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Notes to the consolidated statement of financial position - Liabilities

Equity

The development of equity in 2015/16 and 2014/15 is shown here.

45. Share capital

The share capital of EVN AG totals EUR 330.0m (previous year: EUR 330.0m) and is divided into 179,878,402 (previous year: 179,878,402) zero par value bearer shares.

46. Share premium and capital reserves

The share premium and capital reserves comprise appropriated capital reserves of EUR 195.6m (previous year: EUR195.6m) from capital increases and unappropriated capital reserves of EUR 57.2m (previous year: EUR 57.3m), both in accordance with Austrian stock corporation law.

47. Retained earnings

Retained earnings of EUR 1,949.9m (previous year: EUR 1,868.2m) comprise the proportional share of retained earnings attributable to EVN AG and all other consolidated companies from the date of initial consolidation as well as the proportional share of retained earnings from business combinations achieved in stages.

Dividends are based on the result of EVN AG as reported in the annual financial statements and developed as follows:

47. Reconciliation of EVN AG’s result for the period
EURm
Reported result for the period 2015/1644.9
Retained earnings from the 2014/15 financial year0.2
Release of untaxed reserves0.8
Release of retained earnings29.0
Less addition to untaxed reserves–0.1
Distributable result for the period74.8
Proposed dividend–74.7
Retained earnings for the 2016/17 financial year0.1

Liabilities do not include the proposed dividend of EUR 0.42 per share for the 2015/16 financial year, which will be recommended to the Annual General Meeting.

The 87th Annual General Meeting on 21 January 2016 approved a proposal by the Executive Board and the Supervisory Board to distribute a dividend of EUR 74.7m, or EUR 0.42 per share, to the shareholders of EVN AG for the 2014/15 financial year. The dividend payment to shareholders was made on 29 January 2016.

48. Valuation reserves

The valuation reserve contains changes in financial instruments available for sale and cash flow hedges, IAS 19 remeasurements and the proportional share of changes in the equity of investments in equity accounted investees.

In addition, the statement of comprehensive income includes EUR 0.0m (previous year: EUR –5.2m) for the share of changes in the valuation reserves that are attributable to non-controlling interests (see Consolidated statement of comprehensive income).

48. Valuation reserves
30.09.201630.09.2015
EURmBefore taxTaxAfter taxBefore taxTaxAfter tax
Items recognised under other comprehensive
income from
Available for sale financial instruments207.2–51.8155.487.6–21.965.7
Cash flow hedges–45.714.8–30.9–48.915.5–33.4
Remeasurements IAS 19–130.532.5–98.0–90.622.2–68.5
Investments in equity accounted investees–1.9–1.4–3.3–36.73.0–33.7
Total29.0–5.823.2–88.718.8–69.9

The item “Investments in equity accounted investees“ in the above table includes the changes recognised by WEEV Beteiligungs GmbH in connection with the shares held in Verbund AG (AFS financial instruments) as well as the components of cash flow hedges and remeasurements in accordance with IAS 19 that are recorded directly in equity.

In 2015/16, cash flow hedges totalling EUR 0.5m (previous year: EUR 7.2m) were transferred from other comprehensive income to the consolidated statement of operations. The ineffective part of the cash flow hedges resulted in expenses of EUR 0.1m as of the balance sheet date.

Due to the impairment losses at WEEV Beteiligungs GmbH set out in explanatory note 48. Valuation reserves, an amount of EUR 5.0m was transferred from other comprehensive income to the consolidated statement of operations.

49. Treasury shares

The 87th Annual General Meeting approved the premature termination of the share buyback programme that started on 16 January 2014 and authorised the Executive Board to carry out a new share buyback programme for up to 10% of EVN’s share capital over a period of 30 months. The Executive Board made use of this authorisation and approved the repurchase of up to 1,000,000 shares, representing up to 0.556% of the current share capital. By resolution of 5 October 2016 the Executive Board prematurely terminated this share buyback programme.

A total of 110,800 shares (0.06% of the share capital; previous year: 186,571 shares or 0.10% of the share capital) were repurchased during the financial year 2015/16 at a purchase price of EUR 1.1m and a market value as of the reporting date of EUR 1.2m (30 September 2015: purchase price of EUR 1.9m and a market value of EUR 1.8m) and a total of 133,050 treasury shares were sold for distribution to employees as special bonus called for by a company agreement (previous year: 68,244 shares). EVN AG is not entitled to any rights arising from treasury shares. In particular, these shares are not entitled to dividends.

