Annual report 2012

Annual report 2012

Annual report 2012


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eport<br />

Results <strong>2012</strong>annual

<strong>Annual</strong> Report<br />

1. Profile and key figures 5<br />

2. Healthy and independent 7<br />

3. Financial performance 11<br />

4. Grids and Networks 15<br />

5. Energy and Multimedia 19<br />

6. Waste management 25<br />

7. Report of the Supervisory Board 28<br />

8. Corporate governance 30<br />

9. Risk and risk management 32<br />

10. Personal particulars 36<br />

11. Financial statements <strong>2012</strong> 41

“Delta not only supplies<br />

energy, but is also<br />

constructing a new<br />

high-voltage<br />

distribution<br />

transformer for us.<br />

They are familiar with<br />

the grid, provide<br />

a good service,<br />

and deliver excellent<br />

value for money.”<br />

4<br />

Lloyd Filemon is a manager at the Engineering Department of Zeeland Refinery in Vlissingen.<br />

Zeeland Refinery converts crude oil into fuels, including petrol, kerosene and diesel.<br />

The company employs around 400 people.

DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Profile<br />

and key figures1<br />

DELTA is an independent multi-utility company specialising in energy, grids and networks, and waste management.<br />

Its shares are held by municipal and provincial authorities in the Provinces of Zeeland, Brabant and South Holland.<br />

DELTA’s head office is located in Middelburg, the Netherlands. The company employs around 3,000 people.<br />

Energy<br />

In addition to electricity generation and energy trading, DELTA<br />

supplies gas and electricity to private and business customers.<br />

DELTA also provides consumers in Zeeland Province with digital<br />

services (Internet access, telephony, TV and radio signals) and<br />

water through its share interest in Evides. With its multi-utility<br />

approach, the company serves a large number of households<br />

in Zeeland and corporate customers in and, also increasingly,<br />

outside this service area.<br />

Grids and networks<br />

DELTA Netwerkbedrijf B.V. (DNWB) and DELTA Infra B.V. jointly<br />

form the Networks division. In its capacity as regional grid<br />

operator, DNWB performs its duties under the Dutch Electricity<br />

and Gas Act. It is responsible for managing the regional<br />

gas and electricity distribution grids. Grid construction and<br />

maintenance is entrusted to DELTA Infra. DELTA Infra is also<br />

responsible for constructing and servicing the water mains<br />

networks operated by water company Evides and DELTA’s cable<br />

network. DELTA Infra’s other areas of expertise include<br />

high-voltage applications and metering technology, with<br />

services being delivered in Zeeland Province and elsewhere in<br />

the Netherlands.<br />

Key figures <strong>2012</strong> 2011<br />

Electricity trading and sales 1,084 1,002<br />

Gas trading and sales 337 424<br />

Electricity & gas transmission 112 105<br />

Cable, Internet access, and telecommunication 75 72<br />

Waste logistics and environmental services 505 499<br />

Other revenue 59 83<br />

Total Net revenue 2,172 2,185<br />

Net profit attributable to shareholders 81 83<br />

in € millons<br />

Separate CSR <strong>report</strong><br />

DELTA will release a separate Corporate Social<br />

Responsibility <strong>report</strong> in mid-2013. The CSR <strong>report</strong> will look<br />

at the company’s achievements in terms of People, Planet<br />

and Profit.<br />

Waste management<br />

All the waste management operations have been brought<br />

together in Indaver N.V., a subsidiary company in which DELTA<br />

owns a 75% share interest. Indaver focuses on the public sector<br />

(mainly in the Netherlands, Belgium and Ireland), medical<br />

institutions, and industrial companies (northwestern Europe).<br />

Most of the waste is processed at Indaver’s own facilities, but<br />

some is treated at other plants. The company uses a variety<br />

of waste treatment methods, including recycling, biomass<br />

production, and waste-to-energy (energy produced from waste<br />

incineration).<br />


“We have been<br />

a customer with<br />

DELTA for years.<br />

Everything is<br />

working as it<br />

should and if<br />

it is not, DELTA<br />

is quick to help out.<br />

That’s what counts,<br />

doesn’t it?”<br />

6<br />

Emke de Heus lives in Westkapelle and buys gas, electricity<br />

and water from DELTA. She also relies on DELTA and ZeelandNet<br />

for television, Internet access and telephony services.

DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Healthy<br />

and independent 2<br />

The absence of economic recovery and overcapacity in the<br />

electricity market combined to have a negative impact on<br />

energy generating companies. Driven by its multi-utility<br />

strategy, however, DELTA <strong>report</strong>ed relatively good results.<br />

Grids and networks performed well, with DNWB and DELTA<br />

Infra achieving excellent financial results in <strong>2012</strong>. DNWB’s<br />

revenue was increased partly by the tariffs set by the Dutch<br />

Energy Regulation Office for gas and electricity transmission.<br />

DELTA Infra successfully acquired a number of key commercial<br />

contracts. Despite flat supply tariffs, Evides (in which<br />

DELTA owns a 50% share interest) also recorded a strong<br />

performance. Waste management company Indaver, in which<br />

DELTA owns a 75% stake, also ended the year with a solid profit.<br />

Revenue from waste processing increased, particularly outside<br />

Belgium. Capacity utilisation at the existing waste treatment<br />

plants continued to improve, with the newly constructed<br />

plant in Ireland making a positive contribution. Driven by the<br />

ongoing switch from analogue to digital services, Multimedia<br />

also ended the year with strong financial results. Thanks to the<br />

strong performance of our non-energy related activities, group<br />

profit remained almost at the level <strong>report</strong>ed in 2011.<br />

With continued slack in the energy markets and the change<br />

of heart in terms of nuclear power, we felt the time was right<br />

for a strategic overhaul. Themed ‘Healthy & Independent’,<br />

we launched a new approach in <strong>2012</strong>, involving a number<br />

of adjustments. To ensure an independent future based on<br />

a multi-utility offering, we believe that our focus should<br />

be on our core activities. Long-term cost savings, a leaner<br />

holding company and delegating more decision-making<br />

powers to the divisions (Networks, Energy & Multimedia, and<br />

Waste Management) should ensure that we can address the<br />

challenges ahead without having to abandon our sustainability<br />

objectives. Our main objective is to reduce CO 2<br />

emissions<br />

related to the generation of energy and becoming carbon<br />

neutral by 2050 within the full company and generate electricity<br />

at the same time.<br />

As part of this strategic overhaul, we prepared to downsize<br />

our holding company activities and announced a hiring freeze<br />

during the year. We also hived off our subsidiaries Triqua/DELTA<br />

MBR (waste water purification) and DELTA Industrial Cleaning,<br />

while DELTA Infra discontinued its technical lighting operations.<br />

Tightened financial policy led to a significant improvement in<br />

the company’s debt situation during the year. Net debt fell by<br />

EUR 84m to EUR 538m at year-end <strong>2012</strong>.<br />

Corporate Social Responsibility<br />

At DELTA, we put safety first. We are committed to ensuring<br />

personal safety as well as making our working methods<br />

and production processes safer. Training courses and other<br />

activities are helping raise safety awareness among our staff,<br />

as evidenced by the growing number of improvement proposals<br />

<strong>report</strong>ed via the HSE portal. This number, in fact, more than<br />

doubled. In 2013 the variable pay component for managers will<br />

be made conditional on the active contributions they make to a<br />

safer organisation.<br />

The restructuring of the Kreekraksluis wind farm will boost<br />

the share of wind power in Zeeland Province by 25%. Work<br />

on decommissioning the old turbines began in March. We are<br />

reconstructing the wind farm in conjunction with other partners<br />

and will be operating 16 turbines ourselves. The wind farm is<br />

expected to put into operation in August 2013. DELTA’s existing<br />

renewable power generation activities did well in <strong>2012</strong>.<br />

The biomass power plant at Moerdijk recorded its best year<br />

since it began operations in 2008, in terms of both capacity<br />

availability and production volumes.<br />


2. Healthy and independent<br />

By making the Borssele coal-fired power station fully suited to<br />

biomass, we intend to increase the share of renewable energy<br />

further. The necessary preparations went under way during the<br />

year, which included building broad-based support to get the<br />

project up and running. Full conversion to biomass will increase<br />

renewable energy production in the Netherlands by 20%.<br />

The share of renewable energy also increased in the small-scale<br />

generation segment, as we introduced our ‘Guaranteed Solar’<br />

programme, offering consumers the possibility of generating<br />

their own solar power.<br />

In <strong>2012</strong>, DELTA’s Corporate Social Responsibility <strong>report</strong> was<br />

published for the second time. The company was explicitly<br />

referred to as the ‘biggest riser’ in the Transparency Benchmark<br />

used by the Dutch Ministry of Economic Affairs. We view this<br />

as a clear recognition of the improved quality of our <strong>report</strong>ing<br />

in terms of the impact of our activities on People, Planet and<br />

Profit.<br />

Customer service and system improvement<br />

DELTA’s and ZeelandNet’s customer service achieved great<br />

success in April. A survey of 15,000 households by Intomart<br />

GfK showed that our service and support are rated above<br />

average. We succeeded in maintaining high service levels –<br />

last year we were again ranked high in the league tables of<br />

the Dutch Consumer Association and other survey panels.<br />

Our customer service is one of the reasons why customers<br />

remain loyal to us, given that the percentage of customers<br />

switching supplier was again exceptionally low. In order to<br />

provide customers with even better service, we worked hard to<br />

implement a major IT project in <strong>2012</strong>. All customer information,<br />

currently stored in different systems, will be migrated to a<br />

single computer system. The new system will also allow us to<br />

comply with new industry practices, better identify the needs<br />

and requirements of our customers, and improve our billing<br />

process. The system will be up and running in 2013.<br />

In April we announced plans to roll out an open Wifi network,<br />

giving holidaymakers and residents free Wifi Internet access<br />

at 80 locations in Zeeland Province. It is a key project for<br />

holiday destination Zeeland and at the forefront of nationwide<br />

developments. By introducing mobile telephony in May, we<br />

showed that we are taking the interests of consumers in<br />

Zeeland at heart. Our novel mobile phone subscription provides<br />

for free calls between subscribers and low charges for calling<br />

from Belgium to the Netherlands. We also continued to work to<br />

provide state-of-the-art services to our business customers.<br />

February saw the launch of DELTA Management Information,<br />

which provides customers with easy online access to their<br />

energy use data so as to encourage energy saving. This is<br />

becoming increasingly important to businesses as part of their<br />

Corporate Social Responsibility policy.<br />

Outlook<br />

We believe that an independent position, driven by our Energy,<br />

Waste Management and Regulated Operations units, is the<br />

best way forward to a healthy future. In the coming period, we<br />

will pursue a cautious investment policy and closely monitor<br />

the company’s cash flow, whilst continuing to accommodate<br />

initiatives that enable the transition to sustainable electricity<br />

generation. Grids will be improved to facilitate decentralised<br />

generation and the continued rollout of smart meters is<br />

expected to contribute to a more efficient use of energy. As a<br />

multi-utility company, we have the knowledge and expertise<br />

to achieve this. The revamped Kreekraksluis wind farm will<br />

be put into operation and generate renewable energy in 2013,<br />

and plans are underway to make the coal-fired power plant in<br />

Borssele fully suited to biomass-based power generation.<br />

In the coming period, we will also focus on extending the<br />

useful life of the Borssele nuclear power station. Targeted<br />

maintenance, inspections and replacement should ensure that<br />

it remains among the 25 per cent safest nuclear power stations<br />

in the Western world until 2034, this being a key permit<br />

requirement for keeping the nuclear power plant open.<br />

Organisational improvement will be achieved by having DNWB<br />

and Infra work more closely together, downsizing our head<br />

office in Middelburg, and structuring the Energy en Multimedia<br />

divisions more efficiently.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Thanks to the company’s new strategy entitled ‘Healthy<br />

& Independent’, we are in a position to continue to pay an<br />

attractive dividend to our shareholders, whilst keeping<br />

employment in our service area largely intact. We will continue<br />

to supply corporate and retail customers with reliable and highquality<br />

multi-utility products and services. We are in a position<br />

to do so thanks to the dedication and commitment shown by<br />

our employees, to whom we are very grateful.<br />

We will continue our drive towards cost savings and continued<br />

streamlining of the company in 2013. However, in light of the<br />

unfavourable market conditions, we expect profit on ordinary<br />

activities in 2013 to fall below the level recorded in <strong>2012</strong>.<br />

Rob Frohn<br />

CEO<br />

Frank Verhagen<br />

CFO<br />


“We can monitor<br />

and compare electricity<br />

consumption at all<br />

our separate stores<br />

and transmitter<br />

sites. Our billing<br />

has been<br />

adjusted to<br />

that. It encourages<br />

a more efficient energy<br />

use. DELTA is helping<br />

us deliver on our<br />

sustainability policy.”<br />

10<br />

Hennie de Koning is Corporate Energy Manager at T-Mobile.<br />

With just under 5 million customers, T-Mobile Netherlands,<br />

a group company of Deutsche Telekom, is one of the largest mobile<br />

phone companies serving consumers and small and medium-sized business.

DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Financial<br />

performance3<br />

DELTA ended <strong>2012</strong> with a strong profit. The business units Grids and Networks and Waste Management achieved betterthan-expected<br />

results, with Multimedia also contributing to the positive performance. Our share of profits in associates<br />

(Evides and EPZ) also made a strong contribution and we recorded several one-off gains. Conditions in the electricity<br />

market are still giving cause for concern, due to the existing overcapacity and downward pressure on margins caused<br />

by the economic slowdown. However, the results in this segment benefited from the partial release of the provisions<br />

recognised in the previous year.<br />

Revenue and profit<br />

DELTA succeeded in maintaining its revenue at the level of 2011.<br />

Networks and Grids benefited from the favourable tariffs set<br />

for the regulated transmission of electricity and gas, increasing<br />

revenue by 8%. Infra won a number of key contracts, while<br />

its revenue and gross margin remained at the levels of 2011.<br />

Energy saw its sales volume increase, despite the loss of some<br />

larger customers that went out of business. Tightened credit<br />

management substantially reduced working capital allocation.<br />

The launch of new services and the increase in the share of<br />

digital TV subscriptions drove revenue in the Multimedia<br />

segment up by 4%.<br />

For the first time since its inception, waste management<br />

company Indaver surpassed the EUR 500m mark in revenue,<br />

driven by high capacity utilisation and the newly built medical<br />

waste incinerator in Antwerp (Belgium). In its first full calendar<br />

year of operation, the waste incinerator in Meath (Ireland)<br />

performed in accordance with expectations. Indaver saw its<br />

gross margin improve by 6%.<br />

The decline in profit from electricity generation typifies the<br />

situation across the energy markets in northwestern Europe. In<br />

this segment, gross margin plummeted by more than 30% (net<br />

of the partial release of a provision for loss-making contracts<br />

recognised in 2011). The fair value of the trading portfolio fell by<br />

EUR 5m, compared with a EUR 13m decline in 2011.<br />

Overall gross margin was down EUR 6m (-1%) on the previous<br />

financial year.<br />

Operating expenses remained stable, thanks to costs savings<br />

and efficiency improvements. During the year, impairments<br />

on production assets were recognised, partly triggered by the<br />

bankruptcy of a major multi-utility corporate customer and the<br />

addition to the bad debt provision necessitated by the economic<br />

crisis.<br />

The number of employees fell slightly during the year. At yearend<br />

<strong>2012</strong>, DELTA employed a total of 2,954 staff, compared<br />

with 2,977 at the end of 2011. The reduction was due to a strict<br />

recruitment policy, efficiency programmes, and staff leaving as<br />

operations were hived off.<br />

Share of profits in associates rose to EUR 77.7m, compared with<br />

EUR 71.8m in 2011. Water company Evides recorded the same<br />

profit as it did last year, driven by a one-off book profit on the<br />

IFRS-recognition of an acquisition. Selling the share interest in<br />

N.V. KEMA also contributed to the profit. After the acquisition<br />

of an additional 20% interest in EPZ in 2011, 70% of its results<br />

were consolidated in <strong>2012</strong>. Since the additional 20% interest<br />

was recognised as share of profit in associates, fair value writedowns<br />

were also recognised in this item, reducing the share of<br />

profits in associates by EUR 20m. EPZ benefited from the refund<br />

of the ’Landsbanki funds’ and further payments it expects<br />

to receive in connection with this claim. The Sloe and Elsta<br />

production units operated in accordance with expectations,<br />

but were deployed to a limited extent due to the situation on<br />

the electricity market. Releasing the provisions for loss-making<br />

energy contracts, recognised in 2011 in connection with some<br />

associates, put pressure on our share of profits in associates.<br />

The Moerdijk biomass power plant recorded the highest energy<br />

efficiency output thus far and saw its profit improve as costs<br />

remained stable. The Sleco waste incinerator continued to<br />

<strong>report</strong> good results, while AZN (20% interest) made a lowerthan-expected<br />

profit due to operational problems.<br />


3. Financial review<br />

Compared to 2011, our funding requirement was reduced during<br />

the year, driven by greater focus on working capital control,<br />

reduced investments, and one-off gains including the sale of<br />

our minority interest in KEMA. During the year, interest-bearing<br />

debt net of available cash and cash equivalents decreased by<br />

EUR 84m to EUR 538 at year-end <strong>2012</strong>. Accordingly, interest<br />

expenses fell by EUR 1.8m to EUR 21.9m in <strong>2012</strong>, with EUR 6.3m<br />

of interest being added to the provisions. Finance expenses<br />

increased as a result in <strong>2012</strong>.<br />

Corporate income tax was strongly impacted by movements in<br />

deferred tax assets in connection with tax loss carryforwards<br />

and unprofitable energy contracts.<br />

Subsidiary company Triqua/DELTA MBR was sold in <strong>2012</strong>.<br />

The sale of DELTA Industrial Cleaning is expected to be<br />

completed in early 2013. The operating profits and expected<br />

proceeds from the sale of both companies were recognised in<br />

profit after tax on discontinued operations.<br />

DELTA N.V. ended <strong>2012</strong> with a post-tax profit of EUR 81.1m<br />

(2011: EUR 82.7m), available to its shareholders.<br />

Cash flow and investments<br />

With the exception of the Energy segment, all operations<br />

<strong>report</strong>ed positive cash flows. Cash flow from operating<br />

activities was significantly boosted by working capital control,<br />

leading to strong results particularly in the corporate energy<br />

segment. Cash flow from operating activities totalled EUR<br />

222m.<br />

Cash flow from investing activities stood at EUR 98m, EUR 38m<br />

of which relating to Networks and Grids (extension and<br />

replacement of grids and equipment), and EUR 52m relating to<br />

Waste Management (regular replacement investments and the<br />

use of a new grate incinerator). ICT expenses were EUR 13m.<br />

Investments balanced out depreciation and amortisation during<br />

the year. The proceeds from the sale of our minority interest in<br />

KEMA were recognised in cash from investing activities.<br />

DELTA’s funding position looked solid at year-end <strong>2012</strong>, driven<br />

by strong operating profits in its divisions, one-off gains,<br />

reduced investment, and improved working capital.<br />

The recognition of long-term loans improved the ratio of longterm<br />

debt to short-term debt. Net of the EUR 40m dividend<br />

payout for 2011, the company’s net debt position improved by<br />

EUR 84m on 2011.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Financial position and solvency<br />

In <strong>2012</strong> comprehensive income stood at EUR 48m. This, coupled<br />

with the increase in value of the put option related to Indaver<br />

(EUR 6m) and the dividend payout for 2011 (EUR 40m), boosted<br />

shareholders’ equity to EUR 1,188m.<br />

The solvency ratio improved to 38.8%, driven by the increase in<br />

shareholders’ equity and, particularly, a shorter balance sheet<br />

due to improved working capital allocation and movements<br />

in derivatives. At year-end 2011, the solvency ratio stood at<br />

36.7%.<br />

The profit we made in <strong>2012</strong> allows us to propose a dividend of<br />

EUR 40m, in line with the dividend paid for 2011. We will put this<br />

proposal before the shareholders.<br />

Outlook<br />

We do not expect market conditions for energy production and<br />

energy trading to improve in 2013. Prospects for the company’s<br />

other activities are more favourable. With our diversified<br />

business portfolio and multi-utility approach, we are confident<br />

that we will be able to achieve positive group results in the<br />

coming years.<br />

To offset poor performance in the energy segment, we remain<br />

committed to introducing a new organisation structure,<br />

grouping our operations into four segments steered by a leaner<br />

holding company. Support services, corporate staff and shared<br />

service centres will be positioned closer to the business.<br />

This, and the review of our operations and processes and<br />

segment optimisation, should allow us to achieve significant<br />

cost savings. Reduced investment and cost, credit risk and<br />

working capital control remain necessary to keep the company<br />

‘recession proof’.<br />


“We buy<br />

communication<br />

services and<br />

energy from<br />

DELTA. Because<br />

we do so in<br />

conjunction with<br />

other healthcare<br />

providers in Zeeland,<br />

we can stipulate<br />

competitive rates.”<br />

14<br />

Gabrielle Davits is Chairman of the Board at SVRZ.<br />

SVRZ delivers care to elderly people and rehabilitation services in eight care homes. It also provides small-scale<br />

sheltered accommodation for people with Alzheimer’s or physical disabilities. SVRZ employs around 2,700 people.

DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Grids and<br />

Networks4<br />

Over the years, households, businesses and industrial customers in Zeeland Province have been able to count on reliable<br />

services, with the number of outage minutes remaining well below the national average. This is mostly due to DELTA’s<br />

consistent investment policy, which has led to high-quality infrastructure. Efficient collaboration between the grid<br />

operator and service provider and adequate fault clearance also contributed to our performance.<br />

In financial terms too, DNWB and DELTA Infra performed well in<br />

<strong>2012</strong>. Higher revenue for DNWB was mainly driven by the tariffs<br />

set by the Dutch Energy Regulation Office for gas and electricity<br />

transmission. DELTA Infra continued to improve its customer<br />

relationships during the year, and acquired several major new<br />

contracts.<br />

DNWB and DELTA Infra<br />

DELTA Netwerkbedrijf (DNWB) occupies an independent<br />

position within DELTA Group, its independent status<br />

being ensured by law. DNWB provides safe and secure,<br />

dependable and efficient management of the gas and<br />

electricity grids. Oversight is exercised by DNWB’s<br />

Supervisory Board.<br />

Grid construction and maintenance is entrusted to DELTA<br />

Infra. DELTA Infra also services the water mains and cable<br />

networks in southwestern Netherlands. It also renders<br />

services to industrial customers.<br />

DNWB worked hard to prepare for this switch. In late June, it<br />

was one of the first Dutch grid operators to be connected to<br />

the National Utility Connections Register. EDSN, the National<br />

Register Manager, commented as follows: “Over the weekend<br />

the National Utility Connections Register welcomed its second<br />

user. Grid operator DELTA has migrated more than 400,000<br />

connections seamlessly. Its staff and systems have successfully<br />

been using the Register since Monday morning.”<br />

Safety<br />

DNWB also recorded good results in an entirely different<br />

field. In December, it was the first company to be awarded an<br />

ISO 27001 certificate. ISO 27001 involves compliance with a<br />

set of specifications for a documented Information Security<br />

Management System (ISMS). The certification evidences that<br />

DNWB is in control of information security for its databases and<br />

information processes. With the introduction of smart meters,<br />

the importance of secure information flows is likely to increase<br />

over the next few years. ISO 27001 certification means that the<br />

customers can continue to expect high quality of service.<br />

More flexible energy market<br />

A new market model for the energy industry is expected to be<br />

introduced in the Netherlands in the course of 2013. The new<br />

statutory model aims to render the liberalised electricity market<br />

more flexible. Administrative processes will be simplified and<br />

changes made to the responsibilities of market participants,<br />

including grid operators and service providers. The overall<br />

objective is for all retail customers in the Netherlands to receive<br />

one bill for all costs involved in the supply of electricity. Most<br />

suppliers, including DELTA, are already using this model.<br />

It marks a radical change for grid operators, in particular,<br />

because of the introduction of new IT systems and procedures<br />

and a National Utility Connections Register (“C-AR”). The new<br />

register replaces the current decentralised system, in which<br />

all grid operators have their own register. During the year,<br />

DNWB: grid operator<br />

DNWB operates the 10 kV, 20 kV, and 50 kV grids for the<br />

transmission of electricity to large corporate customers in<br />

Zeeland Province. It also operates the low-voltage grids for<br />

households, small business customers, and public lighting.<br />

DNWB is also responsible for the regional 4 bar and 8 bar gas<br />

networks (connecting large corporate customers) and the<br />

30 to 100 mbar networks for households. It also operates an<br />

additional high pressure network for the transmission of gas<br />

to industrial customers and horticultural companies. This<br />

Midden-Zeeland network is linked to the network operated by<br />

ZEBRA Gasnetwerk B.V., which runs from Zelzate (Belgium) to<br />

Moerdijk. Based in Goes, DNWB employs 146 people.<br />


4. Grids and Networks<br />

In addition to information security, DNWB also continued to<br />

work to improve physical safety, receiving a VCO certificate in<br />

December. VCO is short for Health & Safety and Environmental<br />

Checklist. It is designed to promote collaboration between<br />

customers and suppliers so as to achieve the best possible<br />

situation in terms of health and safety and the environment.<br />

Representatives of DELTA Infra and DNWB together form a<br />

standing safety committee that operates on the basis of the<br />

Hudson Ladder. This method helps organisations improve<br />

their safety culture. This joint approach ensures efficiency<br />

and maximum results. In April <strong>2012</strong>, a part-time employee was<br />

appointed specifically with the aim of strengthening a number<br />

of strategic safety projects.<br />

Innovation and sustainability<br />

In <strong>2012</strong> we continued to work on network and grid innovation.<br />

By the end of the year, we implemented a small-scale smart<br />

network in Tholen. This pilot will allow us to gain experience<br />

in remote control switching so as to remedy outages quicker in<br />

future. Smart meter innovation is on course. During the year,<br />

we fitted 13,556 new meters, well above the planned 9,700.<br />

This new type of meter, which should raise energy efficiency<br />

awareness, will be rolled out on a larger scale from 2014<br />

onwards.<br />

As regards sustainability, DNWB joined a study undertaken by<br />

Zeeland University of Applied Sciences into the possibilities<br />

for more sustainable energy use in Schouwen-Duiveland using<br />

smart networks. This allows DNWB to gain an understanding<br />

of the role smart networks can play as the supply of energy<br />

changes on the back of the transition to other energy sources,<br />

such as solar panels and wind power.<br />

Network of the future in Goes<br />

DELTA Netwerkbedrijf is also working with DELTA’s Retail and<br />

Business divisions on a trial project in Goes to experiment<br />

with energy options for the future. Demand for electricity is<br />

expected to grow, as electrical cars and heat pumps become<br />

more popular. At the same time, decentralised electricity<br />

generation is set to increase because of the use of solar panels<br />

and wind turbines. These changes impose high demands on the<br />

infrastructure: use of the grid will intensify and there will be<br />

more two-way traffic. Matching supply to demand of electricity<br />

will therefore become more complex.<br />

To facilitate these innovative developments without making<br />

an overly substantial investment, we will need to make the<br />

infrastructure smarter. For example, washing machines could<br />

be made to switch on when the sun comes out and electrical<br />

cars in the same street do not necessarily have to be charged<br />

all at the same time. The guiding principle, though, is that<br />

customers must enjoy the same level of convenience.<br />

The trial project is a part of the Smart Energy Collective<br />

(www.smartenergycollective.nl), which comprises 25 leading<br />

businesses that have joined forces to find solutions that make<br />

the energy landscape smarter. DELTA is also a member of the<br />

Collective. The trial project in Goes is run in conjunction with<br />

the RWS housing association, project developers Marsaki, and<br />

construction company Heijmans.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Organisational development<br />

In <strong>2012</strong>, DNWB introduced the ‘Plug & Perform’ concept, which<br />

is a new way of working. Part of its staff were given more<br />

freedom to determine how they went about performing their<br />

duties (‘flexi-working’). Adjustments to the workplace were<br />

combined with a programme centred around cooperation,<br />

feedback, and personal leadership.<br />

DNWB’s professionals worked hard in <strong>2012</strong> to improve services<br />

in a variety of fields, including safety and security, grid<br />

improvements, and industry-wide innovation. Meanwhile, the<br />

company continued to deliver its regular services to end the<br />

year with a profit – ‘business as usual’, but with a focus on<br />

improvements and innovation.<br />

DELTA Infra also <strong>report</strong>ed a profit in <strong>2012</strong>, combining this with<br />

an excellent safety record. It also won several sizeable new<br />

contracts.<br />

DELTA Infra: full-service provider<br />

DELTA Infra delivers comprehensive services to corporate<br />

customers. It has a varied customer base, comprising<br />

(distribution) network operators, central and local<br />

government, industrial customers, and other businesses in,<br />

for example, the tourism industry. Based in Goes, DELTA Infra<br />

employs 487 staff.<br />

Safety: staff training and education<br />

In January, the Board of DELTA Infra announced that it wanted<br />

<strong>2012</strong> to be the company’s ‘top safety year.‘ Management<br />

team members endorsed the ‘Top 10 Safety Rules’ by signing<br />

this list of priorities. Although there are still safety issues,<br />

DELTA’s CFO, Frank Verhagen, concluded at the New Year’s<br />

reception in early January 2013 that “Infra can look back on<br />

a year with no serious safety incidents”. The recertification<br />

programme will undoubtedly have contributed to that. Two<br />

years ago, all employees attended a training course to further<br />

improve safety awareness. During the year, a comprehensive<br />

training programme was launched in conjunction with Stipel<br />

(Foundation for Energy Technology Personal Certifications). An<br />

employee who has been awarded a Stipel personal certificate<br />

is considered an expert in his field, having the knowledge and<br />

skills needed to perform his duties properly and with no risk.<br />

By early December, 160 employees had received this certificate.<br />

Another 90 staff are to follow. Apart from setting up in-depth<br />

training programmes, we also in <strong>2012</strong> changed the structure of<br />

our toolbox meetings (staff safety meetings) in the belief that<br />

participants will feel more involved with an interactive set-up.<br />

Vocational Training<br />

In collaboration with job training company InstallatieWerk<br />

Brabant-Zeeland and Markiezaat College in Bergen op Zoom,<br />

DELTA Infra launched its own two-year vocational training<br />

programme in <strong>2012</strong> – DELTA Infra Vocational Training (DIVO).<br />

Of the 100 students who enrolled, 17 were selected and began<br />

their studies with us to become Data/Electrical Engineers or<br />

Gas/Water Engineers. They are guaranteed a job with DELTA<br />

Infra if they successfully complete the programme. The on-thejob<br />

training programme will enable us to absorb the expected<br />

outflow of staff over the next few years, and allow the older<br />

employees to transfer their knowledge and skills to the younger<br />

generation.<br />

Organisational changes<br />

During the year, we laid the groundwork for a new organisation<br />

model. The current classification into market segments<br />

(Technical Infrastructure, High-voltage Technology, Metering<br />

Technology, and Utility Services) will be abandoned and<br />

replaced by three business divisions: Projects, Operations,<br />

and Total Utility & Metering Services (TUMS). This structure<br />

more accurately reflects our business processes and is likely<br />

to improve customer satisfaction. In <strong>2012</strong>, the decision was<br />

made to discontinue the lighting technology operations for<br />

lack of relevance to our core activities. The 20 members of staff<br />

working in this division were relocated to other departments at<br />

DELTA Infra.<br />


“We are working<br />

to make our<br />

residential portfolio<br />

more sustainable.<br />

That is good for<br />

the environment,<br />

obviously, but it<br />

will also reduce<br />

housing costs for<br />

our tenants.<br />

DELTA has proved<br />

to be a fine partner<br />

to work with.”<br />

Richard de Jager is Manager of Financial and Support Services at l’Escaut Woonservice.<br />

L’Escaut employs 115 staff and manages around 6,500 houses and flats in Vlissingen<br />

and Oost-Souburg.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Energy and<br />

multimedia5<br />

DELTA generates energy at its own plants and at jointly-owned power stations. The company also trades in fuels (natural<br />

gas, coal, oil), electricity and emission allowances in various markets, as well as supplying gas and electricity to<br />

businesses and consumers. Its energy operations account for around three quarters of its revenue.<br />

In addition to energy, the company also delivers multimedia<br />

services, including Internet access and telephony services<br />

through its subsidiary company ZeelandNet. DELTA also<br />

transmits television and radio signals via its cable network.<br />

DELTA’s and ZeelandNet’s multimedia services are targeted at<br />

the consumer and business markets.<br />

The energy segment <strong>report</strong>ed less favourable results in <strong>2012</strong>.<br />

