TIDMPMEA
RNS Number : 5786N
PME African Infrastructure Opps PLC
10 May 2018
10 May 2018
PME African Infrastructure Opportunities plc
("PME" or the "Company")
(AIM: PMEA.L)
Final Results for the year ended 31 December 2017
PME African Infrastructure Opportunities plc announces its
audited results for the year ended 31 December 2017.
Financial Highlights
-- Net Asset Value of US$5.2 million as at 31 December 2017 (2016: US$9.5 million)
-- Net Asset Value per share of US$0.21 (2016: US$0.23)
-- US$3.4 million fully subscribed tender offer completed during the period
-- Loss attributable to shareholders for the year ended 31
December 2017 was US$0.9 million (2016: profit of US$0.4
million)
-- Basic and diluted loss per share of US$0.0241 (2016: profit per share of US$0.0100)
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
Market Abuse Regulation disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
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 2017.
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 net proceeds of realisation of the remaining assets to
shareholders.
Investments
The Company now has one remaining asset, namely a building in
Dar-es-Salaam, Tanzania (the "Dar-es-Salaam Property").
On the 29 June 2017 the Company announced that its wholly-owned
subsidiary PME Locomotives (Mauritius) Limited had completed and
settled a put option with Sheltam (Mauritius) Limited and that cash
consideration of US$4.25 million, together with interest of
US$163,000, had been received by the Group.
At an Extraordinary General Meeting held on 6 September 2017,
shareholders agreed to a tender offer pursuant to which the Company
offered to purchase up to 16,389,294 ordinary shares in the Company
("Ordinary Shares"), representing 40 per cent of the Ordinary
Shares then in issue, at a price of US$0.21 per Ordinary Share.
16,389,294 Ordinary Shares were validly tendered under the tender
offer and were subsequently cancelled on purchase by the Company.
From 19 September 2017 the Company's issued share capital consists
of 24,583,942 Ordinary Shares and the total number of voting rights
in the Company is therefore 24,583,942. The voting rights on all
Ordinary Shares are identical.
The Dar-es-Salaam Property, which is managed by a local managing
agent, is currently 80% let and the investment continues to trade
profitably. In 2010 PME Properties Limited acquired the property
from Dovetel (T) Limited ("Dovetel"), the Company's former
telecommunication investee company in Tanzania.
Dovetel was also a tenant of part of the Dar-es-Salaam Property
but was in default on the payment of rent. As previously reported
to shareholders, the Company has followed various legal steps to
correct the situation. On 19 October 2017, PME Properties Limited
issued an eviction notice to Dovetel. On 3 December 2017 the
eviction was carried out.
Subsequent to the eviction of Dovetel being carried out, First
Seal Ltd, Dovetel's parent company, raised complaints with local
authorities that the eviction was incorrectly carried out and
alleging that PME had attacked the Dar-es-Salaam Property,
destroying a building that belonged to Dovetel and thereafter took
over the properties/equipment within it. Both the property manager
and the lawyer responsible for the eviction were questioned on a
number of occasions over a three-day period.
The Group has responded to local police in respect of these
allegations, through the Group's lawyers appointed by the Group to
execute the Dovetel eviction, and considers the claim to have no
foundation and will strongly defend itself and its ownership of the
building. In its response, the Group has highlighted the background
to the Dovetel eviction, confirmed that the eviction was conducted
by the landlord through the Court Broker who is legally authorised
and provided the police with documentation proving the Group's
ownership of the Dar-es-Salaam building and that Dovetel were
merely a tenant of the Dar-es-Salaam property. As at the date of
writing no further action has been taken by the police who, the
Company understands, continue with their investigation. No
provision has been made for the Dovetel action. The directors
consider it without merit.
Further renovations to the building have been carried out. The
Dar-es-Salaam Property has three tenants. One tenant has a lease
agreement for 809 square metres with approximately 18 months to run
on the lease. The second tenant rents 628 square metres on a five
year lease ending in May 2021 with rental increases built into the
agreement. The third tenant leases 1,206 square metres under a two
year lease ending in February 2020.
There is still uncertainty about the economic position of
Tanzania. Investment decisions continue to be postponed which in
turn has reduced the demand for high end offices. The prospect of
selling the Dar-es-Salaam Property in the short term for a
reasonable price is still uncertain.
