Annual Financial Report and Consolidated Financial Statements
From 1 April 2023 to 31 March 2024
CONTENTS
Page
1 Definitions
4 Summary Information
5 Company Overview
7 Chairās Statement
10 Asset Managerās Report
17 Directors
19 Service Providers
21 Key Information
25 Directorsā Report
36 Environmental, Social and Governance Report
41 Audit and Risk Committee Report
50 Independent Auditorās Report
54 Consolidated Statement of Comprehensive Income
55 Consolidated Statement of Financial Position
56 Consolidated Statement of Cash Flows
57 Consolidated Statement of Changes in Equity
58 Notes to the Consolidated Financial Statements
83 Key Advisers and Contact Information
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
Definitions
āADā Airworthiness Directive
āAdministrative Sharesā Subordinated administrative shares
āAEDā United Arab Emirates dirham
āAGMā Annual general meeting
āANZā The Australia and New Zealand Banking Group Limited
āAR Committeeā Audit and Risk Committee
āArticlesā Companyās Articles of Incorporation
āASKsā Available seat kilometres
āAsset(s)ā or the āAircraftā Airbus A380 Aircraft
āATAGā Air Transport Action Group
āBAā British Airways
āBoardā Companyās board of directors
āCertificatesā DNAFA Pass Through Certificates issued in July 2012
āChairā Chair of the board
āCodeā The UK Corporate Governance Code
āCORSIAā Carbon Offsetting and Reduction Scheme for International Aviation
āDTRsā Disclosure Guidance and Transparency Rules
āDNA2ā or the āCompanyā Doric Nimrod Air Two Limited
āDNAFAā Doric Nimrod Air Finance Alpha Limited
āDoricā or the āAsset Managerā Doric GmbH
āEETCā or āCertificatesā Enhanced equipment trust certificates
āEmiratesā or the āLesseeā Emirates Airline
āEquityā Ordinary Shares in issue
āESGā Environmental, Social and Governance
āEUā European Union
āEU ETSā European Union Emissions Trading System
āFAAā US Federal Aviation Authority
āFCAā Financial Conduct Authority
āFRCā Financial Reporting Council
āFVOCIā Fair value through other comprehensive income
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
Definitions (continued)
āFVTPLā Fair value through profit or loss
āGBPā, āĀ£ā or āSterlingā Pound Sterling
āGrant Thorntonā Grant Thornton Limited
āGFSCā Guernsey Financial Services Commission
āGHGā Greenhouse gas
āGroupā the Company and its subsidiaries
āIAS 1ā International Accounting Standard 1 - Presentation of financial
statements
āIAS 7ā International Accounting Standard 7 - Presentation of financial
statements
āIAS 8ā International Accounting Standard 8 - Accounting policies
āIAS 16ā International Accounting Standard 16 - Property, Plant and Equipment
āIAS 21ā International Accounting Standard 21 - The Effects of Changes in Foreign
Exchange Rates
āIAS 36ā International Accounting Standard 36 - Impairment of Assets
āIASBā International Accounting Standards Board
āIATAā International Air Transport Association
āICAOā International Civil Aviation Organization
āIEnvAā IATA Environmental Assessment
āIFRICā International Financial Reporting Interpretations Committee
āIFRSā International Financial Reporting Standards-Accounting standards as
adopted by the EU
āIFRS 13ā IFRS 13 - Fair value measurement
āIFRS 16ā IFRS 16 - Leases
āIPCCā Intergovernmental Panel on Climate Change
āISAE 3402ā International Standard on Assurance Engagement 3402
āISTATā International Society of Transport Aircraft Trading
āJTCā or āSecretaryā or āAdministratorā JTC Fund Solutions (Guernsey) Limited
āLawā The Companies (Guernsey) Law, 2008, as amended
āLease(s)ā Lease of Aircraft to Emirates
āLoan(s)ā Borrowings obtained by the Group to part-finance the acquisition of
Aircraft
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
Definitions (continued)
āLSEā London Stock Exchange
āNimrodā or āCorporate and
Shareholder Adviserā
Nimrod Capital LLP
āPandemicā COVID-19 Pandemic
āPeriodā 1 April 2023 until 31 March 2024
āPIEsā Public Interest Entities
āPLFā Passenger Load Factor
āRegistrarā JTC Registrars Limited
āRPKsā Revenue passenger kilometres
āSAFā Sustainable Aviation Fuel
āSDGsā Sustainable Development Goals
āSFSā Specialist Fund Segment
āShareholdersā or āMembersā Shareholders of the Company
āSharesā Ordinary Preference Shares of the Company
āShare Capitalā Share capital of the Company
āSubsidiariesā MSN077 Limited, MSN090 Limited, MSN105 Limited and DNAFA
āUAEā United Arab Emirates
āUKā United Kingdom
āUNā United Nations
āUSDā or ā$ā US dollars
āVIUā Value-in-use
āWestpacā Westpac Banking Corporation
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
SUMMARY INFORMATION
Listing Specialist Fund Segment of the London Stock Exchangeās Main Market
Ticker DNA2
Share Price 118.0 pence (as at 31 March 2024)
126.0 pence (as at 12 July 2024)
Market Capitalisation GBPī155.48īmillion (as at 12īJuly 2024)
Current Dividend 4.5 pence per quarter per Share (18 pence per annum)
Dividend Payment Dates April, July, October, January
Currency Sterling
Launch Date / Share Price 14 July 2011 / 200 pence
Incorporation and Domicile Guernsey
Aircraft Registration Numbers
1
(Lease Expiry Dates including the 2 year extension)
A6-EDX (1 October 2024)
A6-EDY (1 October 2024)
A6-EDZ (12 October 2024)
A6-EEB (9 November 2024)
A6-EEC (30 November 2024)
Asset Manager Doric GmbH
Corporate and Shareholder Adviser Nimrod Capital LLP
Administrator JTC Fund Solutions (Guernsey) Limited
Auditor Grant Thornton Limited
Market Makers Investec Bank Plc
Jefferies International Ltd
Panmure Liberum Limited
Peel Hunt LLP Shore Capital Limited
Winterflood Securities Ltd
SEDOL BMWCCD4 (Effective 18 December 2023) and B3Z6252 (Prior to compulsory
redemption on 18 December 2023)
ISIN GG00BMWCCD46 (Effective 18 December 2023) and GG00B3Z62522 (Prior
to compulsory redemption on 18 December 2023)
LEI 213800ENH57LLS7MEM48
Year End 31 March
Website www.dnairtwo.com
1* A6-EDP sold to Emirates 13 October 2023 and A6-EDT sold to Emirates 30 November 2023.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
COMPANY OVERVIEW
The Company is a Guernsey company incorporated on 31 January 2011.
Pursuant to the Companyās prospectus dated 30 June 2011, the Company, on 14 July 2011, raised approximately Ā£136 million by the
issue of Shares at an issue price of Ā£2 each. The Companyās Shares were admitted to trading on the SFS on 14 July 2011.
The Company raised a further Ā£188.5 million from a C Share fundraising, which closed on 27 March 2012 with the admission of
100,250,000 convertible preference shares to trading on the SFS.
On 6 March 2013, the Companyās C Shares converted into an additional 100,250,000 Shares. These additional Shares were admitted
to trading on the SFS and rank
pari passu
with the Shares already in issue.
On 11 December 2023 the Company announced its intention to compulsorily redeem 49,357,143 Shares on a two for seven shares
held basis as at 15 December 2023 and paid a redemption price of 120 pence per Share redeemed on or around 27 December 2023. On
18 December 2023 49,357,144 ordinary shares were redeemed and cancelled.
As at 12 July 2024, the last practicable date prior to the publication of this report, the Companyās total issued Share capital consisted
of the Administrative Shares and 123,392,956 Shares. The Shares were trading at 126.00īpence per Share.
Investment Objective and Policy
The Companyās investment objective is to obtain income returns and a capital return for its Shareholders by acquiring, leasing and
then selling aircraft. The Company receives income from the lease rentals paid to it by Emirates, the national carrier owned by The
Investment Corporation of Dubai, based in Dubai, UAE, pursuant to the Leases.
Subsidiaries
As at the financial reporting date, 31 March 2024, the Company had four wholly owned subsidiaries: MSN077 Limited, MSN090 Limited,
MSN105 Limited and DNAFA. MSN105 Limited and DNAFA hold the remaining Assets of the Group following the sale of the Assets held by
MSN077 Limited and MSN090 Limited. MSN090 Limited was dissolved by way of voluntary strike off, effective 19 June 2024 with MSN077
Limited to be dissolved in due course.
The first Asset was acquired by MSN077 Limited on 14 October 2011 for a purchase price of USD 234 million. It had been leased
to Emirates for an expected initial term of 10 years to October 2021, subsequently extended for a period of 2 years that ended in
October 2023, with fixed lease rentals for the duration. The Company reached agreement with, and sold the first Asset to, Emirates
on 13īOctober 2023 for a total consideration of GBP 28.9 million (equivalent to USD 35 million).
The second Asset was acquired by MSN090 Limited on 2 December 2011 for a purchase price of USD 234 million. It had been leased
to Emirates for an expected initial term ofī10 years to December 2021, subsequently extended for a period of 2 years that ended
in December 2023, with fixed lease rentals for the duration. The Company reached agreement with, and sold the second Asset to,
Emirates on 30 November 2023 for a total consideration of GBP 28.9 million (equivalent to USD 35 million).
The third Asset was acquired by MSN105 Limited on 1 October 2012 for a purchase price of USD 234 million and has been leased to
Emirates for an initial term ofī10 years to October 2022, with an extension period of 2 years ending October 2024, with fixed lease
rentals for the duration.
The fourth Asset, MSN 106, was acquired by DNAFA on 1 October 2012 for a purchase price of USD 234 million and has been leased
to Emirates for an initial term ofī10 years ending October 2022, with an extension period of 2 years ending October 2024, with fixed
lease rentals for the duration.
The fifth Asset, MSN 107, was acquired by DNAFA on 12 October 2012 for a purchase price of USD 234 million and has been leased
to Emirates for an initial term ofī10 years ending October 2022, with an extension period of 2 years ending October 2024, with fixed
lease rentals for the duration.
The sixth Asset, MSN 109, was acquired by DNAFA on 9 November 2012 for a purchase price of USD 234 million and has been leased
to Emirates for an initial term ofī10 years ending November 2022, with an extension period of 2 years ending November 2024, with
fixed lease rentals for the duration.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
COMPANY OVERVIEW (continued)
The seventh Asset, MSN 110, was acquired by DNAFA on 30 November 2012 for a purchase price of USD 234 million and has been
leased to Emirates for an initial term ofī10 years ending November 2022, with an extension period of 2 years ending November 2024,
with fixed lease rentals for the duration.
The leases for the five remaining Aircraft will run for the extended period of twelve years as the Lessee has in all cases made use of
the extension options.
The fourth, fifth, sixth and seventh Assets were acquired by DNAFA using the proceeds of the issue of the C Shares, together with the
proceeds of equipment notes with an aggregate face amount of approximately USD 587.5 million issued by DNAFA. The equipment
notes were fully repaid in November 2022.
In order to complete the purchase of the related Assets, MSN077 Limited, MSN090 Limited and MSN105 Limited entered into separate
loan agreements with a number of banks (see note 15), each of which has or will be fully amortised with quarterly repayments in
arrears over 12 years. MSN105 Limited drew down USD 145,751,153 in accordance with the third loan agreement to finance the
acquisition of the third Asset. The loans in respect of MSN077 Limited and MSN090 Limited were fully repaid in October and December
2023, respectively.
Emirates bears all operating costs (including maintenance, repairs, and insurance) relating to the Aircraft during the lifetime of the
Leases.
Further information about the construction of these Leases is available in note 12 to the financial statements.
Distribution Policy
The Company currently targets a distribution of 4.50 pence per Share per quarter.
There can be no guarantee that dividends will be paid to Shareholders and, if dividends are paid, the timing and amount of such
dividend cannot be assured. There can also be no guarantee that the Company will, at all times, satisfy the solvency test pursuant to
section 304 of the Law, which enables 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 respective Leases.
During the financial year under review, and in accordance with the Distribution Policy, the Company declared four interim dividends
of 4.50 pence per Share. Two interim dividends of 4.50 pence per Share have been declared after the reporting period. Further details
of dividend payments can be found on pageī25.
Return of Capital
The Company intends to return to Shareholders net capital proceeds if and when the Company is wound up (pursuant to a Shareholder
resolution, including the liquidation resolution below), subject to compliance with the Articles and the applicable laws (including
any applicable requirements of the solvency test contained therein).
Following the sales in October and November 2023 of the first two Aircraft, on 11 December 2023 the Company announced the
return to shareholders of GBP 59.229 million of the proceeds by means of a compulsory redemption of two ordinary preference
shares for every seven ordinary preference shares held as at 15 December 2023 for a payment of 120 pence per each share redeemed.
Accordingly, 49,357,044 ordinary shares were redeemed and cancelled.
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 2025 where an ordinary resolution will be proposed that the Company proceed to an orderly wind-up. In the event that the
liquidation resolution is not passed, the Directors will consider alternatives for the future of the Company, including re-leasing the
Assets, or selling the Assets and reinvesting the capital received from the sale of the Assets in other aircraft.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CHAIRāS STATEMENT
I am pleased to present to you the Companyās audited Annual Financial Report and Consolidated Financial Statements for the
12īmonth period ended 31 March 2024.
Sale of Assets
As Shareholders are aware, the Company has sold two of its seven Airbus A380s. The Leases for these first two Aircraft, MSN 077
and MSN 090, expired in mid-October 2023 and early December 2023 respectively. The Company and Emirates reached agreement
in October 2023 that on or before the lease end dates of each Aircraft, 14 October 2023 and 2 December 2023 respectively, the
Company would sell the Aircraft to Emirates. The sale proceeds that were paid by Emirates to the Company were GBP 28.9īmillion
in respect of each Aircraft (as at the date of contract signature equivalent to USD 35īmillion, an aggregate combined total of USD
70īmillion). At the time the Directors announced the intention to make a capital distribution to shareholders as soon as practicably
possible following the successful completion of the sale of the second Aircraft and this was made in late December 2023 by way of
a redemption of two ordinary preference shares for every seven ordinary preference shares in the Company, at 120 pence per share.
Following the sale of these two Aircraft, the Company continues to own five Airbus A380 Aircraft, the leases for which are due to
expire between 1 October 2024 and 30 November 2024. The operating leases in respect of those Aircraft have continued as contracted
between the parties and are expected to do so until their expiry. The Board is considering all options available to the Company as at
the expiry of those operating leases.
The Company
The Companyās investment objective continues to be to obtain income returns and a capital return for its Shareholders by acquiring,
leasing and then selling aircraft. The structures of the operating leases relating to the Companyās remaining five Aircraft are described
on pagesī72īandī73. With two of the original seven Aircraft sold and five remaining, the Directors are focusing on continuing to
achieve further value for Shareholders given the lease expiry dates mentioned above.
The debt portion of the funding used to purchase the Aircraft was designed to be fully amortised, which would leave the Aircraft
unencumbered at the conclusion of each lease. Emirates bears all costs (including maintenance, repairs and insurance) relating
to the Aircraftīduring the lifetime of the leases. Atī12īJulyī2024, the latest practicable date prior to this report, the Company had
outstanding debt associated with only one of the Aircraft (MSN 105) totalling USDī968,902. At 12 July 2024, the share price was
126.00īpence, representing a market capitalisation of GBPī155.48īmillion based on the now 123,392,956īShares in issue following
the redemption effected in December 2023.
All payments by Emirates during the Period and throughout the Leases have been made in accordance with the respective terms of the
leases. While the return to service of the Emiratesā A380 fleet has continued post Pandemic, one of the Companyās Aircraft remains in
storage at Dubai World Center International Airport at the time of writing.
Market conditions
The rebound in travel generally has continued throughout the financial year and Emirates has benefitted significantly, in part as a
result of the A380, for which they are by far the largest operator.
During the Companyās financial year ended on 31 March 2024, global air passenger traffic continued its road to recovery. In April
2024 demand measured in RPKs was up by 11.0% from a year earlier. Over the same period airlinesā capacity, measured in ASKs,
increased by 9.6%, resulting in an improved average PFL of 82.4%. In February 2024, the airline industry achieved full recovery in
total passenger traffic, surpassing the 2019 (pre-Pandemic) threshold by 5.7%. Domestic travel grew 13.7% over its 2019 levels,
while international traffic was 0.9% higher than in February 2019. Ticket sales data for the May ā June 2024 period āsuggests that air
traffic and demand in both domestic and international segments are expected to maintain the solid positive trend observed so farā,
according to IATA.
