1 Annual Report 2009
2 02 Report of the Supervisory Board In the following report, the Supervisory Board accounts for its activity during the past 2009 financial year. In this, it explains its ongoing dialogue with the Executive Board, the emphases of the consultations in the Board, the work of the committees and the annual and consolidated financial statement. In the past financial year 2009, the Supervisory Board dealt in detail with the situation, the prospects and the strategic orientation of the Berlinwasser Group. The Supervisory Board has continuously advised the Executive Board regarding the management of the company and monitored it according to its legal and statutory obligations and duties, under consideration of the Corporate Governance Code and Berlinwasser Holding AG. In all significant decisions for the company, the Supervisory Board was involved intensively and at an early stage. In order to fulfil its monitoring obligations, the Supervisory Board mainly used the extensive written and verbal reports submitted by the Executive Board on a regular basis, regarding all of the material aspects for the company, the development of the business and financial situation and their effects, as well as fundamental issues of corporate planning and strategy, including the risk situation and risk management. The Executive Board furthermore notified the Supervisory Board about the most important key business figures and explained the deviations between the course of business and planning, on the basis of monthly reports. All important business transactions for the Berlinwasser Group were discussed extensively by the Supervisory Board in the committees and in the Board, on the basis of the Executive Board s reports. After thorough review and consultation, the Supervisory Board provided its opinion on the reports and resolution proposals of the Executive Board, to the extent necessary under the law and statutes. Furthermore, the Supervisory Board Chairman found out about significant business transactions and the prospects of the individual Group segments in separate meetings with the Executive Board regarding the current development of the business situation. Overall, the Board met for three meetings during the reporting year, with one Supervisory Board Member participating in fewer than half of the meetings. In two cases, resolutions were passed on the basis of written documents. All Executive Board Members participated in the meetings on a regular basis. Conflicts of interest by Executive Board or Supervisory Board Members, which must immediately be disclosed to the Supervisory Board, did not arise. Committee activities In order to fulfil its tasks, the Supervisory Board has set up a total of four committees, who effectively support the activities in the Board. The committees prepared the Supervisory Board resolutions, as well as topics to be dealt with in the Board. In individual cases, decision-making authorities of the Supervisory Board were transferred to the committees, within the legal framework. The Chairpersons of the committees reported on the activities of the committees in the Board on a regular basis. The Presidential Committee (Audit Committee) met for two meetings during the reporting year. It particularly dealt with the preparation of the annual financial statement and consolidated financial statement audit of Berlinwasser Holding AG, the ascertainment of the audit emphases, the selection of the annual auditor and the review of the risk management system of the Berlinwasser Group. The contractual matters of the Executive Board were the subject of detailed consultations. The Arbitration Committee, the Directive Committee and the Committee for Special Matters did not need to convene during the reporting year. Supervisory Board meetings and emphases of the consultations The emphasis of the Supervisory Board s consultations were on the orientation of the Group portfolio toward the core business for stabilisation and expansion of the market position of the investment companies. Emphases of the Supervisory Board s activities were on the balance sheet meeting with the annual audi-
3 03 tor, including all Group companies and the ascertainment of the audit emphases. The results of the implementation of measures were discussed intensively after the modification of the Berlinwasser International AG business model and the human resources development of the Berlinwasser Group. Furthermore, the Supervisory Board dealt extensively with the benchmarking of Berliner Wasserbetriebe for the optimisation of the processes and on a semi-annual basis, with the review of the risk management system. The Supervisory Board consulted with the Executive Board on a regular basis regarding the situation of the company and the development of the business and financial situation, the human resources situation and fundamental issues of corporate policy and strategy. Corporate Governance Code During the reporting year, the Supervisory Board dealt with the content and application of the basic corporate governance principles of Berlinwasser Holding AG. The Executive Board and Supervisory Board jointly issued an updated declaration of compliance on 4 / 5 January 2010 with relevant application of Article 161 Companies Act, which was made permanently accessible on the company s Internet site. According to this, the Executive Board and Supervisory Board basically complies with all formulated standards of the Corporate Governance Code of Berlinwasser Holding AG, with the exception of succession planning (Code clause 5.1.2) and the remuneration of the committee activity of Supervisory Board Members (Code clause 5.4.4). Furthermore, the Supervisory Board documented and intensively discussed measures for the improvement of its activities from the 2008 efficiency review. Annual financial statement and consolidated financial statement KPMG AG, Wirtschaftsprüfungsgesellschaft, Berlin, audited the annual financial statement and consolidated financial statement, as well as the joint management report of Berlinwasser Holding AG, which was prepared by the Executive Board in accordance with the regulations of the German Commercial Code (HGB) for the 2009 financial year and provided its unqualified opinion. The Audit Committee of the Supervisory Board granted the audit mandate in accordance with the resolution of the Shareholders Meeting. The Supervisory Board received the annual financial statement documentation, the annual auditor s reports and the Executive Board s proposal for the appropriation of net profit in good time prior to the meeting. They were discussed extensively in the Audit Committee on 1 March 2010 and in the Supervisory Board meeting on 4 March In both meetings, the annual auditor reported on the main results of its audit and was available for supplemental questions and answers. After its own review and discussion of the submitted documents and at the recommendation of the Audit Committee, the Supervisory Board approved the annual financial statement of Berlinwasser Holding AG and the management report. The annual financial statement is therefore approved. The proposal for the appropriation of net profit explained by the Executive Board was concurred with by the Supervisory Board after its own review and weighing-off of all arguments. Membership of the Supervisory Board and Executive Board As of 30 January 2009, Mr. Berthold Bonekamp, as of 30 April 2009, Senator Dr. Thilo Sarrazin, retired, and as of 30 June 2009, Dr. Lehmann-Grube resigned from their Supervisory Board mandates. Dr. Arndt Neuhaus was appointed as a Supervisory Board Member by the Extraordinary Shareholders Meeting on 19 February The Senate of Berlin posted Senator Dr. Ulrich Nußbaum to the Supervisory Board with effect from 5 May Furthermore, as of the end of the Ordinary Shareholders Meeting on 28 August 2009, all mandates of the shareholder representatives in the Supervisory Board of Berlinwasser Holding AG ended. As of the same date, the Shareholders Meeting
4 04 elected Senator Harald Wolf, Michel Cunnac, Philippe Guitard, Christiane Hotz-Firlus, Monika Kuban, Ingeborg Neumann, Senator Dr. Ulrich Nußbaum, Ralf Zimmermann and Dr. Knut Zschiedrich were elected as Members of the Supervisory Board of the company. At the end of the Shareholders Meeting on 28 August 2009, the following persons resigned from the Supervisory Board: Dr. Hans-Jürgen Ahlbrecht, Dr. Lore-Maria Peschel-Gutzeit, Dr. Arndt Neuhaus and Dr. Birgit Roos. In view of this, the seats of the shareholder representatives in the committees were newly appointed and Senator Harald Wolf was re-elected as Chairman of the Supervisory Board in the constitutional meeting of the Supervisory Board on 28 October At the end of 2008, the Supervisory Board appointed Dr. Georg Grunwald as a Member of the Executive Board, with responsibility for the Technology division, with effect from 1 January 2009, in a written circulation procedure. Furthermore, in its meeting on 25 February 2009, the Supervisory Board appointed Mr. Jörg Simon and Mr. Norbert Schmidt for a further five years, starting on 1 November 2009, as Executive Board Members of Berlinwasser Holding AG. The Supervisory Board thanks all resigned Supervisory Board Members for their constructive cooperation and for their commitment to the benefit of the company. The Supervisory Board expresses its thanks and appreciation of their commitment to the Executive Board, the Managing Directors and all employees of the Berlinwasser Group. Berlin, 4 March 2010 The Supervisory Board Senator Harald Wolf Chairman of the Supervisory Board of Berlinwasser Holding AG
