Consolidated Financial Statements of the Stadtwerke Leipzig Group ...

operations, and for investment companies with
no staff, the RMS has uniform but separate arrangements
based on the respective cost-benefit
ratio.
Wholesale Energy Trading: Due to the increased
dynamics of European energy trading
and the resultant large number of potential individual
risks, a separate risk management system
has been implemented in Wholesale Energy
Trading at Stadtwerke Leipzig GmbH. To ensure
the conscientious implementation and responsible
handling of the risk management process,
Energy Trading implements the requirements
and specifications of the Minimum Requirements
for Risk Management (MaRisk) issued
by the Federal Financial Supervisory Authority
(BAFin). In addition, the business unit has its
own Risk Management Manual laying down the
organisational framework and responsibilities.
Furthermore, a Risk Commission and a Risk
Committee are fixed parts of the organisation.
The Risk Commission regularly reports to the
Risk Committee on energy trading activities
relating to all traded raw materials and markets.
The Risk Committee meets once a quarter and
is involved in decisions on matters of market
and product release, the distribution of risk
capital, and limit allocation. In addition, the Risk
Committee regularly monitors compliance with
the defined risk policy and ensures that the risk
strategy is observed in the execution of business
processes.
A review of Trading’s activities has shown that
the current volume of business does not trigger
the need for a licence pursuant to section 32 of
the German Banking Act (KWG). Similarly, a
review of current and planned marketing activities
and special cases has revealed no business
activities or services requiring regulation.
Finance: In the course of its operational business
activities, Stadtwerke Leipzig GmbH is also
exposed to financial risks – particularly liquidity,
non-payment and price risks. The main aim of
risk management is to limit these risks using appropriate
management and monitoring systems.
Risk limitation does not mean the complete exclusion
of financial risks, but rather the economic
control of these risks within a documented
action framework and strict limits.
The main financial instruments we currently
use include cash and cash equivalents, financial
investments, trade debtors and creditors, and
borrowings. The derivative financial instruments
we use are mainly interest rate and foreignexchange
derivatives in the financial sphere, and
commodity derivatives in the energy trading
sphere. For further information on derivatives,
please see Stadtwerke Leipzig GmbH’s Notes to
the financial statements.
26 | Annual Financial Statements of Stadtwerke Leipzig GmbH