The Directors have decreased the value of the Dar-es-Salaam
Property to US$4.66m. This valuation is in line with an updated
value assessed by the local expert and accounts for both current
vacancy levels and the current economic climate. For the year end
31 December 2016, the local expert had a market value of US$4.95
million on the Dar-es-Salaam Property.
Financial Results
The loss for the year to 31 December 2017 was US$0.9 million
(2016: profit of US$0.4 million), representing a US$0.0241 loss per
Ordinary Share (2016: profit per Ordinary Share US$0.0100). The
loss for the period was made up of the net loss in the fair value
of assets plus ongoing operating and administrative costs.
The Directors, having considered the latest valuation of the
Dar-es-Salaam Property, are of the opinion that the Dar-es-Salaam
Property is reflected in the balance sheet at realistic fair
value.
As at 31 December 2017, PME's Net Asset Value attributable to
ordinary shareholders in accordance with IFRS was US$5.2 million
(US$0.21 per share), compared to the US$9.5 million (US$0.23 per
share) that was reported as at 31 December 2016.
Return of Cash and Outlook
The Directors will continue with the marketing process for the
sale of the Dar-es-Salaam Property in 2018, provided the local
economic uncertainty has receded, the vacant space has been relet
and the Group has received confirmation that the police
investigation in relation to the Dovetel eviction has been
finalised with no further action being taken.
A further and final tender offer will be proposed once the
building has been sold.
Paul Macdonald
Chairman
9 May 2018
Statement of Comprehensive Income
Year ended Year ended
31 December 2017 31 December 2016
Note US$'000 US$'000
Net (losses)/gains on financial assets at fair value through profit or
loss 3 (204) 1,230
Dividend income 226 -
Operating and administration expenses 9 (898) (802)
Foreign exchange gain/(loss) 1 (17)
----------------------------------------------------------------------- ----- ------------------ ------------------
(Loss)/profit before income tax (875) 411
Income tax 14 - -
----------------------------------------------------------------------- ----- ------------------ ------------------
(Loss)/profit and total comprehensive(expense)/ income for the year (875) 411
Basic and diluted (loss)/profit per share (cents) attributable to the
equity holders of the
Company during the year 5 (2.41) 1.00
----------------------------------------------------------------------- ----- ------------------ ------------------
Balance Sheet
Note As at 31 December 2017 As at 31 December 2016
US$'000 US$'000
------------------------------------------------------- ----- ----------------------- -----------------------
Assets
Current assets
Financial assets at fair value through profit or loss 3 4,687 9,260
Trade and other receivables 26 69
Cash and cash equivalents 554 261
------------------------------------------------------- ----- ----------------------- -----------------------
Total current assets 5,267 9,590
------------------------------------------------------- ----- ----------------------- -----------------------
Total assets 5,267 9,590
------------------------------------------------------- ----- ----------------------- -----------------------
Equity and liabilities
Equity
Issued share capital 6 246 410
Capital redemption reserve 7 1,559 1,395
Retained earnings 3,365 7,682
------------------------------------------------------- ----- ----------------------- -----------------------
Total equity 5,170 9,487
------------------------------------------------------- ----- ----------------------- -----------------------
Current liabilities
Trade and other payables 8 97 103
-----
Total current liabilities 97 103
------------------------------------------------------- ----- ----------------------- -----------------------
Total liabilities 97 103
------------------------------------------------------- ----- ----------------------- -----------------------
Total equity and liabilities 5,267 9,590
------------------------------------------------------- ----- ----------------------- -----------------------
The financial statements were approved and authorised for issue
by the Board of Directors on 9 May 2018 and signed on its behalf
by:
Paul Macdonald Lawrence Kearns
Director Director
Statement of Changes in Equity
Share capital Capital redemption reserve Retained earnings Total
US$'000 US$'000 US$'000 US$'000
---------------------------------------- ----------------------------- ------------------ --------
Balance at 1 January 2016 410 1,395 7,271 9,076
----------------------------------------- ----------- ---------------- ------------------ --------
Comprehensive income
Profit for the year - - 411 411
----------------------------------------- ----------- ---------------- ------------------ --------
Total comprehensive income for the year - - 411 411
----------------------------------------- ----------- ---------------- ------------------ --------
Balance at 31 December 2016 410 1,395 7,682 9,487
----------------------------------------- ----------- ---------------- ------------------ --------
Balance at 1 January 2017 410 1,395 7,682 9,487
------------------------------------------ ------ ------ -------- --------
Comprehensive expense
Loss for the year - - (875) (875)
------------------------------------------ ------ ------ -------- --------
