The Board of Directors and the Managing Director of. Modity Energy Trading AB. Corporate Id no submit the following.

Transcription

1 The Board of Directors and the Managing Director of Modity Energy Trading AB submit the following Annual report for the financial year January 1 - December Table of contents page Administration Report 2 Income statement 4 Balance sheet 5 Assets pledged and contingent liabilities 6 Statement of cash flows 7 Notes to the financial statements 9 Signing of the Annual report 17

2 2 (17) Administration Report General information on activities and significant events during the financial year Modity Energy Trading AB is owned by Lunds Energikoncernen AB (publ) ( , Lund) and Öresundskraft AB ( , Helsingborg) with equal interests. The owners are parent companies of two municipally owned energy groups. With their respective subsidiaries, they are responsible together for various types of energy supply, mainly in southern Sweden. Lunds Energikoncernen AB (publ) is owned by the holding company Kraftringen AB ( , and Lomma (2.1%). Öresundskraft AB is owned by Helsingborg Energi Holding AB ( , Helsingborg) which, in turn, is owned by the City of Helsingborg (100%) via Helsingborgs Stads Förvaltning AB ( , Helsingborg). Modity's main task is to trade in energy and foreign currency and to carry out compatible activities such as risk management and assuming responsibility for balancing the supply of electricity and gas. The activities must be carried out on a commercial basis. The object of the company's activities is to meet the needs of energy companies and major end customers for energy trading services on competitive terms. The activities must support these customers' strategic objectives for cost-efficient energy supply that promotes long-term sustainable development. The owners guarantee to vouch for Modity's equity via capital investment, commitment to pay or waiver of claims. For further information, see the section on Risk exposure and the note on Equity. On 31 May 2012, Modity Energy Management was merged with its parent company Modity Energy Trading AB. In 2012, Modity had sales of SEK 3,052 million and reported a profit of SEK 17.5 million. Expectations of future growth Modity Energy Trading's vision is to become the best energy trading company in Sweden by actively trading on physical and financial energy-related markets. The company achieves profitability by means of good management results in its customers' physical energy balances and hedging portfolios within given risk mandates. In 2012, the company further increased its activities in the management of customers' energy portfolios by means of market-leading knowledge, service and pricing. Its strategic ambition is to improve each customer's ability to be ahead of developments in the energy market in the Nordic region by offering its full experience of market analyses and personal relations. In the coming financial year, the focus will be on continuing to build interactive customer management, developing new management concepts and broadening the range of services to new energy carriers, geographical markets and consultancy services.

3 3 (17) Risk exposure and financial instruments In its activities, Modity is exposed to various types of financial risk. Financial risk relates to fluctuations in the company's profit and cash flow as a result of changes in energy prices (primarily oil, gas and electricity) and exchange rates, interest rates and credit risks. The operational risk and finance policy is adopted by the Board of Directors and forms a framework of guidelines and rules in the form of risk mandates and limits for all financial risks in energy, foreign currency and interest rate markets. The company has an independent risk control department directly subordinate to the CEO that is responsible for managing and controlling the company's risks. Proposed allocation of the company's profit The Board of Directors and the CEO propose that the profit available, SEK , be allocated as follows: Dividend (SEK) Carried forward to new accounts (SEK) Total The Board of Directors and the CEO consider that the proposed dividend is fair in respect of the requirements made by the operations' nature, scope and risks for the size of the equity and the company's consolidation requirements, liquidity and position in other respects. Regarding the company's profit and position in other respects, please see the following income statement and balance sheet with accompanying notes.

4 4 (17) Income statement Amounts in TSEK Note Net sales Other operating income Operating expenses Goods for resale Other external costs Personnel costs Depreciation and amortization of tangible and intangible assets Other operating expenses Operating profit Result from financial items Interest income and similar income Interest expense and similar charges Profit after financial items Appropriations Appropriations, other Income before tax Income taxes Net profit for the year

5 5 (17) Balance sheet Amounts in TSEK Note ASSETS Fixed assets Intangible fixed assets Capitalised development costs and similar items Emissions and Elcertificates Tangible fixed assets Equipment, tools, fixtures and fittings Financial assets Investment in group companies Deferred tax assets Total fixed assets Current assets Inventories Goods for resale Current receivables Trade receivables Other receivables Prepaid expenses and accrued income Cash and bank balances Total current assets TOTAL ASSETS

6 6 (17) Balance sheet Amounts in TSEK Note EQUITY AND LIABILITIES Equity 15 Restricted equity Share capital ( shares) Statutory reserve Unrestricted equity Share premium reserve Profit brought forward Net profit for the year Untaxed reserves Tax allocation reserves Current liabilities Bank overdraft facility Accounts payable - trade Liabilities to group companies Current taxes Other liabilities Accrued expenses and deferred income TOTAL EQUITY AND LIABILITIES Pledged assets and contingent liabilities Amounts in TSEK Pledged assets None None Contingent liabilities None None