The number of shares outstanding developed as follows:

49. Reconciliation of the number of
outstanding shares
Zero par value sharesTreasury sharesOutstanding shares
30.09.2014179,878,402–1,939,992177,938,410
Purchase of treasury shares–186,571–186,571
Disposal of treasury shares68,24468,244
30.09.2015179,878,402–2,058,319177,820,083
Purchase of treasury shares–110,800–110,800
Disposal of treasury shares133,050133,050
30.09.2016179,878,402–2,036,069177,842,333

The weighted average number of shares outstanding, which is used as the basis for calculating earnings per share, equals 177,763,333 shares (previous year: 177,871,236 shares).

50. Non-controlling interests

The item “Non-controlling interests” comprises the non-controlling interests in the equity of fully consolidated subsidiaries.

The following table shows information about each fully consolidated subsidiary of EVN with material non-controlling interests before intercompany eliminations:

50. Financial information of subsidiaries with material non-controlling interests
EURm
30.09.201630.09.2015
SubsidiariesRBGBUHOEVN MacedoniaRBGBUHOEVN Macedonia
Non-controlling interests in per cent49.97 %26.37 %10.00 %49.97 %26.37 %10.00 %
Carrying amount of non-controlling interests197.136.717.8193.836.115.0
Result attributable to non-controlling interests21.12.72.738.22.02.5
Dividends attributable to non-controlling interests17.52.217.52.1
 
Statement of financial position
Non-current assets394.0176.6289.9387.1175.5285.8
Current assets0.18.495.30.27.192.6
Non-current liabilities120.4130.5
Current liabilities0.0*)0.0*)87.90.0*)0.0*)98.9
 
Statement of operations
Revenue0.0*)357.40.0*)375.5
Result after income tax42.310.126.776.47.424.9
 
Net cash flows
Net cash flow from operating activities35.09.458.435.08.243.9
Net cash flow from investing activities–20.2–18.6
Net cash flow from financing activities–35.1–8.3–23.8–35.0–8.1–27.5

Non-current liabilities

51. Non-current loans and borrowings

Non-current loans and borrowings comprised the following as of the balance sheet date:

51. Breakdown of non-current loans and borrowingsNominal
interest rate
(%)
TermNominal amountCarrying amount
30.09.2016
EURm
Carrying amount
30.09.2015
EURm
Carrying amount
30.09.2016
EURm
Bonds550.3679.4683.7
EUR bond5.2502009–2017EUR 150.0m149.6
EUR bond5.2502009–2019EUR 30.0m29.829.833.8
EUR bond4.2502011–2022EUR 293.0m284.7285.1354.2
JPY bond3.1302009–2024JPY 12.0bn113.592.8124.8
EUR bond4.1252012–2032EUR 100.0m97.797.6136.8
EUR bond4.1252012–2032EUR 25.0m24.624.534.2
Bank loans (incl. promissory note loans)0.07–5.37until 2047764.2856.2838.5
Total1,314.51,535.71,522.2

The maturity structure of the non-current loans and borrowings is as follows:

51. Maturity of non-current loans
and borrowings EURm
Remaining term to maturity as of 30.09.2016
Remaining term to maturity as of 30.09.2016
< 5 years> 5 yearsTotal< 5 years> 5 yearsTotal
Bonds29.8520.4550.3179.4500.1679.4
thereof fixed interest29.8406.9436.8179.4407.2586.6
thereof variable interest113.5113.592.892.8
Bank loans310.6453.6764.2356.5499.8856.2
thereof fixed interest226.2431.7657.9245.2469.8715.0
thereof variable interest84.421.9106.3111.330.0141.2
Total340.4974.01,314.5535.8999.91,535.7

Bonds
All bonds involve bullet repayment on maturity. The foreign currency bond is hedged against interest and foreign exchange risk by means of cross currency swaps.

The bonds are carried at amortised cost. Foreign currency liabilities are translated at the exchange rate in effect on the balance sheet date. In accordance with IAS 39, hedged liabilities are adjusted to reflect the corresponding change in the fair value of the hedged risk in cases where hedge accounting is applied. The resulting change in the bond liability is offset by a contrary development in the fair value of the swaps. The results from the crosscurrency swap concluded to hedge the JPY bond totalled EUR 2.4m in 2015/16 (thereof EUR 14.1m for valuation of the bond and EUR 16.5m for the valuation of the swap; previous year: EUR 0.6m earnings effect, thereof EUR 4.8m for valu- ation of the bond and EUR 4.2m for the valuation of the swap). The fair value was calculated on the basis of available market information for the respective bond price and the exchange rate as of the balance sheet date.

