DME Airport Limited Director s Report and Financial Statements For the period from 16 October 2013 (date of incorporation) to 31 December 2014

Transcription

1 Director s Report and Financial Statements For the period from 16 October 2013 (date of incorporation) to 31 December 2014

2 Contents Directors and other information 2 Page Directors report 3 Statement of directors responsibilities 6 Independent auditor s report 7 Statement of comprehensive income 9 Statement of financial position 10 Statement of changes in equity 11 Statement of cash flows 12 Notes to the financial statements 13

3 Directors and other information Directors Yolanda Kelly George Mountis (Cyprus) Rodney O Rourke Company registration number Registered office Company secretary Corporate service provider Independent auditors Solicitors Banker Principal paying agent and trustee Grand Canal House 1 Upper Grand Canal Street Dublin 4 Ireland Cafico Secretaries Limited Grand Canal House 1 Upper Grand Canal Street Dublin 4 Ireland Cafico International Grand Canal House 1 Upper Grand Canal Street Dublin 4 Ireland Deloitte & Touche Chartered Accountants and Statutory Audit Firm Earlsfort Terrace Dublin 2 Ireland Arthur Cox Earlsfort Centre Earlsfort Terrace Dublin 2 Ireland Ulster Bank Ireland Limited Corporate Banking Division 3rd Floor, Block D Georges Quay Dublin 2 Ireland Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB, UK 2

4 Director s Report The directors present the Directors Report and the audited financial statements of DME Airport Limited (the Company ) for the period from 16 October 2013 (date of incorporation) to 31 December Principal activities, review of business and future development The Company was incorporated on 16 October 2013 as a private limited liability company incorporated under the laws of Ireland with registration number and qualifies under Section 110 of the Irish Taxes Consolidation Act, 1997 tax regime. The primary objective of the Company is to enter into a loan participation note transaction with the Company as the lender and Hacienda Investments Limited ( Hacienda ) as the borrower. On 25 November 2013, the Company issued 300 million 6% Loan Participation Notes due 2018 (the Notes ) for the sole purpose of financing a loan to Hacienda. The Notes are listed on the Irish Stock Exchange. The directors expect the company to continue its current operations for the foreseeable future. Results and dividends The results for the period and the Company s financial position are set out on pages 9 and 10. Interest income for the period amounted to 20,140,779. Profit on ordinary activities before taxation amounted to 380. After a tax charge of 95, net income after tax of 285 was transferred to reserves. The directors do not recommend payment of dividends. The Directors are satisfied with the current state of the Company and there are no future plans for further issuance of notes. Principal risks and uncertainties The Company is subject to various risks. The key risks facing the Company and mitigants to address these risks are outlined in Note 14 of the financial statements. Directors The names of the directors who were in office at any time during the period are set out below: Sarah Daly (appointed 16 October 2013, resigned 24 January 2014) Yolanda Kelly (appointed 24 January 2014) George Mountis (appointed 21 October 2013) Rodney O Rourke (appointed 16 October 2013) Directors, secretary and their interests The directors and secretary who held office on 31 December 2014 or during the period from 16 October 2013 to 31 December 2014, had no interest in the shares, share options, deferred shares or debentures of the Company or any group company on that date or during the period. Transaction involving the directors Cafico Corporate Services Limited ( Cafico International ) provided corporate services to the Company at arm s length commercial rates. Yolanda Kelly and Rodney O Rourke are directors of the Company and are also directors of Cafico International and in that capacity had a material interest in transactions conducted between the Company and Cafico International. 3