Total comprehensive expense for the year - - (875) (875)
------------------------------------------ ------ ------ -------- --------
Transactions with owners
Tender offer (note 6) (164) 164 (3,442) (3,442)
------------------------------------------ ------ ------ -------- --------
Total transactions with owners (164) 164 (3,442) (3,442)
------------------------------------------ ------ ------ -------- --------
Balance at 31 December 2017 246 1,559 3,365 5,170
------------------------------------------ ------ ------ -------- --------
Cash Flow Statement
Note Year ended Year ended
31 December 2017 31 December 2016
US$'000 US$'000
-------------------------------------------------------------- ----- ------------------ ------------------
Cash flows from operating activities
Purchase of financial assets - loans to investee companies 3 (14) (174)
Proceeds from sale of financial assets - return of capital 3 4,400 -
Dividends received 226 -
Operating, administrative and project related expenses paid (879) (891)
------------------ ------------------
Net cash generated from/(used in) operating activities 3,733 (1,065)
-------------------------------------------------------------- ----- ------------------ ------------------
Financing activities
Tender offer 6 (3,442) -
Net cash used in financing activities (3,442) -
-------------------------------------------------------------- ----- ------------------ ------------------
Net increase/(decrease) in cash and cash equivalents 291 (1,065)
Cash and cash equivalents at beginning of year 261 1,331
Foreign exchange gains/(losses) on cash and cash equivalents 2 (5)
-------------------------------------------------------------- ----- ------------------ ------------------
Cash and cash equivalents at end of year 554 261
-------------------------------------------------------------- ----- ------------------ ------------------
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 2017 the Company declared and paid
dividends of US$nil (2016: US$nil).
Going concern
In assessing the going concern basis of preparation of the
financial statements for the year ended 31 December 2017, 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 for the foreseeable future 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 2016 or 2017.
Statutory accounts for the year ended 31 December 2016 and for the
year ended 31 December 2017 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 International Financial Reporting
Standards ("IFRS") as adopted by the European Union. The financial
statements have been prepared under the historical cost convention,
as modified by the revaluation of financial assets at fair value
through profit or loss, and the requirements of the Isle of Man
Companies Acts 1931 to 2004. The preparation of financial
statements in conformity with IFRS requires the use of accounting
estimates. It also requires management to exercise its judgement in
the process of applying the Company's accounting policies. The
areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the
financial statements are disclosed in note 3.
In accordance with IFRS 10, 'Consolidated financial statements',
the Directors have concluded that the Company falls under the
definition of an investment entity because the Company has the
following characteristics:
-- the Company has obtained funds for the purpose of providing
investors with investment management services;
-- the Company's investing policy, which was communicated
directly to investors, is investment solely for returns from
capital appreciation and investment income; and
-- the performance of investments is measured and evaluated on a fair value basis.
As a result, the Company does not consolidate its subsidiaries,
instead it is required to account for these subsidiaries at fair
value through profit or loss in accordance with IAS 39, 'Financial
instruments: recognition and measurement' and prepares separate
company financial statements only.
a) New and amended standards and interpretations adopted by the
Company
There are no new international standards, amendments or
interpretations that are effective for the first time for the
financial year ended 31 December 2017 that have had a significant
effect on the financial statements.
b) New standards, amendments and interpretations to existing
standards relevant to the Company, that are not yet effective and
have not been early adopted by the Company
IFRS 9, 'Financial instruments', final version issued July 2014.
This standard replaces the guidance in IAS 39, 'Financial
instruments: recognition and measurement'. IFRS 9 retains but
simplifies the mixed measurement model and establishes two primary
categories for financial assets: amortised cost and fair value. The
basis of classification depends on the entity's business model and
the contractual cash flow characteristics of the financial asset.
For financial liabilities, IFRS 9 retains most of the IAS 39
requirements, but in cases where the fair value option is taken,
the part of a fair value change in a financial liability due to an
entity's own credit risk is recorded in other comprehensive income
rather than the income statement (unless this creates an accounting
mismatch). The standard became applicable on 1 January 2018 and was
not early adopted. The adoption of the revised standard will not
have a material effect on the Company's financial statements.