For the financial year ended 31 March 2024, the Emirates Group posted a record profit of AED 18.7 billion (USD 5.1 billion), up 71%
compared with an AED 10.9 billion (USD 3.0 billion) profit for the previous year. The Groupās revenue was AED 137.3 billion (USD 37.4
billion), an increase of 15% over the previous yearās results. The Groupās cash balance was AED 47.1 billion (USD 12.8 billion), the
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CHAIRāS STATEMENT (continued)
highest ever reported, up 11% from last year. In 2023-24, the Emirates Group collectively invested AED 8.8 billion (USD 2.4 billion)
in new aircraft, facilities, equipment, companies, and the latest technologies to support its growth plans.
The airline itselfīreported a record profit of AEDī17.2 billionī(USD 4.7 billion), up 63% from AED 10.6 billion (USD 2.9 billion) the
previous year.
ā¢ Revenue rose 13% to AED 121.2 billion (USD 33.0 billion), as the airline deployed more capacity to meet the increasing demand.
ā¢ Airline capacity in available tonne kilometres increased by 20%, closing the gap to pre-Pandemic levels.
ā¢ Emirates brought its flagship A380 and popular Premium Economy product to even more cities during this period, as 16 more
aircraft rolled out the cabin retrofit programme, fully refurbished with the airlineās latest signature products. As of 31 March
2024, the Emirates A380 served 49 destinations.
ā¢ Emirates ended its 2023-24 financial year with AED 42.9 billion (USD 11.7 billion) in cash assets (including bank deposits), the
highest-ever balance in the companyās history. The cashflow from operating activities came in strongly at AED 37.6 billion (USD
10.3 billion).
ā¢ Emirates carried 51.9ī million passengers (up 19%) in 2023-24, reaching an average PLF of 79.9%, an improvement of
0.4īpercentage point compared to the same period the year before.
Further details on Emirates and the A380 can be found in the Asset Managerās Report on pagesī10ītoī16.
Stakeholder Engagement
Our Asset Manager, Doric, continues to monitor the Leases, is in frequent contact with the Lessee and reports regularly to the Board.
Nimrod, our Corporate and Shareholder Adviser, continues to liaise with Shareholders alongside or on behalf of the Board and has
provided valuable feedback on the views of Shareholders.
The Board encourages Shareholders to read the Companyās quarterly fact sheets which we believe provide a great deal of interesting
information. We hope these regular reports, in addition to the communication you receive from Nimrod, are useful and informative.
The Directors welcome Shareholder engagement and feedback and encourage you to contact Nimrod to request a meeting or to relay
any feedback.
Further information on stakeholder engagement (s172 of the UKās Companies Act 2006) can be found on pageī33.
Dividends
During the period, the Company has declared and paid four quarterly dividends of 4.50 pence per Share each, a rate of dividend
payment amounting to 18 pence per Share per annum.
Following the sale of two Aircraft in late 2023 and the related return of capital, the Board has continued to maintain the Companyās
current dividend policy.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CHAIRāS STATEMENT (continued)
The Board
I would like to close by thanking my fellow Board members, the Corporate and Shareholder Adviser, Asset Manager and all other
critical service providers who continue to service the Company and have positioned us well to deliver value for our Shareholders in
what have been challenging market conditions over the last few years.
Thank you also to our Shareholders for your continued support and commitment. We were delighted to be able to sell our first two
Assets during the period, swiftly followed by a return of capital to Shareholders. The Board is now exploring possible avenues to
continue realising further value for our stakeholders in the coming year, as the Leases on the remaining five Aircraft come to an end
and we will communicate further on this when we are in a position to do so.
Fiona Le Poidevin
Chair
23īJuly 2024
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT
At the request of the Directors of the Company, this commentary has been provided by the Asset Manager of the Company. The report
reflects the information available at the end of March 2024 unless otherwise noted.
1. The Assets
The Company acquired a total of seven Airbus A380-861 Aircraft between October 2011 and November 2012. Each Aircraft was Leased
to Emirates ā the national carrier owned by the Investment Corporation of Dubai, based in Dubai, UAE ā for a term of 12 years from
the point of delivery with fixed lease rentals for the duration. MSN077 and MSN090 were sold to Emirates at the end of their 12 year
Leases, in October and November 2023.
In order to complete the purchase of the first three Aircraft, MSN077 Limited, MSN090 Limited and MSN105 Limited entered into three
separate loan agreements. The remaining four Aircraft were partially financed with the issuance of EETCs, a form of debt security. The
loans for the two Aircraft sold (manufacturer serial numbers (MSNs) 077 and 090) as well as all outstanding EETC obligations have
been fully repaid. The loan for MSN 105 is the only one remaining and is scheduled to be fully amortised by its lease expiry date.
Following the sales, the five remaining A380 Aircraft are those bearing the MSNs 105, 106, 107, 109, and 110 respectively.
While the return to service of Emiratesā A380 fleet is continuing post Pandemic, one of the DNA2 Aircraft (MSN 105) remains in
storage at Dubai World Central Airport.
Aircraft utilisation for the portfolio Aircraft until the end of March 2024 was as follows:
MSN Delivery Date Flight Hours Flight Cycles
Average
Flight Duration
105 28/09/2012 32,248 5,142 6h 16m
106 01/10/2012 41,372 5,101 8h 7m
107 12/10/2012 39,767 4,748 8h 23m
109 09/11/2012 35,721 5,658 6h 19m
110 30/11/2012 36,215 5,877 6h 10m
Maintenance Status
Emirates maintains its A380 aircraft fleet based on a programme according to which minor maintenance checks are performed every
1,500 flight hours and more significant maintenance checks (C checks) at 36-month or 18,000-flight hour intervals, whichever occurs
first.
Notwithstanding the increasing number of A380s Emirates has returned to service in response to the increased demand for air
travel since the Pandemic eased, Emirates still has one of the five Aircraft owned by the Group in storage in Dubai. The Lessee
has āa comprehensive aircraft parking and reactivation programme [in place], that strictly follows manufacturerās guidelines and
maintenance manualsā. In addition, Emirates has enhanced standards and protocols of its own to protect and preserve the asset
during downtime. This includes the watertight sealing of all apertures and openings through which environmental factors ā sand,
water, birds, and insects ā can find their way inside an aircraft. During parking, maintenance teams complete periodic checks at
different intervals. Depending on the reactivation date of a specific aircraft, Emirates might defer calendar-based maintenance
checks until such time. This allows the airline to make use of the full maintenance interval once the operation of an aircraft resumes.
One of the Groupās Aircraft is in deep storage condition and could be reactivated within months, if required.
Emirates bears all operating costs relating to the Aircraft during the lifetime of the Leases (including for maintenance, repairs, and
insurance).
In November 2023 the EU Aviation Safety Agency issued an AD for A380 aircraft adopting the already mandatory inspection of wing
rear spars between certain wing ribs. After further results of the inspections of the wing rear spars by Airbus revealed more findings,
criteria previously specified by Airbus were no longer justified. Prompted by these developments, Airbus redefined one of the driving
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT (continued)
parameters for the threshold for wing rear spars inspections by replacing a previous to-be-calculated factor with a fixed factor,
defined in this AD. This new factor focuses on time spent in storage.
Starting in 2019 a series of ADs was issued addressing concerns about potential cracks in certain wing rear spars. Based on the data
and evidence collected during the inspections over the last four years or so, contributing factors in addition to the age of the wing
were identified. The probability of a crack, for example, also depends on the amount of time an aircraft has spent on the ground (stored
or parked) in severe environmental conditions. The phenomenon underlying this relationship is called Hydrogen Environmental
Assisted Cracking. It affects specific aluminium alloys used in the A380. Emirates aircraft are more severely affected than those of
other A380 operators due mainly to the hot desert climate in the UAE and prolonged storage periods during the Pandemic in that
environment. The inspection and rectification of potential findings are to be performed before the potential redelivery of the Aircraft,
with the costs covered by the Lessee.
Emirates schedules 60 days for the initial inspection. Teams from Airbus have already inspected the Aircraft with MSNs 106, 107, 109,
and 110 which returned to service immediately after the work had been completed, depending on the individual Aircraft, between
April and July 2023, in Toulouse, France. The inspections were performed between February and July 2023. Repeat inspections are
currently scheduled at an interval of 36 months.
Inspections
Doric, the Asset Manager, conducted physical inspections and records audits of the Aircraft as per the below table. Due to the storage
of MSN 105 and the protective measures associated with, the inspection of this Aircraft was limited to viewing the outside of the
aircraft from ground level.
The condition of the Aircraft, to the extent visible, and the records were in compliance with the provisions of the respective Aircraft
Lease agreements.
MSN Last Inspection MSN Last Inspection
105* 08/2023 109 01/2024
106 08/2023 110 01/2024
107 08/2023
* In storage at the time of inspection
Completed Sale of Two Aircraft
The Leases for the Groupās first two Aircraft with MSNs 077 and 090 expired in mid-October and early December 2023. Both Aircraft
were sold around their respective lease expiry dates to Emirates. Sale proceeds paid by Emirates to the Company were GBP 28.9
million in respect of each Aircraft (equivalent to USD 35 million). Following the sale, the Company returned monies to Shareholders
in the second half of December 2023 by way of a partial compulsory redemption of two ordinary preference shares for each seven
shares in the Company. The redemption proceeds of 120 pence per share were paid on 27īDecember 2023.
Following the sale of the two Aircraft, the Company owns five Airbus A380s whose Leases expire between 1īOctober and 30īNovember
2024. The operating leases of these Aircraft are expected to continue as contracted between the parties until their expiry.
Upcoming Lease Expiration
The Leases for the Companyās five remaining Aircraft are scheduled to expire during the fourth quarter of 2024. Under the terms of the
Leases, Emirates is required to return the Aircraft in redelivery condition together with a cash sum; however, other options including
a sale or re-lease are available, subject to the agreement of the Company. The Asset Manager is currently in discussion with Emirates
about the future of the Aircraft. The Company will report to its Shareholders as soon as the discussions have been completed. In
the event that Aircraft are returned to the Lessor, Emirates is obliged to pay the sum of USD 12 million per Aircraft to the Lessor in
addition to the contracted return conditions, on or prior to the respective lease expiry dates.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT (continued)
2. Market Overview
The impact of the Pandemic on the global economy was severe, resulting in a 3.1% contraction in global GDP in 2020, followed by a
recovery of 6.2%, 3.0% and 2.6% in 2021, 2022 and 2023 respectively. According to its latest report on global economic prospects
from January 2024, the World Bank expects a growth rate of 2.4% for the current year [which would then be the third consecutive
year of deceleration].
In December 2023 the IATA revised its 2023 projection for the airline industry net profits from USD 9.8 billion to USD 23.3 billion. In
2024 profitability is expected to increase further, reaching USD 25.7 billion, a year-over-year 0.1 percentage point net profit margin
improvement.
The year 2023 was marked by a strong industry-wide recovery of air passenger traffic, measured in RPK, with a year-on-year growth
of 36.9%. Traffic reached 94.1% of its 2019 pre-Pandemic levels. The supply of seats, measured in ASKs, increased by 31.0% last year
compared to 2022 and reached 94.4% of its 2019 levels. The average PLF in 2023 came in at 82.3%, an improvement of 3.6īpercentage
points from 2022 and only 0.3 percentage points below its 2019 levels.
The industry had a strong start in the new calendar year. In January RPKs grew by 16.6% compared to the same period the year before.
With 99.6% of pre-Pandemic travel levels seen in January 2019, the industry was closer than ever to monthly recovery. Over the last
twelve months airlines increased their capacities, measured in ASKs, by 14.1%, resulting in a PLF of 79.9% in January 2024. This is an
improvement of 1.7 percentage points from January 2023 and 0.1 percentage points from its pre-Pandemic levels in January 2019.
The majority of airline regions have now exceeded their 2019 benchmark on a monthly basis, according to IATA.
While international travel, measured in RPKs, is still 4.3% short of its volume before the sector was hit by the Pandemic, global
domestic travel has fully recovered, surpassing the 2019 benchmark levels by 6.7% in January 2024. Domestic air passenger traffic is
particularly strong in the United States, China and India, while Australia, Brazil and Japan are lagging behind. With strong domestic
tourism in the worldās second largest market for domestic air travel, China is leading domestic air travel growth compared to both
the previous year and the respective pre-Pandemic levels. In January 2024 RPKs increased by 33.2% year-on-year and 15.0% when
compared to pre-Pandemic levels in January 2019.
The latest ticket sales on a global level ācontinue to indicate resilient demand for air travel on both market segments [domestic and
international]ā, according to an IATA report released in March 2024.
The Middle East, where the Lessee is located, recorded an RPK increase of 16.2% between January 2023 and January 2024, surpassing
its pre-Pandemic air passenger traffic by nearly 4%. Capacities, measured in ASKs, expanded by 15.3% over the period, resulting in
a 0.6 percentage point improvement of the average PLF to 79.9% or 5.4 percentage points above its pre-Pandemic levels in January
2019.
Source: IATA, World Bank
Ā© International Air Transport Association, 2024. Air Passenger Market Analysis December 2023. Air Passenger Market Analysis January 2024. Global Outlook
for Air Transport ā December 2023. Available on the IATA Economics page.
3. Lessee ā Emirates
Network
During the financial year 2023/24 the carrier increased frequency and capacity to 15 destinations globally and replaced Boeing 777
services with A380s on routes to 14 destinations.
From 21 February 2024 till the end of its winter flight schedule Emirates temporarily upgraded the daily flight from Dubai to the
Austrian capital Vienna to an A380 service. Emirates has not operated the A380 since August 2022 on this route and hopes for a
permanent return of the A380 in the future.
From 1 May 2024 Emirates will reintroduce its daily service to the Cambodian capital, Phnom Penh, via Singapore.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT (continued)
Starting on 1 June 2024 Emirates will deploy an A380 for daily flights to Osaka, Japan, replacing the Boeing 777-300ER currently
operating on this route. The upgrade will result in 910 additional weekly seats between Dubai and Osakaās Kansai Airport being
operated by a retrofitted four-class A380 with the airlineās latest premium economy product.
From 1 October 2024 Emirates will upgrade its second daily flight between Dubai and Brisbane, Australia, to an A380 service.
According to the CEO of Brisbaneās airport, āthis will allow up to 100,000 extra passengers per year to travel between Queensland
and Europe, which is Brisbaneās second busiest international destinationā. Starting on 1 December 2024 the Lessee will also add
a second daily flight to Perth. By December 2024, Emirates expects to have returned to its pre-Pandemic capacity offering with 77
weekly services to Australia.
Emirates signed a series of strategic partnership agreements at Europeās leading travel and trade show ITB in Berlin. This includes
new collaborations with the Greek National Tourism organisation, Austrian National Tourist Office and Tourism Ireland. The airline
further renewed partnerships with TUI and AIDA Cruises. In 2023 Emirates transported around 400,000 cruise passengers using Dubai
cruise terminals. Dubai expects 23% more cruise passengers for the upcoming season.
Fleet
According to Emirates, its passenger aircraft fleet consisted of 116 Airbus A380s and 133 Boeing 777s at the end of March 2024. Over
the last two years or so, Emiratesā President, Sir Tim Clark, has provided multiple status updates on the likely future of the airlineās
A380 fleet. In February 2022 he reported on recycling efforts of the first five A380s Emirates had retired, but pointed out that these
efforts will not continue with further A380s. At that time Emirates aimed to extend the life of about 120 A380s and 777s by six to ten
years each.
In a June 2023 interview with Bloomberg, Clark refined the timeline about the future of its A380 fleet, noting that Emirates āwill keep
them flying until 2032ā before the airline starts to take them out of its fleet. Under the current circumstances their operation is āvery
profitableā for the carrier, Clark noted at that time. In November 2023 he once again extended the scheduled end of Emiratesā A380
services, stating that the airline intends to fly the A380 until at least 2041 due to the lack of availability of similar-sized replacement
aircraft. The statement was repeated similarly in March 2024, noting that Emirates plans to keep A380s flying until the late 2030s,
with corresponding extensions of aircraft leases.
To maintain and improve operational efficiency and maximise fleet performance and reliability of its A380 fleet āwell into the next
decadeā, Emirates signed agreements worth over USD 1.5 billion at the 2023 Dubai Air Show. Partners such as Honeywell, Collins
Aerospace, Lufthansa Technik and GAMECO will deliver aviation aftermarket and Maintenance, Repair and Overhaul services. āOur
continued commitment to and confidence in the A380 are why we are investing heavily to keep the fleet in optimal shape and pristine
condition. The A380 will remain core to our network and customer proposition for the next decade, and we want to ensure our fleet is
in tip-top shapeā, said Clark in a statement.
In March 2024 Emiratesā President reported strong demand for flights in the airlineās upcoming summer season, noting that the
capacity is āpretty much sold outā for the summer ā and the lack of additional capacity: āThere is so much more [we could fly]. South
America, Africa, Asia ā¦ If I could just get another 50% more aircraft in the air, I would do it.ā
In May 2024, the carrier announced an expansion of its existing cabin retrofit program with plans to completely refurbish another
43 A380s and 28 Boeing 777 aircraft, topping up its multi-billion-dollar investment and ensure product consistency across fleet. The
latest addition would bring the number of A380s with newest generation seats, including the installation of a premium economy class
seats, and updated cabin fittings to 110.
