Consolidated financial statement 2011 - Aquafin

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Consolidated financial statement 2011
The P-1 short-term rating remained unchanged. Even with
that changed rating, Aquafin was still at the top of creditworthy
companies. The company continued to enjoy the
confidence of various lenders.
n
Active interest management
Through active management of the interest risk Aquafin
wishes to optimize the financing costs. In May 2006, the Board
of Directors approved the outlines of a dynamic management
procedure for interest-rate risks. The interest policy was
modified in 2008. In 2009, primarily the descriptions and
definitions were modified. No changes were made to the
principles themselves.
Active interest management can be applied to a maximum
of 35% of the underlying debt of Aquafin’s total long-term
debts. Its objective is to achieve interest savings. The portfolio
may be built up as follows: minimum of 65% of fixed interest
rates and 35% of variable rates, 25% of which with a maximum
ceiling and 10% fully variable. To cover future financing needs,
the interest rate policy results in a dynamic interestmanagement
programme up to 50% of the future long-term
debts, with a 5-year horizon. It is important to ensure that
the risks are covered and that an underlying loan matches
the coverage structure.
n
Bookkeeping converted to the international standard
As of year-end at 31 December 2011, Aquafin reports
according to the IFRS standards that apply. In addition to
reporting in accordance with the Belgian Generally Accepted
Accounting Principles (Belgian GAAP), consolidated IFRS
financial statements are also prepared. They include a balance
statement, an overview of realised and unrealised results,
a change overview of net equity, cash flow statement and
extensive explanations, including valuation rules.
EU FINE FOR BELGIUM - THE LATEST STATE
OF AFFAIRS
At the moment, Belgium is not compliant with the
provisions of the European Urban Waste Water Directive for
agglomerations of more than 10,000 people equivalents.
In respect of that situation, Europe is filing an application with
the European Court to have Belgium found to be in violation.
With respect to Flanders, there is only one agglomeration/
treatment plant – the one in Beersel – that is not completely
compliant. That plant is operational, but the mandatory
samples couldn’t be submitted for a full year yet.
The financial results of the interest management are
calculated against individual benchmarks (the result of an
individual strategy in comparison with the applicable interest
swap at the moment of the establishment/execution of the
structure). The interest cost of the underlying loan must be
taken together with the results of the structure built on top of
it, in order to see Aquafin's ultimate debt burden. The financial
results are offset with the drinking-water companies.
New structures were established in 2011 for our future
financing requirements. Existing strategies were also optimised.
That allows Aquafin to stay within the 35% to 50% range.
Half of the returns from the interest-rate management are
deducted immediately from the invoice to the drinking-water
companies. The other half is retained within the company as
a buffer for possible optimisations. At the end of the year,
the global result of all of the hedging operations combined is
reviewed so that every euro placed in the buffer is deducted
from the invoice to the drinking-water companies.