale of the Asset in another aircraft.

I am very pleased to present shareholders with the Company’s third annual financial report, covering the period from 1 April 2013 until 31 March 2014 (“the Period”) .

I am glad to report that during the Period the Company has continued to perform well and declared quarterly dividends as expected.

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 (the “Asset”), 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, 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.

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 and interim management statements.

During the calendar year 2013 overall global air traffic passenger demand, measured in revenue passenger kilometres (RPKs), expanded by 5.2% compared to the year before.  This number represents exactly the average historical growth rate over the last 30 years, and was mainly driven by solid economic growth in the emerging regions.  Less mature air travel markets continued to expand significantly faster than the more mature ones. In general, increasing air travel was consistent with the pick-up in economic growth around the globe.

Emirates has also continued to perform well flying more passengers than ever before carrying 44.5 million people to 142 destinations in 80 countries on six continents during the last financial year 2013/14.  Passenger load factors remain high and the airline has ordered more wide bodied planes (including a further 50 A380’s) to cope with its forecast increasing demand.

At the end of April 2014 the A380 had 10 operators with 128 planes in service.  There were undelivered orders of some 195 A380s at that point in time.

According to Airbus, until March 2014 the worldwide A380 fleet had accumulated 1.3 million flight hours in close to 155,000 commercial flights.  The number of passengers who flew aboard an Airbus A380 was 55 million. Currently the A380 operates between 35 airports and every five minutes an A380 takes off or lands at these destinations.

The Board recognise Emirates are the sole lessee of the Asset, and in the event that Emirates default on the rental payments it is unlikely the Company will be able to meet its targeted dividends or, in the case of ongoing default, continue as a going concern.  We do not believe this is a likelihood at this moment in time given the current and historical performance of Emirates and its current financial position.

In economic reality, the Company has also performed well. Four interim dividends were declared in the 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.

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.

An annual review is required of the residual value of the Asset as per IAS 16 Property, Plant and Equipment which defines residual value as “the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of age and in the condition expected at the end of its useful life.” The Company’s estimation technique is to make reference to the current forecast market value, not the amount that would currently be achieved, and so this value is not a direct application of the IAS 16 definition of residual value. The Company has engaged three internationally recognised expert appraisers to provide the Company with third party consultancy valuation services. The Company has also received reports from Doric, who have confirmed it has no reason to question the methodology used within the appraisal reports to determine the residual value and that they do not believe the appraisals show a fundamental movement in the anticipated residual value of the plane since it was acquired. Thus Doric has advised they do not believe the estimate of residual value need be changed for the Period. Upon review of the professional advice they have received, the Board is of the opinion that, the current estimate of the residual value of the Asset is a reasonable approximation of the residual value within the IAS 16 definition of residual value given a comparable asset is not available.

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

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.

 

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 March 2014, a total of 2,819 flight cycles were registered. Total flight hours were 23,573. 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 Doric Nimrod Air One Limited (“the Company”). 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 programme 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 prevent future failures 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”. In May 2013 the Company took ownership of a new engine (P550349) that EA agreed to replace in exchange for the damaged one.

 

The A380 (MSN 016) owned by the Company visited Auckland, London Heathrow, Hong Kong, Manchester, Moscow, Toronto and Sydney during the financial year ended on 31 March 2014.

1. 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) every 24 months or 12,000 flight hours, whichever comes first. 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.

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 remain fully airworthy and the hairline cracks pose no risk to flight safety as affirmed by the European Aviation Safety Agency (EASA) and Airbus.

EASA released its latest Airworthiness Directive in May 2013, outlining which modification need to be made and the respective compliance terms. The wing rib feet modifications 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. The downtime required to incorporate the permanent fix has in some cases been reduced from originally planned eight weeks down to 51 days. The Company has been notified by Emirates that the implementation of the final fix for MSN 016 started on 4 February 2014 and was completed on 28 March 2014. The modification works were being conducted by Sabena Technics (in Bordeaux, France).

