Annual / Quarterly Financial Statement • Sep 22, 2015
Annual / Quarterly Financial Statement
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Société Anonyme Commercial Technical Company 85 Mesogeion Ave., 115 26 Athens Reg.No. 318/06/Β/86/28
for the period
from January 1st to December 31st 2010
According to article 4 of L. 3556/2007 and the relevant executive Decisions by the BoD of the Hellenic Capital Market Commission
| Ι. STATEMENTS BY MEMBERS OF THE BOARD OF DIRECTORS 3 | |
|---|---|
| ΙΙ. AUDIT REPORT BY INDEPENDENT CERTIFIED AUDITOR4 | |
| ΙΙΙ. ANNUAL MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR FINANCIAL YEAR 20106 | |
| ΙV. ANNUAL FINANCIAL STATEMENTS PARENT AND CONSOLIDATED OF 31 DECEMBER 201020 | |
| STATEMENT OF FINANCIAL POSITION21 | |
| STATEMENT OF COMPREHENSIVE INCOME 23 | |
| STATEMENT OF CASH FLOWS 25 | |
| STATEMENT OF CHANGES IN EQUITY27 | |
| 1 ESTABLISHMENT & ACTIVITY OF THE COMPANY 30 |
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| 2 BASIS FOR THE PRESENTATION OF THE FINANCIAL STATEMENTS 30 |
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| 3 SUMMARY OF KEY ACCOUNTING PRINCIPLES 39 |
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| 4 GROUP STRUCTURE49 |
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| 5 OPERATING SEGMENTS55 |
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| 6 INTANGIBLE FIXED ASSETS 58 |
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| 7 TANGIBLE FIXED ASSETS59 |
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| 8 PARTICIPATION IN ASSOCIATE COMPANIES 62 |
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| 9 OTHER LONG-TERM RECEIVABLES62 |
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| 10 INVENTORIES 63 | |
| 11 TRADE RECEIVABLES AND PREPAYMENTS AND OTHER RECEIVABLES 63 | |
| 12 AGREEMENTS FOR THE CONSTRUCTION OF TECHNICAL WORKS64 | |
| 13 CASH & CASH EQUIVALENTS64 | |
| 14 LONG-TERM LOANS65 | |
| 15 PROVISIONS FOR STAFF RETIREMENT INDEMNITIES66 | |
| 16 OTHER PROVISIONS67 | |
| 17 GRANTS 67 | |
| 18 SUPPLIERS68 | |
| 19 ACCRUED AND OTHER LIABILITIES69 | |
| 20 SHORT-TERM LOANS69 | |
| 21 JOINT VENTURES AND JOINTLY CONTROLLED COMPANIES 69 | |
| 22 CAPITAL70 | |
| 23 EARNINGS PER SHARE 70 | |
| 24 DIVIDENDS70 | |
| 25 INCOME TAX71 | |
| 26 COST OF SALES, ADMINISTRATIVE AND RESEARCH & DEVELOPMENT EXPENSES74 | |
| 27 OTHER INCOME/(EXPENSES) 75 | |
| 28 FINANCIAL INCOME/(EXPENSES)75 | |
| 29 PAYROLL COST76 | |
| 30 ACQUISITONS OF COMPANIES76 | |
| 31 TRANSACTIONS WITH RELATED PARTIES76 | |
| 32 AIM AND POLICIES OF RISK MANAGEMENT77 | |
| 33 POLICIES AND PROCEDURES FOR CAPITAL MANAGEMENT 81 | |
| 34 EXISTING COLLATERAL ASSETS82 | |
| 35 SIGNIFICANT EVENTS DURING THE PERIOD82 | |
| 36 SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD 83 | |
| 37 CONTINGENT LIABILITIES 83 | |
| V. DATA AND INFORMATION FOR THE PERIOD 1.1-31.12.201084 | |
| VI. REPORT OF USE OF RAISED CAPITAL FROM THE SHARE CAPITAL INCREASE BY CASH FOR THE | |
| PERIOD 8/11/07 – 31/12/1085 | |
| VII. INFORMATION OF ARTICLE 10 LAW 3401/200590 |
We
To the best of our knowledge:
a. The annual company and consolidated financial statements of TERNA ENERGY ABETE for the period from January 1st 2010 till December 31th 2010, which were prepared in accordance with the accounting standards in effect, give a true picture of the assets and liabilities, the shareholders' equity and the results for the period of the Group and Company, as well as of the companies included in the consolidation and considered aggregately as a whole, and
b. The Board of Directors ' Report depicts in a true manner the performance, developments and position of the Company as well as of the companies included in the consolidation as a whole, along with the description of the major risks and uncertainties the Group faces.
Athens, 24 March 2011
Chairman of the Board Vice Chairman of the Board Board Member and Chief Executive Officer
Georgios Perdikaris Emmanuel Maragoudakis Georgios Spirou
To the Shareholders of TERNA ENERGY SA
We have audited the accompanying company and consolidated financial statements of TERNA ENERGY SA S.A. and its subsidiaries, which comprise the company and consolidated Statement of Financial Position as at December 31, 2010, and the company and consolidated Statement of Comprehensive Income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of these company and consolidated financial statements in accordance with International Financial Reporting Standards as adopted by European Union, and for such internal control as management determines is necessary to enable the preparation of company and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these company and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the company and consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the company and consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the company and consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the company and consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the company and consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the accompanying company and consolidated financial statements present fairly, in all material respects, the financial position of the Company TERNA ENERGY SA S.A. and its subsidiaries as at December 31, 2010, and of their financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards that have been adopted by the European Union.
a) The Board of Directors' Report includes a statement of corporate governance that provides the information required by Paragraph 3d of Article 43a of Law 2190/1920.
b) We verified the agreement and correspondence of the content of the Board of Directors' Report with the attached company and consolidated Financial Statements, in the scope of the requirements of Articles 43a, 108 and 37 of Law 2190/1920.
Athens, March 28th, 2011
The Certified Public Accountants - Auditors
Yiannis Leos SOEL Reg. No 24881
Dear Shareholders,
According to the provisions of C.L. 2190/1920 (article 43α par.3, article 107 par. 3 and article 136, par.2) as well as L. 3556/2007 article 4 par. 2(c), 6, 7 & 8 and the decision issued by the Hellenic Capital Market Commission under No. 7/448/11-10-2007 article 2 and the Company's Articles of Association, we hereby submit the annual management report by the board of directors for the present financial year from 01/01/2010 to 31/12/2010, which includes the audited company and consolidated financial statements, the notes on the financial statements and the audit report by the certified auditors – accountants.
2010 was a year affected by the distress of the "Greek crisis": the large Greek fiscal deficit and the following escalation of government debt blocked Greece's access to international borrowing. As a result, particularly difficult conditions surfaced both as regards to liquidity in the private sector, while significant problems also emerged in the banking sector and its ability to channel capital in the economy.
The global environment exhibited signs of recovery from the crisis of the previous years and the basic economies are returning to growth. At the global level the banking sector is stabilizing and liquidity is returning to satisfactory levels.
The Renewable Energy Sources (RES) sector where TERNA ENERGY operates, remains one of the most dynamic sectors on a global level. The environmental benefits from the use of RES are continuously highlighted, while during the past year the sector has gained a significant position in the global economic activity.
As one of the first companies in Greece to develop activities in this business sector, TERNA ENERGY has created an extended portfolio of RES projects that supports the company's continuous development during the next years. At the same time, TERNA ENERGY has gained presence in countries outside of Greece, by developing and constructing RES projects. It has already set its first wind park in Poland in operation, while it is constructing other projects as well both in Poland and in Bulgaria. Also, the company's direct priorities include expanding its activities to the North America market, where investment opportunities have been identified.
TERNA ENERGY has a total capacity of 423 MW either installed or at the construction stage: it has already set 11 wind parks in operation with a total capacity of 174.5 MW from which 10 wind parks are in Greece with a total capacity of 154.5 MW, while recently the company's firs wind park in Poland, in the Krzyzanow area with 20MW capacity, began operations.
At the same time, the company's first hydroelectric station, with a capacity of 6.6 MW, is already in operation at the Eleousa position of the Axios river (Thessaloniki Prefecture), while soon the second hydroelectric station of 8.5 MW will also begin operations at the Dafnozonara position of Acheloos river (Aitoloakarnania/Evritania region).
Also, the construction of 9 wind parks in Greece, with a total capacity of 167 MW and five wind parks in Eastern Europe with a capacity of 66 MW (36 MW in Poland and 30 MW in Bulgaria), is fully underway.
Moreover, the Company and its subsidiaries also have additional Production Licenses corresponding to a total capacity of almost 1,630 MW for wind parks throughout Greece, with the completion of the licensing process at several stages, while it has also submitted applications for production licenses of 3,164 MW. Also, the company has production licenses for 112 MW relating to hydroelectric projects and it has submitted applications for new production licenses of hydroelectric projects with a capacity of 1,510 MW.
Furthermore the company has decided to enter the sector of Photovoltaic (P/V) Parks and for this reason it has already completed the licensing for one Photovoltaic Park of 1 MW, while it has submitted applications to the Regulatory Authority for Energy (RAE) for additional 21 MW.
The company's construction sector, apart from projects executed on behalf of third parties, continues intense operations in the construction of the company's own RES projects, thus offering its energy sector the ability to effectively control both the cost and the time completion of RES projects, and thus reinforcing the company's verticalization.
The company applies the International Financial Reporting Standards (IFRS) from 2005. For 2010 the Group's consolidated sales according to IFRS amounted to 59 mil euro compared to 73.3 mil in 2009, posting a 19.5% decrease versus the previous year, mainly due to the lower construction activity towards third parties. Operating profit (EBITDA) amount to 21.4 mil euro compared to 26.2 mil the previous year, posting an 18.4% decline due to increased administrative expenses resulting from the company's expansion and also the lower profitability of the construction sector. Earnings before tax amounted to 16.7 mil, decreased by 29.7% compared to 2009 as a result of lower interest income received by the company during 2010 and by its cash & cash equivalents. Earnings after tax amounted to 9.9 mil euro, posting a 39% decline, which was also burdened by the windfall tax.
As regards to the results of the individual sectors: The energy sector posted sales of 33.3 mil euro, posting a 1% decrease compared to 2009, while operating profit (EBITDA) amounted to 18.7 mil euro, posting a 10.7% decrease compared to the previous year, due to increased administrative expenses concerning the company's expansion.
TERNA ENERGY's construction activity towards third parties posted a decline, as relevant sales amounted to 25.7 mil euro, posting a 35% decline versus the previous year. Operating profit (EBITDA) of the sector amounted to 2.6 mil euro compared to 5.2 mil euro the previous year. The backlog of construction projects towards third parties at the end of 2010 amounted to 65 mil euro.
The Group's financial position remains powerful, as its cash & cash equivalents amount to 192.8 mil euro, while bank debt amounted to 202.5 mil euro, resulting in a net debt position (cash minus bank debt) at the low level of 9.6 mil euro.
The company is at the stage of increased investments that increase the constant revenue streams and profitability in the long-term.
The Board of Directors of the Company, intends to propose to the Annual Ordinary General Meeting the distribution of dividend amounting to 0.04034, euro per share.
TERNA ENERGY Group, despite the adverse economic conditions for the Greek economy, significantly reinforced its development during 2010 with the commencement of construction of four new wind parks with a total capacity of 85.05 MW, and thus now maintaining 167 MW under construction in Greece, while in October 2010 a 12.5 MW wind park was set in operation in the area of Nafpaktos.
Also, in the context of the strategic geographic diversification of the Group's activities, its expansion in the markets of Poland and Bulgaria was significantly reinforced by the commencement of construction of six new wind parks with a total capacity of 86 MW, one of which, with a capacity of 20 MW was completed in Poland in March 2011.
In the context of its development in the global market, the Group came to an agreement for the acquisition of companies in the United States of America, which own Wind Parks under development (licensing stage) with a total capacity of 172 MW. The agreement is subject to the fulfillment of a series of conditions and is expected to be completed within 12 months. Also the Group's first Wind Park abroad, namely in Poland with a capacity of 20 MW, was set in operation, while the installation license was granted for a photovoltaic station in Greece with 1.9 MW capacity in the Argolida prefecture.
The Group is subject to several risks and uncertainties, such as market risk (volatility in exchange rates, interest rates market prices etc.), credit risk and liquidity risk, wind and weather conditions.
To handles such financial risks, the Group has a risk management program that aims to minimize the negative effect on the financial results of the group that emerges from the inability to predict financial markets and the volatility of the cost and sales variables.
The financial instruments used by the Group mainly consist of bank deposits, trade debtors and creditors, other receivable and payable accounts, long-term and short-term loans.
Following, the effect of basic risks and uncertainties on the Group's activities is presented.
The Group continuously controls its receivables, either separately or by group and it incorporates the resulting information in its credit control. When deemed necessary, external reports or analysis are used as regards to existing or potential clients. The Group is not exposed to significant credit risk from trade receivables. This is due to both the Group's policy that focuses on working with credible customers and also to the nature of the Group's activities. Specifically, the total receivables of the energy sector correspond to the broader public sector (including the Hellenic Transmission System Operator - HTSO and the Public Power Corporation - PPC), while the same holds for the largest part of receivables from the construction sector.
Credit risk for cash equivalents, as well as for other receivables is negligible, given that the relevant parties are reliable banks with high quality capital structure, the Greek state or companies of the broader public sector or powerful business groups.
The management considers that all the above financial assets, for which the necessary impairments have taken place, are of high credit quality.
The Group's exposure to foreign exchange risk is limited as the largest portion of its transactions are in euro, with the exception of investments in foreign economic entities. Such activities overall refer to the energy sector, while most are at the construction phase and the production process has not yet began. Therefore, the Group's exposure to exchange rate risk due to its foreign investments is limited for now.
The Group's policy is to minimize its exposure to interest rate risk as regards to long-term financing. In the context of this policy, 54% of long-term debt is under fixed interest rates, with no interest rate risk. The remaining long-term debt and the total short-term debt of the Group is exclusively in euro under a floating interest rate linked to euribor. Short-term loans are received mainly for the purpose to finance the construction of the Group's wind parks.
The relevant loans are repaid either when the relevant government grants are received or with long-term loans during the completion of construction and commissioning of the wind parks. The loans are expected to be repaid within one year, while new short-term loans are expected to be received to finance the construction of new wind parks. Therefore the Group is exposed to interest rate risk arising from short-term debt and from part of long-term debt that is under floating interest rates.
The Group is not exposed to market risk in its financial assets, apart from a long-term liability amounting to 7,500 thousand euro, the future cash flows of which are linked to the Eurozone inflation rate excluding tobacco. According to the current market conditions, the risk of change in the fair value of the liability is considered limited.
The Group's liquidity is considered satisfactory, as apart from existing cash and cash equivalents, wind parks currently in operation create satisfactory cash flows. Net cash flows from operating activities settled at 26.9 mil euro during 2010 compared to 17.4 mil euro in 2009.
The Group manages its liquidity needs by carefully monitoring the balance of long-term financial liabilities as well as payments that take place on a daily basis. The liquidity needs are monitored at different time zones, on a daily and weekly basis, as well as on the basis of a moving 30-day period. The liquidity needs for the next 6 months and the next year are defined monthly.
The company maintains cash and cash equivalents in banks to cover its liquidity needs for periods up to 30 days. Capital for mid-term liquidity needs are released from the company's term deposits.
The company remains exposed to short-term fluctuations of wind and hydrologic data, a fact however that does not affect the long-term efficiency of its projects, as prior to the implementation of the investments extensive studies take place as regards to the long-term behavior of such factors.
The construction sector of TERNA ENERGY is subject to significant fluctuations, both as regards to turnover and as regards to the profitability of each construction project, because the construction activity, particularly of specialized companies such as ours, entails increased volatility that is mainly related to the ongoing renewal of the backlog of construction agreements towards third parties, which are mainly Public entities.
2011 is expected to be a milestone for the Company, as many projects currently under construction are expected to be set in operation, thus significantly reinforcing the Group's installed capacity. By taking advantage of its liquidity, the company continues to promote its scheduled investments within a difficult environment, while it is in a position to also take advantage of investment opportunities that arise. The geographic dispersion of investments is expanded and the company's financial position remains strong. The maturity of the licensing process for many projects allows the company to expect that new investments will be implemented during the new year, thus allowing the company to continue its growth at a satisfactory pace.
During the period 1/1/2010 – 31/12/2010, the Company bought back 2,701,362 shares with a nominal value of 810,408.6 euro and value of 9,718,502 euro. Total number of treasury shares held by the Company as of 31/12/2010 had reached 3,445,985 shares or 3.151813% of the total capital with a total acquisition cost of 12,764,787.96 euro.
Related parties according to I.A.S. 24 are considered subsidiaries, companies with joint ownership and/or Management with the company, associate companies as well as the parent company and the subsidiaries of the parent company, and also members of the Board of Directors and the company's senior executives. The Company procures goods and services from its related companies, while it also supplies goods and services to such.
Transactions and balances for 2010 are as follows:
| TERNA ENERGY SA | ||||
|---|---|---|---|---|
| SALES | PURCHA SES |
RECEIVABL E |
LIABILITY | |
| SUBSIDIARIES | ||||
| AIOLIKI PANORAMATOS DERVENOCHORION S.A. |
5,431,766 | - | 4,930,654 | - |
| ENERGIAKI SERVOUNIOU S.A. | 360,000 | - | - | - |
| TERNA ENERGY EVROS S.A. | 440,000 | - | - | - |
| IWECO – CHONOS S.A. | 90,000 | - | - | - |
| TERNA ENERGY OVERSEAS LTD | 185,274 | - | 185,274 | - |
| AIOLIKI ILIOKASTROU S.A. | 1,210,721 | - | 677,079 | - |
| AIOLIKI RACHOULAS DERVENOCHORION S.A. | 2,600,210 | - | 3,172,256 | - |
| ENERGEIAKI DERVENOCHORION S.A. | 1,381,941 | - | 1,685,968 | - |
| ENERGEIAKI FERRON EVROU SA | 2,047,298 | - | 2,516,328 | - |
| ENERGEIAKI NEAPOLOEOS LAKONIAS | 207,926 | - | 253,669 | - |
| Construction Joint Ventures | - | - | 631,443 | 360,130 |
| General & Limited Partnerships | - | - | 260,806 | - |
| PARENT | ||||
| GEK TERNA S.A. | - | 111,099 | - | 9,609 |
| OTHER RELATED PARTIES | ||||
| VIOMEK S.A. | - | 825,855 | 38,637 | 313,309 |
| TERNA S.A. | 457,645 | 9,877,348 | 536,843 | 1,925,481 |
| HERON THERMOELECTRIC S.A. | - | 33,346 | - | 7,924 |
| Joint Ventures in which TERNA S.A. participates in | 6,752,011 | - | 4,000 | - |
Regarding the above transactions, the following clarifications are provided:
a) Sales of TERNA ENERGY SA:
The total remuneration to Board members amounted to 1,234,997 euro from which 735,000 euro refer to Board remuneration while 499,997 euro refer to the provision of services.
The company applies all the established rules from the legal, regulatory and other relevant authorities without deviation on all its activities and operations. Moreover, it has adopted internal rules and business practices that contribute to the adherence to transparency principles, professional ethics and prudent management of all company resources at all management levels, to the benefit of its shareholders and related parties. The overall above rules and practices are incorporated in the Corporate Governance Code (CGC), which was prepared by the company, in line with the provisions of Law 3873/2010. The Code has been posted on the company's website www.terna-energy.gr.
The CGC states, with clarity and accuracy, the following corporate governance rules and practices in detail:
Its role is defined clearly, together with its responsibilities and duties to set and apply the company's strategy with the basic objective of protecting the interest of all its Shareholders. As the highest authority in the company's management, the Board of Directors decides on all the corporate affairs, apart from those that fall under the responsibility of the General Meeting.
Specifically, the responsibilities of the Board of Directors include:
ensuring the smooth and proper operation of the appropriate systems and mechanisms for the company's internal audit, adhering to the company's legal – operational framework, as well as assessing and managing the business risks it faces
the continuous effort for the avoidance or prudent handling of a possible conflict of interest of the Board of Directors or its members or basic shareholders with the interests of the company, by adopting transparency and monitoring rules on its transactions
The Board of Directors consists of nine (9) members, from which three are non-executive and two are independent nonexecutive.
During the exercise of their duties and the Board meetings in 2010, the Board members exhibited "diligence of a prudent businessman", they dedicated the sufficient time needed for the efficient management of the company, acted with integrity, accountability and proper judgment, avoiding actions that could endanger the company's competitiveness or conflict its interests. Also, they protected the confidentiality of information they had privileged access to and ensured the prompt and simultaneous provision of information to all shareholders and interest investors on issues that could affect their decision to realize any transaction on company shares.
During such meetings, the Board was supported by a company secretary, the responsibilities of which are described in the CGC.
The Chairman represents the basic instrument for applying Corporate Governance Principles in the company, with responsibility, among others, for the efficient operation of the Board of Directors and the active participation of all its members in making and reviewing the application of business decisions, as well as for the smooth communication between the company and its shareholders.
The Chairman's responsibilities include convening and addressing the Board's activities on the issues of the daily agenda prepared by the Chairman himself according to the company's needs and the relevant requests by other Board members, making efforts for the efficient coordination and smooth communication between all Board members, as well as between the company and shareholders – investors, which is based on the prompt, clear and reliable provision of information towards Board members on the total activities and operation of the company, as well as ensuring the smooth incorporation of other members to the Board of Directors and their motivation in order to encourage their active and substantial participation in corporate affairs and the decision making process.
The Board of Directors is supported by Committees, which carry an advisory role, but which also carry a heavy weight in the decision making process of the Board. The Committees are as follows:
The above committee is newly established and thus is a deviation from the CGC of 2010.
The Nominee and Remuneration Committee consists of three members and its role is to explore and propose the proper nominees for election in the company's Board of Directors, as well as to propose policies and systems that define remuneration for all company levels.
The Committee's responsibilities, in relation to proposing nominees, mainly include defining the company's requirements as regards to the size and composition of its Board of Directors, defining the role, responsibilities and skills of each position within the Board of Directors, the periodic review of the Board's size and composition and the submission of proposals for changes – improvements when deemed necessary.
In relation to its responsibilities on remuneration issues, the Nominee and Remuneration Committee convenes for such at least twice a year and whenever else deemed necessary. It processes and proposes the system that defines remuneration of employees, Board members and senior executives, it prepares and submits to the Board proposals for the corporate remuneration policy and assesses its application according to the relevant annual remuneration report and it prepares the proposals that must be submitted by the Board to the General Meeting of shareholders for approval.
The above committee is newly established and thus is a deviation from the CGC of 2010.
The mid-long-term strategic planning for the company's development includes, amongst others, the following investment policy in order to achieve and maintain its business objectives through time.
The company's Board of Directors is the responsible body that sets and applies investment policy. In this context the Board bases its decisions on the appropriate proposals submitted by the Investment Committee as regards to acquisitions, mergers, strategic alliances, high budget investments, liquidation of assets and any other action of strategic importance that may affect the capital structure and future development of the company. The Investment Committee convenes once every quarter and at any other time deemed necessary for the Board to make investment decisions.