5 Director s Report (continued) There are no other contracts of significance in relation to the business of the Company in which the directors had any interest as defined in the Companies Act, 1990, at any time during the reporting period other than as outlined in Note 18 of the financial statements. Books of account The measures taken by the directors to secure compliance with the Company s obligations, under Section 202 of the Companies Act, 1990, to keep proper books of account are the use of appropriate systems and procedures and ensuring that competent persons are responsible for the books of account. The Company appointed Cafico International to maintain the accounting records of the Company independently. The books of account are kept at Grand Canal House, 1 Upper Grand Canal Street, Dublin 4. Post-balance sheet events As of the date of the report, there are no significant post-balance sheet events that require adjustment or disclosure. Annual corporate governance statement The Board of Directors of the Company (the Board ) is responsible for establishing and maintaining adequate internal control and risk management systems for the Company in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of failure to achieve the Company s financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Board has established processes regarding internal control and risk management systems to ensure its effective oversight of the financial reporting process. These include appointing Cafico International (the Administrator ) to maintain the accounting records of the Company independently. The Administrator is contractually obliged to maintain proper books and records as required pursuant to the Administration agreement. The Administrator is also contractually obliged to prepare for review and approval by the Board the annual report, including financial statements, intended to give a true and fair view. The Board evaluates and discusses significant accounting and reporting issues as the need arises. From time to time, the Board also examines and evaluates the Administrator s financial accounting and reporting routines. The Administrator has operating responsibility for internal control in relation to the financial reporting process and the Administrator s report to the Board. The Company s policies and the Board s instructions with relevance for financial reporting are updated and communicated via appropriate channels, such as , correspondence and meetings, to ensure that all financial reporting information requirements are met in a complete and accurate manner. The Board has an annual process to ensure that appropriate measures are taken to consider and address the shortcomings identified and measures recommended by the independent auditors. Given the contractual obligations on the Administrator, the Board has concluded that there is currently no need for the Company to have a separate internal audit function in order for the Board to perform effective monitoring and oversight of the internal control and risk management systems of the Company in relation to the financial reporting process. 4

6 Director s Report (continued) Capital structure No person has a significant direct or indirect holding of securities in the Company. No person has any special rights of control over the Company s share capital. There are no restrictions on voting rights. With regard to the appointment and replacement of directors, the Company is governed by its Articles of Association. The Articles of Association themselves may be amended by special resolution of the shareholders. Powers of directors The Board is responsible for managing the business affairs of the Company in accordance with the Articles of Association, which allow it to enter into contracts and perform all tasks necessary to conduct the business of the Company. The directors may delegate certain functions to the Administrator and other parties, subject to supervision and direction by the directors. Audit committee On 20 May 2010, the European Communities (Statutory Audit) (Directive 2006/43/EC) Regulations 2010 SI No. 220 of 2010 (the Regulations ) were published, giving effect in Ireland to Directive 2006/43/EC on statutory audits. Pursuant to the Regulations, public interest entities are required to establish an audit committee. The Company is exempted from this requirement as it is an entity that has, as its sole business, the issuing of asset-backed securities. In this respect, the Company is not required, and has not yet established an audit committee. Independent auditors Deloitte and Touche, Chartered Accountants and Statutory Audit Firm, have been appointed as the auditor and have expressed their willingness to continue in office in accordance with section 160 (2) of the Companies Act, This report was approved by the Board of Directors on 9 April 2015 and signed on its behalf by: Yolanda Kelly Director George Mountis Director 5

7 Statement of Directors Responsibilities The directors are responsible for preparing the directors report and financial statements in accordance with applicable law and regulations. Irish company law requires the directors to prepare financial statements giving a true and fair view of the state of affairs of the Company and the profit and loss of the Company for each financial year. Under that law, the directors have elected to prepare the Company s financial statements in accordance with International Financial Reporting Standards ( IFRSs ) as adopted by the European Union ( EU ) and as applied in accordance with the Companies Acts, 1963 to In preparing the financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgments and estimates that are reasonable and prudent; state that the financial statements comply with IFRS as adopted by the EU and in accordance with Companies Act 1963 to 2013; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Acts, 1963 to They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Yolanda Kelly Director George Mountis Director 9 April

8 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF DME AIRPORT LIMITED We have audited the financial statements of DME Airport Limited for the period ended 31 December 2014 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Statement of Cash Flows and the related notes 1 to 24. The financial reporting framework that has been applied in their preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. This report is made solely to the company s members, as a body, in accordance with Section 193 of the Companies Act, Our audit work has been undertaken so that we might state to the company s members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the Statement of Directors Responsibilities, the directors are responsible for the preparation of the financial statements giving a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the directors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: give a true and fair view, in accordance with or IFRSs as adopted by the European Union, of the state of the affairs of the company as at 31 December 2014 and of the profit for the period then ended; and have been properly prepared in accordance with the Companies Acts, 1963 to