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 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
in an orderly transaction between market participants at the
measurement date. The fair value of financial assets 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 financial assets are recognised
on the trade date, being the date on which the Company commits to
purchase or sell the asset. 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 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 2017 31 December 2016
US$'000 US$'000
------------------------------------------------ ----------------- -----------------
Start of the year 9,260 7,856
Increase in loans to investee companies 14 174
Subsidiary expenses to be paid by the Company* 17 -
Return of capital** (4,400) -
Movement in fair value of financial assets (204) 1,230
End of the year 4,687 9,260
------------------------------------------------ ----------------- -----------------
* The bank account for PME Locomotives (Mauritius) Limited was
closed during the year and all money transferred to the Company's
bank account. The Company is therefore responsible for its
subsidiary's creditors at the year-end (note 8).
** The return of capital relates to a share buyback conducted by
PME Locomotives (Mauritius) Limited in July 2017.
Assets carried at amounts based on fair value are defined as
follows:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
-- Inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2).
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level
3).
The fair values of all financial assets at fair value through
profit or loss are determined using valuation techniques using
significant unobservable inputs. Accordingly, the fair values are
classified as level 3. There were no transfers between levels
during the year. The valuation techniques and the significant
unobservable inputs are shown below.
Fair value as at Fair value as at Valuation Significant Sensitivity to
31 December 2017 31 December 2016 techniques and unobservable significant
inputs inputs unobservable inputs
US$'000 US$'000
------------------ ----------------- ----------------- ------------------ ------------------ --------------------
Rail assets (PME
Locomotives
(Mauritius) Value of net
Limited 4 4,270 assets N/A N/A
Real estate 4,683 4,990 Discounted cash Discount rate If the discount
investments (PME flow property rate were 1%
TZ Property valuation (inputs higher/lower the
(Mauritius) including rental estimated fair
Limited) income, operating value would
costs, (decrease)/increase
vacancy and by US$40,000
discount rate)
plus value of
other net assets
------------------ ----------------- ----------------- ------------------ ------------------ --------------------
Total 4,687 9,260
------------------ ----------------- ----------------- ------------------ ------------------ --------------------
4 Net Asset Value per Share
As at 31 December 2017 As at 31 December 2016
-------------------------------------------------------------------- ----------------------- -----------------------
Net assets attributable to equity holders of the Company (US$'000) 5,170 9,487
Shares in issue (thousands) 24,584 40,973
-------------------------------------------------------------------- ----------------------- -----------------------
NAV per share (US$) 0.21 0.23
-------------------------------------------------------------------- ----------------------- -----------------------
The NAV per share is calculated by dividing the net assets
attributable to equity holders of the Company by the number of
Ordinary Shares in issue.
5 Basic and Diluted (Loss)/Profit per Share
Basic (loss)/profit per share is calculated by dividing the
(loss)/profit attributable to equity holders of the Company by the
weighted average number of Ordinary Shares in issue during the
year.
Year ended Year ended
31 December 2017 31 December 2016
----------------------------------------------------------------------- ------------------ ------------------
(Loss)/profit attributable to equity holders of the Company (US$'000) (875) 411
Weighted average number of Ordinary Shares in issue (thousands) 36,303 40,973
----------------------------------------------------------------------- ------------------ ------------------
Basic (loss)/profit per share (cents) for the year (2.41) 1.00
----------------------------------------------------------------------- ------------------ ------------------
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$0.01 each 31 December 2017 and 2016 31 December 2017 and 2016
Number US$'000
--------------------------------- -------------------------- --------------------------
Authorised 500,000,000 5,000
--------------------------------- -------------------------- --------------------------
C Shares of US$1 each 31 December 2017 and 2016 31 December 2017 and 2016
Number US$'000
----------------------- -------------------------- --------------------------
Authorised 5,000,000 5,000
Issued - -
----------------------- -------------------------- --------------------------
Ordinary Shares of US$0.01 each 31 December 2017 31 December 2016
US$'000 US$'000
-------------------------------------------------------------------------------- ----------------- -----------------
24,583,942 (31 December 2016: 40,973,236) Ordinary Shares in issue, with full
voting rights 246 410
-------------------------------------------------------------------------------- ----------------- -----------------
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 September 2017. Up to 16,389,294
Ordinary Shares were available for tender at a price of US$0.21 per
share. A total of 16,389,294 Ordinary Shares with an aggregate
nominal value of US$163,893 were validly tendered and were
cancelled upon completion on 19 September 2017. Retained earnings
were reduced by US$3,441,752, being the consideration paid for
these shares.