2. Market Overview

During 2013 passenger demand, measured in revenue passenger kilometres (RPKs), expanded by 5.2% compared to the year before. This number represents exactly the average historical growth rate over the last 30 years. Market development during 2013 was mainly driven by solid economic growth in the emerging regions. Less mature air travel markets continued to expand significantly faster than the more mature ones. The industry also experienced a firm start into the year 2014. RPKs in the first quarter of the current calendar year increased by 5.6% above the same period the year before, but stagnated in March compared to February. In general, accelerating air travel markets during the last months are consistent with a pick-up in economic growth across the globe.

A regional breakdown reveals that the Middle East airlines were once more the best-performing in terms of RPK growth with a plus of 11.4% during 2013. The Asia/Pacific region grew by 7.1%. The most modest growth was again observed in North America with 2.3%. This growth pattern is continuing in the current year. During the first quarter of 2014 traffic in the Middle East increased by 13.3% compared to the same period the year before. At the lower end North America has been replaced by Africa where RPKs contracted by 0.5%.

Between January and December 2013 airlines increased their capacities, measured in available seat kilometres (ASKs), by 4.8%. With some exceptions, the operators remained careful in their capacity planning. Overall the growth rate of RPKs exceeded the ASK increase. The average passenger load factor during the year 2013 was 79.5%. This is an increase of 0.4%-points compared to the year before. From a historic perspective passenger load factors remain stable on a high level. In 2014 worldwide passenger load factors could exceed 81% for the first time in the industry’s history. According to the latest traffic forecast released by IATA in March 2014, RPKs are expected to grow by 5.8% in 2014 and 6.7% in 2015. Outlook for 2015 was slightly downgraded by 0.2%-points since the previous publication from December 2013.

IATA released its latest industry outlook in March 2014 according to which global industry profits are expected to reach USD 18.7 billion in 2014. This is slightly lower than IATA’s December 2013 estimate of USD 19.7 billion. The main driver of this downward revision is an adjusted projection for oil price development, which has been increased by USD 3.50 per barrel for geo-political reasons such as the latest developments in the Ukraine. But according to IATA’s General Director and CEO, Tony Tyler, the general outlook to the industry is positive. Expected GDP growth, which is closely linked to airlines profitability, is largely driven by developed economies after some key emerging economies like India and Brazil face economic challenges.

During 2013 Airbus delivered more aircraft to its customers than ever before. At the same time the European aircraft manufacturer received new orders for 1,503 aircraft. At year-end order backlog increased to 5,559 aircraft with a cumulative list price of more than USD 800 billion. This is a new record to the aviation industry.

Source: Airbus, IATA

3. Lessee – Emirates Key Financials

Emirates announced its 26^th consecutive year of profit and company-wide growth for the financial year ended on 31 March 2014, despite competitive pressure and a global economic environment that is only slowly recovering.

Revenue reached a record high of USD 22.5 billion, up by 13% 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 regions with USD 6.5 billion, up 14.1% from 2012/2013. Gulf and Middle East (up 16.6% to USD 2.3 billion), Europe (up 16.3% to USD 6.4 billion) and Africa (up 15.1% to USD 2.1 billion) saw the most significant growth rates, reflecting new destinations as well as increased frequency and capacity to these regions.

The airline posted a net profit of USD 887 million, representing an increase of 43% over last year’s results. With a share of nearly 40% fuel remains the largest operating cost category. Compared to last financial year, the average price of jet fuel was slightly lower relieving the carrier’s bottom line. Due to the growing fleet Emirates’ fuel bill increased by 10% to reach USD 8.4 billion. Total operating costs showed a smaller increase (+11.5%) than the revenues (+13%) in the financial year 2013/2014 resulting in a profit margin of 3.9%.

 

As of 31 March 2014 the balance sheet total amounted to USD 27.7 billion, an increase of 7.2% from the previous year. Total equity increased by 10.6% to USD 6.9 billion with an equity ratio of 25.1%. The equity ratio is defined as total equity/balance sheet total. The current ratio was 0.84; therefore the airline would be able to meet most of 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 8.6 billion and revenues received in advance from passenger and freight sales (USD 3.1 billion). As of 31 March 2014 the carrier’s cash balance reached USD 4.5 billion.