9 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF DME AIRPORT LIMITED Matters on which we are required to report by the Companies Acts, 1963 to 2013 We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the company. The financial statements are in agreement with the books of account. In our opinion the information given in the directors report is consistent with the financial statements. The net assets of the company, as stated in the statement of financial position are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2014 a financial situation which under Section 40(1) of the Companies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the company. Matters on which we are required to report by exception We have nothing to report in respect of the provisions in the Companies Acts, 1963 to 2013 which require us to report to you if, in our opinion, the disclosures of directors remuneration and transactions specified by law are not made. Brian O Callaghan For and on behalf of Deloitte & Touche Chartered Accountants and Statutory Audit Firm Dublin Date: 8

10 Statement of comprehensive income for the period from 16 October 2013 (date of incorporation) to 31 December 2014 Notes Period from 16 Oct 2013 to Interest and similar income 4 20,140,779 Interest and similar expense 5 (20,140,779) - Other income 28,965 Administrative expenses 6 (28,585) Profit on ordinary activities before taxation 380 Taxation 7 (95) Profit on ordinary activities after taxation 285 Other comprehensive income - Total comprehensive income 285 The notes on pages 13 to 24 are integral part of these financial statements The financial statements were approved by the Board of Directors on 9 April Yolanda Kelly Director George Mountis Director 9

11 Statement of financial position as at 31 December 2014 Notes Assets Non-current assets Loans and receivables 8 298,492,850 Current assets Interest and other receivables 9 1,794,721 Cash and cash equivalents 3,261 Total current assets 1,797,982 Total assets 300,290,832 Liabilities and equity Non-current liabilities Loan participation notes ,492,850 Deferred income 11 1,700 Total non-current liabilities 298,494,550 Current liabilities Interest payable 1,750,000 Trade and other payables 12 43,002 Deferred income 11 2,963 Corporation tax payable 31 Total current liabilities 1,795,996 Total liabilities 300,290,546 Equity Share capital 13 1 Retained earnings 285 Total equity 286 Total equity and liabilities 300,290,832 The notes on pages 13 to 24 are integral part of these financial statements The financial statements were approved by the Board of Directors on 9 April Yolanda Kelly Director George Mountis Director 10

12 Statement of changes in equity for the period ended 31 December 2014 Share Capital Retained Earnings Total Note As at 16 October Issue of share capital Total comprehensive income for the period As at 31 December The notes on pages 13 to 24 are integral part of these financial statements 11

13 Statement of cash flows for the period ended 31 December 2014 Period from 16 Oct 2013 to Note Cash flow from operating activities Profit for the period before tax 380 Adjustment for Interest income 4 (20,140,779) Interest expense 5 20,140,779 Working capital adjustments Increase in other receivables (44,721) Increase in trade and other payables 47,665 3,324 Interest received 18,000,000 Interest paid (18,000,000) Income taxes paid (64) Cash flows provided by operating activities 3,260 Cash flows from investing activities Loans and receivables provided 8 (300,000,000) Facility fees received 8 1,897,929 Cash flows used by investing activities (298,102,071) Cash flows from financing activities Issue of participation notes ,000,000 Transaction cost paid 10 (1,897,929) Issue of share capital 1 Cash flows provided by financing activities 298,102,072 Net increase in cash and cash equivalents during the period 3,261 Cash and cash equivalents at the beginning of the period - Cash and cash equivalents at the end of the period 3,261 12

14 Notes to the financial statements 1. Background to the Company The Company was incorporated on 16 October 2013 as a private limited liability company incorporated under the laws of Ireland with registration number The primary objective of the Company is to enter into a loan participation note transaction with the Company as the lender and Hacienda Investments Limited ( Hacienda ) as the borrower. 2. Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) and its interpretations as adopted by the European Union and as applied in accordance with the Companies Acts, 1963 to The financial statements have been prepared under the historical cost convention. These financial statements are presented in US Dollars () which is the Company s functional currency. Functional currency is the currency of the primary economic environment in which the entity operates. The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Management has made judgements based on the available financial information of the borrower and the historic performance of the borrower in meeting its obligations under the loan and completion of an impairment review to assess the recoverability of the loan receivable. The Company adopted all IFRS in issue and effective at 16 October New standard issued but not effective for the financial period beginning 16 October 2013 and not early adopted are as follows: IFRS 9, Financial instruments, issued in November 2009 introduced new requirements for the classification and measurement of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets b) limited amendments to the classification and measurement requirements by introducing a fair value through other comprehensive income (FVTOCI) measurement category for certain simple debt instruments. The Company is yet to assess IFRS 9 s full impact and intends to adopt IFRS 9 at such time the standards comes into effect. IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early adoptions permitted. 13

