Annual Report 2009 - Isagen

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ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.100p) Recognition of revenue, costs and expensesRevenue from sales is recognized during the contractual period orwhen services are rendered. Revenue and costs are recorded onan accrual basis.For cost management, the costing system used is the Activities-Based Costing (ABC) defined by the Superintendency ofDomiciliary Public Utilities in Resolution SSPD 001417 of April 18,1997 as Unified Costs and Expenses System (SUCG, its Spanishinitials), updated by Resolution No. SSPD - 20051300033635 ofDecember 28, 2005. Accordingly, direct costs of energy and gasservices are recorded directly in the process defined by SUCG,and administration expenses are distributed on the basis of revenue,number of people, assigned times and areas. Costs areclosed and reported to the Public Utilities Single InformationSystem (SUI).q) Memorandum accountsAgreements pending formalization and contingent rights or liabilities,such as loans not yet disbursed and the differences existing betweendebit and credit accounts used for accounting purposes and thoseused for tax matters, are recorded under memorandum accounts.r) ContingenciesOn the date financial statements are issued certain contingent conditionsmay exist which might result in a loss for the Company butare only resolved in the future when events actually take place.These contingencies are estimated by the Company’s managementand its legal counsels. The estimation of loss contingenciesis necessarily a matter of judgment and opinion. When estimatingcontingent losses in legal processes pending against the Company,legal counsels assess the merit of claims, related decisions, andthe current state of processes, among other issues. When a caseis decided against the Company in the trial court, it is recorded as aliability affecting the results of the year.If evaluation of the contingency indicates that loss is improbablebut the result is uncertain, or that it is probable but its amount isimpossible to estimate, then the nature of the contingency is recordedin a memorandum account and disclosed in a note to the financialstatements together with an estimate of the probable loss.Generally, loss contingencies estimated as remote are not recordednor disclosed.s) Use of estimatesThe preparation of financial statements according to accountingprinciples generally accepted in Colombia requires some estimatesthat affect the values of assets, liabilities, revenues, costsand expenses reported for such periods. The actual result of certainitems may differ from such estimates.t) Reclassifications of financial statementsSome figures in the financial statements of 2008 have been reclassifiedfor comparison purposes with the year 2009.SPECIFIC NOTES6. Foreign currency investmentsCurrent regulations in Colombia allow open foreign exchange tradingthrough banks and other financial institutions at non-controlled exchangerates. However, most foreign currency transactions still requireGovernment approval.Contents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management
ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.101Foreign currency operations and balances are translated at the currentexchange rates certified by the Financial Superintendency.. ThePeso/US Dollar exchange rates used for the preparation of the financialstatements at December 31, 2009 and 2008, were $2,044.23*and $2,243.59*, respectively.The foreign currency position on December 31, in US dollars andColombian pesos, is:2009 2008USD $Col. USD $Col.ASSETSCash 375 767 496 1,113Accounts receivable 6,876 14,056 7,125 15,985Investments 4,162 8,508 500 1,12211,413 23,331 8,121 18,220LIABILITIESSuppliers 1,506 3,079 554 1,243Creditors 45 92 7,669 17,2061,551 3,171 8,223 18,449FOREIGN-CURRENCYASSET (LIABILITIES)POSITION9,862 20,160 (102) (229)* In Colombian pesos7. CashCash as on December 31 includes:2009 2008Cash in banks, other financial institutions and trusts:Cash 63 33Banks and savings institutionsColpatria 90,673 45,354Banco de Bogotá 35,319 21,468Bancolombia (1) 17,906 40,025BBVA (2) 13,550 6,950AV Villas ahorros 5,070 -Corfidiario de Corficolombiana 691 38,890J.P. Morgan Chase 526 861Bancolombia Miami 238 251Banco Agrario de Colombia 73 410HSBC ahorros 59 -Banco Santander 8 15,147Citibank ahorros - 9,398164,113 178,754TrustsFiducuenta and Fidurenta - Fiducolombia 54,933 16,322Sumar and Lazos - Fidubogotá 39,270 11,020Interés - Corredores Asociados 32,682 -Efectivo, FAM and Fonplazo 30 - Fiduciaria BBVA 41,979 -Renta ya and Renta 120 - Interbolsa 30,312 -Occirenta and Occitesoros - Fiduoccidente 18,259 10,584Renta vista, renta 30 and renta 90 - Valores Bancolombia 16,540 35,302Confianza Plus and Valor plus - Fiduciaria Corficolombiana 789 30,738Open FiduHSBC - 5,385Fidusantander - 3,270234,764 112,621REPOs – Term operationsFixed-income investments REPOs (3) 100,270 -499,210 291,408(1)Includes $299 (2008 - $165) of collections of Shareholding DemocratizationProgram. These funds are periodically transferred to the State.(2)In 2008 included $165 of collections of Shareholding Democratization Programtransferred to the State.(3)Liquidity operations to cover short-term liabilities. Securities received as collateraland valued at market prices.Contents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management
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Annual Report 2009 - Isagen

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