At the 2023 Dubai Air Show in November Emirates also added a number of aircraft to its existing order book for a combined list price
value of USD 58 billion:
Boeing 777X
In November 2023 Emirates topped up an existing order for 115 Boeing 777Xs, a combination of 16 777-8s and 99 777-9s, by signing
a firm order for another 35 777-8 and 55 777-9 aircraft. This brings the Lesseeās Boeing 777X orderbook to a total of 205 units.
14
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT (continued)
According to a statement from Tim Clark in November 2023, delivery of the first 777-9 from the initial order was expected from
October 2025. Deliveries from the new 777-9 order are scheduled up until 2035. The slightly smaller 777-8, for which Emirates is one
of the launch customers, is expected to commence delivery in 2030.
If delivered in 2025, the Boeing 777-9 will be over five years late. Due to multiple delays, and as these aircraft are destined to replace
the airlineās aging Boeing 777-300ER fleet, the carrier has extended the lease period of 25 Boeing 777 aircraft during the 2022/23
financial year, with another 12 during last financial year, and included the aircraft type in its refurbishment programme.
Late last year Tim Clark had no concerns that the delivery of the first 777-9 aircraft for Emirates could slip into 2026. However, his
view has changed, and he is ābeginning to doubtā that the airline will receive its first aircraft in 2025, according to a statement
from late February 2024. In early January 2024 an emergency exit plug and panel separated in flight from a Boeing 737-9 MAX
aircraft delivered only a few weeks earlier. This is the latest event in a series of production-related incidents across the families of
Boeing commercial airplanes. In late December 2023 Boeing, for example, had urged 737 MAX operators to inspect their aircraft
for a āpossible loose bolt in the rudder control systemā. The latest accident has raised concerns and immediately triggered an FAA
investigation into Boeingās manufacturing processes. Furthermore, the FAA announced increased oversight of Boeing production
and manufacturing. In addition, Boeing has hired an independent special adviser conducting āa thorough assessment of Boeingās
quality management system for commercial airplanes, including quality programmes and practices in Boeing manufacturing
facilities and its oversight of commercial supplier qualityā, according to a company statement. Meanwhile, the FAA announced an
āassessment of safety risks around delegated authority and quality oversight, and examination of options to move these functions
under independent, third-party entitiesā. The concept of delegated authority allows designated employees within Boeing to act on
behalf of FAA to streamline aircraft certification. The tightening grip of the FAA on Boeing will likely impact the certification of new
aircraft types including the 777X series.
In early March 2024 the FAA announced that a six-week audit of Boeing and supplier Spirit AeroSystems found multiple instances
where the companies allegedly failed to comply with manufacturing quality control requirements. The FAA investigation is continuing,
while Boeingās CEO has announced his resignation effective as of the end of 2024.
With Airbus A380s and Boeing 747s no longer available for order, the Boeing 777X is currently the biggest aircraft in production.
Boeing 787
During the 2023 Dubai Air Show Emirates also updated an existing order for 30 Boeing 787-9 aircraft and committed to purchasing
another five. As per the latest agreement of mid-November 2023, Emirates will receive 20 Boeing 787-8s and 15 Boeing 787-10s.
However, the airline did not share an updated delivery timeline.
The previously ordered 787-9 aircraft were supposed to be delivered from May 2023 onwards. But Clark does not expect the Boeing
787 to join his fleet soon. Delivery of the 787 family paused for about 19 months between November 2020 and August 2022 after
Boeing had identified quality issues. It only resumed after the FAA decided the airframer āhad made the necessary changes to ensure
that the 787 Dreamliner meets all certification standardsā. Deliveries paused for another few weeks in February/March 2023 over
concerns connected to the aircraftās forward pressure bulkhead which were then resolved. In June 2023 Boeing announced the
discovery of yet another production flaw that required the manufacturer to inspect all 90 787 aircraft in its inventory, potentially
affecting the timing of near-term 787 deliveries as well.
In September 2023 Clark said, āthe 787 isnāt in the short-term picture at this point in timeā.
Airbus A350
An order of a further 15 A350-900s placed during the 2023 Dubai Air Show increases the number of A350-900 widebody aircraft
ordered by Emirates to 65. The first of these is expected to join Emiratesā fleet in August 2024. For the first 50 aircraft the airline and
the manufacturer agreed on a ācompressed delivery scheduleā with all 50 to be delivered within a 30-month period. This should help
āto pick up this big capacity hole that we can seeā, noted Emiratesā President in 2022. The last aircraft of this batch are expected to
be delivered in early 2028.
15
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT (continued)
In late September 2023 Tim Clark confirmed that the airline was also looking at the Airbus A350-1000 āquite seriouslyā. The A350-
1000 is about seven metres longer and has more than 50 additional seats in a typical two-class configuration compared to the A350-
900. However, such an order for up to 50 A350-1000s did not materialise at the Dubai Air Show in November 2023. Clark claimed the
insufficient time-on-wing performance of the Rolls-Royce Trent XWB-98 engine as a major roadblock for an order. Due to the harsh
environment the aircraft are operating in and at the utilisation levels expected, the engine is reaching āless than a quarterā of the
2,500 engine cycles, according to Clark. Hence, Emirates is reportedly requesting guarantees for up to 2,500 engine cycles on wing
and āat a maintenance cost per hour that is alrightā.
With a more diversified fleet, Emirates plans to add 400 destinations to its network over the next decade and expects to operate about
350 aircraft from the early 2030s onwards.
Emirates anticipates reaching its pre-Pandemic capacity by the second quarter of 2024, according to Adnan Kazim, Chief Commercial
Officer of Emirates. This will include up to 97 Airbus A380s with at least 12 additional spare aircraft to cover downtime for maintenance.
In total, Kazim expects that approximately 110 Airbus A380 will have returned to service by then.
Key Financials
All five Aircraft owned by the Company are Leased to Emirates. Under the Leases the Company receives rental income from the Lessee
and will receive USD 12 million per Aircraft in the event that the Aircraft are returned to the Company at the end of the Leases. For
this reason, the Directors actively monitor the financial position and trading performance of Emirates.
For its financial year 2023/24 ending on 31 March 2024, Emirates recorded a net profit of AED 17.2 billion (USD 4.7 billion), a record
performance for the company and 62.9% more than in the same period of the previous year. The airline attributes its performance to
a strong passenger demand for its premium product and offerings. Revenue, including other operating income, was up 13% from last
year and reached AED 121.2 billion (USD 33.0 billion).
Between 1 April 2023 and 31 March 2024, the airline carried 51.9 million passengers, an increase of 19% over the previous financial
year. Emiratesā SkyCargo uplifted 2,176,000 tonnes during that period, an increase of 18% over the previous financial year. However,
an increase in cargo capacity worldwide resulted in a downward pressure on prices and a decrease of 21% in SkyCargoās revenue.
During the financial year 2023/24 Emiratesā capacity increased by 21%, measured in ASKs. At the same time RPKs increased by 22%.
This resulted in an average PLF of 79.9%, an improvement of 0.4 percentage points compared to the last financial year.
Emiratesā total operating cost increased 8%. Fuel was the largest cost component amounting to 34% of operating costs, 2 percentage
points lower than in the period from April 2023 to March 2024. Higher revenues and better margins resulted in an improved Earnings
Before Interest, Taxes, Depreciations and Amortisation of AED 37.6 billion (USD 10.2 billion), a 13% improvement from the previous
year.
As of 31 March 2024, Emiratesā total liabilities decreased by 9.6% to AED 117.4 billion (USD 32.0 billion) compared to the end of the
previous financial year. Amongst other things, the airline repaid AED 20.9 billion (USD 5.7 billion) in bonds, lease liabilities and term
loans and paid a dividend to its shareholders in the amount of AED 2.0 billion (USD 540 million). Total equity came in at AED 46.5
billion (USD 12.7 billion), an improvement of 66% since the beginning of the financial year in April 2023. Emiratesā equity ratio stood
at 28.3% and its cash position, including short-term bank deposits, amounted to AED 42.936 billion (USD 11.7 billion) at the end of
March 2024, 15% more than at the beginning of the current financial year. The net cash flow from operating activities came in at AED
37.6 billion (USD 10.3 billion) for the current financial year, about 15% lower than in the previous financial year.
As at the end of March 2024, Emirates had outstanding USD debt issuances with maturities in 2025 and 2028. These bonds were
trading close to par and with running yields of approximately 4.6% in USDs. There has also been no significant upward pressure on
yields. This level of yields does not appear to indicate any significant financial stress to the issuer. In Emiratesā most recent annual
financial report, the auditor PwC issued an unqualified audit report.
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Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ASSET MANAGERāS REPORT (continued)
Commenting on rising profit announcements of other international airlines, Tim Clark noted in March 2024 that margins at Emirates
now compare favourably with other industries, having risen from around 3% before the Pandemic to 8-10% now.
In January 2024, Emirates announced plans to recruit 5,000 additional cabin crew members, boosting its existing cabin crew numbers
by 25% and helping to provide adequate staffing for the introduction of the Airbus A350. The recruiting team will host open days and
assessments in more than 460 cities across six continents. Last year Emirates hired 8,000 new cabin personnel.
In February 2024, the Emirates Group announced a number of senior executive appointments āas the organisation readies itself for
its net phase of growthā, according to a press release. This includes the newly created position of Deputy President, which has been
assigned to Adel Al Redha and Adnan Kazim, both continuing to act in their respective roles as Chief Operations Officer and Chief
Commercial Officer.
Sustainability
Emirates has pledged to adopt the CORSIA, a global initiative led by the ICAO and supported by the ICAO Member States. CORSIA aims
to maintain international emissions at 2019 levels by utilising internationally approved carbon offsets and promoting sustainable
and low carbon fuels.
In January 2024 Emirates became the first international airline to join The Solent Cluster, a UK initiative focused on low carbon
investments established to reduce CO2 emissions from industry, transport and households in the South Coast of England. The Solent
Cluster has the potential to create a SAF plant with an estimated fuel production capacity of 200,000 tonnes per year and could avoid
emissions of 563,000 tonnes of CO2 per year by producing fuel with 70% less emissions than fossil kerosene.
In March 2024 Emirates commenced the activation of its agreement with SAF provider Neste comprising the delivery of over 3 million
gallons of blended SAF at Amsterdam Schiphol Airport and Singapore Changi Airport in 2024 and 2025, respectively. According to
Adel Al Redha, Deputy CEO and Chief Operations Officer of Emirates, the cooperation with Neste āis one of the practical steps we are
taking to reduce our emissions, and itās an all-important milestone in our own sustainability journey as an airlineā. The carrier already
operates flights from Paris, Lyon and Oslo using SAF.
In May 2024 Emirates received a delivery of SAF from Shell Aviation at London Heathrow Airport. Over 3,000 tonnes of SAF will be
delivered to the airportās refuelling infrastructure network by the end of summer 2024. This marks the first time the airline is using
SAF for some of its flights at London Heathrow and represents the largest quantity of SAF acquired by Emirates so far. The airline is
participating in London Heathrowās SAF Incentive Program to ensure the affordability and accessibility of SAF for airlines operating
at the airport.
Source: AirlineRatings, Bloomberg, Cirium, Emirates, FAA, Reuters
4. Aircraft ā A380
As of the end of March 2024, the global A380 fleet consisted of 214 aircraft with 13 airline operators, according to Ascend. Of these,
160 were in service. The remainder of the fleet is currently parked. The 12 operators are Emirates (120), Singapore Airlines (14),
British Airways (12), Qantas (10), Korean Air Lines (10), Etihad Airways (10), Qatar Airways (10), Deutsche Lufthansa (8), Thai
Airways (6), Asiana Airlines (6), Air France (4), All Nippon Airways (3) and HiFly Malta/Global Airlines (1). Another 16 aircraft are
registered with non-airline entities.
In an analysis published in November 2023 Cirium Ascend Consultancy noted that the number of A380s reactivated post-Pandemic is
higher than initially expected, but that the full extent of the fleet recovery āis hard to forecastā. After the number of in-service A380s
reached a low in the single digits at the height of the Pandemic, Cirium Ascend Consultancy estimated āthat potentially up to 190
aircraft could be reactivatedā. Several factors were identified to explain a āonce-unlikely comebackā. This includes the large-scale
retirements of older twin-aisles in the early months of the Pandemic and āa relative lack of replacement capacityā due to the slow
ramp-up of production by Airbus and Boeing as well as extended delays to the introduction of the Boeing 777X.
Source: Cirium
17
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORS
As at 31 March 2024, the Company had four directors, all of whom were independent and non-executive. As part of the Boardās
ongoing succession plan, Theresa Oldham was appointed to the Board on 1 April 2023 and, as previously announced, Charles
Wilkinson stepped down from the Board on 31 July 2023.
Fiona Le Poidevin ā Chair of the Company
A Chartered Director, Fellow of the Institute of Directors and Chartered Accountant (FCA), Fiona is a non-executive director with
over 25 yearsā experience working in financial services in both London and the Channel Islands with experience in accounting, tax,
strategy, marketing, PR and the regulatory and listed company environments. Among her appointments, in addition to that with the
Company, Fiona is director of Sequoia Economic Infrastructure Income Fund Limited, a FTSE 250 company, and ICG-Longbow Senior
Secured UK Property Debt Investments Limited, both premium listed companies with shares admitted to trading on the Main Market
of the LSE. She is also director of Doric Nimrod Air Three Limited, a company admitted to trading on the Specialist Fund Segment of
the LSE. Fiona is also a member of the AIC Channel Islands Committee.
Until the end of July 2020, Fiona was CEO of The International Stock Exchange Group Limited and prior to that she was CEO of
Guernsey Finance, the promotional body for Guernseyās finance industry internationally. Previously she was an auditor and latterly
tax adviser at PwC (London and Channel Islands) and KPMG (Channel Islands) for over 13 years. She is resident in Guernsey.
Geoffrey Hall
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 earned his masterās degree in Geography at the University of London and is an associate
of the CFA Society of the UK. He is resident in the United Kingdom.
Geoffrey is also a director of Doric Nimrod Air Three Limited and was Chair of the Nomination Committee until 11 October 2023,
stepping down as part of the Companyās succession plan.
Charles Wilkinson
Charles Wilkinson resigned as Director of the Company effective 31 July 2023. He also served as a non-executive director of Doric
Nimrod Air Three Limited until that date.
Andreas Tautscher ā Chair of the AR Committee and the Management Engagement Committee
Andreas Tautscher brings over 34 yearsā financial services experience. He is also a non-executive director of Globalworth PLC which
is an AIM listed Central European property Group and Real Estate Credit Investments which is a premium listed shares admitted to
the Main Market of the LSE. He is an independent director of Northern Trust Guernsey Limited, and a number of private investment
companies. Andreas is a director of Arolla Partners, an independent director services business in the Channel Islands. From 1994 to
2018 Andreas held various roles at Deutsche Bank and was most recently CEO of Deutsche Bank International and Head of Financial
Intermediaries for EMEA and LATAM. He was previously a non-executive director of the Virgin Group. Andreas qualified as a Chartered
Accountant in 1994.
Andreas is also Chair of Doric Nimrod Air Three Limited and Chair of its Management Engagement Committee. He is resident in
Guernsey.
Theresa Oldham ā Chair of the Nomination Committee
Theresa Oldham is a non-executive director with over 30 yearsā experience in the aircraft finance and leasing industry. Having trained
and spent her early career as a solicitor in the City of London, Theresa moved into the industry where she held a number of senior
positions, most recently and until 2019, as Group Director of Aircraft Finance and Leasing for Thomas Cook Group plc where she was
responsible for all related activities for the Groupās international fleet of aircraft.
18
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORS (continued)
Since 2020, Theresa has been providing aviation consultancy services and maintains a practicing certificate as a solicitor in England
and Wales. She is resident in the United Kingdom.
Theresa was appointed as Chair of the Nomination Committee of the Company effective 11 October 2023.
Theresa is also a director of Doric Nimrod Air Three Limited and Chair of its Nomination Committee.
19
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
SERVICE PROVIDERS
Management and the Delegation of Functions
The Directors, whose details are set out on pageī17 are responsible for reviewing the business affairs of the Group in accordance
with the Articles and have overall responsibility for the Groupās activities including all business decisions, review of performance
and authorisation of distributions. The Company has delegated management of the Groupās Aircraft to Doric, which is a company
incorporated in Germany. Further details are outlined below under the heading Asset Manager. The Board has appointed Nimrod,
which is authorised by the FCA, to act as the Corporate and Shareholder Adviser of the Company. The Directors delegate secretarial
and administrative functions to JTC which is a company incorporated in Guernsey and licensed by the GFSC for the provision of
administration services. The registrar function is delegated to the Registrar, which is licensed and regulated by the GFSC.
Asset Manager
Doric has been appointed by the Company to provide asset management services to the Group. Pursuant to the Asset Management
Agreement, Doric will: (i) monitor Emiratesā and any subsequent Lesseesā 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
Group 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 Group 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 loans and EETCs, as required.