15 Notes to the financial statements 2. Basis of preparation (continued) The Company does not include disclosures of new and amended standards and interpretations issued by the International Accounting Standards Board and adopted by the EU that do not and will not impact the financial statements. 3. Significant accounting policies a. Financial instruments Financial instruments held by the Company includes loans and receivables and other liabilities. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Company includes in this category amounts relating to loans receivables, interest and other receivables. Other financial liabilities include all financial liabilities other than those classified as held for trading. The Company includes in this category amounts relating to the loan participation notes, interest and other payables. Initial recognition The Company initially recognizes all financial assets and liabilities on the trade date at which the Company becomes a party to the contractual provisions of the instruments. Loans and receivables and other financial liabilities are measured initially at fair value plus any directly attributable incremental costs of acquisition or issue. Subsequent measurement Loans and receivables are carried at amortised cost using the effective interest method less any allowance for impairment. Gains and losses are recognised in the statement of comprehensive income when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Other financial liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the statement of comprehensive income when the liabilities are derecognised, as well as through the amortisation process. Effective interest method is a method of calculating the amoritsed cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instruments or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company estimates cash flows considering all contractual terms of the financial instruments. The calculation includes all fees paid or received between the parties to the contract that are integral part of the effective interest rate, transaction costs and all other premiums or discounts. Derecognition A financial asset is derecognised where the rights to receive cash flows from the assets have expired or the Company has transferred its rights to receive cash flows from the assets or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass 14

16 Notes to the financial statements 3. Significant accounting policies (continued) through arrangement and either the Company has transferred substantially all the risk and rewards of the assets or the Company has neither transferred nor retained substantially all the risk and rewards of the assets, but has transferred control of the assets. The Company derecognises financial liabilities when, and only when, the Company s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the statement of comprehensive income. Offsetting Financial assets and liabilities are set off and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted by the accounting standards, or for gains and losses arising from a group of similar transactions. Impairment The Company assesses at each reporting date whether a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor, or a group of debtors, is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and, where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred) discounted using the asset s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of comprehensive income as credit loss expense. b. Cash and cash equivalents Cash and cash equivalents includes cash held at banks or other short-term highly liquid investments with maturities of less than three months at acquisition, which are subject to insignificant risk of changes in their fair value and are used by the Company in the management of its short term commitments. Cash and cash equivalents are carried at amortised cost in the statement of financial position. 15

17 Notes to the financial statements 3. Significant accounting policies (continued) c. Deferred revenue Expense reimbursements received in advance are recognised as deferred income and are released to the statement of comprehensive income simultaneously with the recognition of the related expense. d. Share capital Share capital is issued in Euro. Dividends are recognised as a liability in the period in which they are provided. e. Interest income and expense Interest income and expense are recognised in the statement of comprehensive income as they accrue, using the original effective interest rate of the instrument calculated at the acquisition or origination date. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying amount of the financial asset or financial liability. Interest income and expense include the amortisation of any discount or premium, transaction costs or other differences between the initial carrying amount of an interest-bearing instrument and its amount at maturity calculated at an effective interest rate basis. f. Other income and expenses All other income and expenses are accounted for on an accrual basis. g. Foreign currency translation Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the statement of comprehensive income. h. Income tax expense The Company meets the criteria for a Section 110 vehicle under the Tax Consolidation Act, 1997 and is therefore subject to a special tax regime. The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the period as calculated in accordance with Irish Tax Laws. Taxable profit may differ from profit before tax as reported in the statement of comprehensive income because it excludes items of income or expense that are not taxable or deductible. The Company s liability for current tax is calculated using the tax rate that has been enacted or substantively enacted by the statement of financial position date. 16

18 Notes to the financial statements 4. Interest and similar income Period from 16 Oct 2013 to Interest income on loans and receivables 20,140,779 20,140, Interest and similar expense Period from 16 Oct 2013 to Interest expense on loan participation notes 20,140,779 20,140, Administrative expenses Period from 16 Oct 2013 to Auditors' remuneration in respect of the period 18,975 Management fee 8,659 Administration fee 417 Bank Charges 335 Listing fee 215 Foreign exchange (gains) (16) 28,585 S.I. 220 requirements for the period are disclosed below: Period from 16 Oct 2013 to Auditor's remuneration in respect of the period Audit of individual company accounts 14,025 Other assurance services - Tax advisory services 4,950 Other non-audit services - 18,975 No directors remuneration was paid during the period. The Company has no employees. Accounting and other services have been outsourced. 7. Taxation 17

