1、DP AIRCRAFT I LIMITEDANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 202320232PageCONTENTS 3 Fact Sheet 4 Summary7 Highlights 9 Chairmans Statement
2、 11 Asset Managers Report 24 Directors 25 Directors Report 35 Report of the Audit Committee 38 Statement of Principal Risks and Uncertainties 41 Statement of Directors Responsibilities 43 Independent Auditors Report to the Members of DP Aircraft I Limited 49 Consolidated Statement of Comprehensive I
3、ncome 50 Consolidated Statement of Financial Position 51 Consolidated Statement of Cash Flows 52 Consolidated Statement of Changes in Equity 53 Notes to the Consolidated Financial Statements 79 Company Information 81 Appendix 1 Alternative Investment Fund Managers Directive DP AIRCRAFT I LIMITED ANN
4、UAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 202320233PageFACT SHEET TickerDPA Company Number56941 ISIN NumberGG00BBP6HP33 SEDOL NumberBBP6HP3 TradedSpecialist Fund Segment(SFS)of the London Stock Exchange SFS Admission Date 4-Oct-13 Share PriceUS$0.0625 as at 31 D
5、ecember 2023 Loss per Share US$0.01047 for the year ended 31 December 2023 Country of IncorporationGuernsey Current Ordinary Shares in Issue239,333,333 Administrator and Company SecretaryAztec Financial Services(Guernsey)Limited Asset ManagerDS Aviation GmbH&Co.KG Independent Auditor KPMG Channel Is
6、lands Limited Corporate BrokerInvestec Bank Plc Aircraft Registration HS-TQD HS-TQC Aircraft Serial Number35320 36110 Aircraft Type and ModelB787-8 Lessees Thai Airways International Public Company Limited (Thai Airways)WDP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMEN
7、TS Year ended 31 December 202320234PageSUMMARY COMPANY OVERVIEW DP Aircraft I Limited(the Company)was incorporated with limited liability in Guernsey under the Companies(Guernsey)Law,2008 on 5 July 2013 with registered number 56941.The Company was established to invest in aircraft.The Company is a h
8、olding company,and made its investment in aircraft held through two wholly owned subsidiary entities,DP Aircraft Guernsey III Limited and DP Aircraft Guernsey IV Limited(collectively and hereinafter,the Borrowers),each being a Guernsey incorporated company limited by shares and one intermediate less
9、or company,DP Aircraft UK Limited(the Lessor),a UK incorporated private limited company.The Company and its consolidated subsidiaries,DP Aircraft Guernsey III Limited,DP Aircraft Guernsey IV Limited and DP Aircraft UK Limited comprise the consolidated Group(the Group).Pursuant to the Companys Prospe
10、ctus dated 27 September 2013,the Company offered 113,000,000 ordinary shares of no par value in the capital of the Company at an issue price of US$1.00 per share by means of a Placing.The Companys shares were admitted to trading on the Specialist Fund Segment(previously the Specialist Fund Market)of
11、 the London Stock Exchange on 4 October 2013 and the Company was listed on the Channel Islands Securities Exchange until 27 May 2015.On 5 June 2015,the Company offered 96,333,333 ordinary shares(the New Shares)of no-par value in the capital of the Company at an issue price of US$1.0589 per share by
12、means of a Placing.The Companys New Shares were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 12 June 2015.On 13 July 2022 the Company raised gross proceeds of$750,000 through the issue of 30,000,000 new ordinary shares in the capital of the Company at a price of
13、 US$0.025 per new ordinary share.The new ordinary shares were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 15 July 2022.In total there are 239,333,333 Ordinary Shares in issue with voting rights.In addition to the equity raised above in 2013,2015 and 2022,the Gr
14、oup also utilised external debt to fund the initial acquisition of the aircraft.Further details are given within this summary section.INVESTMENT OBJECTIVE&POLICY The Company and Groups investment objective is to obtain income and capital returns for its shareholders by acquiring,leasing and then,whe
15、n the Board considers it appropriate,selling aircraft(the Asset or Assets).THE BOARD The Board comprises of independent non-executive Directors(the Directors or the Board).The Directors are responsible for managing the business affairs of the Company and Group in accordance with the Articles of Inco
16、rporation and have overall responsibility for the Companys and Groups activities,including portfolio and risk management while the asset management of the Group is undertaken by DS Aviation GmbH&Co.KG(the Asset Manager/DS Aviation).THE ASSET MANAGER The Asset Manager has undertaken to provide the as
17、set management services to the Company and Group under the terms of an asset management agreement but does not undertake any regulated activities for the purpose of the UK Financial Services and Markets Act 2000.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year e
18、nded 31 December 202320235PageSUMMARY(CONTINUED)ENVIRONMENTAL,SOCIAL AND GOVERNANCE(ESG)The Group recognises the Paris Agreement on climate change.The Group operates NTA(New Technology Aircraft);specifically Boeing 787-8s equipped with Rolls Royce Trent-1000 engines which are 20%more fuel efficient
19、on a revenue-per-kilometre basis than similar comparable legacy aircraft.The Board has taken steps to reduce its own travelling and maximises the use of virtual meetings within the Board and with all its key service providers.CORONAVIRUS(COVID-19)COVID-19 had a significant impact on the airline sect
20、or,and by extension the aircraft leasing sector.More information is provided below and in the Asset Managers Report.THAI AIRWAYS INTERNATIONAL PCL(THAI AIRWAYS/THAI)The suspension of travel due to COVID-19 in 2020 resulted in Thai Airways entering into business rehabilitation.The Central Bankruptcy
21、Court approved Thais Business Rehabilitation plan on 15 June 2021.The rehabilitation process is currently ongoing,please refer to the Asset Manager Report on pages 11 to 23 for more details regarding the rehabilitation process.The Group signed a Letter of Intent(LOI)dated 1 March 2021 with Thai Airw
22、ays under which the parties agreed to amend the lease terms that existed then.The actual lease agreement reflecting the terms set out in the LOI was signed on 1 April 2022.The effective date for the lease modification was 15 June 2021.The new lease terms provided for a power by the hour(PBH)arrangem
23、ent until 31 December 2022(with rent payable by reference to actual monthly utilisation of the Thai aircraft and engines),with scaled back monthly fixed lease payments thereafter until October 2026 for aircraft MSN 36110 and December 2026 for aircraft MSN 35320 reflecting reduced market rates in the
24、 long-haul market.The lease term can be extended for a further 3 years to October and December 2029 respectively,with further scaled back monthly lease payments starting from November 2026 and January 2027.The Extension Period is however subject to agreement with the Group after consulting the Lende
25、rs.Given the uncertainty around the lease extension,the lease terms are considered to be the period up to October and December 2026.A corresponding agreement was reached with the lenders as detailed below.DEKABANK DEUTSCHE GIROZENTRALE AND TWO OTHER CONSORTIUM MEMBERS(DekaBank)On 6 May 2021,subseque
26、nt to the LOI being entered into by the Group and Thai as described above,the Group and DekaBank amended and restated the existing loan facility agreements in respect of the Thai aircraft to accommodate the new lease terms,First Amendment and Restatement to the Loan Agreements.Repayments of principa
27、l were deferred until after the end of the PBH arrangement(31 December 2022),and a new repayment schedule was to be renegotiated close to the end of the PBH arrangement.On 7 February 2023,the Group and DekaBank entered into a Second Amendment and Restatement to the Loan Agreement in which the partie
28、s agreed on the following main terms:the total loan amount outstanding was split into two tranches:oFacility A loan of US$61,144,842 made up of MSN 35320 loan of US$31,099,453 and MSN 36110 loan of US$30,045,389.The Facility A loan amortizes to a combined balloon of US$33,947,878 and represents the
29、scheduled debt.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 202320236PageSUMMARY(CONTINUED)DEKABANK DEUTSCHE GIROZENTRALE AND THREE OTHER CONSORTIUM MEMBERS(DekaBank)(CONTINUED)oFacility B loan of US$35,504,024(non-amortizing),made up of MS
30、N 35320 loan of US$17,366,650 and MSN 36110 loan of US$18,137,374.The Facility B loan will be settled as a balloon payment at the end of the loan term in 2026.USD 2.36m of surplus cash generated under the PBH period was used to immediately repay debt on the amortizing Facility A loan in February 202
31、3,while an agreed cash reserve of US$500,000 per aircraft will be retained to cover unforeseen costs going forward.the interest rate swap in place for the scheduled debt was dissolved at no net gain or loss.the MSN 35320 and MSN 36110 Facility A loans bear fixed interest rates of 6.61%and 6.89%respe
32、ctively.the MSN 35320 and MSN 36110 Facility B loans bear fixed interest rates of 5.26%and 5.42%respectively.from the monthly fixed lease rental of US$510,000 per aircraft(which denotes the maximum amount the Company can earn in operations per month),US$475,000 is legally restricted so that those fu
33、nds are only payable to the lenders,and US$35,000 per aircraft can be retained by the company to contribute towards ongoing fixed costs of the Company.Due to the limited liquidity position of the Group,restructuring fees associated with the second amendment and restatement will be paid after the eve
34、ntual remarketing of the aircraft,subject to surplus sales proceeds being realised.IMPAIRMENT In line with each reporting date and market capitalisation of US$15 million at 31 December 2023,a detailed impairment assessment of the aircraft was undertaken.Following this review an impairment of US$nil(
35、2022:US$nil)was booked against the aircraft.See note 3 for further details regarding the impairment and comments under Highlights on page 7 regarding the difference between net asset value and market capitalisation.DISTRIBUTION POLICY Under normal circumstances,the Group aimed to provide shareholder
36、s with an attractive total return comprising income,from distributions through the period of the Companys ownership of the Assets,and capital,upon any sale of the Assets.The Company originally targeted a quarterly distribution in February,May,August,and November of each year.The target distribution
37、was US$0.0225 per share per quarter.The dividends were targets only with no assurance or guarantee of performance or profit forecast.Due to the impact of COVID-19 on the aviation industry and therefore our lessor,the Board suspended the payment of dividends from 3 April 2020 until further notice.Thi
38、s suspension remains in place to date.Any lease rental payments received by the Company in respect of the Thai aircraft are expected to be applied exclusively towards the running costs of the Company and its subsidiaries,and as a priority towards interest and principal repayments to the DekaBank.Giv
39、en this backdrop the Company feels that there is no realistic prospect of the Companys shareholders receiving a dividend or other distribution during the remaining lease period.The Board and its advisers will continue to consult with shareholders and its advisors in the future with a view to determi
40、ning the best course of action to take for the future of the Company.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 202320237PageHIGHLIGHTS RESULTS FOR THE YEAR Results for the year ended 31 December 2023 is a loss after tax of US$2,505,687(l
41、oss per share US$0.01).For the year ended 31 December 2022 there was a profit after tax of US$7,660,823(profit per share US$0.03).The results for the year ended 31 December 2023 are mainly driven by rental income earned of US$8,714,249(2022:US$16,462,372)and finance costs incurred of US$9,551,675(20
42、22:US$4,860,305).The increase of finance costs is a result of an adjustment required by IFRS to reflect the modification to the loan terms in February 2023.The adjustment for the modification to the loans in February 2023 totalled US$5,042,029 and increased both finance costs and the loans payable a
