CONTENTS
3
Condensed interim statement of financial position
5
Condensed interim statement of comprehensive income
6
Condensed interim statement of cash flows
7
Condensed interim statement of changes in equity
9
Notes to the condensed interim financial information
Condensed interim statement of financial position (unaudited) For the three - month period ended 31 March 2014. All amounts in LTL thousands unless otherwise stated
Group
Company
31/03/2014 31/12/2013 31/03/2014 31/12/2013 ASSETS Non-current assets Intangible assets
4
334,507
336,017
-
-
Property, plant, and equipment
5
7,243,934
7,318,650
29
33
Prepayments for non-current assets
118
132
-
-
122,600
121,626
-
-
-
-
2,823,796
2,763,355
22,157
28,800
-
-
715,696
712,888
690,000
690,000
169,130
57,302
169,130
57,302
16,786
17,850
-
-
1,493
1,160
74
71
8,626,421
8,594,425
3,683,029
3,510,761
Inventories
33,830
34,614
-
-
Prepayments
27,725
16,292
90
8
Trade receivables
265,159
304,437
2
2
Other receivables
112,080
85,641
41,045
38,537
Other current assets
142
227
3,000
-
Prepaid income tax
9,143
10,190
-
-
Investment property Investments in subsidiaries and other investments
6
Investments in associates Amounts receivable after one year and grants/subsidies receivable Other financial assets
7
Other non-current assets Deferred income tax assets Total non-current assets Current assets
Short-term investments and other financial assets
7
101,533
122,385
101,533
122,385
Cash and cash equivalents
8
651,279
558,396
326,595
309,974
1,200,891
1,132,182
472,265
470,906
618
618
266
266
Total current assets
1,201,509
1,132,800
472,531
471,172
TOTAL ASSETS
9,827,930
9,727,225
4,155,560
3,981,933
Non-current assets held for sale
Continued on next page
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
3
Group
Company
31/03/2014 31/12/2013 31/03/2014 31/12/2013 EQUITY AND LIABILITIES Equity Share capital
4,179,849
4,067,164
4,179,849
4,067,164
Reserves
1,437,874
1,456,119
-
-
105,679
30,194
(86,914)
(87,060)
5,723,402
5,553,477
4,092,935
3,980,104
708,235
699,228
-
-
6,431,637
6,252,705
4,092,935
3,980,104
1,069,565
805,826
-
-
87
36
-
-
1,091,575
1,091,511
-
-
406,729
409,339
-
-
4,583
4,588
-
-
187,395
189,523
-
-
67,403
77,559
-
-
2,827,337
2,578,382
-
-
Retained earnings (deficit) Equity attributable to owners of the parent Non-controlling interest Total equity Amounts payable and liabilities Amounts payable after one year and liabilities Non-current borrowings
11
Finance lease liabilities Grants and subsidies Deferred income tax liability Provisions
10
Deferred income Other non-current amounts payable and liabilities Total amounts payable after one year and non-current liabilities Amounts payable within one year and liabilities Current portion of non- current borrowings
11
113,052
302,656
-
-
Current borrowings
11
9,956
71,562
-
-
43
8
-
-
197,725
268,561
432
409
Advance amounts received
80,953
69,470
-
-
Current income tax liabilities
15,211
7,765
-
-
11,490
12,437
-
-
140,526
163,679
62,193
1,420
568,956
896,138
62,625
1,829
Current portion of finance lease liabilities Trade payables
Provisions
10
Other current amounts payable and liabilities Total amounts payable within one year and liabilities Total amounts payable and liabilities
3,396,293
3,474,520
62,625
1,829
TOTAL EQUITY AND LIABILITIES
9,827,930
9,727,225
4,155,560
3,981,933
The accompanying notes form an integral part of this condensed interim financial information.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
4
Condensed interim statement of financial position (unaudited) For the three - month period ended 31 March 2014. All amounts in LTL thousands unless otherwise stated
Group
Company
31/03/2014 31/12/2013 31/03/2014 31/12/2013 Revenue Sales revenue
692,633
Other operating income Total revenue
731,778
-
-
28,783
24,219
2
2
721,416
755,997
2
2
(406,997)
(440,964)
-
-
Operating expenses Purchase of electricity or related services Purchase of gas and fuel oil
(16,588)
(42,867)
-
-
Depreciation and amortisation
(108,485)
(125,274)
(4)
(4)
Salaries and related expenses
(58,439)
(58,334)
(2,101)
(1,830)
Repair and maintenance expenses
(16,673)
(15,645)
-
-
(32,211)
(49,289)
(885)
(646)
(639,393)
(732,373)
(2,990)
(2,480)
82,023
23,624
(2,988)
(2,478)
3,231
4,964
3,139
3,665
(7,191)
(5,528)
(8)
-
(3,960)
(564)
3,131
3,665
78,063
23,060
143
1,187
(14,758)
(10,517)
-
-
Other expenses
12
Total operating expenses Operating profit/(loss) Financing activities Finance income
13
Finance costs
14
Finance income/(costs), net Profit (loss) before tax Current year income tax expense Deferred income tax (expense)/income Net profit (loss) for the year
2,942
5,175
3
-
66,247
17,718
146
1,187
58,171
14,895
146
1,187
8,076
2,823
-
-
Attributable to: Owners of the parent Non-controlling interests Other comprehensive income (loss) Items that will not be reclassified to profit or loss Gain (loss) on revaluation of non-current assets Total other comprehensive income (loss) for the year Total comprehensive income (loss) for the year
