Download Annual report 2015

Annual report
2015
The English translation of the annual report is for information purposes only.
The annual report 2015 comprises the Dutch text including the independent auditor’s report in Dutch.
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Contents
1
Management Board Report 2015
4
1.1
DELTA in transition
6
1.2
Profile and key figures
10
1.3
Notes to the results
14
1.4
Energy and MultiMedia
16
1.5
DELTA Netwerkgroep
20
1.6
Corporate Social Responsibility
22
1.7
DELTA and its employees 28
1.8
DELTA and corporate governance
32
1.9
Report of the Supervisory Board
34
1.10 Report of the Central Works Council
38
1.11 Opportunities and risks
40
1.12 Statement by the Executive Board 46
2
Financial statements 2015
48
3
Other information 142
4
DELTA in key figures 146
Management Board Report 2015 DELTA N.V.
3
1
Management Board Report 2015
4
Management Board Report
2015
Management Board Report 2015 DELTA N.V.
5
1.1
DELTA in transition
DELTA
in transition
In 2015 we made preparations for the major changes that DELTA was –
and still is – facing. We sold both our waste management business (Indaver)
and the Kreekraksluis wind farm, using the proceeds from the sale to reduce
the DELTA's debt. The company was debt-free by mid-2015. This position
allows us to restructure our operations.
Preparations for restructuring
Pending the national political debate about separating its
grids, DELTA continued to explore ways to find a much-needed
solution to the losses it was making in the energy markets.
Due to poor market conditions, the company was compelled
to review its trading positions.
In the course of 2016, more will become clear about how
DELTA’s divisions will go forward, either as independent
businesses or under new ownership. In close consultation
with the Supervisory Board, the Central Works Council and
the shareholders, we will draw up a plan to find a solution
for the different divisions while keeping as many long-term
jobs as possible. Implementation is scheduled to commence
in 2016.
Prospects for Retail, grid operator DNWG/Enduris, and Evides
are good. A solution will need to be found for EPZ and our
production and trading operations. This is where DELTA’s
management is currently focusing all its efforts.
Responsibility for EPZ lies in part with the Dutch central
government.
Looking back, it is fortunate that we took action already in
2015. As stated, we sold a number of business units, with
EPZ closing its coal-fired plant in the autumn. These steps
were taken as part of our strategy adopted in 2014 to keep
DELTA financially healthy. Putting our words into action,
we also took the first steps in our ambitious quest to generate
low-carbon energy and be the Netherlands’ cleanest energy
producer by 1 January 2016.
At DELTA, we consider it our social duty to raise awareness of
the need to reduce carbon emissions. This is why during the
political debate in 2015 we strongly argued in favour of
closing the Netherlands’ coal-fired power stations.
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We are now working to cement our position as a producer,
trader, supplier and transporter of energy and water, and as
a provider of multi-media products and services. Not by
sticking stubbornly to the old ways, but by recapitalising the
company and ensuring that our different divisions can
continue to operate independently or under new ownership.
Plans were being worked out in greater detail at the time of
writing, and we will implement them once they have been
approved by our shareholders In doing so, we are hoping to
ensure long-term and high-quality employment in Zeeland.
DELTA has a rich history involving municipal energy and water
companies and the provincial electricity (PZEM) and water
(WMZ) companies. The merger between PZEM and WMZ led
to the incorporation of N.V. DELTA Nutsbedrijven in 1991.
Expanding its environmental operations, launching analogue
cable services, and constructing the Netherlands’ first optic
fibre cable, the company was renamed DELTA N.V. in 2001.
Position
In the past few years, we have worked hard to keep the
company’s financial house in order. Continued low prices in
the energy markets, which are unlikely to recover in the
foreseeable future, have added to the need for DELTA to pursue
a prudent financial policy.
The sale of Indaver and the Kreekraksluis wind farm reduced
the company’s debt to nil by mid-2015. However, because of
the impact rapidly falling energy prices had on our working
capital, we saw the company’s debt go up again during the
second half of the year.
The financial buffers which the company has built up in the past
are sufficient to absorb the provision of EUR 154.3 million
euros which we were required to recognise in 2015 to cover
our Gas Flex Portfolio.
This provision for the Gas Flex Portfolio, which includes,
amongst other things, the Sloe power plant, had been
prompted by the reduced flexibility value of our multi-year
contracts for gas storage and transmission capacity and low
spreads (the difference between gas and electricity prices).
Low spreads have rendered the Sloe power plant less profitable
than anticipated when it was built in 2007. Nonetheless,
we every trust in the intrinsic value of this highly efficient power
station as a transitional technology towards fully renewable
energy production.
DELTA seeks to play a leading part in pushing for a fully
renewably energy supply within the next twenty years.
A varied and balanced energy mix of renewable, if possible,
and low carbon, if necessary, ties in with this commitment.
We believe that a balanced energy mix should include the
gas-fired plant at Sloe (which releases far less carbon dioxide
than a coal-fired plant) and EPZ's nuclear power plant
(no carbon emissions at all).
In addition to the Gas Flex Portfolio provision, measures were
taken to improve our capital base in 2015. For example,
we successfully went ahead to achieve our strategic goals
defined in 2014.
In addition to focusing on cutting carbon emissions in energy
production, DELTA also took responsibility as an energy
supplier. In late 2015, we took the decision to supply only
green electricity to our retail and business customers effective
1 January 2016. We source this green electricity partly from
our existing energy mix. In addition, we buy energy from
European wind farms.
These goals are:
•to continue to reduce the carbon footprint of our
production portfolio;
•to integrate Energy’s and Multimedia’s retail product
ranges;
• to rationalise our B2B activities.
The latter two initiatives led to positive financial results.
We incurred a financial loss of 111 million euros in 2015,
driven mainly by the Gas Flex Portfolio provision and ongoing
poor market conditions for the production and sale of
energy. Despite these developments, the different business
units performed well, with the exception of our production
and trading operations. Asset performance went according
to plan.
Making life more comfortable
In 2015 DELTA increasingly transformed from a traditional
energy producer and supplier into a sustainable and innovative
intermediary, adviser and partner who also happens to
produce and supply energy. Also in 2015, changing customer
expectations prompted us to refine and implement our
ambitious goals for renewable production and supply and
accelerate our efficiency drive to achieve Operational Excellence.
Sustainable knowledge partner
During the year, markets were driven by substantial falls in
oil prices and mild winter conditions in the fourth quarter.
To be able to deal effectively with the growing competitive
pressure in the B2B market in these difficult conditions,
we have chosen to position ourselves as a national sustainable
knowledge partner for businesses. In 2015 we specifically
focused on the mid-corporate market.
CO2 reduction
The energy sector is responsible for nearly forty per cent of
CO2 emissions in the Netherlands. At DELTA, we are convinced
that by showing leadership and leading by example the energy
sector can make a huge step towards reducing this percentage.
Shouldering our share of this responsibility, we closed EPZ’s
coal-fired plant – in which we owned a 70% interest – at the
end of 2015 well before expiry of its useful life.
Renewable if possible, low carbon if necessary
The share of renewable energy generation in DELTA’s production
mix is rising rapidly. At 7%, its share was still relatively limited
in 2015. Growth in electricity volumes produced by existing
wind farms and wind farms that are being constructed,
and the definitive closure of the coal-fired plant in November
2015 combined to allow DELTA to take a substantial step
towards achieving its aspiration to be a sustainable company.
We are well-positioned to become the Netherlands’ cleanest
major electricity producer in 2016.
DELTA Netwerkbedrijf renamed Enduris
In the summer of 2015, the Netherlands Authority for
Consumers and Markets (ACM) asked DELTA Netwerkbedrijf
to change its name explaining that the name of a grid operator
is not allowed to resemble that of a production or supply
company. DELTA Netwerkbedrijf was renamed Enduris in order
to make this difference clearer to consumers. Preparations
for the name change were made in the second half of 2015.
The name change became official on 4 January 2016.
The DELTA Netwerkgroep, comprising DELTA Infra and Enduris,
had a good year. The same applies to Evides, the water company
in which we own a 50% interest.
Safety
At DELTA, we put safety first. Safety is naturally a key focus
for DELTA Netwerkgroep and the production facilities.
However, despite all efforts made, three incidents occurred
at the coal-fired plant at Borssele in 2015. The first took
place in July, when an employee was severely injured by hot
fly ash when going about this duties. He is still recovering.
In September, two dust explosions occurred during preparations
to dismantle the biomass system at the coal-fired plant.
Two employees received light injuries but could go home after
seeing a doctor. Two other employees were severely injured
and taken to hospital with burns. They too are still recovering.
In late 2015 an incident happened in which an employee of
the firm of Sagro died after becoming trapped when carrying
out work at the coal storage site near the power plant.
Management Board Report 2015 DELTA N.V.
7
DELTA in transition
The investigation into the cause of these incidents is still
ongoing.
DELTA’s future
DELTA’s long battle against the compulsory separation of its
grid and production and supply operations came to a climax
during the year. In June 2015, the Dutch Supreme Court held
that splitting the company was not in violation of EU law.
DELTA must now complete this process by 1 July 2017.
In 2016 we will, in consultation with our stakeholders,
decide on the precise details of the split-up and how we are
going to ensure a healthy future for each separate business,
as they and our employees are fully entitled to.
Meanwhile, the divisions will continue their day-to-day
activities and DELTA will continue to operate as a socially
responsible company. This means that we will detail our
CO2 reduction plans in the course of 2016 and bring our
knowledge and expertise to partnerships with large and
small companies. We will continue to shape our role as an
intermediary in the retail market.
In March 2016 CEO Arnoud Kamerbeek left the company.
I would like to take this opportunity to thank all our employees
for their efforts and dedication. 2015 was a tense year at
times, with the Supreme Court’s decision, less-than-expected
results, the Dutch parliament voting on the grid separation
legislation, and the departure of our CEO. Still, everyone
continued to work hard and I am proud of that.
Whatever happens, I have every confidence that our employees
have the capabilities and stamina to remain fully dedicated
to their work within the new set-up, or will find rewarding
employment elsewhere.
Frank Verhagen
Executive Board
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Management Board Report 2015 DELTA N.V.
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1.2
Profile and key figures
Profile
and key figures
DELTA is a provider of energy, network and infrastructure services, and digital
services. The company is inextricably connected with the Dutch province of
Zeeland, through the infrastructure it provides to supply gas, electricity, water,
Internet access, telephony and TV to local residents, but also because it plays a
key role in connecting people.
At DELTA, we bring people together. We do so by selling
products and services, through our involvement with community
projects, and by sponsoring events. And we connect people
as an employer, supplier, and social partner. The company’s
shares are held by municipal and provincial authorities in the
provinces of Zeeland, Noord-Brabant, and Zuid-Holland.
DELTA’s head office is located in Middelburg, The Netherlands.
1.2.1
From 1919 to today
DELTA’s roots go back a long way. In 1919 the Zeeland Provincial
Electricity Company (PZEM) was set up, followed in 1934 by
the Zeeland Gas Company (ZEGAM). In 1991 the South West
Netherlands Water Company (WMZ) and Zeeland Provincial
Energy Company (PZEM) merged to form the utility company
DELTA Nuts. In 2001 the company was officially renamed
DELTA N.V. and, after taking over Internet pioneer ZeelandNet
in 2002, also began to provide digital services through this
subsidiary, expanding ZeelandNet into the company it is now.
These years of shared history is one of the reasons why there
is such a special bond between DELTA and Zeeland.
DELTA has, in one form or another, been part of the local
communities for almost a century now.
1.2.2
What we do
DELTA
10
DELTA
Netwerkgroep
Energie &
MultiMedia
Power and gas
gris operation
Wholesale
Grid
maintenance
Retail
EPZ
Energie, Multimedia, and EPZ
DELTA generates electricity, trades in energy, and supplies
gas, power and digital services to retail and corporate
customers in Zeeland and other areas. The company also
supplies drinking water and industrial water services through
its subsidiary Evides, in which it owns a 50% share interest.
Enduris (formerly DELTA Netwerkbedrijf)
In the summer of 2015, the Dutch Authority for Consumers
and Markets (ACM) asked DELTA Netwerkbedrijf to change its
name explaining that the name of a grid operator is not
allowed to resemble that of a production or supply company.
DELTA Netwerkbedrijf was renamed Enduris in order to make
this difference clearer to consumers.
Within the DELTA group, Enduris occupies an independent
position conferred by law. Enduris is the owner of the gas and
electricity grids and, as such, is responsible for constructing,
maintaining, and developing these grids in Zeeland. Enduris
ensures the safe, reliable and cost-efficient operation of
these grids. It has its own Board of Supervisory Directors.
The name change took place on 4 January 2016. In this
annual report, Enduris and DELTA Netwerkbedrijf are used
interchangeably.
DELTA Infra
DELTA Infra B.V. offers a full range of technical infrastructure
services for electricity, gas, water, and data, both in Zeeland
and nationwide. The company carries out work for Enduris
(electricity and gas grids), Retail (data networks), Evides
(water mains), TenneT (high-voltage) and third parties as a
service provider and contractor, performing design,
engineering, construction, management, and maintenance
services. Its other area of expertise is metering technology.
Ten thousands of kilometres of cables and pipes are in the
reliable hands of its staff.
1.2.3
What we stand for
DELTA offers its customers the convenience of sustainable
and innovative multi-utility solutions. The company delivers
a wide range of products and services and is committed to
building long-term customer relationships. We are the partner
of choice for buyers of utility products and services, such as
energy, water, and digital services, on both a large and small
scale.
At DELTA, we have a clear vision of corporate social responsibility.
We show leadership and take responsibility for mitigating
CO2 emissions. Over the next twenty years, we will work towards
an energy supply system that uses only renewable sources.
Renewable if possible, low carbon if necessary. We believe
that our gas-fired plan at Sloe (which releases far less carbon
emissions than a coal-fired plant) and EPZ’s nuclear power
station (no carbon emissions at all) will have a part to play
during this transition.
We are promoting this vision not just as a producer of energy.
We also took responsibility as a supplier of energy, announcing
in late 2015 that all our customers, retail and corporate,
would be delivered green electricity as of 1 January 2016.
1.2.4
Strong ties with local communities
Having public-sector shareholders and a regional customer
base, DELTA has strong ties with its home market. The company
is firmly rooted in society and readily accepts its social
responsibilities. What is good for us is good for the South
Western delta region
Our commitment to society is reflected in our strong reputation
in Zeeland. The monthly reputation surveys commissioned
from the Reputation Institute show that we achieve high scores
because of our ties with local communities as a supplier,
employer, business partner, or customer. Our reputation is
therefore a key indicator. We use these monthly survey
findings to identify market and regional trends and
developments at an early stage. We can then adjust our
external communications accordingly.
1.2.5
Corporate social responsibility (CSR)
Corporate social responsibility mainly involves our energy
operations, particularly those conducted by our group
companies and joint ventures. In 2015 we defined core themes
and focal points for CSR. To do so, we looked from the inside
out to the world around us. But equally important, we invited
the outside world to enter inside. Interactive sessions with a
variety of stakeholders produced themes, focal points, and
goals, giving CSR a more central position within our business.
Rather than a separate track, CSR is an integrated part of our
regular operations.
This annual report does not include water company Evides,
in which DELTA owns a 50% interest. Evides reports on its
CSR policy and related activities separately on its website at
www.evides.nl.
Below is a summary of the key statistics on DELTA’s power
generation activities.
More detailed information is available at www.epz.nl,
www.epz.nl and www.sloecentrale.nl.
Supply mix (source: electricity label / the 2015 figures are not yet known)
Share of carbon neutral and renewables
Carbon neutral
Nuclear
Renewables*
2015
2014
2013
2012
21.1%
24.1%
29.3%
27.2%
9.2%
8.3%
16.2%
17.3%
11.9%
15.8%
13.1%
9.9%
(* wind, water, solar, and biomass)
CSR performance (in EUR)
2015
2014
2013
2012
15,000,000
20,000,000
40,000,000
40,000,000
Roosevelt Academy
359,312
379,083
398,854
418,950
Sponsoring and donations
572,606
834,282
900,000
928,326
Distributions to shareholders
Management Board Report 2015 DELTA N.V.
11
Profile and key figures
Information on DELTA’s total production mix is provided below.
Carbon emissions, in particular, are lower for the production
mix. We expect to reduce our carbon emissions further in
2016 and 2017.
Production mix
2017
2016
2015
2014
2013
2012
Gas
%
19.53%
30.44%
27.69%
34.69%
35.89%
34.05%
Coal
%
0.00%
0.00%
24.65%
21.82%
25.18%
21.54%
Nuclear
%
39.43%
43.83%
40.05%
37.05%
28.48%
34.06%
Wind
%
37.15%
21.76%
4.06%
3.13%
3.91%
3.69%
Solar
%
0.04%
0.04%
0.03%
0.03%
0.03%
0.03%
Biomass (BMC)
%
3.85%
3.93%
3.52%
3.28%
6.50%
6.41%
Other
%
0.00%
0.00%
0.00%
0.00%
0.00%
0.22%
g/kWh
65.13
103.07
293.50
323.58
377.88
332.80
Average CO₂ emissions
1.2.6
Accounting standards
The financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and
the relevant provisions of the Dutch Civil Code (DCC). DELTA
conducts some of its major activities with others in the form
of joint operations.
Our share of assets, liabilities, income and expenses associated
with operations conducted by separate legal entities in which
DELTA, in its capacity as a shareholder and customer, has the
same rights and obligations as its partners, have been included
in our financial information since 2013. This provides a
greater insight into the structure of our capital base and profits.
Financial highlights (EURm)
Revenue
Gross operational margin
EBITDA
Net profit/(loss)
2015
2014
2013
2012
1,299
1,931
2,104
2,168
236
789
786
826
44
312
301
379
(111)
4
75
81
Investments in (in)tangible fixed assets
88
102
168
141
Net debt
92
559
633
630
2015
2014
2013
2012
Sale of electricity and electricity trading
Share of revenue (EURm)
810
882
970
1,046
Sale of gas and gas trading
257
268
344
332
Electricity and gas transmission
107
106
118
112
81
81
79
75
n/a
517
514
519
44
77
79
84
1,299
1,931
2,104
2,168
Cable, Internet, telecommunications
Waste logistics and environmental services
Other revenue
Total revenue
For full details of the financial statements 2015,
please refer to page 49.
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Management Board Report 2015 DELTA N.V.
13
1.3
Notes to the results
Notes
to the results
In 2015 DELTA took important steps to improve its capital base. In the first
half of the year, the company successfully sold its subsidiaries Indaver and
Kreekraksluis, making a substantial profit on the sale of the wind farm.
For comparative purposes, the profit information for 2014 has been restated
to reflect the sale of Indaver and the Kreekraksluis wind farm.
Unfortunately, the decline in electricity market prices
continued in 2015, putting more pressure on margins and
particularly affecting the company’s profit and cash position.
At EUR 1.3 billion, revenue was down EUR 111.7 million on
2014, driven mainly by lower energy and gas prices and
reduced electricity and gas sales volumes. It was also a
difficult year for our trading activities.
DELTA ended the year with a net loss of EUR 110.7 million.
This includes the provision recognised for the Gas Flex
Portfolio. Excluding the effects of the Gas Flex Portfolio
provision, net profit came to EUR 43.6 million.
The sale of the Kreekraksluis wind farm and Indaver contributed
to a positive cash flow. The proceeds were used to reduce the
company’s debt and to pay EUR 15 million in dividends to
our shareholders. Payments made into margin accounts,
necessitated by falling energy and gas prices, made a markedly
negative contribution to the cash flow.
Gas Flex Portfolio
Energy markets continued to deteriorate in 2015, with falling
oil prices putting even greater pressure on margins. Oil prices
had a major impact on energy market prices. The price fall
and worsened outlook forced us to recognise a provision for
our Gas Flex Portfolio operations during the year.
The Gas Flex Portfolio comprises current and future gas
purchases (as a fuel for power generation) and related
transmission and storage capacity. It also includes the
anticipated proceeds from the gas-fired power plant at Sloe.
Until 2014 the gas portfolio – which given the strong
correlation between the different gas assets and contracts is
treated as a single portfolio – represented a positive value
over the entire contract term. Its value was measured on the
basis of gas and electricity price expectations at year-end
2014 (based in turn on the independent Pöyry mid-price
curves) and the cost of transmission and storage capacity
14
(based in turn on multi-year contractual arrangements).
The provision represents the net present value of the
expected negative value of the underlying proceeds and
liabilities and is treated as a component of cost of sales.
The provision is recognised directly within gross margin.
The other parts of DELTA Groep, such as water company
Evides, DELTA Netwerkgroep and the retail business,
delivered a good performance.
1.3.1
Revenue and profit
Revenue fell in 2015 compared with 2014. This was felt
notably in the energy business, including both the trading
floor and sales to corporate and retail customers.
Despite a drop in sales arising from the adjustment to what
are known as the statutory ‘X factors’, DELTA Netwerkgroep
made a profit similar to that in 2014. Sales to retail customers
rose slightly. Water company Evides, in which DELTA owns a
50% interest, reported another satisfactory year in 2015.
Gross margin fell by EUR 171.8 million, down -40.5% on the
previous financial year, largely due to the provision recognised
for the Gas Flex Portfolio. Operating costs declined due to
the ongoing focus on cost control. Depreciation and
amortisation costs were down EUR 4.6 million on 2014,
largely owing to the extended depreciation period for the
Sloe power station.
Falling number of employees
Due in part to efficiency drives and leaner operations, the
number of employees has fallen in recent years. In 2015 jobs
were cut due to the restructuring of the corporate business
(-14 FTEs).
At 31 December 2015, DELTA’s group companies between
them employed a total of 1,786 FTEs, compared with 1,813
at year-end 2014. These numbers also cover employees
working in ‘joint business operations’. Similar to 2014, a
limitation on the number of new hires, a mobility programme
for employees who could not remain in their existing jobs,
and relocations to job openings at other group companies
were the key measures taken to control staff costs. The closure
of EPZ’s coal-fired plant at the end of 2015 also contributed
to reducing staff costs (-11 FTEs). In 2014 a provision of EUR
10 million (70% share) had been recognised for the expected
closure.
Our share of profits in joint ventures and associates increased
by more than EUR 4 million to EUR 37.8 million in 2015,
compared with EUR 33.6 million in 2014, driven mainly by
lower depreciation charges for BMC Moerdijk as its useful
life was extended.
Interest rates
Thanks to the sale of the Kreekraksluis wind farm and Indaver,
DELTA’s external funding requirement improved by EUR 387.7
million in 2015.
During the year, interest-bearing debt net of available cash and
cash equivalents (net debt) decreased by EUR 466.3 million
to 92.3 million at year-end 2015. Interest charges were
EUR 15.9 million, with EUR 18.0 million in interest income
being added to the provisions, in line with 2014. Financial
income in 2015 was in line with 2014. The interest paid by
the buyer of the Indaver shares (EUR 4.9 million euro) –
prompted by the fact that the sale took pace with retroactive
effect to 1 January 2015 – is shown within discontinued
operations. The funds held by the Foundation that manages
the funds to dismantle the Borssele nuclear power station
yielded a return of EUR 1.0 million, substantially down on
the EUR 9.4 million reported for 2014.
Mandatory sale of grid operations
The announced hive-off of Enduris (formerly DELTA Netwerkbedrijf) led to the write-down of a previously recognised
deferred tax asset. The EUR 20 million write-down was
recognised in profit or loss. No deferred tax assets were
recognised for the production and supply operations to the
extent that it was uncertain that they could be realised.
Both items led to a difference between the reported effective
tax rate and the Dutch corporation tax rate of 25%.
compared with a positive cash flow from investing activities
of EUR 115.7 million in 2014. The difference lies mainly in
the de-consolidation of Indaver. Moreover, investments in
the retail business increased, with Enduris investing more in,
for example, smart meters. EPZ invested less in its production
facilities in 2015 than in 2014, partly in view of the planned
closure of its coal-fired plant. Nor were any major projects
scheduled for its nuclear power plant in 2015.
Free cash flow came to EUR 355.9 million, net of a EUR 15
million dividend payout. The free cash flow was used entirely
to reduce debt.
Financial position and solvency
Net realised and non realised results stood at EUR 158.6 million
in 2015. The addition of these net losses to the reserves and
the EUR 15 million in dividends paid to our shareholders
combined to reduce the equity attributable to DELTA N.V.’s
shareholders to EUR 930.8 million.
At 31 December 2015, the company’s solvency ratio was
34.7% (2014: 31.3%).
1.3.3Outlook
Prospects for the energy markets remain bleak over the next
few years. The sale of Indaver and the Kreekraksluis wind
farm allowed us to repay debt at the level of the holding
company in mid-2015. Worsening market conditions will
continue to put pressure on cash flows and profits.
