Interim / Quarterly Report • Aug 31, 2012
Interim / Quarterly Report
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Referring to the provisions of the Article 22 of the Law on Securities of the Republic of Lithuania and the Rules for the Drawing up and Submission of the Periodic and Additional Information of the Securities Commission of the Republic of Lithuania, we, the undersigned Virgilijus Poderys, Chief Executive Officer, Vytautas Tauras, Director of Finance Department and Svetlana Sokolskytė, Chief Financier-Accounting Division Manager of LITGRID AB, hereby confirm that, to the best of our knowledge, the unaudited interim consolidated financial statements of LITGRID AB for the period ended 30 June 2012 are prepared in accordance with the International Financial Reporting Standards adopted by the European Union, give a true and fair view of the LITGRID AB and consolidated group assets, liabilities, financial position, profit (losses) and cash flows for the relevant period.
Virgilijus Poderys Vytautas Tauras
Svetlana Sokolskytė
Chief Executive Officer
Director of Finance Department
Chief Financier
LITGRID AB
CONSOLIDATED INTERIM REPORT FOR THE FIRST HALF-YEAR OF 2012
Name Legal form Date and place of registration Company code Address of registered office Telephone Fax E-mail
LITGRID AB (hereinafter Litgrid or the Company) Public limited liability company 16-11-2010, Register of Legal Entities of the Republic of Lithuania 302564383 A. Juozapavičiaus g. 13, LT-09311, Vilnius +370 5 278 2777 +370 5 272 3986 [email protected]; www.litgrid.eu
Litgrid represents electricity transmission system operator (hereinafter TSO), managing electricity flows in Lithuania and supporting steady operation of national electric energy system. Litgrid is responsible for infrastructure of Lithuanian energy transmission grid and its connection to the electric energy infrastructure in North and West Europe. Kay strategic projects underway by electricity transmission system operator include development of interconnections with Sweden (NordBalt) and Poland (LitPol Link), development of Lithuanian electricity market and integration thereof into common European electricity market, preparation of national electric energy system to become full member of electricity transmission infrastructure, market and system of continental Europe.
Litgrid mission is to ensure a reliable transmission of electricity and provide competitive environment in an open electricity market.
Litgrid vision provides for complete integration of Lithuanian electricity system into European electricity infrastructure and common electricity market.
Litgrid values include responsibility, professionalism, co-operation, initiative and respect.
Having regained the national independence for over twenty years and being a member of European Union for almost a decade, Lithuanian electricity sector still remains part of a non-European energy system, under central control from a neighbour state. Together with Latvia and Estonia, the Baltic region remains an isolated island within the electricity system of the continental Europe. Litgrid, being the back-bone of the Lithuanian electricity sector, is responsible for balance of electricity consumption and generation in the system and reliable transmission of electricity; the company is also responsible for reliable operation of the national electricity system and complete integration thereof to the European electricity network and system. In implementing objectives of the National Energy Strategy in the field of electricity, Litgrid takes active and responsible steps in key fields as follows:
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
Taking over control for the national power system 2020
Once Lithuania becomes a full and equal participant of European electricity system, electricity sector will see introduction of European system management standards, electricity flows shall be managed based on market principles and system frequency level will involve participation.
Common European electricity market by 2016
Development of electricity market in Lithuania, its integration to the Scandinavian electricity market, and subsequent participation in development of common European electricity market shall ensure competition and freedom of choice to all market players and equal trade in electricity with agents of electricity market of the East European states.
Integration of electricity transmission market to European electricity infrastructure by 2015
Lithuania can boast a solid and well developed electricity transmission, with excellent connections to electricity transmission infrastructure of the East neighbour states; once electricity connections to Sweden (NordBalt) and Poland (LitPol Link) are laid by late 2015, the national transmission grid will have first connecting lines to electricity grids in North and West Europe. Direct current insertion, intended to provide interim connection between Lithuanian and Polish electricity arteries, will allow for trade in electricity between different energy systems, whereas optimum investment into the national grid shall ensure integration of new electricity generators, secure transmission of electricity and reliable system operation.
Litgrid is a pro-European, project-focused undertaking, employing best practices of modern management and social responsibility. The company, implementing energy projects of utmost scale and strategic importance to the entire national economy, retains key competencies only: system management and reliable transmission of electricity, maintenance of national electricity balance, maintenance of infrastructure and project management. Litgrid, specialised undertaking of electricity sector, employs energy professionals of top qualification; technical policy of transmission grid focuses on innovations supporting development of smart grids, regional and common European electricity market and integration of national power system into the infrastructure and system of Continental European Net. Litgrid co-operates with country's technical universities, takes active part in international organisations, responsible for planning of electricity infrastructure, markets and system.
On 3 January 2012, an international public procurement for the installation of the high voltage direct current backto-back converter station with 400 kV switchyard in Alytus was announced. The procurement comprises technical design, acquisition of construction permits, equipment manufacture, construction and installation work.
On 2 February 2012, a contract was signed for the reconstruction of Klaipėda transformer substation, valued at nearly LTL 55 million, with 30 percent of the funds allocated from the European Regional Development Fund.
On 21 February 2012, a contract was signed for the technical design of the reconstruction of Alytus transformer substation. The contract is valued at almost LTL 1.3 million. The consortium that is subsequently awarded the public procurement contract will submit a technical design for the 330 kV switchyard, technical specifications for the procurement of contractual works, geological, geodesic, and archaeological surveys, and will obtain the permission for construction as well as ensure further implementation of the construction project.
On 26 March 2012, the agreement with power exchange Nord Pool Spot to launch a bidding area in Lithuania was signed.
On 26 April 2012, the Government of the Republic of Lithuania authorised Litgrid to implement the Lithuanian electric energy system synchronisation with the European Continental Network (ECN). The country's electricity system synchronisation with the European electricity system is the strategic goal of the Lithuanian energy sector.
On 30 April 2012, an agreement was signed for the performance of a feasibility study for the analysis of the price of electric energy system shift to the West, its economic benefit for Lithuania and the most viable variants for the interconnection with the European electricity network. The agreement was signed by the Baltic electricity transmission system operators Litgrid, Augstsprieguma Tikls (Latvia), Elering (Estonia), and Sweden's Gothia Power AB, which will perform the study.
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
On 18 June 2012, power exchange Nord Pool Spot launched its bidding area in Lithuania.
On 27 June 2012, the Lithuanian Business Support Agency (LVPA) drew up an agreement for the allocation of European Union funds to two projects that are related to international power links with Poland and Sweden. Transformer substations in Alytus and Klaipėda, the sites where the construction of the power links LitPol Link and NordBalt will commence as early as in 2013, will be reconstructed.
As of June 30 2012, the Litgrid group of undertakings included Litgrid AB, Baltpool UAB and Tetas UAB.
| Name | BALTPOOL UAB |
|---|---|
| Legal form | Private limited liability company |
| Date and place of registration | 11-12-2009, Register of Legal Entities of the Republic of Lithuania |
| Company code | 302464881 |
| Address of registered office | A. Juozapavičiaus g. 13, LT-09311, Vilnius |
| Telephone | +370 5 278 2260 |
| Fax | +370 5 278 2707 |
| [email protected]; www.baltpool.lt | |
| Nature of activities | Market operator of derivative instruments for the protection against electricity price fluctuations on the power exchange and natural gas market operator |
| Shareholding interest held by Litgrid | 67% |
| The first concerning to the con- | The Committee Committee Committee |
| Name | Tetas |
|---|---|
| Legal form | Private limited liability company |
| Date and place of registration | 08-12-2005, Register of Legal Entities of the Republic of Lithuania |
| Company code | 300513148 |
| Address of registered office | Senamiesčio g. 102B, LT-35116, Panevėžys |
| Telephone | +370 45 504 618 |
| Fax | +370 45 504 684 |
| Type of activities | Specialised services of technical maintenance, repair and installation of transformer substations, distribution stations, testing and trial work, design of energy objects |
| Shareholding interest held by Litgrid | 61.13% |
Litgrid Group also controls shares of the following undertakings:
LitPol Link Sp.z.o.o (Poland) 50% of shares and granted votes Elektros tinklo paslaugos UAB 28.87% of shares and granted votes Technologijų ir inovacijų centras UAB 20.36% of shares and granted votes NT Valdos UAB 0.35% of shares and granted votes
Litgrid, electricity transmission system operator, provides the following services:
Electricity transmission service is transmission of electricity via high-voltage (330-110 kilovolts, kV) facilities. Transmission system operator (hereinafter the TSO) transmits electricity from generators to users or suppliers. Transmission of electricity is a regulated activity. On 24 February 2011, for the purposes of transmission activities, the National Control Commission for Prices and Energy (hereinafter the Commission) granted an open-ended licence for transmission of electricity to Litgrid public limited liability company, effective as of 1 March 2011.
Key objective of SOP activities is to reliable, efficient, quality, transparent and safe transmission of electricity.
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
Litgrid warrants the reliable operation of the system and for this purpose it buys from energy generators capacity reserve service in electricity generation facilities and provides to the users capacity reserve services. Capacity reserve is necessary, in case of an unexpected reduction in electricity generation or increase in consumption.
Litgrid ensures balance of the national electricity generation and consumption. Balancing electricity is electricity, consumed or generated not in compliance with electricity consumption or generation schedules. Litgrid organizes the trade of the balancing electricity, purchases and/or sells the balancing electricity necessary to maintain the national balance of the electricity generation and consumption.
Regulating electricity is electricity bought and/or sold on instruction of TSO, required to perform balancing function national electricity consumption and generation. The trade is carried out at the regulating electricity auction organized by Litgrid. The auction is used by the regulating electricity suppliers and transmission system operators from other countries, provided they are technically capable to promptly change electricity generation and consumption modes and have entered into a respective contract with Litgrid.
Public interests in electricity sector include services, that ensure and enhance national energy security, as well as integration and use of electricity using renewable sources. List of public obligation services, providers and procedure of provision shall be approved by the Government of the Republic of Lithuania or its authorised authority, in line with public interests in electric energy sector. POS funds are funds payable to providers of POS services.