19 Notes to the financial statements (a) Analysis of profit and loss account charge Period from 16 Oct 2013 to Current tax: Irish corporation tax on profit for the period There was no amount of deferred tax either provided or unprovided at the statement of financial position date. (b) Factors affecting the tax charge for the period. Period from 16 Oct 2013 to Profit before tax 380 Profit before tax multiplied by the standard rate of Corporation tax in the Republic of Ireland of 12.5% 48 Effect of earnings subject to tax at 12.5% 47 Current tax charge for the period 95 The Company is an Irish registered company and is structured to qualify as a securitisation company under Section 110 of the Taxes Consolidation Act As such, the profits are chargeable to corporation tax under Case III Schedule D at the rate of 25% but are computed in accordance with the provisions applicable to Case I Schedule D. 8. Loans and receivables Loans and receivables 298,492,850 Movement during the period As at start of the period - Advanced during the period 300,000,000 Deferred facility fee (1,897,929) Amortisation of facility fee 390,779 As at the end of the period 298,492, Loans and receivables (continued) 18

20 Notes to the financial statements The Company provided a 300,000,000 loan (the Loans ) to Hacienda Investments Limited ( Hacienda ) pursuant to the loan agreement dated 21 November 2013 (the Loan Agreement ). The Loans are due for repayment in Interest rate is fixed at 6%. Interest payments are paid semiannually in arrears on 25 May and 25 November. 9. Interest and other receivables Interest receivable 1,750,000 Recoverable administrative expenses 42,359 Prepayments 2,362 1,794, Loan participation notes Loan participation notes 300,390,779 Unamortised transaction costs (1,897,929) 298,492,850 Movement during the period As at the start of the period - Issuance during the period 300,000,000 Capitalised transaction costs (1,897,929) Transaction costs amortised during the period 390, ,492,850 Maturity analysis Less than 1 year years years 300,000,000 More than 5 years - 300,000, Loan participation notes (continued) 19

21 Notes to the financial statements On 25 November 2013 Company issued 300,000,000 6% loan participation notes ( Notes ) due on 26 November 2018 for the sole purpose of financing a loan to Hacienda. Interest on the Notes is paid semi-annually in arrears on 25 May and 25 November and is equal to the amounts of interest actually received from Hacienda under the Loan Agreement. The Notes are listed with the Irish Stock Exchange. 11. Deferred income Current 2,963 Non-current 1,700 4, Trade and other payables Management fees 20,829 Accrued professional fees 17,173 Administration fees 5,000 43, Share capital Authorised 100 ordinary shares of 1 each 133 Allotted, called up and fully paid 1 ordinary share of 1 each Financial risk management The Company s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company s activities. The Company has exposure to the following risks from the use of financial instruments. (a) Market risk; (b) Credit risk; and (c) Liquidity risk. 14. Financial risk management (continued) 20

22 Notes to the financial statements This note presents information about the Company s exposure to each of the above risks, the Company s objectives, policies and processes for measuring and managing risk and the Company s management of capital. (a) Market risk Market risk embodies the potential for both losses and gains and includes interest rate risk, currency risk and price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the returns on risk. (i) Interest rate risk Interest rate risk is the risk that the Company s results are exposed to changes in the prevailing market interest rate. The timing between the payments of interest on the financial assets and financial liabilities matches and the interest rate in the financial assets matches with the interest rate on the financial liabilities. Fixed interest rate on the Loans and receivable and Loan participation notes is 6%. At the reporting date, the interest rate risk profile of the Company s financial instruments is as follows: Fixed Floating Non-interest Total (amounts in ) rate rate bearing Assets Loans and receivables 300,000, ,000,000 Interest receivables - - 1,750,000 1,750,000 Other receivables ,359 42,359 Cash and cash equivalents 3,261-3, ,000,000 3,261 1,792, ,795,620 Liabilities Loan participation notes (300,000,000) - - (300,000,000) Interest payable - - (1,750,000) (1,750,000) Other payables - - (43,002) (43,002) (300,000,000) - (1,793,002) (301,793,002) Net exposure - 3,261 (643) 2,618 As shown above, the Company s exposure to interest rate risk is limited to the cash deposits in bank. The Company is of the view that the sensitivity of the profit and loss due to this exposure is not material. (ii) Foreign currency risk Currency risk is the risk which arises due to the assets and liabilities of the Company held in foreign currencies, which will be affected by fluctuations in foreign exchange rates. The Company is not exposed to significant currency risk as there are no significant assets or liabilities denominated in a foreign currency, therefore sensitivity has not been included. 14. Financial risk management (continued) 21

