KELAG Group Annual report 2012
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 – Table of contents
TABLE OF CONTENTS
I. Consolidated financial statements .................................................................................... 3 I.a Notes to the consolidated financial statements .......................................................... 8 I.b Exhibit ....................................................................................................................... 80 II. Group management report ............................................................................................ 82
2
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Income statement of the KELAG Group
I. CONSOLIDATED FINANCIAL STATEMENTS 1. Income statement of the KELAG Group EUR k
Note
Revenue (including gross income from energy trading activities) thereof electricity/gas thereof heat thereof miscellaneous Cost of purchased energy from energy trading activities
1/1 – 31/12/2012
1/1 – 31/12/2011
2,007,040
1,660,270
1,847,706
1,522,387
146,350
134,049
12,983
3,834
-1,002,424
-705,699
Revenue (including net income from energy trading activities) *
(1)
1,004,615
954,571
Other income
(2)
71,188
44,802
Cost of materials and supplies, and of other purchased services *
(3)
-659,150
-648,401
Personnel expenses
(4)
-147,568
-124,302
Amortisation, depreciation and impairment
(5)
-96,991
-62,593
Other expenses
(6)
-74,290
-66,243
97,803
97,834
Operating result Interest income
(7)
2,399
2,274
Interest cost
(7)
-21,268
-18,348
Other investment result
(8)
29,273
32,083
Earnings from investments accounted for using the equity method
(12)
3,093
-217
111,300
113,627
-15,074
-21,736
96,226
91,890
-37
39
96,263
91,851
Earnings before income taxes Income taxes Consolidated net profit Attributable to non-controlling interests Attributable to the equity holders of the parent company
(9)
* The disclosure of energy trading activities in the income statement was adjusted in these financial statements. As a result the revenue item corresponds to the revenue from all divisions less cost of purchased energy from energy trading activities. Accordingly, the cost of materials and supplies and of other purchased services item was reduced compared to 2011.
3
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Statement of comprehensive income of the KELAG Group
2. Statement of comprehensive income of the KELAG Group EUR k
Note
Consolidated net profit Amounts that are not reclassified in future periods to the income statement Actuarial gains and losses Tax effects on amounts that are not reclassified in future periods to the income statement Amounts that might be reclassified in future periods to the income statement Gains or losses from exchange differences Unrealised gains/losses from the disposal of available-for-sale financial instruments Hedges Tax effects on amounts that will be reclassified in future periods to the income statement
(22)
1/1 – 31/12/2012
1/1 – 31/12/2011
96,226
91,890
-12,627
-278
-16,836
-371
4,209
93
102
-380
-61
-436
486
-13
-356
0
33
69
-12,525
-659
Total comprehensive income
83,700
91,232
Attributable to the equity holders of the parent company
83,776
91,193
-75
39
Other comprehensive income (after income taxes)
Attributable to non-controlling interests
4
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Statement of financial position of the KELAG Group
3. Statement of financial position of the KELAG Group EUR k
Note
Non-current assets
31/12/2012
31/12/2011
1,441,923
1,322,164
Intangible assets
(10)
303,050
289,912
Property, plant and equipment
(11)
965,347
858,456
Investments accounted for using the equity method
(12)
6,878
12,130
Other interests in other entities
(13)
124,943
125,884
Other securities and book-entry securities
(14)
29,693
28,071
Other non-current receivables and assets
(15)
6,179
6,804
Deferred tax assets
(16)
5,832
907
381,597
184,851
Current assets Inventories
(17)
17,323
18,158
Trade receivables and other receivables and assets
(18)
113,470
79,078
Cash and cash equivalents
(19)
250,804
87,614
Assets
1,823,520
1,507,015
Equity
644,840
587,956
Equity attributable to the equity holders of the parent company
(20)
638,730
584,998
Equity attributable to non-controlling interests
(21)
6,110
2,958
912,027
698,983
Non-current liabilities Financial liabilities
(22)
454,245
264,116
Provisions
(23)
300,214
273,457
Deferred tax liabilities
(16)
0
6,028
Construction cost subsidies
(24)
93,200
93,939
Other liabilities
(25)
64,368
61,442
266,653
220,076
3,700
13,403
Current liabilities Financial liabilities
(26)
Current tax provisions
(27)
113
53
Other provisions *
(27)
43,656
41,039
Trade payables and other liabilities *
(28)
219,184
165,580
1,823,520
1,507,015
Equity and liabilities
* With regard to the reclassification from other provisions to trade payables and other liabilities in the comparative period 2011, reference is made to the explanations in the section “Summary of significant accounting policies.”
5
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Statement of changes in equity of the KELAG Group
Accumulated profits/losses
Exchange differences
Actuarial gains and losses
instruments
Hedging reserve
Total
controlling interests
Total equity
263
493,269
-71
-27,343
-442
0
523,836
2,923
526,758
Other comprehensive income
0
0
0
-436
-371
-13
0
-820
0
-820
Tax on the above
0
0
0
66
93
3
0
162
0
162
income taxes
0
0
0
-371
-278
-10
0
-659
0
-659
Consolidated net profit
0
0
91,851
0
0
0
0
91,851
39
91,890
Total comprehensive income
0
0
91,851 -371
-278
-10
0
91,193
39
91,232
Dividends
0
0
0
0
0
-30,000
-4
-30,004
As of 1 January 2011
Equity attributable to non-
Capital reserves
58,160
EUR k
Available-for-sale financial
Capital stock
4. Statement of changes in equity of the KELAG Group
Other comprehensive income after
-30,000
0
-31
Other income and expenses recognised without effect on profit or loss
0
0
0
0
0
0
-31
0
-31
As of 31 December 2011
58,160
263
555,090 -442
-27,622
-452
0
584,998
2,958
587,956
As of 1 January 2012
58,160
263
555,090 -442
-27,622
-452
0
584,998
2,958
587,956
Other comprehensive income
0
0
0
-61
-16,836
486
-305
-16,716
-51
-16,767
Tax on the above
0
0
0
0
4,209
-56
76
4,229
13
4,242
income taxes
0
0
0
-61
-12,627
430
-229
-12,487
-38
-12,525
Consolidated net profit
0
0
96,263
0
0
0
0
96,263
-37
96,226
Total comprehensive income
0
0
96,263
-61
-12,627
430
-229
83,776
-75
83,700
Dividends
0
0
-30,000
0
0
0
0
-30,000
0
-30,000
Acquisition of a subsidiary
0
0
0
0
0
0
0
0
2,869
2,869
0
0
-43
0
0
0
0
-43
358
314
58,160
263
621,309 -503
-40,249
-22
-229
638,730
6,110
644,840
Other comprehensive income after
Other income and expenses recognised without effect on profit or loss As of 31 December 2012
6
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Statement of cash flows of the KELAG Group
5. Statement of cash flows of the KELAG Group EUR k
Note
Earnings before income taxes
2012
2011
111,300
113,627
96,991
62,593
652
1,317
Non-cash adjustment to reconcile earnings before income taxes to net cash flow Amortisation, depreciation and impairment and reversal of impairment losses on intangible assets and property, plant and equipment
(5)
Impairment and reversal of impairment losses on financial assets including share of profit/loss from investments accounted for using the equity method Gain/loss on the disposal of property, plant and equipment, and securities
1,677
3,035
Interest cost
(7)
21,268
18,348
Interest income
(7)
-2,399
-2,274
Sundry
1,029
82
Taxes paid
-17,814
-12,439
2,399
2,274
Interest received Changes in non-current provisions
(23)
2,049
4,779
Changes in construction cost subsidies
(24)
-177
-2,241
216,973
189,100
Cash flow from operating activities Changes in inventories
(17)
1,144
-784
Changes in trade receivables and other receivables and assets
(18)
-18,028
10,765
Changes in trade payables and other liabilities
(28)
20,775
8,874
Changes in current provisions
(27)
2,766
-13,871
223,629
194,083
-144,021
-168,961
Cash flow from operating activities* (10) Investments in intangible assets and property, plant and equipment
(11)
Proceeds from the disposal of intangible assets and property, plant and equipment Acquisition of subsidiaries, net of cash acquired Investments in other securities and book-entry securities Disposals of financial assets Cash flow from investing activities
569
2,266
-8,351
-14,015
-24,751
-520
23,236
2,500
-153,319
-178,730
Repayment and proceeds from financial liabilities *
138,942
-395
Interest paid
-16,480
-14,098
Cash received and paid for non-current loans and financial receivables Profit distribution
364
693
-30,000
-30,004
Cash received from other shareholders
55
0
Cash flows from financing activities
92,881
-43,805
163,190
-28,450
Changes in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year
(19)
87,614
116,065
Cash and cash equivalents at the end of the financial year
(19)
250,804
87,614
(19)
163,190
-28,450
Changes in cash and cash equivalents according to the statement of financial position * Please refer to 6.8
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
I.a NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. The company The KELAG Group is one of the leading energy service providers in Austria. The company operates throughout Austria in the fields of electricity and natural gas, focusing on Carinthia. The subsidiary KELAG Wärme GmbH operates successfully in the heat business throughout Austria. The grids in Carinthia (electricity and natural gas) are operated by the subsidiary KNG-Kärnten Netz GmbH: The hydroelectric and wind power activities and energy trading outside Austria are bundled at KI-KELAG International GmbH. The KELAG Group has decades of experience in the production and distribution of energy.
2. Accounting policies KELAG-Kärntner Elektrizitäts-Aktiengesellschaft (KELAG), with registered office at Arnulfplatz 2, A-9020 Klagenfurt am Wörthersee, commercial register court: regional and commercial court Klagenfurt 99133 i, and its subsidiaries form the KELAG Group for which the following IFRS financial statements for 2012 were prepared. These have an exempting effect pursuant to Sec. 245a UGB (Austrian Commercial Code). Information on its ultimate parent is presented in Note 6.9.
2.1. General information The consolidated financial statements of KELAG were prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The consolidated financial statements are generally prepared in accordance with the historical cost convention. This does not apply to derivative financial instruments and available-for-sale financial assets which are measured at fair value. The annual financial statements of entities included in the consolidated financial statements (whether fully consolidated or accounted for using the equity method) have
8
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
been prepared on the basis of uniform accounting policies. The end of the reporting period for all fully consolidated entities is 31 December 2012. The consolidated financial statements are prepared in thousands of euro (EUR k) (income statement, statement of comprehensive income, statement of financial position, statement of cash flows and statement of changes in equity) and millions of euro (EUR m) (notes). Rounding differences may arise from totalling rounded amounts and percentages using automatic calculation tools. The addition or presentation of rounded figures can lead to rounding differences. Classification as current/non-current in the statement of financial position has been performed pursuant to IAS 1.60 et seq.
9
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
2.2. Scope of consolidation and consolidation methods KELAG’s shareholding %
Capital stock/share capital Consolidation EUR k method*
1.
KNG-Kärnten Netz GmbH, Klagenfurt, Austria
100.00
35
FC
2.
KELAG Wärme GmbH, Villach, Austria
100.00
1,820
FC
2.1.
EKO-TOPLOTA Energetika d.o.o., Ljubljana, Slovenia**
100.00
9
FC
2.2.
SWH – Strom und Wärme aus Holz, Heizwerk ErrichtungsBetriebs GmbH, Purkersdorf, Austria**
50.00
200
EQ
2.2.1.
Biowärme Imst GmbH, Imst, Austria**
45.00
100
EQ
2.2.2.
SBH Biomasseheizkraftwerk GmbH, Enns, Austria**
25.50
36
EQ
2.3.
Biofernwärme Fürstenfeld GmbH, Fürstenfeld, Austria**
50.00
218
EQ
2.4.
KWH Kraft & Wärme aus Holz GmbH, St. Gertraud, Austria**
26.00
36
EQ
2.5.
Bio-Teplo Czechia s.r.o., Znaim, Czech Republic**
100.00
7
FC
2.6.
BES-BioEnergie für Spittal GmbH, Spittal/Drau, Austria**
51.00
35
FC
3.
KELAG Finanzierungsvermittlungs GmbH, Klagenfurt, Austria**
100.00
254
FC
4.
KI-KELAG International GmbH, Klagenfurt, Austria
100.00
10,000
FC
4.1.
Interenergo d.o.o., Laibach, Slovenia**
100.00
10,200
FC
4.1.1.
Interenergo d.o.o. Zagreb, Zagreb, Coatia**
100.00
41
FC
4.1.2.
EHE d.o.o. Banja Luka, Banja Luka, Bosnia and Herzegovina**
100.00
1,001
FC
4.1.3.
Interenergo d.o.o. Sarajevo, Sarajevo, Bosnia and Herzegovina**
100.00
511
FC
4.1.4.
PLC Interenergo d.o.o. Beograd, Belgrade, Serbia**
100.00
533
FC
4.1.5.
Hidrowatt d.o.o. Beograd, Belgrade, Serbia**
80.00
0
FC
4.1.6.
Interenergo Makedonija d.o.o.e.l., Skopje, Macedonia**
100.00
115
FC
4.1.7.
IEP energija d.o.o. Gornji Vakuf-Uskoplje, Gornji Vakuf Uskoplje, Bosnia and Herzegovina**
100.00
1
FC
4.1.8.
LSB Elektrane d.o.o. Banja Luka, Banja Luka, Bosnia and Herzegovina**
100.00
106
FC
4.1.9.
Interhem d.o.o. Banja Luka, Banja Luka, Bosnia and Herzegovina**
100.00
69
FC
4.1.10.
Inter-Energo d.o.o. Gornji Vakuf, Gornji Vakuf, Bosnia and Herzegovina**
100.00
1
FC
4.2.
Windfarm MV I s.r.l., Bucharest, Romania**
100.00
2,010
FC
4.3.
Lumbardhi Beteiligungs GmbH, Klagenfurt, Austria**
90.00
35
FC
4.3.1.
KelKos Energy Sh.p.k., Pristina, Kosovo**
90.00
0
FC
4.4.
Windfarm Balchik 1 OOD, Sofia, Bulgaria**
52.00
3
FC
4.5.
Windfarm Balchik 2 OOD, Sofia, Bulgaria**
52.00
3
FC
4.6.
Windfarm Balchik 4 OOD, Sofia, Bulgaria**
52.00
3
FC
4.7.
KelaVENT Charlie SRL, Bucharest, Romania**
99.99
393
FC
4.8.
KelaVENT Echo SRL, Bucharest, Romania**
99.99
531
FC
5.
Wärmeversorgung Arnoldstein Errichtungs- und Betriebsgesellschaft mbH, Arnoldstein, Austria
99.00
36
FC
Kraftwerk Waben GmbH, Klagenfurt, Austria
51.00
36
FC
6.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
KELAG’s shareholding %
Capital stock/share capital Consolidation EUR k method*
7.
Kraftwerksgesellschaft Tröpolach GmbH, Klagenfurt, Austria
51.00
35
8.
Kärntner Restmüllverwertungs GmbH, Arnoldstein, Austria
85.74
44
FC
9.
Waldensteiner Kraftwerke GmbH, Waldenstein, Austria
40.00
36
EQ
10.
Waldensteiner Kraftwerke GmbH & Co KG, Waldenstein, Austria (limited partner‟s interest)
40.00
7
EQ
11.
Stadtwerke Kapfenberg GmbH, Kapfenberg, Austria
35.00
2,000
EQ
FC
* FC = full consolidation, EQ = equity method ** Indirect interest
The
parent
company
is
KELAG-Kärntner
Elektrizitäts-Aktiengesellschaft.
The
consolidated financial statements include all entities (“subsidiaries”) that are controlled (controlling influence) by the parent company by means of full consolidation. Controlling influence is where the parent company is able, whether directly or indirectly, to determine the entity‟s financial and operating policy. The inclusion of a subsidiary begins when controlling influence is acquired and ends when controlling influence is lost. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary without involving the loss of control is accounted for as an equity transaction. If the parent company loses its controlling influence over a subsidiary, it takes the following steps: Derecognises the assets (including goodwill) and liabilities of the subsidiary Derecognises the carrying amount of any non-controlling interest Derecognises the cumulative translation differences, recorded in equity Recognises the fair value of the consideration received Recognises the fair value of any investment retained Recognises any surplus or deficit in profit or loss Reclassifies the parent‟s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate under IFRSs. In addition to KELAG as parent company, the consolidated financial statements include 30 subsidiaries (prior year: 24) and 8 associates (prior year: 9).
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
31/12/2012 Scope of consolidation
Full consolidation
31/12/2011
Equity Full method consolidation
Equity method
As of the beginning of the reporting period
25
9
20
11
Included in the financial statements for the first time in the reporting period
8
0
6
0
Merged in the reporting period
-2
0
0
0
Deconsolidated in the reporting period
0
-1
-1
-2
As of the end of the reporting period
31
8
25
9
of which Austrian entities
11
8
9
9
of which non-Austrian entities
20
0
16
0
Alternative Energie Salzburg GmbH and Biowärme Friesach GmbH were merged with KELAG Wärme GmbH at the beginning of financial year 2012. For more details of business combinations, reference is made to Section 5. “Notes to the statement of financial position”. Entities on which the parent company can exercise significant influence, whether directly Investments in or indirectly, (“associates”) and shares in joint ventures are accounted for using the equity associates and in joint method. The same consolidation principles are applied. The financial statements of all
ventures
material entities accounted for using the equity method are prepared using uniform accounting policies. Under the equity method, the investment in the associate is carried in the statement of financial position at cost plus post acquisition changes in the Group‟s share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. The income statement reflects the Group‟s share of the results of operations of the associate. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate. Losses by an associate exceeding the Group‟s share in this associate are only recognised to the extent that the Group has entered into legal or constructive obligations or makes payments on behalf of the associate. The share of profit of an associate is shown on the face of the income statement. This is the profit attributable to equity holders of the associate and therefore is profit after tax and non-controlling interests in the subsidiaries of the associates.
12
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group‟s investment in its associate. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the „share of profit of an associate‟ in the income statement. Upon loss of significant influence over the associate, the Group measures and recognises any retaining investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognised in profit or loss under earnings from investments accounted for using the equity method. Intercompany transactions, receivables,
liabilities
and
intercompany profits
are Consolidation methods
eliminated. The reversal of impairment losses and the impairment losses recognised on investments in consolidated entities in separate financial statements are reversed. The acquisition of subsidiaries and businesses is accounted for using the acquisition Business combinations method. The cost of an acquisition is the aggregate of the consideration transferred, and incorporations measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. The identifiable assets, liabilities and contingent liabilities of the acquired entity that satisfy the recognition criteria of IFRS 3 Business combinations are recognised at their fair values as of the acquisition date. Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognised for the non-controlling interest over the net identifiable assets acquired and liabilities of the Group assumed. If, upon reassessment, the fair value of the net assets exceeds total compensation, the difference is recognised immediately through profit or loss. The share of non-controlling interests in the acquired entity is measured as of acquisition date at its shares in the net fair value of the assets, liabilities and contingent liabilities. Acquisitionrelated costs incurred are expensed. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date. If the business combination is achieved in stages, the acquisition-date fair value of the acquirer‟s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss. The fair value of the shares held to date are included in the cost of the business combination to determine the goodwill. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability is recognised in accordance with
13
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
IAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured and its subsequent settlement is accounted for within equity.
14
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
2.3. Accounting policies For the preparation of these consolidated financial statements all mandatory New accounting policies amendments to existing and new IAS and IFRSs as of 31 December 2012 as well as to IFRIC and SIC interpretations as adopted by the European Union were applied. Those IAS and IFRSs as well as those IFRIC and SIC interpretations already adopted by the European Union but not yet mandatory for the financial year 2012 are not early adopted. One exception to this is the early adoption of IAS 1. The following standards and interpretations were applied for the first time for the financial year 2012: Newly applied IFRSs/IFRICs
Effective as of
IAS 1
Amendments: Presentation of Items of Other Comprehensive Income
1 July 2012
IAS 12
Amendments: Deferred Taxes/Recovery of Underlying Assets
IFRS 1
Amendments: Severe Hyperinflation and Removal of Fixed Dates
1 July 2011
IFRS 7
Amendments: Financial Instruments – Disclosures
1 July 2011
1 January 2012
Pursuant to the amendment in IAS 1 “Presentation of Financial Statements” entities must classify the items presented in other comprehensive income into two categories – items that are subsequently posted through profit and loss (recycling) and those that are not. The amendment also affects the KELAG Group‟s statement of comprehensive income and was already implemented in the 2012 financial statements. The amendments to IAS 12 provide an exception to the existing regulation on the measurement of deferred tax assets and liabilities for certain non-financial assets measured at fair value. This essentially affects entities that measure investment properties, property, plant and equipment and intangible assets at fair value in their statement of financial position and originate from countries that stipulate different tax rates for investment income and gains on disposal. It can be assumed that the KELAG Group will not be affected. The amendment to IFRS 1 relates to entities whose functional currency is subject to severe hyperinflation. As the KELAG Group is not a first-time adopter of IFRSs, this amendment is not relevant.
15
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The amendments to IFRS 7 “Financial Instruments – Disclosures” relate to additional mandatory disclosures when derecognising financial assets. In contrast to the previous provisions, where financial assets are not fully derecognised despite the rights being transferred or there being an obligation to transfer cash inflows there is a requirement to make additional disclosures on the newly created liabilities. This includes in particular disclosure as to whether the financial assets that continue to be carried can be used without restriction or the acquiring party has an entitlement to the financial asset. The amendments affect entities that transfer financial assets to another party through sale, securitisation transaction, factoring or another form of transaction. As none of these kinds of transaction have been performed within the KELAG Group to date, no new disclosure requirements are expected to arise.
Prospective IFRS/IFRIC already adopted by EU but not yet applicable
effective date
IAS 19
Amendment: Employee Benefits
1 January 2013
IAS 27
Amendments: Separate Financial Statements
1 January 2014
IAS 28
Amendments: Investments in Associates
1 January 2014
IAS 32
Amendments: Financial Instruments – Offsetting Financial
1 January 2014
Assets and Financial Liabilities IFRS 1
Amendments: First-time Adoption of International Financial
1 January 2013
Reporting Standards IFRS 7
Amendment: Disclosure – Offsetting of Financial Assets and
1 January 2013
Liabilities IFRS 10
Consolidated Financial Statements
1 January 2014
IFRS 11
Joint Arrangements
1 January 2014
IFRS 12
Disclosures of Interests in Other Entities
1 January 2014
IFRS 13
Fair Value Measurement
1 January 2013
IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine
1 January 2013
There have been material amendments to IAS 19 “Employee Benefits” that relate to the recognition and measurement of the expenses for defined benefit plans and postemployment benefits. Subsequently, the mandatory disclosures on employee benefits also change. Actuarial gains and losses must be recognised immediately in other comprehensive income. Recognition using the corridor approach and immediate recognition in profit and loss, which were permissible in the past, are no longer allowed.
