TIDMPMEA
RNS Number : 2512E
PME African Infrastructure Opps PLC
05 May 2017
5 May 2017
PME African Infrastructure Opportunities plc
("PME" or the "Company")
(AIM: PMEA.L)
Final Results for the year ended 31 December 2016
PME African Infrastructure Opportunities plc, an investment
company established to invest in sub-Saharan African infrastructure
and infrastructure related industries, announces its audited
results for the year ended 31 December 2016.
Financial Highlights
-- Net Asset Value of US$9.5 million (2015: US$9.1 million)
-- Net Asset Value per share of US$0.23 (2015: US$0.22)
-- Profit attributable to shareholders for the year ended 31
December 2016 was US$0.4 million (2015: loss of US$2.1 million)
-- Basic and diluted profit per share of US$0.0100 (2015: loss per share of US$0.0284)
For further information please contact:
Smith & Williamson Corporate Finance Limited
Nominated Adviser
Azhic Basirov / Ben Jeynes +44 20 7131 4000
Stifel Nicolaus Europe Limited
Broker
Neil Winward / Tom Yeadon +44 20 7710 7600
Chairman's Statement
On behalf of the Board of Directors (the "Board"), I am pleased
to present the annual results for PME African Infrastructure
Opportunities plc ("PME" or the "Company" and together with its
subsidiaries the "Group") for the year ended 31 December 2016.
The remit of the Company's directors (the "Directors") under the
Company's investing policy is to seek to realise the remaining
assets of the Company and to return both existing cash reserves and
the proceeds of realisation of the remaining assets to
shareholders.
Investments
The Company currently has two assets, namely, three C30
locomotives and a building in Dar-es-Salaam, Tanzania (the
"Dar-es-Salaam Property"). A subsidiary of the Company, PME
Locomotives (Mauritius) Limited ("PME Locomotives") has a put
option requiring Sheltam (Mauritius) Limited ("Sheltam") (formerly
known as "PME RSACO (Mauritius) Limited") to purchase any one or
more of the three C30 locomotives that it owns at exercise of the
option for US$1,416,666 per locomotive (the "Option"). The Option
was exercisable at any point during a 90 day period commencing on 6
November 2016 (the "Option Period").
Under the Option, completion and settlement of the sale of any
one or more C30 locomotives which is or was the subject of an
exercise notice by PME ("Completion") was required to occur within
five business days of the exercise notice.
Subsequent to the year end, on 2 February 2017, the Company
confirmed that it had exercised the Option in respect of all three
C30 locomotives (the "Option Exercise").
The Company announced that alongside the Option Exercise, and
following discussions with the Sheltam group, PME Locomotives had
entered into a deed of variation to the Option agreement with
Sheltam (the "Deed of Variation") pursuant to which Completion will
now occur on the earlier of: (a) the fifth business day after
completion of a Sheltam corporate fundraising currently in
progress; (b) 15 June 2017; and (c) the date specified in writing
by PME Locomotives on the occurrence of any of: (i) a change of
control of Sheltam; (ii) the Sheltam corporate fundraising
currently in progress not proceeding; (iii) the sale, divestment or
transfer to a third party of a material part of the Sheltam group's
business; (iv) the insolvency of the Sheltam group or the Sheltam
group entering into any arrangement with creditors; or (v) any
event of default under the Sheltam group's existing debt
facilities.
Interest is accruing on the US$4.25 million cash consideration
payable to PME in accordance with the Deed of Variation at a rate
of 10% per annum from and including the fifth business day
following the Option Exercise and up to Completion. The three C30
locomotives are currently being used in South Africa on short term
contracts and this will produce additional rental income for the
Group prior to Completion.
The Company continues to expect that Completion will occur by 15
June 2017.
The Dar-es-Salaam Property, which is managed by a local
Tanzanian managing agent, was 54% let as at 31 December 2016
(increasing to 63% from 15 February 2017) and continues to trade
profitably - notwithstanding that further renovations to the
building have been carried out during the period.
In 2010 PME Properties Limited acquired the Dar-es-Salaam
Property from Dovetel (T) Limited ("Dovetel"), the Company's former
telecommunication investment in Tanzania. Dovetel were also a
tenant of part of the Dar-es-Salaam Property but were in default on
the payment of rent. As previously reported to shareholders, the
Company has followed various legal steps to correct the situation
and recover the unpaid rent. On 24 May 2016 Dovetel's lease on the
property expired and the Directors have appointed an experienced
operator to carry out the eviction process. This process is
ongoing.
