74
75
KUWAIT ENERGY plc AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
27
11.
TAXATION
INCOME TAX EXPENSE
2011
2010
Tax on profit on ordinary activities
US
D 000’s
US
D 000’s
Current tax:
Corporation tax
8,957
(476)
Total current tax
8,957
(476)
Deferred tax:
Origination and reversal of timing differences
912
(1,225)
Total deferred tax
912
(1,225)
Tax on profit on ordinary activities
9,869
(1,701)
Corporation tax
in the Company’s country of domicile
is calculated at 0% (2010: 0%) on assessable profits,
this rate being the applicable statutory tax rate for international businesses that are tax resident in Jersey.
Taxation for other jurisdictions are calculated at the rates prevailing in the respective jurisdictions.
Factors affecting the tax charge for the period
The difference between the amount of total tax shown above and the amount calculated by applying the
standard rate of Jersey corporation tax to the profit before tax is as follows:
2011
2010
US
D 000’s
USD
000’s
Profit on ordinary activities before tax
44,632
20,201
Tax on Company profit on ordinary activities at corporation tax rate of
0%
-
-
Effects of:
Effect of different tax rates of subsidiaries operating in other
jurisdictions
15,614
(476)
Income not taxable or expenses not deductible
(6,481)
(1,225)
Deferred tax on group restructuring
736
-
Total tax charge / (credit) for the year
9,869
(1,701)
Deferred taxation
2011
2010
Deferred taxation is comprised as follows:
US
D 000’s
US
D 000’s
Deferred tax asset arising on the recognition of tax losses
8,970
9,146
Deferred tax liability on fixed asset temporary differences
(31,379)
(30,644)
(22,409)
(21,498)
The deferred tax asset shown above primarily arises in Russia, where losses have been incurred in both 2010
and 2011. Management believes it is appropriate to recognize a deferred tax asset, as based on an independent
assessment of its commercial reserves, it expects to generate significant taxable profits in future years in Russia.
There are no material unrecognized deferred tax assets at either year end, nor any material unprovided deferred
tax arising on the unremitted earnings of subsidiaries.
KUWAIT ENERGY plc AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
28
12.
PROFIT FOR THE YEAR
Profit for the year is stated after charging:
2011
2010
US
D 000’s
US
D 000’s
Staff costs
8,190
9,530
Depreciation, depletion and amortisation
49,452
60,417
Foreign exchange (gain)/ losses
(654)
463
Impairment losses recognised on trade receivables
-
1,329
Cost/(recovery) of inventories recognised as expense/(gain)
1,148
(1,128)
13.
INTANGIBLE EXPLORATION AND EVALUATION ASSETS
Exploration
and
evaluation assets
USD 000’s
Cost
As at 1 January 2010
230,554
Additions
41,614
Farm out of working interests (See note below)
(25,830)
Transfer to other receivables (See note 30 (a))
(2,374)
As at 31 December 2010
243,964
Additions
36,273
Transfer to Property, plant and equipment
(131,036)
As at 31 December 2011
149,201
As at 31 December 2011, exploration cost of USD 149,201 thousand (2010: USD 243,964 thousand) were not
amortised, pending further evaluation of whether or not the related oil and gas properties are commercially
viable. The transfer during the year to Property plant and equipment reflects assets for which commercial
reserves have been discovered during the year.
The additions to intangible exploration and evaluation assets include USD 143 thousand (2010: USD 272
thousand) of finance costs on qualifying assets capitalised during the year.
During the previous year, the Group farmed out of certain of its working interests for total proceeds of USD
28,159 thousand.
a.
The Group has farmed out 25 % of the working interest in JAA 429 for a consideration of USD 3,829
thousand. The terms of the transaction resulted in farm out of exploration and evaluation assets of USD
1,500 thousand, property, plant and equipment of USD 1,569 thousand (See note 15) and other working
capital items of USD 579 thousand and gain on farm out of USD 181 thousand.
b.
The Group has farmed out 22 % of the working interest in Abu Sennan for a consideration of USD
20,100 thousand which has been netted off against exploration and evaluation assets. The terms of the
transaction resulted in farm out of intangible exploration and evaluation assets of USD 9,305 thousand.
c.
The Group has farmed out 15 % of the working interest in Mesaha for a consideration of USD 4,230
thousand which has been netted off against exploration and evaluation assets. The terms of the
transaction resulted in farm out of intangible exploration and evaluation assets of USD 721 thousand.
The net cash inflow arising from the above in 2010 was USD 8,683 thousand , with consideration of USD 19,
464 thousand, received in 2011.
Kuwait Energy Plc And Subsidiaries
Notes To The Consolidated Financial Statements
For The Year Ended 31 December 2011
Kuwait Energy Plc And Subsidiaries
Notes To The Consolidated Financial Statements
For The Year Ended 31 December 2011
