GAZETTE NOTICE NO. 1143

in accordance with the provisions of Section 20 of the Public Audit Act, 2003 and Section 18 of the Kenya Revenue Authority Act, Cap 469. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of the audit. Management’s Responsibility for the Financial Statements The management of the Kenya Revenue Authority is responsible for the preparation and fair representation of the financial statements which give a true and fair view of the Authority‘s state of affairs, and its operating results in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Responsibility of the Auditor General My responsibility is to express an independent opinion on the financial statements based on the audit. The audit was conducted in accordance with the International Standards on Auditing. Those standards require compliance with ethical requirements and that the audit be planned and performed with a view to obtaining reasonable assurance that the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor‘s judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity‘s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority‘s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. I believe the audit evidence obtained is sufficient and appropriate to provide a basis for my opinion. Property, Plant and Equipment (i) As disclosed under note 8 to the financial statements, the balance of Kshs 4,581,659,000.00 in respect of the land & buildings as at 30 June 2010 does not include the value of various parcels of leasehold land spread across the country. According to information available, the value of the leasehold land has not been recognised as an operating lease in the financial statements because the land in question was transferred to KRA by the Government at no consideration and with no title documents. (ii) The Authority has not obtained ownership documents for 11 other parcels of leasehold land with carrying value of Kshs 710, 759,591.00. Opinion In my opinion, except for the effect on the financial statements if any, of the matters referred to in the preceding paragraphs, the financial statements give a true and fair view of the state of affairs of the Authority as at 30 June 2010 and of its deficit and cash flows for the year then ended, in accordance with the International Financial Reporting Standards and comply with the Kenya Revenue Authority Act, Cap 469 of the Laws of Kenya. A.S.M. GATUMBU Auditor-General Nairobi 31 December, 2010 MANAGEMENT’S RESPONS IBILITY STATEMENT The Kenya Revenue Authority Act requires Management to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Authority and its operating results for that year. It also requires Management to ensure that the Authority keeps proper accounting records which disclose, with reasonable accuracy, the financial position of the Authority. Management is also responsible for safeguarding the assets of the Authority and maintenance of adequate system of internal financial control. Management accepts the responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in accordance with International Financial Reporting Standards and the requirements of the 4th February, 2011 THE KENYA GAZETTE 339 Kenya Revenue Authority Act. Management is of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Authority and of its operating results. Nothing has come to the attention of Management to indicate that the Authority will not remain a going concern for at least the next twelve months from the date of this statement. M. G. WAWERU, COMMISSIONER GENERAL 31ST AUGUST, 2010 KENYA REVENUE AUTHORITY FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2010 INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2010 2009/2010 2008/2009 NOTE Kshs'000 Kshs'000 INCOME Agency Income 3 8,471,479 7,197,976 Other Income 4 1,206,755 1,135,638 9,678,234 8,333,614 EXPENDITURE Staff Emoluments 5 7,363,502 5,015,999 Other Operating Expenses 6 2,595,181 2,657,921 Depreciation and Amortisation 7 737,825 737,959 10,696,508 8,411,879 DEFICIT FOR THE YEAR (1,018,274) (78,265) The Income and Expenditure statement is to be read in conjunction with the notes to and forming part of the financial statements set out below. BALANCE SHEET AS AT 30 JUNE 2010. 