Dividends and tender offers are recognised as a liability in the
year in which they are declared and approved.
7 Capital Redemption Reserve
The capital redemption reserve is created on the cancellation of
shares equal to the par value of shares cancelled. This reserve is
not distributable.
8 Trade and Other Payables
Trade and other payables are recognised initially at fair value
and subsequently at amortised cost using the effective interest
method.
31 December 2017 31 December 2016
US$'000 US$'000
-------------------------------------------------------- ----------------- -----------------
Administration fees payable 19 20
Audit fee payable 42 53
CREST service provider fee payable 6 5
Subsidiary expenses to be paid by the Company (note 3) 17 -
Other sundry creditors 13 25
97 103
-------------------------------------------------------- ----------------- -----------------
The fair value of the above financial liabilities approximates
their carrying amounts.
9 Operating and Administration Expenses
Year
Year ended 31 December 2017 ended 31
US$'000 December
2016
US$'000
----------------------------------- ------------------------------ -------------------------------------------------
Administration expenses 167 148
Administrator and Registrar fees 84 86
Audit fees 41 56
Directors' fees 222 219
Professional fees 336 255
Other 48 38
----------------------------------- ------------------------------ -------------------------------------------------
Operating and administration
expenses 898 802
----------------------------------- ------------------------------ -------------------------------------------------
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 2017 amounted to US$76,313 (31 December 2016:
US$77,842).
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 2017 amounted to US$7,949 (31 December 2016:
US$7,722).
Administration fees of the Mauritian subsidiaries for the year
ended 31 December 2017 amounted to US$17,325 (31 December 2016:
US$23,845).
Administration fees of PME Properties Limited for the year ended
31 December 2017 amounted to US$53,405 (31 December 2016:
US$42,538).
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 2017 amounted to US$222,143 (31 December 2016:
US$218,546) and was split as below. Directors' insurance cover
payable amounted to US$30,000 (31 December 2016: US$30,028).
Year ended Year ended
31 December2017 31 December 2016
US$'000 US$'000
----------------------- ----------------- ------------------
Paul Macdonald 99 97
Lawrence Kearns 111 108
Expense reimbursement 12 14
222 219
----------------------- ----------------- ------------------
10 Operating Segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker is the person or group that
allocates resources to and assesses the performance of the
operating segments of an entity. The chief operating
decision-makers have been identified as the Board of Directors.
The Board reviews the Company's internal reporting in order to
assess performance and allocate resources. It has determined the
operating segments based on these reports. The Board considers the
business on a project by project basis by type of business. The
type of business is transport (railway) and leasehold property.
Year ended 31 December 2017 Transport Leasehold Other* Total
Property
PME Locomotives PME TZ Property
US$'000 US$'000 US$'000 US$'000
--------------------------------------------------------- ----------------- ---------------- -------- --------
Net gains/(losses) on financial assets at fair value
through profit or loss 116 (320) - (204)
Dividend income - 226 - 226
Profit/(loss) for the year 116 (94) (897) (875)
Segment assets 4 4,683 580 5,267
Segment liabilities - - (97) (97)
---------------------------------------------------------- ----------------- ---------------- -------- --------
* 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$554,414 and other assets US$26,460.
Year ended 31 December 2016 Transport Leasehold Other** Total
Property
PME Locomotives PME TZ Property
US$'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$69,479.
11 Risk Management
The Company's activities expose it to a variety of financial
risks: market risk (including foreign currency risk and interest
rate risk), credit risk and liquidity risk. The financial risks
relate to the following financial instruments: financial assets at
fair value through profit or loss, trade and other receivables,
cash and cash equivalents and trade and other payables. The
accounting policies with respect to the significant financial
instruments are described in notes 2, 3 and 8.
Risk management is carried out by the Executive Directors
Foreign currency risk
Foreign currency risk is the risk that the value of financial
instruments will fluctuate due to changes in foreign exchange
rates. Certain of the Company's operations are conducted in
jurisdictions which generate revenue, expenses, assets and
liabilities in currencies other than US Dollars. As a result, the
Company is subject to the effects of exchange rate fluctuations
with respect to these currencies. The currencies giving rise to
this risk are Euro and Pound Sterling.
The Company's policy is not to enter into any currency hedging
transactions.