43、t the point of modification and resulted in an overall loss for the period.This adjustment essentially recognises a loss now due to the less favourable terms(primarily interest rate increases)under the modified terms compared to the original terms.As a result of this adjustment,interest will be reco
44、gnised at the lower original effective interest rate as opposed to the higher modified interest rate going forward.The decrease in rent was due to the variable rent earned for the period ended 31 December 2022.For the period to 31 December 2023,the entity only earned fixed rental income.Refer to pag
45、e 48 for full details of results for the period.NET ASSET VALUE(NAV)The NAV for the reporting period was US$0.17645 per share at 31 December 2023(2022:US$0.18692).NAV per share has decreased due to the loss made during the year(see above).The NAV excluding the financial effects of the straight-linin
46、g lease asset and the loan modification adjustment was US$0.16018 per share at 31 December 2023(2022:US$0.13662).The straight-lining lease asset and the loan modification adjustment will reduce to nil over time.The adjusted NAV and loan modification adjustment is therefore presented to provide what
47、the Directors consider to be a more relevant assessment of the Groups net asset position.As at 31 December 2023,As at 31 December 2022NoteUS$US$per shareUS$US$per shareNAV per the financial statements42,230,4340.1764544,736,1210.18692Less:Straight-lining lease asset 11(10,038,709)(0.04194)(13,525,50
48、2)(0.05651)Add:Provision for straight lining lease asset 111,103,2540.004611,486,4530.00621Add:Loan modification adjustment65,042,0290.02107-(3,893,426)(0.01627)(12,039,049)(0.05030)Adjusted NAV38,337,0080.1601832,697,0720.13662As at 31 December 2023 the price per share was US$0.0625 which is signif
49、icantly lower than the NAV per share above,excluding the straight-lining lease asset and the loan modification adjustment.The reason for the difference is due to the market price per share reflecting other factors such as market sentiment that cannot be accounted for in a set of annual financial sta
50、tements.The main asset in the Group,the aircraft,has been assessed for impairment(see note 9)with no resulting impairment for the period.Other significant assets comprise cash and receivables whose values are considered to be reflective of fair value due to their short-term nature.Therefore,the low
51、share price is not indicative of a need for further impairment to the assets of the Group.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 202320238PageHIGHLIGHTS(CONTINUED)DIVIDENDS As previously outlined,as a result of the Coronavirus pandemi
52、c on global aviation and particularly on its lessees;the Group suspended dividends on 3 April 2020 until further notice to help preserve liquidity.Further details on the impact of the COVID-19 pandemic can be found within the Summary,the Asset Managers Report,and the Directors Report.Furthermore,in
53、accordance with the second amended loan agreement with DekaBank,the Group will make no dividend payments while loan deferrals remained outstanding under the amended loan agreement.OFFICIAL LISTING The Companys shares were first admitted to trading on the Specialist Fund Segment of the London Stock E
54、xchange on 4 October 2013.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 202320239PageCHAIRMANS STATEMENT I am pleased to present Shareholders with the Annual Report of the Group for the year ended 31 December 2023.The loss per share for the
55、period was US$0.01047 compared to a profit per share of US$0.03429 for the same period last year.The net asset value per share at the period end was US$0.17645 compared to US$0.18692 at 31 December 2022.For the last six months of the year the Group made a profit of US$1.567m.IFRS requires rental inc
56、ome to be recognised on a straight-line basis over the remaining lease period and consequently the accounfing treatment has resulted in some income being recognised earlier than would normally be the case.In addifion,IFRS requires a provision to be made against that lease income which has been esfim
57、ated based on recent credit reports on Thai.Please refer to page 7 which explains the net impact of this on the profit for the period and the NAV of US$0.17645 per share.There has been a confinued improvement in the global aviafion market following the challenges resulfing from the effects of the Co
58、vid-19(Covid)pandemic.Recent senfiment on airline and related stocks has been more opfimisfic.The Ukraine war has not had as a significant impact on the industry as was expected.With Covid restricfions in China being lifted there is cause for some opfimism in tourism numbers from that market going f
59、orward.It has been encouraging to see how the airline and the Thai tourist economy has responded and rebounded from the crippling effect of the Covid years.Thai has regained profitability and anticipates exiting administration currently anticipated in Q4 2024.They have also projected a potential lis
60、ting return during 2025.Both our aircraft,HS-TQC and HS-TQD have mainly flown in the Asian region during the year.This has also been true of the other four,Rolls Royce Trent 1000 powered 787-8 aircraft in the Thai fleet.Sector lengths flown through the year have varied from just under two hours(Sing
61、apore and KL)to approximately six hours(Japanese routes).Other larger aircraft in the Thai fleet have also been serving Asian routes which at present represent the largest passenger segment.Under the terms of industry lease arrangements lessees have the right to fly the routes which serve their need
62、s.Shorter sector lengths do not reduce the airlines responsibility to maintain the aircraft nor in our case to return the aircraft at the lease term end in full life condition.Our asset manager is responsible for liaison with Thai on all operational matters and to regularly inspect our assets.The vi
63、brant uptick of the tourist economy has led to the airline placing both near term orders for seven larger wide bodied aircraft(both Boeing and Airbus)but also for bigger order sizes in the medium term.This larger reported order of 45 Boeing 787-9s is good news as a reinforcement of Boeing as a core
64、fleet constituent but it has opted for GE engines rather than Rolls Royce which power the current six 787-8s in their fleet(including both our aircraft).The positioning of the smaller 787-8 within Thais forward fleet plans is not conclusively known and we,through our asset manager,will be seeking to
65、 clarify greater detail in that regard.Our aircraft are now operafing on fixed monthly lease payments with Thai unfil October/December 2026respecfively,reflecfing the reduced lease rates negofiated earlier.As previously noted,the lease term was extended by a further 3 years to October/December 2029,
66、with further scaled back monthly lease payments starfing from November 2026/January 2027,and the Group retaining a right of early terminafion in October/December 2026 after consultafion with the Lenders.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 D
67、ecember 2023202310PageCHAIRMANS STATEMENT(CONTINUED)The current finance arrangements with our Lenders expire at the end of 2026.In this respect the Group can therefore(i)negofiate to extend the loans with the exisfing Lenders,(ii)refinance the loans with new lenders or(iii)sell the aircraft to an in
68、vestor within a fime frame unfil the end of 2026.Any opfion has to be agreed with thecurrent Lending group and corresponding discussions will start in October 2024.By April 2025,the Group and Lenders have to inform Thai whether or not they will execute the early terminafion opfion under the lease.By
69、 October 2025 the Group has to provide the Lenders with informafion on the steps it is taking to refinance or to remarket the aircraft followed by a Term sheet no later than August 2026.As an ongoing obligafion,the Group has to inform the Lenders in relafion to any negofiafions and or consultafion w
70、ith Thai regarding any restructuring of the Operafing Lease Agreement.Whilst there can be no absolute certainty the preferred opfion for the Group is the sale of the aircraft with a lease aftached which reflects improved market terms and condifions.The current leases require the aircraft to be retur
71、ned in full life condifion.The Board and the Asset Manager remain fully commifted to extract the best value for shareholders in this process and are focussed on acfions to improve and preserve the value of the assets.The forthcoming months will allow us to consider and review the various options and
72、 to recommend a preferred path.Necessarily this will need to involve the proactive involvement of our lenders,advisors and our valued lessee.The Company believes the Boeing 787 remains an aftracfive asset and notes recent transacfions in the market though transparency around transacfion values is no
73、t currently available.Boeing 787 wide body producfion is sfill behind historic levels and delayed deliveries for new aircraft are further strengthening this demand.The Board notes that whilst the 787 aircraft is now key to Thai,the Groups aircraft type are the smaller 8 series and we note that all n
74、ew wide bodied aircraft Thai propose to add to their fleet are the larger 787-9 variant.The priority of the Group will therefore be commencing discussions with Thai on how our aircraft fit into the overall Thai fleet strategy and to what extent exisfing arrangements can be enhanced for the mutual be
75、nefit of both parfies.As previously noted,there is no realisfic prospect of the Companys shareholders receiving a dividend or other distribufion prior to the end of the lease term.The key uncertainty remains the outlook for Thai,though the posifion of Thai has improved considerably,the impact of inf
76、lafion on the travel industry and the knock on effect these factors may have on aircraft values and lease rentals.Notwithstanding there has been some unavoidable cost increases and inflafionary pressures,with respect to ongoing working capital requirements,the Group has been able to reduce the net c
77、ash burn because some service providers and the directors have deferred some amounts due.In order to ensure the Group has sufficient funds to adequately finance the period over which the Board would like to realise value for shareholders,should an appropriate opportunity arise,a further fund raise u
78、p to$1 millionwill be required in Q3 2024.The Board and its advisers will confinue consulfing with investors on an ongoing basis.I am especially grateful to the Board and our key service providers for their confinued significant support over the period and going forward.Finally I would like to thank
79、 our Investors for their confinued support.Jonathan Bridel Chairman 25 April 2024DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202311PageASSET MANAGERS REPORT THE AIRLINE MARKET Snapshot“The airline industry has emerged from the shadows
80、of the pandemic,showing signs of robust recovery and resilience”says Jeremy Bowen,CEO at Cirium.1 Global passenger traffic is expected to outperform pre-Covid levels in 2024 and airline revenues are expected to be about 7%higher than in 2019.2 However,challenges such as rising inflation rates,geopol
81、itical conflicts,environmental pressure and supply chain issues will continue to impact the aviation industry in 2024.Source:IATA December 202331 Cirium:“Celebrating the airline industrys operational performance and 2024 industry outlook”;18th January 2024 2 IATA:“Global Outlook for Air Transport”;D
82、ecember 2023 3 IATA:“Industry Statistics:Fact Sheet December 2023”;December 2023-2000200400600800100020192020202120222023(estimated)2024(forecasted)INDUSTRY FINANCIAL STATISTICSRevenues billionUSDPassengerRevenue billionUSDNet Result billionUSDDP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLID
83、ATED FINANCIAL STATEMENTS Year ended 31 December 2023202312PageASSET MANAGERS REPORT(CONTINUED)Source:IATA December 2023;April 20214Global Current SituationoAll regions benefitted from increasing passenger demand and the lifting of Covid-19 restrictions5oSluggish business travel recovery due to incr
84、easing cost management and sustainability strategies but premium travel of leisure passengers increased6oAircraft deliveries in 2023 lower than in 2019 due to supply chain and manufacturer issues still unsolved7oAt the end of 2023,13%of the global fleet was reported as stored(including aircraft rese