-
(65)
-
-
-
(65)
-
-
66,247
17,653
146
1,187
58,171
14,833
146
1,187
8,076
2,820
-
-
Attributable to: Owners of the parent Non-controlling interests
The accompanying notes form an integral part of this condensed interim financial information.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
5
Condensed interim statement of financial position (unaudited) For the three - month period ended 31 March 2014. All amounts in LTL thousands unless otherwise stated
Group
Company
31/03/2014 31/12/2013 31/03/2014 31/12/2013 Cash flows from operating activities Net profit (loss) Adjustments for non-monetary items: Depreciation and amortisation Revaluation of property, plant and equipment Income tax expense (Depreciation) of grants Gain/(loss) on disposal/write-off of property, plant and equipment Elimination of results of financing and investing activities: Interest income Interest expense Other finance (income)/costs Changes in working capital: (Increase) decrease in trade receivables and other amounts receivable (Increase) decrease in inventories, prepayments and other current assets Increase (decrease) in amounts payable, deferred income and advance amounts received Income tax (paid) Net cash flows from/(used in) operating activities Cash flows from investing activities (Purchase) of property, plant and equipment and intangible assets Proceeds from sale of property, plant and equipment and intangible assets Loans repaid, loan repayments received Change in time deposits Acquisition of subsidiaries/associates Bonds acquired Bonds disposed Interest received Net cash from investing activities Cash flows from financing activities Proceeds from borrowings Repayments of borrowings Lease payments Interest paid Dividends paid Other cash flows from financing activities Net cash flows from/(used in) financing activities (Decrease) increase in cash and cash equivalents (including overdraft) Cash and cash equivalents (including overdraft) at the beginning of the period Cash and cash equivalents (including overdraft) at the end of the period
66,247
17,718
146
1,187
118,599 11,816 (9,124) 2,261
135,437 (20) 5,342 (10,162) 3,329
4 (3) -
4 -
(3,193) 7,176 (23)
(3,795) 7,345 (2,986)
(3,139) 2 6
(3,665) -
12,839 (10,564)
(15,744) 15,485
(255) (82)
66 69
(17,293) (6,252) 172,489
(16,056) (86) 135,807
357 (2,964)
(72) (2,411)
(108,477) 1,111 16 993 20,717 1,016 (84,624)
(113,256) 4,223 49 7,970 (14,396) 11,758 395 (103,257)
(3,000) 993 (10) 20,717 885 19,585
(5,642) 5,000 (14,396) 10,816 218 (4,004)
93,453 (19,318) (2) (4,712) (44) (39) 69,338
77,901 (24,727) (88) (4,346) (9) (17) 48,714
-
-
157,203
81,264
16,621
(6,415)
487,688 644,891
(3,215) 78,049
309,974 326,595
57,765 51,350
The accompanying notes form an integral part of this condensed interim financial information.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
6
Condensed interim statement of financial position (unaudited) For the three - month period ended 31 March 2014. All amounts in LTL thousands unless otherwise stated
Equity attributable to owners of the Group Group Balance at 1 January 2013 (Restated)
Share capital
Legal reserve
4,067,164
Revaluation reserve
75,467
Other reserves
802,934
Retained earnings
689,922
Non-controlling interest
Subtotal
(207,569)
5,427,918
Total
711,864 6,139,782
Revaluation of property, plant and equipment, net of deferred income tax
-
-
(62)
-
-
(62)
(3)
(65)
Total other comprehensive income/(loss) for the period
-
-
(62)
-
-
(62)
(3)
(65)
Net profit (loss) for the reporting period (Restated)
-
-
-
-
14,895
14,895
2,823
17,718
Total comprehensive income/(loss) for the period
-
-
(62)
-
14,895
14,833
2,820
17,653
Transfer of revaluation reserve to retained earnings (depreciation transfer, net of deferred income tax)
-
-
(18,749)
-
18,749
-
-
-
Changes in non-controlling interests on the reorganisation of group structure
-
12
164
-
(2,162)
(1,986)
(6,036)
(8,022)
Balance at 31 March 2013 (restated)
4,067,164
75,479
784,287
689,922
(176,087)
5,440,765
708,648 6,149,413
Balance at 1 January 2014
4,067,164
77,074
727,576
651,469
30,194
5,553,477
699,228 6,252,705
Revaluation of property, plant and equipment, net of deferred income tax
-
-
-
-
-
-
-
-
Total other comprehensive income (loss) for the period
-
-
-
-
-
-
-
-
Net profit (loss) for the reporting period
-
-
-
-
58,171
58,171
8,076
66,247
Total comprehensive income/(loss) for the period
-
-
-
-
58,171
58,171
8,076
66,247
Transfer of revaluation reserve to retained earnings (depreciation transfer, net of deferred income tax) Increase in share capital Changes in non-controlling interests on the reorganisation of group structure Balance at 31 March 2014
-
-
(18,238)
-
18,238
-
-
-
112,685
-
-
-
-
112,685
-
112,685
-
-
-
(7)
(924)
(931)
931
-
4,179,849
77,074
709,338
651,462
105,679
5,723,402
708,235 6,431,637
