DRAVA, KUPA, RJE»INA, LOKVARKA, LI»ANKA LIKA, DOBRA ...

FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
To the owners of HEP-Operator distribucijskog sustava d.o.o.:
We have audited financial statements of HEP – Operator distribucijskog sustava d.o.o (the “Company”), which comprise
the statement of financial position as at 31 December 2010 and the related income statement, statement of
comprehensive income, statements of changes in shareholder’s equity and statement of cash flows for the year
then ended, and a summary of significant accounting policies and other explanatory notes.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted
our audit in accordance with International Standards on Auditing. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entities’ internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
BASIS FOR MODIFIED OPINION
a) The application of IFRIC 18 Transfer of assets from the customer
The Company has not applied IFRIC 18 Transfers of Assets from Customers, which specifies the accounting for assets
transferred from customers, by which the income from such assets should be recognized immediately upon the
transfer in the statement of comprehensive income rather than deferred over the useful life of the transferred asset.
The Interpretation is in force since 1 July 2009, and the Management Board has decided to apply the Interpretation
to periods subsequent to 1 January 2010. As of the date of publication of these financial statements, the Company
has not quantified the effect of untimely adoption of the Interpretation on the financial statements. As a result, we
are unable to assess the impact of this matter on the statement of the comprehensive income of the Company for
the year ended 31 December 2009 and on shareholders’ equity for the year ended 31 December 2010.
MODIFIED OPINION
In our opinion, except for the effect of the matters discussed in paragraph a), financial statements present fairly, in
all material respects, the financial position of the Company as at 31 December 2010, the results of its operations and
its cash flows for the year then ended in accordance with International Financial Reporting Standards.
EMPHASIS OF MATTER
a) Accounting policy for leases
As described in Note 1 to the accompanying unconsolidated financial statements, the Company has leased certain
property, plant and equipment under finance lease agreements to its subsidiaries. The leases bear interest to the
extent of the rates applicable to external funding acquired by the Company to construct those assets. These lease
receivables are carried at nominal amounts because of the special organizational framework of the HEP Group. Our
opinion is not modified in respect of this matter.
Deloitte d.o.o.
Branislav Vrtačnik, Certified Auditor
Zagreb, 25 May 2011
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HEP ANNUAL REPORT 2010 CHAPTER 7 - REPORTS BY HEP GROUP COMPANIES WITH FINANCIAL STATEMENTS