Annual Report 2007 in PDF - Cairn Energy PLC

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STATEMENTS OF CASH FLOWS For the year ended 31 December 2007 76 CAIRN ENERGY PLC ANNUAL REPORT 2007 Group Group (Restated) Company Company 2007 2006 2007 2006 Notes $’000 $’000 $’000 $’000 Cash flows from operating activities Profit/(loss) before taxation 1,553,236 (91,842) 1,170,772 165,327 Unsuccessful exploration costs 40,714 62,018 – – Depletion, depreciation, decommissioning and amortisation 125,326 110,494 1,159 2,368 Share-based payments charge 25,274 13,304 3,271 3,474 Impairment and impairment reversals of oil and gas assets 55,206 71,455 – – Loss on sale of oil and gas assets 89 – – – Negative goodwill on acquisition (17,373) – – – Exceptional gain on deemed disposal of subsidiaries (1,577,276) – – – Finance income (65,176) (4,603) (13,344) (242,578) Finance costs 30,339 31,875 4,912 12,952 Net interest paid (6,708) (5,599) (350) (1,877) Income tax paid (14,716) (12,184) – – Gain on sale of other non-current assets – (2) – – Foreign exchange differences (2,829) (282) 7,785 9,682 Dividends received – – (1,216,653) Movement on inventory of oil and condensate (3,363) 918 – – Trade and other receivables movement 1,883 (7,037) 2,603 7,785 Trade and other payables movement 8,039 15,139 (105,293) 67,957 Movement in other provisions 2,611 5,762 – – ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net cash generated from/(used in) operating activities 155,276 189,416 (145,138) 25,090 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Cash flows from investing activities Expenditure on intangible exploration/appraisal assets (156,394) (157,535) – – Expenditure on tangible development/producing assets (244,009) (114,995) – – Purchase of property, plant & equipment – other (2,122) (1,346) (62) (775) Purchase of intangible assets – other (8,443) (7,779) (3,968) (1,940) Purchase of investments – – (233,925) (63,636) Acquisition costs for business combinations (77,295) – – – Cash acquired as a result of business combinations 7,335 – – – Cash disposed of on disposal of subsidiary (6,738) – – – Proceeds on disposal of subsidiary 54,393 – – – Proceeds on disposal of property, plant & equipment – other – 20 – 1 Movement in funds on bank deposits (30,053) 20,000 – – Interest received 64,532 5,568 13,591 973 Dividends received – – 1,216,653 – ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net cash (used in)/from investing activities (398,794) (256,067) 992,289 (65,377) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Cash flows from financing activities Payment of costs for deemed disposal of subsidiaries (64,304) (23,276) – – Proceeds from deemed disposal of subsidiaries 1,323,329 751,849 – – Buy-back of shares in subsidiary out of capital – – 128,869 – Arrangement and facility fees (22,759) (17,074) (262) (866) Proceeds from issue of shares 9,968 3,219 9,968 3,219 Purchase of own shares – (21,659) – (21,659) Payment of finance lease liabilities (1,405) (285) – – (Repayment)/drawdown of loan facilities (80,000) 155,000 (47,000) 47,000 Return of cash to shareholders (935,653) – (935,653) – ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net cash flows from/(used in) financing activities 229,176 847,774 (844,078) 27,694 ––––––––––– ––––––––––– ––––––––––– ––––––––––– Net (decrease)/increase in cash and cash equivalents (14,342) 781,123 3,073 (12,593) Opening cash and cash equivalents at beginning of year 856,266 75,509 19,513 33,764 Exchange gains/(losses) on cash and cash equivalents 30,348 (366) (5,995) (1,658) ––––––––––– ––––––––––– ––––––––––– ––––––––––– Closing cash and cash equivalents 21 872,272 856,266 16,591 19,513 ––––––––––– ––––––––––– ––––––––––– –––––––––––
NOTES TO THE ACCOUNTS For the year ended 31 December 2007 1. Accounting Policies (a) Basis of preparation Cairn prepares its accounts on a historical cost basis. Where there are assets and liabilities calculated on a different basis, this fact is disclosed in the relevant accounting policy. (b) Accounting standards Cairn prepares its accounts in accordance with applicable International Financial Reporting Standards (‘IFRS’) as adopted by the EU. The Group’s financial statements are also consistent with IFRS as issued by the International Accounting Standards Board (‘IASB’). Relevant new standards and interpretations issued by the IASB, but not yet effective and not applied in these financial statements, are as follows: Date of adoption Title Change to accounting policy by Cairn Impact on initial application Effective date from 1 March 2007 IFRIC 11 ‘Group and Treasury Share Transactions’ Share-based payment awards relating to employees of a subsidiary will be recognised in the equity of that company. Effective date from 1 January 2009 IFRS 8 ‘Operating Segments’ No changes to current accounting policy. Revised IAS 23 ‘Borrowing Costs’ Revised IAS 1 ‘Presentation of Financial Statements’ Effective date from 1 July 2009 Revised IAS 27 ‘Consolidated and Separate Financial Statements’ Revised IFRS 3 ‘Business Combinations’ May result in more borrowing costs being capitalised than under current policy. No changes to current accounting policy. No changes to current policy for Cairn Energy PLC but will impact Group subsidiaries. 1 Jan 2008 Decrease in retained earnings of Cairn Energy PLC, with corresponding adjustment in other debtors. There will be no impact at Group level. 1 Jan 2009 Alternative disclosures regarding segmental performance. 1 Jan 2009 Decrease in borrowing costs charged to the Income Statement, with corresponding increase in assets. 1 Jan 2009 Presentation and disclosure requirements for certain items in the Income Statement. I Jan 2009 No impact on Cairn Energy PLC Group or Company accounts. Expensing of all transaction costs. 1 Jul 2009 Applies only to business combinations after effective date. No other IFRS as issued by the IASB which are not yet effective are expected to have an impact on the Group’s or Company’s financial statements. During the year, the Group adopted IFRIC 8 ‘Scope of IFRS 2’; amendment to IFRS 2 ‘Share-based Payment – Vesting Conditions and Cancellations’; amendment to IAS 1 ‘Presentation of Financial Statements – Capital Disclosures’; and IFRS 7 ‘Financial Instruments: Disclosures’, amendment to IAS 32 ‘Financial Instruments: Disclosure and Presentation’. (c) Presentational currency The functional currency of Cairn Energy PLC, the ultimate parent company of the Group, is Sterling. These accounts have been presented in US Dollars ($), the functional currency of most companies within the Group. It is deemed to be more appropriate to present the financial statements in line with the functional currency of the majority of the Group. The Group’s policy on foreign currencies is detailed in Note 1(p). CAIRN ENERGY PLC ANNUAL REPORT 2007 77
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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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NOTES TO THE ACCOUNTS CONTINUED The
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RESERVES Direct Direct working enti
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NOTICE OF ANNUAL GENERAL MEETING No
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NOTICE OF ANNUAL GENERAL MEETING CO
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GLOSSARY OF TERMS CONTINUED TECHNIC
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