Doric has further undertaken that it will dedicate sufficient time and resources as it reasonably believes is required from time to time
to fulfil any contractual arrangements it enters into with the Company.
The Doric Group is also a member of ISTAT and offers sustainable investment opportunities for institutional and retail investors. A
specialist in real estate, renewable energy and transportation, Doric managed a real asset portfolio with an investment volume of
around USD 7 billion at the end of 2023. The Doric Group has an international presence, with offices in Germany, Austria, the United
Kingdom, and the United States, and a multinational team which offers access to extensive relationship networks and expert asset
knowledge maintaining regulated financial institutions in Europe. One of the firmās core competencies is its asset management
expertise, which is an integrated part of all Doric transactions and a cornerstone of the business. For further information about the
Doric Group, please visit www.doric.com.
The aircraft portfolio currently managed by the Doric Group is valued at $4.6 billion and consists of 32 aircraft under management.
These aircraft include commercial airliners ranging from ATR 72-500s and the Airbus A320 family, through the Boeing 777, 787, and
Airbus A330, up to the Airbus A380 as well as an engine portfolio.
The Doric Group has 15 Airbus A380 aircraft, 5 of which are owned by the Companyās subsidiaries, currently under management and
is therefore considered well positioned to perform the technical asset management of this aircraft type.
Corporate and Shareholder Adviser
Nimrod, which is authorised by the FCA, has been appointed as the Corporate and Shareholder Adviser by the Company.
Nimrod was founded in 2008 as an 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 nine
listed investment companies since its formation and it also provides investment, marketing, distribution and advisory services to
investment companies and their boards and managers.
Nimrod, together with Doric and Emirates, was awarded the āInnovative Deal of the Year 2010 awardā 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
JTC is an independent provider of institutional and private client services to clients in numerous jurisdictions and is a member of the
JTC Group. For further information about the JTC Group, please visit www.jtcgroup.com.
20
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
SERVICE PROVIDERS (continued)
JTC is a Guernsey incorporated company and provides administration and secretarial services to the Group pursuant to an
Administration and Secretarial Agreement. In such capacity, JTC is responsible for the general secretarial functions required by the
Law and assists the Group in its compliance with its continuing legal and regulatory obligations, as well as providing advice on good
corporate governance and best practice for a publicly traded company.
JTC is also responsible for the Groupās general administrative functions and for the preparation of unaudited half-yearly and audited
Annual Financial Report and Consolidated Financial Statements, subject to the direction and oversight of the Board.
Registrar
JTC Registrars is the Companyās CREST compliant registrar. The Registrar is responsible for the maintenance of the Companyās Share
register and for the processing of dividend payments and stock transfers. The Registrar is licensed and regulated by the GFSC and
further information about The Registrar may be obtained from their website at www.jtcgroup.com.
Review
The Board keeps under review the performance of the Asset Manager, Corporate and Shareholder Adviser, the Secretary, Administrator
and the Registrar and the powers delegated to each service provider. In the opinion of the Board, the continuing appointments of the
service providers on the terms agreed is in the best interest of the Companyās Shareholders as a whole.
A full list of the Groupās service providers is set out on pageī83.
21
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
KEY INFORMATION
A description of important events which have occurred during the financial year under review, their impact on the performance of the
Group as shown in the Consolidated Financial Statements and a description of the principal risks and uncertainties facing the Group
are given in the Chairās Statement, Asset Managerās Report, Statement of Principal Risks and the notes to the Consolidated Financial
Statements contained on pagesī58 toī82 and are incorporated here by reference.
Principal Risks and Uncertainties
The Board has undertaken a robust assessment of the principal severe but plausible risks facing the Group and has undertaken a
detailed review of the effectiveness of its risk management and internal control systems. The Board is comfortable that the risks are
being appropriately monitored and controlled since it receives regular risk reports from the AR Committee concerning its analysis of
the risks facing the Group and of the effectiveness of the countervailing measures in place to control those risks.
The risks set out below are those which are considered to be the material risks but are not the only risks. Additional risks and
uncertainties of which the Group is presently unaware or that the Group currently believes are immaterial may also adversely affect
its business, financial condition, results of operations or the value of the Shares.
The principal risks associated with the Group are:
ā¢ Operational risk: The Board is ultimately responsible for all operational facets of performance including cash management,
asset management, regulatory and listing obligations. The Group has no employees and so enters into a series of contracts/
legal agreements with a series of service providers to ensure both operational performance and the regulatory obligations
are met. This risk has been mitigated by the Group using well established, reputable and experienced service providers. The
Management Engagement Committee annually reviews performance of all service providers. Evaluations are documented and
areas for improvement are monitored. Where relevant, service providers provide copies of their control reports.
ā¢ Investment risk: There are a number of risks associated with the Groupās Assets in relation to the occurrence of technical faults
with the Assets or actions by third parties causing both damage to the Assets and also damaging the demand for global air travel.
This risk has been mitigated by the Lesseeās contractual responsibility to insure, repair and maintain the Aircraft for the duration
of the Leases.
There are further risks associated with the expiry of Lease agreements. This risk has been mitigated through the appointment
of an Asset Manager who is responsible for negotiating the end of Lease process in the best interests of the Company and in
compliance with the agreed Lease contracts. The Asset Manager is responsible for planning, understanding the costs involved
in long term storage and ensuring the Company has sufficient funds available to cover these costs. The Asset Manager further
performs regular checks on the Aircraft owned by the Company and updates the Board of any material developments.
ā¢ Borrowings and financing risk: There is a risk that the Group is exposed to fluctuations in market interest rates and foreign
exchange rates. In relation to the debt obligations, this risk has been mitigated by ensuring that debt repayments are made from
lease rental revenues received in the matching currency and by fixing the interest rates on debt and lease rentals.
ā¢ Credit risk: Emirates is the sole Lessee of the Assets and is headquartered in the Middle East. Should Emirates default on the
rental payments due to domestic events, events in the wider airline industry or other reasons 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. The risk of default is
potentially mitigated by the ability of the Group to sell or re-lease the Assets in the event of a single default, together with
the financial position of Emirates. However, this could be impacted by market conditions at the time. The Board monitors the
financial performance of Emirates on an ongoing basis.
ā¢ Secondary market risk: There is a risk that the Group would not be able to achieve the projected resale value of the Assets due
to i) changes in demand for second hand aircraft of the type owned by the Group, ii) the limited number of airlines operating the
aircraft type, and iii) an increasing trend for airlines to operate newer generation twin-engine aircraft that are more efficient
and whose engine costs are substantially less. Therefore, the Board monitors and revises the residual value of the Aircraft on an
annual basis, based on reports received from three independent appraisers, who consider these market trends in their aircraft
valuations.
22
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
KEY INFORMATION (continued)
ā¢ Aircraft preservation risk: In the case that the Aircraft are returned and there are not yet secondary leases in place or an
agreement to sell immediately, there is a risk that the Company would need to utilise financial resources to cover storage costs,
preservation of the Aircraft whilst in storage, and maintain insurance on the aircraft though this would be a smaller cost as the
aircraft would not be flying. The risk is mitigated by ensuring proactive engagement with the Groupās Lessee so that the end of
Lease situation is known and planned for in advance of expiry date. The Board also maintains a healthy cash position from rentals
received which is not paid out as regular dividend in order to facilitate end of lease planning. In the event of a redelivery the
Lessee is obliged to pay USD 12 million per Aircraft on top of monetary compensation. The latter depends on the actual physical
status of the Aircraft at lease expiry.
ā¢ Regulatory risk: The Group is required to comply with the DTRs of the FCA and the requirements imposed by the Law and any
other legislation and regulations as applicable. Any failure to comply could lead to criminal or civil proceedings. Although
responsibility ultimately lies with the Board, the Board is also assisted by the Secretary which monitors compliance with
regulatory requirements.
ā¢ Valuation risk: There is a risk that the useful life or residual value used in determining depreciation are not appropriate or
accurately calculated. The Board assess, based on the latest forecast valuations, whether the selected residual values remains as
an appropriate basis of valuation and with consideration to the range of estimates provided by the external valuers. The Group
has a robust audit process. Additionally, the Group has engaged external experts (two out of those three being ISTAT accredited)
to provide residual values of Aircraft. The Asset Manager is up to date regarding the Aircraft/Aviation industry, giving insight to
the Board regarding the current and future outlook for the industry and appropriate life/residual values. The Company annually
completes impairment testing in line with IAS 36.
Emerging Risks
The Board has developed and continues to maintain a risk matrix for the Group which is reviewed regularly. The Board continually
monitors emerging risk areas relevant to the performance of the Group including those that would threaten its business model, future
performance, solvency and liquidity on an ongoing basis. The Board receives from the Companyās Asset Manager quarterly reporting
confirming the Asset Managerās obligations and highlighting key issues and risks to be brought to the Companyās attention.
Additional risks and uncertainties of which the Board is presently unaware may also adversely affect its business, financial condition,
results of operations or the value of shares.
Data Protection
The Company has implemented measures designed to ensure its compliance with the EU General Data Protection Regulation (EU)
2016/679 and associated legislation in Guernsey. The Company has also issued a privacy notice explaining the data it holds, how the
data is used and its procedures for processing this data. This notice is available for review and download at the Companyās website.
Going Concern
The Groupās principal activities are set out within note 1. The financial position of the Group is set out on pageī55. In addition,
noteī19 to the Consolidated Financial Statements includes the Groupās objectives, policies and processes for managing its capital, its
financial risk management objectives and its exposures to credit risk and liquidity risk.
The Directors are satisfied that the Group can meet its liabilities as they fall due over the next twelve months from the date of approval
of the Annual Financial Report and Consolidated Financial Statements. It has arrived at the conclusion for the following reasons:
ā The Directors have considered Emiratesā ability to continue paying the lease rentals until the end of the longest running
Lease agreement in November 2024, (please refer to note 12 for expiry dates of the Leases) as well as its ability to make the
compensation payments of at least USD 12 million per Aircraft should the Aircraft be returned at the end of the Leases. The
Directors, with the support of its Asset Manager, concluded that it is reasonable to assume as at the date of approval of the
Consolidated Financial Statements that Emirates will continue to meet its contractual payments under the Leases due to the
following:
23
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
KEY INFORMATION (continued)
ā Emirates continues to be a going concern as at the date of the Lesseeās latest signed annual financial report for the financial
year ended 31 March 2024.
ā During the last financial year, Emirates increased its overall capacity, measured in available tonne kilometres (ATKs) by
20%, reaching 99% of pre-Pandemic levels, while maintaining a decade-high passenger load factor of 79.9%, an increase
of 0.4 percentage points from the previous year. The number of passengers increased by 19% compared to the year before
to 51.9 million, while the airlineās capacity for passenger services, measured in ASKs, increased by 21.4% compared to the
previous year.
ā Emirates reported its most profitable year ever with a net profit of AED 17.2 billion (USD 4.7 billion), a nearly 63%
improvement on its previous yearās record result and despite currency fluctuations which negatively impacted the airlineās
profitability by AED 2 billion (USD 0.6 billion).
ā As at 31 March 2024 financial year end Emirates had AED 42.9 billion (USD 11.7 billion) in cash assets (including bank
deposits), the highest-ever balance in the companyās history.
ā Emiratesā Credit Default Swap is trading at its multi-year average, indicating a low default risk.
ā As of the date of the Consolidated Financial Statements, the Board is not aware of a formal request to the Group for a lease
deferral or any other efforts that would result in the restructuring of the existing transaction.
ā Emirates has paid all the lease rentals to the Group in a timely manner.
ā Regardless of Emiratesā s ability to continue paying contractual lease rentals, the Group in any event has sufficient resources
to meet its liabilities as they fall due since it has unencumbered cash at the date of approval of the Annual Financial Report
and Consolidated Financial Statements several times in excess of the combined total of outstanding borrowings and
12īmonths of projected expenses.
At the current time, the Directors therefore concluded that the going concern basis of accounting remains appropriate albeit subject
to material uncertainty noted below. The Companyās liquidity position is sufficient to be able to cover all of its known financial
obligations and allows the Company to continue as a going concern. In case of a redelivery of the Aircraft at the scheduled lease
expiry dates the Lessee is obliged to make significant additional payments in cash as agreed on the redelivery condition side letter.
Although the Company does not have a fixed life, the Articles require that the Directors convene a liquidation proposal meeting in
June 2025 where a liquidation resolution (the āLiquidation Resolutionā) will be proposed that the Company proceed to an orderly
wind-up. In the event the Liquidation Resolution is not passed, the Directors will consider alternatives for the Company and shall
propose such alternatives at a general meeting of the shareholders, including re-leasing the Aircraft (to the extent the Aircraft have
not already been disposed in the market), or selling the Aircraft and applying the capital received from the sale of those Aircraft to:
(i) if applicable, the repayment of loans; and (ii) reinvestment in other aircraft.
The outcome of the Liquidation Resolution (which is due to take place in June 2025) will be known within 12 months of the date the
Board approves the Annual Financial Report and Consolidated Financial Statements for the year ended 31 March 2024. This creates a
material uncertainty over the Companyās ability to continue as a going concern. Should the Company resolve to proceed to an orderly
winding up, i.e. that the Liquidation Resolution is passed, would mean that the Company, though solvent and able as before to meet
its liabilities as they fall due, it would at that point no longer meet the definition of a going concern, i.e. an entity which will continue
its operations for the foreseeable future.
Viability Statement
In accordance with Provision 31 of the Code, the Directors of the Company have considered the prospects of the Group over the period
from present until at least 31 July 2025, a period not less than one year from the date of approval of the Consolidated Financial
Statements. In choosing the period of viability for the Group the Board has considered the prospect of Emirates performing their
obligations until the end of their Leases and the Liquidation Resolution to be put to Shareholders in June 2025.
24
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
KEY INFORMATION (continued)
The Board, in assessing the viability of the Group, has paid particular attention to the principal and emerging risks faced by the Group
as disclosed in the Key Information section and the notes to the Consolidated Financial Statements, reviewing on an ongoing basis
the risks faced and ensuring that any mitigation measures in place are functioning correctly.
The Directors, with the support of its Asset Manager, believe that it is reasonable to assume as of date of approval of the Consolidated
Financial Statements that Emirates will continue with the contracted lease rental payments due to the following:
ā Emirates continues to be a going concern as at the date of the Lesseeās latest signed annual financial report for the financial year
ended 31 March 2024.
ā During the last financial year, Emirates increased its overall capacity, measured in ATKs by 20%, reaching 99% of pre-Pandemic
levels, while maintaining a decade-high passenger load factor of 79.9%, an increase of 0.4 percentage points from the previous
year. The number of passengers increased by 19% compared to the year before to 51.9 million, while the airlineās capacity for
passenger services, measured in ASKs, increased by 21.4% compared to the previous year.
ā Emirates reported its most profitable year ever with a net profit of AED 17.2 billion (USD 4.7 billion), a nearly 63% improvement
on its previous yearās record result and despite currency fluctuations which negatively impacted the airlineās profitability by AED
2 billion (USD 0.6 billion).
ā At the end of the 2023/24 financial year Emirates had AED 42.9 billion (USD 11.7 billion) in cash assets (including bank deposits),
the highest-ever balance in the companyās history.
ā Emiratesā Credit Default Swap is trading at its multi-year average, indicating a low default risk.
ā As of the date of the Consolidated Financial Statements, the Board is not aware of a formal request to the Group for a lease
deferral or any other efforts that would result in the restructuring of the existing transaction.
ā Emirates has paid all the lease rentals to the Group in a timely manner.
The Group retains sufficient cash to cover the forecast operating costs of the Group until the termination date of the final Leases
in 2024, and the immediate post lease end up to the date 12 months following the approval of the Annual Financial Report and
Consolidated Financial Statements whether or not planned rental income is received.
The Directors believe that their assessment of the viability of the Group over the period chosen was sufficiently robust and encompassed
the risks which would threaten the business model, future performance, solvency or liquidity of the Group, together with ongoing
work to forecast future expenditure in various possible scenarios.
As a result of their review, the Directors of the Company have a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due until 31 July 2025.
25
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT
The Directors present their audited Annual Financial Report and Consolidated Financial Statements of the Group for the financial year
ended 31 March 2024.
Principal Activities and Business Review
for the foreseeable future. A description of the activities of the Group in the year under review is given in the Chairās Statement and
the Asset Managerās Report respectively on pagesī7 to 9 and 10 to 16. A description of the principal risks and uncertainties facing the
Group, together with an indication of important events that have occurred since the end of the financial year and are likely to affect
the Groupās future development are included in the Company Overview, the Chairās Statement, Asset Managerās Report, this Directorsā
Report, the Principal Risks and Uncertainties on pagesī7-9, 10-16, 25-35 and 21 to 22.
Status
The Company is a Guernsey domiciled company, the Shares of which are admitted to trading on the SFS. Its registered number is
52985. The Company operates in accordance with the Law.
Results and Dividends
The results of the Group for the financial year are set out on pageī54.