Ensuring security of supply by having high-quality grids in
place remains one of our main objectives. This is what
Enduris uses its cash flows for. The rollout of smart meters
will be accelerated in the coming years. Adding greater depth
to and broadening our retail offerings (traditional gas, power
and water supply and services, decentralised renewable
energy generation, and multimedia services, or a
combination of these) will continue to strengthen our ties
with customers in Zeeland.
Discontinued operations included the proceeds from the
sale of the Kreekraksluis wind farm in 2015 and handling
costs connected with the sale of our share interest in DELTA
Industriële Reiniging in 2013.
DELTA ended the year with a net loss of EUR 110.7 million,
compared with a net profit of EUR 3.8 million in 2014.
1.3.2
Cash flow and investments
Payments into margin accounts due to falling prices contributed
negatively to the cash flow from operating activities.
Net cash flow from operating activities came to EUR 14.3
million in 2015. Excluding the effects of the sale of Indaver
and the Kreekraksluis wind farm, the company reported a
negative cash flow from investing activities of EUR 108.1 million,
Management Board Report 2015 DELTA N.V.
15
1.4
Energy & Multimedia
Energy &
MultiMedia
DELTA believes in the power of connecting and seeks to provide full-service
solutions working with its customers. Our aim is to make daily life more
comfortable. Our multi-utility concept, which has for years provided us with a
competitive edge, constitutes the basis for achieving this aim.
The multi-utility concept provides an easy way for customers
to buy multiple products and services. Through our Energy &
MultiMedia (E&M) business, we not only supply energy
(electricity, gas, and water), but also provide Internet access,
digital telephony, and interactive television. With an average
of four products per customer, we enjoy a high level of
customer loyalty.
Our multi-utility concept enables us to improve our service
delivery and meet today’s needs and requirements of our
retail and business customers. Customers increasingly ask
for renewable energy and want control of and advice about
their energy bill. But most of all, they want fast Internet
access, wherever they are.
Today’s energy company
Using its multi-utility concept, DELTA has evolved from a
traditional energy producer and supplier into a sustainable
and innovative intermediary, advisor and partner who also
happens to produce and supply energy. This way, we can
meet the expectations customers have of a modern energy
company.
1.4.1
Retail and business customers
The vast majority of people in Zeeland are trusted customers
of DELTA and usually buy multiple products and services.
That being the case, they will not readily switch suppliers.
The bond with the company is a strong one. The fact that we
specifically seek to position ourselves as a Zeeland-based
company in social terms as well has unmistakably had a
positive impact on our ties with our customers in Zeeland.
In 2015 the switching rate was again below the national
average.
But this is absolutely no reason for us to sit back and relax.
The bar is raised each year for the E&M division to improve
its customer service, become even more transparent,
and make life easier for its customers. E&M successfully
continued to improve its service delivery in 2015.
16
Cross-selling services
In the second half of 2015, E&M added a digital layer to its
MultiMedia and Energy customer systems. When receiving
phone calls, staff can now immediately see what products and
services customers already have and what may be attractive
additions for them. Customers welcome this cross-selling
service, which we also advertise in information leaflets and
digital newsletters.
These efforts have raised service levels, which is appreciated
by our customers.
‘Encouraging
energy saving
remains one of DELTA’s
main goals
on the retail market.’
Leisure
The leisure industry is important to DELTA. We provide
full-service solutions (fast Internet, WiFi, leisure TV) to
leisure companies and interactive content for their guests.
By defining a clearer focus, upscaling resources,
and streamlining processes, we made major progress within
this industry in 2015 as well. We are working with a group of
customers and selected business partners to review our
services. This co-creation should lead to improved services
that better meet the requirements of leisure companies and
allow them to improve their service delivery to guests.
Healthcare sector
In 2015 DELTA strengthened its ties with the healthcare sector,
where pilot projects have shown that digital applications are
also welcomed by senior citizens. Our All-in-One healthcare
concept was rolled out at different locations. This concept is
based on the belief that elderly people should become
digitally capable before they can use digital care applications
effectively. Senior citizens and their carers receive intensive
guidance on how to use Internet, tablets, and a variety of
apps. We will continue to actively support the healthcare
sector in implementing and use care applications, such as
remote care and self-tests, in 2016.
Rural locations
We continued to focus our attention on getting homes in
thinly populated rural areas in Zeeland connected to fast
broadband. In 2015 we worked with the provincial authorities,
ZLTO, Recron and other partners to carry out a pilot in the
vicinity of Cadzand-Bad to explore ways to provide a wireless
solution using beacon technology. The aim of the project was
to examine whether this technology would work for campsites
and holiday parks, where demand for fast Internet is high.
Based on a positive evaluation of the findings, the decision
was made with everyone involved to continue the project in
2016.
Content and portals
The ‘customers helping customers’ service platform.
In late 2014, DELTA introduced a service platform to provide
support for multi-media service queries. With over 3,000
members and more than 32,000 unique visitors a month,
the service platform got off to a rocket start in 2015.
The platform is accessible for all, allowing members (customers
and non-customers) to help each other with problems with,
for example, Internet access or digital TV. It is also an
important means for us to better understand how customers
experience our products and services. In 2016 the platform
will be expanded to include energy topics and questions.
Working with our partners, we also expanded our content
offerings for small and medium-sized enterprises (SMEs).
This will strengthen our ties with SMEs across Zeeland.
Using the ‘smart city’ concept as a basis, we contribute to
resolving some of the challenges facing businesses in cities
and shopping centres. What does the city of the future look
like? To provide an answer, we launched ‘The New Advertising’
and ‘E-Boulevard’ in 2015. We are also working with Zeelandbased partners to explore ways to take ‘the smart city’ a
step further. This concept also offers opportunities for our
partners to use the catchment area of Zeelandnet.nl.
Smart homes
Homes are becoming increasingly smarter, with ever more
appliances being connected to the Internet. These new
trends contribute to a convenient, efficient, safe and secure
way of living. There is a close relationship between these
new applications and DELTA’s products. We continued to
develop our energy management product in 2015.
Introducing a smart security solution will be one of the next
steps to broaden our product portfolio and make our
products even more compelling for households in Zeeland.
Smart savings
Energy saving is the key to the future. Encouraging energy
saving remains one of DELTA’s main goals on the retail
market. We are continuously developing new products and
services and improving existing ones. Another key objective
is to provide consumers with better information.
1.4.2
Trading and the wholesale market
DELTA trades in gas, oil, electricity, and emission allowances
in various markets. As in previous years, high spare capacity
and low prices dominated markets during the year.
Key market drivers included the substantial fall in oil prices
and mild winter conditions in the fourth quarter of 2015.
To be able to deal effectively with the growing competitive
pressure in the corporate market, we have chosen to position
ourselves as a national sustainable knowledge partner for
businesses. In 2015 we specifically focused on the midcorporate market – a choice prompted by the fact that it is
these businesses that have a particular need for the
knowledge, expertise and services provided by DELTA.
In 2015 major steps were also taken to improve our energy
risk management products and services. In 2016 we will
continue to focus on bringing down costs, digitising our
services, and providing greater transparency in terms of
purchasing for customers. Our joint venture with SAXO Bank
is a perfect example of these improvement efforts (see below).
Transparency of the energy wholesale market
By frequently engaging with our business customers, we have
gained a profound understanding of their requirements as
regards transparency and accessibility of the wholesale market.
E&M addressed this challenge during the year. All our
business customers will be able to buy energy directly on the
wholesale market through a real-time platform operated by
the Danish-based SAXO Bank from 2016. By making our
innovative knowledge available to SAXO Bank, we can help
its customers choose an optimal energy purchasing strategy,
based on considerations of risk and cost control and return
improvement. Our customers remain our number one priority
and we are making every effort to build long-term relationships
with them.
1.4.3The transition towards becoming a renewable
energy producer and supplier
DELTA operates in the energy markets as a developer,
producer, trader, and supplier. We want to play a leading
part in enabling the transition towards a fully renewable
energy supply system. Renewable sources currently do not
generate enough electricity to fully rely on them. In parallel
to our efforts to support the move to a 100% renewable
energy supply, we are making sure that we always have
sufficient electricity available to meet demand. That includes
periods in which the sun is not shining or the wind is not
blowing.
Management Board Report 2015 DELTA N.V.
17
Energy & Multimedia
Production mix
The share of renewable energy generation in DELTA’s production
mix is rising rapidly, although at 7%, this share was still
relatively limited in 2015. That said, with electricity increasingly
being produced by existing and newly constructed wind farms
and the definitive closure of the coal-fired plant (in December
2015), we are well on our way to achieving our sustainability
goals. The share of renewable energy in our production mix
will have risen to more than 40% by 2017.
In addition to the green energy that we generate ourselves,
we buy Guarantees of Origin (GoOs, also known as ‘green
certificates’) so as to provide our customers with green
electricity fully from 2016. Despite the challenges posed by
this transition and the inevitable losses we are likely to incur
in the process, we are making every effort to serve our
customers as best as possible. Against this background,
we are giving priority to existing customers.
Year 2015
Nuclear
40.05%
Coal
24.65%
Gas
27.69%
Renewable
7.61%
Year 2016
Nuclear
43.83%
Nuclear
Gas
40,05%
30.44%
Renewable
25.73%
Gas
19.53%
Solar
0.03%
Biomass (BMC)
3.52%
Wind NL
21.76%
Solar
0.04%
Biomass (BMC)
3.93%
Year 2017
Nuclear
39.43%
Wind NL
4.06%
Renewable
41.04%
Solar
0.04%
Wind NL
37.15%
Biomass (BMC)
3.85%
Gas-fired power stations
Although gas is the ideal transitional fuel – modern gas-fired
plants being highly flexible and producing relatively low carbon
emissions – market conditions continued to be unfavourable
in 2015. The highly efficient power station (Combined Cycle
Gas Turbine) at Sloe was operational for the best part of the
year, especially during peak hours, but margins were minimal.
The Elsta power plant (Combined Heat and Power, CHP) ran
continually to supply steam to Dow Benelux in Terneuzen in
18
2015, although one gas turbine was left out of operation
throughout the year due to market conditions. We signed an
agreement to sell the power plant to Dow in 2018 on expiry
of the contract term.
Unfavourable market conditions in 2015 once again led to
DELTA being unable to extend various contracts with
customers for the supply of heat by means of CHP. To give an
example, we sold our CHP in Kruiningen to Lamb Weston/
Meijer, a former heating customer, who will run the plant
themselves from 2016.
Nuclear power plant
As in 2014, various investment projects were carried out in
2015, the purpose of which was to ensure the nuclear safety
of the plant as effectively as possible until the end of its
useful life in 2033. More information is given in the annual
report published by EPZ.
Coal-fired plant
The coal-fired plant in Borssele was closed down on
14 November 2015, putting a definitive end to nearly fortyfive years of reliable electricity generation using coal and bio
fuels. This decision was in line with our aim to be at the
forefront of reducing carbon emissions released by power
generation, but at the same time closed the chapter on an
important bit of history. Staff at the plant continued to put
in an admirable effort until the very end.
Wind power
In its drive to make energy production greener, DELTA
specifically seeks to be an innovative service provider.
For example, the company made its expertise available for
the development and construction of the Kreekraksluis wind
farm. We sold the wind farm in June 2015, but will continue
to buy GoOs and wind power from the farm under a long-term
contract.
2015 saw the construction of the Barrepolder wind farm at
the site of the Heineken brewery near Zoeterwoude. The four
wind turbines will start production in 2016.
In December 2015, DELTA and Kloosterboer B.V. made an
investment decision. In addition to the current wind turbine
in Vlissingen-Oost, we will build three more wind turbines,
which are scheduled to produce electricity from 2017.
In late 2015, the three wind turbines at the Olaz wind farm
(also located in Vlissingen-Oost) were dismantled to make
way for two larger wind turbines. These are expected to be
up and running by the end of 2016.
In 2015 we also completed preparations for the first batch of
wind turbines to be installed at the Gemini wind farm – north
of the Dutch isles of Ameland and Schiermonnikoog –
in February 2016. They will generate electricity for the first
time in 2016. DELTA will be a buyer of the wind power and
GoOS. Once Gemini has become fully operational, DELTA will
be the Netherlands’ largest provider of wind power.
Biomass power station
BMC Moerdijk is the only power station on the European
mainland to convert poultry litter into green electricity.
The Environmental Quality of Electricity Production (MEP)
subsidy granted to it stands to expire in 2018. A further
subsidy has been committed under a different scheme
(Renewal Energy Promotion+) so we will be able to continue
to produce renewable energy at the plant after 2018.
Solar farms
DELTA jointly owns a solar farm in Willebroek, Belgium,
which generated 2,467 MWh in 2015. We are also developing
two solar farms in Zeeland, one of which will be constructed
on a 17 hectare agricultural tract of land in Tholen. We are
working closely on this project with a local initiator and the
municipal authorities.
The second solar farm will be built in Goes, in cooperation
with the municipal authorities there, at the site of a planned
4.7 hectare industrial park called ‘De Poel V’, which is not
scheduled to be used as such for another fifteen years.
Innovative renewable energy
DELTA buys electricity from the tidal power station at the
Easter Scheldt Storm Surge Barrier. Five turbines located
between two pillars of the barrier have been generating
electricity since the end of November 2015, providing enough
power to supply more than 1,000 homes.
Working with the project’s initiator Tocardo, we are looking
into GoOs and ways to make tidal power economically
profitable so as to enable a wider rollout. There are plans to
install another five to ten turbines.
HSE at E&M and corporate departments
Health and safety at E&M is coordinated by the divisional
staff department. Preventive HSE care is carried out on the
basis of a risk inventory and evaluation (RI&E) and a related
plan of action that provides mitigating measures. We also
operate an HSE portal for staff to report lessons learned,
amongst other things. The efforts made and results achieved
are reported on periodically (weekly, monthly, half-yearly,
annually). This cyclical approach is consistent with OHSAS
18001, a globally accepted occupational health and safety
management system.
‘In its drive to make energy
production greener,
DELTA specifically seeks
to be an innovative
service provider.’
In projects such as the construction and dismantling of wind
turbines, safety is our number one priority. Arrangements
and plans are recorded in as early a stage as possible and
monitored during the project’s implementation.
To promote a proactive safety culture, we are pursuing a policy
of openness about issues concerning health and safety at
work. Weekly safety tips are posted on Insite, managers
share their experience and efforts to ensure health and
safety in the ‘Onder Ons’ periodical, and posters have been
put up showing information on health and safety issues.
In 2015 we began updating and rewriting our RI&E in order for
it provide greater added value for the company. In practical
terms, this means that all risks and controls that are active
and effective will now be documented. The RI&E will become
a source of information in the shape of a handbook available
to all employees, containing references to the HSE portal and
quality assurance system.
Credit Risk & Internal Control has been used to examine how
risks and controls, including action management, can be
included in E2C. These steps have led to actions being better
ensured and followed up across the company.
In 2015 we extended our Risk Inventory & Evaluation (RI&E)
to report on fire safety for all E&M locations according to BRL
K21016/03, the Dutch KIWA Standard for ‘Fire Safe Use of
Buildings (BGB)’. This has resulted in action plans to be
implemented in 2015 and 2016. Key actions include replacing
the fire alarm systems, improving and adjusting fire
compartmentation, and optimising management and
maintenance. Indoor climate conditions at the head office
have also been tested. We found that the climate control
system needs to be improved and measures will be taken
in 2015 and 2016.
Management Board Report 2015 DELTA N.V.
19
1.5
DELTA Netwerkgroep
DELTA
Netwerkgroep
2015 proved to be a good year for DELTA Netwerkgroep (DNWG) all around,
both financially and in terms of security and reliability of supply.
Enduris (formerly DELTA Netwerkbedrijf)
In the summer of 2015, the Netherlands Authority for
Consumers and Markets (ACM) asked DELTA Netwerkbedrijf
to change its name explaining that the name of a grid operator
is not allowed to resemble that of a production or supply
company. DELTA Netwerkbedrijf was renamed Enduris in order
to make this difference clearer to consumers.
Within the DELTA group, Enduris occupies an independent
position conferred by law. Enduris is the owner of the gas and
electricity grids and, as such, is responsible for constructing,
maintaining, and developing these grids in Zeeland.
Enduris ensures the safe, reliable and cost-efficient operation
of these grids. It has its own Board of Supervisory Directors.
The name change took place on 4 January 2016. In this
annual report, Enduris and DELTA Netwerkbedrijf are used
interchangeably.
DELTA Infra
DELTA Infra B.V. offers a full range of technical infrastructure
services for electricity, gas, water, and data, both in Zeeland
and nationwide. DELTA Infra carries out work for Enduris
(electricity and gas grids), Retail (data networks), Evides
(water mains), TenneT (high-voltage) and third parties as a
service provider and contractor, offering design, engineering,
construction, management, and maintenance services.
Its other area of expertise is metering technology.
Ten thousands of kilometres of cables and pipes are in the
reliable hands of its staff.
Safety
Safety is and remains our top priority. Enduris and DELTA
distinguish between two types of safety: safety at work and
process safety. Safety at work refers to the safety of our
employees and those of contractors when carrying out their
duties. Personal safety is ensured through training and
education. Safety awareness at work is the key to achieving
this. Process safety refers to the gas and power grids and
their potential impact on local residents and the environment.
The safety culture programme is an ongoing programme
intended to reach the proactive stage (4.0) on Hudson’s
Culture Ladder. To follow up on a measurement taken in
2012, we carried out another test in 2015. The final score
20
was 3.34, compared with 3.05 for Enduris and 3.27 for DELTA
in 2012, marking an improvement on 2012. DNWG will draw
up a plan action of action to step up its efforts in 2016.
Enduris has been operating a safety management system for
several years now. The system mainly covers management of
the gas grid and meets the requirements and standards set
out in the ‘Decree on the Safety of Low-Pressure Gas
Transmission’.
Process safety, and hence the safety management system,
begins at the stage where plans are made for the grids.
By designing, constructing, operating and decommissioning
the grids safely, the company minimises existing and future
risks to local residents and visitors as well as staff working
the grids. This chain approach follows from our drive to
actively pursue a safety policy and to put in place a proactive
safety culture.
Veerse Lake crossing
In 2015 DELTA Infra replaced a cable protection pipe (pipe
sleeve) beneath the Veerse Lake for Enduris and installed an
additional drinking water pipeline for Evides. The protection
pipe, containing two gas and three drinking water pipelines,
is located between Kortgene and Wolphaartsdijk. When the
marina in Kortgene was extended, the protection pipe became
situated within an intensively used area of the marina.
To make optimum use of the synergies provided by Evides,
Enduris also replaced first-generation gas pipelines – dating
from 1968 – over land over a distance of 3.5 kilometres.
The 1.4 km long pipelines were installed beneath the Veerse
Lake using controlled drilling. The new gas pipeline has a
length of about 5 kilometres.
Reliability of supply
As in previous years, reliability of gas and power supply was
good. The number of outage minutes was well below our
target and below the national average. Reliability of supply is
all to do with the quality of the grids and having an effective
maintenance policy in place. Moreover, Enduris has an
efficient emergency procedure in place that identifies any
malfunctions quickly, enabling its service engineers to resolve
any problems quickly, 24 hours a day.
Annual power outage times
Actual
Target National average
2015
15.6 minutes
21 minutes
32.9 minutes
2014
16.5 minutes
21 minutes
20 minutes
2013
17.6 minutes
21 minutes
23 minutes
Annual gas outage times
Actual
Target National average
2015
17 seconds
30 seconds
2.15 minutes
2014
21 seconds
30 seconds
3.15 minutes
2013
18 seconds
30 seconds
1.1 minutes
Annual outage time (in minutes per connection) = average
disruption time (in minutes) x disruption frequency
Staff
Due in part to the age distribution of our service engineers,
we will see a relatively large number of technical staff leave
the company in the next few years. This is why in 2012,
teaming up with InstallatieWerk Brabant-Zeeland (training
company) and Markiezaat College (regional training centre)
in Bergen op Zoom, DELTA Infra set up a vocational training
programme called the DELTA Infra Vocational Training Course
(DIVO).
During this combined two-year work and training programme,
technically talented students are trained to become an
electricity/COAX service engineer or a gas/water service
engineer. The on-the-job-training allows the ‘old guard’ to
pass on their knowledge to the young engineers in the
making. The second group of students completed the course
in July 2015, with seven young talents being offered
permanent jobs as service engineers.
In 2015 we invested substantially in staff development.
Our managers have a key role to play in achieving DELTA’s
objectives and ensuring that their team members are
motivated to perform well.
Launched in 2014, the Management Development (MD)
programme helps managers fulfil their roles and increases
their involvement in the overall management system.
Issues covered in 2015 included:
• performance management;
• leadership style;
• communication skills.
The MD programme will continue in 2016.
Smart meters
Enduris owns the energy meters it installs and, as such,
is also responsible for introducing smart meters.
All households and small business customers in Zeeland
will have been fitted with smart meters by 2020. Much more
sustainable than their traditional counterparts, smart meters
ensure a better match between supply and demand,
rendering energy consumption more efficient and cutting
=out waste.
Enduris began the process of replacing traditional meters by
smart meters in 2012 and in 2015 launched a large-scale
rollout. Households are offered smart meter sets at no cost
according to postcode area. Smart meters are also installed
in new-build homes, during large-scale renovations, and by
way of regular replacement. By the end of 2015, nearly
50,000 households in Zeeland had been fitted with a smart
meter.
A postcode checker is available at www.enduris.nl/
slimmemeter. Consumers can use this to check when smart
meters will be distributed in their postcode area.
Outlook
Zeeland society needs a responsive and skilled infrastructure
operator, one that seeks to provide a healthy return. DNWG is
committed to serving local communities and businesses,
Its involvement being clear from the high-quality employment
it offers.
One of the region’s major employers, DNWG ensures that
investments are made in local technical training programmes.
We believe that collaboration in this field could and should
be strengthened in order to support local initiatives and
allow Zeeland to make maximum use of our knowledge and
expertise. DNWG can assist provincial and municipal
authorities in achieving their sustainability objectives.
DNWG also plays a vital support role in developing and
implementing the energy transition across Zeeland.
The company owns and operates the provincial power and
gas infrastructure, ensuring sound and proper management
of energy supply and demand. It focuses on decentralised
generation, wind energy on land, and solar farms.
Energy and spatial planning are its main research areas.
The company’s ultimate aim is to allow its customers –
retail and business – to make their own choices as to
how they wish to meet their energy requirements, without
affecting security of supply.
‘Safety is and remains
our top priority.’
Management Board Report 2015 DELTA N.V.
21
1.6
Corporate Social Responsibility (CSR)
Corporate Social
Responsibility (CSR)
DELTA and Zeeland are inextricably linked, in a literal sense by the pipes
and cables that supply gas, power and Internet access to local residents,
and figuratively because we are one of the region’s major employers.
Our roots here have shaped our character and we feel strongly involved
with local communities and businesses. We also show our involvement
by supporting local projects and events.
In 2015 we defined core themes and goals for CSR. To do
so, we looked from the inside out to the world around us.
But equally importantly, we also invited the outside world
to enter inside, with interactive sessions with a variety of
stakeholders producing themes, focal points, and goals.
Rather than a separate track, CSR is an integrated part of
our regular operations.
Communication and transparency
Communication and transparency have been identified
specifically as key pillars of our CSR policy. Our customers
and business partners (‘stakeholders’) have indicated that
we could do more to improve the way in which we show what
we do, why we do it, and how we do it, so as to achieve
greater transparency, which is a CSR requirement. We are
committed to engaging with all of our stakeholders and will
consider their interests when making policy choices.
DELTA’s stakeholders are:
• customers (retail and business);
• DELTA employees;
•financiers;
•shareholders;
•trade associations and network and professional
organisations (energy, grids and networks,
multi-media, general);
• suppliers and business partners;
• regulatory authorities;
• government (local, national, and EU);
• civil-society organisations;
• educational institutions;
• sports clubs, cultural and other institutions.
22
Our Communications and Public Affairs department provides
background and other information to the public and
publishes reports using traditional and social media.
At DELTA, we are proud of, and take every care to preserve,
our role and reputation in local communities in Zeeland, as
reflected by the personal contact we have with many of our
stakeholders. We invite people with subject knowledge and
experience to explore specific issues or current or emerging
themes with us. We also engage with local communities by
attending regional sports or cultural events and trade and
professional events.
We are proud to present our new themes: ››
‘Communication and
transparency
have been identified
specifically as key pillars
of our CSR policy.’
