BKW FMB Energy Ltd Annual Report 2003

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interest expenses. These are fi nanced over the long term with phased maturity dates to minimise the impact of interest rate changes on the earnings situation. In addition, interest rate hedging instruments are used where necessary. Cash is invested over the short to medium term primarily in fi xed interest positions to minimise the impact of interest rate changes and price fl uctuations. Credit risk Credit risk includes the risk that a counterparty will be unable or unwilling to discharge its obligation and cause a fi nancial loss. Active risk management with defi ned limits per counterparty is practised with respect to trade accounts receivable and the investment of funds. 3.13 Derivative fi nancial instruments The fair value of a derivative fi nancial instrument is the amount for which a third party would acquire the rights and obligations arising from such a derivative fi nancial instrument. The amount is calculated using recognised valuation methods or the prevailing price on the balance sheet date. The published fair values may differ from the published fair values for a liquidated sale, due to fl uctuations in relevant market data. Value fl uctuations are continually charged to income. The operating results of energy business derivative fi nancial instruments are recorded in the operating result, and the operating results of derivative fi nancial instruments for currencies and interest are recorded in fi nancial income. 3.14 Contingencies Measurement of the provision for nuclear waste disposal is essential for assessment of the balance sheet of BKW. The industry calculates shared, detailed costs for decommissioning and the disposal of nuclear waste. These cost calculations are examined by the Swiss government, which manages fi nances arising from the provision for nuclear waste disposal. The estimates of BKW are applied for 38 plant-specifi c obligations. Payment to the funds managed by the Swiss government is stated as a receivable at net present value. In accordance with the ordinance governing the state funds, operators must make up any future shortfalls or are entitled to reimbursement of future surplus funds. These receivables or obligations are stated as contingent liabilities in the case of a shortfall, or contingent assets in the case of a surplus. The value of such shortfalls or surpluses can only be determined in the future. Errors in cost calculations and changes in policy requirements for decommissioning and nuclear waste disposal, as well as sustained, long-term discrepancies between the fi nancial income from state funds and the calculated net present value, may affect the Group’s earnings situation. 3.15 Pension plan The Group operates various pension plans. The individual plans are recorded as defi ned benefi t or defi ned contribution pension plans according to IAS 19. Defi ned benefi t plans are subject to periodic valuation (generally every 3 years) and revision by qualifi ed independent actuaries. They are calculated using the projected unit credit method. Until this obligation is recalculated, employees’ acquired benefi ts are updated based on the selected parameters. If subsequent calculations differ by less than 10% (corresponding to the ”corridor” defi ned in IAS 19 Paragraph 92), these benefi ts are recorded unchanged. If the difference exceeds the permissible corridor, the benefi ts are recorded using the straight-line method over the average remaining working life of employees participating in the plan if the difference is also recorded on the balance sheet. If an obligation arises from this calculation, the BKW Group records this in the balance sheet at the anticipated value of the fi nancial cash outfl ow. Gains are accounted for only to the extent of the anticipated future benefi t for the BKW Group. Contributions to defi ned contribution plans, such as the state pension plan, are charged in the period to which they relate.
4 Net sales CHF (million) 2003 2002 Electricity sales Switzerland 888.1 851.1 Electricity sales International 294.1 130.2 Electricity trading 1,475.6 924.6 Other electricity business 121.2 62.0 Gas business 63.1 9.4 Engineering services and electrical installation business 47.1 40.4 Changes in work in progress – 0.3 0.4 Total 2,888.9 2,018.1 5 Energy procurement CHF (million) 2003 2002 Electricity procurement, third parties 1,646.3 982.1 Electricity procurement, joint ventures 285.4 265.8 Net use of provisions for onerous contracts – 40.5 – 43.2 Other expenses for electricity procurement 124.9 28.6 Gas procurement, third parties 61.9 9.1 Total 2,078.0 1,242.4 6 Personnel expenses CHF (million) 2003 2002 Salaries and wages 179.7 174.7 Social security contributions and other personnel expenses 37.0 39.6 Total 216.7 214.3 Number of employees on balance sheet date 31.12.2003 31.12.2002 (full-time equivalent) Employees 1,928 1,889 Trainees 104 110 Total 2,032 1,999 7 Depreciation and amortisation CHF (million) 2003 2002 Property, plant and equipment 82.5 77.3 Intangible fi xed assets 2.0 5.6 Total 84.5 82.9 39
Page 1 and 2: BKW FMB Energy Ltd Annual Report 20
Page 3 and 4: Contents 2 Foreword Partnerships st
Page 5 and 6: The challenges facing energy policy
Page 7 and 8: Strategy Partnerships and continual
Page 9 and 10: Broad-based production plant Thanks
Page 11 and 12: Board of Directors (at 31.12.2003)
Page 13 and 14: Market Switzerland’s electricity
Page 15 and 16: Energy Policy Clear Federal Court r
Page 17 and 18: Future of nuclear power assured Whi
Page 19 and 20: Production Generating power by part
Page 21 and 22: BKW electricity In the year under r
Page 23 and 24: Trade BKW - a competent and reliabl
Page 25 and 26: Sales Partnership in action - the f
Page 27: Networks Guaranteeing network relia
Page 30 and 31: Financial Review Sales and profi t
Page 32 and 33: Consolidated Financial Statements o
Page 38 and 39: 3 Principles of accounting and valu
Page 42 and 43: 40 8 Financial result CHF (million)
Page 44 and 45: 11 Property, plant and equipment CH
Page 46 and 47: 13 Non-current fi nancial assets CH
Page 48 and 49: 46 16 Accounts receivable CHF (mill
Page 50 and 51: 18 Provisions CHF (million) Nuclear
Page 52 and 53: 50 22 Pension obligations The statu
Page 54 and 55: 52 25 Related parties The following
Page 56 and 57: List of Participations Subsidiaries
Page 58 and 59: Financial Statements of BKW Income
Page 60 and 61: Financial Statements of BKW Notes a
Page 62 and 63: 60 8 Bond issue in 1,000 CHF 31.12.
Page 64 and 65: Report of the Statutory Auditors 62
Page 66 and 67: 64 Appropriation of retained earnin
Page 68 and 69: 66 Signifi cant shareholders In a s
Page 70 and 71: 68 3 Board of Directors Information
Page 72 and 73: 70 AG und Genossenschaft, Jungfraub
Page 74 and 75: 72 - - - - - - - - The Audit Commit
Page 76 and 77: 74 4 Executive Board and Extended E
Page 78 and 79: 76 The members of the Board of Dire
Page 80 and 81: 78 Entries in the shareholder regis
Page 82 and 83: Addresses BKW Head Offi ce BKW FMB

BKW FMB Energy Ltd Annual Report 2003

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