The accompanying notes form an integral part of this condensed interim financial information.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
7
Company Balance at 1 January 2013 (Restated)
Share capital
Legal reserve
Revaluation reserve
Other reserves
4,067,164
-
-
-
Retained earnings
Subtotal
Non-controlling interest
Total
(200,328)
3,866,836
-
3,866,836
1,187
1,187
-
1,187
Net profit (loss) for the reporting period Balance at 31 March 2013 (restated)
4,067,164
-
-
-
(199,141)
3,868,023
-
3,868,023
Balance at 1 January 2014
4,067,164
-
-
-
(87,060)
3,980,104
-
3,980,104
112,685
Increase in share capital Net profit (loss) for the reporting period Balance at 31 March 2014
-
-
-
112,685
-
112,685
-
-
-
-
146
146
-
146
4,179,849
-
-
-
(86,914)
4,092,935
-
4,092,935
The accompanying notes form an integral part of this condensed interim financial information.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
8
1
General information
This financial information for the three-month period ended 31 March 2014 contains unaudited condensed interim financial information of Lietuvos Energija UAB (former Visagino Atominė Elektrinė UAB) (“the Company”) and its subsidiaries (“the Group”) for the aforementioned reporting period (“the financial information” or “the interim financial information”). As of 30 August 2013, Visagino Atominė Elektrinė UAB is officially known as Lietuvos Energija UAB. The same company name and new articles of association are registered with the Register of Legal Entities. Lietuvos Energija UAB is a private limited liability company registered in the Republic of Lithuania. The address of the Company’s registered office is Žvejų g. 14, LT-09310, Vilnius, Lithuania. The Company is a limited liability profit-seeking entity registered on 28 August 2008 with the Register of Legal Entities managed by the public institution the Centre of Registers. Company code 301844044, VAT payer’s code LT100004278519. The Company has been established for an unlimited period.
Company’s shareholder
The Company analyses the activities of the Group, represents the Group, exercises rights and duties of shareholder, sets operating guidelines and rules, and coordinates the activities in the fields of finance, law, strategy and development, human resources, risk management, audit, technologies, communication etc. Lietuvos Energija UAB seeks to ensure effective activities of the Group, to accomplish objectives included in the National Energy Independence Strategy and other regulations, where related to the group activities, thereby ensuring socially responsible enhancement of long-term value. The Company‘s shares are owned by the Lithuanian Government.
31/03/2014 Share capital
Republic of Lithuania represented by the Lithuanian Ministry of Finance
Lietuvos Energija UAB is a parent company in charge of management and coordination of activities of group companies engaged in electricity and heat generation, supply, import and export, distribution and trade in electricity, maintenance and development of electricity sector.
4,179,849
31/12/2013 %
Share capital 100
%
4,067,164
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
100
9
The Group includes Lietuvos Energija UAB and subsidiaries directly or indirectly controlled by the Company.
Companies
Registered office address
Effective ownership interest 31/03/2014, %
Share capital (LTL thousands) 31/03/2014
Core activities
Lietuvos Energijos Gamyba AB
Elektrinės str. 21 LT-26108, Elektrėnai
96.1
635,084
Generation, supply, import, export and trade in electricity
LESTO AB
Žvejų str. 14, Vilnius
82.6
603,945
Electricity supply and distribution to customers
NT Valdos UAB
Geologų str. 16, LT-02190 Vilnius
88.0
314,001
Operation of real estate, other related activities and service provision
Duomenų Logistikos Centras UAB
A.Juozapavičiaus str. 13, Vilnius
79.6
58,907
Maintenance of information technologies and telecommunications
ELEKTROS TINKLO PASLAUGOS UAB
Motorų str. 2, Vilnius
82.6
Construction, repair and maintenance of power network and related 18,904 equipment, and customer connection to the grid
Kauno Energetikos Remontas UAB
Chemijos str. 17, Kaunas
96.1
14,245
LITGAS UAB
Gedimino str. 33-2, LT-01104 Vilnius
66,7
Supply of natural gas through liqu3,000 efied natural gas terminal and the natural gas trading
Gotlitas UAB
R.Kalantos str. 119, Kaunas
96.1
1,450 Accommodation services, trade
Energijos Tiekimas UAB
Jeruzalės str. 21, Vilnius
96.1
750 Electricity supply
Respublikinis Energetikų Mokymo Centras VšĮ
Jeruzalės str. 21, Vilnius
79.6
294
Geton Energy OÜ
Narva mnt 5, 10117 Talinas
96.1
121 Electricity supply
Geton Energy SIA
Bezdelingu 12, LV-1048, Ryga
96.1
99 Electricity supply
UAB Technologijų ir inovacijų centras
A. Juozapavičiaus str. 13, Vilnius
85,8
10
VAE SPB UAB
Žvejų str. 14, Vilnius
100.0
As of 31 March 2014, the Group had 4,339 employees (31 December 2013 had 4,378), and the Company had 58 employees (31 December 2013: 53).