Litgrid provides the following POS services:
Procedure of POS provision procedure is prescribed by the description of provision procedure of public obligation services, approved by the order of the Ministry of Energy of the Republic of Lithuania dated 8 October 2010 No 1-283. POS funds administration procedure is prescribed by the description of administration procedure of funds of public obligation services, approved by resolution of the Commission dated 17 December 2010 No O3-328. The POS provision description provides, that Litgrid, transmission system operator, shall be administrator of POS funds, i.e. it shall collect POS funds and pay the same to beneficiaries of POS funds, as designated by the Government of the Republic of Lithuania.
Tetas UAB, subsidiary of Litgrid, provides the following technical maintenance and repair services of transmission grid facilities:
The activity of Tetas UAB complies with the requirements of ISO 9001:2008 and ISO 14001:2004. The Quality and Environment Protection Management System, implemented in the company in 2007, is applied for the operation of the electric facilities up to 400 V and the performance of the designing and construction works of the building part of the special designation constructions.
Services of market operator of derivative instruments for the protection against electricity price fluctuations on the power exchange
The electricity transmission system operator, acting as an independent participant of electricity system, is responsible for development of national electricity market. Such practice is also met elsewhere in Europe.
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
On 18 June 2012, Litgrid subsidiary Baltpool, formerly the Lithuanian power exchange operator, became the market operator trading in derivative instruments for the protection against electricity price fluctuations on the power exchange. The market of Baltpool-administered derivative instruments for the protection against electricity price fluctuations on the power exchange involves the participation of the Lithuanian bidding area of Nord Pool Spot power exchange participants, seeking protection against price fluctuations.
The market of derivative instruments offers power exchange participants the possibility to conclude insurable contracts and establish the price of electricity futures in advance. Insurable contracts allow market participants to set the price of their electricity futures for the coming time, thus offering protection against possible electricity price fluctuations on the power exchange.
Environmental impact assessment or selection procedures are performed for the electricity transmission lines and transformer substations to be built, the finding whereof will be taken into consideration where preparing technical designs. Designing of new structures or reconstruction of the old ones is subject to environmental requirements. In any case it is endeavored to select such equipment that would be less harmful to the environment. Where procuring services, the demand is that the contractors would have introduced the Environmental Management Systems as per LST EN ISO 14001 standard; contractors are committed to manage waste produced during construction and provide the Company with the supporting documentation.
Litgrid operates in accordance with administrative documents governing waste and waste-water treatment and safe use of chemical substances by establishing environmental requirements to objects to be built or being reconstructed.
The main hazardous waste produced includes insulating oil and waste related to the use of such oil, accumulators, luminescent lamps, remains of various chemical substances, etc. Litgrid has liability insurance relating to damage, caused to environment.
Direct customers of Litgrid are users of electricity transmission grid and balancing and regulating energy suppliers.
Users of transmission grid:
Balancing and regulating energy suppliers are electric power generators and suppliers.
There were 692 employees employed in Litgrid Group for the June 2012: Litgrid - 201 employees, Tetas - 479 employees, Baltpool - 12 employees (whereof three - Litgrid employees, working in the secondary position in Baltpool). In the first half of 2012, staff turnover at Litgrid reached 6.4%.
The payroll fund in the reporting year amounted to 13 373 thousand litas.
| Number of employees for the 30 June 2012 |
Average monthly salary, LTL |
|
|---|---|---|
| Workers | 270 | 1768 |
| Specialists | 407 | 3644 |
| Executive personnel | 15 | 12 707 |
| Total | 692 | 3 1 0 9 |
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
Education of employees by group at the end of the period
| Number of employees for the 30 June 2012 |
Number of employees for the 30 June 2011 |
|
|---|---|---|
| Number of employees | 692 | 621 |
| of which have: University education College education Secondary and post-secondary education |
367 196 129 |
353 144 124 |
In 2011 Litgrid signed a frame agreement with the labor union. This agreement defined and ensured a fair payroll policy, regulated socio-economic relations between the employer and the employee.
Litgrid activities are based on the principles of social responsibility, cohesive development, transparency, as well as progressive environmental protection. The Company's activity is a prerequisite for successful functioning of national economy, whereas long-term strategic objectives as well as strategic energy projects contribute to security and establishment of energy independence of the country. The scope and importance of projects implemented encourages the Company and its personnel as well as management to follow the highest professional and ethical standards as well as assume responsibility in nourishing and educating consciousness, responsibility, as well as willingness of society and individual groups thereof to be actively involved in creating the welfare of the country.
Implementing social responsibility policy, Litgrid gives most of its attention to ensuring honest and motivating work conditions, educating responsibility and public spirit, helping the society to grow and develop.
Litgrid, on the annual basis, draws up research and development programs for development of the electricity system and improvement of the effectiveness of the transmission network. One of the main tasks is to reconstruct energy objects by replacing old equipment with the new and modern one and implementing the modern relay protection, systemic automation, control, information collection and transfer systems. The plans for construction and reconstruction of the objects, with reference to scientific research and studies, are drawn for the period of ten years and updated annually.
On 30 April 2012, Lithuanian, Latvian, and Estonian electricity transmission system operators and Sweden's Gothia Power AB signed an agreement for the performance of a feasibility study for the analysis of the price of electric energy system shift to the West, its economic benefit for Lithuania and the most viable variants for the interconnection with the European electricity network. The agreement is valued at almost EUR 1.25 million. The feasibility study is expected to be completed by the end of 2013.
Consolidated financial statements of Litgrid Group are prepared as per EU certified International Financial Reporting Standards. Litgrid internal control process covers the process control of preparation of service provision related business processes, information system operation, and financial accounts.
Preparation of consolidated financial statement is determined by Litgrid accounting policy and description of procedures that ensure the performance of accounting as per EU certified International Financial Reporting Standards and laws of the Republic of Lithuania. Litgrid description of procedures provides for eventual risks relevant to accounting and preparation of financial statement, methods and control thereof, evidentiary material of control, and employees in charge of control.
The Company has appointed the persons in charge of risk management. The Department of Internal Audit and Prevention continually assesses the activity process of the Company and related risks as well as gives recommendations to the management on management of risks observed.
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
The results of the Group's and the Company's activities are given in the table below.
| First half-year 2012 | First half-year 2011 | |||
|---|---|---|---|---|
| Group | Company | Group | Company | |
| Financial results (in thousands of litas) | ||||
| Electricity related sales revenue | 209 895 | 209 710 | 187 468 | 187418 |
| Other revenue | 24 949 | 3692 | 21 674 | 2 1 6 2 |
| EBITDA | 76 770 | 75 896 | 61 221 | 60 275 |
| Operating profit (loss) | 11 504 | 13 4 35 | (6690) | (6341) |
| Net profit (loss) | 11 254 | 12836 | (4088) | (4464) |
| Cash flow from ordinary activities | 63 941 | 70 961 | 42 645 | 44 956 |
| Financial ratios | ||||
| EBITDA margin (%) | 32,7 | 35,6 | 29,3 | 31,8 |
| Average return on equity (%) | 1,2 | 1,5 | (0,4) | (0,5) |
| Average return on assets (%) | 0,9 | 1,0 | (0,3) | (0,4) |
| Equity/assets (%) | 63,0 | 63,4 | 79,9 | 80,5 |
| Liabilities/Equity (%) | 43,4 | 42,4 | 19,4 | 20,5 |
| Financial liabilities/Equity (%) | 0,0 | 0,0 | 0,0 | 0,0 |
| Free cash flow (FCF)/revenue (%) | 31,9 | 38,8 | (7, 9) | (7, 8) |
| TSO performance indicators | ||||
| Volume of electricity transmitted, million kWh | 4 5 5 5 | 4 6 20 | ||
| Losses in the transmission network (%) | 2,20 | 2,25 | ||
| END, MWh (volume of electricity not delivered due to loss of connections)* |
1,62 | 0,00 | ||
| AIT, in minutes (average interruption time)* | 0,08 | 0,00 |
* Only for reasons attributable to the operator's liability and non-identified reasons.
Revenue of the first half-year of 2012 was 234.8 million litas and increased by 12.3% compared to first half-year of 2011 (234.8 million litas).
Transmission revenue totaled 109.4 million litas or 47.1 percent of total income. Compared to first half-year of 2011, the income increased by 6.8 percent.
In the first half-year of 2012 Litgrid transmitted 4 555 million kWh of electric power through high voltage electricity network for the needs of the country or 1.4 percent less than transmitted in the first half-year of 2011. For distribution networks operator Lesto was transmitted 4 182 million kWh - 2.5 percent more than in the same period in 2011, for other consumers - 373 million kWh - 30.7 percent less due to increased own generation and lower electricity demand, also due to the maintenance in the Orlen Lietuva oil refinery. The growth in revenue was due to increased actual electricity transmission price which was 2.40 ct/kWh, while it was 2.22 ct/kWh in the same period of 2011. The price difference is due to different proportions of energy and capacity components.
Revenue from balancing-regulating electricity increased by 27.4 percent and totaled 50 million litas (21.3 percent of total income of the Group), revenue from power reservation increased by 16.1 percent and totaled 32.8 million litas (14 percent). revenue from the participating in the inter-transmission system operators compensation mechanism totaled 7.5 million litas (3.2 percent of total income of the Group), revenue from public service obligations - 6.3
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
million litas (2.7 percent), other revenue related to electricity (income from reactive power, transit, connection of new consumers) - 3.8 million litas (1.6 percent).
Revenue from design, technical service, repair works, and investment projects totaled 21.3 million litas or 9.1 percent of total income of the Group, other revenue - 3.7 million litas (1.5 percent).
The expenses of the Group for the first half-year of 2012 totaled 223.3 million litas. Compared to the expenses of the Group for the first half-year of 2011 (215.8 million litas), it increased by 3.5 percent.
The expenses of purchase of electricity and related services accounted for the major share of the expenses of the Group - 106.4 million litas or 47.7 percent, which, compared to the same period of 2011 (96.7 million litas), increased by 10.1 percent. Whereof expenses of balancing-regulating electricity increased by 20.6 percent and totaled 36.9 million litas (16.5 percent of total expenses of the Group), expenses of power reservation increased by 12 percent and totaled 34.6 million litas (15.5 percent), expenses of purchase of electricity for compensation of technological losses in the network decreased by 7.4 percent and totaled 20.4 million litas (9.2 percent). Expenses of the participating in the inter-transmission system operators compensation mechanism totaled 8.4 million litas (3.8 percent), expenses of provision of public service obligations - 6.1 million litas (2.7 percent).