5 Terms and conditions and general conditions Terms and conditions and general conditions Overview of the company, business activity and general terms and conditions As the parent company of the Berlinwasser Group, Berlinwasser Holding AG fulfils the Group management and cross-divisional activities, particularly in relation to its silent investment in Berliner Wasserbetriebe, as well as other investments held domestically and abroad. With the public-private partnership model, the Berlinwasser Group has been forging an innovative and unique path for the water industry in Germany since Through tried-andtested technology competence and contemporary management know-how, the Group of companies has changed dramatically during the past ten years and has thereby established itself efficiently, as well as in a market-oriented and customer-oriented manner. This included restructuring of the Group portfolio as well as the retention and forward-looking development of the processes and infrastructures in Berlin, which are important for the core business. The regulated and competitive business is combined under the umbrella of Berlinwasser Holding AG. The Berliner Wasserbetriebe division, i.e. the regulated business, encompasses the services of Berliner Wasserbetriebe for Berlin. This company is the largest in the industry in Germany. It supplies 3.9 million Berlin citizens, as well as residents of neighbouring municipalities in Brandenburg, with drinking water/discharge and purifying their waste water. In the International and Services divisions, the competitive business, water-related services are provided for the national and international market. With this, the focus is on operations management projects in the water and waste water sector, as well as water-related services, such as spring rehabilitation, engineering services and technical and business consulting. The Services division is comprised of Berlinwasser Services GmbH, which provides extensive services, particularly for the Berlinwasser Group, Berlinwasser Regional GmbH, which offers services for municipalities and companies, the engineering company, p2m berlin GmbH, pigadi GmbH, which specialises in spring service, the customer care service provider, bluepartner GmbH, as well as the training and personnel service company, perdie.net GmbH. Berlinwasser International AG markets the competences of Berliner Wasserbetriebe and the other companies in the Group internationally. With this, the operation and management of drinking water and waste water plants and systems are important. Berlinwasser International AG is active, inter alia, in China, Hungary, Mauritius and Namibia. Analysis of the course of business and the economic situation and its development In addition to the optimisation of costs and business processes, in view of the further declining water sales, energy management received key importance for Berliner Wasserbetriebe during the 2009 financial year. Energy savings and the increased use of regenerative energy sources received significant attention. The business development of the competitive companies in the Berlinwasser Group was characterised by stabilisation and the expansion of the market position in Berlinwasser International AG intensified its activities in its product lines. The Information Technology division of Berlinwasser Services GmbH, as the central IT service provider of the Group, particularly realised projects with a direct effect on end customers, including new services on the Internet and digital invoices for large customers. Under the management of Berlinwasser Regional GmbH, the Fat in Waste Water network was founded for the avoidance of discharges and simultaneous collection of these fats as resources. p2m berlin GmbH received a large order from Stadtentwässerung München for the renewal of the first biological purification stage. pigadi GmbH and bluepartner GmbH continued to establish themselves in the area of thirdparty business and therefore increased their external sales. perdie.net GmbH was not able to reach its external placement target, as there was a high demand for employees within the Berlinwasser Group. BERLINER WASSERBETRIEBE DIVISION As a drinking water supplier and waste water disposer for the capital city, Berliner Wasserbetriebe is simultaneously Europe s largest integrated supplier and disposer. Sales revenue is at 1.2 billion (previous year: 1.2 billion). The net operating result EBIT1 amounts to million (previous year: million). Berliner Wasserbetriebe supplies 3.4 million Berlin citizens with drinking water and disposes of their waste water. 1 Result before income tax, costs from partial profit transfer, income from loss assumption by silent shareholders, extraordinary result, interest result and investment result
6 Terms and conditions and general conditions 06 For this, the company operates networks with a total length of 18,600 km. Around 700 springs pump ground water, which is treated to become drinking water in nine water works. 150 waste water pumping works link the Berlin sewers with the six sewage treatment plants. In addition to this, Berliner Wasserbetriebe disposes of waste water from 535,000 Brandenburg citizens, of which 70,000 Brandenburg citizens are also supplied with drinking water from Berlin water works. Berliner Wasserbetriebe conducted self-financed investments of million (previous year: million) in At the end of December 2009, 4,712 employees worked for the company. The vocational training rate of 9.4% documents the high commitment of Berliner Wasserbetriebe in occupational vocational training. The quality of the company s services has been confirmed by the recertification of the entire company pursuant to the valid standards for quality and environmental management (DIN EN ISO 9001 and DIN EN ISO 14001). CO 2 savings reinforced. In the past year, Berliner Wasserbetriebe worked more intensively on the reduction of CO 2 emissions. These include measures for reducing the energy requirement, as well as increased use of regenerative energy sources. In June 2009, the second part of the photovoltaics plant in the Tegel water works went into operation. With total capacity of 560 kilowatts, it covers the energy requirement for the drinking water supply of 26,000 people. This saves 475 tons of CO 2 emissions per annum. Furthermore, Berliner Wasserbetriebe is working on making heat energy from the waste water usable. And, it is planned to use old fats from catering and food operations for increased biogas production, as well as a heating oil substitute. These activities contribute to the fulfilment of the climate protection agreement concluded with the State of Berlin in The aim is to save another 5% / 10,600 tons of CO 2 by The environment and negotiating scope of the waste water disposers are changing. The environmental policy requirements are continuing to increase, due to the European Water Framework Directive. Higher quality standards require increased purification performance in the sewage treatment plants, e.g. through a fourth purification stage. This will mean significant investments for the industry. However, it is still outstanding as to how to handle the target conflict that a significant increase in purification performance requires a great deal of energy and therefore leads to higher CO 2 emissions. Implementation of the future scenarios. Berliner Wasserbetriebe is optimising its corporate strategy. During the course of this, the future scenario of the company has been developed and the associated core tasks defined. The core business will remain the operations management and control of plants for drinking water supply and waste water disposal. With the aid of external benchmarking, all processes shall be further improved with regard to the requirements of external and internal customers. Work is intensively taking place on the implementation of the future scenarios. Significant features of this are, e.g. the further automation of facilities, implementation of a changed shift operation in the water works and closure of canal building yards. In the entire company, extensive optimisation of the processes and procedures is taking place, particularly with a view to the social compatibility of the tariff development, with concentration on the core tasks and the reduction of influenceable costs. Many organisational and technical adjustments are associated with this, where particular attention is paid to increasing productivity, as well as further improving service quality. On the basis of the future scenarios, the qualification of the personnel is compared with the future requirements. This specifically opens up a requirement for engineers and marks relevant targets in human resources development. The building connection process is an example of an optimised process. In this regard, customer surveys showed improvement potential. Since the reorganisation of this process in 2009, there is only one contact person for each customer, who is also closer, in terms of location. The further improvement of process quality is being worked on. Tax service exemplary. The European Court of Justice issued the judgement that the laying of drinking water building connections falls under the supplying of water, in terms of VAT, and that the discounted tax rate of 7% is therefore applicable. This is a departure from the practice carried out in Germany since 2000 of applying the full tax rate of 16%/from 2007, of 19%. After the Federal Tax Court and the Federal Court of Justice confirmed the application of the judgement, Berliner Wasserbetriebe was one of the first companies to implement this, with a service offensive, which was assessed as being exemplary by many media sources. Affected customers were informed in detail and the overpaid VAT was gradually refunded. The refunding process was virtually entirely handled in an automated manner.
