• Annual Report 2009
  • 4Letter to shareholders
  • 6Words from the Chairman
  • 8Our business, vision and strategy
  • 9Market overview
  • 12Operations
  • 13Reserves, resources and production
  • 16Core area - Europe
  • 21Core area - Russia
  • 22Core area - South East Asia
  • 23Other operations
  • 24Corporate responsibility
  • 30Corporate governance report
  • 36-Internal control and risk management
  • 38-Board of directors
  • 39-Management
  • 40-Risk factors
  • 41The share and shareholders
  • 44Five year financial summary
  • 45Director's report
  • 54Income statement
  • 55Comprehensive income
  • 56Balance sheet
  • 57Statement of cash flow
  • 58Statement of changes in equity
  • 59Key financial data
  • 60Accounting principles
  • 67Notes - Group
  • 84Parent company annual accounts
  • 88Notes - Parent company
  • 90Board assurance
  • 90Financial reporting dates
  • 91Auditor's report
  • 92Reserve quantity information
  • 93Definitions

Annual Report 2009

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NOTES TO THE FINANCIAL STATEMENTS OF THE GROUP Pension Arrangements The pension benefits comprise a defined contribution scheme with premiums calculated on the full basic salary. The pension contributions in relation to the basic salary are dependent upon the age of the executive. Non-Financial Benefits Non-financial benefits shall be based on market terms and shall facilitate the discharge of each executive’s duties. Severance Arrangements A mutual termination period of between one month and six months applies between the Company and executives, depending on the duration of the employment with the Company. In addition, severance terms are incorporated into the employment contracts for executives that give rise to compensation in the event of termination of employment due to a change of control of the Company. The Compensation Committee shall approve termination packages that exceed USD 150,000 in value per individual. Authorisation for the Board of Directors The Board of Directors is, following the decision of the 2009 AGM, authorised to deviate from the Policy on Remuneration in accordance with Chapter 8, section 53 of the Swedish Companies Act in case of special circumstances in a specific case. No such deviations were made in 2009. Please see page 53 for further information on the Board of Directors’ proposal regarding the remuneration policy for 2010. Salaries and other remuneration to non-executive directors (TSEK) Ian H. Lundin Magnus Unger Lukas H. Lundin William A. Rand Asbjørn Larsen Dambisa Moyo Total 1 Fees 800 600 558 600 450 292 3,300 Other1 1,470 157 – – – – 1,627 Total 2009 2,270 757 558 600 450 292 4,927 Total 2008 2,219 702 400 600 292 – 4,213 Other remuneration paid during 2009 relates to fees paid for special projects undertaken on behalf of the Group. The payment of such fees was in accordance with fees approved at the 2009 AGM. There are no severance pay agreements in place for any non-executive directors. Salaries and other remuneration to Executive Management (TSEK) C. Ashley Heppenstall Alexandre Schneiter Chris Bruijnzeels Other Management3 Total 1 2 3 4 Salary 4,924 3,376 2,363 7,288 17,951 Bonuses4 1,641 1,125 788 1,910 5,464 Benefits1 844 352 277 516 1,989 Total 2009 7,409 4,853 3,428 9,714 25,404 Total 2008 7,299 4,494 3,276 10,929 25,998 Pensions 20092 465 290 188 468 1,411 Pensions 2008 389 252 165 561 1,367 Benefits paid include school fees and health insurance. Pension contributions relate to payments to non-contributory pension funds in excess of the minimum Swiss statutory levels. Other Management comprise the four Vice Presidents in office during the year until 30 April 2009 and three thereafter following the resignation of the VP Operations. Included in the bonus expense for 2009 is also an amount of TSEK 4,032 (TSEK 6,733) relating to bonuses awarded in January 2009 relating to 2008. In December 2009 the Compensation Committee awarded a bonus for 2009 of one month’s salary to the CEO and to the Vice Presidents. In January 2010 the Compensation Committee met and reassessed the bonus payments made for 2009 considering the employees’ contributions to the results of the Company and the achievement of personal targets. The committee awarded C. Ashley Heppenstall an additional bonus of TSEK 2,872 equal to seven months salary and awarded bonuses to Alexandre Schneiter and Chris Bruijnzeels of TSEK 1,969 and TSEK 1,182 respectively and the other Vice Presidents a total of TSEK 2,324 equal to between two and seven months salary. The additional bonus is not included in the table above. The normal retirement age for the CEO is 65 years. The pension contribution is 10% of the qualifying income for pension purposes, 40% of which is funded by the employee. Qualifying income is defined as annual basic salary. Since December 2006 enhanced severance terms have been incorporated into the employment contracts for Executive Management. These provisions give rise to compensation in the event of termination of employment due to a company change of control. If the employee elects to resign or if the employee’s employment is terminated without cause within one year following the change of control, then the employee shall be entitled to receive the stated compensation. The associated compensation is two years’ basic salary for Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Senior Vice President Operations and one year’s basic salary for other Executive Management. The following incentive warrants have been issued to the Executive Management. The Board of Directors have no outstanding incentive warrants. Conditional award of shares under Performance Share Plan 2 Shares – – 5,732 2,293 8,025 Incentive warrants and shares outstanding 31 December 2009 Incentive warrants 200,000 175,000 25,000 115,000 515,000 Shares 2 – 5,732 2,293 8,025 – 2007 Programme Executive Management C. Ashley Heppenstall Alexandre Schneiter Chris Bruijnzeels Other management Total 1 2 Allocated Incentive warrants 400,000 350,000 100,000 300,000 1,150,000 Granted 1 Incentive warrants 200,000 175,000 25,000 140,000 540,000 after Company performance condition and net of shares elected to be taken under the Performance Share Plan. maximum number of shares. Award will be 50% to 100% of the maximum shares based on the Company achieving a further performance condition. For incentive warrants, see also Note 43. 81 FINANCIALS

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