85、rved for part-outs)compared to 19%at the beginning of 20238Outlook o60 national elections to take place in 2024 with uncertain outcome on the political direction9oUnknown impact of increasing geopolitical tensions,acts of war and warlike operations oThe cargo market might profit from disruption of s
86、eaborne cargo and increasing volumes but is expected to remain weak10oBoeing predicts that over 42,000 new aircraft(with an approximate value of USD 8 trillion)will be needed over the next 20 years-an increase of 3.5%compared to Boeings last year outlook11oDBRS Morningstar expects aircraft asset val
87、ues and lease rates to be strong in 202412oUncertainty regarding costs of sustainability strategies134 IATA:“Industry Statistics:Fact Sheet December 2023”;December 2023;IATA:“Industry Statistics:Fact Sheet April 2021”;April 2021 5 PwC:“2024 Aviation Industry Review&Outlook”;25th January 2024 6 Ciriu
88、m:“Celebrating the airline industrys operational performance and 2024 industry outlook”;18th January 2024/PwC:“2024 Aviation Industry Review&Outlook”;25th January 2024 7 IATA:“Global Outlook for Air Transport”;December 2023 8 PwC:“2024 Aviation Industry Review&Outlook”;25th January 2024 9 PwC:“2024
89、Aviation Industry Review&Outlook”;25th January 2024 10 PwC:“2024 Aviation Industry Review&Outlook”;25th January 2024 11 Boeing:“Boeing Forecasts Demand for 42,600 New Commercial Jets Over Next 20 Years“;18th June 2023/Cirium:”Boeing raises 20-year aircraft demand forecast“;19th June 2023 12 DBRS Mor
90、ningstar:“Aviation Secured,ABS,EETC 2024 Outlook StableAsset Values,Lease Rates Strong;Event Risk,Financing Challenges Exist”;12th February 2024 13 Cirium:“ANALYSIS:Whats lies ahead for commercial aviation this year?”;27th February 2024 3%-57%19%40%33%9%4%-67%22%65%38%10%83%65%67%79%82%83%INDUSTRY O
91、PERATIONAL STATISITICSCapacity(ASK)%change vs.previousyearDemand(RPK)%change vs.previousyearPassenger LoadFactor%DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202313PageASSET MANAGERS REPORT(CONTINUED)Asia Current Situation oRecovery lag
92、s behind other regions such as Europe and North America14oAn increase of 131%in demand,measured in Revenue Passenger Kilometers(RPK)and 106%in availability,measured in Available Seat Kilometers(ASK)on full year international 2023 traffic15oBreak-even load-factor expected for 202316Outlook oDemand(AS
93、K)expected to grow by over 13%in 2024 compared to 202317oRecovery year 2024:passenger traffic expected to outperform 2019-levels18oAAPAs(Association of Asia Pacific Airlines)Director general Subhas Menon expects 2024 to be a successful year for Asian airlines19Outlook&ConclusionThe aviation industry
94、 has made good progress to completely return globally to pre-Covid-19 levels,despite ongoing-challenges such as high inflation,supply and maintenance facility bottlenecks as well as the rising number of geopolitical conflicts and wars.The current aircraft shortage results mainly from the still reduc
95、ed delivery rates and the grounding of aircraft due to various reasons such as issues with B737MAX aircraft and Pratt&Whitney GTF engines.This situation might persist and lead to longer aircraft in service lives and the reactivation of previously retired aircraft.The Asia Pacific market represents a
96、bout one third of global demand20 although not having completely recovered from the pandemic,particularly suffering from weak international markets to and from China.Other emerging markets,such as India,offer a huge potential for growth.This in turn,might intensify competition as new market entrants
97、 will try to benefit from such momentum.14 PcW:“2024 Aviation Industry Review&Outlook”;25th January 2024 15 Cirium:“APAC airlines see robust passenger demand in 2023:AAPA”;31st January 2024 16 PcW:“2024 Aviation Industry Review&Outlook”;25th January 2024 17 IATA:“Global Outlook for Air Transport”;De
98、cember 2023 18 IATA:“Global Outlook for Air Transport”;December 2023 19 Cirium:“APAC airlines see robust passenger demand in 2023:AAPA”;31st January 2024 20 IATA:“Air Passenger Market Analysis December 2023”;31st January 2024 DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STA
99、TEMENTS Year ended 31 December 2023202314PageASSET MANAGERS REPORT(CONTINUED)Considering the enormous number of new aircraft orders in 2023 shows that airlines are confident in the rising numbers of travellers and a positive trend of aviation transport.Increasing premium travel of leisure passengers
100、 indicates the importance of the freedom to travel after the pandemic and the importance of holiday trips.The current development emphasises the resilience of the aviation industry,although this business sector will always remain fragile to temporary downturns.One very important and significant chal
101、lenge for the aviation industry,not only from a financial perspective,is to reduce its environmental impact and ultimately to reach zero CO2 emissions.Please note that all forecasts are predicated on historical facts and educated projections.It ought to be regarded as a potential rule of thumb.THELE
102、SSEE THAI AIRWAYS INTERNATIONAL PUBLIC COMPANY LIMITED Snapshot Fleet of 69 aircraft in operation and 20 decommissioned aircraft in storage21Thai Airways is the market leader within Thailands carriers on international routes(16%market share)while being the smallest on domestic routes 22Launch of a d
103、aily flight to Istanbul(Turkey)in December 202323Yields in the third quarter 2023 were up more than 50%compared to the same quarter 201924Stronger focus on sustainability through partnerships regarding SAF(Sustainable Aviation Fuel)usage and commitment to use more eco-friendly material(on-board amen
104、ity kits,new flight attendant uniforms,etc.)25The largest number of tourist arrivals at Thai airports are from Malaysia,China and South Korea26Arrivals from China and Japan in 2023 had reached only 35%and 65%respectively of 2019-levels,while inbound travel from Vietnam,Taiwan,Indonesia,UAE and the P
105、hilippines(nearly)exceeded pre-pandemic levels27Main threats result from lower economic growth in the Asia Pacific region,a high level of inflation,volatility of oil prices and the entrance of new market players2821 Cirium:“Thai Airways International Fleet Summary”;2nd February 2024 22 ISHKA:Thai Ai
106、rways and Thai AirAsia seize demand recovery as rival Nok Air lags behind”;5th February 2024 23 Thai Airways International PCL:“Managements Discussion and Analysis for the three months ended March 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“24 ISHKA:Thai Airway
107、s and Thai AirAsia seize demand recovery as rival Nok Air lags behind”;5th February 2024 25 Thai Airways International PCL:“Managements Discussion and Analysis for the three months ended March 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“26 Thai Airways Internat
108、ional PCL:“Managements Discussion and Analysis for the three months ended March 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“27 Cirium:“ANALYSIS:Can Thailand recoup lost ground after the pandemic?”;5th February 2023 28 Thai Airways International PCL:“Managements
109、 Discussion and Analysis for the three months ended March 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202315PageASSET MANAGERS REPORT(CONTINUED)Restruct
110、uring and Rehabilitation Process since 18th May 2022 Debt repayment according to the Business Rehabilitation Plan on track29Sale of six B747-400s,one A340-500,three additional unused aircraft,five unused engines,two overseas properties and shares in a pipeline Transportation company30The integration
111、 of Thai Smile into Thai had been completed 31st December 2023 and is expected to increase the carriers efficiency,flight operations and fleet utilisation31The carrier implemented a route expansion and fleet efficiency improvement plan32The Stock Exchange of Thailand(SET)approved to extend the time
112、limit to 7th March 2025 for Thai to eliminate the criteria for delisting(negative equity)33Thai Airways plans to exit rehabilitation by the end of 20243429 Thai Airways International PCL:“The update on the 10th progress of the implementation of the Business Rehabilitation Plan for the period from 15
113、th September 2023 to 14 December 2023(2nd quarter of the 3rd year);27th December 2023 30 Thai Airways International PCL:“The update on the progress of the implementation of the Business Rehabilitation Plan for the period from 15th March 2023 to 14 June 2023(4th quarter of the 2nd year);27th June 202
114、3/Thai Airways International PCL:“The update on the 9th progress of the implementation of the Business Rehabilitation Plan for the period from 15th June 2023 to 14 September 2023(1st quarter of the 3rd year);27th September 2023 31 ISHKA:Thai Airways and Thai AirAsia seize demand recovery as rival No
115、k Air lags behind”;5th February 2024/ch-Aviation:“Thai Smile ends flight operations”;4th January 2024 32 Thai Airways International PCL:“Managements Discussion and Analysis for year 2023 ended December 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“33 SET:“SET ann
116、ounces time extension for THAI to eliminate the ground for delisting”;8th March 2024 34 Thai Airways International PCL:“Managements Discussion and Analysis for the three months ended March 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“DP AIRCRAFT I LIMITED ANNUAL
117、 REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202316PageASSET MANAGERS REPORT(CONTINUED)Thais Financial&operational performance in brief(incl.subsidiaries)35*Exchange rate THB:USD as at 31st December 2023:1,00 THB:0,03 USD36Remarks a)Catering,ground services,cargo
118、handling,etc.b)Increase is in-line with increased operations c)Average fuel price in 2023 decreased by 16%compared to 2022 d)Crew expenses,aircraft maintenance,lease of aircraft,etc 35 Thai Airways International PCL:“Managements Discussion and Analysis for year 2023 ended December 31,2023,for Thai A
119、irways International Public Company Limited and Its Subsidiaries“36 Bundesverband Deutscher Banken;27th February 2024 billion THB*20232022ChangeLinkOperating Revenues161.07105.04+53%-Passenger and Excess Baggage 132.7474.04+79%-Freight and Mail15.4623.78-35%-Other Businesses9.256.67+39%a)-Other Inco
120、me3.620.55+562%Operating Expenses120.8697.24+24%b)-Fuel and Oil47.7738.38+25%c)-Non-Fuel Operating Costs73.0958.87+24%d)Operating Result excl.One-Time Items 24.60-4.59Net Result28.10-0.27e)Capacity-ASK(million)54,28038,526+41%Demand-RPK(million)43,26826,163+65%Load Factor79.7%67.9%+11.8 ppPassengers
121、(million)13.769.01+53%Passenger Yield THB/RPK3.062.82+9%Aircraft Utilisation block hours 12.2 10.4+17%Number of Aircraft7786-11%Increase in Cash&Cash Equivalents bn THB 18.40 29.03 f)Current Ratio(consolidated)2.51 2.04 g)DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEME
122、NTS Year ended 31 December 2023202317PageASSET MANAGERS REPORT(CONTINUED)Thais Financial&operational performance in brief(incl.subsidiaries)37(Continued)Remarks(continued)e)Affected by one-time expenses,particularly due to a gain on debt restructuring(THB 3.96 billion),the sale of assets(THB 0.47 bi
123、llion)and a loss on foreign currency exchange(THB 1.07 billion)f)Slower increase than last year but the amount of cash and cash equivalents further increased g)Improve in liquidity and the ability to pay debt services(Current Ratio=Current Assets/Current Liabilities)Fleet Source:Cirium:“Thai Airways
124、 International Fleet Summary”;2nd February 2024 Currently about 70 aircraft in operation38Pre-pandemic fleet comprised approximately 100 aircraftTargeted growth of about ten aircraft annually to 90 aircraft by the end of 202539Agreement to lease four A350-900s,three B787-9s and ten A321NEOs from Aer
125、Cap with delivery between 2024 and 202640Signed leases for two used A330-300s with CDB Aviation41Agreement with Air Lease Corporation on leases for three B787-9s with delivery in 202542Firm order of 45 B787-9s equipped with GE Aerospace engines and additional 35 B787-9s on option;deliveries are expe
126、cted to start in 2027 and Thai has the flexibility to change the order(partially)to B787-8s or B787-10s43Potential aircraft type phase-out in the mid-term44A330 fleet as the only three aircraft in the current fleet(two used will join shortly on a lease;lease term unknown)are about 15 years old B777-
