Download TPS, East Africa 2008 Annual Report - Serena Hotels

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Notes to the Financial Statements 1 General information TPS Eastern Africa Limited is incorporated in Kenya under the Companies Act as a public limited liability Company, and is domiciled in Kenya. The address of its registered office is: Williamson House 4th Ngong Avenue PO Box 48690 00100 NAIROBI KENYA The Company's shares are listed on the Nairobi Stock Exchange. 2 Summary of significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. (a) Basis of preparation The financial statements are prepared in compliance with International Financial Reporting Standards (IFRS). The measurement basis applied is the historical cost basis, except where otherwise stated in the accounting policies below. The financial statements are presented in Kenya Shillings (Shs), rounded to the nearest thousand. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed in Note 4. Interpretations effective in 2008 In 2008, the following new interpretations became effective for the first time but have not had an impact on the company's financial statements: - IFRIC 11 - IFRS 2 - Group and treasury share transactions - IFRIC 12 - Service Concession Arrangements - IFRIC 14 - IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction - IAS 39 and IFRS 7 - Reclassification of financial assets. Standards, interpretations and amendments to published standards that are not yet effective One new standard (IFRS 8 - Operating Segments) and numerous amendments to existing standards and new interpretations have been published and will be effective for the company's accounting periods beginning on or after 1 January 2009, but the company has not early adopted any of them. The Directors have assessed the relevance of these amendments and interpretations with respect to the Group's operations and concluded that they are not relevant to the Group, other than IFRS 8, which will result in changes to the reportable segments and the information disclosed in respect of those segments and the amendments to IAS 1 - Presentation of Financial Statements, which will require non-owner changes in equity to be presented in a 'Comprehensive Statement of Income'. 32 TPS EASTERN AFRICA LIMITED | ANNUAL REPORT AND FINANCIAL STATEMENTS 2008
2 Summary of significant accounting policies (continued) (b) Consolidation (i) Subsidiaries Notes to the Financial Statements (cont’d) Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date the control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (ii) Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. The Group's share of its associates' post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. (c) Functional currency and translation of foreign currencies (i) Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Kenya Shillings, which is the Company's functional and presentation currency. TPS EASTERN AFRICA LIMITED | ANNUAL REPORT AND FINANCIAL STATEMENTS 2008 33
Page 1 and 2: Contents Directors and Administrati
Page 3 and 4: PRINCIPAL OFFICERS Michael Opondo D
Page 5 and 6: Other Corporate Information REGISTE
Page 7 and 8: Notisi ya Mkutano wa Pamoja wa Mwak
Page 9 and 10: withholding tax, where applicable.
Page 11 and 12: Sehemu ya nje ya Hoteli ya Serenget
Page 13 and 14: Halmashauri na wasimamizi wanakadir
Page 15 and 16: Mr. Ameer Kassim-Lakha Non-executiv
Page 17 and 18: Corporate Governance Statement The
Page 19 and 20: SHAREHOLDERS' PROFILE AS AT 31 DECE
Page 21 and 22: which allow for optimum conservatio
Page 23 and 24: Statement of Directors’ Responsib
Page 25 and 26: Consolidated Profit and Loss Accoun
Page 27 and 28: Company Balance Sheet For the perio
Page 29 and 30: Consolidated Statement of Changes i
Page 31: Consolidated Cash Flow Statement Fo
Page 35 and 36: 2 Summary of significant accounting
Page 37 and 38: 2 Summary of significant accounting
Page 39 and 40: 3 Financial risk management (contin
Page 41 and 42: 3 Financial risk management (contin
Page 43 and 44: 5 Segment information (continued) N
Page 45 and 46: 7 Employee benefits expense Notes t
Page 47 and 48: 14 Borrowings The borrowings are ma
Page 49 and 50: 15 Deferred income tax (continued)
Page 51 and 52: 17 Available for sale financial ass
Page 53 and 54: Notes to the Financial Statements (
Page 55 and 56: 23 Receivables and prepayments Note
Page 57 and 58: 27 Related party transactions Notes
Page 59 and 60: 28 Contingent liabilities Notes to
Page 61 and 62: CUT HERE FORM OF PROXY I / We being
Page 63 and 64: KATA HAPA FOMU YA UWAKILISHI Mimi /

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