The Company declared dividends during the financial year under review as follows:
Quarter End Announcement Date Payment Date
Dividend
per Share
(pence)
31 March 2023 13 April 2023 28 April 2023 4.50
30 June 2023 13 July 2023 31 July 2023 4.50
30 September 2023 10 October 2023 31 October 2023 4.50
31 December 2023 11 January 2024 31 January 2024 4.50
The Company declared the following dividends after the financial year end:
Announcement Date Payment Date
Dividend
per Share
(pence)
11 April 2024 30 April 2024 4.50
11 July 2024 31 July 2024
(expected payment date)
4.50
The Company pays quarterly dividends of 4.50 pence per Share, in line with the current Distribution Policy.
Directors
The Directors in office are shown on pageī17 and all Directors remain in office as at the date of signing of these Consolidated Financial
Statements. Further details of the Directorsā responsibilities are given on pages 34 toī35.
26
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
Substantial Controllers of Voting Rights
As of 12 July 2024, the following Shareholders had notified the Company that they held or controlled 5% or more of the total voting
rights of the Company in issue:
Name
% of Total
Voting Rights
Number of
Shares*
Elliott Investment Management L.P. 11.25% 13,881,557
City of Bradford Metropolitan District Council 10.16% 12,535,714
City of Bradford ā West Yorkshire Pension Fund 9.00% 11,107,143
Schroders plc 7.68% 9,477,062
Seneca IM Limited 5.10% 6,293,488
Quilter Cheviot Limited 5.00% 6,172,838
* Number of shares as notified directly to the Board or as communicated by Shareholders via TR1 notifications adjusted for any compulsory redemptions in the
interim period from the date of notification to the date of this report.
Corporate Governance
Statement of Compliance with the Code, as published in July 2018
As a Guernsey incorporated company and under the DTRs, the Company was not, for the Period under review, required to comply with
the Code. The Company has, however, voluntarily committed to comply with the Code or explain any departure. A copy of the Code
is available for download from the FRCās website (www.frc.org.uk). The Company considers the disclosures made are sufficient to
comply with the Code.
Having reviewed the Code, the Board considers that it has maintained procedures during the year to ensure that it has complied with
the Code, other than the following exceptions:
27
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
(i) Provision 2: The board should assess and monitor culture.
Provision 5: The board should understand the views of the companyās other key stakeholders and describe in the annual report
how their interests and the matters set out in section 172 of the Companies Act 2006 have been considered in board discussions
and decision-making. The board should keep engagement mechanisms under review so that they remain effective.
For engagement with the workforce, one or a combination of the following methods should be used:
ā¢ a director appointed from the workforce;
ā¢ a formal workforce advisory panel;
ā¢ a designated non-executive director.
Provision 6: There should be a means for the workforce to raise concerns in confidence and ā if they wish ā anonymously.
Company Response: Although the Company does not have employees, the Board recognises that it, together with the service
providers of the Company, contributes to the overall culture of the Company. As a Guernsey incorporated company, the Boardās
election to comply with section 172 is voluntary. Therefore, the Board assesses and monitors this culture. It also explores
effective engagement mechanisms for key stakeholders.
(ii) Provision 10: The board should identify in the annual report each non-executive director it considers to be independent.
Circumstances which are likely to impair, or could appear to impair, a non-executive directorās independence include, but are
not limited to, whether a director:
ā¢ has, or has had within the last three years, a material business relationship with the company, either directly or as a partner,
shareholder, director or senior employee of a body that has such a relationship with the company;
ā¢ holds cross-directorships or has significant links with other directors through involvement in other companies or bodies;
ā¢ has served on the board for more than nine years from the date of their first appointment.
Where any of these or other relevant circumstances apply, and the board nonetheless considers that the non-executive director
is independent, a clear explanation should be provided.
Company Response: The Board considers the Directors to be independent however it could be construed that they are not
independent on the basis that the Directors of the Company are also directors of other DNA companies. The Board have
implemented measures to manage any conflicts which might arise as a result of these appointments.
Geoffrey Hall has been a member of the Board since the incorporation of the Company in January 2011. He has therefore served
on the Board for more than nine years and could now be viewed as no longer independent. However, in light of the Groupās
Assets each having a fixed lease term of 12 years (ending at different times) the Board remains of the opinion that continuity is
paramount in the final years of the Companyās life and that Geoffrey continues to provide an excellent degree of independent
consideration.
Provision 12: The board should appoint one of the independent non-executive directors to be the SID to provide a sounding
board for the chair and serve as an intermediary for the other directors and shareholders. Led by the SID, the non-executive
directors should meet without the chair present at least annually to appraise the chairās performance, and on other occasions as
necessary.
Company Response: The Board have formed the view that, given the size of the Board, it is not immediately necessary to fill this
vacancy. However, such an appointment remains a matter of ongoing consideration for the Board.
28
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
(iii) Provision 9: The chair should be independent on appointment when assessed against the circumstances set out in Provision 10.
The roles of chair and chief executive should not be exercised by the same individual.
Company Response: The Chair was a director of the Company on appointment. There are no executive roles in the Company.
(iv) Provision 13: Non-executive directors have a prime role in appointing and removing executive directors. Non-executive
directors should scrutinise and hold to account the performance of management and individual executive directors against
agreed performance objectives. The chair should hold meetings with the non-executive directors without the executive directors
present.
Provision 32: The board should establish a remuneration committee of independent non-executive directors, with a minimum
membership of three, or in the case of smaller companies two.
Provision 33: The remuneration committee should have delegated responsibility for determining the policy for executive director
remuneration and setting remuneration for the chair, executive directors, and senior management.
Provision 35: Where a remuneration consultant is appointed, this should be the responsibility of the remuneration committee.
Provision 41: There should be a description of the work of the remuneration committee in the annual report.
Company Response: The Company has no executive directors, senior management or employees. It does not have a remuneration
committee given the small size of the exclusively non-executive and independent Board, but have established a Nomination
Committee where the remuneration of the Board is considered. Remuneration provision is set out in this Directorsā Report.
Board Evaluation
The Board is committed to ensuring that on an annual basis the strengths of the Board are recognised and any weaknesses are
addressed. Each Director has undertaken to engage with the evaluation process and take appropriate action when development
needs have been identified. An external facilitation of the performance evaluation is considered by the Chair of the Nomination
Committee on an annual basis.
For the financial year under review, the Nomination Committee agreed that an external facilitation of the performance evaluation
required by provision 21 of the Code was not required and instead the evaluation was performed by the Nomination Committee.
Directors were asked to complete individual questionnaires on the performance of the Board and its committees on an anonymous
basis and the completed questionnaires were considered at a meeting of the Nomination Committee. At the conclusion of its
evaluation, the Nomination Committee made minor suggestions for improvements and also concluded that the Board generally
operated well given its compact size.
Board Responsibilities
The Board comprises four Directors and their biographies appear on pageī17 demonstrating the wide range of skills and experience
they each bring to the Board. All the Directors are non-executive and independent, with Mrs Le Poidevin acting as Chair.
The other significant commitments of the current Chair are detailed in her biography on pageī17. The Board was satisfied during the
year and remains satisfied that the Chairās other commitments do not interfere with the day-to-day performance of her duties to the
Company and that she has the commitment and time to make herself available at short notice should the need arise.
The Nomination Committee regularly reviews the balance, knowledge and effectiveness of the Board, to identify if any additional
experience or skills are needed and to ensure that the current Directors have sufficient available time to undertake the tasks required
and remain independent. The Directors are able and encouraged to provide statements to the Board of their concerns and ensure
that any items of concern are recorded in the Board minutes. When undertaking a search for a new director the Board is mindful of
diversity and meritocracy.
29
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
In accordance with the Articles the Directors shall determine the directorsā fees payable provided that the aggregate amount of such
fees paid in respect of services rendered to the Company shall not exceed Ā£250,000 per annum. All Directors receive an annual fee
and there are no share options or other performance related benefits available to them. All Directors are paid a fee of Ā£48,000 per
annum. The Chair is paid an additional fee of Ā£11,000 per annum and the Chair of the AR Committee is paid an additional Ā£9,000 per
annum. The terms and conditions of appointment of non-executive directors are available for inspection at the Companyās registered
office by prior arrangement with the Secretary.
The Board usually meets in Guernsey at least four times per year to consider the business and affairs of the Group, at which meetings
the Directors review the Groupās Assets and all other important issues to ensure control is maintained. The Directors hold a Dividend
Committee meeting in Guernsey each quarter to consider and if thought suitable, approve the payment of a dividend in accordance
with the Companyās distribution policy.
Between these scheduled meetings the Board keeps in regular contact by email and telephone as well as meeting to consider specific
matters of a transactional nature. Additionally, the Directors may hold strategy meetings with its relevant advisors as appropriate.
The Directors are kept fully informed by the Asset Manager and Secretary of all matters that are relevant to the business of the Group
and should be brought to the attention of the Directors and/or the Shareholders. All Directors have direct access to the Secretary who
is responsible for ensuring that Board procedures are followed and that there are effective information flows both within the Board
and between the committees and the Board.
The Directors also have access to the advice and services of the Asset Manager and Corporate and Shareholder Adviser and may also,
in the furtherance of their duties, take independent professional advice at the Companyās expense.
During the year under review the number of full Board meetings and committee meetings attended by the Directors was as follows:
Director
Board
Meetings
Audit and Risk
Committee
Meetings
Nomination
Committee
Meetings
Management
Engagement
Committee
Meetings
Dividend
Committee
Meetings*
Geoffrey Hall 11 of 11 5 of 6 3 of 3 2 of 2 1 of 4
Charles Wilkinson** 2 of 4 2 of 3 1 of 1 0 of 0 2 of 2
Fiona Le Poidevin 11 of 11 N/A*** 3 of 3 2 of 2 4 of 4
Andreas Tautscher 11 of 11 5 of 6 3 of 3 2 of 2 4 of 4
Theresa Oldham 11 of 11 6 of 6 2 of 3 1 of 2 4 of 4
* refer to pageī30 for the composition and function of the Dividend Committee.
**Charles Wilkinson resigned as non-executive Director of the Board effective 31 July 2023.
***Mrs Le Poidevin was appointed as Chair of the Board effective 1 March 2023 and ceased in her role as a member of the AR Committee.
Audit and Risk Committee
Mr Tautscher, Miss Oldham and Mr Hall are all members of the AR Committee, with Mr Tautscher acting as Chair. The AR Committee
has regard to the Guidance on Audit and Risk Committees published by the FRC in September 2012 and as updated in April 2016,
in conjunction with the Audit Committees and the External Audit: Minimum Standard document as published in May 2023. The AR
Committee examines the effectiveness of the Groupās, and its service providersā internal control systems as appropriate, the annual
and half-yearly reports and financial statements, the auditorās remuneration and engagement, as well as the auditorās independence
and any non-audit services provided by them, according to the latest standards and guidelines.
The AR Committee considers the nature, scope and results of the auditorās work and reviews it annually prior to providing a
recommendation to the Board on the re-appointment or removal of the auditor. When evaluating the external auditor, the AR
Committee has regard to a variety of criteria including industry experience, independence, reasonableness of audit plan, ability
30
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
to deliver constructive criticism, effectiveness of communication with Board and the Groupās service providers, quality control
procedures, effectiveness of audit process and added value beyond assurance in audit opinion.
Auditor independence is maintained by restricting non-audit services to specific, audit-related tasks within defined categories.
While Grant Thornton adheres to the IESBA Ethical Code instead of the FRCās updated Ethical and Auditing Standards, no non-audit
services were provided during the Period. All engagements with the auditor require pre-approval from the AR Committee and are fully
disclosed in the Annual Financial Report and Consolidated Financial Statements for the relevant period. A new lead audit partner
is appointed every seven years, and the AR Committee ensures that the auditor has appropriate internal mechanisms to maintain
independence.
The AR Committee usually meets in Guernsey at least twice per year, shortly before the Board meets to consider the Groupās half-
yearly and Annual Financial Report and Consolidated Financial Statements, and reports to the Board with its deliberations and
recommendations and also has annual planning and final meetings with the auditor. In addition, the Board also meets during the
audit process with the auditors to discuss issues relating to the residual values of the Assets. The AR Committee operates within
clearly defined terms of reference based on The Chartered Governance Institute UK & Ireland recommended terms and provides a
forum through which the Groupās external auditor reports to the Board. The AR Committee can request information from the Groupās
service providers with the majority of information being directly sourced from the Asset Manager, the Secretary and Administrator
and the external auditor. The terms of reference of the AR Committee are available on the Companyās website and on request from
the Secretary.
Each year the Board examines the AR Committeeās performance and effectiveness and ensures that its tasks and processes remain
appropriate. Key areas covered included the clarity of the AR Committeeās role and responsibilities, the balance of skills among its
members and the effectiveness of reporting its work to the Board. The Board is satisfied that all members of the AR Committee have
relevant financial experience and knowledge and ensure that such knowledge remains up to date. Overall, the Board considers that
the AR Committee has the right composition in terms of expertise and has effectively undertaken its activities and reported them to
the Board during the year under review.
During the financial year the AR Committee met six times. The AR Committee considered the Annual Financial Report and Consolidated
Financial Statements for the year ended 31 March 2023 and the half-yearly financial report for the period ended 30 September
2023. The AR Committee also met in February 2024, with the external auditor in attendance, to approve the 2024 audit plan. The
AR Committee furthermore considered the Companyās Business Risk Matrix at the February 2024 meeting. The AR Committee also
undertook a review of the Companyās auditor during the year.
Dividend Committee
The Dividend Committee consists of any one or more Director, who has been given full power and authority to consider and, if thought
suitable, declare and approve the payment of a dividend in accordance with the Companyās distribution policy, provided that all
Directors had been provided with prior notice of the proposal to declare each dividend and no Director had raised any objection to
the declaration of each dividend. In practice, a majority of Directors of the Board are usually present.
Nomination Committee
The Nomination Committee consists of all Directors of the Company, with Miss Oldham acting as Chair of the committee.
31
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
The functions of the Nomination Committee include to regularly review the structure, size and composition of the Board (including the
skills, knowledge, experience, diversity and how effectively members work together to achieve objectives) and make recommendations
to the Board with regard to any changes, and to perform a formal and rigorous performance evaluation of the Board, its committees,
the Chair and individual Directors, including the consideration of having a regular externally facilitated Board evaluation. Full
description of the Board evaluation is included on pageī28, above.
During the financial year the Nomination Committee met three times, to consider the appointment of a new non-executive director
and to undertake the annual performance evaluation of the Board and its committees.
The Nomination Committee is responsible for identifying and nominating for the approval of the Board candidates to fill Board
vacancies as and when they arise. Prior to any appointment made by the Board, the Nomination Committee will evaluate the balance
of skills, knowledge, experience and diversity on the Board, and, in the light of this evaluation, prepare a description of the role and
capabilities required for a particular appointment. In identifying suitable candidates, the Nomination Committee shall:
ā¢ generally use open advertising or the services of external advisers to facilitate the search, unless there is a valid reason for not
doing so in which case justification for this decision would be disclosed;
ā¢ consider candidates from a wide range of backgrounds; and
ā¢ consider candidates on merit and against objective criteria and with due regard for the benefits of diversity on the Board,
including gender, taking care that appointees have enough time available to devote to the position.
The Nomination Committee prepares a job specification for the appointment of a director, including the time commitment expected.
A proposed directorās other significant commitments should be disclosed to the Board before their appointment and any significant
changes to the directorās commitments should be reported to the Board as they arise.
Prior to the appointment of a director, the Nomination Committee requires any proposed appointee to disclose any other business
interests that may result in a conflict of interest.
The Nomination Committee ensures that, on appointment to the Board, a new non-executive director receives a formal letter of
appointment, setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside
Board meetings.
Succession planning is performed based on the results of the Nomination Committeeās evaluation of the structure, size and
composition of the Board as well as the results of the Board evaluation. In giving full consideration to succession planning for
directors, the Nomination Committee takes into account the challenges and opportunities facing the Company and the skills and
expertise needed on the Board in the future. The Nomination Committee keeps under review the leadership needs of the Company
with a view to ensuring the continued ability of the Company to operate effectively in the marketplace. The Board has a succession
plan in place which commenced with the appointment of Mr Tautscher in August 2019, continuing with the appointment of Mrs Le
Poidevin in March 2022 and with the more recent appointment of Miss Oldham on 1 April 2023. These new Directors have brought a
diverse set of skills and knowledge to the Board from their prior experience and the appointments of Mrs Le Poidevin and Miss Oldham
demonstrate the Boardās commitment to gender diversity and diversity of mind. An internal Board Evaluation was carried out during
the year.
Management Engagement Committee
The Management Engagement Committee was established on 15 October 2020 and consists of all Directors of the Company, with
Mr Tautscher acting as Chair. The Management Engagement Committee meets at least once a year and the principal duties of the
Management Engagement Committee are to review the terms of the agreements between the Company and its key service providers
to ensure that they are competitive, fair and reasonable for Shareholders, to review and make recommendations on any proposed
amendment or material breach of those agreements and to monitor and evaluate the performance of the key service providers
including the ongoing suitability of the key service providers to provide advice to the Company.