Repair of energy equipment, production of metal structures
Professional development and further training of energy specialists
Maintenance of information technologies and telecommunications
10 Consultation activities
This financial information was approved by the management of Lietuvos Energija UAB on 30 May 2014.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
10
2
Summary of significant accounting policies
This interim financial information for the period ended 30 March 2014 has been prepared in accordance with the International Accounting Standard (“IAS”) No 34, “Interim financial reporting”.
with those applied during the preparation of the annual financial statements for the year 2013.
For a better understanding of data contained in this condensed interim financial information, this financial information should be read in conjunction with the consolidated and stand-alone financial statements of Lietuvos Energija UAB (former Visagino Atominė Elektrinė UAB) for the year ended 31 December 2013 prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
Income tax for the interim reporting periods is estimated using the tax rate which would be applied in calculation of taxes on the probable total profit for the year.
The accounting policies adopted in the preparation of the condensed interim financial information are consistent
3
Income tax
New standards, amendments and interpretations There are no new standards, amendments and interpretations that are mandatory for the Company and the Group in 2014 and that have a significant impact on the Company’s and the Group‘s financial information.
Critical accounting estimates and judgements used in the preparation of the financial statements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The preparation of financial information according to International Financial Reporting Standards as adopted by the EU requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and costs and contingencies. Changes in the underlying assumptions, estimates and judgements may have a material effect on this financial information. The accounting estimates applied in preparing the condensed interim financial information are consistent with those used in preparing the annual financial statements Revaluation and impairment of assets The Group accounts for property, plant and equipment, except for the assets of Kaunas Hydro Power Plant, Kruonis Pumped Storage Power Plant and the Stand- by Power Plant, at revaluated amount in accordance with International Accounting Standard No16 ‘Property, plant and equipment’. The fair value of most items of fixed tangible assets due to its specific nature was measured using a depreciated replacement cost approach as at 31 December 2008. If the value of assets is measured based on a depreciated replacement cost method, International Valuation Standards require that an adequate profitability test is performed. Accounting standards require a periodical re-
view of value of property, plant and equipment . When the carrying amount of property, plant and equipment stated in the balance sheet is higher than its value in use or fair value, less selling expenses, the value of property, plant and equipment shall be reduced. In other words, the value of property, plant and equipment recorded in the balance sheet should be written down to a higher of the two indicators: the value of future benefits of assets expected by the Group from their use or the value of proceeds expected to be received from immediate write-off and disposal of assets. The previous version of the Law on Electricity of the Republic of Lithuania effective as at 31 December 2008 stipulated that the price caps for electricity transmission, distribution and public supply services were determined based on the value of assets used in licensed activities of the service provider, with the value of such assets established with reference to data reported in the service provider’s financial statements (Regulated Assets Base). According to the amendment to the above-mentioned Law effective from 1 June 2009, the price caps for electricity transmission, distribution and public supply services are to be determined based on the value of assets used in licensed activities of the service provider, with the value of such assets being estimated and approved by the National Control Commission for Prices and Energy (“the Commission”) in accordance with the principles for determination of the value of assets used in licensed activities of the service provider that had been drafted by the Commission and approved by the Government.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
11
According to the Government’s Resolution No. 1142 of 9 September 2009 “On the methodology for determination of the value of assets used in licensed activities of the electricity service provider”, the determination of the price caps for electricity transmission, distribution and public supply services is to include the value of assets used in licensed activities of the service provider, which is equal to the book value (carrying amount) of fixed tangible assets as at 31 December 2002 increased by the amount of capital expenditures implemented and agreed with the Commission and reduced by the depreciation amount calculated pursuant to the procedure stipulated in the Lithuanian Law on Corporate Income Tax. For the above-mentioned reasons, the values of property, plant and equipment reported in the above financial information may significantly differ from those that would have been determined if the valuation of assets had been performed by independent appraisers as required by International Valuation and Accounting Standards. It is probable that such valuation would have a negative impact on the Group’s result of operation and on the shareholders’ equity reported in the financial information as of 30 March 2014. Revaluation of assets As at 31 December 2013, independent valuation of assets was performed at the Group with respect to Lietuvos Energijos Gamyba AB (assets carried at revalued amount), ELEKTROS TINKLO PASLAUGOS UAB and NT Valdos UAB (buildings and structures). The valuation was carried out by independent valuation companies. As decided by the management, independent appraisers did not carry out assessment of the fair value of the other property, plant and equipment of 31 March 2014 due to remaining uncertainties, related to the change in the above regulations. Impairment of investment value in subsidiaries Although the subsidiaries LESTO AB and Lietuvos Energijos Gamyba AB are listed on Vilnius stock exchange, the Group management believes the market is not sufficiently active to treat the listed price of shares as a fair value of investment into subsidiaries at the balance sheet date. As of 31 March 2014 and 31 December 2013, due to significant uncertainties, as described in Note 3 Revaluation and impairment of assets, related to effect of amendments to legal acts regulating the cap prices for electricity transmission, distribution and public supply on the future cash flows of the Group, the Company did not carry out impairment tests for investment value in subsidiaries LESTO AB. Impairment of goodwill and intangible assets not subject to amortisation The consolidated financial information include goodwill