127、200ER fleet(five aircraft)being 16 to 17 years of age 37 Thai Airways International PCL:“Managements Discussion and Analysis for year 2023 ended December 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“38 Cirium:“Thai Airways International Fleet Summary”;2nd Februa
128、ry 2024 39 Cirium:“SNAPSHOT:Thai Airways poised for widebody fleet renewal”;16th February 2024 40 AerCap:“AerCap announces lease agreements with Thai Airways for four Airbus A350-900 aircraft,three Boeing 787-9 aircraft and ten Airbus A321NEO aircraft;21st February 2024 41 Cirium:“Thai Airways to le
129、ase two A330-300s from CDB Aviation”;3rd January 2024 42 Cirium:“ALC places three new 787-9s with Thai Airways International”;27th February 2024 43 Thai Airways International PCL:“THAI Strengthens Fleet Efficiency by Adding Boeing 787 Dreamliners Powered by GEnx Engines”;20th February 2024 44 Cirium
130、:“SNAPSHOT:Thai Airways poised for widebody fleet renewal”;16th February 2024 29%25%23%9%7%4%3%THAISS TOTAL OPERATING FLEET PER AIRCRAFT TYPEA320777-300A350-900787-8777-200A330-300787-9DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202318
131、PageASSET MANAGERS REPORT(CONTINUED)Outlook&Opportunities post-Covid-19 pandemic Additional destinations to be resumed in spring/summer 2024:Perth,Colombo,Milan and Oslo and frequencies on popular routes will be increased 45Thai Airways plans to codeshare with low-cost airline Nok Air to enlarge its
132、 domestic network once Nok Air opens a base at Bangkok Suvarnabhumi Airport;expected for the second half of 202446Eight start-up airlines had been granted an AOC in 2023,including cargo airlines,operators of less than 20-seat aircraft as well as competing airlines such as Really Cool Airlines;howeve
133、r,it remains uncertain if all of them will start operations47Passenger numbers at Thailands Airports in 2023 only recovered to about 75%of pre-pandemic levels leaving room for further growth48The Airports of Thailand announced to invest THB 97 billion(approx.USD 2.72 billion49)in the expansion of si
134、x major international Thai Airports,including Bangkok Suvarnabhumi,within the next six years50The Thai Government decided on a permanent visa-exemption for Chinese tourists51Analysts are not aligned if Thailands passenger numbers will fully recover in 2024 as this strongly depends on tourism,especia
135、lly on Chinese tourists numbers which are currently impacted by a weak Chinese economy52Comments&conclusions Thai Airways is dependent on the tourism sector,particularly on in-bound tourism and contingent on any decision made by the Government to soften travel restrictions.Consequently,the visa-exem
136、ption for Chinese travellers might be welcome to support the airlines growth of passengers,revenues and operational income.The airlines move to fully integrate the subsidiary Thai Smile is expected to offer a more consistent brand identity and to allow Thai Airways to switch more easily narrow-and w
137、idebody aircraft on domestic and regional routes due to seasonality and overall demand.Therefore,it makes sense that the Business Class comfort of the former A320 Thai Smile Fleet will be enhanced to offer a consistent product within its fleet.However,it will be interesting to see if increased fleet
138、 flexibility and synergy effects will succeed to counterbalance the parent companys higher aircraft operating costs.45 Thai Airways International PCL:“Managements Discussion and Analysis for year 2023 ended December 31,2023,for Thai Airways International Public Company Limited and Its Subsidiaries“4
139、6 ch-aviation:“Thailands Nok Air firms Suvarnabhumi base for 2H24”;6th February 2024 47Cirium:“ANALYSIS:Can Thailand recoup lost ground after the pandemic?”;5th February 2023 48 ISHKA:Thai Airways and Thai AirAsia seize demand recovery as rival Nok Air lags behind”;5th February 2024 49 Exchange rate
140、 as at 6th February 2024 50 The Nation Thailand:“AOT earmarks 97 billion baht to expand 6 airports in the next 6 years”;26th November 2023 51 Thai Airways International PCL:“Managements Discussion and Analysis for year 2023 ended December 31,2023,for Thai Airways International Public Company Limited
141、 and Its Subsidiaries“52 Cirium:“ANALYSIS:Can Thailand recoup lost ground after the pandemic?”;5th February 2023 DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202319PageASSET MANAGERS REPORT(CONTINUED)Outlook&Opportunities post-Covid-19
142、pandemic(Continued)Comments&conclusions(Continued)Thais order of B787s demonstrates that this aircraft type is of significance in the carriers long term fleet strategy.The decision for engines from GE is not a big surprise as Thai has publicly mentioned not to be happy with Rolls-Royces pricing stra
143、tegy53 and Rolls-Royce engine shop capacity is limited.It is not completely uncommon to operate one aircraft family with engines from different manufacturers.Emirates operates its A380 fleet with two different engine types and LATAM recently ordered B787s equipped with GE engines despite operating i
144、ts current B787s fleet with Rolls-Royce engines.Taking into account that not all aircraft joining the fleet over the next ten years are dedicated for growth but also for replacement of older aircraft puts the growth rate into perspective.Nevertheless,Thai will need to demonstrate that their aircraft
145、 orders are not bringing more seat capacity into the market than the airline will be able to profitably utilise.The 2023 financial results look promising,and Thai intends to exit Rehabilitation earlier than originally forecasted.Though,the carrier will have to prove profitability in the long-term al
146、lowing for potential new market entrants and a flattening passenger growth after pre-pandemic levels have been reached.The recovery in the Asia Pacific region could also attract new airline launches aiming to benefit from a recovering market.Potentially,in times of delivery and aircraft shortages,th
147、e winners will be those who successfully manage to receive additional aircraft at the time of market need.THE ASSETS Update Boeing 78754313 Boeing 787s were ordered in 2023;including 14 of the B787-8 variant 73 B787s were delivered in 2023,including ten B787-8s The orderbook showed 797 backlogs of t
148、he Dreamliner,including 43 of the B787-8 variant(as at 27thFebruary 2024)Boeing intends to increase the monthly B787 production rate to ten aircraft in 2025;the current rate was at five per month as at the end of 202355Seven B787 aircraft,all of them of the B787-8s variant,were published for remarke
149、ting as at March 20245653 Bangkok Post:“THAI baulks at Rolls-Royce engine prices”;9th November 2023 54 Boeing Commercial Airplanes:Orders and Deliveries as per 27th February 2024 55 Flight Global:“Boeing moves forward with plan to bump up 737 and 787 production rates”;26th July 2023/Reuter:“Boeing e
150、xecs stand by 2025-26 financial guidance;near-term focus is safety”;1st February 2024 56 ISHKA:“Remarketing Watch Data Sheet:March 2024”;5th March 2024 in service52%on order35%on option12%storageGLOBAL B787 FLEETDP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year e
151、nded 31 December 2023202320PageASSET MANAGERS REPORT(CONTINUED)THE ASSETS(Continued)Update Boeing 78757(Continued)Source:Cirium:“Fleet Analyzer”;28th February 2024 27%of delivered and ordered B787s are powered by Rolls-Royce compared to a market share of 33%in 202258Rolls-Royce is going to invest GB
152、P 1 million in the improvement of existing products,including the Trent 1000 engine(powering B787s)59Latest transactions:oNovember 2023:Credit Agricole closed a finance lease of one B787-9 operated by Vistara60oDecember 2023 First delivery of one B787-9 to a Chinese airline after two years61Order of
153、 five B787s powered with GE-engines by LATAM62Air Europe took delivery of one B787-9 leased from AerCap63o2023:Lessor AerCap bought three B787-9s to be hold in their own portfolio64oJanuary 2024:Air Japan(Low-Cost-Carrier newly launched by ANA)received its first B787-8(formerly operated by ANA)65oFe
154、bruary 2024 Royal Brunei ordered four B787-9s with deliveries starting in 202866Thai Airways ordered 45 B787-9s plus 35 Dreamliner on option67Hawaiians first Dreamliner(B787-9)will be financed by the Lessor Jackson Square Aviation68oOne B787-9 had been delivered to Turkish Airlines by AerCap69oMarch
155、 2024:Oman Air intends to sell its only two B787-8s and keep its B787-9s a part of their restructuring7057 Boeing Commercial Airplanes:Orders and Deliveries as per 27th February 2024 58 Cirium:“Rolls-Royce homes in on durability improvements”;23rd February 2024 59 Cirium:“Rolls-Royce homes in on dur
156、ability improvements”;23rd February 2024 60 Cirium:“Credit Agricole arranges Vistara 787 finance lease”;30th November 2023 61 Cirium:“Juneyao breaks Chinese 787 delivery drought”;22nd December 2023 62 Cirium:“LATAM switches to GEnx engines for new order of five 787s”;20th December 2023 63 ISHKA:“Les
157、sor order books:Avolon moves to head of the pack with 140-strong December narrowbody orders”;22ndJanuary 2024 64 Cirium:“AerCap sells 20 aircraft in fourth quarter”;4th January 2024 65 ch-Aviation:“AirJapan takes first B787-8;launches”;12th February 2024 66 Cirium:“Royal Brunei orders four 787-9s”;2
158、0th February 2024 67 Thai Airways International PCL:“THAI Strengthens Fleet Efficiency by Adding Boeing 787 Dreamliners Powered by GEnx Engines”;20th February 2024 68 Cirium:“Jackson Square finances Hawaiian Airlines first 787-9”;22nd February 2024 69 Cirium:“DEALS REPORT:What to do with an A330 as
159、a regional lessor”;23rd February 2024 70 Cirium:“Oman Air selling widebodies:sources”;8th March 2024 DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202321PageASSET MANAGERS REPORT(CONTINUED)Assets&OperationsOverview Both aircraft,HS-TQC a
160、nd HS-TQD,are based at Bangkok International Airport and operated by Thai Airways.HS-TQC is in regular commercial service.The utilisation of TQC and TQD as well as their respective titled engines is shown in the following tables:Engine ESN 10243 was removed due to IPC Stage 8 blade damage found and
161、inducted into shop at the SAESL facility in Singapore on 31st January 2024.Moreover,during replacing engine ESN 10240 with ESN 10243,it was contractually agreed with Thai Airways that the AD(Airworthiness Directives)-2019-0286 would be included in the work scope of the next shop visit of ESN 10243.O
162、n 27th October 2023,the C3-check of HS-TQC was completed at the maintenance facilities at Don Muang Airport(Bangkok,Thailand).On 21st December 2023,the annual inspection of HS-TQC has been performed at Bangkok Suvarnabhumi Airport.The aircraft was undergoing an A-check at this time.No major issues h
163、ad been found.The aircraft is airworthy and currently in regular commercial operation with Thai Airways.The C3-Check of HS-TQD was completed on 15th March 2024 at the maintenance facilities at Don Muang Airport(Bangkok,Thailand)AIRCRAFT OPERATIONSThai AirwaysHS-TQCHS-TQDCabin Layout24 Business Class
164、 Seats240 Economy Class Seats LAST PHYSICAL INSPECTIONDate 21stDecember 20233rdFebruary 2023PlaceBangkok Airport(BKK)AIRFRAME STATUS(29thFebruary 2024)Total Flight Hours24,31322,166Average Monthly Utilisation Since Delivery FH217200Total Flight Cycles5,7025,144Average Monthly Utilisation Since Deliv
165、ery FC5146Hours/Cycles Ratio Since Delivery4.264.31TITLED ENGINES(29th February 2024)HS-TQCHS-TQD ESN 10239 ESN 10243ESN 10244ESN 10248Total Time Flight Hours22,73516,64518,96721,431Total Flight Cycles5,3223,4824,6404,632LocationOn-wingIn-shop at SAESL for repair HS-TQEOn-wingDP AIRCRAFT I LIMITED A
166、NNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202322PageASSET MANAGERS REPORT(CONTINUED)Snapshot:Destinations of HS-TQC and HS-TQD in December 2023 DestinationAverage Flight TimeFrequency TQCFrequency TQD*Bangalore,India3:181-Chitose,Japan6:3211Delhi,India3:38
167、11Denpasar,Indonesia3:4411Dhaka,Bangladesh2:0631Hanoi,Vietnam1:4632Hyderabad,India3:018-Islamabad,Pakistan4:26-2Istanbul,Turkey9:182-Jakarta,Indonesia2:5383Karachi,Pakistan4:28-1Kuala Lumpur,Malaysia1:4611Lahore,Pakistan4:0621Madras,India2:56-1Manila,Philippines2:5552Mumbai,India4:1241Rangoon,Myanma