The Dar-es-Salaam Property currently has three tenants (not
including Dovetel). One tenant reduced the space occupied in
November 2016 from 1,702 square meters to 809 square meters, but
extended its lease on the remaining part of the building at a
higher rate for a further three years. The lease with the second
tenant to rent 628 square meters has been extended for five years
with rental increases built into the agreement. The third tenant
had originally rented 310 square meters but has since the year end
increased this to 603 square meters and has also extended the
duration of the lease for a further three years, but at rents lower
than had previously been achieved.
The Tanzanian government in place since November 2015 continues
to make significant changes in the country and there remains
uncertainty as to the direction of further change. As a result
investors are delaying investment decisions which has in turn
curtailed the demand for high end offices. Some progress has been
made in replacing tenants but at lower rents, as described above.
The prospect of selling the building in the short term for a
reasonable price has not improved since my last report on 13
September 2016.
The Directors have increased the carrying value of the
Dar-es-Salaam Property from US$3.8 million as at 31 December 2015
(reflecting the legal uncertainty regarding Dovetel's occupation)
to US$5.0 million as at 31 December 2016. Whilst demand for
Tanzanian high end offices is currently subdued, this valuation is
in line with the Dar-es-Salaam Property value assessed by the local
expert as at 31 December 2016 accounting for both current vacancy
levels and the current economic climate, of US$5.0 million (31
December 2015 appraised unencumbered market value of US$6.5
million).
Financial Results
The profit for the year to 31 December 2016 was US$0.4 million
(2015: loss of US$2.1 million), representing a US$0.0100 profit per
ordinary share (2015: loss per ordinary share of US$0.0284). The
profit for the year was made up of a net gain in the fair value of
assets less ongoing operating and administrative costs.
The Directors, having considered the value of the Option and the
latest valuation of the Dar-es-Salaam Property are of the opinion
that the rail assets and the Dar-es-Salaam Property are reflected
in the balance sheet at fair value.
As at 31 December 2016, PME's Net Asset Value attributable to
ordinary shareholders in accordance with IFRS was US$9.5 million
(US$0.23 per ordinary share), compared to the US$9.1 million
(US$0.22 per ordinary share) that was reported as at 31 December
2015.
As at 31 December 2016, PME had cash balances of US$261,333.
Return of Cash and Outlook
The Directors expect to receive the proceeds from Completion of
the Option for the three remaining C30 locomotives by 15 June
2017.
In addition, the Directors will start the marketing process for
the sale of the Dar-es-Salaam Property in the second half of 2017,
provided prevailing local economic uncertainty has receded and the
vacant space has been relet. The sale will incur costs which cannot
currently be reflected in the fair value of the investment in
accordance with IFRS.
Based on the results of these actions, the Directors continue to
anticipate that another tender offer will be proposed to
shareholders immediately following the receipt of the proceeds from
the Option for the three remaining C30 locomotives. A further and
final tender will be proposed thereafter once the building has been
sold.
Paul Macdonald
Chairman
4 May 2017
Statement of Comprehensive Income
Year ended Year ended
31 December 2016 31 December 2015
Note US$'000 US$'000
Net gains/(losses) on financial assets at fair value through
profit or loss 3 1,230 (441)
Operating and administration expenses 9 (802) (1,110)
Project related expenses - (594)
Foreign exchange (loss)/gain (17) 65
---------------------------------------------------------------- ----- ------------------------- ------------------
Operating profit/(loss) 411 (2,080)
Finance income - 15
Finance costs 13 - (36)
Profit/(loss) before income tax 411 (2,101)
Income tax 14 - -
---------------------------------------------------------------- ----- ------------------------- ------------------
Profit/(loss) and total comprehensive income/(expense) for the
year 411 (2,101)
Basic and diluted profit/(loss) per share (cents) attributable
to the equity holders of the
Company during the year 5 1.00 (2.84)
---------------------------------------------------------------- ----- ------------------------- ------------------
Balance Sheet
Note As at 31 December 2016 As at 31 December 2015
US$'000 US$'000
------------------------------------------------------- ----- ----------------------- -----------------------
Assets
Current assets
Financial assets at fair value through profit or loss 3 9,260 7,856
Trade and other receivables 69 32
Cash and cash equivalents 261 1,331
------------------------------------------------------- ----- ----------------------- -----------------------
Total current assets 9,590 9,219
------------------------------------------------------- ----- ----------------------- -----------------------
Total assets 9,590 9,219
------------------------------------------------------- ----- ----------------------- -----------------------
Equity and liabilities
Equity
Issued share capital 6 410 410
Capital redemption reserve 7 1,395 1,395
Retained earnings 7,682 7,271
------------------------------------------------------- ----- ----------------------- -----------------------
Total equity 9,487 9,076
------------------------------------------------------- ----- ----------------------- -----------------------
Current liabilities