Bank loans
The loans consist of general borrowings from banks, which are subsidised in part by interest and redemption grants from the Austrian Environment and Water Industry Fund. This position also includes the EUR 121.5m promissory note loans that were issued in October 2012.

Accrued interest expense is included under other current liabilities.

52. Deferred taxes

In the course of a more transparent and detailed presentation of deferred taxes, the amounts for the previous year were adapted.

52. Deferred taxes
EURm
30.09.201630.09.2015
Deferred tax assets
Employee-related provisions–53.2–43.0
Tax loss carryforwards–9.5–18.4
Investment depreciation–61.2–56.1
Property, plant and equipment–38.9–28.9
Financial instruments–25.3–25.9
Provisions–10.7–1.8
Other deferred tax assets–4.8–4.3
Deferred tax liabilities
Property, plant and equipment25.115.6
Intangible assets12.815.6
Untaxed reserves25.726.5
Financial instruments41.215.3
Provisions75.345.4
Other deferred tax liabilities16.04.8
Total–7.3–55.2
thereof deferred tax assets100.5–86.4
thereof deferred tax liabilities93.231.2

Deferred taxes developed as follows:

52. Changes in deferred taxes EURm2015/162014/15
Deferred taxes on 01.10.–55.2–39.0
– Changes resulting from currency translation reserve and other changes3.8–1.4
– Changes in deferred taxes recognised through profit and loss19.621.7
– Changes in deferred taxes recognised directly in equity from the valuation reserve24.6–36.6
Deferred taxes on 30.09.–7.3–55.2

Losses for which deferred tax assets were recognised can be used over the coming years based on projected tax results. Deferred tax assets of EUR 84.8m (previous year: EUR 79.5m) related to loss carryforwards were not recognised because they are not expected to be used within the foreseeable future. Of this total, EUR 3.2m will expire during the next five years (previous year: EUR 4.6m). The remaining loss carryforwards that were not capitalised can be carried forward for an indefinite period of time.

Deferred tax liabilities of EUR 70.5m (previous year: EUR 8.6m) on temporary differences of EUR 284.4m (previous year: EUR 67.8m) were not recognised because these differences will remain tax-free in the foreseeable future. These temporary differences arise from differences between the tax base of the participation interest and the proportional share of equity owned, respectively between the tax base of the participation interest and the carrying amount of the equity accounted investees (outside basis differences).

53. Non-current provisions

53. Non-current provisions EURm30.09.201630.09.2015
Provisions for pensions282.0259.6
Provisions for obligations similar to pensions24.820.5
Provisions for severance payments95.190.3
Other non-current provisions106.190.7
Total508.0461.1

The amounts reported for the provisions for pensions and for obligations similar to pensions as well as for provisions for severance payments were generally calculated on the basis of the following parameters:

  • Interest rate 1.35% p. a. (previous year: 2.40% p. a.)
  • Remuneration increases 2.00% p. a.; in subsequent years 2.00% p. a. (previous year: remuneration increases 2.00% p. a., in subsequent years 2.00% p. a.)
  • Pension increases 2.00% p. a.; in subsequent years 2.00% p. a. (previous year: pension increases: 2.00% p. a., in subsequent years 2.00%)
  • Austrian mortality tables (“Rechnungsgrundlagen AVÖ 2008-P – Rechnungsgrundlagen für die Pensionsversicherung – Pagler & Pagler“), also used in the previous year

As of 30 September 2016, the weighted average remaining term equalled 13.6 years for the pension obligations (previous year: 13.9 years). Payments for pensions are expected to total EUR 15.1m in 2016/17 (previous year: EUR 15.5m).

53. Reconciliation of provisions for pensions
EURm
2015/162014/15
Present value of pension obligations (DBO) as of 01.10.259.6282.4
+ Service costs2.22.5
+ Interest costs6.36.8
– Pension payments–15.2–16.1
+/– Actuarial loss/gain29.1–16.0
thereof
demographic assumptions
financial assumptions36.1–15.8
assumptions based on experience–7.0–0.1
Present value of pension obligations (DBO) as of 30.09.282.0259.6
53. Reconciliation of the provision for obligations similar to pensions
EURm
2015/162014/15
Present value of the provision for obligations similar to pensions (DBO) as of 01.10.20.531.8
+ Service costs0.50.6
+ Interest costs0.50.8
– Payments–0.9–11.3
+/– Actuarial loss/gain4.2–1.4
thereof
demographic assumptions
financial assumptions4.2–0.5
assumptions based on experience0.0*)–0.9
Present value of the provision for obligations similar to pensions (DBO) as of 30.09.24.820.5

As of 30 September 2016, the weighted average remaining term equalled 18.4 years for the obligations similar to pensions (previous year: 17.3 years). Payments for obligations similar to pensions are expected to total EUR 0.8m in 2016/17 (previous year: EUR 0.7m).