23 Notes to the financial statements (iii) Price risk Price risk is the risk that the value of financial instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, the issuer or all factors affecting all instruments traded in the market. The Company has no financial assets or liabilities exposed to price risk. (b) Credit risk Credit risk arises from the possibility of counterparties failing to meet their obligations to the Company and represents the most significant category of risk. The Company's maximum exposure to credit risk in the event that counterparties fail to perform their obligations as at the reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the statement of financial position. The Company has minimised the credit risk by lending to high credit quality institutions. The loan has been made to Hacienda and is considered recoverable as they are still performing. Hacienda has a credit rating of BB+ from both Fitch and Standard s and Poor s. Such ratings suggest that Hacienda has a very strong capacity to meet its financial commitments. There are no financial assets that are past due or impaired. The counterparties in the Company s financial assets are concentrated in Ireland. (c) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset and thus, the Company will not be able to meet its financial obligations as they fall due. The Company s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company s reputation. The Company s primary source of funds is from the issuance of debt. The Company s debt is secured directly over its assets. The Company expects that its cash on hand and the cash flow from loans and receivables will satisfy its liquidity needs. The Notes are unconditionally and irrevocably guaranteed by Airport Management Company Limited, DME Limited, Domodedovo International Airport Corporation, Joint-Stock Company Domodedovo Commercial Services, Domodedovo Catering Services Corporation, Domodedovo Fuel Services Corporation, Domodedovo Passenger Terminal Corporation and Domodedovo Fuel Facilities Corporation (collectively, the Guarantors ). As provided in the loan agreement, the Company can recover from the Guarantors all payments for operating expenses incurred by the Company. The following are the contractual maturities of financial assets and liabilities excluding the impact of netting agreements: 14. Financial risk management (continued) 22

24 Notes to the financial statements Within Between More than (amounts in ) 1 year 2 to 5 years 5 years Total Assets Loans and receivables 300,000, ,000,000 Interest receivables 1,750,000 70,250,000-72,000,000 Other receivables 42, ,359 Cash and cash equivalents 3, ,261 1,795, ,250, ,045,620 Liabilities Loan participation notes - (300,000,000) - (300,000,000) Interest payable (1,750,000) (70,250,000) - (72,000,000) Other payables (43,002) - - (43,002) (1,793,002) (370,250,000) - (372,043,002) Net Exposure 2, , Capital risk management The Company views the share capital as its capital. The Company is a special purpose vehicle set up to finance the purchase of assets for the purpose of making investments as defined in the Memorandum of Association. Share capital of 1 held in trust by Cafico Trust Company Limited was issued in line with Irish Company Law and is not used for financing and re-financing the investment activities of the Company. The Company is not subject to any other externally imposed capital requirements. 16. Segment reporting The Company identifies its operating segment based on the nature of activity. All of the activities fall within one operating segment, being the provision of loans. The Company s operations are concentrated in Ireland. All revenues emanate from Ireland. 17. Directors interest in shares The directors had no interest in the shares of the Company. 18. Related party transactions Cafico International provided corporate services to the Company at arm s length commercial rates. Yolanda Kelly and Rodney O Rourke are directors of the Company and are also directors of Cafico International and in that capacity had a material interest in transactions conducted between the Company and Cafico International. The company incurred fees from Cafico International for corporate administration services amounting to 8, Ownership of the Company The Company has issued one share which is held by Cafico Trust Company Limited on behalf of the DME Airport Limited Charitable Trust. 20. Subsequent events 23

25 Notes to the financial statements As of the date of approval, there are no post-balance sheet events. 21. Approval of financial statements The Board of directors approved these financial statements on 9 April