Trade and other payables 8 103 143
-----
Total current liabilities 103 143
------------------------------------------------------- ----- ----------------------- -----------------------
Total liabilities 103 143
------------------------------------------------------- ----- ----------------------- -----------------------
Total equity and liabilities 9,590 9,219
------------------------------------------------------- ----- ----------------------- -----------------------
The financial statements were approved and authorised for issue
by the Board of Directors on 4 May 2017 and signed on its behalf
by:
Paul Macdonald Lawrence Kearns
Director Director
Statement of Changes in Equity
Share capital Capital redemption reserve Retained earnings Total
US$'000 US$'000 US$'000 US$'000
---------------------------------------- ----------------------------- ------------------ --------
Balance at 1 January 2015 768 1,037 16,528 18,333
----------------------------------------- -------------- ------------- ------------------ --------
Comprehensive expense
Loss for the year - - (2,101) (2,101)
----------------------------------------- -------------- ------------- ------------------ --------
Total comprehensive expense for the year - - (2,101) (2,101)
----------------------------------------- -------------- ------------- ------------------ --------
Transactions with owners
----------------------------------------- -------------- ------------- ------------------ --------
Tender offer (note 6) (358) 358 (7,156) (7,156)
----------------------------------------- -------------- ------------- ------------------ --------
Total transactions with owners (358) 358 (7,156) (7,156)
----------------------------------------- -------------- ------------- ------------------ --------
Balance at 31 December 2015 410 1,395 7,271 9,076
----------------------------------------- -------------- ------------- ------------------ --------
Balance at 1 January 2016 410 1,395 7,271 9,076
----------------------------------------- ---- ------ ------ ------
Comprehensive income
Profit for the year - - 411 411
----------------------------------------- ---- ------ ------ ------
Total comprehensive income for the year - - 411 411
----------------------------------------- ---- ------ ------ ------
Balance at 31 December 2016 410 1,395 7,682 9,487
----------------------------------------- ---- ------ ------ ------
Cash Flow Statement
Note Year ended Year ended
31 December 2016 31 December 2015
US$'000 US$'000
------------------------------------------------------------- ----- ------------------ ------------------
Cash flows from operating activities
Purchase of financial assets - loans to investee companies 3 (174) (237)
Proceeds from sale of financial assets - return of capital 3 - 11,500
Interest received - 15
Interest paid 13 - (36)
Dividends received - -
Operating, administrative and project related expenses paid (891) (2,219)
------------------ ------------------
Net cash (used in)/generated from operating activities (1,065) 9,023
------------------------------------------------------------- ----- ------------------ ------------------
Financing activities
Tender offer 6 - (7,156)
Loan from third party 13 - 486
Repayment of loan from third party 13 - (1,137)
Net cash used in financing activities - (7,807)
------------------------------------------------------------- ----- ------------------ ------------------
Net (decrease)/increase in cash and cash equivalents (1,065) 1,216
Cash and cash equivalents at beginning of year 1,331 144
Foreign exchange losses on cash and cash equivalents (5) (29)
------------------------------------------------------------- ----- ------------------ ------------------
Cash and cash equivalents at end of year 261 1,331
------------------------------------------------------------- ----- ------------------ ------------------
Notes to the Financial Statements
1 General Information
PME African Infrastructure Opportunities plc (the "Company") was
incorporated and is registered and domiciled in the Isle of Man
under the Isle of Man Companies Acts 1931 to 2004 on 19 June 2007
as a public limited company with registered number 120060C. The
investment objective of PME African Infrastructure Opportunities
plc and its subsidiaries (the "Group") was to achieve significant
total return to investors through investing in various
infrastructure projects and related opportunities across a range of
countries in sub-Saharan Africa. On 19 October 2012 the
shareholders approved the revision of the Company's investing
policy which is now to realise the remaining assets of the Company
and to return both existing cash reserves and the proceeds of
realisation of the remaining assets to shareholders.
The Company's investment activities were managed by PME
Infrastructure Managers Limited (the "Investment Manager") to 6
July 2012. No alternate has been appointed and the Board of
Directors has assumed responsibility for the management of the
Company's remaining assets. The Company's administration is
delegated to Galileo Fund Services Limited (the "Administrator").
The registered office of the Company is Millennium House, 46 Athol
Street, Douglas, Isle of Man, IM1 1JB.
Pursuant to its AIM admission document dated 6 July 2007, there
was an original placing of up to 180,450,000 Ordinary Shares with
Warrants attached on the basis of 1 Warrant for every 5 Ordinary
Shares. Following the close of the placing on 12 July 2007,
180,450,000 Shares and 36,090,000 Warrants were issued. The
Warrants lapsed in July 2012. The Shares of the Company were
admitted to trading on AIM, a market of the London Stock Exchange,
on 12 July 2007 when dealings also commenced.