53. Reconciliation of the provision for severance payments EURm2015/162014/15
Present value of severance payment obligations (DBO) as of 01.10.90.393.6
+/– Changes in the scope of consolidation–0.2
+ Service costs3.83.2
+ Interest costs2.32.4
– Severance payments–6.8–4.8
+/– Actuarial loss/gain5.4–3.8
thereof
demographic assumptions
financial assumptions7.1–3.4
assumptions based on experience–1.7–0.4
Present value of severance payment obligations (DBO) as of 30.09.95.190.3

As of 30 September 2016, the weighted average remaining term of the severance payment obligations equalled 9.6 years (previous year: 10.9 years). Severance payments are expected to total EUR 5.4m in 2016/17 (previous year: EUR 3.9m).

A change in the actuarial parameters (ceteris paribus) would have the following effect on the provisions for pensions and obligations similar to pensions as well as the provisions for severance payments:

53. Sensitivity analysis for provisions for pensions
%
30.09.201630.09.2015
Change in
assumption
Decrease in
assumption/
change in DBO
Increase in
assumption/
change in DBO
Decrease in
assumption/
change in DBO
Increase in
assumption/
change in DBO
Interest rate0.507.36–6.536.87–6.13
Remuneration increases1.00–2.933.19–2.813.16
Pension increases1.00–10.6613.06–9.6711.75
Remaining life expectancy1 year–4.935.03–4.564.62
  
53. Sensitivity analysis for provisions for
obligations similar to pensions %
30.09.201630.09.2015
Change in
assumption
Decrease in
assumption/
change in DBO
Increase in
assumption/
change in DBO
Decrease in
assumption/
change in DBO
Increase in
assumption/
change in DBO
Interest rate0.5010.05–8.709.10–7.95
Remuneration increases1.00
Pension increases1.00–13.0216.40–11.8914.76
Remaining life expectancy1 year–4.224.25–3.863.87
53. Sensitivity analysis for provisions for
severance payments %
30.09.201630.09.2015
Change
in assumption
Decrease in
assumption/
change in DBO
Increase in
assumption/
change in DBO
Decrease in
assumption/
change in DBO
Increase in
assumption/
change in DBO
Interest rate0.505.00–4.644.99–4.65
Remuneration increases1.00–9.9011.30–10.1511.56

The sensitivity analysis was carried out separately for each key actuarial parameter. Only one parameter was changed at a time during the examination, while the other variables remained constant (ceteris paribus). The calculation of the changed obligation reflected the calculation of the actual obligation. The analytical capacity of this method is limited because the interdependencies between the individual actuarial parameters are not taken into account. With respect to the severance compensation obligations, a sensitivity analysis was not carried out for the remaining life expectancy because this parameter has only an immaterial effect on the liability.

53. Reconciliation of other non-current provisions
EURm
Service
anniversary
bonuses
Rents for
network access
Process costs
and risks
Environmental
and disposal
risks
Other
non-current
provisions
Total
Carrying amount 01.10.201521.47.010.449.42.390.7
Currency translation differences0.0*)0.0*)0.0*)0.0*)
Interest expense0.70.10.20.50.31.8
Use0.1–1.3–0.4–0.4–2.0
Release–0.6–1.2–1.0–3.6–0.1–6.5
Additions1.50.35.29.71.620.2
Transfers–0.30.21.31.0–0.41.9
Carrying amount 30.09.201622.96.414.756.83.5106.1

Rents for network access involve provisions for rents to gain access to third-party facilities in Bulgaria. Various legal proceedings and lawsuits, which for the most part arise from operating activities and are currently pending, are reported under process costs and risks. Environmental and disposal risks primarily encompass the estimated costs for demolition or disposal as well as provisions for environmental risks and risks related to contaminated sites.

54. Deferred income from network subsidies

The investment subsidies are related primarily to heating plants, facilities of EVN Wasser, small hydroelectric power stations and windpower plants of EVN Naturkraft and facilities of Netz Niederösterreich.

