EAPCC_Annual_Report_.. - Investing In Africa

2010/2011
EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2011
39. RETIREMENT BENEFITS OBLIGATIONS
The company, with effect from 1 July 2006, operates a defined contribution pension scheme for senior and supervisory
staff. The scheme was previously a non-contributory defined benefits pension scheme. The scheme
is administered independently by Alexander Forbes Financial Services (E.A) Limited, while its investments are
managed by Stanbic Investments Services (East Africa) Limited. Contributions to this scheme during the year
amounted to KShs 42,966,000 (2010 – KShs 39,873,000).
The company also operates an in-house gratuity scheme for unionisable employees. Contributions to this gratuity
scheme are governed by a collective bargaining agreement that is reviewed triennially and was last reviewed
on 30 June 2010. These contributions are not invested or managed as a separate fund, but are self funded and
are fully provided for in the company’s financial statements.
The company also contributes to the statutory defined contribution pension scheme, the National Social Security
Fund. Contributions to the statutory scheme are determined by local statute and are currently limited to KShs
200 per employee per month. The company’s contributions are charged to the statement of comprehensive income
in the year to which they relate. Contributions to this scheme during the year amounted to KShs 1,540,000
(2010 – KShs 2,146,000).
40. REVENUE ANALYSIS AND SEGMENTAL REPORTING
The company revenues are derived from sales in the
following markets;
2011 2010
KShs’000
KShs’000
Local market – Kenya 9,617,947 8,609,731
Regional market (East and Central Africa) 554,193 798,980
10,172,140 9,408,711
Sales to the regional market are done through depots whose net assets constitute less than 5% of the company’s
total net assets. Segment reporting with respect to net assets is, therefore, not considered of any real value. In
addition, the local sales are 92% of the total revenue hence there is only one reportable segment.
41. CAPITAL MANAGEMENT
The company manages its capital to ensure that it will be able to continue as a going concern while optimization
the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the
company consists of debt, which includes borrowings (disclosed in note 9, 20, 21 and 22), cash and cash equivalents
and equity attributable to equity holders, comprising issued capital and retained earnings. Consistent with
others in the industry, the company monitors capital on the basis of the gearing ratio. This ratio is calculated as
net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total
capital is calculated as equity plus net debt.
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EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS 2010/2011