88
89
KUWAIT ENERGY plc AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
41
29. FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk management (Continued)
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
2011
2010
USD
000’s
USD
000’s
Egypt
131,039
57,376
Yemen
1,134
1,381
Ukraine
36
4,500
Oman
977
1,503
Russia
70
441
133,256
65,201
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 for the management of the Group’s short, medium and long
-
term 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 tabl
es detail the Group’s remaining contractual maturity for its financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities.
At 31 December 2011
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
%
Long-term loans
8,000
40,667
7,721
-
56,388
10.11%
Trade and other
payables
52,964
-
-
-
52,964
56,964
44,667
7,721
-
109,352
KUWAIT ENERGY plc AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
42
29. FINANCIAL INSTRUMENTS (CONTINUED)
At 31 December 2010
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
%
Long-term loans
-
9,090
50,208
-
59,298
5.3
Trade and other
payables
46,407
-
-
-
46,407
46,407
9,090
50,208
-
105,705
Fair value of financial instruments
Management believes that the fair value of all of the Group’s financial assets and financial li
abilities is not
significantly different from their respective carrying values.
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 from 2010.
The capital structure of the Group consists of equity comprising issued share capital, share premium and
merger reserve (see note 18), other reserves (see note 19) and retained earnings.
Gearing ratio
The gearing ratio at year end was as follows:
2011
2010
USD
000’s
USD
000’s
Debt (i)
53,000
53,000
Less: Cash and bank balances and liquid investments
(40,477)
(58,092)
Net debt
12,523
(5,092)
Equity
734,292
631,302
Net debt to equity ratio (%)
1.7
-
(i) Debt is defined as long-term loans as detailed in note 20.
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
