Directors' Report and Financial Statements 31 March ... - Precision Air

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Investing activities Acquisition of computer software 16 (38,361) (293,517) (38,361) (293,517) Aircraft security deposit paid 18 (10,433,786) - (10,433,786) - Aircraft security deposit refunded 18 - 1,526,938 - 1,526,938 Proceeds from sale of unquoted investment - 3,000 - 3,000 Proceeds from sale of property and equipment 71,249 - 71,249 - Purchase of property and equipment 15 (8,929,380) (88,395,201) (8,929,380) (86,421,561) Net cash flows used in investing activities (19,330,278) (87,158,780) (19,330,278) (85,185,140) Financing activities Proceeds from borrowings 23 7,454,941 86,983,330 7,454,941 84,855,849 Repayment of borrowings 23 (23,179,103) (24,496,403) (22,166,253) (23,586,672) Proceeds from Initial Public Offer 22 11,000,083 - 11,000,083 - Interest paid (7,600,447) (7,318,524) (7,545,769) (7,186,771) Net cash flows from/(used in) financing activities (12,324,526) 55,168,403 (11,256,998) 54,082,406 Net increase/(decrease) in cash and cash equivalents (3,633,277) 1,358,775 (3,633,277) 1,358,775 Net realised foreign currency exchange difference (52,264) - (52,264) - Cash and cash equivalents at beginning of the year 20 138,636 (1,220,139) 138,636 (1,220,139) Cash and cash equivalents at 31 March 20 (3,546,905) 138,636 (3,546,905) 138,636 24 DIRECTORS’ REPORT AND FINANCIAL STATEMENTS 31 MARCH 2012
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012 1 CORPORATE INFORMATION The consolidated financial statements of the Group for the year ended 31 March 2012 were authorised for issue as shown in the Consolidated Statement of Financial Position. The Company is incorporated in Tanzania under the Companies Act, 2002 as a limited liability Company and it is domiciled in Tanzania. The Company’s shares are publicly traded at the Dar es Salaam Stock exchange. The wholly owned subsidiary, Precision Handling Limited was incorporated in Tanzania during the year 2010 and 100 % of its share capital is held by the Company. The registered office is New Safari Hotel, Boma Road, P. O. Box 1636, Arusha Tanzania. Principal place of business is Quality Plaza, Nyerere Road, P. O. Box 70770, Dar es Salaam Tanzania. Incorporation The Company and its Subsidiary are incorporated in Tanzania under the Tanzanian Companies Act, 2002. Principal activities The principal activities of the Company are regional and domestic carriage of passengers and cargo by air while that of the Subsidiary is provisioning of ground handling services. 2 BASIS OF PREPARATION The consolidated financial statements have been prepared on a historical cost basis except for financial instruments and certain items of property, plant and equipment that have been measured at fair value or revaluation. The financial statements are presented in Tanzanian Shillings (TZS) and all values are rounded to the nearest thousand (TZS ‘000’) except when otherwise indicated. Whereas the comparative amounts in the financial statements of the Company relates to the state of affairs for the period of twelve (12) months to 31 March 2011, those of the subsidiary forming part of the “Group” consolidated financial statements relate to only seven (7) months of operations since the Subsidiary commenced operations in September 2010. 2.1 Going concern basis of preparation The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that the Group will continue in operation for at least one year from the date of the audit report and will be able to realize its assets and discharge its liabilities in the normal course of operations. Several conditions and events cast doubt about the Group’s ability to continue as a “going concern.”The Group’s current liabilities as at 31 March 2012 exceeded its current assets by TZS 31.04 billion (31 March 2011 - TZS 35.22 billion). This is due to the existence of the interest bearing loans and borrowings which were necessary to support the recently concluded fleet modernisation program that was 97.5% financed by Citibank (Senior lender) and Finnish Fund for Industrial Development (Junior lender). The current portion of the Interest bearing loans and interests falling due in the next financial year equate to approximately 10% of projected company revenues which the airline would be able to settle as they mature. DIRECTORS’ REPORT AND FINANCIAL STATEMENTS 31 MARCH 2012 25
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Directors' Report and Financial Statements 31 March ... - Precision Air

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