Annual Report 2005 (6 MB) - Lundin Petroleum

NOTES
life. It was further agreed that upon the death of Mr Adolf H. Lundin, monthly payments totalling an annual amount of TCHF 138 (TSEK
827) would be paid to his wife, Mrs Eva Lundin for the duration of her life. The Company may, at its option, buy out the obligation to
make the pension payments through a lump sum payment in the amount of TCHF 2,000 (TSEK 11,986). With the adoption of the Swedish
recommendation RR29 a provision has been accounted for resulting in a reduction to the 2004 retained earnings brought forward of
MSEK 15.7.
Group
Group Parent Company Parent Company
Pension provision
2005
2004
2005
2004
1 January 14,518 – – –
Adoption of RR 29 – 15,737 – –
Instalments paid -1,236 -1,219 – –
Currency translation diff erence 528 – – –
31 December 13,810 14,518 – –
NOTE 25 – OTHER PROVISIONS (TSEK)
Other provisions comprises:
Termination
indemnity provision Other Total
1 January 2005 4,865 14,763 19,628
Additions 1,111 – 1,111
Payments – -13,039 -13,039
Currency translation diff erence 981 528 1,509
31 December 2005 6,957 2,252 9,209
The termination indemnity provision represents Lundin Petroleum’s share of the provision for employment termination costs within the
Salawati joint ventures in Indonesia. This provision is supported in full by cash deposits held by the joint venture that are included within
fi nancial fi xed assets.
As at 31 December 2004 an amount of MSEK 12.7 was accounted for in relation to transfer taxes on certain French assets originating
before the time of acquisition of the Coparex group by Lundin Petroleum.
NOTE 26 – BANK LOANS (TSEK)
Group
Group Parent Company Parent Company
31 December
31 December
31 December
31 December
Bank loans comprises:
Current
2005
2004
2005
2004
Repayment within one year – – – –
Long term
Repayment within 2 – 5 years 736,151 629,147 – –
Repayment after fi ve years – 713,874 – –
736,151 1,343,021 – –
Loan repayments are made based upon a net present value calculation of the assets future cash fl ows. No loan repayments are currently
forecasted under this calculation. The loan repayments as shown in the table are driven by the loan reduction schedule. The eff ective
interest rate, after consideration taken to interest rate swaps, at the balance sheet date was 4.21% (4.85%). The fair value as at 31 December
2005 amounted to MSEK 746.5 (MSEK 1,352.0), based on the borrowing rate of 5.3%.
The Group’s credit facility agreement provides that an “event of default” occurs where the Group does not comply with certain material
covenants or where certain events occur as specifi ed in the agreement, as are customary in fi nancing agreements of this size and nature.
If such an event of default occurs and subject to any applicable cure periods, the external lenders may take certain specifi ed actions to
enforce their security, including accelerating the repayment of outstanding amounts under the credit facility.
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Group