2011 Annual Report and Accounts - Investing In Africa

Notes to the Financial Statements (continued)
28 Related party transactions (continued)
vi)
Loans to directors of the Company (continued)
The loans advanced to directors and key management have the following terms and conditions:
Amount Term Security Interest rate
2011 Shs’000 Years Shs’000
Loan balance 408 5 4,392 8%
2010
Loan balance 1,076 5 4,392 8%
No provisions for impairment losses have been required in 2010 and 2011 for any related party receivables
vii)
TPS Eastern Africa Limited has provided a corporate guarantee to the lenders of Tanruss Investment Limited, the
owner of Dar es Salaam Serena Hotel, for an amount of Shs 1,701,400,000 which was obtained to settle loans to the
previous owners.
29 Contingent liabilities
At 31 December 2011, Tourism Promotion Services (Kenya) Limited had given guarantees amounting to Shs
6,389,000 (2010: Shs 4,560,000) to banks on behalf of third parties for supply of goods and services.
Tourism Promotion Services (Kenya) Limited is a defendant in various legal actions and claims made by third parties.
In the opinion of the directors, after taking appropriate legal and other advice, no material liabilities are expected to
crystallise from these claims. Consequently no provision has been set against the claims in the books of accounts.
30 Commitments
Capital commitments
Capital expenditure contracted for at the reporting date but not recognised in the financial statements is as follows:
Group
2011 2010
Shs’000 Shs’000
Property, plant and equipment - -
Operating lease commitments
Group
2011 2010
Shs’000 Shs’000
Not later than 1 year 4,359 3,998
Later than 1 year and not later than 5 years 7,237 5,396
Later than 5 years 49,115 50,113
60,711 59,507
TPS EASTERN AFRICA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 83