16
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The amended standard will in future affect the net benefit expense (net of income), as the planned income from plan assets is determined using the same interest rate as that used to discount the defined benefit obligation. Apart from a change in the disclosures in the notes, this will not affect the KELAG Group as it had already converted to the method allowed under the amended version of IAS 19 in 2010. IAS 27 “Consolidated and Separate Financial Statements” has been renamed and in future only contains provision on separate financial statements. The existing guidelines for separate financial statements remain unchanged, however. IAS 28 “Investments in Associates” has been amended such that the disclosure requirements it contained for investments in associates have been transferred to IFRS 12 and are no longer part of IAS 28. The amendments to IAS 32 “Financial Instruments: Presentation” do not concern the provisions relating to the offsetting of financial instruments, but rather clarify certain terms; there are therefore no effects on the KELAG Group. The amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” concern government loans granted at below-market rates of interest. As the KELAG Group is not a first-time adopter of IFRSs, the amendment does not affect the consolidated financial statements. Pursuant to the amendment of IFRS 7 “Offsetting of Financial Assets and Financial Liabilities”, entities have to disclose information on rights to set-off and related arrangements (e.g., collateral arrangements). This is intended to provide users of an entity‟s financial statements information to evaluate the effect of netting arrangements on the entity‟s financial position. The new disclosures are required for all recognised financial instruments that were netted under IAS 32 “Financial Instruments: Presentation.” The disclosures apply to the financial instruments used subject to enforceable master netting agreements or similar agreements, irrespective of whether they are netted in accordance with IAS 32. The amendment is effective for the first time for fiscal years beginning on or after 1 January 2013, and is not expected to have any effect on the Group‟s financial position and performance. IFRS 10 “Consolidated Financial Statements” will replace IAS 27 “Consolidated and Separate Financial Statements” and SIC 12 “Consolidation – Special Purpose Entities”; it contains guidelines on control and consolidation. The definition of control is amended such that the criterion of control is met where the controlling entity is able to exercise control over the relevant activities, leading to variable returns from the entity. Returns can 17
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
be positive, negative or both. The provisions for consolidation are not affected. Within the KELAG Group it will be necessary to review each individual equity interest with a view reference to the new definition of control, but it may be assumed that there will be no material changes. According to IFRS 11 “Joint Arrangements” there will be two types of joint arrangement in future: joint operations and joint ventures. A joint operation is a joint arrangement where direct rights to the assets and liabilities are transferred to the partner entities in this joint arrangement. A partner entity in a joint operation records its share on the basis of its share in the joint operation instead of on the basis of the interest in the joint arrangement. A partner entity in a joint venture on the other hand does not have any rights to individual assets or liabilities. Partner entities in a joint venture have a share in the net assets and thus in the results of the activities performed by the joint venture. Joint ventures are accounted for using the equity method; proportionate consolidation is now prohibited by IFRS 11. The KELAG Group must review its existing or new agreements in order to decide whether it invested in a joint arrangement or a joint venture, pursuant to the new standard. IFRS 12 “Disclosure of Interests in Other Entities” stipulates the disclosures that have to be made by an entity on its interests in other entities. According to the new standard, entities must make disclosures that enable the users of the financial statements to assess the nature of the entity‟s interest in subsidiaries, associates, joint arrangements and unconsolidated structured entities (special purpose vehicles) and the associated risks and financial impact. IFRS 13 “Fair Value Measurement” specifies how the fair value is measures and expands the disclosures on fair value. The fair value is uniformly defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard, however, does not contain any details when fair value is to be applied. As almost all entities, including the KELAG Group, perform measurement at fair value, the new requirements have to be met. However, it is mainly the extended disclosure requirements that will affect the KELAG Group. The new IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine” is not relevant for KELAG.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Summary of significant accounting policies Assets and liability items that are expected to be recovered or settled within the normal Current versus nonoperating cycle are reported as current items.
current classification
Assets and liability items that are not expected to be recovered or settled within the normal operating cycle are reported as non-current items. In these financial statements, an amount of about EUR 6.4m was reclassified in the Reclassification of comparative period 2011 from “Other current provisions” to the item of the statement of financial statements financial position “Trade payables and other liabilities.” Accrued vacation and time
items
accounts of employees fall within the scope of the “hierarchy of uncertainty” pursuant to IAS 37.11. Due to a lack of disclosure guidance in IAS 37, they are frequently recorded in the other liabilities. The disclosure of energy trading activities in the income statement was adjusted in these financial statements. As a result the revenue item corresponds to the revenue from all divisions less cost of purchased energy from energy trading activities. This provides the users of the financial statements improved comparability of financial statements within the energy industry. When accounting for business combinations, differences can emerge between the Goodwill consideration and the remeasured net assets. If the difference is negative, the calculation of cost and the purchase price allocation must be reassessed. Under IFRSs, any positive difference is recognised as goodwill. Pursuant to IFRS 3, the goodwill recognised in the statement of financial position is not amortised but must be tested for impairment at least once a year. For this purpose, the goodwill must be allocated to those cash-generating units that are expected to benefit from the synergies resulting from a business combination. These cash-generating units correspond to the lowest organisational level at which management monitors the goodwill for internal management purposes. The recoverability of goodwill is tested by comparing the recoverable amount of a cash-generating unit with its carrying amount including goodwill. If the recoverable amount falls below the carrying amount of the cash-generating unit, goodwill must be written down in a first step. If there is any further need for an impairment charge, the carrying amounts of the other assets must be reduced proportionately. Impairment losses charged on goodwill cannot be reversed in subsequent periods. In the KELAG Group, the annual impairment test of goodwill at the level of the cashgenerating units takes place in the fourth quarter of the reporting period based on the mid-range planning. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained. Acquired intangible assets are recorded at amortised cost. Intangible assets acquired as Property, plant and part of a business combination are recognised separately from goodwill if they meet the equipment and definition as an intangible asset and their fair value can be reliably determined. The cost
intangible assets
of such intangible assets corresponds to their fair value as of the acquisition date. All of these assets have finite useful lives, and are thus amortised using the straight-line method. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised. As long as intangible assets are not yet available for use, they must be tested for impairment annually. Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the income statement as incurred. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised. The cost of self-constructed assets includes direct production and materials costs and an appropriate portion of materials and production overheads less any idle capacity costs. The amortisation of intangible assets and depreciation of property, plant and equipment subject to depletion are based on the expected useful lives in the Group and begin when the asset is ready for use. The expected useful lives, residual values and amortisation and depreciation methods are assessed annually and all necessary changes in estimates are taken into account prospectively. Amortisation and depreciation is calculated according to the following uniform group useful lives:
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Useful lives
Years
Intangible assets Water usage rights
0-90
Other rights of use
0-50
Software
4-10
Property, plant and equipment Office and factory buildings
33-55
Plant and machinery
10-60
Other property, plant and equipment Wind turbines
1-10 12-16
The gain or loss on disposal or closure of an item of property, plant and equipment is determined as the difference between the net disposal proceeds and the carrying amount of the asset, and is posted to profit or loss. Borrowing costs directly attributable to the acquisition, construction or production of an Borrowing costs asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. This is done in line with the Group‟s accounting guidelines. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. The Group capitalises borrowing costs for all eligible assets where construction was commenced on or after 1 January 2009. The financing cost of the investment allocable to the first half of 2012 comes to 4.5% and that allocable to the second half of the year comes to 4.0% (in the prior year for the full financial year: 4.5%). The determination of whether an arrangement is, or contains, a lease is based on the Leases substance of the arrangement at inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Assets held under finance leases are written down over their expected useful lives in the same way as assets owned by the Group or, if shorter, over the term of the underlying lease. Initial recognition of the assets is at the present values of the minimum lease payments (or their fair values, if lower) in non-current assets in the statement of financial position of the KELAG Group. On the liabilities side, the lease liability is recognised and rolled forward in subsequent periods using the effective interest method. All other leases where the KELAG Group is the lessee are accounted for as operating leases. The lease payments are expensed on a straight-line basis over the term of the lease. If there is an indication of impairment of non-financial assets that fall within the scope of Recoverability of nonIAS 36, the recoverability of the carrying amounts is tested (impairment test). Regardless financial assets of whether or not there is an indication of impairment, an annual impairment test must be
21
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
carried out for goodwill, intangible assets with indefinite useful lives and assets that are not yet ready for use. An impairment charge has to be recognised if the carrying amount exceeds the recoverable amount of the asset. The recoverable amount is the higher of an asset‟s value in use or fair value less costs to sell. The value in use is calculated based on an income-based approach using the discounted cash flow method (DCF method). To this end, the relevant cash flows are derived based on management‟s financial plans. The discount rate is the pre-tax rate that reflects the current market assessments of the time value of money and the specific risks, taking into account the capital structure of the asset. An impairment loss must be recognised at the amount by which the carrying amount exceeds the recoverable amount. If the reasons for impairment no longer apply in subsequent periods, impairment losses are reversed (except in the case of goodwill). Other interests in other entities are recognised at cost less impairment losses if it is not Other interests in other possible to derive the fair value using comparable transactions for the corresponding entities and investments accounted for using the
period and measurement was not performed by discounting the expected cash flows equity method because cash flows could not be reliably determined. In accordance with IAS 28, investments accounted for using the equity method are initially recognised at cost and subsequently recognised according to the amortised interest in net assets. The carrying amounts of the investment are increased or decreased by the share of the KELAG Group in the earnings for the period and in other comprehensive income as well as by distributions, material elimination of intercompany profits and rolled forward fair value adjustments from share acquisitions recognised in accordance with IFRS 3. Goodwill included therein in accordance with IFRS 3 is not subject to amortisation and, in accordance with IAS 28, is not reported separately.
As of the respective reporting date, other interests in other entities are checked for signs Recoverability of other of impairment as defined by IAS 39, and if necessary an impairment test is carried out in interests in other entities accordance with IAS 36.
and investments accounted for using the equity method
Recoverability is assessed by calculating the recoverable amount, which is the higher of the value in use and fair value less costs to sell. The recoverable amount of the equity investments is calculated primarily based on the concept of the fair value less costs to sell. To determine the fair value less costs to sell, market-based approaches are favoured over income-based approaches. The best information available must be used for the measurement, which is the information that a company would use as of the reporting date in connection with the sale of the asset at market conditions between willing, competent and independent business partners. To determine value in use, the present value of the estimated cash flows allocated to the KELAG Group and to be recorded by the associate or joint venture as a whole in future is generally used. Alternatively, in accordance with IAS 28, the proportionate present value of estimated future dividends and liquidation proceeds can be used.
22
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The securities and book-entry securities reported in the statement of financial position Other securities and mainly comprise securities and sovereign bonds. At the KELAG Group, securities are
book-entry securities
classified as available for sale or, if the criteria of IAS 39 are satisfied, as held to maturity. Securities are classified as available for sale if the entity has the positive intention and ability to hold or use them to maturity. This category essentially comprises financial instruments that are not loans or receivables, not held to maturity and not measured at fair value through profit or loss. They are measured at fair value, which is calculated based on market prices. Initial measurement is performed on the settlement date. Changes in value are posted to other comprehensive income (in equity) up until sale or any impairment losses in accordance with IAS 39. In the event of a prolonged decline in fair value, impairment losses are posted to profit or loss (see recoverability of financial assets). The gain or loss on sale is posted to profit or loss. If an asset is impaired, the accumulated loss is reclassified to finance cost in profit or loss and derecognised from the reserve for available-for-sale financial assets. If the fair value falls significantly or for a longer period, impairment losses are recognised in profit or loss. Acquisitions and sales are recognised on their settlement date. Interest income calculated using the effective interest rate method is recognised in the financial result with an effect on income. Securities are classified as financial investments held to maturity if the Group has the intention and ability to hold these to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement in finance costs. The Group did not have any held-to-maturity investments in the fiscal years prior to reporting period 2012. All sovereign bonds purchased in financial year 2012 were classified as held-to-maturity investments. Interest-bearing non-current receivables are allocated to the loans and receivables Other non-current category. These are recognised at amortised cost less any impairment losses using the receivables and assets effective interest rate method. In the case of impairment, measurement is at the present value of the repayments expected.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
All trade receivables, receivables from affiliated non-consolidated entities and receivables Trade receivables and from other investees and investors are allocated to the loans and receivables category other receivables and and measured at amortised cost in accordance with IAS 39. If impairment losses are
assets
expected, the items are recognised in the statement of financial position less impairment losses for parts that are expected to be uncollectible. Impairment losses adjusted on an item by item basis via allowance costs make sufficient provisions for the expected default risks. Actual default leads to derecognition of the receivables in question. Other assets are recognised at cost loss impairment losses. Current other receivables contain derivatives relating to energy. The derivative financial instruments are recognised at fair value. The values of derivatives with a netting agreement are offset and thus reported as net figures in the statement of financial position. Other non-current and current receivables are carried at amortised cost. Any impairment losses must also be recognised. The carrying amounts of financial assets not carried at fair value through profit or loss are Recoverability of tested on each reporting date as defined by IAS 39 for objective evidence of impairment financial assets (such as significant financial difficulties of the debtor, a high probability of insolvency proceedings against the debtor). If such evidence exists, the impairment losses to be recognised are recorded in the income statement. Natural gas inventories are measured using the FIFO method. Materials and supplies are Inventories measured at the lower of cost or net realisable value on the reporting date. For marketable inventories, this stems from the current market price. For all other inventories, the net realisable value can be derived from the planned income less cost yet to be incurred. Measurement is based on the moving average price method. Services not yet invoiced and work in process are measured at cost, which comprises direct production and materials costs as well as an appropriate portion of materials and production overheads, taking any idle capacity costs into account. The “Cash and cash equivalents” item in the statement of financial position comprises Cash and cash cash in hand, bank balances and short-term highly liquid deposits that can be converted equivalents into a fixed amount of cash at any time and are subject only to immaterial risks of changes in value. Cash and cash equivalents as reported in the statement of cash flows comprise the items defined above. Liabilities are recognised at fair value less transaction costs. A premium, debt discount or Financial liabilities other difference between the amount received and the repayment amount is spread over
24
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
the term of the financing using the effective interest method and recognised in the financing result. The provisions for current pensions, claims to future pensions and similar obligations are Pension obligations and calculated using the projected unit credit method in accordance with IAS 19. The Group statutory severance recognises actuarial gains and losses in full in the period in which they occur in other
payments
comprehensive income. Such actuarial gains and losses are also immediately recognised in other comprehensive income and are not reclassified to profit or loss in subsequent periods. Based on company agreements and individual contracts, there is an obligation to pay pensions to certain employees under certain circumstances after they have retired. Earmarked pension trust funds exist for these defined benefit obligations. To the extent that these obligations have to be met by the pension trust fund, there is an obligation on the part of the employer to make additional capital contributions. The plan assets are not available to the creditors of the Group, nor can they be paid directly to the Group. Fair value is based on market price information and, in the case of quoted securities, is the published bid price. Pension obligations are determined on the basis of actuarial reports. The biometrical assumptions
used
were
the
“AVÖ
2008-P
–
Rechnungsgrundlagen
für
die
Pensionsversicherung – Pagler & Pagler” for employees. Apart from death and invalidity or retirement upon reaching the imputed pension age, the actuarial experts did not take any other reasons for leaving the company into account, such as employee turnover or similar reasons. The amount of the pension depends on the period of service at KELAG before payment of a pension commences. The pension age taken as a basis for the calculations is the earliest possible age at which (early) retirement is possible in accordance with the relevant statutory regulations, taking transitional regulations into account. For female employees with vested pension rights, the pension age taken as a basis for the calculations was gradually increased in accordance with the “Bundesverfassungsgesetz über unterschiedliche Altersgrenzen von männlichen und weiblichen Sozialversicherten” (Austrian Federal Constitutional Law on Different Retirement Ages of Men and Women under Social Security). The pension trust invests the pension trust funds mainly in different investment funds, observing the regulations of the PKG (Austrian Pension Fund Act). Based on labour-law obligations, employees who commenced service (in Austria) on or before 31 December 2002 receive a one-off severance payment if the employment relationship is terminated by the employer or upon retirement. The amount of the entitlement depends on the number of years served at the company and the remuneration authoritative at the time the payment falls due. This obligation is calculated
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
in accordance with the projected unit credit method with a savings period of 25 years pursuant to IAS 19. Resulting actuarial gains and losses are also taken into account in other comprehensive income. For all (Austrian) employment relationships commencing after 31 December 2002, employees no longer have any direct entitlement to statutory severance. For the employees affected by this regulation, the employer pays a monthly amount of 1.53% of the remuneration into a staff provision fund where the contributions are deposited on an account of the employee. This severance model means that the employer is obliged only to pay the regular contributions, and it is therefore recognised as a defined contribution plan pursuant to IAS 19. The calculations of the above provisions as of 31 December 2012 and 31 December 2011 are based on the following assumptions: Actuarial assumptions
2012
2011
3.50%
4.30%
Pensions Discount rate Pension increases
1.50 – 2.00% 1.50 – 2.00%
Salary increases
2.00 – 3.00% 2.00 – 3.00%
Employee turnover
None
None
Pension age for women
56.5 – 62
56.5 – 62
Pension age for men
61.5 – 62
61.5 – 62
3.50%
4.10%
Discount rate
3.50%
4.30%
Salary increases
3.00%
3.00%
None
None
Expected long-term return on plan assets Statutory severance payments
Employee turnover (depending on period of service at the company)
The provision for long-service awards is recognised in accordance with the same actuarial assumptions as the provision for severance payments. Other provisions are recognised in accordance with the regulations in IAS 37 if the Provisions company has a legal or constructive obligation to a third party based on a past event and it is probable that this obligation will lead to an outflow of resources. It must be possible to make a reliable estimate of the amount of the obligation. If a reliable estimate cannot be made, no provision is recognised. Provisions are stated at the amount needed to settle the obligation and are not netted against any rights to reimbursement. The settlement amount is calculated based on the best estimate with which a present obligation could be settled or transferred to a third party on the reporting date. Future cost increases that are foreseeable and probable as of the reporting date are taken into account. Provisions for potential losses from onerous agreements are also included in KELAG‟s consolidated financial statements in accordance with the regulations in IAS 37. The
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
amount recognised in the statement of financial position reflects the amount of the outflow of resources that cannot be avoided. If there is a material difference between the present value of the provision calculated on the basis of a customary market discount rate and its nominal value, the present value of the obligation is recognised in the statement of financial position and any expense incurred on unwinding the discount on the provision is recorded in the financing result. KELAG has “Altersteilzeit” (special phased retirement scheme) models that give employees the option to avail themselves of a subsidised model before reaching the age for a pension entitlement under the ASVG (Austrian General Social Security Act) with continued payment of their remuneration until they reach the statutory retirement age. The projected unit credit method in accordance with IAS 19 is used to measure the provision reported in the statement of financial position, and actuarial gains or losses are recognised immediately in profit or loss (i.e., without using the corridor method). The measurement parameters correspond more or less to those used for pension-related obligations. The expenses to be recorded as a result are reported in the income statement under salaries. Trade payables and other liabilities are measured at amortised cost.
Trade payables and other liabilities
Current other liabilities contain derivatives relating to energy. The derivative financial instruments are recognised at fair value. The values of derivatives with a netting agreement are offset and thus shown as net figures in the statement of financial position. Contingent liabilities are possible obligations to third parties or existing obligations that Contingent liabilities will probably not lead to an outflow of resources or whose amount cannot be reliably measured. Contingent liabilities are recognised in the statement of financial position only if they were assumed as part of a business combination. They are recognised at fair value. Subsequently, they are measured at the higher of: the amount that would be recognised in accordance with the guidance for provisions above (IAS 37) or the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with the guidance for revenue recognition (IAS 18) The volumes of contingent liabilities reported in the notes correspond to the potential liability as of the end of the reporting period. Government grants are recognised where there is reasonable assurance that the grant Investment subsidies will be received and all attached conditions will be complied with. When the grant relates and construction cost to an expense item, it is recognised as income over the period necessary to match the
subsidies
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
grant on a systematic basis to the costs that it is intended to compensate. Since 2004, investment subsidies are offset against the corresponding cost. Construction cost subsidies received are reported as a liability on the equity and liabilities side of the statement of financial position and reversed over the useful lives of the items of property, plant and equipment concerned. Green certificates and CO2 allowances obtained without charge qualify as grants related Emissions allowances to income within the meaning of IAS 20. Pursuant to IAS 20.7, these are recognised when there is assurance that the company will comply with the conditions attaching to them and the grants will be received. In the special case of government grants of nonmonetary goods, the KELAG Group elects to record the fair value of the assets concerned. IFRIC 12 “Service Concession Arrangements” does not apply to the KELAG Group Service concession because this interpretation gives guidance on the accounting by operators for public-to- arrangements private service concession arrangements, and the hydroelectric power station in Kosovo, to which the interpretation could possibly be applied, is a public-sector company in the broader sense. The income tax expense reported in the income statement for the past financial year Income taxes comprises the income tax calculated from the income liable to tax and the applicable tax rate for the individual entities as well as the change in deferred tax liabilities and assets. Current income tax assets and liabilities for the period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date in the countries where the Group operates and generates taxable income. With a group and tax equalisation agreement dated 7 December 2004, KELAG formed a tax group pursuant to Sec. 9 KStG (Austrian Corporate Income Tax Act) as a member with KÄRNTNER ENERGIEHOLDING BETEILIGUNGS GMBH as the group parent. Since 2005 and 2009 respectively, several new members from the Group were added to this tax group. The group parent allocates the corporate income tax amounts caused by the group members (calculated using the standalone method) to those group members using tax allocations. The tax expense in the income statement of the group parent is adjusted by means of the tax allocations. Deferred taxes (future taxes) are calculated using the liability method prescribed in IAS 12 for all temporary differences between the carrying amounts of the items in the IFRS consolidated financial statements and the tax amounts for the individual entities. The probable realisable tax benefit from existing unused tax losses is also included in the calculation if this can be offset against taxable profits in the future. Deferred tax assets
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
and tax liabilities are netted if there is a legally enforceable right to offset current tax assets with current tax liabilities and if they relate to income taxes levied by the same taxation authority. Goodwill resulting from first-time consolidation of subsidiaries does not lead to deferred taxes. By contrast, temporary differences that result or change in subsequent periods as a result of the ability to amortise goodwill for tax purposes are taken into account accordingly when calculating the deferred taxes. The income tax rates to be used to calculate deferred taxes are the rates expected to apply at the time when the temporary differences are likely to be reversed. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted. Deferred taxes relating to items recognised outside profit or loss are recognised outside profit or loss. Deferred taxes are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity. The corporate income tax rate applicable to the parent company KELAG-Kärntner Elektrizitäts-Aktiengesellschaft amounts to 25%. The following income tax rates were used for the fully consolidated entities: Income tax rates in %
2012
2011
Bosnia and Herzegovina
10
10
Bulgaria
10
10
Kosovo
10
10
Croatia
20
20
Macedonia
10
10
Austria
25
25
Romania
16
16
Serbia
10
10
Slovenia
18
20
Czech Republic
19
19
The financial instruments in the KELAG Group can be broken down into primary and Derivative financial derivative financial instruments. In the case of KELAG, derivative financial instruments instruments relating to constitute commodity forwards relating to energy (electricity and gas) as defined in
energy
accordance with IAS 39. The derivative financial instruments are recognised at fair value. The measurement basis in the field of electricity is provided by the market prices on the EEX in the last active trading day for annual products in 2013 to 2015. For gas products, fair value is measured in line with the procedure for electricity products, using the listings of the corresponding virtual trading hubs. The following overview shows the derivative financial instruments measured at fair value broken down according to their main
29
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
measurement parameters. The resulting measurement levels are defined as follows in accordance with IFRS 7: Level 1: Quoted prices for similar instruments. This means that the measurement is based on unadjusted prices of products traded on active markets. Level 2: Inputs other than those included within level 1 that are directly observable. This means that the measurement is based on models which in turn have observable parameters (quotations) as inputs. Level 3: Inputs that are not based on observable market data. Derivative financial instruments resulting from the trade and sale of energy are measured at fair value. Unrealised measurement gains and losses are generally recognised in the income statement unless the prerequisites for hedge accounting pursuant to IAS 39 are met. The KELAG Group currently does not use hedge accounting in the energy business. The income and expenses from the measurement at fair values are netted for each trading partner and reported in revenue and in the cost of materials in the income statement. Contracts entered into and for the purpose of the receipt or delivery of non-financial items in accordance with the expected purchase, sale or usage requirements of the KELAG Group are recognised not as derivative financial instruments but as pending transactions (own use exemption). If such an agreement for own use is onerous as defined by IAS 37, a provision for losses from pending transactions must be created. If the agreements contain embedded derivatives, these and the host contracts are recognised separately unless the economic characteristics and risks are closely linked to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required. All commercial transactions that optimise energy production constitute derivative financial instruments as defined by IAS 39. They are reported in other assets if they have a positive fair value and in other liabilities if they have a negative fair value. The fair values of the derivatives used in the KELAG Group (forwards) can be measured reliably as of each reporting date. The measurement of derivative financial instruments relating to energy is based on market prices and a price forward curve derived from market prices. As already mentioned, in the field of gas, listings for the corresponding virtual trading hubs are used directly for measurement. The results of fair value measurement are recorded in the corresponding income and expense items concerning the energy industry. The resulting total comprehensive income is part of the operating result.