Financial year end
The financial year end for the Company is 31 December in each
year.
Dividends
In the year to 31 December 2016 the Company declared and paid
dividends of US$nil (2015: US$nil).
Going concern
In assessing the going concern basis of preparation of the
financial statements for the year ended 31 December 2016, the
Directors have taken into account the status of current
negotiations on the realisation of the remaining assets. The
Directors consider that the Group has sufficient funds for its
ongoing operations and therefore have continued to adopt the going
concern basis in preparing these financial statements.
2 Summary of Significant Accounting Policies
This note provides a list of the significant accounting policies
adopted in the preparation of these financial statements to the
extent that they have not already been disclosed in the other notes
below. These policies have been consistently applied to all years
presented unless otherwise stated.
2.1 Basis of preparation
The financial information contained in this announcement does
not constitute the Company's statutory accounts for 2015 or 2016.
Statutory accounts for the year ended 31 December 2015 and for the
year ended 31 December 2016 have been reported on by the
independent Auditors. The Auditors' Reports for both years were
unqualified and did not include references to any matters by way of
emphasis.
The financial information contained in this announcement has
been prepared in accordance with IFRS as adopted by the European
Union. The principal accounting policies adopted in the preparation
of the financial information contained in this announcement are set
out in the Group's full annual report and accounts for the year
ended 31 December 2016.
2.2 Foreign currency translation
a) Functional and presentation currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which the
entity operates ('the functional currency'). These financial
statements are presented in US Dollars, which is the Company's
functional and presentation currency.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement
of comprehensive income.
2.3 Revenue and expense recognition
Interest income is recognised in the financial statements on a
time-proportionate basis using the effective interest method.
Interest expense for borrowings is recognised in the financial
statements using the effective interest method.
Dividend income is recognised when the right to receive payment
is established.
Expenses are accounted for on an accruals basis.
2.4 Financial assets and financial liabilities
The Company classifies its financial assets in the following
categories: at fair value through profit or loss, and loans and
receivables. The classification depends on the purpose for which
the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
The Company designates its investments, including equity,
related loans and similar instruments (note 3), as at fair value
through profit or loss on initial recognition if they are not
classified as held for trading but are managed, and their
performance is evaluated on a fair value basis in accordance with
the Company's investing policy.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date which are
classified as non-current assets. The Company's loans and
receivables comprise 'trade and other receivables' and 'cash at
bank' in the balance sheet. Loans and receivables are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.
A provision for impairment is established when there is objective
evidence that the Company will not be able to collect all amounts
due according to the original terms of the receivables.
The Company classifies its financial liabilities as other
liabilities. Other liabilities are 'trade and other payables' in
the balance sheet (note 8).
2.5 Cash and cash equivalents
Cash and cash equivalents comprise cash deposited with banks
held with original maturities of less than three months.
3 Financial Assets at Fair Value through Profit or Loss
Investments are designated at fair value through profit or loss
on initial recognition. Such investments are initially recorded at
fair value, and transaction costs for all financial assets and
financial liabilities carried at fair value through profit or loss
are expensed as incurred. Gains and losses arising from changes in
the fair value of financial assets, including foreign exchange
movements, are recognised in the statement of comprehensive
income.
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are in relation to the financial assets at
fair value through profit or loss.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value of
financial assets and liabilities that are not traded in an active
market is determined using valuation techniques. The Company uses a
variety of methods and makes assumptions that are based on market
conditions existing at each reporting date. Valuation techniques
used include the use of comparable recent or proposed arm's length
transactions, discounted cash flow analysis and other valuation
techniques commonly used by market participants.
Regular purchases and sales of investments are recognised on the
trade date, being the date on which the Company commits to purchase
or sell the investment. Financial assets are derecognised when the
rights to receive cash flows from the investments have expired or
the Company has transferred substantially all risks and rewards of
ownership.
The following subsidiaries of the Company are held at fair value
in accordance with IFRS 10:
Country of incorporation Percentage of shares held
------------------------------------- -------------------------- --------------------------
PME Locomotives (Mauritius) Limited Mauritius 100%
PME TZ Property (Mauritius) Limited Mauritius 100%
------------------------------------- -------------------------- --------------------------
The Company's wholly owned subsidiary PME Tanco (Mauritius)
Limited appointed a liquidator on 28 June 2016.
