Annual Report 2009 - Isagen

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ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.11219. Labor liabilitiesBalance of financial liabilities at December 31 included:2009 2008Retirement pensions (1) 68,224 60,671Severance payments and interest 3,663 3,152Vacations and vacation bonus 3,447 3,063Other provisions 1,933 1,86177,267 68,747Less current portion (21,154) (16,000)Non-current portion 56,113 52,747(1) The balance of labor liabilities as of December 31 includes:2009 2008Initial balance 60,671 48,777Year payments (7,560) (6,630)Year increase (*) 15,113 18,524Retirement pensions – Net 68,224 60,671(*) Since actuarial calculation is 100% amortized, any variation is recorded in theincome statement. See note 27.According to the Law, actuarial calculation includes 12 regular monthlypension payments plus additional monthly pension payments inJune and December.The main estimates used in the actuarial calculation were as follows:2009 2008Pension readjustment rate (1) 6.48% 5.15%Technical interest rate (2) 4.80% 4.80%Number of people covered (3) 148 147(1) Weighted average of inflation rates for 2006, 2007 and 2008, with the followingrelative importance weights: 2008, three points; 2007, two points; and 2006, onepoint, as provided by Number 1 of Article 1 of Decree 2783 of December 20 of2001.(2) Percentage established in Number 2 of Article 1 of Decree 2783 of December 20of 2001.(3) Includes 132 current pensioners; of them, 47 have pensions shared with the socialsecurity system, and 16 are expected to retire in July 31, 2010.20. Other liabilitiesBalance of other liabilities at December 31:2009 2008Advances received from customers (1) 38,960 11,574Contract withholding (2) 4,434 1,251Contingency provision (3) 525 522Collection shareholding democratization 299 770Customers loyalty bonus points (4) 536 525Other 174 18344,928 14,825Less: Current portion (40,494) (13,574)Non-current portion 4,434 1,251(1) crease explained by $17,039 advance payments received from VenezuelanElectrificadora de Caroni – Edelca. Such advance payment are required as wayof guarantee.(2) Accounts payable for contractual withholdings to contractors of productive projectsas way of guarantee. These withholdings shall be reimbursed upon satisfactorycompletion of the works $4,434 (2008 - $1,251).(3) Mainly, provision to cover contingent unfavorable decisions in the followingprocesses:Muncipality of Victoria:Nullity and Redress lawsuit against administrative decisions issued by the municipalityof Victoria, Caldas Province regarding payment of royalties for quarryexploitation for construction of Miel I power plant. Decision of November 23,2006 of Administrative Court of Caldas denied the Company’s claims. An appealwas filed with the Administrative Supreme Court. Estimated amount payable,including interest, totals $246 for 2009 and 2008.Rafael Gross Bohórquez:Administrative claim for damages suffered on occasion of construction of a generationplant. This claim was assigned to ISAGEN upon ISA’s split-off. The trialcourt decision was unfavorable to the Company. It is currently awaiting appealdecision by the Administrative Supreme Court. Amount claimed totals $176 for2009 and 2008.Contents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management
ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.113(4) Provision to cover customer bonuses granted under loyalty program; bonuspoints given for energy purchases can be redeemed later for technical services.Points are valid for 2 years but can be cancelled upon payment default. TheCompany’s statistics show good use rate.21. Capital stockSubscribed and paid-in capital at December 31 was distributed asfollows:ShareholderNumber ofShares2009Value %The State 1,571,919,000 39,298 57.66Empresas Públicas de Medellín E.S.P. 352,960,000 8,824 12.95Fondo de Pensiones Protección 116,648,004 2,916 4.28Fondo de Pensiones Porvenir 89,744,079 2,244 3.29Minority shareholders * 594,800,917 14,870 21.82Total 2,726,072,000 68,152 100.00ShareholderNumber ofShares2008Valor %The State 1,571,919,000 39,298 57.66Empresas Públicas de Medellín E.S.P. 352,960,000 8,824 12.95Empresa de Energía del129,989,917 3,250 4.77Pacífico S.A. - E.S.P.Fondo de Pensiones Protección 99,911,500 2,498 3.67Fondo de Pensiones Porvenir 88,495,574 2,212 3.25Minority shareholders * 482,796,009 12,070 17.70Total 2,726,072,000 68,152 100.0022. ReservesBalance of reserves at December 31 included:2009 2008Legal reserve (1) 51,134 51,134Mandatory reserve for tax purposesArticle 130 of Tax Law (2) 480,485 407,161Article 272 of Tax Law (3) - 559Investment occasional reserve (4) 38,446 -570,065 458,854(1) The law requires the Company to appropriate 10% of annual net income as a legalreserve until the balance of the reserve is equal to 50% of subscribed capital.This mandatory reserve may not be distributed prior to the liquidation of theCompany, but may be used to absorb or reduce net losses of the year. Any balanceof the reserve in excess of 50% of subscribed capital is at the disposal ofthe shareholders.(2) Since 2004, the Shareholders’ Meeting in compliance with Article 130 of the TaxLaw, has appropriated this net income reserve equivalent to 70% of depreciationin excess of per-books depreciation. As legally provided, this reserve can bereleased whenever subsequently accounted depreciation exceeds tax depreciation,or when the assets giving rise to the incremental amount deducted are sold.(3) In compliance with Article 272 of Tax Law and Article 1 of Regulatory Decree2336 of 1995, a reserve was established with per-books income resulting fromapplication of special investment valuation systems at market values and not realizedaccording to tax regulations. Such reserve can only be affected whensuch income is capitalized or when the revenue is fiscally realized.(4) The Stockholders’ Meeting approved establishment of $38,446 occasional investmentreserve from net taxable after-dividend income of year 2008.(*) Minority shareholders are those owners, beneficial owners or administrators ofcommon shares together representing up to 3% of outstanding common shares.Contents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management
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Annual Report 2009 - Isagen

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