2011 Annual Report & Financial Statements - Kengen

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Notes to the Financial Statements(Continued) Notes to the Financial Statements(Continued) KenGen KenGen 66 2011 ANNUAL REPORT & FINANCIAL STATEMENTS For The Year Ended 30 June 2011 For The Year Ended 30 June 2011 2011 ANNUAL REPORT & FINANCIAL STATEMENTS 67 13. Earnings Per Share (Continued) 14. Property, Plant And Equipment (Continued) 2011 2010 (Restated) Profit attributable to ordinary shareholders for basic earnings (in Shs’000) 2,080,121 3,286,487 Number of ordinary shares in issue during the year used in the calculation 2,198,361,456 2,198,361,456 Basic and diluted earnings per share (in Shs) 0.94 1.49 14. Property, Plant And Equipment 30 June 2011 Freehold Trans- Furniture, land and mission Plant & Motor Equipment Work- inbuildings lines machinery vehicles & fittings progress Total Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 COST /VALUATION At 1 July 2010 18,299,235 81,061 93,904,430 595,675 2,216,984 15,405,859 130,503,244 Additions - - - - - 19,169,926 19,169,926 Transfers from WIP 3,018,025 21,686 10,195,339 168,554 258,598 (13,662,202) - Reclassification (524,700) (3,331) 354,010 - 174,021 - - Adjustments* (1,768) - - - - - (1,768) At 30 June 2011 20,790,792 99,416 104,453,779 764,229 2,649,603 20,913,583 149,671,402 DEPRECIATION At 1 July 2010 4,336,618 8,357 21,988,827 346,029 1,592,629 - 28,272,460 Charge for year 497,421 3,562 3,739,163 140,098 169,561 - 4,549,805 Impairment losses - - 63,092 - - - 63,092 Adjustments* (365) - (19) - - - (384) At 30 June 2011 4,833,674 11,919 25,791,063 486,127 1,762,190 - 32,884,973 NET BOOK VALUE At 30 June 2011 15,957,118 87,497 78,662,716 278,102 887,413 20,913,583 116,786,429 Plant and machinery were last revalued on 30 June 2005, by CB Richard Ellis International valuers, on a depreciated replacement cost basis. Their report was issued on 21 May 2007. The company land is located in the following power stations: • Olkaria 1 and II • Kamburu • Kindaruma • Gitaru • Sosiani • Gogo • Kiambere • Tana • Sagana • Mesco • Nairobi South • Garissa • Masinga • Wanjii • Ndula • Turkwel • Tana • Ndula • Sondu Miriu • Kipevu I and III • Lamu 15. Prepaid Leases On Leasehold Land 2011 2010 2009 Shs’000 Shs’000 Shs’000 COST At start of the year 1,768 1,768 1,768 PREPAID LEASE EXPENSES At start of the year 351 322 293 Prepaid lease expense for the year 44 29 29 At close of the year 395 351 322 NET BOOK VALUE At close of the year 1,373 1,417 1,446 16. Intangible Assets COST At start of the year 695,284 543,893 303,751 Additions 143 151,391 240,142 At close of the year 695,427 695,284 543,893 30 June 2010 COST/VALUATION At 1July 2009 15,826,045 81,061 84,911,431 439,290 2,064,096 13,820,806 117,142,729 Additions - - - - 13,360,160 13,360,160 Transfers from work - in-progress 2,471,420 - 8,993,019 156,385 152,888 (11,773,712) - Adjustments* 1,770 - (20) - - (1,395) 355 At 30 June 2010 18,299,235 81,061 93,904,430 595,675 2,216,984 15,405,859 130,503,244 DEPRECIATION At 1 July 2009 3,924,270 5,264 18,762,099 268,013 1,483,678 - 24,443,324 Charge for year 412,003 3,093 3,237,442 78,016 98,615 - 3,829,169 Adjustments* 345 - (10,714) - 10,336 - (33) AMORTIZATION At start of the year - - - Charge for the year (31,874) - - (31,874) - - At close of the year 663,553 695,284 543,893 Intangible asset relates to costs incurred towards the installation of the Scada software at the power stations. Amortisation has been charged on these assets from the time they became available for use. At 30 June 2010 4,336,618 8,357 21,988,827 346,029 1,592,629 - 28,272,460 NET BOOK VALUE At 30 June 2010 13,962,617 72,704 71,915,603 249,646 624,355 15,405,859 102,230,784 At 30 June 2009 11,901,775 75,797 66,149,332 171,277 580,418 13,820,806 92,699,405 *Relates to correction of errors made in prior years.
