82
83
KUWAIT ENERGY plc AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
35
24.
SHARE-BASED PAYMENTS
At an Extraordinary General Meeting held on 14 October 2008 the shareholders of Kuwait Energy K.S.S.C.
(see note 1) approved the issue of shares for nil consideration to employees in accordance with the employee
incentive scheme (“EIS”) approved by the Board of Directors (“BOD”). The EIS is available to specified
employees employed at the beginning of the financial year and pro-rated for specified employees who have
joined before 1 October of the financial year. The entitlement of each employee is determined based on the
maximum incentive entitlement decided by the BOD and the weighted average of corporate performance
ratings and individual performance ratings. The share awards vest in a staggered manner of 30%, 30% and 40%
after one, two and three years respectively. Any unutilised share awards cannot be carried forward. If the
employee leaves the Group (other than due to exceptional circumstances beyond the employee’s control)
during the vesting period, the unvested shares will be forfeited. If the employee leaves the Group due to
exceptional c
ircumstances beyond the employee’s control during the vesting period, the fair value of the
unvested share awards will be paid in cash. The unvested shares are not entitled to dividends or bonus shares.
The EIS is operational for 10 years (effective 1 January 2008). The source of the shares granted under the EIS
will be through issues of new shares before the Company gets listed and through treasury shares of the
Company once it gets listed. The total number of shares to be granted under the EIS is not to exceed 10% of the
paid-up share capital.
The Group records an expense, based on its best estimate related to the fair value determined by reference to
the fair value of the share awards from independent market sources at the dates of the grant 1 January 2008
(139 fils/share), 1 January 2009 (201 fils/share), 1 January 2010 (201 fils/share) and 1 January 2011 (201
fils/share) on a straight-line basis over the vesting period. At 31 December 2011, management has estimated
that all 183 employees will be entitled to the shares under the EIS and recognised an expense of USD 1,229
thousand (2010: USD 886 thousand) including reversal of previously recognised expenses relating to forfeited
shares as the cost of EIS and credited the share-based compensation reserve in equity. The share-based
compensation reserve will be reversed and share capital/share premium credited on issue of the vested shares.
Prior to the restructuring described in note 1, Kuwait Energy K.S.S.C issued 916 thousand shares (2010: 361
thousand shares) to employees who exercised their entitlements as at 1 January 2010 under the EIS.
Following the restructuring described in note 1, the EIS obligations have been transferred from Kuwait Energy
K.S.S.C. to Kuwait Energy plc. The fair values of awards made up to and including 2010 are unchanged
following the restructuring, however the disclosures below have been restated to reflect the relevant number of
Kuwait Energy plc shares.
As at 31 December 2011, the entitlement of employees under the EIS was as follows:
Vesting dates
Number
of
employees
Total share
awards
granted
(thousands)
1 January 2012
183
334
1 January 2013
183
318
1 January 2014
183
206
Total number of granted shares
858
Year ended
31 December 2011
Year ended
31 December 2010
Number
Fair value
Number
Fair value
000’s
USD 000’s
000’s
USD 000’s
Outstanding at beginning of the year
618
1,696
264
670
Granted during the year
514
1,485
460
1,291
Forfeited during the year
(42)
(118)
(16)
(41)
Vesting during the year
(232)
(614)
(90)
(224)
Outstanding at the end of the year
858
2,449
618
1,696
KUWAIT ENERGY plc AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
36
25.
EARNINGS PER SHARE
a) Basic earnings per share
The earnings and weighted average number of shares used in the calculation of basic earnings per share are as
follows:
2011
2010
USD 0
00’s
USD 000’s
Profit for the year
34,763
21,902
Shares
Shares
Weighted average number of shares for the purposes of basic earnings
per share (thousand)
312,340
263,923
Basic earnings per share (cents)
11.1
8.5
b)
Diluted earnings per share
The earnings used in the calculation of diluted earnings per share are as follows:
2011
2010
USD 0
00’s
USD 000’s
Earnings used in the calculation of diluted earnings per share
34,763
21,902
The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to
the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Shares
Shares
Weighted average number of ordinary shares used in the calculation of
basic earnings per share (thousand)
312,340
263,923
Shares deemed to be issued for no consideration in respect of:
Employee awards (thousand)
858
618
Business combinations (thousand)
-
247
Weighted average number of ordinary shares used in the calculation of
diluted earnings per share (thousand)
313,198
264,788
Diluted earnings per share (cents)
11.1
8.5
26.
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.
All related party transactions are conducted on an arm’s
length basis and are approved by the board of directors
.
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.
Note 1 contains information on the restructuring of the Group and the basis of preparation of the financial
statements. No transactions between the Company and Kuwait Energy K.S.S.C. prior to the completion of the
restructuring are disclosed in this note due to the merger accounting approach followed.
Kuwait Energy KSSC, the parent company prior to the restructuring has continued to provide staff to the Group
at cost plus a mark-up, representing an arm
’
s length transaction, whilst the contracts for those staff are
transferred to subsidiaries of the group. The charge to the Group after completion of the restructuring in this
regard was USD 569 thousand and USD 569 thousand was owed to Kuwait Energy KSSC in this regard at 31
December 2011 (2010: USD nil)
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
