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KUWAIT ENERGY plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2014
37
13.
DISCONTINUED OPERATIONS
During the second half of 2013 the management of the Group resolved to dispose of the Group’s Russia and Ukraine
operations as a part of its strategy to focus on Middle East and North Africa (MENA) region operations and
negotiations with several interested parties have subsequently taken place. These operations, which are expected to be
sold within 12 months from initial classification, have been classified as held for sale and presented separately in the
balance sheet. The results of these operations are classified under discontinued operations and have been included in
the condensed consolidated income statement as follows.
For the six months
period ended 30 June
For the year ended 31 December
2014
2013
2013
2012
2011
Audited
Unaudited
Audited
Audited
Audited
USD 000’s USD 000’s USD 000’s USD 000’s USD 000’s
Revenue
5,939
12,049
23,363
21,684
20,374
Expenses
(6,839)
(17,108)
(52,246)
(26,800)
(27,886)
Exploration expenditure written
off on discontinued operations
-
(11,121)
(18,622)
-
-
Impairment
charge
on
discontinued operations
(1,700)
(16,157)
(236,940)
(26,032)
(8,520)
Loss before tax
(2,600)
(32,337)
(284,445)
(31,148)
(16,032)
Attributable tax gain(loss)
-
4,656
5,658
6,747
(928)
Net loss attributable to
discontinued operations
(2,600)
(27,681)
(278,787)
(24,401)
(16,960)
6 months ended 30 June 2014:
During the six months period ended 30 June 2014, the Group has completed the disposal of its assets in Ukraine for a
sale consideration equal to their net carrying value at 31 December 2013 of USD 5 Million and received the
consideration.
During the period the assets and liabilities held for sale related to Russia have been written down to their revised fair
value less cost to sell of USD 8,300 thousand and an additional impairment of USD 1,700 thousand has been charged
to the consolidated income statement. The fair value of assets classified as held for sale is classified as Level 3. Level
3 fair value measurements are those derived from inputs that are not based on observable market data. This is a non-
recurring fair value arrived at by management judgement based on the most recent non-binding offer received.
12 months ended 31 December 2013:
The loss for the year from discontinued operations includes an impairment charge of USD 236,940 thousand (2012:
USD 26,031 thousand; 2011: USD 8,520 thousand) of which USD 89,031 thousand arose in Russia (2012: USD
30,862 thousand; 2011: USD nil) and USD 147,909 thousand in Ukraine (2012: USD 4,830 thousand reversal; 2011:
USD 8,520 thousand charge). The 2013 impairment includes a charge of USD 8,766 thousand relating to the
recycling of amounts previously recorded within the foreign currency translation reserve.
The assets and liabilities held for sale were written down to their fair value less cost to sell of USD 15,000 thousand.
The fair value of assets classified as held for sale is classified as Level 3. Level 3 fair value measurements are those
derived from inputs that are not based on observable market data. This is a non-recurring fair value arrived at by
management judgement based on the non-binding offers received.