The following company is an indirect investment of the Company
and is included within the fair value of the direct
investments:
Country of incorporation Percentage of shares held Parent company
----------------------- ------------------------- -------------------------- ------------------------------------
PME Properties Limited Tanzania 100% PME TZ Property (Mauritius) Limited
----------------------- ------------------------- -------------------------- ------------------------------------
The following table shows a reconciliation of the opening
balances to the closing balances for fair value measurements:
31 December 2016 31 December 2015
US$'000 US$'000
-------------------------------------------- ----------------- -----------------
Start of the year 7,856 19,560
Increase in loans to investee companies 174 237
Return of capital* - (11,500)
Movement in fair value of financial assets 1,230 (441)
End of the year 9,260 7,856
-------------------------------------------- ----------------- -----------------
* The return of capital relates to a share buyback conducted by
PME Locomotives (Mauritius) Limited in May 2015.
Assets carried at amounts based on fair value are defined as
follows:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
-- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2).
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
The fair values of all financial assets at fair value through
profit or loss are determined using valuation techniques using
significant unobservable inputs. Accordingly, the fair values are
classified as level 3. There were no transfers between levels
during the year. The valuation techniques and the significant
unobservable inputs are shown below.
Fair value as at Fair value as at Valuation Significant Sensitivity to
31 December 2016 31 December 2015 techniques and unobservable significant
inputs inputs unobservable inputs
US$'000 US$'000
------------------ ----------------- ----------------- ------------------ ------------------ --------------------
Rail assets (PME 4,270 3,988 Agreed/ proposed Estimated N/A
Locomotives transaction terms recovery value
(Mauritius) plus value of
Limited other net assets
Real estate 4,990 3,868 Adjusted Discount rate If the discount
investments (PME discounted cash rate were 1%
TZ Property flow property higher/lower the
(Mauritius) valuation (inputs estimated fair
Limited) including rental value would
income, operating (decrease)/increase
costs, vacancy by US$38,000
and discount
rate)
plus value of
other net assets
------------------ ----------------- ----------------- ------------------ ------------------ --------------------
Total 9,260 7,856
------------------ ----------------- ----------------- ------------------ ------------------ --------------------
Commitments under operating leases relating to PME Properties
Limited are disclosed in note 12.
4 Net Asset Value per Share
As at As at
31 December 2016 31 December 2015
-------------------------------------------------------------- -------------------------- --------------------------
Net assets attributable to equity holders of the Company
(US$'000) 9,487 9,076
Shares in issue (thousands) 40,973 40,973
-------------------------------------------------------------- -------------------------- --------------------------
NAV per share (US$) 0.23 0.22
-------------------------------------------------------------- -------------------------- --------------------------
The NAV per share is calculated by dividing the net assets
attributable to equity holders of the Company by the number of
Ordinary Shares in issue.
5 Basic and Diluted Profit/(Loss) per Share
Basic profit/(loss) per share is calculated by dividing the
profit/(loss) attributable to equity holders of the Company by the
weighted average number of Ordinary Shares in issue during the
year.
Year ended Year ended
31 December 2016 31 December
2015
----------------------------------------------------------------------- ------------------ -------------
Profit/(loss) attributable to equity holders of the Company (US$'000) 411 (2,101)
Weighted average number of Ordinary Shares in issue (thousands) 40,973 74,009
----------------------------------------------------------------------- ------------------ -------------
Basic profit/(loss) per share (cents) for the year 1.00 (2.84)
----------------------------------------------------------------------- ------------------ -------------
There is no difference between basic and diluted Ordinary Shares
as there are no potential dilutive Ordinary Shares.
6 Share Capital
Ordinary Shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
Ordinary Shares of US$0.01 each 31 December 2016 and 2015 31 December 2016 and 2015
Number US$'000
--------------------------------- -------------------------- --------------------------
Authorised 500,000,000 5,000
--------------------------------- -------------------------- --------------------------
C Shares of US$1 each 31 December 2016 and 2015 Number 31 December 2016 and 2015 US$'000
----------------------- --------------------------------- ----------------------------------
Authorised 5,000,000 5,000
Issued - -
----------------------- --------------------------------- ----------------------------------
Ordinary Shares of US$0.01 each 31 December 2016 31 December 2015
US$'000 US$'000
-------------------------------------------------------------------------------- ----------------- -----------------
40,973,236 (31 December 2015: 40,973,236) Ordinary Shares in issue, with full
voting rights 410 410
410 410
-------------------------------------------------------------------------------- ----------------- -----------------
At incorporation the authorised share capital of the Company was
US$10,000,000 divided into 500,000,000 Ordinary Shares of US$0.01
each and 5,000,000 C Shares of US$1.00 each. The holders of
Ordinary Shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of
the Company.
The holders of C Shares would be entitled to one vote per share
at the meetings of the Company. The C Shares can be converted into
Ordinary Shares on the approval of the Directors. On conversion
each C share would be sub-divided into 100 C Shares of US$0.01 each
and will be automatically converted into New Ordinary Shares of
US$0.01 each.