30
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The KELAG Group designates individual hedging instruments (derivatives) to hedge cash
Cash flow hedges
flows (cash flow hedges). The hedging relationship between the hedged item and the hedge instrument is documented at the inception of hedge accounting, including the aims of risk management and the entity‟s strategy on which the hedge relationship is based. Moreover, it is regularly documented, both at the inception of the hedge and during its term, whether the designated hedging instrument is highly effective at offsetting changes in cash flows attributable to the hedged risk. The effective part of the change in fair value of derivatives suitable as cash flow hedges and designated as such is recorded in the hedging reserve under other comprehensive income. The gain or loss allocable to the ineffective portion is immediately released to profit or loss in the line items “Other income” or “Other expenses”. Amounts that are recognised in other comprehensive income are reclassified to profit or loss in the period in which the hedged item affects the profit or loss for the period. The disclosure in the statement of comprehensive income and the income statement is made in the same line items as are use for the hedged item. However, if a hedged forecast transaction leads to the recognition of a non-financial asset or non-financial liability, the gains and losses previously recognised in the other comprehensive income and accumulated in equity are reclassified from equity and taken into account in the first-time measurement of the cost of the asset or liability. The hedge is derecognised when the Group dissolves the hedging relationship, the hedging instrument matures, is sold, is cancelled or is exercised or is no longer suitable for hedging purposes. The complete amount of the gains and losses recognised at that point in time in other comprehensive income and accumulated in equity remains in equity is not released to profit or loss until the forecast transaction is also recognised in the income statement. If the forecast transaction is no longer expected to occur, the full amount of gains recognised in equity is immediately released to the income statement. Energy trading transactions that are settled physically and are allocable to the value- Disclosure of energy added activities in the energy industry are presented on a gross basis, while pure trading trading transactions or speculative transactions (including, but not limited to price optimisation transactions) which are settled net (such as an offsetting transaction) are presented on a net basis. Contracts that satisfy the own use exemption in IAS 39 are always allocable to the valueadded activities in the energy industry. Revenue is recognised when the goods are delivered to the customer or the service is Revenue recognition performed. The corresponding revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer in accordance with the contractual agreements, payment has been fixed contractually and it is probable that the trade receivable will be fulfilled.
31
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Most of the revenue is generated from the sale of electricity, gas and heat to industry customers and consumers, energy supply companies and electricity exchanges as well as network services. For all financial instruments measured at amortised cost and interest bearing financial assets classified as available for sale, interest income or cost is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included under finance income in profit or loss. Dividends are recognised when the Group‟s right to receive the payment is established. Preparation of the consolidated financial statements in accordance with IFRS requires Judgements and judgements in the application of accounting policies. In addition, assumptions must be forward-looking made by management about future developments that can materially affect the
statements
recognition and value of assets and liabilities, the disclosure of other obligations as of the reporting date and the presentation of income and expenses during the financial year. All assumptions and estimates are based on circumstances and judgements prevailing on the reporting date. Qualifying assets are projects with a construction period of at least six months. The recoverability of the carrying amounts of associates included at equity is assessed on the basis of forecasts for future cash flows as well as using a discount rate adjusted to the industry and the company risk. The assessment of the existing social capital obligations are based on assumptions concerning the discount rate, pensionable age, life expectancy and future salary and wage increases. In order to calculate any goodwill impairment, it is necessary to determine the value in use of the cash-generating unit to which the goodwill is allocated. Calculation of the value is use is based on estimates of future cash flows of the cash-generating unit as well as on determining an appropriate discount rate. The discount rate is derived from the risk-free interest rate plus a risk mark-up for borrowed capital (calculated based on current longterm refinancing costs) and market risk, taking into account the beta factor. Valuation appraisals and cost of capital assessments were referred to in determining the beta factor, taking into account listed peer companies in the energy sector. A pre-tax WACC of 7.1% was determined for impairment testing of the domestic cash-generating units. To cover country-specific risks, a corresponding mark-up for country risk was added to WACC. This was derived applying a bond spread model.
32
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
For the purpose of the impairment test, the goodwill resulting in the KELAG Group was allocated to cash-generating units (CGUs) as follows: Goodwill in EUR m
2012
2011
3.9
4.5
International wind projects – Romania
0.0
1.1
International hydroelectric power projects – Bosnia
0.4
0.0
International hydroelectric power projects – Kosovo
0.2
0.2
National heat projects
3.3
3.2
Total goodwill in the KELAG Group
The goodwill of the international hydroelectric projects in Bosnia is solely preliminary goodwill due to purchase price allocations for the business combinations carried out in the financial year 2012 that have not yet been completed. From a current perspective it can be assumed that when the assets and liabilities assumed have been finally determined and remeasured, goodwill will no longer have an effect due to the adjusted first-time consolidation in the financial year 2013. The impairment test of wind turbines in Romania led to impairment losses of around EUR -1.7m due to changed market conditions on the Romanian energy sector. This reduces the goodwill existing in the KELAG Group. Goodwill of around EUR 0.2m resulted as part of the asset deal of the power plant in Kosovo in the financial year 2009. The computational basis for impairment testing is the 2013 budget and the medium-term planning. A terminal value based on a normalised financial year without growth reduction was applied at the end of plan periods. The impairment test did not result in any need for impairment losses. Uncertainties also exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. The measurement of provisions for potential losses was based on assumptions and estimates as of the reporting date. The cost of defined benefit plans and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various 33
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
assumptions that can differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Contingent liabilities amounting to EUR 31.0m not recorded in the consolidated statement of financial position are regularly assessed in relation to their probability of occurrence. If the probability of an outflow of resources embodying economic benefits is not high enough to require the recognition of provisions and is not remote either, the relevant obligations are to be disclosed as contingent liabilities. The estimates are made by the experts responsible, taking market-related inputs into account (where possible). In their separate financial statements, the entities measure non-monetary items Currency translation denominated in foreign currency on the reporting date at the rate prevailing when they were first recorded. Monetary items are translated at the exchange rate as of the reporting date. Any exchange rate gains generated and losses incurred as of the reporting date from the measurement of monetary items in the statement of financial position that are denominated in foreign currency are recognised through profit or loss in other income and expenses respectively. The Group‟s consolidated financial statements are presented in euros, which is also the parent company‟s functional currency. Each entity in the Group determines its own functional currency. Because the main foreign entities included in the consolidated financial statements conduct their business independently in their local currency, the items in the statement of financial position of all foreign entities are translated to the euro at closing rates (mean rate) in the consolidated financial statements as of the reporting date. Goodwill is translated at the closing rate as an asset of the economically independent foreign entities. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is reclassified to the income statement. The translation of the equity roll-forward of foreign companies accounted for at equity is performed by analogy. Currency translation was based on the following exchange rates:
34
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Exchange rates per EUR
Average
Reporting date
2012
31/12/2012
Bulgarian leva (BGN)
1.9558
1.9558
Czech koruny (CZK)
25.1893
25.1510
Romanian lei (RON)
4.4471
4.4445
Croatian kuna (HRK)
7.5269
7.5575
61.5214
61.5000
Serbian dinara (RSD)
112.8799
113.7183
Bosnian marks (BAM)
1.9558
1.9558
Average
Reporting date
2011
31/12/2011
Bulgarian leva (BGN)
1.9558
1.9558
Czech koruny (CZK)
24.6351
25.7870
Romanian lei (RON)
4.2416
4.3233
Macedonian denari (MKD)
Exchange rates per EUR
Croatian kuna (HRK)
7.4441
7.5370
61.5317
61.5050
Serbian dinara (RSD)
102.3105
104.6409
Bosnian marks (BAM)
1.9558
1.9558
Macedonian denari (MKD)
35
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
3. Notes on segment reporting The segments and the information to be reported are based on the internal control and reporting
(management
approach).
The
segments
in
the
KELAG
Group
of
“Electricity/Gas”, “Heat” and “Investments/Misc.” correspond to the internal reporting structure to the Board of Directors as the chief operating decision maker. The internal performance of business segments is assessed primarily on the basis of operating income; for the “Investments/Misc.” segment, the investment result is also relevant. In segment reporting, the business activities of the KELAG Group are allocated to the following segments: Electricity/Gas Heat Investments/Misc. The segments in these consolidated financial statements follow the management approach concept set out in IFRS 8.5 and reflect the basis on which the management and control of the company‟s economic situation is carried out by the Group‟s chief operating decision makers. It is based on the internal reporting. The “Electricity/Gas” segment contains the following (where applicable) for each product: Production Trading Distribution Network Pursuant to Sec. 8 (3) ElWOG (Austrian Electricity Industry and Organisation Act), electricity companies that provide at least two of the three functions of production, transfer and distribution are required to provide separate statements of financial position and income statements for production, transfer and distribution and to publish them in the notes. This obligation to present the segments is already fulfilled in the separate financial statements of KELAG and KNG-Kärnten Netz GmbH. All activities in the field of utilising waste heat and bio-energy to supply heat on domestic and foreign markets are allocated to the “Heat” segment.
36
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The “Investments/Misc.” segment consists of Management and control functions as well as activities in the field of domestic investments Financing function of KELAG Finanzierungsvermittlungs GmbH and Activities in the telecommunications sector The accounting policies applied to the segments subject to mandatory reporting are the same as those described in the group accounting guidelines. The chief decision maker monitors the investments in intangible assets and property, plant and equipment and investments in equity investments for the purpose of monitoring performance and allocating resources between the segments. This information is disclosed to the users of financial statements in the segment reporting. The internal performance of the business segments is assessed primarily on the basis of operating income. This corresponds to the total operating income achieved by the entities incorporated in the respective business segment under consideration of inter-segment revenue and expenses. Additions to intangible assets and property, plant and equipment and equity investments (investments accounted for using the equity method and other investments) include investments and increases through business combinations. These values also correspond to the asset volume reported internally. Geographical information on the revenue generated with external customers and on noncurrent assets was not provided, as the information required is not available and the costs for gathering such information would be disproportionate.
37
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Electricity/ Gas*
Heat*
843.9
158.0
2.7
0.0
1,004.6
10.8
1.4
0.0
-12.3
0.0
Total revenue
854.7
159.5
2.7
-12.3
1,004.6
Operating result
105.4
24.4
-31.9
0.0
97.8
Amortisation, depreciation and impairment
-70.9
-19.3
-6.8
0.0
-97.0
Segment reporting 2012**
Investments/ Misc. Eliminations
Total Group
EUR m External revenue (including net income from energy trading activities) Intercompany revenue
thereof impairments
-25.8
0.0
0.0
0.0
-25.8
Investment result
0.0
0.0
29.3
0.0
29.3
Profit/loss from investments accounted for using the equity method
0.0
0.0
3.1
0.0
3.1
Carrying amount of investments accounted for using the equity method
0.0
0.0
6.9
0.0
6.9
128.7
13.9
6.0
0.0
148.6
6.0
2.4
0.0
0.0
8.4
Electricity/ Gas*
Heat*
Investments/ Misc. Eliminations
Total Group
815.7
136.0
2.9
0.0
Investments in intangible assets and property, plant and equipment Investments in other interests in other entities
Segment reporting 2011** EUR m External revenue (including net income from energy trading activities) Intercompany revenue
954.6
12.3
0.3
0.0
-12.5
0.0
828.0
136.2
2.9
-12.5
954.6
94.4
17.0
-13.5
0.0
97.8
-42.0
-14.1
-6.5
0.0
-62.6
0.0
-1.5
0.0
0.0
-1.5
Investment result
0.0
0.0
31.9
0.0
31.9
Profit/loss from investments accounted for using the equity method
0.0
0.0
-0.2
0.0
-0.2
Carrying amount of investments accounted for using the equity method
0.0
0.0
12.1
0.0
12.1
140.0
24.9
8.2
0.0
173.1
4.8
9.2
0.0
0.0
14.0
Total revenue Operating result Amortisation, depreciation and impairment thereof impairments
Investments in intangible assets and property, plant and equipment Investments in other interests in other entities
* Earnings are calculated from the proceeds from secondary business (LWL mediation) after deduction of overheads for the central division. ** The revenue reported in the income statement from Electricity/Gas, Heat and Investments/Misc. are not comparable with the segment reporting, as the segments record revenue in all of the aforementioned areas.
38
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
4. Notes to the income statement The breakdown of revenue proceeds by area of activity presents the following picture for (1) Revenue
the year 2012: Revenue EUR m Revenue (including gross income from energy trading activities) thereof electricity/gas thereof heat thereof miscellaneous Cost of purchased energy from energy trading activities Revenue (including net income from energy trading activities)
2012
2011
2,007.0
1,660.3
1,847.7
1,522.4
146.4
134.0
13.0
3.8
-1,002.4
-705.7
1,004.6
954.6
Of the electricity revenues including gross income from energy trading activities, electricity trading accounted for about EUR 1,157.8m (prior year: approximately EUR 897.0m). The total increase of EUR 260.8m is due to the economic growth and to making use of the market volatility in electricity trading. The revenue including gross income from energy trading activities also comprises around EUR 163.2m (prior year: roughly EUR 94.2m) of income from natural gas trading. Other income EUR m Changes in inventories of finished goods and work in process
2012
2011
1.7
-1.9
Own work capitalised
26.7
25.0
Income from the reversal of provisions
17.2
5.0
Sundry
25.5
16.7
Total other income
71.2
44.8
(2) Other income
The largest items included in sundry other income are income from rentals and leases of approximately EUR 2.2m (prior year: approximately EUR 2.4m) and various offsetting transactions of approximately EUR 19.2m (prior year: approximately EUR 11.5m). Cost of materials and supplies, and of other purchased services EUR m
2012
2011
Cost of materials
-86.9
-75.7
-467.5
-484.4
Natural gas
-74.1
-74.1
Third-party services
-30.6
-14.1
Total cost of purchased services
-572.3
-572.7
Total cost of materials and supplies, and of other purchased services
-659.1
-648.4
Cost of purchased services Electricity
(3) Cost of materials and supplies, and of other purchased services
39
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Personnel expenses EUR m Wages and salaries Expenses for statutory social insurance contributions, payroll-related taxes and mandatory contributions
2012
2011
-113.4
-92.6
-24.4
-23.2
Expenses for trainees‟ wages
-1.3
-1.2
Other expenses relating to social security
-1.2
-1.2
Subtotal
-140.3
-118.2
Expenses for severance payments
-1.6
-1.3
Expenses for old-age pensions
-5.7
-4.8
-147.6
-124.3
Total personnel expenses
(4) Personnel expenses
The increase in personnel expenses of around EUR 23.3m is largely due to the decision to extend the phased retirement model and the recognition of personnel expenses as part of full consolidation of Kärntner Restmüllverwertungs GmbH. The number of employees, measured as an annual average of full-time equivalents (parttime jobs taken into account pro rata, including dormant employment contracts), was as follows in the KELAG Group Headcount
2012
2011
Change
Salaried employees
1,406
1,357
49
116
114
2
1,522
1,471
51
Trainees Total employees
The increase is mostly attributable to the expansion of the investment in Kärntner Restmüllverwertungs GmbH in 2012 and the associated first-time inclusion of its employees in the group headcount as well as the implementation of the growth strategy abroad. About EUR 0.3m was paid in the form of contributions to employee pension funds during the financial year 2012 (prior year: about EUR 0.3m). Depreciation of property, plant and equipment amounted to EUR 53.5m (prior year: (5) EUR 49.0m), while amortisation of intangible assets amounted to EUR 41.8m (prior year: Amortisation,
depreciation and
EUR 13.6m). In addition, an impairment loss of around EUR 1.7m was charged on impairment goodwill within this item (prior year: EUR 0.0m). This includes an impairment loss of around EUR 24.1m for a pumped storage power station. The impairment loss was due to changed market conditions.
40
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Other expenses EUR m
2012
2011
Taxes (excluding taxes on income)
-1.9
-2.4
Office and factory buildings
-2.9
-2.7
Motor vehicle costs
-2.4
-2.1
Travel expenses
-3.9
-3.8
Communication expenses
-2.1
-2.0
Rental and lease expenses
-6.6
-5.8
Personnel leasing
-7.6
-7.5
Operating costs
-0.7
-0.9
Advertising and promotion expenses
-5.3
-5.3
Insurance
-2.9
-2.8
Sundry expenses
-38.0
-30.9
Total other expenses
-74.3
-66.2
(6) Other expenses
With regard to other expenses, reference is made to Note 23 “Non-current provisions” and Note 27 “Current provisions”. Interest result EUR m Interest income
2012
2011
2.4
2.3
Interest expenses
-21.3
-18.3
Total interest result
-18.9
-16.1
(7) Interest result
Interest income mainly includes interest income from bank balances. Interest expenses are mainly composed of interest payments and deferred interest for the bonds and interest components of additions to provisions, which contain the annual accrued interest amounts in connection with rolling forward the present value of the noncurrent provisions. Of the borrowing costs, around EUR 4.6m (previous year: around EUR 4.2m) had to be capitalised in the reporting year in accordance with IAS 23. The investment result included all income and expenses recorded in connection with the (8) operating investments. Income from investments amounting to approximately EUR 28.3m Other investment result (prior year: around EUR 31.8m) was recognised as the main item in the other investment result.
41
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Income taxes EUR m
2012
2011
Current income taxes / tax allocation
-24.7
-17.4
9.7
-4.3
-15.1
-21.7
Deferred income taxes Total income taxes
(9) Income taxes
The tax expense in the 2012 reporting period of approximately EUR -15.1m is around EUR 12.8m lower than the imputed tax expense of approximately EUR -27.8m, which would result from applying a tax rate from 25% to earnings before income taxes (around EUR 111.3m). The reasons for the difference between the imputed and reported tax expense in the Group are as follows: Tax reconciliation EUR m
2012
2011
Earnings before income taxes
111.3
113.6
Imputed income tax expense
-27.8
-28.4
Differences due to different tax rates
0.1
0.1
Tax-free income
7.2
9.5
Non-deductible expenses
4.0
-0.8
-16.6
-19.6
Income tax expense for the period Income tax income/expense relating to other periods Reported income tax expense
1.5
-2.2
-15.1
-21.8
42
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
5. Notes to the statement of financial position Effective as of 27 October 2011, all of the shares in IEP energija d.o.o. were acquired at a Purchase price cost of EUR 4.0m. The entity‟s hydroelectric power stations at Duboki potok and Sastavci allocation for business acquisitions and
in the Federation of Bosnia and Herzegovina have 1.9 MW of installed capacity. The final business start-ups purchase price allocation is as follows: Cost of IEP energija d.o.o. EUR k Purchase price paid in cash (including cash equivalents acquired) Contingent purchase price adjustments Cost of acquisition
3,989 0 3,989
IEP energija d.o.o. EUR k Acquisition date
27/10/2011
Acquired share (direct)
100%
Non-current assets
3,990
Current assets
1
Remeasured assets
3,991
Equity
3,991
Non-current liabilities
0
Current liabilities
0
Remeasured liabilities
0
Net assets
3,991
Cost
3,989
Residual goodwill as of the acquisition date
-1
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition Included in the consolidated net profit Revenue 2011 Net profit or loss 2011 Revenue and net profit or loss Revenue 2011 Net profit or loss 2011
3,989 0 3,989 27/10 – 31/12/2011 0 -2 1/1 – 31/12/2011 0 -2
43
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The purchase transaction relating to 99.99% of the shares in KelaVENT Charlie SRL was closed on 22 December 2011. Upon completion, the wind farm will have an installed capacity of 8 MW. The final amounts from purchase accounting are as follows based on the purchase price adjustment of EUR 0.3m: KelaVENT Charlie SRL EUR k Acquisition date Acquired share (direct) Non-current assets Current assets Remeasured assets Equity Non-current liabilities Current liabilities Remeasured liabilities Net assets Cost Residual goodwill as of the acquisition date
22/12/2011 99.99% 2,580 420 3,000 343 2,456 201 2,657 343 1,191 848
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition Included in the consolidated net profit
920 -387 533 22/12 – 31/12/2011
Revenue 2011
0
Net profit or loss 2011
0
Revenue and net profit or loss Revenue 2011 Net profit or loss 2011
1/1 – 31/12/2011 0 -50
44
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Effective 30 September 2011 and 11 August 2011 100% of the shares in the entities Alternative Energie Salzburg GmbH and Biowärme Friesach GmbH were acquired at a cost of EUR 7.5m and EUR 2.3m respectively. Provisional amounts were consolidated for both entities in the 2011 reporting period. The final purchase price allocation is as follows: Alternative Energie Salzburg GmbH EUR k Acquisition date
30/9/2011
Acquired share (direct)
100%
Non-current assets
6,006
Current assets
855
Remeasured assets
6,861
Equity
5,011
Non-current liabilities
957
Current liabilities
893
Remeasured liabilities
1,850
Net assets
5,011
Cost
7,500
Residual goodwill as of the acquisition date
2,489
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition Included in the consolidated net profit Revenue 2011 Net profit or loss 2011 Revenue and net profit or loss Revenue 2011 Net profit or loss 2011
7,500 -393 7,107 30/9 – 31/12/2011 1,646 160 1/1 – 31/12/2011 1,646 160
45
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Biowärme Friesach GmbH EUR k Acquisition date
11/8/2011
Acquired share (direct)
100%
Non-current assets
2,022
Current assets
402
Remeasured assets
2,424
Equity
1,602
Non-current liabilities
419
Current liabilities
403
Remeasured liabilities
822
Net assets
1,602
Cost
2,300
Residual goodwill as of the acquisition date
698
Net outflow of cash from the acquisition Purchase price paid in cash
2,300
less cash acquired Net outflow from the acquisition Included in the consolidated net profit
-214 2,086 11/8 – 31/12/2011
Revenue 2011
463
Net profit or loss 2011 Revenue and net profit or loss
40 1/1 – 31/12/2011
Revenue 2011 Net profit or loss 2011
463 63
Effective 10 May 2012, the previously held interests in Kärntner Restmüllverwertungs GmbH (KRV) were increased from 42.87% to 85.74%. KRV, which was incorporated in 1997, operates a thermal waste treatment facility at Industriepark Arnoldstein/Carinthia with the objective of disposing of the annual volume of household waste in Carinthia. Thermal waste treatment is not part of the KELAG Group‟s core competence. Taking into account the generation of green electricity and district heating extraction based on biogenic waste, the increase in the shareholding in KRV will, however, contribute to the implementation of the growth strategy adopted by KELAG on the basis of renewable energies.