7 Terms and conditions and general conditions 07 Numerous other water supply companies have turned to Berliner Wasserbetriebe for information regarding the process flow. Customer survey shows a good result. The results of the annual customer survey not only indicate improvement potential, but also clarify differences between public and published opinion. The estimated drinking water price achieved its highest acceptance in all target groups in this year s survey, since the surveys started in With the mentioning of the actual price, the acceptance again increased significantly. The results also showed changes with the assessment regarding handling and availability of the resource. With this, inter alia, the increasing reporting about the global water shortage and the large quantity of imported products for production of so-called virtual water played a part. This is seen alongside the water supply concept 2040 for Berlin that was completed in 2008, which highlights diverse climatic and demographic scenarios. It concludes that Berlin can supply itself sufficiently with high-quality drinking water on its own territory, even with the assumption of disadvantageous circumstances. Corruption prevention is exemplary. The Berliner Wasserbetriebe system for corruption prevention was praised at the Stockholm Water Week 2009 by the Water Integrity Network, as being exemplary and presented as best practice. The independent nongovernmental organisation had published the Global Corruption Report 2008 on Water in cooperation with Transparency International. It gathers information worldwide regarding anticorruption initiatives. High sustainability status. Berliner Wasserbetriebe regards itself as an environmental company. Particularly in this industry, sustainable business management is becoming increasingly important. In view of this, it was investigated where the company stands in the three areas of sustainability business, environment and social affairs. In the so-called sustainability check, a very good result was achieved. The achieved sustainability status is classified as high, according to the consultants. The basis for this is the commitment of the employees. Duck captures hearts. After the yellow rubber duck of the image campaign with the motif, Eau bleib doch, captured the hearts of Berlin citizens in 2008, it became the ambassador for Berliner Wasser in The focus of the communication was on the themes of purity of the water, environment and wellness. The claim Without us, it would only be wet points out to the Berlin citizens, how much performance is behind Berlin s drinking water and the purification of waste water. Another highlight was the presentation at the WASSER BER- LIN trade fair, within the context of the Berlinwasser Group. At the Building Site Day at the trade fair, which was jointly organised with regional pipeline construction companies to present innovative building, repair and renovation methods, there was a record number of visitors. Research and development. For natural, safe and more cost-effective water treatment, as well as effective waste water treatment, Berliner Wasserbetriebe is researching and developing innovative and practical technologies and processes. In future, the company s performance will be measured even more on the basis of sustainability and management of water resources, energy savings and consequently, CO 2 reduction, as well as recycling nutrients, e.g. phosphorous. The basis for the practical research is formed by the cooperation with partners, such as the Kompetenzzentrum Wasser Berlin ggmbh (Competence Centre Water Berlin), the colleges and the Technische Universität Berlin. The strategy for research and development, which was formulated in 2009, pursues a requirement-oriented approach, according to which these projects are initiated if they serve a purpose for the provision of know-how or technology for concrete technical requirements. Selection of current research projects: Spring management (WELLMA). The delivery rate of drinking water springs decreases during running operating hours. This socalled spring ageing requires targeted monitoring and maintenance. The age-related performance reduction of the springs are positively influenced by switching frequency and stable flow conditions, which are kept as low as possible. Regular spring regeneration reduces performance declines resulting from sedimentation and clogging. The results are intended to support the operation, monitoring and maintenance over the long term. The aim is to slow down the ageing of drinking water springs and secure the water quality. The experiences also from camera inspections - are digitally catalogued and systematically evaluated.
8 Terms and conditions and general conditions 08 Online-capable drinking water monitoring AquaBioTox. In order to increase the security of drinking water monitoring, water suppliers are looking for an online-capable broadband sensor, which reacts quickly and reliably to all trace elements and is robust against false alarms. The aim of the AquaBioTox project is to develop such a concept. It is based on monitoring the vitality of very quickly reacting biological microorganisms online, which are exposed to a stable, constant flow of water, using a camera with automatic image evaluation, in order to quickly diagnose significant changes and initiate relevant countermeasures. INTERNATIONAL DIVISION Berlinwasser International AG is active in several regions of the world as a leading German service provider with an emphasis on management and operation of drinking water supply and waste water disposal systems. Inter alia, within the context of public-private partnerships, it offers extensive infrastructural and advisory competence for investment and development projects abroad. Berlinwasser International AG also pursued the product lines of Consulting, Management Contracts/ Operations Management and Cooperation with Investors, in Consulting. Berlinwasser Management Consult GmbH & Co. KG a joint venture between Berlinwasser International AG and H.P. Gauff Ingenieure GmbH & Co. KG concluded an order for consulting services in 2009 for the implementation of a training programme for reducing water loss in the City of Mersin, Turkey. Furthermore, the company has an order for evaluating investments for the water supply of Azerbaijan. The business development of Berlinwasser Management Consult GmbH & Co. KG during the 2009 financial year did not proceed according to the company s planning when founded. This is due to longer lead times for projects and delays in awarding contracts. Costs were able to be saved compared with the original planning, however, this was not able to compensate the sales development, which is significantly behind planning. As a result of this, financial overindebtedness occurred at Berlinwasser Management Consult GmbH & Co. KG in The shareholder assumes that the continuation of Berlinwasser Management Consult GmbH & Co. KG is likely and no obligation exists to file for insolvency pursuant to Article 19 of the Insolvency Act. Management/operations management contracts. Beteiligungsgesellschaft Windhoek Goreangab Operating Company Ltd. in Namibia, which operates a plant that generates drinking water from surface and waste water, within the context of an operation and maintenance contract, is developing above budget. In 2009, Berlinwasser International AG successfully concluded the Rajasthan, India and Serbia 4 Cities, Serbia projects, both financed by the Kreditanstalt für Wiederaufbau. In Cixi, China, Berlinwasser International AG is processing a contract for technical support of the institutional development of the Cixi waste water company, financed by the World Bank. The shares in Wassergesellschaft Imishli JV mbh, Azerbaijan, which operates the water supply for approx. 50,000 residents in Imishli in Southern Azerbaijan, was sold to the Azerbaijani coshareholder on 22 October 2009, as an efficient operation was no longer ensured due to a significant fall in customer numbers. The operations management contract for the St. Martin sewage treatment plant on Mauritius with the local Wastewater Management Authority, is developing as anticipated. The number of projects available for Berlinwasser International AG in the operations management and management sector remains significantly behind overall expectations. Cooperation with investors. The investment company, Berlinwasser China Holdings Ltd., was awarded the contract in April 2009 for the expansion of the sewage treatment plant in Nanchang. In a building period of only four months, the capacity of this plant was increased from 330,000 m 3 /day to 500,000 m 3 / day. The supplemental contract also runs until SERVICES DIVISION The Services divisions is characterised by activities regarding the core business of water supply and waste water disposal, the marketing of Berliner Wasserbetriebe s know-how and personnel services. Berlinwasser Services GmbH. Berlinwasser Services GmbH is a service company and serves the Berlinwasser Group, with the focus on Berliner Wasserbetriebe, as well as the external market. The services are carried out in both operational divisions of Information Technology and Spring and Measurement Points Service. In the Information Technology division, the emphasis was on project business in The majority of these projects sup-
