Rank: Chief Joined: 1/3/2007 Posts: 18,347 Location: Nairobi
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obiero wrote:Gatheuzi wrote:In 2015 AR, this was the comment on contingent liabilities; Quote: .30 Contingent liabilities
The Group is a defendant in various legal actions. In the opinion of the directors, after taking appropriate legal advice, the
outcome of such actions will not give rise to any significant loss.
The Company has also provided corporate guarantees in favour of subsidiaries and other entities to a maximum of US$ 12.5
million (2014: US $ 21.9 million).
In addition, at year end, the Company had transit bonds and performance guarantees totalling KShs 1.1 Billion (2014: KShs
831 million).
At every year end, the directors carry out an assessment to ensure that the Company has accounted for all its obligations
(both legal and constructive) in accordance with the requirements of IAS 37 (Provisions, Contingent Liabilities and Contingent
Assets). Based on the facts available at the time, a provision is recognised if it is deemed to be probable that a payment will
be required to be made to settle the obligation. The impact will therefore depend on whether there was a provision for this award in past periods. In case no provision was made the impact will be a small loss of 26cts per share. (386M/1,500M). @gatheuzi the issue is not the settlement amount but the lack of discipline by KQ management in prompt payment of determined obligations.. True, KQ should pay its suppliers on time. It's not surprising that many vendors don't want to supply KQ except on a COD basis. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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