and licences with indefinite useful life that arose as a result of acquisition of VST AB in 2008. As of 31 March 2014 and 31 December 2013, due to significant uncertainties, as described in Note 3 Revaluation and impairment of assets, related to inability to assess reliably the impact on the Group’s future cash flows of amendments to legal acts regulating the prices for electricity distribution and supply services, the Group did not carry out impairment tests for goodwill and licences with indefinite useful life. The Group’s management believe the value of these assets of the Group could not be measured reliably as of 31 March 2014 and 31 December 2013. Useful lives of property, plant and equipment The estimation of the useful lives of property, plant and equipment is a matter of judgment based on the experience with similar assets. The economic benefits embodied in the assets are obtained through use. However, other factors, such as technical or commercial obsolescence often result in the diminution of the economic benefits embodied in the assets. The remaining useful lives are assessed in accordance with the current technical conditions of the assets and estimated period during which the assets are expected to earn benefits for the Group. The following key factors are considered: (a) expected usage of the assets; (b) expected physical wear and tear, which depends on operational method; and (c) technical or commercial obsolescence arising from changes in market conditions. Accrued income Revenue received from private customers is recognised based on the payments received. Therefore at the end of each reporting period the amount of the revenue earned but not yet paid by private customers is estimated and accrued by the management of the Group. Accrued sales income are assessed as 1/3 of the payments for electricity received in the last month of the reporting period. The accrual is based on historic experience and average period of payment by customers for electricity. The Group‘s management has estimated that the majority of private customers declare and make payment for the electricity consumed on approx. the 20 th day of the month, while electricity is supplied for a full month (30 or 31 days). Consequently, the volume of electricity used over the remaining 10 days is proportionally estimated based on total volume of electricity supplied to the grid (factually known variable) and the volume of electricity used by private customers during the last month of the reporting period and multiplied by the average rate per 1 kWh. Accounting for customer connection fees Before 1 July 2009, the Group used to defer income received from new customer connections to the grid. This was recognised as deferred income over the period of 31 years, which is the average useful life of electricity equipment constructed by the Group upon connection of new
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
12
customers. Management of the Group believe that the period of provision of services to customers is indefinite, therefore, the average useful life of electricity equipment constructed by the Group upon connection of new customers was used as the best estimate of the period over which connection fees paid customers were recognised as income.
Amortisation rates of licences
With effect from 1 July 2009 and based on IFRIC 18 interpretation, the newly connected customers to the grid do not obtain any additional future benefits as compared to all the remaining customers, consequently, the provision of connection service is treated as completed and income from connection is recognised upon the connection of a new customer.
Held-to-maturity financial assets
Impairment of amounts receivable Impairment losses were determined in respect of amounts receivable based on the management’s estimates on recoverability and timing relating to the amounts that will not be collectable according to the original terms of receivables. This determination requires significant judgement. Judgement is exercised based on significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments. Current assessment by the management could change significantly due to change in the market environment or national economy. Indicator of recoverability is also significantly related to the success indicator and steps taken in order to recover seriously delayed receivables. In order to determine the value and decrease in it, receivables are assessed either individually or collectively in a group of comparable receivables. In respect of individually assessed receivable, each amount receivable is assessed in view of both current or available data in the external information sources on market trends and forecasts, possible collateral of the amount receivable, as well as events demonstrating that the value of amounts receivable has decreased, e.g. compliance with conditions of contract, facts on the activities of debtor etc. In case of impairment of the amounts receivable in general, in view of historic statistics, verification is carried out yearly, whether the deferral rules applied to the general assessment correspond to historic data of impairment of amounts receivable; it also includes setting of deferral rules applicable to generally assessed amounts receivable for the next year. Tax audits The Tax Inspectorate may at any time inspect the books and records within 5 years subsequent to the reporting tax year, and may impose additional tax assessments and penalties. The Group’s management is not aware of any circumstances that might result in a potential material liability in this respect.
Indefinite useful lives were established for the licences of distribution system operator and public supply services that were acquired on a business combination in 2008 because the validity term of these licences can be extended at no significant efforts or costs.