Emirates continued with its growth plan and saw the largest increase in Available Tonne Kilometres (ATKs) in the airline’s history during the financial year 2013/2014.

Between April 2013 and March 2014, as compared to the prior financial year, the airline’s ASKs increased by 14.6%. Measured in RPKs passenger traffic grew by 14.2%, resulting in an average passenger load factor of 79.4%. This is slightly below the 79.7% reached in the period before. A record 44.5 million passengers flew with Emirates between April 2013 and March 2014 – an increase of 13.1% compared to the previous period.

The airline received 24 widebody aircraft, including 16 Airbus A380s, 6 Boeing 777-300ER and 2 Boeing 777F freighters during the financial year ended on 31 March 2014. At the Dubai Air Show in November 2013 Emirates signed contracts with Airbus and Boeing for a combined value of USD 99 billion (list prices) consisting of 150 Boeing 777X and another 50 Airbus A380. According to the operator, the first 25 of the additional A380 will come into service before the first quarter of 2018. Deliveries for 777Xs are scheduled to start in 2020. By that year Emirates expects to have more than 250 widebody aircraft in the air serving some 70 million passengers a year.

The airline is not only heavily investing in new aircraft, but it is also running the world’s largest paint hangar owned by an airline. Twice the size of a football field, the facility operates 24 hours a day, seven days a week. Between January and December 2013 Emirates completed 21 “make-overs” comprising paint stripping and repaint of complete aircraft. According to the airline, the first A380 which entered into service in August 2008 will be due for a repaint in 2015.

As of 30 April 2014 Emirates has 213 widebody aircraft in operation, with firm orders for another 224 aircraft, including 93 A380s, 58 Boeing 777-300ER and 120 Airbus A350. The airline operates the world’s largest fleets of Airbus A380s and Boeing 777-300ER. During the financial year 2013/2014 Emirates raised USD 3.3 billion in new funding mainly to secure its on-going fleet expansion. The carrier benefited from a variety of financing structures to meet its refinancing needs, including a second Enhanced Equipment Trust Certificate (EETC) issue by a lessor (Doric Nimrod Air Three Ltd.).

With its increased fleet and resources, Emirates launched nine new destinations during the last financial year. In May 2014 Emirates operated flights to 141 destinations in 80 countries on six continents. During the calendar year 2013 the airline’s fleet travelled more than 751 million kilometres, circling the globe over 18,000 times and carrying over 43 million passengers. As of May 2014 the airline operates nearly 3,200 flights per week.

In the current financial year the airline envisage adding at least another five passenger routes including Abuja (Nigeria), Brussels, Chicago, Kano (Nigeria) and Oslo.

Source: Ascend, Emirates

4. Aircraft – A380

At the end of April 2014 Emirates had a fleet of 47 A380s which serve 26 destinations worldwide: Amsterdam, Auckland, Bangkok, Barcelona, Beijing, Brisbane, Hong Kong, Jeddah, Kuala Lumpur, London Gatwick, London Heathrow, Los Angeles, Manchester, Mauritius, Melbourne, Moscow, Munich, New York JFK, Paris, Rome, Seoul, Shanghai, Singapore, Sydney, Toronto, and Zurich. London Gatwick became an A380 destination only recently, even though it was Emirates’ first destination when the airline commenced flights to the UK back in 1987. Furthermore Emirates announced an upgrade of service from Dubai to Kuwait with the introduction of the A380 starting in July 2014. Dallas is scheduled to complement the list of A380 destinations in October 2014. The carrier remains by far the largest A380 operator in terms of aircraft number. Emirates has an additional 93 aircraft of this type on firm order.

At the end of April 2014, the global A380 fleet consisted of 128 planes that were in service with ten operators: Emirates (47 A380 aircraft), Singapore Airlines (19), Qantas (12), Deutsche Lufthansa (11), Air France (9), Korean Airways (8), China Southern Airlines (5), Malaysia Airlines (6), Thai Airways (6) and British Airways (5). There are 195 outstanding orders for Airbus A380s at the end of April 2014 as yet undelivered. Qantas, Air France and Virgin Atlantic have announced various postponements from the original delivery dates of their part of these unfilled orders, which concerns 16 of these aircraft . Deutsche Lufthansa has cancelled options to buy three aircraft  following a fleet planning revision in 2013.