’s CSR Themes
A
T
L
E
D
CO2-reduction and climate change
Renewal
energy
production and
supply
Energy-saving
information and
advice
Knowledge
partner in
sustainable
energy
Sponsorships
Customer loyalty
Digital society
Employment in Zeeland
Buy local
Investing in
education
Communication
Transparency
Promoting vitality and quality in local communities
Local
employees
Other themes
Privacy
Long-term
employability
Security of
supply
Management Board Report 2015 DELTA N.V.
23
Corporate Social Responsibility (CSR)
We want to focus on these themes to achieve a strong CSR
position. This section gives an account of the progress we
have made at group level, based on the CSR model.
1.6.1CO2 reduction and climate change
At DELTA, we take responsibility for our environment in order
to ensure a sustainable future. In 2015 we took a leading part
in helping the Dutch government meet the challenge of
reducing carbon emissions. We believe that all coal-fired
plants should and can be closed down with immediate effect.
There is simply no way around it if we want to keep global
warming below 2°C and prevent irreversible harm to our climate.
Renewal energy production and supply
With the closure of our coal-fired plant on 14 November 2015,
DELTA has become the Netherlands’ cleanest major energy
producer. Using a balanced production mix of wind, gas,
solar and nuclear power, we have by far the smallest footprint
in terms of power generation in the Netherlands. Our carbon
emissions will continue to fall (by 30%) once the Gemini wind
farm in the North Sea has become operational.
We seek to have a fully renewably energy supply system in
place in twenty years’ time. A varied and balanced mix of
renewable energy, if possible, and low carbon energy,
if necessary, ties in with this goal. We take responsibility
as a producer and supplier.
‘At DELTA, we take
responsibility for our
environment in order
to ensure
a sustainable future.’
We are proud to work with our customers to preserve the
environment and ensure a sustainable future. We laid the
foundation for this at the end of 2015, when we made the
decision to supply all of our retail and business customers
with 100% green electricity as of 1 January 2016. We will
implement this switch, allowing our customers to contribute
directly to a sustainable future without having to take any
action of their own.
Energy-saving information and advice
At DELTA, we consider it our social duty to raise awareness of
energy saving. The company is a partner in the Smart Energy
Collective and, working in collaboration with Enduris, RWS
Goes, and Marsakis, has set up a smart energy testing ground
in Goes to explore innovative ways to make energy supply
more sustainable. Working with our business partners and
local residents, we are looking into what is the best and most
24
convenient way to save energy. The most prominent outcome
of this project has been an ‘ice buffer system’ installed in
homes owned by the RWS housing association. This is a bold
and innovative sustainability concept that benefits the
environment because it is entirely CO2 neutral. Listening to
and working with our business partners, we are learning
‘what works’ for the energy transition.
In 2015 one of our energy consultants, Sjaak Vogel, carried
out energy checks in four community centres. His advice and
tips helped the centres better understand and reduce their
energy bill.
Knowledge partner in sustainable energy
DELTA is the number one knowledge partner in renewable
energy. In 2015 DELTA and seventeen other companies set up
the Dutch Association for Renewable Energy (NVDE),
representing the interests of some 1,000 companies and
housing associations. Its aim is to have a fully renewable
energy supply by 2050. By actively joining forces with others,
we want to accelerate the energy transition up and down the
supply chain.
As early as 2007, DELTA earmarked funds to plant trees in
Duinzoom, a nature area created between the towns of
Haamstede and Renesse. The trees compensate for the carbon
emissions released by local households. The Duinzoom
nature area also lends itself perfectly to inform visitors
about the storage of CO2 in trees.
On 1 July 2015 , the ‘DELTA climate park’ near Renesse
opened its doors. Its routes guide walkers along the themes
of Hydro Power, Growth Power, Solar Power and Wind Power.
Information boards and activities stimulate the imagination
of walkers to think about how to deal with energy
consciously and economically.
In 2015 Tocardo, a company involved in renewable energy
generation using tidal and wave power, installed a tidal
power system between two pillars of the Easter Scheldt
Storm Surge Barrier. The system consists of five turbines
with a total capacity of 1,275 kW. DELTA Netwerkgroep put
in its bit by connecting the system to the mid-voltage grid.
1.6.2Promoting vitality and quality in local
communities
DELTA and Zeeland are inextricably linked to each other.
In addition to selling our products and services to customers
in Zeeland, we are a major local employer and involved in
local community projects and events.
Sponsorships
DELTA provides three types of sponsoring: corporate and social
sponsoring and sponsoring through the DELTA Zeeland Fund.
• Corporate sponsoring
Corporate sponsoring involves providing support to a limited
number of major long-term projects. Benefiting from this
long-term relationship, events can grow in size and success
and become a ‘Zeeland pearl’. An example in point is the
DELTA Ride for the Roses, in which around 5,000 people from
Zeeland participate and which in 2015 raised a total of
EUR 135,008 for the Dutch Cancer Research Fund. We also
sponsor the Light Coast Run, a running event in the dark
with lights and music.
Excitingly, 2015 saw the Dutch stage finish of the Tour de
France on the artificial island of Neeltje Jans on 5 July.
Working with partners from Arrivée Zélande, DELTA made
this special event a huge success. We sponsored the event
by supplying power, water, Internet/WiFi and sanitation
services at the finish location.
• Social sponsoring
Social sponsoring involves providing support to groups of
people who need extra care and attention. In 2015 we hosted
CAS for Kids, a festival for pupils of all practice schools in
Zeeland, staged on the fringe of the Concert at Sea event.
We also organised various days out for lonely elderly people,
including a concert by singer Willeke Alberti in the
Zeelandnet studio in Kamerland.
• DELTA Zeeland Fund
Through the DELTA Zeeland Fund, we make donations to
charities and good causes across Zeeland, supporting many
local initiatives every year. Examples include Truckroll Zeeland
– in which 500 people with a disability are invited to hitch a
ride on a truck – the digitisation of the Zeeland dictionary,
and tilting, an ancient local sporting contest. For children in
Zeeland who, due to circumstances, were unable to go on a
summer holiday or did not receive a present under the tree,
we provided surprise packages and Christmas presents.
The DELTA Zeeland Fund helps people move on and contributes
directly to promoting a society that includes everyone.
In 2015 the DELTA Zeeland Fund accepted 58 applications,
involving a total expenditure of EUR 180,485. The sponsoring
budget available in 2015 was lower than in previous years.
It was used in part for social sponsoring. We seek to ensure
that donations are distributed equally. This does depend,
however, on the applications we receive for the different
categories. Zie opmaak tabel in NLse versie!
EUR
2015
2014
2013
2012
Arts & Culture
60,450
98,800 132,850 133,000
Nature & Environment
14,330
24,000
11,500
Sport & Leisure
52,205
93,150
99,500 139,576
Healthcare & Welfare
53,500
87,000
76,250
TOTAL
32,500
93,250
180,485 302,950 320,100 398,326
Customer loyalty
In order to win and keep customers, it is important for us to
know what they find important and how they experience our
service delivery. We have set up Advisory Boards to gauge
the views of our business customers. And we keep a close
eye on the retail market by conducting periodic customer
satisfaction surveys.
In 2015, we set up an online DELTA Community embracing
the motto ‘Together we can make a difference’. We use this
digital platform to ask our customers and others for their
opinion on innovations and to test and assess concepts and
campaigns.
These online contacts help us accelerate the implementation
of improvement ideas.
Digital society
DELTA recognises that it has a responsibility in this digital
society. In 2015 we assisted care providers in implementing
a digital portal and we taught elderly people how to use a
tablet. We helped churches bring their services into elderly
people’s living rooms. And we developed a portal for leisure
companies to provide holidaymakers with Internet access.
ZeelandNet/DELTA was voted the most popular telecom
website for the fourth year running.
1.6.3
Employment in Zeeland
Headquartered in Middelburg, and through the consumer
spending of its employees, DELTA makes a substantial
contribution to Zeeland’s gross domestic product. As such,
the company is a key driver of local employment and
contributes substantially to the regional economy.
Buy local
DELTA supports the regional economy by working together
mainly with local parties. We deliberately choose to keep
short lines with local businesses, such as catering and
security companies, but also when purchasing promotional
materials. We do so because we believe that this is our
social responsibility, but also because we want to operate
a sustainable business. Buying locally avoids people and
products having to travel long distances. With the launch of
E-Boulevard, DELTA allows small enterprises in Zeeland to
sell their products through their own web shop. E-Boulevard
is Zeeland’s number one online shopping centre, with local
companies offering their products online: buy local,
buy Zeeland products.
Investing in education
At DELTA, we believe that it is important to invest in education.
We are a member of the Job Market and Training Committee
of the employers’ association for Brabant and Zeeland.
In 2015 we launched a new initiative called Sjaak’s Schools
Tour. Sjaak Vogel, one of our energy consultants, is making
a tour of primary schools in Zeeland to show pupils the
importance of energy saving. Safe use of the Internet and
social media also features in the programme. We believe that
it is important to provide children with information about
these issues at as early an age as possible.
Management Board Report 2015 DELTA N.V.
25
Corporate Social Responsibility (CSR)
Local employees
DELTA and its subsidiaries together employ 1,786 FTEs.
Around 90% of our employees live in Zeeland. Working in
collaboration with InstallatieWerk Brabant-Zeeland (training
company) and Markiezaat College (regional training centre)
in Bergen op Zoom, DELTA Netwerkgroep provides a combined
work and training programme to recruit and train young
service engineers. More information on our employees is
given on page 29.
1.6.4
Other themes
Privacy
People are sharing an increasing amount of information
about themselves online. At the same time, they want to be
able to control what their personal information is used for.
Privacy is a hot topic, now more so than ever. At DELTA,
we do more than simply comply with the law. We respect the
privacy of our customers and employees in everything we do.
For example, we make sure that our employees are aware of
the risks if personal information about our customers is lost
or hacked. We also actively publish information on the safe
use of the Internet and online privacy. We work hard to
increase the safety of data stored by us by having a strict
Cloud policy in place and by taking technical measures such
as data encryption.
Long-term employability
DELTA is one of the largest employers in Zeeland. We provide
a socially and physically safe working environment with many
career opportunities and want our employees to remain
employable in the long term. To us, long-term employability
means that our employees remain fit, motivated and skilled,
regardless of their age or life phase, whether they are
employed by us or others. In 2015 we provided a number of
work experience placements to applicants at a distance from
the job market and/or with no work experience. 1 January
2015 also saw the introduction of the Dutch Participation
Act. Section 1.7 describes how we comply with the new
legal requirements.
26
Security of supply
Ensuring security of supply by having high-quality grids in
place remains one of DELTA’s main objectives. A good indicator
of the reliability of our gas and power grids is the annual
outage duration. The number of outage minutes was well
below our target and also below the national average.
If there is a power cut or any other malfunction, our service
engineers can respond quickly because the majority of them
live in Zeeland.
‘DELTA actively publishes
information on the safe use
of the Internet and
online privacy.’
By actively distributing smart meters, we are working towards
a renewable energy supply that better matches supply to
demand. This allows the energy grids to be used more
efficiently and ensures that energy remains affordable in
the future. By providing more information on energy use
and using smart technology, we are making energy saving
a lot easier.
Management Board Report 2015 DELTA N.V.
27
1.7
DELTA and its employees
DELTA and
its employees
DELTA is rooted in Zeeland society. Not only do we count a large number of
local residents among our customers, but we are also a major local employer.
Aside from providing a socially and physically safe working environment,
we also – in line with our aspirations – offer a variety of career opportunities
to our employees.
1.7.1
Number of employees
At 31 December 2015, DELTA (including its subsidiaries)
employed a total of 1,786 FTEs. Of this total, 1,268 were
employed by our divisions in Goes, Middelburg, and
Vlissingen.
Number of employees including joint businesses
2015
2014
2013
2012
1,786
3,349
3,394
2,954
Key social figures for EPZ are not included in this report.
EPZ publishes its own report.
2015 saw a further decline in the number of employees, due
in part to the sale of Indaver (-1,536 FTEs), the ‘Future-Proof’
restructuring of our Energy & Multimedia division, and the
closure of EPZ's coal-fired plant. Also, employees whose
jobs had previously become redundant found employment
elsewhere and left the company. At the same time,
we welcomed a number of new employees, offering work
experience placements to people some distance from the
job market or with no work experience.
1.7.2
External workforce policy
In 2015 we continued to look critically at our external workforce policy. Hiring in staff may be necessary on a temporary
basis to carry out specialist jobs or projects or to cover peak
periods, or even permanently to create a flexible layer.
We are, however, cautious to do so and prefer to encourage
our own employees to move up within the company.
This way, we can make maximum use of their capabilities,
advance their careers, and keep them with us. External staff
are also, of course, more expensive.
In the next five years, around 27% of our workforce will retire,
including technical staff. To respond to this situation,
28
DELTA Netwerkgroep (DNWG) has been recruiting and
training young service engineers, in collaboration with
InstallatieWerk Brabant-Zeeland (training company) and
ROC Markiezaat College (regional training centre) in
Bergen op Zoom, as part of a combined work and training
programme. We also have close contacts with other schools.
DELTA is a member of the Job Market and Training Committee
of the employers’ association for Brabant and Zeeland.
‘At DELTA, we want our
employees to remain
employable in the long term.’
1.7.3
Key HR objectives
DELTA’s HR policy is defined at holding company level.
Policy implementation has been entrusted to the individual
divisions. Each division has its own HR manager, who reports
to the divisional director. In 2015 HR policy centred on the
following four main issues:
1. Strategic HR Planning
At DELTA, we believe that strategic HR planning is one of the
most important ways to achieve our strategy and to offer our
employees a suitably challenging, supportive and inspiring
working environment. It allows us to assess the feasibility of
operational choices by analysing which employees will be
needed at a particular location at a particular time relative
to current capacity. This way, we can take timely action to
address any discrepancies. Successful examples include
DNWG’s training programme, as discussed above, the timely
redeployment of nearly all staff at DELTA Utility Services,
which has ceased its operations, and the creation of career
paths within several E&M departments.
The Mobility Phase provided for in our Social Plan is also an
example of strategic HR planning. When it is clear that jobs
will disappear or change substantially in the short term,
employees affected are regarded as ‘mobile’, allowing us
to find a solution at an early stage and possibly prevent
redundancies.
2. Performance management
At DELTA, we prepare individual work plans with our employees
to make clear what we expect of them in terms of achieving
the company’s strategic goals. Separate processes are in
place for performance management, development and strategic
HR planning. In 2015 we made preparations to integrate
these into a single Performance & Development cycle,
supported by a new system that will become operational
on 1 January 2016.
It is our firm belief that employees and managers should
engage in a continuous dialogue about issues such as
performance, employability, energy sources, development
and potential, and that this should continuously be tested to
ensure compatibility with the company’s goals.
3. Long-term employability
At DELTA, we want our employees to remain employable in
the long term and to have the flexibility and skills to be able
to move with market dynamics. To us, long-term employability
means that our employees remain fit, motivated and skilled,
regardless of their age or life phase, whether they are employed
by us or others.
The 2014 employee satisfaction survey showed us that there
is sufficient room for improvement in this area. Still too many
of our employees suffer from stress and run the risk of a
burnout. This is why in 2015 we launched our ‘Shared Journey’
programme, whose aim is to ensure that employees remain
fit at work and in their personal lives, physically as well as
mentally.
The programme is visualised using a roadmap to symbolise
that employees are on a continuous journey and that they are
in the driver’s seat. And although they will face crossroads
moments, they will be supported by the company throughout
their journey.
4. HR Development and Management Development
Continuing development remains one of the keys to success.
To stand still is to go backwards – a weary cliché but true all
the same. That is why we continue to offer our employees
career development and training opportunities, especially in
these uncertain times. We want to ensure that they can keep
up with the changes in our line of work, whilst at the same
time ensuring and improving their value on the internal and
external job market.
We believe that employees should have a back-up plan in
case their jobs become redundant. But they cannot do this
on their own; their managers have a shared responsibility.
This also explains why we keep investing in in management
development programmes so as to give our managers the
right tools to take on this role and show leadership in
uncertain times.
Employee satisfaction
In 2014 we carried out our biennial employee satisfaction
survey, and in 2015 followed up on the areas for improvement
identified. As previously explained, one of the steps we have
taken is to introduce our ‘Shared Journey’ programme to
enhance the long-term employability of our staff.
Other actions taken in 2015 included:
•updating job descriptions to remove the uncertainty
over certain job duties;
• providing training on ‘Giving and Receiving Feedback’;
• 360 degrees feedback for managers;
• creating career paths;
•fleshing out employee potential assessments and
succession planning so as to identify and encourage
development opportunities.
Physical safety
At DELTA, we put safety first. Safety is a key issue, especially
for DNWG and the production facilities, but safety awareness
is also promoted across our office locations. Examples
include mandatory workplace inspections and annual fire
safety drills. Because we expect our managers to lead by
example, we made their variable pay conditional on their
making a contribution to a safer organisation in 2015.
The Health, Safety and Environment (HSE) portal tells us that
the number of injuries fell slightly, with more lessons learned
reported in 2015. This leads us to conclude that safety
awareness across the divisions improved during the year.
Number of safety incidents reported by E&M, DNWG, and the
holding company
2015
2014
2013
2012
No. of accidents resulting
in absenteeism
4
6
5
7
No. of accidents with
no absenteeism
6
5
9
16
10
11
14
23
492
467
435
238
TOTAL
Other lessons learned
Social safety
At DELTA, we are committed to providing a socially safe
working environment, and have appointed in-company
counsellors to help us achieve this goal. In 2015 they held
presentations at work meetings in order to draw attention
to this issue and explain their own role.
In 2015 28 employees went to see one of our counsellors,
compared with 34 in 2014.
Management Board Report 2015 DELTA N.V.
29
DELTA and its employees
Illness and absenteeism
In 2015 absenteeism fell by 0.3% to 4.3%. This is below
the company’s 4.5% target. The fall was driven in part by
extra efforts to prevent absenteeism. Examples included
our long-term employability programme, focus on frequent
absenteeism, follow-up of employee satisfaction survey
findings, and the continuous dialogue between managers
and employees.
Absenteeism
2015
2014
2013
2012
Target
4.3%
4.6%
4.1%
4.1%
4.5%
Dutch Participation Act
1 January 2015 saw the introduction of the Dutch Participation
Act, the aim of which is to get more people with a disability
in regular employment. If employers fail to create the agreed
number of jobs (a total of 6000 extra jobs in 2016),
the government will impose a statutory quota. The legislation
seeks to help people who are unable to earn the statutory
minimum wage on their own, people who are now in sheltered
employment, and young people with a disability who should
be able to work on a part-time basis. In 2015 we offered
placements to three applicants, after looking critically at
whether this work could be done by excess employees so
as to ensure that this group would not be prejudiced.
30
Management Board Report 2015 DELTA N.V.
31
1.8
DELTA and corporate governance
DELTA and
corporate governance
Sound business practices, integrity, respect, supervision, transparent reporting
and other forms of accountability are the cornerstones of DELTA’s corporate
governance policy. We are in compliance with the Dutch Corporate Governance
Code, which applies to listed companies in the Netherlands. We also comply with
‘best practice’ provisions to the extent that they apply to the company.
Corporate governance structure
DELTA N.V. is a company with a two-tier board (a so called
“structuurvennootschap”) as referred to in Section 2:154
of the Dutch Civil Code. The involvement of the General
Meeting of Shareholders and the Supervisory Board with
the company’s operations is reflected in its articles of
association and various sets of regulations. These are
available at www.DELTA.nl/Raad vanCommissarissen.
The articles of association explain, for example, which body
must approve proposed board resolutions on investments,
takeovers, or the sale of all or any part of the company’s
business.
If the amount involved exceeds five million euros, the proposed
resolution requires approval from the Supervisory Board.
If it involves an investment or disinvestment in excess of 55
million euros, the proposal requires prior approval from
DELTA’s shareholders. This was the case in 2015 when we
sold Indaver and the Kreekraksluis wind farm.
Executive Board
The powers and responsibilities of the Executive Board are
defined in the Executive Board Regulations. These provide
for a division of duties among the Executive Board members,
define internal powers of attorney, and lay down decisionmaking procedures. The regulations also contain rules that
are consistent with the Dutch Corporate Code, including
rules dealing with conflicts of interest involving Executive
Board members.
DELTA endorses the rules on a balanced composition of the
Executive Board as referred to in Section 391.7, Title 9, Book
2 of the Dutch Civil Code, as introduced on 1 January 2013.
The company’s Executive Board comprises only two members,
whose term of office did not expire during the year.
When appointing new members, we will certainly consider
the importance of broad-based diversity.
32
Supervisory Board
DELTA’s Supervisory Board oversees the company’s overall
performance, including compliance with its policies,
the results achieved by the Executive Board, the company’s
financial position and risk profile, and its financial reporting.
The Supervisory Board also acts as a sparring partner for the
Executive Board. In order for the Supervisory Board to properly
fulfil its role, its profile should be consistent with that of the
company. The profile drawn up by the Supervisory Board in
2010 describes the capabilities required of its members,
having regard to the extended powers of nomination vested
in the Central Works Council.
The Supervisory Board is in compliance with the Dutch
Corporate Governance Code, including in terms of its
composition (independent, diversity in age, background and
expertise), although gender diversity remains an issue.
The Supervisory Board’s powers and duties, internal decisionmaking and the role of its chair are set out in the Supervisory
Board Regulations, which also provide for matters such as
periodic performance reviews in accordance with the Code.
Audit, Risk & Compliance Committee
One of the duties of the Audit, Risk & Compliance Committee,
in addition to financial and tax matters, is to monitor the
risks that the company is willing to take. Risk management
and risk policy reporting feature regularly on the agendas
of both the Audit, Risk & Compliance Committee and the
Supervisory Board’s plenary meetings.
Shareholders
The role of DELTA’s shareholders and the powers of the
General Meeting of Shareholders (GMS) are set out in the
company’s Articles of Association. DELTA’s shareholders are
committed and dedicated, in part because they are public
sector entities (all being municipalities or provincial
authorities). Owing to the wide-ranging powers entrusted to
the GMS under the Articles of Association, the way in which
the shareholders exercise their voting rights has a significant
influence on the company’s policies and operations.
Two formal and three informal general meetings were held
during the year.
Works Councils
Amidst the articles of association, board regulations and
similar arrangements, the relationship between DELTA and
its Works Councils and Central Works Council should not go
unmentioned. It is a relationship built on mutual respect,
as reflected in standing consultations between the Executive
Board and the councils.
In 2015 the Central Works Council met nine times with the
Executive Board and HR Director attending, and four times
without. One of the main issues for the Works Councils and
Central Works Council in 2015 was the compulsory split-up
of the company, which ran like a red thread through their
meetings. The councils cooperated very constructively with
the Executive Board.
‘One of the main issues
in 2015 was the
compulsory split-up
of the company.’
Compliance
DELTA operates a whistleblowing policy, adopted by the
Supervisory Board, which, in addition to the compliance
officer’s activities, allows employees to raise concerns about
any wrongdoing with the Executive Board and/or a counsellor
without running the risk of reprisals at work. If preferred,
reports can be made to an external party.
The compliance officer received no reports in 2015.
Management Board Report 2015 DELTA N.V.
33
1.9
Report of the Supervisory Board
Report of the
Supervisory Board
The Supervisory Board is pleased to report on its activities undertaken in 2015,
and the way in which it has performed its supervisory and advisory duties.
Membership composition
In 2015, DELTA N.V.’s Supervisory Board comprised:
• Mr C. Maas (Chairman)
• Ms A.M.H. Schöningh (Vice-Chairman)
• Mr J. Bout (until 25 September 2015)
• Mr B.P.T. de Wit (until 25 September 2015)
• Mr G. van Harten (since 25 September 2015)
• Mr M. van ’t Noordende (since 25 September 2015)
•Mr E. Robbe (from 25 September 2015; stepped down
on 30 March 2016)
Mr Bout and Mr De Wit decided to step down in 2015.
We regret but respect their decision. The Supervisory Board
is very grateful for the way in which they fulfilled their duties.
Following their resignation, and Mr Van Doorn’s stepping down
in 2014, three new supervisory directors were appointed in
2015.
We are pleased to welcome them to DELTA N.V.’s Supervisory
Board. Mr Robbe stepped down on 30 March 2016 after
accepting new employment that conflicted with his duties
as a supervisory director of DELTA N.V.
Committees
The Supervisory Board’s guiding principle is that practically
any matter can be discussed at its plenary meetings.
From this perspective of collective responsibility, we believe
that there is no place for numerous committees consisting
of Supervisory Board members entrusted with primary
responsibility for individual areas of work. In line with the
Dutch Corporate Governance Code, we have made an
exception for the Audit, Risk & Compliance Committee
and the Remuneration & Nomination Committee.