A tender offer took place in November 2015. Up to 38,376,948
Ordinary Shares were available for tender at a price of US$0.20 per
share. A total of 35,780,661 Ordinary Shares with an aggregate
nominal value of US$357,807 were validly tendered and were
cancelled upon completion on 4 December 2015. Retained earnings
were reduced by US$7,156,132, being the consideration paid for
these shares.
Dividends and tender offers are recognised as a liability in the
year in which they are declared and approved.
7 Capital Redemption Reserve
The capital redemption reserve is created on the cancellation of
shares equal to the par value of shares cancelled. This reserve is
not distributable.
8 Trade and Other Payables
Trade and other payables are recognised initially at fair value
and subsequently at amortised cost using the effective interest
method.
31 December 2016 31 December 2015
US$'000 US$'000
------------------------------------ ----------------- -----------------
Administration fees payable 20 24
Audit fee payable 53 69
CREST service provider fee payable 5 10
Legal fees payable - 15
Other sundry creditors 25 25
103 143
------------------------------------ ----------------- -----------------
The fair value of the above financial liabilities approximates
their carrying amounts.
9 Operating and Administration Expenses
Year
Year ended
ended 31 December
31 December 2016 2015
US$'000 US$'000
--------------------------------------- ------------------- --------------------------------------------------------
Administration expenses 148 183
Administrator and Registrar fees 86 97
Audit fees 56 72
Directors' fees 219 288
Professional fees 255 404
Other 38 66
--------------------------------------- ------------------- --------------------------------------------------------
Operating and administration expenses 802 1,110
--------------------------------------- ------------------- --------------------------------------------------------
Administrator and Registrar fees
The Administrator receives a fee of 10 basis points per annum of
the net assets of the Company between GBP0 and GBP50 million; 8.5
basis points per annum of the net assets of the Company between
GBP50 and GBP100 million and 7 basis points per annum of the net
assets of the Company in excess of GBP100 million, subject to a
minimum monthly fee of GBP4,000 and a maximum monthly fee of
GBP12,500 payable quarterly in arrears.
Administration fees expensed by the Company for the year ended
31 December 2016 amounted to US$77,842 (31 December 2015:
US$87,929).
The Administrator provides general secretarial services to the
Company, for which it receives a minimum annual fee of GBP5,000.
Additional fees, based on time and charges, will apply where the
number of Board meetings exceeds four per annum. For attendance at
meetings not held in the Isle of Man, an attendance fee of GBP750
per day or part thereof will be charged. The fees payable by the
Company for general secretarial services for the year ended 31
December 2016 amounted to US$7,722 (31 December 2015:
US$9,159).
Administration fees of the Mauritian subsidiaries for the year
ended 31 December 2016 amounted to US$23,845 (31 December 2014:
US$42,266).
Administration fees of PME Properties Limited for the year ended
31 December 2016 amounted to US$42,538 (31 December 2015:
US$24,010).
Directors' remuneration
The maximum amount of basic remuneration payable by the Company
by way of fees to the Directors permitted under the Articles of
Association is GBP200,000 per annum. The Directors are each
entitled to receive reimbursement of any expenses incurred in
relation to their appointment. The Executive Directors are entitled
to receive annual basic salaries of GBP75,000.
Total fees and basic remuneration (including VAT where
applicable) and expenses payable by the Company for the year ended
31 December 2016 amounted to US$218,546 (31 December 2015:
US$288,282) and was split as below. Directors' insurance cover
payable amounted to US$30,028 (31 December 2015: US$29,972).
Year ended Year ended
31 December 2016 31 December 2015
US$'000 US$'000
----------------------- ------------------ ------------------
Paul Macdonald 97 114
Lawrence Kearns 108 128
Expense reimbursement 14 46
219 288
----------------------- ------------------ ------------------
10 Operating Segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker is the person or group that
allocates resources to and assesses the performance of the
operating segments of an entity. The chief operating
decision-makers have been identified as the Board of Directors.
The Board reviews the Company's internal reporting in order to
assess performance and allocate resources. It has determined the
operating segments based on these reports. The Board considers the
business on a project by project basis by type of business. The
type of business is transport (railway) and leasehold property.
