Consolidated financial statement 2011 - Aquafin

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6 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.
Expansion of the wastewater treatment infrastructure for the Flemish Region During 2011, we brought the people who were working on the Vision creation of the network, the Accelerated Execution of Projects and Account Management together into business units. In doing that, we prepared our core processes for future growth. In spite of the internal focus, a large number of projects for expanding the treatment infrastructure in Flanders were carried out. When we look at all of the contract amounts for the region and for client municipalities combined, 2011 was even one of the best years ever. We expect that working in business units will really start to pay off in 2012, so that we can develop, execute and finish projects completely in accordance with our own high quality standards and we can also deliver the results that the clients want. On 31 December 2011, the investment-project order portfolio for the Flemish Region amounted to more than €1.3 billion for 1,316 projects. Up until that date, Aquafin had delivered 2,268 new-build and renovation projects worth nearly €3 billion. VALUE PROJECT PORTFOLIO n In design phase: €934.03 mio n Delivered €2,964.21 mio Last year, we developed a multilateral agreement for study contracts. That way, we want to expand a long-term relationship with high-quality study bureaus and we can reserve capacity in the market without disrupting it. The agreement should also reduce the time required to award contracts. The call for candidates has gone out. The business units will also intensify the cooperation with the operational teams and lead to treatment areas that function optimally. The regional engineers within the Vision creation process will play a particularly important role in our asset management. n Increased tendering volumes In 2011, Aquafin put projects worth €154 million out to tender for the Flemish Region. That is €3 million more than in 2010. The target of €160 million was adjusted to €157 million based on the actual prices that the contractors submitted during the project tender process. Ninety-eight per cent of that amount has been achieved. With the Urban Waste Water Directive having been nearly completely implemented, the projects that remained to be tendered were relatively small. Such projects demand a lot of technical and administrative monitoring, but each one of them contributes individually to the global tendering volumes. For 2012, the target has been set at €183 million, on the assumption that that objective fits within the budgets of the Flemish Region. n n Awarded and contracted out: €403.51 mio Vision development concerning the expansion and management of the wastewater treatment infrastructure In hydraulic studies, the physical parameters of the system are registered and formalised. In 2011, Aquafin delivered 36 hydronaut studies worth a total of more than €3 million. Twenty-five of those were needed for the expansion of the sewer system. The other 11 studies were intended to increase the knowledge about the wastewater treatment areas. For all agglomerations, a determination has been made of the water-treatment infrastructure that is a priority in order to comply with the Urban Waste Water Directive. In municipalities of greater than 10,000 people equivalents, all of the treatment plants have been delivered. All of the collector sewers have already been put into use, but three projects are still to be delivered. At the beginning of 2012, in agglomerations of between 2,000 and 10,000 people equivalents, only one treatment plant – in Melsbroek – was still missing. That plant will become operational in the course of 2012. The remaining 13 priority collector sewers are all in progress. Report of the Board of Directors 7
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Aquafin develops and implements eff
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Consolidated financial statement 2011 - Aquafin

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