2009/2010 2008/2009 Non-Current Assets NOTE Kshs '000 Kshs '000 Property, Plant & Equipment 8 7,327,523 7,542,808 Intangible Assets 9 5,124 22,065 Amount due from Treasury 11 1,767,197 2,270,219 Security Deposits 12 1,198,429 978,553 10,298,273 10,813,645 Current Assets Debtors 10 240,065 236,376 Cash and Bank Balances 13 1,203,539 1,090,391 1,443,604 1,326,767 Current Liabilities Creditors 14 316,329 274,044 Provisions 15 582,951 400,711 899,280 674,755 Net Current Assets 544,324 652,012 Net Assets 10,842,597 11,465,657 Non Current Liabilities Contribution to Govt Pension Fund 16 27,313 27,494 Represented by: Equity Contribution by the Treasury 17 9,643,159 9,233,009 Accumulated Fund 1,066,201 2,084,475 Designated Fund 18 105,924 120,679 10,815,284 11,438,163 10,842,597 11,465,657 THE KENYA GAZETTE 4th February, 2011 The financial statements set out below were approved by the Board of Directors on 31st August, 2010 and were signed on its behalf by: MAJOR (RTD) MARSDEN MADOKA, Chairman M. G. WAWERU, Commissioner General The Balance Sheet is to be read in conjuction with the notes to and forming part of the Financial Statements set out below STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2010 Contribution by Accumulated Designated Total Treasury Fund Fund Fund NOTE Kshs'000 Kshs'000 Kshs'000 Kshs'000 At 1 July 2008 8,497,509 2,162,740 186,135 10,846,384 Contribution for the year 651,343 - - 651,343 Deficit for the Year - (78,265) - (78,265) Transfer to Contribution by Treasury 84,157 - (84,157) - Net Funds Received - - 18,701 18,701 At 30 June 2009 9,233,009 2,084,475 120,679 11,438,163 At 1 July 2009 9,233,009 2,084,475 120,679 11,438,163 Contribution for the year 17 410,150 - - 410,150 Deficit for the year - (1,018,274) - (1,018,274) Net fund Movement 18 - - (14,755) (14,755) At 30 June 2010 9,643,159 1,066,201 105,924 10,815,284 The statement of Equity is to be read in conjuction with the notes to and forming part of the Financial Statements set out below CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2010 2009/2010 2008/2009 NOTE Kshs `000 Kshs `000 CASH FLOWS FROM OPERATING ACTIVITIES Deficit for the year (1,018,274) (78,265) Non- cash movements Depreciation 8 720,884 721,602 Amortisation 9 16,941 16,357 Gain on disposal of Assets (3,253) (5,837) Increase in Security Deposits 12 (219,876) (144,232) Increase in Debtors 499,333 (19,249) (Decrease)/Increase in Creditors 224,344 (187,708) Net cash flows from operating activities 220,099 302,668 CASH FLOWS FRO M INVESTING ACTIVITIES Purchase of Fixed Property, Plant & Equipment (511,367) (990,052) Proceeds from sale of Property, Plant & Equipment 9,021 18,524 Net cash flows from investing activities (502,346) (971,528) CASH FLOWS FROM FINANCING ACTIVITIES Contribution by the Treasury 17 410,150 535,198 Increase in designated Funds 18 (14,755) 18,702 Net cash flows from financing activities 395,395 553,900 4th February, 2011 THE KENYA GAZETTE 341 NET INCREASE IN CASH AND CASH EQUIVALENTS 113,148 (114,960) Cash and cash equivalents at 1 July 2009 1,090,391 1,205,351 CASH AND CASH EQUIVALENTS AT 30 JUNE 2010 13 1,203,539 1,090,391 The cash flow statement is to be read in conjunction with the notes to and forming part of the Financial Statements set out below NOTES TO THE FINANCIAL STATEMENTS 1. ESTABLISHMENT Kenya Revenue Authority was established by an Act of Parliament, The Kenya Revenue Authority Act, and CAP 469. The Authority‘s objectives are the assessment and collection of revenue, administration, enforcement of laws relating to and accounting for revenue collected under the Act. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements are prepared under the historical cost basis of accounting as modified by the revaluation of certain items of property, plant and equipment and fair value adjustments to investments. They are presented in Kenya Shillings (Kshs.) rounded to the nearest thousand shillings and comply with the International Financial Reporting Standards (IFRS). (b) Income Recognition i) Agency Income In accordance with the Kenya Revenue Authority Act CAP 469, income to the Authority is ―such amounts not exceeding 2% as may be determined by the Minister each financial year‖ of the total estimated revenue