102-103 / 116
103
102
KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014
43
29.
OPERATING LEASE ARRANGEMENTS
2014
2013
USD 000’s
USD 000’s
Minimum lease payments under operating leases recognised in the
consolidated statement of income
1,527
1,810
At the consolidated statement of financial position date, the Group had outstanding commitments for future minimum
lease payments under operating leases, which fall due as follows:
Within one year
1,423
1,442
Between two years and five years
58
12
1,481
1,454
Operating lease payments represent rentals payable by the Group for certain of its office properties. Leases are
negotiated for an average term of one to two years and rentals are fixed for an average of two years with an option to
extend for a further two years at the then prevailing market rate.
30.
FINANCIAL INSTRUMENTS
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset
and financial liability are disclosed in note 3 to these consolidated financial statements.
Categories of financial instruments
(Restated)
2014
2013
USD 000’s
USD 000’s
Financial assets
Trade and other receivables
108,319
150,395
Cash and cash equivalents
215,992
127,594
Financial liabilities
At amortised cost
- Borrowings
252,355
88,867
- Current portion of borrowings
-
75,649
- Trade and other payables
128,449
89,001
At fair value through profit and loss account (FVTPL)
-Designated as FVTPL - convertible loans
117,829
112,551
-Derivative financial instruments
-
162
Fair value measurement
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. Financial instruments comprise of financial assets and
financial liabilities.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices that are observable for assets or liabilities either directly (as prices) or
indirectly (derived from prices); and
Level 3: inputs for assets or liabilities that are not based on observable market data.
KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014
44
30.
FINANCIAL INSTRUMENTS (CONTINUED)
Fair value measurement (continued)
Fair value measurement hierarchy for financial assets and financial liabilities that are carried at fair value is as follows:
31 December 2014
Level 1
Level 2
Level 3
Total
USD 000’s
USD 000’s
USD 000’s
USD 000’s
Financial liabilities measured at fair value
Financial liabilities at fair value
through profit and loss account (FVTPL):
- Convertible loans
-
-
117,829
117,829
31 December 2013
Financial assets measured at fair value
Assets classified as held for sale
-
-
51,274
51,274
Financial liabilities measured at fair value
Liabilities directly associated with assets
classified as held for sale
-
-
36,274
36,274
Financial liabilities at fair value
through profit and loss account (FVTPL):
- Convertible loans
-
-
112,551
112,551
- Derivative financial instruments
-
162
-
162
There were no transfers between Level 1, Level 2 and Level 3 fair value measurements during the year.
The following table shows a reconciliation of all movements in the fair value of financial instruments categorised
within Level 3 between the beginning and the end of the reporting year.
2014
2013
Asset classified as
held for sale (net)
Convertible
loans
Asset classified as
held for sale (net)
Convertible
loans
USD 000’s
USD 000’s
USD 000’s
USD 000’s
Asset/(liability) at 1 January
15,000
(112,551)
-
(87,244)
Amounts drawndown
-
-
-
(17,000)
Additions/repayment
2,339
8,469
293,787
7,376
Losses arising in the year/change
in fair value
(4,039)
(13,747)
(278,787)
(15,683)
Proceeds from disposal
(13,300)
-
-
-
Asset/(liability) at 31 December
-
(117,829)
15,000
(112,551)
Total losses for the year included
in profit or loss for assets held at
the end of the reporting year
4,039
9,931*
278,787
12,071*
*Net of amounts capitalised within finance costs of USD 3,816 thousand (2013: USD 3,612 thousand) (see note 24).
Fair values of all financial instruments are not materially different from their carrying values.
(a)
For financial assets and financial liabilities that are liquid or having a short-term maturity (less than three
months) it is assumed that the carrying amounts approximate to their fair value.
(b)
Fair value of borrowings (note 23) approximates carrying value which is recognised at amortised cost.
(c)
Financial assets and liabilities that are measured subsequent to initial recognition at fair value are derivatives
(note 27) and convertible loans (note 24).