For years, the demand for electricity increased by 2% to 3%<br />

a year, but due to the economic slowdown growth has halted.<br />

Moreover, wholesale electricity prices are at low levels due<br />

to overcapacity. With fuel prices generally elevated, this has<br />

caused margins to decrease.<br />

5.1 Energy and the corporate market<br />

The economic slowdown has particularly hit the corporate<br />

energy market. However, DELTA Corporate succeeded in<br />

maintaining a strong position and acquiring new customers<br />

in <strong>2012</strong>. Like-for-like results improved on the back of strict<br />

contract and credit management.<br />

DELTA combines high service levels with innovative corporate<br />

services. In <strong>2012</strong> we launched DELTA Management Information<br />

aimed at the corporate energy market. It is a web-based<br />

application that business customers can use to access their<br />

energy consumption data. Knowing how much energy you<br />

use is a first step on the way to more conscious and more<br />

efficient energy use, particularly for energy-intensive users<br />

and industries. In the summer of <strong>2012</strong>, we teamed up with BAM<br />

Techniek, Tebodin, and SunSolutions to provide our customers<br />

with advice on sustainable energy use. These are independent<br />

companies that can advise businesses, central government<br />

and local authorities on how to make technical adjustments to<br />

substantially improve their energy efficiency.<br />

Customer satisfaction has steadily improved over the years,<br />

reaching 7.6 in <strong>2012</strong>. Compared to other energy providers,<br />

we have low switching rates in the corporate and consumer<br />

markets. New service initiatives have contributed to increased<br />

customer satisfaction. Through monthly market <strong>report</strong>s and<br />

white papers, we give our customers background information,<br />

keeping them informed of price developments on the energy<br />

markets.<br />

5.2 Energy and households<br />

As in previous years, our switching rate is low. We are<br />

successful in retaining our customers, with less than 2%<br />

switching suppliers in <strong>2012</strong>. Elsewhere, supplier switching<br />

rates are nearly 10% higher. At the end of the financial year,<br />

DELTA counted more households among its customers than at<br />

the beginning, driven by favourable tariffs and strong service<br />

levels.<br />

These high service levels were confirmed in a study carried<br />

out by Intomart Gfk for the Dutch Ministry of Economic Affairs,<br />

Agriculture and Innovation in <strong>2012</strong>. The study showed that our<br />

customers gave us a score of 8.2 on a scale of 1 to 10.<br />

In the autumn, we launched Guaranteed Solar, the first solar<br />

equipment for households with a 10-year electricity output<br />

warranty. We take care of everything, from installing the<br />

equipment to providing a warranty – retail customers can count<br />

on our services.<br />


5. Energy and Multimedia<br />

5.3 Multimedia<br />

In <strong>2012</strong> we delivered improved services and new products in<br />

the multimedia business segment. In October, for example,<br />

we added HBO to our TV offering and Internet users now have<br />

access to the fastest connections in the Netherlands:<br />

160 Mb/second for downloads and 10 Mb/second for uploading.<br />

Customers on a less extensive subscription can still enjoy<br />

speeds of 50 Mb/second for downloads and 5 Mb/second for<br />

uploads.<br />

These high speeds are possible because DELTA/ZeelandNet is<br />

using the latest data-over-cable technology, while competitors<br />

in Zeeland Province are still using DSL connections. Although<br />

the ‘old’ ADSL is increasingly making way for the more<br />

advanced VDSL – also in Zeeland – it is still substantially<br />

slower than cable, especially if customers live farther away<br />

from the telephone exchange.<br />

In the spring, commissioned by ZIEN Foundation (Educational<br />

Network Initiative), ZeelandNet Corporate completed the<br />

second phase of the glass fibre network for schools in Zeeland<br />

Province, providing 76 primary schools with a fast glass fibre<br />

connection. During the first phase, 27 primary schools and<br />

all secondary schools, higher educational institutions, and<br />

all libraries in Zeeland Province had already been connected.<br />

The new network allows primary schools to create a modern<br />

learning and working environment and improve collaboration<br />

between them.<br />

Quality of service<br />

The quality of our services is one of our strengths, as shown<br />

in the above-mentioned study by Intomart Gfk. This study<br />

looked at the friendliness of our staff, waiting times, tariffs, and<br />

the way in which complaints are handled. Of the 12 providers<br />

assessed, ZeelandNet achieved the highest scores against<br />

all nine criteria. ZeelandNet was awarded a score of 7.8 by its<br />

customers. Its high quality of service bears fruit, as evidenced<br />

by the rise in the number of callers: in May ZeelandNet reached<br />

a milestone as it welcomed its 50,000th digital telephony<br />

customer.<br />

5.4 Electricity generation<br />

In addition to fossil fuels and renewable energy sources,<br />

DELTA uses nuclear power to produce electricity. Roughly one<br />

third of electricity is generated in a carbon neutral manner<br />

(through joint-ventures). Our aim is to produce fully carbon<br />

neutral electricity by 2050. Below is a summary of key events in<br />

electricity production in <strong>2012</strong>.<br />

Biomass power station performing well<br />

The biomass power plant in Moerdijk (BMC) has been doing<br />

increasingly well. During the year, capacity availability rose<br />

to 95%. The power station went into operation in September<br />

2008. In the following year, it generated 182,998 MWh.<br />

In <strong>2012</strong> output rose to around 296,000 MWh. That is enough to<br />

supply electricity to 70,000 homes. Mainly because of the more<br />

homogeneous composition of the fuel – poultry litter – the<br />

power station saw its efficiency improve during the year.<br />

In October, DELTA/ZeelandNet was awarded best provider<br />

of Internet, telephony and digital TV services by the Dutch<br />

Consumer Association for the 11th time running. Since February<br />

2011, DELTA/ZeelandNet has been the number one provider<br />

of Internet and telephony services according to the Consumer<br />

Association’s Provider Monitor. In May <strong>2012</strong>, digital TV services<br />

were added to the Monitor.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Second life for coal-fired power station?<br />

In <strong>2012</strong> plans were under way to fully convert the coal-fired<br />

power plant in Borssele to biomass-based power generation.<br />

Full conversion to biomass would increase renewable energy<br />

production in the Netherlands by 20%. The power station<br />

would, in fact, make a substantial contribution to the Dutch<br />

government’s sustainability target of raising the share of<br />

renewable energy to 16% by 2020. That share is currently<br />

around 4%. It would also mean a second life for the power<br />

station, because coal-fired electricity generation is becoming<br />

too expensive in the current market climate. The power plant<br />

made a loss during the year, as overcapacity in the electricity<br />

market dampened prices. Whether there is enough political<br />

support to have the coal-fired station fully converted to<br />

biomass will become clear in 2013.<br />

Nuclear power plant: extension of useful life<br />

In September, DELTA applied to the Dutch Ministry of Economic<br />

Affairs, Agriculture and Innovation for a permit change to keep<br />

the nuclear power station in Borssele open for a longer period<br />

of time. In 1973 its useful life had been set at forty years. This<br />

period would expire in 2013. Given that the power plant’s<br />

technical state of repair and economic conditions permitted<br />

an extension of its life cycle, the Dutch government and the<br />

EPZ shareholders signed an agreement in 2006 to enable the<br />

nuclear power plant to remain in operation until 2034, subject<br />

to certain conditions. One of these conditions is that the power<br />

plant must continue to be one of the 25 per cent safest nuclear<br />

power plants in the Western world until 2034.<br />

Calling upon the government: more biomass needed.<br />

In September, DELTA’s CEO Rob Frohn urged politicians<br />

in The Hague to allocate sustainability subsidies more<br />

efficiently. “We advocate making greater use of biomass.<br />

In the current market conditions, it would be unprofitable<br />

and irresponsible to invest in low-carbon electricity<br />

generation without financial support. This holds true for<br />

wind power, solar power and biomass. But it can be done.<br />

A stable and long-term strategy that considers all clean<br />

energy options could bring these targets within reach.”<br />

“A megawatt worth of biomass is currently 30% cheaper<br />

than a megawatt of wind power generated at sea. With<br />

the price of ‘biomass power’ being relatively favourable,<br />

we can keep our electricity supply affordable. That is why<br />

we believe biomass should be given priority. This way<br />

of generating electricity can be put in place in the short<br />

term. It is stable and will go a long way to achieving the<br />

government’s reduction target. 100% biomass-fired energy<br />

production has already been introduced on a large-scale<br />

in Belgium and the United Kingdom, partly funded by<br />

subsidies, but not in this country.”<br />


5. Energie and Multimedia<br />

Gas-fired power stations: Elsta and Sloe<br />

In the spring of <strong>2012</strong>, electricity imports into the Netherlands<br />

increased sharply. Never before did we import so much<br />

electricity for domestic use. Much of it was purchased in<br />

Germany. In recent years, Germany has invested heavily in solar<br />

and wind power. During the daytime, in particular, Germany<br />

has a surplus of electricity. This surplus ended up in the<br />

Netherlands, causing electricity prices to fall.<br />

Much of the electricity we generate in the Netherlands comes<br />

from gas-fired power stations. In fact, around 60% of our<br />

electricity supply is based on this. Natural gas prices, which<br />

are linked to oil prices, rose in 2011 and <strong>2012</strong>. Oil prices went<br />

up because of the growing worldwide demand for oil.<br />

High fuel prices and low electricity tariffs combined to erode<br />

the profits of gas-fired power stations in the Netherlands.<br />

DELTA owns an interest in two gas-fired power plants: the<br />

Sloe power station in Vlissingen and ELSTA power station in<br />

Hoek (Zeeuws-Vlaanderen).<br />

Wind power: restructuring of the Kreekrak wind farm<br />

In March, work began on the restructuring of the Kreekraksluis<br />

wind farm in the municipality of Reimerswaal. The old turbines<br />

were dismantled and removed. The choice was made to revamp<br />

the existing wind farm because its output could be increased by<br />

adding just a limited number of additional turbines. The 31 new<br />

wind turbines between them produce seven to ten times more<br />

energy than the current turbines. They are also more efficient,<br />

and we are using an existing location.<br />

At the old wind farm, all the turbines along the Kreekraksluis<br />

were situated north of the A58 motorway. The new wind farm<br />

will have 13 of the 31 turbines located south of the A58. This is<br />

necessary because the new turbines are taller and therefore<br />

require more space. All the wind turbines at the wind farm will<br />

be 80 metres high. The wind farm will have a total capacity of<br />

77.5 MW, enough to meet the electricity needs of 55,000 homes.<br />

It will increase the share of wind power in Zeeland Province by<br />

25% relative to existing production capacity. The Kreekraksluis<br />

wind farm is being constructed by DELTA, Eneco, Scheldewind,<br />

and Winvast. DELTA will operate 16 turbines, Eneco 7,<br />

Scheldewind 6, and Winvast 2. It will be put into operation in<br />

mid-2013.<br />

Generating capacity of DELTA Energy B.V.<br />

EPZ (70% owned)<br />

Nuclear power plant - fuel: uranium<br />

Output: 512 MW (DELTA: 70%)<br />

Coal-fired power station - fuel: coal and biomass<br />

Output: 426 MW (DELTA: 70%)<br />

ELSTA (25% owned)<br />

Fuel: gas<br />

Output: 405 MW (DELTA: 50% of residual electricity)<br />

Sloe power station (50% owned)<br />

Fuel: gas<br />

Output: 870 MW (DELTA: 50%)<br />

Biomass power station (50% owned)<br />

Fuel: poultry litter<br />

Output: 36.5 MW (DELTA: 100%)<br />

Wind farms (full ownership, share interests, contracts)<br />

DELTA owned: 30 MW<br />

Share interests: 42 MW<br />

Contracts: 27 MW<br />

Total output: 99 MW<br />

Combined heat and power<br />

Total output: 60 MW (DELTA: 100%)<br />

Solar power<br />

Willebroek solar farm (Belgium) (49% owned)<br />

Total output: 2.6 MWp (DELTA: 100%)<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Capacity availability<br />

The Sloe power station in Vlissingen and the Elsta power<br />

station in Hoek had good capacity availability in <strong>2012</strong>. Even so,<br />

production levels at both stations were substantially lower than<br />

expected, due to unfavourable market conditions affecting<br />

gas-fired power generation. The biomass power plant in<br />

Moerdijk exceeded expectations, with strong capacity<br />

availability and high energy production. Capacity availability<br />

at the Borssele coal-fired power plant was less than expected,<br />

due to boiler leakages and vibrations in the low pressure<br />

generator. The power plant nevertheless generated a very<br />

decent output of 2640 GWh. Changing the fuel rods at the<br />

nuclear power plant took more time than scheduled, causing<br />

capacity availability to fall short of our expectations, with<br />

output standing at a little over 3700 GWh.<br />

In <strong>2012</strong> we sold or removed several of our CHP systems as they<br />

neared the end of their economic useful lives. The wind turbines<br />

produced a normal amount of electricity at fairly constant wind<br />

speeds, hitting a trough in March and a peak in December.<br />

The solar farm at Willebroek (Belgium) produced in accordance<br />

with expectations.<br />

5.5 Trading<br />

Electricity, fuels (natural gas, oil, and coal) and emission<br />

allowances change ownership in various markets on a daily<br />

basis. DELTA’s Trading department is responsible for, amongst<br />

other things, selling electricity and buying fuels for its power<br />

stations. Trading takes place on markets in the Netherlands,<br />

Belgium and France. It helps mitigate the risks involved in<br />

energy price fluctuations and ensure security of supply.<br />

In <strong>2012</strong> electricity prices trended downwards on the back of<br />

stagnating economic growth and the relocation of energyintensive<br />

industries from Europe to Asia and the United<br />

States. The supply side was affected by the explosive growth<br />

of renewable energy (wind and solar power), particularly<br />

in Germany, driven by the German government’s generous<br />

subsidy policy. This exerted considerable downward pressure<br />

on German electricity prices. With German electricity being<br />

imported into the Netherlands, this also had a knock-on effect<br />

on electricity prices here. Falling prices of coal and emission<br />

allowances also contributed to lower electricity prices.<br />

The drop in coal prices was triggered by falling demand in<br />

China and increased supply by the United States. With shale<br />

gas production on the increase, the United States can export its<br />

coal surplus.<br />

Driven by rising demand for gas from Asia, amongst other<br />

things, gas prices rose slightly in <strong>2012</strong>, in line with the modest<br />

increase in oil prices. The price of carbon emissions declined in<br />

<strong>2012</strong>, due to the economic crisis and the increase in renewable<br />

electricity production. On the back of rising gas prices and<br />

lower electricity and carbon emission prices, margins of<br />

gas-fired power stations came under severe pressure, so much<br />

so that they are steadily reducing their output in favour of<br />

renewable energy sources and coal-fired energy production.<br />


“Nice and<br />

simple, one<br />

Zeeland<br />

supplier for<br />

everything<br />

I need.”<br />

24<br />

Dennis de Paauw lives in Vlissingen.<br />

Apart from energy, he also buys Internet services from DELTA and ZeelandNet.

DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Waste<br />

management6<br />

Indaver made headway in achieving its international ambitions in <strong>2012</strong>. The bulk of its revenue previously came from<br />

Belgium, but now all service areas (Belgium, the Netherlands, Ireland & the UK, and Germany) made a substantial<br />

contribution to its profit.<br />

DELTA has a 75% share interest in Indaver. Headquartered in Mechelen (Belgium), Indaver serves central government<br />

and local authorities (mainly in Belgium, the Netherlands and Ireland) and industrial companies (northwestern Europe),<br />

offering a full-service package of waste treatment services. Indaver mainly operates in the chemical, pharmaceutical,<br />

automotive, and electronics sectors.<br />

Through acquisitions and by developing new activities, the<br />

company has in recent years significantly expanded its area<br />

of operation in northwestern Europe. In <strong>2012</strong> its key focus<br />

was on consolidation, creating a single brand and single<br />

business committed to driving growth based on two clear<br />

market concepts (see box), whilst encouraging international<br />

cooperation at all levels. Knowledge sharing took place<br />

between management, business units, and supporting<br />

departments. Indaver has grown to become Europe’s second<br />

largest hazardous waste treatment company.<br />

In <strong>2012</strong> the dispatch of waste consignments was brought to<br />

a new level – incoming waste is now registered centrally and<br />

distributed in a way so as to make maximum use of available<br />

treatment capacity. During the year, this led to improved<br />

capacity utilisation at the treatment plants. Previously,<br />

planning had been decentralised to the four business regions.<br />

Despite unfavourable economic conditions, Indaver recorded<br />

excellent results in <strong>2012</strong>, with capacity utilisation at the<br />

existing plants increasing further and the newly constructed<br />

treatment plant in Ireland also adding its contribution.<br />

Two service concepts<br />

Indaver uses two different service concepts in two different<br />

markets. The company has a leading position in Industrial<br />

& Hazardous Waste on the northwestern European market,<br />

offering a Total Waste Management concept and thermal<br />

treatment of hazardous waste.<br />

This involves offering a full-service package, ranging from<br />

advice and waste prevention through to processing and,<br />

if required, the full operation of facilities. The treatment<br />

plants recycle as much material as possible, with residual<br />

waste being incinerated and electricity generated at the<br />

same time.<br />

Public Waste PartnershipS is Indaver’s service concept<br />

aimed at the domestic and equivalent industrial waste<br />

market. In this area, it is a key partner of central government<br />

and local authorities in Belgium, the Netherlands and<br />

Ireland. The main treatment methods used in this market<br />

are recycling and incineration coupled with energy<br />

production.<br />

Ireland<br />

The new waste incineration plan in Meath, near Dublin, went<br />

into operation in September 2011. The Waste-to-Energy<br />

plant can look back on <strong>2012</strong> as its first full year of operation,<br />

processing 207,000 tons of waste. The quantity of waste offered<br />

exceeded expectations. In fact, the contract portfolio became<br />

so sizeable that a part of the waste (40,000 tons) could be<br />

shipped for treatment to the Netherlands. The plant is now fully<br />

connected to the Irish power grid and is operating to capacity,<br />

its 20 MW turbine generating enough power to supply 20,000<br />

homes.<br />

The need for treatment capacity in Ireland has increased,<br />

because the European Union has imposed a duty on member<br />

states to reduce the disposal of waste at landfill sites.<br />


6. Waste management<br />

At the same time, businesses have come to realise that<br />

sustainable waste management makes for a healthier business.<br />

Moreover, the incinerator in Meath is a convenient location<br />

for Irish ‘suppliers’: getting the waste to the plant is quick and<br />

easy. Dumping it at a landfill is more complex and carries a fine<br />

under EU policy. Finally, Irish industrial companies are doing<br />

well, so Indaver also benefits from that.<br />

Germany<br />

In <strong>2012</strong>, economic conditions were also relatively favourable<br />

in Germany, with Indaver making a healthy profit in this<br />

service area as well. During the year, work continued on the<br />

further integration of the two companies that were members<br />

of the group of companies acquired by Indaver in 2008: HIM,<br />

headquartered in Biebesheim, and AVG, based Hamburg.<br />

Between them, the companies operate four waste incineration<br />

plants and also own other waste treatment plants in different<br />

locations across the north and southwest of Germany. They<br />

are now operating under a single name on the German market,<br />

Indaver Deutschland, a rebranding to which the market has<br />

responded positively.<br />

With the acquisition of HIM and AVG in 2008, Indaver can<br />

respond more efficiently to the needs and requirements of<br />

customers in its European markets. Key customers include<br />

international companies in the chemical, petrochemical,<br />

pharmaceutical and automotive industries. These<br />

industries require an integrated approach to the treatment<br />

of hazardous and non-hazardous waste produced at their<br />

European facilities. Offering such an approach requires<br />

having sufficient in-house treatment capacity and adequate<br />

geographical diversification. The acquisition in Germany<br />

marked a further step in shaping this strategy.<br />

The company can now position itself as a nationwide service<br />

provider, whereas previously it occupied a regional position.<br />

The large chemical companies, in particular, have responded<br />

favourably. The company is increasingly seen as a partner in<br />

sustainable waste management rather than just a technical<br />

supplier of treatment capacity. The Total Waste Management<br />

service concept currently applied in the Benelux countries and<br />

Ireland will also be rolled out in Germany.<br />

Indaver’s participation in the IFAT fair in Munich in May marked<br />

this transition, with its full-service approach being widely<br />

advertised in the market for the first time. With over 100,000<br />

visitors, the fair is one of the most important platforms within<br />

the industry.<br />

The Netherlands<br />

The Dutch hazardous waste market expanded in <strong>2012</strong>, with<br />

Indaver Netherlands reinforcing its position within this segment.<br />

Despite turbulent economic conditions, the domestic waste<br />

market remained relatively stable. Indaver Netherlands mainly<br />

operates in the Province of Zeeland.<br />

The company’s organisation structure was simplified in <strong>2012</strong>,<br />

with the number of private limited liability companies being<br />

reduced. The portfolio-based organisation, in which each activity<br />

is a standalone business, is being abandoned in favour of a new<br />

and integrated service provider. The separate activities can now<br />

support each other, with all customers being offered a fullservice<br />

offering (waste-to-energy, composting, landfill).<br />

This will benefit the organisation as a whole.<br />

In <strong>2012</strong> preparations went underway for a name change with<br />

effect from 1 January 2013. From the integration of DELTA Milieu<br />

with Indaver in 2010, the company had been trading under two<br />

brands, Indaver and DELTA Milieu. The most important reason for<br />

the name change is to better position Indaver’s service offerings<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Established in 2010, Indaver Netherlands is the outcome<br />

of a merger between three companies, DELTA Milieu B.V<br />

(environment), AROC B.V. (hydrochloric acid regeneration),<br />

and Indaver Gevaarlijk Afval B.V. (hazardous waste). The<br />

company’s Dutch head office is located in Nieuwdorp<br />

(Zeeland Province). Indaver Netherlands employs over<br />

300 staff across more than 30 locations in the Netherlands,<br />

mainly in the Provinces of Zeeland and South Holland.<br />

on the Dutch market, making clear that the company can meet<br />

all of the waste disposal needs of industrial companies and<br />

central and local government. With effect from 1 January 2013,<br />

the company will carry on its Dutch operations under the name of<br />

Indaver.<br />

The disposal of waste at 3 e Merwede Haven in Dordrecht, one<br />

of Indaver Netherlands’ landfill sites, was discontinued on<br />

28 December <strong>2012</strong>. Under the original plan, operations at the<br />

landfill site were to cease with effect from 1 January 2017. After<br />

consulting various stakeholders, the South Holland provincial<br />

authorities, the city of Dordrecht, operator DELTA Milieu, and the<br />

provincial waste disposal company Proav N.V. agreed in late 2010<br />

to bring this date forward, partly in response to public concerns.<br />

It has been agreed with the provincial and city authorities that<br />

the former landfill site will be converted into a landscaped<br />

recreational area covering around 55 hectares. A small-scale<br />

business park measuring around 4 hectares will remain situated<br />

alongside the quay in the vicinity of the former landfill site.<br />

The new recreational area is expected to be completed by 2022.<br />

This prolonged period has to do with the time that is needed for<br />

the dumped waste to settle. The top layer will be applied in<br />

2020-2021 to construct a landscaped nature area suited to<br />

recreation uses.<br />

Belgium<br />

The state-of-the-art MediPower plant officially opened in<br />

Antwerp on 9 October, in the presence of Flemish Prime Minister<br />

Kris Peeters. Thanks to MediPower, Indaver can now offer a<br />

sustainable and safe solution as far as the treatment of high-risk<br />

medical waste is concerned. In Flanders alone, the health sector<br />

produces 7,000 tons of such waste a year, that is 20,000 kg a<br />

day. MediPower is scheduled to process around 30,000 tons of<br />

waste a year, combining controlled incineration with electricity<br />

generation.<br />

The heat released during incineration is converted to steam and<br />

power for use at its own premises and production processes.<br />

The plant also supplies electricity to the public grid, generating<br />

enough power to supply 14,000 homes. The incineration plant is<br />

unique for its very high energy efficiency and the nearly fullyautomated<br />

way in which the waste is fed into the incinerator.<br />

This not only increases the speed at which the waste can be<br />

treated, but it is also safer for the staff. At the same location in<br />

Antwerp, Indaver already operates two rotary kilns. The three<br />

incinerators serve as each other’s back-up so as to ensure<br />

continuity of service for our customers.<br />

The MediPower incinerator was started up and fine-tuned in the<br />

autumn of <strong>2012</strong>, with any teething troubles being eliminated.<br />

It will be fully up and running in 2013.<br />

At the Beveren site, we surpassed the mark of a million tons<br />

of waste treated in <strong>2012</strong>. This was made possible by the<br />

construction of a new and third turbine. We now have enough<br />

capacity available to treat waste and convert it to power or<br />

electricity at any desired time.<br />


The Supervisory Board <strong>report</strong>s on its activities undertaken<br />

in <strong>2012</strong>, and the way in which it has performed its<br />

supervisory and advisory duties.<br />

Membership composition<br />

In <strong>2012</strong>, the Supervisory Board comprised:<br />

• Mr D. van Doorn (chairman);<br />

• Mr J. Bout;<br />

• Mr R.J. Frohn (until 31 May <strong>2012</strong>);<br />

• Mr J.G. van der Werf;<br />

• Mr B.P.T. de Wit.<br />

Meetings and other activities of the Supervisory Board<br />

In <strong>2012</strong> the Supervisory Board met five times, with the<br />

Executive Board attending. The matters discussed included:<br />

• Appointments to the Supervisory Board and its committees.<br />

In 2010 the decision was made to reduce the number of<br />

Supervisory Board members to five. Linked to this is our<br />

philosophy that nearly all items require discussion by the<br />

full Supervisory Board. From this perspective of collective<br />

responsibility, we believe that there is no place for numerous<br />

committees consisting of Supervisory Board members who<br />

have primary responsibility for individual areas of work. In<br />

line with the Dutch Corporate Governance Code, we have<br />

made an exception for the Audit Committee.<br />

• After DELTA’s former CEO resigned in late 2011, the decision<br />

was made to appoint Supervisory Board member Rob Frohn<br />

as the company’s new CEO. The vacancy that arose on the<br />

Supervisory Board was filled with a female candidate in 2013.<br />

• Financial matters, including the quarterly <strong>report</strong>s and<br />

financial statements, and the company’s business plan and<br />

operational and financial goals.<br />

• Strategic issues, including acquisitions, investments, and<br />

disposals. An important issue was the Executive Board’s<br />

resolution to adopt DELTA’s strategy for 2013 onwards. The<br />

Executive Board worked closely with the Supervisory Board<br />

to develop this strategy. Apart from strategic matters, the<br />

Supervisory Board also looked at the major risks inherent in<br />

the policies pursued.<br />

• Dividend policy, investment and financing policies, risk<br />

management, and corporate governance.<br />

• We also looked at how the company could help its<br />

shareholders formulate a shareholders’ strategy within the<br />

governance framework.<br />

• Developments regarding the Independent Grid Operation Act<br />

[Wet onafhankelijk netbeheer], and talks with shareholders<br />

about developments involving the company’s share interest<br />

in water company Evides N.V.<br />

• Developments surrounding the integration of N.V. EPZ into<br />

the company’s organisation, particularly focusing on safety<br />

aspects and governance. On 30 October <strong>2012</strong>, Supervisory<br />

Board members paid a work visit to EPZ to gather information<br />

on nuclear safety aspects.<br />

The Supervisory Board also convened to review its own<br />

performance, without the Executive Board attending,<br />

discussing matters such as its main duties and responsibilities<br />

(oversight and advice) and cultural and behavioural aspects.<br />

Audit Committee<br />

Since 1 January 2011, the number of Supervisory Board<br />

committees has been limited to the Audit Committee. Other<br />

matters are discussed directly in the Supervisory Board.<br />

The Audit Committee was reduced to two members and met<br />

four times during the year. The issues discussed included the<br />

management letter, group plan, quarterly <strong>report</strong>s, half-year<br />

<strong>report</strong>, financial statements, financial returns on projects<br />

and investments, risk management, IFRS, and several other<br />

proposals to invest or divest.<br />

The Audit Committee consisted of Mr R. Frohn (chairman)<br />

and Mr J. Bout. The vacancy left by Mr Frohn was filled by<br />

Supervisory Board member Mr B.P.T. de Wit. The Audit<br />

Committee meetings were attended by the Executive Board, the<br />

Deputy Director of F&C, and the external auditor.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Report of the<br />

Supervisory Board7<br />

Executive Board membership<br />

Until 1 June <strong>2012</strong>, following Mr Boerma’s departure, the<br />

Executive Board only comprised Mr . F. Verhagen. Mr R. Frohn<br />

was subsequently appointed to the Executive Board as CEO,<br />

with Mr Verhagen resuming his position as CFO.<br />

Executive Board remuneration<br />

The remuneration policy for the members of the Executive<br />

Board was adopted by the General Meeting of Shareholders,<br />

in line with the Supervisory Board’s proposal. The policy’s<br />

guiding principle is that DELTA should be able to offer a pay<br />

package that allows the right people to be recruited and<br />

retained by the company. The Supervisory Board determines<br />

the remuneration of Executive Board members annually, within<br />

the limits set by this policy.<br />

The Supervisory Board determined the remuneration of both<br />

Executive Board members within the limits of the pay policy.<br />

The remuneration of the newly appointed CEO was cleared by<br />

the shareholders’ committee.<br />

The dividend proposal, which will be submitted for approval<br />

to the GMS, involves a payout of EUR 40m and adding the<br />

remaining net profit to the reserves.<br />

On behalf of DELTA N.V.’s Supervisory Board<br />

D. van Doorn,<br />

Chairman<br />

Financial statements<br />

The Supervisory Board has reviewed and approved the annual<br />

<strong>report</strong>, financial statements, and notes for the <strong>2012</strong> financial<br />

year, as submitted by the Executive Board. It has also read<br />

the management letter, the audit findings, and the auditors’<br />

<strong>report</strong> issued by Deloitte Accountants. The Executive Board<br />

prepared the financial statements <strong>2012</strong> on that basis, and the<br />

Supervisory Board recommends their unqualified adoption by<br />

the General Meeting of Shareholders.<br />


Sound business practices, integrity, respect, supervision, transparent <strong>report</strong>ing and other<br />

forms of accountability constitute the main pillars of DELTA’s corporate governance policy.<br />

We are mindful of the interests of the communities in which we operate. We are in compliance<br />

with the Dutch Corporate Governance Code, which applies to listed companies in the<br />

Netherlands, although several of its provisions are less relevant for us. We have adopted the<br />

Code’s best-practice provisions in so far as they apply to the company.<br />

Because DELTA is a public limited liability company whose shares are registered,<br />

the provisions on, for example, anti-takeover measures are not applicable.<br />

30<br />

Structure, policy, and compliance<br />

DELTA N.V. is a company with a two-tier board as referred to in<br />

Section 2:154 of the Dutch Civil Code (DCC) [Burgerlijk Wetboek].<br />

The legal consequences which the DCC attaches to this status are<br />

not entirely appropriate to the company’s governance structure.<br />

The involvement of the General Meeting of Shareholders (GMS)<br />

and the Supervisory Board with the company’s operations<br />

is reflected in its articles of association and various sets of<br />

regulations. These documents also set out when the Executive<br />

Board requires (additional) approval from either the Supervisory<br />

Board or the GMS for resolutions on investments and/or<br />

takeovers or the sale of all or any part of its business.<br />

If the amount involved exceeds five million euros, the proposed<br />

resolution requires approval from the Supervisory Board.<br />

If the proposal involves an investment in excess of<br />

55 million euros, it requires the prior approval of DELTA’s<br />

shareholders.<br />

Executive Board<br />

The powers and responsibilities of DELTA’s Executive Board are<br />

defined in the Executive Board Regulations. These provide for a<br />

division of duties among the members of the Executive Board,<br />

define internal powers of attorney, lay down decision-making<br />

procedures, and contain rules that are consistent with the Dutch<br />

Corporate Code, including those dealing with conflicts of interest<br />

of Executive Board members.<br />

DELTA endorses the new rules on a balanced composition of<br />

the Executive Board as laid down in Section 391.7, Title 9,<br />

Book 2 of the Dutch Civil Code, as introduced on 1 January 2013.<br />

Consideration will be given to the new guidelines as and when<br />

appropriate.<br />

Supervisory Board<br />

DELTA’s Supervisory Board oversees the company’s overall<br />

performance, including compliance with its policies, the results<br />

achieved by the Executive Board, the company’s financial<br />

position and risk profile, and its financial <strong>report</strong>ing. The<br />

Supervisory Board also acts as sparring partner for the Executive<br />

Board. In order for the Supervisory Board to properly fulfil its<br />

role, its profile must be consistent with that of the company.<br />

The profile drawn up by the Supervisory Board in the course of<br />

2010 describes the capabilities required of its – prospective –<br />

members, having regard to the expanded powers of nomination<br />

vested in the Central Works Council. Against the background<br />

of the details given in the profile, the new Supervisory Board<br />

chairman, who was appointed in June 2010, initiated and<br />

completed the process of appointing an almost entirely new<br />

Supervisory Board, which started 1 January 2011.<br />

The Supervisory Board is also in compliance with the Code<br />

in terms of its membership composition (independence, age<br />

diversity, background, and expertise). However, gender diversity<br />

remains a focal point, particularly in view of the Dutch Corporate<br />

Management & Supervision Act [Wet bestuur & toezicht], which<br />

came into force on 1 January 2013, and will require an effort<br />

on the part of DELTA to increase the share of women on its<br />

Executive and Supervisory Boards. Accordingly, we expressed<br />

our preference for a female candidate to be appointed to fill the<br />

current vacancy on the Supervisory Board. The Supervisory<br />

Board’s powers and duties and internal decision-making and<br />

the role of its chairman are set out in the Supervisory Board<br />

Regulations.<br />

These also provide for matters such as periodic reviews of the<br />

Supervisory Board’s own performance, in accordance with the<br />

Code. Special regulations have been drawn up for the Audit<br />

Committee. The Audit Committee’s mandate covers financial<br />

and tax matters and oversight of the risks which the company<br />

is willing to take. Risk management and risk policy are regular<br />

items on the agendas of both the Audit Committee and the<br />

Supervisory Board’s plenary meetings.

DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Corporate<br />

governance8<br />

Shareholders<br />

The role of DELTA’s shareholders and the powers of the General<br />

Meeting of Shareholders are set out in the company’s Articles<br />

of Association. DELTA’s shareholders are committed and<br />

dedicated, in part because they are public sector entities<br />

(all being municipalities or provincial authorities). In line with<br />

the Code, they may act in their own interests, but must comply<br />

with the regulatory requirement of fairness and reasonableness.<br />

However, owing to the wide-ranging powers entrusted to the<br />

GMS under the Articles of Association, the way in which the<br />

shareholders exercise their voting rights has a significant<br />

influence on the company’s policies and operations.<br />

In a broader context, the Frijns Committee encountered the same<br />

situation at numerous other companies in the Netherlands,<br />

and has recommended pursuing a policy to promote bilateral<br />

contacts between companies and their shareholders.<br />

At DELTA, we have introduced a policy that provides for periodic<br />

and informal talks between the Executive Board and our<br />

shareholders, which were held at very regular intervals during<br />

the year.<br />

Works Council<br />

Amidst the Articles of Association, regulations and other<br />

arrangements, the relationship between DELTA Group and<br />

its Works Council and Central Works Council should not go<br />

unmentioned. This is a relationship built on mutual respect,<br />

as reflected in the standing consultations between the<br />

company/Executive Board and the Works Council and Central<br />

Works Council on a range of issues which both parties have<br />

agreed are open to discussion, and the facilities made available<br />

to the members of the Works Council, Central Works Council, and<br />

European Works Council, which was set up in 2009.<br />

With the acquisition of a majority interest in N.V. EPZ by DELTA,<br />

the European Works Council now also includes a representative<br />

of EPZ. At divisional level, standing consultations are held with<br />

the divisional works councils.<br />

Compliance<br />

DELTA operates a ‘whistleblower scheme’, adopted by the<br />

Supervisory Board, which, in addition to the compliance<br />

officer’s activities, enables employees to raise concerns about<br />

malpractice with the Executive Board and/or a counsellor<br />

without running the risk of reprisals. An external party has been<br />

appointed with whom concerns can be raised.<br />

Contacts with external stakeholders<br />

In view of the company’s importance and position, DELTA<br />

regularly publishes its financial results and announces important<br />

events by means of press releases and publications on its<br />

website.<br />

Regulations<br />

DELTA has introduced regulations that define the framework<br />

within which its corporate bodies must operate or explain in<br />

greater detail the rules that apply at the company.<br />

These regulations are reviewed and, where necessary, amended<br />

from time to time. They include:<br />

• Articles of Association<br />

• Executive Board Regulations<br />

• Code of Conduct, revised in <strong>2012</strong>, and now easier to access on<br />

our internal website<br />

• Procedure for dealing with suspicions of misconduct<br />

(‘whistleblower scheme’).<br />

The following is also available on the website:<br />

• Supervisory Board Regulations<br />

• Retirement rota for Supervisory Board members.<br />


DELTA operates in a variety of markets and is exposed to a large number<br />

of risks. Some of these risks arise from the composition of its trading<br />

portfolio, others evolve from economic, financial and legal developments.<br />

These risks are inherent to DELTA’s strategic choices and operations and<br />

hence form a part of the company’s risk profile.<br />

DELTA seeks to identify these risks at an early stage. The COSO<br />

Enterprise Risk Management framework (COSO-ERM) is used as<br />

a benchmark. Risks are identified and assessed, and controls<br />

defined, systematically. In doing so, we make a deliberate<br />

choice as to which risks we are willing to accept and which risks<br />

we prefer others to shoulder.<br />

DELTA’s Executive Board is responsible for the design and<br />

operational effectiveness of the company’s internal risk<br />

management system. During the year, the risk management<br />

system was expanded by implementing a company-wide control<br />

framework. We fully updated our risk management policy, with<br />

the risk management activities to be performed across the<br />

company being detailed in a manual.<br />

Risk control at divisional level is subject to periodic discussion<br />

with DELTA’s Executive Board and periodic audits performed<br />

by the independent Internal Audit division, which looks at the<br />

quality assurance system and risk management, control and<br />

compliance procedures.<br />

The Compliance Officer ensures that DELTA adheres to<br />

applicable laws and compliance risks are identified and<br />

mitigated to the greatest possible extent.<br />

DELTA’s operations have a strong correlation with regulatory<br />

requirements, subsidies, and laws and regulations.<br />

Recognising the risks associated with its operations, which<br />

touch upon aspects of public and private law, DELTA mitigates<br />

these risks by actively taking part in the public debate and<br />

through its close contacts with its public sector shareholders.<br />

DELTA trades on the international gas and electricity markets.<br />

Prices on these markets fluctuate continuously. Electricity<br />

producers are currently operating on a market affected by<br />

overcapacity, as a result of which prices have come under<br />

pressure. Because of the continued economic slowdown, sales<br />

volumes are an uncertain factor and there is an elevated risk of<br />

trading partners and producers defaulting on their obligations<br />

to the company. Chaired by the CFO, the Risk Management<br />

Committee ensures that DELTA’s energy trading activities<br />

remain within the defined risk margins.<br />

Given the importance of most of DELTA’s operations to society,<br />

the law imposes high standards on its services in terms of<br />

their quality and safety. To meet these standards, the company<br />

makes substantial investments in adequate processes and<br />

systems.<br />

We succeeded in maintaining a stable position in the energy<br />

and multimedia retail markets during the year. Successful<br />

investments in Ireland and Belgium strengthened the<br />

company’s position in the waste management segment.<br />

Staff at all levels continued to focus on cost control and risk<br />

mitigation. During the year, we sold the last of our higher-risk<br />

activities which we felt did not belong to our core business.<br />

The allocation of working capital to the corporate market,<br />

in particular, was substantially reduced. Thanks to the ongoing<br />

focus on debt control and risk reduction, the company’s<br />

financial and operational risk profit did not deteriorate, despite<br />

difficult economic conditions.<br />

As a result, DELTA continued to meet the credit requirements<br />

imposed by the financial and energy markets. We saw our<br />

strong performance in this area confirmed by Standard &<br />

Poor’s, which maintained our BBB+ rating, with a stable<br />

outlook.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Risk and<br />

risk management9<br />

In Control Statement<br />

DELTA’s Executive Board is responsible for the design and<br />

operational effectiveness of the company’s internal control<br />

system. This system is designed to:<br />

• provide management with timely information on the progress<br />

made towards achieving the company’s strategic, operational<br />

and financial goals;<br />

• ensure reliable financial <strong>report</strong>ing;<br />

• ensure compliance with applicable laws.<br />

At DELTA, we ensure that we can deploy our staff on a long-term<br />

basis. Mitigating safety risks is high on management’s agenda.<br />

We work with suppliers and external service providers that<br />

adhere to similar standards, so as to be able to achieve our<br />

goals and continuously improve our services. At DELTA, we have<br />

a rule: “work safely or don‘t work at all.”<br />

Each of our employees should be able to work in a socially<br />

safe environment, in which they feel protected. This involves<br />

showing respect and acting with integrity in their dealings<br />

with colleagues and superiors, and being able to express<br />

themselves freely and going about their business without<br />

fearing repercussions.<br />

Risk-taking is inextricably linked to the company’s operations<br />

and the implementation of its strategy. The risk control system<br />

allows DELTA to accept calculated business risks by identifying,<br />

controlling and monitoring risks and taking appropriate action<br />

where necessary.<br />

The likelihood and impact of errors, wrong decisions and<br />

unforeseen events are mitigated to the greatest possible<br />

extent. However, there is no single internal risk control system<br />

that can provide absolute certainty that business targets will<br />

be achieved or that inaccuracies, losses, fraud or regulatory<br />

breaches can be fully prevented.<br />

In auditing the financial statements, the independent auditors<br />

also investigate the design, existence and operation of internal<br />

controls on financial <strong>report</strong>ing. The independent auditors<br />

<strong>report</strong> their findings to the Executive Board, Audit Committee,<br />

and Supervisory Board. The independent auditors’ <strong>report</strong> is<br />

included in the financial statements.<br />

The Executive Board <strong>report</strong>s on, and accounts for, the design<br />

and operational effectiveness of the internal risk control system<br />

to the Audit Committee and the Supervisory Board.<br />

On the basis of its evaluation in accordance with the Dutch<br />

Corporate Governance Code, the Executive Board believes that,<br />

in terms of financial <strong>report</strong>ing risks, the internal risk control<br />

system functioned properly during the year and provides<br />

reasonable assurance that the financial statements for the year<br />

under review contain no material errors.<br />

The Executive Board remains committed to further<br />

strengthening and professionalising the company’s internal<br />

risk control system in 2013, amongst other things by expanding<br />

and strengthening its Internal Control Framework.<br />


9. Risk and risk management<br />

Risk management<br />

DELTA is exposed to a variety of risks, including risks inherent<br />

to financial instruments, market risk, liquidity risk, and credit<br />

risk.<br />

DELTA trades on the international gas and electricity markets.<br />

Prices on these markets fluctuate strongly. DELTA uses financial<br />

instruments to mitigate commodity market risk, foreign<br />

exchange risk, interest rate risk, liquidity risk, and credit risk,<br />

subject to the conditions laid down in the Risk Policy Document<br />

and Treasury Charter.<br />

Under the auspices of the Executive Board, the Risk<br />

Management Committee has put in place general procedures<br />

and limits and is responsible for ensuring that DELTA’s energy<br />

trading and sales activities remain within the defined risk<br />

margins.<br />

The following paragraphs describe the different types of risk<br />

and the way in which DELTA manages the related exposures.<br />

Market risks<br />

Commodity price risk<br />

Market risks arise from price movements on the buying and<br />

selling markets where DELTA operates (gas, electricity, coal,<br />

oil, emission allowances, currencies, transmission capacity,<br />

imports/exports capacity, etc.). It is our policy to mitigate<br />

the effects of price movements in the short term and track<br />

prevailing market prices in the long term. To provide for<br />

systematic risk control, asset allocation and exposures are<br />

determined on the basis of expected price movements.<br />

These exposures are monitored on a daily basis. Trading risks<br />

are mitigated by strictly enforcing a system of limits.<br />

Value-at-Risk<br />

DELTA uses the Value-at-Risk (VaR) method to calculate and<br />

assess market risks in its commodity markets. This method<br />

involves using various assumptions regarding possible<br />

changes in market conditions. The VaR method is an important<br />

tool to assess DELTA’s exposure to market risk. VaR identifies<br />

the maximum portfolio losses likely to be incurred as a result<br />

of price changes over a three-day period with a confidence<br />

level of 95% (i.e. in 5% of cases the portfolio losses may<br />

exceed the VaR limit). VaR is calculated using Monte Carlo<br />

simulations based on historical volatilities and correlations.<br />

Because portfolios include opposing positions and there is an<br />

underlying correlation, the VaR of the total portfolio is smaller<br />

than the sum of the sub-portfolio VaRs.<br />

VaR is an important tool for DELTA to manage its portfolios and<br />

is therefore computed and <strong>report</strong>ed on a daily basis.<br />

Cash flow hedging<br />

DELTA uses financial instruments to mitigate fluctuations in<br />

expected cash flows to the greatest possible extent.<br />

The company uses derivatives, including forward contracts,<br />

options, and swaps, to control the effects of future changes in<br />

market prices. These hedging instruments concern derivatives<br />

in the commodities traded by the company, and are entered into<br />

to hedge cash flow, price and currency risks. Hedge accounting<br />

is applied to cushion the total change in value of these<br />

derivatives.<br />

To the extent permitted, DELTA accounts for these financial<br />

instruments and the physical purchase and sale contracts in a<br />

cash flow hedge in accordance with IAS 39. The item hedged is<br />

the future purchase (power plants, long-term sourcing) or sale<br />

of gas and electricity.<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Currency risk<br />

Currency risk is the risk that the value of assets will change due<br />

to movements in foreign exchange rates. DELTA’s risk policy is<br />

to hedge its currency risk exposure to positions denominated<br />

in foreign currencies. To hedge this risk, the company uses<br />

financial instruments (forward contracts) to prevent any<br />

fluctuations in expected cash flows to the greatest possible<br />

extent. Currency positions arising from commodity and other<br />

contracts are <strong>report</strong>ed to the Treasury department on a daily<br />

basis to be hedged at group level. Currency risk limits are<br />

set periodically in consultation with the Risk Management<br />

Committee, and are monitored by the Treasury department.<br />

Interest rate risk<br />

DELTA’s interest rate risk policy is to mitigate the effects of<br />

interest rate fluctuations. To hedge this risk, the company uses<br />

derivatives, including interest rate swaps. These swaps allow a<br />

floating rate to be exchanged for a fixed rate.<br />

DELTA holds several interest rate swaps. all of which were<br />

effective at the balance sheet date. No Value-at-Risk (VaR) is<br />

computed for interest rate derivatives.<br />

Liquidity risk<br />

Liquidity risk is the risk that DELTA may have insufficient funds<br />

available to meet its liabilities.<br />

DELTA’s capital management policy focuses on centralising its<br />

cash management and borrowing and repayment operations at<br />

holding company level (DELTA N.V.).On the basis of its business<br />

plan, the company prepares an annual financing plan to give<br />

direction to the activities undertaken by DELTA N.V.’s Treasury<br />

department, and to determine the ratio of short-term to longterm<br />

debt.<br />

DELTA also ensures that it more than meets banking ratios<br />

and other ratios necessary to keep its corporate credit rating<br />

and optimise working capital management. The company also<br />

pursues a very strict policy in terms of providing guarantees<br />

and cash collateral.<br />

DELTA has a standby line of credit to meet its working capital<br />

requirements and to have the flexibility needed to absorb<br />

seasonal movements in cash and pre-finance projects and<br />

acquisitions. There are separate lines of credit for independent<br />

projects, for entities that are not wholly-owned by DELTA , and<br />

for entities for which the law so requires. These lines of credit<br />

provide for no recourse against DELTA N.V.<br />

DELTA maintained its BBB+ rating with a stable outlook from<br />

Standard & Poor’s in <strong>2012</strong>.<br />



Mr D. (Daan) van Doorn (1948), chairman<br />

Nationality: Dutch<br />

First appointed: 21 June 2010<br />

Current term: 20 June 2014<br />

Profession/principal position:<br />

former Executive Board chairman<br />

of VION Food Group<br />

Outside interests:<br />

Supervisory Board member of<br />

Brunel International, chairman<br />

of the Wageningen University<br />

Fundraising Committee, chairman of<br />

the Science Group Advisory Council<br />

at Wageningen University, chairman<br />

of the Netherlands Mussels Farmers’<br />

Association, chairman of the Van<br />

Doorn Committee, chairman of the<br />

South West Netherlands Strategic<br />

Board, Supervisory Board chairman of<br />

Rabobank Oosterschelde, Supervisory<br />

Board member of A-ware Food Group.<br />

Mr J.(Jan) Bout (1946)<br />

Nationality: Dutch<br />

First appointed: 1 January 2011<br />

Current term: until the end of 2014<br />

Profession/principal position: former<br />

Executive Board chairman of Royal<br />

Haskoning<br />

Outside interests:<br />

Supervisory Board member of<br />

Ballast-Nedam N.V., Supervisory<br />

Board chairman of Brunel<br />

International N.V., and Audit<br />

Committee chairman, Supervisory<br />

Board member of Royal Haskoning<br />

DHV Groep B.V. and Audit Committee<br />

chairman, Supervisory Board<br />

chairman of Deltares and Audit<br />

Committee chairman, Vice-Chairman<br />

of the Netherlands Environmental<br />

Impact Assessment Commission,<br />

co-founder of Bout & Co consultants,<br />

chairman of the Advisory Council on<br />

sustainable healthcare at Nijmegen<br />

University Hospital, chairman of the<br />

High Level Group on Export Financing,<br />

Board member of the Ubbo Emmius<br />

Fund.<br />

Mr J.G. (Johan) van der Werf (1952),<br />

vice-chairman<br />

Nationality: Dutch<br />

First appointed: 2001<br />

Current (and last) term: 3 June 2014<br />

Profession/principal position:<br />

former Management Board member of<br />

AEGON N.V.<br />

Outside interests:<br />

Supervisory Board chairman of<br />

Ordina, chairman of the Board of<br />

Trustees of NOS, vice-chairman of the<br />

Board of Trustees of Utrecht University<br />

Hospital, Supervisory Board member<br />

of De Lotto, Supervisory Board<br />

member of ONVZ, chairman of the Arts<br />

and Culture Pension Fund, Advisory<br />

Council member of SVB, vice-chairman<br />

of the Board of Trustees of Nederlands<br />

DansTheater<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />

Personal<br />

particulars10<br />


Mr B.P.T. (Peter) de Wit, (1949)<br />

Nationality: Dutch<br />

First appointed: 1 January 2011<br />

Current term: until the end of 2014<br />

Profession/principal position:<br />

former CEO of Shell Netherlands B.V.<br />

Outside interests:<br />

Non-executive board director of<br />

Caithness Petroleum, London,<br />

Advisory Council member of Energy<br />

Delta Gas Research (EDGaR)<br />

Mr R.J.(Rob) Frohn (1960), Chief Executive<br />

Officer (CEO)<br />

Nationality: Dutch<br />

First appointed: 1 June <strong>2012</strong>, appointed<br />

for a four-year term<br />

Outside interests:<br />

Supervisory Board member of<br />

Nutreco N.V., member of the Board<br />

of Trustees at the Arnhem/Nijmegen<br />

University of Applied Sciences,<br />

Supervisory Board chairman of<br />

Havenbedrijf Rotterdam N.V.<br />

Also Audit Committee chairman at<br />

these organisations.<br />

Rob Frohn was a member of DELTA’s<br />

Supervisory Board until 1 June.<br />

He was appointed CEO with effect<br />

from this date.<br />

Mr F. (Frank) Verhagen RA (1961),<br />

Chief Financial Officer (CFO)<br />

Nationality: Dutch<br />

First appointed: 1 February 2009,<br />

reappointed for a four-year term<br />

until 2017<br />

Outside interests:<br />

Member of the Board of Trustees at<br />

the Admiraal de Ruiter Hospitals,<br />

Board member of the employers’<br />

association WENb<br />


10. Personal particulars<br />


Executive Committee<br />

Mr A. (Bram) Nonnekes,<br />

chairman, OTS-AD&O Works Council<br />

Mr H.A.M. (Harrie) Martens,<br />

secretary, Infra Works Council<br />

Mr B. (Bart) van Houte,<br />

vice-secretary, C&Z Works Council<br />

Mr H.E.A. (Huub) Knoors,<br />

vice-chairman, EPZ Works Council<br />

Other members<br />

Mr S. (Stephan) de Beer,<br />

OTS-AD&O Works Council<br />

Mr L. (Leen) Boer,<br />

Infra Works Council<br />

Ms A.P. (Tonny) Jobse-Griep,<br />

EPZ Works Council<br />

Mr C. (Kees) Joosse,<br />

Group Staff Works Council<br />

Mr B. (Bojan) Loncaric,<br />

C&Z Works Council (until March <strong>2012</strong>, succeeded by:)<br />

Mr L. (Leon) Fondse ,<br />

C&Z Works Council (from May <strong>2012</strong>)<br />

Mr P. (Peter) Maljers,<br />

EPZ Works Council<br />

Mr J.G.T. (Theo) Nieuwburg,<br />

Infra Works Council<br />

Mr E.Y.M. (Etienne) Poppe,<br />

IR Works Council<br />

Mr J. (Joop) Janse,<br />

formal secretary<br />

Employer representatives<br />

Mr R. (Rob) Frohn,<br />

DELTA N.V.’s CEO<br />

Mr M. (Michel) van Neutigem,<br />

DELTA N.V.’s Director of HRM<br />


DELTA <strong>Annual</strong> Report <strong>2012</strong><br />


Employee representatives<br />

Mr S. (Stephan) de Beer,<br />

DELTA N.V. Netherlands’ Central Works Council<br />

Mr L. (Leen) Boer,<br />

DELTA N.V. Netherlands’ Central Works Council<br />

Mr A. (Bram) Nonnekes,<br />

DELTA N.V. Netherlands’ Central Works Council, chairman<br />

Mr H. (Huub) Knoors,<br />

DELTA N.V. Netherlands’ Central Works Council<br />

Employer representatives<br />

Mr R. (Rob) Frohn,<br />

DELTA N.V.’s CEO<br />

Mr P. (Paul) de Bruycker,<br />

Indaver N.V.’s CEO<br />

Mr M. (Michel) van Neutigem,<br />

DELTA N.V.’s Director of HRM<br />

Mr A.J. (André) van Os,<br />

DELTA N.V.’s formal secretary<br />

Ms K. (Karin) Aspeslagh,<br />

Indaver Netherlands B.V.’s Works Council<br />

Mr E. (Eric) Demaertelaere,<br />

Indaver N.V.’s Works Council<br />

Mr G. (Guy) Smits,<br />

Indaver N.V.’s Works Council, secretary<br />

Mr R. (Rainier) Martens,<br />

Indaver Deutschland GmbH’s Works Council<br />

Mr R. (Rudi) Wachtel,<br />

Indaver Deutschland GmbH’s Works Council<br />


“DELTA supplies<br />

electricity, gas,<br />

heating and multimedia<br />

services to nearly<br />

all of our<br />

holiday parks in<br />

the Netherlands.<br />

We are now<br />

working to provide<br />

our guests with<br />

Internet access in<br />

all of our buildings.”<br />

David Hannewijk is Director of Operations at Roompot Holidays.<br />

Over the last 45 years, the company has evolved from a simple campsite<br />

into a leading holiday company operating 200 holiday parks across<br />

the Netherlands, Belgium, Germany and France.

Financial Statements<br />

<strong>2012</strong>11<br />

Consolidated financial statements 42<br />

Consolidated balance sheet as at 31 December <strong>2012</strong> (before profit appropriation)42<br />

Consolidated income statement 43<br />

Consolidated statement of comprehensive income 44<br />

Consolidated statement of changes in equity 45<br />

Consolidated cash flow statement 46<br />

Accounting policies 47<br />

Notes to the consolidated balance sheet 60<br />

Notes to the consolidated income statement 98<br />

Notes to the consolidated cash flow statement 108<br />

Post-balance-sheet events 109<br />

Consolidated companies 110<br />

Non-consolidated companies 112<br />

Company financial statements 114<br />

Company balance sheet as at 31 December <strong>2012</strong> (before profit appropriation)114<br />

Company income statement 115<br />

Notes to the company financial statements 116<br />

Notes to the company balance sheet 117<br />

Notes to the company income statement 125<br />

Other information 128<br />

Profit appropriation 128<br />

Auditors’ <strong>report</strong> 130<br />

DELTA in financial figures, consolidated 132<br />

DELTA key figures 133<br />


Consolidated financial statements<br />

Consolidated balance sheet as at 31 December <strong>2012</strong> (before profit appropriation)<br />

(x EUR 1,000)<br />

Ref. no. 31-12-<strong>2012</strong> 31-12-2011<br />

Non-current assets<br />

Intangible assets 1 390,232 394,801<br />

Property, plant and equipment 2 1,010,059 1,035,754<br />

Joint ventures, associates and other investments 3 826,459 867,809<br />

Loans to joint ventures, associates, etc. 4 14,352 14,370<br />

Deferred tax assets 4 63,122 75,851<br />

Other financial assets 4 9,337 9,305<br />

Derivatives 5 101,232 68,007<br />

Financial assets 1,014,502 1,035,342<br />

Total non-current assets 2,414,793 2,465,897<br />

Current assets<br />

Inventories 6 16,916 17,303<br />

Trade receivables 7 370,792 390,303<br />

Current tax assets 7 2,949 7,324<br />

Other receivables 7 71,212 46,629<br />

Derivatives 5 136,557 230,250<br />

Total receivables 581,510 674,506<br />

Assets held for sale 24 1,743 2,647<br />

Total current assets 600,169 694,456<br />

Cash 8 48,931 52,390<br />

Total assets 3,063,893 3,212,743<br />

Shareholders’ equity 1,052,889 1,043,039<br />

Profit for the year 81,084 82,690<br />

Equity attributable to shareholders of DELTA N.V. 1,133,973 1,125,729<br />

Non-controlling interests 53,892 54,091<br />

Group equity 1,187,865 1,179,820<br />

Provisions 9 230,088 236,824<br />

Pension liabilities 9 22,158 21,869<br />

Long-term debt 10 429,087 588,606<br />

Deferred tax liabilities 11 51,939 57,470<br />

Deferred revenue 11 77,286 70,999<br />

Other non-current liabilities 11 177,691 25,472<br />

Derivatives 5 101,283 77,149<br />

Non-current liabilities 1,089,532 1,078,389<br />

Trade payables 12 311,725 324,381<br />

Current tax liabilities 12 73,414 59,191<br />

Deferred revenue 12 13,172 13,401<br />

Work in progress for third parties 12 3,603 -<br />

Current portion of provisions 12 12,254 15,876<br />

Other liabilities 12 133,020 247,082<br />

Bank borrowings 12 98,303 66,429<br />

Derivatives 5 139,344 223,724<br />

Current liabilities 784,835 950,084<br />

Liabilities held for sale 24 1,661 4,450<br />

Current liabilities 786,496 954,534<br />

Total equity and liabilities 3,063,893 3,212,743<br />


DELTA Financial statements <strong>2012</strong><br />

Consolidated income statement<br />

(x EUR 1,000)<br />

Ref. no. <strong>2012</strong> 2011<br />

Revenue 13 2,171,793 2,185,099<br />

Cost of sales 14 (1,551,017) (1,549,359)<br />

Gross operating margin 620,776 635,740<br />

Other gains and losses (third parties) 15 33,431 32,408<br />

Fair value gains and losses on the trading portfolio 16 (5,002) (12,955)<br />

Gross margin 649,205 655,193<br />

Third-party services 17 240,862 242,771<br />

Staff costs 18 204,054 211,606<br />

Depreciation, amortisation and impairment 19 131,835 114,002<br />

Other operating expenses 20 17,113 9,801<br />

Total net operating expenses 593,864 578,180<br />

Earnings from operations 55,341 77,013<br />

Result aquisition 20% interest N.V. EPZ - 153,979<br />

Added provision tolling contracts - (140,544)<br />

Share in results of joint ventures and associates 21 77,674 71,778<br />

Operating result 133,015 162,226<br />

Net finance income (expense) 22 (29,783) (24,315)<br />

Profit before tax 103,232 137,911<br />

Corporate income tax 23 (13,901) (35,541)<br />

Profit after tax from continuing operations 89,331 102,370<br />

Profit after tax from discontinued operations 24 (1,385) (11,665)<br />

Profit for the year 87,946 90,705<br />

Attributable to:<br />

Non-controlling interests 6,862 8,015<br />

Shareholders of DELTA N.V. 81,084 82,690<br />


Consolidated financial statements<br />

Consolidated statement of comprehensive income<br />

(x EUR 1,000)<br />

Ref. no. <strong>2012</strong> 2011<br />

Profit after tax for the year 87,946 90,705<br />

Other comprehensive income:<br />

Effective portion of gains and losses<br />

5<br />

on cash flow hedges<br />

Energy derivatives 3,407 (21,340)<br />

Reclassification - adjustments 177 (45,976)<br />

3,584 (67,316)<br />

Interest rate derivatives (1,130) (970)<br />

Reclassification - adjustments 2,980 5,168<br />

1,850 4,198<br />

Corporate income tax (1,408) 15,701<br />

4,026 (47,417)<br />

Share of other comprehensive income of joint<br />

ventures and associates<br />

Share of other comprehensive income of joint<br />

(14,025) (10,736)<br />

ventures and associates<br />

Reclassification - adjustments - (591)<br />

(14,025) (11,327)<br />

Translation reserve differences<br />

Translation reserve differences 4 139<br />

Reclassification - adjustments<br />

-<br />

(506)<br />

4 (367)<br />

Other movements<br />

Other movements - 23,115<br />

Reclassification - adjustments (22,890) (372)<br />

(22,890) 22,743<br />

Total other comprehensive income (32,885) (36,368)<br />

Total comprehensive income 55,061 54,337<br />

Total comprehensive income attributable to:<br />

Non-controlling interests 6,817 8,422<br />

Shareholders of DELTA N.V. 48,244 45,915<br />

For an explanation of the changes in energy and interest rate derivatives, see section 5.<br />

The share in income from joint ventures involves a change in the accounting policy for the recognition of a provision in the EPZ joint venture.<br />

The reclassification from unrealised income to realised income is mainly due to the sale of the 7.6% equity interest in N.V. KEMA in <strong>2012</strong>.<br />


DELTA Financial statements <strong>2012</strong><br />

Consolidated statement of changes in equity<br />

(x EUR 1,000)<br />

Total<br />

Paid-up<br />

capital<br />

Statutory<br />

reserve<br />

Revaluation<br />

reserve<br />

Other<br />

reserves<br />

Hedgereserve<br />

Unappropriated<br />

profit<br />

Noncontrolling<br />

interests<br />

Carrying amount as at<br />

1,183,084 6,937 87,812 41,837 - 1,167,395 (174,167) 53,270<br />

31 December 2010<br />

Profit appropriation for 2010 - - - - - (174,167) 174,167 -<br />

Payment of dividend (50,000) - - - - (50,000) - -<br />

Transfer to liabilities due to put<br />

(7,601) - - - - - - (7,601)<br />

options<br />

Total comprehensive income 54,337 - (11,327) (47,881) 23,115 (682) 82,690 8,422<br />

Profit appropriation for 2011 - - 125,522 - - - (125,522) -<br />

Carrying amount as at<br />

1,179,820 6,937 202,007 (6,044) 23,115 942,546 (42,832) 54,091<br />

31 December 2011<br />

Profit appropriation for 2011 - - - - - (42,832) 42,832 -<br />

Payment of dividend (40,000) - - - - (40,000) - -<br />

Other changes - - (1,849) - - 1,849 - -<br />

Transfer to liabilities due to put<br />

(7,016) - - - - - - (7,016)<br />

options<br />

Total comprehensive income 55,061 - (13,851) 4,122 (23,115) 4 81,084 6,817<br />

Profit appropriation for <strong>2012</strong> - - 7,126 - - - (7,126) -<br />

Carrying amount as at<br />

31 December <strong>2012</strong><br />

1,187,865 6,937 193,433 (1,922) - 861,567 73,958 53,892<br />

The statutory reserve relates to the undistributed profits of associates. Consequently, the statutory reserve is not freely distributable.<br />

This applies equally to the hedge reserve, which should be seen in relation to the unrealised income from the change in fair value of the<br />

derivatives used for hedging purposes.<br />

The changes in fair value of derivatives after tax is part of the hedge reserve (which is a non-distributable reserve). For further<br />

explanation, see 5 ‘Principles for the valuation of financial instruments’ and 5.1.3 of the ‘Notes to the consolidated balance sheet’.<br />

The participation revaluation reserve, resulting from assets held for sale, is also a reserve that is not available for dividend payments.<br />

The ‘Other reserves’ item consists primarily of the retained profit.<br />

The transfer to liabilities due to put options relates to the third-party minority interest in Indaver N.V. A put option, which has been<br />

included in the non-current liabilities, has been granted to these shareholders, who hold 25% of the Indaver N.V. shares.<br />

The non-controlling interests in the consolidated equity of DELTA mainly concerns the interest held by NEIF (NIBC European<br />

Infrastructure Fund) in the German waste processing company Indaver Deutschland GMBH (previously: SAV Beteiligungs GmbH).<br />


Consolidated financial statements<br />

Consolidated cash flow statement<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

From operating activities<br />

Earnings from operations 55,341 77,013<br />

Fair value gains and losses on the trading portfolio 5,002 12,955<br />

Adjustment for deferred income 6,058 3,289<br />

Depreciation, amortisation and impairment 131,835 114,002<br />

Provisions (34,301) (19,089)<br />

Inventories 3,990 (3,292)<br />

Trade receivables 19,511 (80,124)<br />

Trade payables 3,014 81,408<br />

Other receivables/payables (15,595) (31,122)<br />

Other 2,497 (8,263)<br />

From operating activities 177,352 146,777<br />

Cash flows arising from dividends received from joint ventures and associates 69,873 59,311<br />

