CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

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The fair value of borrowing is calculated, for the purposes of disclosure, by discounting the future contractedcash flow at the current market interest rate that is available to the Group for similar financial instruments.NOTE 3. IMPORTANT ESTIMATES AND ASSESSMENTS FOR ACCOUNTING PURPOSESEstimates and assessments are evaluated on an ongoing basis and are based on historical experience and otherfactors, including expectations of future events that are considered reasonable in the prevailing circumstances.Important estimates and assumptions for accounting purposesThe Group makes estimates and assumptions about the future. The estimates for accounting purposes that arethe consequence of these will, by definition, seldom correspond with the actual outcome.The carrying amount, after any amortization, of trade and other receivables and trade and other payables isconsidered to correspond to their fair values, as these items are current by nature. The fair value of financial liabilities iscalculated, for the purposes of disclosure, by discounting the future contracted cash flow at the current market interestrate that is available to the Group for similar financial instruments.The estimates and assumptions that involve a significant risk of major adjustments in recorded values of assetsand liabilities for subsequent fiscal years are explained in general below.Impairment testing of goodwillEvery year the Group tests whether an impairment need exists for goodwill, in accordance with the accountingpolicy described in note 1 and 17. The recoverable amount of cash generating units has been defined by calculating thevalue in use. These calculations require certain estimates to be made, see note 17.If the budgeted margin used when calculating the value in use of the cash generating unit that comprisesSupply & Refining had been 20% lower than the management assessment as of December 31, 2010, the Group would nothave needed to perform any impairment of goodwill.If the estimated discount rate before tax that was applied for discounted cash flows for the cash generating unitthat comprises Supply & Refining had been 2% higher than the management assessment, the Group would not haveneeded to perform any impairment of goodwill.PensionsPension obligations are based on actuarial calculations that are based on assumptions about discount rate,expected return on managed assets, future wage increases, staff turnover, inflation and expected average remainingperiod of service.The expected return on managed assets is defined by considering the expected return on the assets covered bythe investment policy in question. The expected return on investments with a fixed interest rate is based on the returnreceived if these securities are held until maturity. The expected return on shares and real estate is based on the long-termreturn that has occurred in the market in question.Provisions for environmental commitmentsProvisions are made for environmental commitments for known and planned decontamination works. A possiblefuture close-down of operations within the Group may involve a requirement for decontamination and restoration works.This is, however, considered to be well into the future and it is not believed that any possible future expenses for this canbe calculated reliably. Such potential environmental commitments are not included in provisions in the balance sheet oraccounted for as contingent liabilities.Important assessments when applying the Company’s accounting policiesFunctional currencyPreem has significant cash flows in USD, and when assessing the Company’s functional currency managementhas evaluated the criteria contained in IAS 21 on defining the functional currency. Having given careful consideration toall indicators, management has made the assessment that Corral’s functional currency is SEK.F-21
NOTE 4. SEGMENT REPORTINGOperating segmentsThe Group consists of two operating segments:Supply & Refining—Crude oil is bought for the two refineries Preemraff Lysekil and Preemraff Gothenburg andis refined to produce finished oil products. Approx. 2 / 3 of production is exported, mainly to the Northern Europeanmarket. The proportion of production that is sold in Sweden is sold through the Group’s own market channels andthrough other oil companies.Marketing—This segment sells refined oil products, which are bought from the Supply & Refining segment.Sales are channeled directly to consumers via the company’s network of gas stations and to companies andconsumers via direct sales.Internal pricingPrices are set at market levels at prices based on official listings in the oil market.Profit per segmentThe Group 2010Information within the Group that regularly are followed up by senior executives is presented below.Supply &Refining Marketing TotalSales per segmentTotal sales revenues................................................................................. 76,050 16,822 92,871Internal sales............................................................................................ (15,450) (82) (15,532)External sales .......................................................................................... 60,600 16,739 77,339Residual, exchange rate differences......................................................... (83)Total external sales.................................................................................. 77,256Operating profitOperating profit per segment .................................................................. 2,693 349 3,042Depreciation per segment ........................................................................ 894 87 981The Group 2009Supply &Refining Marketing TotalSales per segmentTotal sales revenues................................................................................. 61,870 13,702 75,573Internal sales............................................................................................ (11,659) (80) (11,738)External sales .......................................................................................... 50,212 13,623 63,834Residual, exchange rate differences......................................................... (21)Total external sales.................................................................................. 63,813Operating profitOperating profit per segment .................................................................. 4,847 213 5,060Depreciation per segment ........................................................................ 887 92 979F-22
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TABLE OF CONTENTSDisclosure Regardi
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which was merged into Preem on Octo
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RISK FACTORSThe risk factors below
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the cost of exploring for, developi
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purchase a minimum of 10% to 20% of
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market price at the time of settlem
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Notes, we would try to obtain waive
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are reasonable grounds for believin
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civil liability, whether or not pre
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SELECTED CONSOLIDATED FINANCIAL DAT
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MANAGEMENT’S DISCUSSION AND ANALY
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Year ended December 31,%2008 2009 C
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arrel in February, increased to app
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(1) Includes sales by our supply an
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SEK 5,519 million, from a loss of S
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Cash flow used in investment activi
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Restrictions on transfers of fundsW
Page 38 and 39: Variable rate debt—amount due .
Page 40 and 41: As of December 31, 2008, SEK 21,999
Page 42 and 43: Our StrengthsOur competitive streng
Page 44 and 45: Lysekil has a total storage capacit
Page 46 and 47: Unfinished and Blend Stocks........
Page 48 and 49: Heating Oil .......................
Page 50 and 51: Business-to-Business DivisionWe pre
Page 52 and 53: “.nu,” “.org,” “.biz,”
Page 54 and 55: Energy AB, Huda Trading AB, the Swe
Page 56 and 57: was incorporated on March 22, 2007,
Page 58 and 59: RELATED PARTY TRANSACTIONSCapital T
Page 60 and 61: DESCRIPTION OF CERTAIN INDEBTEDNESS
Page 62 and 63: effected by the Third Supplemental
Page 64 and 65: first ranking mortgage certificates
Page 66 and 67: LEGAL INFORMATIONCorral Petroleum H
Page 68 and 69: CORRAL PETROLEUM HOLDINGS AB (publ)
Page 76 and 77: SubsidiariesSubsidiaries are compan
Page 78 and 79: The refinery installations consist
Page 80 and 81: of occupational pension insurance,
Page 82 and 83: Emission rights 2010LysekilGothenbu
Page 84 and 85: NOTE 2. FINANCIAL RISK MANAGEMENTTh
Page 86 and 87: In addition to price risk managemen
Page 90 and 91: Reconciliation with the Group’s t
Page 92 and 93: The Board members including the Cha
Page 94 and 95: NOTE 12. EXPENSES BROKEN DOWN BY TY
Page 96 and 97: NOTE 16. EXCHANGE RATE DIFFERENCES
Page 98 and 99: Equipment, tools, fixtures and fitt
Page 100 and 101: NOTE 23. TRADE AND OTHER RECEIVABLE
Page 102 and 103: The change in the fair value of pla
Page 104 and 105: Loan conditions, effective interest
Page 106 and 107: Capitalized interest cost..........
Page 108: SalesDecember 31, 2009AccountsPurch
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CORRAL PETROLEUM HOLDINGS AB (PUBL) - Preem

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