Annual Report and Audited Financial Statements 2011 - The Kenya ...

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Notes to the Financial Statements for the year ended 31 Dec 2011 - Continued SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) g) Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and deposits held at call with banks. h) Taxation The Institute is tax exempt under the provisions of the Income Tax Act. i) Accounting for leases Leases of property, plant and equipment, where the Institute assumes substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at cost. Each lease payment is allocated between the liability and finance charges. The interest element is charged to the profit or loss over the lease period. Such property, plant and equipment is depreciated over its useful life. Leases of assets under which a significant portion of the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the profit or loss on a straight line basis over the period of the lease. The Institute as a lessor Assets leased to third parties under operating leases are included in property, plant and equipment in the balance sheet. Leased assets are recorded at historical cost less depreciation. Depreciation is calculated on the straight line basis to write down the cost of leased assets to their residual values over their estimated useful life using annual rates consistent with the normal depreciation policies for similar assets under property, plant and equipment. Gains and losses on disposal of leased assets are determined by reference to their carrying amount and are taken into account in determining operating profit. j) Translation of foreign currencies Transactions in foreign currencies during the year are converted into Kenya Shillings at rates applicable on the transaction dates. Assets and liabilities at the balance sheet date which are expressed in foreign currencies are translated into Kenya Shillings at the rates of that date. The resulting differences from conversion and translation are dealt with in the income statement in the year in which they arise. k) Retirement benefit obligations Employee entitlements to gratuity and long service awards are recognised when they accrue to employees. A provision is made for the estimated liability for such entitlements as a result of services rendered by employees up to the reporting date. The Institute operates a defined contribution staff retirement benefit scheme for its permanent and pensionable employees. The scheme is administered by an insurance company. The Institute's contributions to the defined contribution retirement benefit scheme are charged to profit or loss in the year to which they relate. The Institute has no further payment obligations once the contributions have been paid. 34 Annual Report and Audited Financial Statements 2011
Notes to the Financial Statements for the year ended 31 Dec 2011 - Continued SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) l) Special reserves Special funds are those held for a designated purpose. The funds are created by transferring the authorised amount from the accumulated reserves to special reserves. Subsequently any expenditure related to designated activity are debited directly to this fund. Included in the special reserves are the following reserves:- i) Staff separation reserves Staff separation reserve relates to a general provision of 1% of the gross income made to cater for any likely staff severance and retirement benefit. ii) Members' service funds Members' service funds set aside by the management to cater for the members' training costs. m) Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. Annual Report and Audited Financial Statements 2011 35
Page 1 and 2: Annual Report and Audited Financial
Page 3 and 4: Table of Contents KIM Officials 2 N
Page 5 and 6: Notice of the Annual General Meetin
Page 7 and 8: Minutes of the 45th Annual General
Page 13 and 14: I am glad to present to you the Ins
Page 15 and 16: Corporate Information (Continued) P
Page 17 and 18: Corporate Governance Report The Gen
Page 19 and 20: CSR REPORT 2011 Corporate Social Re
Page 21 and 22: ORGANISATIONAL PERFORMANCE INDEX (O
Page 23 and 24: Independent Auditor’s Report To t
Page 25 and 26: OUR BELIEF, A BETTER KENYA OUR DREA
Page 27 and 28: Statement of Financial Position for
Page 29 and 30: Statement of Cash Flows for the yea
Page 31 and 32: Notes to the Financial Statements f
Page 33: Notes to the Financial Statements f
Page 47 and 48: Total Turnover 2007 - 2011 in Kshs
Page 49 and 50: cut here Proxy Form THE 46th ANNUAL
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