Depreciation and amortisation expenses decreased by 5.8 percent and totalled 63.1 million litas (28.2 percent of total expenses of the Group), other operational expenses increased by 3.2 percent and totalled 53.8 million litas $(24.1$ percent).
The Group's profit before tax for the first half-year of 2012 totaled 13.5 million litas, while the loss before tax for the same period of 2011 totaled 4.6 million litas.
The Group's EBITDA totaled 76.8 million litas, and compared to the first half-year of 2011 increased by 24.5 percent. EBITDA margin - 32.7 percent (29.3 percent in the same period of 2011).
For the first half-year of 2012 the Group's asset totaled 2.412 million LTL. Long-term asset of the Group totaled 86.6 percent of total asset of the Group. At the ordinary general meeting of "Litgrid" shareholders, convened on 30 April 2012, the shareholders decided to distribute the Company's profits for 2011 and pay 390.9 million litas in dividends. Due to the payment of dividends, the share of the shareholders' in the Group's assets decreased from 75.9 percent in December 2011 to 63 percent on 30 June 2012.
At the 30 June 2012 the Group had no financial liabilities to credit institutions, its cash, cash equivalents, and investments, kept until redemption, amounted to 88.2 million litas. 97.9 million litas funds of administered public service obligations, was kept in a separate bank account, and accounted as other current assets.
Net cash flow from the main activities of the Group for the first half-year of 2012 totaled 63.5 million litas (42.6 million litas in 2011), payments for acquired long-term tangible and intangible asset totaled 42.1 million litas (109.2 million litas in 2011). In the first half-year of 2012 190.9 million litas were paid in dividends. The rest part of the dividends according to payment agreement will be paid in the second half-year of 2012.
Net cash flow excluding cash flow into term deposits and investments held to maturity was negative - (115.9) million litas.
According to the requirements for electricity transmission reliability and quality of services approved by the National Control Commission for Prices and Energy, the following indicators are used for establishing the electricity transmission reliability level: END, i.e. volume of electricity not delivered, which shows the volume of electricity that was not transmitted due to loss of connections during the reporting period, and AIT, i.e. the average interruption time.
The minimum level of reliability determined by the Commission for 2012 was as follows: END - 5 MWh (actually it was 1.62 MWh), AIT - 0.26 min (actually it was 0.08 min).
9
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
Litgrid's investment in the property to be used in the transmission activity in the first half-year of 2012 amounted to 51.9 million LTL. The major portion of the investment was allocated for the implementation of strategic objects -30.9 million LTL (60 percent of total investment). Investment into reconstruction and expansion of the transmission grid totaled 21 million LTL (40 percent of total investment).
Electricity sector is a particularly important area of economy that highly influences national political and economic interests. The management, structure and functioning of the power sector in the Republic of Lithuania is under the regulation of the Law on Energy and the legal instruments. Any amendments of the legal instruments regulating the power sector either at the European Union or national level may result in the changes of Litgrid Group operation.
The prices of electricity services are regulated and ceiling of prices are set by the National Control Commission for Prices and Energy. Results of Litgrid activities are directly dependent on these decisions.
At the performance of the activity Litgrid Group companies may encounter the financial risk, i.e. credit risk, liquidity risk and market risk (foreign currency risk, interest rate risk with respect of the true value and cash flow, securities price risk). At managing such risks the Group companies seek to mitigate the influence of the factors that may have negative impact on the financial results of the Group activity. Risk management is performed by the Finance Planning and Treasury Department of the Company pursuant to the description of treasury management procedure of Litgrid Group, approved by Litgrid Board.
The Lithuanian power system has many interconnecting system lines with the neighboring power systems. The available power and balancing facilities are rather scarce therefore the management of the capacity and power balancing is quite complicated.
About 50 percent of all the equipment in transformer substations is older than 25 years. 35 percent of all the 110 kV overhead lines and 24 percent of all 330 kV overhead lines are older than 45 years. Failures and breakdowns of the most important technological facilities used in the activities can have a negative effect on the activities and financial results of Litgrid.
The companies of the Group follow environmental protection rules providing for proper marking, use and storage of hazardous substances used by it, ensures that the facilities operated by it meet the requirements applicable to their use. The work in operated objects, where there is more risk of environmental damage due to the volumes of emitted pollutants or production of waste, is carried out in accordance with Integrated Pollution Prevention and Control (IPPC) permits issued to the Company by regional environmental protection departments.
The explanatory note of financial statements for the first half-year of 2012 explains the financial information in more detail.
The Government of the Republic of Lithuania, that indirectly (through Visagino Atominė Elektrinė UAB) holds 97.5 percent of Litgrid's shares, by its Resolution No. 20 of 14 January 1997 (version of Resolution No. 1451 of 3 December 2001) has set principles of distribution of dividend for state-owned shares.
At the ordinary general meeting of Litgrid shareholders, convened 30 April 2012, the shareholders decided to distribute the Company's profits for 2011 and pay 0.775 litas per share in dividends.
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
The Government of the Republic of Lithuania on 4 July 2012 has adopted a resolution on the establishment of a private limited company with the purpose of managing the electricity transmission system operator Litgrid and national asset investment. On 19 July 2012 the private limited company EPSO-G was established and on 25 July 2012 was registered by the Ministry of Energy. The shares of Litgrid owned by the Visagino atomine elektrine will be passed to EPSO-G by 1 October 2012.
Litgrid has not acquired own shares; the Company did not acquire and did not assign own shares over the accounting period. Daughter-enterprises of the Company have not acquired the Company's shares either.
The authorized capital of the Company registered in the Register of Legal Entities on 16 November 2010 amounts to LTL 504,331,380. It is divided into 504,331,380 ordinary registered shares of one Litas nominal value each. All the shares are fully paid up and grant equal rights to the shareholders. As of 22 December 2010 Litgrid's shares have been included in Subsidiary trade list of NASDAQ OMX Vilnius Stock Exchange, issue ISIN code LT0000128415.
The number of shareholders of the Company for the first half year of 2012 was 5741 (five thousand seven hundred fourty one). For the first half year of 2012 Visagino Atominė Elektrinė UAB (Žvejų g. 14, LT-09310 Vilnius, organization identification number 301844044) owned 491,736,153 ordinary registered shares of the Company, i.e. 97.5 percent of Litgrid's authorized capital.
On 25 October 2011 Litgrid signed a contract with AB SEB bankas on the Company's securities accounting and services related to securities accounting. The contract is valid until 1 November 2012.
Securities of daughter-enterprises of the Company are not traded on stock exchange.
Articles of Association of Litgrid are amended in the manner prescribed by the Law on Companies of the Republic of Lithuania. The decision is made by 2/3 majority vote of the shareholders attending the meeting.
The General Meeting of Shareholders is the supreme body of the Company.
The competence of the General Meeting of Shareholders and the procedure for convening the meeting and adopting decisions are governed by laws, other legal acts and the Articles of Association.
The Board, constituting five members, is elected for the term of office of four years. The term of office of the Board starts after the end of the General Meeting of Shareholders that has elected the Board and ends on the day of the General Meeting of Shareholders that is held during the year of the end of the term of office of the Board.
If the Board or the member of the Board is withdrawn, resigns, or abandons the office due to some other reasons before the end of term of office, a new Board or a member of the Board is elected for the remaining term of office. Shareholder of the Company or his representative, where suggesting the candidacies to the members of the Board, must provide information in writing on qualification, experience, and eligibility of suggested member to hold the office of a member of the Board. Candidates to the members of the Board must submit a written consent to hold the office and the declaration of interests.
The Board shall elect the chairman of the Board from among its members.
The Board follows the laws, other legal acts, Articles of Association, decisions of the General Meeting of Shareholders, as well as regulation of work of the Board.
The Board is a collegial management body of the Company.
Powers of the Board, procedure of decision-making as well as election and revocation of the members is established by the laws, other legal acts, and Articles of Association.
The Board is subordinate to the General Meeting of Shareholders.
CONSOLIDATED INTERIM REPORT AS AT 30 JUNE 2012
The Board considers and approves the strategy of the Company's activities, its budget, as well as the organizational structure of the Company, employee positions, and total number thereof, establishes the terms and conditions of employment contract of the manager of internal audit subdivision, approves his job description, provides incentives for and imposes penalties against him. The Board makes decisions on assignment of shares or rights granted by shares to other persons, issuance of debenture bonds, allocation of assistance, involvement of the Company in the activities of various associations, establishment of daughter-enterprises and subsidiaries as well as activities thereof. Moreover, the Board takes the decision on the transactions of the value higher than 10 million litas and disposal of facilities of strategic significance to national safety.
The Board also resolves the issues in respect of which the Board is addressed by the Managing Director. If the decisions of the Board require the approval of the General Meeting of Shareholders, the Board decisions may be implemented only upon approval of the General Meeting of Shareholders.
The Managing Director is a one-person managing body of the Company. The Managing Director organises the Company's activities, manage the Company, act on behalf of the Company and unilaterally conclude transactions.
The competence of the Managing Director and the procedure for election and recall thereof are governed by laws, other legal acts and the Articles of Association.
| issuer's shares held |
||
|---|---|---|
| Board 03/11/2011 Arvydas Darulis Chairman of the Board Romas Švedas 28/10/2010 Member of the Board 28/10/2010 Violeta Greičiuvienė Member of the Board Renatas Šumskis 28/10/2010 Member of the Board 28/10/2010 Vidmantas Grušas Member of the Board 08/12/2010 Virgilijus Poderys Member of the Board 01/04/2011 Gintaras Labutis Member of the Board 03/11/2011 Viktorija Sankauskaitė Member of the Board 01/04/2011 Valentinas Pranas Member of the Board Milaknis 08/12/2010 Virgilijus Poderys Managing Director 17/11/2010 Tatjana Didikienė Chief Financier 02/07/2012 Svetlana Sokolskyte Chief Financier |
12/09/2011 01/04/2011 01/04/2011 02/11/2011 02/05/2012 |
$\overline{\phantom{a}}$ îΔ, |
Benefits for the work in the Board of the Company are not paid to the manager of the Company. One of the Board members was paid 3 450 litas. Total amount of salary, calculated for the managing director and chief financier of the company over the accounting period, was 175 616 litas; average amount of calculated salary per person (f managing director and chief financier) was 87 808 litas.