Meetings and other activities
In 2015 the Supervisory Board met five times with the
Executive Board attending, and three times by means of
a telephone or video conference. The matters discussed
included:
•financial matters, including the quarterly reports and
financial statements, and the company’s financial plan
containing its operational and financial goals;
•DELTA’s business strategy and related strategic issues,
such as acquisitions and investments and disposals;
34
•the main risks arising from the policies implemented:
•safety;
• HR policy, including management development policy;
• risk management;
• dividend policy;
• Investment policy and key investments and disposals;
• finance policy;
• tax issues;
• corporate governance.
The Supervisory Board held extensive consultations with
the Executive Board about the company's business strategy,
Key items on the agenda were the options to merge with
another energy company and the potential impact of a
compulsory split-up.
Members of the Supervisory Board attended the meetings
between the Executive Board and the shareholders’ committee.
Eleven of these meetings were convened in 2015 to discuss
progress on the sale of Indaver, DELTA’s business strategy,
the shareholders’ strategy, and the possible split-up of the
company.
The Supervisory Board and the shareholders’ committee met
once without the Executive Board attending. The Supervisory
Board also met once with Zeeland’s provincial executive.
During the year, the Supervisory Board was updated
periodically by DELTA N.V.’s Executive Board and EPZ’s Board
on the situation at EPZ, including the closure of the coal-fired
plant and safety and other operational aspects of the nuclear
power plant in Borssele. The Supervisory Board paid work
visits to DELTA Netwerkgroep, the nuclear power plant,
and the trading floor in Middelburg.
‘The Supervisory Board’s
guiding principle is
that practically any matter
can be discussed at
its plenary meetings.’
The Supervisory Board also convened several times without
the Executive Board attending. Key items on the agenda were:
• the company’s business strategy;
•the review of the performance of the Supervisory Board
and its members;
• the adoption of the Supervisory Board’s remuneration;
•the proposal to extend the contract with the independent
auditors by one year;
•the proposal to appoint three new members to the
Supervisory Board.
The Supervisory Board also convened to review its own
performance, without the Executive Board attending,
discussing matters such as its main duties and responsibilities
(oversight and advice) and cultural and behavioural aspects.
Audit, Risk & Compliance Committee
The Audit, Risk & Compliance Committee comprises two
members. Until 25 September 2015, they were Mr Bout
(Chairman) and Mr Maas. Mr Bout was replaced by Mr Robbe,
who was appointed a member and chairman on 25 September
2015. A vacancy arose on 30 March 2016 when Mr Robbe
stepped down as a member of the Supervisory Board.
The Committee convened five times during the year.
The issues discussed included:
• management letter;
• financial plan;
•quarterly reports, half-year report, financial statements,
IFRS;
• financial results on projects and investments;
• cash flow projections and cash management;
• risk management;
• tax issues;
• design and set-up of the financial functions;
• (dis)investment proposals.
The Committee meetings were attended by the members of
the Executive Board, the Group Internal Control Manager,
and the independent auditors. The Audit, Risk & Compliance
Committee also met with the independent auditors without
the Executive Board attending.
Remuneration & Nomination Committee
Comprised of Ms Schöningh (chair) and Mr Maas,
the Remuneration & Nomination Committee met four times
during the year. The Committee members conducted a
performance review meeting with both the CEO and the CFO.
Based in part on market research, the Committee submitted
a proposal to the Supervisory Board to adjust the CEO’s and
CFO’s remuneration in line with the company’s pay policy.
The Committee also led the selection process and submitted
a proposal to the Supervisory Board to fill its three vacancies.
These had arisen following the departures of Mr Van Doorn in
2014 and Mr Bout and Mr Wit during the year. In connection
with the appointment of the three new members, the General
Meeting of Shareholders adopted a ‘Nomination Procedure
for DELTA N.V.’s Supervisory Board’.
‘The policy’s guiding
principle is that DELTA
should be able to offer
a pay package that allows
the right people to be
recruited and retained by
the company.’
Executive Board membership
In 2015 the Executive Board comprised Mr A.B. Kamerbeek
(CEO) and Mr F. Verhagen (CFO). Mr Kamerbeek left the
company in March 2016.
Executive Board remuneration
The remuneration policy for Executive Board members was
last adopted by the General Meeting of Shareholders in 2005,
in line with the Supervisory Board’s proposal. The policy’s
guiding principle is that DELTA should be able to offer a pay
package that allows the right people to be recruited and
retained by the company. The Supervisory Board determines
the remuneration of Executive Board members annually,
within the limits set by this policy.
Financial statements
The financial statements 2014 were adopted by the General
Meeting of Shareholders in June 2015. On the proposal of
the Supervisory Board, the entire profit for the 2014 financial
year (EUR 3.76 million) was paid as a dividend, with an
additional EUR 11.24 million being paid out of other reserves.
The Supervisory Board has reviewed and approved the annual
report, financial statements, and notes for the 2015 financial
year, as submitted by the Executive Board. The Executive
Board prepared the financial statements 2015 on that basis,
and the Supervisory Board recommends their unqualified
adoption by the General Meeting of Shareholders. Due to the
net loss of EUR 111 million sustained in 2015, no dividend
will be paid. Nor do the deteriorated cash flow and cash
position allow a dividend to be paid out of other reserves.
On behalf of DELTA N.V.’s Supervisory Board,
C. Maas
Chairman
Management Board Report 2015 DELTA N.V.
35
Report of the Supervisory Board
1.9.1
The members of the Supervisory Board
Mr drs. C. (Cees) Maas (1947)
Nationality: Dutch
First appointed: 16 May 2014, appointed chairman on
26 September 2014
Current term: until 16 May 2018
Profession/main position: former CFO of ING Group N.V.
Other board memberships at 31 December 2015:
• Senior adviser Cerberus Global Investment Advisors, LLC;
• Supervisory Board vice chairman of BAWAG P.S.K.;
• Non-executive director of HAYA Real Estate S.L.U.;
•Non-executive director of Gescobro Collection Services
S.L.U.;
• Supervisory Board vice chairman of BCD Holding N.V.;
• Supervisory Board vice chairman of Stadion Feijenoord N.V.;
• Board member of Stichting Preferente Aandelen DSM;
•Board member of Stichting Administratiekantoor
Hoofdplaat;
• Advisory Board chairman of Erasmus University Hospital;
• Chairman of Nationaal Fonds 4 en 5 mei.
Ms drs. A.M.H. (Marieke) Schöningh MBA (1963)
Nationality: Dutch
First appointed: 17 May 2013
Current term: until 17 May 2017
Profession/main position: Global Vice President of M&S DSM Sinochem Pharmaceuticals
Mr drs. E.M. (Engelhardt) Robbe RA (1955)
Nationality: Dutch
First appointed: 25 September 2015
Stepped down: 30 March 2016
Profession/main position: Executive Board member and CFO
of NV Nederlandse Spoorwegen.
Other board memberships at 31 December 2015:
• Supervisory Board chairman of NS Insurance;
• Supervisory Board chairman of NS Financial Services LTD;
• Advisory Board chairman of Stichting Spoorwegmuseum
•Non-executive director and Audit Committee chairman of
Eurofima;
•Member of Curatorium Executive Masters in Finance &
Control Programme, VU Amsterdam;
• Ambassador for Stichting UAF;
• Board member of Nationaal Fonds 4 en 5 mei.
36
Mr ir. G. (Gerard) van Harten (1952)
Nationality: Dutch
First appointed: 25 September 2015
Current term: until 25 September 2019
Profession/main position: Former CEO of Dow Benelux B.V.
Other board memberships at 31 December 2015:
• Advisory Board member of Stichting Biobased Delta;
• Supervisory Board chairman of Dow Benelux N.V.;
•Supervisory Board chairman of Green Chemistry
Campus B.V.;
• Chairman of Top Sector Chemistry;
• Supervisory Board member of Zeeland Seaports;
•Advisory Board chairman of University College
Roosevelt;
•Advisory Board member of Stichting Wonen en
Psychiatrie.
Mr mr. (Marc) van 't Noordende, (1958)
Nationality: Dutch
First appointed: 25 September 2015
Current term: until 25 September 2019
Profession/main position: Operating Partner at the North
Haven Infrastructure Fund, an investment fund managed
by Morgan Stanley Infrastructure Partners.
Other board memberships at 31 December 2015:
•Supervisory Board member and Audit Committee
chairman of ICE Endex BV;
•Supervisory Board member and Audit Committee
chairman of Berenschot Groep BV;
•Supervisory Board member of Amsterdams Energie
Bedrijf NV;
•Advisory Board member and Audit Committee member
of ROC Leiden.
Management Board Report 2015 DELTA N.V.
37
1.10
Report of the Central Works Council
Report of the
Central Works Council
DELTA’s Central Works Council consists of members of the works councils
at the company’s four divisions. The Central Works Council holds regular
consultations with the Executive Board. The divisional Works Councils meet
regularly with their divisional Board.
Until mid-2015 DELTA also had a European Works Council in
place, comprising members of the Central Works Council and
members of Indaver’s works council. The European Works
Council was abandoned in June 2015 when Indaver was sold
to KatoenNatie.
Workers’ participation has since been organised as follows:
• Central Works Council;
• Works Council for Energy & Multimedia;
• Works Council for DELTA Netwerkgroep;
• Works Council for EPZ;
• Works Council for Group Staff;
The Works Councils each convene their own meetings and
consultations with the divisional Board. The items on the
agenda concern matters regarding their own division.
The Central Works Council discusses cross-divisional
matters and issues that impact the company as a whole.
DELTA operates a Works Council Support Scheme, which
provides how many hours employees are exempt from work
to carry out their duties as works council members.
In 2015 the Central Works Council comprised:
•4 members of the E&M Works Council: Stephan de Beer,
Bart van Houte, Bram Nonnekes, Jan Scheele;
•4 members of the DNWG Works Council: Leen Boer,
Martijn Hofman, Harrie Martens, Theo Nieuwburg;
•3 members of the EPZ Works Council: Jack van Bruggen,
Huub Knoors, Peter Maljers;
• 1 of the Group Staff Works Council: Hans van Stel.
In 2015 the Central Works Council's executive committee
comprised:
• Bram Nonnekes (chairman)
• Harrie Martens (secretary)
• Bart van Houte (vice chairman)
• Huub Knoors (vice secretary)
• Hans van Stel (member)
38
A key issue for all Works Councils and the Central Works
Council in 2015 was the compulsory split-up of the company,
which ran like a red thread through our meetings.
We cooperated very constructively with the Executive Board.
Our members devoted a great deal of time and energy to the
issue. The Central Works Council drew up its own vision of
how the company could be restructured following a split-up,
its guiding principle being to secure as many jobs as
possible for Zeeland. The chairman explained and promoted
the Central Works Council’s views during staff meetings.
‘A key issue for
all Works Councils
and the Central Works
Council in 2015
was the compulsory
split-up of the company.’
In 2015 the Central Works Council met nine times with the
Executive Board and HR Director attending, and four times
without. Employees, target groups and stakeholders were
regularly consulted, depending on the issue at hand.
When the negotiations for a new collective agreement became
deadlocked, the Central Works Council organised information
meetings for employees.
On behalf of the Central Works Council,
Bram Nonnekes
Chairman
Management Board Report 2015 DELTA N.V.
39
1.11
Opportunities and risks
Opportunities
and risks
DELTA wants to seize market opportunities while at the same time minimising
risks. To achieve this, we have a risk management system in place, which we
ensure is applied and complied with across the company. The system factors
in the specific features of the markets in which our divisions operate and
which are consolidated at company level.
DELTA seeks to continue its service delivery to customers by
offering a variety of products and services, providing
high-quality local employment, and maintaining good
relations with its shareholders and other stakeholders.
This section of the annual report looks at how risk management
is structured within DELTA. We also discuss the main risks
and uncertainties facing the company.
DELTA’s internal control framework
The Group Internal Control department has developed and
implemented the DELTA Internal Control Framework (DICF).
The DICF supports the divisions and staff department in
performing their risk management responsibilities and
implementing the internal control system.
Based on the COSO-ERM model, the DICF ultimately leads to
the preparation of a Management in Control Statement (MiCS)
by divisional management and department heads once
every six months. MiCSs are substantiated by validating
(i.e. establishing the effectiveness of) key controls.
These, in turn, are identified during annual Strategic Risk
Assessments and multiple Process and Thematic Risk
Assessments. The divisional directors discuss developments
likely to impact their risk assessments with the Executive
Board at least twice a year.
1.11.1 Duties and responsibilities defined by the DICF
Executive Board and divisional management
The Executive Board has ultimate responsibility for risk
management at DELTA. Primary responsibility lies with the
divisions, whose staff and management are responsible for
properly performing risk management and internal control
activities.
Group Internal Control
On the instructions of the Executive Board, Group Internal
Control monitors compliance with the internal control
40
framework, which has been designed to ensure that:
•DELTA is notified in a timely fashion as to when strategic,
operational and financial targets have been achieved;
• financial reporting is reliable;
•DELTA operates in accordance with applicable laws and
regulations;
• the company’s property and assets are protected;
• DELTA has a clear understanding of its obligations;
•effective and efficient processes are in place and
complied with across the company.
Internal audits
Risk control at divisional level and various other processes
are subject to regular audits by the independent Internal
Audit department, which looks at the quality assurance system
and risk management, control and compliance procedures.
Independent auditors
When auditing the financial statements, the independent
auditors investigate the design, existence and effectiveness
of the company’s internal financial reporting controls. The
audit findings and recommendations are set out in an annual
Management Letter and reported to the Executive Board,
Audit, Risk & Compliance Committee, and Supervisory Board.
The Management Letter may lead to controls being tightened
further.
Supervisory Board
DELTA’s Executive Board reports on, and accounts for, the
design and operating effectiveness of the internal risk
control system to the Audit, Risk & Compliance Committee
and the Supervisory Board. External parties, including the
Dutch Consumer & Markets Authority, monitor compliance
with applicable laws and regulations.
1.11.2 Risk management and internal control system
Risks and controls in 2016
We will continue to monitor major risks and mitigate such
risks where appropriate and economically feasible in 2016.
Safety risks will remain a focal point in 2016. DELTA ensures
good working conditions, robust and reliable business
processes, and skilled staff. At DELTA, we have a rule that says
“I work safely or I don‘t work at all.” Following on from our
focus in 2015, we will also take additional steps to identify
and control cyber risks and ensure data and privacy security.
In 2015 policy was tightened further, with practice guidelines
being set out in a new handbook. We expanded our monitoring
of controls by using IT technology, amongst other things.
We also took important steps towards improving our internal
reporting. Due in part to these improvements, risk awareness
was raised in 2015 as well.
Risk appetite
DELTA reviews its risk appetite on the basis of various risk
assessments that determine the probability and impact of
each individual risk. If either or both are elevated, we will
take additional mitigating action. If residual risks remain
elevated, we may take follow-on action. This may include:
•accepting the elevated residual risk, but stepping up our
monitoring efforts and taking additional action to limit
any damage if an incident occurs;
•sharing the elevated residual risk with a third party,
for example through a joint venture or by taking out
insurance.
Risks and controls in 2015
Ensuring security of supply and providing access to the Internet
are essential to society. DELTA is also a major employer in
Zeeland and an important economic partner to the public and
private sector. DELTA identifies any risks that may threaten the
provision of these services as clearly as possible, and seeks
to mitigate such risks where appropriate and economically
feasible.
DELTA is involved in international gas and electricity trading.
Prices on these international markets fluctuate strongly.
We use financial instruments to mitigate commodity, foreign
exchange, interest rate, liquidity and credit risks, subject to
the requirements set out in our Risk Policy Document and
Treasury Charter.
Under the auspices of the Executive Board, the E&M division’s
Risk Management Committee has put in place general
procedures and limits, and is responsible for ensuring that
the company's energy trading and sales activities remain
within the defined risk margins.
The evolution of risks in 2015
The decision handed down by the Dutch Supreme Court in
June 2015 has shed more light on the potential risks involved
in a hive-off of the grid operations (DELTA Netwerkgroep).
The continued decline in electricity and gas prices is worrying.
Compliance risk inherent to our waste incineration operations
has disappeared with the sale of those operations. At the
same time, cyber risk has increased nationwide and globally,
prompting us to keep a close eye on this risk in 2015.
‘ DELTA is a major
employer in Zeeland and
an important economic
partner to the public
and private sector.’
Management in Control Statements 2015
Management submitted two Management in Control Statements
(MiCS) to the Executive Board in 2015. The statements
confirmed that management was generally ‘in control’ during
the year.
The exceptions noted arose from the uncertainty caused by the
threatened hive-off of Enduris (formerly DELTA Netwerkbedrijf)
and the financial impact of falling electricity prices and
spreads. These risks are discussed in more detail below and
summarised in the table below. Risks are also discussed
elsewhere in this report. The two MiCSs were the basis for the
Executive Board's In Control Statement as included in this
annual report.
1.11.3 Summary of the main risks
Below is a summary of the main risks facing DELTA.
The summary also shows how we mitigate the probability
and impact of these risks. Risks were assessed individually
over a one-year horizon.
Key risks became clearer during the year, with the Supreme
Court’s ruling that we must separate our grid operations
(Enduris) and in the face of deteriorating commodity prices.
A. Continuity of current business
DELTA is facing one of the most challenging times in its history.
Market prices have been falling since 2009 and are placing
substantial pressure on the profitability of the company's
power generation and trading activities. This, coupled with
the compulsory hive-off of Enduris in mid-2017 and the wish
of our shareholders to directly own DELTA Group’s regulated
operations, gave us enough reason to reconsider our current
organisational structure ahead of the split-up in 2017.
DELTA is rooted in Zeeland and has seen major growth here
over the years. Continuing to ensure value for our public-sector
Management Board Report 2015 DELTA N.V.
41
Opportunities and risks
and other shareholders in Zeeland and securing high-quality
local employment are key goals moving forward. Economic
reality and the political wish to split up the company will lead
to DELTA being divided up into multiple units. Selling one or
more of these units is an option. Either way, we will make
every effort to promote the interests of our stakeholders.
Other major risks facing DELTA prior to the split-up:
B. A further decline in spreads (the difference between
electricity prices and gas and CO2 prices),
lower electricity prices, and, to a lesser extent,
lower gas prices.
Impact on the company:
•A fall in electricity prices will directly impact gross margin
on the unhedged part of our production operations and
put pressure on future cash flows;
•A lower corporate credit rating: a credit rating downgrade
will adversely affect our trading position in the markets
and require us to provide additional cash collateral under
existing contracts;
•
Pressure on liquidity: mark-to-market positions of existing
rights and obligations (exchange-traded) must be
maintained in cash on the exchanges where they are traded.
Positions maintained with the same counterparties are
netted. Failure to meet a mark-to-market obligation will
lead to liquidation and an immediate obligation to settle
all positions. In 2015 DELTA saw a substantial net cash
outflow into margin accounts as a result of strongly
deteriorating energy prices. The output generated by
the company’s power plants and its sales to business
customers are largely hedged. If electricity prices fall,
we are required to make extra payments into these margin
accounts due to the rising mark-to-market. The margin on
sales achieved at the time of delivery or settlement of
the position remains intact. Due to lower gas prices,
the mark-to-market and hence the mandatory payments
into margin accounts have also become negative for the
obligations entered into for gas (net gas purchases).
The trend of falling prices continued in early 2016 .
The Executive Board monitors the way in which future
production by assets is hedged (lock-in strategy), based on
the advice provided by the appropriate department and
taskforces and the Risk Management Committee. Position
monitoring takes place on a daily basis; if necessary additional
hedging is provided or reverse trades are entered into.
Measures have been taken to reduce the exposure (by selling
the future output of our power plants). We also actively limit
the size of our wholesale supply operations so as to prevent
any unforeseen additional use of working capital.
In strategic terms, we engage the support of expert lawyers,
participate in public debates and engage with policy-makers
so as to encourage the adoption of legislation in favour of a
properly working energy system (reduced support for polluting
fuels, capacity rate), sustainable stimulus measures (such as
an effective CO2 pricing mechanism), and renewable
generation methods.
42
C.Existing long-term contracts which DELTA has signed in
the past, for example to hedge positions and create
option value.
Due to market conditions, these contracts currently have a
negative value. Examples include multi-year contracts for the
purchase of transmission and storage capacity and tolling
contracts. We were required to recognise a provision for
unprofitable contracts of EUR 154.3 million at year-end 2015
in order to cover our obligations arising from the Gas Flex
Portfolio.
Risk mitigation is carried out preferably by renegotiating
contracts and, where appropriate, by winding down
positions and actively monitoring and adjusting positions.
D.DELTA’s future as an independent company is threatened
by the mandatory hive-off of its grid operations
(Enduris).
Because of this threatened statutory split-up, Standard &
Poor’s placed DELTA on credit watch in 2014. Separating the
grid operations will reduce DELTA Netwerkgroep’s diversity
and increase overall risk.
We are considering splitting up the company early so as to
allow its different units being restructured or sold in an
orderly way.
Additionally, there are a number of other key risks which did
not increase in significance during the year.
E. Unplanned outages at power stations
Unplanned outages at our power plants (for example, due to
malfunctions, overrunning investment projects or overrunning
works when changing the fissile rods) may lead to planned
volumes not being achieved or planned services not being
delivered. This could, in turn, lead to lower revenue, the need
to buy back energy previously sold, and/or imbalance costs
being incurred.
Through its representation on EPZ’s Investment Committee,
DELTA ensures that appropriate maintenance programmes are
in place and spare parts policy is monitored. Through similar
bodies, DELTA also monitors the availability of the other power
stations. Their performance statistics are compared and
areas for improvement identified using PAS55 benchmarks.
EPZ management has been expanded to ensure stricter
management of its investment and maintenance projects.
F. Elevated risk in terms of data security
Cyber attacks by criminals that are becoming increasingly
professional may cause damage to ICT systems or lead to
confidential and/or privacy-sensitive information being
stolen. Operational processes may be disrupted temporarily
as a result, potentially harming our reputation.
The Executive Board and line management are monitoring
cyber risk closely. The findings of the baseline study conducted
by KPMG have been converted into action by divisional
management.
DELTA’s divisions are also members of ISACs (Information
Sharing and Analysis Centres). These are public-private
partnerships in which members share information and
experience concerning cyber security sectorwise on a tactical
level. ISACs were set up on the initiative of the National Cyber
Security Centre, an agency of the Dutch Ministry of Security
and Justice.
Summarising table
Risk
Control
Risk area
Current risk
Risk appetite
1
Continuity under pressure from
mandatory hive-off of grid
operations (Enduris), coupled with
poor market conditions for
traditional energy producers.
Restructure business while
focusing continually on ensuring an
adequate liquidity buffer.
Strategic
Medium
Low
2
Mandatory hive-off of grid
operations and poor market
conditions for traditional energy
producers may lead to credit rating
downgrade by Standard & Poor’s.
Adjust trading activities and ensure
an adequate liquidity buffer.
Financial
High
Low
3
Negative trend in spreads on
electricity production and lower
energy prices. Poor market
conditions may lead to elevated
counterparty risk.
Influence legislation in the long
term. Restructure operations to
control cash outflows and credit
risk.
Operational
Medium
Medium
4
Strongly negative value of existing
long-term contracts. The ensuing
margining obligations put pressure
on cash position, potentially
creating funding risks.
Actively manage and reduce
positions. Renegotiate contracts.
Financial
High
Low
5
Unplanned outages at power
stations.
Stricter management of investment
and maintenance projects.
Operational
Low
Medium
6
Increased data security risk
Specific ongoing actions in
collaboration with external experts.
Compliance
Low
Medium
Management Board Report 2015 DELTA N.V.
43
Opportunities and risks
1.11.4 Specific market risks and features
Commodity price risk
Market risks arise from price movements in the markets where
DELTA buys and sells (gas, electricity, coal, oil, emission
allowances, currencies, transmission capacity, imports/exports
capacity, etc.). It is DELTA’s policy to mitigate the impact of
price movements in the short term and track prevailing market
prices in the long term. For systematic risk control purposes,
asset allocations and positions are determined on the basis
of expected price developments. DELTA monitors these positions
on a daily basis. Trading risks are mitigated by strictly enforcing
a system of limits, the most important of which is calculated
using the Value-at-Risk method.
DELTA also uses financial instruments to minimise fluctuations
in expected cash flows. The company uses derivatives,
including forward contracts, options, and swaps, to control
the effects of future changes in market prices.
These hedging instruments are derivatives of commodities
traded by DELTA and they are entered into to mitigate cash
flow, price and currency risks. Hedge accounting is applied
to cushion the total change in value of these derivatives.
