Annual Report 2007 in PDF - Cairn Energy PLC

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NOTES TO THE ACCOUNTS CONTINUED 23. Deferred Taxation 114 CAIRN ENERGY PLC ANNUAL REPORT 2007 Liabilities Group Note $’000 $’000 At 1 January 2006 (Restated) 1(u) (129,143) (129,143) Charge to Income Statement 4,380 4,380 Exchange differences (5,202) (5,202) ––––––––––– ––––––––––– At 1 January 2007 (Restated) 1(u) (129,965) (129,965) Credit to Income Statement (22,120) (22,120) Fair value adjustments on business combinations (51,793) (51,793) Disposals 773 773 Exchange differences (16,971) (16,971) ––––––––––– ––––––––––– At 31 December 2007 (220,076) (220,076) ––––––––––– ––––––––––– Liabilities Group $’000 $’000 Deferred taxation – UK Accelerated allowances (51,793) (51,793) ––––––––––– ––––––––––– Deferred taxation – India Accelerated allowances (170,559) (170,559) Other temporary differences 2,276 2,276 ––––––––––– ––––––––––– (168,283) (168,283) ––––––––––– ––––––––––– Total deferred taxation as at 31 December 2007 (220,076) (220,076) ––––––––––– ––––––––––– Liabilities Group Note $’000 $’000 Deferred taxation – UK (Restated) 1(u) Accelerated allowances (7,440) (7,440) Other temporary differences 478 478 ––––––––––– ––––––––––– (6,962) (6,962) ––––––––––– ––––––––––– Deferred taxation – India (Restated) 1(u) Accelerated allowances (127,040) (127,040) Losses 2,218 2,218 Other temporary differences 1,819 1,819 ––––––––––– ––––––––––– (123,003) (123,003) ––––––––––– ––––––––––– Total deferred taxation as at 31 December 2006 (Restated) (129,965) (129,965) ––––––––––– –––––––––––
NOTES TO THE ACCOUNTS CONTINUED At the Balance Sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised was $29.6m (2006: $110.6m). No liability has been recognised in respect of these differences because Cairn is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future. As at the Balance Sheet date, a deferred tax asset was not recognised in respect of Group losses of $799.0m (2006 (restated): $532.1m) (Company: $131.7m; 2006: $64.8m) where it is not probable that they can be utilised in future periods. At 31 December 2007, no deferred tax asset has been recognised in respect of trading losses. At 31 December 2006, a deferred tax asset of $5.3m (restated) was recognised as it was considered that these losses would be utilised against future trading profits arising to the Group. 24. Obligations under Finance Leases The Group has finance leases for various items of tenants’ improvements and office equipment all of which provide the specific entity which holds the lease with the option to purchase. Future finance lease commitments are as follows: Present value of minimum Minimum lease payments lease payments 2007 2006 2007 2006 Group $’000 $’000 $’000 $’000 Amounts payable: Within one year 2,268 1,613 1,949 1,380 Between two and five years 2,642 3,614 2,431 3,092 ––––––––––– ––––––––––– ––––––––––– ––––––––––– 4,910 5,227 4,380 4,472 Less: future finance charges (530) (755) – – ––––––––––– ––––––––––– ––––––––––– ––––––––––– Present value of lease obligations 4,380 4,472 4,380 4,472 ––––––––––– ––––––––––– ––––––––––– ––––––––––– The average lease term is 3 to 5 years. For the year ended 31 December 2007, the average effective borrowing rate was 7.52% (2006: 16.92%). Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The fair value of the Group’s lease obligations approximates their carrying amount. The Group’s obligations under finance leases are secured by the lessors’ rights over the leased assets. The Company does not have any obligations under finance leases. 25. Loans and Borrowings Group Group Company Company 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Bank loans 75,000 155,000 – 47,000 ––––––––––– ––––––––––– ––––––––––– ––––––––––– At 31 December 2007, the loans were advanced under the Group’s $850m, syndicated, revolving floating rate credit facilities (2006: $1bn facility); see Note 30 for details. Interest during the year was charged at an average rate of 7.4% (2006: 6.6%). CAIRN ENERGY PLC ANNUAL REPORT 2007 115
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ANNUAL REPORT & ACCOUNTS 2007 CAIRN
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CAIRN is an edinburgh based oil and
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CAIRN INDIA performance First comme
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2000 lakshmi disCovery 2001 sarasWa
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THE RESTRUCTURING OF THE GROUP INTO
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ajasthan midstream the government o
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Cambay Basin, India CAIRN ENERGY PL
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Cairn india assets 30% 30% 49% 40%
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Rajasthan, India the increased reso
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Detail heading here relore min ullu
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uk (West Of shetland) Block 214/19
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nePal the security situation in nep
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angladesh reserves sangu gross 2p r
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activities in all operated blocks.
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2007 marked the beginning of a new
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key financial performance indicator
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CAIRN INDIA CAPITAL EXPENDITURE FOR
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3 9 12 4 8 1 Sir Bill Gammell, Chie
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2007 ACCOUNTS Risk Factors 36 Corpo
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RISk FACTORS CONTINUED The developm
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RISk FACTORS CONTINUED Corporate Re
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CORPORATE GOVERNANCE STATEMENT CONT
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DIRECTORS’ REPORT CONTINUED At 31
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DIRECTORS’ REPORT CONTINUED Elect
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DIRECTORS’ REPORT CONTINUED Age o
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DIRECTORS’ REMUNERATION REPORT Re
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DIRECTORS’ REMUNERATION REPORT CO
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DIRECTORS’ REMUNERATION REPORT CO
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Annual Report 2007 in PDF - Cairn Energy PLC

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