The table below summarises the Company's exposure to foreign
currency risk:
31 December 2017 Monetary Assets Monetary Liabilities Total
US$'000 US$'000 US$'000
------------------ ---------------- --------------------- ---------
Euro - - -
Pound Sterling 22 (80) (58)
22 (80) (58)
------------------ ---------------- --------------------- ---------
31 December 2016 Monetary Assets Monetary Liabilities Total
US$'000 US$'000 US$'000
------------------ ---------------- --------------------- ---------
Euro - (6) (6)
Pound Sterling 66 (97) (31)
66 (103) (37)
------------------ ---------------- --------------------- ---------
The Board of Directors monitors and reviews the Company's
currency position on a continuous basis and act accordingly.
At 31 December 2017, had the US Dollar weakened by 3% (2016:
weakened by 1%) in relation to Euro and Pound Sterling, with all
other variables held constant, the shareholders' equity would have
(decreased)/increased by the amounts shown below:
2017 2016
US$'000 US$'000
--------------------- --------- ---------
Euro - -
Pound Sterling 2 -
Effect on net assets 2 -
--------------------- --------- ---------
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 Board of Directors
monitor and review the interest rate fluctuations on a continuous
basis and act accordingly.
During the year ended 31 December 2017 should interest rates
have increased by 100 basis points, with all other variables held
constant, the shareholders' equity and the result for the year
would have been US$4,000 (2016: decreased 100 basis points US$nil)
higher 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.
Credit risk (continued)
At the reporting date, the Company's financial assets exposed to
credit risk amounted to the following:
31 December 2017 31 December 2016
US$'000 US$'000
----------------------------- ----------------- -----------------
Trade and other receivables - 43
Cash and cash equivalents 554 261
554 304
----------------------------- ----------------- -----------------
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. None of the financial assets are either
past due or impaired. In addition, the Company has indirect credit
risk within its financial asset at fair value through profit or
loss, whose underlying assets includes cash and cash equivalents of
US$282,835 (31 December 2016: US$401,279) and receivables of
US$100,401 (31 December 2016: US$248,077).
The Company manages its credit risk by monitoring the
creditworthiness of counterparties regularly. Cash transactions and
balances are limited to high-credit-quality financial institutions
(at least an Aa2 credit rating).
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its obligations as they fall due. The Company currently
manages its liquidity risk by maintaining sufficient cash. The
Company and the Group's liquidity positions are monitored by the
Board of Directors.
The residual undiscounted contractual maturities of financial
liabilities are as follows:
31 December 2017 Less than 1 month 1-3 months 3 months to 1 1-5 years Over 5 years No stated
year maturity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
Financial
liabilities
Trade and other 97 - - - - -
payables
97 - - - - -
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
31 December 2016 Less than 1 month 1-3 months 3 months to 1 1-5 years Over 5 years No stated
year maturity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
Financial
liabilities
Trade and other 103 - - - - -
payables
103 - - - - -
------------------ ------------------ ----------- ------------------ ---------- ------------- ------------------
Capital risk management
The Company's primary objective when managing its capital base
was to safeguard the Company's ability to continue as a going
concern in order to realise the remaining assets of the Company at
a time and under such conditions as the Directors may determine in
order to maximise value on behalf of the shareholders of the
Company and to return both existing cash reserves and the proceeds
of realisation of the remaining assets to shareholders.
Company capital comprises share capital and reserves.
No changes were made in respect of the objectives, policies or
processes in respect of capital management during the years ended
31 December 2016 and 2017.
12 Contingent Liabilities and Commitments
The Company has no contingent liability. In relation with its
financial asset at fair value through profit or loss, PME
Properties Limited has entered into a number of operating lease
agreements in respect of property. The lease terms are between one
and ten years and the majority of the lease agreements are
renewable at the end of the lease period at market rates.
The Groups' future aggregate minimum lease payments, by virtue
of its indirect investment in PME Properties Limited, under
operating leases are as follows:
31 December 2017 31 December 2016
US$'000 US$'000
----------------------------------------- ----------------- -----------------
Amounts payable under operating leases:
Within one year 19 25
In the second to fifth years inclusive 277 300
Beyond five years 1,160 1,220
----------------------------------------- ----------------- -----------------
1,456 1,545
----------------------------------------- ----------------- -----------------
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.
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 (2016: zero
per cent).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ALMFTMBIMBIP
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