‘It is DELTA’s policy
to mitigate the impact
of price movements
in the short term and track
prevailing market prices
in the long term.’
Value-at-Risk
When calculating Value-at-Risk (VaR), DELTA uses various
assumptions regarding possible changes in market conditions.
VaR identifies the maximum portfolio losses likely to be
incurred as a result of price changes over a three-day period
with a confidence level of 95% (i.e. in 5% of cases the
portfolio losses may exceed the VaR limit). VaR is calculated
using Monte Carlo simulations based on historical volatilities
and correlations.
Because portfolios include opposing positions and there is
an underlying correlation, the VaR of the total portfolio is
smaller than the sum of sub-portfolio VaRs.
44
Currency risk
Currency risk is the risk that the value of assets will change
due to movements in foreign exchange rates. DELTA’s risk
policy is to hedge currency risks associated with positions
denominated in foreign currencies. To hedge this risk, the
company uses financial instruments (forward contracts) to
minimise fluctuations in expected cash flows.
Currency positions arising from commodity and other
contracts are reported to the Treasury department on a daily
basis to be hedged at group level. Currency risk limits are set
periodically in consultation with the Risk Management
Committee and are monitored by the Treasury department.
Interest rate risk
DELTA’s interest rate risk policy is to mitigate the effects of
interest rate fluctuations. To hedge this risk, the company
uses derivatives, including interest rate swaps. These swaps
allow a floating rate to be exchanged for a fixed rate.
Liquidity risk
Liquidity risk is the risk that DELTA may have insufficient
funds available to meet its short-term liabilities. DELTA’s
capital management policy focuses on centralising its cash
management and borrowing and repayment operations at
holding company level (DELTA N.V.) as much as possible.
The company’s business plan forms the basis for the annual
financing plan, which gives direction to the activities
undertaken by the Treasury department and annually
determines the ratio of short-term to long-term debt.
DELTA also ensures that it more than meets banking ratios
and other ratios necessary to maintain its corporate credit
facility and corporate credit rating and to optimise working
capital management.
In order to meet its working capital requirement, DELTA has
access to a stand-by credit facility, which allows us the
flexibility, for example, to absorb seasonal cash flow
fluctuations and pre-finance projects. There are separate
lines of credit for independent projects, for entities that are
not wholly-owned by DELTA , and for entities for which the
law so requires. There is no recourse to DELTA N.V. under
these facilities.
Standard & Poor's affirmed the company’s credit rating at
BBB with a negative outlook, despite difficult market conditions
and poor prospects, adding that a definitive obligation to
split up the company could lead to a rating downgrade,
depending on DELTA’s financial profile at that time.
Management Board Report 2015 DELTA N.V.
45
1.12
Statement by the Executive Board
Statement by
the Executive Board
The Executive Board is responsible for the design and operating
effectiveness of the company’s risk management and internal control system:
the DELTA Internal Control Framework (DICF). We reviewed its design and
operation during 2015, based in part on the Management in Control
Statements submitted by the divisions, the internal audit report, and the
independent auditors’ report.
Risk-taking is inextricably linked to the company’s operations
and the implementation of its strategy. The DICF framework
allows DELTA to take risks by identifying, controlling,
and actively monitoring those risks, and taking appropriate
action where necessary. The Executive Board seeks to
minimise the probability and impact of any errors, incorrect
decisions or unforeseen events. We are aware that this does
not provide absolute assurance that business targets will be
achieved and misstatements, loss, fraud or breaches of the
law eliminated.
When auditing the financial statements 2015, the independent
auditors tested the design, existence and operating
effectiveness of the company’s internal controls on financial
reporting.
They reported their findings to the Executive Board, Audit,
Risk & Compliance Committee, and Supervisory Board.
In Control Statement
On the basis of the foregoing, the Executive Board believes
that the risk management and internal control system
operated effectively during 2015 and provides reasonable
assurance that the financial statements for the year under
review contain no material inaccuracies.
The Executive Board will ensure that the company will continue
to strengthen and professionalise its DICF framework in 2016.
46
Management statement
To our knowledge:
•the financial statements give a true and fair view of the
assets, liabilities, financial position, and profit or loss of
DELTA N.V.;
•the additional information, as contained in this annual
report, gives a proper view of the state of affairs as at
31 December 2015 and of DELTA N.V.’s operations during
the 2015 financial year;
•the Opportunities and Risks section, as contained in
this annual report, provides a description of potential
material risks facing DELTA N.V.
Middelburg, 6 April 2016
The Executive Board,
Frank Verhagen
Management Board Report 2015 DELTA N.V.
47
2
Financial statements 2015
48
Financial statements
2015
DELTA N.V.
Inclusion of comparative information for 2014
Due to the sale of the waste operations and a large wind farm
in 2015, the presentation of comparative information in the
income statement has been expanded to ensure comparability
in line with IFRS 5. The income statement shows the information
as presented in DELTA N.V.’s financial statements 2014,
and as restated net of the sold operations. Accordingly,
the profits generated by the sold operations are aggregated
and shown within profit after tax from discontinued operations.
The restated information is identified by the reference ‘2014A’.
Financial statements 2015 DELTA N.V.
49
Financial statements 2015
Contents
Financial statements
Consolidated financial statements
51
Consolidated balance sheet as at 31 December 2015
52
Consolidated income statement
53
Consolidated statement of comprehensive income
54
Consolidated statement of changes in equity
56
Consolidated cash flow statement
57
Accounting policies
58
Notes to the consolidated balance sheet
72
Notes to the consolidated income statement
108
Notes to the consolidated cash flow statement
120
Post-balance-sheet events
121
Consolidated companies
122
Non-consolidated companies
124
Company financial statements 2015
127
Company balance sheet as at 31 December 2015 128
Company income statement
129
Notes to the company financial statements 129
Notes to the company balance sheet
130
Notes to the company income statement 140
Other information
142
Profit appropriation
143
Independent auditors’ report
144
Statement
145
146
50
DELTA in key figures
Consolidated
financial statements 2015
Financial statements 2015 DELTA N.V.
51
Financial statements 2015
Consolidated balance sheet
(EUR 1,000)
REF. NR.
31-12-2015
31-12-2014
NON-CURRENT ASSETS
INTANGIBLE ASSETS
1
33,418
366,945
PROPERTY, PLANT AND EQUIPMENT
2
1,220,510
1,713,812
Joint ventures, associates and other investments
3
387,122
429,005
Loans to joint ventures, associates, etc.
4
13,044
14,269
Deferred tax assets
4
40,684
90,996
Other financial assets
4
124,403
109,262
Derivatives
5
42,174
78,679
607,427
722,211
1,861,355
2,802,968
6
88,973
106,318
FINANCIAL ASSETS
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
INVENTORIES
Trade receivables
7
154,495
339,668
Current tax assets
7
19,461
22,087
Onderhanden projecten voor derden
7
2,444
-
Other receivables
7
103,401
48,434
Derivatives
5
215,138
187,655
TOTAL RECEIVABLES
494,939
597,844
TOTAL CURRENT ASSETS
583,912
704,162
238,976
157,844
TOTAL ASSETS
CASH
2,684,243
3,664,974
Shareholders’ equity
1,041,482
1,100,608
Profit for the year
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF DELTA N.V.
(110,710)
930,772
3,760
1,104,368
8
Non-controlling interests
GROUP EQUITY
Provisions
Pension liabilities
Long-term debt
9
-
41,426
930,772
1,145,794
552,399
504,159
9
-
39,104
10
260,285
509,953
Deferred tax liabilities
11
13,122
64,375
Deferred revenue
11
61,676
84,880
Other non-current liabilities
11
24,252
43,007
Derivatives
5
NON-CURRENT LIABILITIES
102,306
133,806
1,014,040
1,379,284
313,626
Trade payables
12
166,683
Current tax liabilities
12
70,378
89,628
Deferred revenue
12
-
15,612
Work in progress for third parties
12
-
147
Current portion of provisions
12
94,992
64,855
Other liabilities
12
119,146
290,517
Bank borrowings
12
-
141,533
5
288,232
223,978
739,431
1,139,896
2,684,243
3,664,974
Derivatives
CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
The 2014 information included Indaver and the Kreekraksluis wind farm.
52
Consolidated income statement
REF. NR.
2015
2014A
2014
REVENUE
13
1,298,680
1,410,343
1,930,836
COST OF SALES
14
(1,062,809)
(994,539)
(1,141,576)
235,871
415,804
789,260
(EUR 1,000)
GROSS OPERATING MARGIN
Other gains and losses (third parties)
15
12,096
8,839
29,230
Fair value gains and losses on the trading portfolio
16
4,273
(615)
(615)
252,240
424,028
817,875
GROSS MARGIN
Third-party services
17
105,732
113,598
275,997
Staff costs
18
129,302
143,595
258,044
Depreciation, amortisation and impairment
19
105,239
109,795
275,857
Other operating expenses
20
13,826
14,880
16,278
354,099
381,868
826,176
(101,859)
42,160
(8,301)
37,760
33,551
41,209
(64,099)
75,711
32,908
(31,631)
(23,201)
(32,736)
(95,730)
52,510
172
(28,405)
(10,766)
(15,959)
(124,135)
41,744
(15,787)
13,425
(37,984)
642
(110,710)
3,760
(15,145)
-
-
(18,905)
(110,710)
3,760
3,760
TOTAL NET OPERATING EXPENSES
EARNINGS FROM OPERATIONS
Share in results of joint ventures and associates
21
OPERATING RESULT
Net finance income (expense)
22
PROFIT BEFORE TAX
Corporate income tax
23
PROFIT AFTER TAX FROM CONTINUING OPERATIONS
Profit after tax from discontinued operations
PROFIT FOR THE YEAR
24
ATTRIBUTABLE TO:
Non-controlling interests
SHAREHOLDERS OF DELTA N.V.
Financial statements 2015 DELTA N.V.
53
Financial statements 2015
Consolidated statement of comprehensive income
(EUR 1,000)
PROFIT AFTER TAX FOR THE YEAR
2015
2014A
(110,710)
3,760
OTHER COMPREHENSIVE INCOME:
TOTAL OTHER COMPREHENSIVE
INCOME NOT TRANSFERRED
TO INCOME STATEMENT
-
-
- ITEMS TO BE TRANSFERRED
TO INCOME STATEMENT
Effective portion of gains and
losses on cash flow hedges
Energy deravitives
Reclassification adjustments
(83,256)
(47,326)
29,645
13,745
(53,611)
Interest rate derivatives
Reclassification adjustments
(33,581)
23
(18,700)
6,369
6,362
6,392
(Deferred) corporate income tax
(12,338)
(1,598)
(145)
(48,817)
(46,064)
Share of other comprehensive
income of joint ventures and
associates
Share of other comprehensive
income of joint ventures and
associates
Reclassification adjustments
(Deferred) corporate income tax
959
436
-
-
959
436
-
959
436
Other movements
Other movements
Reclassification adjustments
(Deferred) corporate income tax
1
2
(29)
-
(28)
2
-
(28)
CARRY OVER
54
(47,886)
2
- (110,710)
(45,626)
-
3,760
CARRIED OVER
(47,886)
Other comprehensive income of
assets held for sale
TOTAL OTHER COMPREHENSIVE
INCOME TO BE TRANSFERRED
TO INCOME STATEMENT
Total other comprehensive income
TOTAL COMPREHENSIVE INCOME
- (110,710)
-
(45,626)
-
3,760
(1,846)
(47,472)
(47,886)
(47,886)
(47,472)
(158,596)
(43,712)
-
-
(158,596)
(43,712)
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Non-controlling interests
SHAREHOLDERS OF DELTA N.V.
For an explanation of movements in energy and interest-rate
derivatives, please refer to Section 5 in the Notes to the
consolidated balance sheet.
Financial statements 2015 DELTA N.V.
55
Financial statements 2015
Consolidated statement of changes in equity
(EUR 1,000)
CARRYING AMOUNT AS AT
31 DECEMBER 2013
Profit appropriation for 2013
Payment of dividend
Other changes
Transfer to liablilities due
to put options
Total comprehensive income
CARRYING AMOUNT AS AT
31 DECEMBER 2014
Profit appropriation for 2014
Payment of dividend
Other changes
Change in consolidation scope
Total comprehensive income
CARRYING AMOUNT AS AT
31 DECEMBER 2015
TOTAL
PAID-UP STATUTORY
CAPITAL
RESERVE
HEDGE
RESERVE
REVALUAOTHER UNAPPRONONPRIATED CONTROLTION RESERVES
PROFIT
RESERVE
LING
INTERESTS
1,213,429
6,937
214,866
(34,658)
(4,724)
910,868
74,788
45,352
-
-
-
-
-
54,788
(54,788)
-
(20,000)
-
-
-
-
-
(20,000)
-
61
-
(5,488)
1
-
5,490
-
58
16,424
-
-
-
-
-
-
16,424
(64,120)
-
436
(45,321)
(2,587)
-
3,760
(20,408)
1,145,794
6,937
209,814
(79,978)
(7,311)
971,146
3,760
41,426
-
-
-
-
-
(11,240)
11,240
-
(15,000)
-
-
-
-
-
(15,000)
-
-
-
(38,900)
(32)
8,052
30,880
-
-
(41,426)
-
-
-
-
-
-
(41,426)
(158,596)
-
930
(48,816)
-
- (110,710)
-
930,772
6,937
171,844 (128,826)
741
990,786 (110,710)
-
The statutory reserve comprises undistributed profits of
associates and is therefore not freely distributable. This also
applies to the hedge reserve, which should be seen in relation
to unrealised income from fair value changes in derivatives
used for hedging purposes.
The transfer to liabilities arising from put options
concerned third-party minority interests in Indaver N.V.
These shareholders owned a 25% interest and had been
granted a put option. This liability no longer existed on the
balance-sheet date.
Fair value changes in derivatives after tax are shown within
the hedge reserve. For more information, please refer to
Section 5 Principles for the valuation of financial instruments,
and 5.1.3. of the Notes to the consolidated balance sheet.
Other non-distributable reserves comprise, amongst other
things, a revaluation reserve for derivatives.
Non-controlling interests in DELTA N.V.’s consolidated equity
mainly comprised the minority share interest owned by NEIF
(NIBC European Infrastructure Fund) in the German-based
waste processing company Indaver Deutschland GmbH.
Other reserves mainly comprise retained earnings.
56
Consolidated cash-flow statement (prepared according to the indirect method)
(EUR 1,000)
2015
2014
(101,860)
(8,301)
(4,273)
615
FROM OPERATING ACTIVITIES
Earnings from operations
Fair value gains and losses on the trading portfolio
Adjustment for deferred income
Depreciation, amortisation and impairment
Provisions
Inventories
7,146
(4,004)
105,239
275,857
69,534
(63,783)
865
(18,523)
77,125
44,739
Trade payables
(69,005)
(27,423)
Other receivables/payables
(90,305)
7,961
1,067
4,856
(4,467)
211,994
Trade receivables
Other
FROM OPERATING ACTIVITIES
Cash flows arising from dividends received from joint ventures and associates
34,683
35,664
(12,314)
(20,178)
Cash flows from taxes on profits
(3,555)
(16,508)
CASH FLOW FROM OPERATING ACTIVITIES
14,347
210,972
(87,885)
(101,925)
(2,291)
(5,825)
Cash flows from finance income and expense
FROM INVESTING ACTIVITIES
Acquisition and disposal of intangible assets and property, plant and equipment
(after deduction of cash acquired)
Acquisition of investments in subsidiaries and associates and interests in
joint ventures (after deduction of cash disposed)
Disposal of investments in subsidiaries and associates and interests in joint ventures
452,899
485
Other financial assets
(21,217)
(8,435)
CASH FLOW FROM INVESTING ACTIVITIES
341,506
(115,700)
FREE CASH FLOW BEFORE DIVIDEND
355,853
95,272
(35,823)
20,535
FROM FINANCING ACTIVITIES
Bank borrowings
Long-term liabilities
Paying off borrowings
Dividend payments
CASH FLOW FROM FINANCING ACTIVITIES
MOVEMENTS IN NET CASH FLOW DURING THE YEAR
Cash as at 1 January
-
20,000
(223,898)
(132,078)
(15,000)
(20,000)
(274,721)
(111,543)
81,132
(16,271)
157,844
174,115
81,132
(16,271)
Cash as at 31 December
238,976
157,844
Derecognition of Indaver debt (due to sale)
127,961
-
MOVEMENTS IN NET DEBT
466,272
74,133
Movements in cash position
The 2014 information included Indaver and the Kreekraksluis wind farm.
Financial statements 2015 DELTA N.V.
57
Financial statements 2015
Accounting
policies
DELTA N.V. is a public limited liability company organised
and existing under Dutch law and the parent company of a
number of subsidiary companies involved in:
•energy generation, transmission, trading, and supply;
•the delivery of cable services for analogue and digital TV,
the Internet, and mobile and digital telephony;
•the development and production of renewable energy,
including wind power, and water services.
With a view to these activities, the Group owns interests in
a number of joint arrangements, associates and other
investments.
DELTA N.V.’s shareholders are the Zeeland provincial
authorities, the towns and cities in Zeeland, several towns
and cities in the provinces of Zuid-Holland and Noord-Brabant,
and the Zuid-Holland and Noord-Brabant provincial authorities.
DELTA N.V.’s registered office is situated at
Poelendaelesingel 10, Middelburg, The Netherlands.
The following changes occurred within the group during 2015:
•the share interest in EDSN B.V. was increased from 1.65%
to 2.47% on 26 February 2015;
•DNWB acquired a 50% share interest in TeslaN B.V. on
12 March 2015;
• The Kreekraksluis wind farm was sold on 15 June 2015;
• Indaver N.V. was sold on 19 June 2015;
•Electrorisk Verzekeringsmaatschappij N.V. ceased its
operations on 23 June 2015;
• Sloe Centrale 3 B.V. was liquidated on 15 October 2015;
• DWK II B.V. was incorporated on 24 November 2015;
58
•Windpark Kloosterboer II Beheer B.V. was incorporated
on 24 November 2015;
•Windpark Kloosterboer II C.V. was incorporated on
25 November 2015;
•DELTA Personeel B.V. changed its name to DELTA Infra
Water B.V. on 27 November 2015;
•Windpark Distridam v.o.f. was dissolved on 28 December
2015;
•after the addition of new limited partners in late
December 2015, DELTA's interest in SET Fund II C.V.
(in which DELTA Investeringsmaatschappij B.V. is a
limited partner) stood at 20.54% at 31 December 2015.
The company’s functional currency is the euro. Unless
otherwise stated, all amounts are presented in thousands
of euros.
DELTA N.V. used the option available under Part 9, Book 2,
of the Dutch Civil Code to prepare the company financial
statements in accordance with the International Financial
Reporting Standards applied to the consolidated financial
statements, with the exception of equity-accounted group
companies and investments.
The company income statement is presented in abridged
form in accordance with Section 402, Title 9, Book 2, of the
Dutch Civil Code.
The financial statements 2015 were signed and released for
publication by the Supervisory Board on 6 April 2016.
The Supervisory Board will present the financial statements
for adoption by the General Meeting on 26 May 2016.
1.Compliance with IFRSs and summary of changes
in IFRS recognition and measurement rules
The company’s consolidated financial statements have been
prepared in compliance with the International Financial
Reporting Standards (IFRSs) issued by the International
Accounting Standards Board (IASB) and the interpretations
issued by the IFRS Interpretations Committee (IFRS IC) of the
IASB, as endorsed by the European Commission (EC) up to
and including 31 December 2015.
Compliance with recognition and going concern principles
The basic principles of accounting (recognition and going
concern principles) have been complied with. In terms of the
continuity assumption, management has made an assessment
so as to be satisfied that the company will continue in operation
in the foreseeable future. Management is satisfied that the
company has neither the intention nor the need either to
liquidate it or radically downsize its operations. At the time
of assessing, the liquidity position of the different group
companies, including committed borrowing facilities, were
sufficient to meet existing obligations in the foreseeable
future. On the instructions of the Dutch Consumer and
Markets Authority (ACM), the mandatory hive-off of the grid
operations (Enduris) must take place no later than 1 July
2017. The possibilities for recapitalising and restructuring
the DELTA Group, which are currently being explored, will
allow the different group companies to continue in operation
prior to that date.
Assets and liabilities are recognised on the assumption that
the entity will be able to realise its assets and will be able to
satisfy its liabilities in the normal course of business.
Adopted new standards and/or improvements
New standards and/or supplements/improvements in
relation to the previous financial year were issued by the
IASB and approved by the European Commission for
adoption within the European Union. Changes not yet
adopted by the EC are omitted from the summary below.
1.1. D
ELTA adopted the following new standards and
improvements in its financial statements 2015
1) IFRIC 21 Levies
The objective of IFRIC Interpretation 21 is to provide guidance
on how to properly account for levies that fall within the scope
of IAS 37 Provisions, Contingent Liabilities and Contingent
Assets, so as to make it easier for users to compare financial
statements. More specifically, it answers the question as to
when to recognise a liability for the payment of a levy that is
accounted for in accordance with IAS 37.
2)Annual improvements to IFRSs, 2011-2013 Cycle
(originally published by the IASB on 12 December 2013).
The following approved amendments to IFRS 3 and IFRS 13
constitute clarifications or corrections.
• IFRS 3 Business Combinations
This amendment affects the scope. The definition of the
scope was adjusted to reflect the definitions in IFRS 11 Joint
Arrangements.
IFRS 3 excludes from its scope the accounting for the
formation of a joint arrangement in the financial statements
of the joint arrangement itself.
• IFRS 13 Fair Value Measurement
This amendment clarifies the scope of the ‘portfolio exception’.
It provides that the portfolio exception includes all contracts
accounted for within the scope of IAS 39 Financial Instruments:
Recognition and Measurement, regardless of whether they
meet the definition of financial assets or financial liabilities
in IAS 32 Financial Instruments: Presentation.
The following approved amendments to 40 concern changes
to existing requirements or additional guidance to comply
with those requirements.
• IAS 40 Investment Property
This amendment concerns the classification of property as
investment property or as property for own use, and clarifies
the relationship between IAS 40 Investment Property and
IFRS 3 Business Combinations.
1.2. DELTA did not adopt the following new standards
and improvements in its financial statements
2015. Adoption is mandatory for annual periods
beginning on or after 1 January 2016.
1)Annual improvements to IFRSs, 2010-2012 Cycle
(originally published by the IASB on 12 December 2012).
Effective for annual periods beginning on or after 1 February
2015. For DELTA, that will be the 2016 financial year.
The following approved amendments to IFRS 2 and IFRS 3
concern changes to existing requirements or additional
guidance to comply with those requirements.
• IFRS 2 Share-based Payment
This amendment provides a clarification of the definition of
‘vesting condition.’
Financial statements 2015 DELTA N.V.
59
Financial statements 2015
• IFRS 3 Business Combinations
Clarifies the accounting for ‘contingent consideration’ in a
business combination. This clarification also affects IAS 37
Provisions, Contingent Liabilities and Contingent Assets and
IAS 39 Financial Instruments: Recognition and Measurement.
The following approved amendments to IFRS 8, IAS 16,
IAS 24 and IAS 38 constitute clarifications or corrections.
• IFRS 8 Operating Segments
Requires the entity to disclose the judgments made by
management in applying to operating segments the
aggregation criteria listed in IFRS 8.12.
• IFRS 8 Operating Segments
Clarifies the provisions set out in IFRS 8.28 regarding the
‘reconciliations’ to be provided.
• IAS 16 Property, Plant and Equipment
The amendments concern the ‘revaluation method.’
• IAS 24 Related Party Disclosures
The amendments concern ‘key management personnel.’
IAS 24 was found to be unclear about the disclosures to be
provided about key management personnel who were not
employees of the reporting entity.
The definition of related parties has been widened. A related
party of the reporting entity includes ‘the entity, or any member
of a group of which it is a part, provides key management
personnel services to the reporting entity or to the parent of
the reporting entity.'
The reporting entity’s obligations to furnish detailed
information on key management personnel compensation
in total and for the different categories have been relaxed
for those situations in which the compensation is paid to a
separate ‘management entity’ (an entity which provides key
management personnel services). Instead, the reporting
entity discloses the amounts it incurred for the provision of
key management personnel services delivered by the
separate management entity.
• IAS 38 Intangible Assets
The amendments concern the ‘revaluation method.’
2)Amendments to IAS 19 Employee Benefits, Defined
Benefit Plans: Employee Contributions.
Effective for annual periods beginning on or after 1 February
2015. For DELTA, that will be the 2016 financial year.
The amendments are intended to simplify and clarify the
accounting for employee or third-party contributions to
defined benefit plans.