46
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The overall assets and liabilities of KRV are as follows as of the acquisition date: Kärntner Restmüllverwertungs GmbH EUR k Acquisition date Acquired share (direct)
10/5/2012 85.74%
Non-current assets
59,543
Current assets
13,955
Remeasured assets
73,498
Equity
20,123
Non-current liabilities
42,258
Current liabilities
11,117
Remeasured liabilities
53,375
Net assets
20,123
Consideration paid
17,259
Non-controlling interests recognised as of the acquisition date Residual goodwill as of the acquisition date
2,869 5
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition
9,450 -7,173 2,277
Disclosures relating to the business combination achieved in stages Carrying amount of the previously held investment accounted for using the equity method
4,246
Gain on remeasurement of previously held equity interests*
3,563
Acquisition-date fair value of previously held equity interests
7,809
Included in the consolidated net profit Revenue 2012 Net profit or loss 2012 Revenue and net profit or loss Revenue 2012 Net profit or loss 2012
10/5 – 31/12/2012 9,561 -1,903 1/1 – 31/12/2012 16,909 708
* Recognised in the profit/loss from investments accounted for using the equity method
47
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The purchase transaction relating to 99.99% of the shares in KelaVENT Echo SRL was closed by KI-KELAG International GmbH on 28 September 2012. KelaVENT Echo SRL is constructing a wind farm in Pogoanele, Romania. The four turbines have a total output of 8 MW. KelaVENT Echo SRL EUR k Acquisition date Acquired share (direct)
28/9/2012 99.99%
Non-current assets
796
Current assets
419
Remeasured assets
1,215
Equity
448
Non-current liabilities
233
Current liabilities
534
Remeasured liabilities
767
Net assets
448
Cost Residual goodwill as of the acquisition date
1,292 844
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition Included in the consolidated net profit Revenue 2012 Net profit or loss 2012 Revenue and net profit or loss Revenue 2012 Net profit or loss 2012
1,292 -314 978 28/9 – 31/12/2012 0 111 1/1 – 31/12/2012 0 68
48
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The entity Interhem d.o.o. Banja Luka was consolidated for the first time by Interenergo d.o.o. as of 11 July 2012. It has a concession to construct and operate Kobiljska Rijeka hydroelectric power station in the Bosnian region of Republika Srpska. Interhem d.o.o. Banja Luka EUR k Acquisition date Acquired share (direct) Non-current assets Current assets
11/7/2012 100.00% 54 9
Remeasured assets
62
Equity
49
Non-current liabilities
0
Current liabilities
13
Remeasured liabilities
13
Net assets
50
Cost Residual goodwill as of the acquisition date
100 50
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition Included in the consolidated net profit Revenue 2012 Net profit or loss 2012 Revenue and net profit or loss Revenue 2012 Net profit or loss 2012
100 0 100 11/7 – 31/12/2011 0 -15 11/7 – 31/12/2011 0 -15
49
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Effective 22 March 2012, the entity LSB Elektrarne d.o.o. Banja Luka was included in KELAG‟s scope of consolidation for the first time. This entity holds the concession for Medna hydroelectric power station with a planned installed capacity of 4.9 MW. The purchase price for the project company domiciled in the Bosnian region of Republika Srpska came to EUR 0.4m. LSB Elektrane d.o.o. Banja Luka EUR k Acquisition date Acquired share (direct) Non-current assets Current assets Remeasured assets Equity Non-current liabilities Current liabilities Remeasured liabilities Net assets
22/3/2012 100.00% 289 7 296 1 291 4 295 1
Cost
400
Residual goodwill as of the acquisition date
399
Net outflow of cash from the acquisition Purchase price paid in cash less cash acquired Net outflow from the acquisition Included in the consolidated net profit Revenue 2012 Net profit or loss 2012 Revenue and net profit or loss Revenue 2012 Net profit or loss 2012
400 0 400 22/3 – 31/12/2011 0 -42 22/3 – 31/12/2011 0 -42
50
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
In addition, Interenergo d.o.o. purchased 100% of the shares in Inter-Energo d.o.o. Gornji Vakuf – Uskoplje on 31 December 2012. The purchase price allocation was as follows: Inter-Energo d.o.o. Gornji Vakuf EUR k Acquisition date Acquired share (direct) Non-current assets Current assets Remeasured assets Equity
31/12/2012 100.00% 7,250 54 7,305 24
Non-current liabilities
2,450
Current liabilities
4,831
Remeasured liabilities
7,281
Net assets Cost Residual goodwill as of the acquisition date
24 1 -23
Net outflow of cash from the acquisition Purchase price paid in cash
1
less cash acquired
0
Net outflow from the acquisition
1
Included in the consolidated net profit
31/12/2011
Revenue 2012
0
Net profit or loss 2012
0
Revenue and net profit or loss
1/1 – 31/12/2011
Revenue 2012
0
Net profit or loss 2012
0
The net assets reported in the consolidated financial statements as of 31 December 2012 from all business combinations in the financial year 2012 are based solely on a preliminary assessment of fair value. The final accounting for the business combinations takes place within the twelve-month period defined in IFRS 3.45, since the fair values of identifiable assets, liabilities and contingent liabilities of the acquirees could not be reliably determined at the time of preparing the financial statements.
51
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
5.1. Non-current assets Electricity purchase rights, natural gas purchase rights and other rights – including (10) software and memo items for concessions and goodwill – were reported as intangible Intangible assets assets. Goodwill – development of carrying amounts*
Goodwill
EUR k
2012
2011
Opening balance
4,309
0
Additional amounts recognised from business combinations in the financial year
1,411
4,309
Adjustment due to final purchase price allocation Impairment losses Total carrying amount of goodwill
-253
0
-1,697
0
3,769
4,309
* From consolidation procedures
Accumulated impairment losses as of the beginning of the financial year 2012 totalled some EUR 20.1m. The development of the other intangible assets and of property, plant and equipment is (11) Property, plant and equipment
shown in the statement of changes in non-current assets at the end of the notes. Investments accounted for using the equity method EUR m
2012
2011
3.8
6.5
Non-current assets
23.6
38.5
Liabilities
21.5
32.9
5.8
12.1
Revenue
12.7
19.3
Profit/loss
0.6
1.7
Carrying amount of the investment
6.9
12.1
Share in assets and liabilities of the investments accounted for using the equity method Current assets
Equity
(12) Investments accounted for using the equity method
Share in revenue and profit/loss from investments accounted for using the equity method
The profit/loss from investments accounted for using the equity method reported in the income statement included around EUR 3.6m from the remeasurement of the equity interests held in Kärntner Restmüllverwertungs GmbH before the change in consolidation methods. In addition to affiliates that are not fully consolidated on grounds of immateriality, interests (13) in other entities reported in the statement of financial position also include immaterial Other interests in other investments in associates that are not accounted for using the equity method. Other
entities
52
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
interests in other entities with a shareholding of less than 20.0% are also reported in this item. As these equity instruments are not listed and their fair values cannot be reliably determined, they are recognised at cost less any impairment. The main investment is the 10% investment in VERBUND Hydro Power AG of around EUR 123.3m. Long-term securities (mainly government bonds) serve to cover the pension and (14) Other securities and book-entry securities
severance provisions. Other securities and book-entry securities EUR m
2012
2011
Securities
29.6
27.9
0.1
0.1
29.7
28.1
Book-entry securities Total other securities and book-entry securities
Other non-current receivables and assets EUR m
2012
2011
Loans
4.1
4.9
Receivables from offsetting of loans
0.7
0.8
Payments on account
0.0
0.3
Sundry
1.4
0.9
Total other non-current receivables and assets
6.2
6.8
(15) Other non-current receivables and assets
The differences between the tax bases and the IFRS carrying amounts as well as the (16) existing unused tax losses as of the reporting date result in the following deferred taxes:
Deferred tax assets and liabilities
53
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Deferred tax assets and liabilities
31/12/2012
31/12/2011
Deferred tax assets
Deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Non-current assets
9.1
35.8
7.3
31.9
Current assets
0.0
7.0
0.0
0.6
Special tax-allowed items
8.9
13.8
9.8
14.1
Pension provisions
11.3
0.0
9.6
0.0
Other non-current provisions
25.0
0.0
15.3
0.1
Other non-current liabilities
1.3
0.0
0.1
0.5
Current liabilities
6.6
0.0
0.1
0.0
62.3
56.7
42.1
47.2
0.2
0.0
0.1
0.0
EUR m
Subtotal Unused tax losses Total before netting* Netting* Recognised in the statement of financial position
62.5
56.7
42.2
47.2
-56.7
-56.7
-41.2
-41.2
5.8
0.0
0.9
6.0
* The adjustment item for netting relates to the netting of deferred taxes at group entity level.
In the 2012 reporting period, the net item for deferred tax assets and liabilities changed as follows: Deferred tax assets and liabilities EUR m Opening balance as of 1 January
2012
2011
-5.1
-0.2
Change not recognised in profit or loss
1.2
-0.6
Change recognised in profit or loss
9.7
-4.3
Closing balance as of 31 December
5.8
-5.1
The change not recognised in profit or loss essentially refers to gains and losses recognised directly in other comprehensive income from available-for-sale financial instruments, actuarial gains and losses arising from use of the projected unit credit method in accordance with IAS 19 for pension obligations and statutory severance payments and the initial recognition as a result of changes in the scope of consolidation. Tax effects on other comprehensive income EUR m
2012
2011
Actuarial gains and losses
4.2
0.1
Gains or losses from exchange differences
0.0
0.1
-0.1
0.0
Hedges
0.1
0.0
Total income taxes
4.2
0.2
Unrealised gains/losses from the disposal of available-for-sale financial instruments
54
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
5.2. Current assets The current assets item includes all assets that are expected to be recovered or settled within the course of ordinary operations. Inventories EUR m
2012
2011
Materials and supplies
10.6
11.7
Work in process
0.0
0.1
Finished goods and merchandise
4.8
6.2
Services not yet invoiced
1.9
0.2
17.3
18.2
Total inventories
(17) Inventories
The value of the natural gas inventory on the reporting date amounted to approximately EUR 3.9m (prior year: roughly EUR 5.8m). Write-downs of approximately EUR 0.3m were recognised in inventories in the financial year 2012 (prior year: around EUR 1.2m). Trade receivables and other receivables and assets EUR m
2012
2011
Trade receivables from third parties
53.6
40.3
Receivables from associates
0.7
2.8
Other receivables and assets
59.2
35.9
113.5
79.1
Total trade receivables and other receivables and assets
(18) Trade receivables and other receivables and assets
Trade receivables from third parties related chiefly to electricity, heat and natural gas receivables already billed. See Note 6.3 “Credit risk” on the credit risk of trade receivables to understand how the Group manages and measures credit quality of trade receivables that are neither past due nor impaired. Receivables from associates all involved trade receivables.
55
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Impairment losses EUR m
Carrying amount
Impairment loss
Gross
2011 Trade receivables from third parties
40.3
3.6
43.9
Receivables from associates
2.8
0.0
2.8
Other receivables and assets
35.9
0.0
35.9
Total trade receivables and other receivables and assets
79.1
3.6
82.7
53.6
4.0
57.6
Receivables from associates
0.7
0.0
0.7
Other receivables and assets
59.2
0.1
59.2
113.5
4.0
117.5
EUR m
2012
2011
Receivables from offsetting of taxes
11.2
9.6
1.1
3.0
Market value of derivatives
27.7
17.7
Sundry
19.2
5.6
Total other receivables and assets
59.2
35.9
2012 Trade receivables from third parties
Total trade receivables and other receivables and assets
Other receivables and assets
Prepayments made
Other receivables and assets on the reporting date included receivables from claims, accrued interest, receivables from the tax office, market value of derivatives, etc. With the exception of the derivatives, other receivables and assets have been accounted for at amortised cost, which essentially corresponded to their fair values. The derivatives were recognised at fair value. Age structure of the trade receivables
Total
Neither past due nor impaired
< 30 days
31 – 120 days
121 – 360 days
> 360 days
2012
53.6
42.3
6.0
0.6
1.0
3.7
2011
40.3
29.7
8.6
2.0
0.0
0.0
EUR m
As of the reporting date on 31 December 2012, bank balances and cash in hand (19) amounting to about EUR 250.8m (prior year: approximately EUR 87.6m) were Cash and cash recognised.
equivalents
56
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Cash and cash equivalents EUR m
2012
2011
0.1
0.5
Bank balances
250.7
87.1
Total cash and cash equivalents
250.8
87.6
Cash in hand
For an explanation of the increase, reference is made to the statement of cash flows (see 5. Statement of cash flows of the KELAG Group).
5.3. Equity Issued capital was unchanged at EUR 58.2m and is divided into 8,000,000 registered no- (20) par value shares. There were no options to issue new shares. The capital reserves amounting to about EUR 263k reported in the statement of changes
Equity attributable to the equity holders of the parent company Capital reserves
in equity are appropriated capital reserves. The accumulated profit or loss reported in the statement of changes in equity included the Accumulated profit or statutory reserve, which was unchanged on the prior year at around EUR 5.8m and, with loss and dividend 10% of the issued capital, was fully endowed in accordance with stock corporation law. The item also comprises untaxed reserves of around EUR 54.4m (prior year: approximately EUR 56.4m). The accumulated profit or loss included the Group‟s retained earnings. The dividend is determined on the basis of the net profit for the year shown in the separate financial statements of KELAG-Kärntner Elektrizitäts-Aktiengesellschaft as parent company, which are prepared in accordance with company law. Accordingly, it will be proposed to the Annual General Meeting to distribute approximately EUR 40.0m to the shareholders. This is equivalent to a proposed dividend per share of EUR 5.0. Equity attributable to non-controlling interests shows the shareholdings of third parties in (21) group
entities.
These
stemmed
from
the
consolidation
of
Lumbardhi/Kosovo Equity attributable to
Beteiligungsgesellschaft mbH, KelKos Energy Sh.p.k, Windfarm Balchik 1 OOD,
non-controlling interests
Windfarm Balchik 2 OOD and Windfarm Balchik 4 OOD. Third-party ownerships interests from the consolidation of Interenergo-Gesellschaft Hidrowatt d.o.o. Beograd, Kärntner Restmüllverwertungs GmbH, Kraftwerk Waben GmbH as well as Wärmeversorgung Arnoldstein Errichtungs- und Betriebsgesellschaft mbH, Kraftwerksgesellschaft Tröpolach GmbH and BES-BioEnergie für Spittal GmbH are also reported in this item.
57
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
5.4. Non-current liabilities Non-current financial liabilities rose on the prior-year level from around EUR 264.1m to (22) around EUR 454.2m. This item of the statement of financial position includes the Non-current financial EUR 250m bond issued in 2009 at an issue price of 99.383% and interest of 4.5% for the
liabilities
five-year term, the EUR 150m bond issued in the financial year 2012 at an interest rate of 3.25% for a ten-year term. The issue price was at 99.916%. In addition to provisions for severance payments and pensions, other non-current (23) Non-current provisions
provisions were recognised in the item for non-current provisions. List of non-current provisions EUR m
2012
2011
Pension provisions
96.5
91.2
Provision for severance payments
69.5
62.3
Provisions for phased retirement
36.7
21.5
Provision for long-service awards
13.0
12.0
Other
84.5
86.3
300.2
273.5
Total non-current provisions
58
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Pension provisions
Development of pension provisions EUR m
2012
2011
Present value (DBO) of the obligations covered by the plan assets
147.6
136.5
Fair value of plan assets
-51.0
-45.3
96.5
91.2
0.9
0.9
Reconciliation of the provision reported in the statement of financial position
Provision recognised as of 31 December The expense for pension provisions breaks down as follows: Service cost Interest cost Expected return on investment Pension cost recognised in the income statement
5.6
5.8
-1.8
-1.9
4.7
4.7
91.2
91.7
Development of the pension provision Provision recognised as of 1 January Net expense recognised in profit or loss
4.7
4.7
Change in the fully recognised actuarial gains/losses in the period
10.5
1.4
Pension/bonus payments
-9.8
-10.1
3.4
3.3
-3.6
0.0
0.2
0.1
96.5
91.2
Accumulated actuarial gain (+)/loss (-) as of 1 January
-265
-25.1
Actuarial gain (+)/loss (-)
Plan payments Contributions to plan assets Net transfer contributions Provision recognised as of 31 December Development of actuarial gains/losses (accumulated)
-14.1
0.9
Investment gains (+)/losses (-) for the year
3.6
-2.3
Accumulated actuarial gain (+)/loss (-) *
-37.0
-26.5
136.5
140.7
0.9
0.9
Development of the present value of the obligation (DBO) Present value (DBO) as of 1 January Service cost (entitlements acquired) Interest cost Pension payments Transfer amount due to additions Actuarial gains/losses Actual DBO as of 31 December
5.6
5.8
-9.8
-10.1
0.2
0.1
14.1
-0.9
147.6
136.5
45.3
49.0
Development of the plan assets Plan assets at fair value as of 1 January Contributions to plan assets Plan payments
3.6
0.0
-3.4
-3.3
Expected return on plan assets
1.8
1.9
Actuarial gains (+)/losses (-)
3.6
-2.3
51.0
45.3
Plan assets at fair value as of 31 December * Reported in other comprehensive income
59
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Plan assets in %
2012
2011
Bonds – euros
25.76
46.20
Bonds – Euro High Yield
11.61
0.00
0.00
2.61
Corporate bonds – euros
17.70
21.86
Shares – euros
12.64
4.40
Shares – non-euros
Bonds – Euro Emerging Markets
12.72
9.70
Shares – Emerging Markets
6.79
0.40
Real estate
3.24
9.82
Alternative investment instruments
3.39
5.01
Cash
6.15
0.00
Total
100.00
100.00
Experience adjustments on actuarial gains and losses EUR m Expected present value (DBO) at the end of the period +/-
Present value (DBO) at the end of the period according to the measurement parameters of the beginning of the period
2012
2011
2010
2009
112.1
137.1
125.9
113.7
-124.8
-136.5
-126.4
-117.8
Transfer amount due to additions/exits
0.0
0.1
0.2
0.2
+
Expected pension payments
8.6
10.3
10.2
10.1
-
Current pension payments
-6.3
-10.1
-10.5
-10.4
=
Experience adjustments on actuarial gains and losses
-10.4
0.9
-0.6
-4.2
60
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Development of the provision for severance payments EUR m
2012
2011
Present value (DBO) of the obligation
69.5
62.3
Provision recognised as of 31 December
69.5
62.3
Service cost
1.2
1.0
Interest cost
2.6
2.6
Severance expenses recognised in the income statement
3.8
3.6
62.3
61.3
Provisions for severance payments
Provision recognised in the statement of financial position
The expense for provisions for severance payments breaks down as follows:
Development of the provision Provision recognised as of 1 January Net expense recognised in profit or loss
3.8
3.6
Change in the fully recognised actuarial gains/losses in the period
6.2
-0.7
Severance payments
-2.8
-1.9
Provision recognised as of 31 December
69.5
62.3
Accumulated actuarial gain (+)/loss (-) as of 1 January
-8.8
-9.5
Actuarial gain (+)/loss (-)
-6.2
0.7
-15.0
-8.8
Development of actuarial gains/losses (accumulated)
Accumulated actuarial gain (+)/loss (-)
Experience adjustments on actuarial gains and losses EUR m Expected present value (DBO) at the end of the period
2012
2011
2010
2009
62.9
62.5
57.5
51.9
-64.0
-62.3
-56.5
-52.9
3.3
2.4
3.5
3.2
-
Present value (DBO) at the end of the period according to the measurement parameters of the beginning of the period
+
Expected total payments
-
Actual total payments
-2.8
-1.9
-3.9
-3.7
=
Experience adjustments on actuarial gains and losses
-0.7
0.7
0.7
-1.6
Other non-current provisions contain provisions for potential losses from onerous Other non-current agreements. Other material items relate to measures necessary due to official regulations provisions for existing power plants as well as provisions in connection with pending and anticipated litigation. Non-current provisions are discounted at 3.5% (prior year: 3.5%). The development of other non-current provisions for the financial year 2012 is as follows:
61
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Provisions for
EUR m Carrying amount as of 1 January 2011
German phased retirement (“Altersteilzeit”)
Longservice awards
Other
21.3
11.1
70.7
Additions
0.0
1.4
14.6
Unwinding of the discount
0.9
0.5
0.4
Utilisation
0.0
0.9
1.1
Reversal
0.6
0.0
2.1
Other income and expenses recognised in equity
0.0
0.0
-0.5
Reclassification
0.0
0.0
4.3
Carrying amount as of 31 December 2011 / 1 January 2012
21.6
12.0
86.3
Additions
14.2
1.1
8.6
Unwinding of the discount
0.9
1.0
0.4
Utilisation
0.0
1.0
0.2
Reversal
0.0
0.0
10.5
Other income and expenses recognised in equity
0.0
0.0
-0.5
Reclassification
0.0
0.0
0.4
36.7
13.0
84.5
Carrying amount as of 31 December 2012
For more details on other provisions, reference is made to Note 27 – Current provisions. In the electricity sector, around EUR 39.7m (prior year: around EUR 37.2m) related to (24) construction cost subsidies for grids and around EUR 47.5m (prior year: around Construction cost EUR 49.5m) for connection costs. From 2007, the construction cost subsidies are
subsidies
amortised at a rate of 5% and offset against revenue in accordance with Sec. 3 (6) SNTVO (system user charges ordinance) 2006. Non-current other liabilities of EUR 3.8m (prior year: EUR 3.8m) related to liabilities to (25) affiliates, while EUR 60.5m (prior year: EUR 57.5m) concerned sundry other liabilities.
