56
57
KUWAIT ENERGY plc GROUP
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2011
9
2011
2010
Notes
USD 000’s
USD 000’s
OPERATING ACTIVITIES
Profit before tax
44,632
20,201
Adjustments for:
Depreciation, depletion and amortisation
49,452
60,417
Impairment losses
8,520
-
Impairment losses recognised on trade receivables
-
1,329
Gain on farm out of working interests
-
(156)
Loss on held for trading derivative
75
675
Loss on sale of other assets
1
-
Loss on disposal of oil & gas assets
55
132
Finance costs
7,749
1,818
Interest income
(197)
(80)
Share-based compensation expense
1,229
886
Provision for retirement benefit obligation
413
348
Operating cash flow before movement in working capital
111,929
85,570
Increase in trade and other receivables
(87,303)
(38,783)
Increase in trade and other payables
2,224
14,513
(Decrease)/Increase in derivative financial instruments
-
4,337
Tax paid
(499)
(1,061)
Net cash generated by operating activities
26,351
62,717
INVESTING ACTIVITIES
Purchase of intangible exploration and evaluation assets
(31,677)
(41,614)
Purchase of property, plant and equipment
(68,474)
(64,413)
Increase/(decrease) in producing inventory stores
1,435
(1,834)
Purchase of other fixed assets
(2,893)
(3,612)
Proceeds from sale of held to maturity investment
-
13,256
Proceeds from farm out of working interests
13
19,464
8,683
Proceeds from disposal of other assets
9
7
Decrease / (increase) in liquid investments
-
3,483
Interest received
197
2,256
Net cash used in investing activities
(81,939)
(81,954)
FINANCING ACTIVITIES
Proceeds from issue of share capital
73,696
32,002
Increase in long term loans
-
20,828
Dividend paid
(22,799)
-
Finance costs paid
(12,782)
(1,724)
Net cash generated by financing activities
38,115
51,106
Effect of foreign currency translation
(142)
66
Net increase / (decrease) in cash and bank balances
(17,615)
31,935
Cash and bank balances at beginning of the year
58,092
26,157
Cash and bank balances at end of the year
17
40,477
58,092
KUWAIT ENERGY plc GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
10
1.
INCORPORATION AND ACTIVITIES
Kuwait Energy plc
(“Company”) is a
company incorporated on 12 September 2011 in accordance with the
Commercial Companies Law in the Bailiwick of Jersey.
The Company
and its subsidiaries (together referred to as “the Group”) have
been established with the objective
of exploration for production and commercialisation of crude oil and natural gas.
The Company
’s
registered address is Queensway House, Hilgrove Street, St Helier, Jersey, JE1 1ES.
GENERAL INFORMATION AND RESTRUCTURING
The Company is incorporated in Jersey, and is the new ultimate parent company of the Kuwait Energy Group
(
“
Kuwait Energy
”
) and owner of all the assets and liabilities previously held directly by Kuwait Energy KSSC,
following a restructuring of the ownership interests in Kuwait Energy KSSC in December 2011 (the
“Restructuring”)
. During 2011, Kuwait Energy plc
acquired all of Kuwait Energy KSSC’s material assets and
subsidiaries in consideration for the issue to Kuwait Energy KSSC of 317,500,000 new shares of Kuwait Energy
plc. The share capital of Kuwait Energy KSSC was subsequently reduced to 2.5% of the existing share capital
and 90% of the shares in Kuwait Energy plc
were transferred to Kuwait Energy KSSC’s shareholders on a pro
-
rata basis, with the remaining 10% being held by Kuwait Energy KSSC. Immediately prior to the capital
reduction, Kuwait Energy KSSC transferred 285,750,000 ordinary shares of £1 in Kuwait Energy plc to Kuwait
Energy KSSC shareholders, pro-rata to their shareholding in Kuwait Energy KSSC.
After the Restructuring, each Kuwait Energy KSSC shareholder held 25 Kuwait Energy KSSC and 225 Kuwait
Energy plc shares for every 1000 Kuwait Energy KSSC shares held immediately prior to the Restructuring.
Although this consolidated financial information has been released in the name of the parent, Kuwait Energy
plc, it represents in-substance, continuation of the existing Group, headed by Kuwait Energy plc. For accounting
purposes it represents a reorganisation of entities under common control. As such, this business combination
was outside the scope of IFRS 3 “Business Combinations” and for the period prior to the Restructuring the
results have therefore been prepared using the principles of merger accounting. Under this method:
• the consolidated assets and liabilities of the previous ultimate parent, Kuwait Energy KSSC, were recognised
and measured at the pre-restructuring carrying amounts, without restatement to fair value;
•
the results for the year ended 31 December 2010 and the period from 1 January 2011 to the date of the
Restructuring are those of Kuwait Energy KSSC;
• comparative numbers presented in the consolidated financial statements are those reported in the consolidated
financial statements of Kuwait Energy KSSC, for the year ended 31 December 2010, except for the presentation
of the share capital and other reserves, which have been restated to reflect the change in the nominal value of the
ordinary shares resulting from the Restructuring as if Kuwait Energy plc had been the parent company during
such periods; and
• the
difference between the historical carrying amounts of net assets transferred and consideration received has
been recognised as a merger reserve.
These consolidated financial statements were approved for issue by the Board of Directors of the Parent
Company on 4 April 2012 and are subject to the approval of the Annual General Meeting of the shareholders.
2.
ADOPTION OF REVISED STANDARDS
In the current year, the following new and revised Standards and Interpretations have been adopted and have
affected the amounts reported in these financial statements.
Standards not affecting the reported results or the financial position
The following new and revised Standards and Interpretations have been adopted in the current year. Their
adoption has not had any significant impact on the amounts reported in these financial statements but may
impact the accounting for future transactions and arrangements.
Kuwait Energy Plc Group
Consolidated Statement Of Cash Flows
For The Year Ended 31 December 2011
Kuwait Energy Plc Group
Notes To The Consolidated Financial Statements
For The Year Ended 31 December 2011