The Investment Committee (I.C.) consists of five members, while three (3) members from the company's and its parent's Boards participate in the Committee together with two (2) senior executives or advisors of the company, according to the issue to be discussed. The Chairman and Managing Director of the parent company may be members of the Investment Committee.
As is the case for other company committees, the I.C. has the character of providing proposals and not making decisions. Its basic responsibilities include preparing the investment policy and long-term investment plan of the company, evaluating and approving the implementation of the annual investment plan, as well as any new significant investment that is separately submitted, examining the company's capital adequacy to implement each investment proposal, evaluating the business risks associated with such and evidencing its objective and confirming that its implementation is included in the application measures of the company's approved business strategy.
The composition, role and responsibilities of the Audit Committee are described below, in the paragraph referring to the company's internal control.
The Audit Committee convened four (4) times during 2010 and discussed with the head of the company's internal audit about its findings and conclusions and confirmed the correctness of the preparation procedure for the financial statements. Also, it undertook the responsibility to incorporate all the rules, procedures and practices of internal control and risk management during 2011 for the company's activities in Greece and abroad, in an integrated system that will be proposed for approval by the Board of Directors.
The internal control system is defined by the total rules and measures applied by the company, which aim at the preventive and restrictive audit of operations and procedures at all levels of the company's hierarchy and organization, in order to ensure: the legality and security of management and transactions, the accuracy and reliability of published financial statements and any other financial information and announcement, as well as the effectiveness of the company's operational systems and activities.
The Board employs the internal control system so as to protect the company's assets, estimate the evident risks from its operations and to provide accurate and complete information towards shareholders as regards to the actual condition and prospects of the company, as well as the manner in which detected risks are handled.
To implement the above, the Board defines the operational context of the internal control, approves the conduct and evaluation procedures of its results and decides on its composition, adhering to the relevant legal and regulatory framework. It establishes a special internal audit division, which is independent, is not subject to any hierarchy in relation to any other organizational unit and is supervised by the company's Audit Committee.
With the contribution of the Audit Committee, it evaluates the adequacy and effectiveness of the special internal audit division and the extent to which its reports are utilized by the Board for the continuous improvement of the company's operation at all levels ant the effective management of business risks. Moreover, the Audit Committee maintains direct and regular contact with the external auditors, in order to by systematically informed on the adequacy and reliability regarding the operation of the internal control and risk management systems, as well as the accuracy and reliability of the financial information.
The evaluation and management of risks during 2010 is described in the relevant paragraph of the company's Annual Financial Report.
During 2011, the Audit Committee, in direct cooperation with the respective Committee of the Group, will revise all the internal control rules, procedures and practices for the company's activities in Greece and abroad, it will proceed with any required additions – improvements and will include such in an integrated risk management system that will be proposed for approval by the Board of Directors.
The Audit Committee consists of three (3) non-executive Board members, from which one (1) is independent. One (1) of the three members has adequate knowledge and experience in accounting and auditing issues.
The Audit Committee supports the Board of Directors in fulfilling its responsibility to ensure compliance of the company's bodies and actions with the provisions of the legal – institutional – regulatory framework and the Corporate Governance Principles that govern its operation, the completeness and reliability or accounting, IT and administrative systems of the company and the derived by such published financial statements and other reports, as well as the smooth and effective operation of all the company's control mechanisms in order promptly identify, apart from the above, business risks and handle such prudently and effectively.
The Audit Committee convenes at least four times a year and whenever else it deems necessary. It invites the ordinary auditor to its meeting at least twice a year to provide clarifications – explanations on its activity and its comments – conclusions on the financial statements and the general financial information of the company.
The Audit Committee has the following, by subject, basic responsibilities:
It oversees the production procedure of the company's financial statements and other financial reports, examines their reliability and sees to the smooth operation of the internal control's activities providing its support, and also periodically reviews the adequacy and reliability of internal control mechanisms and mechanisms for the management of business risks with the following criteria: the prompt identification of business risk and the quick response to handle such. It investigates possible transactions of the company with any related party in detail and submits relevant reports to the Board of Directors in order to evaluate the possibility of present conflicts of interest with complete transparence and to prevent possible damage or loss for the company.
Also, the Audit Committee receives the reports of the Internal Audit Division, assesses their contents and proposes the head of the Division to the Board of Directors, evaluates the effectiveness and efficiency of such, and based on the above proposes the continuity or termination of his/her responsibilities.
The Audit Committee monitors the conduct of activities by the ordinary auditor and assesses whether such is in accordance with the relevant legal – regulatory framework, the international standards and best practices. It also examines and evaluates the adequacy of knowledge, professional consistency, independence and effectiveness of the ordinary auditor, and based on such proposes to the Board of Directors the continuance or termination of the relationship with the ordinary auditor.
The Board of Directors emphasizes greatly on protecting the rights of all company Shareholders, by facilitating the information they receive on the development of corporate affairs and by encouraging their participation in the General Meetings, where they have the opportunity to communicate directly with Management, submit questions they may have and contribute to the final positioning of the company's strategic directions.
The company has a special Investor Relations and Shareholders' Service Department, which ensures the direct, responsible and complete provision of information, as well as the facilitation of shareholders to exercise their rights.
In the same context, the Chairman of the Board and/or Managing Director may realize individual meetings with company shareholders that own a significant share of its capital, with the objective to provide more detailed information on corporate governance issues. They also collect the views stated by shareholders, transfer such to the remaining Board members and ensure that the principles and procedures of corporate governance and any other information useful for shareholders and investors are promptly available and easily accessible through modern means.
The company adheres to the total relevant terms and provisions stipulated by the effective legal – regulatory framework as regards to the General Meeting of its Shareholders, with particular dedication on reinforcing their ability to smoothly exercise their rights, based on the completeness, accuracy and clarity of the information such receive promptly by the relevant company bodies, through all means available to the company.
Aiming at the largest possible presence of its shareholders (institutional and private) during the General Meeting, the company promptly announces, through any appropriate means, the daily agenda issues, the date and location where the General Meeting will convene. To facilitate their active participation in the General Meeting's activities, it provides complete information on the manner and deadline for exercising the right to list issues on the daily agenda, as well as to submit questions. Also, it informs shareholders about the number of shares and voting rights, the voting procedures and offers any other required supplementary document in order to conduct the General Meeting's activities most effectively.
Members of the Board of Directors, the company auditors and any other senior company executive, who are considered essential for the provision of detailed information and clarifications on shareholders' inquiries, are present at the General Meetings.
The required information is already included in another section of the Management Report that refers to the additional information of article 4 par. 7 of Law 3556/2007.
The Board of Directors provides the cases and reasons for which it deviated from the recommendations of the Code during 2010.
The Nominee and Remuneration Committee, as well as the Investment Committee are newly established bodies of the company and thus deviate from the CGC for 2010.
The Board of Directors evaluated its performance during 2010 according to the effective, informal practices. During 2011 it will formalize the relevant evaluation procedure.
The present Explanatory Report of the Board of Directors is submitted towards the Ordinary General Shareholders' Meeting, according to paragraph 8 article 4 of L. 3556/2007 and has been prepared according to those stipulated by paragraph 7 of article 4 of the same law.
The Company's share capital amounts to thirty two million eight hundred thousand and twenty euro (32,800,020€) it is fully paid up and divided into one hundred and nine million three hundred and thirty three thousand and four hundred (109,333,400) common registered shares with voting right and a nominal value of thirty cents (0.30€) each.
The Company's shares are listed and traded on the securities market "Large Capitalization" Category of the Athens Exchange following their transfer, on 1 June 2009, from the "Middle and Small Capitalization" category.
All the rights and obligations stated by Law and the Company's Articles of Association emanate from each share.
The transfer of Company shares takes place according to Law and there is no limitation to their transfer according to the Articles of Association.
Shareholders which during 31/12/2010 held a percentage larger than 5% are presented in the following table:
| NAME OF SHAREHOLDER | SHARES | PERCENTAGE |
|---|---|---|
| GEK TERNA SA | 52,084,711 | 47.638% |
| Georgios Peristeris | 24,646,551 | 22.543% |
Direct participation of GEK TERNA SA: 52,083,211 shares or 47.637% Indirect participation via subsidiary HERON HOLDINGS SA: 1,500 shares or 0.001% Total (direct and indirect) participation settles at 47.638%
According to the Company's Articles of Association there are no shares that provide special control rights.
According to the Company's Articles of Association there are no limitations of voting rights emanating from its shares.
To the Company's knowledge, there are no agreements between its Shareholders, which imply limitation to the transfer of its shares or to the exercise of voting rights emanating from its shares.
The Company's Articles of Association have been conformed to the provisions of L. Ν,3604/2007 and their provisions do not differ from those stipulated by C.L. 2190/20 as in effect, both as regards to the appointment and replacement of Board Members and as regards to the amendment of its articles.
According to those stipulated by par. 2 article 5 of the Articles of Association, the General Meeting may by means of its decision, assign authority to the Board of Directors to increase by means of its decision, the share capital according to those stipulated by C.L. 2190/20.
According to the provisions of article 13 par. 13 of C.L. 2190/20, as in effect, the Board of Directors may increase the share capital by issuing new shares in the context of implementing the approved by the General Meeting Stock Option Plan, for acquisition of Company shares by the beneficiaries.
According to the provisions of article 16 of C.L. 2190/1920, as in effect, following approval of the General Meeting, the Company may with the responsibility of the Board of Directors, acquire through the Athens Exchange, its own shares with the condition that the nominal value of shares acquired, including shares acquired previously and maintained by the Company, does not exceed 10% of its paid up share capital.
There are no agreements which are put into effect, amended or terminated in case of change in the Company's control following a tender offer.
There are no agreements of the Company with members of its Board of Directors or its employees, which include the payment of indemnity, specifically in case of resignation or termination without reasonable cause or termination of term or employment due to a tender offer.
Athens, 24 March 2011
Georgios Perdikaris Chairman of the Board
The Financial Statements were approved by the Board of Directors of TERNA ENERGY ABETE on 24 March 2011 and have been published by being posted on the internet at the website www.terna-energy.gr in which they remain at the disposal of the investment community for at least 5 years since their publication. It is noted that the published in the press Data and Information derived from the Financial Statements, aim at providing the reader with certain general financial information but do not provide a full picture of the financial position and the results of the Company and Group, in accordance with the International Financial Reporting Standards (IFRS).
| GROUP COMPANY 31 31 31 Note December December December 2010 2009 2010 ASSETS Non-current assets |
31 December 2009 989 110,552 923 71,051 |
|---|---|
| Intangible assets 6 17,930 1,774 1,508 |
|
| Tangible assets 7 417,194 340,820 124,919 |
|
| Investment property 923 923 923 |
|
| Participation in subsidiaries - - 106,993 |
|
| Participations in associates 8 3,499 51 3,448 |
- |
| Participation in joint-ventures 21 - - 244 |
374 |
| Other long-term receivables 9 286 219 230 |
183 |
| Other investments 1 1 1 |
1 |
| Deferred tax assets 25 303 1,233 - |
819 |
| Total non-current assets 440,136 345,021 238,266 |
184,892 |
| Current assets | |
| Inventories 10 2,196 536 1,903 |
244 |
| Trade receivables 11 14,870 22,394 26,404 |
19,225 |
| Receivables according to IAS 11 11,12 3,096 2,269 5,066 |
10,466 |
| Prepayments and other receivables 11 26,584 24,880 7,237 |
7,749 |
| Income tax receivables 864 518 797 |
518 |
| Cash and equivalents 13 192,873 244,837 174,794 |
233,561 |
| Total current assets 240,483 295,434 216,201 |
271,763 |
| TOTAL ASSETS 680,619 640,455 454,467 |
456,655 |
| EQUITY AND LIABILITIES | |
| Shareholders' equity | |
| Share capital 22 32,800 32,800 32,800 |
32,800 |
| Share premium 22 281,892 281,930 282,006 |
282,006 |
| Reserves 11,330 17,269 7,782 |
14,708 |
| Retained earnings 37,876 39,812 34,545 |
37,102 |
| Total 363,898 371,811 357,133 |
366,616 |
| Non-controlling interests 2,603 1,405 - |
- |
| Total equity 366,501 373,216 357,133 |
366,616 |
| Long-term liabilities | |||||
|---|---|---|---|---|---|
| Long-term loans | 14 | 63,204 | 67,646 | 36,754 | 36,707 |
| Other provisions | 16 | 1,144 | 1,136 | 597 | 597 |
| Provision for staff indemnities | 15 | 178 | 181 | 178 | 181 |
| Grants | 17 | 59,130 | 50,796 | 18,722 | 19,777 |
| Deferred tax liabilities | 25 | 1,497 | 838 | 356 | - |
| Other long-term liabilities | 1,965 | - | - | - | |
| Total long-term liabilities | 127,118 | 120,597 | 56,607 | 57,262 | |
| Short-term liabilities | |||||
| Suppliers | 18 | 36,612 | 14,071 | 12,402 | 12,660 |
| Short-term loans | 20 | 126,848 | 111,503 | 12,176 | 7,145 |
| Long-term liabilities falling due in the | |||||
| next period | 14 | 12,505 | 10,929 | 7,484 | 5,917 |
| Liabilities according to IAS 11 | 12,19 | 3,940 | 3,368 | 4,038 | 3,368 |
| Accrued and other short-term liabilities | 19 | 6,860 | 6,214 | 4,627 | 3,687 |
| Income tax payable | 235 | 557 | - | - | |
| Total short-term liabilities | 187,000 | 146,642 | 40,727 | 32,777 | |
| Total liabilities | 314,118 | 267,239 | 97,334 | 90,039 | |
| TOTAL LIABILITIES AND |
|||||
| EQUITY | 680,619 | 640,455 | 454,467 | 456,655 |
| GROUP | COMPANY | |||||
|---|---|---|---|---|---|---|
| Note | 1/1 - 31/12 2010 |
1/1 - 31/12 2009 |
1/1 - 31/12 2010 |
1/1 - 31/12 2009 |
||
| Continued activities | ||||||
| Turnover | 59,055 | 73,376 | 51,126 | 65,221 | ||
| Cost of sales | 26 | (36,819) | (48,704) | (35,663) | (47,390) | |
| Gross profit | 22,236 | 24,672 | 15,463 | 17,831 | ||
| Administrative & distribution expenses | 26 | (6,968) | (5,217) | (4,987) | (3,997) | |
| Research & development expenses | 26 | (3,274) | (3,156) | (2,604) | (3,736) | |
| Other income/(expenses) | 27 | 2,803 | 3,491 | 1,289 | 3,140 | |
| Operating results | 14,797 | 19,790 | 9,161 | 13,238 | ||
| Financial income/(expenses) | 28 | 1,998 | 4,131 | 3,451 | 6,171 | |
| EARNINGS BEFORE TAX | 16,795 | 23,921 | 12,612 | 19,409 | ||
| Income tax expense | 25 | (6,831) | (7,564) | (4,636) | (6,032) | |
| NET EARNINGS FOR THE PERIOD | 9,964 | 16,357 | 7,976 | 13,377 | ||
| Other income recognized directly in Equity from: Foreign exchange differences from |
||||||
| incorporation of foreign units | 47 | (9) | - | - | ||
| Expenses of capital increase of subsidiary | (38) | (31) | - | - | ||
| Income tax recognized directly in Equity Other income/expenses for the period net of |
(409) | (132) | (415) | (139) | ||
| income tax | (400) | (172) | (415) | (139) | ||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
9,564 | 16,185 | 7,561 | 13,238 | ||
| Net earnings attributed to: | ||||||
| Shareholders of the parent from continued activities |
9,572 | 15,864 | ||||
| Non-controlling interests from continued activities |
392 | 493 | ||||
| 9,964 | 16,357 | |||||
| Total income attributed to: | ||||
|---|---|---|---|---|
| Shareholders of the parent from continued activities |
9,174 | 15,692 | ||
| Non-controlling interests from continued activities |
390 | 493 | ||
| 9,564 | 16,185 | |||
| Earnings per share (in Euro) | ||||
| From continued activities attributed to |
||||
| shareholders of the parent | 0.0890 | 0.1459 | 0.0741 | 0.1230 |
| Average weighted number of shares | ||||
| Basic | 107,526,657 | 108,723,395 | 107,526,657 | 108,723,395 |
| Note | GROUP | COMPANY | |||
|---|---|---|---|---|---|
| 1/1 - 31/12 2010 |
1/1 - 31/12 2009 |
1/1 - 31/12 2010 |
1/1 - 31/12 2009 |
||
| Cash flow from operating activities | |||||
| Net earnings for the period before tax | 16,795 | 23,921 | 12,612 | 19,409 | |
| Adjustments for the agreement of net flows from operating activities |
|||||
| Depreciation | 6, 7 | 9,107 | 8,880 | 4,789 | 4,597 |
| Provisions | 15, 16 | 165 | (228) | 160 | 160 |
| Interest and related income | 28 | (6,644) | (9,338) | (6,419) | (9,196) |
| Interest and other financial expenses | 28 | 4,646 | 5,206 | 2,968 | 3,024 |
| Results from participations and securities | - | - | - | (1,505) | |
| Amortization of grants | 17, 27 | (2,398) | (2,396) | (1,055) | (1,055) |
| Other adjustments | (77) | 83 | - | - | |
| Operating profit before working capital changes | 21,594 | 26,128 | 13,055 | 15,434 | |
| (Increase)/Decrease in: | |||||
| Inventories | (1,660) | 350 | (1,659) | (102) | |
| Trade receivables | 6,697 | (9,304) | (1,779) | (15,770) | |
| Prepayments and other short term receivables | 2,190 | (19,082) | (2,452) | (2,163) | |
| Increase/(Decrease) in: | |||||
| Suppliers | (2,922) | 5,993 | (257) | 4,925 | |
| Accruals and other short term liabilities | 3,267 | 4,417 | 2,485 | 1,017 | |
| (Increase)/Decrease of other long term receivables and liabilities | 1,898 | 18,216 | (47) | 7,824 | |
| Income tax payment | (4,073) | (9,244) | (2,340) | (8,072) | |
| Net cash inflow from operating activities | 26,991 | 17,474 | 7,006 | 3,093 | |
| Cash flow from investment activities: | |||||
| Purchases/Sales of tangible and intangible assets | (60,884) | (111,082) | (19,675) | (27,844) | |
| Grants received | 2,733 | 17,691 | - | 5,953 | |
| Interest and related income received | 6,747 | 11,232 | 6,533 | 11,102 | |
| (Purchases) / sales of participations and securities | (12,985) | (30) | (35,812) | (22,254) | |
| Dividends received from investments | - | - | - | 1,376 | |
| Increase of investments in associate company | (3,448) | - | (3,448) | - | |
| Cash outflows for investment activities | (67,837) | (82,189) | (52,402) | (31,667) |
| Proceeds from share capital increase | 765 | - | - | - |
|---|---|---|---|---|
| Purchase of Treasury Shares | (9,719) | (1,434) | (9,719) | (1,434) |
| Net change of long term loans | (2,768) | 20,799 | 1,621 | 14,888 |
| Net change of short term loans | 15,190 | 14,215 | 5,000 | (24,118) |
| Dividends paid | (7,329) | (7,317) | (7,329) | (7,317) |
| Interest paid | (7,290) | (7,635) | (2,944) | (3,023) |
| Cash outflows for financial activities | (11,151) | 18,628 | (13,371) | (21,004) |
| Effect of exchange rate changes on cash & cash equivalents | 33 | 38 | - | - |
| Net increase/(decrease) in cash | (51,964) | (46,049) | (58,767) | (49,578) |
| Cash & cash equivalents at the beginning of the period | 244,837 | 290,886 | 233,561 | 283,139 |
| Cash & cash equivalents at the end of the period | 192,873 | 244,837 | 174,794 | 233,561 |
| S ha re |
Re ine d ta |
||||
|---|---|---|---|---|---|
| Ca ita l p |
S ha Pr ium re em |
Re ser ve s |
Ea ing rn s |
To l ta |
|
| 1 J 2 0 0 9 an ua ry |
3 2, 8 0 0 |
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| To l c he ive inc for he io d ta t om p re ns om e p er |
- | - | - | 1 3, 2 3 8 |
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| iv i den ds D |
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| Tr fer he t ent an s s o r m ov em s |
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| 3 1 D 2 0 1 0 mb ece er |
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Re ine d ta Ea ing rn s |
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|
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|
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The TERNA ENERGY SA Group of companies (hereinafter the «Group» or «TERNA ENERGY») is a Greek group of companies mainly engaged in the energy and construction sector. The Group's activity in the energy sector is related to the construction and exploitation of renewable sources of Wind energy. The Company is also engaged in the research for the operation and construction of projects related to other renewable energy sources (RES).
TERNA ENERGY has a class 6 contractor certificate and its activity in the construction sector relates to the construction of private and public projects as a main contractor or subcontractor or through joint ventures. Based on the Greek legislation in effect, companies who hold a class 6 certificate, undertake public works with an initial contracting price from € 5.25 to €44.00 million or up to €60.00 million through joint ventures and private or selffinanced independently budgeted, either as main contractors or as sub-contractors or through joint ventures.
TERNA ENERGY is the continuation of the Technical Constructions Company (ETKA SA), which was established in 1949 (Gov. Gaz. 166/21.06.1949), and which during 1999 absorbed TERNA ENERGY SA. The latter had been established in 1997 (Gov.Gaz.6524/11.09.1997), and is based in Athens, 85 Mesogeion Ave.
The Company is listed on Athens Exchange. The parent company of TERNA ENERGY, which is also listed on Athens Exchange, is GEK TERNA SA and which on 31/12/2010 owned 47.638% of the company's share capital.
The accompanying separate and consolidated financial statements have been prepared according to the International Financial Reporting Standards (IFRS) that have been issued by the International Accounting Standards Board (IASB) and the Interpretations issued by the Standard Interpretations Committee and which have been adopted by the European Union.
Until the 31st of December 2004 TERNA ENERGY SA and its Greek subsidiaries kept their accounting books and prepared financial statements according to the provisions of L. 2190/1920 and the tax legislation in effect. From January 1st, 2005 they are obliged, according to the legislation in effect, to prepare their Statutory Financial Statements according to the IFRS that have been adopted by the European Union. The Company and the Greek companies of the Group continue to keep their accounting books in accordance with the provisions of the tax laws, as they have the right to do so. Off balance sheet adjustments are then made in order to prepare the accompanying financial statements in accordance with the IFRS.
The accounting principles applied for the preparation of the financial statements are the same with those applied for the preparation of the annual financial statements of the Company and the Group as of 31 December 2009, apart from the adoption of new accounting standards. The Group has fully adopted all IFRS and interpretations which up to the preparation date of the financial statements had been adopted by the European Union. The application of those standards according to the International Accounting Standards Board (IASB) was compulsory for the financial year ended on 31 December 2010. Therefore, from 1 January 2010, the Group and the Company adopted certain new standards and amendments of standards as follows:
Standards and Interpretations mandatory for 2010
Amendments to standards that are part of the IASB (International Accounting Standards Board) annual improvements plan published in May 2008. The application of all amendments issued is for 31 December 2009, with the following exception:
Part I: IFRS 5 (Amendment) "Non-Current Assets Held for Sale and Discontinued Operations" (and subsequent amendments to IFRS 1 "First Adoption of International Financial Reporting Standards")
The amendment clarifies that all assets and liabilities of a subsidiary are classified as held for sale if a sales plan for partial distribution results in loss of its control and therefore the relevant disclosures must be made for the subsidiary given that the definition for a discontinued operation is met. The subsequent amendment to IFRS 1 defines that such amendments will be applied in the future from the transition date to IFRS.
