TPSEAL 2010 Financial Results. - Serena Hotels

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Notes to the Financial Statements (continued) 4 Financial risk management (continued) (ii) Price risk The Group has invested in the unquoted shares of Tourism Promotion Services (Rwanda) Limited which have been classified under Available-for-sale financial assets. In the opinion of the directors, there is no material exposure to price risk. (iii) Cash flow and fair value interest rate risk The Group has borrowings at variable rates. The Group does not hedge itself against interest rate risk. No limits are placed on the ratio of variable rate borrowing to fixed rate borrowing. At 31 December 2010, an increase/decrease of 2% on interest rate would have resulted in an increase/decrease in consolidated post tax profit of Shs 1,040,081 (2009: 3,146,987). Credit risk Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions as well as credit exposures to customers, including outstanding receivables and committed transactions. Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The credit controller is responsible for managing and analysing credit risk for each new customer before standard payment and delivery terms are offered. Credit risk arises from cash at bank and short term deposits with banks, as well as trade and other receivables. The Group does not have any significant concentrations of credit risk. For banks and financial institutions, only reputable well established financial institutions are accepted. For trade receivables, the credit controller assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. The Group does not grade the credit quality of receivables. Individual risk limits are set based on internal ratings in accordance with limits set by the Board. The utilisation of credit limits is regularly monitored. The amount that best represents the Group’s and Company’s maximum exposure to credit risk at 31 December 2010 and 2009 is made up as follows: Group Company 2010 2009 2010 2009 Shs’000 Shs’000 Shs’000 Shs’000 Cash equivalents 1,040,317 339,869 723,540 - Trade receivables 744,084 534,447 - - Receivables from related companies 99,001 222,704 72,403 169,455 Other receivables 105,318 105,267 7,001 1,518 1,988,720 1,202,287 802,944 170,973 No collateral is held for any of the above assets. Receivables that are neither past due or impaired are within their approved credit limits, and no receivables have had their terms renegotiated. 56 TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2010
Notes to the Financial Statements (continued) 4 Financial risk management (continued) Credit risk (continued) Related party and other receivables are neither past due nor impaired. The Group’s bankers are reputable and sound financial institutions. None of the above assets are past due or impaired except for the following amounts in trade receivables (which are due within 30 days of the end of the month in which they are invoiced): Group Company 2010 2009 2010 2009 Shs’000 Shs’000 Shs’000 Shs’000 Past due but not impaired: - by up to 30 days 382,587 301,327 - - - by 31 to 60 days 107,591 69,304 - - - by 61 to 90 days 14,678 29,247 - - - by over 90 days 67,682 70,441 - - Total past due but not impaired 572,538 470,319 - - Impaired and fully provided for 50,239 62,193 - - Liquidity risk Prudent liquidity risk management includes maintaining sufficient cash securities, and the availability of funding from an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, Treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flows. The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant. Group Less than 1 Between 1 Between 2 Over year and 2 years and 5 years 5 years Shs’000 Shs’000 Shs’000 Shs’000 At 31 December 2010: - borrowings 420,757 366,427 838,097 - - trade and other payables 1,205,488 - - - At 31 December 2009: - borrowings 326,738 339,754 867,055 - - trade and other payables 611,298 - - - TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2010 57
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Contents Directors and Administrati
Page 5 and 6: Directors and Administration (conti
Page 7 and 8: Other Corporate Information REGISTE
Page 9 and 10: (c) a mobile telephone money transf
Page 11 and 12: (b) Kutumwa moja kwa moja hadi benk
Page 13 and 14: Chairman’s Statement (continued)
Page 15 and 16: Taarifa ya Mwenyekiti Mr. Francis O
Page 17 and 18: Taarifa ya Mwenyekiti (Kuendelea) U
Page 19 and 20: The Managing Director’s Report (c
Page 21 and 22: Taarifa kutoka kwa Meneja Mkurugenz
Page 23 and 24: Taarifa kutoka kwa Meneja Mkurugenz
Page 25 and 26: Board of Directors (continued) Mr.
Page 27 and 28: aspects of the Company’s operatio
Page 29 and 30: Corporate Governance Statement (con
Page 31 and 32: Corporate Social Responsibility (co
Page 33 and 34: Statement of Directors’ Responsib
Page 35 and 36: Consolidated Income Statement for t
Page 37 and 38: Consolidated Statement of Financial
Page 39 and 40: Consolidated Statement of Changes i
Page 41 and 42: Consolidated Statement of Changes i
Page 43 and 44: Company Statement of Changes in Equ
Page 45 and 46: Notes to the Financial Statements 1
Page 47 and 48: Notes to the Financial Statements (
Page 55: Notes to the Financial Statements (
Page 85 and 86: Proxy Form I/We being a member/memb
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