Information on major transactions of affiliated parties, amounts thereof, nature of relations between affiliated persons, and such other information on transactions, which is necessary in order to understand the financial status of the company, is given in the explanatory note to the financial accounts under Note 9.
The Company complies with all provisions of Sections IV-VIII of the Transparency Guidelines, except for the following:
| 20.06.2012 | Resolutions Adopted on June 20, 2012 at the Extraordinary General Shareholders Meeting of LITGRID AB |
|---|---|
| 29.05.2012 | Convocation of Extraordinary General Meeting of Shareholders of LITGRID AB |
| 25.05.2012 | LITGRID AB revenue increased in 2012 O1 |
| 23.05.2012 | Draft Government resolution on Litgrid unbundling submitted |
| 23.05.2012 | Announcement of LITGRID AB Dividend Payment Procedure for 2011 |
| 18.05.2012 | "Litarid" will borrow 58 million Euros |
| 02.05.2012 | CORRECTION: Annual information for the year 2011 confirmed by the Ordinary General Shareholders Meeting |
| 30.04.2012 | Resolutions Adopted on April 30, 2012 at the Ordinary General Shareholders Meeting of LITGRID AB |
| 30.04.2012 | Resolutions Adopted on April 30, 2012 at the Ordinary General Shareholders Meeting of LITGRID AB |
| 06.04.2012 | Convocation of Ordinary General Meeting of Shareholders of LITGRID AB |
| 06.04.2012 | LITGRID AB Obliged to Implement Activity Separation Plan by 1 October |
| 30.03.2012 | Litgrid Prepared the Unbundling Plan |
| 26.03.2012 | Nord Pool Spot to Launch Bidding Area in Lithuania |
| 15.03.2012 | Preferred method for separation of LITGRID AB to be presented by March 30, 2012 |
| 29.02.2012 | LITGRID AB announces interim activity results for 2011 |
| 21.02.2012 | Parties Responsible for Preparation of Technical Design of the LitPol Link International Power Link Selected |
| 08.02.2012 | New Version of the Law on Electricity Comes into Effect |
| 01.02.2012 | Klaipėda Transformer Substation Reconstruction Contract Signed |
All information on material events that took place during the first six months of 2012 is available on the website of NASDAQ OMX Vilnius at www.nasdagomxbaltic.com/market/?pg=news and on the website of the Company at www.litgrid.eu.
Consolidated interim report signed on 31 August 2012
$-e$
Virgilijus Poderys General Director
Vytautas Tauras Director of Finance Department
CONSOLIDATED AND THE COMPANY'S CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (UNAUDITED)
TABLE OF CONTENTS
| PAGE | |
|---|---|
| REVIEW REPORT | $3 - 4$ |
| CONDENSED INTERIM FINANCIAL INFORMATION | |
| CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION | 5 |
| CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE INCOME | $6 - 7$ |
| CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY | $8 - 9$ |
| CONDENSED INTERIM STATEMENT OF CASH FLOWS | 10 |
| NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION | $11 - 21$ |
The condensed interim financial information was signed on 30 August 2012.
Ver
Virgilijus Poderys
Chief Executive Officer
FIM
Vytadtas Tauras
Divector of Finance Department
Světlana Sokolskyté
Chief Financier
$\overline{2}$
Our report has been prepared in Lithuanian and English languages. In all matters of interpretation of information, views or opinions, the Lithuanian language version of our report takes precedence over the English language version.
To the shareholders and Board of Directors of LITGRID AB
We have reviewed the accompanying stand alone and consolidated condensed interim statement of financial position of LITGRID AB ("the Company") and its subsidiaries (collectively "the Group") as at 30 June 2012 and the related stand alone and consolidated condensed interim statements of comprehensive income, changes in equity and cash flows for the six-month period then ended, and condensed interim explanatory notes set out on pages $5 - 21$ . Management is responsible for the preparation and presentation of this stand alone and consolidated condensed interim financial information in accordance with International Financial Reporting Standards as adopted by the European Union applicable to interim financial reporting (IAS 34, "Interim financial reporting"). Our responsibility is to express a conclusion on this stand alone and consolidated condensed interim financial information based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
According to the Company's and the Group's accounting policy, property, plant and equipment should be carried at revalued amounts (being their fair values as of the date of revaluation less subsequent accumulated depreciation and impairment losses) and are subject to an impairment test when impairment indicators exist. As explained in Note 3.3 to the stand alone and consolidated condensed interim financial information, the amendments to the legislation may have had a significant adverse impact on the fair value and recoverable amount of the Company's and the Group's assets. The management has not reassessed fair values of property, plant and equipment with the carrying amounts of LTL 1,951 million and LTL 1,954 million, respectively, as at 30 June 2012 (LTL 1,986 million and LTL 1,989 million, respectively, as at 31 December 2011), or carried out a proper impairment test. It has not been possible to estimate reliably the effects of this non-compliance on the stand alone and consolidated condensed interim financial information.
PricewaterhouseCoopers UAB, J. Jasinskio 16B, LT-01112 Vilnius, Lithuania T: +370 (5) 239 2300, F: +370 (5) 239 2301, E-mail: [email protected], www.pwc.com/lt
PricewaterhouseCoopers UAB, company code 111473315, VAT payer's code LT114733113, registered office at J. Jasinskio 16B, LT-01112 Vilnius,
is a private company registered with the Legal Entities' Register of the Republic o
Based on our review, with the exception of the effect on the stand alone and consolidated condensed interim financial information of the matter described in the preceding paragraph, nothing has come to our attention that causes us to believe that the accompanying stand alone and consolidated condensed interim financial information is not prepared, in all material respects, in accordance with International Financial Reporting Standards as adopted by the European Union applicable to interim financial reporting (IAS 34, "Interim financial reporting").
On behalf of PricewaterhouseCoopers UAB
Rimyydas Jogėla
Director Additor's Certificate No.000457
Vilnius, Republic of Lithuania 30 August 2012
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius
| Notes | Group at 30 June 2012 |
Company at 30 June 2012 |
Group at 31 December 2011 |
Company at 31 December 2011 |
|
|---|---|---|---|---|---|
| ASSETS | unaudited | unaudited | |||
| Non-current assets: | |||||
| Intangible assets | 1,392 | 1,062 | 1,759 | 1,434 | |
| Property, plant and equipment | 4 | 1,954,710 | 1,950,913 | 1,990,187 | 1,985,537 |
| Prepayments for property, plant, equipment | 111,109 | 111,109 | 87,029 | 87,029 | |
| Investments in subsidiaries | 8,608 | 8,608 | |||
| Investments in associates and joint ventures | 21,056 | 21,332 | 20,804 | 21,332 | |
| Deferred income tax assets | 303 | 297 | |||
| Other financial assets | 1,084 | 1,084 | 1,084 | 1,084 | |
| Total non-current assets | 2,089,654 | 2,094,108 | 2,101,160 | 2,105,024 | |
| Current assets | |||||
| Inventories | 7,105 | 2,177 | 4,202 | 2,214 | |
| Prepayments | 2,337 | 411 | 236 | 2,440 | |
| Trade receivables | 49,425 | 38,660 | 45,310 | 37,782 | |
| Other receivables | 75,767 | 75,426 | 88,911 | 79,181 | |
| Other financial assets | 99,884 | 99,884 | 61,096 | 61,096 | |
| Time deposits | 115,079 | 115,079 | |||
| Held-to-maturity investments | 21,539 | 21,539 | |||
| Cash and cash equivalents | 88,235 | 85,723 | 65,185 | 57,131 | |
| Total current assets | 322,753 | 302,281 | 401,558 | 376,462 | |
| TOTAL ASSETS | 2,412,407 | 2,396,389 | 2,502,718 | 2,481,486 | |
| EQUITY AND LIABILITIES | |||||
| Capital and reserves: | |||||
| Share capital | 504,331 | 504,331 | 504,331 | 504,331 | |
| Share premium | 29,621 | 29,621 | 29,621 | 29,621 | |
| Revaluation reserve | 257,109 | 256,899 | 267,179 | 266,960 | |
| Legal reserve | 50,465 | 50,433 | 50,477 | 50,433 | |
| Other reserves | 5 | 654,738 | 654,654 | 979,738 | 979,654 |
| Retained earnings | 6 | 19,946 | 23,991 | 63,942 | 66,951 |
| Equity attributable to owners of the parent | |||||
| company | 1,516,210 | 1,519,929 | 1,895,288 | 1,897,950 | |
| Non-controlling interests | 3,728 | 4,253 | |||
| Total equity | 1,519,938 | 1,519,929 | 1,899,541 | 1,897,950 | |
| Non-current liabilities | |||||
| Grants | $\overline{7}$ | 232,085 | 232,085 | 182,359 | 182,359 |
| Deferred income | 14,299 | 14,299 | 14,642 | 14,642 | |
| Other non-current payables and liabilities | 12,336 | 12,152 | 7,458 | 7,273 | |
| Deferred income tax liabilities | 172,631 | 172,631 | 178,588 | 178,588 | |
| Total non-current liabilities | 431,351 | 431,167 | 383,047 | 382,862 | |
| Current liabilities | |||||
| Trade payables | 2,285 | ||||
| Advance amounts received | 67,539 | 58,192 | 54,921 | 52,459 | |
| Income tax payable | 2,093 | 1,347 | 4,340 | 1,363 | |
| Other payables | 14,176 | 13,976 | 7,162 | 6,800 | |
| Total current liabilities | 375,025 | 371,778 | 153,707 | 140,052 | |
| Total liabilities | 461,118 | 445,293 | 220,130 | 200,674 |
583,536
2,481,486
$603,177$
2,502,718
876,460
The accompanying notes form an integral part of this condensed interim financial information.