Cash flows from finance income and expense (18,136) (17,264)<br />

Cash flows from taxes on profits (7,041) 6,845<br />

Cash flow from operating activities 222,048 195,669<br />

From investing activities<br />

Acquisition and disposal of intangible assets and property,<br />

plant and equipment (after deduction of cash acquired) (122,995) (149,055)<br />

Acquisition of investments in subsidiaries and associates and interests in joint ventures<br />

(2,739) (137,226)<br />

(after deduction of cash disposed)<br />

Disposal of investments in subsidiaries and associates and interests in joint ventures 28,235 1,358<br />

Other financial assets (218) 12,881<br />

Cash flow from investing activities (97,717) (272,042)<br />

From financing activities<br />

Bank borrowings 31,874 1,100<br />

Long-term liabilities 239,331 174,532<br />

Paying off borrowings (358,995) (46,279)<br />

Dividend payments (40,000) (50,000)<br />

Cash flow from financing activities (127,790) 79,353<br />

Evolvement cash flow during the year (3,459) 2,980<br />

Cash as at 1 January 52,390 49,410<br />

Evolvement cash position during the year (3,459) 2,980<br />

Cash as at 31 December 48,931 52,390<br />


DELTA Financial statements <strong>2012</strong><br />

Accounting policies<br />

DELTA N.V. is a public limited liability company formed under<br />

Dutch law, and is the parent company of a number of subsidiaries<br />

active in:<br />

• electricity generation and the transportation and supply of<br />

energy,<br />

• environmental services concerned with waste management<br />

and industrial cleaning,<br />

• provision of cable services for both analogue and digital<br />

television as well as for internet and digital telephony over<br />

cable,<br />

• development and production of sustainable energy relating to<br />

wind,<br />

• water activities.<br />

The group also has interests in a number of joint ventures and<br />

various investments in associates.<br />

The owners of DELTA N.V. are the Province of Zeeland, the<br />

municipalities of Zeeland, certain municipalities of South<br />

Holland and North Brabant and the Provinces of South Holland<br />

and North Brabant.<br />

DELTA N.V. is domiciled, in accordance with its Articles of<br />

Association, at Poelendaelesingel 10, Middelburg.<br />

The following changes occurred in the consolidation in <strong>2012</strong>:<br />

1. Frassur GmbH Umweltschutz-Dienstleistungen was sold on<br />

21 February <strong>2012</strong>;<br />

2. AVA Abwasser- und Verwertungsanlagen GmbH was also sold<br />

on 21 February <strong>2012</strong>;<br />

3. KEMA N.V. shares (7.6%) were sold on 28 February <strong>2012</strong>;<br />

4. V.O.F. Diepp was wound up on 3 May <strong>2012</strong>;<br />

5. WT I B.V. was established on 24 May <strong>2012</strong>;<br />

6. Internet Services B.V. Zeeland and Internet Platform<br />

Zeeland B.V. merged with Zeelandnet B.V. on 31 August <strong>2012</strong>;<br />

7. DELTA / Essent Lighting V.O.F. was wound up on<br />

1 October <strong>2012</strong>;<br />

8. All shares in Fesil Sunergy AS (Norway) were sold on<br />

8 October <strong>2012</strong>;<br />

9. Sloe Centrale 3 B.V. was established on 10 October <strong>2012</strong>;<br />

10. Spanin N.V. was sold on 23 October <strong>2012</strong>;<br />

11. Solsilc Development Company AS was wound up in<br />

November <strong>2012</strong>;<br />

12. All shares in Decu Beheer B.V. and Decu C.V. were sold by 7<br />

November <strong>2012</strong>;<br />

13. All shares in DELTA MBR B.V. were sold on 14 December <strong>2012</strong>;<br />

14. DELTA Energy B.V. obtained 50% of Windpark<br />

Kloosterboer B.V. on 19 December <strong>2012</strong>;<br />

15. Indaver obtained the remaining 50% of the shares in<br />

Depmer B.V. by 21 December <strong>2012</strong><br />

The functional currency is the euro. Unless otherwise stated, all<br />

amounts are presented in thousands of euros.<br />

DELTA N.V. availed itself of the option in Title 9, Book 2, of<br />

the Netherlands Civil Code to prepare the company financial<br />

statements in accordance with the IFRS accounting policies used<br />

in the consolidated financial statements with the exception of the<br />

equity-accounted subsidiaries, joint ventures and associates.<br />

The company income statement is presented in abridged form in<br />

accordance with article 402, Title 9, Book 2, of the Netherlands<br />

Civil Code.<br />

The Supervisory Board signed these <strong>2012</strong> financial statements<br />

on 29 March 2013 and released them for publication.<br />

The Supervisory Board will present the financial statements to<br />

the General Meeting of Shareholders for adoption on<br />

17 May 2013.<br />


Consolidated financial statements<br />

1. Compliance with IFRS and summary of changes in IFRS recognition and measurement rules<br />

The company’s consolidated financial statements have been<br />

drawn up in compliance with the International Financial<br />

Reporting Standards (IFRS) issued by the International<br />

Accounting Standards Board (IASB) and the interpretations<br />

issued by the IFRS Interpretations Committee (IFRS IC) of the<br />

IASB, as endorsed by the European Commission (EC) up to<br />

year-end <strong>2012</strong>.<br />

In comparison with previous financial year, new standards,<br />

interpretations or supplements / improvements were issued by<br />

IASB and approved by the European Commission for adoption<br />

within the European union in <strong>2012</strong>. Those changes not yet<br />

adopted by the EC are not mentioned.<br />

1.1 DELTA applied the following standards and<br />

improvements in its financial statements for <strong>2012</strong><br />

Amendments to IFRS 7 Financial Instruments:<br />

Disclosures –Transfers of Financial Assets.<br />

These amendments aim to help users of financial statements<br />

better evaluate the risk exposures relating to transfers of<br />

financial assets and the effect of those risks on an entity’s<br />

financial position.<br />

1.2 DELTA has not yet applied the following standards<br />

and improvements in its financial statements for<br />

<strong>2012</strong> (application officially required with effect from<br />

1 January 2013 or later):<br />

Amendments to IAS 1 Presentation of Financial Statements –<br />

Presentation of Items of Other Comprehensive Income (as from<br />

the commencement date of the financial year starting on or after<br />

1 July <strong>2012</strong>).<br />

The objective of the amendments to IAS 1 is to make the<br />

presentation of the increasing number of items of other<br />

comprehensive income clearer, and to assist the users of<br />

financial statements in distinguishing between the items<br />

of other comprehensive income that can be reclassified<br />

subsequently to profit or loss, and those that will never be<br />

reclassified to profit or loss.<br />

Amendments to IAS 19 Employee Benefits (as from the<br />

commencement date of the financial year starting on or after<br />

1 January 2013).<br />

The amendments to IAS 19 should help users of financial<br />

statements better understand how defined benefit plans affect<br />

an entity’s financial performance and cash flows.<br />

The main changes are:<br />

a) Eliminating an option to defer the recognition of gains and<br />

losses, known as the “corridor method”. Presentation<br />

of changes in assets and liabilities arising from defined<br />

benefit plans, including requiring remeasurements in other<br />

comprehensive income;<br />

b) Introduction of net interest on the net defined benefit<br />

liability (asset) and in consequence elimination of the<br />

expected return on asset. The net interest is based on the<br />

IAS 19 discount rate and the (un)funded status;<br />

c) In general it became easier under het amended IAS 19 to<br />

classify a pension plan as a defined contribution plan;<br />

d) In the determining the pension liabilities items as risk<br />

sharing or shared financing can also be taken into account.<br />


DELTA Financial statements <strong>2012</strong><br />

IFRS 13 Fair Value Measurement (as from the commencement<br />

date of the financial year starting on or after 1 January 2013).<br />

IFRS 13 sets out a single IFRS framework for measuring fair<br />

value and provides comprehensive guidance on how to measure<br />

the fair value of both financial and non-financial assets and<br />

liabilities. IFRS 13 applies when another IFRS requires or<br />

permits fair value measurement or disclosures about fair value<br />

measurements.<br />

Amendments to IFRS 7 Financial Instruments: Disclosures –<br />

Offsetting Financial Assets and Financial Liabilities (as from the<br />

commencement date of the financial year starting on or after<br />

1 January 2013).<br />

The amendment to IFRS 7 aims to require the provision of<br />

additional quantitative information in order to allow the users<br />

to better compare and reconcile the disclosures under IFRS and<br />

the Generally Accepted Accounting Principles (GAAP) of the<br />

United States.<br />

Amendments to IAS 32 Financial Instruments: Presentation -<br />

Offsetting Financial Assets and Financial Liabilities (as from the<br />

commencement date of the financial year starting on or after<br />

1 January 2014).<br />

IAS 32 is amended to provide additional guidance to reduce<br />

inconsistent application of the standard in practice.<br />

IFRS 10 Consolidated Financial Statements (as from the<br />

commencement date of the financial year starting on or after<br />

1 January 2014).<br />

The objective of IFRS 10 is to provide a single consolidation<br />

model that identifies control as the basis for consolidation<br />

for all types of entities. IFRS 10 replaces IAS 27 Consolidated<br />

and Separate Financial Statements and Interpretation SIC 12<br />

Consolidation – Special Purpose Entities.<br />

IFRS 11 Joint Arrangements (as from the commencement date of<br />

the financial year starting on or after 1 January 2014).<br />

IFRS 11 establishes principles for the financial <strong>report</strong>ing by<br />

parties to a joint arrangement, and replaces IAS 31 Interests<br />

in Joint Ventures and Interpretation SIC 13 Jointly Controlled<br />

Entities – Non-monetary Contributions by Venturers.<br />

IFRS 12 Disclosure of Interests in Other Entities (as from the<br />

commencement date of the financial year starting on or after<br />

1 January 2014).<br />

IFRS 12 combines, enhances and replaces the disclosure<br />

requirements for subsidiaries, joint arrangements, associates<br />

and unconsolidated structured entities.<br />

Amended IAS 27 Separate Financial Statements (as from the<br />

commencement date of the financial year starting on or after<br />

1 January 2014).<br />

IAS 27 has been amended as a consequence of the new IFRS 10,<br />

IFRS 11 and IFRS 12.<br />

Amended IAS 28 Investment in Associates and Joint Ventures<br />

(as from the commencement date of the financial year starting<br />

on or after 1 January 2014).<br />

IAS 28 has been amended as a consequence of the new IFRS 10,<br />

IFRS 11 and IFRS 12.<br />

Application of IFRS 10, 11 and 12 is officially required with effect<br />

of the financial year 2014.<br />

DELTA considers application of these IFRS’s as from the<br />

financial year 2013.<br />


Consolidated financial statements<br />

2. General<br />

2.1 Estimates and assumptions<br />

The preparation of financial statements entails the used of<br />

estimates and assumptions based on past experience and on<br />

factors considered acceptable in the management’s judgement.<br />

These estimates relate primarily to (i) the proceeds from the<br />

sale and transport of electricity and gas to domestic consumers<br />

in connection with staggered meter readings, (ii) deferred tax<br />

assets and (iii) the level of provisions.<br />

They affect the figures in the financial statements, which may<br />

vary from the actual figures. The effects of changes in estimates<br />

are recognised prospectively in the income statement.<br />

Changes in estimates can also lead to adjustments in assets<br />

and liabilities or in components of equity. Such changes in<br />

estimates are recognised in the period in which they occur.<br />

In the notes to the balance sheet and the income statement,<br />

separate disclosures are made of special aspects relating to<br />

estimates and assumptions.<br />

2.2 Impairment of assets<br />

During the year, assessments are made for indications that<br />

assets may be impaired. If so, an estimate is made of the<br />

asset’s recoverable amount, equal to the higher of fair value<br />

less costs to sell and value in use.<br />

If the fair value less costs to sell results in unavoidable costs,<br />

the carrying amount is written down accordingly. Value in use<br />

represents the present value of estimated future cash flows,<br />

based on internal business plans approved by management,<br />

discounted using a pre-tax discount rate that reflects current<br />

market assessments of the time value of money and the risks<br />

specific to the asset. <strong>Annual</strong> impairment tests are performed for<br />

recognised goodwill.<br />

Impairment losses are recognised if the carrying amount<br />

of an asset or the cash-generating unit to which the asset<br />

belongs exceeds the recoverable amount. Impairment of assets<br />

attributed to cash-generating units is first deducted from<br />

the carrying amount of the goodwill attributed to the cashgenerating<br />

units (or groups of units) and then, pro rata, from<br />

the carrying amount of the other assets of the unit or group of<br />

units. The carrying amount of the assets concerned is never<br />

less than their individual recoverable amount.<br />

An impairment loss is reversed if it is established that there<br />

has been a change in the basis on which the recoverable<br />

amount was previously determined, but only to the extent that<br />

the carrying amount of the asset after such reversal does not<br />

exceed the carrying amount of the asset, less depreciation,<br />

if no impairment had occurred. Impairment of goodwill is<br />

not reversed. Impairment losses and reversals thereof are<br />

recognised through profit or loss.<br />


DELTA Financial statements <strong>2012</strong><br />

3. Basis of consolidation<br />

2.3 Government grants<br />

Government grants are recognised as soon as it is reasonably<br />

certain that the conditions for obtaining the grant have been<br />

met or will be met and that the grants have been or will be<br />

received.<br />

On capitalisation of investment projects, grants received and<br />

contributions received to construction costs are deducted<br />

from the acquisition cost of the assets. Operating grants are<br />

generally deducted from the purchase costs.<br />

Subsidies in the form of tax breaks are recognised in the<br />

calculation of the taxable amount.<br />

2.4 Foreign currencies<br />

Assets and liabilities denominated in foreign currencies are<br />

translated into euros at the exchange rates prevailing at yearend.<br />

Differences resulting from movements in exchange rates<br />

are recognised in profit or loss in so far as they do not relate to<br />

the net investment in foreign entities, in which case they are<br />

recognised in equity as part of other comprehensive income.<br />

Income and expenses denominated in foreign currencies are<br />

translated into euros at the exchange rates prevailing at the<br />

time of the transaction.<br />

The consolidated financial statements comprise the financial<br />

data of DELTA NV and its subsidiaries.<br />

Subsidiaries are legal entities and partnerships in which DELTA<br />

controls the operating and financial policy decisions. Existing<br />

and potential voting rights that can currently be exercised or<br />

converted are taken into account in assessing control. The<br />

existence of other agreements that allow DELTA NV to govern<br />

the operating and financial policy are also taken into account.<br />

Subsidiaries are included in the consolidation from the date on<br />

which control is obtained. Consolidation is discontinued with<br />

effect from the date on which control no longer exists.<br />

Subsidiaries are fully consolidated, with 100% of equity and<br />

results included in the consolidation. If DELTA’s interest in a<br />

subsidiary is less than 100%, the non-controlling interest is<br />

recognised separately in the balance sheet and the income<br />

statement.<br />

Acquisitions are accounted for using the purchase accounting<br />

method. Subsidiaries’ accounting policies are changed where<br />

necessary to ensure consistency with the policies applied by<br />

DELTA.<br />

In the case of put options, the corresponding non-controlling<br />

interest is classified as current or non-current liabilities. The<br />

exercise of the put option, acquired in 2007, is seen as part of<br />

the purchase price, ultimately affecting the amount of goodwill.<br />

Put options are accordingly treated in the same way as an earnout<br />

clause, in accordance with IFRS 3.<br />


Consolidated financial statements<br />

4. Basis of recognition and measurement of assets and liabilities<br />

The financial statements have been prepared according to<br />

the historical cost convention, except for measurement of the<br />

carrying amount of derivatives (financial instruments), which is<br />

based on fair value. All transactions in financial instruments are<br />

accounted for on the transaction date.<br />

4.1 Intangible assets<br />

Intangible assets comprise goodwill arising on acquisition,<br />

development costs, software, customer records and acquired<br />

transport rights.<br />

Goodwill<br />

The goodwill represents the positive difference between<br />

the acquisition cost of subsidiaries and the fair value of the<br />

acquisition. Goodwill paid on the acquisition of subsidiaries is<br />

recognised as an intangible asset.<br />

Goodwill arising on the acquisition of an interest in a joint<br />

venture or an investment in an associate is included in the<br />

cost of the relevant investments. If the cost is lower than the<br />

fair value of the identifiable assets, liabilities and contingent<br />

liabilities acquired (negative goodwill), the difference is<br />

recognised directly as income.<br />

The carrying amount of goodwill comprises the historical<br />

cost less the accumulated impairment. Goodwill is not<br />

amortised. <strong>Annual</strong> impairment tests are performed to identify<br />

any impairment of goodwill. For the purposes of these tests,<br />

goodwill is allocated to cash-generating units. If a transaction<br />

qualifies as a transaction between owners, the difference<br />

between acquisition cost and fair value is recognised in equity.<br />

Development costs<br />

Development expenditure is measured at historical cost and<br />

amortised over a period of 10 years according to the pattern of<br />

the additional cash flows generated by the acquired process<br />

knowledge.<br />

Software<br />

Capitalised software is carried at historical cost less<br />

amortisation. In principle, straight-line amortisation is applied<br />

over a five-year period. The useful life is assessed annually.<br />

Any adjustments are accounted for prospectively.<br />

Customer contracts<br />

Customer contracts are measured at cost and amortised<br />

according the pattern of the additional cash flows generated by<br />

the acquired accounts.<br />

Transport rights<br />

Transport rights are measured at cost and amortised on a<br />

straight-line basis over a period of 20 years. The useful life<br />

is assessed annually. Any adjustments are accounted for<br />

prospectively.<br />

4.2 Property, plant and equipment<br />

Property, plant and equipment is stated at cost less<br />

accumulated depreciation on a straight-line basis over the<br />

estimated useful life, determined on the basis of technical and<br />

economic criteria, taking account of the estimated residual<br />

value, less any accumulated impairment losses. In accordance<br />

with IFRIC 18, third-party contributions to construction costs of<br />

property, plant and equipment are no longer deducted from the<br />

carrying amount of the assets but recognised under liabilities<br />

as deferred revenue.<br />

Also included in property, plant and equipment is the<br />

discounted amount that is expected to be necessary for<br />

capping landfill sites when landfill activities come to an end.<br />

Depreciation is based on the actual period for which the landfill<br />

capacity is used. Changes in residual values as a result of<br />

technical and economic developments and the consequences of<br />

applying a different discount rate are recognised in the carrying<br />

amounts of the assets concerned and recognised in profit or<br />

loss in future years by means of depreciation. In the case of<br />

assets which have been fully depreciated, the difference is<br />

expensed immediately.<br />


DELTA Financial statements <strong>2012</strong><br />

Directly attributable external financing expenses for assets<br />

(construction period interest) are included in the cost. If assets<br />

consist of components with different depreciation periods and<br />

residual values, the components are recognised separately.<br />

Investments for the replacement of components are capitalised,<br />

with simultaneous write-down of the component to be replaced.<br />

The estimated life and the estimated residual value are<br />

assessed annually when the business plan is produced. The<br />

carrying amount is adjusted accordingly if impairment tests<br />

indicate impairment.<br />

Property, plant and equipment under construction is stated<br />

at the costs incurred as at the balance sheet date, including<br />

the costs of materials and services, direct staff costs and an<br />

appropriate share of directly attributable overhead costs.<br />

In 1999, Indaver entered into a cross-border lease with an<br />

American investor for the use of lines 1 and 2 of the incineration<br />

plant in Doel, whereby the legal and economic ownership<br />

of the assets remained with the company. These assets are<br />

accordingly recognised in the consolidated financial statements<br />

on the basis of the accounting policies applied for property,<br />

plant and equipment.<br />

4.3 Financial assets<br />

General<br />

A business combination is the bringing together of separate<br />

entities or businesses into one <strong>report</strong>ing entity. A business<br />

combination as defined is accounted for by applying the<br />

purchase method, which involves the following steps:<br />

1. identifying an acquirer;<br />

2. measuring the cost of the business combination; and<br />

3. allocating the acquisition-date cost of the business<br />

combination.<br />

The cost of a business combination is the aggregate of the<br />

fair values, at the date of exchange, of assets given, liabilities<br />

incurred or assumed and equity instruments issued by the<br />

acquirer plus any costs directly attributable to the business<br />

combination. Under IFRS 3 (as approved by the EU in 2004),<br />

the sum was increased for costs directly attributable to the<br />

business combination. Since the revision of IFRS 3 (applied<br />

with effect from 2009) the costs directly attributable to the<br />

acquisition are no longer recognised as cost of the business<br />

combination but are recognised directly in profit or loss.<br />

Goodwill is measured as the value by which the cost of the<br />

business combination exceeds the acquirer’s interest in the<br />

net fair value of identifiable assets, liabilities and contingent<br />

liabilities. Negative goodwill is recognised directly in profit or<br />

loss and noncontrolling interests are recognised in equity.<br />

Joint ventures, associates and other investments<br />

Joint ventures are contractual arrangements whereby DELTA and<br />

one or more other parties undertake economic activities that<br />

are subject to joint control by all parties.<br />

Associates are entities over which DELTA directly or indirectly<br />

has significant influence, but not control. Generally speaking,<br />

this refers to entities in which DELTA can exercise between 20%<br />

and 50% of the voting rights.<br />

Interests in joint ventures and investments in associates are<br />

recognised in the consolidated financial statements using the<br />

equity method. According to this method, the investments<br />

are initially carried at cost, i.e. the fair value of the underlying<br />

asset or liability, including goodwill. If the fair value is higher<br />

than the cost price, the result will be added to the equity<br />

participation. The share in the profits or losses is recognised in<br />

the carrying amount each year and dividend distributions are<br />

deducted. If the (cumulative) losses of the joint venture and/or<br />

associate would lead to a negative book value, these losses are<br />

not recognised, unless DELTA has an obligation to clear these<br />

losses or has made payments to do so.<br />


Consolidated financial statements<br />

Other investments are entities in which DELTA NV has an interest<br />

of less than 20%. In the consolidated financial statements, they<br />

are recognised at fair value unless insufficient information is<br />

available, in which case they are carried at cost.<br />

Undistributed profits of a joint venture or an associate and<br />

direct increases in equity at a joint venture or associate, whose<br />

distributions cannot be received without restriction, are added<br />

to the statutory reserve.<br />

Loans to other investment entities<br />

Loans granted to investees or third parties are carried at face<br />

value, i.e. amortised cost. Where necessary, provisions are<br />

recognised for bad debts and are deducted from the carrying<br />

amount.<br />

Deferred tax<br />

Financial assets also includes deferred tax assets, arising<br />

from the difference between <strong>report</strong>ed amounts and recognised<br />

amounts for tax purposes and from tax loss carryforwards.<br />

Deferred tax assets and liabilities are recognised at face value<br />

calculated at standard corporate income tax rates enacted<br />

or substantially enacted at the end of the <strong>report</strong>ing period.<br />

Deferred tax assets are recognised if it is reasonable to assume<br />

that future taxable profits will be available, permitting them<br />

to be realised. The recognition of a deferred tax asset is<br />

reassessed each year.<br />

4.4 Inventories<br />

Construction and maintenance materials are stated at the<br />

lower of cost, on the basis of the first-in first-out (FIFO) method,<br />

and the net selling price, less a provision for obsolescence.<br />

Impairment losses on inventories are expensed and disclosed<br />

separately.<br />

4.5 Receivables<br />

Trade receivables are measured at fair value on initial<br />

recognition and subsequently carried at amortised cost less<br />

impairment. The short time horizon means that amortised cost<br />

is the same as the face value of the receivables as a rule.<br />

4.6 Construction contracts<br />

DELTA applies the percentage of completion method to<br />

determine construction contract costs and revenues to<br />

be recognised in the income statement for the <strong>report</strong>ing<br />

period. The percentage of completion is based on production<br />

measurements. Work in progress on construction contracts is<br />

recognised at cost less a provision for expected losses and less<br />

invoiced instalments. The profit realised in proportion to the<br />

percentage of completion is included in the carrying amount if it<br />

can be reliably measured.<br />

4.7 Non-current assets held for sale and discontinued<br />

operations<br />

DELTA classifies an asset (or disposal group) as held for sale<br />

if its carrying amount will be recovered principally through a<br />

sale transaction rather than through its continued use. For this<br />

to be the case, the asset (or disposal group) must be available<br />

for immediate sale in its present condition and its sale must be<br />

highly probable and expected to take place within one year.<br />

On recognition of a group of assets as being held for probable<br />

or definite sale, the liabilities directly associated with those<br />

assets will be included in the carrying amount. Immediately<br />

after classification as held for sale, the amount of the assets<br />

is measured at the lower of carrying amount and fair value less<br />

costs to sell and depreciation is discontinued. Any impairment<br />

losses are expensed.<br />


DELTA Financial statements <strong>2012</strong><br />

4.8 Cash<br />

Cash includes not only cash but also cash equivalents that can<br />

be converted into cash with no material risk of impairment. Cash<br />

is carried at fair value.<br />

4.9 Shareholders’ equity<br />

Movements in shareholders’ equity are presented in the<br />

consolidated statement of changes in equity.<br />

The company’s authorised capital amounts to EUR 9,080,000,<br />

divided into 20,000 shares, each with a nominal value of EUR<br />

454. As at 31 December <strong>2012</strong>, EUR 6,937,120 was issued and<br />

paid up. Dividends are recognised as a liability in the period in<br />

which they are declared. During the year no changes occurred.<br />

No changes occurred during the year. None of the shares have<br />

pre-emptive rights or restrictions.<br />

4.10 Provisions<br />

Provisions are recognised in respect of legal or constructive<br />

obligations relating to operations. The provisions are carried<br />

at the present value of the expected expenditure. The present<br />

value is computed using a discount rate before tax reflecting the<br />

current market view of the time value of money.<br />

The expected expenditure within one year of the balance sheet<br />

date is included in current liabilities.<br />

4.11 Employee benefits<br />

Provisions relating to pension obligations and health insurance<br />

costs are determined on an actuarial basis.<br />

The related liabilities are presented separately in the balance<br />

sheet. This is only the case at the subsidiary Indaver. Indaver<br />

provides post-employment benefits for most of its employees.<br />

These benefits are paid under defined contribution plans and<br />

defined benefit plans involving both pension insurance and<br />

unfunded arrangements. The contributions payable under the<br />

defined contribution plan are recognised immediately in the<br />

income statement. For the defined benefit plan, the cost of each<br />

benefit payment is determined separately using the actuarial<br />

Projected Unit Credit Method.<br />

The company recognises part of the actuarial gains or losses in<br />

profit or loss if the accumulated unrecognised gains and losses<br />

at the end of the prior <strong>report</strong>ing period exceeded 10% of:<br />

• the present value of the gross amount of the defined benefit<br />

obligation at that date; and<br />

• the fair value of the plan assets at that date,<br />

any such excess or deficit being divided by the expected average<br />

remaining working lives of the employees participating in the<br />

plan.<br />

4.12 Non-current liabilities<br />

commitments on non-current liabilities due within one year are<br />

included in current liabilities.<br />

With finance leases (in which all the risks and rewards of<br />

ownership are borne by the lessee), the finance lease is<br />

recognised as an asset at the start of the lease period and the<br />

liabilities are included in equity and liabilities at fair value. The<br />

depreciation of the asset is calculated according to the rules for<br />

property, plant and equipment.<br />

With operating leases (in which all the risks and rewards of<br />

ownership are borne by the lessor) the lease payments are<br />

recognised in the income statement on a straight-line basis over<br />

the lease term.<br />

The non-current portion of deferred revenue is classified as a<br />

non-current liability. The portion that is released in the next<br />

<strong>report</strong>ing period is included in current liabilities. The portion<br />

relating to the current <strong>report</strong>ing period is included in revenue.<br />

4.13 Put options<br />

The put options are recognised at fair value attributable to the<br />

put option holder concerned, less any dividends paid. The value<br />

is based on the indirect recoverable amount of the appropriate<br />

non-controlling interest.<br />


Consolidated financial statements<br />

5. Basis of recognition and measurement of financial instruments<br />

5.1 Financial instruments<br />

DELTA uses financial instruments to manage and optimise<br />

normal market risks associated with the company’s energy,<br />

currency and interest rate positions. DELTA applies IAS 32<br />

Financial Instruments:<br />

Disclosure and Presentation and IAS 39 Financial Instruments:<br />

Recognition and Measurement. These standards require<br />

derivatives to be measured and recognised at fair value through<br />

profit or loss and the trading contracts are accounted for in the<br />

income statement on this basis.<br />

Definition<br />

A derivative is a financial instrument or other contract falling<br />

within the scope of IAS 39, with the following three features:<br />

• the value changes as a result of movements in a particular<br />

interest rate, price of a financial instrument, commodity<br />

price, exchange rate, index of prices or interest rates or other<br />

variable, provided that, in the case of non-financial variables,<br />

the variable is not specific to a contract party (also known as<br />

the ‘underlying asset’);<br />

• no or only a minor net initial investment is required in relation<br />

to other types of contract that respond in similar ways to<br />

movements in market factors; and<br />

• settlement takes place in the future.<br />

5.2 Derivatives<br />

DELTA trades in contracts for electricity, gas, coal, oil, CO 2<br />

certificates and currencies relating to the current year and the<br />

three following years. DELTA regards the markets for these<br />

commodities to be liquid over this time horizon, reliable<br />

prices being available from brokers, markets and suppliers<br />

of price information. The fair value of commodity contracts is<br />

calculated on the basis of these published prices; in-house<br />

valuation models are not used. Adjustments are only made to<br />

the published prices for the months, quarters or years ahead<br />

in order to match the relative periods in the trading systems.<br />

DELTA also uses derivatives such as interest rate swaps. The<br />

fair value of interest rate swaps is measured on the basis of<br />

yield curves provided by, amongst others, brokers and De<br />

Nederlandsche Bank N.V.<br />

Classification and netting<br />

Derivatives are classed as current or non-current assets if<br />

the fair value represents a gain and as current or non-current<br />

liabilities if the fair value represents a loss. Receivables and<br />

payables in respect of derivatives for different transactions<br />

with the same party are shown net where there is a contractual<br />

or legally enforceable right of set-off and DELTA also settles the<br />

relevant cash flows on a net basis.<br />

Recognition of fair value gains and losses<br />

Pursuant to IAS 39, energy commodity contracts (electricity,<br />

gas, coal, oil and CO 2<br />

certificates, as well as the related foreign<br />

currency positions) and interest rate swap contracts are<br />

regarded as derivatives. IAS 32 required and IAS 39 and IFRS<br />

7 require all derivatives to be measured at fair value from the<br />

time of initial recognition.<br />

The general principle is that adjustments to the fair value of<br />

derivatives should be recognised through profit or loss. There<br />

are, however, two exceptions:<br />

1. accrual accounting: DELTA accounts for commodity<br />

contracts intended for its own use on an accruals basis,<br />

which means that interim increases in value are not<br />

reflected in the results. Such transactions are recognised as<br />

purchases or sales at the time of settlement, at the prices<br />

obtaining at that time;<br />

2. hedge accounting: this affords the possibility of limiting the<br />

effect of fair value gains and losses on the results by taking<br />

account of opposite effects on results due to fair value gains<br />

and losses on the hedge and on the hedged position. With<br />

hedge accounting, fair value gains and losses on derivatives<br />

are recognised (via the statement of changes in unrealised<br />

income) in equity until the hedged position/transaction is<br />

settled.<br />


DELTA Financial statements <strong>2012</strong><br />

Hedge accounting<br />

DELTA uses derivatives to hedge price and currency risks<br />

arising from energy commodity contracts (electricity, gas,<br />

coal and oil). Interest rate swaps are also used to hedge the<br />

risk of cash flow volatility due to interest rate movements.<br />

DELTA uses cash flow hedging for this purpose, contracting<br />

hedging instruments to offset the exposure to variations in<br />

existing and future cash flows that could ultimately affect the<br />

results. The hedges are attributed to a specific risk relating to<br />

a balance sheet item or a highly probable forecast transaction.<br />

The effective portion of the fair value gain or loss is recognised<br />

directly in hedge reserves in equity (through the statement of<br />

comprehensive income). The ineffective portion of the gain or<br />

loss on the hedging instrument is recognised in the income<br />

statement. The cumulative amounts recognised in equity<br />

are taken to the income statement in the same period as the<br />

hedged transaction.<br />

Criteria for the application of hedge accounting<br />

For hedge accounting to be applied, there are strict rules with<br />

regard to documentation and assessment of effectiveness.<br />

A derivative can be included in hedge accounting if it complies<br />

with the following criteria:<br />

1. at the inception of the hedge there is formal designation<br />

and documentation of the hedging relationship and the risk<br />

management objective and strategy for undertaking the<br />

hedge;<br />

2. for cash flow hedges, a forecast transaction that is the<br />

subject of the hedge must be highly probable and must<br />

present an exposure to variations in existing or future cash<br />

flows that could ultimately affect the results;<br />

3. the effectiveness of the hedge can be reliably measured;<br />

4. the hedge is expected to be highly effective;<br />

5. the hedge is assessed on an ongoing basis and determined<br />

actually to have been highly effective.<br />

Hedge effectiveness<br />

DELTA formally assesses whether the derivatives used as<br />

hedging instruments have been highly effective in mitigating<br />

changes in the fair value or cash flows attributable to the<br />

hedged position, both at the inception of the hedge and during<br />

its life. To this end, DELTA assesses and determines whether<br />

changes in the fair value or cash flows attributable to the<br />

hedged position are offset by changes in the fair value or cash<br />

flows attributable to the hedge within a range of 80% to 125%.<br />

The ineffective portion of a hedging relationship, in a fair<br />

value hedge, is the extent to which changes in the fair value<br />

of the derivative differ from the changes in the fair value of<br />

the hedged position or, in a cash flow hedge, the extent to<br />

which changes in the fair value of the derivative exceed the<br />

fair value movements in the expected cash flow. Ineffective<br />

hedges and gains and losses on components of derivatives<br />

that are disregarded in the assessment of the effectiveness of<br />

a hedge are recognised directly in the income statement. DELTA<br />

discontinues hedge accounting if the hedging relationship is no<br />

longer effective or is no longer expected to remain effective.<br />


Consolidated financial statements<br />

6. Basis of determination of results<br />

6.1 Revenue<br />

Revenue represents income arising directly from the supply of<br />

goods and services to third parties, net of any discounts and<br />

net of sales taxes, such as VAT and regulating energy tax (REB).<br />

Revenue is recognised when the material risks and benefits<br />

of ownership of the goods have been transferred to the buyer.<br />

Revenue from services is recognised proportionate to the<br />

service delivered at the end of the <strong>report</strong>ing period.<br />

Recognition of revenue from transport services and the<br />

supply of electricity and gas is based on supplies during the<br />

calendar year. Revenue from supplies to domestic and smallbusiness<br />

users is partly estimated as meter readings are taken<br />

throughout the year.<br />

Recognition of revenue from electricity sales is based on the<br />

assumption that electricity generated by the group’s own<br />

production facilities (including joint ventures) will be supplied<br />

to third parties, while the power supplied to end-users will be<br />

procured entirely from third parties.<br />

In the case of gas and electricity trading contracts that do not<br />

involve physical delivery, the amounts of purchases and sales<br />

are netted off, provided that this has been contractually agreed.<br />

Revenue from telecommunications covers subscription fees for<br />

signal distribution as well as income from internet services and<br />

other data transmission services.<br />

Income from environmental services and directly related<br />

expenses over environmental services are allocated to the<br />

period in which the services are supplied.<br />

6.2 Net operating expenses<br />

Net operating expenses are recognised and measured on the<br />

basis of actual performance and according to the accounting<br />

policies set out above. The operating expenses are accounted<br />

for in the year to which they relate. Gains are recognised in the<br />

year in which they are realised; losses are recognised in the<br />

year in which they are identified.<br />

6.3 Net finance income (expense)<br />

Finance income and expense is attributed to the period to which<br />

it relates, in accordance with the effective interest method.<br />

DELTA capitalises the costs of external financing (construction<br />

period interest) as appropriate.<br />

6.4 Corporate income tax<br />

Corporate income tax on the result is calculated by applying<br />

the standard current rate to the profit before tax shown in the<br />

financial statements, taking account of permanent differences<br />

between this result and the result based on tax valuations.<br />

Within the DELTA N.V. tax group, DELTA uses the no-settlement<br />

method, except in the case of transferable tax-loss<br />

carryforwards predating the date of inclusion in a tax group.<br />

For the network operations, the separate return approach is<br />

used because of the special regulatory regime.<br />

6.5 Discontinued operations<br />

In the income statement, all financial consequences arising<br />

from decisions to dispose of or wind up operations, plus the<br />

normal trading results for <strong>2012</strong>, are accounted for in the ‘Profit<br />

after tax from discontinued operations’ item.<br />

Revenue from construction contracts is recognised in the<br />

income statement in accordance with the<br />

percentage of completion.<br />


DELTA Financial statements <strong>2012</strong><br />

7. Basis of the cash flow statement<br />

The cash flow statement is prepared using the indirect method,<br />

based on the actual cash flows. A distinction is made between<br />

operating, investing and financing activities. Although the<br />

current portion of the non-current liabilities is recognised in<br />

the balance sheet as part of other liabilities (under current<br />

liabilities), the corresponding movement in the current portion<br />

of the non-current liabilities in the cash flow statement is<br />

included in the cash flow from financing activities.<br />

Cash flows relating to minority interests (dividend payments),<br />

financial income and expenses and income taxes (tax<br />

assessments) are based on the actual receipts and payments.<br />


Consolidated financial statements<br />

Notes to the consolidated balance sheet<br />

1. Intangible assets<br />

(x EUR 1,000)<br />

Total Goodwill R&D Software Customer<br />

contracts<br />

Transport<br />

rights<br />

2011<br />

Carrying amount as at 1 January 2011 419.949 340,147 125 49,710 4,477 8,820 16,671<br />