Year ended 31 December 2016 Transport Leasehold Other* Total
Property
PME Locomotives PME TZ Property
US$'000 US$'000 US$'000 US$'000
--------------------------------------------------------- -------------------- ---------------- -------- --------
Net gains/(losses) on financial assets at fair value
through profit or loss 184 1,058 (12) 1,230
Profit/(loss) for the year 184 1,058 (831) 411
Segment assets 4,270 4,990 330 9,590
Segment liabilities - - (103) (103)
---------------------------------------------------------- -------------------- ---------------- -------- --------
* Other refers to income and expenses of the Company not
specific to any specific sector such as income on un-invested funds
and corporate expenses. Other assets comprise cash and cash
equivalents US$261,333 and other assets US$69,479.
Year ended 31 December 2015 Transport Leasehold Other** Total
Property
PME RSACO PME Locomotives PME TZ Property
US$'000 US$'000 US$'000 US$'000 US$'000
-------------------------------------------------- ---------- ---------------- ---------------- -------- --------
Net gains/(losses) on financial assets at fair
value through profit or loss (34) (738) 346 (15) (441)
Finance income - - - 15 15
Finance costs - - - (36) (36)
Profit/(loss) for the year (34) (738) 346 (1,675) (2,101)
Segment assets - 3,988 3,868 1,363 9,219
Segment liabilities - - - (143) (143)
-------------------------------------------------- ---------- ---------------- ---------------- -------- --------
** Other refers to income and expenses of the Company not
specific to any specific sector such as income on un-invested funds
and corporate expenses. Other assets comprise cash and cash
equivalents US$1,330,692 and other assets US$31,655.
11 Risk Management
The Company's activities expose it to a variety of financial
risks: market risk (including foreign currency risk and interest
rate risk), credit risk and liquidity risk. The financial risks
relate to the following financial instruments: financial assets at
fair value through profit or loss, trade and other receivables,
cash and cash equivalents and trade and other payables. The
accounting policies with respect to the significant financial
instruments are described in notes 2, 3 and 8.
Risk management is carried out by the Executive Directors
Foreign currency risk
Foreign currency risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange
rates. The Company's operations are conducted in jurisdictions
which generate revenue, expenses, assets and liabilities in
currencies other than US Dollars. As a result, the Company is
subject to the effects of exchange rate fluctuations with respect
to these currencies. The currencies giving rise to this risk are
Euro and Pound Sterling.
The Company's policy is not to enter into any currency hedging
transactions.
The table below summarises the Company's exposure to foreign
currency risk:
31 December 2016 Monetary Assets Monetary Liabilities Total
US$'000 US$'000 US$'000
------------------ ---------------- --------------------- ---------
Euro - (6) (6)
Pound Sterling 66 (97) (31)
66 (103) (37)
------------------ ---------------- --------------------- ---------
31 December 2015 Monetary Assets Monetary Liabilities Total
US$'000 US$'000 US$'000
------------------ ---------------- --------------------- ---------
Euro - (3) (3)
Pound Sterling 27 (140) (113)
27 (143) (116)
------------------ ---------------- --------------------- ---------
The Board of Directors monitors and reviews the Company's
currency position on a continuous basis and act accordingly.
At 31 December 2016, had the US Dollar weakened by 1% (2015:
strengthened by 3%) in relation to Euro and Pound Sterling, with
all other variables held constant, the shareholders' equity would
have (decreased)/increased by the amounts shown below:
2016 2015
US$'000 US$'000
---------------------- ---------- ---------
Euro - -
Pound Sterling - 3
Effect on net assets - 3
---------------------- ---------- ---------
Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest rates.
The Company is not exposed to significant interest rate risk from
the cash held in interest bearing accounts at floating rates or
short term deposits of one month or less. The secured loan was at a
fixed rate of interest. The Board of Directors monitor and review
the interest rate fluctuations on a continuous basis and act
accordingly.
During the year ended 31 December 2016 should interest rates
have decreased by 100 basis points, with all other variables held
constant, the shareholders' equity and the result for the year
would have been US$nil (2015: 100 basis points US$7,000) lower as a
result of the impact on bank balances.
Credit risk
Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Company.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the balance sheet date. This
relates also to financial assets carried at amortised cost. Any
change in credit quality of financial assets at fair value through
profit or loss is reflected in the fair value of the asset.
At the reporting date, the Company's financial assets exposed to
credit risk amounted to the following:
31 December 2016 31 December 2015
US$'000 (restated)
US$'000
------------------------------------------------------- ----------------- -----------------
Financial assets at fair value through profit or loss 649 496
Trade and other receivables 43 -
Cash and cash equivalents 261 1,331
953 1,827
------------------------------------------------------- ----------------- -----------------
The Company's financial assets at fair value through profit or
loss are equity investments of the Company which would not usually
be subject to credit risk. Portions of the underlying investments
are in the form of loans and receivables, cash and cash equivalents
or other instruments that are subject to credit risk, and therefore
the value attributable to such instruments is provided in the
credit risk table above. The comparative figures in the table above
have been restated for consistency with the current year
presentation.