According to the manufacturer, a number of new operators will receive their aircraft in the current calendar year. Qatar Airways will join the club of A380 operators first, followed by South-Korean based Asiana Airlines and Skymark Airlines of Japan. United Arab Emirates’ flag carrier Etihad Airways is expected to receive the first A380 by the close of this year.

In January 2014 the Indian Ministry of Civil Aviation lifted the ban for A380 operations at Indian airports. Four major international airports including New Delhi and Mumbai have already been equipped to handle the superjumbo. It is expected that major A380 operators like Emirates, Deutsche Lufthansa and Singapore Airlines will use their aircraft for flights to India in the future. Services will be subject to traffic entitlements within bilateral agreements.

In February 2014 Doric Lease Corp Management Limited, which had been formed in 2013, changed its name to Amedeo Management Limited. Amedeo aims to be a dedicated and actively managed widebody aircraft acquisition and leasing business , with a specialised focus on the A380. It confirmed an order for twenty A380s at the Singapore Air Show in February 2014 with the aim of leasing these planes on to commercial airlines.

According to Airbus, the worldwide A380 fleet has accumulated around 1.3 million flight hours in close to 155,000 commercial flights until March 2014. The number of passengers flying aboard an Airbus A380 to date is approximately 55 million.

Source: Airbus, Ascend, Bloomberg, Emirates

Charles Edmund Wilkinson – Chairman (Age 71)

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 and 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 65)

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 on the board of the UK subsidiary of a major Canadian bank and 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 Head of Risk at AIB Capital Markets, which he left in 2002. He has worked as a consultant on risk issues internationally.

He earned a degree in Economics from Queens University Belfast, studied at Stanford Graduate School of Business and 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.

Geoffrey earned his masters degree in Geography at University of London. He is an associate of the UK Society of Investment Professionals (CFA Institute of the UK).

John Le Prevost (Age 62)

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 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 BlueCrest AllBlue Fund Limited, a FTSE 250 listed fund of hedge funds and 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 and Doric Nimrod Air Three Limited. He is resident in Guernsey.Management and the Delegation of Functions

The directors, whose details are set out in pages 15 to 16 are responsible for reviewing the business affairs of the Company in accordance with the Articles and the Prospectus and have overall responsibility for the Company’s activities including all business decisions, review of performance and authorisation of distributions.  All of the directors are independent and non-executive.  The Company has delegated management of the Asset to Doric GmbH (“Doric” or the “Asset Manager”), which is a Company incorporated in Germany and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, as outlined in more detail below under the heading Asset Manager.  The directors delegate secretarial and administrative functions to JTC Fund Managers (Guernsey) Limited (“JTC” or the “Secretary & Administrator”) which is a company incorporated in Guernsey and licensed by the Guernsey Financial Services Commission for the provision of administration services.

Asset Manager

Doric has been appointed by the Company to provide asset management services to the Company. Pursuant to the Asset Management Agreement, Doric will: (i) monitor Emirates’ and any subsequent lessees’ performance of its obligations under the Leases and any subsequent leases respectively (which shall include the obligations relating to the maintenance of insurance cover); (ii) provide the Company with information regarding alternatives with respect to any potential sale or re-lease of the Assets; (iii) carry out mid-lease inspections of the Assets; (iv) provide the Company with asset monitoring reports describing the state and any material changes to the state of the Assets; and (v) liaise, as and when necessary, with lenders, on all matters relating to the loan, as required.

Doric has further undertaken that it will dedicate sufficient time and resources as the Company reasonably believes is required from time to time to fulfil any contractual arrangements it enters into with the Company.