Investments 16,507 - - 14,188 - - 2,319<br />

Amortisation (25,894) - - (24,138) (745) (1,011) -<br />

Impairment (125) - (125) - - - -<br />

Disposals (251) - - - - - (251)<br />

Earn Out (149) (149) - - - - -<br />

Other movements (15,236) - - (939) - - (14,297)<br />

Carrying amount as at 31 December 2011 394,801 339,998 - 38,821 3,732 7,809 4,442<br />

Accumulated amortisation and impairment 303,946 99,458 15,530 151,963 21,760 11,499 3,736<br />

Acquisition cost as at 31 December 2011 698,747 439,456 15,530 190,784 25,492 19,308 8,178<br />

Other<br />

<strong>2012</strong><br />

Carrying amount as at 1 January <strong>2012</strong> 394,801 339,998 - 38,821 3,732 7,809 4,442<br />

Investments 13,208 - - 13,208 - - -<br />

Amortisation (17,111) - - (15,622) (478) (1,011) -<br />

Impairment (298) (298) - - - - -<br />

Disposals (402) - - - - - (402)<br />

Earn Out 620 620 - - - - -<br />

Change in the scope of the consolidation 298 298 - - - - -<br />

Other movements (884) - - (884) - - -<br />

Carrying amount as at 31 December <strong>2012</strong> 390,232 340,618 - 35,523 3,254 6,798 4,040<br />

Accumulated amortisation and impairment 304,244 99,756 15,530 151,963 21,760 11,499 3,736<br />

Acquisition cost as at 31 December <strong>2012</strong> 694,476 440,374 15,530 187,486 25,014 18,297 7,776<br />

Amortisation periods in years n/a variable 5 variable 20 variable<br />

(x EUR 1,000)<br />

Allocation of goodwill to cash-generating units 31-12-<strong>2012</strong> 31-12-2011<br />

Indaver 329,385 328,765<br />

Kreekraksluis 1,390 1,390<br />

Zeelandnet 9,843 9,843<br />

Total Goodwill 340,618 339,998<br />


DELTA Financial statements <strong>2012</strong><br />

General<br />

No significant impairments occurred in <strong>2012</strong>, as in 2011.<br />

Goodwill<br />

IFRS requires an impairment test to be performed each year to<br />

determine whether the carrying amount of goodwill paid in the<br />

past for subsidiaries should be written down.<br />

Software<br />

In the context of the extension and replacement of some key<br />

software applications, particularly with regard to commercial<br />

activities, there was accelerated depreciation of IT assets in<br />

2011. The level of depreciation of IT assets in <strong>2012</strong> was therefore<br />

lower than in the previous year.<br />

Indaver<br />

With regard to Indaver’s activities, impairment calculations<br />

were made at the level of its cash flow generating units. The<br />

management based cash flow predictions on the business<br />

plans for 2013-2015 and in a number of cases on a longer time<br />

frame. An infinite series was used as from the end of the time<br />

frame, taking account of the available information relating to<br />

market developments. No use was made of extrapolations with<br />

growth rates in excess of inflation.<br />

The impairment tests were carried out using a specific discount<br />

rate for each entity. Allowing for the ratio of debt to equity that<br />

is customary in the market and the risk perceptions in each<br />

country and sector, a number of scenarios were worked out with<br />

regard to the discount rate. The discount rate per entity ranged<br />

from 7.6% to 9.1% before tax, account being taken of tax rates<br />

applicable locally. These calculations gave no grounds for<br />

recognising any impairment.<br />


Consolidated financial statements<br />

2. Property, plant and equipment<br />

(x EUR 1,000)<br />

Total<br />

Land and<br />

buildings<br />

Plant and<br />

equipment<br />

Other assets<br />

Assets under<br />

construction<br />

Third-party<br />

2011<br />

Carrying amount as at 1 January 2011 977,407 178,566 791,637 14,081 153,983 (160,860)<br />

Investments 151,329 4,236 20,723 160 127,122 (912)<br />

Capitalized interest 249 - - - 249 -<br />

Depreciation (83,567) (10,931) (76,451) (2,850) - 6,665<br />

Impairments (6,245) (1,218) (2,054) 1,104 (4,077) -<br />

Disposals (3,243) (372) (221) (60) (3,054) 464<br />

Other movements (176) 21,294 166,292 1,862 (190,104) 480<br />

Carrying amount as at 31 December 2011 1,035,754 191,575 899,926 14,297 84,119 (154,163)<br />

Carrying amount before deduction of contributions 1,189,917 191,575 899,926 14,297 84,119<br />

Accumulated depreciation and impairment 1,300,413 163,079 1,076,528 56,328 4,478<br />

Acquisition cost as at 31 December 2011 2,490,330 354,654 1,976,454 70,625 88,597<br />

<strong>2012</strong><br />

Carrying amount as at 1 January <strong>2012</strong> 1,035,754 191,575 899,926 14,297 84,119 (154,163)<br />

Investments 95,955 1,073 30,002 22 67,287 (2,429)<br />

Capitalized interest 513 - - - 513 -<br />

Depreciation (92,186) (10,706) (85,133) (2,612) - 6,265<br />

Impairments (23,932) (655) (24,507) (789) - 2,019<br />

Disposals (1,974) (339) (1,116) (519) - -<br />

Change in the scope of the consolidation (846) 7 (853) - - -<br />

Reclassified as held for sale (1,600) - - (1,600) - -<br />

Other movements (1,625) 855 81,187 1,529 (87,618) 2,422<br />

Carrying amount as at 31 December <strong>2012</strong> 1,010,059 181,810 899,506 10,328 64,301 (145,886)<br />

Carrying amount before deduction of contributions 1,155,945 181,810 899,506 10,328 64,301<br />

Accumulated depreciation and impairment 1,424,815 174,440 1,186,168 59,729 4,478<br />

Acquisition cost as at 31 December <strong>2012</strong> 2,580,760 356,250 2,085,674 70,057 68,779<br />

Depreciation periods in years 0 - 40 7 - 40 5 - 15 n/a<br />

The level of investment is lower than in 2011. Investment in machinery and equipment (including changes in assets under construction)<br />

relates mainly to the expansion and replacement of electricity and gas networks (network company) and the expansion and renovation<br />

of waste treatment facilities (Indaver). DELTA N.V. also started constructing a new wind farm Kreekraksluis (Zeeland Province).<br />

The impairment charge relates mainly to a write-down of combined heat and power (CHP) plants and the impairment of a transport<br />

connection to an industrial estate. An impairment assessment was performed based on the portfolio of the CHPs, with associated<br />

contractual maturities and the expected development in energy prices. The reason for the impairment assessment of the transport<br />

connection was the substantial reduction in purchases by the businesses on the industrial estate in question. A pre-tax discount rate<br />

of 7.9% was applied in both these assessments, which showed a lower value in use than the book value.<br />

All assets of DELTA Industriële Reiniging B.V., have been transferred to assets held for sale because of the planned sale of that<br />

business in 2013.<br />

As required by IFRIC 18, with effect from 1 January 2009, contributions received from third parties towards the costs of constructing<br />

property, plant and equipment are no longer deducted from the carrying amount of the assets concerned but recognised instead as<br />

deferred revenue.<br />


DELTA Financial statements <strong>2012</strong><br />

3. Interests in joint ventures, investments in associates and other investments<br />

(x EUR 1,000)<br />

Total Joint Ventures Associates Other investments<br />

Carrying amount as at 1 January 2011 521.563 466,090 47,294 8,179<br />

Fair Value adjustments 23,115 - - 23,115<br />

Acquisitions 137.226 137,000 226 -<br />

Negative goodwill 153,979 153,979 - -<br />

Investments/Disposals (1,300) - - (1,300)<br />

Dividends received (59,311) (48,505) (5,217) (5,589)<br />

Share of profits 71,778 60,901 10,602 275<br />

Other movements 20,759 7,046 (78) 13,791<br />

Carrying amount as at 31 December 2011 867,809 776,511 52,827 38,471<br />

Carrying amount as at 1 January <strong>2012</strong> 867,809 776,511 52,827 38,471<br />

Acquisitions 16 9 7 -<br />

Investments/Disposals (22,663) - - (22,663)<br />

Dividends received (69,873) (58,129) (6,726) (5,018)<br />

Share of profits 77,674 49,815 6,618 21,241<br />

IAS39 movement (23,115) - - (23,115)<br />

Other movements (3,389) (5,440) (92) 2,143<br />

Carrying amount as at 31 December <strong>2012</strong> 826,459 762,766 52,634 11,059<br />

KEMA’s shares were recognised at fair value in 2011; the completion of the sale in <strong>2012</strong> led to a write-off of the interest and recognition<br />

of the realised sales. These items are included under ‘Other associates’. In addition, the sale of the Decu C.V. participation was<br />

completed.<br />

The higher revenue from dividends is attributable in particular to the water company Evides, to energy production units operating on<br />

the basis of a tolling agreement, including with DELTA, and to a final dividend on the sale of one of the other associates.<br />

During the financial year, a change in the estimates was made for the lifespan of a joint venture in waste incineration. The related<br />

depreciation is recognised under ‘Profit from associates’. In addition, an assessment was made of the fair value resulting from the<br />

acquisition of the joint venture. This led to a minor impairment.<br />

The fair value associated with the tolling rights obtained in acquisitions is amortised over the remaining life of the related activities.<br />

Over the year being <strong>report</strong>ed on, this led to a depreciation charge of EUR 20 million, included in the ‘Profit from associates’. The ‘Profit<br />

from associates’ item of EUR 14 million was affected by mutations in the year and by updates to the provision for onerous contracts.<br />

The other changes relate mainly to a repayment of share premium of EUR 5.5 million from a joint venture.<br />


Consolidated financial statements<br />

3.1 Joint ventures<br />

Summarised balance sheet and income statement information relating to the principal joint ventures (based<br />

on 100% interest):<br />

(x EUR 1,000)<br />

Balance sheet 31-12-<strong>2012</strong> 31-12-2011<br />

Property, plant and equipment 1,863,016 1,836,685<br />

Financial assets 284,624 196,999<br />

Current assets 226,495 210,212<br />

Cash and cash equivalents 262,648 330,891<br />

Total assets 2,636,783 2,574,787<br />

Shareholders' equity 560,971 531,242<br />

Provisions 701,975 620,961<br />

Non-current liabilities 815,595 923,570<br />

Current liabilities 558,242 499,014<br />

Total equity and liabilities 2,636,783 2,574,787<br />

Result <strong>2012</strong> 2011<br />

Total income 837,351 875,504<br />

Total expenses 678,523 738,541<br />

Balance 158,828 136,963<br />

The above information relates to the principal joint ventures in which DELTA has an interest, viz.:<br />

the electricity generators N.V. EPZ, Elsta B.V. and Sloe Centrale Holding B.V., the water company Evides N.V. and the waste-to-energy<br />

company Sleco-Centrale N.V.<br />


DELTA Financial statements <strong>2012</strong><br />

3.2 Associates<br />

Summarised balance sheet and income statement information relating to the principal associates (based on<br />

100% interest):<br />

(x EUR 1,000)<br />

Balance sheet 31-12-<strong>2012</strong> 31-12-2011<br />

Property, plant and equipment 303,426 302,605<br />

Financial assets 635 635<br />

Current assets 16,765 17,570<br />

Cash and cash equivalents 20,362 19,631<br />

Total assets 341,188 340,441<br />

Shareholders' equity 176,304 154,644<br />

Provisions 6,789 6,034<br />

Non-current liabilities 84,367 106,421<br />

Current liabilities 73,728 73,342<br />

Total equity and liabilities 341,188 340,441<br />

Result <strong>2012</strong> 2011<br />

Total income 151,915 150,647<br />

Total expenses 131,079 126,687<br />

Balance 20,836 23,960<br />

This information relates to the principal associates in which DELTA has an interest: landfill company<br />

Intercommunale Hooge Maey cvba and waste-to-energy company AZN Holding B.V.<br />

The 2011 numbers are based on the final annual <strong>report</strong>ed figures of concerning entities.<br />

In <strong>2012</strong>, numbers are based on the last known information within DELTA.<br />


Consolidated financial statements<br />

3.3 Other investments<br />

All <strong>report</strong>ed entities presented as other investments are<br />

included in the list of non-consolidated companies.<br />

The interests in Decu Beheer B.V. (60%) and Decu C.V. (60%),<br />

classified in 2011 as ‘Financial instruments’, have been sold.<br />

In connection with the implementation of the Borssele<br />

convenant, the Sustainable Energy Technology Fund<br />

(SET-Fund I C.V.) was set up in 2007, with the then energy<br />

companies DELTA (via DELTA Investeringsmaatschappij B.V.<br />

as silent partner) and Essent both having an interest of 50%.<br />

Having regard to the Fund’s articles of association and the<br />

altered shareholding in N.V. EPZ, a new SET-Fund II C.V. was<br />

established on 23 December 2011 in which DELTA has a 70%<br />

interest and Essent (RWE) a 30% interest in the initial capital<br />

of EUR 10 million. In view of the limited degree of control,<br />

the investments in both entities are classed as financial<br />

instruments and recognised at fair value.<br />


DELTA Financial statements <strong>2012</strong><br />

3.4 Transactions with related parties<br />

(x EUR 1,000)<br />

Sales Purchases Trade<br />

receivables<br />

Trade<br />

Payables<br />

Loans granted<br />

Interest<br />

% Interest <strong>2012</strong> 2011 <strong>2012</strong> 2011 31-12-<strong>2012</strong> 31-12-2011 31-12-<strong>2012</strong> 31-12-2011 31-12-<strong>2012</strong> 31-12-2011 <strong>2012</strong> 2011<br />

Elsta B.V en Co C.V.<br />

24.75% 103 3,524 25,065 27,107 12 359 2,481 2,757 132 132 - -<br />

Elsta B.V.<br />

25.00%<br />

}<br />

N.V. EPZ 70.00% 20,049 18,421 224,850 184,775 2,433 262 20,244 3,084 - - - -<br />

Sloe Centrale Holding B.V. 50.00% 19 524 38,419 32,616 - 47 12,098 10,021 - - - -<br />

BMC Moerdijk B.V. 50.00% 1,732 2,473 5,819 5,014 484 441 1,137 1,334 14,320 14,823 1,552 1,087<br />

Zebra Gasnetwerk B.V. 33.33% 786 830 3,360 3,808 397 403 - 375 - - - 570<br />

IC Hooge Maey cvba 30.00% 856 825 166 771 178 115 61 299 - - - -<br />

Sleco Centrale N.V. 50.00% 22,037 18,730 59,032 55,986 6,165 3,153 6,790 4,948 5,000 4,000 112 -<br />

Evides N.V. 50.00% 27,148 33,786 - - 1,536 2,750 - - - - - -<br />

Total 72,730 79,113 356,710 310,077 11,205 7,530 42,811 22,818 19,452 18,955 1,664 1,657<br />

Transactions with related parties are conducted at arm’s length prices. N.V. EPZ, Elsta B.V. and Sloe Centrale B.V. operate on the basis<br />

of tolling agreements (effectively on a cost-plus basis). Sleco Centrale N.V. also has an internal pricing structure not related to current<br />

market prices. Other transactions are at arm’s length.<br />

No allowance for doubtful receivables has been recognised for receivables from related parties since there is no need to do so.<br />

Although DELTA’s shareholders (provincial and municipal authorities) are related parties, there are no material transactions between<br />

DELTA and its shareholders.<br />


Consolidated financial statements<br />

4. Other financial assets<br />

(x EUR 1,000)<br />

Total Loans to joint ventures Deferred tax asset Other financial assets<br />

and associates etc.<br />

Carrying amount as at 1 January 2011 127,126 13,775 91,056 22,295<br />

Reversal of current portion 4,029 1,150 - 2,879<br />

New loans 5,407 4,818 - 589<br />

Results (30,761) - (30,761) -<br />

Repayments (14,555) (23) - (14,532)<br />

Transferred to equity as hedge reserve 16,098 - 16,098 -<br />

Impairment (2,300) - - (2,300)<br />

Other movements (128) - (542) 414<br />

Carrying amount as at 31 December 2011 104,916 19,720 75,851 9,345<br />

Current portion of financial assets (5,390) (5,350) - (40)<br />

Carrying amount as at 1 January <strong>2012</strong> (long term) 99,526 14,370 75,851 9,305<br />

Reversal of current portion 5,390 5,350 - 40<br />

New loans 2,380 2,185 - 195<br />

Results (11,320) - (11,320) -<br />

Repayments (1,229) (618) - (611)<br />

Transferred to equity as hedge reserve (1,408) - (1,408) -<br />

Other movements (3) (450) (1) 488<br />

Carrying amount as at 31 December <strong>2012</strong> 93,336 20,837 63,122 9,377<br />

Current portion of financial assets (6,525) (6,485) - (40)<br />

Carrying amount as at 31 December <strong>2012</strong> (long term) 86,811 14,352 63,122 9,337<br />

4.1 Loans to joint ventures, associates etc.<br />

This concerns loans to joint ventures, associates and other<br />

investment entities. The loans are stated at face value. Of<br />

these loans, an amount of EUR 13.8 million is in the form of<br />

subordinated loans. As at year-end <strong>2012</strong>, the weighted average<br />

interest rate was 7.2% (2011: 7.3%).<br />


DELTA Financial statements <strong>2012</strong><br />

4.2 Deferred tax assets<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Intangible assets and property, plant and equipment (9,683) 50,090<br />

Financial assets 6,437 (55,718)<br />

Provisions 44,618 53,882<br />

Unutilised tax losses 20,307 24,567<br />

Hedge reserve pursuant to IAS39/derivatives 1,414 2,674<br />

Other 29 356<br />

Total deferred tax asset 63,122 75,851<br />

Deferred tax assets relate to the carrying amounts of intangible<br />

assets, property, plant and equipment and previously<br />

recognised provisions. The deferred tax asset relating to<br />

intangible assets and property, plant and equipment is largely<br />

the result of:<br />

• differences between the tax bases and the carrying amounts<br />

for <strong>report</strong>ing purposes in the balance sheet at 1 January 1998<br />

(opening balance sheet for tax purposes for DELTA);<br />

• the acquisition of the 20% interest in N.V. EPZ;<br />

• the provision for unprofitable contracts has been allowed for<br />

commercially but does not apply for tax purposes.<br />

Furthermore, a deferred tax asset has been recognised for<br />

unused tax losses that are expected to be offsettable in the<br />

coming years. At the balance-sheet date, consultations with<br />

the tax authorities are still ongoing to establish the extent of<br />

these tax losses. Depending on the outcome of these talks, the<br />

deferred tax asset may change. The deferred tax assets on loss<br />

carry-forwards are reviewed annually and are recognised if, as<br />

expected, they can be offset against future taxable profits.<br />

Since 2006, a hedge reserve for unrealised fair value gains<br />

and losses on derivatives/trading contracts has also been<br />

recognised in compliance with IAS 39/32. A deferred tax asset<br />

is also recognised in respect of these unrealised fair value<br />

gains and losses. As at year-end <strong>2012</strong>, this hedge reserve was<br />

negative (therefore an asset), resulting in an increase in the<br />

deferred tax asset.<br />

As at year-end <strong>2012</strong>, a deferred tax asset amounting to<br />

EUR 26.7 million was not recognised in the balance sheet<br />

because of uncertainty as to when the related tax loss carry<br />

forwards (in the Netherlands and in other countries) might be<br />

utilised or the asset might be realised. EUR 5.1 million of the<br />

losses that may be carried forward expires within five years.<br />

The remainder has a carry-forward period of more than 5 years.<br />

4.3 Other financial assets<br />

The ‘Other financial assets’ as at year-end <strong>2012</strong> mainly<br />

comprise prepayments. In 2011, sale-and-leaseback contracts<br />

were terminated. The repayments received relate to the return<br />

of funds placed on deposit; under the terms of the sale-andleaseback<br />

contracts, the purchase prices were placed on<br />

deposit in favour of the lessor by way of security.<br />


Consolidated financial statements<br />

5. Derivatives and risk management<br />

DELTA N.V. trades in contracts for gas, electricity, coal, oil, CO 2<br />

certificates and currencies relating to the current year and the<br />

three following years. DELTA N.V. regards the markets for these<br />

commodities to be liquid over this time horizon: reliable prices<br />

are available for them from brokers, markets and suppliers of<br />

price information. Fair values for these contracts are calculated<br />

on the basis of these published prices; inhouse valuation<br />

models are not used. Adjustments are only made to the<br />

published prices for the months, quarters or years ahead in<br />

order to match the relative periods in the trading systems.<br />

DELTA has a contractual obligation to settle forward contracts<br />

on maturity.<br />

To hedge interest rate risks, DELTA N.V. makes use of<br />

derivatives such as interest rate swaps. The effect of this type<br />

of swap contract is to change loans contracted at floating rates<br />

into fixed-rate loans.<br />

This section covers the following topics:<br />

5.1. Derivatives<br />

5.1.1 Relationships of derivatives in the financial<br />

statements<br />

5.1.2 Derivatives position<br />

5.1.3 Changes in the hedge reserve<br />

5.1.4 Hierarchy of financial instruments<br />

5.2. Risk management<br />

5.2.1 Risk management<br />

5.2.2 Market risks<br />

5.2.3 Liquidity risk<br />

5.2.4 Credit risk<br />


DELTA Financial statements <strong>2012</strong><br />

5.1 Derivatives<br />

5.1.1 Relationships of derivatives in the financial statements<br />

(x EUR 1,000)<br />

Derivatives on the balance sheet (see 5.1.2)<br />

Assets<br />

<strong>2012</strong><br />

Balance of derivatives<br />

Assets<br />

2011<br />

Liabilities<br />

<strong>2012</strong><br />

Liabilities<br />

2011<br />

Changes in derivatives<br />

Change in <strong>2012</strong><br />

Assets<br />

Non-current assets 101,232 68,007 33,225<br />

Current assets 136,557 230,250 (93,693)<br />

237,789 298,257 (60,468)<br />

Change in <strong>2012</strong><br />

Liabilities<br />

Non-current liabilities 101,283 77,149 24,134<br />

Current liabilities 139,344 223,724 (84,380)<br />

240,627 300,873 (60,246)<br />

Other balance sheet items relating to derivatives<br />

Hedge reserve (see 5.1.3) (1,922) (6,044) 4,122<br />

Deferred tax (see 5.1.3) (1,266) (2,674) 1,408<br />

Non-controlling interest connected with swaps<br />

(1,000) (904) (96)<br />

(see 5.1.3)<br />

Sub total - - (4,188) (9,622) - 5,434<br />

Purchase of interest rate derivatives by DNWB 2,250 2,250 -<br />

Changes in equity through profit or loss (2,106) (1,453) (653)<br />

Fair value changes in equity through profit or loss 1,206 6,209 (5,003)<br />

- - (2,838) (2,616) - (222)<br />

Total 237,789 298,257 237,789 298,257 (60,468) (60,468)<br />


Consolidated financial statements<br />

5.1.2 Derivatives position<br />

(x EUR 1,000)<br />

Assets Liabilities Net<br />

Non-current Current Non-current Current<br />

<strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011<br />

Commodity contracts<br />

Gas 24,774 23,194 52,123 152,004 (37,335) (33,408) (56,284) (145,584) (16,722) (3,794)<br />

Electricity 57,358 27,101 57,229 27,446 (39,918) (19,508) (47,781) (28,277) 26,888 6,762<br />

Coal 1,805 428 1,596 5,523 (3,168) (1,733) (8,228) (11,219) (7,995) ( 7,001)<br />

Oil 1,243 2,013 4,037 5,368 - (623) (709) (2,498) 4,571 4,260<br />

Other 2,847 1,306 5,205 10,592 (10,440) (13,722) (14,193) (16,218) (16,581) (18,042)<br />

Other derivatives<br />

Foreign exchange<br />

13,061 13,167 16,367 29,176 (8,262) (5,667) (10,694) (16,807) 10,472 19,869<br />

contracts<br />

Interest rate swaps 144 798 - 141 (2,163) (2,488) (1,455) (3,121) (3,474) (4,670)<br />

Total 101,232 68,007 136,557 230,250 (101,283) (77,149) (139,344) (223,724) (2,841) (2,616)<br />

An amount of EUR 5.4 million negative (2011: EUR 63.1 million positive) of the gains and losses on these contracts has been recognised<br />

in the hedge reserve.<br />


DELTA Financial statements <strong>2012</strong><br />

5.1.3 Changes in the hedge reserve<br />

The changes in the fair value after tax of the derivatives are included in the hedge reserve. This reserve is not freely distributable.<br />

The movements in the hedge reserve over the past two years are presented below.<br />

(x EUR 1,000)<br />

Commodity contracts<br />

Swaps<br />

Gas Electricity Coal Oil CO 2<br />

Forex Total Interest Total<br />

rate swaps<br />

2011<br />

Hedge reserve 1-1-2011 (gross) 61,042 (8,772) 10,037 (125) (4,023) 5,003 63,162 (9,666) 53,496<br />

Changes in 2011<br />

Recognised directly in equity (22,373) 9,530 (8,196) 1,645 (14,482) 12,536 (21,340) (970) (22,310)<br />

Released to income (37,560) 1,517 (5,649) 1,386 (3,007) (2,663) (45,976) 5,168 (40,808)<br />

Total changes 2011 (59,933) 11,047 (13,845) 3,031 (17,489) 9,873 (67,316) 4,198 (63,118)<br />

Hedge reserve 31-12-2011 (gross) 1,109 2,275 (3,808) 2,906 (21,512) 14,876 (4,154) (5,468) (9,622)<br />

Deferred tax (277) (569) 952 (726) 5,378 (3,719) 1,039 1,636 2,674<br />

Non-controlling interest 904 904<br />

Hedge reserve at 31-12-2011 832 1,706 (2,856) 2,180 (16,134) 11,157 (3,115) (2,928) (6,044)<br />

<strong>2012</strong><br />

Hedge reserve 1-1-<strong>2012</strong> (gross) 1,109 2,275 (3,808) 2,906 (21,512) 14,876 (4,154) (5,468) (9,622)<br />

Changes in <strong>2012</strong><br />

Recognised directly in equity (4,875) 11,178 (5,755) 3,213 (4,552) 4,197 3,407 (1,130) 2,277<br />

Released to income (7,367) 5,245 2,723 (107) 7,532 (7,848) 177 2,980 3,157<br />

Total changes <strong>2012</strong> (12,242) 16,423 (3,032) 3,106 2,980 (3,651) 3,584 1,850 5,434<br />

Hedge reserve 31-12-<strong>2012</strong> (gross) (11,133) 18,698 (6,840) 6,012 (18,532) 11,225 (570) (3,618) (4,188)<br />

Deferred tax 2,783 (4,714) 1,710 (1,503) 4,633 (2,806) 103 1,163 1,266<br />

Non-controlling interest (72) (72) 1,072 1,000<br />

Hedge reserve at 31-12-<strong>2012</strong> (8,350) 13,912 (5,130) 4,509 (13,899) 8,419 (539) (1,383) (1,922)<br />


Consolidated financial statements<br />

The composition of the hedge reserve in relation to the commodities, on a gross basis, as at year-end <strong>2012</strong> is attributable as follows<br />

to the years ahead:<br />

Hedge-reserve commodities<br />

(x EUR 1,000)<br />

Commodities<br />

Gas Electricity Coal Oil CO 2<br />

Forex Total<br />

2013 (1,872) 4,989 (6,753) 4,488 (10,811) 6,628 (3,331)<br />

2014 (8,730) 12,125 (87) 1,524 (6,186) 3,892 2,538<br />

2015 (531) 1,584 - - (1,535) 705 223<br />

2016 - - - - - - -<br />

Total (11,133) 18,698 (6,840) 6,012 (18,532) 11,225 (570)<br />

The release from the hedge reserve to profit or loss is recognised in the gross operating margin.<br />