Non-current other liabilities
5.5. Current liabilities Current financial liabilities accounted for around EUR 3.7m in the reporting period (prior (26) year: around EUR 13.4m). The reduction can mainly be explained by the repayment of Current financial current liabilities to banks and other loan providers. The development of current provisions in the KELAG Group is as follows:
liabilities
(27) Current provisions
62
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Current taxes
Other
Total
Carrying amount as of 1 January 2011
0.2
58.8
59.0
Additions
0.1
15.2
15.3
Utilisation
0.2
25.8
26.0
Reversal
0.0
2.8
2.8
Reclassification
0.0
-4.3
-4.3
Other income and expenses recognised in equity and changes in the scope of consolidation
0.0
0.0
0.0
Carrying amount as of 31 December 2011/ 1 January 2012
0.1
41.1
41.1
Additions
0.0
22.9
22.9
Utilisation
0.0
12.4
12.4
Reversal
0.0
7.9
7.9
Reclassification
0.0
-0.4
-0.4
Other income and expenses recognised in equity and changes in the scope of consolidation
0.0
0.4
0.4
Carrying amount as of 31 December 2012
0.1
43.7
43.8
EUR m
2012
2011
Easements, transfer fees and similar obligations
31.8
18.9
Potential losses and rate risks relating to electricity
50.1
48.8
Potential losses from long-term natural gas agreements
16.7
8.5
7.9
7.5
EUR m
Non-current and current other provisions
Measures due to requirements made by authorities relating to power stations Other Total non-current and current other provisions
21.7
43.7
128.3
127.5
Trade payables and other liabilities totalled EUR 219.2m (prior year: EUR 165.6m), which (28) Trade payables and other liabilities
constitutes a rise of roughly EUR 53.6m on the prior-year level. Trade payables and other liabilities EUR m
2012
2011
Trade payables to third parties
50.7
43.0
Liabilities to affiliates
47.5
28.7
Liabilities to associates
3.0
8.8
Other liabilities
118.1
85.2
Total trade payables and other liabilities
219.2
165.6
Maturities of trade payables EUR m 2012
Total
On demand
50.8
46.1
less than 3 months 3 to 12 months 4.0
0.5
1 to 5 years 0.1
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Other liabilities EUR m
2012
2011
Tax liabilities
34.9
17.6
Social security liabilities
2.3
2.2
Liabilities from advance payments received
1.9
1.1
Market value of derivatives
26.5
12.6
Sundry
52.5
51.6
118.1
85.2
Total other liabilities
For the measurement of derivatives, please refer to accounting policies in Section 2.3.
6. Other notes 6.1. Financial instruments and risk management With the exception of derivative financial instruments related to trading activities and one Reporting on interest hedging instrument, the KELAG Group holds only non-derivative financial financial instruments instruments, which on the assets side include mainly cash, securities, trade receivables, bank balances and other receivables, and on the liabilities side bank loans, bonds, trade payables and other liabilities. The fair values result from market prices or are determined using generally accepted measurement methods. The fair value of the bonds issued by KELAG amounted to EUR 416.0m (prior year: EUR 259.9m) as of the reporting date and was determined based on observable market prices (Level 1). For the other financial instruments under IFRS 7, we refer to Note 18 “Trade receivables and other receivables and assets”, Note 19 “Cash and cash equivalents”, and Note 28 “Trade payables and other liabilities”. The carrying amount recognised in the statement of financial position for the items mentioned corresponds to the market value as of the reporting date. Non-current and current financial liabilities 2012 EUR m 1. Bonds
Principal repayments Carrying amounts 400.0
20142013 2017
Interest payments
from 2018
0.0 250.0 150.0
2013
20142017
from 2018
16.1
30.8
24.4
2. Liabilities to banks
46.0
7.4
17.6
20.9
0.5
6.1
3.2
3. Liabilities to others
12.0
0.1
5.3
6.6
0.0
0.0
1.0
7.5 272.9 177.5
16.6
36.9
28.6
Total financial liabilities
457.9
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Non-current and current financial liabilities 2011 EUR m 1. Bonds 2. Liabilities to banks 3. Liabilities to others Total financial liabilities
Principal repayments Carrying amounts 248.7 21.4 7.4 277.5
2012
Interest payments
2013- from 2016 2017
0.0 250.0
2012
20132016
from 2017
0.0
11.3
23.8
0.0
15.6
3.4
2.4
0.4
0.6
0.1
0.1
6.1
1.3
0.3
0.6
0.1
15.7 259.5
3.7
12.0
25.1
0.3
There were no delayed payments or payment defaults and contract breaches relating to loan liabilities during the financial year.
Fair value hierarchy in the measurement of the derivative financial instruments 2012 EUR m
Level 1
Level 2
Level 3
Total
Market value of derivatives (assets)
0.0
27.7
0.0
27.7
Market value of derivatives (liabilities)
0.0
26.5
0.0
26.5
Cash flow hedge (liabilities)
0.0
4.6
0
4.6
Fair value hierarchy in the measurement of the derivative financial instruments 2011 EUR m
Level 1
Level 2
Level 3
Total
Market value of derivatives (assets)
0.0
17.7
0.0
17.7
Market value of derivatives (liabilities)
0.0
12.6
0.0
12.6
The net gain or loss from the measurement of the derivatives used came to around EUR -3.9m (prior year: roughly EUR 3.7m). Because earnings are recognised in the corresponding income and expense accounts for energy, these earnings are part of the operating result. Net gain or loss pursuant to IFRS 7 from derivative financial instruments EUR m
2012
2011
Financial assets and liabilities at fair value through profit or loss
-3.9
3.7
of which held for trading
-3.9
3.7
The risks from the area of derivative financial instruments are essentially market and credit risks that arise from the company‟s trading activities and the sale of energy. In terms of market risks, adverse price developments represent the main risk for KELAG. This risk is counteracted by a commodity risk management system with limit systems derived from the central risk management system. The same applies to the area of credit risk, where bad debts and the replacement and re-use risks are limited and controlled by strict selection and intense monitoring of the trading and distribution partners.
65
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The carrying amount of the loans and receivables corresponds more or less to fair value.
Carrying amounts and fair values by measurement category 2012 Measurement
Assets – items in the statement of financial position
category
Carrying
pursuant to
amount as of
Fair value as
31/12/2012
of 31/12/2012
124.9
124.9
IAS 39
Level
EUR m Other interests in other entities Securities Other loans Other
FAAC FAAFS/HTM
29.6
29.3
LAR
1
4.1
4.1
-
2.2
-
Other financial assets and other non-current receivables Trade receivables Receivables from associates Derivative financial instruments relating to energy Other
35.9 LAR LAR FAHFT -
Trade receivables and other current assets Cash and cash equivalents
53.6
2
53.6
0.7
0.7
27.7
27.7
31.4
-
113.5 LAR
250.8
250.8
FAAC
124.9
-
Aggregated by measurement category Financial assets at cost Loans and receivables Available-for-sale and held-to-maturity financial assets Financial assets related to trading FAAC
… financial assets at cost
LAR
… loans and receivables
FAAFS
… financial assets available for sale
FAHFT
… financial assets held for trading
HTM
… held to maturity
LAR
309.2
-
FAAFS/HTM
29.6
-
FAHFT
27.7
-
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Carrying amounts and fair values by measurement category 2012 Measurement
Liabilities – items in the statement of financial position
category
Carrying
pursuant to
amount as of
Fair value as
IAS 39
Level
31/12/2012
of 31/12/2012
Bonds
FLAAC
1
400.0
416.0
Financial liabilities to banks and others
FLAAC
53.3
53.3
Financial liabilities to others
FLHFT
4.6
4.6
457.9
474.0
EUR m
1
Non-current and current financial liabilities Trade payables
FLAAC
0.1
0.1
Liabilities to associates
FLAAC
3.8
3.8
-
60.5
-
Other Other non-current liabilities
64.4
Trade payables
FLAAC
Liabilities to associates
FLAAC
3.0
3.0
Liabilities to affiliates
FLAAC
47.5
47.5
Derivative financial instruments relating to energy
FLHFT
26.5
26.5
91.6
-
Other
-
Trade payables and other current liabilities
50.7
2
50.7
219.2
Aggregated by measurement category Financial liabilities at amortised cost
FLAAC
558.3
-
Financial liabilities held for trading
FLHFT
31.1
-
FLAAC
… financial liabilities at amortized cost
FLHFT
… financial liabilities held for trading
67
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Carrying amounts and fair values by measurement category 2011 Measurement
Assets – items in the statement of financial position
category
Carrying
pursuant to
amount as of
Fair value as
31/12/2011
of 31/12/2011
125.9
125.9
IAS 39
Level
EUR m Other interests in other entities Securities
FAAC
27.9
27.9
Loans to other investees and investors
LAR
0.1
0.1
Other loans
LAR
4.8
4.8
-
2.1
-
34.9
-
Other
FAAFS/HTM
1
Other financial assets and other non-current receivables Trade receivables
LAR
40.3
40.3
Receivables from associates
LAR
2.8
2.8
17.7
17.7
18.2
-
79.1
-
LAR
87.6
87.6
FAAC
125.9
-
LAR
135.6
-
Available-for-sale financial assets
FAAFS
27.9
27.9
Financial assets related to trading
FAHFT
17.7
17.7
Derivative financial instruments relating to energy Other
FAHFT -
Trade receivables and other current assets Cash and cash equivalents
2
Aggregated by measurement category Financial assets at cost Loans and receivables
FAAC
… financial assets at cost
LAR
… loans and receivables
FAAFS
… financial assets available for sale
FAHFT
… financial assets held for trading
68
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Carrying amounts and fair values by measurement category 2011 Measurement
Liabilities – items in the statement of financial position
category
Carrying
pursuant to
amount as of
Fair value as
IAS 39
Level
31/12/2011
of 31/12/2011
Bonds
FLAAC
1
248.7
259.9
Financial liabilities to banks and others
FLAAC
EUR m
Non-current and current financial liabilities
28.8
28.8
277.5
288.7
0.2
0.2
Trade payables
FLAAC
Liabilities to associates
FLAAC
3.8
3.8
-
57.5
-
61.4
-
Other Other non-current liabilities Trade payables
FLAAC
43.0
43.0
Liabilities to associates
FLAAC
8.9
8.9
Liabilities to affiliates
FLAAC
28.7
28.7
Derivative financial instruments relating to energy
FLHFT
12.6
12.6
Other
-
Trade payables and other current liabilities
2
66.1
-
159.2
-
Aggregated by measurement category Financial liabilities at amortised cost
FLAAC
348.7
-
Financial liabilities held for trading
FLHFT
12.6
-
FLAAC
… financial liabilities at amortized cost
FLHFT
… financial liabilities held for trading
In the income statement, a total interest expense of roughly EUR 2.3m (prior year: roughly EUR 1.2m) calculated using the effective interest method was recognised for financial assets and liabilities not measured at fair value through profit or loss.
6.2. Liquidity risk The KELAG Group is well positioned in terms of liquidity and met all its payment obligations on time and properly in the financial year 2012. A possible liquidity risk is countered by proactive planning of liquidity and cash flows, medium and long-term capital requirement planning, a conscious move to maintain sufficient liquidity reserves as well as open credit lines from banks. Maintaining liquidity at all times and increasing financial flexibility are on the one hand guaranteed by large cash reserves (EUR 250.8m as of 31 December 2012; EUR 87.6m as of 31 December 2011) and on the other by a contracted cash advance credit line amounting to EUR 250.0m (prior year: EUR 150.0m) until April, September and December 2015 with a renewal option. Reflecting the overarching corporate strategy, ensuring adequate liquidity reserves and maintaining an excellent credit rating remain the primary objectives of the KELAG Group. The liquidity
69
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
risk can therefore be classified as very moderate, as has also been confirmed by the rating agency.
6.3. Credit risk Credit risks arise from non-fulfilment of contractually agreed services. In terms of assets (mainly receivables and other assets), the reported amounts also represent the maximum default or credit risk. The risk of default is monitored using regular credit rating analyses and market observations. Transactions are only concluded with counterparties with an excellent credit rating based on the external rating of an internationally recognised rating agency or according to an internal credit rating review. To the extent that default risks can be identified in financial assets, they are immediately recognised by value adjustments. Collateral may be required in individual cases, depending on the type and amount of the respective service. KELAG‟s investment strategy allows for conservative investments in a diversified portfolio with banks of good to prime credit ratings. In addition, risk is mitigated for money market investments by means of limit systems and monitoring. Counterparty risk is limited, evaluated and monitored based on a uniform approach throughout the Group.
6.4. Market risk Interest rate risk The interest rate risk currently remains manageable given the structure of financial liabilities, as the KELAG Group pursues a conservative investment and financing policy. The share of variable-rate debt amounts to about 4.25% of total borrowed capital (prior year: approximately 9.80%). Most of the financing portfolio therefore has a fixed interest rate and as a result is not subject to any fluctuations affecting cash. The variable interest rate share is continuously monitored and risks limited to 40% at group level. An interest rate increase of 1% for variable-rate financial liabilities as of the reporting date would reduce financial income by around EUR 0.2m (prior year: around EUR 0.3m) per year. An interest rate decrease of 1% for variable-rate financial liabilities as of the reporting date would increase financial income by around EUR 0.2m (prior year: around EUR 0.3m) per year. The KELAG Group is financed with an average effective interest rate of 4.54% (prior year: 4.60%). The equivalent nominal interest rate is 4.30% (prior year: 4.34%). Currency risk The Group Finance Framework Directive stipulates that only transactions in euros are approved for the fully consolidated group entities with their registered offices in Austria. KELAG‟s scope of consolidation at year end has no financial liabilities in foreign currency
70
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
and for this reason the foreign currency risk is negligible. Because of the limited assets in foreign currencies (approximately 4.97% of total assets in 2012 and approximately 4.34% of total assets in 2011), the currency translation risk for goodwill and assets is also negligible.
6.5. Financial risk The KELAG Group operates as an international energy supplier in an increasingly complex environment. On the financial markets, energy suppliers are not as heavily affected by the negative effects of the difficult economic situation because of the noncyclical development of their business and the stability of their cash flows. Nevertheless the KELAG Group is confronted with liquidity, market and credit risks in the course of its ordinary business activities. The conservative financial strategy of the KELAG Group that is geared toward continuity and yet adjusted to the varied challenges of day-to-day business has shown its worth in the current unstable environment. In the area of financial management, a Group Framework Directive as well as implementation guidelines for operations serve as a basis for carrying out business and set out binding and stringent risk measures, responsibilities and controls. In 2012, Standard & Poor‟s confirmed the KELAG Group‟s A rating, giving the Group a leading position in both a national and international comparison. The basic prerequisites for maintaining this position include commitment to a capital structure that is stable and robust in the long term, compliance with the main KPIs relevant for the rating and regular and intensive communication and discussion of the Group‟s strategic objectives with the rating agency. The fully consolidated companies of the KELAG Group generally do not hold any derivative financial instruments. Exceptions to this rule are those instruments relating to trading and one interest hedging instrument that is presented in the consolidated financial statements as part of the increase in the shareholding and associated full consolidation of Kärntner Restmüllverwertungs GmbH (KRV) for the first time. Interest rate and currency risks are minimised by an adequate internal control system for all financial products used. It is not permissible to use derivatives for speculative purposes. The risk of counterparty default is reduced by written regulations for Treasury. Transactions with counterparties (banks) are carried out only if they have at least the same credit rating as KELAG. As of 31 December 2012, there are no indications of any further financial risks for the financial year 2012 that could impact negatively on the business development of the KELAG Group.
71
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
6.6. Capital management The objective of capital management is to maintain a strong capital base, to successfully continue the path of the value-based growth and innovation strategy based on renewable energies and thus to promote the Group‟s future development. For management, the Group‟s capital is its equity reported pursuant to IFRSs. Equity came to EUR 644.8m as of the reporting date (prior year: EUR 588.0m). Financial liabilities (current and non-current) amounted to EUR 457.9m (prior year: EUR 277.5m), while cash and cash equivalents totalled EUR 250.8m (prior year: EUR 87.6m). The Group monitors its capital using net gearing, which is the ratio of net financial liabilities to total equity. With net gearing of 32.1% as of the reporting date (prior year: 32.3%), the KELAG Group has a stable capital structure. Net gearing EUR m
2012
2011
Non-current financial liabilities
454.2
264.1
Current financial liabilities Total financial liabilities
3.7
13.4
457.9
277.5
less cash and cash equivalents
-250.8
-87.6
Net financial liabilities / net debt
207.1
189.9
Equity Net gearing
644.8
588.0
32.1%
32.3%
Further objectives of capital management include retaining a high credit rating (A rating), which is also firmly entrenched as a component of the Group‟s strategy, ensuring an adequate return on equity and a consistent dividend policy. No changes were made to the capital management objectives, policies or processes as of 31 December 2012.
6.7. Risk policy Entrepreneurial activity means that “opportunity is not without risk”. Consequently, the willingness to take risk and, in turn, risk limits have to be defined. To this end, KELAG operates a risk management system that addresses risks from its own activities as well risks from its market environment. The group-wide rules and minimum standards ensure a systematic and uniform risk management system. It is the KELAG Group‟s strategic goal to raise risk awareness at all levels, to systematically consider risk aspects in all business decisions, to improve performance of internal control systems and reporting and
72
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
to establish a value-oriented risk culture at all levels of the Group, beyond the scope of the requirements set by the legal minimum standards. The main focus of group-wide risk management relates to the five risk categories identified for the KELAG Group – market risks, operational risks, financial risks, systemic risks and other risks. Risks are identified and managed for each business division and for material equity investments. Risks can arise during the execution of operational processes, in any business division or Process risks investment. These are mitigated using for example an extensive internal control system and with the support of corresponding hardware and software. The default of trading partners or customers encompasses the risk that energy already Market and credit risks supplied may not be paid or that replacement energy may have to be sourced in energy trading and (replacement and settlement risk). Risks also arise due to changes in the value of
distribution
commodity positions as well as regulatory changes to transfer prices. Risks are mitigated by executing an initial credit worthiness screening and ongoing credit worthiness monitoring in line with the value of contracts with each trading partner or customer; in addition the commodity positions concerned are closed and offset against each other.
6.8. Additional notes Dividends and interest received are allocated to the cash flow from operating activities. Notes to the Dividend and interest paid are recognised in the cash flow from financing activities.
consolidated statement of cash flows
Borrowed capital amounting to around EUR 153.5m was obtained in the financial year 2012. KELAG has taken over a guarantee for all liabilities resulting from the service agreement Contingent liabilities dated 27 October 1998 between KÄRNTNER Entsorgungsvermittlungs GmbH and Kärntner Restmüllverwertungs GmbH. As the value of this guarantee is secured with the 1996 Consumer Price Index, a contingent liability of approximately EUR 8.1m exists as of 31 December 2012 (prior year: around EUR 3.9m). This guarantee is valid until the end of the service agreement, in which the two parties waive their termination rights until 31 December 2023. Bank guarantees recognised as contingent liabilities of approximately EUR 8.7m have been assumed for the Slovenian subsidiary Interenergo and its subsidiaries as well as for KelKos Energy Sh.p.k., KelaVENT Charlie SRL and KelaVENT Echo SRL. These chiefly relate to liability declarations. In the course of the restructuring of SWH, KELAG Wärme GmbH signed a 50% liability waiver for the general managers of the SWH Group. In the event that the general
73
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
managers are made liable and up to a maximum amount of EUR 2.8m, KELAG Wärme GmbH will assume 50% of the liability, i.e., a maximum of EUR 1.4m. In addition, five letters of comfort were issued for the entities Interenergo d.o.o. (for EUR 12.0m), KelKos Energy Sh.p.k. (for EUR 1.2m) and KelaVENT Charlie SRL (for EUR 0.8m). The 2013 ordinance on the renewable electricity contribution charge based on the ÖSG Subsequent events (Austrian Green Electricity Act) 2012 entered into force on 1 January. It sets the charges payable by all final customers connected to the public grid by grid level for promoting renewable electricity for the 2013 calendar year. On the basis of the authorisation by the ÖSG 2012, the Austrian regulator E-Control confirmed the price for guarantees of origin that the Green Electricity Settlement Agency allocates to electricity traders based on their supply volume to final customers at EUR 1.5 per MWh. As part of the multiple-year incentives regulation system, the new SNE-VO (system user charge ordinance for electricity) came into effect on 1 January 2013 based on the second regulatory period for electricity (2010 to 2013). The regulator raised the system user charges for electricity customers of KNG-Kärnten Netz GmbH by an average of 4.0%. The second regulatory period for natural gas commenced at the start of 2013. The existing regulatory system will generally be continued for the second regulatory period within the new legal framework (Austrian Gas Industry Act (GWG) 2011). Compared to the first regulatory period, the main changes were a reduction in WACC to 6.42% and changes in the investment and operating cost factor. The rate setting procedure for natural gas has set the costs, targets and quantities by means of notice and charges by ordinance effective 1 January 2013. Accordingly, as part of the multiple-year incentives regulation system, the new GSNE-VO (system user charge ordinance for gas) came into effect on 1 January 2013 based on the second regulatory period for natural gas (2013 to 2017). For grid level 3 customers of KNG-Kärnten Netz GmbH with an annual consumption of 15,000 kWh this translates into a decrease in user charges of about 3.3%.
6.9. Related party disclosures Related parties of KELAG Group include all non-consolidated affiliates or associates and the controlling companies and their affiliates. Due to its position as majority shareholder, KÄRNTNER ENERGIEHOLDING BETEILIGUNGS GMBH is a related party, as is its
74
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
owner – the state of Carinthia and RWE. The latter also qualifies as a related party on account of its direct shareholding in KELAG. Companies that are controlled by the state of Carinthia are also related parties. Because of its direct participation in KELAG, VERBUND and its subsidiaries are also related parties, as is the Austrian state as the majority shareholder of VERBUND together with its majority interests. The parent company that prepares the consolidated financial statements for the largest group of companies is KÄRNTNER ENERGIEHOLDING BETEILIGUNGS GMBH with its registered offices in Klagenfurt. The consolidated financial statements are disclosed in the commercial register of Klagenfurt regional court. The parent company that prepares the consolidated financial statements for the smallest group of companies is Interenergo d.o.o. with its registered offices in Ljubljana, Slovenia. The consolidated financial statements are published with the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) in Ljubljana, Slovenia. The members of the Board of Directors and Supervisory Board of KELAG are related parties, as are their immediate family members. The following transactions took place with investments accounted for using the equity Business relationships with associates
method: Related party transactions EUR m
2012
2011
Revenue
4.0
4.8
Other income
0.3
0.5
-1.4
2.5
Income statement
Other expenses Statement of financial position Receivables
0.7
2.8
Liabilities
6.8
12.6
The transactions with associates mainly relate to energy procurement and supply transactions. Revenues from electricity trading activities with shareholders and their affiliates amounted Business relationships to about EUR 54.0m (prior year: around EUR 41.2m). Services from electricity trading with shareholders and activities, subscription rights and network costs of approximately EUR 145.8m (prior year:
their affiliates
around EUR 91.1m) were purchased from the shareholders and their affiliates. Furthermore,
KEH-Kärntner
Energieholding
Beteiligungs
GmbH
was
charged
approximately EUR 24.2m in the financial year 2012 (prior year: around EUR 17.2m) in expenses from the tax allocation.