9 Terms and conditions and general conditions 09 port the Customer Service of Berliner Wasserbetriebe. The Internet portal was upgraded with numerous online functionalities. In addition to the general functions, such as master data or bank data changes, customers can now display their current and historical invoices online or have invoicing entirely changed over to an online process. In the Electronic Invoicing for Large Customers project, e.g. housing construction companies can automatically import their invoice data into their respective invoicing systems through an exchange platform. The purchasing portal of Berliner Wasserbetriebe was also further optimised. In addition to announcing their participation in public tenders, potential bidders can not only download the tender documentation, but also request large-format sketches and (building) plans online. The new double-sided invoice printout saves paper and postage. Berlinwasser Services GmbH has concluded a contract with Berliner Stadtreinigung (BSR) with a term from 1 December 2009 until 20 November 2014 for the use of a Lampertz cell. BSR intends to relocate its main data centre into this Lampertz cell. The Spring and Measurement Points Service division successfully implemented a high-performance sedimentation process for the first time in 2009 for the regeneration and new construction of springs, e.g. in the Friedrichshagen water works. Another new path was forged for the rehabilitation of springs in the Beelitzhof water works. For the filling of the ring space, glass balls were used, instead of the conventional filter gravel, which reduces the accumulation of sediment. The cooperation with pigadi GmbH, which offers the same portfolio on the external market, continues to develop positively. Berlinwasser Regional GmbH. Berlinwasser Regional GmbH is responsible in the Berlinwasser Group for the development of the industrial and municipal business outside of the core business of Berliner Wasserbetriebe. From the investigation of basic principles right up to operations management on the basis of Berliner Wasserbetriebe s know-how the full range is opened up for what is necessary for the building, operation and maintenance of water supply and waste water disposal plants and networks. During the 2009 financial year, inter alia, the operations management for the ground water treatment plant in Johannisthal (the client is Deutsche Bahn), additional services within the context of the construction phase of Berlin Brandenburg International Airport - BBI - (the clients are various joint ventures for the implementation of complex building projects for construction of the airport), two orders regarding the use of the operations management software, UBI canal (the clients are Stadtentwässerung Frankfurt/Main and Entsorgungsbetriebe Wiesbaden), as well as a series of smaller services, mainly in the Berlin region, were ordered. In May 2009, under the management of Berlinwasser Regional GmbH, the Fat in Waste Water network was founded. The aim of this network is to add the content of the fat separators in Berlin catering companies to orderly recycling. Within the project, Berlinwasser Regional GmbH provides a series of consulting services and is anticipating the expansion of the service portfolio, when it comes to recycling of the fats, e.g. through additional supply contracts. The targets set for 2009 with the services for the municipalities, to take on the order for the drinking water supply for the Municipality of Panketal for ten years and market the UBI canal software, were successfully implemented. The Industrial Services division particularly concentrates on the development of services for the large BBI Airport, which is currently under construction, and the associated industrial parks. Furthermore, additional strategic projects were developed. The activities in relation to the use of heat from waste water, the development of a service package for Messe Berlin and energy recycling from food waste in the sewage treatment sludge digestion plants are particularly promising in this regard. p2m berlin GmbH. p2m berlin GmbH and its subsidiary, pbv potsdam GmbH, also showed extraordinarily positive development in The international projects particularly influenced the position of p2m berlin GmbH in the market of German engineering companies. An improvement in the result, compared with the previous year s period, confirms this. The order for the new construction of the Ahzwaz West sewage treatment plant in Iran, to provide the complete, accompanying consulting and engineering services, is strategically very important, but is negatively influenced by the intention of the World Bank to withdraw from the financing of projects in Iran. The development in Bahrain, where p2m berlin GmbH received a large order in 2007 for engineering services for upgrading the Tubli sewage treatment plant, is just as important. The scope of the ordered volume has increased significantly, so that p2m berlin GmbH has received a follow-up order for the planning, tendering and construction supervision.
10 Earnings, Financial and Net Assets Situation of Berlinwasser Holding AG 10 The subsidiary, pbv potsdam GmbH, founded at the end of 2008, with the aim of utilising order potential in the field of project planning and implementation more intensively than before in the Brandenburg region, has also developed positively. A close network with partners of the local and national water industry supported p2m berlin GmbH sustainably positively. p2m berlin GmbH received a large order from Stadtentwässerung München for the renewal of the first biological purification stage. In addition to water and sewage services, p2m is also active in landscape planning. In 2009, an interesting project was completed for the Environmental and Nature Agency in Berlin-Pankow. Along the lines of its original design in the 19th century, the restorations of the gardens, in accordance with regulations for historical monuments, was planned and implemented by p2m berlin GmbH around the historical building ensemble of the Pankow Municipal Authority. pigadi GmbH. pigadi GmbH has a high level of know-how in the area of spring diagnosis and spring maintenance which suits requirements. Furthermore, services are provided for the metrological recording of quantitative and qualitative statuses of the ground water situation (operational ground water monitoring) are provided. The constantly growing customer base documents a high-quality service and long-term trust of the municipal and industrial clients. Sales also continued a positive trend in The fact that the skeleton agreements were extended again is worth highlighting. The Baseler Brunnentage, organised by pigadi GmbH, which took place in Switzerland, formed an excellent platform for exchanging experiences with potential customers and national/international experts. bluepartner GmbH. bluepartner GmbH also developed very successfully. The optimisation of the business processes with Berliner Wasserbetriebe and the expansion of third-party business were also promoted. Additional customers were gained for the Secretarial Service in A total of 347 customers therefore utilised these services. In May 2009, bluepartner GmbH conducted a customer satisfaction and requirement analysis in the Secretarial Service division. The results were very satisfactory. Suggestions for improvements and new product requests were analysed regarding their implementability and where possible have already been implemented. In the Large Customers division, a market analysis in the water industry was conducted for third-party business, with the support of the Corporate Development department of Berlinwasser Holding AG, with the involvement of external consultants. This analysis was particularly intended to analyse the intrinsic value of the sales targets for coming years. Furthermore, findings were gained from the analysis, which enable a targeted sales approach in this area. perdie.net GmbH. perdie.net GmbH supports the employment market and social policy responsibility of the Berlinwasser Group. With this, it focuses on the later placement and leasing of young, skilled workers for a qualified activity within and outside of the Berlinwasser Group. perdie.net GmbH is the official supporter of all training relationships for Berliner Wasserbetriebe, whereby the selection of vocational trainings and implementation lie within the responsibility of Berliner Wasserbetriebe. In July 2009, a new skeleton agreement was concluded between Berliner Wasserbetriebe and its employee representatives and perdie.net GmbH, regarding vocational training and permanent employment until the end of As a result of the general revival of the employment market, perdie.net GmbH placed twelve employees externally in The current personnel requirement of Berliner Wasserbetriebe and the associated retention of employees with the company currently do not permit any large scope for external leasing of employees. 2. Earnings, Financial and Net Assets Situation of Berlinwasser Holding AG Earnings situation The result for the 2009 financial year fell by 4.0 million compared with the previous year. The decline is particularly due to the write-down on the book value of Berlinwasser Services GmbH in the amount of 2.0 million. Furthermore, the dividend income of Csatorna Holding Zrt., in the amount of 2.1 million, was included in the previous year s result. Other operating income fell compared with the previous year.