The timing of the expected cash flows does not always coincide<br />

with their recognition in the income statement.<br />

This is because some hedges have a ‘timing effect’. This is the<br />

case, for example, with the majority of gas hedges, in that<br />

the gas price for the first quarter of a year may be determined<br />

by the average oil price over the six months preceding that<br />

quarter. The value of the swaps used in such a hedging<br />

relationship, settlement of which takes place in the six months<br />

preceding the quarter in which delivery is made, is recognised<br />

in the hedge reserve up to the beginning of the delivery quarter,<br />

with the gain or loss recognised in income in the first quarter<br />

of delivery. The maximum time lag on contracts in a hedging<br />

relationship is nine months. During the <strong>report</strong>ing period, there<br />

were no hedging relationships that were discontinued because<br />

an expected transaction did not go ahead.<br />


DELTA Financial statements <strong>2012</strong><br />

5.1.4 Hierarchy of financial instruments<br />

The financial instruments, measured at fair value, are classified in accordance with the following hierarchy as required by IFRS 7<br />

Financial Instruments:<br />

- Level 1: Quoted prices (not adjusted) in active markets for identical assets or liabilities;<br />

- Level 2: Inputs other than the quoted prices in level 1 that are observable for an asset or liability, either directly (i.e. as prices) or<br />

indirectly (i.e. derived from prices);<br />

- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).<br />

Assets and liabilities measured at fair value<br />

(x EUR 1,000)<br />

Fair value hierarchy<br />

Total as at 31 December Level 1 Level 2 Level 3<br />

<strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011<br />

Assets<br />

Derivatives 237,789 298,257 - - 237,789 298,257 - -<br />

Equity investments < 20% 11,795 38,471 - - - - 11,795 38,471<br />

Total assets 249,584 336,728 - - 237,789 298,257 11,795 38,471<br />

Equity and liabilities<br />

Derivatives 240,627 300,873 - - 240,627 300,873 - -<br />

Put options 152,277 146,511 - - - - 152,277 146,511<br />

Total equity and liabilities 392,904 447,384 - - 240,627 300,873 152,277 146,511<br />

The fair value of the other shareholdings (

Consolidated financial statements<br />

5.2 Risk management<br />

5.2.1 Risk management<br />

DELTA operates on the international gas and electricity<br />

markets. The prices on these markets fluctuate a great deal.<br />

Making use of financial instruments allows DELTA to mitigate<br />

commodity market risks, currency risks, interest-rate risks,<br />

liquidity risks and credit risks. The preconditions for this have<br />

been set out in the Risk Policy Document and the Treasury<br />

Regulations.<br />

The Risk Management Committee has - under the responsibility<br />

of the statutory board - established general procedures and<br />

limits. It ensures that the energy trading and sales activities of<br />

DELTA remain within the defined risk margins.<br />

5.2.2 Market risks<br /> Commodity prices<br />

Market risks arise from price movements on the markets on<br />

which DELTA buys and sells (gas, electricity, coal, oil, CO 2<br />

emission rights, currencies, transport capacity, import/export<br />

capacity etc.) DELTA’s policy aims to reduce the impact of price<br />

movements in the short term and to follow the applicable<br />

market prices in the longer term. For this systematic risk<br />

control, DELTA determines how its assets will be used and<br />

which positions should be adopted, depending on the expected<br />

price developments.<br />

The positions are monitored on a daily basis. Trading risks are<br />

mitigated by strictly enforcing a system of limits.<br />

The various types of risk and how DELTA deals with them are<br />

explained below.<br />


DELTA Financial statements <strong>2012</strong><br /> Value at Risk<br />

DELTA uses the Value at Risk (VaR) method to assess market<br />

risks on the commodity markets in which it operates. The<br />

method involves various assumptions regarding possible<br />

changes in market conditions. The VaR method is an important<br />

tool to assess market risks within DELTA. The method identifies<br />

the maximum losses likely to be incurred as a result of price<br />

changes over a three-day period with a confidence level of<br />

95% (i.e. the maximum loss might exceed the VaR limit in<br />

just 5% of cases). The VaR is calculated using Monte Carlo<br />

simulations based on historical volatilities and correlations.<br />

Since portfolios include opposing positions and there is an<br />

underlying correlation, the VaR on the total portfolio is smaller<br />

than the sum of that on the individual portfolios.<br />

The VaR method is an important tool for managing the<br />

portfolios within DELTA and the value at risk is therefore<br />

calculated and <strong>report</strong>ed each day. The above specification is<br />

drawn up on the basis of these daily <strong>report</strong>s.<br />

Although the VaR for the Asset Book and for the total portfolio<br />

is <strong>report</strong>ed on a daily basis, it is not used as a management<br />

parameter. The Asset Book is hedged on the basis of a<br />

predetermined disposal schedule to establish the average<br />

market value. Departures from the disposal schedule come<br />

into Trade Books, for which the VaR is the key measure of risk.<br />

During the year, the parameter was within limits.<br />

Value at Risk<br />

(x EUR 1,000)<br />

Value at Risk<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Asset Book 12,977 11,436<br />

Trade Books 2,546 2,097<br />

Diversification over Books (2,665) (2,105)<br />

Total 12,858 11,428<br />


Consolidated financial statements<br /> Cashflow hedges<br />

DELTA uses financial instruments to prevent fluctuations in<br />

expected cash flows in so far as possible. In order to control<br />

the consequences of future movements in market prices, DELTA<br />

uses derivatives such as forwards, options and swaps. The<br />

hedging instruments are derivatives in the commodities traded<br />

by DELTA that are concluded to mitigate cash flow, price and<br />

currency risks. Hedge accounting is applied to cushion the total<br />

change in value of these derivatives.<br />

Where permitted, DELTA accounts for these financial<br />

instruments and physical purchase and sale contracts in a<br />

cash flow hedge in accordance with IAS 39. The item hedged<br />

is the future purchase transaction (power stations, long-term<br />

sourcing) or gas and electricity sales transaction.<br />

Cashflow hedges<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2013 2014 2015 2016 and beyond Total Average price Contract value<br />

Gas forwards (1,484) (11,075) (1,023) - (13,582) 0.266 (268,713)<br />

Electricity<br />

3,168 9,742 1,612 - 14,522 53.461 98,521<br />

forwards<br />

Coal swaps (3,216) (758) - - (3,974) 82.993 (29,304)<br />

Oil swaps 2,860 1,243 - - 4,103 660.307 (106,573)<br />

CO 2<br />

forwards (10,294) (4,458) (815) - (15,567) 11.015 (40,975)<br />

Currency swaps 3,993 7,471 740 - 12,204 0.921 (291,213)<br />

Total (4,973) 2,165 514 - (2,294)<br />

2011 <strong>2012</strong> 2013 2014 2015 and beyond Total Average price Contract value<br />

Gas forwards (3,805) 752 (10,561) - (13,614) 0.249 (379,492)<br />

Electricity<br />

(505) 1,549 9,811 - 10,855 56.043 194,225<br />

forwards<br />

Coal swaps (1,622) (687) - - (2,309) 89.742 (67,092)<br />

Oil swaps 1,781 658 368 - 2,807 664.125 (151,765)<br />

CO 2<br />

forwards (5,903) (8,189) (4,747) - (18,839) 14.476 (42,423)<br />

Currency swaps 9,070 3,694 3,070 - 15,834 0.865 (357,443)<br />

Total (984) (2,223) (2,059) - (5,266)<br />


DELTA Financial statements <strong>2012</strong><br />

The hedge reserve includes changes in the value of underlying<br />

derivatives in the period in which they are included in an<br />

effective hedge. The derivatives presented in the analysis of<br />

cash flow hedges concern the derivatives that were part of a<br />

hedging relationship on the balance sheet date.<br />

A mismatch occurs because:<br />

• the analysis of cash flow hedges also includes the ineffective<br />

portion of the hedging instrument;<br />

• the gains and losses on the hedging instrument prior to the<br />

inception of a hedging relationship are also included in the<br />

analysis of cash flow hedges;<br />

• also included in the hedging reserve are the gains and losses<br />

on the hedging instruments which were part of a hedging<br />

relationship in the past but which were no longer part of such<br />

a relationship at year-end.<br />

The amounts recognised in the hedge reserve take account<br />

of the date on which an instrument was designated as part<br />

of a hedging relationship, which may be different from the<br />

date of the associated trade. In addition, only the gains and<br />

losses in the fair value of the effective portion of the hedging<br />

instruments are recognised in the hedge reserve.<br /> Currency risk<br />

Currency risk concerns the price risk related to exchange rate<br />

movements. DELTA’s risk policy is to hedge currency risks on<br />

positions in foreign currencies. To hedge the risks, DELTA uses<br />

financial instruments to prevent fluctuations in expected cash<br />

flows in so far as possible. Currency positions resulting from<br />

contracts, including commodity contracts, are <strong>report</strong>ed to the<br />

Treasury Department on a daily basis for hedging at group<br />

level. Currency risk limits are set periodically in consultation<br />

with the Risk Management Committee and monitored by the<br />

Treasury Department.<br />

The following exchange rates were used for translating the<br />

amounts of items denominated in foreign currencies on the face<br />

of the balance sheet:<br />

31-12-<strong>2012</strong> 30-12-2011<br />

Middle rates<br />

US dollar 1.3175 1.2933<br />

Pound sterling 0.8150 0.8353<br />


Consolidated financial statements<br /> Interest rate risk<br />

DELTA’s interest rate risk policy is to limit the effect of interest<br />

rate fluctuations. To hedge the risks, DELTA makes use of<br />

derivatives such as interest rate swaps.<br />

Hedged loans<br />

DELTA has a number of interest rate swaps. All the swaps<br />

were effective at the end of the <strong>report</strong>ing period. Sensitivity is<br />

measured by increasing or decreasing the floating spot by 10%.<br />

The swaps remained effective. Several of these interest rate<br />

derivatives can be classified as option contracts, which qualify<br />

for the exemption referred to in IAS 39, paragraph 74. The<br />

change in the fair value is accounted for in the hedge reserve<br />

with the change in the time value recognised through profit or<br />

loss. The following table shows the effect of a 10% increase and<br />

a 10% decrease compared with the carrying amounts as at 31<br />

December <strong>2012</strong>.<br />

Sensitivity interest rate<br />

(x EUR 1,000)<br />

Position as at<br />

31 December<br />

Value based on<br />

yield curve<br />

10% increase 10% decrease<br />

Increase in value<br />

relative to carrying<br />

amount<br />

Value based<br />

on yield curve<br />

Decrease in value<br />

relative to carrying<br />

amount<br />

<strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011<br />

Derivatives<br />

Derivatives (3,474) (4,670) (3,338) (4,103) 136 568 (3,601) (5,196) (127) (526)<br />

Deferred tax on derivatives 1,163 1,636 1,135 1,545 (28) (91) 1,191 1,728 28 92<br />

Total (2,311) (3,034) (2,203) (2,558) 108 477 (2,410) (3,468) (99) (434)<br />

Interest rate swaps<br />

Hedge reserve 1,383 2,928 1,355 2,757 (29) (171) 1,412 3,100 28 172<br />

Non-controllig interest 1,072 904 1,037 854 (34) (50) 1,105 955 34 50<br />

Total 2,455 3,832 2,392 3,611 (63) (221) 2,517 4,055 62 222<br />

Gains and losses on swaps<br />

Total 2,106 1,453 2,061 1,198 (45) (255) 2,144 1,665 37 212<br />


DELTA Financial statements <strong>2012</strong><br />

As at 31 December <strong>2012</strong>, the interest rate derivatives position<br />

represented a loss. An upward movement of the yield curve<br />

reduces this loss.<br />

The hedge reserve relating to interest rate swaps as at 31<br />

December <strong>2012</strong> represented a debit item in equity. An upward<br />

movement of the yield curve reduces the amount of this debit.<br />

Unhedged loans<br />

If the interest rates on unhedged variable rate loans had been<br />

10% higher or lower at the end of the <strong>report</strong>ing period and<br />

all other variables remain constant, the profit or loss (before<br />

non-controlling interests) would have been EUR 0.4 million per<br />

annum lower or higher, respectively.<br />

5.2.3 Liquidity risk<br />

Liquidity risk is the risk that DELTA might not have sufficient<br />

funds available to settle its liabilities.<br />

DELTA’s capital management policy focuses on centralising<br />

cash management and funding and borrowing repayment<br />

operations at holding company level as far as possible.<br />

A financing plan is prepared each year on the basis of the<br />

business plan, giving direction to the activities of the<br />

DELTA N.V. Treasury department.<br />

This includes the annual determination of the ratio of current to<br />

non-current borrowings.<br />

In order to provide the flexibility required for executing<br />

strategic projects, DELTA has standby credit facilities available<br />

up to a limit of EUR 500 million, from which an amount of<br />

EUR 34 million was drawn down as at year-end <strong>2012</strong>.<br />

In <strong>2012</strong>, DELTA refinanced EUR 180 million of the withdrawals<br />

under the credit facility through long-term private placements.<br />

The standby credit facility will be extended in 2013.<br />

Two businesses within the DELTA group look after their own<br />

finances:<br />

1. The Indaver group manages the liquidity risk and<br />

funding risk within the framework of the DELTA policy, by<br />

maintaining adequate reserves and ample committed credit<br />

lines. The Indaver group had borrowings and credit facilities<br />

totalling EUR 291 million as at year-end <strong>2012</strong>, of which EUR<br />

97 million remains to be drawn down.<br />

2 DNWB, as required by the Independent Network<br />

Management Act (WON), had a separate credit facility of<br />

EUR 190 million as at balance sheet date. These facilities<br />

have been fully utilised.<br />

The credit rating for DELTA issued by Standard & Poor’s<br />

remained unchanged in <strong>2012</strong>: BBB+ with a stable outlook.<br />


Consolidated financial statements<br />

In order to provide a view of the liquidity risk, the following<br />

table presents the contractual maturities of the financial<br />

liabilities.<br />

(x EUR 1,000)<br />

Contractual maturities of financial obligations as at 31 december <strong>2012</strong><br />

< 1 year 1-5 years > 5 years Total<br />

Trade payables 311,725 - - 311,725<br />

Interest-bearing loans 184,542 312,400 89,915 586,857<br />

Derivatives 139,344 101,283 - 240,627<br />

Other 174,895 255,766 1,973 432,634<br />

Total 810,506 669,449 91,888 1,571,843<br />

Related interest payable 6,394 16,343 3,506 26,243<br />

Contractual maturities of financial obligations as at 31 december 2011<br />

< 1 year 1-5 years > 5 years Total<br />

Trade payables 324,381 - - 324,381<br />

Interest-bearing loans 97,801 468,649 116,857 683,307<br />

Derivatives 223,724 77,149 - 300,873<br />

Other 308,628 97,298 2,273 408,199<br />

Total 954,534 643,096 119,130 1,716,760<br />

Related interest payable 13,100 39,222 9,393 61,716<br />

The contractual maturities of the financial liabilities reflect<br />

the expected outgoing cash flows relating to the outstanding<br />

financial commitments as at the balance sheet date.<br />

The ‘Other’ contractual maturities item consists primarily of<br />

deferred revenue, current taxation and the Indaver put option.<br />


DELTA Financial statements <strong>2012</strong><br />

5.2.4 Credit risk<br />

Credit risk concerns the losses that could arise if a counterparty<br />

defaults on a contractual obligation. DELTA has set credit limits<br />

for its external counterparties in order to limit the credit risk.<br />

An internal rating system sets a credit limit for each external<br />

counterparty. This system uses publicly available information<br />

on the company concerned or the guarantor (such as financial<br />

statements and credit ratings). In the case of previous DELTA<br />

customers, their payment history is a major factor in agreeing<br />

to supply them.<br />

DELTA uses various instruments to manage credit risks,<br />

including trading on the basis of standard forms of contract and<br />

terms of business, trading via exchanges, ensuring a diversified<br />

portfolio of customers and requiring guarantees. If the credit<br />

rating of an external counterparty or guarantor is not or is no<br />

longer investment grade, no additional credit risk is accepted.<br />

In addition to the credit limits based on this, DELTA uses<br />

various instruments to manage credit risks, including operating<br />

under standard contracts and conditions, operating through<br />

exchanges, diversification in its end users and requesting<br />

additional collateral.<br />

For end users whose energy is supplied by DELTA,<br />

creditworthiness is based on data from external information<br />

providers. For existing customers, the historical payment<br />

behaviour is also taken into consideration when deciding<br />

whether or not to enter into a supply contract. Additional<br />

collateral in the form of a bank guarantee, deposit or advance is<br />

requested if necessary.<br />

At year-end <strong>2012</strong>, the credit ratings of DELTA’s external<br />

counterparties were distributed over the different rating<br />

classes in the following percentages:<br />

Credit rating counterparties<br />

35%<br />

<strong>2012</strong><br />

2011<br />

30%<br />

25%<br />

20%<br />

15%<br />

10%<br />

5%<br />

0%<br />

AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+<br />


Consolidated financial statements<br />

6. Inventories<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Raw materials 9,346 9,979<br />

Consumables 4,442 4,429<br />

Finished products 390 654<br />

Goods for resale 3,390 4,440<br />

Total 17,568 19,502<br />

Less: Provision for obsolescence (652) (2,199)<br />

Total inventories 16,916 17,303<br />


DELTA Financial statements <strong>2012</strong><br />

7. Receivables<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Trade receivables 370,792 390,303<br />

Current tax assets 2,949 7,324<br />

Cash not available on demand 49,300 19,075<br />

Current portion of long-term loans granted 6,525 5,390<br />

Other receivables, prepayments and accrued income 15,387 22,164<br />

Total other receivables 71,212 46,629<br />

Total receivables (excluding derivates) 444,953 444,256<br />

The cash not available on demand consists of deposits relating<br />

to the trading activities on the futures exchange markets.<br />

A provision for possible bad debts totalling EUR 20.2 million<br />

(2011: EUR 13.8 million) was recognised in respect of the trade<br />

receivables.<br />


Consolidated financial statements<br />

Aged analysis of trade receivables<br />

per 31-12<br />

Age <strong>2012</strong> 2011<br />

(in days) (x EUR 1,000)<br />

< 30 341,574 365,520<br />

31-60 16,647 18,050<br />

61-90 6,791 2,827<br />

91-120 5,601 2,038<br />

> 120 20,427 15,663<br />

Total 391,040 404,098<br />

Bad debt provision (20,248) (13,795)<br />

Total trade receivables 370,792 390,303<br />


DELTA Financial statements <strong>2012</strong><br />

8. Cash<br />

Cash comprises not only cash but also cash equivalents that<br />

can be converted into cash with no material risk of impairment.<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Deposits 24,288 29,308<br />

Cash/Bank 24,643 23,082<br />

Total cash 48,931 52,390<br />

The amounts placed on deposit become available within three<br />

months.<br />


Consolidated financial statements<br />

9. Provisions<br />

(x EUR 1,000)<br />

Total<br />

Environmental<br />

costs<br />

Unprofitable<br />

contracts<br />

Employee<br />

benefits<br />

Dismantling<br />

costs<br />

Other<br />

provisions<br />

Carrying amount as at 1 January 2011 95,504 59,742 24,611 4,780 - 6,371<br />

Reversal of current portion of provision 17,331 10,157 - 886 4,000 2,288<br />

Added 159,265 - 158,954 311 - -<br />

Interest added 3,717 3,262 - 114 - 341<br />

Released (19,938) - (18,006) (390) (526) (1,016)<br />

Utilised (3,039) (440) - (816) - (1,783)<br />

Other movements (140) (166) 1 201 - (176)<br />

Carrying amount as at 31 December 2011 252,700 72,555 165,560 5,086 3,474 6,025<br />

Current portion of provisions (15,876) (9,710) - (830) (3,474) (1,862)<br />

Carrying amount as at 31 December 2011 236,824 62,845 165,560 4,256 - 4,163<br />

Reversal of current portion of provision 15,876 9,710 - 830 3,474 1,862<br />

Added 11,188 4,256 4,339 939 - 1,654<br />

Interest added 9,976 2,846 6,758 92 - 280<br />

Released (25,769) - (24,106) (19) (2,104) 460<br />

Utilised (4,611) (484) - (844) - (3,283)<br />

Other movements (1,143) (885) - 57 - (315)<br />

Carrying amount as at 31 December <strong>2012</strong> 242,341 78,288 152,551 5,311 1,370 4,821<br />

Current portion of provisions (12,253) (9,299) - (461) (1,370) (1,123)<br />

Carrying amount as at 31 December <strong>2012</strong> 230,088 68,989 152,551 4,850 - 3,698<br />

The amount of the provisions probable to be utilised within one<br />

year, being EUR 12.3 million (2011: EUR 15.9 million), has been<br />

included in current liabilities.<br />


DELTA Financial statements <strong>2012</strong><br />

Environmental costs<br />

Indaver has recognised provisions for the capping and aftercare<br />

of its current landfill sites. An amount of approximately EUR<br />

24.8 million of these provisions is expected to be utilised<br />

over the next five years. The costs have been estimated by<br />

the management using best estimates based on existing<br />

technology. The discount rate was 4.67% (2011: 4.67%) for the<br />

Belgian landfill sites and 5.0% for the German and Dutch<br />

landfill sites (2011: 5.0%).<br />

Between now and 2020, an estimated EUR 31.9 million (2011<br />

price levels) will be required for the preparatory aftercare,<br />

capping and landscaping of the Derde Merwedehaven landfill<br />

site. Utilisation of the provisions recognised for this purpose<br />

will occur as from 2013. In the period up to 2025, an estimated<br />

EUR 22.4 million (<strong>2012</strong> price levels) will be required for the<br />

preparatory aftercare and capping of the Noord- en Midden<br />

Zeeland landfill site. Utilisation of the provisions recognised for<br />

this purpose will occur as from 2017.<br />

The current portion of the provision mainly relates to the<br />

Koegorspolder landfill site, which ceased to be used in 2005.<br />

Within Indaver, EUR 4 million of provisions has been included<br />

for expected costs due to contaminants identified at certain<br />

locations.<br />

Unprofitable contracts<br />

In light of the current market prices for electricity, some<br />

energy purchase/sale contracts that were made in the past<br />

are no longer profitable. Prices are under pressure due to the<br />

economic development in relation to the available production<br />

capacity on the one hand and the rise in fuel prices due to the<br />

increasing global demand on the other. In addition, the coal<br />

tax agreed in the coalition agreement and current emission<br />

legislation are having a negative impact on the production<br />

costs of some plants, leading to a further negative impact on<br />

the gross margin of supply contracts.<br />

Therefore, a provision has been made for onerous contracts<br />

to cover the unprofitable part of some contracts. Withdrawals<br />

are made annually to offset the accumulated negative gross<br />

margin. Any results of a production unit involved are added<br />

annually to this provision, because of the causal link between<br />

the result of the participation and the formation of the<br />

provision. Provisions are reviewed each year in the light of<br />

developments in the electricity and fuel markets, the relevant<br />

legislation and contractual agreements.<br />

In <strong>2012</strong>, the discount rate for calculating this provision was<br />

changed to 4.25% (2011: 4.5%) due to market developments and<br />

the short duration of the liabilities.<br />

The provision remaining at the end of <strong>2012</strong> primarily relates to<br />

contracts with joint ventures.<br />

Employee benefits<br />

These provisions have been recognised in order to be able to<br />

meet existing future financial obligations. Under the terms of<br />

the CLA, DELTA pays employees long-service benefits. From the<br />

date on which an employee joins the company, a provision is<br />

recognised for these benefits, based on the number of years<br />

of service, expected price and wage inflation and statistical<br />

severance, invalidity and mortality rates. The discount rate is<br />

4.5% (2011: 4.5%).<br />

In addition, a provision has been recognised in connection with<br />

the transitional arrangements relating to IZA/IZR (public sector)<br />

health insurance schemes for former employees that were<br />

agreed with the unions in 2006 covering a period of 10 years.<br />


Consolidated financial statements<br />

Retirement benefits<br />

DELTA has transferred its retirement benefit obligations to<br />

pension funds in the Netherlands, primarily ABP.<br />

The pension contributions that DELTA pays to the pension funds<br />

are based on expectations regarding inflation and pay rises, the<br />

ageing of the workforce, mortality rates and the return on the<br />

plan assets. The ABP industry-wide pension fund has stated<br />

that there is no consistent and reliable basis for attributing<br />

the pension liabilities, plan assets and costs to the individual<br />

participating entities. DELTA consequently makes use of the<br />

exemption provided by IAS 19 to treat the defined benefit plan<br />

as a defined contribution plan.<br />

Retirement benefit obligations at Indaver<br />

Indaver provides a defined benefit plan for the employees of the<br />

Indaver holding company and some subsidiaries that were part<br />

of the Indaver group before 31 December 2007. This concerns<br />

two plans contracted with various insurance companies.<br />

Indaver also operates unfunded defined benefit plans for the<br />

employees of Indaver Deutschland GmbH in Germany. For new<br />

employees who have joined the holding company and some<br />

subsidiaries in Belgium since 1 January 2008, as well as for the<br />

employees of Indaver Ireland, Indaver also provides defined<br />

contribution plans.<br />

On the above basis, Indaver has the following long-term<br />

pension liabilities:<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Pension liabilities 22,158 21,869<br />

Total Pension liabilities 22,158 21,869<br />

The current portion of the pension liabilities relating to Indaver,<br />

amounting to EUR 1.0 million (2011: EUR 1.0 million), has been<br />

included in current liabilities.<br />


DELTA Financial statements <strong>2012</strong><br />

Retirement benefit provisions at Indaver<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Belgium Germany Belgium Germany<br />

1. Net liability<br />

Present value of defined benefit obligation 31,460 15,594 24,189 12,877<br />

Fair value of plan assets (20,779) - (19,922) -<br />

Present value of net obligation 10,681 15,594 4,267 12,877<br />

Unrecognised past service cost - - - -<br />

Actuarial gains and losses 111 (4,018) 6,313 (1,526)<br />

Defined benefit plan based on simple actuarial calculations 268 483 175 759<br />

Net liability on the face of the balance sheet 11,060 12,059 10,755 12,110<br />

2. Movements in present value<br />

Opening defined benefit obligation 24,189 12,877 21,908 13,543<br />

Constributions by employer 1,714 254 1,579 329<br />

Interest cost 1,258 688 1,031 651<br />

Actuarial gains and losses 5,836 2,520 1,007 (765)<br />

Contributions by employees 260 - 263 -<br />

Costs paid (55) - (55) -<br />

Insurance premiums paid (284) - (272) -<br />

Benefits paid (1,433) (663) (1,267) (881)<br />

Net transfer in/out - (82) - -<br />

Curtailments and settlements (25) - (5) -<br />

Other - - - -<br />

Closing defined benefit obligation 31,460 15,594 24,189 12,877<br />

3. Movements in fair value<br />

Opening fair value of plan assets 19,922 - 19,136 -<br />

Expected return 1,106 - 967 -<br />

Actuarial gains and losses (174) - (224) -<br />

Contributions by employer 1,415 - 1,379 -<br />

Contributions by employees 261 - 263 -<br />

Expenses paid (55) - (55) -<br />

Premiums paid (284) - (272) -<br />

Benefits paid (1,433) - (1,267) -<br />

Settlements (13) - (4) -<br />

Business combinations 34 - (1) -<br />

Closing fair value of plan assets 20,779 - 19,922 -<br />

4. Retirement benefit costs<br />

Current service cost 1,714 270 1,579 329<br />

Interest cost 1,258 688 1,031 651<br />

Expected return on plan assets (1,106) - (967) -<br />

Actuarial gains and losses (193) - (269) -<br />

Other - 12 - 57<br />

Net benefit expense recognised in staff costs 1,673 970 1,374 1,037<br />

5. Actuarial valuation assumptions<br />

Employee benefit plan obligations<br />

Discount rate 4.3% 4.3% 5.5% 5.5%<br />

Expected return 4.3% - 5.5% -<br />

Future pay rises 3.5% 2.0% 3.5% 1.8%<br />

Increases in medical expenses 2.0% 2.0% 2.0% 2.0%<br />

6. Actual return on fund investments<br />

The actual return on fund investments in <strong>2012</strong> was EUR 0.9 million (2011: EUR 0.7 million.)<br />


Consolidated financial statements<br />

10. Movements in long-term debt<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Carrying amount as at 1 January 610,907 482,474<br />

Loans drawn down 239,331 171,612<br />

Movements in cross-border leases (338) 3,100<br />

Repayments (358,995) (46,279)<br />

490,905 610,907<br />

Current portion (61,818) (22,301)<br />

Total long-term debt 429,087 588,606<br />

The liabilities include bank borrowings. The average interest rate<br />

on the debt as at year-end <strong>2012</strong> was 1.9% (2011: 2.3%).<br />

EUR 90.0 million of the carrying amount falls due after more than<br />

five years.<br />

Collateral amounting to EUR 1.8 million has been pledged as<br />

security for the negative fair value of interest-rate swaps entered<br />

into in previous years by Indaver Deutschland.<br />

DELTA has a bilateral standby credit facility amounting to EUR<br />

500 million with five banks. No security has been provided for<br />

this facility.<br />

In <strong>2012</strong>, refinancing of amounts drawn under this credit facility<br />

was done through private placements with a medium to long<br />

term to maturity, for an amount of EUR 180 million.<br />

11. Other non-current liabilities<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Deferred tax liabilities 51,939 57,470<br />

Deferred revenue 77,286 70,999<br />

Indaver put option 152,277 -<br />

Other non-current liabilities 25,414 25,472<br />

Total other non-current liabilities 306,916 153,941<br />


DELTA Financial statements <strong>2012</strong><br />

The deferred tax liability arises mainly from past acquisitions.<br />

When an equity interest is acquired, the acquired property<br />

plant and equipment and intangible assets are recognised<br />

at fair value. Fair value adjustments are not tax-allowable,<br />

necessitating the recognition of a deferred tax liability in<br />

connection with the adjustment to fair value of the acquired<br />

assets. The amount of the tax liability decreases at the same rate<br />

as the fair value adjustments are written down, except for the fair<br />

value adjustments on land.<br />

Equally, additions to provisions lead to a deferred tax asset.<br />

The movement of the tax asset is dependable on the utilised<br />

provisions.<br />

The deferred tax liability is attributable to:<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Intangible assets 2,943 4,014<br />

Property, plant and equipment 47,975 51,399<br />

Other 1,021 2,057<br />

Total 51,939 57,470<br />

In 2007, DELTA increased its interest in Indaver to 75%. A put<br />

option was given to the shareholder holding the remaining 25%.<br />

This put option can be exercised between the end of the fifth year<br />

and the end of the seventh year after the close of 2007; the put<br />

option is recognised in non-current liabilities and is measured at<br />

fair value as at 31 December.<br />

Profit attributable to non-controlling interests has been added to<br />

the value of the put option.<br />

The exercise price of the option is determined based on the<br />

discounted cash flow method, and various estimates are<br />

discussed. Management has based the cash flow projections on<br />

the business plans for the years 2013-2015 and in some cases for<br />

a longer timeframe.<br />

After the period that this covers, a perpetual series is used.<br />

This takes into account the available information regarding<br />

market developments. No extrapolations have been used that<br />

have growth rates in excess of inflation.<br />

For this reason, DELTA uses a bandwidth when determining the<br />

fair value of the put options. The valuation as at the balance<br />

sheet date falls within this bandwidth.<br />

Deferred revenue relates to payments already received in respect<br />

of waste which still has to be processed by Indaver. In both<br />

<strong>2012</strong> and 2011, the deferred revenue was aggregated with the<br />

contributions received from third parties for new capital projects<br />

(in accordance with IFRIC 18).<br />

Movements in other non-current liabilities<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Carrying amount as at 1 January 153,941 292,991<br />

Released deferred tax liability (recognised in profit or loss) (5,530) (3,793)<br />

Other movements in deferred tax liabilities - (1,425)<br />

Movement in deferred tax position (5,530) (5,218)<br />

Released deferred revenue (recognised in profit or loss) (8,143) (8,666)<br />

Deferred revenue 14,430 10,822<br />

Change in Indaver put option 152,277 (138,913)<br />

Other movements (59) 2,925<br />

Total other non-current liabilities 306,916 153,941<br />


Consolidated financial statements<br />

12. Current liabilities<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Trade payables 311,725 324,381<br />

Current tax liabilities 10,218 9,148<br />

Other current tax liabilities 63,196 50,043<br />

Deferred revenue 13,172 13,401<br />

Work in progress for third parties 3,603 -<br />

Current portion of provision 12,254 15,876<br />

Current portion of long-term debt 61,818 22,301<br />

Put option Indaver - 146,511<br />

Accruals and deferred income 71,202 78,270<br />

Other current liabilites 133,020 247,082<br />

Bank borrowings 98,303 66,429<br />

Total current liabilities (excluding derivatives) 645,491 726,360<br />

The ‘Other current tax liabilities’ are for the most part sales<br />

tax that is still to be paid. In addition, the current tax liabilities<br />

include liable payroll tax and social security contributions,<br />

corporation tax and energy taxes that are payable.<br />

Repayments on long-term loans and withdrawals from provisions<br />

that are planned for 2013 have also been included under ‘Current<br />

liabilities’ (in addition to the other payables and accruals).<br />

As explained for the non-current liabilities, the put option that<br />

the minority shareholders of Indaver hold has been moved from<br />

short-term to long-term liabilities, as a result of the change in the<br />

term during which they may be exercised.<br />


DELTA Financial statements <strong>2012</strong><br />

Commitments and contingent liabilities<br />

A summary of the off-balance sheet rights and obligations is<br />

given below, insofar as they exceed EUR 5 million.<br />

A. Operational<br />

DELTA Energy B.V. trading portfolio<br />

DELTA’s risk management policy aims to actively control the<br />

risk exposures connected with production assets and long-term<br />

procurement contracts. Positions arising from trading activities<br />

are controlled through a strict system of limits, using both<br />

financial and energy derivatives, including swaps and options.<br />

The sales contracts in the portfolio relate to energy supplied<br />

to end users and trading partners and associated financial<br />

instruments. The value of the <strong>2012</strong> sales contracts at the end of<br />

the <strong>report</strong>ing period was EUR 1,040 million<br />

(2011: EUR 1,068 million).<br />

Procurement contracts in the portfolio relate to production<br />

and purchasing agreements with trading partners and<br />

associated contracts for financial instruments. The value of<br />

the procurement contracts as at the balance sheet date was<br />

EUR 3,238 million (2011: EUR 3,751 million). The value of the<br />

financial instruments is determined on the basis of market<br />

values derived from transactions contracted in the physical<br />

commodities trade.<br />

Stock CO 2<br />

-rights<br />

DELTA has neither used nor sold CO 2<br />

emission rights for energy<br />

production acquired in <strong>2012</strong>.<br />

Long-term waste processing contracts<br />

Indaver has entered into various long-term contracts for<br />

processing waste. They are covered by payments upfront,<br />

which have been recognised in the balance sheet (<strong>2012</strong>: EUR<br />