168、r1:1321Saigon,Vietnam1:30-1Singapore,Singapore2:0072*Less frequencies compared to HS-TQC due to the C3-Check starting 13 December 2023 Source:Flightaware DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202323PageASSET MANAGERS REPORT(CONTI
169、NUED)Asset Managers actions ensure asset value Regular monitoring is the top priority for DS Aviation as DP Aircrafts Asset Manager to make sure that the Lessee is keeping the aircraft in the best condition per the manufacturers and Lessors requirements.Therefore,both aircraft are inspected regularl
170、y by DS Aviations technical staff or on-site representatives.As previously reported,HS-TQD was lastly inspected in February 2023 at Bangkok International Airport.The next annual inspection will be scheduled in due course.Aircraft HS-TQC was inspected December 2023 at Bangkok International Airport by
171、 DS Aviations on-site representative.Considering the past,it is essential to monitor the Lessees activities including both aircraft and its overall activities.Additionally,it is important to ensure a prompt exchange of updated information.Because of this,DS Aviation continues to have an on-demand co
172、ntract with the on-site service provider.Their expertise and workforce are available whenever the circumstance calls for it,ensuring prompt and efficient support on the spot.Comments and Conclusions The challenges for the manufacturers and airlines to deal with bottlenecks and quality issues remain.
173、The procurement of metals and parts take up to five times longer than in 2019.71 Airbuss supply chain management had been increased by 150%and engineers sent out to critical supplier facilities.72 Therefore,many airlines are not able to grow as quickly as intended.If a carrier is in the favourable p
174、osition to extend leases,reactivate stored aircraft or push back the phase-out of older aircraft,it might overcome the current bottlenecks.But this might cause new issues as airlines might then not be able to meet given or self-proclaimed standards of sustainability.The significance of sustainabilit
175、y is growing,not only in the population but also in statutory provisions.And delaying the change to a more environmentally friendly fleet might result in additional costs.The latest B787 transactions show that this aircraft is still a liquid asset and well accepted by airlines.On the engine side,Rol
176、ls-Royce pays for their reliability issues,particularly with the Trent 1000 engines where the manufacturer lost market shares.Both Thai and LATAM,operating their current B787 fleet with Roll-Royce engines,decided on the GE engine option regarding their latest orders.Rolls-Royce needs to make huge ef
177、forts to regain the airlines trust and generate orders.Nevertheless,the Dreamliner B787 is of the latest technology and seems to be well-positioned for the near and mid-term future.However,it remains important to closely watch the market and monitor the assets condition.71 Reuters:“Supply chain stra
178、ins set to weigh on aviation industry bounce-back”;23rd February 2024 72 Forbes:Airbus CEO On World Of Bottlenecks In Supply,Spirit AeroSystems”;16th February 2024 DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202324PageDIRECTORS Jonatha
179、n(Jon)Bridel,Non-Executive Chairman(59),appointed 10 July 2013 Jon is a Guernsey resident and is currently a non-executive director of Fair Oaks Income Fund Limited.Jon was previously managing director of Royal Bank of Canadas(RBC)investment businesses in the Channel Islands and served as a director
180、 on other RBC companies including RBC Regent Fund Managers Limited.Prior to joining RBC,Jon served in a number of senior management positions in banking,specialising in credit and corporate finance and private businesses as Chief Financial Officer in London,Australia and Guernsey having previously w
181、orked at Price Waterhouse Corporate Finance in London.Jon graduated from the University of Durham with a degree of Master of Business Administration,holds qualifications from the Institute of Chartered Accountants in England and Wales(1987)where he is a Fellow,the Chartered Institute of Marketing an
182、d the Australian Institute of Company Directors.Jon is a Chartered Marketer and a Member of the Chartered Institute of Marketing,a Chartered Director and Fellow of the Institute of Directors and a Chartered Fellow of the Chartered Institute for Securities and Investment.Jeremy Thompson,Non-Executive
183、 Director(68),appointed 10 July 2013 Jeremy Thompson is a Guernsey resident.He acts as a non-executive director to a number of businesses which include three private equity funds,an investment manager serving the listed NextEnergy Solar Fund Limited and London listed Riverstone Energy Limited.Prior
184、to that he was CEO of four autonomous global businesses within Cable&Wireless PLC and earlier held CEO roles within the Dowty Group.Jeremy currently serves as chairman of the States of Guernsey Renewable Energy Team and is a commissioner of the Alderney Gambling Control Commission.He is also an inde
185、pendent member of the Guernsey Tax Tribunal panel.Jeremy is an engineering graduate of Brunel(B.Sc)and Cranfield(MBA)Universities and attended the UKs senior defence course(Royal College of Defence Studies).He holds the Institute of Directors(IoD)Certificate and Diploma in Company Direction and is a
186、n associate of the Chartered Institute of Arbitration.He completed an M.Sc in Corporate Governance in 2016 and qualified as a Chartered Company Secretary in 2017.Harald Brauns,Non-Executive Director(70),appointed 1 November 2019 Harald is a German banker with extensive experience in the specialised
187、lending sector.He joined NORD/LB Hannover,Germany in 1977 with a first engagement in the shipping segment.In 1985 he started the aircraft finance activities for the bank from scratch.As the Global Head of Aircraft Finance,he built successively a team of more than 40 dedicated aviation experts locate
188、d in Hannover,New York and Singapore.Focused on an asset-based business model with sophisticated solutions for selected clients,he and his team advanced to global leaders in commercial aircraft finance with an exposure of well above US$10 billion split over a portfolio of 650 aircraft assets.After m
189、ore than 35 years in the aviation industry Harald retired in October 2019.He is resident in Germany and was appointed as a director of the Company with effect from 1 November 2019.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202325PageD
190、IRECTORS REPORT The Directors present their Annual Report and Audited Consolidated Financial Statements for DP Aircraft I Limited for the year ended 31 December 2023.Principal Activity and Review of the BusinessThe Companys principal activity is to purchase,lease and then sell two Boeing 787-8 Aircr
191、aft(the Assets).The Company wholly owns two subsidiary entities,DP Aircraft Guernsey III Limited and DP Aircraft Guernsey IV Limited(collectively and hereinafter,the Borrowers),each being a Guernsey incorporated company limited by shares and one intermediate lessor company,DP Aircraft UK Limited(the
192、 Lessor),a UK incorporated private limited company.The Company and its consolidated subsidiaries,DP Aircraft Guernsey III Limited,DP Aircraft Guernsey IV Limited and DP Aircraft UK Limited comprise the consolidated Group(the Group).The investment objective of the Group is to obtain income and capita
193、l returns for the Companys shareholders by acquiring,leasing and then,when the Board considers it appropriate,selling the Assets.The Company has made its investments in the Assets through its subsidiaries.The Ordinary Shares of the Company are currently trading on the Specialist Fund Segment of the
194、London Stock Exchange.Notwithstanding the requirement for the aircraft to be parked in the past due to Trent 1000 issues there are no incidents to bring to the attention of Shareholders concerning the operation of the Thai aircraft.Inspections have revealed no matters of concern.The aircraft have be
195、en operational for all of 2023 year and are currently in regular commercial use with the exception of regular mandated C checks where the aircraft are thoroughly checked.Such checks are a functions of flight hours flown.It should be noted that the Company receives full lease payments during such che
196、cks.Rolls Royce are continuing to address the Trent 1000 engine warranty related issues which have not impacted the Company.A more detailed review of the business and prospects is contained in detail in the Asset Managers Report on pages 11 to 23.Results and DividendsFor the year ended 31 December 2
197、023 the Group made a loss of US$2,505,687(2022:US$7,660,823).The results for the year ended 31 December 2023 are mainly driven by rental income earned of US$8,714,249(2022:US$16,462,372)and finance costs incurred of US$9,551,675(2022:US$4,860,305).The increase of finance costs is a result of an adju
198、stment required by IFRS to reflect the modification to the loan terms in February 2023.The modification adjustment for the modification to the loans in February 2023 totalled US$5,042,029 and increased both finance costs and the loans payable at the point of modification and resulted in an overall l
199、oss for the period.This adjustment essentially recognises a loss now due to the less favourable terms(primarily interest rate increases)under the modified terms compared to the original terms.As a result of this adjustment,interest will be recognised at the lower original effective interest rate as
200、opposed to the higher modified interest rate going forward.The decrease in rent was due to the variable rent period ending on 31 December 2022.For the period to 31 December 2023,the entity only earned fixed rental income.As a result,the group reported loss during the period ended 31 December 2023,se
201、e page 49 for full results for the year.Historically,under normal circumstances,the Company aimed to provide Shareholders with an attractive total return comprising income,from distributions through the period of the Companys ownership of the Assets,and capital,upon any sale of the Assets.The Compan
202、y targeted a quarterly distribution in February,May,August and November of each year.The target distribution was US$0.0225 per share per quarter.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202326PageDIRECTORS REPORT(CONTINUED)On 3 Apri
203、l 2020,the Company announced a suspension of dividends until further notice due to the impact of Covid-19 in global aviation and especially with long haul operations.The suspension is continuing and as noted in Summary report on pages 4 to 6,there is no realistic prospect of the Companys shareholder
204、s receiving a dividend or any other distribution.Subsequent Events Refer to note 23 for further details regarding Subsequent Events.DirectorsThe Independent Directors of the Company,who served during the year and to date,are as shown below:Jonathan Bridel;Jeremy Thompson;and Harald Brauns.Directors
205、Interests The Directors interests in the shares of the Company as at 31 December 2023 are set out below and there have been no changes in such interests up to the current date:Number of ordinary shares 31 December 2023 Number ofordinary shares 31 December 2022 Connected parties of Jon Bridel90,00090
206、,000Jeremy Thompson15,00015,000Harald Brauns-Principal Risks and Uncertainties The Statement of Principal Risks and Uncertainties are as described on pages 38 to 40.Substantial Shareholdings The Directors note the following substantial interests in the Companys share capital as at 31 December 2023(1
207、0%and more shareholding):oM&G Investments 59,533,421 shares 24.87%oIronsides Partners 53,082,972 shares 22.18%As at the date of this report there have been no significant changes in the above list of substantial shareholdings.The BoardThe Board consists of three directors,all of whom are non-executi
208、ve.Mr Bridel and Mr Thompson satisfy all the criteria for assessing director independence set out by the Association of Investment Companies(AIC)and adopted by the Board.Although they have served on the Board for over ten years,it is the opinion of the other member of the Board that they both contin
