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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
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24.
OBLIGATIONS UNDER FINANCE LEASES
Minimum lease payments
2015
2014
Amounts payable under finance leases:
USD 000’s
USD 000’s
Within one year
1,766
-
In the second to fifth years inclusive
4,469
-
6,235
-
Less: future finance charges
(589)
-
Present value of lease obligation
5,646
-
Present value of minimum lease
payments
2015
2014
Amounts payable under finance leases:
USD 000’s
USD 000’s
Within one year (shown under current liabilities)
1,735
-
In the second to fifth years inclusive
3,911
-
Present value of lease obligation
5,646
-
During 2015, the Group sold its new office building in Egypt with a carrying value of USD 7.1 million for a sales
consideration of USD 7.5 million. The Group leased back the sold building under a finance lease for a total lease value
of USD 8.2 million which was settled by USD 1.5 million down payment and the remaining lease payments to be paid
over a lease term of 5 years. The Group has the right to buy the leased building at the end of lease period for an agreed
nominal sale price of USD 1 only. The leased building is recognised as an asset in the consolidated balance sheet at
USD 7.5 million equal to the present value of the minimum lease payments discounted at an implicit interest rate of 5%.
USD 0.4 million excess of sales consideration over the original carrying amount of building has been deferred and
amortised over the lease term.
T
he Group’s obligations under finance leases are secured by the lessor’s rights over the
leased asset. The lease is on a fixed repayment basis and no arrangements have been entered into for contingent rental
payments.
The fair value of the Group’s lease obligation is approximately equal to their carrying value.
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