The Group follows the requirements of IAS 39, based on which non-derivative financial assets with fixed or otherwise determinable payments and fixed maturity terms are classified as held-to-maturity. For the purpose of such classification, the Group assesses its intentions and abilities to hold these investments to maturity. If the Group were not able to hold these investments to maturity due to other than specific circumstances, for instance, sells an insignificant part of securities close to maturity, the Group would have to reclassify the entire group as available-for-sale financial assets and measure investment at fair value rather than at amortised cost. If all held-to-maturity investments were reclassified to another category of assets, the carrying amount would not change significantly. Provision for utilisation of emission allowances The Group estimates provision for utilisation of emission allowances based on actual emissions over the reporting period multiplied by the market price for one unit of emission allowances. Actual emissions are approved by the relevant regulating State over the period of 4 months after the year end. Based on its past experience, the Group’s management does not expect any significant differences between the estimated provisions as of 31 December 2013 and emissions that will be approved in 2014. Accrual of public service obligation fees The variable part of public service obligation (“PSO”) fees is estimated with reference to variable costs incurred during the reporting period. The producers ensuring the security of electric power supply and reserves of energy system, submit their PSO fee estimates to the National Commission for Control of Prices and Energy which include breakdown of variable electric power production costs – natural gas, fuel oil, and emission allowance costs, costs for desulphurisation of reagents. The variable part of PSO fees for the next calendar year is estimated with reference to expected variable costs to be incurred in the production of the approved quota of electricity subject to compensation.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
13
4
Intangible assets Group
Net book amount at 1 January 2013 Acquisitions Reclassified from/to property, plant and equipment
Patents and licences
Computer software
Emission allowances
Other intangible assets
Goodwill
Total
118,873
6,587
55,413
2,677
178,103
361,653
16
726
1,221
333
-
2,296
-
-
-
(30)
-
(30)
Disposals
-
-
(4,041)
-
-
(4,041)
Revaluation of emission allowances
-
-
(13,923)
-
-
(13,923)
(160)
(1,136)
-
(13)
-
(1,309)
Net book amount at 31 March 2013
Amortisation
118,729
6 177
38,670
2,967
178,103
344,646
Net book amount at 1 January 2014
118,781
6,205
28,704
4,224
178,103
336,017
70
61
-
97
-
228
-
621
-
(621)
-
-
Acquisitions Reclassified from/to property, plant and equipment Grants received
-
-
1,358
-
-
1,358
Revaluation of emission allowances
-
-
(2,052)
-
-
(2,052)
(163)
(868)
-
(13)
-
(1,044)
118,688
6,019
28,010
3,687
178,103
334,507
Amortisation Net book amount at 31 March 2014
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
14
5
Property, plant and equipment Group
Land
Buildings
Net book amount at 1 January 2013
Structures and machinery
Assets of Hydro Power Plant*
Other property, plant and equipment
Motor vehicles
4,228,702 2,664,957
Construction in progress
Total
6,190
383,536
50,268
102,222
Acquisitions
-
7
378
385
248
1,501
73,361 7,509,236 39,547
42,066
Revaluation
-
(77)
-
-
-
-
-
(77)
Disposals
-
-
(91)
(135)
(14)
(1)
-
(241)
Write-offs
-
(10)
(3,274)
-
-
(1)
(4)
(3,289)
Impairment
-
-
(25)
-
-
-
-
(25)
Reversal of impairment
-
-
20
-
-
-
25
45
Reclassifications between groups
-
1,173
52,405
99
-
763
(54,440)
-
Reclassified to assets, intangible assets
-
-
-
-
-
-
30
30
Reclassified to investment property
-
(1,229)
(6)
-
-
-
-
(1,235)
Reclassified from/to inventories
-
-
(3)
-
-
(25)
-
(28)
(92,716)
-
(136,586)
-
(4,946)
(31,045)
(1,856)
(6,023)
Net book amount at 31 March 2013
Depreciation
6,190
378,454
4,185,390 2,634,261
48,646
98,436
58,519 7,409,896
Net book amount at 1 January 2014
6,943
361,555
4,164,382 2,567,102
73,829 7,318,650
-
89
Acquisitions
416
54,059
90,780
172
-
331
46,889
47,897
Disposals
-
(9)
(82)
-
(203)
(8)
-
(302)
Write-offs
-
(9)
(3,044)
(2)
-
(10)
(6)
(3,071)
Reclassifications between groups
-
1,207
46,110
184
-
528
(48,029)
-
Reclassified to assets, intangible assets
-
(68)
(42)
-
-
-
-
(110)
Reclassified to investment property
-
(1,586)
-
-
-
-
-
(1,586)
Reclassified from/to inventories
-
-
-
12
-
-
-
12
(76,524)
-
(117,556)
Depreciation Net book amount at 31 March 2014
-
(4,917)
6,943
356,262
Company
(28,712)
(1,852)
(5,551)
4,131,216 2,538,756
52,004
86,070
Other fixed tangible assets
Construction in progress
72,683 7,243,934
Total
Net book amount at 1 January 2013
48
24,334
24,382
Depreciation
(4)
-
(4)
Net book amount at 31 March 2013
44
24,334
24,378
Net book amount at 1 January 2014
33
-
33
Depreciation
(4)
-
(4)
Net book amount at 31 March 2014
29
-
29
*Assets of Hydro Power Plant, Pumped Storage Power Plant and Stand-by Power Plant.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
15
6
Investment
As of 31 March 2014, the Company had ownership interests in the following Group companies: Group company
Acquisition cost
Contributions for loss
Carrying amount
Ownership interest, %
Subsidiaries: Lietuvos energijos gamyba, AB
1,017,998
-
1,017,998