209、ue to demonstrate objective and independent thought processes during Board meetings and in their dealings with the Asset Manager,and therefore consider them both to be independent,despite their long service.Jeremy Thompson was appointed as Senior Independent Director(the SID)on 1 April 2016.During t
210、he year ended 31 December 2023 the Board had a breadth of experience relevant to the Company and a balance of skills and experience.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202327PageDIRECTORS REPORT(CONTINUED)The Board recognises t
211、he importance of diversity and will evaluate applicants to fill any vacant positions regardless of gender and without prejudice.Applicants will be assessed on their broad range of skills,expertise and industry knowledge,and business and other expertise.In view of the long-term nature of the Companys
212、 investments,the Board believes that a stable board composition is fundamental to run the Company.The Board has not stipulated a maximum term of any directorship.Board Independence and Disclosure The Board is composed entirely of independent Directors,who meet as required without the presence of the
213、 Asset Manager or service providers to scrutinise the achievement of agreed goals,objectives and monitor performance.Through the Audit Committee and the Management Engagement Committee they are able to ascertain the integrity of financial information and confirm that all financial controls and risk
214、management systems are robust and analyse the performance of the Asset Manager and other service providers on a regular basis.The Directors have challenged the Asset Manager throughout the year under review and for the purposes of assessing compliance with the AIC Code,the Board as a whole considers
215、 that each Director is independent of the Asset Manager and free from any business or other relationship that could materially interfere with the exercise of their independent judgment.If required,the Board is able to access independent professional advice.Open communication between the Asset Manage
216、r and the Board is facilitated by regular Board meetings,to which the Asset Manager is invited to attend and update the Board on the current status of the Companys aircraft,along with ad hoc meetings as required.The Board has been actively engaged in negotiating revised agreements with its lending g
217、roup and Thai.Jon Bridel and Jeremy Thompson have served for ten years and together with Harald Brauns have acted independently and in the best interests of the Company.The Board is now focused on using its experience to work with the Asset Manager to maximise value for shareholders.Directors As the
218、 Company is not a FTSE 350 company,Directors were not subject to annual election by the shareholders nor for the requirement for the external audit contract to be put out to tender every 10 years.Historically,the Directors had offered themselves by rotation for re-election at each annual general mee
219、ting(AGM).Harald Braun was re-elected at the AGM on 19 September 2023.Jeremy Thompson is offering himself for re-election at the forthcoming AGM.The Directors are on a termination notice of three months.Directors Duties and ResponsibilitiesThe Board of Directors has overall responsibility for the Co
220、mpanys affairs and is responsible for the determination of the investment policy of the Company,resolving conflicts and for monitoring the overall portfolio of investments of the Company.To assist the Board in the day-to-day operations of the Company,arrangements have been put in place for the perfo
221、rmance of certain of the day-to-day operations of the Company to third-party service providers,such as the Asset Manager,Administrator and Company Secretary,under the supervision of the Board.The Board receives full details of the Companys assets,liabilities and other relevant information in advance
222、 of Board meetings.The Board undertakes an annual evaluation of its own performance and the performance of its audit committee and individual Directors.This is to ensure that they continue to act effectively and efficiently and to fulfil their respective duties,and to identify any training requireme
223、nts.The results of the most recent evaluation have been reviewed by the Chairman and his fellow Directors.No significant corporate governance issues arose from this review.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202328PageDIRECTORS
224、 REPORT(CONTINUED)Directors Duties and Responsibilities(continued)The Board also undertakes an annual review of the effectiveness of the Companys system of internal controls and the safeguarding of shareholders investments and the Companys assets.A Management Engagement Committee,chaired by Harald B
225、rauns has been established to further this safeguarding.At each quarterly meeting the Audit and Risk Committee reviews a risk matrix.Issues identified as a result of this review are discussed and action plans put in place as is necessary.There is nothing to highlight from the reviews of these report
226、s as at the date of this report.Board MeetingsThe Board meets at least four times a year to consider the business and affairs of the Company for the previous quarter.Between these quarterly meetings the Board keeps in regular contact by email and video calls as well as meeting to consider specific m
227、atters of a transactional nature.There is regular contact with the Secretary and administrator.The Directors are kept fully informed of investment and financial controls and other matters that are relevant to the business of the Company.The Directors also have access,where necessary in the furtheran
228、ce of their duties,to professional advice at the expense of the Company.The Board considers agenda items laid out in the Notice and Agenda which are formally circulated to the Board in advance of any meeting as part of the board papers.Such items include but are not limited to;investment performance
229、,share price performance,review of marketing and shareholder communication.The Directors may request any agenda items to be added that they consider appropriate for Board discussion.In addition,each Director is required to inform the Board of any potential or actual conflict of interest prior to Boa
230、rd discussion.Board meetings are attended by representatives of the Asset Manager.The Companys corporate brokers also attend to assist the Directors in understanding the views of major shareholders about the Company.Board Meeting attendance The table below shows the attendance at Board meetings and
231、Audit Committee meetings during the year.DirectorNo of board meetings attendedNo of audit committee meetings attendedJonathan Bridel54Jeremy Thompson54Harald Brauns54No.of meetings during the year54The Directors also attended committee meetings for the Management Engagement Committee meeting in addi
232、tion to the regular quarterly meetings as shown in the above table and the Chairman attended further meetings with various stakeholders and on management related matters.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202329PageDIRECTORS R
233、EPORT(CONTINUED)Directors Remuneration The remuneration of the non-executive Directors is reviewed on an annual basis and compared with the level of remuneration for directorships of funds with similar responsibilities and commitments.Base annual fees are as follows:Annual FeesJan 23 to Dec 23Oct 22
234、 to Dec 22Jan 22 to Sept 22Jonathan Bridel61,75061,75066,000Jeremy Thompson 49,45049,45053,700Harald Brauns 49,45049,45053,800In 2021,in recognition of the extra services performed by the Directors and the significant increase of committed time during 2021 due to the Groups circumstances,the Board h
235、ad earned extra fees of 65,000 which were not paid in cash but deferred to be possibly settled by the issue of shares.This is included in note 13 as part of the Directors fees payable.No additional fees were earned by the Board during the 2023 financial period.On 1 October 2022,the Director fees wer
236、e reduced by 10%which was the portion being deferred and possibly payable in shares.During the current and prior year each Director received the following remuneration in the form of Directors fees from Group companies:Year endedYear ended31 December 202331 December 2022US$equivalentUS$equivalentJon
237、athan Bridel(Chairman)61,75078,60864,93780,701Jeremy Thompson(Audit Committee Chairman)49,45062,95052,63765,503Harald Brauns(Management Engagement Committee Chairman)49,45062,95048,22960,064160,650204,508165,803206,268Up to 30 September 2022,10%of base fees and all extra fees were not paid by way of
238、 cash payments but were deferred to be settled in the future or to be paid by way of equity.There has been no settlement of director remuneration via the issue of equity in the current year(2022:nil)and the deferred fees remain outstanding as at 31 December 2023(see note 13).There are no executive d
239、irector service contracts in issue.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202330PageDIRECTORS REPORT(CONTINUED)Remuneration Policy All Directors of the Company are non-executive and therefore there are no incentive or performance
240、schemes.Each directors appointment is subject to an appointment letter and article 24 of the Companys articles of association.Base remuneration is paid monthly in arrears and reflects the experience,responsibility,time,commitment and position on the main board as well as responsibility for sitting o
241、n subsidiary boards when required.The Chairman,Audit Chairman(SID)and other committee Chairman may receive additional remuneration to reflect the increased level of responsibility and accountability.The maximum amount of directors fees payable by the Company in any one year is currently set at 200,0
242、00 in accordance with article 24.Remuneration may if deemed appropriate also be payable for special or extra services if required in accordance with article 24.This is defined as work undertaken in connection with a corporate transaction including a new prospectus to acquire,finance and lease an air
243、craft and/or engines,managing a default,refinancing,sale or re-lease of aircraft and for defending a takeover bid.This may include reasonable travel time if applicable.The Board may appoint an independent consultant to review fees if it is considered an above inflation rise may be appropriate.Intern
244、al Controls and Risk Management ReviewThe Board is responsible for the Companys 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 Company.The Board carries ou
245、t an annual review of internal controls including those of the administrator.The internal control systems are designed to meet the Companys 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
246、to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.The Directors of the Company clearly define the duties and responsibilities of their agents and advisors.The appointment of agents and advisers is conducted by the
247、Board after consideration of the quality of the parties involved and the Board monitors their ongoing performance and contractual arrangements.Each service provider is reviewed annually,and key risks and operating matters are addressed as part of that review.Dialogue with ShareholdersAll holders of
248、shares in the Company have the right to receive notice of,and attend,all general meetings of the Company,during which the Directors are available to discuss issues affecting the Company.The Directors are available to enter into dialogue with shareholders and make themselves available for such purpos
249、e when reasonably required.The Company believes such communications to be important.Reports are provided to the Board of Directors on shareholders views about the Company and any issues or concerns they might have.Board Policy on Tenure and IndependenceThe Board has not yet formed a policy on tenure
250、.However,it does consider the independence of each director on an annual basis during the performance evaluation process.All Directors are considered independent.AuditorIn order to align the Companys auditing arrangements with the location of its business,the Board have changed the KPMG entity which
251、 undertakes the Companys audit during the year.As a consequence,KPMG Channel Islands Limited has assumed the role of independent auditor for the year ended 31 December 2023 and has replaced KPMG Ireland.KPMG Channel Islands Limited have indicated their willingness to continue in office.DP AIRCRAFT I