TOTAL EQUITY AND LIABILITIES
Current liabilities
892,469
$2,412,407$ $2,396,389$
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius
| Group January - June 2012 |
Company January - June 2012 |
Group January - June 2011 |
Company January - June 2011 |
|
|---|---|---|---|---|
| Notes | ||||
| unaudited | unaudited | unaudited | unaudited | |
| Revenue | ||||
| Sales of electricity and related services | 209,895 | 209,710 | 187,468 | 187,418 |
| Other operating income | 24,949 | 3,692 | 21,674 | 2,162 |
| Total revenue | 234,844 | 213,402 | 209,142 | 189,580 |
| Operating expenses | ||||
| Purchase of electricity and related services | (106, 440) | (107, 368) | (96,708) | (97, 917) |
| Depreciation and amortisation | (63, 073) | (62, 437) | (66, 949) | (66, 388) |
| Wages and salaries and related expenses | (17, 272) | (8,150) | (16, 945) | (8, 143) |
| Repair and maintenance expenses | (6, 501) | (10, 047) | (6, 261) | (9,944) |
| Telecommunications and IT systems expenses | (7, 229) | (6, 615) | (8,283) | (7, 836) |
| Write-offs of property, plant and equipment | (93) | (93) | (790) | (790) |
| Other expenses | (22, 732) | (5,257) | (19, 896) | (4,903) |
| Total operating expenses | (223, 340) | (199, 967) | (215, 832) | (195,921) |
| OPERATING PROFIT (LOSS) | 11,504 | 13,435 | (6, 690) | (6, 341) |
| 1,952 | 1,841 | 1,360 | 1,240 | |
| Finance income Finance costs |
(222) | (219) | (9) | (4) |
| Finance income, net | 1,730 | 1,622 | 1.351 | 1.236 |
| Share of profit (loss) of associates and joint ventures |
20 | 730 | 0 | |
| Gain on change in ownership interests in associate | 232 | $\mathbf{o}$ | ||
| 252 | 730 | $\overline{0}$ | ||
| PROFIT (LOSS) BEFORE INCOME TAX | 13,486 | 15,057 | (4,609) | (5, 105) |
| (8, 196) | (8, 179) | (5,248) | (5,045) | |
| Current income tax expenses Deferred income tax income |
5,964 | 5,958 | 5,769 | 5,686 |
| (2, 232) | (2, 221) | 521 | 641 | |
| PROFIT (LOSS) FOR THE PERIOD | 11,254 | 12,836 | (4,088) | (4, 464) |
| COMPREHENSIVE INCOME (LOSS) | 11,254 | 12,836 | (4,088) | (4, 464) |
| PROFIT (LOSS) AND COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD ATTRIBUTABLE TO: |
||||
| Owners of the Company | 11,779 | 12,836 | (4,088) | (4, 464) |
| Non-controlling interest | (525) | |||
| 11,254 | 12,836 | (4,088) | (4, 464) | |
| Basic and diluted earnings (deficit) | ||||
| 10 per share (in LTL) |
0.02 | (0.01) |
The accompanying notes form an integral part of this condensed interim financial information.
. . . . . . . . . . . . . . . . . . . .
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius
| Notes | Group April - June April - June April - June April - June 2012 |
Company 2012 |
Group 2011 |
Company 2011 |
|---|---|---|---|---|
| unaudited | unaudited | unaudited | unaudited | |
| Revenue | ||||
| Sales of electricity and related services | 94,137 | 94,040 | 85,917 | 85,879 |
| Other operating income | 16,232 | 1,866 | 14,744 | 1,331 |
| Total revenue | 110,369 | 95,906 | 100,661 | 87,210 |
| Operating expenses | ||||
| Purchase of electricity and related services | (51, 614) | (52, 042) | (44, 075) | (44, 678) |
| Depreciation and amortisation | (31, 568) | (31, 231) | (33, 467) | (33, 189) |
| Wages and salaries and related expenses | (9, 280) | (4, 226) | (9, 103) | (4, 377) |
| Repair and maintenance expenses | (4, 633) | (6, 919) | (71) | (3, 409) |
| Telecommunications and IT systems expenses | (3,486) | (3, 129) | (4, 141) | (3,882) |
| Write-offs of property, plant and equipment | (306) | (306) | ||
| Other expenses | (15,099) | (2, 712) | (15, 317) | (2,601) |
| Total operating expenses | (115,680) | (100, 259) | (106, 480) | (92, 442) |
| OPERATING PROFIT (LOSS) | (5, 311) | (4, 353) | (5, 819) | (5, 232) |
| Finance income | 965 | 917 | 718 | 648 |
| Finance costs | (220) | (217) | (7) | (2) |
| Finance income, net | 745 | 700 | 711 | 646 |
| Share of profit (loss) of associates and joint | ||||
| ventures | (174) | 206 | ||
| Gain on change in ownership interests in associate | ۰ | |||
| (174) | 206 | |||
| PROFIT (LOSS) BEFORE INCOME TAX | (4,740) | (3,653) | (4, 902) | (4,586) |
| Current income tax expenses | (2,350) | (2, 353) | (1,754) | (1,676) |
| Deferred income tax income | 2,995 | 3,014 | 2,474 | 2,361 |
| 645 | 661 | 720 | 685 | |
| PROFIT (LOSS) FOR THE PERIOD | (4,095) | (2,992) | (4, 182) | (3,901) |
| Other comprehensive income | ||||
| Other comprehensive income (loss) recognised directly in equity |
(5) | |||
| Other comprehensive income, net of deferred | ||||
| income tax COMPREHENSIVE INCOME (LOSS) FOR THE |
(5) | |||
| PERIOD | (4, 095) | (2,992) | (4, 187) | (3,901) |
| PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLE TO: | ||||
| Owners of the Company | (3,902) | (2,992) | (4, 196) | (3,901) |
| Non-controlling interest | (193) | 14 | ||
| (4,095) | (2,992) | (4, 182) | (3,901) | |
| COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD ATTRIBUTABLE TO: |
||||
| Owners of the Company | (3,902) | (2,992) | (4, 201) | (3,901) |
| Non-controlling interest | (193) | 14 | ||
| (4,095) | (2,992) | (4, 187) | (3, 901) | |
| Basic and diluted earnings (deficit) per share (in LTL) |
(0.01) | (0.01) | ||
| The accompanying notes form an integral part of this condensed interim financial information. |
$\begin{picture}(120,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170)(-20,170$
LITGRID AB
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012
| Equity attributable to owners of the Company | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Share | lare ົທ |
Revalua- tion |
Legal | Other | Retained | controlling Non- |
Total | |||
| Group | Note | capital | premium | reserve | reserve | reserves | earnings | Total | interest | equity |
| Balance at 1 January 2011 | 504,331 | 29,621 | 296,353 | 47,730 | 1,035,947 | 1,913,982 | 3,359 | 1,917,341 | ||
| Comprehensive income | ||||||||||
| Share of comprehensive income of Profit (loss) for the period |
(4,088) | (4,088) | (4,088) | |||||||
| associate | (1,638) | (1,638) | (1,638) | |||||||
| Depreciation of revaluation reserve | ||||||||||
| Deferred income tax arising from and amounts written off |
(13,025) | 13,025 | ||||||||
| business combinations | $^{10}$ | $\overline{10}$ | 10 | |||||||
| Total comprehensive income (loss) | (13, 025) | ı | 7,309 | (5,716) | (5,716) | |||||
| subsidiary that does not result in a loss Decrease in ownership interests in Transactions with owners |
||||||||||
| of control | r | ť | ı | (982, 485) | (92) | 352 | 260 | |||
| Transfers to reserves | I | 2,747 | 979,738 | |||||||
| Total transactions with owners | B | ı | 2,747 | 979,738 | (982, 577) | (92) | 352 | 260 | ||
| Balance at 30 June 2011 (unaudited) | 504,331 | 1621 R |
283,328 | 50,477 | 979,738 | 60,679 | 1,908,174 | 3,711 | 1,911,885 | |
| Balance at 1 January 2012 Comprehensive income |
504,331 | ,621 R |
267,179 | 50,477 | 979,738 | 63,942 | 1,895,288 | 4,253 | 1,899,541 | |
| Depreciation of revaluation reserve Profit (loss) for the period |
ı | 11,779 | 11,779 | (525) | 11,254 | |||||
| and amounts written off | (10,070) | 10,070 | ||||||||
| Total comprehensive income (loss) | (10,070) | 21,849 | 11,779 | (525) | 11,254 | |||||
| Transactions with owners Dividends |
(390, 857) | (390, 857) | (390, 857) | |||||||
| Transfers to retained earnings | ດ ທ | (44) | (325,000) | 325,044 | ||||||
| Transfers to reserves | 55 | 32) | ||||||||
| Total transactions with owners | I, | (12) | (325,000) | (65, 845) | (390, 857) | (390, 857) | ||||
| Balance at 30 June 2012 (unaudited) | 504,331 | ,621 $\mathbf{a}$ |
257,109 | 50,465 | 654,738 | 19,946 | 1,516,210 | 3,728 | 1,519,938 |
$\infty$
$LTCRD$
LTTGRID AB
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012
(All amounts in LTL thousands unless otherwise stated)
| Company | Note | capital Share |
premium Share |
Revalua- reserve tion |
reserve Legal |
reserves Other |
Retained earnings |
Total |
|---|---|---|---|---|---|---|---|---|
| salance at 1 January 2011 | 504,331 | 29,621 | 296,353 | 47,665 | 1,040,304 | 1,918,274 | ||
| Profit (loss) for the period Comprehensive income |
(4,464) | (4,464) | ||||||
| Depreciation of revaluation reserve and amounts written off |
(13, 025) | 13,025 | ||||||
| otal comprehensive income (loss) | (13,025) | 8,561 | (4,464) | |||||
| otal transactions with owners ransactions with owners Transfers to reserves |
2,768 2,768 |
979,654 979,654 |
(982, 422) (982, 422) |
ı 1 |
||||
| Salance at 30 June 2011 unaudited) |
504,331 | 29,621 | 283,328 | 50,433 | 979,654 | 66,443 | 1,913,810 | |
| Salance at 1 January 2012 | 504,331 | 29,621 | 266,960 | 50,433 | 979,654 | 66,951 | 1,897,950 | |
| Profit (loss) for the period Comprehensive income |
12,836 | 12,836 | ||||||
| Depreciation of revaluation reserve nd amounts written off |
(10, 061) | 10,061 | ||||||
| otal comprehensive income (loss) | (10, 061) | 22,897 | 12,836 | |||||
| ransactions with owners Transfers to reserves |
(325,000) | 325,000 | ||||||
| Dividends | ო დ | (390, 857) | (390, 857) | |||||
| otal transactions with owners | (325,000) | (65, 857) | (390, 857) | |||||
| Salance at 30 June 2012 unaudited) |
504,331 | 29,621 | 256,899 | 50,433 | 654,654 | 23,991 | 1,519,929 | |
The accompanying notes form an integral part of this condensed interim financial information.