96.13
AB LESTO
1,742,737
-
1,742,737
82.63
60,931
-
60,931
79.64
2,000
-
2,000
66.67
5
-
5
50.00
UAB Duomenų logistikos centras UAB LITGAS UAB Technologijų ir inovacijų centras UAB „VAE SPB“
10
15
25
100.00
2,823,681
15
2,823,696
Investments: NT Valdos, UAB
100
-
100
0.03
100
-
100
2,823,781
15
2,823,796
As of 31 December 2013, the Company had ownership interests in the following Group companies: Group company
Acquisition cos
Contributions for loss
Carrying amount
Ownership interest, %
Subsidiaries: Lietuvos energijos gamyba, AB
1,017,998
-
1,017,998
96.13
AB LESTO
1,742,737
-
1,742,737
82.63
2,000
-
2,000
66.67
5
-
5
50.00 100.00
UAB LITGAS UAB Technologijų ir inovacijų centras UAB „VAE SPB“
10
5
15
2,762,750
5
2,762,755
Investments: UAB Duomenų logistikos centras
500
-
500
0.65
NT Valdos, UAB
100
-
100
0.03
600
-
600
2,763,350
5
2,763,355
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
16
7
Investments and other financial assets
Long-term investments and other financial assets comprised as follows: Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
Held-to-maturity financial assets: Lithuanian Government bonds Other financial assets Carrying amount
56,444
57,302
56,444
57,302
112,686
-
112,686
-
169,130
57,302
169,130
57,302
Short-term investments comprised as follows: Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
Held-to-maturity financial assets: Lithuanian Government bonds
40,131
40,131
40,131
40,131
60,717
81,433
60,717
81,433
685
821
685
821
101,533
122,385
101,533
122,385
Loans and receivables: Bank bonds Interest receivable Carrying amount
8
Cash and cash equivalents
Cash and cash equivalents and bank overdraft include the following for the purpose of the cash flow statement: Group 31/03/2014 Cash and cash equivalents Bank overdraft Carrying amount
9
Company 31/12/2013
31/03/2014
31/12/2013
651,279
558,396
326,595
309,974
(6,388)
(70,708)
-
-
644,891
487,688
326,595
309,974
Share capital
On 13 February 2013, the shares of the Company were transferred to the Ministry of Finance of the Republic of Lithuania. As at 31 March 2014 the Company’s authorised share
capital totalled LTL 4,179,849,289 ( 4,067,163,632 LTLon 31 December 2013). As at 31 December 2013 and 31 March 2014, the authorised share capital was divided into ordinary registered shares with a nominal value of LTL 1 each. All the shares are fully paid.
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
17
10
Provisions Group 31/03/2014
Non-current
Company 31/12/2013
31/03/2014
31/12/2013
4,583
4,588
-
Current
11,490
12,437
-
-
Carrying amount
16,073
17,025
-
-
Group At 1 January 2013 Increase over the period
Provisions for emissions
Provisions for employee benefits
-
Other provisions
Total
13,895
3,227
305
17,427
1,419
3,318
-
4,737
-
(6)
-
(6)
Used over the period Revaluation for the changing of assumption
(3,441)
-
-
(3,441)
At 31 March 2013
11,873
6,539
305
18,717
At 1 January 2014
9,745
6,894
386
17,025
370
-
-
370
-
(660)
(106)
(766)
Increase over the period Used over the period Revaluation for the changing of assumption At 31 March 2014
11
(556)
-
-
(556)
9,559
6,234
280
16,073
Borrowings Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
Non-current Bank borrowings
1,069,565
805,826
-
-
113,052
302,656
-
-
Bank overdraft
6,389
70,708
Interest payable
3,567
854
-
-
1,192,573
1,180,044
-
-
Current Current portion of non- current borrowings
Total loans
Non-current loans analysed by maturity Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
1 to 2 years
312,064
113,352
-
-
2 to 5 years
634,927
590,329
-
-
Over 5 years Total
122,574
102,145
-
-
1,069,565
805,826
-
-
The loan agreements contain certain financial and non-financial covenants that the individual Group companies are obliged to comply with. In the opinion of the management, as of 31 December 2013 and 31 March 2014, the Group complied with all the covenants. CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
18
12
Other expenses Group 31/03/2014
Company
31/12/2013
31/03/2014
31/12/2013
Utility services
2,283
2,607
86
49
Telecommunications and IT services
2,761
3,127
193
126
Business trips
274
312
25
62
Consultation services
713
870
126
12
HR development
339
388
33
31
Expenses of small-value inventory items
513
543
-
-
Public relation and marketing services
330
416
28
22
Lease
2,243
2,034
141
115
Transport
3,725
3,400
118
134
Services to customers
2,064
2,226
-
-
Taxes
4,245
5,060
23
26
Subcontractor works and materials
5,249
4,536
-
-
Impairment of other non-current assets
(820)
1,042
-
-
Impairment of property, plant and equipment
3,063
3,289
-
-
Revaluation of emission allowances, related provisions and grants
2,881
16,429
-
-
Revaluation of assets and fair value gains and losses Allowances for inventories Other expenses
13
6
1,359
-
218
461
-
-
2,124
1,190
112
69
32,211
49,289
885
646
Finance income Group 31/03/2014
Interest income
14
31/12/2013
31/03/2014
31/12/2013
3,193
3,795
3,139
3,665
2
-
-
-
Foreign exchange net gain Other finance income
Company
36
1,169
-
-
3,231
4,964
3,139
3,665
Finance costs Group 31/03/2014
Interest expenses Foreign exchange net loss Other finance costs
Company
31/12/2013
31/03/2014
31/12/2013
7,176
7,345
2
-
4
6
-
-
11
(1,823)
6
-
7,191
5,528
8
-
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
19
15
Income tax expenses
Income tax expenses over the period comprise income tax of the reporting period and deferred income tax.