75
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
All transactions were entered into at arm‟s length conditions. The business relationships are no different from the trade relationships with entities that are not related to the KELAG Group. A total of less than 10% of total revenue is recorded with all related parties in the state of Carinthia. Information relating to internal group matters must be eliminated and are not subject to mandatory disclosure in the consolidated financial statements. Transactions by KELAG with subsidiaries that are fully consolidated therefore do not have to be reported. Dividends paid
Dividends paid Total
Number of shares
Per share
EUR m
EUR
Dividends paid in 2012 for the financial year 2011
30.0
8,000,000
3.75
Dividends paid in 2011 for the financial year 2010
30.0
8,000,000
3.75
In the financial year 2012, the fixed remuneration of KELAG‟s Board of Directors Notes on corporate amounted to EUR 719k (prior year: EUR 696k), while variable remuneration totalled boards EUR 296k (prior year: EUR 294k) and non-cash benefits came to EUR 35k (prior year: EUR 34k). All of these relate to short-term benefits arising from the remuneration of persons in key positions in the KELAG Group. Long-term benefits to the Board of Directors in the form of pensions and severance payments of about EUR 428k (prior year: around EUR 361k) were taken into account. Members of KELAG‟s Supervisory Board received no compensation. The KELAG Group does not have any additional material related party transactions. The
KELAG
Group
is
jointly
audited
by
the
companies
Ernst
&
Young Audit fees
Wirtschaftsprüfungsgesellschaft m.b.H. and MOORE STEPHENS ALPEN ADRIA Wirtschaftsprüfungs GmbH. Expenses of around EUR 264k (prior year: approximately EUR 230k) were incurred for each of the group auditors in relation to the audit of the annual financial statements. In addition, expenses of around EUR 198k (prior year: approximately EUR 36k) were charged by the audit firms for advisory services.
76
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
Audit fees
EUR k
MOORE STEPHENS ALPEN ADRIA Ernst & Young Wirtschaftsprüfungs Wirtschaftsprüfungsge GmbH sellschaft m.b.H.
Statutory audit KELAG-Kärntner Elektrizitäts-Aktiengesellschaft
70
77
KNG - Kärnten Netz GmbH
26
27
9
9
KI-KELAG International GmbH KELAG Wärme GmbH
15
15
KELAG Finanzierungsvermittlungs GmbH
3
3
Kärntner Restmüllverwertungs GmbH
6
0
Wärmeversorgung Arnoldstein Errichtungs- und Betriebsgesellschaft mbH
4
0
164
35
296
166
Other services KELAG-Kärntner Elektrizitäts-Aktiengesellschaft
The Board of Directors consisted of the following members during the reporting year:
Members of the Board of Directors
Univ.-Prof. Dipl.-Ing. Dr. Hermann Egger Dipl.-Ing. Harald Kogler Dipl.-Kfm. Armin Wiersma
77
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
The Supervisory Board consisted of the following members during the reporting year:
Members of the Supervisory Board
Mag. Dr. Günther Pöschl Chairman Dr. Rolf Martin Schmitz First deputy chairman Ing. Willibald Dörflinger Dr. Thomas Glimpel Mag. Leopold Rohrer Dr. Joachim Schneider Dr. Johann Sereinig Dkfm. Dr. Heinz Taferner Dr. Bernd Widera Dipl.-Ing. Jochen Ziegenfuß The following persons were delegated by the works council in accordance with Sec. 110 ArbVG (Austrian Labour Constitution Act): Gerald Loidl Second deputy chairman Gerd Altersberger Herwig Kircher (until 19 June 2012) Mag. Petra Krainer (since19 June 2012) Ing. Helmut Polsinger Johann Prentner
78
KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Notes
These consolidated financial statements were prepared by the Board of Directors on the Approval of the 2012 date indicated. The consolidated financial statements of KELAG-Kärntner Elektrizitäts- consolidated financial statements for
Aktiengesellschaft will be submitted to the Supervisory Board for review and approval on publication 22 March 2013. The Board of Directors assures that to the best of its knowledge the annual financial statements prepared in accordance with the relevant financial reporting standards present a fair view of the KELAG Group‟s financial position and performance.
Klagenfurt am Wörthersee, 18 February 2013 The Board of Directors:
Univ.-Prof. Dipl.-Ing. Dr. Hermann Egger e. h. Spokesperson of the Board Dipl.-Ing. Harald Kogler e. h. Member of the Board Dipl.-Kfm. Armin Wiersma e. h. Member of the Board
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Exhibits
I.b EXHIBIT Statement of changes in non-current assets PreOther
EUR k Cost as of 1 January 2011 Additions Changes in the scope of consolidation
payments,
Total
property, assets under
property,
Developed
Un-
Intangible
land and
developed
Plant and
plant and
construction
plant and
assets
buildings
land
machinery
equipment
and projects
equipment
380,043
144,306
4,779
1,634,109
122,491
88,559
1,994,244
60,706
10,061
0
63,562
8,968
29,844
112,435
78
2,548
0
13,317
4,252
2,580
22,697
-294
-211
0
-12,789
-2,084
-2,031
-17,115
Reclassifications
2
22,698
0
43,666
299
-66,665
-2
Exchange differences (net)
0
-1
0
0
0
-140
-141
440,536
179,401
4,779
1,741,865
133,927
52,147
2,112,118
141,213
85,274
0
1,044,769
76,271
4,757
1,211,070 49,283
Disposals
As of 31 December 2011 Accumulated amortisation, depreciation and impairment as of 1 January 2011 Addition in 2011 *)
14,100
4,881
0
37,159
7,243
0
Reversal of impairment losses in 2011
0
0
0
-196
0
-296
-492
Changes in the scope of consolidation
25
754
0
4,689
255
0
5,699
-233
-185
0
-9,745
-1,966
0
-11,897
1
9,164
0
-9,177
23
-11
-1
As of 31 December 2011
155,106
99,889
0
1,067,498
81,826
4,450
1,253,662
Net carrying amount as of 31 December 2011
285,430
79,512
4,779
674,367
52,100
47,697
858,455
Cost as of 1 January 2012
Disposals in 2011 Reclassifications
440,536
179,401
4,779
1,741,865
133,927
52,147
2,112,118
Additions
38,391
6,171
63
59,296
8,314
36,396
110,240
Changes in the scope of consolidation
16,984
14,870
315
48,383
15,065
2,211
80,845
-147
-241
-2
-4,782
-4,068
-843
-9,936
905
4,697
-7
30,153
-3,937
-31,811
-905
1
-10
0
-6
-17
-588
-621
496,671
204,888
5,148
1,874,909
149,283
57,512
2,291,740
155,106
99,889
0
1,067,498
81,826
4,450
1,253,662
41,764
4,679
0
40,915
7,935
0
53,529
Disposals Reclassifications Exchange differences (net) As of 31 December 2012 Accumulated amortisation, depreciation and impairment as of 1 January 2012 Addition in 2012 Reversal of impairment losses in 2012
0
0
0
0
0
0
0
Changes in the scope of consolidation
838
3,638
0
18,422
4,855
0
26,915
-147
-138
0
-3,958
-3,617
0
-7,713
1
-52
0
51
0
0
-1
Disposals in 2012 Reclassifications Exchange differences (net)
0
0
0
2
-1
0
1
As of 31 December 2012
197,562
108,016
0
1,122,930
90,998
4,450
1,326,393
Net carrying amount as of 31 December 2012
299,109
96,872
5,148
751,979
58,285
53,062
965,347
*) In the income statement of the KELAG Group, the impairments were reduced by around EUR 0.3m due to the utilisation of a provision.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Exhibits
Intangible assets in the statement of financial position also comprise goodwill from consolidation entries of around EUR 3.8m (prior year: approximately EUR 4.3m). Reference is made to Note 10 “Goodwill” for further details. In accordance with IAS 23, borrowing costs of around EUR 4.6m (prior year: around EUR 4.2m) were capitalised in intangible assets and property, plant and equipment in these consolidated financial statements for the financial year 2012; this equates to a capitalisation rate of 4.5% for the first half-year and 4.0% for the second half of 2012 (prior year for the entire reporting period: 4.5%).
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
II. GROUP MANAGEMENT REPORT 1. Company and environment Economic environment The slowdown in global economic growth which started in 2011 continued throughout 2012. The subdued demand in the industrialised countries, in the eurozone and the US in particular, reduced global trade and led to a decrease in exports in the emerging countries of Asia, Latin America, Africa and the Middle East, which had most recently been the drivers of global economic growth. International financial markets were characterised by the downturn in the global economy as well as a renewed tightening of the sovereign debt crisis in the eurozone. Global economic growth slowed from 3.9% in 2011 to 3.1% in 2012. The loss of trust in public finances and the financial system as well as dramatic consolidation programmes placed a burden on economic development in many member states of the European Union in 2012. Exceptionally high risk premiums on the secondary market for government bonds reflected the deteriorating financing terms and conditions for southern European banks and governments. By contrast, the Netherlands, Finland, Luxembourg, Austria and in particular Germany benefited from shifts in capital towards safe havens, which reduced their financing costs. The interest spread between the euro countries did not decrease until the ECB intervened in the summer months. There were considerable differences in economic development within the eurozone in 2012. While there was a continuing downturn in economic output in crisis states such as Spain, Portugal, Italy and Cyprus, other euro countries, including Germany, still recorded positive growth rates. The growth rate within the EU for 2012 was most recently reported at -0.2% after +1.5% in the prior year. Austria‟s economy has to date been able to escape the recession in the eurozone. In the first quarter of 2012, the domestic economy expanded strongly once again, and then stagnated over the course of the rest of the year. With estimated economic growth of 0.6% for 2012, Austria is expected to have fallen clearly below the prior-year value of 2.7%, yet seen a significantly higher rate than the eurozone (-0.4%). The labour market recorded an above-average increase in employment rates in 2012 compared to the long-term trend. However, the economic development was also reflected here. According to the EU definition, the unemployment level in Austria increased from 4.2% in 2011 to 4.4%. By comparison to the other EU member states, Austria still has the lowest unemployment rate. Particularly the countries that are severely affected by the crisis, such as Greece, Spain or Ireland, face high double-digit rates of unemployment.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
At the beginning of July, in a further step the ECB lowered the key interest rates by a quarter of a percentage point to 0.75%. Since then interest rates have been at a historical low. The inflation rate in Austria averaged 2.4% in 2012. Economic development is expected to stay subdued in the near future. At 1.0%, the present forecast for economic growth in Austria in 2013 is slightly higher than the 2012 level. A further increase in the unemployment rate is expected on the labour market in 2013.
Conditions in the energy sector Electricity consumption in Austria of around 69.3 TWh increased moderately by 1.0% in 2012. Austria‟s natural gas consumption fell by 4.5% compared to 2011 to around 95.9 TWh. The decline in global economic growth was also reflected in the price development on the international markets for raw materials. With regard to crude oil, however, the economic impact was outweighed by geopolitical factors. Tensions in Iran on account of its nuclear programme and the civil war in Syria gave rise to concerns of declining oil supply, driving prices upwards in the first and third quarter. In 2012, Brent oil traded at an average of USD 111.5 per barrel, slightly up by 0.7% on the annual average for 2011. Since a large volume of gas imports into continental Europe are still governed by oilindexed contracts, the development of gas prices tends to track oil prices with a time lag. Since 2010, a small portion of the supply volumes governed by these contracts are sourced based on the forward prices quoted on the central European gas market. Over the past several years, trade in freely available gas volumes has become more prominent. These gas volumes, which are not indexed to the price of oil, trade at lower prices, as a result of which gas markets are drifting apart. Annual average prices for the constant supply of natural gas on the German spot market rose from EUR 22.8 per MWh in 2011 to EUR 25.3 per MWh in 2012. The average forward price for the respective following year rose less by comparison, up from EUR 26.3 per MWh in 2011 to EUR 27.0 per MWh in 2012. The price of hard coal fell considerably due, on the one hand, to weaker demand from Europe, India and China and, on the other, to excess supply. This was primarily attributable to coal exports from the USA, where coal is increasingly being substituted by cheaper shale gas. The forward rates quoted on the European Energy Exchange (EEX) averaged USD 103.4 per metric ton in the past calendar year. This corresponds to a decrease of 16.5% compared to 2011.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
The average price of CO2 emission allowances was halved from EUR 13.8 per metric ton in 2011 to EUR 7.6 per metric ton in 2012. On the one hand, this substantial fall in price is primarily due to the sovereign debt crisis in the eurozone and the economic slowdown this has triggered. On the other, the increasing volume of electricity generated from renewable sources means that fossil-fired power stations are used less, and the demand for emission allowances is consequently lower. The EU is pursuing initiatives to reduce supply in order to raise prices for CO2 emission allowances. As a result of the fall in prices for coal and CO 2 emission allowances and the sharp rise in feed-in volumes from renewable energy sources, prices on European electricity exchanges dropped considerably. Base-load electricity on the EEX averaged EUR 42.6 per MWh in spot trading over the reporting period, compared to EUR 53.4 per MWh for peak electricity. Compared to the financial year 2011, this corresponds to a decrease of EUR 8.5 per MWh or 16.6% for base load and EUR 7.7 per MWh or 12.6% for peak load. Prices have also fallen considerably on forward markets. In the reporting period, forward contracts for the following year (2013 forwards) averaged EUR 49.3 per MWh for baseload and EUR 60.9 per MWh for peak-load electricity. Compared to the forward for 2012 in the financial year 2011, this corresponds to a decrease of EUR 7.1 per MWh or 12.6% for base load and EUR 8.5 per MWh or 12.3% for peak load. Relative price development on wholesale markets 3,5
3 Coal 2,5
2
1,5
1
Electricity Oil
0,5
0 02.01.2007 2007 02.01.2008 2008 02.01.2009 2009 02.01.2010 2010 02.01.2011 2011 02.01.2012 2012
KELAG pursues a long-term sourcing and marketing strategy. This means that a large portion of the energy production volume is gradually marketed for subsequent years. At the same time, energy requirements are likewise sourced in advance. KELAG‟s marketing and sourcing policy levels out short-term price fluctuations and thus helps improve planning certainty and in turn the stability of earnings. Nevertheless, falling
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
electricity prices on wholesale markets mean that the profitability of our generation capacity is in decline. In the past financial year, the Heating division benefited from colder weather conditions compared to the long-term average.
Consequences of the legal framework for energy As part of the 18th UN Climate Change Conference in Qatar in December 2012, fundamental decisions were made for the future of international climate change policy. In addition to extending the Kyoto Protocol to 2020, resolutions covered rules on financing and compensation, promising developing countries an annual USD 200b as of 2020 for climate protection and compensation for losses due to climate change. Only six countries besides the EU have committed to the agreement to extend the Kyoto Protocol. A fartherreaching global climate agreement with the commitment of developing countries as well as the US, Canada, Russia and Japan is to be developed by 2015 to take effect from 2020. For years, KELAG has set great store by climate protection and energy efficiency. The Commitment to company‟s entrepreneurial alignment is anchored in the 20-20-20 energy and climate sustainability policy targets of the European Union. Under these targets, the EU‟s energy consumption and CO2 emissions have to be reduced by 20% by 2020. The EU plans to cut greenhouse emissions by between 80% and 95% by 2050 compared to 1990 levels. The aim is to raise the share of renewables in the EU‟s energy mix to 20% by 2020. These European targets were broken down into national targets for each individual member state. As a result, Austria has to cut its energy consumption by 20% by 2020 and build up the share of renewables in its total consumption from 23.3% in 2005 to 34%. In 2011, Austria had already reached a share of 31.0%. Austria is pursuing the European targets with its national energy strategy which is set on Austria‟s national energy three pillars: increase energy efficiency, build up renewables and secure energy supply.
strategy
Based on the European and national energy policy targets, KELAG has adopted a valuedriven growth and innovation strategy focused on expanding energy production capacity based on renewables in Austria and abroad while raising energy efficiency. Preconditions for this are a stable regulatory framework that eases investment in renewables as well as the expansion and renewal of grids. Other changes to the law that will affect our business operations also entered into force in 2012. The new ÖSG (Austrian Green Electricity Act) entered into effect on 1 July 2012. The Austrian Green main amendments concern the substantial step-up of the annual subsidy increase and Electricity Act entered the changed mechanism for the collection of subsidies. The cost of green electricity is
into force
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
now mostly billed to final customers via network operators rather than through energy traders. On the basis of the new ÖSG, the Austrian regulator E-Control set the price for guarantees of origin for subsidised quantities of green electricity at EUR 1.5 per MWh. The ÖSG contains the relevant authorisation for E-Control to set the prices annually. The new Austrian 2012 ordinance governing feed-in tariffs for green electricity entered into effect in mid-September. It governs the feed-in tariffs for electricity generated from renewable facilities with retroactive effect as of the beginning of July 2012 through to the end of 2013. The subsidy programme for the production of green electricity in Austria provides for an Green electricity transfer annual adjustment of the transfer prices between electricity traders and Abwicklungsstelle prices 2012 für Ökostrom AG (the clearing and settlement company for green electricity). The Austrian transfer price ordinance 2012 reduced this clearing price as of 1 January 2012, especially for electricity from small hydroelectric power plants. The Austrian transfer price ordinance went out of force upon entry in effect of the 2012 ordinance on the renewable electricity contribution charge as of 1 July 2012. The amendment to the UVPG came into force at the beginning of August. This not only Amendment to the enhanced the participation rights of environmental protection organisations, but also UVPG (Austrian
Environmental Impact
introduced measures to accelerate the determination process. With respect to Assessment Act) hydroelectric power, the regulations governing small-scale hydropower projects were revised and an exemption was introduced for efficiency enhancement measures for existing hydropower projects. Small-scale hydropower plants or wind turbines below defined thresholds are exempt from the duty to have environmental impact assessments performed.
At the end of November, the Carinthian state parliament adopted the amendment of the Amendment to the Carinthian Electricity Act. This amendment introduces a preliminary inspection duty for Carinthian Electricity Act underground cabling when installing electrical systems. At the end of April 2012, the Austrian Federal Ministry of the Economy, Family and Youth Smart metering issued the IME-VO (smart meter rollout ordinance). This ordinance provides for at least 10% of the metering points connected to the grid to be converted to smart meters in Austria by the end of 2015, at least 70% by the end of 2017 and, if technically feasible, at least 95% by the end of 2019. As part of the multiple-year incentives regulation system, the new SNE-VO (Austrian Regulator‟s ordinances system user charges ordinance) for electricity came into effect on 1 January 2012 based on the second regulatory period for electricity (2010 to 2013). The regulator raised the system user charges for electricity customers of KNG-Kärnten Netz GmbH by an average of 2.8%.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
Also on 1 January 2012, the new SNE-VO for natural gas came into effect based on the multiple-year incentives regulation system for natural gas (2008 to 2012). For retail and business customers with an annual consumption of 15,000 kWh this translates into a decrease in user changes of about 6.8%. Based on the Energy Efficiency Directive adopted by the EU parliament in September, a Increase in energy draft appraisal was presented at the end of December on the federal government‟s efficiency energy efficiency package. This package is intended to drive forward the implementation of measures to increase energy efficiency both at energy supply companies and businesses. In addition, some of the changes relate to switching supplier, basic supply by grid operators and stricter electricity labelling regulations. Talks have already been initiated between Österreichs Energie and E-Control as regards the design of the third regulatory period for electricity grids beginning on 1 January 2014.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
2. Strategic alignment The KELAG Group pursues a strategy of value-driven growth and an innovation strategy Review of group based on renewables. The Group‟s strategic alignment was confirmed in 2012 in the strategy course of the related annual review. The key finding of the strategy review was that, backed by KELAG‟s solid financial position and performance, it is possible to hold on to the existing growth and innovation strategy.
Corporate strategy Growth
Innovation
Value management
Domestic
Positioning as a “full-service provider for renewables, energy efficiency and new technologies”
Value-oriented corporate management as an overarching objective
solid equity and an A rating
Focus: expansion of hydroelectric activities in Carinthia Wind power in Austria Biomass in Austria Acquiring new customers International Selective growth in South-East Europe for smaller hydroelectric and wind power projects
Energy consulting Photovoltaic pilot projects E-mobility Smart grids / smart meters / smart home
E-business
Securing…
appropriate returns and cost efficiency value added for Carinthia as a centre for business and energy
Improved positioning as a “green company”
Domestic and international growth KELAG is focusing its domestic growth efforts on building up hydroelectric power Expanding hydroelectric generation capacity in Carinthia and the nationwide heating and bioenergy business. power and bioenergy in 2012 was the first full operating year of the new Feldsee pumped storage power station at
Austria
Kraftwerksgruppe Fragrant and of the new storage pump at the Koralpe power station in Lavamünd. KELAG continued to invest in the construction of new power stations in Carinthia in 2012. The construction phase started at the Tröpolach power station. Work on the joint project Reißeck II in collaboration with VERBUND Hydro Power AG is progressing according to plan. This project adds an additional 430 MW of generation and pumping capacity to the existing Reißeck/Kreuzeck and Malta power station groups. At an international level, KELAG studies the development and acquisition of selected hydroelectric, wind and solar power projects. A key company in this regard is the wholly
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
owned subsidiary Interenergo d.o.o., which is active in electricity trading and the development of hydroelectric power station projects in the former Yugoslavian states. With KELAG Trading‟s support, it was already possible to grow the electricity trading volume to just under 4 billion kWh in 2012. At the beginning of the year, KELAG had four hydroelectric power stations operating in Serbia, Bosnia and Kosovo. One further 5 MW hydroelectric power station went online in the summer of 2012 in Bosnia-Herzegovina. In addition, three hydroelectric power stations with a total capacity of 3 MW were acquired. Another two small-scale hydroelectric power stations in Kosovo with a total of 20 MW are under construction. KELAG has a 10 MW wind farm in operation in Balchik on the Bulgarian Black Sea coast. Another wind farm on the Romanian Black Sea coast with 14 MW went into operation in 2012. Two further wind farms in Romania with a total capacity of 24 MW are under construction. The implementation of further wind power projects is in preparation. In the field of photovoltaics, KELAG commissioned two small-scale projects in Slovenia with a total capacity of 2 MW in 2012.