Doric Partners LLP (“Doric LLP”), a limited liability partnership incorporated in England and Wales and Amedeo Services (UK) Limited (“Amedeo”) have been appointed by the Company, pursuant to the Amended Liaison Services Agreement to act as Liaison agents. Doric LLP has been appointed to (i) coordinate the provision of

services by Doric to the Company under the Asset Management Agreement; and (ii) facilitate communication between the Company and Doric.

Doric is the holding company of the Doric Group of companies and provides for the fund administration and asset management services of the Doric Group.

The Doric Group is a leading provider of products and services for investors in the fields of aviation, shipping, renewable energy and real estate. The Doric Group has an international presence, with offices in Germany, the United States and the United Kingdom, and a multinational team which offers access to extensive relationship networks and expert asset knowledge. One of the firm’s core competencies is its asset management expertise, which is an integrated part of all Doric transactions and a cornerstone of the business.

The Doric Group is also a member of ISTAT, the International Society of Transport Aircraft Trading.

 

The aircraft portfolio currently managed by the Doric Group is valued at US$7 billion and consists of 36 aircraft under management. These aircraft include commercial jet airliners ranging from the Airbus A320 family, through the Boeing 777 and Airbus A330/A340 family, up to the Airbus A380.

The Doric Group has 22 Airbus A380 aircraft currently under management and is therefore considered well positioned to perform the technical asset management of this aircraft type.

Liaison Agent

Amedeo Services (UK) Limited has been appointed by the Company, pursuant to the Liaison Services Agreement, to,  where requested by the Board, participate in Board meetings, assist in the review of all asset management matters and provide advice in all asset management related matters. Amedeo Services (UK) Limited is part of the Amedeo group of companies.

The Amedeo group is primarily involved in the operating lease and management of widebody aircraft. In February 2014 at the Singapore Air Show, Amedeo confirmed an order for twenty A380 aircraft. Amedeo is a member of ISTAT, the International Society of Transport Aircraft Trading.

 

Corporate and Shareholder Adviser

Nimrod Capital LLP (which is authorised by the Financial Conduct Authority) has been appointed as the Corporate and Shareholder adviser by the Company.

 

Nimrod Capital LLP was founded in 2008 as an entirely independent organisation which specialises in generating and sourcing interesting investment funds, themes and solutions managed by experts in their fields for the professional investor marketplace.  It has launched eight listed investment companies since its formation and it also provides investment, marketing, distribution and advisory services to investment companies and their Board and managers.

 

Nimrod, together with Doric and Emirates, was awarded the “Innovative Deal of the Year 2010” by the international aviation magazine Airfinance Journal in recognition of the innovative financing of an Airbus A380 leased to Emirates by the first stock market listed aircraft investment vehicle Doric Nimrod Air One Limited.

 

Secretary  & Administrator

Formed in 1987, JTC Group is a multi-jurisdictional, independent provider of corporate, fund and private client services, with significant global experience and £23.8 billion (US$39.7bn) assets under administration.

 

With a highly qualified and multilingual workforce of nearly 300 employees, JTC Group operates from 18 jurisdictions around the world with offices in Argentina, Brazil, BVI, Guernsey, Jersey, Luxembourg, New Zealand, Switzerland, UK and USA (a representative office), as well as alliance offices in the Cayman Islands, Cyprus, Hong Kong, Indonesia, Labuan, Malaysia, Netherlands and Singapore.

 

JTC Fund Managers (Guernsey) Limited (“JTC”) is a Guernsey incorporated company and provides administration and secretarial services to the Company pursuant to an Administration and Secretarial Agreement.  In such capacity, JTC is responsible for the general secretarial functions required by the law and ensures that the Company complies with its continuing obligations as well as advising on the corporate governance requirements and recommendations as applicable to a company listed on the CISE and admitted to trading on the SFM. JTC was formerly known as Anson Fund Managers Limited which was acquired by JTC Group in December 2013.

The Administrator is also responsible for the Company’s general administrative functions such as the calculation of the net asset value of Shares, the maintenance of accounting and statutory records and any reporting required under the Foreign Account Tax Compliance Act of the United States of America

The full Report is available in PDF format here on the companies website.