This amendment will not affect the financial statements of the Group and Company during the presented period.
The amended IAS 27 requires that transaction that lead to changes in participation percentages in a subsidiary, be registered in equity. Moreover, the amended standard changes the accounting treatment for losses realized by a subsidiary as well as the loss of control in a subsidiary.
The approval of the amendments to IAS 27 entails amendments to international financial reporting standards (IFRS)1, IFRS 4, IFRS 5, IAS1, IAS 7, IAS 14, IAS 21, IAS 28, IAS 31, IAS 32, IAS 33, IAS 39 and interpretation 7 of the Standing Interpretation Committee (SIC) in order to ensure consistency between the international accounting standards.
The present amendment clarifies how the hedge accounting is used on the part of the financial instrument that corresponds to inflation and to options when such are used as hedging instruments.
This amendment does not apply to the financial statements of the Group and Company during the presented period.
The restructured IFRS 1 replaces the existing IFRS 1, in order to facilitate the use of IFRS 1 and its amendment in the future. Moreover, the restructured IFRS 1 deletes from the standard several transitional guidances and it includes several less significant restatements. The effective requirements remain unchanged.
The specific amendment has no effect on the Company's and Group's financial statements as the Company has already made the transition to IFRS.
The amendment clarifies the definition of "vesting conditions", with the introduction of the term "non-vesting conditions" for terms that do not constitute service of performance terms. It also clarifies that all cancellations either arising from the entity itself or from third parties, must have the same accounting treatment. The amendment has no effect on the financial statements.
The revised IFRS 3 introduces a series of changes in the accounting treatment of business combinations that will affect: a) The amount of goodwill that arises,
b) The results of the reported period during which the companies' acquisition takes place and
c) The future results.
Such changes include:
a) The registration in the results of expenses related to the acquisition and
b) The registration in the results of subsequent changes to the fair value of the potential price
The approval of revised IFRS 3 entails amendments to IFRS 1, IFRS 2, IFRS 7, to International Accounting Standards (IAS 12), IAS 16, IAS 28, IAS 32, IAS 33, IAS 34, IAS 36, IAS 37, IAS 38, IAS 39 and interpretation 9 of the International financial Reporting Interpretation Committee (IFRIC) in order to ensure consistency between the international accounting standards.
The amendment applies to the financial statements of the Group and Company during the presented period.
The interpretation applies to an economic entity that hedges the foreign exchange risk from a net investment in a foreign operation and meets the condition for accounting hedge according to IAS 39.
The interpretation provides guidance regarding the way in which an entity must define the amounts reclassified from equity to the results both for the hedge instrument and for the hedged item.
The interpretation does not apply to the Group's and Company's financial statements during the presented period, as the Group and Company do not apply accounting hedging for any investment in a foreign operation.
The interpretation provides guidance on the accounting treatment of the following non-reciprocal distributions of assets from the economic entity to shareholders who act under their capacity as such: a) distribution of non-cash assets and b) distributions providing the option to shareholders of either non-cash assets or cash. Also several amendments were made to IFRS 5 and IAS 10.
This interpretation does not apply to the Group's and Company's financial statements during the presented period.
The interpretation clarifies the requirements of IFRS for the agreements under which the economic entity receives tangible assets from one customer, and subsequently it must use such assets to provide constant access to goods or services to the customer. In several cases, the economic entity receives cash from a customer that must be used only for the purchase or construction of the tangible asset.
Several amendments were also made to IFRS 1.
This interpretation does not apply to the Group's and Company's financial statements during the presented period.
Amendments to standards that are part of the IASB (International Accounting Standards Board) 2009 annual improvement plan
The following amendments describe the most important changes introduced to IFRS as a result of the annual improvement plan of the IASB, which was released in April 2009. The following amendments apply for the present financial period.
Also, unless stated otherwise, the following amendments do not have a significant effect on the Group's financial statements.
The amendment confirms that the contributions of a company for the establishment of a joint venture and the joint control transactions are exempt from the application scope of IFRS 2.
The amendment clarifies disclosures required for non-current assets classified as held for sale or discontinued operations.
The amendment provides clarifications for the disclosure of information relating to the segment's assets.
The amendment provides clarification that the potential settlement of a liability with the issue of equity instruments is not relevant to its classification as current or non-current.
The amendment requires that only expenses that lead to a recognized asset in the statement of financial position can be classified as investment activities.
The amendment provides clarification regarding the classification of land and building leases as finance or operating leases.
The amendment provides additional guidance regarding the definition of whether an entity acts as a principal or agent.
The amendment clarifies that the largest cash flow generating unit in which goodwill should be allocated for the purposes of an impairment review is an operating segment as defined by paragraph 5 of IFRS 8 (namely before the concentration – summation of segments).
The amendments clarify (a) the requirements according to IFRS 3 (revised) regarding the accounting treatment of intangible assets acquired in a business combination and (b) the description of valuation methods used broadly from entities during the fair value measurement of intangible assets acquired in a business combination that are not traded in active markets.
The amendments concern (a) clarifications regarding the treatment of penalties / fines from loan prepayments as closely related embedded derivatives, (b) the exemption scope for business combination contracts and (c) clarifications that profit or losses from a cash flow hedge of an expected transaction should be reclassified from equity to the results during the period when the hedged expected cash flow affects the results.
The amendment clarifies that IFRIC 9 does not apply in a possible re-evaluation, during the acquisition date, of embedded derivatives in contracts that were acquired in a business combination that concerns entities under joint control.
The amendment mentions that in a hedge of a net investment in a foreign operation, appropriate hedging instruments may be held by any entity within the group, including the foreign entity itself, given that specific conditions are met.
Standards and Interpretations mandatory for financial statements beginning after 1 January 2010
Specific new standards, amendments of standards and interpretation that have been issued and are mandatory for accounting periods beginning during the present period or after. The Company's (and Group's) assessment regarding the effect from the application of the new standards, amendments and interpretations, is presented below.
– IFRS 9 "Financial instruments" (applied for annual accounting periods beginning on or after 1 January 2013) IFRS 9 is the first part of the first phase in the plans of IASB (International Accounting Standards Board) to replace IAS 39. The IASB intends to extend IFRS 9 during 2010 in order to add new requirements for the classification and measurement of financial liabilities, the de-recognition of financial instruments, the impairment of value and hedge accounting. IFRS 9 defines that all financial assets are initially measured at fair value plus, in the case of a financial asset not at fair value through the results, specific transaction costs. The subsequent measurement of financial assets takes place either at amortized cost or at fair value and depends on the business model of the economic entity regarding the management of financial assets and the contractual cash flows of the financial asset.
IFRS 9 does not permit reclassifications, except for rare occasions where the entity's business model changes, and in such a case the entity is required to reclassify the affected financial assets in the future. According to the principles of IFRS9, all investments in equity instruments must be measured at fair value. However, management has the option to present realized and unrealized profit and losses from fair value of equity instruments not held for commercial purposes in other comprehensive income. This definition is made during initial recognition for each financial instrument separately and cannot be changed. The fair value profit or losses are not subsequently transferred to the results, while income from dividends will continue to be recognized in the results. IFRS 9 repeals the exception of measurement at cost for non-listed shares and derivatives on non-listed shares, but it provides guidance for when the cost may be considered as a representative estimation of fair value. The Group is currently assessing the effect of IFRS 9 on its financial statements. The standard has not yet been adopted by the EU.
The present amendment attempts to relax the disclosures of transactions between government-related entities and to clarify the definition of a related party. Specifically, the obligation of government-related entities to disclose details of all transactions with the government and other government-related entities is repealed, the definition of a related party is clarified and simplified and the amendment also imposes the disclosure not only of the relationships, transactions and balances between related parties but also of the commitments both in the separate and in the consolidated financial statements. The Group will apply these changes from the day such are put in effect.
Applied for annual accounting periods beginning on or after 1 February 2010.
The amendment to IAS 32 clarifies the accounting treatment of several options when the issued instruments are expressed in a currency other than the issuer's operational currency. If such instruments are distributed proportionately to existing shareholders of the issuer for a specific amount of cash, such must be classified as share capital, even if their exercise price is in a currency different than the issuer's operational currency. Specifically, the amendment concerns, rights, pre-emptive rights, options for the purchase of a specific number of equity instruments of the economic entity. The amendment will not apply to the Company and Group.
The present amendment provides, for companies that apply IFRS for the first time, the same transition provisions that are included in the amendment of IFRS 7 as regards to the comparative information concerning disclosures of the new three-level hierarchy of fair value. The specific amendment will not affect the Group's financial statements as the Group has already made the transition to IFRS.
The present amendment provides the disclosures for transferred financial assets that have not been fully derecognized as well as for transferred financial assets that have been fully de-recognized but for which the Group has a continued involvement. It also provides guidance on the application of the required disclosures.
IFRIC 14 (Amendment) "The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction" (applied for annual accounting periods beginning on or after 1 January 2011)
The amendments apply to limited cases: when the entity is subject to a minimum funding requirement and proceeds with an advance payment of contributions to cover such requirements. The amendments allow such an entity to face the benefit from such an advance payment as an asset. The interpretation does not apply to the Group.
Applied for annual accounting periods beginning on or after 1 July 2010.
IFRIC 19 refers to the accounting treatment applied by the entity that issues equity instruments to a creditor, in order to settle, in full or in part, a financial liability. The interpretation does not apply to the Group.
– Amendments to standards that are part of the IASB (International Accounting Standards Board) annual improvement plan for 2010, were published in May 2010.
The effective dates for the amendments vary, however most apply for annual accounting periods beginning on or after 1 January 2011.
Such amendments are not expected to have a significant effect on the Group's financial statements.
The amendments concern: (a) additional disclosures if an entity changes its accounting policies or the application of the exemption of IFRS 1 if it has already published interim financial information according to IAS 34. (b) exemptions when the readjustment base is used as "deemed cost", and (c) exemptions for entities that are subject to a special standard to use the book values as "deemed cost" for tangible or intangible assets according to the previous accounting standards financial statements.
The amendments provide additional clarification as regards to: (a) contingent consideration agreements that result from business combinations with acquisition dates prior to the application of IFRS 3 (2008), (b) the calculation of the non-controlling interest, and (c) the accounting treatment of share-based payments that are part of a business combination, including awards based on shares and that were not replaces or indirectly replaced.
The amendments include multiple clarifications regarding the disclosures of financial instruments.
The amendment clarifies that entities may present the analysis of the individual items in total comprehensive income either in the statement of changes in equity or in the notes.
The amendment clarifies that the amendments of IAS 21, IAS 28 and IAS 31 that emanate from the revision of IAS 27 (2008) must be applied in the future.
The amendment put the largest emphasis on the disclosure principles that must be applied in relation to significant events and transactions, including the changes regarding fair value measurements, as well as the need to update the relevant information from the most recent annual report.
The amendment clarifies the definition of the term "fair value", in the context of the measurement of customer loyalty programs.
The accompanying annual consolidated financial statements were approved by the Board of Directors of the Parent Company on March 24th 2011.
The Group makes estimations, assumptions and judgments in order to choose the best accounting principles related to the future evolution of events and transactions. These estimations, assumptions and judgments are continuously assessed in order to reflect current information and risk and are based on the management's experience related to level/volume of transactions or events.
The main assumptions and judgments that may affect the financial statements in the coming 12 months are as follows:
a) Recognition of income from construction contracts: The Group uses the percentage of completion method to recognize revenue from construction contracts, in accordance with IAS 11. According to this method the construction cost as of each balance sheet date is compared to the budgeted total cost of the project in order to determine the percentage of completion of the project. The cumulated effect of the restatements/reassessments of the total budgeted cost of the projects and the total contractual payment (recognition of work over and above the contract) is recorded in the financial years during which such restatements arise. The total budgeted cost and the total contractual payment of the projects arise from estimation procedures and are reassessed and reviewed at each balance sheet date.
b) Provision for income tax: The provision for income tax according to IAS 12 is calculated with the estimation of taxes to be paid to tax authorities and includes the current income tax for each period and a provision for additional taxes that may occur from tax audits. The final settlement of income tax may differ from the relevant amounts recognized in the financial statements.
c) Provision for environmental rehabilitation: The Group creates a provision against its relevant liabilities for dismantlement of technical equipment of wind parks and environmental rehabilitation, that arise based on the written environmental legislation or by the Group's restrictive practices. The environmental rehabilitation provision reflects the present value (based on an appropriate discount rate), at the balance sheet date of the rehabilitation liability less the estimated recoverable value of material estimated to be dismantled and sold.
d) Valuation of inventories: For the valuation of inventories, the Group estimates according to statistical data and market conditions, the expected sale prices and the finalization and distribution cost of such per category of inventories.
e) Impairment of assets and recovery: The Group performs evaluation of the technological, institutional and financial developments by examining indications of impairment of all assets (fixed, trade and other receivables, financial assets etc.) as well as their recovery. Also, the installation licenses of wind parks that have not been set in operation are subject to an annual impairment review. The establishment of possible impairment requires, among others, estimation of the value in use, which is estimated using the discounted cash flow method.
During the application of this method, the Group relies on a series of factors, which include future operating results as well as market data. The estimation of future operating results is based on efficiency estimations of the wind parks according to wind statistical data and historical data on comparable units.
f) Provision for staff indemnities: The Group, according to IAS 19, performs estimations of assumptions based on which the actuarial provision for staff indemnities is calculated.
g) Depreciation of fixed assets: For the calculation of depreciations, the Group reviews the useful economic life and residual value of tangible and intangible fixed assets based on the technological, institutional and financial developments, as well as the experience from their use.
h) Acquisition of companies: The Group consolidates all companies it acquires from the date when control on such is acquired. In case where the acquisition depends on the realization of a series of future events – conditions, the company examines whether according to the actual events it has acquired control on the relevant companies. In case of a company acquisition, it is examined whether the acquired company meets the definition of a business according to IFRS 3. A business company usually consists of inflows, procedures that are applied on such inflows and resulting outflows that are used or will be used for the generation of income. In case where a company acquired is assessed not to consist of a complete series of activities and assets with the form of a company, then the acquisition is accounted for as an acquisition of assets and not of a company.
i) Fair value of financial assets and liabilities: The Group applies estimation of the fair value of financial assets and liabilities.
The main accounting principles adopted during the preparation of the accompanying interim consolidated and individual financial statements are the following:
The attached condensed interim consolidated financial statements comprise the condensed interim financial statements of TERNA ENERGY and its subsidiaries. The subsidiary companies in which the Group holds directly or indirectly more than half of the voting rights or has the right to exercise control over their operation have been consolidated. Subsidiaries are consolidated from the date that the Group acquires control over them and cease to be consolidated from the date it no longer has control.
The Group's interests in Joint Ventures, in the cases where they are subject to common control, are consolidated in the consolidated financial statements using the equity consolidation method whereby the Group's share of each of the assets, liabilities, income and expenses of a jointly controlled entity is included in the Group's financial statements.
Intra-group transactions and balances have been cancelled-out in the attached consolidated financial statements. Whenever required the accounting principles of the subsidiaries have been amended in order to ensure consistency with the accounting principles adopted by the Group.
Includes companies in which the Group exercises significant influence however they are not subsidiaries or joint ventures. The Group's participating interests are recorded using the equity method. According to this method the participating interest in the associate company is carried at acquisition cost plus any change in the percentage of its equity held by the Group, less any provisions for impairment. The consolidated income statement shows the Group's share in the associate's results, while the amounts recorded by the associates directly in their equity, are recognized directly in Group's equity.
Financial assets that fall under the provisions of IAS 39 and are governed by them are classified according to their nature and characteristics into one of the following four categories:
Initially they are recognized at acquisition cost, which represents the fair value plus, in some cases, the direct transaction and acquisition expenses.
The classification of the above financial assets is made upon their initial recognition and wherever permitted it is reviewed and reassessed on a periodic basis.
Financial assets (non-derivative) that cannot be classified in any of the above categories are designated and classified as investment available for sale. After the initial recognition, available for sale investments are registered in other comprehensive income. Upon sale or write-off or impairment of the investment the accumulated gains or losses are included in the profit or loss.
Receivables and loans created by the activities of the Group (and which fall outside the usual credit limits) are valued at net amortized cost using the effective interest rate method. Gains or losses are recorded in the profit or loss when the relevant amounts are written-off or suffer impairment as well as through the amortization process.
This relates to the trading portfolio and comprises investments acquired with a view to liquidate them in the near future. Gains or losses from the valuation of such assets are recorded in the profit or loss.
Financial assets (non-derivative) with defined flows and defined maturity are classified as held to maturity when the company is willing and able to retain them until their maturity. Investments held indefinitely or for a predetermined period cannot be classified in this category. Held to maturity investments are valued, after the initial recording, at net amortized cost using the effective interest rate method. Gains or losses are recorded in the profit or loss when the relevant amounts are written-off or suffer impairment as well as through the amortization process.
The current value of such investments that are traded in an organized exchange is derived by the exchange value of the investment at the closing date. As regards investments that are not traded in an active market, their fair value is calculated on the basis of relevant valuation techniques. These techniques are based on recent arm's-length investment transactions, with reference to the exchange value of another investment with characteristics similar to the investment valued, discounted cash-flow analysis and investment valuation models.
Non-derivative financial assets and liabilities in the balance sheet include cash balances, receivables, participations bank loans and other short and long-term liabilities. The Company does not use derivative financial products. The accounting principles for the recognition and measurement of these items are mentioned in the respective accounting principles, which are presented in this Note. Financial instruments are disclosed as receivables, liabilities or equity based on the substance and the contents of the relevant contracts from which they stem. Interest, dividends, gains and losses resulting from the financial instruments that are classified as receivables or liabilities are accounted for as expenses or income respectively. The distribution of dividends to shareholders is accounted for directly through equity. Financial instruments are netted-off when the Company, according to the law, has this legal right and intends to set them off (against each other) on a net basis or to recover the asset and net the liability off at the same time. Financial risk management aims to minimize possible negative effects and specifically:
The Company's bank loans are denominated in euro and are subject to variable and fixed interest rates. The Company does not use derivative instruments in order to reduce its exposure to interest rate risk. The Management of the Company follows the development of interest rates and exchange rates and takes the necessary measures to reduce the risk.
The amounts appearing in the attached Statement of Financial Position for cash balances, short-term receivables and other short-term liabilities approximate their respective real values due to their short-term nature. The fair value of short-term bank loans does not differ from their accounting value due to the use of variable interest rates.
A substantial part of trade receivables in general relate to agencies and entities of the Public sector with which there is no credit risk, per se. Furthermore, the total income from the energy sector is derived from two Public sector companies.
Regarding receivables from the private sector, the Group policy is to seek business with customers of satisfactory credit standing while the constant aim is to resolve any resulting differences within a amicable settlement context.
The Group has not entered into contracts in order to hedge the market risk arising from its exposure to fluctuations in the prices of raw materials used in the production process.
The euro is the currency of operation and presentation of the Group and its Greek subsidiaries. Transactions in other currencies are converted into euro using the exchange rates in effect at the date of the transaction. At the date of compilation of the financial statements the monetary asset and liability items that are denominated in other currencies are adjusted so as to reflect the current exchange rates.
The profits and losses resulting from the end-of-year valuation of monetary items in foreign currencies are reflected in the attached consolidated income statement. The profits or losses resulting from transactions are also reflected in the consolidated income statement.
The currency of operation of the foreign subsidiaries of the Group is the official currency of the country each subsidiary operates in. Accordingly, at each reporting period all the accounts of the Statement of Financial Position of subsidiaries are converted into euro using the exchange rate in effect at the balance sheet date. Income and expenses are converted using the weighted average rate in effect during the year.
The resulting exchange differences from the valuation of foreign subsidiaries as described above are presented in the Statement of Comprehensive Income. Upon sale or disposal of a foreign subsidiary the cumulated exchange differences described above are recorded in the profit and loss account.
Intangible assets consist of rights for use of forestry land, where Wind Parks are installed, purchased Wind Park licenses and software acquisition costs. The right of use of forestry land, where Wind Parks are installed, includes the related acquisition costs less accumulated amortization and possible impairment. The value of software includes the acquisition cost and all expenses incurred to develop the software in order to bring it to operating condition less accumulated amortization and possible impairment. Significant subsequent expenses are capitalized when such increase the software's capacity after initial specifications.
Amortization of licenses and on the rights of use for land where Wind Parks are installed is accounted for, using the straight-line method over the duration of the contractual right for the production of energy (approximately 20 years), beginning from the period when each Wind Park starts operating. Amortization of software is accounted for based on the straight-line method over 3 years. The amortization of all the aforementioned items is included in the income statement.
Income is recognized to the extent that it is probable that economic benefits will result for the Group and that the relevant amounts can be accurately measured. The following specific recognition criteria must also be met for the recognition of income.
Construction subsidiaries and joint-ventures recognize income from construction contracts in their accounting books based on amounts invoiced to customers, which result from the relevant partial certifications of work completed that are issued by the responsible engineers and correspond to the work completed up to the closing date. For reasons of compliance with the IFRS income from construction activity is accounted for in the attached consolidated financial statements using the percentage-of-completion method in accordance with the provisions of IAS 11 "Construction Contracts".
According to the percentage-of-completion method the construction costs incurred up to the reporting date are compared to the total estimated cost of the project in order to determine the percentage of the project that has been completed. This percentage is applied to the total revised contract price in order to determine the cumulated income from the project, based on which the invoiced income to date is revised. The cumulated effect of the revisions of the total estimated construction cost and the total contract price are accounted for during the accounting periods in which they arise. In the cases of contracts where it is forecast that the total estimated cost will exceed the total contract price, the entire loss is recognized in the year during which the loss-making events become probable.
Non-invoiced accrued income relates to income recognized on the basis of the method described above that has not yet been invoiced. Non-accrued income comprises amounts invoiced up to the balance sheet date over and above the income calculated using the percentage-of-completion method.
Project execution down payments represent amounts received by the Group upon signing the relevant contracts and are proportionally netted-off with the partial invoicing. The remaining amount appears as a liability in the attached financial statements.
Revenue from the sale of goods, net of trade discounts, sales incentive discounts and the corresponding VAT, is recognized when the significant risks and benefits from ownership of the goods have been transferred to the buyer.
Revenue from the sale of Electric Energy is accounted for in the year in which it accrues. Revenue from sales of electric energy to DESMHE or any other buyer that have not yet been invoiced is recognized as accrued noninvoiced income in the financial statements.
Rent revenue is recognized using the straight-line method, according to the terms of the lease.
Dividends are accounted for when the right to receive them has been finalized by the shareholders by virtue of a General Meeting resolution.
Interest income is recognized on an accruals basis.