3)Amendments to IAS 16 Property, Plant and Equipment,
and IAS 41 Agriculture: Bearer Plants
4)Amendments to IFRS 11 Joint Arrangements:
Accounting for Acquisitions of Interests in Joint Operations
60
The amendments provide new guidance on the accounting
treatment of an acquisition of an interest in a joint operation
in which the activity of the joint operation constitutes a
business. IFRS 11 now requires such transactions to be
accounted for using the principles related to business
combinations accounting in IFRS 3 Business Combinations
and other standards.
5)Amendments to IAS 16 Property, Plant and Equipment,
and IAS 38 Intangible Assets: Clarification of Acceptable
Methods of Depreciation and Amortisation:
Due to divergent practices, it is necessary to clarify whether
it is appropriate to use revenue-based methods to calculate
the depreciation or amortisation of an asset.
•IAS 16: A depreciation method that is based on revenue
that is generated by an activity that includes the use of
an asset is not appropriate.
•IAS 38: There is a rebuttable presumption that an
amortisation method that is based on the revenue
generated by an activity that includes the use of an
intangible asset is inappropriate. This presumption can
be overcome only in the limited circumstances:
a) In which the intangible asset is expressed as a
measure of revenue. In the circumstances in which
the predominant limiting factor that is inherent in an
intangible asset is the achievement of a revenue
threshold, the revenue to be generated can be an
appropriate basis for amortisation;
b) When it can be demonstrated that revenue and the
consumption of the economic benefits of the intangible
asset are highly correlated.
6)Annual improvements to IFRSs, 2012-2014 Cycle
(originally published by the IASB on 24 September 2014).
The amendments concern:
• IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations
The changes are related to changes to a plan of sale or to a
plan of distribution to owners. If an entity has classified an
asset (or disposal group) as held for sale or as held for
distribution to owners, but the criteria mentioned in IFRS 5
are no longer met, the entity shall cease to classify the asset
(or disposal group) as held for sale or held for distribution to
owners ( respectively). The amendments describe how to
account for in this situation.
• IFRS 7 Financial Instruments: Disclosure
The amendment provides additional guidance to clarify
whether a servicing contract is continuing involvement in a
transferred asset for the purpose of disclosures required in
relation to transferred assets. When an entity transfers an
financial asset, the entity may retain the right to service that
financial asset for a fee that is included in, for example,
a servicing contract. The entity assesses the servicing contract
in accordance with the guidance to decide whether the entity
has continuing involvement as a result of the servicing
contract for the purposes of the disclosure requirements.
• IFRS 7 Financial Instruments: Disclosure
The amendments clarify that the offsetting disclosures are
not explicitly required for all interim periods. However, the
disclosures may need to be included in condensed interim
financial statements to comply with IAS 34 Interim Financial
Reporting.
that i) will not be reclassified subsequently to profit or loss
and ii) will be reclassified subsequently to profit or loss when
specific conditions are met.
- Notes. Clarifies that entities have flexibility when designing
the structure of the notes and provides guidance on how to
determine a systematic order of the notes.
• IAS 19 Employee Benefits
Amendment IAS19.83 regarding actuarial assumptions:
discount rate. The discount rate shall be determined by
reference to market yields at the end of the reporting period
on high-quality corporate bonds. For currencies for which
there is no deep market in such high-quality corporate bonds,
the market yields at the end of the reporting period on
government bonds denominated in that currency shall be
used. The amendments to IAS 19 clarify that the high-quality
corporate bonds used to estimate the discount rate for
post-employment benefits should be issued in the same
currency as the benefits to be paid.
8)Amendments to IAS 27 Separate Financial Statements:
Equity Method in Separate Financial Statements
The objective of the amendments is to permit entities to use
the equity method, as described in IAS 28, Investments in
Associates and Joint Ventures, to account for investments in
subsidiaries, joint ventures and associates in their separate
financial statements.
• IAS 34 Interim Financial Reporting
Concerns consistency and cross-reference between interim
financial statements to some other statements (such as
management commentary or risk report) that is available to
users of the financial statements on the same terms as the
interim financial statements and at the same time. If users of
the financial statements do not have access to the information
incorporated by cross-reference on the same terms and at the
same time, the interim financial report is incomplete.
Taking into account the amendments to IAS 27, when an
entity prepares separate financial statements, it shall
account for investments in subsidiaries, joint ventures and
associates either
a) at cost,
b) in accordance with IFRS 9 Financial Instruments or,
as long as IFRS 9 has not been adopted by the EU,
in accordance with IAS 39 (Financial Instruments:
Recognition and Measurement), or
c) using the equity method as described in IAS 28.
7)Amendments to IAS 1 Presentation of Financial
Statements: Disclosure Initiative
The amendments aim to improve the effectiveness of
disclosure and to encourage companies to apply professional
judgement in determining what information to disclose in
their financial statements when applying IAS1.
The amendments concern:
- M
ateriality and aggregation. This clarifies that an entity
should not obscure useful information by aggregating or
disaggregating information. Materiality considerations
apply to the primary statements, notes and any specific
disclosure requirements in IFRSs. Disclosures specifically
required by IFRSs need not be provided if the information
is not material.
- I nformation to be presented in the statement of financial
position (balance sheet, income statement and statement
of other comprehensive income). Additional line items
(including by disaggregating the line items listed in IAS 1),
headings and subtotals shall be presented when such
presentation is relevant to an understanding of the entity’s
financial position.
- I nformation to be presented in the other comprehensive
income. In the other comprehensive income shall be
presented (separately from the rest of other comprehensive
income) line items of the share of the other comprehensive
income of associates and joint ventures accounted for
using the equity method, separated into the share of items
Financial statements 2015 DELTA N.V.
61
Financial statements 2015
2. General accounting policies
2.1 Estimates and assumptions
The preparation of financial statements entails the use of
estimates and assumptions based on past experience and on
factors considered acceptable in management’s judgement.
These estimates relate primarily to the proceeds from the sale
and transmission of gas and power to domestic consumers
due to staggered meter readings, deferred tax assets,
and the level of provisions. These estimates and assumptions
will affect the information in the financial statements and
the actual figures may be different. The effects of changes
in estimates are recognised prospectively in the income
statement. Changes in estimates may also lead to changes
in assets and liabilities or equity components. Such changes
in estimates are recognised in the period in which they occur.
Any specific disclosures about estimates and assumptions
are provided in the notes to the balance sheet and income
statement. The provision for unprofitable contracts,
in particular, may be affected by future estimates because
commodity markets are volatile. Although this provision is
based as much as possible on existing contracts and positions,
estimated movements in commodity prices (electricity, gas,
CO2) are a key influencing factor. Expected future price
paths are based on the latest, independent Pöyry power
price forecasts (mid-prices) at the balance-sheet date.
These forecasts are, in turn, based on in-depth market and
regulatory analyses performed by this firm. Still, these price
sets are projections as well.
2.2 Impairment of assets
Tests are conducted annually to check for indications that
assets may be impaired. If that is the case, an estimate is
made of the asset’s recoverable amount, which is the higher
of its fair value less costs to sell and its value in use. If the fair
value less costs to sell leads to unavoidable costs, a liability
is recognised. Value in use is measured as the present value
of the estimated future cash flows, based on the business
plans drawn up internally and approved by the Executive
Board, using a pre-tax discount rate that reflects current
market interest rates. Specific risks relating to the asset or
the cash-generating unit are incorporated into the estimated
future cash flows. Annual impairment tests are conducted
for recognised goodwill.
An impairment loss is recognised if the carrying amount of
an asset or the cash-generating unit to which the asset belongs
exceeds its recoverable amount.
The impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the cash-generating unit
(or group of units) and then to reduce the carrying amounts
of the other assets of the unit (or group of units) on a pro rata
62
basis. The carrying amount of an asset should not be reduced
to below its recoverable amount.
An impairment loss is reversed if it there has been a change
in the basis on which the recoverable amount was previously
determined. An impairment loss is reversed only to the extent
that the carrying amount of the asset due to reversal does not
exceed its carrying amount less depreciation or amortisation
if no impairment loss had been recognised. An impairment
loss or reversal of an impairment loss is recognised in profit
or loss. Impairment losses for goodwill are not reversed.
2.3 Measurement of financial instruments
Unless stated otherwise in the notes to the individual items
in the financial statements, management believes that the
carrying amounts of financial instruments are reasonable
approximations of the fair value of those instruments.
2.4 Government grants
Government grants are recognised as soon as it is reasonably
certain that the conditions for obtaining the grant have been
or will be met and the grants have been or will be received.
When investment projects are capitalised, grants received and
contributions to the construction costs are deducted from
the acquisition cost of the assets.
Operating grants are shown within revenue. Subsidies in the
form of tax breaks are factored into the calculation of the
taxable amount.
2.5 Foreign currency
Assets and liabilities denominated in foreign currencies are
translated into euros at the exchange rates prevailing at the
end of the reporting period. Differences arising from movements
in exchange rates are recognised in profit or loss, unless relating
to the net investment in foreign entities, in which case they are
recognised in equity as part of other comprehensive income.
Income and expenses denominated in foreign currencies are
translated into euros at the exchange rates prevailing at the
time of the transaction.
2.6 Taxation
2.6.1 Income taxes
Income taxes comprise current taxes and movements in
deferred taxes. These amounts are taken to the income
statement or recognised in equity as part of other
comprehensive income.
Current taxes comprise amounts that are probably due and
capable of being offset against the taxable profit for the year.
They are calculated on the basis of the prevailing tax
legislation and rates.
2.6.2 Deferred taxes
Deferred taxes are recognised for differences between the
carrying amount and the tax base of assets and liabilities.
Deferred taxes are measured at the tax rates that are expected
to apply to the period when the asset is realised or the liability
is settled, based on the prevailing tax legislation and rates.
Deferred taxes are stated at face value. Deferred tax assets
are recognised only if and to the extent that it is probable that
sufficient taxable profits and/or other temporary differences
will be available against which they can be utilised.
A deferred tax asset is recognised for unused tax losses and
unused tax credits if and to the extent that it is probable that
taxable profits will be available against which such unused
losses or credits can be utilised.
2.7 Comparative information
Comparatives are adjusted, where necessary, for
presentation purposes. However, these are minimal and
non-material adjustments.
Financial statements 2015 DELTA N.V.
63
Financial statements 2015
3. Basis of consolidation
The consolidated financial statements comprise the financial
information of DELTA N.V. and its group companies.
Group companies are legal entities and companies over
which control is exercised in terms of their governance and
operational and financial policies. IFRS 10 provides that an
investor controls an investee if the investor is exposed,
or has rights, to variable returns from its involvement with
the investee and has the ability to use its power over the
investee to affect the amount of the investor’s returns.
Existing and potential voting rights that were exercisable
or convertible as at the balance-sheet date are considered
when determining whether DELTA N.V. controls an entity.
Any other agreements that allow DELTA N.V. to determine
operating and financial policy are also taken into account.
Group companies are included in the consolidation from the
date when control is obtained.
Consolidation is discontinued from the date when control
over the group company ceases.
Group companies are fully consolidated, with 100% of their
equity and profits included in the consolidation. If the share
interest in a group company is less than 100%, the noncontrolling interest is shown separately in the balance sheet
and income statement.
Joint arrangements are recognised in proportion to DELTA’s
(group company’s) interest in the arrangement if the
arrangement involves a joint operation. They are included in
the consolidation from the date when the arrangement is
made. Consolidation discontinues from the date when the
arrangement ceases.
Joint arrangements that take the form of ‘joint operations’
are consolidated according to the partial method.
The investor recognises its interest in the joint operation in
its consolidated financial statements as follows:
64
•Assets to which the investor has direct rights are
recognised fully in the financial statements;
•Liabilities for which the investor is directly responsible
are recognised fully in the financial statements;
•Revenue from the sale of the investor's share of the
output of the joint operation by the joint operation itself
is recognised fully in the financial statements (the joint
operation itself being responsible for the sale of the
output);
•Revenue from the sale of the investor's share of the
output of the joint operation by the investor is recognised
fully in the financial statements;
•Expenses allocated directly to the investor are fully
recognised in the financial statements;
•Assets, liabilities, revenue and expenses that are not
directly attributable to the investors are allocated to the
investors indirectly in proportion to their interest in the
joint operation.
Joint arrangements that take the form of ‘joint ventures’ are
accounted for according to the equity method.
Associates are also recognised using the equity method.
The acquisition of a group company is accounted for using
the purchase accounting method. The accounting policies
adopted by group companies are adjusted, where necessary,
to ensure consistency with the policies applied by DELTA.
In the case of put options, the corresponding non-controlling
interests are classified as current or non-current liabilities.
Scope of consolidation
The financial statements include a separate overview of the
main subsidiaries, associates and joint ventures, including
the relevant share interests.
4. Basis of recognition and measurement of assets and liabilities
The financial statements have been prepared according to
the historical cost convention, with the exception of derivatives
(financial instruments), which are carried at fair value, and
the differences referred to below. All transactions in financial
instruments are accounted for on the transaction date.
4.1 Intangible assets
Intangible fixed assets comprise goodwill paid, development
costs, software, and acquired transport rights.
Goodwill
Goodwill represents the positive difference between the
acquisition cost of a group company and the fair value of
the acquisition. Goodwill paid on the acquisition of a group
company or joint arrangement is recognised as an intangible
fixed asset. Goodwill paid on the acquisition of an interest
in a joint venture or investment in an associate is included in
the cost of the interest or investment. If the cost is lower
than the fair value of the identifiable assets, liabilities and
contingent liabilities acquired (negative goodwill),
the difference is recognised directly in profit or loss.
The carrying amount of goodwill is measured at historical
cost less accumulated impairment losses. Goodwill is not
amortised. Annual impairment tests are conducted to identify
any impairment of goodwill. For the purposes of these tests,
goodwill is allocated to cash-generating units. If a transaction
qualifies as a transaction between owners, the difference
between the acquisition cost and fair value is recognised in
equity.
Development costs
Development expenditure is measured at historical cost and
amortised over a period of 10 years according to the pattern
of the additional cash flows generated by the acquired
process knowledge.
Software
Capitalised software is carried at historical cost less
amortisation. Amortisation is on a straight-line basis over
a period of 5 years. The useful life is assessed annually,
with any adjustments being accounted for prospectively.
Transport rights
Transport rights are measured at cost and amortised on a
straight-line basis over a period of 20 years. The useful life
is assessed annually, with any adjustments being accounted
for prospectively.
4.2 Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation on a straight-line basis over its
estimated useful life, determined on the basis of technical
and economic criteria, taking account of its estimated residual
value, less any accumulated impairment losses. Land is
not depreciated. In accordance with IFRIC 18, third-party
contributions to the construction costs of an item of property,
plant or equipment are no longer deducted from the carrying
amount of the asset; instead, they are recognised within
deferred revenue (liability).
External financing expenses for assets (construction period
interest) are included in the cost if they can be allocated
directly to the asset.
If an asset consists of various components with different
depreciation periods and residual values, the components
are recognised separately. Investments to replace components
are capitalised, with the replaced component being written
down simultaneously. Estimated useful lives and estimated
residual values are assessed annually when the business
plan is prepared. If an impairment test shows an impairment
loss, the carrying amount is adjusted accordingly.
Property, plant and equipment under construction is stated
at costs incurred as at the balance-sheet date, including
the costs of materials and services, direct staff costs,
an appropriate share of directly attributable overhead costs,
and the financing costs allocated directly to the asset.
4.3 Financial fixed assets
General
A business combination involves bringing together separate
entities or businesses into one reporting entity.
Business combinations are accounted for using the acquisition
method. Steps in applying the acquisition method are:
1. Identification of the acquirer;
2. Measurement of the cost of the business combination;
3.Allocation of the cost of the business combination as at
the acquisition date.
The cost of a business combination is the aggregate of the
acquisition-date fair values of the assets acquired, liabilities
incurred or assumed and equity instruments issued by the
acquirer. Under IFRS 3 (as approved by the EU in 2004),
the aggregate is increased by the costs directly attributable
to the business combination. With the revision of IFRS 3
(applied since 2009), the costs directly attributable to the
acquisition are no longer shown within the cost of the
Financial statements 2015 DELTA N.V.
65
Financial statements 2015
business combination, but recognised directly in profit or
loss. Goodwill is measured as the value by which the cost of
the business combination exceeds the acquirer’s interest in
the net fair value of identifiable assets, liabilities and
contingent liabilities.
Negative goodwill is recognised directly in profit or loss,
and non-controlling interests are recognised in equity.
Joint ventures, associates and other investments
•Joint ventures are joint arrangements whereby the parties
that have joint control of the arrangement have rights to
the net assets of the arrangement. The parties are called
joint venturers.
• A
joint operation is a joint arrangement whereby the parties
that have joint control of the arrangement (such as DELTA
N.V. or any of its subsidiaries) have rights to the assets,
and obligations for the liabilities, relating to the
arrangement. These parties are called joint operators.
In the case of a joint operation, DELTA recognises a
proportion of the assets and liabilities, revenue and
expenditure equivalent to its interest in the joint operation;
its share in the joint operation’s equity is therefore not
recognised as a financial fixed current asset.
•Associates are entities over which DELTA N.V. exercises
significant influence, whether directly or indirectly,
but which it does not control. Generally speaking, this
is the case if DELTA N.V. can exercise between 20% and
50% of the voting rights.
•Other investments are non-associated investments in
which DELTA N.V. has an interest of less than 20%.
The financial statements include an overview of the main
joint arrangements and investments.
Valuation of joint ventures, associates and other investments
Investments in joint ventures and associates are recognised
in the consolidated financial statements using the equity
method. Under the equity method, on initial recognition the
investment is recognised at cost, i.e. the fair value of the
underlying assets and liabilities, including goodwill. If the
fair value exceeds the cost, the positive difference is added
to the carrying of the investment. The share of profits or losses
is recognised in the carrying amount each year and dividend
distributions are deducted. If the (cumulative) losses of the
joint venture and/or associate lead to a negative book value,
these losses are not recognised, unless DELTA N.V. has an
obligation to clear these losses or has made payments to do so.
Movements in other investments are shown within other
comprehensive income, unless they involve a permanent
impairment, which is then recognised directly in profit or loss.
If insufficient information is available, valuation is at cost.
Undistributed profits of joint ventures and associates and
direct increases in equity at a joint venture or associate which
66
cannot readily be distributed are added to the statutory reserve.
The accounting policies of joint ventures and investments are
adjusted, where necessary, to ensure consistent application
of the accounting policies throughout the DELTA group.
Loans to other investees
On initial recognition, loans to investees or third parties are
stated at fair value and, subsequently, at amortised cost.
Amortised cost is usually equivalent to the face value of the
loans because they are short-term. Where necessary, a provision
is recognised for bad debts and deducted from this value.
4.4 Inventories
Inventories are stated at the lower of weighted average cost,
based on first-in first-out (FIFO), and net realisable value,
less a provision for obsolescence. Impairment losses on
inventories are recognised as an expense and disclosed
separately.
4.5 Receivables
On initial recognition, trade receivables are stated at fair
value and, subsequently, at amortised cost less impairment
losses. Amortised cost is usually equivalent to the face value
of receivables because they are short-term.
4.6 Construction contracts
DELTA applies the percentage-of-completion method to
measure and recognise contract cost and revenue in the
income statement for the reporting period. The stage of
completion is based on production measurements.
Contracts in progress are recognised at cost less a provision
for probable losses and invoiced instalments. Profits are
recognised in proportion to the percentage of completion
if they can be reliably measured.
4.7 Derivatives
Information on derivatives accounting is provided in Section
5 Basis of recognition and measurement of financial
instruments.
4.8 Cash and cash equivalents
Cash includes not only cash but also cash equivalents that
can be converted into cash with no material risk of impairment.
Cash is stated at fair value.
4.9 Shareholders’ equity
Changes in shareholders’ equity are presented in the
consolidated statement of changes in equity. The company’s
authorised capital amounts to EUR 9,080,000, divided into
20,000 shares with a par value of EUR 454. At 31 December
2015, EUR 6,937,120 worth of shares had been issued and
paid up. Dividends are recognised as a liability in the period
in which they are declared. No changes occurred during the
year. None of the shares come with pre-emptive rights or
restrictions.
4.10 Provisions
Provisions are recognised for legally enforceable, present
obligations relating to operations. Provisions are carried at
the present value of the expected expenditure. The present
value is calculated using a pre-tax discount rate that reflects
current market assessments of the time value of money.
Expenditures expected to be incurred within one year of the
balance-sheet date are shown within current liabilities.
Provisions relating to pension liabilities and health insurance
costs are determined on an actuarial basis and comprise all
provisions for the business divisions sold in 2015.
4.11 Non-current liabilities
Non-current liabilities are measured at amortised cost using
the effective interest method. Repayment obligations for
non-current liabilities due within one year are shown within
current liabilities.
The non-current portion of deferred revenue is classified as
a non-current liability. The portion to be released during the
next reporting period is shown within current liabilities.
The portion relating to the current reporting period is shown
within revenue.
Financial statements 2015 DELTA N.V.
67
Financial statements 2015
5. Basis of recognition and measurement of financial instruments
5.1 Financial instruments
DELTA uses financial instruments to manage and optimise
normal market risks associated with the company’s
commodities, currency and interest-rate exposures.
DELTA applies IAS 32 Financial Instruments: Presentation and
IAS 39 Financial Instruments: Recognition and Measurement.
Under these standards, derivatives (derivative financial
instruments) are measured at fair value and trading contracts
are recognised in the income statement at fair value through
profit or loss.
Definition
A derivative is a financial instrument or other contract that falls
within the scope of IAS 39. It has the following three features:
•its value changes as a result of movements in a particular
interest rate, price of a financial instrument, commodity
price, exchange rate, or index of prices, interest rates or
other variables, provided that, in the case of non-financial
variables, the variable is not specific to a contract party
(also known as the ‘underlying asset’);
•no, or only a minor, net initial investment is required in
relation to other types of contract that respond in similar
ways to movements in market factors;
• settlement takes place in the future.
5.2 Derivatives
DELTA is involved in gas, electricity, coal, oil, emissions and
currency trading contracts for the current calendar year and
the following four years. DELTA considers the markets for these
commodities to be liquid over this time horizon because reliable
prices are available from brokers, markets, and data providers.
The fair value of a commodity contract is calculated according
to the DCF method using these prices; no in-house valuation
models are used. The monthly, quarterly and annual prices
published are adjusted only to reconcile them with the relative
periods in the trade systems. DELTA uses derivatives, such as
interest rate swaps, to hedge its interest rate risk exposure.
These swaps allow a floating rate to be exchanged for a fixed
rate. The fair value of interest-rate derivatives is also calculated
according to the DCF method, using a yield curve that is
based on data from the European Central Bank (ECB). IFRS 13
requires value changes in CVA/DVA to be reported in the
income statement as from 1 January.
Classification and netting
A derivative is classified as a current asset if its fair value
represents a gain and as a non-current liability if its fair value
represents a loss. Receivables and payables in respect of
derivatives for different transactions with the same counterparty
are netted, if there is a contractual or legally enforceable
68
right of set-off and DELTA also settles the relevant cash flows
on a net basis.
Recognition of fair value gains and losses
Under IAS 39, energy commodity contracts (electricity, gas,
coal, oil, emission allowances and related foreign exchange
exposures) and interest rate swaps are classified as derivatives.
Under IAS 32, IAS 39 and IFRS 7 Financial Instruments:
Disclosures, all derivatives are measured at fair value on
initial recognition.
As a general rule, fair value changes in derivatives are
recognised through profit or loss. The exceptions to this
rule are:
1. Own use: DELTA applies accrual accounting for commodity
contracts intended for its own use or production and for
sales and purchasing contracts entered into for the
purpose of delivering physical commodities to end users.
This means that any changes in value are not shown in
the income statement. These transactions are recognised
as sales or purchase transactions at the prevailing prices
at the time of settlement;
2a. Derivatives used to hedge an own-use contract.
Hedge accounting may be applied for these derivatives
on certain conditions;
2b. Interest rate derivatives. Hedge accounting may be
applied for these derivatives on certain conditions.
Hedge accounting
Hedge accounting allows the impact of fair value changes
on profit or loss to be mitigated by taking into account the
opposing effects on the profit or loss of fair value changes
in the hedges and the hedged items. Fair value gains and
losses on derivatives are recognised in equity (through the
statement of comprehensive income) until the hedged
position/transaction is settled.
DELTA uses derivatives to hedge price and currency risks
arising from energy commodity contracts (electricity, gas,
coal, oil, and carbon emissions).