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius
| Notes | Group January - June 2012 |
Company January - June 2012 |
Group January - June 2011 |
Company January - June 2011 |
|
|---|---|---|---|---|---|
| unaudited | unaudited | unaudited | unaudited | ||
| Cash flows from operating activities | |||||
| Profit (loss) for the period | 11,254 | 12,836 | (4,088) | (4, 464) | |
| Reversal of non-monetary items and other | |||||
| adjustments for: | |||||
| Depreciation and amortisation expenses Share of profit (loss) of associates and joint |
4 | 63,928 | 63,292 | 67,898 | 67,337 |
| ventures | (20) | (730) | |||
| Gain on change in ownership interests in | |||||
| associate | (232) | ||||
| Income tax expenses /(income) | 2,232 | 2,221 | 521 | 641 | |
| Loss on write-off of property, plant and equipment |
93 | 93 | 804 | 803 | |
| 4 7 |
(856) | (856) | (949) | (949) | |
| (Depreciation) of grants Interest income |
(1,893) | (1,806) | (1, 128) | (1,008) | |
| 163 | 184 | 4 | |||
| Finance costs | (38, 788) | (38, 788) | (47,001) | (47,001) | |
| Change in other financial assets | |||||
| Changes in working capital: (Increase) decrease in trade receivables and |
|||||
| other receivables | 7,749 | 1,597 | 40,844 | 24,475 | |
| (Increase) decrease in inventories and | |||||
| prepayments | (5,002) | 2,068 | (694) | (3,092) | |
| Increase (decrease) in accounts payable and | |||||
| advance amounts received | 26,045 | 31,123 | (7, 831) | 13,455 | |
| Cash generated from operations | 64,673 | 71,964 | 46,608 | 48,916 | |
| Income tax paid | (1182) | (1003) | (3963) | (3960) | |
| Net cash generated from operating activities | 63,491 | 70,961 | 42,645 | 44,956 | |
| Cash flows from investing activities | |||||
| (Purchase) of property, plant and equipment | (42, 079) | (41, 614) | (109, 186) | (109, 670) | |
| and intangible assets | 50,582 | 50,582 | 49,390 | 49,390 | |
| Grants received | 7 | 597 | 477 | ||
| Interest received | 3,173 | 3,086 | (34, 217) | ||
| Investments in time deposits | 115,079 | 115,079 | (34, 217) | ||
| Acquisition of held-to-maturity investments | 21,539 | 21,539 | |||
| Other | (163) | (184) | (4) | ||
| Net cash generated from (used in) investing activities |
148,131 | 148,488 | (93, 420) | (94, 020) | |
| Cash flows from financing activities | |||||
| Non-controlling interests' contribution to the | |||||
| share capital of the subsidiary | 260 | ||||
| Credit line facility (overdraft) | 2,285 | ||||
| Dividends paid | (190, 857) | (190, 857) | |||
| Net cash generated from (used in) financing activities |
(188, 572) | (190, 857) | 260 | ||
| Net increase (decrease) in cash and cash equivalents |
23,050 | 28,592 | (50, 515) | (49,064) | |
| Cash and cash equivalents at beginning of the period |
65,185 | 57,131 | 74,004 | 63,492 | |
| Cash and cash equivalents at end of the period |
88,235 | 85,723 | 23,489 | 14,428 |
The accompanying notes form an integral part of this condensed interim financial information.
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
LITGRID AB (named as LITGRID Turtas AB until 14 March 2011) is a public limited liability company registered in the Republic of Lithuania. The address of its registered office is: A. Juozapavičiaus g. 13, LT-09311, Vilnius, Lithuania. LITGRID AB (hereinafter LITGRID or "the Company") is a limited liability profit-making business entity established as a result of spin-off of Lietuvos Energija AB operations based on the decision of the Extraordinary General Meeting of Shareholders of Lietuvos Energija AB dated 28 October 2010, which was passed to approve the spin-off of Lietuvos Energija AB. On 16 November 2010, the Company was registered with the Register of Legal Entities managed by a
public institution Centre of Registers. The Company's code is 302564383; VAT payer's code is LT100005748413.
LITGRID is an operator of electricity transmission system, operating electricity transmissions in the territory of Lithuania and ensuring the stability of operation of the whole electric power system. In addition, the Company is responsible for the integration and development of the Lithuanian electricity market, as well as for the maintenance and development of electricity transmission network – the strategic projects for electricity interconnections with Sweden and Poland that will ensure the country's energetic independence.
The principal objectives of the Company's activities include ensuring the stability and reliability of electric power system in the territory of Lithuania within its areas of competence, creation of objective and non-discriminatory
conditions for the use of the transmission networks, management, use and disposal of electricity transmissio of electricity market operator, including the companies that own electricity interconnections with other countries or those that develop, manage, use or dispose them.
With effect from 18 June 2012, LITGRID organises an additional trade session for electricity market participants as stipulated in the Electricity Trading Rules approved by the Order of the Lithuanian Minister of Energy. This additional trade session enables the market participants to secure against the risk of imbalance when trade is conducted between isolated trade areas. The additional trade session is relevant for as long as the Lithuanian trade area acts in isolation. Trade during the additional trade session is conducted at exchange prices, and involves the participants of the Lithuanian Power Exchange upon the closing of trade in the power exchange.
On 24 February 2011, the Company obtained a license of the electricity transmission system operator from the National Control Commission for Prices and Energy (the Commission).
As at 30 June 2012 and 31 December 2011, the Company's authorised share capital totalled LTL 504,331,380 and was divided into 504,331,380 ordinary registered shares with par value of LTL 1 each. All shares are fully paid. As at 30 June 2012 and 31 December 2011, the Company's shareholders structure was as follows:
| Ownership interest $(in$ LTL |
Number of shares held (%) |
|
|---|---|---|
| Visagino Atominė Elektrinė UAB | 491,736,153 | 97.5% |
| Other shareholders | 12,595,227 | 2.5% |
| Total | 504,331,380 | 100% |
The ultimate controlling shareholder of Visagino Atominė Elektrinė UAB is the Ministry of Energy of the Republic of Lithuania.
The Company's shares are traded on NASDAQ OMX Vilnius Stock Exchange.
As at the date of this condensed interim financial information, the Group consisted of LITGRID and its directly controlled subsidiaries, which are listed below.
| Subsidiary | Registered office address |
Group's shareholding at 30 June 2012 |
Group's shareholding at 31 December 2011 |
Profile of activities |
|---|---|---|---|---|
| BALTPOOL UAB | A. Juozapavičiaus g. 13, Vilnius, Lithuania |
67% | 67% | Energy source exchange |
| TETAS UAB | Senamiesčio g. 102B, Panevėžys, Lithuania |
61% | 61% | Transformer substation, distribution station design, construction, repair and maintenance services |
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
The structure of the Group's investments in associates and joint venture as at 30 June 2012 and 31 December 2011 was as follows:
| Company | Registered office address |
Group's shareholding at 30 June 2012 |
Group's shareholding at 31 December 2011 |
Profile of activities |
|---|---|---|---|---|
| Technologiju ir Inovaciju Centras UAB |
$Z$ vejų g. 14, Vilnius, Lithuania |
20% | 20% | IT services |
| Elektros Tinklo Paslaugos UAB |
Motory g. 2, Vilnius, Lithuania |
25% | 29% | Power network and related equipment repair, maintenance and construction services |
| LitPol Link SD.Z.0.0 |
Woiciecha Gorskiego 900-033 Warsaw, Poland |
50% | 50% | Designing of electricity transmission interconnection facilities |
As at 30 June 2012, the Group had 692 employees (31 December 2011: 623 employees), whereas the Company had 201 employees (31 December 2011: 205 employees).
Despite the increase in the Company's revenue from electricity transmission activities in the first and fourth quarters of the year, seasonal variations do not have significant impact on the Company's half-year financial information. The Company's revenue for the first and the second quarters of 2011 amounted respectively to 26.3 % and 22.4 % of the Company's annual revenue of 2011, whereas the Company's revenue of the first and second half-years amounted respectively to 48.7% and 51.3% of the Company's total annual revenue of 2011. The same tendency remains in 2012.
The Company's and consolidated Group's condensed interim financial information for a six-month period ended 30 June 2012 has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and applicable to interim financial reporting (International Accounting Standard (IAS) 34, 'Interim financial reporting').
This condensed interim financial information should be read together with the annual financial statements for the year ended 31 December 2011, which have been prepared in accordance with IFRS as adopted by the EU.
This condensed interim financial information has not been audited, but reviewed.
Except as described below, the accounting policies applied in the preparation of this condensed interim financial information are consistent with those of the annual financial statements for the year 2011.
Income taxes for the interim reporting periods have been estimated using the tax rate that would be applicable to the estimation of income taxes on the expected gross profit for the year.
There are no new standards, amendments and interpretations that are mandatory for the Company and the Group with effect from 2012, and that have a significant impact on the Company's and the Group's financial information.
The Company's management do not believe the newly published standards, amendments and interpretations that are mandatory for the Company's and the Group's reporting periods beginning on or after 1 January 2013 will have a significant impact on the Company's and the Group's financial statements.