252、 LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202331PageDIRECTORS REPORT(CONTINUED)Going Concern The Directors believe that it is appropriate to prepare these consolidated financial statements on a going concern basis as the current cash flow forecas
253、ts demonstrate that the Group,with continued deferral of fees,as outlined below,from some service providers,has sufficient cash to cover operating costs for a period of at least twelve months from the signing of the consolidated financial statements(the“going concern period”).Should a plausible down
254、side scenario occur additional finance will be required to provide sufficient funding to fund the Groups activities to cover any negotiations with the lenders as further detailed below.In this respect the Company believes it is therefore prudent to raise additional capital in Q3 2024.The Board will
255、consult with its broker regarding a proposed capital raise and its uptake.However,the outcome is currently uncertain.The Board therefore concludes that to sufficiently cover off all going concern scenarios,there is a material uncertainty,however it remains appropriate to prepare the financial statem
256、ents on a going concern basis.In making this conclusion,the Board have taken into consideration:that Thai Airways have made monthly fixed lease rental payments on time and in full from the start of the revised fixed rental period commencing in January 2023.Further that Thai have reported a consisten
257、t return to profitability and have projected that they will exit their formal rehabilitation Period in Q4 2024;that given Thai Airways improved performance the Company will continue to receive US$35,000 per aircraft per month as a contribution towards its operating costs with the rest going towards
258、the pay down of the Groups outstanding loan arrangements;the continued deferral of some fees by the Board,the Asset Manager and the Broker as noted in note 13;successfully raising up to US$1m in Q3 2024 to allow the Group to trade beyond the going concern period to facilitate negotiating(i)an extens
259、ion to the current loan maturities beyond the expiring loan terms in Q4 2026 with the Lenders,and(ii)an enhancement of the terms and conditions of the leases with Thai Airways,noting that negotiations with the lenders will commence in late 2024;and as a matter of prudence,the Company will need to co
260、nsider costs associated with the winding up of the Group should it be required.Viability Statement As with previous reports the Directors regularly assess the viability of the Group with respect to the impact of potential risks the Group faces and the Groups current position.In February 2023,the Gro
261、up and DekaBank entered into Second Amendment and Restatement to the Loan Agreements in which the parties agreed to new repayment schedules for the loans in place.Under the revised repayment schedules,monthly payments of fixed interest and principal will be limited to net lease rental monies availab
262、le for application towards the loans of US$475,000 per loan and the final balloon repayments will be settled out of proceeds from sale of the aircraft at the end of the lease term.These new repayment terms are aligned with the lease agreements in place.The PBH period on the Thai Airways leases expir
263、ed on 31 December 2022 and now the Group is receiving fixed monthly rental payments of US$510,000 per aircraft.This is in line with the amended lease agreements finalised and signed on 1 April 2022.US$35,000 per aircraft of the fixed monthly rental payments will be retained by the Group to contribut
264、e to ongoing fixed costs,the remainder will be used to cover principal and fixed interest payable on the DekaBank loans per above.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202332PageDIRECTORS REPORT(CONTINUED)Viability Statement(cont
265、inued)Both aircraft have been operational for the 2023 year and are currently in regular commercial use.With both aircraft operational,this not only means the aircraft are earning revenue,but it also means that if Thai were to default,the aircraft are in flightworthy condition.Thai Airways,at the en
266、d of the lease term,have an obligation to return the aircraft in full life condition.This is either by undertaking all the work themselves to do this or provide the lessor with the equivalent cash to undertake the work required.The viability and therefore continuation of the Group looks positive sav
267、e any major,likely force majeure,scenarios.The Company is though dependent on contracted lease payments paid on time and in full.Mindful of the significant challenges which could still impact the airline industry,Thai Airways in particular and the Company,the Company has extended its viability perio
268、d to June 2025 assuming Thai Airways continue to meet its lease payment obligations and certain service providers(Asset Manager,Broker and Directors)continue to defer some of their fees as agreed.The Board also proposes an additional capital raise in 2024 as stated in going concern section on page 3
269、1.The Group is required to present a plan for refinancing or similar to the lenders before the expiry of the current loan facilities in the last quarter of 2026.The Directors are currently assessing this keeping in mind that they have to act in the best interest of the Group.Continuing and foremost
270、amongst the near-term risks faced by the Group,is the successful emergence from restructuring of Thai Airways and the recovery from Covid related restrictions to Thais tourist economy.So far,the news from Thai Airways has been positive.The Directors note that whilst they believe that Thai Airways is
271、 currently in a good position to exit rehabilitation,there is no guarantee of this.The Directors continue to monitor the developments of the rehabilitation process and the impact on the Group.The Directors regularly consider and assess the viability of the Company and take into account the Companys
272、current position and the potential impact of the principal risks outlined below.The Directors have considered the impact of the Russian invasion of Ukraine on the Group and other emerging conflicts and have concluded that to date there has been no material impact on the operations of the Group save
273、for indirect impacts such as rising fuel costs.Of note is that the Companys aircraft currently operate in the Indo-Pacific region where there are at present no overfly or other restrictions.The Directors continue to consider that an investment in the Company should be regarded as long term in nature
274、 and is suitable only for sophisticated investors,investment professionals,high net worth bodies corporate,unincorporated associations and partnerships and trustees of high value trusts and private clients(all of whom will invest through brokers),in each case,who can bear the economic risk of a subs
275、tantial or entire loss of their investment and who can accept that there may be limited liquidity in the shares.The Directors consider that the Notes to the Financial Statements are integral to the support of the Viability Statement.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANC
276、IAL STATEMENTS Year ended 31 December 2023202333PageDIRECTORS REPORT(CONTINUED)Annual General MeetingThe next AGM of the Company will be held in Guernsey at a date that will be communicated in the future at East Wing,Trafalgar Court,Les Banques,St Peter Port,Guernsey.The meeting will be held to,inte
277、r alia;receive the Annual Report and Audited Consolidated Financial Statements;elect and re-elect Directors;propose the reappointment of the auditor;authorise the Directors to determine the auditors remuneration;approve the Directors remuneration policy;authorise the Company to issue and allot new s
278、hares and approve a partial disapplication of the pre-emption rights to allow the Company to issue new shares by way of tap issues.Shareholders are encouraged to vote in advance by proxy.The formal notice of AGM will be issued to shareholders in due course.The Board continues to welcome engagement w
279、ith its shareholders and those who have questions relating directly to the business of the AGM can forward their questions to the Company Secretary by email to DPAaztecgroup.co.uk by no later than one week before the AGM.A Q&A reflecting the questions received and responses provided will be made ava
280、ilable on the Companys website at as soon as practicable following the AGM.On 19 September 2023 at the Companys last AGM,the following percentages of total votes cast were cast against resolutions:o32.16%against resolution 2,(to approve the re-election of Harald Brauns);o36.65%against resolution 4,(
281、to approve the Directors remuneration report);o73.21%against resolution 5,(to approve the Directors remuneration policy);o32.27%against resolution 7,(to authorise Directors to allot and issue up to 10%of ordinary shares in issue);and o32.27%against resolution 8,(to authorise Directors to allot and i
282、ssue a further 10%of ordinary shares in issue).The Company noted it would reflect and continue to consult with shareholders in this respect.The Company has subsequently discussed the matter with shareholders who wished to engage further and following discussions with those shareholders,the matters r
283、aised had been satisfactorily clarified and resolved.The Board is thankful to all shareholders for their continuous support.Corporate Governance The Company is not required to comply with any particular corporate governance codes in the UK or Guernsey,but the Directors take corporate governance seri
284、ously and will have regard to relevant corporate governance standards in determining the Companys governance policies including without limitation in relation to corporate reporting,risk management and internal control procedures.The Directors intend to comply,and ensure that the Company complies,wi
285、th any obligations under the Companies(Guernsey)Law,2008 and the Articles to treat shareholders fairly as between themselves.Directors Share DealingsThe Board has agreed to adopt and implement the Market Abuse Regulation for Directors dealings.The Board will be responsible for taking all proper and
286、reasonable steps to ensure compliance with the Market Abuse Regulation.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202334PageDIRECTORS REPORT(CONTINUED)Board Committees The Board of Directors has established an audit committee,which op
287、erates under detailed terms of reference,copies of which are available on request from the Company Secretary.Details of the Company Secretary are included within the Company information on page 79.The Board have established a Management Engagement Committee which reviewed the performance of the Asse
288、t Manager and the key service providers at least annually and this review includes a consideration of the service providers internal controls,risk management,operational management,information technology and their effectiveness.Alternative Investment Fund Managers Directive(AIFMD)In July 2013 the Eu
289、ropean Alternative Investment Fund Management Directive(AIFMD)came into effect with transitional provisions until July 2014.The Company has been determined to be a self-managed Guernsey Alternative Investment Fund(AIF)and as such will be treated as a non-EU AIFM for the purposes of the Directive.The
290、 Company has registered with the Financial Conduct Authority(and notified the Guernsey Financial Services Commission)under the AIFMD(Marketing)Rules,2013.For a non-EU AIFM that has over EUR 100 million(equivalent to US$107 million at 31 December 2023)of net assets under management and also utilises
291、leverage,certain Annual Investor Disclosures are required.For the purpose of AIFMD,the Company is a Self-Managed Alternative Investment Fund Manager with assets above the EUR 100 million(equivalent to US$107 million at 31 December 2023),with leverage,threshold.AIFMD does not prescribe use of any one
292、 particular accounting standard.However,the financial statements must be audited by an auditor empowered by law to audit the accounts in accordance with the EU Statutory Audit Directive.The required disclosures for investors are contained within the Financial Conduct Authority checklist and the Comp