The Company manages its credit risk by monitoring the
creditworthiness of counterparties regularly. Cash transactions and
balances are limited to high-credit-quality financial institutions
(at least an Aa2 credit rating).
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its obligations as they fall due. The Company currently
manages its liquidity risk by maintaining sufficient cash. The
Company and the Group's liquidity positions are monitored by the
Board of Directors.
The residual undiscounted contractual maturities of financial
liabilities are as follows:
31 December 2016 Less than 1 month 1-3 months 3 months to 1 1-5 years Over 5 years No stated
year maturity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
Financial
liabilities
Trade and other 103 - - - - -
payables
103 - - - - -
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
31 December 2015 Less than 1 month 1-3 months 3 months to 1 1-5 years Over 5 years No stated
year maturity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
Financial
liabilities
Trade and other 143 - - - - -
payables
143 - - - - -
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
Capital risk management
The Company's primary objective when managing its capital base
was to safeguard the Company's ability to continue as a going
concern in order to realise the remaining assets of the Company at
a time and under such conditions as the Directors may determine in
order to maximise value on behalf of the shareholders of the
Company and to return both existing cash reserves and the proceeds
of realisation of the remaining assets to shareholders.
Company capital comprises share capital and reserves.
No changes were made in respect of the objectives, policies or
processes in respect of capital management during the years ended
31 December 2015 and 2016.
12 Contingent Liabilities and Commitments
PME Properties Limited has entered into a number of operating
lease agreements in respect of property. The lease terms are
between one and ten years and the majority of the lease agreements
are renewable at the end of the lease period at market rates.
The Groups' future aggregate minimum lease payments, by virtue
of its indirect investment in PME Properties Limited, under
operating leases are as follows:
31 December 2016 31 December 2015
US$'000 US$'000
----------------------------------------- --------------------------- ---------------------------
Amounts payable under operating leases:
Within one year 25 -
In the second to fifth years inclusive 300 200
Beyond five years 1,220 1,280
----------------------------------------- --------------------------- ---------------------------
1,545 1,480
----------------------------------------- --------------------------- ---------------------------
13 Related Party Transactions
Parties are considered to be related if one party has the
ability to control the other party or to exercise significant
influence over the other party in making financial or operational
decisions. Key management is made up of the Board of Directors.
The Directors of the Company are considered to be related
parties by virtue of their influence over making operational
decisions. Directors' remuneration is disclosed in note 9.
Interest payable by the Company for the year ended 31 December
2015 under secured loan agreements with Helvetica Deutschland GmbH
("Helvetica") amounted to US$36,105. Paul Macdonald holds 40% of
Helvetica's issued share capital, therefore Helvetica is deemed to
be a related party of the Company and the loans were a related
party transaction. The loans and all outstanding interest were
settled in full on completion of the disposal of rail assets in May
2015.
14 Income Tax Expense
The Company is resident for taxation purposes in the Isle of Man
and is subject to income tax at a rate of zero per cent (2015: zero
per cent).
15 Post Balance Sheet Events
On 2 February 2017 the Company exercised the Option in respect
of all three C30 locomotives.
Following discussions with the Sheltam group, PME Locomotives
(Mauritius) Limited has entered into a deed of variation to the
Option Agreement with Sheltam pursuant to which Completion will now
occur on the earlier of: (a) the fifth business day after
completion of a Sheltam corporate fundraising currently in
progress; (b) 15(th) June 2017; and (c) the date specified in
writing by PME Locomotives (Mauritius) Limited on the occurrence of
any of: (i) a change of control of Sheltam; (ii) the Sheltam
corporate fundraising currently in progress not proceeding; (iii)
the sale, divestment or transfer to a third party of a material
part of the Sheltam group's business; (iv) the insolvency of the
Sheltam group or the Sheltam group entering into any arrangement
with creditors; or (v) any event of default under the Sheltam
group's existing debt facilities.
Interest shall accrue on the US$4.25 million cash consideration
payable to the Company in accordance with the Deed of Variation at
a rate of 10% per annum from and including the fifth business day
following the exercise of the Option and up to Completion.
16 Financial Statements
The financial information set out in this announcement does not
constitute statutory accounts but has been extracted from the
Group's Financial Statements. The Group's annual report will be
posted to shareholders shortly and will be available on the
Company's website www.pmeinfrastructure.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AIMFTMBMMBJR
(END) Dow Jones Newswires
May 05, 2017 02:00 ET (06:00 GMT)
Pme African Infrastructu... (LSE:PMEA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pme African Infrastructu... (LSE:PMEA)
Historical Stock Chart
From Jul 2023 to Jul 2024