to be collected by the Authority on behalf of the Exchequer. In addition, the Authority is entitled to a Bonus of 3% of the surplus revenue collected above the estimates and also earns income from other activities. ii) Other Income Interest Income is recognised on a time basis at the effective interest rate applied on the principal amounts outstanding Rental income is recognised on accrual basis Other incomes are recognised when earned. (c) Development funding and asset Contributions by the Treasury Contributions by the Treasury in form of assets or funding for acquisition of major assets or development projects are recognized as a financing reserve when received. No repayment of the financing is expected by the Authority. (d) Property, Plant and Equipment The value of land is not reflected as prepaid lease rentals as the land was allocated to the Authority at no purchase consideration. All categories of property, plant and equipment are stated at cost or valuation less accumulated depreciation and annual impairment losses. No depreciation is provided on freehold land. Depreciation is calculated to write off the cost or valuation of each asset to its residual value where applicable, over the expected useful life of the asset in equal instalments. A full year‘s depreciation is charged in the year of purchase but no charge is made in the year of disposal. The estimated useful life is as follows: - Plant & Machinery 8 years Equipment/Furniture/Fittings 8 years Boats 8 years Motor Vehicles 5 years (with a 10% residual value) Computers 3 years Computer Software 3 Years Buildings 40 years Gains or losses on property, plant and equipment are determined by reference to their carrying value and are taken into account in determining the surplus / (deficit) for the year. (e) Intangible Assets Intangible assets consist of various computer software systems purchased for use by the Authority. The Authority recognises Intangible Assets acquired separately at cost less accumulated amortisation. Amortisation is charged on a straight-line basis over their useful lives as estimated by management from time to time. (f) Translation of foreign currencies Transactions in foreign currencies during the year are converted into Kenya Shillings at rates ruling at the transaction dates. Assets and liabilities at the balance sheet date, which are expressed in foreign currencies, are translated into Kenya Shillings at the rate ruling on that date. The resulting foreign exchange gains and losses are recognized on a net basis, differences are dealt with in the income and expenditure statement in the financial year in which they arise. (g) Retirement Benefits Obligations The Authority operates a hybrid pension scheme with a defined benefit section and a defined contribution section for the permanent and pensionable employees. The pension costs relating to this scheme are assessed in accordance with the advice of a qualified actuary. The assets of the scheme are held in a separate trustee-administered fund. The cost of providing pension and other post-retirement benefits for employees is charged to the income and expenditure account. THE KENYA GAZETTE 4th February, 2011 (h) Cash and Cash equivalents For purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and short-term deposits held with banks. (i) Accrued Leave Days Provision Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by the employees up to the balance sheet date. (j) Taxation The Authority is exempt from taxation on investment income. (k) Inventories All consumable stocks held for use in operations are expensed on purchase 3. AGENCY INCOME The Agency Income and Bonus are provided in accordance with the provisions of the Kenya Revenue Authority Act CAP 469. 