293、anys compliance therewith can be found in Appendix 1 to these financial statements.Environmental,social and governance(ESG)The Group recognises the Paris Agreement on climate change.The Group operates NTA(New Technology Aircraft);specifically Boeing 787-8s equipped with Rolls Royce Trent-1000 engine
294、s which are 20%more fuel efficient on a revenue-per-kilometre basis than similar comparable current technology legacy aircraft.The Board continue to implement steps to reduce its own travelling and maximises the use of virtual meetings within the Board and with all its key service providers.Jonathan
295、 Bridel Jeremy Thompson Director Director 25 April 2024 25 April 2024 DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202335PageREPORT OF THE AUDIT COMMITTEE On the following pages,we present the Audit Committee(the Committee)Report for 20
296、23,setting out the Committees structure and composition,principal duties and key activities during the year.The Committee has reviewed the Companys financial reporting,the independence and effectiveness of the independent auditor(the auditor)and the internal control and risk management systems of se
297、rvice providers.The Board is satisfied that for the period under review and thereafter the Committee has recent and relevant commercial and financial knowledge sufficient to satisfy the requirements of the Committees remit.Structure and CompositionThe Committee is chaired by Mr Thompson and its othe
298、r members are Mr Bridel and Mr Brauns.The Committee conducts formal meetings not less than three times a year.There were four meetings during the period under review and multiple ad-hoc meetings.All Directors were present and forming part of the quorum.The auditor is invited to attend those meetings
299、 at which the annual and interim reports are considered.Principal DutiesThe role of the Committee includes:Monitoring the integrity of the published financial statements of the Group;Keeping under review the consistency and appropriateness of accounting policies on a year to year basis;Satisfying it
300、self that the annual financial statements,the interim statement of financial results and any other major financial statements issued by the Group follow International Financial Reporting Standards and give a true and fair view of the Group and its subsidiaries affairs;matters raised by the external
301、auditors about any aspect of the financial statements or of the Groups internal control,are appropriately considered and,if necessary,brought to the attention of the Board,for resolution;Monitoring and reviewing the quality and effectiveness of the auditor and their independence;Considering and maki
302、ng recommendations to the Board on the appointment,reappointment,replacement and remuneration of the Groups auditor;Monitoring and reviewing the internal control and risk management systems of the service providers;andConsidering at least once a year whether there is a need for an internal audit fun
303、ction.The complete details of the Committees formal duties and responsibilities are set out in the Committees terms of reference,a copy of which can be obtained from the Secretary.Independent AuditorThe Committee is also the forum through which the auditor reports to the Board of Directors.The Commi
304、ttee reviews the scope and results of the audit,its cost effectiveness and the independence and objectivity of the auditor,with particular regard to the terms under which it is appointed to perform non-audit services including fees.The Committee has established pre-approval policies and procedures f
305、or the engagement of KPMG Channel Islands Limited(KPMG)to provide non-audit services.In order to align the Companys auditing arrangements with the location of its business,the Board have changed the KPMG entity which undertakes the Companys audit during the year.As a consequence,KPMG Channel Islands
306、 Limited has assumed the role of independent auditor for the year ended 31 December 2023 and has replaced KPMG Ireland.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202336PageREPORT OF THE AUDIT COMMITTEE(CONTINUED)Independent AuditorThe
307、 audit fees proposed by the auditor each year are reviewed by the Committee taking into account the Groups structure,operations and other requirements during the year and the Committee make appropriate recommendations to the Board.The Committee considers KPMG Channel Islands Limited to be independen
308、t of the Company.The Committee also met with the external auditors without the Asset Manager or Administrator being present so as to provide a forum to raise any matters of concern in confidence.Evaluations or Assessments made during the yearThe following sections discuss the assessments made by the
309、 Committee during the year:Significant Areas of Focus for the Financial StatementsThe Committees review of the interim and annual financial statements focused on:Valuation of the Companys Assets(more detail in relation to the approach is in note 3);Assessing straight lining lease asset for impairmen
310、t;Considering the accounting treatment of the loan modification and its associated adjustment;The financial statements giving a true and fair view and being prepared in accordance with International Financial Reporting Standards and the Companies(Guernsey)Law,2008;and Going concern and the viability
311、 statement review.Effectiveness of the Audit The Committee had formal meetings with KPMG during the period under review:Before the start of the audit to discuss formal planning,discuss any potential issues and agree the scope that will be covered;and After the audit work was concluded to discuss any
312、 significant matters such as those stated above.The Board considered the effectiveness and independence of KPMG by using a number of measures,including but not limited to:The audit plan presented to them before the start of the audit;The audit results report;Changes to audit personnel;The auditors o
313、wn internal procedures to identify threats to independence;and Feedback from both the Asset Manager and Administrator.Internal Audit There is no internal audit function.As all of the Directors are non-executive and all of the Companys administration functions have been delegated to independent third
314、 parties,the Audit Committee considers that there is no need for the Company to have an internal audit function.However,this matter is reviewed periodically.Conclusion and RecommendationAfter reviewing various reports such as the operation and risk management framework and performance reports from t
315、he Directors and the Asset Manager and assessing the significant areas of focus for the financial statements listed on pages 49 to 52,the Committee is satisfied that the financial statements appropriately address the critical judgements and key estimates(both in respect to the amounts reported and t
316、he disclosures).DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202337PageREPORT OF THE AUDIT COMMITTEE(CONTINUED)Conclusion and Recommendation(continued)The Committee is also satisfied that the significant assumptions used for assessing g
317、oing concern and,determining the value of assets and liabilities have been appropriately scrutinised,challenged and are sufficiently robust.The independent auditor reported to the Committee that no material misstatements were found in the course of its work.Furthermore,the Administrator confirmed to
318、 the Committee that they were not aware of any material misstatements including matters relating to presentation.The Committee confirms that it is satisfied that the independent auditor has fulfilled its responsibilities with diligence and professional scepticism.Following the completion of the fina
319、ncial statements review process on the effectiveness of the independent audit and the review of audit services,the Committee will recommend that KPMG be reappointed at the next Annual General Meeting.For any questions on the activities of the Committee not addressed in the foregoing,a member of the
320、Committee will attend each Annual General Meeting to respond to such questions.By order of the Audit CommitteeJeremy Thompson Audit Committee Chairman 25 April 2024DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202338PageSTATEMENT OF PRIN
321、CIPAL RISKS AND UNCERTAINTIES Geopolitical and economic risks The Company leases aircraft to a customer in Thailand exposing it to(i)Thailands varying economic,social,legal and geopolitical risks,(ii)instability of Thailand markets and(iii)the impact of global health pandemics and other global marke
322、t disruptions.Exposure to Thailands jurisdiction may adversely affect the Companys future performance,position and growth potential if Thailands economy does not perform well or if laws and regulations that have an adverse impact on the aviation industry are passed in Thailand.The adequacy and timel
323、iness of the Companys response to emerging risks in this jurisdiction is of critical importance to the mitigation of their potential impact on the Company.The Geopolitical risk surrounding the Russian invasion of Ukraine and ongoing conflict in the Middle East and the subsequent consequences have th
324、e potential to impact travel and/or travellers willingness to travel which in turn could affect the volume of traffic to and from Thailand.The Thai government led by PM Thavisin and the return from exile of former PM Thaksin provides an unknown backdrop in terms of political stability.However,it is
325、clear though that tourism is a major part of the Thai economy.Exposure to the commercial airline industry As a supplier to and partner of the airline industry,the Group is exposed to the financial condition of the airline industry as it leases its aircraft to commercial airline customers.The financi
326、al condition of the airline industry is affected by,among other things,geopolitical events,outbreaks of communicable pandemic diseases and natural disasters,fuel costs and the demand for air travel.To the extent that any of these factors adversely affect the airline industry they may result in(i)dow
327、nward pressure on lease rates and aircraft values,(ii)higher incidences of lessee defaults,restructuring,and repossessions and(iii)inability to lease aircraft on commercially acceptable terms.Thai Airways Thai went into debt rehabilitation on 27 May 2020,and the business rehabilitation plan was appr
328、oved on 15 June 2021,by the Central Bankruptcy Court of Thailand.There is risk that the business rehabilitation plan does not achieve the desired results,and this could have an adverse impact on the entitys lease arrangements,with Thai Airways which is the core source of income for the Group.Thai is
329、 under the contractual obligation to return the aircraft in full life condition.The additional requirement to cash collateralize the obligation by payment of Maintenance Reserves was waived in the novated lease agreement.This leaves the company with the risk that in case of a Thai default under the
330、lease the aircraft may not be returned in a full life status.In addition,the continuing impact of COVID-19 and the conflict between Russia and Ukraine has the potential to impact Thais business rehabilitation plan and adversely impact the Group.This is particularly relevant for the Group given the a
331、ircraft leased to Thai Airways are the sole source of income for the Group.Asset riskThe Companys Assets as at year end comprise of two Boeing 787-8 aircraft.The Group bears the risk of selling or re-leasing the aircraft in its fleet at the end of their lease terms or if the lease is terminated.If d
332、emand for aircraft decreases market lease rates may fall,and should such conditions continue for an extended period,it could affect the market value of aircraft in the fleet and may result in an impairment charge.The Directors have engaged an asset manager with appropriate experience of the aviation
333、 industry to manage the fleet and remarket or sell aircraft as required to reduce and address this risk.Any lasting impact of the COVID-19 situation on both aircraft demand and lease rates are at present unknown.DP AIRCRAFT I LIMITED ANNUAL REPORT AND AUDITED CONSOLIDATED FINANCIAL STATEMENTS Year ended 31 December 2023202339PageSTATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES(CONTINUED)Asset risk(c
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