108-109 / 116
109
108
KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014
49
31.
SUBSIDIARY AND JOINT VENTURE COMPANIES
a)
The principal subsidiaries of the Company at 31 December 2014 were as follows:
Company’s name
Ownership %
Country of
incorporation
Country of
operations
Type of activity
31.12.14 31.12.13
Kuwait Energy International Limited
100
100
Jersey
Egypt/
Yemen
Holding Company
Kuwait Energy Company
K.S.C.(Closed)
87.8
-
Kuwait
Kuwait
Exploration /
development/
production
KEC (Egypt) Ltd
100
100
British Virgin
Islands
Egypt
Development/
production
Kuwait Energy Egypt Ltd
100
100
British Virgin
Islands
Egypt
Exploration /
development/
production
Kuwait Energy (Eastern Desert)
Petroleum Services SAE
100
100
Egypt
Egypt
Exploration /
development/
production
KEC (Yemen) Ltd
100
100
British Virgin
Islands
Yemen
Exploration /
development/
production
Kuwait Energy AMED Yemen Ltd
100
100
British Virgin
Islands
Yemen
Exploration
Kuwait Energy Iraq Limited
100
100
British Virgin
Islands
Iraq
Exploration /
development/
production
KE Netherlands Coöperatief U.A.
100
100
Netherlands
Ukraine/
Latvia/
Russia
Holding Company
Kuwait Energy Ukraine
-
100
Ukraine
Ukraine
Exploration/
Production
Pechora Energy Company
-
100
Russia
Russia
Exploration/
Production
Jannah Hunt Oil Company Limited
100
100 British Virgin
Islands
Yemen
Development/
production
b)
The group has a 20% interest in Medco LLC. Medco LLC is the operator for Karim Small fields in Oman.
KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2014
50
32.
RELATED PARTY TRANSACTIONS
Related parties comprise major shareholders, directors and executive officers of the Group, their families and
companies of which they are the principal owners. Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
During the year 2014, a restructuring of the Group was undertaken in July 2014 to bring KEC, the parent Company
prior to the restructuring in 2011, into the Group. As approved in the 2013 Annual General Meeting of the Company
and ratified in the 2014 Extraordinary General Meeting of the Company, shares of KEC have been acquired from its
shareholders for new ordinary shares of the Company on a 1:1 basis (note 15).
The other
related party transactions and balances included in the Group’s consolidated financial statements are as
follows:
a) Compensation of key management personnel:
Key management personnel are considered to be the Board of Directors of the Company.
The remuneration of key management personnel during the year was as follows:
Year ended
2014
Year ended
2013
USD 000’s
USD 000’s
Salaries and other short-term benefits
1,456
1,667
Consultancy fees paid to non-executive director
296
296
Post-employment benefits
32
33
Share-based payments
-
346
1,784
2,342
b) Agreement to purchase shares
10,000
11,000
The current Deputy Chief Executive Officer (Dy. CEO), previously Chief Operating Officer, of the Group has entered
into an agreement with a third party on behalf of the Group to purchase a specified number of shares of the Company
held by that third party. Depending on the outcome of certain future events, and unless otherwise agreed, the Group
may be required to lend the Dy. CEO the purchase price of the shares, approximately USD 10 million, until such time
as the Dy. CEO is able to sell the shares and repay the loan to the Company. The Company anticipates that, as and
when the Dy. CEO is required to purchase shares from the third party, it will purchase them from the Dy. CEO and
hold them as treasury shares.
During 2014, under the arrangement described above, the Dy. CEO was required to purchase 792,741 ordinary shares
of the Company at a price of KWD 0.620 per share (totalling USD 1,749 thousand). The Company lent the Dy. CEO
the funds to complete this transaction. Shareholder approval to buy back these shares from the Dy. CEO was obtained
in October 2014 and the Company now holds these shares as treasury shares (note 22). The loan to the Dy. CEO was
repaid to the Company in the year.