2009/2010 2008/2009 Kshs '000 Kshs '000 Agency Income 8,444,500 7,144,500 Bonus 26,979 53,476 8,471,479 7,197,976 4. OTHER INCOME 2009/2010 2008/2009 Kshs '000 Kshs '000 Road Maintenace Levy Commission 475,609 431,396 Petroleum Development Levy Income 32,371 30,730 Sale of Number Plates 275,815 257,708 Sale of Tamper Proof Seals 28,711 36,471 Public Overtime 8,430 16,329 Document Processing Fees 26,793 25,711 Aviation Revenue Commission 42,769 39,330 Air Passenger Service Charge Commission 49,278 42,882 Sugar Development Levy Commission 37,028 33,900 Interest Income 75,902 61,560 Staff Housing Rental Income 68,591 68,314 Property Rental Income 10,884 14,103 Gain on disposal of Fixed Assets 6,056 5,837 Insurance Deductions Commission 1,945 1,820 Miscellaneous Income ** 66,571 69,547 1,206,755 1,135,638 ** Miscellaneous income consists of income from sale of tender documents, revenue stamps, staff identity cards, PSV Badges, training school activities and road transit toll collections. 5. STAFF EMOLUMENTS 2009/2010 2008/2009 Kshs '000 Kshs '000 Salaries and Allowances 7,223,344 4,879,556 Staff Leave Days Provision 140,158 136,443 7,363,502 5,015,999 6. OTHER OPERATING EXPENSES 2009/2010 2008/2009 Kshs '000 Kshs '000 Travelling and Accomodation 408,477 371,204 Utilities 314,966 306,157 Staff Welfare 30,496 35,421 Medical Expenses 330,513 325,420 Printing & Stationery 70,334 116,928 Rent & Rates 76,931 82,294 Consultancy 72,416 52,465 Tax Payer Education 42,213 49,068 Computer Expenses 120,964 176,898 Training Expenses 194,118 199,196 4th February, 2011 THE KENYA GAZETTE 343 2009/2010 2008/2009 Kshs '000 Kshs '000 Motor Running Expenses 115,574 113,539 Building repairs and maintenance 55,295 43,037 Office Running Expenses 168,393 180,229 Advertising & Public Relations 55,392 81,824 Insurance Expenses 53,814 6,670 Secretarial Expenses 23,662 29,822 Official Entertainment 38,144 26,557 Uniforms & Laundry Expenses 1,705 9,657 Consumable Stores 6,775 13,681 Materials & Supplies 192,325 217,286 Bank Charges 883 1,846 Security Expenses 212,756 201,933 Motor Boat Repairs 6,706 5,414 Container Sealing Expenses 530 8,728 Laboratory Expenses 1,798 2,648 - 2,595,181 2,657,921 7. DEPRECIATION AND AMORTISATION 2009/2010 2008/2009 Kshs '000 Kshs '000 Depreciation charge on Fixed Assets 720,884 721,602 Amortisation of Intangible Assets 16,941 16,357 737,825 737,959 8. PROPERTY, PLANT AND EQUIPMENT. (i) MovemenT Schedule OFFICE LAND & PLANT & MOTOR EQUIPMENT MOTOR BUILDINGS MACHINERY VEHICLES FURNITURE COMPUTERS BOATS WIP TOTAL Kshs '000 Kshs '000 Kshs '000 Kshs '000 Kshs '000 Kshs '000 Kshs '000 Kshs '000 COST/VALUATION 1 Jul 2009 6,112,842 2,061,785 579,467 571,943 1,251,333 398,418 496,331 11,472,119 Additions 17,756 142,590 53,975 46,135 44,113 10,014 196,783 511,366 Disposals - - (32,939) - - - - (32,939) Transfer - - - - - - - - 30 June 2010 6,130,598 2,204,375 600,503 618,078 1,295,446 408,432 693,114 11,950,546 DEPRECIATION 1 Jul 2009 1,395,712 613,360 443,028 364,553 1,042,150 70,508 - 3,929,311 Charge for period 153,227 275,547 51,020 53,398 139,596 48,096 - 720,884 Disposals - - (27,172) - - - - (27,172) 30 June 2010 1,548,939 888,907 466,876 417,951 1,181,746 118,604 - 4,623,023 NET BOOK VALUE 30 June 2010 4,581,659 1,315,468 133,627 200,127 113,700 289,828 693,114 7,327,523 30 June 2009 4,717,130 1,448,425 136,439 207,390 209,183 327,910 496,331 7,542,808 (ii) Land & buildings There are parcels of leasehold land countrywide which were transferred to the Authority from the Government at no purchase consideration and with no title documents. The value of the leasehold land has not been recognised as an operating lease in the financial statements in accordance with the IAS 17 requirements since they were transferred to the Authority at no cost. The Authority is yet to receive title documents for some 11 pieces of leasehold land with buildings with carrying values of Kshs. 710,759,591. These properties are at various stages of registration with the Commissioner of Lands. Included in the value of land and buildings is the value of Taveta land purchased at Kshs 1,250,000 on lease for 99 years. The amortisation on the land is Kshs 25,000. (iii) Fully depreciated assets Included in the assets are fully depreciated assets comprising of Motor Vehicles whose original cost was Kshs 322,449,779 with a residual value of Kshs 32,244,978, Motor Boats whose cost is Kshs 23,663,422, Computers whose cost is Kshs 868,127,419, Office Equipment of Kshs 101,559,146, Laboratory Equipment Kshs 9,105,173 and Furniture and Fittings of Kshs 55,478,297 whose book value is nil. The total notional depreciation charge for the assets is Kshs 371,142,521 (2009- Kshs 331,456,294). Most of these