16
Income tax at a rate of 15% was payable on profit for 2014 (the same as in 2013) in accordance with the Lithuanian regulatory legislation on taxation.
Dividends
In 2013 and during the first quater, 2014 the Company paid out no dividends.
On 30 April 2013, the general meeting of Lietuvos Energijos Gamyba AB declared the payment of dividends of LTL 25,403 thousand from the profit for appropriation. Dividends received by to the Company amounted to LTL 24,421 thousand.
On 30 April 2013, the general meeting of LESTO AB declared the payment of dividends of LTL 102,670 thousand from the profit for appropriation. Dividends received by to the Company amounted to LTL 84,834 thousand.
17
Related-party transactions
As at 31 December 2013 and 31 March 2014, the sole shareholder of Lietuvos Energija UAB was the Republic of Lithuania represented by the Lithuanian Ministry of Finance. For the purpose of disclosure of related parties, the Republic of Lithuania does not include central and
local government authorities. The disclosures comprise transactions and balances of these transactions with the shareholder, subsidiarines, associates and management. The following transactions were conducted with related parties:
Sales of goods and services
Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
AB LESTO
-
-
2
UAB Technologijų ir inovacijų centras
-
-
8
-
2,390
2,748
2,390
2,748
UAB "EPSO-G" The Group‘s associates and joint ventures
36
151
-
-
-
2,541
2,748
2,400
2,784
Purchases of goods and services Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
AB LESTO
-
-
1
1
„Lietuvos energijos gamyba“, AB
-
-
1
-
NT Valdos, UAB
-
-
318
237
UAB Technologijų ir inovacijų centras
-
-
196
134
The Group‘s associates and joint ventures
-
500
-
-
-
500
516
372
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
20
Amounts receivable from related paties Group 31/03/2014 AB LESTO
Company 31/12/2013
-
UAB Technologijų ir inovacijų centras UAB "EPSO-G"
31/03/2014
31/12/2013
-
2
2
-
-
3,003
-
729,859
727,469
729,859
727,469
64
77
-
-
729,923
727,546
732,864
727,471
The Group‘s associates and joint ventures
Amounts payable to related paties Group 31/03/2014
Company 31/12/2013
31/03/2014
31/12/2013
AB LESTO
-
-
19,082
„Lietuvos energijos gamyba“, AB
-
-
41,352
-
NT Valdos, UAB
-
-
158
194
UAB Technologijų ir inovacijų centras
-
-
-
68
124
-
-
60,660
318
The following payments were made to key management personnel: Group 31/03/2014 Salaries and other short-term benefits to key management personnel
31/12/2013
2,122
Including: termination benefits Number of key management personnel
Company 31/03/2014
31/12/2013
2,113
508
201
231
1
87
-
58
53
10
4
Key management personnel includes heads of administration and their deputies.
18
Events after the end of the reporting period
AB LESTO and „Lietuvos energijos gamyba“, AB dividends for 2013.
cated for the payment of dividends. The Company received dividends of LTL 144,197 thousand.
As a result of appropriation of profit during the General Meeting of Shareholders of LESTO AB held on 4 April 2014, LTL 114,749 thousand was allocated for the payment of dividends. The Company received dividends of LTL 94,815 thousand.
Acquiring shares of AB LESTO and AB „Lietuvos dujos“
As a result of appropriation of profit during the General Meeting of Shareholders of Lietuvos Energijos Gamyba AB held on 4 April 2014, LTL 150,000 thousand was allo-
On May 21, Lietuvos Energija, UAB signed contracts with German concern E.ON Ruhrgas International, in accordance with which it will take over 38.9 per cent of shares of natural gas supplier and distributor Lietuvos Dujos and 11.76 per cent of shares of electricity distribution network operator LESTO. The total price of the share package is EUR 97.57 million (LTL 336.9 million).
CONSOLIDATED AND COMPANY’S CONDENSED INTERIM FINANCIAL INFORMATION (unaudited) For the three month period ended 31 march 2014.
21
Lietuvos Energija UAB Žvejų str. 14, Vilnius www.le.lt