11 Situation of Berlinwasser Holding AG 11 The share of rechargeable Group service income fell by 0.4 million during the financial year. At the same time, income from directly rechargeable costs fell by 0.3 million. Compared with the previous year, the average number of employees fell from 25 to 24 and therefore also the personnel expense. Other operating expenses fell compared with the previous year, as fewer legal and consulting costs were incurred, as well as communication and measurement costs. In the previous year, one-off costs were included in this for the audit of the semi-annual financial statement as of 30 June The investment result includes the 2008 profit distribution of Berlinwasser Services GmbH and the income from the project transfer agreements with bluepartner GmbH, p2m berlin GmbH, pigadi GmbH and perdie.net GmbH for The extraordinary depreciation on the book values of Berlinwasser Services GmbH had an opposing effect. Due to the current financial crisis, assumptions were adjusted in the valuation of the investment. This resulted in a lower company value for Berlinwasser Service GmbH and a relevant, extraordinary write-down of the investment book value. The financial result includes interest expense of 0.6 million and interest income of 0.7 million. Compared with the previous year, the financial result fell due to lower market interest rates for financial investments. In addition to this, interest expense is included from the additional trade tax claims arising from the tax audit for the years 1999 to 2001, in the amount of 0.3 million. The taxes on income and profit mainly include the trade tax expenses for 2009 ( 5.2 million) and the trade tax for the years 1999 to 2008 ( 4.1 million), which are taken into consideration as a provision, due to the results of the 1999 to 2001 tax audit. This trade tax originates from the silent company with RWE-Veolia Berlinwasser Beteiligungs GmbH. Income from profit transfer agreements includes the profit transfer from the silent company of Berlinwasser Holding AG to Berliner Wasserbetriebe in the amount of million. After deducting administration costs and the trade tax charge, the silent shareholder of RWE-Veolia Berlinwasser Beteiligungs GmbH is Summarised Profit and Loss Statement % % Other operating income 4, , Personnel expense 2, , Depreciation Other operating expenses 3, , Result of ordinary activities (EBIT) 1, , Investment result , ,584 Financial result Result before taxes from silent company and partial profit transfer 1, , ,281 Income from partial profit transfer agreements 137,328 3, ,275 2, ,053 Taxes from silent company 9, , ,444 Costs from partial profit transfer 127,538 3, ,240 2, ,298 Profit before tax (PBT) , ,970 Taxes on income and profit Net loss for the year/net profit for the year , ,970 Change 000
12 Earnings, Financial and Net Assets Situation of Berlinwasser Holding AG 12 entitled to this amount and is stated as a cost from profit transfer agreements. The result of ordinary activities was improved slightly in the 2009 financial year. For the 2010 and 2011 financial year, a positive annual result is anticipated. Financial situation Due to the repayment of the loan to Berlinwasser International AG in the amount of 3.2 million and the inflow of funds from the profit distribution for 2008 by Berlinwasser Services GmbH in the amount of 1.2 million, as well as the distribution of the annual results of the subsidiaries in the amount of 1.1 million, the balance of funds increased. The scheduled loan repayments, including interest liabilities in the amount of 1.2 million and the utilisation of other provisions in the amount of 1.0 million had an opposing effect. During the financial year, trade tax advance payments were made of 3.0 million for 2009, which, however, is seen alongside an advanced remuneration by Berliner Wasserbetriebe on the partial profit transfer for 2009 in the same amount. Furthermore, during the financial year, a total of 0.2 million of interest and 3.0 million of income tax were paid. The average interest rate for interest-bearing debt capital amounts to 3.77%. The receipt from the disposal of financial assets results from the repayment of loans by Berlinwasser International AG in the amount of 3.2 million. Berlinwasser Holding AG currently regards itself as having sufficient funds to secure its existence and further development. It also regards itself as being able to fulfil all payment obligations. The monitoring and control for the avoidance of financial risks takes place through the use of instruments, such as annual financial planning with adjustments during the year and the close-meshed analysis of budget deviations. Through this, possible risks can already be identified at an early stage and appropriate countermeasures initiated. Cashflow Statement +/ Periodic result 526 3,444 +/ Depreciation/write-ups on non-current assets 2, / Increase/reduction in provisions 6,258 4,341 /+ Increase/reduction in inventories, receivables and other assets, as well as miscellaneous assets that are not attributable to the financing or investment activity 8,598 59,790 +/ Increase/decrease in liabilities, as well as other liabilities that are not attributable to the investment or financing activity 127, ,789 Cashflow from ordinary activitiest 126, ,708 Withdrawals for investments in fixed assets 9 10 Withdrawals for investments in intangible assets 2 + Receipts from the disposal of financial assets 3, ,298 Cashflow from investment activity 3, ,288 Payments to company owners and minority interests 125, ,523 Payments from loan repayments 1, Cashflow from financing activity 126, ,505 Change to liquid funds 3,385 4,491 + Balance of funds at the beginning of the period 16,707 12,215 Balance of funds at the end of the period 20,092 16,
13 Earnings, Financial and Net Assets Situation of Berlinwasser Holding AG 13 Net assets situation The balance sheet structure is determined by the financial assets on the asset side and the contribution by RWE-Veolia Berlinwasser Beteiligungs GmbH on the liability side. The financial assets include the silent investment of Berlinwasser Holding AG in Berliner Wasserbetriebe. The financial assets declined during the financial year by 5.2 million, on the one hand, due to the repayment of Berlinwasser International AG loans in the amount of 3.2 million and on the other hand, due to an unscheduled write-down of the book value of Berlinwasser Services GmbH in the amount of 2.0 million. Receivables due from affiliates increased compared with the previous year, due to the positive effects from the 1999 to 2001 tax audit and the resulting increased partial profit transfer. The increase in provisions mainly results from the addition of tax provisions for trade tax in the current year in the amount Summarised Balance Sheet % % Aktiva Intangible assets Tangible assets Financial assets 1,373, ,378, ,234 Non-current assets 1,373, ,378, ,251 Receivables due from affiliates, investments and shareholders 136, , ,815 Other receivables , Liquid funds 20, , ,385 Accruals and deferrals Current assets 157, , ,983 1,531, ,524, ,732 Liabilities and Equity Equity capital 1,386, ,387, Debt capital Long-term Provisions Other liabilities , Medium-term and short-term Provisions 7, , ,204 Liabilities due to banks , Accounts payable Liabilities due to affiliates, investments and shareholders 133, , ,923 Other liabilities 1, , Accruals and deferrals , , ,540 1,531, ,524, ,732 Change 000