The Group has valued certain land, buildings, machinery and vehicles at fair value on January 1st, 2004 and these fair values have been used as implied cost at the date of transition to IFRS. The resulting surplus was credited to the profits carried forward account. The remaining land, buildings, machinery and vehicles are measured at purchase cost less accumulated depreciation and any provisions for impairment.
Repairs and maintenance are booked as expenses during the year in which they are incurred. Significant improvements are capitalized in the cost of the respective fixed assets provided that they augment the useful economic life, increase the production level or improve the efficiency of the respective fixed assets.
Tangible fixed asset items are eliminated from the balance sheet on disposal or withdrawal or when no further economic benefits are expected from their continued use. Gains or losses resulting from the elimination of an asset from the balance sheet are included in the income statement of the financial year in which the fixed asset in question is eliminated.
Fixed assets under construction include fixed assets that are work in progress and reflect their cost. Fixed assets under construction are not depreciated until the asset is completed and put into operation.
Depreciation is calculated according to the straight-line method using rates that approximate the relevant useful economic lives of the respective assets. The useful economic lives per fixed asset category are as follows:
| Asset Category | Years |
|---|---|
| Buildings and technical installations | 8-30 |
| Machinery and Technical Installations | 3-20 |
| Vehicles | 5-12 |
| Fixtures and Other Equipment | 3-12 |
The book values of licenses of Wind Parks that are not yet in operation and of intangible assets with an indefinite life are reviewed for impairment purposes on an annual basis. Other long-term assets are reviewed for impairment purposes when facts or changes in circumstances imply that the book value may not be recoverable. When the book value of an asset exceeds its recoverable amount, the respective impairment loss is registered in the income statement. The recoverable amount is defined as the largest value between the net estimated sales price and the value in use.
The net sales value is the plausible income from the sale of an asset in the context of an arm's-length transaction, in which all parties have full knowledge and willingness, after the deduction of each additional direct sales cost for the asset. The acquisition cost consists of the net present value of future estimated cash flows expected to occur from the continuous use of the asset and from the income expected to arise from its sale at the end of its estimated useful economic life. In order to determine the impairment, the asset items are grouped at the lowest level for which cash flows can be recognized separately.
A reversal of an impairment loss for the value of assets accounted for in previous years, takes place only when there are sufficient indications that such an impairment no longer exists or it has been reduced. In these cases the above reversal is treated as income.
The Management assesses that there is no case of impairment of the Group's fixed assets and thus a calculation of the assets' recoverable amounts has not been made.
Investments in property are those held for rent income or capital gain and are valued at their fair value that is based on market value, that is to say the amount the property is likely to be sold at the date of a transaction. The assessment, when necessary, is made by external professional evaluators. Profits or losses that arise from changes in the real value of investments in property are included in the income statement of the period during which they arise. Repairs and maintenance are recorded as expenses in the year in which they are incurred. Material subsequent expenses are capitalized when they augment the useful economic life of the buildings, their productive capacity or reduce their operation cost. Investment properties are eliminated from the accounts upon sale. All gains or losses resulting from the sale of a property are included in the income statement of the year during which it was sold. Investment property under construction are recorded at cost value as tangible assets till their completion and then are transferred to investment property account.
Inventories comprise machinery parts and raw and auxiliary materials of Wind Parks. Inventories are valued at the lower of cost and net realizable value. The cost of raw materials, semi-finished and finished products is defined based on the weighted average method.
The cost of finished and semi-finished products includes all the realized expenses in order for them to reach the current point of storing and processing and consists of raw materials, labor costs, general industrial expenses and other costs that directly relate to the purchase of materials. The net realizable value of finished products is their estimated selling price during the Group's normal course of business less the estimated costs for their completion and the estimated necessary costs for their sale. The net realizable value of raw materials is their estimated replacement cost during the normal course of business. A provision for impairment is made if it is deemed necessary.
Short-term receivables are accounted for at their nominal value less the provisions for doubtful receivables, while long-term receivables are valued at net amortized cost based on the effective interest rate method. At each reporting period all overdue or doubtful receivables are reviewed in order to determine the necessity for a provision for doubtful receivables. The balance of the specific provision for doubtful receivables is appropriately adjusted at each balance sheet date in order to reflect the estimated relevant risks.
Each write-off of customer balances is debited to the existing provision for doubtful receivables.
The Group considers time deposits and other highly liquid investments with a maturity less than three months, as cash and cash equivalents, as well as time deposits with a maturity over three months, which however include the right for early liquidation with no loss of capital.
For the preparation of the cash flow statements, cash and cash equivalents consist of cash, deposits in banks and cash and cash equivalents as defined above.
All long-term and short-term loan liabilities are initially booked at cost, which is the actual value of the received payment less the issuance expenses related to the loan. After the initial recording, interest-bearing loans, except for loans classified as financial liabilities at fair value through the results, are valued at amortized cost using the effective interest rate method.
The amortized cost is calculated after taking into account the issuance expenses and the differences between the initial amount and the amount at maturity. Profits and losses are registered in the net profit or loss when the liabilities are written off or impaired and through the amortization procedure. The interest on loans is recognized as an expense in the period such arise according to the accrual principle, apart for loan interest that is allocated directly or indirectly to the acquisition or construction of selective tangible assets, which are capitalized during the period that is required to construct the assets and until such are ready for use. The Group classifies loans with embedded derivatives, whose financial characteristics are not linked closely with the loan agreement, as financial liabilities at fair value through the results during their initial recognition.
According to the provisions of L2112/20, the Group reimburses its retiring or dismissed employees, and the amount of the relevant indemnities depends on the years of service, the level of wages and the reason for exit from employment (dismissal or retirement). The liabilities for staff retirement indemnities are calculated using the discounted value of future benefits that have accrued at the end of the year, based on the recognition of the employees' benefit rights during the duration of their expected working years. The above liabilities are calculated based on the financial and actuarial assumptions and are defined using the projected unit method of actuarial valuation.
Net retirement costs for the period are included in the attached income statement and consist of the present value of benefits that have accrued during the year, the interest on the benefits' liability, the cost of prior service, the actuarial profit or loss and any other additional retirement costs. The prior service costs are recognized on a straightline basis over the average period during which access to the program's benefits is earned. The liabilities for retirement benefits are not financed. As at the 1st of January 2004 (transition date to IFRS and compilation of initial Balance Sheet) the Group, applying the exemptions provided for by IFRS 1 for the first-time application of the IFRS, recognized the total actuarial losses that had accumulated as of the 1st of January 2004. During the compilation of subsequent financial statements TERNA, applying the general provisions of IAS 19, followed the "margin" method for the recognition of accumulated actuarial losses/profits.
Actuarial profits and losses are registered as income or expenses when the accumulated actuarial profit or losses for each program separately exceed 10% of the largest value between the liability of the defined benefit and the actual value of the program's assets. These profits or losses are systematically recorded during the expected average remaining working life of employees participating in the plans.
The staff of the Group is mainly covered by the main Government Social Security Fund for the private sector (IKA) and which provides pension and medical-pharmaceutical benefits. Each employee is required to contribute part of his/her monthly salary to the fund, while part of the total contribution is covered by the Group. At the time of retirement, the pension fund is responsible for the payment of retirement benefits to the employees. Consequently, the Group has no legal or constructive obligation for the payment of future benefits according to this plan.
Current and deferred taxes are calculated based on the financial statements of each of the companies included in the consolidated financial statements, according to the tax regulation effective in Greece or other tax frameworks under which the foreign subsidiaries operate. Income tax is calculated based on the earnings of each company as such are reformed on the companies' tax reports, on additional income taxes emerging from the Tax Authorities' tax audits and on deferred income taxes based on the enacted tax rates.
Deferred income tax is calculated using the liability method on all temporary differences between the tax base and the book value of assets and liabilities on the balance sheet date. Deferred tax liabilities are recognized for all taxable temporary differences.
Deferred tax receivables are recognized for all the exempt temporary differences and transferable tax losses, to the extent that it is likely that there will be available taxable earnings, which will be set against the exempt temporary differences and the transferable unused tax losses.
The deferred tax assets are estimated during each reporting period and are reduced to the degree that it is not considered likely that there will be adequate taxable earnings against which part or the total of receivables from deferred income taxes may be used.
Deferred tax assets and liabilities are calculated according to the tax rates that are expected to be in effect during the financial year when the asset will be realized or the liability will be settled, and are based on the tax rates (and tax regulations) that are effective or enacted during the reporting period.
Income tax that relates to items, which have been recognized in other comprehensive income, is directly recorded in other comprehensive income and not in the consolidated income statement.
Finance leases, which essentially transfer to the Group all the risks and returns related to the leased fixed asset, are capitalized during the inception of the lease based on the leased asset's fair value or, if it is lower, on the present value of the minimal leases. Payments for finance leases are allocated between the financial expenses and the reduction of the financing liability, in order to achieve a fixed interest rate on the remaining portion of the liability. The financial expenses are debited directly to the results. Capitalized leased fixed assets are depreciated with the straight-line method based on the estimated useful life of the asset.
Leases where the lessor maintains all the risks and returns related to ownership of the fixed asset, are recorded as operating leases. The payments of operating leases are recognized as an expense in the income statement on a constant basis for the duration of the lease.
Government grants relating to subsidies of tangible fixed assets are recognized when there is reasonable certainty that the grant will be received and all relevant terms will be met. These government grants are recorded in a deferred income account and are transferred to the income statement in equal annual installments based on the expected useful life of the asset that was subsidized, as a reduction to the relevant depreciation expense. When the grant relates to an expense it is recognized, as income during the period deemed necessary to match the grant on a systematic basis with the expenses it is meant to reimburse.
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is possible that a transfer of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The provisions are reviewed during each reporting period and are adjusted in order to reflect the present value of expenses that are deemed necessary for the settlement of the liability. If the effect of the time value of money is significant, then provisions are calculated by discounting the expected future cash flows with a pre-tax rate, which reflects the market's current estimations for the time value of money, and wherever considered necessary, the risks related specifically to the obligation. Contingent liabilities are not recognized in the consolidated financial statements but are disclosed, unless the probability of an outflow of economic benefits is small. Contingent assets are not recognized in the consolidated financial statements but are disclosed when an inflow of financial benefits is likely.
The Group forms provisions for the dismantlement of power generators from wind parks and the rehabilitations of environment. These provisions reflect the present value, during the reporting period, of the estimated cost, reduced by the estimated residual value of recoverable materials. The provisions are re-examined on each reporting date of the statement of financial position and are adjusted in order to reflect the present value of the expense that is expected to be cashed for the settlement of liability for dismantlement and rehabilitation.
The relevant provision is recorded increasingly of the cost value of wind power generators and is depreciated based on the straight line during a 20-year period in which the contract for the production of energy lasts. The depreciationexpense of the capitalized expenses for dismantlement and rehabilitation is included in the income statements together with the depreciations of wind parks. Any changes of estimations regarding the estimated cost or the discount rate are added or deducted respectively from the cost of the asset. The discounting effect of estimated cost is recorded in income statements as interest expense.
Basic earnings per share (EPS) are calculated by dividing net earnings with the average weighted number of common shares that are outstanding during each year, with the exception of the average common shares acquired by the Group as treasury-shares.
Earnings per share are calculated by dividing the net earnings attributed to shareholders by the weighted average number of shares outstanding during the year.
The Group records its transaction with minority interest as transactions with owners. In case of a minority acquisition in subsidiaries, the possible difference between the acquisition cost and the book value of the minority interest, is recognized in the statement of changes in equity.
The participations in subsidiaries, associates and joint ventures on 31.12.2010 are as follows:
i) Subsidiaries, with the legal form of a Société Anonyme or Limited Liability Company:
The parent company TERNA ENERGY SA has been audited by the tax authorities until the fiscal year 2008 included. During the preparation date of the accompanying annual financial statements, the tax un-audited fiscal years of the Group's companies are as follows:
(All amounts in thousand Euro, unless stated otherwise)
| Participation Percentage | ||||||||
|---|---|---|---|---|---|---|---|---|
| Company Name | Establishm ent |
31/12/2010 | 31/12/2009 | Activity | Tax Un audited Years |
|||
| 1. IWECO CHONOS LASITHIOU CRETE SA |
11.04.2000 | 100% | 100% | Production of El. Energy from Renewable energy sources (RES) |
1 | |||
| 2. ENERGIAKI SERVOUNIOU SA |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 3. TERNA ENERGY EVROU SA |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 4. PPC RENEWABLES – TERNA ENERGY S.A. |
20.06.2000 | 51% | 51% | Production of El. Energy from RES |
1 | |||
| 5. AIOLIKI PANORAMATOS S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 6. AIOLIKI RACHOULAS DERVENOCHORION S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 7. ENERGEIAKI DERVENOHORION S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 8. AIOLIKI MALEA LAKONIAS S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 9. ENERGEIAKI FERRON EVROU S.A |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 10. AIOLIKI DERVENI TRAIANOUPOLEOS S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 11. ENERGEIAKI PELOPONNISOU S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 12. ENERGEIAKI NEAPOLEOS LAKONIAS S.A. |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 13. AIOLIKI ILIOKASTROU S.A. |
23.4.2010 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 14. EUROWIND S.A. | 24.8.2010 | 100% | - | Production of El. Energy from RES |
1 | |||
| 15. ENERGIAKI XIROVOUNIOU S.A. |
14.02.2001 | 100% | 100% | Production of El. Energy from RES |
1 | |||
| 16. DELTA AXIOU ENERGEIAKI S.A. |
8.10.2010 | 51% | - | Production of El. Energy from RES |
1 | |||
| 17. GP ENERGY LTD | 26.09.2005 | 100% | 100% | Trade of El. Energy | 6 | |||
| 18. EOL TECHNICS CONSULT SRL |
03.04.2008 | 100% | 100% | Production of El. Energy from RES |
3 | |||
| 19.TERNA ENERGY OVERSEAS LTD |
4.1.2008 | 100% | 100% | Production of El. Energy from RES |
3 | |||
| 20. EOLOS POLSKA SPZO | 30.6.2008 | 100% | 100% | Production of El. Energy from RES |
3 | |||
| 21 EOLOS NOWOGRODZEC SPZOO |
12.12.2008 | 61% | 61% | Production of El. Energy from RES |
3 |
| 22. TERNA ENERGY NETHERLANDS BV |
29.5.2009 | 100% | 100% | Production of El. Energy from RES |
2 |
|---|---|---|---|---|---|
| 23. HAOS INVEST 1 EAD | 30.3.2010 | 100% | - | Production of El. Energy from RES |
2 |
| 24. VALUE PLUS LTD | 4.1.2010 | 100% | - | Trade of El. Energy Equipment |
2 |
| 25. GALLETTE LTD | 24.8.2010 | 100% | - | Holdings | 3 |
| 26. AIOLOS LUX S.A.R.L | 1.7.2010 | 100% | - | Holdings | 3 |
| 27. ECO ENERGY DOBRICH 2 EOOD |
1.7.2010 | 100% | - | Production of El. Energy from RES |
2 |
| 28. ECO ENERGY DOBRICH 3 EOOD |
1.7.2010 | 100% | - | Production of El. Energy from RES |
2 |
| 29. ECO ENERGY DOBRICH 4 EOOD |
1.7.2010 | 100% | - | Production of El. Energy from RES |
2 |
| Participation Percentage | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Company Name | Establishme nt |
31/12/2010 | 31/12/2009 | Activity | Tax Un audited Years |
|||||
| 1. TERNA ENERGY SA & SIA AIOLIKI POLYKASTROU GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 2. TERNA ENERGY SA & SIA ENERGEIAKI VELANIDION LAKONIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 3. TERNA ENERGY SA & SIA ENERGEIAKI DYSTION EVIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 4. TERNA ENERGY SA & SIA AIOLIKI PASTRA ATTICA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 5. TERNA ENERGY SA & SIA AIOLIKI KARYSTIAS EVIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 6. TERNA ENERGY SA & SIA ENERGEIAKI ARI SAPPON GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 7. TERNA ENERGY SA & SIA AIOLIKI EASTERN GREECE GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 8. TERNA ENERGY SA & SIA AIOLIKI MARMARIOU EVIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 9. TERNA ENERGY SA & SIA ENERGEIAKI PETRION EVIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 10. TERNA ENERGY SA & SIA AIOLIKI ROKANI DERVENOCHORION GP |
01.02.2001 | 99% | 99% | Production of El. Energy from RES |
4 | |||||
| 11. TERNA ENERGY SA & SIA ENERGEIAKI STYRON EVIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 12. TERNA ENERGY SA & SIA ENERGEIAKI KAFIREOS EVIA GP |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 | |||||
| 13. TERNA ENERGY SA & SIA AIOLIKI PROVATA TRAIANOUPOLEOS |
01.02.2001 | 100% | 100% | Production of El. Energy from RES |
4 |
| Company Name | Participation Percentage 2010 and 2009 % |
Tax un-audited fiscal years |
|
|---|---|---|---|
| 1 | J/V ENVAGELISMOU, PROJECT C' | 50.00 | 8 |
| 2 | J/V TERNA ENERGY – TSAMPR. DRAMAS HOSPITAL |
40.00 | 8 |
| 3 | J/V EPL DRAMAS | 24.00 | 8 |
| 4 | J/V K. MANIOTIS - TERNA - TERNA ENERGY | 37.50 | 8 |
| 5 | J/V/ EMBEDOS – PANTECHNIKI - TERNA ENERGY |
50.10 | 4 |
| 6 | J/V THEMELI - TERNA ENERGY - TERNA SA IMPREGILO SPA |
40.00 | 4 |
| 7 | J/V EKTER - TERNA - ATHONIKI SA | 31.00 | 4 |
| 8 | J/V/ KL. ROUTSIS - TERNA ENERGY ABETE | 50.00 | 4 |
During the 3rd quarter of 2010 the joint venture TRAM POLITICAL ENGINEER WORKS was resolved and liquidated due to the completion of the undertaken project and its final delivery. No loss resulted from the liquidation of the aforementioned Joint Venture.
| Participation Percentage | |||||
|---|---|---|---|---|---|
| Company Name | Establishm ent |
31/12/2010 | 31/12/2009 | Activity | Tax Un audited Years |
| TERNA ENERGY SA - M.E.L. MACEDONIAN PAPER COMPANY SA & SIA CO PRODUCTION GP |
12.02.2001 | 50% | 50% | Construction/ Operation of co production unit of electricity for serving of needs of MEL |
5 |
| TERNA ENERGY SA & SIA LP | 24.05.2000 | 70% | 70% | Completion of construction works of section Kakavia – Kalpaki |
5 |
The above company No. 1 is currently inactive. The company No. 2 had essentially completed the aforementioned project from 2003.
All aforementioned companies and joint ventures have been established in Greece, except for GP ENERGY LTD and HAOS INVEST 1EAD, ECO ENERGY DOBRICH 2, ECO ENERGY DOBRICH 3 and ECO ENERGY DOBRICH 4 which have been established in Bulgaria, EOL TECHICHS CONSULT SRL established in Romania, TERNA ENERGY OVERSEAS LTD, VALUE PLUS LTD and GALLETTE LTD established in Cyprus, EOLOS POLSKA Spzoo and EOLOS NOWOGRODZEC Spzoo, which were established in Poland, TERNA ENERGY NETHERLANDS, which was established in Holland and AIOLOS LUX S.A.R.L. that was established in Luxembourg.
| Company Name | Domicile | Participation Consolidation Percentage% Method |
Tax un-audited fiscal years |
||
|---|---|---|---|---|---|
| 2010 | 2009 | ||||
| Renewable Energy Center RES Cyclades SA * |
Greece | 45 | 45 | Equity | 1 |
| EN.ER.MEL. S.A. | Greece | 48 | - | Equity | 1 |
* Participation through IWECO CHONOS LASITHIOU CRETE S.A.
During the 3rd quarter of 2010 the Company acquired, through the participation in the share capital increase, 48% of the shares of the company EN. ER.MEL S.A. (See also Note 8)
An operating sector is a component of an economic entity: a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses that concern transactions with other components of the same economic entity) and, b) whose operating results are regularly reviewed by the chief operating decision maker of the entity to make decisions about resources to be allocated to the segment and assess of its performance. The term "chief operating decision maker" defines the function of the Group that is responsible for the allocation of resources and the assessment of the economic entity's operating segments. For the application of IFRS 8, this function is assigned to the Managing Director (Chief Executive Officer).
The economic entity presents separately the information on each operating segment that fulfils certain criteria of characteristics and exceeds certain quantitative limits.
The amount of each element of the segment is that which is presented to the chief operating decision maker with regard to the allocation of resources to the segment and the evaluation of its performance.
The above information is presented in the accompanying consolidated statements of financial position, statements of comprehensive income and statements of cash flows according to the IFRS, whereas previously recorded operating segments –as presented in the financial statements of the previous year- require no modifications. The Group recognizes the following operating segments that must be reported, whereas no other segments exist that could be incorporated in the "other segments" category.
Construction: Refers , almost exclusively, to contracts for the construction of technical projects.
Electricity from renewable sources of energy: Refers, mainly, to the electricity production from wind generators (wind parks) and secondly from hydroelectric plants.
In line with the application of the revised standard, the Group allocates –whenever such allocation is not possible to be made directly- all assets and liabilities per segment as well as the corresponding income and expenses for the period, such as financial results and income tax.