32
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
During the Period the Management Engagement Committee met on two occasions, the first in October 2023 and met again in February
2024 to perform a review of the Companyās service providers. Additionally, the committee met with Nimrod in May 2023 and Doric in
June 2024 to review and discuss their internal control environment and any major developments affecting the Company.
Internal Control and Financial Reporting
The Board is responsible for the Groupās system of internal control and for reviewing its effectiveness. The Board confirms that there
is an ongoing process for identifying, evaluating and monitoring the significant risks faced by the Group.
The internal control systems are designed to meet the Groupās particular needs and the risks to which it is exposed. Accordingly, the
internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their
nature can only provide reasonable and not absolute assurance against misstatement and loss.
The Board reviews its risk matrix on a quarterly basis, which covers various areas of risk including corporate strategy, accuracy of
published information, compliance with laws and regulations, relationships with service providers and business activities.
Asset Management services are provided to the Group by Doric. Corporate and Shareholder advisory services are provided to the
Group by Nimrod. Administration and secretarial duties for the Group are performed by JTC.
The Board clearly defines the duties and responsibilities of their agents and advisors. The appointment of agents and advisers is
conducted by the Board after consideration of the quality of the parties involved and the Board monitors their ongoing performance
and contractual arrangements. The Board also specifies which matters are reserved for a decision by the Board and which matters may
be delegated to its agents and advisers.
Management of Conflicts of Interest
The Group has adopted a formal conflicts of interest policy and is committed to ensuring that all Directors and service providers
facilitate the Group conducting its business in a manner that is consistent with its reputation, conducive to maintaining high standard
of integrity in all its business dealings, in the best interests of the Groupās Shareholders.
The Board considers the Directorsā conflicts of interest at each Board meeting by reviewing a schedule of each Directorās other
directorships and other interests held. Each Director is required to notify the Secretary of any potential, or actual, conflict situations
that would need to be considered by the Board.
No Director has a service contract with the Company, although Directors are issued with letters of appointment nor did any Director
have any interest in contracts with the Company during the financial year under review, or subsequently.
Anti-Bribery Policy
The Directors have undertaken to operate the business in an honest and ethical manner and accordingly take a zero-tolerance
approach to bribery and corruption. The key components of this approach are implemented as follows:
ā¢ The Board is committed to acting professionally, fairly and with integrity in all its business dealings and relationships.
ā¢ The Group has implemented an anti-bribery policy and enforces effective procedures to counter bribery.
ā¢ The Group requires all its service providers and advisors to adopt equivalent or similar principles.
Criminal Facilitation of Tax Evasion
The Board has a zero-tolerance appetite for the criminal facilitation of tax evasion.
33
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
Dialogue with Shareholders
All holders of Shares in the Company have the right to receive notice of, and attend, the general meetings of the Company, during
which members of the Board will be available to discuss issues affecting the Group.
The primary responsibility for shareholder relations lies with the Groupās Corporate and Shareholder Adviser. The Corporate and
Shareholder Adviser regularly meets with Shareholders to discuss the Company and seek feedback. The views of Shareholders are
discussed by the Board at every Board meeting, and action would be taken to address any shareholder concerns. The Group provides
regular updates to Shareholders through the Annual Financial Report and Consolidated Financial Statements, the unaudited half-
yearly financial reports and the quarterly factsheets. Further communications are made to the market as and if required.
In addition, the Directors are available to enter into dialogue with Shareholders and the Chair is willing to meet Shareholders as the
Group believes such communication to be important. The Companyās Directors can be contacted at the Groupās registered office or
via the Secretary.
Stakeholders and Section 172
The Code requires that the Company should understand the views of the Companyās key stakeholders and describe in the annual
report how their interests and the matters set out in section 172 of the UKās Companies Act 2006 have been considered in Board
discussions and decision-making. Section 172 is not strictly applicable as this is a Guernsey company. However, its application is
being considered as part of the Code requirements.
The Group has no employees, and all of the Directors are non-executive, so the Board considers that its key stakeholders are its
Shareholders, its Lessee, its service providers, society, the government and regulators.
As the Groupās sole Lessee, the Board recognises Emirates as an important stakeholder and maintains a regular dialogue with Emirates
through the Asset Manager. The activities of Emirates are more fully considered within the Asset Managerās Report.
The Boardās engagement with Shareholders is described in the āDialogue with Shareholdersā section above. All Shareholders are
treated equally and no Shareholder receives preferential treatment. When making decisions of relevance to Shareholders, the
Board considers first and foremost the likely consequences of their decisions in light of their duty to act in the best interests of the
Group. The Board also considers what is likely to be in the best interests of Shareholders as a whole but does not consider individual
Shareholdersā specific circumstances or desires when making its decisions.
In addition to the regular reporting provided by key service providers, the Management Engagement Committee undertakes a review
of the performance of these key service providers on an annual basis. The services provided by the key third party service providers
are critical to the ongoing operational performance of the Group. The Board believes that fostering constructive and collaborative
relationships with the Groupās service providers will assist in their promotion of the success of the Group for the benefit of all
Shareholders.
As described in detail in the Groupās Viability Statement, the Board considers the prospects of the Group to at least 31 July 2025
whenever it considers the Groupās long-term sustainability. All strategic decisions are therefore taken with the success of the Group in
mind and the Board would take external advice whenever it considered that such would be beneficial to its decision-making process,
primarily from its retained service providers (including legal counsel), but also from other external consultants.
The Board recognises that responsible investment and the associated ESG considerations can have a significant impact on investment
activity in terms of raising funds, identifying investment opportunities and long-term value creation for Shareholders. Please see
more information regarding ESG in the report on pagesī36 toī40.
The Board ascribes to the highest standards of business conduct and has policies in place to ensure compliance with all applicable
laws and regulations. In addition to the monitoring of the Groupās compliance with its own obligations, the Board also monitors
compliance by its service providers with their own obligations. The Board encourages openness and transparency and promotes
proactive compliance with new regulations.
34
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
Disclosure of Information to the Auditor
The Directors who held office at the date of approval of this Directorsā Report confirm in accordance with the provisions of Section
249 of the Law that, so far as they are each aware, there is no relevant audit information of which the Groupās auditor is unaware;
and each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit
information and to establish that the Groupās auditor is aware of that information.
Auditor
Grant Thornton has expressed its willingness to continue in office as auditor and the Audit Committee has recommended
re-appointment. Pursuant to section 199 of the Law, the Shareholders of the Company approved the re-appointment of Grant
Thornton at the AGM of the Company held on 7 December 2023 in respect of the 31 March 2024 year end.
Statement of Directorsā Responsibilities
The Directors are responsible for preparing the Annual Financial Report and the Consolidated Financial Statements in accordance
with applicable Guernsey law and regulations. Under the Law the Directors are required to prepare financial statements for each
financial year. The Directors have chosen to prepare the Groupās Consolidated Financial Statements in accordance with IFRS.
Under the Law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and of the profit or loss of the Group for that period.
In preparing these Consolidated Financial Statements, IAS 1 requires that directors:
ā¢ properly select and apply accounting policies;
ā¢ present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
information;
ā¢ provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to
understand the impact of particular transactions, other events and conditions on the entityās financial position and financial
performance; and
ā¢ make an assessment of the Groupās ability to continue as a going concern.
The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Groupās transactions
and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Consolidated
Financial Statements comply with the Law. They are also responsible for safeguarding the Assets of the Group and for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Companyās
website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in
other jurisdictions.
Responsibility Statement
Each of the Directors, whose names and functions are listed on page 17, confirms to the best of each personās knowledge and belief:
(a) the Consolidated Financial Statements, prepared in accordance with IFRS Accounting Standards as adopted by the EU, give a true
and fair view of the assets, liabilities, financial position and [profit or loss] of the Group, as required by DTR 4.1.12R; and
(b) the Annual Financial Report and Consolidated Financial Statements, taken as a whole, is fair, balanced and understandable
and includes a fair review of the development and performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties that they face, as required by DTR 4.1.8R and DTR 4.1.11R.
35
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
DIRECTORSā REPORT (continued)
(c) the Annual Financial Report taken as a whole is fair, balanced and understandable and provides the information necessary for
the Companyās Shareholders to assess the Companyās and the Groupās position, performance, business model and strategy.
Fiona Le Poidevin Andreas Tautscher
Chair Director
Signed on behalf of the Board
On 23 July 2024
36
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT
The Board recognises that responsible investment and the associated ESG considerations can have a significant impact on investment
activity in terms of raising funds, identifying investment opportunities and long-term value creation for Shareholders. This report
sets out our policy and approach to ensuring that the level of engagement on ESG matters is commensurate to the size, nature and
complexity of the business.
This policy seeks to address ESG matters on two levels; firstly, with regard to the Company itself and secondly, in relation to the
Assets which the Group owns. The direct and practical management of the Company seeks to uphold ESG standards where possible and
applicable. This is greatly influenced by the nature of the Groupās activities and the legal structure of the associated Leases.
The Company
The Company is a self-managed Guernsey company incorporated on 31 January 2011. Its Shares were initially admitted to trading on
the SFS on 14 July 2011. Following the closing of a C Share fundraising on 27 March 2012, these C Shares were converted to additional
ordinary preference shares which were admitted to trading on the SFS on 6 March 2013.
The Company is under the control of its Board of directors on behalf of Shareholders. All directors are independent and non-
executive. The Board is responsible for reviewing the business affairs of the Company in accordance with the Articles and has overall
responsibility for the Companyās activities including all business decisions, review of performance and authorisation of distributions.
The Company has delegated the following activities to its appointed service providers:
ā¢ Asset Management ā Doric
ā¢ Corporate and Shareholder Adviser ā Nimrod
ā¢ Secretary and Administrator ā JTC
ā¢ Registrar ā JTC Registrars Limited
The Company has no executive directors or employees and no physical office premises. The Companyās business is carried out in a
series of meetings held in the offices of its Administrator JTC, in Guernsey, the Companyās place of incorporation.
Subject to any travel restrictions imposed, the Directors are required to travel in the fulfilment of their duties. Where circumstances
allow, travel is kept to a minimum. The Directors are required to travel to Guernsey on at least a quarterly basis for board and other
committee meetings, and to other destinations to visit Shareholders and service providers as and when required. Regular dialogue
with the Lessee is maintained via the Asset Manager.
The Company consequently has a limited physical footprint and therefore its direct environmental impact is considered to be low.
The Modern Slavery Act
Due to the nature of the Companyās business, being a company that does not offer goods or services to customers, the Board considers
there are no relevant disclosures with regard to modern slavery in relation to the Companyās own operations. The Board considers the
Companyās supply chains, dealing predominantly with professional advisers and service providers in the financial services industry,
to be low risk in this regard.
Emiratesā statement on modern slavery is available on their website and can be accessed through the following link.
37
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT (continued)
The Assets
The principal activity of the Company is to acquire, lease and then sell aircraft. As at 31 March 2024, the Company had four wholly
owned subsidiaries; MSN077 Limited, MSN090 Limited, MSN105 Limited and DNAFA. The Group currently owns five Airbus A380-861
aircraft which were leased for twelve years to the Lessee, the national carrier owned by The Investment Corporation of Dubai based
in Dubai, UAE.
The Groupās own operational influence in the fields of climate change, air quality, and resource efficiency is minimal. The nature
of the Leases with the Lessee means that control over the usage of the Assets rests with the Lessee. The Group has leased the
Assets for a term of twelve years, with fixed lease rentals for the duration, to the Lessee. The Lessee bears all costs (including for
maintenance, repairs, and insurance) relating to the Aircraft during the lifetime of the Leases. This would include any modifications
or modernisations related to ESG requirements as mandated by regulatory agencies. However, in all other respects, the influence of
the Group over the Lessee with regard to voluntary ESG concerns is limited due to existing quiet enjoyment arrangements between
the Group and the Lessee.
The Airbus A380 is the worldās largest commercial passenger aircraft. It is the first and only aircraft with two full-length passenger
decks, giving it a maximum capacity of up to 853 passengers. In a typical three-class configuration (First, Business and Economy
Class), the Airbus A380 has capacity for approximately 525 passengers. Additionally, developments with respect to the aircraftās
aerodynamics, control elements and flight systems, coupled with the use of advanced, lightweight composite materials make the
A380 an attractive and efficient aircraft. In comparison with other modern long-range passenger aircraft of the same category
(the so-called Very Large Aircraft segment), the Airbus A380 consumes less fuel per passenger, using approximately three litres of
kerosene per 100 passenger kilometres, when equipped with Engine Alliance engines. Furthermore, the A380 offers an efficient way
to capture traffic at the most concentrated airports and times by giving airlines the ability to consolidate routes, thereby increasing
seat capacity while creating economies of scale.
Air transportation is one of the most energy and carbon dioxide intensive modes of transport, whether measured per passenger
kilometre or per hour in transit. The global aviation industry (including domestic and international; passenger and freight) accounts
for:
ā¢ 2.5% of carbon emissions; and
ā¢ 3.5% of āeffective radiative forcingā ā a measure of impact on global warming.
Source:
https://ourworldindata.org/co2-emissions-from-aviation
The Aviation Industry
Despite aviationās important role in local and global economic development, the aviation industry faces the challenge of meeting long
term strong growth in passenger demand while simultaneously reducing its environmental impacts. In addition to GHG emissions,
these environmental impacts could also include noise and nuisance, as well as water pollution (due to aircraft de-icing, cleaning, and
other chemical-heavy aircraft operations).
To address these growing environmental concerns, the cross-industry ATAG developed the āWaypoint 2050ā action plan in line with
the Paris Agreement on climate change. The blueprint builds on IATAās 2009 commitment to (1) increase fuel efficiency by 1.5%
every year between 2010-20, (2) to cap carbon emissions (carbon neutral growth) from 2020, and (3) to achieve the 50% emissions
reduction by the middle of the century, as the first two goals have already been accomplished. Annual fuel efficiency gains have
exceeded expectations with annual improvements greater than 2%. The mechanism for ensuring carbon neutral growth, known as
CORSIA, started as a pilot scheme in 2021 with approximately 100 countries participating and the remaining scheduled to join by
2027. Starting on 1 January 2024, CORSIAās First Phase has begun, involving 126 participating countries and the commencement of
offsetting requirements.
38
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT (continued)
In pursuit of the final goal, Waypoint 2050 has identified three key technological developments to accelerate the reduction of carbon
emissions:
1. Improved aircraft and engine designs for lighter, more efficient aircraft;
2. Hydrogen and electric powered aircraft; and
3. SAF.
The analysis performed for Waypoint 2050 revealed that SAF will play a key role, driving between 50% and 75% of the emissionsā
reductions. SAFs, such as drop-in power fuels like biofuels that can be used in todayās aircraft and engines without modification,
are already commercially available and are expected to increase in prominence once initial costs can be reduced through scale.
Evolutionary concepts, such as the second-generation geared turbo fan engine, could become widely commercially available
in the medium-term. Revolutionary concepts, such as hydrogen and electric powered aircraft, represent the greatest potential
improvements, but will most likely not be commercially available until the 2050s, based on current forecasts.
As these technological developments progress, the aviation industry is taking additional measures to curb its environmental impact,
while maintaining its commitment to local and global economic development. For example, alongside CORSIA, the aviation industry
is able to participate in other carbon dioxide emissions trading markets, such as the EU ETS.
Furthermore, a number of countries currently levy passenger taxes on air tickets over and above infrastructure charges and there
are a number of proposals for additional environmental taxes to be imposed on the aviation industry. However, as IATA notes, the
income generated from an environmental tax is usually seen as general revenue by governments, thus it can be used to fund any
variety of public sector programs and initiatives. As such, IATA takes the position that, while the overall goal of an environmental tax
is laudable, it has distortionary effects on jobs and the economy, while at the same time not effectively incentivising the development
or use of newer and greener technology. The effects of any newly introduced environmental taxes on the aviation industry will have
to be monitored. The aviation industry plays a critical role in local and global economic development, contributing 4.1% to global
Gross Domestic Product and supporting 87.7 million jobs worldwide.
Source:
https://aviationbenefits.org/economic-growth
The Waypoint 2050 plan can be found here:
https://aviationbenefits.org/media/167417/w2050_v2021_27sept_full.pdf
Further environmental information can be found on the IATA website:
https://www.iata.org/en/policy/environment/.
ICAO have used the UNā SDGs as a basis to identify the contributions the aviation industry is making to sustainable development. For
further information and the full working paper on aviationās contributions towards the UN 2030 agenda for sustainable development
from ICAOās 40th session please refer to the ICAO website:
https://www.icao.int/Meetings/A40/Documents/WP/wp_189_en.pdf
39
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT (continued)
Concerning the role of aircraft in sustainable development, aircraft assets are likely to contribute to at least five of the SDGs.