7 7 (17) Statement of Cash Flows Construction in progress and Operating activities Result after financial items Adjustments for items not requiring an outflow of cash Income taxes paid Cash flows from operating activities before changes in working capital Cash flows from changes in working capital Increase(-)/Decrease(+) in inventories Increase(-)/Decrease(+) in current receivables Increase(+)/Decrease(-) in current liabilities Cash flows from operating activities Investing activities Acquisition of intangible fixed assets -331 Disposal of tangible assets 142 Cash flows from investing activities -189 Financing activities Dividends paid Group contributions paid Cash flows from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Merger of subsidiaries Cash and cash equivalents at end of period

8 8 (17) Notes to the statement of cash flows Construction in progress and Interest paid and dividend received Interest received Interest paid Adjustments for items not requiring an outflow of cash Depreciation and write down of assets Unrealised exchange rate difference Gains/losses from sale of fixed assets -63 Other provisions Market value electricity futures Market value currency futures Market value emissions Market value swedish electricity certificate

9 9 (17) Notes to the financial statements Amounts in TSEK unless otherwise stated Accounting principles The Annual Report has been prepared in accordance with the Annual Accounts Act, the standards issued by the Swedish Financial Accounting Standards Council and its Emerging Issues Task Force pronouncements. Valuation principles Assets, provisions and liabilities are stated at historical cost unless otherwise stated. Intangible assets Other intangible assets acquired by the company are recognised at cost less accumulated amortisation and any write-downs. Depreciation Depreciation is based on the asset's historic cost, less an estimated residual value. Depreciation on a straight-line basis is charged to income over the estimated useful economic life of the asset. Plant and machinery Equipments, tools, fixtures and fittings Computer software 5 years 3-10 years 5 years Receivables Receivables are reported at the amount expected to be collected based on individual assessment of collectibility. Receivables and liabilities denominated in foreign currency Receivables and liabilities denominated in foreign currency are stated in accordance with Standard no 8 of the Swedish Financial Accounting Standards Council at the exchange rate at the balance sheet date, except that non-current monetary receivables from foreign entities are stated at the historical rate of exchange. Exchange rate differences on current receivables and liabilities are reported in operating income while differences on financial receivables and liabilities are reported with financial items. Inventories Inventories, valued in accordance with guideline BFNAR 2000:3 issued by the Swedish Accounting Standards Board, are stated at the lower of cost (measured on the first-in first-out method) or net realizable value, with due consideration for obsolescence.

10 10 (17) Financial instruments Financial instruments entered to the balance sheet include liquid funds, accounts receivable, securities holdings, loans receivable and derivatives. Liabilities and equity capital include trade debts, debt and equity instruments, loans payable and derivatives. Derivative instruments consist among other things of forward contracts, options and swaps that are utilised to cover risks associated with exchange rate fluctuations and exposure to interest rate risks. Derivative instruments are classified either as a hedging instrument or as a holding for commercial purposes and are attributed to the trading book. A derivative instrument held for commercial purposes is valued at the fair value. Profit or loss on change in fair value is recognized in the income statement. Financial assets or financial liabilities are entered to the balance sheet when the company becomes involved in accordance with the instrument s contractual terms. Accounts receivable are recognised on the balance sheet when an invoice has been sent. Accounts payable are recognised when the invoice is received. Financial assets are removed from the balance sheet when the rights of the agreement have been realised, fall due or the company loses control of them. The same applies to parts of financial assets. A financial liability is removed from the balance sheet when the contractual obligation has been fulfilled or in some other manner extinguished. The same applies to parts of financial liability. Liquid assets Liquid assets comprise cash, bank deposits that are immediately available and other montary market instruments with a maturity of three months or less. Items bearing a fixed interest are measured at amotised cost. Trade receivables Trade receivables are reported at the amount expected to be collected after deduction of indiviually assessed bad debts. Trade receivables are expected to have short maturity, thus they are reported at nominal value without discounting. Accounts payables Accounts payables have a short maturity, thus are valued without discounting to nominal value. Employee Benefits The obligation of the company for each period consists of the amounts the company must contribute for the period in question. Thus, no actuarial assumptions are made in order to calculate the obligation or the expense, and there are no actuarial gains or losses. The obligation is calculated without discounting, except when part of the obligation is to be paid more than twelve months after the period in which the employees earned the benefit.

