106-107 / 116
107
106
KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014
47
30.
FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk management (continued)
During the year ended 31 December 2014, 79% of total revenue (2013:74%) was derived from the sales to the
Group’s largest counterparty, EGPC and 18% of total revenue (2013: 21%) was derived from sales to Exxon Mobil.
Further details of the Group’s receivables with
EGPC and Exxon Mobil are provided in note 4 (“Debtor
recoverability”) and note 1
9. The Group defines counterparties as having similar characteristics if they are related
entities.
Credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with
high credit ratings assigned by international credit rating agencies.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was:
2014
(Restated)
2013
USD 000’s
USD 000’s
Trade and other receivables
108,319
150,395
Cash and cash equivalents
215,992
127,594
324,311
277,989
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
2014
(Restated)
2013
USD 000’s
USD 000’s
Egypt
66,249
115,824
Yemen
7,355
8,961
73,604
124,785
Liquidity risk management
Liquidity risk is the risk that
the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Ultimate responsibility for liquidity risk management rests with the management, which has built an appropriate
liquidity risk management framework f
or the management of the Group’s short, medium and
s funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking
facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities
(including interest).
The tables have been drawn up based on the undiscounted cash flows of financial liabilities.
Financial liabilities
Less than
1 year
Between
1 and 3
years
Between
3 and 5
years
More than
5 years
Total
Weighted
average
effective
interest rate
USD 000’s
USD 000’s
USD 000’s
USD 000’s
USD 000’s
%
At 31 December 2014
Borrowings
23,750
47,500
297,500
-
368,750 10.6%
Convertible loans
9,250
35,500
89,585
-
134,335
12.0%
Trade and other
payables
128,449
-
-
-
128,449
161,449
83,000
387,085
-
631,534
KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014
48
30.
FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk management (continued)
At 31 December 2013
Borrowings
84,436
93,447
-
-
177,883
6.62%
Convertible loans
8,000
16,000
96,796
17,169
137,965
16%
Trade and other
payables (restated)
89,001
-
-
-
89,001
-
181,437
109,447
96,796
17,169
404,849
The group has access to financial facilities as described in notes 23 and 24. The group expects to meet its other
obligations from operating cash flows.
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to the shareholders through the optimisation of debt and equity balance. The Group’s overall strategy remains
unchanged during 2014.
The capital structure of the Group consists of equity comprising issued share capital (note 21), share premium, other
reserves (note 22) and retained deficit.
Gearing ratio
The gearing ratio at year end was as follows:
2014
(Restated)
2013
USD 000’s
USD 000’s
Total debt (i)
360,288
277,067
Less: Cash and cash equivalents
(215,992)
(127,594)
Net debt
144,296
149,473
Equity attributable to owners of the Company
407,742
370,210
Net debt to equity ratio (%)
35.4
40.4
(i) Debt is defined as borrowings as detailed in note 23 and convertible loans as detailed in note 24.