Interest rate swaps are used to hedge the risk of cash-flow
volatility due to movements in interest rates. DELTA uses
cash-flow hedging, which involves entering into hedges to
mitigate its exposure to variability of existing and future cash
flows that could ultimately affect profit or loss. The hedges
are allocated to a specific risk relating to a balance-sheet
item or highly probable forecast transaction.
Criteria for applying hedge accounting
Hedge accounting is subject to strict rules in terms of
documentation and effectiveness testing. Hedge accounting
is permitted if a derivative meets the following criteria:
1.At the time of entering into the transaction, the derivative
is formally classified as a hedge, and the hedging
relationship, the objectives of the hedge, and the risk
management strategy are documented;
2.In the case of a cash-flow hedge, the forecast transaction
that is the subject of the hedge is highly probable and
expected to expose the entity to variability in existing or
future cash flows that could ultimately affect profit or loss;
3. The effectiveness of the hedge can be reliably measured;
4. The hedge is expected to be highly effective;
5.The hedge is assessed on an ongoing basis and
determined to have been highly effective.
Hedge effectiveness testing and recognition of changes
DELTA formally tests whether derivatives used as hedging
instruments have been highly effective in achieving offsetting
changes in fair value or cash flows attributable to the hedged
item, both at the inception of the hedge and during its life.
DELTA tests and determines whether changes in fair value
or cash flows attributable to the hedged item are offset by
changes in fair value or cash flows attributable to the hedging
instrument. A range of between 80% and 125% is used to
regard a hedging relationship as being effective.
The effective portion of fair value changes is recognised in
equity and shown within the hedge reserve (through the
statement of comprehensive income).
The ineffective portion of a hedging relationship, in a fair
value hedge, is the extent to which changes in the fair value
of the derivative differ from the changes in the fair value of
the hedged item or, in a cash flow hedge, the extent to which
changes in the fair value of the derivative differ from the fair
value change in the expected cash flow. Ineffective hedges,
the ineffective portion of a hedge and gains and losses on
components of derivatives that are disregarded when testing
the effectiveness of a hedge are recognised directly in the
income statement.
The cumulative amounts recognised in equity are taken to
the income statement in the same period as the hedged
transaction.
DELTA discontinues hedge accounting if the hedging
relationship is no longer effective or no longer expected to
remain effective.
Financial statements 2015 DELTA N.V.
69
Financial statements 2015
6. Accounting policies for the income statement
6.1 Revenue
6.2 Net operating expenses
Revenue represents income arising directly from the supply
of goods and services to third parties, net of any discounts
and net of sales taxes, such as VAT and regulating energy tax
(regulerende energiebelasting; REB) in the Netherlands.
Net operating expenses are measured on the basis of products
and services purchased and in accordance with the
measurement and depreciation rules set out above.
Expenses are allocated to the financial year in which they
are incurred. Gains are recognised in the year in which
they are realised; losses are recognised in the year in which
they are foreseeable.
Revenue is recognised when the material risks and benefits
of ownership of the goods have passed to the buyer.
Revenue from services is recognised in proportion to the
services delivered as at the end of the reporting period.
Recognition of revenue from transport services and the
supply of electricity and gas is based on supplies during
the calendar year.
Revenue from supplies to domestic and small-business users
is partly estimated as meter readings are taken throughout
the year.
Recognition of revenue from electricity sales is based on the
assumption that power generated by the group’s own
production facilities (including joint arrangements) and
third-party production facilities is supplied to third parties
if purchased in full, while power supplied to end-users is
procured entirely from third parties.
For gas and electricity trading contracts that do not involve
physical delivery, purchases and sales are netted if this was
contractually agreed.
Revenue from telecommunications covers subscription fees
for signal distribution as well as revenue from Internet
services, telephony, and other data transmission services.
Revenue from construction contracts is recognised in the
income statement using the percentage-of-completion method.
70
6.3 Net finance income (expense)
Finance income and expense is allocated to the period to which
it relates, using the effective interest method. Costs of
external financing associated with the construction or
acquisition of property, plant and equipment (construction
period interest) are capitalised as and when appropriate.
6.4 Discontinued operations
All financial consequences of final decisions to sell and
discontinue operations are shown within profit after tax from
discontinued operations.
Profits or losses on activities previously classified as
discontinued operations for the current year are also shown
within this item.
7. Accounting policies for the cash flow statement
The cash flow statement has been prepared according to the
indirect method, based on actual balance-sheet movements.
A distinction is made between operating, investing, and
financing activities. Although the current portion of
non-current liabilities is recognised in the balance sheet as
part of other current liabilities, movements in the current
portion of non-current liabilities is shown within the cash
flow from financing activities in the cash flow statement.
Cash flows relating to minority interests (dividend payments),
finance income or expense, and corporate income taxes (tax
assessments) are based on the actual receipts and payments.
Financial statements 2015 DELTA N.V.
71
Financial statements 2015
Notes to the
consolidated balance sheet
1. Intangible assets
(EUR 1,000)
TOTAL
GOODWILL
SOFTWARE
CUSTOMER TRANSMISSION
CONTRACTS
RIGHTS
OVERIG
2014
473,189
430,040
30,762
2,819
5,616
Investments
CARRYING AMOUNT AS AT 1 JANUARY
1,984
-
1,984
-
-
-
Depreciation
(12,959)
-
(8,966)
(2,811)
(1,182)
-
Impairments
(95,129)
(95,129)
-
-
-
-
(140)
38
(3,480)
7,254
-
(3,952)
CARRYING AMOUNT AS AT 31 DECEMBER
366,945
334,949
20,300
7,262
4,434
-
Accumulated depreciation and impairment
256,157
104,459
112,559
24,265
14,874
-
Acquisition cost as at 31 December
623,102
439,408
132,859
31,527
19,308
-
366,945
334,949
20,300
7,262
4,434
-
Other
3,952
2015
CARRYING AMOUNT AS AT 1 JANUARY
(332,077)
(325,106)
291
(7,262)
-
-
Investments
Change in consolidation scope
5,878
-
5,878
-
-
-
Depreciation
(7,325)
-
(6,143)
-
(1,182)
-
(3)
-
(3)
-
-
-
CARRYING AMOUNT AS AT 31 DECEMBER
33,418
9,843
20,323
-
3,252
-
Accumulated depreciation and impairment
124,941
3,161
105,724
-
16,056
-
ACQUISITION COST AS AT 31 DECEMBER
158,359
13,004
126,047
-
19,308
-
n/a
5
various
20
various
31-12-2015
31-12-2014
Indaver
-
323,716
Kreekraksluis
-
1,390
Zeelandnet
9,843
9,843
TOTAL GOODWILL
9,843
334,949
Other
Depreciation periods in years
ALLOCATION OF GOODWILL TO CASH-GENERATING UNITS
72
Goodwill
Under IFRS (IAS 36 Impairment of Assets), for group companies
for which goodwill has been paid in the past, value in use is
measured annually so as to determine whether to recognise
an impairment loss on the goodwill.
If the recoverable amount of the asset is lower than the
carrying amount, the carrying amount is reduced to reflect the
recoverable value. This reduction constitutes an impairment
loss and is immediately recognised in profit or loss, unless
the asset is revalued according to a different standard
(which is not the case for DELTA).
The recoverable value of an asset or a cash-generating unit
(CGU) is the highest of its fair value less costs of disposal and
its value in use.
Value in use is the present value of the future cash flows
expected to be derived from an asset or a cash-generating unit.
DELTA measures both the recoverable value and value in use
of classifiable assets, i.e. assets, groups of assets, and/or
cash-generating units, through impairment tests.
ZeelandNet B.V.
Impairment tests were conducted for the operations of
ZeelandNet B.V., with management basing its cash-flow
projections on the business plans for 2016-2018. An infinite
series was used for the period after this time horizon,
taking into account the available information about market
developments. No use was made of extrapolations with
growth rates in excess of inflation.
The impairment tests were conducted using a discount rate,
based on debt-to-equity ratios generally accepted by market
participants, The test used a pre-tax discount rate of 7.9%.
No impairment loss was identified for this CGU.
Software
Key investments in 2015 involved upgrading Netwerkgroep's
ERP system and improving and updating the customer
registration and invoicing system for the retail market and
online projects.
Use of inflation expectations
The impairment tests are based on an expected annual
inflation rate of 2%. The ECB’s policy is to achieve an annual
inflation rate of 2% or just under 2%. The ECB’s inflation
objective is used to calculate cash-flow projections in
impairment testing, taking into account a minimum threeyear horizon as reflected in the underlying business plans,
and what basically is then an infinite series of those cashflow projections.
Financial statements 2015 DELTA N.V.
73
Financial statements 2015
2. Property, plant and equipment
(EUR 1,000)
TOTAL
LAND
PLANT
AND
AND
BUILDINGS EQUIPMENTS
OTHER
ASSETS
THIRDASSETS UNDER CON- PARTY CONSTRUCTION TRIBUTIONS
2014
1,783,585
273,895
1.514,854
64,625
69,236
(139,025)
Investments
CARRYING AMOUNT AT 1 JANUARY 2014
103,793
1,879
30,891
176
70,924
(77)
Depreciation
(167,359)
(19,218)
(137,838)
(15,981)
(21)
5,699
Impairments
(410)
(410)
-
-
-
-
(4,007)
(2,425)
(1,477)
(109)
-
4
Disposals
Other movements/activated items
(1,790)
(263)
50,694
20,187
(74,483)
2,075
1,713,812
253,458
1,457,124
68,898
65,656
(131,324)
OF CONTRIBUTIONS
1,845,136
253,458
1,457,124
68,898
65,656
Accumulated depreciation and impairments
1,782,542
223,276
1,494,380
63,566
1,320
ACQUISITION COST AT 31 DECEMBER 2014
3,627,678
476,734
2,951,504
132,464
66,976
CARRYING AMOUNT AT 1 JANUARY 2015
1,713,812
253,458
1,457,124
68,898
65,656
(131,324)
Change in consolidation scope
1,500
CARRYING AMOUNT AT 31 DECEMBER 2014
CARRYING AMOUNT BEFORE DEDUCTION
2015
(532,000)
(132,516)
(395,779)
(1,182)
(4,023)
Investments
81,915
-
445
3,912
77,558
-
Depreciation
(97,914)
(13,644)
(74,953)
(14,692)
-
5,375
Disposals
Capitalised power plant dismanting costs
Other movements
(515)
(36)
(17)
(462)
-
-
55,723
53,865
1,858
-
-
-
(511)
(103)
58,156
8,583
(66,056)
(1,091)
1,220,510
161,024
1,046,834
65,057
73,135
(125,540)
OF CONTRIBUTIONS
1,346,050
161,024
1,046,834
65,057
73,135
Accumulated depreciation and impairments
1,153,136
100,156
976,923
74,737
1,320
ACQUISITION COST AT 31 DECEMBER 2015
2,499,186
261,180
2,023,757
139,794
74,455
0 - 40
7 - 40
5 - 15
n/a
CARRYING AMOUNT AT 31 DECEMBER 2015
CARRYING AMOUNT BEFORE DEDUCTION
Depreciation periods in years
74
Investments in plant and equipment (including changes
in assets under construction) mainly involved expanding
and replacing gas and power grids and smart meters
(Netwerkgroep), smaller wind farms, and investments in
EPZ’s nuclear power station.
The net cash value of demolition provisions have been
recalculated at a discount rate of 3.5%. Given that the discount
rate was 4.5% until 2014, this led to an upward revaluation
in 2015. The upward revaluation is shown within capitalised
power plant demolition costs in the balance sheet.
Tolling rights obtained on acquisition are amortised over the
remaining useful life of the operations in question.
Tolling rights are inextricably linked to the power stations
and therefore allocated to these tangible fixed assets.
This led to an amortisation charge of EUR 16 million during
the year.
Investment by type of operation:
Grids, mains, and networks
EUR 44.9 million
EPZEUR 15.9 million
Energy & Multimedia
EUR 21.1 million
In 2012 an impairment loss was recognised for the writedown of combined heat and power systems (CHP) and the
write-down of a supply connection to an industrial estate.
These impairment losses could not be reversed during
the year.
In accordance with IFRIC 18, third-party contributions to the
construction costs of an item of property, plant and equipment
are no longer deducted from the carrying amount of the asset
(for which the contribution was received), and instead are
shown within deferred revenue.
Financial statements 2015 DELTA N.V.
75
Financial statements 2015
3. Interests in joint ventures, investments in associates and
other investments
TOTAL
JOINT VENTURES
ASSOCIATES
OTHER
INVESTMENTS
412,522
343,606
53,376
15,540
3,393
-
(403)
3,796
(35,664)
(30,326)
(5,244)
(94)
48,126
39,047
7,590
1,489
(EUR 1,000)
CARRYING AMOUNT AS AT 1 JANUARY 2014
Investments/Disposals
Dividends received
Share of proftis
Other movements
628
1,151
(516)
(7)
429,005
353,478
54,803
20,724
CARRYING AMOUNT AS AT 1 JANUARY 2015
429,005
353,478
54,803
20,724
Change in consolidation scope
(54,045)
(3,562)
(48,525)
(1,958)
CARRYING AMOUNT AS AT 31 DECEMBER 2014
(1,041)
-
-
(1,041)
Dividends received
Investments/Disposals
(34,683)
(33,740)
(791)
(152)
Share of proftis
(47,102)
46,058
961
83
Other movements
CARRYING AMOUNT AS AT 31 DECEMBER 2015
784
879
-
(95)
387,122
363,113
6,448
17,561
Dividends received mainly comprise the two largest joint
ventures, water company Evides and Elsta.
Share of profits in joint ventures comprises the profits
generated by the joint ventures.
Movements in the provision for unprofitable contracts
relating to the results of joint ventures was adjusted in
the Group’s income statement.
Other movements mainly comprise a change in shareholders’
equity of a joint venture.
76
3.1 Joint Ventures
Below is a summary of the information in the balance sheet and income statement relating to joint ventures
(under IFRS, based on a 100% interest).
EVIDES N.V.
(EUR 1,000)
Current assets
31-12-2015
31-12-2014
77,767
68,188
Non-current assets
1,054,596
1,026,690
Current liabilities
(166,742)
(178,537)
Non-current liabilities
(491,731)
(460,533)
Revenue
Profit form continuing operations
Profit from discontinued operations
Profit for the year
2015
2014
306,216
296,558
58,176
60,731
-
-
58,176
60,731
Other comprehensive income
1,906
808
Total comprehensive income
60,082
61,539
Dividend received by DELTA
21,000
22,400
ABOVEMENTIONED INCOME STATEMENT CONSISTS AMONG OTHERS OF THE FOLLOWING:
71,338
67,068
External finance income/expenses
Depreciation, amortisation and impairment
7,175
7,865
Corporate income tax
1,837
1,573
31-12-2015
31-12-2014
473,890
455,808
Equity
DELTA's interest
Goodwill
CARRYING AMOUNT
50%
50%
95,502
95,502
332,447
323,406
Financial statements 2015 DELTA N.V.
77
Financial statements 2015
ELSTA B.V. & CO. C.V.
31-12-2015
31-12-2014
Current assets
53,838
66,252
Non-current assets
66,062
83,240
Current liabilities
(33,961)
(36,298)
Non-current liabilities
(27,601)
(61,012)
(EUR 1,000)
2015
2014
Revenue
73,640
73,524
Profit form continuing operations
36,237
28,410
-
-
36,237
28,410
Profit from discontinued operations
Profit for the year
-
-
Total comprehensive income
36,237
28,410
Dividend received by DELTA
11,014
5,198
20,174
18,266
4,193
6,032
-
-
31-12-2015
31-12-2014
Other comprehensive income
ABOVEMENTIONED INCOME STATEMENT CONSISTS AMONG OTHERS OF THE FOLLOWING:
Depreciation, amortisation and impairment
External finance income/expenses
Corporate income tax
Equity
58,338
52,182
DELTA's interest
24.75%
24.75%
Goodwill
Other
CARRYING AMOUNT
-
-
2,045
5,096
16,484
18,011
31-12-2015
31-12-2014
8,001
1,650
-
-
OVERIGE JOINT VENTURES
(EUR 1,000)
Profit from continuing operations attributable to DELTA N.V.
Profit from discontinued operations attributable to DELTA N.V.
Other comprehensive income attributable to DELTA N.V.
1,906
808
Total comprehensive income attributable to DELTA N.V.
9,907
2,458
14,182
12,061
TOTAL CARRYING AMOUNT
78
3.2 Other associates
OTHER ASSOCIATES
(EUR 1,000)
Profit from continuing operations attributable to DELTA N.V.
Profit from discontinued operations attributable to DELTA N.V.
Other comprehensive income attributable to DELTA N.V.
Total comprehensive income attributable to DELTA N.V.
TOTAL CARRYING AMOUNT
31-12-2015
31-12-2014
961
2,723
-
-
-
-
961
2,723
6,448
5,728
3.3 Other investments
All entities presented as other investments are included
in the list of non-consolidated companies.
In 2007, as part of the Borssele Agreement, DELTA (with DELTA
Investeringsmaatschappij B.V. acting as limited partner) and
Essent (now an RWE company) set up the Sustainable Energy
Technology Fund (SET Fund C.V.). Both partners own a 50%
interest in the partnership.
In the light of the Fund’s articles of association and the change
in ownership interests in N.V. EPZ, a new fund (SET Fund II
C.V.) was launched on 23 December 2011. DELTA owned a
69.65% interest and Essent (RWE) a 29.85% interest in SET
Fund II C.V.'s initial share capital. In view of the limited degree
of control, the investments in both entities are classified as
financial instruments and stated at fair value. After the addition
of new limited partners in late December 2015, DELTA's interest
in SET Fund II C.V. (in which DELTA Investeringsmaatschappij
B.V. is a limited partner) came to 20.54% at 31 December 2015
(2014: 54.22%).
Financial statements 2015 DELTA N.V.
79
Financial statements 2015
3.4 Related party transactions
Related party transactions are recognised if the value of the
related party is material to DELTA’s financial information and
sales and purchase transactions, receivables and payables,
and loans granted involve at least EUR 5 million.
Transactions with Elsta B.V. are based on tolling agreements
(cost-plus method). Other transactions are at arm’s length.
No provision for bad debts is recognised for amounts owed
by related parties because there is no need to do so.
Although DELTA’s shareholders (provincial and municipal
authorities) are related parties, no material transactions
are conducted between DELTA and its shareholders.
The remuneration paid to the Executive Board and Supervisory
Board is shown within staff costs and other operating
expenses.
SALES
(EUR 1,000)
PURCHASES
TRADE RECEIVABLES
% Interest
2015
2014
2015
2014
31-12-2015
31-12-2014
Evides N.V.
Elsta B.V. & Co C.V.
Elsta B.V.
BMC Moerdijk B.V.
Zebra Gasnetwerk B.V.
50.00%
24.75%
25.00%
50.00%
33.33%
29,201
35,478
141
486
2
-
-
-
22,505
25,318
-
-
1,461
-
1,864
-
5,886
3,018
5,567
1,963
629
-
266
-
IHM cvba
Vlaamse Mileu Holding N.V.
30.00%
n/a
-
982
-
-
315
-
-
283
-
30,662
38,324
31,550
33,649
631
549
}
TOTAL
TRADE PAYABLES
(EUR 1,000)
LOANS GRANTED
INTEREST
% Interest
31-12-2015
31-12-2014
31-12-2015
31-12-2014
2015
2014
Evides N.V.
Elsta B.V. & Co C.V.
Elsta B.V.
BMC Moerdijk B.V.
Zebra Gasnetwerk B.V.
50.00%
24.75%
25.00%
50.00%
33.33%
4,812
8,516
-
-
-
-
2,499
141
-
-
-
-
512
18
1,054
36
12,560
-
12,564
-
857
-
996
-
IHM cvba
Vlaamse Mileu Holding N.V.
30.00%
n/a
-
15
-
-
-
-
-
7,841
9,762
12,560
12,564
857
996
% Interest
31-12-2015
31-12-2014
Evides N.V.
Elsta B.V. & Co C.V.
Elsta B.V.
BMC Moerdijk B.V.
Zebra Gasnetwerk B.V.
50.00%
24.75%
25.00%
50.00%
33.33%
-
-
-
-
-
-
IHM cvba
Vlaamse Mileu Holding N.V.
30.00%
n/a
-
20,000
-
20,000
}
TOTAL
LOANS
(EUR 1,000)
TOTAL
80
}
4. Other financial assets
(EUR 1,000)
TOTAL
JOINT VENTURES
LOANS TO
ASSOCIATES
ETC.
DEFERRED
TAX ASSETS
OTHER
FINANCIAL
ASSETS
195,762
15,366
90,671
89,725
1,735
1,585
-
150
10,586
184
-
10,402
CARRYING AMOUNT AS AT 1 JANUARY 2014
Reversal of current portion
New loans
Results
Repayments
Transferred to equity as hedge reserve
Other movements
7,016
-
(2,368)
9,384
(2,555)
(1,565)
-
(990)
2,693
-
2,693
-
600
(1)
-
601
215,837
15,569
90,996
109,272
(1,310)
(1,300)
-
(10)
214,527
14,269
90,996
109,262
1,310
1,300
-
10
(26,605)
(2,391)
(17,705)
(6,509)
21,100
182
-
20,918
(30,008)
-
(31,010)
1,002
Repayments
(1,152)
(316)
-
(836)
Transferred to equity as hedge reserve
(1,598)
-
(1,598)
-
CARRYING AMOUNT AS AT 31 DECEMBER 2014
Current portion of financial assets
CARRYING AMOUNT AS AT 1 JANUARY 2015 (LONG TERM)
Reversal of current portion
Change in consolidation scope
New loans
Results
Other movements
CARRYING AMOUNT AS AT 31 DECEMBER 2015
Current portion of financial assets
CARRYING AMOUNT AS AT 31 DECEMBER 2015 (LONG TERM)
566
-
-
566
178,141
13,044
40,684
124,413
(10)
-
-
(10)
178,131
13,044
40,684
124,403
4.1 Loans to joint ventures, associates and investments
These comprise loans to joint ventures, associates and other
investments. Loans are stated at face value. Subordinated
loans amounted to EUR 12.0 million.
In 2015 the weighted average interest rate was 7.9%
(2014: 6.9%).
Financial statements 2015 DELTA N.V.
81
Financial statements 2015
4.2 Deferred tax assets
(EUR 1,000)
Intangible assets and property, plant and equipment
31-12-2015
31-12-2014
8,326
28,547
Financial assets
(3,221)
6,570
Provisions
22,022
17,030
Unutilised tax losses
3,987
29,182
Hedge reserve pursuant to IAS39/derivatives
9,570
11,474
-
(1,807)
40,684
90,996
Other
TOTAL DEFERRED TAX ASSET
The deferred tax asset relating to intangible assets and
property, plant and equipment largely arises from differences
between the tax bases and carrying amounts for reporting
purposes of assets as at 1 January 1998 (the opening balance
sheet for tax purposes for DELTA N.V.). The deferred tax asset
relating to provisions arises from liabilities recognised in
the financial statements which are either not recognised or
recognised in a different manner for tax purposes. In all cases,
these are temporary differences which will be reflected in
the effective tax rate in the coming years.
When preparing the financial statements, an annual
assessment is made of the extent to which unused tax losses
may result in future tax-savings. If it is likely that the tax
losses can be utilised within the statutory nine-year period,
a deferred tax asset is recognised. The deferred tax asset is
measured on the basis of, amongst other things, known
differences between the commercial profit and taxable profit
calculations. In the light of a possible mandatory split-up
under the Independent Grid Management Act (WON),
the deferred tax asset covers the period until 1 July 2017.
Any restructuring within the Group may affect the value of
this deferred tax asset. Losses at 31 December 2015 were
attributable to DELTA N.V. They arose during the period when
the fiscal unity DELTA N.V. comprised all of the Dutch-based
wholly-owned subsidiaries.
Since 2006 a hedge reserve for unrealised fair value gains
or losses on derivatives and trading contracts has been
recognised in compliance with IAS 39/32. At 31 December
2015, the hedge reserve resulted in a deferred tax of EUR 25
million, but no deferred tax asset was recognised because
it was uncertain whether and within what period of time it
could be realised.
At 31 December 2015, no deferred tax asset was recognised
for EUR 198 million in tax loss carryforwards due to uncertainty
over whether and when the unused tax losses or unused tax
credits might be utilised. EUR 19 million in unused tax losses
will expire within 5 years. The remaining losses have a
carry-forward period of more than 5 years.