11 11 (17) Taxes The company applies the recommendation issued by the Swedish Financial Accounting Standards Council in accounting for income taxes, RR9 Income taxes. Total tax expense (tax income) comprises current tax expense (current tax benefit) and deferred tax expense (deferred tax benefit). Tax effects are shown in the income statement, except when the underlying transaction is taken directly to equity. Then the related tax effect is taken directly to equity. Current tax is the amount of income taxes payable or recoverable in respect of the current year. Adjustments to current tax related to current tax of other periods are also included. Deferred tax is calculated using the liability method, and is based on temporary differences between carrying amounts in the balance sheet and tax bases of assets and liabilities. Deferred tax amounts reflect the tax consequences that follow from the manner in which the company expects to recover or settle the differences, and are measured at tax rates enacted or substantively enacted at the balance sheet date. Untaxed reserves are reported inclusive of the deferred tax portion in the balance sheet. Deferred tax assets relating to deductible temporary difference and loss carryforwards are recognised only to the extent that it is probable that future taxable profits will be available. Revenue recognition The company recognises revenue at the fair value of the consideraton received or receivable. Therefore, the company recognises revenue at the nominal amount (invoice amount) if the company is paid in cash or cash equivalents directly upon delivery. An allowance is made for any given rebates. Revenue from the sale of goods is recognised when the following conditions have been satisfied: the company has transferred to the buyer the significant risks and rewards of ownership of the goods, the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company, and the costs incurred or to be incurred in respect of the transaction can be measured realiably. Merger During the year, the subsidiary was merged with the parent company. The merger has been reported in accordance with guideline BFNAR 1999:1 "Merger of wholly owned limited liability companies". Under the group perspective of this guideline, the assets and liabilities of the merged subsidiaries are stated at the values earlier included in the consolidated accounts.

12 12 (17) Note 1 Revenue by business and geographic segment Revenue by business segment Electricity trade Gas trade Revenue by geographic segment Sweden In all figueres are energy tax excluded. Energy tax mounts to (87 072) Note 2 Other operating income Exchange gains on operating receivables /liabilities Other Note 3 Audit fees and expenses KPMG AB Audit services Tax Consulting Other services Audit services refer to the examination of the annual report and accounts, the Board of Director's and the President's management, other work assignments which are incumbent on the Company's auditor to conduct, and advisning or other support justified by course of examination or performance of other such work assignments. All else is otherobservations in the services.

13 13 (17) Note 4 Employees, personnel costs and remunerations to management Average number of employees Sweden Male (percentage) 79% 75% Disclosure of the distribution of women and men in company management Distribution of women and men in company management Percentage women Percentage women Board members 17% 0% Other key management personnel 0% 0% Salaries, other remunerations and social security costs Board of Directors and Managing Director (of that bonuses, etc.) (341) (102) Other employees (of that bonuses, etc.) (3 029) (3 365) Total Social security costs (of that pension costs) (3 303) (2 482) Of the Company's pension costs 370 (249) relate to the board of directors and the managing director. Severance Pay The managing director and the company have a mutual notice time of 6 month. According to the agreement the MD receives a severance pay amounting to 12 monthly payments when the company cancels the agreement. Note 5 Depreciation and amortisation of tangible and intangible fixed assets Capitalised development costs Equipment, tools, fixtures and fittings

14 14 (17) Note 6 Operating income by line of business and geographic market Operating income by line of business Electricity trade Gas trade Operating income by geographic market Sweden Note 7 Interest income and similar income Interest income - other Exchange gains Note 8 Interest expense and similar charges Interest expense - other Exchange loss Note 9 Appropriations, other Tax allocation reserve, assessment year Not 10 Income taxes Current tax Deferred tax

15 15 (17) Note 11 Capitalised development costs Accumulated cost At beginning of year Acquisitions Accumulated depreciation At beginning of year Depreciation for the year Net book value at end of year Note 12 Equipment, tools, fixtures and fittings Accumulated cost At beginning of year Acquisitions Accumulated depreciation At beginning of year Depreciation for the year Net book value at end of year Note 13 Investment in group companies Accumulated cost At beginning of year Merger Net book value at end of year Note 14 Prepaid expenses and accrued income Accrued income Other items

16 16 (17) Note 15 Equity Share Statutory Non-restricted capital reserve equity At beginning of year Result from merger Resolutions at the AGM Dividend Net income for the year Balance at end of year Note 16 Provisions for deferred tax The provision is a temporary difference and is calculated with a tax rate of 22%. Note 17 Bank overdraft facility Credit facility Unutilised facility Utilized facility Note 18 Merger During the year, a merger was effected with Modity Energy Management AB org nr The income statement and the balance sheet of Modity Energy Management AB as at the date of the merger are presented below. Amounts as at Net sales 474 Operating expenses -475 Operating loss -1 Loss after financial items -1 Current assets Total assets Equity Liabilities Total eguity ans liabilities

17 17 (17) Note 19 Accrued expenses and deferred income Accrued energy costs Personnel costs Other items Lund Please see the official annual report in Swedish for signatures. If there are any uncertainty regarding the wording or figures in the annual report the Swedish official version shall supersede. Urban Ottoson Chairman of the Board Sylvia Michel Anders Östlund Magnus Thysell Managing Director Mikael Andersson Åke Kronberg Lars-Olof Svensson My audit report was issued Dan Kjellqvist Authorized Public Accountant