Innovation Energy consulting The KELAG Group is driving forward its positioning as a full-service provider of Full-service provider for renewables and energy efficiency. Owing to the rising interest of customers in energy- renewables saving measures, KELAG offers attractive industry-specific energy services such as energy monitoring for industry and municipalities as well as professional energy consulting services for private and business customers. As an innovative energy service provider, KELAG develops forward-looking products. It sells its service packages for industry and commercial customers via market partners throughout Austria. These are aimed at affording customers long-term energy efficiency and cost savings. With SmartMonitoring, KELAG launched a new product in 2013 for industrial companies to permanently monitor their own energy needs. Under the SmartHome Austria brand, KELAG sells an innovative home management system, which offers not only increased energy efficiency but also comfort and safety in households. Private and business customers can determine their energy-saving potential themselves using the interactive energy consultant (www.kelag.at). All advice provided by KELAG‟s energy consulting team centres on customer benefits and responsibility for climate protection and energy efficiency.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
Smart metering The smart metering pilot project launched by KNG-Kärnten Netz GmbH in Ferlach in the Smart metering 2009 financial year was continued and brought to a close in 2012. The purpose of the project, which was to achieve a consistent communication infrastructure currently encompassing 361 metering points to the SAP/IS-U settlement system, was achieved in full. A total of 270 pilot customers are optimising their consumption patterns and making a more conscious use of electricity. The pilot project has produced significant findings on the technical options of different transmission channels. Know-how with respect to future processes and the organisational measures required support the implementation of the first steps for the introduction of smart meters required by law.
E-mobility KELAG is also demonstrating its innovative power in its activities in the field of e-mobility. Installation of e-charging Electric cars are seen as an energy-efficient alternative to combustion engine vehicles in stations the medium to long term. To this extent, KELAG views e-mobility as a very important topic for the future. Under the cooperation agreement with RWE, KELAG is installing a modern, smart public charging infrastructure. In addition, KELAG is in charge of the sale of RWE charging infrastructure in Austria and Slovenia. KELAG offers charging infrastructure throughout Austria for dealerships selling and buyers of Renault electric vehicles. In addition, KELAG is deeply involved in raising awareness of the topic of electromobility among the general public.
Photovoltaic power KELAG is engaged in future-oriented technologies for the production of electricity. As part Photovoltaic power of a pilot project, it has set up five local photovoltaic facilities in the district of St. Veit an 2
der Glan with a total output of around 450 kWp and a module surface of about 3,100 m . The project was completed at the end of 2012 and serves primarily research and development as well as demonstration purposes. The heterogeneous structure and orientation of the power station locations and the use of different technologies provides plant configurations that make it possible to draw important conclusions about the performance of the facilities and their long-term behaviour patterns. KNG-Kärnten Netz GmbH uses the research facilities erected by KELAG to gather experience for the lowvoltage grid in terms of the integration and operational use of local generation facilities. Further photovoltaics projects in the form of public participation models are at the preparation stage in Carinthia.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
E-business E-business solutions mean that KELAG customers can benefit from modern services Product variety in the based on the latest technology. The user friendliness and value added of the online internet applications available on KELAG‟s website are continually checked and improved. Renowned benchmarking studies have repeatedly testified to its high service quality on the internet. KELAG ranked first in the most recent survey of all energy supply companies in Austria. In the benchmarking of the 100 largest electricity providers in Germanspeaking countries carried out in 2012, KELAG came third. Since the end of 2012, KELAG has been operating an online store of its own for the sale of energy efficiency products under the SmartHome Austria brand. A specially developed portal displays the contents of the “Generation climate protection” campaign in interactive form. For smart phone users, KELAG provides special apps online, such as a filling station finder, the PlusClub events calendar or the energy diary. Acceptance of these online services is very high – some 4,200 online registrations in 2012 show that the majority of new energy customers in the B2C and B2B sectors enter into their contracts online.
IT projects In the financial year 2012, KELAG‟s IT implemented a range of business process support projects. In preparation for ISO certification in terms of IT security, the IT successfully passed test audits and developed an information security management system. As part of the Green IT initiative, emissions and electricity consumption are being reduced, as are resources used and IT operating costs for central IT facilities. The company-wide SAP system was adapted to future requirements regarding the electricity switching ordinance 2012 and smart metering processes.
Value management The overarching objective of the KELAG Group‟s approved strategy focuses on value- Value-based based corporate governance. Creating value for investors, customers and employees is management the benchmark for all activities at KELAG. Our corporate activities are planned, managed and controlled based on a value-driven management system. Taking the strategic objectives as a starting point, value-based operational measures are derived and implemented.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
Value added constitutes the central target and indicator in this context. It indicates the growth in the value of the company and is determined by comparing the return on capital employed (ROCE) and the cost of capital. Value added is generated when ROCE exceeds the cost weighted average cost of capital. As an operating yield indicator, ROCE reflects the ratio of operating result to capital employed. The cost of capital reflects the minimum interest required for value-based corporate governance. Investment in growth is measured based on clear return requirements. Additional valuedriven criteria such as a solid equity ratio and a suitable rating have to be observed. In the financial year 2012, Standard & Poor‟s once again confirmed KELAG‟s rating of “A/stable”. This favourable rating is necessary to obtain the best possible terms on the capital market, with which the objective of an optimal financing structure can be reached.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
3. Financial position and performance KELAG was able to defend its good competitive position in the energy market. The Improved financial company‟s financial position and performance was strengthened further. In the financial position and
performance
year 2012, the Group generated consolidated net profit of about EUR 96.3m. Consolidated income statement 1/1 – 31/12/2012
1/1 – 31/12/2011
Revenue, gross
2,007.0
1,660.3
Revenue, net
1,004.6
954.6
Operating result
97.8
97.8
Financial and investment result
13.5
15.8
Consolidated net profit
96.3
91.9
Earnings per share in EUR
12.0
11.5
Condensed version in EUR m
The high increase in gross revenue is principally attributable to an increased trading volume. However, even without the trading volume, an increase in revenue was achieved due to new business and higher water levels.
Revenue, net
1/1 – 31/12/2012
1/1 – 31/12/2011
EUR m
%
EUR m
%
Electricity
760.5
75.7
737.2
77.3
Heat
146.4
14.6
134.0
14.0
Natural gas
84.7
8.4
80.1
8.4
Other
13.0
1.3
3.0
0.3
1,004.6
100.0
954.3
100.0
The entire personnel expenses for the financial year 2012 are above the prior-year level as a result of the decision to extend the phased retirement model and the associated provisions of EUR 147.6m recognised. Cost of materials increased to EUR 659.1m, in line with revenue growth adjusted for trading volume, on account of the new business generated. Amortisation, depreciation and impairment came to about EUR 97.0m and, among other factors, reflect the intensive investment activities of the last few years. Due to changed market conditions, an impairment loss had to be recognised on a pumped storage power station. Other operating expenses of about EUR 74.3m are above the prior-year level, primarily due to required additions to provisions.
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
The financial and investment result of about EUR 13.5m declined compared to the prior year mainly due to a lower dividend payment by VERBUND Hydro Power AG. No financial transactions exposed to risks, such as cross-border leasing, were entered into by the KELAG Group. Consequently, it was not necessary to recognise any valuation allowances on such transactions.
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4. Business divisions 4.1. Electricity/Gas Electricity Production KELAG is one of the largest Austrian producers of electricity from hydroelectric power. In addition, KELAG has activities in the wind power segment. Pilot projects are being realised in the field of photovoltaic power. With a total of 75 of its own power stations and drawing on supply rights from third-party power stations, KELAG has a total power station capacity of 1,070 MW and a total production volume of about 2,906 million kWh in an average year. KELAG‟s largest production plants are located in the Fragant power station group. The Feldsee pumped storage power station has seen full operation for more than one year. Likewise Koralpe power station near Lavamünd completed its first full operating year as a pumped storage facility. Work started on the construction of Tröpolach hydroelectric power station with a capacity of around 8 MW in the financial year 2012. The power station is being realised in cooperation with a private partner. Further small-scale hydroelectric power projects are at the approval stage. KELAG brought the “Solar City St. Veit” pilot project to a close in December when the fifth Photovoltaic power facility went online. In total the project has a total module surface of about 3,100 m² and an output of around 450 kWp. In addition, KELAG commissioned two photovoltaic facilities in Slovenia with an annual feed-in volume of some 2 GWh. At present, KELAG‟s largest single investment is the Reißeck II joint project in Pumped storage power collaboration with VERBUND Hydro Power AG. Construction work began in the summer station Reißeck II of 2010. The existing Reißeck/Kreuzeck and Malta power station groups are being upgraded by an additional 430 MW of generation and pumping output. Start of operation is scheduled for 2014. Until then, KELAG will invest about EUR 191m for its share of 181 MW generation output and 137 MW pumping output. The investment in this power station will raise KELAG‟s annual production by 415 million kWh. In addition to the new construction activities, KELAG undertook further replacement investments and maintenance measures in 2012 to ensure the availability and supply reliability of the existing generation facilities. Extensive renewal measures were implemented on the generator of Wurten 4 machine and modernisation work was performed on the turbine and ball valve. With respect to the storage facilities, the surface sealing was completely overhauled at Wölla storage facility. After the Innerfragrant storage facility had been emptied, KELAG performed an extensive inspection of the facility.
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KELAG continued to pursue its activities abroad with success. In addition to the existing Expansion of small-scale hydroelectric power stations in operation in Serbia, Bosnia and in Kosovo, the hydroelectric generation Novakovici small-scale hydroelectric power station with a capacity of around 5 MW in
capacity abroad
Bosnia-Herzegovina was commissioned once construction was completed in June. The ground-breaking ceremony was held for two further small-scale hydroelectric power stations at the site of the existing Lumbardhi power station in Kosovo. Together with the additionally planned Lumbardhi II power station, the power station chain is planned to generate some 115 GWh of electricity per year. In December, the project Rosewood was closed in Bosnia-Herzegovina, involving the acquisition of three operating power stations with an annual generation capacity in excess of 10 GWh. In the Dobrogea region on the Romanian Black Sea coast, KELAG built Mihai Viteazu Growth in wind turbines wind farm with an installed output of 14 MW. Since completion of the commissioning process, this wind farm has been in full operation. Together with Balchik wind farm, KELAG has a wind power generation capacity of 24 MW in operation with an expected annual energy yield of 62 GWh. In the second half of the year 2012, construction work started on three additional wind power projects in Romania with a total output of 24 MW. Further hydroelectric and wind power projects are being developed and expected to be implemented in the near future.
Energy Trading and Distribution Electricity production The KELAG Group‟s electricity production increased in the financial year 2012 by 4,610 million kWh or 21.4% to 26,129 million kWh compared to 2011. Besides an increased trading volume, this is attributable to a higher level of electricity generated by the Group itself, which rose by 634 million kWh or 27.4% to 2,946 million kWh. This was driven by the higher water levels, with a water flow quota of 103.4% compared to 88.5% in 2011. The volume of purchased electricity rose by 3,975 million kWh or 20.7% to 23,183 million kWh.
Electricity sales The external electricity sales of the KELAG Group increased to 25,242 million kWh. The Increase in electricity change compared to the prior year corresponds to an increase of 4,320 million kWh or unit sales 20.6%. The unit sales to final customers of 4,102 million kWh was at prior-year level. Thanks to consistent measures to win new customers, KELAG recorded an absolute addition of
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some 1,800 retail and business customers. About half of private customer unit sales in 2012 were allocable to industry customers outside Carinthia. By expanding trading frequency, KELAG was able to make optimal use of the volatility of wholesale prices in electricity trading. Reaching a total of 20,969 million kWh the trading volume was up 4,318 million kWh or 25.9% compared to 2011. KELAG holds a solid competitive positioning in all customer segments. KELAG Defended strong customers value in particular the responsible use of natural resources, employees‟ high competitive position competence and the reliability of supply. Thanks to targeted customer retention measures, KELAG was able to further increase the high level of customer loyalty. For instance, the number of PlusClub members was increased by about 3% to about 35,000 households. The successful events series for industry customers, KELAG Business Circle, was continued in the financial year 2012 with events in Graz, Linz, Carinthia and Vienna. Customers likewise value KELAG‟s commitment to the topics of climate protection and Commitment to climate energy efficiency. Apart from supplying electricity from renewable resources, KELAG has protection and energy a core competence in the field of energy consulting. A manifestation of the keen customer
efficiency
interest in this area is the fact that about 7,000 energy consulting services were rendered in 2012, resulting in an annual savings potential of about 25 million kWh or 5,300 metric tons of CO2. This is equivalent to the heating requirements of more than 1,400 detached houses. These savings will have a sustained impact and ease the long-term burden on the environment. Moreover, additional savings will be made each year. In the area of heat pumps, KELAG acquired contracts for some 800 new installations in 2012. In total, this brought the number of heat pump customers up to around 9,000. In this context, in partnership with “power partners” – selected technicians, electricians and manufacturers – KELAG offers retail and business customers financing for heating, photovoltaics and energy systems. As a special service, KELAG organised energy days for municipalities at which residents received competent advice on a range of topics from planning of heating systems through to the financial assistance programmes available. In addition, 103 municipalities in Carinthia have partnered with KELAG‟s energy consulting team and offer KELAG‟s municipal energy consulting package to all residents. With EnergieMonitoring, a special offer for industry customers and municipalities, potential for cutting operating and maintenance costs can be analysed. In the key customer segment, more than 50% of KELAG‟s energy consulting services are already provided outside of Carinthia. Via its own online store, KELAG sells products under the SmartHome Austria brand to improve energy efficiency as well as comfort and safety in households.
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The survey conducted in 2012 among energy consulting customers once again confirmed the high quality of consulting. 98% of all participants awarded KELAG energy consulting services top marks and would recommend them. In addition, KELAG energy consulting offered premium service quality on the internet. The online energy advisor includes a calculator that allows a comparison of costs and emissions of heating systems. Some 13,000 visitors were recorded by this service offered by KELAG energy consulting in 2012. KELAG‟s range of products and services is subject to ongoing expansion and innovative and service-driven realignment to make sure that it always meets customers‟ needs.
Gas sourced The volume of gas sourced increased by 1,840 million kWh or 27.7% to 8,478 million kWh compared to the prior year. The increase in the amount sourced is primarily attributable to the increase in the volume of gas trading transactions. Most of the gas was sourced using long-term supply agreements and via trading partners on the free market. Seasonal consumption fluctuations were levelled out using gas storage facilities.
Gas sales The group-wide unit sales of gas rose by 2,148 million kWh or 34.6% to a total of 8,355 Increased gas trading million kWh. This increase in unit sales is chiefly a consequence of the increased gas activities trading activities of 5,839 million kWh. In the retail and business customers sector, the number of customers rose by around 1,200 through attractive pricing. An increase in volume was recorded with key customers. KELAG‟s unit sales of gas to final customers outside of Carinthia were already considerably higher than 50%.
4.2. Electricity and Natural Gas Grid As an operator of distribution grids for electricity and natural gas in Carinthia, KNGKärnten Netz GmbH is tasked with providing non-discriminatory access to the grid infrastructure to all customers and energy suppliers. The high-performance grid infrastructure has to be functional around the clock, 365 days a year. KNG-Kärnten Netz GmbH main tasks include managing operations, expanding the distribution grids for
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electricity and gas in line with requirements, ensuring necessary maintenance and providing efficient repair management. Extensive investments in the medium- and low-voltage grids over the financial year 2012 Investment in quality of were aimed at continuing to guarantee customers in Carinthia the premium quality of supply electricity supply to which they are accustomed. To secure future electricity supply in the Villach region, the approval process for the Villach South 220/110 kV transformer substation was continued. To further secure electricity supplies for the company Infineon, KNG-Kärnten Netz GmbH built a new 110/20 kV transformer substation in Auen and commissioned it in June. Further focal points were the renewal of the 110/20 kV switchgear installed in the Innerfragant transformer substation, construction of the new 20 kV load dispatch centres in St. Michael ob Bleiburg, Goldeck, Völkermarkt Industriepark and Moosburg as well as renewal and expansion of the 20 kV switchgear at UW Bleiburg. In addition, work started on renewing the 110 kV switchgear at UW Landskron. In total, the KELAG Group invested EUR 58.0m in grid facilities in the financial year 2012. The ÖSG (Austrian Green Electricity Act) 2012 entered into force on 1 July 2012. The Austrian 2012 Green annual subsidy increase for new facilities in Austria rose from EUR 21m to EUR 50m. In Electricity Act future, grid operators will have to collect not only the flat-rate green electricity charge but also the green electricity contribution charge. The green electricity contribution charge is set as a fixed mark-up on the grid user and grid loss charge for all grid levels.
Electricity and natural gas grid sales The electricity grid sales of KNG-Kärnten Netz GmbH grew by 104 million kWh or 2.6% to 4,100 million kWh compared to the prior year. The natural gas grid sales rose by 93 million kWh or 4.8% to 2,044 million kWh compared to the prior year 2011 on account of the higher demand for natural gas from key customers.
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4.3. Heat KELAG Wärme GmbH is one of the largest nationwide heating service providers in Biomass and waste heat Austria. It operates some 900 central heating stations and 79 district heating grids throughout Austria to supply customers with energy for heating purposes or process energy. In addition to the generation and distribution of heating and process energy, KELAG Wärme GmbH also generates electricity through combined heat and power plants. The focus of entrepreneurial activity of KELAG Wärme GmbH is on generating heating and process energy for our customers in as environmentally friendly as possible a form. The heat sources used are primarily biomass and otherwise unused industrial waste heat – areas in which KELAG Wärme GmbH holds a leading position throughout Austria. KELAG Wärme GmbH is the first large Austrian heat provider to do entirely without heavy heating oil as a primary energy source. Where it is not possible to use industrial waste heat and heating energy cannot be generated from biomass, natural gas as the by far most environmentally friendly of all fossil energy sources is given preference as heating medium. Besides implementing new projects, i.e., constructing new district heating systems and central heating stations, KELAG Wärme GmbH expands existing district heating grids to supply new customers with district heat. It also optimises generation facilities on an ongoing basis and realises potential for efficiency. In 2012, KELAG Wärme GmbH received ISO certificates 9001 and 14001. The ISO 9001 certificate attests an efficient and high-quality business organisation, and ISO certificate 14001 documents resource efficiency and appropriate preventive measures to avoid any negative environmental impact from business operations. Austria is KELAG Wärme GmbH‟s core market. In addition, it is active in the Slovenian market via a subsidiary. Besides KELAG Wärme GmbH, our Heat business division comprises Wärmeversorgung Arnoldstein Errichtungs- und Betriebsgesellschaft mbH and the Slovenian bio mass activities as well as Kärntner Restmüllverwertungs GmbH (KRV). The majority of shares was acquired by Verbund Renewable Power GmbH in 2012, and KRV was therefore consolidated in full for the first time.
Heat production The Heat business division‟s heat production increased by 105 million kWh or 5.0% to 2,221 GWh compared to 2011. This increase is attributable to the colder weather in 2012
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as well as to the acquisition of a majority holding in Kärntner Restmüllverwertungs GmbH and the associated full consolidation of the entity. About half of the heat produced stemmed from renewable energy sources such as biomass and waste heat.
Heat sales The heat sales grew by 78 million kWh or 4.8% to 1,716 million kWh compared to the prior year.
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5. Capital expenditures and maintenance In the financial year 2012, KELAG implemented an extensive investment programme. The Group invested about EUR 148.6m in property, plant and equipment and electricity purchase rights. Capital expenditures focused on power station projects in Austria and other countries and distribution grid facilities. In addition, the investments in the 45% interest in the Reißeck II pumped storage power station should also be mentioned. KELAG invested about EUR 43.8m in the area of generation in Austria. Some EUR 58.0m were spent on distribution grid facilities. Around EUR 13.9 million was attributable to the Heat business division and about EUR 6.9 million to miscellaneous. Abroad, KELAG chiefly invested around EUR 26.1m in the construction of wind power projects in Bulgaria and Romania. Investment EUR m
2012
2011
Intangible assets
38.4
61.0
Property, plant and equipment
110.2
112.0
Total
148.6
173.0
KELAG spent around EUR 34.7m on maintenance in the financial year 2012. Maintenance EUR m Generation facilities, Austria
2012
2011
5.7
4.7
15.2
16.6
Heat
2.8
2.3
Other
11.0
1.9
Total
34.7
25.5
Grids
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6. Financing and financial strategy The current uncertainties on the financial and capital markets illustrate the advantages of the KELAG Group‟s conservative financing strategy. The focus is placed on maintaining liquidity and strengthening the Group‟s credit standing. The financial strategy is a system of rules that is embraced by employees and is embedded in the overarching corporate strategy of the KELAG Group. In this context, safeguarding a suitable liquidity reserve and maintaining the A rating, which was once again confirmed, are still the primary objectives that guarantee the KELAG Group a high level of flexibility and access to the financial markets. In addition, one of the Group‟s key tasks is to centrally manage financing of group companies such that it is in line with requirements while ensuring that it is balanced and that maturity terms match. When selecting financing structures, the Group aims to diversify its sources of finance and thereby reduce use of existing bank lines. Net financial liabilities increased from EUR 189.9m to EUR 207.1m. The KELAG Group‟s financing strategy is anchored in guidelines to this effect that have remained unchanged strategically for years now. It is essentially based on the following pillars. Secure a suitable liquidity reserve KELAG still has high and very stable cash inflows from operating activities. The financing strategy for 2012 centred on ensuring that the Group had stable internal financing as well as fast and secure access to cash based on contractually fixed facilities. The KELAG Group has contractually agreed financing lines amounting to EUR 250m. In addition, the new bond issued significantly improved the Group‟s liquidity base. Provide central group financing for KELAG and its subsidiaries in line with requirements to ensure financial flexibility KELAG Finanzierungsvermittlungs GmbH (KFG) was established for the purpose of optimum bundling of all medium to long-term financing measures of the KELAG Group. KFG is also responsible for short-term liquidity clearance between group companies. Optimise the risk structure based on predefined limits Without exception, all financing activities of the KELAG Group are handled in accordance with the respective rules of the group finance guidelines, which are continually adjusted to the ever more stringent requirements. Secure solid creditworthiness by maintaining the A rating The cost of borrowing and the unrestricted access to financial instruments hinge on the company‟s credit rating. Because risk premiums are determined based on rating categories, maintaining KELAG‟s high credit rating in the long term is of crucial
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importance. In June 2012 Standard & Poor‟s confirmed the good A rating with a stable outlook. Statement of cash flows Cash flow from operating activities of EUR 223.6m increased on the prior year by 15.2%. It was possible to cover all investments and dividend distributions from the company‟s internal financing power. Statement of cash flows EUR m
2012
2011
Cash flow from operating activities
223.6
194.1
Cash flow from investing activities
-153.3
-178.7
Cash flow from financing activities
92.9
-43.8
Change in cash and cash equivalents
163.2
-28.5
Cash and cash equivalents as of 31 December
250.8
87.6
87.6
116.1
EUR m
2012
2011
Cash flow from operating activities
223.6
194.1
Interest cost
-21.3
-18.3
Cash and cash equivalents as of 1 January
Key financial indicators Key financial indicators
Interest income Net gearing as of 31 December Net financial liabilities as of 31 December
2.4
2.3
32.1%
32.3%
207.1
189.9
A key financial indicator, the net gearing ratio indicates the degree of indebtedness expressed as net financial liabilities (interest-bearing financial liabilities less cash and cash equivalents) as a percentage of equity. This indicator remained virtually stable compared to 2011 at 32.3%. Net financial liabilities of about EUR 207.1m are calculated as the sum of non-current and current financial liabilities of about EUR 457.9m less cash and cash equivalents of about EUR 250.8m. The value added constitutes the central target and indicator of KELAG‟s value management. It indicates the growth in the value of the company and is determined by comparing the return on capital employed (ROCE) and the cost of capital. Value added is generated when ROCE exceeds the weighted average cost of capital. ROCE for the financial year 2012 came to 12.9% and cost of capital to 8.0%, producing a relative value added of 4.9%.
