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

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
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