Specifically, airlines are able to utilise aircraft in a manner consistent with the achievement of the following targets:
1. SDG 5: Aviation is working to achieve gender balance across the sector. In Europe, aviation is the most gender-balanced of all
transport modes with 41 percent female employees. More work is still needed to encourage balance in technical and executive
roles;
2. SDG 8.1: Devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and
products;
3. SDG 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and trans-border infrastructure,
to support economic development and human wellbeing, with a focus on affordable and equitable access for all;
4. SDG 12.2: Achieve sustainable management and efficient use of natural resources productions; and
5. SDG 13: Invest in the transition to net-zero carbon dioxide energy, energy efficiency and the reduction of GHG emissions from
transport operations.
Detailed information on the SDGs can be found on the UN website:
https://sdgs.un.org/
The Lessee
The Emirates Group took significant strides in its sustainability journey during 2023-24, putting into action numerous initiatives
focused on the environment, its people, customers, and communities. Environmental topics were high on the agenda during the year,
as the UAE hosted the worldās biggest conference for climate action, COP28, in Dubai. The Emirates Group ramped up investments
in people development, rolling out a comprehensive programme of learning and training options for its workforce in partnership
with top universities and key industry partners. A Gender Balance Council was established to champion and promote gender equality
within the Emirates Group.
Emirates, the Lessee, is committed to efforts to reduce resource consumption while also investing in wildlife conservation and
protection. This includes participation in CORSIA as well as in EU, Swiss and UK Emissions Trading Systems and internal initiatives.
Emirates has reinforced its commitment to environmentally responsible practices and achieved IEnvA Stage One in August 2023
and the IEnvA Illegal Wildlife Trade module certification. The IEnvA system is described as an industry-leading and comprehensive
environmental management system. Stage One of its core scope comprises flight operations, corporate activities as well as an
illegal wildlife trade module. Reflecting on Emirates recent achievements, Marie Owens Thomsen, IATAās chief economist and
SVP Sustainability said: āStakeholder including governments, financiers and business partners will know that Emirates is not just
meeting global standards and best practices on sustainability but is committed to continuous improvements to stay at the forefront
of sustainabilityā.
In early November 2023 Emirates confirmed that the first flights operating with SAF had taken off from Dubai International Airport.
This was the first ever supply of SAF to Emirates in Dubai, according to the airline. The 315,000 gallons of blended SAF were supplied
by Shell and enabled Emirates to power a number of missions over the course of a few weeks. The ratio of 40% neat SAF and 60%
conventional Jet A-1 allowed for a seamless integration into the existing airport fuel infrastructure and did not result in any
modification requirements for the aircraft engines. Neat SAF reduces GHG emissions by up to 80% over its life cycle compared with
conventional jet fuel.
Later that month Emirates became the worldās first airline to operate an A380 demonstration flight with one of the four engines
powered on 100% SAF, together with the auxiliary power unit. For commercial flights SAF use is currently capped at a 50% blend
limit. In the run-up to the demonstration flight ground engine testing was performed at the Emirates Engineering Centre in Dubai
to validate the engineās capability to run on the specially blended 100% drop-in SAF without affecting its performance or requiring
40
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE REPORT (continued)
any modifications. The Engine Alliance GP7200 engine used for the test is the same engine type as installed on the A380s owned by
the Group.
An Airbus spokesperson emphasised that āSAF is vital to meeting the sectorās target of net-zero emissions in 2050ā. The manufacturer
is working to make all its aircraft 100% SAF-capable by 2030. Engine manufacturer Engine Alliance noted that all of its engines ācan
operate on approved SAF blends today and through extensive research and testing, GE Aerospace is helping lead the approval and
adoption of 100% SAF in the aviation industryā.
For further information on Emiratesā environmental policy and initiatives, please visit the Emirates website where annual
environmental reports are also available: https://www.emirates.com/english/about-us/our-planet/
Conclusion
In the context of the Assets and the associated Lease agreements, the Board are committed to responsible decision making and strong
governance throughout the lifecycle of the Group. The Board is in continuous dialogue with its service providers and regularly reviews
processes and procedures, including via service provider compliance visits and annual questionnaires, to guarantee transparency and
accountability. The Board will continue to monitor the sustainability efforts of the industry and of the Lessee and keep Shareholders
abreast of any relevant developments.
41
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT
Membership
Andreas Tautscher ā Chair of the AR Committee
Charles Wilkinson ā Non-executive Director (Resigned from the Board and ceased AR Committee membership effective 31 July 2023)
Theresa Oldham ā Non-executive Director
Geoffrey Hall ā Non-executive Director
Key Objective
The provision of effective governance over (i) the appropriateness of the Groupās financial reporting including the adequacy of related
disclosures, (ii) the performance of the Groupās external auditor, (iii) monitoring of the systems of internal controls operated by the
Company and (iv) the Groupās principal service providers and the management of the Companyās regulatory compliance activities.
Responsibilities
The key duties of the AR Committee are as follows:
ā¢ reviewing the Groupās financial results announcements and financial statements and monitoring compliance with relevant
statutory and listing requirements;
ā¢ reporting to the Board on the appropriateness of the Groupās accounting policies and practices including critical accounting
policies and practices;
ā¢ advising the Board on whether the annual report and accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Groupās position, performance, business model and strategy;
ā¢ overseeing the relationship with the external auditor and reviewing the effectiveness of the external audit process; and
ā¢ monitoring the systems of internal controls operated by the Group and by the Groupās principal service providers.
AR Committee Meetings
The AR Committee usually meets in Guernsey at least twice a year. The AR Committee reports to the Board as part of a separate agenda
item, on its activities and on matters of particular relevance to the Board in the conduct of its work. During the financial year under
review the AR Committee formally reported to the Board on three occasions.
42
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Main Activities of the AR Committee during the Financial Year
The AR Committee assisted the Board in carrying out its responsibilities in relation to financial reporting requirements, compliance
and the assessment of internal controls. The AR Committee also managed the Groupās relationship with the external auditor.
Fair, Balanced and Understandable
In order to comply with the Code, the Board requested that the AR Committee advises them on whether it believes the Annual Financial
Report and Consolidated Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Groupās performance, business model and strategy.
The AR Committee engaged with the Administrator in order to ensure that the financial statements were fair, balanced and
understandable.
Financial Reporting and Significant Issues
The AR Committeeās primary role in relation to financial reporting is to review, with its service providers and the external auditor, the
appropriateness of the half-year and annual financial statements, the significant financial reporting issues and accounting policies
and disclosures in the financial statements. The AR Committee has considered the key risks identified as being significant to these
accounts and the most appropriate treatment and disclosure of any new significant issues identified during the audit and half-year
reviews as well as any recommendations or observations made by the external auditor, Grant Thornton. To aid its review the AR
Committee considered reports prepared by external service providers, including Doric and Nimrod, and reports from Grant Thornton
on the outcome of their annual audit. The significant issues considered by the AR Committee in relation to the 2024 accounts and how
these were addressed are detailed below:
43
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Significant issues for the year under review How the AR Committee addressed these significant issues
Residual value of aircraft assets
The non-current Assets of the Group comprise of five Airbus
A380 aircraft. An annual review is required of the residual value
of the Assets as per IAS 16, which defines residual value as
āthe
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 an age and in the condition
expected at the end of its useful life.ā
The Group has engaged three internationally recognised expert
appraisers to provide the Group with third party consultancy
valuation services. Due to limited sales data for similar used
assets, appraisers are heavily reliant on databases containing
historical data points of aircraft sales relating to large
commercial aircraft. Interpretation of historical data is the
basis for the current market value and provides, together with
the expected developments in the future, the foundation for
their opinions on future values. Furthermore, the appraisersā
valuations take into account specific technical and economic
developments as well as general future trends in the aviation
industry and the macro-economic outlook.
In the aftermath of Airbusā February 2019 decision to
discontinue the A380 production in 2021, a number of A380
operators disclosed plans to withdraw at least parts of their
A380 fleets earlier than originally anticipated. Furthermore, it
became obvious that A380s returned following the expiration
of operating lease agreements could not be placed with a new
operator within a reasonable period of time and owners were
forced to explore alternative scenarios for revenue generation
like engine lease. This also includes part-out activities for the
first few A380s returned from Singapore Airlines.
While the prospect for the aircraft type looked āvery gloomyā
according to appraiser ASCEND two years ago, with the
number of aircraft returning to service expected to be very
slow over the coming years, the strong recovery in long-haul
passenger demand, āhas earned the A380 a stay of execution
for the medium termā. With the restricted supply of new aircraft,
operators like Lufthansa and Etihad Airways reintroduced the
aircraft type after a pandemic-related pause with statements
that indicated their respective A380s would never return to
service again. At the same time, the worldās largest A380
operator, Emirates, did not waiver in its support of the A380 and
is committed to operate the aircraft type for the long term. In a
March 2024 statement Emiratesā President Tim Clark noted that
the airline plans to keep A380s flying until the late 2030s, with
corresponding extensions of aircraft leases.
To assess the Assetsā residual value at lease expiry with Emirates,
the Company has historically relied on the appraisersā Future
Base Value estimates, an established concept to measure the
residual value which, however, assumes that the market is in
a theoretical constant equilibrium, characterised by a balance
of supply and demand. Due to the A380-specific developments
since the financial year ended 31 March 2020 of the Company
and the generally dampened market sentiment in the aviation
sector during the Pandemic, there was increased risk that the
underlying assumptions of
44
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Significant issues for the year under review How the AR Committee addressed these significant issues
the Base Value concept might not be met at the time of the
respective lease expirations. For this reason, in its Valuation
Report for the Companyās financial year ended 31 March
2020, the Asset Manager recommended to the Directors of
the Company to adopt a more conservative approach by using
Soft Values instead of Base Values to assess the residual value
of the aircraft. While the Pandemic, according to the WHO
classification, no longer constitutes a public health emergency
of international concern and the passenger air traffic has
rebounded to pre-Pandemic levels recently, the Asset Manager
maintains this recommendation to continue using Soft Values,
mainly due to A380-specific factors, as only a limited secondary
market for the aircraft type has developed so far. The renewed or
continued interest in the A380 is primarily limited to accelerated
return-to-service activities of existing A380s operators. None of
them have increased its A380 fleet size in a secondary market
transaction in addition to the number of aircraft initially ordered
from Airbus.
An increase in USD terms in the residual values of the Aircraft
from the prior year, has resulted in an adjustment made to
depreciation in the current year, details of which have been
disclosed in note 10.
As updated valuations of all Assets as at the financial year end
were commissioned and received from third party professional
valuers and analysed by the Asset Manager and the Directors,
the AR Committee believes that those valuations are appropriate
for use in preparing the financial statements. Therefore, the
average residual values excluding inflation used in the accounts
are based on these appraisals.
Upon review of the advice they have received from Doric and the
appraisers, the AR Committee is of the opinion that, the latest
estimate of the residual soft values excluding inflation of the
Assets is a reasonable approximation of the residual value of the
Aircraft within the IAS 16 definition.
Residual values remain exposed to estimation uncertainty. This
is disclosed in note 3 and has been highlighted by the auditor in
their key observations section of the valuation and ownership of
aircraft key audit matter.
45
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Significant issues for the year under review How the AR Committee addressed these significant issues
Recording foreign exchange gains/losses
IFRS require that certain transactions denominated in
currencies other than the presentation currency (including,
most importantly, the cost of the Assets) be translated into the
presentation currency at the exchange rate ruling transaction
date whilst monetary balances (principally the outstanding
borrowings) are translated at the rate prevailing on the
reporting date. The resultant figures sometimes show very large
mismatches which are reported as unrealised foreign exchange
differences.
In assessing foreign exchange, the AR Committee has considered
the issue at length and is of the opinion that, on an ongoing
basis and assuming the lease and debt 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 USD are in fact closely matched.
Rental income received in USD is used to pay debt repayments
due which are likewise denominated in USD. Furthermore, USD
lease rentals and debt repayments are fixed at the outset of the
Groupās life and are very similar in amount and timing.
The AR Committee concluded that the matching of the lease
rentals to settle debt repayments therefore mitigates risks of
foreign exchange fluctuations.
The AR Committee carefully considered the disclosure in note
19(b) to the Consolidated Financial Statements to ensure that
the reality of the Groupās foreign exchange risk exposure is
properly explained.
Going concern risk
Emirates are the sole Lessee of the Assets. Should Emirates
default on the rental payments, it will result in the Group failing
to service debt and it is unlikely the Group will be able to meet
its targeted dividend or, in the case of ongoing default, continue
as a going concern.
The AR Committee received quarterly reports from Doric during
the year which comment on the performance of Emirates.
Emirates reported its most profitable year ever with a net
profit of AED 17.2 billion (USD 4.7 billion), a nearly 63%
improvement on its previous yearās record result and despite
currency fluctuations which negatively impacted the airlineās
profitability by AED 2 billion (USD 0.6 billion).
At the end of the financial year ended 31 March 2024 Emirates
had AED 42.9 billion (USD 11.7 billion) in cash assets (including
bank deposits), the highest-ever balance in the companyās
history.
The net cash flow from operating activities came in at
AEDī37.6ībillion (USD 10.3 billion) in 2023/24, about 15% less
than in the period before, but still the second highest in the last
decade.
The management of the airline concluded that the company
is a going concern. The auditors PwC did not raise a material
uncertainty on going concern in its unqualified audit report,
which is dated 3 May 2024.
46
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Significant issues for the year under review How the AR Committee addressed these significant issues
The management of Emirates Group, the combined businesses
of Emirates and dnata, said that āthe business outlook is
positive, and we expect customer demand for air transport
and travel to remain strong in the coming monthsā, according
to Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief
Executive of Emirates Airline and Group. External factors such
as oil prices, currency fluctuations, and volatile environments
caused by socio-political changes were flagged as challenges
the management will have an eye on.
The Asset Manager is not aware of a formal request addressed
to the Group for a lease deferral or any other efforts that would
result in the restructuring of the existing transactions and could
potentially have an impact on the committed future lease rental
receipts.
Emirates is owned by the Investment Corporation of Dubai, a
state-owned holding company that can be characterised as a
sovereign wealth fund owned by the Government of Dubai. It
is neither listed, nor carry its bond issuances an issuer rating.
However, Emiratesā senior unsecured USD bonds with maturities
in 2025 and 2028 are trading and the marketsā pricing for such
instruments provide proxies for the credit risk of the Lessee.
As the operating Lease agreement between Emirates and the
Company include a hell or high-water clause, the lease rental
stream and any other contractual payment primarily depends
to Emiratesā ability to meet its financial obligations, whenever
they fall due. As of 15 April 2024 Emiratesā bonds were trading
at around 98.9 cents (2025 maturity) and 97.3 cents (2028
maturity), representing USD running yields of approximately
4.6%. This level of yields certainly does not appear to indicate
any significant financial stress to the issuer.
The AR Committee concluded that it would continue to receive
regular updates from Doric on the performance of Emirates and
would continue to monitor Emiratesā overall performance.
The AR Committee is mindful that all Group Lease agreements
will be due to expire in the next 12 months, but has concluded
that the Group will be able to pay its debts as they fall due
over the next 12 months, remaining a going concern, but
with substantial uncertainty as to an upcoming vote to pass a
liquidation resolution within 11 months from the release of this
Consolidated Annual Financial Report.
The AR Committee carefully considered the disclosure in note
19(c) to the Consolidated Financial Statements to ensure that
this concentration of credit risk is properly reflected.
47
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Significant issues for the year under review How the AR Committee addressed these significant issues
Consideration of any triggers for impairment
IAS 36 Impairment of Assets requires that a review for
impairment be carried out by the Company when there is an
indication of impairment of an asset and if events or changes
in circumstances indicate that the carrying amount of an asset
may not be recoverable. The review will compare the carrying
amount of the Asset with its recoverable amount, being the
higher of fair value less costs to sell and the assetās value in use.
The Directors consider that fair value less costs to sell is a valid
measure given recent secondary market transactions relating to
the A380 and the fact that third party independent valuers have
provided valuations to permit the computation of fair value less
costs to sell.
The AR Committee has considered the issue at length and
accordingly an impairment review has been undertaken as at
31 March 2024. Refer to note 3 for further detail on the factors
triggering the review and the sensitivity analysis performed
on the discount rates and residual value inputs. As a result of
the current year review, an impairment loss of Ā£2,213,804 was
booked in the accounts as disclosed in note 3. However, this
impairment adjustment related to the two aircraft sold in October
and November 2023. There was no impairment adjustment in
the year ended 31 March 2024 for the five remaining Aircraft.
Contributing factors, which triggered the AR Committeeās
decision to perform an impairment review, included the
Pandemic and its consequences. It was also necessary as the
Group continued to adhere to the concept of Future Soft Values
for measuring the residual value of the Aircraft.
Although recognition of rental income has been considered by the AR Committee in the current year, as there have been no changes
in respect of this risk, it has not been a primary area of focus.