44.8 million; 2011: EUR 48.9 million).<br />

In some cases, the client has been given a put option conferring<br />

the right to sell some of the rights concerned back to Indaver.<br />

No liability has been recognised in respect of these put<br />

options since exercise of the options is not considered to be a<br />

probability.<br />

Investment commitments<br />

As at year-end <strong>2012</strong>, the company had outstanding financial<br />

commitments totalling approximately EUR 90.0 million (2011:<br />

EUR 59.9 million). These commitments relate chiefly to capital<br />

projects under construction.<br />

Borssele covenant<br />

In 2006, a covenant was agreed with the central government<br />

on the extension of the service life of the nuclear power station<br />

until 2033. As part of the covenant, agreements were also<br />

reached on the efforts that DELTA (and Essent) would make to<br />

address and provide technical and financial support for new<br />

renewable energy developments. In addition to their interests<br />

in Sustainable Energy Technology (SET) Fund C.V., these<br />

commitments include investments in Additional Innovative<br />

Projects. In <strong>2012</strong>, a stake was acquired in Sustainable Energy<br />

Technology (SET) Fund II C.V.<br />

Cross-border lease on waste incineration plant<br />

On 17 August 1999, Indaver entered into a cross-border lease<br />

with an American investor for the use of lines 1 and 2 of the<br />

incinerator plant in Doel. The initial lease term was 25.4 years,<br />

with an option of a maintenance contract for a further 13 years.<br />

Under the terms of the lease, Indaver received an amount<br />

of USD 135 million and placed USD 129.4 million on deposit<br />

on the date of inception of the contract. On the strength of<br />

this deposit, a payment agreement covering the cost of the<br />

lease almost entirely was concluded with banks enjoying a<br />

high credit rating. In 2011, an additional bank guarantee was<br />

provided on behalf of the American counterparty.<br />


Consolidated financial statements<br />

B. Collateral and guarantees<br />

DELTA has issued and received the following financial collateral<br />

to guarantee transactions entered into:<br />

(x EUR 1,000)<br />

Collateral granted<br />

Term in years<br />

< 1 year 1 – 5 years > 5 years Total<br />

Collateral granted for associates and joint ventures 26,824,4 20,797,6 7,506,0 55,128,0<br />

Other collateral granted 91,841,7 10,731,0 48,213,7 150,786,4<br />

Total collateral granted 118,666,1 31,528,6 55,719,7 205,914,4<br />

Collateral received<br />

Term in years<br />

< 1 year 1 – 5 years > 5 years Total<br />

Collateral received for associates and joint ventures - - - -<br />

Other collateral received 52,760,6 9,134,7 121,167,4 183,062,7<br />

Total collateral received 52,760,6 9,134,7 121,167,4 183,062,7<br />

Principal collateral granted<br />

DELTA has given guarantees totalling EUR 22.3 million to<br />

the Zeeland provincial authority in respect of the financial<br />

obligations connected with the capping of the Koegorspolder<br />

and Noord- en Midden Zeeland landfill sites. DELTA has also<br />

given guarantees totalling EUR 24.6 million to the Zuid-<br />

Holland provincial authority for the cost of capping the Derde<br />

Merwedehaven landfill site in Dordrecht. In addition, DELTA<br />

issued a guarantee for the construction of the Kreekraksluis<br />

wind farm for the sum of EUR 31.9 million.<br />

Indaver has also issued a number of bank guarantees, totalling<br />

EUR 88.8 million, of which EUR 51.9 million related to the<br />

transportation and treatment of waste streams and<br />

EUR 36.9 million to a cross-border lease that was signed in the<br />

past.<br />

Indaver has also underwritten the bank loans contracted by the<br />

joint venture Sleco Centrale, which totalled<br />

EUR 25.0 million as at 31 December <strong>2012</strong>.<br />

Principal collateral received<br />

Of the collateral received, an amount of EUR 141.6 million<br />

relates to bank guarantees received in connection with DELTA’s<br />

trading activities.<br />

Indaver has received bank guarantees from customers and<br />

suppliers totalling EUR 18.8 million.<br />


DELTA Financial statements <strong>2012</strong><br />

C. Lawsuits and claims<br />

Unbundling plan – Independent Network Management Act<br />

(WON)<br />

The Minister approved the plan to unbundle the company on<br />

2 December 2009. However, on 22 June 2010, the Court in<br />

The Hague declared parts of the unbundling act non-binding.<br />

In the light of this judgement, the unbundling did not go<br />

ahead, although the conditions stipulated by the Minister<br />

have been complied with as far as possible and necessary.<br />

The government took the case to the Supreme Court in an<br />

attempt to get the decision overturned. On 24 February <strong>2012</strong>,<br />

the Supreme Court referred the case to the European Court<br />

of Justice in Luxembourg. On 14 January 2013, parties gave a<br />

verbal presentation of the case before the Court. The ruling<br />

of the European Court is not expected to follow before the end<br />

of 2013. After the judgement of the European Court, the case<br />

will be referred back to the Supreme Court.<br />

Court cases<br />

Legal proceedings have been initiated against DELTA by a<br />

former non-controlling shareholder in a subsidiary with a claim<br />

for compensation for alleged losses from DELTA. A ruling has<br />

been made that is completely in favour of DELTA. Meanwhile,<br />

an appeal has been lodged by the other party.<br />


Consolidated financial statements<br />

Notes to the consolidated income statement<br />

13. Revenue<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Electricity trade and supply 1,083,693 1,001,782<br />

Gas trade and supply 337,217 423,692<br />

Electricity and gas transport 112,417 105,188<br />

Cable, internet and telecommunications 75,076 72,216<br />

Waste management and environmental services 504,633 498,882<br />

Other revenue 58,757 83,339<br />

Total revenue 2,171,793 2,185,099<br />

Revenue from gas and electricity supplies to domestic and<br />

small-business users are partly estimated, as staggered meter<br />

readings are taken throughout the year.<br />

Trading volumes in the energy segment increased, despite the<br />

loss of several large customers through bankruptcies. Waste<br />

processor Indaver achieved a turnover of more than EUR 500<br />

million for the first time. Loyal customer relations, the high<br />

capacity utilisation of the facilities and the commissioning of<br />

the new incinerator for medical waste in Antwerp contributed<br />

to the positive development. The introduction of new services<br />

and the increase in the share of digital TV viewers meant that<br />

revenue in the cable segment rose by 4%.<br />

Turnover can be broken down geographically as follows:<br />

(x EUR 1,000)<br />

Revenue per country<br />

<strong>2012</strong> 2011<br />

The Netherlands 1,412,659 1,285,637<br />

Belgium 204,651 220,375<br />

Great Britain & Ireland 354,836 265,257<br />

Germany 168,109 271,762<br />

Other EU 28,708 142,068<br />

Outside EU 2,830 -<br />

Total 2,171,793 2,185,099<br />

The revenue per country is made up entirely of external<br />

revenue. Revenue outside the Netherlands has been<br />

realised almost entirely in the Energy and Waste Management<br />

segments.<br />


DELTA Financial statements <strong>2012</strong><br />

14. Cost of sales<br />

17. Third-party services, materials and other<br />

external charges<br />

Part of the electricity requirement was purchased from the<br />

related parties EPZ, the Sloe power station, Elsta and BMC<br />

Moerdijk, in which DELTA has an equity interest. This electricity<br />

is mainly procured on a cost-plus basis.<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Third-party work and services 165,428 167,045<br />

Consumption of materials 55,648 56,562<br />

Other external charges 19,786 19,164<br />

Total 240,862 242,771<br />

15. Other gains and losses<br />

Other gains and losses consist chiefly of payments received for<br />

third-party services.<br />

16. Fair value gains and losses on the trading<br />

portfolio<br />

DELTA uses derivatives to hedge price and currency risks<br />

arising from energy commodity contracts (electricity, gas,<br />

coal and oil). DELTA uses cash flow hedging for this purpose,<br />

contracting hedging instruments to offset the exposure<br />

to variations in existing and future cash flows that could<br />

ultimately affect the results.<br />

The hedges are attributed to a specific risk relating to an item<br />

in the balance sheet or a highly probable forecast transaction.<br />

The effective portion of the fair value gain or loss on the hedge<br />

reserve is recognised directly in hedge reserves in equity.<br />

The cumulative amounts recognised in equity are taken to<br />

the income statement in the same period as the hedged<br />

transaction.<br />

The portion of the gain or loss on the contract portfolio that is<br />

not hedged by means of hedging instruments (the non-effective<br />

hedges) is recognised in the income statement as a fair value<br />

gain or loss.<br />

A large part of the external charges is related to the operations<br />

of Indaver. The costs of materials used by Indaver amounted<br />

to EUR 52.9 million in <strong>2012</strong>, costs for third-party services<br />

amounted to EUR 97.0 million and other external charges<br />

totalled EUR 6.2 million.<br />

The other third-party work and services largely concerns costs<br />

connected with the electricity, gas and digital infrastructure.<br />

Also included in third-party work and services are ICT costs.<br />

Energy market price movements in <strong>2012</strong> resulted in a net loss<br />

on the fair value of the portfolio of contracts amounting to<br />

EUR 1.4 million, of which approximately EUR 5.0 million has<br />

been recognised in income and approximately EUR 3.6 million<br />

has been recognised directly in equity.<br />


Consolidated financial statements<br />

18. Staff costs<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Salaries 155,869 156,184<br />

Social securities contributions 25,643 24,631<br />

Pension charges 17,095 16,420<br />

Other staff costs 11,851 16,516<br />

Staff costs 210,458 213,751<br />

Capitalised staff costs (6,404) (2,145)<br />

Total 204,054 211,606<br />

Number of employees (FTEs) as at 31 December 2,954 2,977<br />

FTEs related to discontinued operations/assets held for sale 128 17<br />

Number of FTEs related to the above total staff costs 2,826 2,960<br />

Average number of FTEs (related to the above total staff costs) 2,824 2,993<br />

The FTEs from discontinued operations relate to DELTA Industriële<br />

Reiniging B.V.<br />

FTE average: segment <strong>2012</strong><br />

Energy + Corporate 720<br />

Waste management 1,478<br />

Grids and Networks 626<br />

Total 2,824<br />

FTE average: geographical <strong>2012</strong><br />

The Netherlands 1,618<br />

Foreign 1,206<br />

Total 2,824<br />


DELTA Financial statements <strong>2012</strong><br />

Remuneration of the members of the Executive Board of DELTA<br />

N.V. registered as directors with the Chamber of Commerce.<br />

The remuneration policy for the members of the company’s<br />

Executive Board was adopted by the General Meeting of<br />

Shareholders on the recommendation of the Supervisory<br />

Board. The underlying principle of the remuneration policy is<br />

that DELTA N.V. should be able to offer a sufficiently competitive<br />

remuneration package to attract and retain people with the<br />

right expertise and experience.<br />

The members of the Executive Board are employed on a<br />

permanent basis and are appointed as directors for a period<br />

of four years. Their contracts of employment are drafted<br />

accordingly and contain, in addition to a minimum period of<br />

notice, a clause providing for termination pay amounting to a<br />

maximum of one year’s salary, in conformity with the Dutch<br />

Corporate Governance Code.<br />

The Supervisory Board decides the remuneration for the<br />

individual Executive Board members each year. Since 2010,<br />

the benchmark for determining the gross fixed salaries has<br />

been taken as the median level in the market for company<br />

directors in the Netherlands, i.e. half of those in comparable<br />

positions (as graded by Hay) are paid less and half are paid<br />

more.<br />

The annual pay also has a variable component, which is related<br />

to the achievement of a number of agreed targets in the current<br />

year. The maximum amount of this variable remuneration is<br />

30% of the gross basic annual salary. Each year, the targets to<br />

be achieved are set by the Supervisory Board and the CEO. They<br />

are partly financial (net profit and cash flows) and partly in the<br />

form of personal targets and related to personal performance<br />

and contribution to the achievement of group-wide HR<br />

objectives.<br />

The Executive Board members are also covered by the pension<br />

plan applicable to all the company’s employees (administered<br />

by Stichting Pensioenfonds ABP).<br />

Executive Board pay<br />

(amounts in EUR)<br />

<strong>2012</strong> R.J. Frohn (CEO) F. Verhagen (CFO)<br />

Gross basic annual salary 218,750 280,000<br />

Pension contributions by employer 60,853 64,821<br />

Variable remuneration - 79,125<br />

Total 279,603 423,946<br />

As of 1 June <strong>2012</strong>, Mr Frohn was appointed CEO of DELTA N.V.<br />

The one-time crisis levy payable on directors’ salaries and due<br />

in <strong>2012</strong> under the ‘Elaboration of fiscal measures Act for the<br />

2013 Budget Agreement’ was EUR 32,672. Given the nature of<br />

the charge, this amount is not included in the ‘Remuneration of<br />

directors’ item.<br />

The remuneration of directors in 2011 amounted to<br />

EUR 1.9 million. This remuneration includes severance pay for<br />

the former CEO. In addition, there were four members of the<br />

Executive Board during part of 2011, before it was reduced to<br />

two members.<br />


Consolidated financial statements<br />

19. Depreciation, amortisation and impairment<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Intangible assets<br />

Amortisation 17,111 25,894<br />

Impairment 298 125<br />

Property, plant and equipment<br />

Depreciation 98,451 90,232<br />

Impairment 23,932 7,349<br />

Reversal of previous impairments - (1,104)<br />

Third-party contributions released<br />

(received prior to 2009)<br />

(6,265) (6,665)<br />

Brought to result from discontinued operations (1,692) (1,829)<br />

Total 131,835 114,002<br />

The impairment of property, plant and equipment relates mainly<br />

to a write-down of combined heat and power (CHP) plants and<br />

the write-down of a transport connection to an industrial park.<br />


DELTA Financial statements <strong>2012</strong><br />

20. Other operating expenses<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Added to provision for bad debts 8,165 2,365<br />

Other operating expenses 3,003 7,125<br />

Added to other provisions 5,945 311<br />

Total other operating expenses 17,113 9,801<br />

The main reason for the allocation to the provision for bad<br />

debts was the bankruptcy of a major multi-utility customer.<br />

‘Other operating expenses’ includes the directors’ fees for<br />

members of the company’s Supervisory Board.<br />

The additions to the ‘Other provisions’ relate mainly to<br />

additions to provisions for onerous contracts.<br />

Remuneration of the Supervisory Board <strong>2012</strong><br />

With effect from 1 January 2011, the Supervisory Board has been<br />

made up of the chairman and four members. The remuneration<br />

amounts to annual fees of:<br />

Chairman<br />

EUR41,000,-<br />

Ordinary member EUR 25,600,-<br />

Audit Committee member EUR 5,200,-<br />

As of 1 June <strong>2012</strong>, Mr Frohn was appointed CEO of DELTA N.V.<br />

and consequently resigned from the Supervisory Board. This<br />

vacancy had not been filled by the end of year.<br />

The total remuneration of the members of the Supervisory<br />

Board amounted to EUR 169,000 in <strong>2012</strong>, of which EUR 27,500<br />

was a consultancy fee for a former commissioner.<br />

In 2011, the total remuneration came to EUR 153,000.<br />


Consolidated financial statements<br />

21. Share in the profit of joint ventures and associates<br />

This concerns the results attributable to DELTA from its<br />

interests in joint ventures and investments in associates.<br />

In <strong>2012</strong> the share in the profit of joint ventures and associates<br />

was EUR 78 million, which is more than in 2011. The result of<br />

the Evides participation also had a one-off income item, thus<br />

leaving its profits at the same level as in 2011.<br />

In <strong>2012</strong>, a gain was made on the sale of the stake in N.V. KEMA.<br />

However, <strong>2012</strong> was the first full year that the amortisation of<br />

the fair value of the additional 20% stake in EPZ acquired in the<br />

year before, was partially written down.<br />

The result of Sloe Centrale was better in <strong>2012</strong> than in 2011, inter<br />

alia because of payouts on claims submitted in the past to an<br />

insurance company.<br />


DELTA Financial statements <strong>2012</strong><br />

22. Net finance income (expense)<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

External finance income 3,562 5,669<br />

External finance expense (22,408) (23,727)<br />

Interest added to provisions (9,977) (3,716)<br />

Other finance income (expense) (1,473) (2,790)<br />

(30,296) (24,564)<br />

Capitalised interest 513 249<br />

Total finance income (expense) (29,783) (24,315)<br />

The interest expenses were EUR 22.4 million, EUR 1.3 million<br />

less than in 2011. This is mainly due to lower debt in <strong>2012</strong>.<br />

The higher interest addition to provisions is due to the<br />

provisions set aside in 2011 for onerous contracts. This will<br />

mean a higher level of interest additions in the coming years<br />

too.<br />

The interest rate applied for the capitalisation of constructionperiod<br />

interest in <strong>2012</strong> was 1.9% (2011: 2.3%).<br />


Consolidated financial statements<br />

23. Corporate income tax<br />

(x EUR 1,000)<br />

Corporate income tax<br />

<strong>2012</strong> 2011<br />

Current corporate income tax liability (5,995) (10,944)<br />

Movements in deferred tax assets and liabilities (7,204) (24,772)<br />

Total tax (13,199) (35,716)<br />

Of which <strong>report</strong>ed under discontinued operations 702 (175)<br />

Tax expense recognised in profit or loss (13,901) (35,541)<br />

Effective tax burden (including discontinued operations) 12.8% 28.3%<br />

Current corporate income tax liability<br />

The reconciliation of the profit before tax and the actual taxable amount with the resulting tax burden, is as<br />

follows:<br />

Result before corporate income tax (including discontinued operations) 103,395 126,421<br />

Substantial-holding privilege (133,545) (237,255)<br />

EIA/MIA schemes - (1,857)<br />

Temporary differences connected with the carrying amounts of assets and provisions (incl, VAMIL) 3,695 60,515<br />

Other differences 646 458<br />

Taxable amount, Netherlands (25,809) (51,718)<br />

Standard tax rate in the Netherlands as from 2011 25.00% 25.00%<br />

Tax for the year - -<br />

Adjustment for prior years 1,890 (728)<br />

Tax paid by subsidiaries outside the Netherlands (7,885) (10,216)<br />

Current corporate income tax liability (5,995) (10,944)<br />

Movements in deferred tax assets and liabilities<br />

The tax income results from differences between the <strong>report</strong>ed profit and the profit calculated for tax purposes<br />

plus utilisation of tax loss carryforwards.<br />

<strong>2012</strong> 2011<br />

Applicable tax loss carryforwards 6,452 12,186<br />

Temporary differences (4,493) (20,480)<br />

Movements in deferred tax for deductible tax losses (10,757) (19,041)<br />

Adjustment for prior years 1,594 440<br />

Movements in tax provisions recognised by subsidiaries (including outside the Netherlands) - 2,123<br />

Movements in tax provisions (7,204) (24,772)<br />

Consolidated statement of changes in equity<br />

Deferred tax assets related to items recognised directly in equity:<br />

Fair value gains and losses on hedges (1,408) (16,098)<br />

(1,408) (16,098)<br />


DELTA Financial statements <strong>2012</strong><br />

24. Assets held for sale and discontinued operations<br />

On 6 March <strong>2012</strong>, the Executive Board decided that the<br />

activities of DELTA Industriële Reiniging B.V. no longer belonged<br />

within the DELTA Group. The sale of the operations took effect<br />

on 1 February 2013.<br />

In November 2011, the management of DELTA decided to sell the<br />

group companies Triqua B.V. and DELTA MBR B.V.<br />

On 14 December <strong>2012</strong>, transfer of the assets/liabilities of<br />

Triqua B.V. was completed. The shares in DELTA MBR B.V. were<br />

transferred.<br />

In addition, the ‘Discontinued operations’ item includes some<br />

costs and revenues relating to DELTA Biovalue B.V. (liquidated<br />

as of 14 December 2010), Solland Solar (sold in July 2011), the<br />

operations of Sunergy Investco B.V., and the associates Fesil<br />

Sunergy AS and AS Solsilc Development Company that were<br />

sold in <strong>2012</strong>.<br />

These developments led to the recognition, in the income<br />

statement, of all the consequent financial implications as profit<br />

after tax from discontinued operations and, in the balance<br />

sheet, as assets/liabilities held for sale.<br />

24.1 Income statement<br />

The combined effect of the above activities on the income<br />

statement is as follows:<br />

24.2 Balance sheet<br />

The carrying amount of the assets held for sale is presented as<br />

a net amount of approximately EUR 2 million in conformity with<br />

IFRS 5. This amount is an estimate of the selling price less costs<br />

to sell.<br />

Both assets and liabilities held for sale mainly relate to the<br />

settlement of DELTA Industriële Reiniging B.V. on 1 February<br />

2013.<br />

24.3 Cash flow statement<br />

The following amounts have been included in the consolidated<br />

cash flow statement of DELTA N.V. in respect of of the above<br />

activities.<br />

In total, the cash flow from operating activities relating<br />

to discontinued operations is approximately EUR 1 million<br />

negative. These expenditures are accounted for in other<br />

movements.<br />

The cash flow from other receivables/payables includes the<br />

payments made out of the provision recognised as at year-end<br />

2011. The total amount is approximately EUR 2 million negative.<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Profit before tax (2,087) (11,490)<br />

Tax 702 (175)<br />

Profit after tax (1,385) (11,665)<br />

The bulk of the negative result from discontinued operations<br />

in <strong>2012</strong> is attributable to DELTA Industriële Reiniging B.V.,<br />

whereas Triqua B.V./DELTA MBR B.V. and also Sunergy made<br />

positive contributions in <strong>2012</strong>.<br />


Consolidated financial statements<br />

Notes to the consolidated cash flow statement<br />

The statement of cash flows has been prepared in accordance with the indirect method. As some items in the income statement<br />

and the balance sheet do not generate direct cash flow effects, the cash flow for these items has been neutralised. This essentially<br />

concerns three items:<br />

Treatment of derivatives<br />

Fair value gains and losses on the trading portfolio lead to current and non-current movements on both the assets and the liabilities<br />

sides of the balance sheet. Some of these gains and losses are also included in the operating result and some in the hedge reserve,<br />

forming part of group equity. However, none of these movements results directly in cash flow. For this reason, all movements are<br />

included in the operating cash flow, with positive and negative movements cancelling each other out.<br />

Share in profits of joint ventures and associates<br />

Not all of the share in the profits of joint ventures and associates is distributed as dividends; the undistributed portion results in an<br />

increase in the equity of the company concerned and therefore in a change in the amount of the financial assets recognised on the<br />

face of DELTA’s balance sheet. Consequently, only the actual dividend receipts are recognised in the cash flow.<br />

Corporate income tax<br />

The profit after tax takes account not only of the corporate income tax payable on the profit before tax but also of the deferred tax<br />

assets and liabilities resulting from the agreement with the Dutch Tax Administration concerning the opening balance sheet for tax<br />

purposes in 1998. As movements in deferred tax do not lead to actual cash flow, movements in deferred tax assets and liabilities<br />

have been eliminated in the cash flow.<br />

The cash flow from operating activities was higher than in 2011. In <strong>2012</strong>, the working capital position was improved due to targeted<br />

control. The operating cash flow item ‘Other changes’ includes expenditure - insofar as this had not been provided for at the end<br />

of 2011 - for the discontinued operations, especially for DELTA Industriële Reiniging B.V., Triqua/DELTA MBR B.V. and Sunergy. The<br />

changes in ‘Other receivables / payables’ includes expenditure that had been provided for at the end of 2011. These amounts are a<br />

negative EUR 1 million and a negative EUR 2 million respectively. In 2011, the cash flow from discontinued operations was a negative<br />

EUR 35 million.<br />

Capital expenditure on tangible and intangible fixed assets was lower in <strong>2012</strong> than in 2011. There was a restrictive policy in place<br />

with regard to investments. In addition, the sale of the shares of N.V. KEMA and miscellaneous assets ensured a cash inflow.<br />

Becase of the positive balance of operating and investing cash flows, external loans could be repaid in <strong>2012</strong>. Moreover, a dividend<br />

of EUR 40 million was paid to the shareholders.<br />


DELTA Financial statements <strong>2012</strong><br />

Post-balance-sheet events<br />

There were no events after the balance sheet date.<br />


Consolidated financial statements<br />

Consolidated companies<br />

Company<br />

Headquarters<br />

DELTA’s interest 1)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

DELTA Infra B.V. Middelburg 100% 100% 100%<br />

Zeeuwse Netwerkholding N.V. Middelburg 100% 100% 100%<br />

DELTA Netwerkbedrijf B.V. Middelburg 100% 100% 100%<br />

DELTA Energy B.V. Middelburg 100% 100% 100%<br />

DELTA Ficus Holding B.V. Middelburg 100% 100% 100%<br />

DELTA Pipe B.V. Middelburg 100% 100% 100%<br />

Deltius B.V. Ritthem 100% 100% 100%<br />

Windpark Kreekraksluis B.V. Middelburg 100% 100% 100%<br />

DELTA Tolling Sloe B.V. Middelburg 100% 100% 100%<br />

DELTA Saefthinge N.V. Doel, Belgium 99.9% 99.9% 99.9%<br />

Limo Energie Nederland B.V. Middelburg 100% 100% 100%<br />

Litro Energie Nederland B.V. Middelburg 100% 100% 100%<br />

DELTA Comfort B.V. Middelburg 100% 100% 100%<br />

DELTA Kabelcomfort Netten B.V. Middelburg 100% 100% 100%<br />

ZeelandNet B.V. Kamperland 100% 100% 100%<br />

Voting<br />

rights<br />

Internetservices Zeeland B.V. Kamperland n/a 100% n/a<br />

Internetplatform Zeeland B.V. Kamperland n/a 100% n/a<br />

DELTA Energy Belgium N.V. Doel, Belgium 99.9% 99.9% 99.9%<br />

DELTA Industriële Reiniging B.V. Bergen op Zoom 100% 100% 100%<br />

DELTA Investerings Maatschappij B.V. Middelburg 100% 100% 100%<br />

DELTA Onroerend Goed Ontwikkelingsmaatschappij B.V. Middelburg 100% 100% 100%<br />

Stichting DELTA Zeeland Fonds Middelburg 100% 100% 100%<br />

DELTA Development & Water B.V. Middelburg 100% 100% 100%<br />

DELTA MBR B.V. Middelburg n/a 100% n/a<br />

Triqua B.V. Wageningen 100% 100% 100%<br />

DELTA Biovalue B.V. (declared bankrupt) Eemshaven 100% 100% 100%<br />

DELTA Biovalue Nederland B.V. (declared bankrupt) Eemshaven 100% 100% 100%<br />

DELTA Biopat B.V. (declared bankrupt) Eemshaven 100% 100% 100%<br />

DELTA Solar B.V. Middelburg 100% 100% 100%<br />

Sunergy Investco B.V. Middelburg 100% 100% 100%<br />

Solsilc Development Company AS Norway n/a 60% n/a<br />

1) Shareholding of the parent company in the entity<br />


DELTA Financial statements <strong>2012</strong><br />

Company<br />

Headquarters<br />

DELTA’s interest 1)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Indaver N.V. Belgium 75% 75% 75%<br />

Indaver Participaties N.V. Belgium 99.9% 99.9% 99.9%<br />

Indaver Logistics N.V. Belgium 99.9% 99.9% 99.9%<br />

Indaver Medical Services N.V. Belgium 99.9% 99.9% 99.9%<br />

Indaver Italia S.R.L. Italy 100% 100% 100%<br />

Indaver Ireland Ltd Ireland 100% 100% 100%<br />

Indaver Energy Ltd Ireland 100% 100% 100%<br />

Indaver Nederland B.V. Netherlands 100% 100% 100%<br />

Indaver Gevaarlijk Afval B.V. Netherlands 100% 100% 100%<br />

Indaver Personeel B.V. Netherlands 100% 100% 100%<br />

AROC B.V. Netherlands 100% 100% 100%<br />

DELTA Milieu B.V. Terneuzen 100% 100% 100%<br />

Voting<br />

rights<br />

DELTA Milieu Compost en Biomassa B.V. Terneuzen 100% 100% 100%<br />

DELTA Milieu Biofuels B.V. Terneuzen 100% 100% 100%<br />

DELTA Milieu Groencompost B.V. Terneuzen 100% 100% 100%<br />

DELTA Milieu Composteren B.V. Terneuzen 100% 100% 100%<br />

DELTA Impex B.V. ‘s-Gravenpolder 100% 100% 100%<br />

Zeeuwse Reinigingsdienst B.V. Terneuzen 99% 99% 99%<br />

DELTA Milieu Verwerking B.V. Terneuzen 100% 100% 100%<br />

DELTA Milieu Recycling B.V. Terneuzen 100% 100% 100%<br />

Perex B.V. Terneuzen 100% 100% 100%<br />

DELTA Milieu Afvalbergingen B.V. Terneuzen 100% 100% 100%<br />

Derde Merwedehaven B.V. Terneuzen 100% 100% 100%<br />

Stortplaats Koegorspolder B.V. Terneuzen 100% 100% 100%<br />

Stortplaats Noord en Midden Zeeland B.V. Terneuzen 100% 100% 100%<br />

DELTA Milieu Verbranding & Handel B.V. Terneuzen 100% 100% 100%<br />

Depmer B.V. Terneuzen 100% n/a 100%<br />

DELTA Milieu Personeel B.V. Terneuzen 100% 100% 100%<br />

Indaver Portugal SA Portugal 100% 100% 100%<br />

Indaver Schweiz AG Switzerland 100% 100% 100%<br />

Indaver UK Ltd UK 100% 100% 100%<br />

Indaver Deutschland GmbH Germany 51% 51% 51%<br />

SAV Zweite Beteiligungs GmbH & Co. KGHIM GmbH Germany 94.90% 94.90% 94.90%<br />

AVG Abfall-Verwertungs-Gesellschaft GmbH Germany 99.74% 99.74% 99.74%<br />

Gareg Umwelt-Logistik GmbH Germany 100% 100% 100%<br />

HIM GmbH Germany 93.83% 93.83% 93.83%<br />

Frassur GmbH Umweltschutz-Dienstleistungen Germany n/a 100% n/a<br />

Panse Wetzlar Entsorgung GmbH Germany 100% 100% 100%<br />

AVA Abwasser- und Verwertungsanlagen GmbH Germany n/a 100% n/a<br />

1) Shareholding of the parent company in the entity<br />


Consolidated financial statements<br />

Non-consolidated companies<br />

Company<br />

Headquarters<br />

DELTA’s interest 1)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Voting<br />

rights<br />

Joint Ventures<br />

DELTA Infra B.V.<br />

vof Diepp Etten-Leur n/a 50.00% n/a<br />

DELTA Energy B.V.<br />

N.V. EPZ Borssele 70.00% 70.00% 70.00%<br />

Sloewind B.V. Middelburg 50.00% 50.00% 50.00%<br />

Windpark Distridam vof Terneuzen 50.00% 50.00% 50.00%<br />

PVNed Holding B.V. Middelburg 50.00% 50.00% 50.00%<br />

PVNed B.V. Middelburg 100.00% 100.00% 100.00%<br />

Arbel N.V. (Belgium) Mechelen, Belgium 99.90% 99.90% 99.90%<br />

BMC Moerdijk B.V. Moerdijk 50.00% 50.00% 50.00%<br />

Sloe Centrale Holding B.V. Vlissingen 50.00% 50.00% 50.00%<br />

Sloe Centrale B.V. Vlissingen 100.00% 100.00% 100.00%<br />

Sloe Centrale 3 B.V. Middelburg 50.00% n/a 50.00%<br />

Windpark Kloosterboer B.V. Middelburg 50.00% n/a 50.00%<br />

DELTA Industriële Reiniging B.V.<br />

Vedis Reiniging B.V. Terneuzen 50.00% 50.00% 50.00%<br />

DELTA Mourik Industrial Services (DEMIS) vof Terneuzen 50.00% 50.00% 50.00%<br />