Notes to the Financial Statements(Continued) Notes to the Financial Statements(Continued) KenGen KenGen 68 2011 ANNUAL REPORT & FINANCIAL STATEMENTS For The Year Ended 30 June 2011 For The Year Ended 30 June 2011 2011 ANNUAL REPORT & FINANCIAL STATEMENTS 69 17. Related Party Transactions The company is 70% owned by the Government of Kenya. The remaining 30% of the shares are widely held. The company main related parties are the Government of Kenya and Kenya Power. Kenya Power is the authorised electricity distributor in Kenya with its majority shareholder being the Government of Kenya. 2011 2010 2009 Shs’000 Shs’000 Shs’000 (a) Amount due from Kenya Power 7,786,396 3,590,525 5,195,179 17. Related Party Transactions (Continued) (d) Related party transactions (Continued) (iii) Government of Kenya (Ministry of Energy): 2011 2010 2009 Shs’000 Shs’000 Shs’000 Funds received for Geothermal Resource Assessment - 22,300 4,472,700 (b) Amount due from Kenya Power-deferred debt 1,472,503 1,220,570 1,064,696 Interest expense on project borrowings - - 437,100 The average credit period on amounts due from Kenya Power is 40 days. No interest is charged on the receivables for the first 40 days from the date of the invoice. Thereafter, interest is charged at the Central Bank of Kenya rate on the outstanding balance. Allowances for doubtful debts are recognised against receivables which remain partially or fully unserviced for one year and when a debt is under dispute based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s current financial position. The deferred debt from Kenya Power relates to the foreign component of project costs for land, other costs, transmission lines and substations on the Sondu Miriu project implemented by the company on behalf of Kenya Power under a management agreement. The debt is payable over a duration of 30 years commencing on 15 August 2014 to 15 August 2044. The effective interest rate on the deferred debt during the year was 0.74% (2010 0.74%, 2009 0.74%). Japan Bank for International Corporation funded the foreign component of the Sondu Miriu project under the loan agreement between the Japan Bank for International Corporation, and the company. The loan balance of Shs 1,472,503,000 (2010 Shs 1,220,570,000, 2009 Shs 1,064,696,000) is payable over a duration of 30 years commencing 20 February 2014 to 20 February 2044 and is included in the loans disclosed under note 26 of these financial statements. Interest accrues at 0.75% per annum. 2011 2010 2009 Shs’000 Shs’000 Shs’000 (c) Amount due to Kenya Power 13,659 5,955 8,037 (d) Related party transactions Parties are considered to be related if one party has the ability to control the other or exercise significant influence over the other party in making financial or operational decisions. During the year the following transactions were carried out with related parties: 2011 2010 Shs’000 Shs’000 Geothermal Resource Assessment advance 525,761 1,130,250 4,730,738 Geothermal Development Company 2,732,272 - - Other details relating to balances with the Government of Kenya (Ministry of Energy) are disclosed in notes 22, 26 and 35. 2011 2010 Shs’000 Shs’000 (iv) Staff advances 108,674 88,663 The company, through the welfare and benefits scheme, provides staff with financial support. (v) Executive directors and key management compensation 2011 2010 Shs’000 Shs’000 Salaries and wages 60,597 63,933 Pension scheme contributions - 17 Other allowances 34,943 21,922 95,540 85,872 Non-executive directors’ emoluments - Fees 6,000 6,000 - Others 17,545 16,413 23,545 22,413 (i) Electricity sales to Kenya Power 13,428,674 9,818,889 Realised foreign exchange adjustments 897,407 968,195 14,326,081 10,787,084 Fuel pass-through 6,148,072 5,835,258 (ii) Electricity purchases from Kenya Power 133,152 128,440 Terms and conditions of transactions with related parties The deferred debt from Kenya Power is payable in 60 equal semi-annual instalments at an interest rate of 0.75% per annum. The sales to Kenya Power are made in accordance with the signed Power Purchase Agreements whereas the purchases from Kenya Power are made at normal market prices. Outstanding balances at the year-end are unsecured and settlement occurs in cash.
Page 1 and 2: 59 th ANNUAL REPORT & FINANCIAL STA
Page 3 and 4: Contents Go Green Now In our endeav
Page 5 and 6: KenGen 2011 ANNUAL REPORT & FINANCI
Page 7 and 8: KenGen KenGen 2011 ANNUAL REPORT &
Page 9 and 10: Vision, Mission & Core Values KenGe
Page 11 and 12: Message from the Chairman Ujumbe ku
Page 13 and 14: Barua kutoka kwa Mkurugenzi Mkuu na
Page 15 and 16: Board of Directors Management Team
Page 17 and 18: Executive Performance Overview Exec
Page 19 and 20: Our Strategic Focus Our Strategic F
Page 21 and 22: Corporate Governance Masinga Power
Page 23 and 24: Corporate Governance Corporate Gove
Page 25 and 26: Corporate Governance Corporate Gove
Page 27 and 28: Sustainability Sustainability KenGe
Page 29 and 30: Sustainability Sustainability KenGe
Page 31 and 32: Financials Report of the Directors
Page 33 and 34: Financials (Continued) Financials (
Page 35 and 36: 52 KenGen 2011 ANNUAL REPORT & FINA
Page 37 and 38: Notes to the Financial Statements(C
Page 41: Notes to the Financial Statements(C
Page 55 and 56: 5 Year Statistical Information 5 Ye
Page 57 and 58: KenGen KenGen 96 2011 ANNUAL REPORT
Page 59 and 60: Shareholders’ Diary Shareholders
Page 61 and 62: Shareholders’ Diary Shareholders
Page 63 and 64: Contact Information HEAD OFFICE Sti

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