2012 TPSEA Annual Report - Serena Hotels

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Notes to the Financial Statements (continued) 20 Intangible asset - Group Goodwill 2011 2010 Shs’000 Shs’000 Cost 1,057,861 1,077,869 Impairment - (20,008) Net book amount 1,057,861 1,057,861 Impairment during the year 2010 relates to the write off of goodwill relating to Samburu <strong>Serena</strong> Safari Lodge which forms part of the Kenya operating segments. This lodge was fully damaged by floods in March 2010 and has since not been operational. Impairment tests for goodwill Goodwill is allocated to the group’s operating segments identified according to the location of operation and business segment. An entity-level summary of the goodwill allocation is presented below: 2011 2010 Shs’000 Shs’000 Tourism Promotion Services (Kenya) Limited 324,643 324,643 Tourism Promotion Services (Tanzania) Limited 576,345 576,345 Tourism Promotion Services (Zanzibar) Limited 154,671 154,671 Tourism Promotion Services (Mangapwani) Limited 2,202 2,202 1,057,861 1,057,861 A summary of the segment level goodwill allocation is presented in Note 5. The recoverable amount of an operating segment is determined based on value-in-use calculations. These calculations use cash flow projections based on financial projections approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using estimated growth rates. The growth rates do not exceed the long-term average growth rates for the respective businesses in which the operating segments operate. Key assumptions used for value-in-use calculations: Kenya Tanzania Zanzibar EBITDA margin1 23% 37% 37% Growth rate2 2% 2% 2% Discount rate3 12.3% 12.5% 12.5% 1 Budgeted EBITDA margin 2 Weighted average growth rate used to extrapolate cash flows beyond the projected period. 3 Pre-tax discount rate applied to the cash flow projections. These assumptions have been used for the analysis of each operating segment within the business segment. Management determined budgeted EBITDA margin based on past performance and its expectations for the market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments. 74 TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2011
Notes to the Financial Statements (continued) 21 Investment in subsidiaries (at cost) The Company’s interest in its subsidiaries (Tourism Promotion Services (Kenya) Limited – TPS(K), Tourism Promotion Services (Tanzania) Limited – TPS(T), Tourism Promotion Services (Zanzibar) Limited – TPS(Z), Tourism Promotion Services (Mangapwani) Limited – TPS(Mgp), Tourism Promotion Services (South Africa)(Pty) Limited – TPS(SA) and Tourism Promotion Services (Management) Limited – TPS(M)) none of which is listed on a stock exchange and all of which have the same year end as the company, were as follows: The movement in investments in the year is as follows: TPS(K) TPS(T) TPS(Z) TPS(Mgp) TPS(SA) TPS(M) Total Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 At 1 January 2010 828,621 1,216,768 437,423 45,795 1 - 2,528,608 Additional investment - 271,015 1 - - - - 271,015 At 31 December 2010 and 2011 828,621 1,487,783 437,423 45,795 1 - 2,799,623 South Country of Incorporation Kenya Tanzania Tanzania Tanzania Africa Kenya % interest held – 2010 and 2011 100% 100% 100% 100% 100% 75% 1 TPS(T) is an owner and operator of hotel and lodge facilities in Tanzania, serving the business and tourist markets. During 2010, TPS Eastern Africa Limited invested in additional equity in TPS(T) and the funds were utilised to purchase two previously managed lodges, Mountain Village in Arusha and Mbuzi Mawe Tented Camp in Western Serengeti. The additional investment formed part of the purchase price for the two lodges while the balance of the funds were invested in TPS(T) as long term loans. Other indirect subsidiaries include Jaja Limited (100% subsidiary of TPS(K), which owns Lake Elmenteita <strong>Serena</strong> Camp, and Upekee Lodges Limited (51% subsidiary of TPS(T)) which owns two properties; Mivumo River Lodge and Selous Luxury Camp situated in the Selous Game Reserve in Southern Tanzania. In the opinion of the directors, there has been no impairment of any of the investments. TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 75
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2011 Annual Report and Accounts
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Directors and Administration BOARD
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Operating Subsidiaries and Properti
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Notice of Annual General Meeting No
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Chairman’s Statement Mr. Francis
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Chairman’s Statement (continued)
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Taarifa ya Mwenyekiti (kuendelea) u
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The Managing Director’s Report Mr
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The Managing Director’s Report (c
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Taarifa kutoka kwa Meneja Mkurugenz
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Board of Directors 1 MR. FRANCIS OK
Page 24 and 25: Corporate Governance Statement The
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Page 28 and 29: Corporate Social Responsibility At
Page 30 and 31: Charitable Donations Serena and its
Page 32 and 33: Directors’ Report The Directors s
Page 34 and 35: Report of the Independent Auditor t
Page 36 and 37: Consolidated Statement of Comprehen
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Page 42 and 43: Company Statement of Changes in Equ
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Page 46 and 47: Notes to the Financial Statements (
Page 84 and 85: Notes
Page 86: FOLD 1 / KUNJA 1 Please afix Stamp
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