Based on the explanation of the State Tax Inspectorate under the Lithuanian Ministry of Finance of 6 October 2011 in response to the inquiry as to the taxation of PSO service fees received/disbursed, the Company restated current year income tax expenses and deferred income tax for the year ended 31 December 2011 during the preparation of
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
the financial statements as at 31 December 2011. The effects of restatement on the condensed interim statement of comprehensive income for a six-month period ended 30 June 2011 are given in the table below:
| Group | Group 2011 (as previously reported) |
Company January - June January - June 2011 (as previously reported) |
Effects of restatement |
Group January - June 2011 (restated) |
Company January - June 2011 (restated) |
|---|---|---|---|---|---|
| Current income tax expenses Deferred income tax |
(18, 782) | (18, 579) | 13,534 | (5, 248) | (5,045) |
| income | 19,303 | 19,220 | (13, 534) | 5,769 | 5,686 |
The preparation of condensed interim financial information in conformity with IFRS requires management to make estimates and assumptions that affect the accounting policies applied and the reported amounts of assets, liabilities, income and expenses and disclosure of contingencies. The actual results may ultimately differ from these estimates. Significant judgements made by management in relation to accounting policies and key sources of identification of contingencies were consistent with those applied in preparation of the financial statements for the year ended 31 December 2011.
As a result of the spinoff process in 2010, the Company took over property, plant and equipment from Lietuvos Energija AB. The fair value of property, plant and equipment of Lietuvos Energija AB as at 31 December 2008 was determined by independent valuers who used the methods of comparative prices, depreciated replacement value or discounted cash flows to determine the fair value of the assets, depending on the type of asset.
As at 31 December 2009, management of Lietuvos Energija AB revised the carrying amounts of property, plant and equipment. Having assessed the fall in the construction cost indices in respect of relevant categories of assets published by the Lithuanian Statistics Department for 11 months of 2009, Lietuvos Energija AB reduced the carrying amount of property, plant and equipment. Lietuvos Energija AB applied a 12.27% statistical index in respect of the category of buildings and a 9.68% index in respect of other categories of property, plant and equipment, which had been revalued under the depreciated replacement cost method as at 31 December 2008.
The previous version of the Lithuanian Law on Electricity effective as at 31 December 2008 stipulated that the price caps for electricity transmission services were determined based on the value of assets used in licensed activities of the service provider, with the value of such assets established with reference to data reported in the service provider's financial statements (Regulated Assets Base).
According to the amendment to the above-mentioned Law effective from 1 June 2009, the price caps for electricity transmission services are to be determined based on the value of assets used in licensed activities of the service provider, with the value of such assets being estimated and approved by the Commission in accordance with the principles for determination of the value of assets used in licensed activities of the service provider that had been drafted by the Commission and approved by the Government.
According to the Government's Resolution No. 1142 of 9 September 2009 On the methodology for determination of the value of assets used in licensed activities of the electricity service provider, the determination of the price caps for electricity transmission services is to include the value of assets used in licensed activities of the service provider, which is equal to the net book value (carrying amount) of property, plant and equipment as at 31 December 2002 as increased by the amount of capital expenditures implemented and agreed with the Commission and reduced by the depreciation amount calculated pursuant to the procedure stipulated in the Lithuanian Law on Corporate Income Tax.
For the above-mentioned reasons, the values of property, plant and equipment reported in this condensed interim
financial information may significantly differ from those that would have been determined if the valuation of had been performed by independent valuers as required by International Valuation and Accounting Standards. Such valuation is likely to have a negative impact on the results of the Company' and Group's operations and the shareholders' equity reported in the financial statements for the years 2012 and 2011.
Based on management's decision, valuation of fair values of property, plant and equipment as at 30 June 2012 and 31 December 2011 was not performed by independent valuers, as a substantial reorganisation of the whole energy sector took place in 2010 through to 2011, and in 2010 the Company was separated from Lietuvos Energija AB, and in 2011 it was merged with LITGRID AB.
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012
(All amounts in LTL thousands unless otherwise stated)
Movements in the Group's PP&E account were as follows:
| Group | Land | Buildings | Structures and machinery |
Motor vehicles |
Other PP&E | Construc- tion in progress |
Total |
|---|---|---|---|---|---|---|---|
| At 31 December 2010 | |||||||
| Opening net book amount | 1,961 | 36,488 | 1,943,993 | 1,829 | 45,563 | 34,285 | 2,064,119 |
| Additions | 42 | 122 | 185 | 25,567 | 25,916 | ||
| Write-offs | (1) | (797) | (6) | (804) | |||
| Reclassification between categories |
3,282 | (420) | (2, 862) | ||||
| Depreciation charge | (1, 159) | (61, 674) | (234) | (4, 528) | (67, 595) | ||
| Net book amount at 30 June 2011 |
1,961 | 35,328 | 1,884,846 | 1,717 | 40,794 | 56,990 | 2,021,636 |
| At 31 December 2011 | |||||||
| Opening net book amount | 1,961 | 34,851 | 1,841,223 | 1,638 | 38,161 | 72,353 | 1,990,187 |
| Additions | 26 | 5 | 466 | 27,587 | 28,084 | ||
| Write-offs | (95) | (95) | |||||
| Reclassification between categories |
586 | 10,446 | 1,112 | (12, 144) | |||
| Depreciation charge | (1,090) | (57,960) | (250) | (4, 171) | 5 | (63, 466) | |
| Net book amount at 30 June 2012 |
1,961 | 34,347 | 1,793,640 | 1,393 | 35,568 | 87,801 | 1,954,710 |
Movements in the Company's PP&E account were as follows:
| Company | Land | Buildings | Structures and machinery |
Other PP&E | Construction in progress |
Total |
|---|---|---|---|---|---|---|
| At 31 December 2010 | ||||||
| Opening net book amount | 1,961 | 35,636 | 1,943,758 | 43,606 | 34,686 | 2,059,647 |
| Additions | 119 | 26,288 | 26,407 | |||
| Write-offs | (1) | (797) | (5) | (803) | ||
| Reclassification between | ||||||
| categories | 3,282 | (420) | (2,862) | |||
| Depreciation charge | (1, 124) | (61, 652) | (4,268) | (67, 044) | ||
| Net book amount at 30 June 2011 |
1,961 | 34,511 | 1,884,591 | 39,032 | 58,112 | 2,018,207 |
| At 31 December 2011 | ||||||
| Opening net book amount | 1,961 | 33,613 | 1,840,627 | 36,573 | 72,763 | 1,985,537 |
| Additions | 249 | 28,097 | 28,346 | |||
| Write-offs | (95) | (95) | ||||
| Reclassification between | ||||||
| categories | 586 | 10,446 | 1,112 | (12, 144) | ||
| Depreciation charge | (1,037) | (57, 916) | (3,922) | (62, 875) | ||
| Net book amount at 30 June 2012 |
1,961 | 33,162 | 1,793,062 | 34,012 | 88,716 | 1,950,913 |
As at 30 June 2012 and 31 December 2011, the Group/Company had significant contractual commitments to purchase property, plant and equipment, which would have to be fulfilled in later periods.
| At 30 June 2012 |
At 31 December 2011 |
|
|---|---|---|
| Interconnection between the electricity transmission |
||
| systems of Lithuania and Sweden (NORDBALT) | 597,783 | 620,783 |
| Transformer substations | 92,088 | 60,778 |
| Construction of 330 kV air line (AL) Telšiai-Klaipėda | 53,624 | 58,210 |
| Cabling of 110 kV AL near Viršuliškes | 33,461 | |
| Replacement of section of 110 kV AL "Marios-Juodkrantė" Interconnection between the electricity transmission |
5,380 | |
| systems of Lithuania and Poland (LitPolLink) | 1,544 | 1,706 |
| Other | 4,830 | 901 |
| Total | 788,710 | 742,378 |
The Ordinary General Meeting of Shareholders of LITGRID AB held on 30 April 2012 approved the proposed profit appropriation and resolved to transfer LTL 325,000 thousand from other reserves to retained earnings.
During the Ordinary General Meeting of Shareholders of LITGRID AB held on 30 April 2012, the decision was made in relation to the payment of dividends in amount of LTL 390,857 thousand. Dividends per share amounted to LTL $0.775.$
The grants balance consists of grants to finance acquisition of assets. Movements in grants during the first half of 2012 and 2011 were as follows:
| Group | Company | |
|---|---|---|
| Balance at 31 December 2010 | 42,349 | 42,349 |
| Received during the period | 49,390 | 49,390 |
| Recognised as income during the period | (949) | (949) |
| Balance at 30 June 2011 | 90,790 | 90,790 |
| Balance at 31 December 2011 | 182,359 | 182,359 |
| Received during the period | 50,582 | 50,582 |
| Recognised as income during the period | (856) | (856) |
| Balance at 30 June 2012 | 232,085 | 232,085 |
The grants received during the first half of 2012 comprised as follows:
In the statement of comprehensive income for a six-month period ended 30 June 2012, depreciation and amortisation charges were reduced by income from grants amounting to LTL 856 thousand (2011: LTL 949 thousand).
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
Management distinguished operating segments based on the reports reviewed by the Board. The Board is a primary decision maker within the Group. The Board analyses business operations by geographical areas and types of services provided. Management analyses operating profit (loss) as a profitability indicator. The reports reviewed b the Board are in line with the financial statements prepared in accordance with IFRS, except for the format of presentation.
The Group has distinguished the following 6 segments:
The electricity transmission segment is involved in transmitting electricity over high voltage (330-110 kV) networks from producers to end users or suppliers not in excess of the contractual limit. The main objective of these activities is to ensure a reliable, effective, high quality, transparent and safe electricity transmission to distribution networks, large network users from power stations and neighbouring energy systems.
Trade in balancing/regulating electricity is a separate service of the transmission system operator ensuring the balancing of electricity generation/import and demand/export levels.
Provision of capacity reserve services. To ensure a liable work of the system, the Company purchases from electricity producers the service of ensuring capacity reserve for power generation facilities and provides capacity reserve services to end users. The capacity reserve is required in case of unexpected fall in electricity production volumes or increase in electricity consumption.
