psc - Kufpec

KUWAIT FOREIGN PETROLEUM EXPLORATION COMPANY K.S.C. (CLOSED)
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2010
21. DEFERRED TAX LIABILITY
2010 2009
KD 000’s KD 000’s
Provision at 1 January 18,611 21,336
Deferred tax charge for the year - income taxes 3,999 2,691
Deferred tax charge for the year – PRRT (1,212) (3,464)
Currency translation effect 2,510 (1,952)
Provision at 31 December 23,908 18,611
The rates of taxation applicable to profits arising in foreign operations vary between 25% and 56%.
Deferred tax arises primarily on temporary differences in depreciation applicable to fixed assets, including
decommissioning assets between the consolidated financial statements and the various foreign operations
tax returns.
The effective average rate of tax borne by the Group is 52% for 2010 (46% for 2009).
22. LONG-TERM LOAN
Current
Non-current
2010 2009 2010 2009
KD 000’s KD 000’s KD 000’s KD 000’s
Long-term loan 25,655 22,948 38,482 68,844
The long-term loan of US Dollars 320 million equivalent to KD 90 million ( 31 December 2009: US
Dollars 320 million equivalent to KD 91 million) denominated in US Dollars was obtained in 2008 from a
consortium of local and international banks bearing interest at the rate of LIBOR plus 0.475% per annum.
During 2010 the average interest rate on the loan was 0.74% (2009: 1.767%) per annum. The loan is
unsecured and repayable in eight equal semi-annual instalments which started on 11 May 2010.
23. OTHER INCOME
Other income includes KD 2,721 thousand (2009: KD 2,226 thousand) of insurance claim received in
connection with the pipeline rupture and fire that occurred at one of the Group’s gas processing and
transportation hubs in 2008.
24. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while
maximising the return to the shareholder. The Group’s overall strategy remains unchanged from 2009.
The capital structure of the Group consists of equity comprising issued share capital, statutory reserve and
voluntary reserve as disclosed in notes 13, 14 and 15 respectively, foreign currency translation reserve and
retained earnings.
26
55