Apart from the income tax receivables that can be allocated directly to the corresponding segment, the allocation of the income tax expense, liabilities and other receivables is based on the financial results of each segment for the period.
| Bu ine nts s ss seg me 3 1. 1 2. 2 0 1 0 |
Co ion nst ct ru |
El ic ity fro ect r m b le ren ew a en erg y sou rce s |
Co l ida ion t ns o ite f fs W r -o |
To l Co l ida d ta te ns o |
|---|---|---|---|---|
| fro In ext l c ust co me m ern a om ers |
||||
| Sa les f p du cts o ro |
- | 3 3, 3 4 9 |
3 3, 3 4 9 |
|
| fro ion ice Inc str t om e m con uc se rv s |
25 0 6 7 , |
- | 25 7 0 6 , |
|
| To l inc fro l c ta ext ust om e m ern a om ers |
25 7 0 6 , |
3 3, 3 4 9 |
5 9, 0 5 5 |
|
| inc Int nt er- seg me om e |
6, 4 5 5 |
- | ( 6, 4 ) 5 5 |
|
| inc To ta l om e |
3 2, 2 6 0 |
3 3, 3 4 9 |
5 9, 0 5 5 |
|
| Ne Re lts Se t nt su p er g me |
1, 1 2 8 |
8, 8 3 6 |
9, 9 6 4 |
|
| iat ion De p rec s |
( 1 47 ) |
( 8, 9 6 0 ) |
( 9, 1 0 7 ) |
|
| Am iza ion f g ort t ts o ran |
- | 2, 3 9 8 |
2, 3 9 8 |
|
| f ina ia l re lts Ne t nc su |
( 3 6 0 ) |
2, 3 5 8 |
1, 9 9 8 |
|
| Fo ig ha d i f fer re n e xc ng e en ces |
- | 7 7 |
7 7 |
|
| Inc e t om ax |
( 1, 0 3 9 ) |
( 5, 7 9 2 ) |
( 6, 8 3 1 ) |
|
| ing be for int dep iat ion & iza ion Ea st, tax ort t rn s e ere es, rec am ( ) EB I ΤD A |
2, 6 7 4 |
1 8, 7 5 5 |
2 1, 4 2 9 |
|
| Ea ing be for int d t ( EB I Τ ) st a rn s e ere n ax es |
2, 27 5 |
1 2, 1 9 3 |
1 4, 2 0 7 |
|
| Se nt ets g me ass |
2 4, 0 4 0 |
6 5 3, 0 8 0 |
6 7 7, 1 2 0 |
|
| Inv in iat est nts me ass oc es |
- | 3, 4 9 9 |
3, 4 9 9 |
|
| To l As ta set s |
2 4, 0 4 0 |
6 6, 9 5 5 7 |
6 8 0, 6 1 9 |
|
| Se l ia b il it ies nt g me |
1 8, 0 3 6 |
2 9 6, 0 8 2 |
3 1 4, 1 1 8 |
|
| ita l e d itu Ca p xp en re |
6 6 |
8 6, 6 2 9 |
8 6, 6 9 5 |
| Bu ine nts s ss seg me 3 1. 1 2. 2 0 0 9 |
Co ion nst ct ru |
El ic ity fro ect r m b le ren ew a en erg y sou rce s |
Co l ida ion t ns o W ite f fs r -o |
To l Co l ida d ta te ns o |
|---|---|---|---|---|
| In fro l c ext ust co me m ern a om ers |
||||
| Sa les f p du cts o ro |
- | 3 3, 7 3 6 |
3 3, 3 6 7 |
|
| fro ion ice Inc str t om e m con uc se rv s |
3 9, 6 4 0 |
- | 3 9, 6 4 0 |
|
| To l inc fro l c ta ext ust om e m ern a om ers |
3 9, 6 4 0 |
3 3, 7 3 6 |
7 3, 3 7 6 |
|
| inc Int nt er- seg me om e |
6, 4 2 8 |
- | ( ) 6, 4 2 8 |
|
| To l inc ta om e |
4 6, 0 6 8 |
3 3, 7 3 6 |
7 3, 3 7 6 |
|
| Ne Re lts Se t nt su p er g me |
3, 2 9 1 |
1 3, 0 6 6 |
1 6, 3 5 7 |
|
| iat ion De p rec s |
( 1 4 0 ) |
( 8, 4 0 ) 7 |
( 8, 8 8 0 ) |
|
| Am iza ion f g ort t ts o ran |
- | 2, 3 9 6 |
2, 3 9 6 |
|
| f ina ia l re lts Ne t nc su |
( ) 3 0 4 |
4, 4 3 5 |
4, 1 3 1 |
|
| Inc e t om ax |
( 1, 5 3 5 ) |
( 6, 0 2 9 ) |
( 7, 5 6 4 ) |
|
| ing be for int dep iat ion d a iza ion Ea st, tax rt t rn s e ere es, rec an mo ( ) EB I ΤD A |
5, 27 0 |
2 1, 0 0 4 |
2 6, 27 4 |
|
| ing be for int d t ( ) Ea EB I Τ st a rn s e ere n ax es |
5, 1 3 0 |
1 4, 6 6 0 |
1 9, 7 9 0 |
|
| Se nt ets g me ass |
2 8, 3 4 1 |
6 1 2, 0 6 3 |
6 4 0, 4 0 4 |
|
| Inv in iat est nts me ass oc es |
5 1 |
5 1 |
||
| To l As ta set s |
2 8, 3 4 1 |
6 1 2, 1 1 4 |
6 4 0, 45 5 |
|
| Se ia il it ies nt l b g me |
1 4, 25 0 |
25 2, 9 8 9 |
2 6 2 3 9 7, |
|
| ita l e d itu Ca p xp en re |
1 1 9 |
1 1 0, 9 6 3 |
1 1 1, 0 8 2 |
Intangible fixed assets and their movement for the periods from 1 January to 31 December 2010 and 2009, which are presented in the accompanying financial statements, are analyzed as follows:
| GROUP | |||
|---|---|---|---|
| Software Programs |
Concessions and Rights |
Total | |
| Acquisition Cost | |||
| As at 1 January 2009 | 169 | 1,454 | 1,623 |
| Additions | 26 | 380 | 406 |
| Reduction during the period | (31) | - | (31) |
| 31 December 2009 | 164 | 1,834 | 1,998 |
| As at 1 January 2010 | 164 | 1,834 | 1,998 |
| Additions | 12 | 1,293 | 1,305 |
| Additions from acquisition | - | 14,949 | 14,949 |
| Reduction during the period | - | - | - |
| 31 December 2010 | 176 | 18,076 | 18,252 |
| Accumulated Amortization | |||
| As at 1 January 2009 | 57 | 103 | 160 |
| Amortization for the period | 30 | 65 | 95 |
| Reduction during the period | (31) | - | (31) |
| 31 December 2009 | 56 | 168 | 224 |
| As at 1 January 2010 | 56 | 168 | 224 |
| Additions | 34 | 64 | 98 |
| Reduction during the period | - | - | - |
| 31 December 2010 | 90 | 232 | 322 |
| Net Book Value | |||
| 31 December 2009 | 108 | 1,666 | 1,774 |
| 31 December 2010 | 86 | 17,844 | 17,930 |
(All amounts in thousand Euro, unless stated otherwise)
| COMPANY | |||
|---|---|---|---|
| Software Programs |
Concessions and Rights |
Total | |
| Acquisition Cost | |||
| As at 1 January 2009 | 168 | 628 | 796 |
| Additions | 25 | 336 | 361 |
| Reductions | (31) | - | (31) |
| 31 December 2009 | 162 | 964 | 1,126 |
| As at 1 January 2010 | 162 | 964 | 1,126 |
| Additions | 13 | 578 | 591 |
| Reductions | - | - | - |
| 31 December 2010 | 175 | 1,542 | 1,717 |
| Accumulated Amortization | 56 | 44 | 100 |
| As at 1 January 2009 | 30 | 38 | 68 |
| Additions | (31) | - | (31) |
| Reductions | 55 | 82 | 137 |
| 31 December 2009 | |||
| As at 1 January 2010 | 55 | 82 | 137 |
| Additions | 34 | 38 | 72 |
| Reductions | - | - | - |
| 31 December 2010 | 89 | 120 | 209 |
| Net Book Value | |||
| 31 December 2009 | 107 | 882 | 989 |
| 31 December 2010 | 86 | 1,422 | 1,508 |
Concessions and Rights include the acquisition cost of licenses for intervention and use rights of forestall land, where Wind Parks are installed. The Group's additions for 2010 amounting to 14,949 thousand euro concern the cost of licenses as such was recognized during the acquisition of companies. (See also Note 30). During the period from January 1st to December 31st 2010, the Group received new licenses for use rights and intervention on forestall land amounting to € 1,293 (€ 380 during the period from January 1st to December 31st 2009).
Tangible fixed assets and their movement for the periods from January 1st to December 31st 2010 and 2009, in the accompanying financial statements, are analyzed as follows:
(All amounts in thousand Euro, unless stated otherwise)
| Land Plots |
Buildings and Installation s |
GROUP Technological and Mechanical equipment |
Vehicles | Fixtures and other equipment |
Assets under constructio n |
Total | |
|---|---|---|---|---|---|---|---|
| Acquisition Cost | |||||||
| 1 January 2009 | 1,135 | 28,452 | 153,624 | 663 | 2,142 | 90,820 | 276,836 |
| Additions | 262 | 233 | 1,003 | 88 | 169 | 108,084 | 109,839 |
| Borrowing cost Reductions |
- | - | - | - | - | 812 | 812 |
| Transfers from assets |
- | (11) | (11) | (3) | (34) | - | (59) |
| under construction | - | - | 394 | - | - | (394) | - |
| 31 December 2009 | 1,397 | 28,674 | 155,010 | 748 | 2,277 | 199,322 | 387,428 |
| 1 January 2010 | 1,397 | 28,674 | 155,010 | 748 | 2,277 | 199,322 | 387,428 |
| Additions | 663 | 87 | 1,107 | 126 | 181 | 78,623 | 80,787 |
| Borrowing cost | - | - | - | - | - | 4,603 | 4,603 |
| Reductions | - | - | (7) | - | - | - | (7) |
| Transfers from assets under construction |
- | 2,211 | 13,067 | - | - | (15,278) | - |
| 31 December 2010 | 2,060 | 30,972 | 169,177 | 874 | 2,458 | 267,270 | 472,811 |
| Accumulated depreciations |
|||||||
| 1 January 2009 | - | 4,389 | 31,738 | 431 | 1,349 | - | 37,907 |
| Depreciations for the |
|||||||
| period Reductions |
- | 1,311 | 7,112 | 83 | 283 | - | 8,789 |
| - | (7) | (46) | (1) | (34) | - | (88) | |
| 31 December 2009 | - | 5,693 | 38,804 | 513 | 1,598 | - | 46,608 |
| 1 January 2010 | - | 5,693 | 38,804 | 513 | 1,598 | - | 46,608 |
| Depreciations for the period |
- | 1,325 | 7,338 | 93 | 256 | - | 9,012 |
| Reductions | - | - | (3) | - | - | - | (3) |
| 31 December 2010 | - | 7,018 | 46,139 | 606 | 1,854 | - | 55,617 |
| Net Book Value | |||||||
| 31 December 2009 | 1,397 | 22,981 | 116,206 | 235 | 679 | 199,322 | 340,820 |
| 31 December 2010 | 2,060 | 23,954 | 123,038 | 268 | 604 | 267,270 | 417,194 |
(All amounts in thousand Euro, unless stated otherwise)
| Land-Plots | Buildings and Installatio ns |
Technological and Mechanical equipment |
Vehicles | Fixtures and other equipment |
Assets under construction |
Total | |
|---|---|---|---|---|---|---|---|
| Acquisition Cost | |||||||
| 1 January 2009 | 853 | 7,829 | 84,059 | 662 | 2,098 | 19,752 | 115,253 |
| Additions | 21 | 9 | 210 | 86 | 162 | 26,997 | 27,485 |
| 31 December 2009 | 874 | 7,838 | 84,269 | 748 | 2,260 | 46,749 | 142,738 |
| 1 January 2010 | 874 | 7,838 | 84,269 | 748 | 2,260 | 46,749 | 142,738 |
| Additions | 17 | 12 | 40 | 107 | 173 | 18,735 | 19,084 |
| Transfers from assets under construction |
- | 2,204 | 13,581 | - | - | (15,785) | - |
| 31 December 2010 | 891 | 10,054 | 97,890 | 855 | 2,433 | 49,699 | 161,822 |
| Accumulated depreciations |
|||||||
| 1 January 2009 | 0 | 2,275 | 23,641 | 430 | 1,309 | 0 | 27,655 |
| Additions | - | 369 | 3,804 | 83 | 275 | - | 4,531 |
| 31 December 2009 | 0 | 2,644 | 27,445 | 513 | 1,584 | 0 | 32,186 |
| 1 January 2010 | 0 | 2,644 | 27,445 | 513 | 1,584 | 0 | 32,186 |
| Additions | - | 395 | 3,981 | 93 | 248 | - | 4,717 |
| 31 December 2010 | - | 3,039 | 31,426 | 606 | 1,832 | - | 36,903 |
| Net Book Value | |||||||
| 31 December 2009 | 874 | 5,194 | 56,824 | 235 | 676 | 46,749 | 110,552 |
| 31 December 2010 | 891 | 7,015 | 66,464 | 249 | 601 | 49,699 | 124,919 |
The account "Technological and mechanical equipment" includes Wind Park generators that have been collateralized at banks as security against loans the value of which amounted to 49,371 during 31.12.2010 (55,251 on 31.12.2009).
The categories "Land-Plots", "Buildings and installations" and "Technological and mechanical equipment", include fixed assets with a net book value of € 8,635 and € 7,362, during December 31st 2010 and 2009 respectively, which refer to Installations of Distribution Networks constructed by the Company, and as stipulated by the agreements with PPC, such are transferred to PPC, free of charge, during the commissioning of each Wind Park. However, and after their transfer, such installations will continue to serve the purpose for which they were constructed, namely for the sale of produced electric energy to PPC and HTSO, remaining at the exclusive use of the Company and therefore, the net book cost during the transfer date, will continue to depreciate, as previously, until the 20year depreciation period of the Wind Parks is fulfilled.
As of 31/12/2010, the Group owns 6,750 common shares with a nominal value of €10 each of the associate company Cyclades RES Energy Center SA. Also, on 28/7/2010 the Company acquired 48% of the shares of EN.ER.MEL S.A. through its participation in the latter's share capital increase. The basic activity of the company is the production of electric energy from renewable energy sources. The total consideration of the Company's participation in the aforementioned share capital increase amounted to € 2,200. With this acquisition, significant influence was acquired and thus the participation was recognized as an associate.
Information on the net assets acquired and goodwill is provided as follows:
| Agreed consideration (paid) | 2,200 |
|---|---|
| Temporary Fair value of net recognized assets | 1,056 |
| Goodwill | 1,144 |
In the Statement of Financial Position, the above goodwill is included in the associate's value. Following the completion of the acquisition, the Company participated in a share capital increase of EN.ER.MEL S.A. amounting to € 1,248. During 31 December 2010 and 2009, no profit or loss was generated from the participations. The following table presents summary financial data of the associate companies.
| 31 December | 31 December | |
|---|---|---|
| 2010 | 2009 | |
| Total Long-term Assets | 4,872 | 93 |
| Total Short-term Assets | 87 | 59 |
| Total Assets | 4,959 | 152 |
| Total Long-term Liabilities | - | - |
| Total Short-term Liabilities | 22 | 2 |
| Total Liabilities | 22 | 2 |
| Total Income | - | - |
| Total Expenses | - | - |
| Profit (losses) after taxes | - | - |
The account Other Long-term Receivables is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Several Provided Guarantees | 286 | 219 | 230 | 183 |
| Total | 286 | 219 | 230 | 183 |
Inventories on 31 December 2010 and 2009, in the accompanying consolidated financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Merchandise | 69 | 69 | 69 | 69 |
| Raw and Auxiliary Materials | 1,823 | 113 | 1,823 | 113 |
| Spare-parts of Fixed Assets | 304 | 354 | 11 | 62 |
| Total inventories | 2,196 | 536 | 1,903 | 244 |
During 31 December 2010 and 2009 there was no need for provisions for impaired or low turnover inventories. The cost of inventories recognized as an expense in "cost of sales" amounts to € 5,605 and €10,860, for the financial years ended on 31 December 2010 and 2009.
Trade receivables on 31 December 2010, in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Customers of the construction sector | 10,670 | 15,665 | 23,867 | 15,665 |
| Customers of the energy sector (PPC, HTSO and others) | 4,323 | 6,612 | 2,660 | 3,443 |
| Construction project agreements underway | 3,096 | 2,269 | 5,066 | 10,466 |
| Customers – Litigious and Doubtful | 88 | 88 | 88 | 88 |
| Checks Receivable | - | 240 | - | 240 |
| Minus: Provision for doubtful receivables | (211) | (211) | (211) | (211) |
| 17,966 | 24,663 | 31,470 | 29,691 |
The above trade receivables also include receivables from Wind Energy customers amounting to euro 731 (euro 1,647 on 31 December 2009) which are forfeited to banks as security for provided long-term and bon loans to finance the construction of Wind Parks.
The prepayments and other receivables on 31 December 2010 in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Prepayments to Suppliers | 1,682 | 1,795 | 2,988 | 2,159 |
| Accounts for Management of Prepayments and Credit | 411 | 564 | 359 | 483 |
| Deferred expenses | 1,168 | 1,101 | 797 | 614 |
| Accrued income | 418 | 541 | 398 | 513 |
| Other Receivables of the Group's Joint Ventures | 666 | 247 | 689 | 991 |
(All amounts in thousand Euro, unless stated otherwise)
| 26,584 | 24,880 | 7,237 | 7,749 | |
|---|---|---|---|---|
| Minus: Provisions for doubtful receivables | (60) | (60) | (60) | (60) |
| Other Receivables - Sundry Debtors | 3,270 | 2,436 | 1,248 | 1,362 |
| Prepayments for Acquisition of Companies | - | 7,550 | - | - |
| Blocked Deposits | 116 | 1,576 | - | - |
| Receivables related to Insurance Indemnities | 1,057 | 727 | 818 | 680 |
| Receivables from grants of Wind Parks | 10,732 | 2,732 | - | - |
| Receivables from VAT | 7,124 | 5,671 | - | 1,007 |
On 31 December 2010, the Group has recognized a receivable from grants amounting to euro 10,732,
The grants concern investments in Wind Parks and are expected to be received with the completion of the relevant investment plans.
The information related to the Group's and company's technical works in progress, are as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Cumulatively from the beginning of the | 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 |
| projects | ||||
| Cumulative costs | 132,504 | 114,712 | 165,071 | 137,536 |
| Cumulative profit | 34,542 | 31,461 | 38,282 | 34,020 |
| Cumulative losses | (203) | (231) | (203) | (231) |
| Received prepayments | 862 | - | 862 | - |
| Amounts withheld from customers of projects | 165 | 180 | 165 | 180 |
| Receivables of projects, priced | 167,687 | 147,041 | 202,560 | 164,227 |
| Receivables from customers of projects | 3,096 | 2,269 | 3,448 | 10,466 |
| Liabilities towards customers of projects | (3,940) | (3,368) | (4,038) | (3,368) |
| Net receivable from customers of projects | (844) | (1,099) | (590) | 7,098 |
The cash & cash equivalents on December 31st 2010 and 2009, in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Cash in Hand | 31 | 26 | 2 | 2 |
| Sight & Time Deposits | 192,842 | 244,811 | 174,792 | 233,559 |
| Total | 192,873 | 244,837 | 174,794 | 233,561 |
Term deposits usually have a duration of 3-6 months and bear interest rates ranging between 3%-3.5% and 2.5%-3% for 2010 and 2009 respectively.
The balance of time deposits on 31/12/2010 includes the amount of 63,900 thousand euro which is blocked as a guarantee on financing of the Group's subsidiaries.
Long-term loans in the accompanying consolidated financial statements mainly cover the development needs of Wind Parks of the Group's energy sector and are analyzed as follows:
| 31 December 2010 | 31 December 2009 |
|
|---|---|---|
| Loan of European Investment Bank – TERNA | ||
| ENERGY SA | 18,838 | 23,324 |
| Bond Loan € 20,000 - TERNA ENERGY SA | 17,900 | 19,300 |
| Bond Loan € 10,000 - PPC RENEWABLES – TERNA | ||
| ENERGY SA | 9,100 | 9,700 |
| Bond Loan € 16,000 – TERNA ENERGY EVROU SA | 12,313 | 14,364 |
| Bond Loan € 12,000 – ENERGEIAKI SERVOUNIOU | ||
| SA | 8,429 | 9,961 |
| Bond Loan € 2,600 - IWECO CHONOS LASITHIOU | ||
| CRETE SA | 1,629 | 1,926 |
| Long-term Loan with Embedded Derivatives € 7,500- | ||
| TERNA ENERGY SA | 7,500 | - |
| Total | 75,709 | 78,575 |
| minus: Long term debt payable in the next financial | ||
| year | (12,505) | (10,929) |
| Long-term loans | 63,204 | 67,646 |
The Group's total long-term debt has been contracted in Euro in Greece, while loans received prior to 2009 (54% of total at the end of the present year and 63.09% at the end of the previous year) are under fixed interest rates. The floating interest rates are based on euribor.
The weighted average interest rate for the Group for financial years 2010 and 2009 corresponded to 4.26% and 4.04%, respectively.
The total interest on the above loans for financial years 2010 and 2009 amounted to € 3,130 and € 2,439 respectively. The Group considers that the fair value of the above loans does not differ substantially from their book value.
On 29/12/2010 the Company received a five-year loan amounting to € 7,500 thousand euro. This loan includes embedded derivatives, according to which future payments depend on changes of the Eurozone inflation rate excluding tobacco. The relevant liability is valued at fair value through the results. For 2010 no profit or loss resulted from the change in the fair value of the loan as the relevant loan agreement was signed during the last days of the year.
To secure all Group loans, Wind Park wind generators are collateralized, as well as cash while insurance contracts and receivables from the sale of electric energy to HTSO and PPC are forfeited to banks. In the context of this form of financing, the Group's companies maintain a series of blocked bank accounts, which serve the above liabilities.
According to Greek labor law, each employee is entitled to a lump-sum indemnity in case of dismissal or retirement. The amount of the indemnity depends on the length of service with the company and the employee's wages the day he/she is dismissed or retires. Employees that resign or are justifiably dismissed are not entitled to such an indemnity. The indemnity payable in case of retirement in Greece is equal to 40% of the indemnity calculated in case of dismissal. According to the practices in the countries where the subsidiaries of the Group are operating in, staff indemnity programs are usually not funded.
The estimations for staff indemnity liabilities were determined through an actuarial study. The following tables present an analysis of the net expenditure for the relevant provisions recorded in the consolidated results for the financial year ended on the 31st of December 31, 2010 and the movement of the relevant provision accounts for staff indemnities presented in the attached consolidated Statement of Financial Position for the year ended on December 31st 2010.
The amount due for staff indemnities is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Present value of liabilities | 250 | 245 | 250 | 245 |
| Non-registered actuarial losses | (72) | (64) | (72) | (64) |
| Recognized liability | 178 | 181 | 178 | 181 |
The expense for staff indemnity recognized in the results in cost of sales, is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Current cost of service | 39 | 56 | 39 | 56 |
| Financial cost | 14 | 9 | 14 | 9 |
| Absorption / (Transfer) of Personnel | (21) | (14) | (21) | (14) |
| Effect of Reduction / Settlement / Final | ||||
| Benefits | 119 | 106 | 119 | 106 |
| Recognition of actuarial profit/losses | 9 | 3 | 9 | 3 |
| Additional payments | - | - | ||
| 160 | 160 | 160 | 160 |
The movement of the relevant provision in the Statement of Financial Position is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Opening balance | 181 | 141 | 181 | 141 |
| Provision recognized in the income |
||||
| statement | 160 | 160 | 160 | 160 |
| Indemnity payments | (163) | (120) | (163) | (120) |
| Closing balance | 178 | 181 | 178 | 181 |
The main actuarial assumptions for financial year 2010 are as follows:
| Discount rate | 4.1% |
|---|---|
| Average annual rate of inflation | 2% |
| Average annual long-term GDP growth | 3% |
| Mortality: Greek mortality table 1990 | |
| Future wage increases | 2.9% |
| Movement of salaried workers (departure under their own will) | 3% |
| Movement of day-waged workers (departure under their own will) | 2% |
| Movement of salaried workers (laid-off) | 12% |
| Movement of day-waged workers (laid-off) | 25% |
The movement of the relevant provision in the Statement of Financial Position for financial years 2010 and 2009, is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Provisions for environmental rehabilitation |
Other provisions |
Provisions for environmental rehabilitation |
Other provisions |
|
| Balance 1.1.2010 | 721 | 415 | 317 | 280 |
| Provision recognized in the income statement | 8 | - | - | - |
| Provision recognized in fixed assets | ||||
| Balance 31.12.2010 | 729 | 415 | 317 | 280 |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Provisions for environmental rehabilitation |
Other provisions |
Provisions for environmental rehabilitation |
Other provisions |
|
| Balance 1.1.2009 | 717 | 335 | 317 | 200 |
| Provision recognized in the income statement | 4 | 80 | - | 80 |
| Balance 31.12.2009 | 721 | 415 | 317 | 280 |
The companies of the Group's energy sector are obliged to proceed to environmental rehabilitation where they install production units for electricity, after the completion of the license period that lasts for 20 years according to the licenses granted by the state. The aforementioned provision of 729 euro (721 at 31.12.2009) reflects the required expenses for the removal of equipment and formation of the area in which the equipment was installed, using the available technology and materials.