assets are in use by the Authority. THE KENYA GAZETTE 4th February, 2011 (iv) Capital Work in Progress 2009/2010 2008/2009 Kshs '000 Kshs '000 Common Cash Receipting System Project 38,908 35,236 Electronic cargo system 77,612 65,032 Intergrated Tax Management System 406,199 281,371 Customs Revenue Accounting Module 4,664 2,692 Partition Eldoret Offices 1,546 1,546 Times Tower Ventilations 300 300 Support Departments ERP System 5,276 180 1 ocean Boats - KRA 3 (Sinnautic) 155,431 106,795 Valuations Database system 3,178 3,178 693,114 496,331 9. INTANGIBLE ASSETS 2009/2010 2008/2009 COST Kshs '000 Kshs '000 1 July 169,267 153,895 Additions - 15,372 30 June 169,267 169,267 AMORTISATION 1July 147,202 130,846 for the year 16,941 16,356 30 June 164,143 147,202 NET BOOK VALUE 30 June 5,124 22,065 The intangible assets are made up of different computer software in use by the Authority. Included in the Intangible Assets are fully amortised assets whose original cost was Kshs 118,444,590 (2009- Kshs 32,233,400). The notional annual amortisation on these assets is Kshs 39,481,530 (2009 – Kshs 10,744,466). The fully amortised assets are in use by the Authority. 10. DEBTORS 2009/2010 2008/2009 Kshs '000 Kshs '000 Trade Debtors Other Agency debtors 118,410 129,805 Rent Receivable 748 2,075 Interest Receivable 1,576 815 120,734 132,695 Other Debtors Staff Debtors 75,850 79,562 Prepayments 13,853 9,433 Other Debtors 29,628 14,686 119,331 103,681 Debtors Total 240,065 236,376 Other agency debtors represent outstanding commission on collection of revenues on behalf of other organisations. Staff debtors mainly comprise of outstanding travel imprests, loans for acquisition of laptops and medical advances. 11. AMOUNT DUE FROM T REASURY 2009/2010 2008/2009 Kshs '000 Kshs '000 1 July 2,270,219 2,216,742 Accrued in the year 8,471,478 7,197,977 Amount received in the year (8,974,500) (7,144,500) 30 July 1,767,197 2,270,219 Disclosed as: Receivable after one year 1,767,197 2,270,219 1,767,197 2,270,219 The amount represents outstanding agency commission, bonuses and payments on behalf of the Treasury. The Treasury has repaid the past debts up to a total of Kshs.2,708,030,000 over the years 2004 to 2010. However, the debt has increased due to 3% bonus earned on surplus collections in years 2004, 2005, 2007 2008, 2009 and 2010 as provided for in the KRA Act Section 16. 12 SECURITY DEPOSITS 4th February, 2011 THE KENYA GAZETTE 345 2009/2010 2008/2009 Kshs '000 Kshs '000 Savings & Loan (k) Ltd 901,326 711,877 Housing Finance 152,478 125,859 National Bank of Kenya Ltd 144,625 140,817 1,198,429 978,553 The deposits with Savings & Loans and Housing Finance are placed as security against staff mortgage advances, while the National bank deposits are placements against staff car loans. 13 CASH AND BANK BALANCES 2009/2010 2008/2009 Kshs '000 Kshs '000 Cash in Hand 892 684 Cash at Bank 120,016 588,819 Fixed Deposits 1,082,631 500,888 1,203,539 1,090,391 The fixed deposits are made up of one month deposits in commercial banks. The maturity period for the deposits is between July and August 2010. The deposits are further analysed as follows: 2009/2010 2008/2009 Kshs '000 Kshs '000 National Bank of Kenya 602,038 259,702 Cooperative Bank of Kenya 454,475 205,710 World Bank project Account - NBK 26,118 35,476 1,082,631 500,888 14. CREDITORS 2009/2010 2008/2009 . . Trade Payables 269,457 236,869 Payroll Deductions Creditors 21,292 11,891 Staff Creditors 7,096 5,625 Withholding Tax 18,484 19,659 316,329 274,044 Trade payables represent the outstanding payments to suppliers. Payroll deductions include outstanding amounts for statutory deductions, loans SACCOS and others. Staff creditors comprise of outstanding payments and other expense refunds. 15. PROVISIONS 2009/2010 2008/2009 Staff Leave Days Provision 510,422 370,263 General Provisions 72,529 30,448 582,951 400,711 The general provisions relate to utilities and staff medical expenses. 16. CONTRIBUTION TO GOVERNMENT PENSION FUND 2009/2010 2008/2009 Kshs '000 Kshs '000 1 July 27,494 30,145 Payment to the Treasury in the year (181) (2,651) 30 June 27,313 27,494 This amount relates to contributions made to the Government pension during the nine-month secondment period from October 1995 to June 1996 for pensionable staff who were transferred from the Treasury to the Authority. The amount falls due for payment on retirement of an officer and is then transferred to the Treasury to facilitate processing of the pension. 