Internal Controls
The AR Committee has made due enquiry of the internal controls of the Administrator. The AR Committee is satisfied with the controls
currently implemented by the Administrator. However, it has requested that the Administrator keeps the Company informed of any
developments and improved internal control procedures.
The most recent report on the internal control of JTCās administration services, prepared in accordance with the ISAE 3402, for the
Period has been provided, confirming no major deficiencies.
During the Period the Management Engagement Committee conducted a site visit to Nimrod in May 2023 and visited Doric in June
2024.
Internal Audit
The Group has no employees and operates no systems of its own, relying instead on the employees and systems of its external service
providers. Following a recommendation from the AR Committee, the Board has therefore taken the decision that it would be of
insufficient benefit for the Group to engage an internal auditor.
External Audit
The effectiveness of the external audit process is dependent on appropriate audit risk identification at the start of the audit cycle. The
AR Committee received from Grant Thornton a detailed audit plan identifying their assessment of the key risks. For the financial year
under review, the primary risks identified were in respect of valuation of the Groupās Assets, the recognition of Lease rental income
and the presumed risk on management override of controls.
48
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Using its collective skills, the AR Committee evaluates the effectiveness of the audit process in addressing the matters raised through
the reporting it received from Grant Thornton at the conclusion of the audit. In particular the AR Committee formally appraise Grant
Thornton against the following criteria:
ā¢ Independence
ā¢ Ethics and conflicts
ā¢ Knowledge and experience
ā¢ Challenge
ā¢ Promptness
ā¢ Cost
ā¢ Overall quality of service
In addition the AR Committee also seeks feedback from the Administrator on the effectiveness of the audit process.
For the financial year under review, the AR Committee was satisfied that there had been appropriate focus on the primary areas of
audit risk and assessed the quality of the audit process to be good.
The AR Committee holds meetings with the external auditor to provide additional opportunity for open dialogue and feedback from
the auditor. Should it be necessary, the AR Committee members meet with the external auditor without the Administrator and Asset
Manager being present. Matters typically discussed include the auditorās assessment of business risks and management activity
thereon, the transparency and openness of interactions with the Administrator, confirmation that there has been no restriction in
scope placed on them by the Administrator on the independence of their audit and how they have exercised professional scepticism.
Appointment and Independence
Grant Thornton provided audit services to the Company for the financial year under review. This has been the third audit of the
Company carried out by Grant Thornton, following its appointment on 2 August 2021.
The AR Committee considers Grant Thornton, the Companyās auditor, to be independent of the Company and the Group. The AR
Committee provided the Board with its recommendation to Shareholders on the re-appointment of Grant Thornton as external auditor
for the year ending 31 March 2024 at the AGM held on 7 December 2023.
Non-Audit Services
To further safeguard the objectivity and independence of the external auditor from becoming compromised, the AR Committee has a
formal policy governing the engagement of the external auditor to provide non-audit services. No changes have been made to this
policy during the year. This policy specifies that the external auditor should only be engaged for non-audit services where there
is considered to be a very low threat to auditor independence. No non-audit services had been provided by Grant Thornton during
theīyear.
The external auditor is prohibited from providing any other services without the AR Committeeās prior approval. In reaching such a
determination the AR Committee will take into consideration whether it is in the best interests of the Group that such services should
be supplied by the Groupās external auditor (rather than another service provider) and, if so whether any safeguards regarding
auditor objectivity and independence in the conduct of the audit should be put in place, whether these would be effective and how
such safeguards should be disclosed.
49
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
AUDIT AND RISK COMMITTEE REPORT (continued)
Committee Evaluation
The AR Committeeās activities formed part of the review of Board effectiveness performed in the year under review.
An internal evaluation of the AR Committeeās effectiveness was carried out in 2024, concluding that it was operating effectively.
Andreas Tautscher
Chair of the Audit and Risk Committee
23 July 2024
50
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
INDEPENDENT AUDITORāS REPORT
Opinion
We have audited the Consolidated Financial Statements of Doric Nimrod Air Two Limited (the āCompanyā) and its subsidiaries (the
āGroupā) for the year ended 31 March 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for
the year then ended, and notes to the Consolidated Financial Statements, including material accounting policy information.
In our opinion, the accompanying Consolidated Financial Statements:
ā¢ give a true and fair view of the consolidated financial position of the Group as at 31 March 2024, and of its consolidated financial
performance and its consolidated cashflows for the year then ended;
ā¢ are in accordance with IFRS Accounting Standards as adopted by the European Union (EU); and
ā¢ comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our responsibilities under
those standards are further described in the āAuditorās responsibilities for the audit of the Consolidated Financial Statementsā section
of our report.
We are independent of the Group in accordance with the International Ethics Standards Board for Accountantsā International Code
of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), together with the ethical
requirements that are relevant to our audit of the Consolidated Financial Statements in Guernsey, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2(k) in the Consolidated Financial Statements which indicates that the Company will convene a liquidation
proposal meeting in June 2025 where a liquidation resolution will be proposed that the Company proceed to an orderly wind-up.
As noted in note 2(k), these events or conditions, along with the other matters as set forth in note 2(k), indicate that a material
uncertainty exists that may cast significant doubt in the Groupās ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Consolidated
Financial Statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter
described below to be the key audit matter communicated in our report.
The key audit matter How the matter was addressed in our audit
Determination of residual value and impairment
assessment of aircraft
(2024: Ā£171.0m, and 2023: Ā£275.7m)
We identified the determination of residual value and
impairment assessment of aircraft as the most significant
assessed risk of material misstatement due to fraud and
error, with the estimation of the aircraftās residual value
being a significant source of estimation uncertainty.
In responding to the key audit matter, we performed the following
audit procedures:
ā¢ We have assessed the Groupās accounting policies regarding
the determination of the residual values of the aircraft and
impairment assessment in accordance with International
Accounting Standard (IAS) 16 - Property, Plant and Equipment
and IAS 36 - Impairment of Assets, respectively;
51
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
INDEPENDENT AUDITORāS REPORT (continued)
The Groupās aircraft are measured at cost less
accumulated depreciation and impairment losses.
The depreciation is charged on a straight-line basis over
the term of the lease to an estimated residual value at
the end of that period.
The Group uses external appraisers who provide an
estimate of the residual value which is determined
based on significant judgement and assumptions about
current and future market conditions.
The determination of the residual values and impairment
assessment involves complex estimates and professional
judgment. As such, there is a risk that the residual value
and useful life of the aircraft may not be estimated
correctly. As a result, the carrying value of the aircraft
and the amount of depreciation charged may be
misstated.
Also, there is a risk that management may fail to account
for impairment indicators such as the illiquid market of
the aircraft that triggers an impairment review which
causes the value of the aircraft to be written down to its
recoverable amount (if less than carrying value).
Refer to the Audit and Risk Committee Report on pages
43 to 44; Accounting policies on pages 61 to 62; Note 3,
āSignificant Judgements and Estimatesā ā Estimates on
Residual Value, Impairment and Useful Life of Aircraft
and Note 10, āProperty, Plant and Equipment ā Aircraftā,
to the Consolidated Financial Statements.
ā¢ We have obtained detailed supporting documentation from
management and assessment of the key inputs, assumptions
and methodology used from which the aircraftās residual value is
determined and the impairment assessment is based;
ā¢ We have assessed the independence, competence and objectivity
of managementās external appraisers;
ā¢ We have assessed the external appraiserās report, lease
agreements, amendments to such agreements, redelivery
condition side letter, valuation report from the asset manager
and maintenance status at the end of the lease. Further, we
have challenged management on their method selection and
assumptions;
ā¢ We held discussions with management to understand the status of
the aircraft and if they are operating relative to the assumptions
underpinning their models and to identify operational issues, if
any, that may impact the residual value of the aircraft;
ā¢ We have engaged our internal Aircraft valuation experts to assist
in performing the testing of the valuation of the aircraft which
included the following:
ā¢ ā¢ Assisted in determining whether the valuation methodologies
used to estimate the residual value of the aircraft are
consistent with methods usually used by market participants
for similar types of assets;
ā¢ ā¢ Used their knowledge of the market to assess, challenge and
corroborate managementās valuation;
ā¢ ā¢ Determined if the key assumptions used in determining the
residual value are reasonable and that the carrying value of
the aircraft is appropriately calculated;
ā¢ We performed independent research to check for references of
secondary market options for A380 aircraft. Further, we have
used the information from the recent sale of the Groupās aircraft
to assess the reasonableness of the residual value used for the
remaining aircraft and to identify any impairment indicators;
ā¢ We performed independent research to assess the reasonableness
of discount and inflation rate changes and to assist in identifying
macro-economic uncertainties (such as but not limited to
increased cost of living) as contributing factor to such updates;
and
ā¢ We have assessed the completeness and sufficiency of related
disclosures in the Consolidated Financial Statements.
Our result
Based on the audit work performed, we have not identified any
indication of material misstatement in relation to the determination
of residual value and impairment assessment.
52
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
INDEPENDENT AUDITORāS REPORT (continued)
Other information
The Directors are responsible for the other information. The other information comprises the information included in the Annual
Financial Report and Consolidated Financial Statements, but does not include the Consolidated Financial Statements and our
auditorās report thereon.
Our opinion on the Consolidated Financial Statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the Consolidated Financial Statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the directors for the Consolidated Financial Statements
As explained more fully in the Statement of Directorsā Responsibilities set out on page 34, the directors are responsible for the
preparation of the Consolidated Financial Statements that give a true and fair view in accordance with IFRS Accounting Standards as
adopted by the EU, and for such internal control as the directors determine is necessary to enable the preparation of Consolidated
Financial Statements that are free from material misstatement, whether due to fraud or error.
In preparing the Consolidated Financial Statements, the directors are responsible for assessing the Groupās ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditorās responsibilities for the audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditorās report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated
Financial Statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:
ā¢ Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
ā¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Groupās internal control.
ā¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the Directors.
ā¢ Conclude on the appropriateness of the directorsā use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Groupās
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
53
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
INDEPENDENT AUDITORāS REPORT (continued)
auditorās report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorās report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
ā¢ Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures,
and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves
fair presentation.
ā¢ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the
Consolidated Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our
auditorās report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Use of our report
This report is made solely to the Companyās members, as a body, in accordance with section 262 of the Companies (Guernsey) Law,
2008. Our audit work has been undertaken so that we might state to the Companyās members those matters we are required to state to
them in an auditorās report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Companyās members as a body, for our audit work, for this report, or for the opinions we
have formed.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies (Guernsey) Law, 2008 requires us
to report to you if, in our opinion:
ā¢ proper accounting records have not been kept by the Company; or
ā¢ the Groupās Consolidated Financial Statements are not in agreement with the accounting records; or
ā¢ we have not obtained all the information and explanations, which to the best of our knowledge and belief, are necessary for the
purposes of our audit.
Cyril Swale
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Peter Port
Guernsey
Date: 23 July 2024
54
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2024
Notes
| Year ended | Year ended | ||
| 31 Mar 2024 | 31 Mar 2023 | ||
| GBP | GBP | ||
| INCOME | |||
A rent income | 4 | ||
B rent income | 4 | ||
| EXPENSES | |||
Operating expenses | 5 | ( | ( |
Depreciation of Aircraft | 10 | ( | ( |
Impairment of Aircraft | 10 | ( | ( |
( | ( | ||
| Net profit for the year before finance costs and foreign exchange | |||
gains/(losses) | |||
Finance income | |||
Finance costs | 11 | ( | ( |
| Net profit for the year after finance costs and before foreign exchange | |||
gains/(losses) | |||
Net foreign exchange gains/(losses) | 7 | ( | |
Profit for the year | |||
Total Comprehensive Income for the year | |||
Pence | Pence | ||
Earnings per Share for the year ā Basic and Diluted | 9 |
In arriving at the results for the financial year, all amounts above relate to continuing operations.
The notesīon pages 58 to 82 form an integral part of these Consolidated Financial Statements.
55
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2024
Notes
| 31 Mar 2024 | 31 Mar 2023 | ||
| GBP | GBP | ||
| NON-CURRENT ASSETS | |||
Property, Plant and Equipment ā Aircraft | 10 | ||
| CURRENT ASSETS | |||
Accrued income | |||
Receivables | 13 | ||
Cash and cash equivalents | 17 | ||
Financial assets at fair value through profit and loss | 19 | ||
TOTAL ASSETS | |||
| CURRENT LIABILITIES | |||
Borrowings | 15 | ||
Deferred income | 4 | ||
Payables | 14 | ||
| NON-CURRENT LIABILITIES | |||
Borrowings | 15 | ||
Deferred income | 4 | ||
TOTAL LIABILITIES | |||
TOTAL NET ASSETS | |||
| EQUITY | |||
Share capital | 16 | ||
Retained loss | ( | ( | |
TOTAL EQUITY | |||
Pence | Pence | ||
| Net Asset Value per Ordinary Share based on | |||
Shares in issue |
The Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 23 July 2024 and are
signed on its behalf by:
Fiona Le Poidevin
Director
Andreas Tautscher
Director
The notesīon pages 58 to 82 form an integral part of these Consolidated Financial Statements.
56
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2024
Notes
| Year ended | Year ended | ||
| 31 Mar 2024 | 31 Mar 2023 | ||
| GBP | GBP | ||
| OPERATING ACTIVITIES | |||
Profit for the year | |||
Movement in accrued and deferred income | ( | ( | |
Interest received | ( | ( | |
Depreciation of Aircraft | 10 | ||
Impairment of Aircraft | 10 | ||
Loan interest payable | 11 | ||
Movement in financial assets/liabilities through profit and loss | 11 | ( | |
Decrease in payables | 14 | ( | ( |
Decrease in receivables | 13 | ||
Foreign exchange movement | 7 | ( | |
Amortisation of debt arrangement costs | 11 | ||
NET CASH FROM OPERATING ACTIVITIES | |||
| INVESTING ACTIVITIES | |||
Interest received | |||
Proceeds from sale of assets | 10 | ||
NET CASH FROM INVESTING ACTIVITIES | |||
| FINANCING ACTIVITIES | |||
Dividends paid | 8 | ( | ( |
Repayments of capital on borrowings | 20 | ( | ( |
Interest on borrowings | 20 | ( | ( |
Capital redemption | 16 | ( | |
NET CASH USED IN FINANCING ACTIVITIES | ( | ( | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | |||
Increase in cash and cash equivalents | |||
Effects of foreign exchange rates | ( | ||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 17 |
The notesīon pagesī58 to 82 form an integral part of these Consolidated Financial Statements.
57
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2024
| Share | Retained | |||
| Notes | Capital | Loss | Total | |
| GBP | GBP | GBP | ||
Balance as at 1īApril 2023 | ( | |||
Total Comprehensive Income for the year | ||||
Dividends paid | 8 | ( | ( | |
Capital redemption | 16 | ( | ( | |
Balance as at 31īMarch 2024 | ( | |||
| Share | Retained | Total | ||
| Capital | Loss | |||
| GBP | GBP | GBP | ||
Balance as at 1īApril 2022 | ( | |||
Total Comprehensive Income for the year | ||||
Dividends paid | 8 | ( | ( | |
Balance as at 31īMarch 2023 | ( |
The notesīon pages 58 to 82 form an integral part of these Consolidated Financial Statements.
58
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2024
59
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
60
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
61
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
62
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
63
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
64
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
65
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
66
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
67
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
68
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
69
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
70
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
71
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
72
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
73
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
74
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
75
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
76
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
77
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
78
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
79
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
80
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
81
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
82
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the year ended 31 March 2024
83
Doric Nimrod Air Two Limited (the āCompanyā) Annual Financial Report and Consolidated Financial Statements
KEY ADVISERS AND CONTACT INFORMATION
KEY INFORMATION
Exchange: Specialist Fund Segment of the London Stock Exchangeās Main Market
Ticker:
Listing Date:
Financial Year End:
Base Currency:
ISIN:
SEDOL:
LEI:
Country of Incorporation:
Registration number:
DNA2
14 July 2011
31 March
Pound Sterling
GG00BMWCCD46
BMWCCD4
213800ENH57LLS7MEM48
Guernsey
52985
MANAGEMENT AND ADMINISTRATION
Registered Office
Doric Nimrod Air Two Limited
Company Secretary and Administrator
JTC Fund Solutions (Guernsey) Limited
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey GY1 2HT
Asset Manager
Doric GmbH
Berliner Strasse 114
63065 Offenbach am Main
Germany
Lease and Debt Arranger
Doric Asset Finance GmbH & Co. KG
Berliner Strasse 114
63065 Offenbach am Main
Germany
Corporate and Shareholder Advisor
Nimrod Capital LLP
35 Ballards Lane
London
N3 1XW
Advocates to the Group (as to Guernsey Law)
Carey Olsen
Carey House
Les Banques
St Peter Port
Guernsey, GY1 4BZ
Solicitors to the Company (as to English Law)
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London, England
EC2A 2EG
Auditor
Grant Thornton Limited
St James Place
St James Street
St Peter Port
Guernsey
GY1 2NZ
Registrar
JTC Registrars Limited
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey GY1 2HT
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