Grants at December 31st 2010 and December 31st 2009 in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |
|---|---|---|
| Balance 1 January 2010 | 50,796 | 19,777 |
| Additions | 10,732 | - |
| Rebates | - | |
| Amortization of grants | (2,398) | (1,055) |
| Balance 31 December 2010 | 59,130 | 18,722 |
| Balance 1 January 2009 | 48,614 | 18,824 |
| Additions | 4,983 | 2,231 |
| Rebates | (402) | (223) |
| Amortization of grants | (2,399) | (1,055) |
| Balance 31 December 2009 | 50,796 | 19,777 |
Grants relate to government grants for the development of Wind Parks and are amortized in the results of the period such refer to, according to the depreciation rate of fixed assets granted, in the income statement they refer to.
The amount of additions for the period January 1st – December 31st 2010 for the Group, include grants that have not yet been received.
The total approved and non-received grants for the Company and Group is included in "Prepayments and other receivables". Such grants were recognized based on the Group Management's certainty that all the requirements to receive such are regularly met and eventually the amounts will be received with the completion of the relevant investments.
The aforementioned grants are amortized in income only by the portion that corresponds to fully completed and operating wind generators of wind parks.
The suppliers as at December 31st 2010 and 2009, in the accompanying financial statements are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Domestic suppliers | 5,844 | 5,433 | 5,041 | 4,515 |
| Foreign suppliers | 21,660 | 2,411 | 1,114 | 2,405 |
| Sub-contractors | 4,646 | 2,656 | 1,806 | 2,278 |
| Withheld guarantees of suppliers | 401 | - | 401 | - |
| Withheld guarantees of sub-contractors | 1,391 | 1,582 | 1,391 | 1,582 |
| Free agents | 550 | 287 | 529 | 272 |
| Suppliers of fixed assets | 2,066 | 1,488 | 2,066 | 1,489 |
| Post-dated checks | 54 | 214 | 54 | 119 |
| 36,612 | 14,071 | 12,402 | 12,660 |
The accrued and other short-term liabilities as at December 31st 2010, in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Customer Prepayments | 940 | 35 | 940 | 35 |
| Liabilities towards proportionately | ||||
| consolidated companies | 151 | 125 | 151 | 140 |
| Deferred income of construction contracts | 3,940 | 3,368 | 4,038 | 3,368 |
| Social Security Funds | 253 | 275 | 241 | 258 |
| VAT Liabilities | 684 | 1,226 | 658 | 1,210 |
| Other withheld taxes | 467 | 471 | 333 | 449 |
| Windfall Tax | 2,230 | 1,425 | 1,814 | 1,425 |
| Dividends payable | 12 | 15 | 12 | 15 |
| Sundry Creditors | 2,094 | 2,349 | 478 | 155 |
| Deferred Income -accrued expenses | 29 | 293 | - | - |
| 10,800 | 9,582 | 8,665 | 7,055 |
The Group's and Company's short-term loans refer to current bank accounts having a duration usually of three months and are renewed depending on the needs. The amounts withdrawn are mainly used to cover the liquidity needs during the construction period of Wind Parks of the Group's energy sector. The net increase of the Group's short-term loans during 2010 amounted to €15,345 (€14,122 during the previous year) whereas for the Company the net increase of short-term loans amounted to €5,031 (€24,128 during the previous year). The Group estimates that the fair value of the above loans does not differ substantially from their book value.
The weighted average interest rate for the aforementioned loans was 4.6% and 5.4% for 2010 and 2009 respectively. The total interest on the aforementioned loans of the Group for the financial years ended on December 31st 2010 and December 31st 2009 is €487 and €1,604 respectively. The corresponding amounts for the Company were €397 and € 1,241.
The Group participates through its parent TERNA ENERGY in joint ventures with other construction companies aiming to undertake and execute private and public technical projects.
Also, the Group participates in jointly controlled companies which have activities related to construction or energy. The joint ventures and jointly controlled companies are analyzed in Note 4.
The participation of the Group in Total Assets, Total Liabilities, Total Income and Total Expenses of the joint ventures that are consolidated in the accompanying financial statements is analyzed as follows:
| 31-Dec | ||||
|---|---|---|---|---|
| 2010 | 2009 | |||
| Total Long-term Assets | - | 6 | ||
| Total Short-term Assets | 978 | 1,162 | ||
| Total Assets | 978 | 1,168 | ||
| Total Long-term Liabilities | - | 7 | ||
| Total Short-term Liabilities | 694 | 1,053 | ||
| Total Liabilities | 694 | 1,060 | ||
| Total Income | - | - | ||
| Total Expenses | - | - | ||
| Earnings after taxes | - | - |
During the period 1/1-31/12/2010, as during the period 1/1-31/12/2009, the number of shares and their nominal value remained unchanged. The share premium decreased by € 38, an amount that concerns expenses for the share capital increase of subsidiaries, which was concluded during the period 1.1-31.12.2010. The total number of shares on 31/12/2010 amounts to 109,333,400 from which 3,445,985 are owned by the Company (treasury shares). The share capital is fully paid up.
The basic earnings per share were calculated by dividing the net earnings attributed to shareholders of the parent company with the average weighted number of shares outstanding as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Net earnings attributed to shareholders of the | ||||
| parent | 9,572 | 15,864 | 7,976 | 13,377 |
| Average weighted number of shares | 107,526,657 | 108,723,395 | 107,526,657 | 108,723,395 |
The Annual Shareholders' Meeting of the Company on May 12th 2010 approved the distribution of dividend from earnings of financial year 2009 amounting to €7,325 thousand. The dividend was fully paid within the first half of 2010.
According to Greek tax legislation the tax rate corresponds to 24% for 2010, and 20% for the next financial years. The effective tax rate differs from the nominal. The calculation of the effective tax rate is affected by several factors, the most important of which are the non-exemption of specific expenses, differences from the use of depreciation rates that emerge between the fixed asset's useful life and the use of rates stipulated by PD 299/2003 and the capability of companies to create tax-exempt discounts and tax-exempt reserves, and the aforementioned reduction of the tax rate through calculations of deferred income tax.
Moreover, in May 2010 the law "Extraordinary Social Responsibility Contribution Tax" (L3845/2010) was put into effect. According to the provisions of article 5 of the above law, a Windfall Tax was applied retrospectively to the total net earnings of 2009, amounting to € 2,229 for the Group and € 1,815 for the Company. The above amounts were registered in the Group's and Company's current tax expenses respectively.
Income tax in the accompanying consolidated financial statements, is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Current tax expense | ||||
| Current tax | 3,185 | 4,629 | 2,062 | 3,481 |
| Tax of previous years | 224 | 120 | - | 115 |
| Windfall tax | 2,229 | 1,425 | 1,814 | 1,425 |
| 5,638 | 6,174 | 3,876 | 5,021 | |
| Deferred tax expense | 1,193 | 1,389 | 760 | 1,011 |
| Total | 6,831 | 7,563 | 4,636 | 6,032 |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Consolidated Earnings before taxes | 16,795 | 23,921 | 12,612 | 19,409 |
| Nominal tax rate | 24% | 25% | 24% | 25% |
| Income tax based on effective nominal tax rate | 4,031 | 5,980 | 3,027 | 4,852 |
| Adjustments for: | ||||
| - Other non-taxed income | - | (265) | - | (449) |
| - Tax of previous periods & Additional taxes | 224 | 43 | 0 | 42 |
| - Provisions for Additional income Tax | 2 | 80 | 2 | 80 |
| - Difference of tax rate on foreign operations | (247) | - | 0 | - |
| - Windfall tax | 2,229 | 1,425 | 1,814 | 1,425 |
| - Change of recoverable tax losses | 742 | - | - | |
| - Other permanent tax Differences - non-exempt expenses |
517 | 139 | 410 | 94 |
| - Other | - | 194 | - | - |
| - Effect of change in Tax Rate | (667) | (33) | (617) | (12) |
| Real tax expense | 6,831 | 7,563 | 4,636 | 6,032 |
| Effective tax rate | 40.67 | 31.6% | 36.7% | 31% |
The effective tax rate is higher in years 2010 and 2009 due to the windfall tax. The weighted tax rate for 31/12/2010, without the surcharge by the Windfall Tax, corresponded to 27.4% for the Group and 22.37% for the Company.
The income tax statement is submitted on an annual basis but the profits or losses declared remain provisional until the tax authorities audit the taxpayer's books and records and issue a final audit report.
In this case it is possible that the tax authorities may impose additional taxes and surcharges.
The tax losses, to the extent that such are accepted by the tax authorities, may offset future profit for a period of five years from the year such emerged.
The parent company, TERNA ENERGY S.A. is tax-audited up to the fiscal year 2008 included. During the preparation date of the accompanying financial statements, the non-audited tax years (including fiscal year 2010) of the Group's companies are presented in Note 4.
Deferred income tax is calculated on all the temporary tax differences between the book value and the tax value of the assets and liabilities.
The Company and Group maintain tax-exempt reserves and reserves taxed with specific way amounting to €13,093 and €18,007 respectively, which in case of distribution or capitalization will be taxed under the current tax rate. In the immediate future the Group does not plan to distribute or capitalize this reserve and thus has not estimated a deferred tax on such.
The deferred income tax is calculated using the expected tax rate at the time in which the tax receivable/ liability matures:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Receivables from deferred income tax | 303 | 1,233 | 0 | 818 |
| Liability from deferred income tax | (1,497) | (838) | (356) | 0 |
| Net deferred tax asset (liability) | (1,194) | 395 | (356) | 818 |
| Opening balance | 395 | 1,908 | 818 | 1,968 |
| Debit / (Credit) recognized in the results Debit / (Credit) recognized in other |
(1,193) | (1,388) | (760) | (1,011) |
| comprehensive income | (409) | (132) | (415) | (139) |
| Other | 13 | 7 | 1 | - |
| Closing balance | (1,194) | 395 | (356) | 818 |
OF THE PARENT COMPANY AND GROUP, FOR 31st DECEMBER 2010
(All amounts in thousand Euro, unless stated otherwise)
The deferred tax receivables and liabilities of 2010 and 2009 are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Deferred Tax Liability | ||||
| - Tangible assets | (3,951) | (2,781) | (1,905) | (1,427) |
| - Intangible assets | (1,147) | (930) | (2,186) | (1,694) |
| - Receivables of construction projects | (1,013) | (2,512) | (1,013) | (2,512) |
| - Investment Property | (185) | (185) | (185) | (185) |
| - Other | (94) | (141) | (79) | (128) |
| Total Deferred Tax Liability | (6,390) | (6,549) | (5,368) | (5,946) |
| Deferred Tax Receivable | ||||
| - Provision for staff indemnities | 36 | 36 | 36 | 36 |
| - Liabilities of construction projects | 808 | 808 | 808 | 808 |
| - Provision for doubtful receivables | 54 | 64 | 54 | 64 |
| - Cost of construction projects | 475 | 1,946 | 631 | 2,101 |
| - Other provisions | 201 | 202 | 119 | 122 |
| - Tax loss | 60 | 99 | - | |
| - Expense for share capital increase | 2,794 | 3,202 | 2,776 | 3,191 |
| - Grants | 768 | 587 | 588 | 442 |
| Total Deferred Tax Receivable | 5,196 | 6,944 | 5,012 | 6,764 |
| Net deferred tax asset (liability) | (1,194) | 395 | (356) | 818 |
The net charge in the results in the consolidated statement of comprehensive income of 2010 and 2009 regarding deferred tax is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| Effect on the income statement: | ||||
| - Tangible Fixed Assets | (1,170) | (712) | (478) | (374) |
| - Receivables of construction projects | 1,499 | (1,973) | 1,499 | (1,973) |
| - Investment Property | 0 | - | 0 | - |
| - Cost of construction projects | (1,471) | 1,312 | (1,470) | 1,468 |
| - Grants | 181 | 185 | 146 | 149 |
| - Intangible Assets | (217) | (700) | (492) | (760) |
| - Provision for staff indemnities | - | 8 | - | 8 |
| - Liabilities of construction projects | - | (4) | - | (4) |
| - Provision for doubtful receivables | (10) | (3) | (10) | (3) |
| - Other provisions | (1) | 16 | (3) | 16 |
| - Tax loss | (39) | 20 | - | - |
| - Other | 47 | 463 | 49 | 463 |
| (1,181) | (1,388) | (759) | (1,010) | |
| Effect on the income statement: | ||||
| Expenses of share capital increase | (408) | (132) | (415) | (138) |
| (1,589) | (1,520) | (1,174) | (1,148) |
The cost of sales, administrative and research & development expenses at 31st December 2010 and 2009, in the accompanying financial statements, are analyzed as follows:
| COST OF SALES | GROUP | COMPANY | ||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Employee remuneration and expenses | 2,965 | 3,256 | 3,427 | 3,358 |
| Fees of consultants | 1,599 | 1,692 | 1,599 | 1,852 |
| Remuneration and expenses of third | 1,227 | 1,899 | 2,306 | 1,844 |
| parties (engineers) | ||||
| Materials and expenses of |
5,605 | 10,860 | 6,316 | 13,141 |
| constructions | ||||
| Leases | 806 | 1,645 | 1,232 | 1,639 |
| Repairs, Maintenance | 2,875 | 3,189 | 1,657 | 2,251 |
| Sub-contractors | 9,507 | 13,821 | 11,685 | 16,082 |
| Depreciation | 8,795 | 8,689 | 4,548 | 4,369 |
| Third party benefits | 397 | 340 | 410 | 273 |
| Contributions to local government | 1,030 | 1,068 | 563 | 599 |
| authorities | ||||
| Transportation expenses | 263 | 325 | 336 | 325 |
| Insurance premiums | 822 | 765 | 681 | 508 |
| Other | 928 | 1,155 | 903 | 1,149 |
| Total | 36,819 | 48,704 | 35,663 | 47,390 |
| ADMINISTRATIVE EXPENSES | GROUP | COMPANY | ||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Employee remuneration and expenses | 1,338 | 1,219 | 1,232 | 1,113 |
| Fees of consultants | 855 | 332 | 722 | 291 |
| Remuneration and expenses of third parties (engineers) |
2,225 | 1,018 | 919 | 658 |
| Insurance premiums | 1 | 1 | - | - |
| Leases | 199 | 161 | 178 | 122 |
| Subscriptions | 235 | 203 | 213 | 184 |
| Depreciation | 190 | 156 | 143 | 107 |
| Travel and promotion expenses | 479 | 332 | 208 | 135 |
| Third party benefits (utility companies) |
57 | 75 | 41 | 40 |
| Other | 1,389 | 1,720 | 1,331 | 1,347 |
| Total | 6,968 | 5,217 | 4,987 | 3,997 |
(All amounts in thousand Euro, unless stated otherwise)
| RESEARCH & DEVELOPMENT EXPENSES |
GROUP | COMPANY | ||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Employee remuneration | 78 | 62 | 78 | 62 |
| Remuneration of engineers | 1,697 | 1,064 | 1,660 | 924 |
| Fees of consultants | 1,011 | 1,326 | 378 | 2,046 |
| Depreciation of equipment | 119 | 116 | 119 | 116 |
| Travel expenses | 20 | 30 | 20 | 30 |
| Scientific/Lab experiments | 137 | 167 | 137 | 167 |
| Third party benefits | 69 | 8 | 69 | 8 |
| Other expenses | 143 | 383 | 143 | 383 |
| Total | 3,274 | 3,156 | 2,604 | 3,736 |
The other income/(expenses) for the period, in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Grant amortization (Note 17) | 2,398 | 2,396 | 1,055 | 1,055 |
| Income from leasing of machinery | 10 | 39 | 10 | 39 |
| Income from leasing of property | 81 | 71 | 81 | 71 |
| (Note 7) | ||||
| Income from J/V | - | - | - | 224 |
| Other income | 681 | 991 | 183 | 1,757 |
| Profit from sales of fixed assets | 5 | - | 5 | - |
| Other Tax | - | (6) | - | (6) |
| Other expenses | (372) | - | (45) | - |
| Total | 2,803 | 3,491 | 1,289 | 3,140 |
The financial income/(expenses) in the accompanying financial statements, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | |
| Interest of Long-term Loans (note 14) Interest of Short-term Loans (note 20) Bank expenses and other expenses |
(3,130) (487) (1,075) |
(2,439) (1,604) (1,172) |
(1,578) (397) (992) |
(1,036) (1,241) (748) |
| Financial Expenses | (4,692) | (5,215) | (2,967) | (3,025) |
| Interest from site deposits Interest from term deposits Other Financial income |
787 5,903 - |
275 9,071 - |
713 5,705 - |
200 8,996 - |
| Financial Income | 6,690 | 9,346 | 6,418 | 9,196 |
| Net Financial Results | 1,998 | 4,131 | 3,451 | 6,171 |
Employee remuneration and the average employed staff, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 1,1- 31.12.2010 |
1,1- 31.12.2009 |
1,1- 31.12.2010 |
1,1- 31.12.2009 |
|
| Wages and Related benefits of day-wage workers | 754 | 645 | 733 | 626 |
| Wages and Related benefits of regular staff | 2,367 | 2,659 | 2,805 | 2,746 |
| Social Security Contributions | 1,100 | 1,073 | 1,039 | 1,001 |
| Provision for employee indemnities | 160 | 160 | 160 | 160 |
| Other | - | - | ||
| Total Expenses | 4,381 | 4,537 | 4,737 | 4,533 |
| Average Number of Employees | ||||
| Day-wage workers | 54 | 34 | 53 | 34 |
| Regular staff | 100 | 120 | 92 | 111 |
As presented in detail in note 4 of the Group's 2010 consolidated financial statements, the following companies are consolidated for the first time: HAOS INVEST 1 EAD, AIOLIKI ILIOKASTROU SA, GALLETTE LTD, EUROWIND, AIOLOS LUX S.A.R.L, ΕCO ENERGY DOBRICH 2 EOOD, ECO ENERGY DOBRICH 3 EOOD, and ECO ENERGY DOBRICH 4 EOOD.
The Group accounts for the aforementioned acquisitions as acquisition of assets according to paragraph 3 and B7- B12 of IFRS 3 "Business Combinations". Specifically, during the acquisition dates the basic asset of the above subsidiaries corresponded to the licenses such held, while no construction activity had commenced on the wind parks. The acquired assets do not constitute a "company" according to the definition of IFRS 3 as the subsidiaries did not include the facilities and procedures that would allow such to produce product – electric energy. From the total consideration of the above acquisition amounting to 15,136 thousand euro, the amount of 14,949 thousand euro concerns acquisition of wind park licenses (note 6), while the remaining amount of 187 thousand euro concerns other assets (mainly fixed assets).
The transactions of the Company and the Group with related parties for the periods 01/01-31/12/2010 and 01/01- 31/12/2009, as well as the balances of receivables and liabilities arisen from the above transactions as of 31/12/2010 and 31/12/2009 are as follows:
(All amounts in thousand Euro, unless stated otherwise)
| Period 1/1-31/12/2010 |
GROUP | COMPANY | ||||||
|---|---|---|---|---|---|---|---|---|
| Related party | Sales | Purchases | Debit Balances |
Credit Balances |
Sales | Purchases | Debit Balances |
Credit Balances |
| Subsidiaries | - | - | - | - | 13,955 | - | 13,682 | - |
| Joint Ventures | - | - | - | - | - | - | 631 | 360 |
| Parent | - | 111 | - | 10 | - | 111 | - | 10 |
| Other related parties | 7,227 | 15,998 | 1,345 | 2,253 | 7,210 | 10,737 | 579 | 2,247 |
| Basic senior executives |
- | 500 | - | - | - | 464 | - | - |
| Period 1/1-31/12/2009 |
GROUP | COMPANY | ||||||
|---|---|---|---|---|---|---|---|---|
| Related party | Sales | Purchases | Debit Balances |
Credit Balances |
Sales | Purchases | Debit Balances |
Credit Balances |
| Subsidiaries | - | - | - | - | 890 | 1,686 | 268 | 1,351 |
| Joint Ventures | - | - | - | - | - | - | 793 | 360 |
| Parent | - | 99 | - | - | - | 99 | - | - |
| Other related parties | 8,173 | 5,066 | 353 | 824 | 8,173 | 4,664 | 302 | 440 |
| Basic senior executives |
- | 513 | - | - | - | 513 | - | - |
Remuneration of Board of Directors members and senior executives of the Company: The remuneration of Board of Directors members and senior executives of the group and Company, recognized on 31 December 2010 and 2009 are as follows:
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | ||
| Board of Directors remuneration | 735 | 682 | 360 | 360 | |
| Remuneration of executives included in the executive Board members |
500 | 513 | 464 | 513 | |
| 1,235 | 1,195 | 824 | 873 |
The group is exposed to many financial risks such as market risk (volatility in exchange rates, interest rates, market prices etc.), credit risk and liquidity risk. The risk management plan aims to eliminate the negative effect of these risks on financial results of the group as these effects are the results of the uncertainty in financial markets and the changes in costs and sales. The group uses financial derivatives to hedge its exposure in certain risk categories. The risk management policy is undertaken by the treasury of the Group and the procedure is as follows:
The financial means of the Group are mainly deposits in banks, overdraft facility by banks, short-term financial products of high liquidity traded in the money market, trade debtors and creditors, loans to and from subsidiaries, associates and joint ventures, shares, dividends payable and liabilities arising from leasing.
The Group is not exposed to foreign exchange risk because its total transactions are denominated in euro, with the exception of investments in foreign companies.
Such foreign activities overall refer to the energy sector and are all at a primary stage, while the construction of their production capacity (wind parks) has not yet commenced. Therefore, the Group's exposure to foreign exchange risk due to investments abroad is limited for now.
With regard to long-term financing, Group's policy is to minimize its exposure to interest rate risk. In this context, long-term loans are a) fixed rate loans and b) floating rate loans linked to euribor. Therefore, fixed rate loans are not subject to any interest rate risk contrary to floating rate loans (Note 14).
The Group's short-term debt is also exclusively in euro and under floating interest rates (Note 20) linked to euribor. The following table presents the sensitivity of the results towards the Group's short-term debt and deposits, in case of an interest rate change of +20% –20% (2009: +/-20% as well). The changes in interest rates are estimated to be in line with the recent market conditions which until today are stable as compared to the previous year.
| 2010 | 2009 | |||
|---|---|---|---|---|
| Amounts in thousand € | ||||
| +20% | -20% | +20% | -20% | |
| Results after taxes – Group | 806 | (806) | 1,043 | (1,043) |
| Results after taxes – |
||||
| Company | 840 | (840) | 1,234 | (1,234) |
The Group does not have a policy to manage risk from such interest rate changes.