17. CONTRIBUTION BY THE TREASURY THE KENYA GAZETTE 4th February, 2011 2009/2010 2008/2009 Kshs '000 Kshs '000 1 July 9,233,009 8,497,509 Funds for X-ray Scanners Procurement - 249,100 Funds for Intergrated Tax Management System 250,000 152,400 Funds for Valuation Data Base - - Funds for Motor Boats procurement - 121,752 Boats donated by JICA 10,013 9,236 World bank funded projects 150,137 118,855 Transfer From Designated funds - 84,157 30th June 9,643,159 9,233,009 The amounts represent assets and asset funds provided by the Treasury. The Treasury separately funds the major reform and modernization programmes undertaken by the Authority in all departments for revenue enhancement and efficient service delivery. The Authority is procuring an Integrated Tax Management System (ITMS) for management of domestic taxes and four patrol boats. Three Boats have been delivered and are in use. The JICA donations comprise of two boats for patrols on Lake Victoria. The World Bank funded projects comprise one X-ray Scanner and funding of Large Area Network (LAN) installation in Times Towers. 18. DESIGNATED FUNDS LEGAL CLAIM WORLD BANK TOTAL FUND FUNDS Kshs '000 Kshs '000 Kshs '000 1 July 2009 85,294 35,385 120,679 Funds Received - - - Interest Earned - 362 362 Amount Spent (9,331) (5,786) (15,117) 30 June 2010 75,963 29,961 105,924 The legal claim funds are received from the Treasury for settling legal awards against the Authority in revenue related court cases. The World Bank funds are disbursements to the local account for the East African Trade and Transportation Facilitation Project Fund (EATTF), provided to improve the infrastructure for monitoring movement of goods for the facilitation of trade in East Africa. 19. RETIREMENT BENEFIT COSTS During the year ended 30th June 2010, Kshs 781.853 Million (2009 Kshs 561.618 Million) was paid as contributions to the staff pensions scheme. The scheme changed from a defined benefit plan to a Hybrid scheme with a defined benefit section and a defined contribution section with effect from 1 July 2005. Under the defined benefit scheme, the employer contribution on actuarial advice was maintained at 13.2% per member while a rate of 14% was adopted for the defined contribution scheme. Employees contribute 7.5% of their salaries for both sections of the scheme. The value placed on the existing final assets per the last valuation of 30th June 2009, was Kshs 4,177 Million while the present value of past service liabilities at that date was Kshs 4,288 Million (2006 Kshs. 3,712 Million). 20. CAPITAL COMMITMENTS 2009/2010 2008/2009 Kshs '000 Kshs '000 Approved and contracted 100,523 417,252 Approved and not contracted 1,465,122 124,221 1,565,645 541,473 21. RECURRENT COMMITMENTS 2009/2010 2008/2009 Kshs '000 Kshs '000 30 June 780,684 474,292 The above represents items and activities approved and contracted but not yet delivered. 22. EMPLOYEES The number of employees at the end of the year was, 2009/2010 2008/2009 30 June 4,561 4,311 23. CONTINGENT LIABILITIES 4th February, 2011 THE KENYA GAZETTE 347 These include: An amount of KSh. 2 million included in utility deposits representing a bank guarantee to Kenya Power and Lighting for Times Tower power supply. An amount of KSh. 1,297,759 representing a guarantee to Telkom Kenya Limited for supply of telephone facilities in the Times Tower building. Pending legal cases and court awards against the Authority estimated at Kshs 3,719,816,583 at the financial year end. The Treasury is expected to meet the cost of settling the awards should they materialize. Eighteen other court cases where Taxpayers have made Judicial Review applications which do not have monetary claim. The contingent liability in respect of these cases is estimated at Kshs. 18 million. 24. COMPARATIVES Where necessary, comparatives have been adjusted to conform to changes in presentation in the current year. 25. CURRENCY The Financial Statements are presented in Kenya Shillings (Kshs ‗000). B1232086