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Relative value added
−
ROCE (Return on capital employed)
Cost of capital
÷ Operating result
Average capital employed
7. Composition of assets, equity and liabilities In the financial year 2012, KELAG was able to keep its financial and earnings power stable. The ratio of equity to debt capital remained at a very good level. Consolidated statement of financial position
31/12/2012
31/12/2011
Condensed version
EUR m
%
EUR m
%
Assets
1,823.5
100.0
1,507.0
100.0
Non-current assets
1,441.9
79.1
1,322.2
87.7
381.6
20.9
184.9
12.3
1,823.5
100.0
1,507.0
100.0
Equity
644.8
35.4
588.0
39.0
Non-current liabilities
912.0
50.0
699.0
46.4
Current liabilities
266.7
14.6
220.1
14.6
Current assets Equity and liabilities
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KELAG-Kärntner Elektrizitäts-Aktiengesellschaft Annual report 2012 | Group management report
8. Value added Value added
%
EUR m
Inputs
74.8
830.4
1
Cost of materials
59.4
659.1
2
Amortisation, depreciation and impairment
8.7
97.0
3
Other expenses
6.7
74.3
Value added
25.2
280.2
4
Employees
13.3
147.6
5
Public sector
1.4
15.1
6
Lenders
1.9
21.3
7
Shareholders
3.6
40.0
8
Company (retained profits) Company output
5.1
56.3
100.0
1,110.6
Overall, about 76% of the value added remains in the Carinthia region. This corresponds to about EUR 213m.
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9. Subsequent events The 2013 ordinance on the renewable electricity contribution charge based on the ÖSG 2013 ordinance on the (Austrian Green Electricity Act) 2012 entered into force on 1 January. It sets the charges renewable electricity payable by all final customers connected to the public grid by grid level for promoting
contribution charge
renewable electricity for the 2013 calendar year. On the basis of the authorisation by the ÖSG 2012, the Austrian regulator E-Control Regulator‟s ordinances confirmed the price for guarantees of origin that the Green Electricity Settlement Agency allocates to electricity traders based on their supply volume to final customers at EUR 1.5 per MWh. As part of the multiple-year incentives regulation system, the new SNE-VO (system user charge ordinance for electricity) came into effect on 1 January 2013 based on the second regulatory period for electricity (2010 to 2013). The regulator raised the system user charges for electricity customers of KNG-Kärnten Netz GmbH by an average of 4.0%. The second regulatory period for natural gas commenced at the start of 2013. The existing regulatory system will generally be continued for the second regulatory period within the new legal framework (Austrian Gas Industry Act (GWG) 2011). Compared to the first regulatory period, the main changes were a reduction in WACC to 6.42% and changes in the investment and operating cost factor. The rate setting procedure for natural gas has set the costs, targets and quantities by means of notice and charges by ordinance effective 1 January 2013. Accordingly, as part of the multiple-year incentives regulation system, the new GSNE-VO (system user charge ordinance for gas) came into effect on 1 January 2013 based on the second regulatory period for natural gas (2013 to 2017). For grid level 3 customers of KNG-Kärnten Netz GmbH with an annual consumption of 15,000 kWh this translates into a decrease in user charges of about 3.3%. There were no events after the end of the reporting period on 31 December 2012 that would have led to a different presentation of financial position and performance.
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10. Development of risks and opportunities Adequate risk policy Entrepreneurial activity means that opportunity is not without risk. Consequently, the willingness to take risk and, in turn, risk limits have to be defined. To this end, KELAG operates a risk management system that addresses risks from its High risk awareness own activities as well risks from its market environment. The group-wide rules and minimum standards ensure a systematic and uniform risk management system. It is the KELAG Group‟s strategic goal to raise risk awareness at all levels, to systematically consider risk aspects in all business decisions, to improve performance of internal control systems and reporting and to establish a value-oriented risk culture at all levels of the Group, beyond the scope of the requirements set by the legal minimum standards. Risk organisation The organisation of the risk management system that has been implemented is designed to ensure that business decisions and business activities are only executed within defined risk limits. Risk management is an integral element of the structural and workflow organisation. The risks are regularly reported by the company‟s divisions to the Board of Directors. Risk management process Key objectives of the risk management system are to create transparency in order to avoid risks and to efficiently manage risk exposures. Timely notification of all current risks is essential in order to achieve these objectives. In accordance with a risk management guideline, risks are treated in a uniform manner and presented in a risk inventory broken down by probability of occurrence and potential loss. Risk categories Identified risks are classified into five categories (markets risks, operating risks, financial risks, systemic risks and other risks). Risks are identified and managed for each business division and for material investments.
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Process risks Risks can arise during the execution of operational processes, in any business division or investment. These are mitigated using for example an extensive internal control system and with the support of corresponding hardware and software. Market and credit risks in energy trading and distribution The default of trading partners or customers encompasses the risk that energy already supplied may not be paid or that replacement energy may have to be sourced (replacement and settlement risk). Risks also arise due to changes in the value of commodity positions as well as regulatory changes to transfer prices. Risks are mitigated by executing an initial credit worthiness screening and ongoing credit worthiness monitoring in line with the value of contracts with each trading partner or customer; in addition the commodity positions concerned are closed and settled. Specific guidelines on commodity risks have been developed in this regard. Quantity and market price risks in production In the case of hydroelectric power, whether a planned production quantity is reached or not largely hinges on the water levels and, in turn, on the weather. Apart from quantity, the market price level is another factor influencing revenue. Risks are mitigated based on a long-term sales strategy and by updating forecasts of water levels on a rolling basis. Operating risks from grid and production activities The risk of defects in technical plant and equipment due to major weather events (wind storms, sleet) is minimised using an appropriate maintenance strategy and by taking out suitable insurance policies. Regulatory risks in grid activities The risk that the regulator might fail to factor in existing cost positions when setting charges is mitigated by means of active regulatory and cost management. Investment risks Investment decisions are based on investment and M&A guidelines that define clear profitability and risk criteria. Observance of high technical standards serves to keep technical risks to a minimum.
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Equity investment risks Equity investment risks result from potential fluctuations in dividends from subsidiaries and other investees. Targeted equity investment management in accordance with a guideline (early warning indicators and ongoing monitoring and reporting) is used to mitigate the risk. Financial risk Interest and currency risks are mitigated using an adequate internal control system for all financial products used. The risk of counterparty default is reduced by written regulations for Treasury. Transactions are only entered into with counterparties (banks) that have at least the same credit rating as the KELAG Group. Legal risks – compliance Part of risk management activities are also dedicated to the identification and handling of legal risks. To this end, a group-wide compliance system was implemented in cooperation with an international law firm. This system ensures that the probability of legal infringements by employees of the KELAG Group is kept as low as possible. The compliance system thus serves to protect both the KELAG Group as well as every individual KELAG employee, while making a contribution to safeguarding the business value in the long term. Internal control and risk management system relating to the financial reporting processes In accordance with Sec. 82 AktG (Austrian Stock Corporations Act), it is the responsibility of the Board of Directors to install an adequate internal control and risk management system relating to the financial reporting process. KELAG‟s Board of Directors has accordingly adopted policies that apply group-wide with binding effect. The accounting department of the group parent KELAG prepares the separate financial statements of the individual group entities and the consolidated financial statements using SAP software. KELAG‟s financial reporting process is based on consistent groupwide accounting policies as well as corporate instructions that are updated at regular intervals. These contain consistent accounting policies on the recognition, posting and accounting for transactions that must be complied with by all entities concerned throughout the Group. The financial reporting systems are protected by access rights. In addition, the various processes involve compulsory, automatically triggered control and approval steps.
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To avoid any material misstatements, automatic controls have also been implemented in the reporting and consolidation system along with a range of manual controls in the process. These measures range from a review by management of the profit or loss for the period through to the specific reconciliation of accounts. Every quarter, the Supervisory Board is provided with a report on the Group‟s financial position and performance by the Board of Directors. This also includes additional information such as detailed variance analyses. Ahead of supervisory board meetings, the individual KELAG organisational units provide an activity report to the Supervisory Board. Risk management covers not only operating risks but also the financial reporting system. Potential risks relating to the financial reporting process are surveyed on a regular basis and preventive measures taken. The focus is placed on those risks that typically qualify as material for the entity. Compliance and the quality of the internal control system are monitored on an ongoing basis as part of internal audits. The internal audit function reports directly and regularly to the Board of Directors.
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11. Employees High-performing and dedicated employees constitute prerequisites for the company‟s ability to compete and continue as a going concern. KELAG tackles the demands of modern personnel management. Personnel figures In 2012, the KELAG Group employed an average of 1,406 employees (measured as fulltime-equivalents, including inactive employees, excluding trainees). Group company
Full-time equivalents
1
KELAG
532
2
KNG-Kärnten Netz GmbH
619
3
KELAG Wärme GmbH
191
4
Kärntner Restmüllverwertungs GmbH
28
5
Foreign investments
36
Total
1,406
Strategic personnel management Against the backdrop of the company‟s strategic alignment and the growing complexity Long-term personnel this entails, transformation efforts toward a modern human resources function continued. planning and retainment Underlying factors such as demographic change and labour market shortages necessitate long-term personnel planning and activities to secure human resources together with the systematic, requirements-based development of employees. The methods and tools of personnel management in particular are continually enhanced to support the implementation of the corporate strategy. Targeted focal points of 2012 The Job Families project developed as a follow-on project of the HR strategy project was “Job Families” project pursued further. This project supports the development of a company-wide functional structure. Job families are career profiles derived from existing functions. These career profiles serve as the basis for future HR measures such as models for career development as well as personnel marketing or recruiting activities. A modern salary system drawing on market analyses and existing collective agreements and company agreements is developed on that basis. KELAG has traditionally had a large emphasis on training to secure the next generation Diverse basic and of skilled employees. Group-wide, 116 trainees were trained up as electrical engineers, advanced training metal workers, technical drawing designers, warehouse logistics staff, cooks and office clerks on average for the year 2012. This corresponds to a ratio of trainees to total
opportunities
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workforce of roughly 10%. A total of 38 trainees were taken on in 2012. KELAG thus makes an important contribution to the training of qualified professionals and the employment of young people. KELAG supports the individual development of employees using targeted measures. In total, 970 employees of the KELAG Group participated in 4,296 training days. A particular emphasis is placed on requirements-based further training. The existing phased retirement model has been extended until 2017 to optimise the employee structure. This model allows a smooth transition into retirement. Participating employees remain employed by the company for 18 months on average. In this context, particular attention is paid to securing the transfer of knowledge to young employees. Health is the most important asset of each employee. KELAG sees it as one of its tasks as employer to support its employees through healthcare promotion. As part of the occupational healthcare promotion project, a holistic concept was prepared to keep fit and actively prevent illnesses. Focal points are industrial health and safety, a healthy diet, sport and psychosocial healthcare. In order to position KELAG as an attractive employer for young people during their training, the company presents itself regularly at various events held by vocational training colleges, universities of applied sciences and universities, such as at the Teconomy job fair organised by the Graz University of Technology. For the third time the KELAG HR Night was held as part of the Connect job fair of the University of Klagenfurt. The event‟s objective is to provide companies, personnel managers and students with a communication platform to discuss personnel topics while identifying future prospects and trends. The Group conducted an employee survey in 2012. At three-year intervals, all employees are surveyed on topics such as work processes, innovations and learning, customers and quality, leadership, industrial health and safety. The results of the survey are integrated in the Group‟s continuous improvement measures. One of the objectives of strategic personnel management is to secure the competences that will be required in key positions in future. This objective is supported by the groupwide talent management programme. An orientation centre helps nominated candidates to identify their individual strengths and potential for improvement based on the KELAG competence model. Individual development measures are then arranged in subsequent feedback talks. In order to increase KELAG‟s attractiveness for women, too, and employee satisfaction on the part of the female workforce, a group-wide women‟s network has been put in place. It offers a forum for regular exchange on topics of relevance for women.
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12. Sustainability KELAG sees sustainability as an integrated approach to economic, environmental and social matters. This is a central aspect of the KELAG‟s responsible and long-term corporate strategy and involves being an active partner for customers, employees and the region. Company policy is characterised by the increased use of renewable sources of energy and the implementation of innovative solutions in order to contribute to supply quality and climate protection in a forward-looking manner.
KELAG’s sustainability programme The profitability and economic stability of the company are key prerequisites for KELAG‟s Diverse sustainability actions to be oriented not only towards business facts and figures, but to also take into activities account social and ecological aspects in the management of the business. By making the use of renewable sources of energy its central task, the company is already making an important contribution to environmental protection. Many parts of the company are also proactively taking measures based on a feeling of responsibility towards future generations. In order to bundle these activities and improve communication and also to apply sustainability measures to further areas, a group-wide sustainability programme was launched at the end of 2010. A core team with representatives from all parts of the company is in charge of implementing defined measures while at the same time developing the programme further. The aim is to tackle future challenges in a sustainable manner. For the first time, KELAG presented the development of its sustainability work to its stakeholders and the interested public in the form of a sustainability report in the financial year 2012. This report was prepared in accordance with the guidelines issued by the Global Reporting Initiative (GRI) for application level B and confirmed by GRI. Besides a qualitative description of the measures and projects under the sustainability programme, the report also contains quantitative indicators on economic, ecological and social topics.
Resource-saving energy generation and CO2 avoidance KELAG generates electricity from domestic hydroelectric power. These clean energy Using clean energy sources open up a solid foundation for electricity supply while proactively protecting the sources climate. With the electricity production from hydroelectric power, KELAG avoids about one million metric tons of CO2 emissions each year compared to the European energy mix (ENTSO e-mix). The use of wind power and photovoltaics also emphasises KELAG‟s commitment to sustainable electricity generation.
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KELAG also offers heating from biomass and waste heat. Environmentally compatible heat generation translates to a reduction of a further 300,000 metric tons of CO 2 each year compared to individual heating systems based on fossil fuels. Further expansion of renewables in Austria and abroad is one of the central objectives of the KELAG Group. The focus here is on compliance with environmental standards both in the construction and the operation of power stations.
Reliable economic factor in the region For KELAG, sustainability involves not only climate protection and saving resources along the entire value added chain, but also being a reliable partner for the region. KELAG meets this standard by not just guaranteeing supply reliability for energy, but also making a significant contribution to the generation of value added in Carinthia. In the past financial year, the KELAG Group purchased services with a volume of around EUR 60m from some 1,000 suppliers in Carinthia. In Carinthia, the KELAG Group generates value added, including indirect effects, in excess of EUR 330m per year. The company plans to invest around EUR 1.9b in the expansion of the energy infrastructure by 2022. Businesses in Carinthia will be among the first to benefit from this investment volume. In addition to the roughly 1,400 jobs that KELAG offers, the company secures a total of about 3,000 jobs in Carinthia in light of its growth strategy. Furthermore, the KELAG Group offers training for some 110 young people every year in anticipation of the future demand for qualified employees, thereby also providing impetus against youth unemployment.
Social responsibility KELAG promotes initiatives in the areas of art, culture, sport and other social activities. Apart from responsibility for climate protection and energy efficiency, KELAG supports numerous sustainable corporate social responsibility projects. KELAG is involved in various cooperation projects to foster the social integration of people with disabilities and the integration of the long-term unemployed in the workplace. In 2012, for instance, KELAG again supported the organisation INCLUSIA, which organises workshops at which school children from Carinthia can engage with disabled people from across Europe. Concerts in senior citizen‟s, nursing and disabled people‟s homes are supported via the Live Music Now project. Besides the therapeutic effect of music, this project also provides important support for young musicians in Carinthia.
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In the field of sports, KELAG sponsors young sportsmen and women from Carinthia, for example via the Kärnten Sport association. KELAG has also confirmed its commitment to sport
for
disabled
persons
via
a
cooperation
agreement
with
Kärntner
Behindertensportverband. On the culture stage, KELAG has two focal points, namely music and literature. Apart from the Carinthia music association, with its rich tradition, and the Carinthian Summer, KELAG supported the events Trigonale and La Guitarra Esencial in 2012. “Tage der deutschsprachigen Literatur” (German-language literature days) was one of the Group‟s main areas of involvement in the world of literature. In addition, KELAG furthered reading and writing at schools with projects such as the Schulhausroman project. In the area of education, activities focused on initiatives like “NAWIMIX”, which promotes efforts to provide children early access to the natural sciences and technology. With support for projects such as “Safety on tour” children‟s safety olympics or “Große schützen Kleine” (the big protect the little ones), KELAG again promoted fun ways to give children safety training and prevent accidents at an early stage in 2012. The longstanding cooperation with Kärntner Bildungswerk is further evidence of KELAG‟s social commitment.
Climate Protection Generation Since 2008, KELAG has bundled its climate protection and energy efficiency activities Raising public under the slogan “Climate Protection Generation”. The emphasis is placed on creating an awareness for climate awareness for the responsibility of each and every individual. The company is in a
protection
position to share its expertise with customers, showing them the contribution to climate protection that they could make with KELAG at their side. This involves activities that can be put in practice in everyday life as well as expert energy consulting sessions highlighting extensive energy savings potential. In 2012, KELAG further pursued its campaign with the slogan “Climate Protection Generation – Changing the Future. Now.” The focus in on topics such as grids, energy efficiency using the example of smart homes, or heat generated from biomass.
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13. Research and development In research and development, KELAG focuses on application-oriented activities in the field of technology, primarily in cooperation with universities. The Group cooperated with institutes of Graz University of Technology, the University of Klagenfurt, RWTH Aachen University and the Milan Vidmar Electric Power Research Institute in Ljubljana in 2012. Current projects relate to the following topics: technical diagnosis of operating resources, assessment of the condition and risks from technical plant and equipment, earth fault detection in grounded grids and stability issues in the establishment of isolated grids. In addition, basic considerations on the topic of smart grids, likewise addressed in cooperation with industry partners, are of significance. E-business activities were the focus of the efficient use of electric power again in 2012. Supplementary to its in-house activities, KELAG co-finances R&D projects under the “Research and Innovation” programme of the Austrian energy advocacy group, Österreichs Energie. Österreichs Energie initiates and coordinates joint research activities of its member companies. The key issues in 2012 were: supply security and reliability, regulatory issues, power station capacity, information and communication technology, smart metering.
14. Other disclosures All financial instruments of relevance for the assessment of the financial position and performance are presented in the consolidated financial statements. KELAG does not have any branches in Austria or abroad.
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15. Outlook The energy industry is facing a difficult market environment. Due to the high level of capital employed, investment decisions must be based on a reliable long-term political framework or relatively stable planning parameters. In light of the EU‟s 20-20-20 targets in the context of liberalisation and regulation as well as the energy policy decisions on the new energy concept, there has been an increase in the uncertainties relating to the legal and economic framework for the energy industry. Added to this are uncertainties arising from the financial crisis and the economic development in Europe. The improvement in leading indicators points to an economic recovery by mid-year 2013. For the year as a whole, Austria is expected to see a slight increase in the growth rate to 1.0%. The new energy concept has many different implications. In view of the economic development and substantial increase in generation capacity for renewable energies, in Germany in particular, we anticipate the temporary excess supply of generation capacities to continue. Accordingly, we forecast slightly declining wholesale market prices on the European electricity market. In the long term, we therefore expect a lower level of profitability of our hydroelectric power stations, as we market the respective quantities amidst the competition on the wholesale market. At the same time, we expect the return on capital employed to be lower for our grid business on the basis of discussions with the regulator on the mechanisms of the third incentive regulation period although investment incentives for the grids are needed for the new energy concept to succeed. The draft Austrian Efficiency Act also highlights that the rules of measurability and chargeability of energy efficiency measures initiated and performed by energy companies are unclear and could lead to an increase in expenses subject to risks. Despite the uncertainties inherent in the economic and legal framework conditions Continuation of growth affecting the energy industry, we will uphold our strategic alignment in terms of the value- and innovation strategy based growth and investment strategy on the basis of renewable energies. Our stable financial and earnings power anchored in our broad portfolio of business segments means that we are able to continue our long-term investment programme. We have budgeted about EUR 234m for new construction and maintenance in 2013. The focus will remain on hydroelectric and wind power projects, biomass projects in the heating sector and the modernisation of the grid infrastructure. However, we will examine these projects against tighter risk criteria in a market environment that is becoming increasingly uncertain. We will rigorously grow our portfolio of products and services in line with changing Further development of customer requirements as well as the competitive and market environment. The focus will products and services be on expanding the offering of energy-related services in the context of climate protection and energy efficiency. In addition, we will continue to address the development of innovative technologies ranging from increasing convergence of telecommunications,
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information and electricity networks through to smart technologies, electromobility and internet developments. Apart from consistent market and customer orientation, operational excellence and cost management are key management tasks for the flexibility and future sustainability of our company. This means that we will increasingly review our processes and organisation for efficiency and adapt them according to the economic requirements in a continuous improvement process. For example, we aim to capture additional cost improvement potential, proactively use our block phased retirement model and monitor and structure the optimal capital allocation of our finances in a targeted manner. Our corporate philosophy is founded on the principle of sustainability. To this end, we endeavour to strike an optimal balance between business stability, reliability of supply, climate protection and social responsibility. With the “Climate Protection Generation” campaign we will again communicate our commitment to climate protection in the coming year. Our aim is to further underscore the sustainable gearing of our entrepreneurial activities and to clearly confirm KELAG‟s green image. In addition, we will show our customers how they can make a joint contribution to climate protection. In addition, we will intensify the open dialog with our stakeholders on a partnership basis regarding the opportunities and risks of the new energy concept and our entrepreneurial activity. We will continue to systematically pursue the course we have taken, guided by values, Earnings stability growth, innovation and climate protection principles. Despite the high level of anticipated uncertainties regarding the market environment, we anticipate earnings stability in 2013. Klagenfurt am Wörthersee, 18 February 2013 The Board of Directors: Univ.-Prof. Dipl.-Ing. Dr. Hermann Egger e. h. Spokesperson of the Board Dipl.-Ing. Harald Kogler e. h. Member of the Board Dipl.-Kfm. Armin Wiersma e. h. Member of the Board
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