14 Earnings, Financial and Net Assets Situation of the Group 14 of 2.2 million and for trade tax for 1999 to 2001 of 4.1 million. This was taken into consideration as the result of the tax audit for the silent company. The taxes incurred within the context of the silent company are borne by REW-Veolia Berlinwasser Beteiligungs GmbH. The rise in liabilities due to affiliates mainly results from the increased partial profit transfer for 2009 ( 2.3 million). Overall, the economic situation of Berlinwasser Holding AG continues to be positive. The result of ordinary activities is charged with the unscheduled write-down on the book value of Berlinwasser Services GmbH in the amount of 2.0 million. 3. Earnings, Financial and Net Assets Situation of the Group Earnings situation The sales revenue of the Group was above the level for the previous year s time period. The increase was mainly attributable to Berliner Wasserbetriebe. During the 2009 financial year, million m 3 of drinking water were supplied in Berlin and surrounding areas. The quantity of drinking water sold in Berlin was 0.4 million m 3 below the comparative time period for the previous year, at m 3, due to the regular damp weather in the summer months. A decline in quantities was also shown with the drainage services. The tariff increase had an opposite effect as of 1 January The fees for the drainage of public roads and spaces fell by 2.2 million in comparison with the previous year. Out of the total sales revenue, 1,183.3 million (previous year: 1,168.1 million) was realised in the Berliner Wasserbetriebe division, 6.4 million (previous year: 5.2 million) in the Services division and 7.5 million (previous year: 19.4 million) in the International division. The internal sales amount to 1,188.2 million (previous year: 1,172.5 million). 8.9 million (previous year: 20.2 million) was generated abroad. Under other operating income, a total of 87.7 million is stated, which is 5.8 million more than in the previous year. Deviations resulted from higher income for Berliner Wasserbetriebe from compensation, from third-party cost refunds, from technical operations management and investments in the Waßmannsdorf sewage treatment plant, which are compensated by TELO Beteiligungsgesellschaft mbh & Co. Objekt Kläranlage Waßmannsdorf KG (TELO). Overall, cost of materials is above the level of the previous year. In particular, the costs for external services increased in comparison to the previous year. The rise in disposal costs of Berliner Wasserbetriebe was affected by the increase in capital and financing costs for the Waßmannsdorf sewage treatment plant. As the loans of the TELO special purpose company needed to be refinanced in December 2008 and June 2009 and the interest conditions deteriorated due to the financial crisis, these costs increased. The ground water extraction fee, which Berliner Wasserbetriebe pays to the State of Berlin, was lower than in the previous year, due to lower untreated water pumping and higher ground water enrichment. Personnel expense rose by 1.9 million compared with the previous year s value, due to a tariff increase by 3.55% as of 1 January 2009, with the national companies. The headcount fell further as of 31 December As of 31 December 2009, 5,324 employees (without vocational trainees) worked in the Berlinwasser Group. At the end of December 2009, 4,712 staff were employed with Berliner Wasserbetriebe. The depreciation includes unscheduled costs from depreciation on silent reserves in properties of 4.2 million (previous year: 4.2 million). The revealing of the silent reserves in properties took place within the context of the initial consolidation of Berliner Wasserbetriebe. Other operating income increased overall, compared with the previous year. While the costs for semi-retirement and sludge blockage and removal costs declined, the costs for the special utilisation fee, rents, leases, leasing fees and the trade fair and communication costs increased. The Group s investment result includes the dividends of Csatorna Holding Zrt. ( 6.0 million), as well as the results of Berlinwasser China Holdings Ltd. ( 1.0 million) and Metito Berlinwasser Ltd. (- 0.5 million). The financial result was mainly the outcome of the negative interest result of Berliner Wasserbetriebe in the amount of million (previous year: million). Particularly since the insolvency of the investment bank, Lehman Brothers, in September 2008, the financial crisis resulted in banks not granting loans at all anymore/only very restrictively and with higher margins. Nevertheless, Berliner Wasserbetriebe was able to finance itself more favourably in 2009 than in the previous year.
15 Earnings, Financial and Net Assets Situation of the Group 15 This resulted from a lower interest level and targeted bank selection by Berliner Wasserbetriebe. The liquidity and financing of Berliner Wasserbetriebe has been and is always ensured and at relatively good conditions. As Berliner Wasserbetriebe virtually entirely finances itself on a long-term basis, the effects of the financial crisis were not significant with regard to the financial result and the asset, financial and earnings situation of Berliner Wasserbetriebe. In the 2009 financial year, the result before taxes and partial profit transfer of the Group was slightly below the previous year s level. For the consolidated annual result, it should be considered that part of the Berliner Wasserbetriebe result is transferred to RWE-Veolia Berlinwasser Beteiligungs GmbH within the context of the partial profit transfer agreement. The consolidated net profit for the year is mainly generated by Berliner Wasserbetriebe. The stake of the State of Berlin in the annual result of Berliner Wasserbetriebe is stated in the Consolidated net profit attributable to minority interests item. Financial situation BASIC PRINCIPLES AND GOALS OF FINANCIAL RESOURCE MANAGEMENT The aim of financial management is to ensure solvency at all times and optimum financing of the companies in the Berlinwasser Group s investments and operations, under cost and risk aspects. The Berlinwasser Group aims at the highest possible level of self-financing. However, as a high and regular investment Summarised Profit and Loss Statement % % Sales revenue 1,197, ,192, ,329 Increase in/reduction of inventory of unfinished services 1, , ,393 Other capitalised services 60, , ,054 Other operating income 87, , ,801 Total performance 1,346, ,334, ,469 Cost of materials 310, , ,289 Personnel expense 292, , ,918 Depreciation 254, , Other taxes 9, , Other operating expenses 96, , ,016 Result of ordinary activities (EBIT) 384, , ,483 Investment result 6, , Financial result 105, , ,189 Result before taxes and expenses from partial profit transfer (PBT) 284, , ,180 Taxes on income and profit , ,441 Costs from partial profit transfer 127, , ,298 Consolidated net profit 157, , ,963 Net profit attributable to minority interests 148, , ,151 Consolidated net profit attributable to the parent company 8, , ,188 Change 000
16 Earnings, Financial and Net Assets Situation of the Group 16 requirement particularly exists for the Berliner Wasserbetriebe division, which can only be amortised over the long term, debt financing is also necessary. This mainly takes place through bank loans. The possibility of short-term and long-term borrowing, as well as the conditions for these funds, are based mainly on the guarantee indemnity of the State of Berlin for Berliner Wasserbetriebe, as well as the type and structure of the business model and the derived, good own creditworthiness. The vast majority of debt borrowing takes place by taking up long-term loans from banks. The constant solvency is additionally supported by credit lines from banks. As of the reference date, liabilities exist from this in the amount of 2,275 million (previous year: 2,322 million), which is stated in the amount of 2,274 million (previous year: 2,295 million) at Berliner Wasserbetriebe. Furthermore, credit-like liabilities also exist with Berliner Wasserbetriebe, mainly against the Federal Ministry of Finance and the Kreditanstalt für Wiederaufbau, in the amount of 175 million (previous year: 191 million). These are stated under other liabilities in the consolidated financial statement. The current loans are repayable at around 68% (previous year: 60%) during a period of more than five years. In the coming financial year, 259 million of liabilities due to banks will fall due. The average interest rate was at 4.19% (previous year: 4.36%) during the financial year. The cashflow from financing activity was characterised by the surplus of principal repayments over new borrowing, as well as distributions to the shareholders. The negative cashflows from the investment activity and the financing activities only slightly exceed the cashflow from ordinary activities for the financial year. The increase in negative cashflow from investment activities mainly results from Berliner Wasserbetriebe s rise in investment activity. FINANCING CONCEPT FOR NEUE JÜDENSTRASSE In 1996 and 1997, Berliner Wasserbetriebe concluded contracts with Immobilienvermietungsgesellschaft Schumacher & Co. Objekt Rolandufer KG regarding the financing and construction of administration buildings and a leasing agreement for buildings, in which, inter alia, the company headquarters of Berliner Wasserbetriebe are housed. The contracts optionally end in 2018 or FINANCING CONCEPT FOR WASSMANNSDORF SEWAGE TREATMENT PLANT In 1996, Berliner Wasserbetriebe concluded contracts with TELO Beteiligungsgesellschaft mbh & Co. Objekt Kläranlage Waßmannsdorf KG (TELO), which commercially correspond to a sale-and-leaseback transaction regarding Waßmannsdorf sewage treatment plant. TELO has the right to sell the sewage treatment plant to Berliner Wasserbetriebe in Net assets situation NON-CURRENT ASSETS The consolidated balance sheet is characterised by extensive non-current assets. 