54. Deferred income from network subsidies
EURm
Network
subsidies
Investment
subsidies
Total
Carrying amount 01.10.2015454.353.1507.4
Currency translation differences0.20.2
Changes in the scope of consolidation2.62.6
Additions83.114.497.5
Release–0.0*)–0.0*)
Transfers–41.2–5.7–46.9
Carrying amount 30.09.2016496.364.4560.7

55. Other non-current liabilities

Leases are related mainly to the long-term utilisation of heating networks and heat generation plants. The accruals from financial transactions are related to present value advantages from lease-and-lease-back transactions in connection with electricity procurement rights from the Danube power plants.

The liabilities from derivative transactions include the negative fair values from hedges concluded for bonds, which are contrasted in part by the development of the bond liability, and for project financing related to the Duisburg-Walsum power plant project.

The remaining other non-current liabilities include, among others, accrued tax liabilities related to the tax group in Austria, accrued longterm electricity delivery obligations and non-current prepayments made by customers.

55. Other non-current liabilities EURm30.09.201630.09.2015
Leases14.316.0
Accruals from financial transactions1.52.0
Liabilities from derivative transactions37.348.7
Remaining other non-current liabilities11.28.9
Total64.375.6
55. Term to maturity of other non-current liabilities EURm
Remaining term to maturity as of 30.09.2016Remaining term to maturity as of 30.09.2015
 < 5 years> 5 yearsTotal< 5 years> 5 yearsTotal
Leases7.37.014.37.78.316.0
Accruals from financial transactions1.50.0*)1.51.80.12.0
Liabilities from derivative transactions25.112.237.332.116.748.7
Remaining other non-current liabilities3.77.611.22.26.78.9
Total37.526.864.343.831.875.6

Current liabilities

56. Current loans and borrowings

Bank overdrafts are included under cash and cash equivalents in the consolidated statement of cash flows.

56. Current loans and borrowings EURm30.09.201630.09.2015
Bank loans75.5101.4
Bond liabilities149.928.5
Bank overdrafts and other current loans13.710.2
Total239.1140.1

Loans of EUR 75.5m were reclassified to current financial liabilities because they are now due within one year (previous year: EUR 101.1m). The bond liabilities (EUR bond) will mature on 23 June 2017 and were therefore reclassified from non-current to current loans and borrowings.

57. Taxes payable and levies

Taxes payable and levies as of the balance sheet date comprise the following:

57. Taxes payable and levies EURm30.09.201630.09.2015
Energy taxes24.229.2
Value added tax16.518.1
Corporate income tax5.57.8
Other taxes and duties9.08.6
Total55.263.6

58. Trade payables

Trade payables include obligations resulting from outstanding invoices amounting to EUR 84.4m (previous year: EUR 102.6m).

59. Current provisions

The provisions for personnel entitlements comprise special payments not yet due, outstanding leave and liabilities resulting from a voluntary early retirement programme for employees. The provisions for legally binding agreements totalled EUR 8.8m as of the balance sheet date (previous year: EUR 7.2m).

59. Reconciliation of current provisions EURmPersonnel
entitlements
Onerous
contracts
Rents for
network access
Process risksOther current
provisions
Total
Carrying amount 01.10.201574.351.13.03.814.0146.1
Currency translation differences0.0*)0.0*)0.0*)0.0*)
Use–9.4–39.3–1.0–1.7–51.4
Release–0.1–2.0–2.1
Additions9.9–6.60.91.75.8
Transfers2.0–0.20.8–3.4–0.8
Carrying amount 30.09.201676.75.22.84.48.697.8

60. Other current liabilities

The liabilities to investments in equity accounted investees consist primarily of cash pooling balances between EVN Finanzservice and these companies as well as amounts due to EAA for the distribution and procurement of electricity.

The other financial liabilities include a liability of EUR 45.8m (previous year: EUR 55.5m) related to a tariff decision in Bulgaria on 1 July 2014, which requires the repayment of revenue from previous periods. This position also includes a liability of EUR 60.9m related to the contract performance guarantee for the Duisburg-Walsum power plant project (carrying amount: EUR 65.7m; previous year: EUR 63.6m) that was drawn in November 2013. The other components of this position include accrued interest, employee-related liabilities and deposits received.

Other liabilities include the following: prepayments received to cover the costs of electricity, natural gas and heating supplies; prepayments to cover the installation of customer equipment; obligations to social security carriers; and subsidies received for construction costs and investments that will be recognised to revenue within one year.

60. Other current liabilities EURm30.09.201630.09.2015
Financial liabilities
Liabilities to investments in equity accounted investees134.7151.8
Liabilities to non-consolidated subsidiaries10.49.5
Deferred interest expenses17.618.3
Liabilities arising from derivative transactions18.817.7
Other financial liabilities143.7148.2
325.1345.4
Other liabilities128.3132.5
Total453.4477.9

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