Indaver N.V.<br />

Sleco-Centrale N.V. Belgium 50.00% 50.00% 50.00%<br />

Svex N.V. Belgium 50.00% 50.00% 50.00%<br />

Wips N.V. Belgium 50.00% 50.00% 50.00%<br />

HIM GmbH<br />

Gesellschaft fur die Verwertung<br />

von Sonderabfallen mbH& Co. KG<br />

Germany 50.00% 50.00% 50.00%<br />

DELTA Milieu Verbranding & Handel B.V.<br />

Depmer B.V. Dordrecht n/a 50.00% n/a<br />

DELTA Milieu Afvalbergingen B.V.<br />

Zeeuwgrond B.V. Nieuwdorp 50.00% 50.00% 50.00%<br />

DELTA Milieu Biofuels B.V.<br />

Ecofuels B.V. Well 50.00% 50.00% 50.00%<br />

Laarakker Landbouw B.V. Well 100.00% 100.00% 100.00%<br />

DELTA N.V.<br />

Evides N.V. Rotterdam 50.00% 50.00% 50.00%<br />

Elsta B.V. Middelburg 25.00% 25.00% 25.00%<br />

Elsta B.V. & Co C.V. Middelburg 24.75% 24.75% 24.75%<br />

DELTA/Essent Lighting vof Goes n/a 50.00% n/a<br />

Associates<br />

DELTA Netwerkbedrijf B.V.<br />

Zebra GasNetwerk B.V. Middelburg 33.33% 33.33% 33.33%<br />

Zebra Activa B.V. Middelburg 100.00% 100.00% 100.00%<br />

Zebra Pijpleiding vof Middelburg 33.33% 33.33% 33.33%<br />

Entrade Pipe B.V. Vught 100.00% 100.00% 100.00%<br />

Zebra Pijpleiding vof Middelburg 66.67% 66.67% 66.67%<br />

112 1) Shareholding of the parent company in the entity

DELTA Financial statements <strong>2012</strong><br />

Company<br />

Headquarters<br />

DELTA’s interest 1)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Voting<br />

rights<br />

DELTA Energy B.V.<br />

Windpark Neeltje-Jans B.V. Veere 40.00% 40.00% 40.00%<br />

Windpark Zeeland 1 B.V. Vlissingen/Kapelle-Schore 40.00% 40.00% 40.00%<br />

NPG Willebroek N.V. Antwerpen, Belgium 49.00% 49.00% 49.00%<br />

WT I B.V. Amersfoort 40.00% n/a 40.00%<br />

DELTA N.V.<br />

Sunergy Investco B.V.<br />

Fesil Sunergy AS Noorwegen n/a 49.00% n/a<br />

Partners Vliegveld Zeeland B.V. Middelburg 40.91% 40.91% 40.91%<br />

Zeeland Airport B.V. Middelburg 46.00% 46.00% 46.00%<br />

Indaver N.V.<br />

IHM cvba Belgium 30.00% 30.00% 30.00%<br />

Ibogem cvba Belgium 35.12% 35.12% 35.12%<br />

Intercommunale vereniging Verko N.V. Belgium 39.90% 39.90% 39.90%<br />

Ecowest N.V. Belgium 42.61% 42.61% 42.61%<br />

Indaver Participaties N.V.<br />

Sita Decontamination Services N.V. Belgium 26.00% 26.00% 26.00%<br />

Ecov N.V. Belgium 50.00% 50.00% 50.00%<br />

Ivago cvba Belgium 50.00% 50.00% 50.00%<br />

N.V. Brussel Compost Belgium 40.00% 40.00% 40.00%<br />

DELTA Milieu B.V.<br />

AZN Holding B.V. Wijster 20.00% 20.00% 20.00%<br />

B.V. Grondbezit AVI Moerdijk Moerdijk 100.00% 100.00% 100.00%<br />

B.V. Grondbezit AVI Moerdijk II Moerdijk 100.00% 100.00% 100.00%<br />

N.V. AZN Den Bosch 100.00% 100.00% 100.00%<br />

Others<br />

DELTA Netwerkbedrijf B.V.<br />

Energie Data Services Nederland B.V. 1.65% 1.65% 1.65%<br />

DELTA Energy B.V.<br />

Decu Beheer B.V. n/a 60.00% n/a<br />

Decu C.V. n/a 59.76% n/a<br />

DELTA N.V.<br />

N.V. KEMA n/a 7.60% n/a<br />

Synergia Capital Partners B.V. 5.00% 5.00% 5.00%<br />

DELTA Investerings Maatschappij B.V.<br />

Sustainable Energy Technology Fund C.V. 49.93% 49.93% 49.93%<br />

Sustainable Energy Technology Fund II C.V. 60.28% 69.65% 60.28%<br />

Business Park Terneuzen B.V. 15.00% 15.00% 15.00%<br />

Indaver N.V.<br />

Vlar Papier N.V. 34.96% 34.96% 34.96%<br />

Spanin N.V. n/a 50.00% n/a<br />

Ecowest N.V.<br />

IVIO cvba 1.50% 1.50% 1.50%<br />

Ivvo cvba 3.46% 3.46% 3.46%<br />

1) Shareholding of the parent company in the entity 113

Company financial statements<br />

Company balance sheet as at 31 December <strong>2012</strong> (before profit appropriation)<br />

(x EUR 1,000)<br />

ASSETS<br />

Notes 31-12-<strong>2012</strong> 31-12-2011<br />

Non-current assets<br />

Intangible assets 1 2,397 3,470<br />

Property, plant and equipment 2 24,584 26,681<br />

Financial assets<br />

Investments in subsidiaries 3 1,030,124 996,809<br />

Other investments 3 318,001 327,997<br />

Receivables from subsidiaries 3 - 59,567<br />

Loans to other investment entities 3 600 418<br />

Other loans 3 288 360<br />

Deferred tax assets 4 51,174 60,638<br />

1,400,187 1,445,789<br />

1,427,168 1,475,940<br />

Current assets<br />

Receivables from subsidiaries 127,415 115,458<br />

Other receivables 5 2,742 10,364<br />

130,157 125,822<br />

Cash 5,407 10,157<br />

Total assets 1,562,732 1,611,919<br />


Notes 31-12-<strong>2012</strong> 31-12-2011<br />

Shareholders' equity<br />

Shareholders' equity 6 1,052,889 1,043,039<br />

Profit for the year 6 81,084 82,690<br />

1,133,973 1,125,729<br />

Provisions 7 2,920 2,822<br />

Non-current liabilities<br />

Payables to subsidiaries 7,080 -<br />

Other non-current liabilities 8 209,805 306,533<br />

216,885 306,533<br />

Current liabilities<br />

Payables to subsidiaries 168,701 130,462<br />

Other payables 9 40,253 46,373<br />

208,954 176,835<br />

Total equity and liabilities 1,562,732 1,611,919<br />


DELTA Financial statements <strong>2012</strong><br />

Company income statement<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Profit on parent company activities (36,405) (75,500)<br />

Share in profits of subsidiaries, joint ventures and associates 117,489 158,190<br />

Profit for the year 81,084 82,690<br />


Company financial statements<br />

Notes to the company financial statements<br />

DELTA N.V. is the holding company, incorporated under Dutch<br />

law, of a number of the subsidiaries active in the generation of<br />

electricity, in the transportation and supply of energy and in the<br />

provision of environmental and cable services. The functional<br />

currency is the euro. Unless otherwise stated, all amounts are<br />

presented in thousands of euros.<br />

DELTA availed itself of the option in Title 9, Book 2, of the<br />

Netherlands Civil Code to prepare the company financial<br />

statements in accordance with the IFRS accounting policies<br />

used in the consolidated financial statements with the<br />

exception of the equity-accounted subsidiaries, joint ventures<br />

and associates. The company income statement is presented in<br />

abridged form in accordance with article 402, Title 9, Book 2, of<br />

the Netherlands Civil Code.<br />

Accounting policies<br />

The investments in the equity of other entities are stated at net<br />

asset value, measured in accordance with the IFRS accounting<br />

policies applied in the consolidated financial statements,<br />

adjusted for the goodwill paid on acquisition and any<br />

impairment of goodwill. No account is taken of non-controlling<br />

interests which are recognised in the carrying amount of the<br />

subsidiary concerned.<br />

For the other accounting policies, reference is made to the notes<br />

to the consolidated financial statements.<br />


DELTA Financial statements <strong>2012</strong><br />

Notes to the company balance sheet<br />

1. Intangible assets<br />

(x EUR 1,000)<br />

Total Software<br />

2011<br />

Carrying amount as at 1 January 28,415 28,415<br />

Investments 688 688<br />

Amortisation (14,145) (14,145)<br />

Reclassification/other changes (11,488) (11,488)<br />

Carrying amount as at 31 December 3,470 3,470<br />

Total Software<br />

<strong>2012</strong><br />

Carrying amount as at 1 January 3,470 3,470<br />

Investments 427 427<br />

Amortisation (1,500) (1,500)<br />

Carrying amount as at 31 December 2,397 2,397<br />

Amortisation period in years 5<br />

In 2011, several IT applications purchased exclusively for use by one of DELTA’s subsidiaries were transferred to the company<br />

concerned. The value of the assets carried on the balance sheet of DELTA N.V. was reduced and the depreciation and amortisation<br />

costs were accordingly lower in <strong>2012</strong> compared to 2011.<br />


Company financial statements<br />

2. Property, plant and equipment<br />

(x EUR 1,000)<br />

Total<br />

Land and<br />

buildings<br />

Plant and<br />

equipment<br />

Other assets<br />

Assets under<br />

construction<br />

Third-party<br />

contributions<br />

2011<br />

Carrying amount as at 1 January 27,510 18,256 6,923 1,562 1,736 (967)<br />

Investments - - - - - -<br />

Depreciation (914) (733) - (181) - -<br />

Disposals - - - - - -<br />

Other movements 85 1,585 (678) (91) (980) 249<br />

Carrying amount as at 31 December 26,681 19,108 6,245 1,290 756 (718)<br />

Carrying amount before deduction of<br />

27,399 19,108 6,245 1,290 756<br />

contributions<br />

Accumulated depreciation and<br />

97,020 25,468 51,815 19,737<br />

impairment<br />

Acquisition cost as at 31 December 124,419 44,576 58,060 21,027 756<br />

Total<br />

Land and<br />

buildings<br />

Plant and<br />

equipment<br />

Other assets<br />

Assets under<br />

construction<br />

Third-party<br />

contributions<br />

<strong>2012</strong><br />

Carrying amount as at 1 January 26,681 19,108 6,245 1,290 756 (718)<br />

Investments 28 6 - 22 - -<br />

Depreciation (789) (658) - (131) - -<br />

Disposals (12) - - (12) - -<br />

Other movements (1,324) (455) (661) (99) (159) 50<br />

Carrying amount as at 31 December 24,584 18,001 5,584 1,070 597 (668)<br />

Carrying amount before deduction of<br />

25,252 18,001 5,584 1,070 597<br />

contributions<br />

Accumulated depreciation and<br />

97,809 26,126 51,815 19,868<br />

impairment<br />

Acquisition cost as at 31 December 123,061 44,127 57,399 20,938 597<br />

Depreciation periods in years 0-40 7-40 5-15 n/a<br />

Property, plant and equipment consists chiefly of investments in premises. There were no new investments or disposals in <strong>2012</strong>.<br />


DELTA Financial statements <strong>2012</strong><br />

3. Financial assets (excluding tax assets)<br />

(x EUR 1,000)<br />

Receivables<br />

from<br />

subsidiaries<br />

Receivables<br />

from other<br />

investment<br />

entities<br />

Total<br />

Investments<br />

in subsidiaries<br />

Other<br />

investments<br />

Other<br />

receivables<br />

Carrying amount as at 31 December 2010 1,333,285 1,001,826 288,567 29,550 - 13,342<br />

Reversal of current portion 2,839 - - - - 2,839<br />

Acquisition/grant of loans (2,271) - - (3,000) 418 311<br />

Share in profits 158,190 114,720 43,470 - - -<br />

Disposals / repayments / dividends (57,307) (49,695) (26,098) 33,017 - (14,532)<br />

Movements in hedge reserve (77,314) (77,314) - - - -<br />

Other movements 27,729 7,272 22,058 (1) - (1,600)<br />

Carrying amount as at 31 December 2011 1,385,151 996,809 327,997 59,567 418 360<br />

Reversal of current portion 165 - - - 165 -<br />

Acquisition/grant of loans 2,280 - - 1,670 610 -<br />

Share in profits 117,489 52,416 65,073 - - -<br />

Disposals / repayments / dividends (119,214) (5,000) (52,223) (61,237) (143) (611)<br />

Movements in hedge reserve (8,545) (8,545) - - - -<br />

Other movements (28,313) (5,556) (22,846) - (450) 539<br />

Carrying amount as at 31 December <strong>2012</strong> 1,349,013 1,030,124 318,001 - 600 288<br />

The hedge reserve decreased in <strong>2012</strong>, solely on account of the<br />

related deferred tax.<br />

The revaluation of the investment in N.V. KEMA to fair value was<br />

included in the ‘Other changes’ item in 2011.<br />

The sale in <strong>2012</strong> was realised at fair value and consequently<br />

there was an opposite change in the ‘Other changes’ item.<br />


Company financial statements<br />

4. Deferred tax assets 5. Other receivables<br />

Deferred tax assets have arisen as a result of temporary<br />

differences between the carrying amount in the financial<br />

statements and the corresponding tax bases. Amounts are<br />

also included in connection with loss carryforwards.<br />

DELTA also recognises a hedge reserve for unrealised<br />

movements in the value of derivatives/trade contracts in<br />

accordance with IAS 39/32.<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Trade receivables 717 1.835<br />

Total current taxes 1,109 2,972<br />

Derivatives - 141<br />

Other receivables, prepayments and<br />

591 4,926<br />

accrued income<br />

Current portion of long-term loans<br />

325 490<br />

granted<br />

Other receivables 916 5,416<br />

Total 2,742 10,364<br />


DELTA Financial statements <strong>2012</strong><br />

6. Statement of changes in equity<br />

(x EUR 1,000)<br />

Total<br />

Paid-up<br />

capital<br />

Statutory<br />

reserve<br />

Hedge<br />

reserve<br />

Assets held<br />

for sale<br />

Other<br />

reserves<br />

Unappropriated<br />

profit<br />

Carrying amount as at 31 December 2010 1,129,814 6,937 87,812 41,837 - 1,167,395 (174,167)<br />

Profit appropriation for 2010 - - - - - (174,167) 174,167<br />

Payment of dividend (50,000) - - - - (50,000) -<br />

Other movements 11,106 - (11,327) - 23,115 (682) -<br />

Movement in hedge reserve for energy<br />

derivatives<br />

(66,950) - - (66,950) - - -<br />

Movement in hedge reserve for interest<br />

rate derivatives<br />

2,971 - - 2,971 - - -<br />

Add: Corporate income tax effect 16,098 - - 16,098 - - -<br />

Net profit for 2011 82,690 - 125,522 - - - (42,832)<br />

Carrying amount as at 31 December 2011 1,125,729 6,937 202,007 (6,044) 23,115 942,546 (42,832)<br />

Profit appropriation for 2011 - - - - - (42,832) 42,832<br />

Payment of dividend (40,000) - - - - (40,000) -<br />

Other movements (36,961) - (15,700) 1 (23,115) 1,853 -<br />

Movement in hedge reserve for energy<br />

derivatives<br />

3,435 - - 3,435 - - -<br />

Movement in hedge reserve for interest<br />

rate derivatives<br />

1,965 - - 1,965 - - -<br />

Add: Corporate income tax effect (1,279) - - (1,279) - - -<br />

Net profit for <strong>2012</strong> 81,084 - 7,126 - - - 73,958<br />

Carrying amount as at 31 December <strong>2012</strong> 1,133,973 6,937 193,433 (1,922) - 861,567 73,958<br />

The statutory reserve comprises the undistributed profits of<br />

subsidiaries, joint ventures and associates. It is consequently<br />

not freely distributable. The hedge reserve is also not freely<br />

distributable inasmuch as it relates to the unrealised fair value<br />

gains and losses on the trading portfolio. The hedge resulting<br />

from assets held for sale is also not freely distributable. For<br />

an explanation of changes in equity, reference is made to the<br />

consolidated financial statements.<br />

In contrast to the consolidated financial statements,<br />

non-controlling interests in subsidiaries are deducted directly<br />

from the carrying amounts of the investments concerned<br />

(equity method).<br />


Company financial statements<br />

7. Provisions<br />

(x EUR 1,000)<br />

Total<br />

BMAP<br />

Employee<br />

benefits<br />

Other<br />

provisions<br />

Carrying amount as at 1 January 2011 3,372 408 2,964 -<br />

Reversal of current portion of provisions 5,534 650 884 4,000<br />

Added 260 - 260 -<br />

Interest added 122 8 114 -<br />

Released (913) - (387) (526)<br />

Utilised (848) (70) (778) -<br />

Other movements (1) (1) - -<br />

Carrying amount as at 31 December 2011 7,526 995 3,057 3,474<br />

Current portion of provisions (4,704) (400) (830) (3,474)<br />

Carrying amount as at 31 December 2011 2,822 595 2,227 -<br />

Reversal of current portion of provisions 4,704 400 830 3,474<br />

Added 883 - 883 -<br />

Interest added 97 5 92 -<br />

Released (2,167) - (63) (2,104)<br />

Utilised (1,657) (1,000) (657) -<br />

Other movements 57 - 57 -<br />

Carrying amount as at 31 December <strong>2012</strong> 4,739 - 3,370 1,370<br />

Current portion of provisions (1,819) - (449) (1,370)<br />

Carrying amount as at 31 December <strong>2012</strong> 2,920 - 2,920 -<br />

The long-term provisions consisted only of employee benefits at<br />

the end of <strong>2012</strong>.<br />

The BMAP provision relates to a provision in connection<br />

with the Environmental Action Plan for Industry (BMAP). The<br />

environmental surcharge on electricity and gas supplies<br />

charged to certain groups of users in the period 1991–1999<br />

constitutes the basis of this provision. Remaining liabilities<br />

connected with activities undertaken in the past under the Plan<br />

are settled out of this provision.<br />

Following the introduction of the new health insurance system<br />

on 1 January 2006, the obligations underlying the provision<br />

for health care have changed substantially. An amount of EUR<br />

0.5 million of the provision formed in the past continues to be<br />

recognised.<br />

Under the terms of the collective labour agreement (CLA),<br />

DELTA also pays employees long-service benefits. From the<br />

date on which an employee joins the company, a provision is<br />

recognised for these benefits based on the number of years of<br />

service, expected price and salary inflation (averaging 2%)<br />

and statistical severance, invalidity and mortality rates.<br />

The relevant discount rate is 4.5% (2011: 4.5%).<br />


DELTA Financial statements <strong>2012</strong><br />

8. Non-current liabilities<br />

9. Other payables<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Carrying amount as at 1 January 306,533 146,383<br />

Reversal of current portion 2,301 2,157<br />

Loans drawn down 180,000 165,000<br />

Repayments (277,301) (2,157)<br />

Movements in interest rate swap - (2,050)<br />

Other movements 7,170 (499)<br />

218,703 308,834<br />

Repayments due in the current year (1,818) (2,301)<br />

Total 216,885 306,533<br />

(x EUR 1,000)<br />

31-12-<strong>2012</strong> 31-12-2011<br />

Trade payables 3,448 12,692<br />

Current tax liabilities 6,731 5,571<br />

Derivatives - 2,107<br />

Current portion of non-current<br />

1,818 2,301<br />

liabilities<br />

Current portion of provisions 1,819 4,704<br />

Accruals and deferred income 13,346 14,998<br />

Total other payables 16,983 22,003<br />

Bank borrowings 13,091 4,000<br />

Carrying amount as at 31 December 40,253 46,373<br />

The other payables include the current portion of the<br />

provisions, the current portion of borrowings and outstanding<br />

supplier accounts. The current tax liabilities include VAT and<br />

energy tax payable.<br />


Company financial statements<br />

Commitments and contingent liabilities<br />

403 Declarations<br />

DELTA N.V. has filed a statement with the Chamber of Commerce<br />

as required by the provisions of Section 403, Book 2, of the<br />

Netherlands Civil Code assuming joint and several liability for<br />

any debts arising from the legally binding transactions of any of<br />

the following subsidiaries as at balance sheet date:<br />

• DELTA Comfort B.V.<br />

• DELTA Energy B.V.<br />

• DELTA Ficus Holding B.V.<br />

• DELTA Infra B.V.<br />

• DELTA Kabelcomfort Netten B.V.<br />

• DELTA Onroerend Goed Ontwikkelingsmaatschappij B.V.<br />

• DELTA Pipe B.V.<br />

• DELTA Tolling Sloe B.V.<br />

• DELTIUS B.V.<br />

• LIMO Energie Nederland B.V.<br />

• LITRO Energie Nederland B.V.<br />

• ZeelandNet B.V.<br />

Given the filing of this statement and the declarations of<br />

agreement on the part of the shareholders filed annually<br />

with the Chamber of Commerce, these companies are exempt<br />

from using the prescribed format in preparing their financial<br />

statements.<br />

DELTA N.V. forms a tax group with some of its subsidiaries.<br />

On that basis, DELTA N.V. is jointly and severally liable for the<br />

various tax liabilities of those companies.<br />

Put options<br />

DELTA has issued put options to the non-controlling<br />

shareholders of Indaver.<br />

Unbundling plan –<br />

Independent Network Management Act (WON)<br />

The Minister approved the plan to unbundle the company on<br />

2 December 2009. However, on 22 June 2010, the Court in The<br />

Hague declared parts of the unbundling act non-binding. In<br />

the light of this judgement, the unbundling did not go ahead,<br />

although the conditions stipulated by the Minister have<br />

been complied with as far as possible and necessary. The<br />

government took the case to the Supreme Court in an attempt<br />

to get the decision overturned. On 24 February <strong>2012</strong>, the<br />

Supreme Court referred the case to the European Court of<br />

Justice. On 14 January 2013, the parties gave a verbal<br />

presentation of the case before the Court. A ruling by the<br />

European Court is not expected to follow until the end of 2013.<br />

After the judgement by the European Court, the case will be<br />

reffered back to the Supreme Court.<br />


DELTA Financial statements <strong>2012</strong><br />

Notes to the company income statement<br />

The average number of employees (FTEs) employed by<br />

DELTA N.V. was 1,203 in <strong>2012</strong> (2011: 1,171 FTEs).<br />

For an explanation of the remuneration of the Executive<br />

Directors of DELTA N.V., see note 18 (Staff costs) to the<br />

consolidated financial statements.<br />

For an explanation of the remuneration of the Supervisory<br />

Board of DELTA N.V., see note 20 (Other operating expenses) to<br />

the consolidated financial statements.<br />


Company financial statements<br />

Audit fees<br />

In <strong>2012</strong>, DELTA NV paid the following fees:<br />

(x EUR 1,000)<br />




TOTAL<br />

<strong>2012</strong> 2011 <strong>2012</strong> 2011 <strong>2012</strong> 2011<br />

Audit <strong>Annual</strong> Reports DELTA Group 428 615 - - 428 615<br />

Other analysis assignments 89 67 - - 89 67<br />

Tax-related advice services - 19 7 - 7 19<br />

Other non-analysis services 48 93 92 135 140 228<br />

Total 565 794 99 135 664 929<br />

Performance-related fees are not paid.<br />


DELTA Financial statements <strong>2012</strong><br />

Was signed:<br />

Executive board<br />

R.J. Frohn, CEO<br />

Supervisory Board<br />

D. van Doorn, Chairman<br />

F. Verhagen RA, CFO Ing. J. Bout<br />

J.G. van der Werf<br />

B.P.T. de Wit<br />


Other information<br />

Profit appropriation<br />

Profit appropriation under the Articles of Association.<br />

Article 39 of the Articles of Association provides for the<br />

appropriation of profits as follows.<br />

1. Any loss <strong>report</strong>ed in the income statement, as included<br />

in the adopted financial statements, shall be taken to the<br />

general reserve. If the general reserve holds insufficient<br />

funds to cover said loss, the remainder of the loss shall be<br />

charged to any profits achieved in future years.<br />

2. If the income statement, as included in the adopted<br />

financial statements, <strong>report</strong>s any profit, the Supervisory<br />

Board may use this profit to allocate funds to the general<br />

reserves. Any profit remaining shall be at the disposal of the<br />

General Meeting of Shareholders.<br />

3. The General Meeting has the authority to declare one<br />

or more interim dividends and/or make other interim<br />

distributions, provided the requirements of Section 2:105,<br />

subsection 2, of the Netherlands Civil Code are satisfied<br />

on the evidence of an interim statement of financial<br />

position as referred to in Section 2:105, subsection 4, of the<br />

Netherlands Civil Code.<br />

Profit appropriation<br />

(x EUR 1,000)<br />

<strong>2012</strong> 2011<br />

Profit after tax 81,084 82,690<br />

Charged/added to the statutory reserve (7,126) (125,522)<br />

Profit available for appropriation 73,958 (42,832)<br />

Charged/added to the general reserves 33,958 (82,832)<br />

Proposed dividend 40,000 40,000<br />


DELTA Financial statements <strong>2012</strong><br />


Other information<br />

Deloitte Accountants B.V.<br />

Park Veldzigt 25<br />

4336 DR Middelburg<br />

Postbus 7056<br />

4330 GB Middelburg<br />

Nederland<br />

Tel: 088 288 2888<br />

Fax: 088 288 9895<br />

www.deloitte.nl<br />

Independent auditor’s <strong>report</strong><br />

To: the shareholders of DELTA N.V.<br />

Report on the financial statements<br />

We have audited the accompanying financial statements of DELTA N.V., Middelburg.<br />

The financial statements include the consolidated financial statements and the company financial<br />

statements. The consolidated financial statements comprise the consolidated balance sheet as at<br />

31 December <strong>2012</strong>, the consolidated statements of comprehensive income, changes in equity and<br />

cash flows for the year then ended, and notes, comprising a summary of the significant accounting<br />

policies and other explanatory information. The company financial statements comprise the<br />

company balance sheet as at 31 December <strong>2012</strong>, the company income statement for the year then<br />

ended and the notes, comprising a summary of the accounting policies and other explanatory<br />

information.<br />

Management’s responsibility<br />

Management is responsible for the preparation and fair presentation of these financial statements<br />

in accordance with International Financial Reporting Standards as adopted by the European<br />

Union and with Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the annual<br />

<strong>report</strong> in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is<br />

responsible for such internal control as it determines is necessary to enable the preparation of the<br />

financial statements that are free from material misstatement, whether due to fraud or error.<br />

Auditor’s responsibility<br />

Our responsibility is to express an opinion on these financial statements based on our audit. We<br />

conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing.<br />

This requires that we comply with ethical requirements and plan and perform the audit to obtain<br />

reasonable assurance about whether the financial statements are free from material misstatement.<br />

An audit involves performing procedures to obtain audit evidence about the amounts and<br />

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,<br />

including the assessment of the risks of material misstatement of the financial statements, whether<br />

due to fraud or error.<br />

Deloitte Accountants B.V. is ingeschreven in het handelsregister van de Kamer van Koophandel te<br />

Rotterdam onder nummer 24362853.<br />

Member of<br />

Deloitte Touche Tohmatsu Limited<br />


DELTA Financial statements <strong>2012</strong><br />

In making those risk assessments, the auditor considers internal control relevant to the entity’s<br />

preparation and fair presentation of the financial statements in order to design audit procedures<br />

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the<br />

effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness<br />

of accounting policies used and the reasonableness of accounting estimates made by management,<br />

as well as evaluating the overall presentation of the financial statements. We believe that the audit<br />

evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.<br />

Opinion with respect to the consolidated financial statements<br />

In our opinion, the consolidated financial statements give a true and fair view of the financial<br />

position of DELTA N.V. as at December 31, <strong>2012</strong> and of its result and its cashflows for the year<br />

then ended in accordance with International Financial Reporting Standards as adopted by the<br />

European Union and with Part 9 of Book 2 of the Dutch Civil Code.<br />

Opinion with respect to the company financial statements<br />

In our opinion, the company financial statements give a true and fair view of the financial position<br />

of DELTA N.V. as at December 31, <strong>2012</strong> and of its result for the year then ended in accordance<br />

with Part 9 of Book 2 of the Dutch Civil Code.<br />

Report on other legal and regulatory requirements<br />

Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code,<br />

we have no deficiencies to <strong>report</strong> as a result of our examination whether the annual <strong>report</strong>, to the<br />

extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and<br />

whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further<br />

we <strong>report</strong> that the annual <strong>report</strong>, to the extent we can assess, is consistent with the financial<br />

statements as required by Section 2:391 sub 4 of the Dutch Civil Code.<br />

Middelburg, 29 March 2013<br />

Deloitte Accountants B.V.<br />

Was Signed: W.A. de Leeuw<br />


Other information<br />

DELTA in financial figures, consolidated<br />

(x EUR million)<br />

<strong>2012</strong> 2011<br />

Assets<br />

Intangible assets 390 395<br />

Property, plant and equipment 1.010 1.036<br />

Financial assets 1.015 1.035<br />

Current assets 600 695<br />

Cash 49 52<br />

3.064 3.213<br />

Equity and liabilities<br />

Group equity 1.188 1.180<br />

Provisions 230 237<br />

Non-current liabilities 859 842<br />

Current liabilities 787 954<br />

3.064 3.213<br />

Revenue<br />

Electricity 1.084 1.002<br />

Gas 337 424<br />

Electricity and gas transport 112 105<br />

Telecommunications 75 72<br />

Waste management and environmental services 505 499<br />

Miscellaneous 59 83<br />

Total revenue 2.172 2.185<br />

Expenses<br />

Cost of sales 1.551 1.549<br />

Fair value gains and losses on the trading portfolio 5 13<br />

Other operating income (33) (32)<br />

Net operating expenses 593 578<br />

Total operating expenses 2.116 2.108<br />

Earnings from operations 55 77<br />

Share in results of joint ventures and associates 78 85<br />

Operating result 133 162<br />

Net finance income (expense) (30) (24)<br />

Profit before tax 103 138<br />

Corporate income tax (14) (35)<br />

Profit from discontinued operations (1) (12)<br />

Non-controlling interests (7) (8)<br />

Profit after tax 81 83<br />

Proposed dividend 40 40<br />


DELTA Financial statements <strong>2012</strong><br />

DELTA key figures<br />

(x EUR million)<br />

<strong>2012</strong> 2011<br />

Nett revenue 2,171.8 2,185.1<br />

of which:<br />

Electricity trade and supply 1,083.7 1,001.8<br />

Gas trade and supply 337.2 423.7<br />

Electricity and gas transport 112.4 105.2<br />

Cable, internet and telecommunications 75.1 72.2<br />

Waste management and environmental sevices 504.6 498.9<br />

Other revenue 58.8 83.3<br />

Finances<br />

Gross margin 649.2 655.2<br />

Operating result 133.0 162.2<br />

Profit before tax 103.2 137.9<br />

Profit after tax 81.1 82.7<br />

EBITDA 293.0 281.9<br />

Group equity (excluding dividend) 1,187.9 1,179.8<br />

Balance sheet total 3,063.9 3,212.7<br />

Ratios<br />

Return on investment 6.1% 7.0%<br />

Return on equity attributable to the shareholders 7.2% 7.3%<br />

Equity ratio 38.8% 36.7%<br />

Interest coverage ratio 15.5 15.6<br />


Other information<br />

Definition of financial ratios<br />

Return on capital employed (ROCE)<br />

Earnings from operations plus interest income from financial<br />

assets and the share in the profit of joint ventures and<br />

associates divided by capital employed x 100.<br />

Capital employed<br />

The sum of non-current assets and net working capital as at<br />

balance sheet date.<br />

Return on equity (ROE)<br />

Profit attributable to shareholders of DELTA N.V.,<br />

divided by the shareholders’ equity attributable<br />

to the equity holders of DELTA N.V.<br />

Equity ratio<br />

Group equity divided by total assets x 100.<br />

Interest coverage ratio<br />

Operating result + depreciation/amortisation charges + interest<br />

income divided by net external finance income and expense.<br />


DELTA Jaarbericht <strong>2012</strong>

<strong>Annual</strong> Report <strong>2012</strong><br />

<br />

DELTA N.V. | Poelendaelesingel 10 | 4335 JA Middelburg<br />

T +31 (0)118 88 20 00 | F + 31 (0)118 88 21 00 | E info@DELTA.nl | W www.DELTA.nl<br />

Entered in the trade register of the Chamber of Commerce in Middelburg under number 22031457.

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