98.9% (previous year: 98.3%) of the non-current assets are comprised of the Berliner Wasserbetriebe assets. In total, non-currenqt assets fell by 67.8 million compared with the previous year. The compensation payments to be made for line rights of Berliner Wasserbetriebe on non-public land, according to the Land Register Amendment Act, amount to million. Consolidated cashflow statement Cashflow from ordinary activities 499, ,126 Cashflow from investment activity 227, ,375 Cashflow from financing activity 275, ,381 Change to liquid funds 3,901 1,631 + Balance of funds at the beginning of the period 43,032 43,702 + Exchange-rate related changes to funds Balance of funds at the end of the period 38,986 43,
17 Earnings, Financial and Net Assets Situation of the Group 17 A share of million is attributable to compensation payments for the former eastern part of Berlin, approx. 2.7 million is envisaged for compensation payments in Brandenburg. The compensation payments for the former eastern part of Berlin encompass all of the plants operated by Berliner Wasserbetriebe. This means that in addition to own assets, such as drinking wa- Summarised Balance Sheet % % Assets Intangible assets 99, , ,009 Tangible assets 5,594, ,593, ,066 Financial assets 65, , ,190 Non-current assets 5,759, ,826, ,753 Inventories 16, , ,165 Accounts payable 805, , ,942 Receivables due from affiliates, investments and shareholders 17, , ,293 Other receivables 99, , ,864 Liquid funds 38, , ,046 Current assets 978, , ,218 Accruals and deferrals 7, , ,745, ,709, ,952 Change 000 Liabilities and Equity Equity capital 2,340, ,304, ,413 Special items from subsidies and building cost subsidies 644, , ,526 Debt capital incl. accruals and deferrals Long-term Provisions 33, , ,700 Liabilities due to banks 1,542, ,399, ,794 Liabilities due to shareholders 4, , Other liabilities 107, , ,925 1,687, ,585, ,657 Medium-term and short-term Provisions 257, , ,960 Liabilities due to banks 732, , ,477 Payments received on account for orders 786, , ,843 Accounts payable 27, , ,332 Liabilities due to affiliates, investments and shareholders 136, , ,800 Other liabilities 109, , ,619 Accruals and deferrals 22, , ,483 2,072, ,189, ,644 6,745, ,709, ,952
18 Earnings, Financial and Net Assets Situation of the Group 18 ter supply lines and sewage water canals, also the road drainage plants belonging to the State of Berlin. The financing of the compensation payments takes place regarding the road drainage plants by the State of Berlin, furthermore also by Berliner Wasserbetriebe. For 5,036 (84%) of the parcels of land out of a total of 5,987 affected parcels of land, according to an extrapolation, in the former eastern part of Berlin, a calculation exists for the concrete compensation payments. This results in approx. 44% to be financed by the State of Berlin and approx. 56% by Berliner Wasserbetriebe. When transferring this ratio to the forecasted total of million for the former eastern part of the city, according to this, approx million shall be financed by the State of Berlin and approx million by Berliner Wasserbetriebe, in terms of compensation payments. As the compensation payments for limited personal easements financed by Berliner Wasserbetriebe are accounted for as intangible assets, a reduction takes place of the intangible assets taken into consideration so far for the limited personal easements of million, by 52.5 million. Berlinwasser Services GmbH produced intangible assets in the amount of 28.8 million for Berliner Wasserbetriebe by the end of the financial year, which are not capitalised in the Group. Of this, 5.5 million was attributable to the 2009 financial year. This mainly involves the introduction and optimisation of software in the area of consumption invoicing and in the network operation, as well as the introduction and optimisation of SAP modules. The Berlinwasser Group invested million (previous year: million) during the financial year. Through the deconsolidation of Hefei Wang Xiao Ying SewageTreatment & Co. Ltd. as of 31 May 2009, the Group s non-current assets fell by 36.7 million. Financial assets grew by 14.0 million by means of the increase in the investment by Berlinwasser International AG in Berlinwasser China Holding Ltd. In 2009, Berliner Wasserbetriebe invested million (previous year: million) in non-current assets. Of this, million (previous year: million) is attributable to water supply and million (previous year: million) to drainage. The debt financed share of investments was at 13.2%, with 36.1 million (previous year: at 13.5% with 36.3 million). The Drainage division had a share in this of 29.1 million (previous year: 30.6 million), in the Water Supply division, 7.1 million (previous year: 5.7 million) was financed by clients. The investments continue to be used for quality assurance in the water works and sewage treatment plants, as well as for network maintenance. Parts of the canal network budget are used for sewer construction in old residential areas, in accordance with the commitment from the waste water removal plan. INVESTMENT EMPHASES AT BERLINER WASSERBETRIEBE Waste water pumping works completely automated. The waste water control and information system (LISA) project has been completed after eight years. At its core was the automation and remote control of all 150 Berlin waste water pumping works from one control centre. For LISA, the 40 waste water pumping works with the majority of waste water pumping were fitted with new pumping automation for the 200 upgraded or converted waste water pumps. The specifically developed, complex monitoring and control technology ensures, inter alia, that the waste water is pumped, under consideration of the pipeline and sewage treatment plant capacities, so that fewer overflows are caused in the bodies of water, during heavy rainfall. In the LISA control centre in the Mitte main pumping works, the employees in each shift coordinate the pumping of waste water to the control sewage treatment plants, Waßmannsdorf, Schönerlinde and Ruhleben, as well as to the controlled sewage treatment plants, Stahnsdorf, Münchehofe and Wansdorf. A significant effect of this is the standardisation of technology. This relates to the automation, as well as the electrical and mechanical technology systems. The optimisation of the system is being worked on, whereby three pumping works still under construction/in planning, Charlottenburg I, Berlin XII and Berlin IV, will be integrated. New flue gas purification planned. A flue gas purification system limits harmful emissions from the sludge incineration plant in the Ruhleben sewage treatment plant. In order to reduce the quicksilver emissions, trials were carried out. A study concluded that the existing, single-stage wet flue gas purification should be replaced by a dry flue gas purification system. On the basis of the study, an ideas competition was initiated. The two best ideas were mandated with in-depth planning. On the basis of these plans and the computed costs, a decision is now being made about the new construction of the flue gas purification system.
