Wiener Stadtwerke Annual Report 2012

structure. Following this realignment, there continue to exist
five funds (special funds) with the aim of covering the pension-
related obligations and for long-term accumulation purposes
(e.g. for investments). The new strategy however only entails
one mixed investment fund; one which also includes shares.
The remaining four funds are maintained as bond funds
(including money market assets), whereby three of the four
funds are managed according to the buy-and-hold principle.
Since being restructured, this portfolio is characterised by a
significantly lower degree of volatility. During the course of
this restructuring process, the shares in these funds were
exchanged applying the principle of continuance of book
values.
3. Current assets
inventories are valued at the respective costs of acquisition or
manufacture in as far as the underlying values of these assets
are not lower on the balance sheet date, e.g. due to lower
stock exchange or market prices, in which case these are
applied.
Manufacturing costs relate solely to direct costs (of materials
and wages) and the corresponding proportion of material and
manufacturing-related overheads based on the assumption of
operation at full capacity, plus expenses for voluntary social
expenses and occupational pension fund contributions.
Expenses incurred through general administration work and
interest on loans are not capitalised.
The calculation of costs of acquisition and manufacture for the
same classes of assets applies the weighted average cost
method or similar methods. Appropriate impairment charges
are recognised for inventories subject to risks or of reduced
utility.
Receivables and other assets are valued at their respective
acquisition costs. Recognisable risks are taken into account by
means of appropriate impairment charges.
Purchased CO 2 emission certificates are carried under the
position 'Other assets' and are recognised strictly applying the
lower of cost or market principle. Certificates obtained free of
charge are not carried in the financial statements.
Available-for-sale securities are carried at the lower of their
cost of acquisition or market value on the balance sheet date.
4. Untaxed reserves
Pursuant to Article 205 of the Austrian Commercial Code
(UGB), untaxed reserves are recognised in the consolidated
financial statements in accordance with Article 253, para. 3
UGB.
5. provisions
5.1. Provisions for severance payments
and provisions for similar obligations
Provisions for severance payments as at 31.12.2011 were
calculated applying actuarial principles in accordance with IAS
48 Annual Report 2012 | Notes to the Consolidated Financial Statements
19 on the basis of the projected unit credit method. The
following parameters and assumptions were applied to the
calculations:
31.12.2011
Discount rate 5.25 %
Salary increase 3 %
From the 2012 financial year, the provisions for severance
payments are now calculated applying actuarial principles on
the basis of the entry-age normal method and, due to the
current level of interest rates, on the basis of an interest rate
(real interest rate) of 2.5 percent. As in the prior year, no
discount for employee turnover was taken into account, a
retirement age of 65 for both male and female employees was
assumed, and the mortality table AVÖ 2008-P Rechnungsgrundlagen
für die Pensionsversicherung – Pagler & Pagler was
applied.
31.12.2011
Real interest rate 2.5 %
The provisions for similar severance payment obligations are
calculated using the same parameters as applied to the
provisions for severance payments, albeit applying actuarial
principles based on the entry-age normal method in future.
5.2. Provisions for pensions
The Vienna Public Enterprises – Allocation Act
(Wiener Stadtwerke – Zuweisungsgesetz), published in the
State Law Gazette (LGBI 17/1999), requires that Wiener
Stadtwerke reimburses the City of Vienna for pension-related
expenses of municipal employees assigned to work for the
Group. This represents a direct obligation in respect of
pension contributions. Pursuant to Article 211, para. 2, of the
Austrian Commercial Code, the Group recognises these direct
pension obligations applying the rules relating to the correct
accounting of pension obligations based on the Austrian
Financial Reporting Act (RLG) as defined in an expert report
prepared by the Fachsenat für Handelsrecht und Revision of
the Institut für Betriebswirtschaft, Steuerrecht und Organisation
(part of the Austrian Chamber of Tax Consultants and
Certified Accountants — Document No. 80, KFSRL 2) as
amended and supplemented at a sitting of this committee on
5th May 2004.
The use of the different accounting principles, in particular due
to the adjustment of the parameters and revised calculation
methods, gives rise to a due back payment in the 2005
financial year compared to 31.12.2004 in the amount of
TEUR 453,488. An agreement was reached between
Wiener Stadtwerke Holding AG and the City of Vienna on this
issue on 26 July 2005. On the basis of this agreement, the
entitlements accrued by the City of Vienna with regard to the
reimbursement of pension-related expenses only need to be
fulfilled to the extent that it is possible to charge these
obligations exclusively against the net result for the period
reported in the consolidated financial statements, pursuant to
Article 231, para. 2 (22) of the Austrian Commercial Code, up
to a maximum of four percent (1/25) of the amount to be
reimbursed. In line with this agreement, the back payments