The Group is not exposed to other interest rate risks.
The Group is not exposed to market risk on its financial assets, apart from a long-term liability amounting to 7,500 thousand euro (Note 14), the future cash flows of which are linked to the Eurozone inflation rate excluding tobacco. This liability is recognized at fair value through the results and changes up to 25% of the above inflation rate from current levels do not affect the Group's results.
Credit risk is the risk that a counterparty in a financial instrument will cause loss to the other by failing to pay the relevant liability.
(All amounts in thousand Euro, unless stated otherwise)
The Group continuously controls its receivables, either separately or by group and it incorporates the resulting information in its credit control. When deemed necessary, external reports or analysis are used as regards to existing or potential clients. The Group's policy is to cooperate only with reliable customers.
The Group's management considers that all the above financial assets for which all the necessary impairments have been made, are of high credit quality, including those due.
For trade and other receivables, the Company and Group are not exposed to significant credit risk. Due to the nature of the Group's activities, the total receivables of the energy sector correspond to the broader public sector (including HTSO and PPC), while the same holds for the largest part of receivables from the construction sector.
Credit risk for liquid receivables, as well as for other short-term assets (cash & cash equivalents), is considered negligible, given that the relevant parties are reliable banks, the Greek state or companies of the broader public sector or powerful business groups.
The amounts that represent the largest exposure to this risk at the end of the current and the comparative period, are the current value of such accounts in the respective periods. The largest credit risk of the company is the possibility of default of the counter party.
On 31/12/10 there are no guarantees and credit enhancements for security against credit risk of the above receivables, both for the Company and for the Group.
On 31/12/10 there are no financial receivables overdue, both for the Company and the Group, apart from an amount of € 211, for which an equivalent provision has been made.
The TERNA ENERGY Group manages its liquidity needs by carefully monitoring the balance of long-term financial liabilities as well as payments that take place on a daily basis. The liquidity needs are monitored at different time zones, on a daily and weekly basis, as well as on the basis of a moving 30-day period. The liquidity needs for the next 6 months and the next year are defined monthly.
The company maintains cash and cash equivalents in banks to cover its liquidity needs for periods up to 30 days. Capital for mid-term liquidity needs are released from the company's term deposits.
The maturity of the financial liabilities on December 31st 2010 for the TERNA ENERGY Group, is analyzed as follows:
| Short-term | Long-term | |
|---|---|---|
| 1 to 5 | ||
| 0 to 12 months | years | over 5 years |
| 13,270 | 46,487 | 22,410 |
| 2,000 | 6,500 | 0 |
| 126,848 | 0 | 0 |
| 0 | ||
| 8,317 | 0 | 0 |
| 187,047 | 52,987 | 22,410 |
| 36,612 | 31.12.2010 0 |
(All amounts in thousand Euro, unless stated otherwise)
The corresponding maturity of financial liabilities for December 31st 2009 was as follows:
| 31.12.2009 | ||||||
|---|---|---|---|---|---|---|
| Amounts in thousand € | Short-term | Long-term | ||||
| 0 to 12 months | 1 to 5 years | over 5 years | ||||
| Long-term Debt | 10,929 | 49,151 | 18,494 | |||
| Short-term Debt | 111,503 | - | - | |||
| Trade Liabilities | 14,071 | - | - | |||
| Other short-term liabilities | 10,139 | - | - | |||
| Total | 146,642 | 49,151 | 18,494 |
The above contractual maturities reflect the gross cash flows, which may differ from the book values of liabilities during the end of the reporting period.
The financial assets as well as the financial liabilities during the end of the reporting period, may be categorized as follows:
| 31.12.2010 | 31.12.2009 | |
|---|---|---|
| Non- current assets: | ||
| 286 | - | |
| Loans and receivables – Other long-term receivables | ||
| Financial assets available for sale – Other investments | 1 | 1 |
| 287 | 1 | |
| Current assets: | ||
| Loans and receivables – Trade receivables | 17,966 | 22,393 |
| Loans and receivables – Prepayments and other receivables | 5,035 | - |
| Cash & cash equivalents | 192,873 | 244,837 |
| 215,874 | 267,230 | |
| Total | 216,161 | 267,231 |
| Amounts in thousand € | 31.12.2010 | 31.12.2009 |
| Long-term liabilities: | ||
| Liabilities measured at amortized cost – Long-term loans | 57,204 | 67,645 |
| Liabilities measured at fair value – Liabilities from derivatives | 5,500 | 0 |
| 62,704 | 67,645 | |
| Short-term liabilities: | ||
| Liabilities measured at amortized cost – Suppliers | 36,612 | 14,072 |
| Liabilities measured at amortized cost – Short-term loans | 126,848 | 111,503 |
| Liabilities measured at amortized cost – Long-term liabilities payable in the next period |
11,005 | 10,929 |
| Liabilities measured at fair value – Liabilities from derivatives | 2,000 | 0 |
| Liabilities measured at amortized cost – Accrued and other short-term liabilities |
6,226 | - |
| Total | 182,691 | 136,504 |
See notes 3c, 3d for a more detailed description on how the category of financial instruments affects their subsequent valuation.
The long-term loan of 7,500 thouand euro is the only financial instrument which is measured at fair value during 31/12/2010. The 2010 results include no amount concerning this loan. The fair value of the loan is determined using a valuation technique. This evaluation is based both on data observable in the market and on data that are not directly observable, such as the estimation of the future Eurozone inflation rate excluding tobacco.
The group has adopted the revision of IFRS 7 regarding the hierarchy of items measured at fair value in the following levels:
The liability from the long-term loan of € 7,500 thousand is included in level 3. In case of a reasonable change in the valuation model's data regarding the specific loan (inflation rate), the fair value would not change significantly. This is due to the fact that the loan agreement states that the loan payments do not change given that the inflation rate fluctuates within a specific range.
The aims of the Group regarding the management of its capital is as follows:
The Group defines the level of capital in proportion to the risk of its activities, it monitors the developments of the economic environment and their effect on the risk characteristics, and it manages the capital structure (relation of debt to equity) with the adjustment of the amount and maturity of debt, the issue of new shares or the return of capital to shareholders, with the adjustment of the dividend and the sale of individual or a group of assets.
For this purpose, the Group monitors its capital based on the leverage ratio which is defined as Net Debt / Adjusted Equity, where a) Net Debt is defined as Liabilities from loans and financial leases minus Cash equivalents and other short-term financial Assets, as such appear in the Statement of Financial Position and b) Adjusted Equity is defined as Total Equity plus unsecured loans. The ratio at the end of 2010 and 2009 was as follows:
| Amounts in thousand € | 31.12.2010 | 31.12.2009 |
|---|---|---|
| Interest bearing debt | 195,057 | 190,077 |
| Minus: | ||
| Cash & Cash equivalents | (192,873) | (244,837) |
| Net Debt | 2,184 | (54,760) |
(All amounts in thousand Euro, unless stated otherwise)
| Total equity | 366,501 | 373,216 |
|---|---|---|
| Minus: Net unrealized profit carried forward and reserves | 0 | 0 |
| Adjusted Equity | 366,501 | 373,216 |
| Leverage ratio (Net Debt / Adjusted Equity) | 0.8% | (15%) |
The change in the leverage ratio during 2010 presented in the above table is attributed to the Group's investment development.
There are no mortgage prenotations on the Group's property.
During 2010, in the energy sector, installation licenses were issued for four new Wind Parks in Greece, with a total capacity of 85.02 MW, in the Prefectures of Viotia, Argolida, Evia and Dodecanese, while at the same time 12.5 MW of the total 20 MW of a Wind Park in the Prefecture of Aitoloakarnania, was set in operation.
Also, an installation license was acquired for a Photovoltaic Station in Greece with a capacity of 1.9 MW in the prefecture of Argolida, production licenses were issued for Photovoltaic Stations with a total capacity of 17.95 MW and production licenses were issued for Small Hydroelectric Stations (SMHS) with a total capacity of 31.6 MW.
During the 2nd half of 2010, the Company established the subsidiary "DELTA AXIOU ENERGY S.A.", whose basic activity is the design, construction, organization, management and utilization of an Electricity Heat Co-Production Station which uses biogas for fuel.
Furthermore, during 2010 construction began of four Wind Parks in Poland, with a total capacity of 56 MW and of two Wind Parks in Bulgaria, with a total capacity of 30 MW.
In the construction sector, during the 1st half of 2010, a construction agreement was signed between the company TERNA ENERGY SA and the Public Power Corporation S.A. (PPC S.A.) for the project ""Design, procurement of equipment and construction of a closed type GIS hydroelectric station of 150KV at the production station of South Rhodes", with a contractual value of 8,619,000 euro, which is expected to be completed by the beginning of 2012, while during the 2nd half of 2010 a construction agreement was signed between the company TERNA ENERGY SA and the Special Service of Public Works/Large Projects of Western Greece, for the project "Construction of Igoumenitsa – Preveza Road, improvement by sections, Subsections 4: Karteri - Gerakari – Parga from K.M. 0+000 to K.M. 14+937.2" with a contractual value of 20,756,316 euro, which is expected to be completed by the end of 2013.
The total backlog of construction projects towards third parties on 31/12/2010 amounts to €65 million.
In March 2011 production licenses were issued for 27 Wind Parks, with a total capacity of 954 MW in Crete, for two Wind Parks of 22MW and 26 MW each in the Aitoloakarnania Prefecture, one Wind Park of 40 MW in the Drama Prefecture, while the increase of capacity was approved for a Wind Park under construction in the Viotia Prefecture by 10 MW, namely from 30 MW to 40 MW, and the Group's first Wind Park abroad, in Poland with a capacity of 20 MW, was set in operation. Also, the installation license was issued for a Photovoltaic Park of 1.912MW, in the Argolida Prefecture.
Moreover, in the context of its development in the global market, the Group came to an agreement for the acquisition of companies in the United States of America, which own Wind Parks under development (licensing stage) with a total capacity of 172 MW. The agreement is subject to the fulfillment of a series of conditions and is expected to be completed within 12 months.
In the constructions sector, the Company was declared as the temporary lowest bidder and is expecting to sign an agreement on the following projects:
a. For the execution of the project "Anti-flooding protection projects for the Xiria watercourse", in the Magnisia Prefecture, with a contractual amount of 8,628,264.40 euro and
b. For the execution of the project "Construction of the overpass connection node of Paraglavkios arteries with the new Patra port and construction of the technical extrusion of the Diakoniari watercourse from K.M. 0-001.5 to 0- 050.00" with a contractual amount of 23,872,184.80 euro.
During the execution of projects, the Group may face contingent legal claims by third parties. According to the Management, as well as the legal counselor of the Group there are no cases under litigation or arbitration except from the following:
Several claims made at the Council of State for cancellation of the planned installation of the Wind Park by the subsidiary "AIOLIKI PANORAMATOS DERVENOCHORION GP", are pending. The court session took place in November 2009 and the Council of State has ordered a pause on the building works for 17 out of 40 wind generators.
Managing Director
The Chairman of the Board Vice-Chairman & The Chief Financial Officer
ID No.Χ 516918 ID No. ΑΒ 986527 ID No. ΑΙ 028273
Georgios Perdikaris Emman. Maragoudakis Konstantinos Dimopoulos
85 Mesogeion Ave., 11526 Athens Greece
DATA AND INFORMATION FOR THE FINANCIAL YEAR FROM 01/01/2010 TO 31/12/2010
Published according to C.L. 2190/20 article 135 for companies that prepare annual financial statements, consolidated and non-consolidated according to IFRS The following data and information that have been derived from the financial statements, aim at providing general information on the financial position and results of TERNA ENERGY SA and its Group. Therefore, before proceeding with any kind of
investment choice or other transaction with the company or group, readers should refer to the company's website where the financial statements are posted as well as the Audit Report by the Certified Auditor.
| COMPANY INFORMATION Approval Date of the Annual Financial Statements |
|||
|---|---|---|---|
| Ministry of Finance Competitiveness and Shipping, Division of Société | (from which the condensed data were derived) : | 24 March 2011 | |
| Relevant Authority: | Anonyme Companies and Credit | Legal Auditor: | Ioannis Leos (SOEL Reg. No.: 24881) |
| Board of Directors Composition: | Chairman: Georgios Perdikaris Vice-Chairman & Managing Director: Emmanuel Maragoudakis, |
Auditing Firm: Type of Audit Report: |
GRANT THORNTON SA In accordance |
| Members: Panagiotis Pothos, Michael Gourzis, Georgios Spyrou, Theodoros Tagas, Grigoris Charalambopoulos (non-executive member), |
Company Website: | www.terna-energy.gr | |
| STATEMENT OF FINANCIAL POSITION (Consolidated and Non-Consolidated) | Aristeidis Dasis, Nikolaos Kalamaras (independent non-executive members) | STATEMENT OF COMPREHENSIVE INCOME (Consolidated and Non-Consolidated) | |
| Amounts in thousand euro | GROUP COMPANY |
Amounts in thousand euro GROUP COMPANY |
|
| 31/12/2010 31/12/2009 31/12/2010 31/12/2009 |
1/1- 1/1- 1/1- 1/1- 31/12/2010 31/12/2009 31/12/2010 31/12/2009 |
||
| ASSETS Self used tangible fixed assets Investment property |
417.194 340.820 124.919 110.552 923 923 923 923 |
Turnover Gross profit / (losses) |
59.055 73.376 51.126 65.221 22.236 24.672 15.463 17.831 |
| Other non-current assets Intangible assets |
4.089 1.504 110.916 72.428 17.930 1.774 1.508 989 |
Earnings/(Loss) before interest and tax (EBIT) Earnings/(Loss) before tax |
14.797 19.790 9.161 13.238 16.795 23.921 12.612 19.409 |
| Inventories Trade receivables |
2.196 536 1.903 244 17.966 24.663 31.470 29.691 |
Earnings/(Loss) after tax (A) Allocated to: |
9.964 16.357 7.976 13.377 |
| Cash & cash equivalents Other current assets |
192.873 244.837 174.794 233.561 27.448 25.398 8.034 8.267 |
Company Shareholders Minority Shareholders |
9.572 15.864 392 493 |
| TOTAL ASSETS | 680.619 640.455 454.467 456.655 |
9.964 16.357 |
|
| EQUITY & LIABILITIES Share capital |
32.800 32.800 32.800 32.800 |
Other comprehensive income after taxes (B) Total comprehensive income after taxes (A+B) |
(400) (172) (415) (139) 9.564 16.185 7.561 13.238 |
| Other items of Shareholders' Equity Total Shareholders' Equity (a) |
331.098 339.011 324.333 333.816 363.898 371.811 357.133 366.616 |
Allocated to: Company Shareholders |
9.174 15.692 |
| Non-controlling interests Total Equity (b) |
2.603 1.405 0 0 366.501 373.216 357.133 366.616 |
Minority Shareholders | 390 493 9.564 16.185 |
| Long-term bank liabilities Provisions/Other-long-term liabilities |
63.204 67.646 36.754 36.707 63.914 52.951 19.853 20.555 |
Earnings/(Losses) after tax per share - basic (in €) | 0,0890 0,1459 0,0741 0,1230 |
| Short-term bank liabilities Other-short-term liabilities |
139.353 122.432 19.660 13.062 47.647 24.210 21.067 19.715 |
Proposed dividend per share (€) Earnings/(Losses) before interest, tax, depreciation and amortization (EBITDA) |
0,0403 0,0670 21.429 26.274 12.895 16.780 |
| Total liabilities TOTAL EQUITY & LIABILITIES |
314.118 267.239 97.334 90.039 680.619 640.455 454.467 456.655 |
Amounts in thousand euro | STATEMENT OF CASH FLOWS (indirect method) (Consolidated and Non-Consolidated) |
| GROUP COMPANY 1/1- 1/1- 1/1- 1/1- |
|||
| STATEMENT OF CHANGES IN EQUITY (Consolidated and Non-Consolidated) | Operating activities | 31/12/2010 31/12/2009 31/12/2010 31/12/2009 |
|
| Amounts in thousand euro | GROUP COMPANY |
Profit before tax Plus/less adjustments for: |
16.795 23.921 12.612 19.409 |
| 31/12/2010 31/12/2009 31/12/2010 31/12/2009 |
Depreciation Provisions |
9.107 8.880 4.789 4.597 165 (228) 160 160 |
|
| Total equity at beginning of period (1/1/2010 and 1/1/2009) Profit/(Losses) for the period after taxes |
373.216 365.809 366.616 362.146 9.564 16.185 7.561 13.238 |
Interest income and related income Interest expenses and related expenses |
(6.644) (9.338) (6.419) (9.196) 4.646 5.206 2.968 3.024 |
| Increase / (decrease) of subsidiaries' share capital | 382.780 381.994 374.177 375.384 765 0 0 0 |
Results from participations and securities Results from intangible and tangible fixed assets and investment property |
0 0 0 (1.505) 0 0 0 0 |
| Distributed dividends Net income registered directly in equity Purchases of treasury shares |
(7.325) (7.334) (7.325) (7.334) 0 0 0 0 (9.719) (1.434) (9.719) (1.434) |
Amortization of grants Other adjustments Operating profit before changes in working capital |
(2.398) (2.396) (1.055) (1.055) (77) 83 0 0 21.594 26.128 13.055 15.434 |
| Transfers other movements | 0 (10) 0 0 |
Plus/Less adjustments for working capital account movements or movements related to operating activities: |
|
| Establishment of subsidiary Total equity at end of period (31/12/09 and 31/12/08) |
0 0 0 0 366.501 373.216 357.133 366.616 |
Decrease / (increase) in inventories Decrease / (increase) in receivables |
(1.660) 350 (1.659) (102) 8.887 (28.386) (4.231) (17.933) |
| (Decrease) / increase in liabilities (other than to banks) (Less): |
2.243 28.626 2.181 13.766 |
||
| Taxes paid Total inflows / (outflows) from operating activities (a) |
(4.073) (9.244) (2.340) (8.072) 26.991 17.474 7.006 3.093 |
||
| ADDITIONAL DATA & INFORMATION | Investing activities Purchases of tangible & intangible assets |
(60.884) (111.082) (19.675) (27.844) |
|
| 1. There was no change in the accounting policies and estimations, and there is no case for correction of accounting errors or reclassification of accounts in | Grants received | 2.733 17.691 0 5.953 |
|
| the financial statements. 2. The Basic Accounting Principles of the financial statements as of 31/12/09 have been followed. |
Interest received (Purchases)/sales of participations and securities |
6.747 11.232 6.533 11.102 (12.985) (30) (35.812) (22.254) |
|
| 3. The group during the present period employed 154 individuals. For the respective period of 2009 the group employed 154 individuals. During the present | Increase of investments in associate company | (3.448) 0 (3.448) 0 |
|
| year the company employed 145 individuals, while during the previous year the company employed 145 individuals. 4. The Company has been audited by the tax authorities up to fiscal year 2008 included. Note No 4 of the financial statements refer to the tax un-audited fiscal |
|||
| years of the consolidated entities. | Dividends received from investments | 0 0 0 1.376 |
|
| 5.Claims to cancel the planned installation of the Wind Park of the subsidiary "AIOLIKI PANORAMATOS DERVENOCHORION SA" are pending before the Council of State. The hearing of the case took place in November 2009, and until it issues its decision, the Council of State has ordered the postponement of construction activities for the 17 of the 40 wind generators under construction. Reference to such is also made in Note No 37 of the financial statements. |
Total inflows / (outflows) from investing activities (b) | (67.837) (82.189) (52.402) (31.667) |
|
| 6. Earnings per share were calculated based on the weighted average number of shares. 7. The financial statements of the group are included in the consolidated financial statements of GEK TERNA SA, consolidated with the full consolidation method. The |
|||
| aforementioned parent company is registered in Greece and on 31/12/2010 owned 47.638% of the company's share capital. 8.The amounts of sales and purchases (goods and services) cumulatively from the beginning of the financial period, as well as the balances of receivables |
Financing activities Proceeds from share capital increase |
765 0 0 0 |
|
| and liabilities of the company at the end of the present period, that have emerged from its transactions with its related parties, as such are defined by IAS 24, are as follows: |
Purchases of treasury shares Net change in long-term loans |
(9.719) (1.434) (9.719) (1.434) (2.768) 20.799 1.621 14.888 |
|
| GROUP COMPANY |
Net change in short-term loans Interest and related expenses paid |
15.190 14.215 5.000 (24.118) (7.290) (7.635) (2.944) (3.023) |
|
| a) Sales of goods and services b) Purchases of goods and services |
7.227 21.165 16.109 10.848 |
Dividends paid Total inflows / (outflows) from financing activities (c) |
(7.329) (7.317) (7.329) (7.317) (11.151) 18.628 (13.371) (21.004) |
| c) Receivables | 1.345 14.892 2.263 |
Effect of FX differences on cash equivalents Net increase / (decrease) in cash and cash equivalents for the period (a) + (b) + |
33 38 0 0 |
| d) Liabilities e) Transactions & remuneration of Board members and executives |
2.617 500 464 |
(c) Cash and cash equivalents at the beginning of the period |
(51.964) (46.049) (58.767) (49.578) 244.837 290.886 233.561 283.139 |
| f) Receivables from Board members and executives g) Liabilities to Board members and executives |
0 0 0 0 |
Cash and cash equivalents at the end of the period | 192.873 244.837 174.794 233.561 |
| 9. The provisions of the company and group are analyzed as follows: | |||
| Provision for unaudited tax years | GROUP COMPANY 80 80 |
||
| Other provisions | 1.512 766 |
||
| 10. The names, domiciles, participation percentages and consolidation method of companies and joint ventures that were consolidated in the financial statements of 31/12/2010 are mentioned in detail in Note 4 of the financial statements. 11. During 31 December 2010 the following companies were incorporated with the full consolidation method in the consolidated financial statements compared to the respective period of the previous year: |
|||
| VALUE PLUS LTD (100%, established on 4.1.2010), HAOS INVEST 1 EAD (100%, acquired on 30.3.2010), Aioliki Iliokastrou S.A. (100%, acquisition completed on 23.4.2010), GALLETTE L.T.D (100%, acquisition completed on 24.8.2010), AIOLOS LUX S.A.R.L. (100%, acquired on 1.7.2010), ECO ENERGY DOBRICH 2 EOOD (100%, acquired on 1.7.2010), |
|||
| ECO ENERGY DOBRICH 3 EOOD (100%, acquired on 1.7.2010), ECO ENERGY DOBRICH 4 EOOD (100%, acquired on 1.7.2010), EUROWIND S.A. (100%). Also, on 28/7/2010 the company acquired, through participating in the share capital increase | 48% of the shares of the company EN.ER.MEL. S.A. which was incorporated with the equity method in the consolidated financial statements, compared to the respective period of the previous year. Reference to such is made in Note No 4 of the financial statements. | ||
| 12. The amounts and nature of other comprehensive income/(expenses) after taxes, are analyzed as follows: | COMPANY GROUP |
||
| Foreign exchange differences from conversion of incorporated foreign operations | 31/12/2010 31/12/2010 47 0 |
||
| Expenses for share capital increase of subsidiary Tax on items transferred directly to or from equity |
(38) 0 (409) (415) |
||
| (400) (415) |
|||
| 14. No sector or company has ceased operations. | 13. The number of treasury shares owned by the company on December 31st 2010 corresponded to 3,445,985 shares with a total acquisition cost of 12,765 thousand €. | ||
| Athens, 24/03/2011 | |||
| THE CHAIRMAN OF THE BOARD | THE MANAGING DIRECTOR | THE CHIEF FINANCIAL OFFICER | THE HEAD ACCOUNTANT |
| GEORGIOS PERDIKARIS ID No.: Χ 516918 |
EMMANUEL MARAGOUDAKIS ID No.:ΑΒ 986527 |
KONSTANTINOS DIMOPOULOS ID No.: ΑΙ 028273 |
NIKOLAOS MANAVERIS ID No.:ΑΕ 567798 |
| License Reg. No. A' CLASS 9674 |
It is notified that in accordance with article 3 of the decision 7/448/11.10.2007 by the Hellenic Capital Markets Commission BoD and decision 25/17.7.2008 by the BoD of Athens Exchange, from the share capital increase of TERNA ENERGY ABETE paid in cash that was decided by the Extraordinary General Shareholders Meeting on 20.07.2007, the net amount of € 300,572 thousand was raised, (including issue expenses of € 13,908 thous.).
