Consolidated financial statement 2011 - Aquafin

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60 Consolidated financial statement 2011 A sensitivity analysis uses forward rates to estimate the impact of a shift in the interest. Forward rates are the estimated future interest rates in the assumption that all other variables in the market will be kept constant. On that basis, the impact of an interest decline or increase is translated into an interest cost or interest receipts. The table below illustrates the impact. Net result (in €000) impact at 31/12/12 Impact at 31/12/2012 -0,50% -717 Impact at 31/12/2012 -0,25% 322 Impact at 31/12/2012 0,00% 1,192 Impact at 31/12/2012 0,25% 1,660 Impact at 31/12/2012 0,50% 1,149 Impact at 31/12/2012 1,00% 3,200 The interest burdens are calculated on the basis of the forward rates as set at 30 December 2011. The interest burdens at 31 December 2012, for example, are estimated on the basis of the estimated long-term interest in accordance with the underlying loans. On the basis of those forward rates – with all of the variables kept constant – the net effect at 31 December 2012 is plus €1,192 thousand. The theoretical approach whereby a shift of the interest is simulated ranges from -50bp to +100bp. An interest rate increase and small interest rate decrease results in a positive impact and an interest rate decrease of 50 bp results in a negative impact. The assumed movement as expressed in basic points for the sensitivity analysis of the interest is based on market conditions that are clearly more volatile than they have been in recent years. An increase in the interest rate results in more savings in comparison with interest rate declines. n Liquidity risk Sources of long-term financing are diversified via the issue of private and public bond issue. In addition, there is a also a commercial paper programme, a revolving credit facility and there are credit and back-up lines at various banks. n Financial risks Aquafin has loans and must be able to repay them. The short-term loans are used primarily to fund the work in progress before delivery. Long-term financing is based on the allocation agreement. It defines that the balance of the longterm credits must be smaller than the claims that Aquafin has on the drinking water companies, respectively the Flemish Region. These claims consist of the investment projects that have not been paid, but that have already been delivered. The covenants with the credit institutions have been satisfied. A breakdown of the financial instruments by year of settlement is shown below. Expiry year Expiry year Expiry year (in €000) 2012 2013-2016 ≥ 2017 Total DISTRIBUTION BY SETTLEMENT YEAR (AT NOMINAL VALUE) Outstanding debt 24,333 219,833 875,833 1,120,000 EXPLANATION 5.10 OTHER PROVISIONS AT 31 DECEMBER 2011 The provisions provided at 31 December 2011 relate to legal disputes, insurance dossiers, disputes in the context of the execution of the management agreement and processing of the sludge buffered in the plants. From financial year 2011, the (net) provisions to be created are broken down into gross liabilities and receipts from third parties. The retroactive split of the net provisions at 31 December 2010 and on the situation of the opening balance would have been too expensive, which would not have been proportional to the improved quality of the information. (in €000) 31/12/2011 31/12/2010 01/01/2010 Gross liabilities 7,064 2,139 2,173 Intervention of third parties -5,321 - - Net provisions 1,743 2,139 2,173
Evolution of the provisions by type: Disputes Legal Insurance Management Sludge (in €000) Arrears disputes dossiers Agreement buffers Total PROVISIONS AT 31/12/2010 16 1,597 152 122 252 2,139 Additions 27 4,997 912 40 61 6,037 Clawbacks of unused amounts -20 -897 -45 -150 -1,112 Draws 0 PROVISIONS AT 12/31/11 23 5,697 1,019 162 163 7,064 Short-term at 31/12/2011 9 163 172 Long-term at 31/12/2011 14 5,697 1,019 162 6,892 Disputes Legal Insurance Management Sludge (in €000) Arrears disputes dossiers Agreement buffers Total PROVISIONS AT 1/1/10 32 1,428 107 122 484 2,173 Additions 432 45 164 641 Clawbacks of unused amounts -16 -141 -396 -553 Draws -122 -122 PROVISIONS AT 31/12/2010 16 1,597 152 122 252 2,139 Short-term at 12/31/10 3 252 255 Long-term at 12/31/10 13 1,597 152 122 1,884 The provisions for processing the sludge that is buffered in the plants can be charged to the drinking water companies/the Flemish Region immediately because they fall under 'reasonable costs' as provided for in the management agreement with the Flemish Region. The other posts with respect to provisions cannot be charged to the drinking water companies/the Flemish Region – or only over the long term – and accompanied by clear statement of why those costs should be considered reasonable. n Provisions for lateness For delays in the delivery of investment projects, in comparison with the agreed delivery dates, the group legally owes compensation for damages. Provisions were made to cover any such delays that could have been foreseen at 31 December 2011. The provision for lateness amounts to €22,745 for five projects. n Provisions for insurance dossiers At 31 December 2011, the provision amounted to €1,018,508 for four insurance dossiers. n Provisions for various disputes in the context of the management agreement All of the remaining risks related to the management agreement fall under this provision, especially with respect to the possible infringements of the management agreement or the risk of unreasonableness and thus no repayment of specific costs. n Provision for sludge buffers Every year, a provision is made for the processing costs for the sludge in the buffers. The processing cost for the buffered sludge falls under 'reasonable costs' as provided for in the management agreement with the Flemish Region. n Provisions for legal disputes With respect to legal disputes, a provision was made in the amount of a reasonable estimate of the penalty in the event that it was considered likely that the group would lose the dispute. At 31 December 2011, the provision for legal disputes amounted to €5,697,771 for 138 disputes. Consolidated financial statement 61
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Consolidated financial statement 2011 - Aquafin

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