The Company's/Group/s services provided under PSO scheme comprise as follows:
The Company's subsidiary BALTPOOL UAB carries out the activities of natural gas market operator and applies measures to secure against the fluctuations in electricity prices on power exchange. BALTPOOL UAB earns revenue mainly from turnover fees for trade in power exchange. Until 18 June 2012, BALTPOOL UAB used to act as power exchange operator.
Repair and maintenance services are carried out by the Company's subsidiary TETAS UAB. Its core line of business is reconstruction, repair and maintenance of medium voltage transformer substations and distribution stations.
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012
(All amounts in LTL thousands unless otherwise stated)
The table below shows the Group's information on segments for the period ended 30 June 2012:
| 2012 | Operating segments | |||||||
|---|---|---|---|---|---|---|---|---|
| transmission Electricity |
regulating electricity balancing Trade in |
capacity reserve Provision of services |
of services under PSO Provision scheme |
of market Activities operator |
maintenance Repair and activities |
eliminations Other inter- segment |
Total | |
| Revenue | 124,223 | 50,039 | 32,811 | 6,321 | 1,121 | 25,459 | 239,974 | |
| Inter-segment revenue | (956) | (3,664) | (510) | $(5,130)$ $234,84$ |
||||
| company revenue within the Group Revenue after elimination of inter- |
124,223 | 50,039 | 32,811 | 6,321 | 165 | 21,795 | (510) | 4 |
| Operating profit (loss) | 2,072 | 13,102 | (1,747) | t, | 77 | (1,495) | (505) | 11,504 |
| Finance income (costs), net | 1,622 | $\frac{1}{2}$ | I | 1,730 | ||||
| Share of result of associates and joint ventures |
$\overline{20}$ | l | 20 | |||||
| Gain on change in ownership interests in associate |
232 | 232 | ||||||
| Profit (loss) before income tax | 3,946 | 13,102 | (1, 747) | 178 | (1,488) | (505) | 13,486 | |
| *Income tax | (2, 221) | (16) | m | (2, 232) | ||||
| Net profit (loss) for the period | 1,725 | 13,102 | (1, 747) | ĩ | 162 | (1, 483) | (505) | 11,254 |
| Depreciation and amortisation expenses | 62,437 | ī | 57 | 604 | ම | 63,073 | ||
| Write-offs of property, plant and equipment | 33 | 93 |
*Income tax is not allocated among the Company's operating segments and it is attributed to the activities of electricity transmission.
Company code: 302564383 A. Juozapavičiaus g. 13, LT-09311 Vilnius LTGRID AB
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION
FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012
(All amounts in LTL thousands unless otherwise stated)
The table below shows the Group's information on segments for the period ended 30 June 2011:
* Income tax is not allocated among the Company's operating segments and it is attributed to the activities of electricity transmission.
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
The Group operates in Lithuania and its revenue generated from customers in Lithuania accounts for 99% of total revenue.
The Company sells regulating electricity to transmission system operators in Latvia and Estonia and provides the electricity transit service to the Russian transmission system operator.
In 2012 and 2011, the Group's and the Company's revenue by geographical location of customer was as follows:
| Country | Group January – June 2012 |
Company January – June 2012 |
Group January - June 2011 |
Company January – June 2011 |
|---|---|---|---|---|
| Lithuania | 232,921 | 211,479 | 206,663 | 187,101 |
| Russia | 917 | 917 | 1,023 | 1,023 |
| Estonia | 508 | 508 | 563 | 563 |
| Latvia | 482 | 482 | 893 | 893 |
| Bulgaria | 16 | 16 | ۰ | |
| Total | 234,844 | 213,402 | 209,142 | 189,580 |
All assets of the Group and the Company are located in Lithuania.
The Group's revenue from its major external customer (Visagino Atomine Elektrine UAB group companies) amounted to LTL 168,625 thousand during a six-month period ended 30 June 2012 (30 June 2011: LTL 145,321 thousand).
The Company's/Group's related parties remained the same in 2012.
During a six-month period ended 30 June 2012 and 2011, the major purchases and sales between related parties within the Group were conducted between the Company and LESTO AB or Lietuvos Energija AB (Visagino Atomine Elektrinė UAB group companies). The Group mostly purchased electricity and paid PSO service fees. Sale
transactions mostly comprised sales of electricity, provision of capacity reserve services, electricity transmission services, and collection of PSO service fees.
The Group's transactions with related parties during a six-month period ended 30 June 2012 and the balances arising on these transactions as at 30 June 2012 are presented below.
| Related parties | Trade and other payables and prepayments |
Trade and other receivables |
Purchases | Sales |
|---|---|---|---|---|
| Other Visagino Atominė Elektrinė UAB group companies The Group's associates The Group's parent company |
71,371 2.710 |
91,134 1,192 |
314,786 10,718 |
730,341 3,075 |
| (Visagino Atominė Elektrinė UAB) |
200,000 | 208 | ||
| Total | 274,081 | 92,326 | $325,712*$ | 733,416** |
*Whereof: LTL 161,490 thousand PSO service fees paid to related parties and LTL 84,698 thousand purchases of electricity on the power exchange from related parties. The Group acts as an agent in these transactions. The Group does not recognise revenue and expenses from electricity trading in power exchange and administration of PSO service fees with respect to those transactions in which it acts as an agent on behalf of the
Commission/Government.
**Whereof: LTL 311,789 thousand PSO service fees received from related parties and LTL 253,002 thousand sales of electricity on the power exchange to related parties.
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
The Company's transactions with related parties during a six-month period ended 30 June 2012 and the balances arising on these transactions as at 30 June 2012 are presented below.
| Related parties | Trade and other payables and prepayments |
Trade and other receivables |
Purchases | Sales |
|---|---|---|---|---|
| Other Visagino Atominė Elektrinė | ||||
| UAB group companies | 70,285 | 80,990 | 230,630 | 462,674 |
| The Company's subsidiaries | 4,513 | 14 | 19,983 | 70 |
| The Company's associates The Group's parent company (Visagino Atominė Elektrinė |
2,595 | 1,192 | 10,304 | 3,072 |
| UAB) | 200,000 | 208 | ||
| Total | 277,393 | 82,196 | 261,125* | 465,816** |
*Whereof: LTL 161,490 thousand PSO service fees paid to related parties and LTL 2,999 thousand purchases of electricity on the power exchange from related parties. The Company acts as an agent in these transactions. The Company does not recognise revenue and expenses from electricity trading in power exchange and administration of PSO service fees with respect to those transactions in which it acts as an agent on behalf of the Commission/Government.
**Whereof: LTL 311,789 thousand PSO service fees received from related parties and LTL 2,999 thousand sales of electricity on the power exchange to related parties.
The Group's transactions with related parties during a six-month period ended 30 June 2011 and the balances arising on these transactions as at 30 June 2011 are presented below.
| Related parties | Trade and other payables and prepayments |
Trade and other receivables |
Purchases | Sales |
|---|---|---|---|---|
| Other Visagino Atominė Elektrinė UAB group companies The Group's associates The Group's parent company (Visagino Atominė Elektrinė |
58,274 2,626 |
99,314 1,211 |
308,805 12,694 |
646,933 1,354 |
| UAB) | ||||
| Total | 60,900 | 100,525 | 321,499* | 648,287 ** |
*Whereof: LTL 143,821 thousand PSO service fees paid to related parties and LTL 107,265 thousand purchases of electricity on the power exchange from related parties. The Group acts as an agent in these transactions. The Group does not recognise revenue and expenses from electricity trading in power exchange and administration of PSO service fees with respect to those transactions in which it acts as an agent on behalf of the Commission/Government.
**Whereof: LTL 259,336 thousand PSO service fees received from related parties and LTL 243,630 thousand sales of electricity on the power exchange to related parties.
The Company's transactions with related parties during a six-month period ended 30 June 2011 and the balances arising on these transactions as at 30 June 2011 are presented below.
| Trade and other payables and prepayments |
Trade and other receivables |
Purchases | Sales |
|---|---|---|---|
| 390,182 | |||
| 2,576 | 804 | 112 | |
| 4,706 | 2,573 | 12,455 | 1,318 |
| $\blacksquare$ | Ξ | ||
| 63,993 | 90,828 | 230,751* | 391,612** |
| 56,711 | 87,451 | 198,761 19,535 |
*Whereof: LTL 143,821 thousand PSO service fees paid to related parties. ** Whereof: LTL 259,336 thousand PSO service fees received from related parties.
NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION FOR A SIX-MONTH PERIOD ENDED 30 JUNE 2012 (All amounts in LTL thousands unless otherwise stated)
| Group January – June 2012 |
Company $January -$ June 2012 |
Group January – June 2011 |
Company January – June 2011 |
|
|---|---|---|---|---|
| Employment-related payments | 1.379 | 795 | 1,403 | 835 |
| Whereof: termination benefits | 154 | 85 | 203 | 164 |
| Number of key management personnel |
15 | 8 | 14 |
Key management personnel includes heads of administration and their deputies (directors of departments) and chief financier.
Basic and diluted earnings (deficit) per share for a six-month period ended 30 June 2012 and 2011 were as follows:
| January – June 2012 |
January – June 2011 |
|
|---|---|---|
| 11,779 | (4, 464) | |
| 504,331,380 | 504,331,380 | |
| 0.02 | (0.01) | |
Litigations
The investigation of a civil case conducted at Kaunas Regional Court based on the Company's claim for compensation of debt and interest from Achema AB, was suspended by the Court's resolution dated 14 June 2012 until the completion of investigation of the civil case at Vilnius Regional Court. The management believe this litigation will have no negative impact on the Company's/Group's financial statements.
Based on the Lithuanian Government's Resolution No. 826 of 4 July 2012 On the establishment of a private limited liability company and investment of state-owned capital, on 19 July 2012 the Ministry of Energy established E UAB and it was registered with the register of legal entities on 25 July 2012. Based on the above-mentioned Resolution, the Company's shares owned by Visagino Atomine Elektrine UAB will be transferred to the newly established company, presumably by 1 October 2012.
On 1 August 2012, the Company acquired 2% of shares of power exchange operator for Nordic and Baltic countries -Nord Pool Spot AS.
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