The period for the Public Offering was 31/10/07-2/11/07. For the share capital increase 27,333,400 new common registered shares were issued.
All shares of the company (109,333,400) were listed for trading on the Athens Exchange on 14/11/2007 in the large capitalization market segment.
The certification for the deposit of the share capital increase by the Board of Directors of the Company was made on 8/11/07 and recorded on Société Anonyme Registry on 9/11/07 with the announcement No 36439.
The ordinary General Meeting on 2/4/2009 decided on the restructuring of the time schedule and use of the outstanding balance, by extending the completion time of the distribution by one year, namely until 31/12/2011, due to observed delays in the licensing procedures in the RES sector. Additionally, the extraordinary General Meeting on 29/6/2009 extended the use of one account.
The total raised capital of € 300,572, according to the aforementioned amended time schedule, presented the following movement until 31/12/2010:
| TABLE OF UTILIZATION OF CAPITAL PROCEEDS (AMENDMENT ACCORDING TO THE EXTRAORDINARY SHAREHOLDERS MEETING AS OF 29.06.2009) |
||||||||
|---|---|---|---|---|---|---|---|---|
| TIME FRAME | Utilization of Capital Proceeds | Total utilized |
Non | |||||
| in thousand € | 08/11/07- 31/12/07 |
01/01/08- 31/12/08 |
01/01/09- 31/12/09 |
01/01/10- 31/12/10 |
01/01/11- 31/12/11 |
Total | capital 08/11/07 until 31/12/2010 |
utilized capital 31/12/2010 |
| Total investments in wind parks | 4,084 | 10,494 | 48,200 | 99,472 | 15,200 | 177,450 | 71,680 | 105,770 |
| Total investments in hydroelectric stations |
2,661 | 2,853 | 1,300 | 6,700 | 6,700 | 20,214 | 15,169 | 5,045 |
| Photovoltaic stations | 0 | 0 | 1,500 | 4,000 | 6,000 | 11,500 | 0 | 11,500 |
| Electric energy production from biomass |
0 | 0 | 0 | 5,000 | 10,000 | 15,000 | 3,448 | 11,552 |
| Wind parks abroad | 0 | 2,500 | 5,000 | 15,000 | 20,000 | 42,500 | 22,500 | 20,000 |
| Acquisition of companies, RES licenses (from the Company or via its subsidiaries) - Share capital increase of subsidiaries for acquisition of companies – licenses in RES |
0 | 0 | 6,000 | 7,000 | 7,000 | 20,000 | 10,700 | 9,300 |
| Total Investment from Capital | ||||||||
| Proceeds | 6,745 | 15,847 | 62,000 | 137,172 | 64,900 | 286,664 | 123,497 | 163,167 |
| Issue Expenses | 13,380 | 528 | 13,908 | 13,908 | 0 | |||
| Total | 20,125 | 16,375 | 62,000 | 137,172 | 64,900 | 300,572 | 137,405 | 163,167 |
Additional decision was made regarding the change in the utilization of proceeds among investment categories and among the years 2009 up to 2011, in an effort to align the investment plan with the current progress in the granting of licenses. Specifically, the Company increased the appropriation of funds for Wind Park investments (due to accumulation of several projects) by € 26.6 million and for Biomass by €0.2 million, and added a category for the acquisition of RES related companies of € 20 million. As result there was a decrease up to 2011, in the utilization of funds for investments in Hydroelectric units, Photovoltaic stations and Wind Parks abroad.
Furthermore, the Extraordinary Shareholders' Meeting of 29/06/2009 approved the BoD's decision as of 25/6/2009 to extend the utilization of the item of € 20 million in order to enable the Company to acquire RES related companies and licenses through its subsidiaries as well.
| TIMEFRAME | INITIAL TIMEFRAME (2007) OF CAPITAL RAISED | ||||||
|---|---|---|---|---|---|---|---|
| 08/11/07- 31/12/07 |
01/01/08- 31/12/08 |
01/01/09- 31/12/09 |
01/01/09- 31/12/10 |
Total | |||
| in thousand € | |||||||
| Total investments in wind parks | 20,588 | 11,931 | 61,120 | 57,248 | 150,887 | ||
| Total investments in hydroelectric stations |
2,741 | 12,323 | 11,886 | 27,096 | 54,046 | ||
| Photovoltaic stations | 0 | 5,000 | 7,000 | 7,000 | 19,000 | ||
| Electric energy production from biomass |
0 | 5,563 | 4,188 | 5,000 | 14,751 | ||
| Wind parks abroad | 0 | 0 | 20,200 | 27,780 | 47,980 | ||
| Total Investment from Capital Proceeds |
23,329 | 34,817 | 104,394 | 124,124 | 286,664 | ||
| Issue Expenses | 13,908 | 0 | 0 | 0 | 13,908 | ||
| Total | 37,237 | 34,817 | 104,394 | 124,124 | 300,572 |
The initial utilization plan of capital proceeds according to the Prospectus of 19 October 2007 was the following:
As presented in the above table, from the capital of € 300,572 thousand raised by the Company, until 31/12/2010 the amount of € 137,405 thousand had been utilized. From its listing on the Athens Stock Exchange and until 31/12/2010, apart from the issue expenses that amounted to € 13,908 thousand, the amount of € 123,497 thousand has been used to cover the participation of the Company as well as -through share capital increases- of TERNA ENERGY subsidiaries for projects which an installation license exists and is owned by those companies.
The Chairman of the Board Vice-Chairman & The Chief Financial Officer
Managing Director
ID No.Χ 516918 ID No. ΑΒ 986527 ID No. ΑΙ 028273
Georgios Perdikaris Emman. Maragoudakis Konstantinos Dimopoulos
To the Board of Directors of "TERNA ENERGY SOCIETE ANONYME INDUSTRIAL COMMERCIAL TECHNICAL COMPANY S.A."
According to the mandate we received from the Board of Directors of "TERNA ENERGY SOCIETE ANONYME INDUSTRIAL COMMERCIAL TECHNICAL COMPANY S.A." (the "Company") we have performed prescribed and enumerated below in accordance with the regulatory framework of the Athens Stock Exchange and the relevant legal framework of the Hellenic Capital Markets Commission with respect to the Report on the Use of raised capital of the Company which relates to the share capital increase paid in cash, that took place on 8 November 2007. The preparation of the report is the responsibility of the Company's management. Our engagement was undertaken in accordance with the International Standard on Related Services "ISRS 4400" which applies to the conduct of agreed upon procedures engagements. Our responsibility is solely for performing the procedures described below and to report to you on our findings.
Given that the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the report beyond what we have referred to above. Had we performed additional procedures or had we performed an audit or review, other matters might have come to our attention that would have been reported to you, in addition to the ones reported above.
The present report is addressed exclusively to the Board of Directors of the Company, so that the latter can fulfill its responsibilities in accordance with the legal framework of the Athens Stock Exchange and the relevant regulatory framework of the Hellenic Capital Market Commission. Therefore this report is not to be used for any other purpose, since it is limited to what is referred to above and does not extend to the annual financial statements prepared by the company for the financial year ended on 31/12/2010, for which we have issued a separate Audit Report dated 28 March 2011.
Athens, March 28th, 2011
The Certified Public Accountants - Auditors
Yiannis Leos SOEL Reg. No 24881
The following Press Releases and Corporate Announcements are listed on the Company's website as well as on the website of the Athens Exchange, at the electronic addresses: www.terna-energy.gr and www,ase,gr
| 29/11/2010 | 9M 2010 Financial Results of TERNA ENERGY |
|---|---|
| 29/11/2010 | IR Report 30.09.2010 |
| 30/08/2010 | First half 2010 Financial Results of TERNA ENERGY |
| 30/08/2010 | IR Report 30.06.2010 |
| 28/05/2010 | First Quarter 2010 Financial Results of TERNA ENERGY |
| 28/05/2010 | IR. Report 31.03.2010 |
| 30/03/2010 | Annual Results 2009 of TERNA ENERGY |
| 30/03/2010 | IR Report 31.12.2009 |
| 12/03/2010 | Start of construction of two new wind parks |
| 31/12/2010 | Purchase of TERNA ENERGY's shares |
|---|---|
| 30/12/2010 | Purchase of TERNA ENERGY's shares |
| 29/12/2010 | Purchase of TERNA ENERGY's shares |
| 28/12/2010 | Purchase of TERNA ENERGY's shares |
| 24/12/2010 | Purchase of TERNA ENERGY's shares |
| 23/12/2010 | Purchase of TERNA ENERGY's shares |
| 22/12/2010 | Purchase of TERNA ENERGY's shares |
| 21/12/2010 | Purchase of TERNA ENERGY's shares |
| 20/12/2010 | Purchase of TERNA ENERGY's shares |
| 17/12/2010 | Purchase of TERNA ENERGY's shares |
| 16/12/2010 | Purchase of TERNA ENERGY's shares |
| 15/12/2010 | Purchase of TERNA ENERGY's shares |
| 14/12/2010 | Purchase of TERNA ENERGY's shares |
| 13/12/2010 | Purchase of TERNA ENERGY's shares |
| 10/12/2010 | Purchase of TERNA ENERGY's shares |
| 09/12/2010 | Purchase of TERNA ENERGY's shares |
| 08/12/2010 | Purchase of TERNA ENERGY's shares |
| 07/12/2010 | Purchase of TERNA ENERGY's shares |
|---|---|
| 06/12/2010 | Purchase of TERNA ENERGY's shares |
| 03/12/2010 | Purchase of TERNA ENERGY's shares |
| 02/12/2010 | Purchase of TERNA ENERGY's shares |
| 01/12/2010 | Purchase of TERNA ENERGY's shares |
| 30/11/2010 | Purchase of TENRA ENERGY's shares |
| 29/11/2010 | Purchase of TERNA ENERGY's shares |
| 26/11/2010 | Purchase of TERNA ENERGY's shares |
| 25/11/2010 | Purchase of TERNA ENERGY's shares |
| 24/11/2010 | Purchase of TERNA ENERGY's shares |
| 23/11/2010 | Purchase of TERNA ENERGY's shares |
| 22/11/2010 | Purchase of TERNA ENERGY's shares |
| 19/11/2010 | Purchase of TERNA ENERGY's shares |
| 18/11/2010 | Purchase of TERNA ENERGY's shares |
| 17/11/2010 | Purchase of TERNA ENERGY's shares |
| 16/11/2010 | Purchase of TERNA ENERGY's shares |
| 15/11/2010 | Purchase of TERNA ENERGY's shares |
| 12/11/2010 | Purchase of TERNA ENERGY's shares |
| 11/11/2010 | Purchase of TERNA ENERGY's shares |
| 10/11/2010 | Purchase of TERNA ENERGY's shares |
| 09/11/2010 | Purchase of TERNA ENERGY's shares |
| 08/11/2010 | Purchase of TERNA ENERGY's shares |
| 05/11/2010 | Purchase of TERNA ENERGY's shares |
| 04/11/2010 | Purchase of TERNA ENERGY's shares |
| 03/11/2010 | Purchase of TERNA ENERGY's shares |
| 02/11/2010 | Purchase of TERNA ENERGY's shares |
| 01/11/2010 | Purchase of TERNA ENERGY's shares |
| 29/10/2010 | Purchase of TERNA ENERGY's shares |
| 27/10/2010 | Purchase of TERNA ENERGY's shares |
| 20/10/2010 | Purchase of TERNA ENERGY's shares |
| 19/10/2010 | Purchase of TERNA ENERGY's shares |
| 15/10/2010 | Purchase of TERNA ENERGY's shares |
| 13/10/2010 | Purchase of TERNA ENERGY's shares |
| 12/10/2010 | Purchase of TERNA ENERGY's shares |
| 11/10/2010 | Purchase of TERNA ENERGY's shares |
| 08/10/2010 | Purchase of TERNA ENERGY's shares |
| 07/10/2010 | Purchase of TERNA ENERGY's shares |
| 06/10/2010 | Purchase of TERNA ENERGY's shares |
| 05/10/2010 | Purchase of TERNA ENERGY's shares |
| 04/10/2010 | Purchase of TERNA ENERGY's shares |
| 01/10/2010 | Purchase of TERNA ENERGY's shares |
|---|---|
| 30/09/2010 | Purchase of TERNA ENERGY's shares |
| 29/09/2010 | Purchase of TERNA ENERGY's shares |
| 28/09/2010 | Purchase of TERNA ENERGY's shares |
| 27/09/2010 | Purchase of TERNA ENERGY's shares |
| 24/09/2010 | Purchase of TERNA ENERGY's shares |
| 23/09/2010 | Purchase of TERNA ENERGY's shares |
| 21/09/2010 | Purchase of TERNA ENERGY's shares |
| 20/09/2010 | Purchase of TERNA ENERGY's shares |
| 09/09/2010 | Purchase of TERNA ENERGY's shares |
| 08/09/2010 | Purchase of TERNA ENERGY's shares |
| 06/09/2010 | Purchase of TERNA ENERGY's shares |
| 02/09/2010 | Purchase of TERNA ENERGY's shares |
| 01/09/2010 | Purchase of TERNA ENERGY's shares |
| 31/08/2010 | Purchase of TERNA ENERGY's shares |
| 30/08/2010 | Purchase of TERNA ENERGY's shares |
| 27/08/2010 | Purchase of TERNA ENERGY's shares |
| 26/08/2010 | Amendment to the Financial Calendar of the year 2010 |
| 26/08/2010 | Purchase of TERNA ENERGY's shares |
| 25/08/2010 | Purchase of TERNA ENERGY's shares |
| 24/08/2010 | Purchase of TERNA ENERGY's shares |
| 23/08/2010 | Purchase of TERNA ENERGY's shares |
| 20/08/2010 | Purchase of TERNA ENERGY's shares |
| 19/08/2010 | Purchase of TERNA ENERGY's shares |
| 17/08/2010 | Purchase of TERNA ENERGY's shares |
| 16/08/2010 | Purchase of TERNA ENERGY's shares |
| 13/08/2010 | Purchase of TERNA ENERGY's shares |
| 12/08/2010 | Purchase of TERNA ENERGY's shares |
| 11/08/2010 | Purchase of TERNA ENERGY's shares |
| 10/08/2010 | Purchase of TERNA ENERGY's shares |
| 09/08/2010 | Purchase of TERNA ENERGY's shares |
| 06/08/2010 | Purchase of TERNA ENERGY's shares |
| 05/08/2010 | Purchase of TERNA ENERGY's shares |
| 04/08/2010 | Purchase of TERNA ENERGY's shares |
| 02/08/2010 | Purchase of TERNA ENERGY's shares |
| 29/07/2010 | Purchase of TERNA ENERGY's shares |
| 27/07/2010 | Purchase of TERNA ENERGY's shares |
| 26/07/2010 | Purchase of TERNA ENERGY's shares |
| 23/07/2010 | Purchase of TERNA ENERGY's shares |
| 22/07/2010 | Purchase of TERNA ENERGY's shares |
| 21/07/2010 | Purchase of TERNA ENERGY's shares |
|---|---|
| 20/07/2010 | Purchase of TERNA ENERGY's shares |
| 19/07/2010 | Purchase of TERNA ENERGY's shares |
| 15/07/2010 | Purchase of TERNA ENERGY's shares |
| 14/07/2010 | Purchase of TERNA ENERGY's shares |
| 13/07/2010 | Purchase of TERNA ENERGY's shares |
| 12/07/2010 | Purchase of TERNA ENERGY's shares |
| 09/07/2010 | Purchase of TERNA ENERGY's shares |
| 08/07/2010 | Purchase of TERNA ENERGY's shares |
| 07/07/2010 | Purchase of TERNA ENERGY's shares |
| 06/07/2010 | Purchase of TERNA ENERGY's shares |
| 05/07/2010 | Purchase of TERNA ENERGY's shares |
| 02/07/2010 | Purchase of TERNA ENERGY's shares |
| 01/07/2010 | Purchase of TERNA ENERGY's shares |
| 30/06/2010 | Purchase of TERNA ENERGY's shares |
| 29/06/2010 | Purchase of TERNA ENERGY's shares |
| 28/06/2010 | Purchase of TERNA ENERGY's shares |
| 25/06/2010 | Purchase of TERNA ENERGY's shares |
| 24/06/2010 | Purchase of TERNA ENERGY's shares |
| 23/06/2010 | Treasury Shares |
| 23/06/2010 | Purchase of TERNA ENERGY's shares |
| 22/06/2010 | Purchase of TERNA ENERGY's shares |
| 21/06/2010 | Purchase of TERNA ENERGY's shares |
| 18/06/2010 | Purchase of TERNA ENERGY's shares |
| 17/06/2010 | Purchase of TERNA ENERGY's shares |
| 16/06/2010 | Purchase of TERNA ENERGY's shares |
| 15/06/2010 | Purchase of TERNA ENERGY's shares |
| 14/06/2010 | Purchase of TERNA ENERGY's shares |
| 11/06/2010 | Purchase of TERNA ENERGY's shares |
| 10/06/2010 | Purchase of TERNA ENERGY's shares |
| 09/06/2010 | Purchase of TERNA ENERGY's shares |
| 08/06/2010 | Purchase of TERNA ENERGY's shares |
| 07/06/2010 | Purchase of TERNA ENERGY's shares |
| 04/06/2010 | Purchase of TERNA ENERGY's shares |
| 03/06/2010 | Purchase of TERNA ENERGY's shares |
| 02/06/2010 | Announcement for extraordinary tax contribution L.3845/2010 |
| 02/06/2010 | Purchase of TERNA ENERGY's shares |
| 01/06/2010 | Purchase of TERNA ENERGY's shares |
| 31/05/2010 | Purchase of TERNA ENERGY's shares |
| 28/05/2010 | Purchase of TERNA ENERGY's shares |
| 24/03/2010 | Financial Calendar of the year 2010 |
|---|---|
| 24/03/2010 | Purchase of TERNA ENERGY's shares |
| 22/03/2010 | Purchase of TERNA ENERGY's shares |
| 19/03/2010 | Purchase of TERNA ENERGY's shares |
| 18/03/2010 | Purchase of TERNA ENERGY's shares |
| 17/03/2010 | Purchase of TERNA ENERGY's shares |
| 16/03/2010 | Purchase of TERNA ENERGY's shares |
| 15/03/2010 | Purchase of TERNA ENERGY's shares |
| 12/03/2010 | Purchase of TERNA ENERGY's shares |
| 11/03/2010 | Purchase of TERNA ENERGY's shares |
| 10/03/2010 | Purchase of TERNA ENERGY's shares |
| 08/03/2010 | Purchase of TERNA ENERGY's shares |
| 05/03/2010 | Purchase of TERNA ENERGY's shares |
| 04/03/2010 | Purchase of TERNA ENERGY's shares |
| 03/03/2010 | Purchase of TERNA ENERGY's shares |
| 02/03/2010 | Purchase of TERNA ENERGY's shares |
| 01/03/2010 | Purchase of TERNA ENERGY's shares |
| 26/02/2010 | Purchase of TERNA ENERGY's shares |
| 25/02/2010 | Purchase of TERNA ENERGY's shares |
| 24/02/2010 | Purchase of TERNA ENERGY's shares |
| 23/02/2010 | Purchase of TERNA ENERGY's shares |
| 22/02/2010 | Purchase of TERNA ENERGY's shares |
| 19/02/2010 | Purchase of TERNA ENERGY's shares |
| 18/02/2010 | Purchase of TERNA ENERGY's shares |
| 17/02/2010 | Purchase of TERNA ENERGY's shares |
| 16/02/2010 | Purchase of TERNA ENERGY's shares |
| 12/02/2010 | Purchase of TERNA ENERGY's shares |
| 11/02/2010 | Purchase of TERNA ENERGY's shares |
| 10/02/2010 | Purchase of TERNA ENERGY's shares |
| 09/02/2010 | Purchase of TERNA ENERGY's shares |
| 08/02/2010 | Purchase of TERNA ENERGY's shares |
| 05/02/2010 | Purchase of TERNA ENERGY's shares |
| 04/02/2010 | Purchase of TERNA ENERGY's shares |
| 03/02/2010 | Purchase of TERNA ENERGY's shares |
| 29/01/2010 | Purchase of TERNA ENERGY's shares |
| 28/01/2010 | Purchase of TERNA ENERGY's shares |
| 27/01/2010 | Purchase of TERNA ENERGY's shares |
| 26/01/2010 | Purchase of TERNA ENERGY's shares |
| 25/01/2010 | Purchase of TERNA ENERGY's shares |
| 22/01/2010 | Purchase of TERNA ENERGY's shares |
| 21/01/2010 | Purchase of TERNA ENERGY's shares |
|---|---|
| 20/01/2010 | Purchase of TERNA ENERGY's shares |
| 19/01/2010 | Purchase of TERNA ENERGY's shares |
| 05/01/2010 | Purchase of TERNA ENERGY's shares |
| 04/01/2010 | Purchase of TERNA ENERGY's shares |
03/12/2010 Notification of Transaction 08/10/2010 Notification of Transaction 13/09/2010 Notification of Transaction 23/06/2010 Notification of Transaction 08/06/2010 Notification of Transaction 03/06/2010 Notification of Transaction 19/05/2010 Notification of Transaction 17/05/2010 Notification of Transaction 14/05/2010 Notification of Transaction 13/05/2010 Notification of Transaction 13/05/2010 Notification of Transaction 12/05/2010 Notification of Transaction 10/02/2010 Notification of Transaction 04/02/2010 Notification of Transaction 11/01/2010 Notification of Transaction
The annual financial statements of the Group and Company, as well as the financial statements of the consolidated companies, the audit report by the Certified Auditor and the Reports by the Board of Directors for the year ended on 31st December 2010, have been posted on the Company's website. http://www,terna-energy,gr
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