19 Earnings, Financial and Net Assets Situation of the Group 19 New Berlin IV waste water pumping works. The Mitte waste water pumping works (Berlin IV), built in 1880 on Scharnhorststraße, are being abandoned and replaced by a new structure on a neighbouring property in Chausseestraße. To the southwest of the new pumping works, the construction of a rain overflow basin is planned. The plant will be built using trough construction, including the upstream separation and inlet structures. The building shell for the buildings and plants and the construction of the pressure pipelines have been completed. Fourth purification stage for the Ruhleben sewage treatment plant. The Senate Administration for Health, Environment and Consumer Protection has imposed the condition on Berliner Wasserbetriebe, in implementation of the EU Water Framework Directive, to build a pilot system in the Ruhleben sewage treatment plant, for the gradual introduction of the fourth purification stage for combined, further phosphate removal and sterilisation of the waste water. The Ruhleben sewage treatment plant has a purification capacity of 247,500 m 3 per day and is therefore Berlin s largest sewage treatment plant. Throughout Germany, a plant in this magnitude has not yet been equipped with a fourth purification stage. Two planning alternatives were investigated within the context of preliminary planning. The alternative processes of microfiltration and flocculation filtration, with downstream UV disinfection were evaluated in terms of their effects on the discharge quality of the sewage treatment water, the sustainability, the energy and operating resource consumption, the timetable for implementation and the financial effects. Within the framework of the cross-state coordination regarding the implementation of the Water Framework Directive between Berlin and Brandenburg, the Senate Administration for Health Environment and Consumer Protection defines the necessary process quality regarding the phosphorous parameter, on the basis of an efficacy study. This forms the basis for the decision regarding the favoured approach. CURRENT ASSETS Current assets grew by a total of million. Of this, accounts receivable increased by 30.9 million. The receivables include water sales and drainage services of Berliner Wasserbetriebe, which have not yet been invoiced. Berliner Wasserbetriebe calculates its sales and receivables as is customary in the industry, on the basis of a rolling annual consumption settlement, so that an annual consumption accrual takes place. The instalment payment amounts received from the customers for the financial year, but not yet invoiced, are reported as payments received on account. The increase in other receivables mainly results from the transfer to tax claims of 55 million from the Berliner Wasserbetriebe tax audit for the period from 1999 to 2001 and its consequences for the subsequent assessment periods. Through the deconsolidation of Hefei Wang Xiao Ying Sewage Treatment & Co. Ltd. as of 31 May 2009, the Group s current assets fell by 3.8 million. EQUITY CAPITAL Out of the Group s equity capital of 2,340.5 million, 1,096.4 million is attributable to Berlinwasser Holding AG and 1,244.1 million is attributable to third-party shareholders. The generated Group equity capital amounts to million. With this, it must be taken into consideration that due to the articles of association between Berlinwasser Holding AG and the silent shareholder, RWE-Veolia Berlinwasser Beteiligungs GmbH, the share in the annual result of Berliner Wasserbetriebe (49.9% of this equates to million as of 31 December 2009) is passed on directly to RWE-Veolia Berlinwasser Beteiligungs GmbH, by being stated as a cost comprised of a partial profit transfer. With this, profits and losses from the former subsidiary, Sekundärrohstoff-Verwertungszentrum Schwarze Pumpe GmbH i.l of million (cumulative as of 31 December 2009) are not deducted, in accordance with the contract. For the Berliner Wasserbetriebe division, the generated Group equity capital therefore only includes the losses from the former subsidiary, Sekundärrohstoff-Verwertungszentrum Schwarze Pumpe GmbH i.l., which reserves attributable to Berlinwasser Holding AG at Berliner Wasserbetriebe and the results from other Berlinwasser Group divisions. This mainly also reflects losses of Berlinwasser Holding AG of million (cumulative as of 31 December). The positive consolidated annual result of million during the 2009 financial year had an effect on the Group s equity capital. The share of minority interests increased by 34.8 million. This results from the addition of this year s
20 Supplementary Report, Risk Report 20 share of minority interests in the consolidated net profit of million. At the same time, the distribution of the previous year s result took place of million. In total, the equity capital grew by 1.7%, compared with the previous year. The equity capital amounts to 34.7% (previous year: 34.3%). DEBT CAPITAL The Group s long-term debt capital grew by million compared with the previous year. This results, on the one hand, from the reduction of provisions for easements of Berliner Wasserbetriebe by 26,300, which were accounted for here in the previous year. Through the refinancing of loans, the fixed interest period of which had expired, the long-term loan liabilities of Berliner Wasserbetriebe grew by million. Shortterm and medium-term loan liabilities fell accordingly. The short-term and medium-term liabilities fell by million. The reduction of the provision for easements ( million) also had an effect on this. Payments received on account grew by 32.8 million. This is mainly due to the fact that the customer instalments paid to Berliner Wasserbetriebe are above the previous year s value, as a result of the reference date. Through the deconsolidation of Hefei Wang Xiao Ying Sewage Treatment & Co. Ltd. as of 31 May 2009, the Group s current assets fell by 22.4 million. The Group s equity capital grew by 36.4 million and debt capital reduced by 15.0 million. In total, the Group s assets grew during the reporting period. 4. Supplementary Report Business transactions of particular significance did not occur after the close of the financial year. 5. Risk Report The Berlinwasser Group has implemented the risk management requirements stipulated in Article 91 Par. II AktG [Companies Act] and has established an extensive risk management system. As a result of the evaluations of the risk inventories and current changes, there are no risks identifiable which jeopardise the portfolio. Market, environmental and financial risks mainly exist, which are assessed as being relevant/significant risks. In order to compensate and reduce these risks, suitable measures have been undertaken by the company management. In all divisions of the Berlinwasser Group, risk owners and risk managers are responsible for carrying out the risk management functions. For the semi-annual inventory (31 March and 30 September) a workshop is conducted in all companies of the Berlinwasser Group. The results are summarised as a risk inventory, evaluated and documented in a risk report for the Executive Board and Supervisory Board. For the timely identification of particularly negative developments, issue management has been implemented at Berliner Wasserbetriebe. Issues are (weak) signals from the company s environment and the company itself, which represent a risk to reputation and strategy, as well as opportunities. Furthermore, the Berliner Wasserbetriebe risk management is linked closely with the balanced scorecard. The balanced scorecard is the strategic control instrument, with the aid of which, the targets and strategies of the company and the organisational units are represented, including measurable key figures. Market risks In cooperation with Berlinwasser Holding AG, Berlinwasser International has developed a business model regarding the reorientation of the international business. The emphasis of this is on the expansion of non-investment business, with consulting and operations management. The new business model has significantly lower risks than the previously emphasised investment business. Environmental risks The water authority approvals applied for by Berliner Wasserbetriebe in 1996 for all water works for pumping ground water for public drinking water supply shall be granted by 2013, according to the Senate Administration for Health, Environment and Consumer Protection. In 2001, an approval was granted for the Wuhlheide water works. For all other water works, with a letter from the Senate Administration for Urban Development, the period formulated in a letter dated 4 June 1998 for pumping ground water for the drinking water supply in the previous form (tolerance without approval) until further notice was extended, however not longer than until the existence of a definitive pumping approval. For the approval, environmental compatibility investi-