82
4.3 Other financial assets
At 31 December 2015, other financial assets mainly comprised
prepayments. Other financial assets also comprise the
investments made through Stichting Beheer Ontmantelingsgelden Kerncentrale Borssele (BOKB) to provide security as
required by the Nuclear Energy Act that sufficient funds will
be available to dismantle the nuclear power station after its
expected closure date. Keeping the money in a separate
foundation covers the risk of the available funds being part
of the assets of the permit holder in the event of the
company going into liquidation.
5. Derivatives and risk management
This section covers the following topics:
DELTA is involved in gas, electricity, coal, oil, emissions and
currency trading contracts for the current calendar year and
the following four years. DELTA considers the markets for
these products to be sufficiently liquid over this time horizon
because reliable prices are available from brokers, markets,
and data providers. The fair value of commodity contracts is
calculated on the basis of these published prices; no in-house
valuation models are used. The monthly, quarterly and annual
prices published are adjusted only to reconcile them with the
relative periods in the trade systems.
5.1
Derivatives
5.1.1Relationships of derivatives in the financial
statements
5.1.2 Derivatives position
5.1.3 Changes in the hedge reserve
5.1.4 Hierarchy of financial instruments
5.2
5.2.1
5.2.2
5.2.3
5.2.4
DELTA uses derivatives, such as interest rate swaps, to hedge
its interest rate risk exposure. These swaps allow a floating
rate to be exchanged for a fixed rate.
Risk management
Risk control
Market risks
Liquidity risk
Credit risk
5.1 Derivates
5.1.1 Relationship of derivates in the financial statements 2015
BALANCE OF DERIVATIVES
(EUR 1,000)
Assets
2015
Assets
2014
Liabilities
2015
CHANGES IN DERIVATIVES
Liabilities
2014
Change
in 2015,
assets
Change
in 2014,
liabilities
DERIVATIVES ON THE BALANCE SHEET (SEE 5.1.2)
Non-current assets
Current assets
42,174
78,679
(36,505)
215,138
187,655
27,483
257,312
266,334
(9,022)
Non-current liabilities
102,306
Current liabilities
133,806
(31,500)
288,232
223,978
64,254
390,538
357,784
32,754
(128,826)
(79,978)
(48,848)
OTHER BALANCE SHEET ITEMS RELATING TO DERIVATIVES
Hedge reserve (see 5.1.3)
Deferred tax (see 5.1.3)
9,570
11,474
Non-controlling interest connected with swaps (see 5.1.3)
SUBTOTAL
9,570
11,474
Purchase of interest rate derivatives by DNWB
Cumulative ineffectiveness (Derivatives Sloe)
Cumulative ineffectiveness (Market-to-Market)
TOTAL
-
264
-
(174)
(128,826)
(79,888)
-
3
(1,904)
(264)
174
(1,904)
(48,938)
(3)
988
-
988
4,182
(91)
4,273
9,570
11,474
(123,656)
(79,976)
(1,904)
(43,680)
266,882
277,808
266,882
277,808
(10,926)
(10,926)
A (non realised) amount of EUR 47.0 million (negative) on these contracts
is recognized in the hedge reserve (2014: EUR 44.2 million negative).
Financial statements 2015 DELTA N.V.
83
Financial statements 2015
5.1.2a Offsetting of financial assets
ASSETS
(EUR 1,000)
Non-current assets
Gross amount
Offsetting
Net amount
Current assets
Gross amount
Offsetting
Net amount
2015
COMMODITY CONTRACTS
Gas
Electricity
70,757
50,047
20,710
616,213
463,828
152,385
152,248
132,173
20,075
494,850
456,304
38,546
1,822
1,771
51
61,413
61,413
-
Oil
Coal
962
924
38
15,260
14,526
734
Other
439
102
337
735
279
456
963
-
963
22,992
-
22,992
-
-
-
25
-
25
227,191
185,017
42,174
1,211,488
996,350
215,138
OTHER DERIVATIVES
Foreign exchange contracts
Interest rate swaps
TOTAL
5.1.2b Offsetting of financial liabilities
LIABILITIES
(EUR 1,000)
Non-current liabilities
Gross amount
Offsetting
Net amount
Current liabilities
Gross amount
Offsetting
Net amount
2015
COMMODITY CONTRACTS
Gas
Electricity
Coal
(98,327)
(50,047)
(48,280)
(650,853)
(463,827)
(187,026)
(155,374)
(132,174)
(23,200)
(514,775)
(456,305)
(58,470)
(1,771)
(1,771)
-
(61,892)
(61,413)
(479)
Oil
(924)
(924)
-
(14,603)
(14,526)
(77)
Other
(101)
(101)
-
(279)
(279)
-
(685)
-
(685)
(35,005)
-
(35,005)
(30,141)
-
(30,141)
(7,175)
-
(7,175)
(287,323)
(185,017)
(102,306)
(1,284,582)
(996,350)
(288,232)
OTHER DERIVATIVES
Foreign exchange contracts
Interest rate swaps
TOTAL
84
5.1.3 Movements in the hedge reserve
Fair value changes in derivatives after tax are shown
within the hedge reserve, which is a non-distributable
reserve. Movements in the hedge reserve in the past
two years are presented below.
Movements in the hedge reserve
COMMODITY CONTRACTS
(EUR 1,000)
Gas
Electricity
Coal
(7,267)
13,743
(9,940)
SWAPS
CO2
Foreign
Exchange
Total
Interest
rate swaps
Total
2,228 (9,284)
(2,376)
(12,896)
(34,232)
(47,128)
11,957
(46,550)
(18,804)
(65,354)
Oil
2014
HEDGE RESERVE 1-1-2014 (GROSS)
CHANGES IN 2014
Recognised directly in equity
Released to income
TOTAL CHANGES 2014
(42,494)
7,463
(6,321) (13,985)
(7,919)
(35,031) (14,240)
-
4,293
7,232 (2,228)
7,711
1,458
13,717
7,403
21,120
(6,753) (2,228) 12,004
13,415
(32,833)
(11,401)
(44,234)
HEDGE RESERVE 31-12-2014 (GROSS) (42,298)
(497) (16,693)
-
2,720
11,039
(45,729)
(45,633)
(91,362)
Deferred tax
-
(264)
-
-
-
-
(264)
11,474
11,210
-
(128)
Non-controlling interest
-
-
-
-
(128)
302
174
(42,298)
(889) (16,693)
-
2,720
11,039
(46,121)
(33,857)
(79,978)
HEDGE RESERVE 1-1-2015 (GROSS) (42,298)
(497) (16,693)
-
2,720
11,039
(45,729)
(45,633)
(91,362)
-
(83,048)
HEDGE RESERVE AT 31-12-2014
2015
CHANGES IN 2015
Recognised directly in equity
808
1,152
(84,032)
984
(3,190)
15,853
- (2,711)
(10,220)
29,645
6,369
36,014
(34,874) (23,541)
14,999
- (1,903)
(9,068)
(54,387)
7,353
(47,034)
HEDGE RESERVE 31-12-2015 (GROSS) (77,172) (24,038)
(1,694)
-
817
Released to income
TOTAL CHANGES 2015
(64,787) (20,351)
29,913
(854)
1,971 (100,116)
(38,280) (138,396)
Deferred tax
-
-
-
-
-
-
-
9,570
9,570
Non-controlling interest
-
-
-
-
-
-
-
-
-
(77,172) (24,038)
(1,694)
-
817
HEDGE RESERVE AT 31-12-2015
1,971 (100,116)
(28,710) (128,826)
Financial statements 2015 DELTA N.V.
85
Financial statements 2015
The composition of the hedge reserve in relation to
commodities, on a gross basis, at year-end 2015 is
attributable to the years ahead as follows:
Commodities hedge reserve (gross)
COMMODITY CONTRACTS
(EUR 1,000)
Gas
Electricity
Coal
2016
(50,554)
(18,627)
2017
(20,118)
(6,241)
2018
TOTAAL
CO2
Foreign Exchange
Total
(1,694)
-
420
1,576
(68,879)
-
-
369
395
(25,595)
-
(5,642)
(6,500)
830
-
-
28
(77,172)
(24,038)
(1,694)
-
817
The release from the commodities hedge reserve to profit
or loss is shown within gross operating margin.
The timing of expected cash flows does not always coincide
with their recognition in the income statement. This is because
some hedges have a ‘timing effect.’ This is the case,
for example, with the majority of gas hedges, in which the
gas price for the first quarter of a year can be determined on
the basis of the average oil price over the six months preceding
86
Oil
1,971 (100,116)
that quarter. The value of the swaps used in such a hedging
relationship, settlement of which takes place in the six
months preceding the quarter in which delivery is made,
is recognised in the hedge reserve up to the beginning of
the delivery quarter, with the gain or loss being recognised
in profit or loss in the first quarter of delivery. The maximum
time lag on contracts in a hedging relationship is nine months.
During the year, no hedging relationships were discontinued
on the basis that an expected transaction did not go ahead.
a)Quoted prices for similar assets or liabilities in active
markets;
b)Quoted prices for identical or similar assets or liabilities
in markets that are not active;
c)Inputs other than quoted prices that are observable for
the asset or liability in question, for example:
i)interest rates and yield curves that are published
on a regular basis
ii) implied volatilities; and
iii) credit spreads (differences in interest rates);
d) Market-corroborated inputs.
5.1.4 Hierarchy of financial instruments
Financial instruments are all recurring valuations, measured
at fair value, and classified according to the following
hierarchy as required by IFRS 13 Fair Value Measurement:
Level 1: Level 1 inputs are (unadjusted) prices quoted on
active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2: Level 2 inputs are inputs other than quoted market
prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 2 inputs include:
Level 3: Level 3 inputs are unobservable inputs for the asset
or liability.
Assets and liabilities measured at fair value
FAIR VALUE HIERARCHY
(EUR 1,000)
Total as at 31 December
Level 1
2015
2014
2015
-
2014
Level 2
2015
Level 3
2014
2015
2014
- 257,312 266,334
-
-
ASSETS
Derivatives
257,312
266,334
Part of other investments and other
financial assets
138,819
120,221 122,549 100,929
-
16,270
19,292
TOTAL ASSETS
396,131
386,555 122,549 100,929 257,312 266,334
16,270
19,292
Derivatives
390,538
357,784
-
- 390,538 357,784
-
-
Put options
-
138,732
-
-
-
- 138,732
390,538
496,516
-
- 390,538 357,784
- 138,732
-
EQUITY AND LIABILITIES
TOTAL EQUITY AND LIABILITIES
Movements in ‘part of other investments and other financial
assets’ in 2015 comprised EUR 18.6 million, EUR 17.6 million
of which related to investments/new receivables and
EUR 1.0 million concerned a gain.
Other investments comprised, inter alia, the share interests
in SET Fund C.V. and SET Fund II C.V. (see also note 3.3).
Other financial assets comprised, inter alia, the investments
made through Stichting Beheer Ontmantelingsgelden
Kerncentrale Borssele, the foundation that manages the
funds earmarked for the dismantling of the nuclear power
station (see also note 4.3).
-
The fair values are based on:
•Measurements in accordance with the International
Private Equity and Venture Capital Valuation Guidelines
issued by International Private Equity and Venture Capital
(IPEVC) and approved by the European Private Equity and
Venture Capital Association (EVCA);
•Specially established asset funds with their own market
value per unit.
Financial statements 2015 DELTA N.V.
87
Financial statements 2015
5.2 Risk management
5.2.1 Risk control
DELTA is involved in international gas and electricity trading.
Prices on these international markets fluctuate strongly.
We use financial instruments to manage and mitigate
commodity, foreign exchange, interest rate, liquidity and
credit risks, subject to the conditions laid down in the Risk
Policy Document and Treasury Charter.
Under the auspices of the Executive Board, the E&M division’s
Risk Management Committee has put in place general
procedures and limits and is responsible for ensuring that
DELTA’s energy trading and sales activities remain within
the defined risk margins.
The following paragraphs describe the different types of risk
and the way in which DELTA manages the related exposures.
5.2.2 Market risks
5.2.2.1 Commodity price risk
Market risks arise from price movements in the markets where
DELTA buys and sells (gas, electricity, coal, oil, emission
allowances, currencies, transmission capacity, imports/exports
capacity, etc.). It is DELTA’s policy to mitigate the impact of
price movements in the short term and track prevailing market
prices in the long term. For systematic risk control purposes,
asset allocations and positions are determined on the basis
of expected price developments. These positions are monitored
on a daily basis. Trading risks are mitigated by strictly
enforcing a system of limits, the most important of which
is calculated using the Value-at-Risk method.
The downward trend in commodity prices, notably electricity
prices, poses a risk to DELTA’s continuity in the coming years.
The price falls have had an immediate additional dampening
impact on the profits of its production units, which have
deteriorated in the past few years. Sales contracts in which
there is no correlation between energy market prices and
fuel prices are hit hardest, such as nuclear power, power
from poultry waste, and wind power generated by our own
wind farms. Revenues in these segments have declined while
fuel prices have remained virtually stable. Each euro off the
selling price is immediately reflected in the profit, unless the
output is hedged. For the gas-fired plants, this impact is
mitigated because gas prices are also declining due to global
spare capacity.
Various market studies suggest that commodity prices will
pick up by 2020/2021.
88
5.2.2.2 Value-at-Risk
Determining Value-at-Risk (VaR) involves using various
assumptions regarding possible changes in market conditions.
VaR identifies the maximum portfolio losses likely to be
incurred as a result of price changes over a three-day period
with a confidence level of 95% (i.e. in 5% of cases the
portfolio losses may exceed the VaR limit). VaR is calculated
using Monte Carlo simulations based on historical volatilities
and correlations.
Because portfolios include opposing positions and there is
an underlying correlation, the VaR of the total portfolio is
smaller than the sum of sub-portfolio VaRs.
Value-at-Risk
Value-at-Risk
(EUR 1,000)
Asset Book
Trade Books
31-12-2015
31-12-2014
4,583
6,193
260
994
Diversification over Books
(558)
(1,553)
TOTAL
4,285
5,634
VaR is an important tool for DELTA to manage its portfolios
and it is therefore calculated and reported on a daily basis.
Although the VaRs for the Asset Book and total portfolio are
reported on a daily basis, they are not used as a management
parameter. The Asset Book is hedged on the basis of a
predetermined disposal schedule to establish average market
value. Variations from the disposal schedule fall within the
Trade Books, for which VaR is the key measure of risk.
5.2.2.3 Cash flow hedges
DELTA uses financial instruments to minimise fluctuations in
expected cash flows. The company uses derivatives, including
forward contracts, options, and swaps, to control the effects
of future changes in market prices. These hedging instruments
are derivatives of commodities traded by DELTA and they are
entered into to mitigate cash flow, price and currency risks.
Hedge accounting is applied to cushion the total change in
value of these derivatives.
To the extent permitted, DELTA accounts for these financial
instruments and the physical purchase and sale contracts in
a cash flow hedge relationship in accordance with IAS 39.
The hedged item is the future purchase transaction (power
stations, long-term sourcing) or sales transaction for gas or
electricity.
Cash flow hedges
AMOUNT AT FAIR VALUE
(EUR 1,000)
2016
2017
2018
2019
and beyond
Total
Average
price
Contract
value
Gas forwards
(51,605)
(20,797)
(6,935)
-
(79,337)
0.217
(256,066)
Electricity forwards
38.799
(88,544)
2015
(18,952)
(7,624)
2,132
-
(24,444)
Coal swaps
-
-
-
-
-
Oil swaps
-
-
-
-
-
CO2 forwards
414
373
41
-
828
7.628
(9,154)
Currency swaps
846
493
-
-
1,339
1.202
(11,416)
(69,297)
(27,555)
(4,762)
-
(101,614)
2015
2016
2017
2018
and beyond
Total
Average
price
Contract
value
(28,416)
(9,849)
(4,243)
-
(42,508)
0.249
(254,139)
2,310
(3,831)
206
(177)
(1,492)
44.551
(105,051)
(16,747)
-
-
-
(16,747)
72.227
(67,604)
-
-
-
-
-
1,965
8
-
-
1,973
6.552
(16,459)
0.893
(109,673)
TOTAL
2014
Gas forwards
Electricity forwards
Coal swaps
Oil swaps
CO2 forwards
Currency swaps
TOTAL
9,966
414
178
-
10,558
(30,922)
(13,258)
(3,859)
(177)
(48,216)
The hedge reserve comprises value changes in derivatives in
the period in which they are included in an effective hedging
relationship. Derivatives shown in the analysis of cash flow
hedges comprise derivatives that were part of a hedging
relationship as at the balance-sheet date.
A mismatch occurs because:
•the analysis of cash flow hedges also includes the
ineffective portion of the hedging instrument;
•the gains and losses on the hedging instruments entered
into to form a hedging relationship are also included in
the analysis of cash flow hedges;
•the hedge reserve also includes the gains and losses on
hedging instruments that were part of a hedging
relationship in the past but were no longer included in
a hedging relationship at the end of the financial year.
The amounts recognised in the hedge reserve take account
of the date on which an instrument was designated as part
of a hedging relationship, which may be different from the
date of the associated trade.
In addition, the hedge reserve comprises only the effective
portion of the total fair value of hedging instruments
recognised in the hedge reserve.
5.2.2.4 Currency risk
Currency risk is the risk that the value of assets will change
due to movements in foreign exchange rates. DELTA’s risk
policy is to hedge currency risks associated with positions
denominated in foreign currencies. To hedge this risk, the
company uses financial instruments (forward contracts) to
minimise fluctuations in expected cash flows.
Currency positions arising from commodity and other
contracts are reported to the Treasury department on a daily
basis to be hedged at group level.
Currency risk limits are set periodically in consultation with
the Risk Management Committee and are monitored by the
Treasury department.
The following exchange rates against the euro were used to
convert currency positions as shown in the balance sheet:
Rates
MIDDLE RATES
31-12-2015
31-12-2014
US dollar
1.0902
1.2153
Pound sterling
0.7344
0.7797
Financial statements 2015 DELTA N.V.
89
Financial statements 2015
5.2.2.5 Interest rate risk
DELTA’s interest rate risk policy is to mitigate the effects of
interest rate fluctuations. To hedge this risk, the company
uses derivatives, including interest rate swaps.
Several of these interest-rate derivatives can be classified as
option contracts, which qualify for the exemption referred to
in IAS 39.74. Changes in fair value are accounted for in the
hedge reserve, with changes in the time value being recognised
through profit or loss. The table shows the effects of a 10%
increase and 10% decrease compared with the carrying
amounts as at 31 December 2015. No Value-at-Risk (VaR) is
calculated for interest rate derivatives.
Hedged loans
DELTA holds a number of interest rate swaps, all of which
were effective at the balance-sheet date. Sensitivity is
measured by increasing or reducing the floating spot by 10%.
Sensitivity interest rate
10% INCREASE
(EUR 1,000)
Position as at 31
December
2015
Value based on Increase in value
yield curve
relative to
carrying amount
2014
2015
2014
2015
2014
10% DECREASE
Value based on
yield curve
2015
Decrease in
value relative to
carrying amount
2014
2015
2014
832 (39,079) (46,466)
DERIVATIVES
Derivatives
Deferred tax on derivatives
TOTAL
(38,278) (45,630) (37,487) (44,798)
9,570
11,474
9,372
791
11,266
(198)
(28,708) (34,156) (28,115) (33,532)
593
(801)
(836)
11,684
200
210
624 (29,309) (34,782)
(601)
(626)
(208)
9,770
INTEREST RATE SWAPS
Hedge reserve
Non-controllig interest
TOTAL
GAINS AND LOSSES ON SWAPS
28,710
33,857
28,117
33,240
(593)
(617)
29,311
34,476
601
619
-
302
-
295
-
(7)
-
309
-
7
28,710
34,159
28,117
33,535
(593)
(624)
29,311
34,785
601
626
1,439
1,436
1,439
1,436
-
-
1,439
1,436
-
-
At 31 December 2015, interest-rate derivatives represented a
loss. An upward movement in the yield curve will reduce this
loss.
The hedge reserve relating to interest-rate swaps as at
31 December 2015 constituted a debit item in equity.
An upward movement in the yield curve will reduce the
amount of this debit item.
Unhedged loans
The vast majority of loans at 31 December 2015 carried a
fixed rate of interest or were hedged. Because the hedges
were entered into quite a while ago, actual interest rates are
well above current market interest rates.
5.2.3 Liquidity risk
Liquidity risk is the risk that DELTA may have insufficient
funds available to meet its short-term liabilities.
DELTA’s capital management policy focuses on centralising
its cash management and borrowing and repayment operations
at holding company level (DELTA N.V.) as much as possible.
On the basis of its business plan, the company prepares an
annual financing plan to give direction to the activities
90
undertaken by the Treasury department, and to determine
the ratio of short-term to long-term debt. DELTA also ensures
that it more than meets banking ratios and other ratios
necessary to maintain its corporate credit facility and corporate
credit rating and to optimise working capital management.
In order to meet its working capital requirement, DELTA has
access to a stand-by credit facility, which allows us the
flexibility, for example, to absorb seasonal cash flow
fluctuations and pre-finance projects. There are separate
lines of credit for independent projects, for entities that are
not wholly-owned by DELTA , and for entities for which the
law so requires. There is no recourse to DELTA N.V. under
these facilities.
After receiving the cash proceeds from the sale of two business
units, DELTA repaid all amounts owed under its revolving credit
facility in July. In consultation with the banks, the funds
available under the RCF have been reduced to EUR 200 million,
while keeping the remaining term unchanged until March 2018.
The RCF is a stand-by facility that can be used to finance
working capital, absorb seasonal fluctuations, and for
acquisitions, subject to pre-agreed terms.
A number of DELTA Group companies have their own credit
facilities, more specifically:
1.
DELTA Netwerkbedrijf B.V. has had a separate line of credit
since 2010, in accordance with the requirements of the
Independent Grid Management Act (Wet Onafhankelijk
Netbeheer). The amount of the financing remained
unchanged at around EUR 150 million in 2015;
2.Sloe Centrale B.V. has been financed through project
funding. At year-end 2015, an amount of EUR 183.8
million was outstanding (based on a 50% share interest).
3.N.V. EPZ has no credit lines because it has sufficient cash.
If it requires any external funding, this will be arranged
on a non-recourse basis.
Standard & Poor's affirmed the company’s credit rating at
BBB with a negative outlook, despite difficult market
conditions and poor prospects, adding that a definitive
obligation to split up the company could lead to a rating
downgrade, depending on DELTA’s financial profile at that
time.
A corporate credit rating downgrade could lead to the
obligation to provide additional collateral to commodity
trading partners, and hence put pressure on our cash position.
We do not know whether and, if so, to what extent our trading
partners would take such a step. Our additional collateral
exposure was EUR 138 million at the balance-sheet date.
To provide an insight into DELTA’s liquidity risk exposure,
the following table presents the contractual maturities of its
financial obligations:
Contractual maturities of financial obligations as at 31 December 2015
(EUR 1,000)
< 1 YEAR
Trade payables
166,683
70,978
288,232
102,306
Interest-bearing loans
Derivatives
1-5 YEARS
> 5 YEARS
TOTAL
-
-
166,683
139,287
120,998
331,263
-
390,538
Other
213,538
85,928
-
299,466
TOTAL
739,431
327,521
120,998
1,187,950
5,289
10,077
2,271
17,637
(EUR 1,000)
< 1 YEAR
1-5 YEARS
> 5 YEARS
TOTAL
Trade payables
313,626
-
-
313,626
Interest-bearing loans
260,049
321,667
134,685
716,401
Derivatives
223,978
133,806
-
357,784
Related interest payable
Contractual maturities of financial obligations as at 31 December 2014
Other
TOTAL
Related interest payable
393,442
128,688
1,602
523,732
1,191,095
584,161
136,287
1,911,543
9,676
18,845
4,229
32,750
The contractual maturities of financial obligations reflect the
expected outgoing cash flows relating to outstanding financial
commitments as at the balance-sheet date.
Other contractual maturities mainly comprise deferred revenue,
current taxation, and the Indaver put option.
Financial statements 2015 DELTA N.V.
91
Financial statements 2015
5.2.4 Credit risk
Credit risk is the risk that a counterparty will default on its
contractual obligations. In order to mitigate its credit risk
exposure, DELTA has set credit limits for external counterparties.
The company’s internal rating system sets a credit limit for
each external counterparty. The system uses publicly
available information about the companies or guarantors
concerned (financial statements, credit ratings, etc.). If the
external counterparty’s or guarantor’s credit rating is not,
or no longer, investment grade, no additional credit risk
will be accepted. As long as there are any open positions
that still need to be settled, external counterparties are
shown as non-investment grade in the chart below. Due to
an overall decline in creditworthiness, the number of
non-investment grade counterparties increased compared
with 2014.
The chart below shows the percentage distribution of
DELTA’s external counterparties by credit rating class at
31 December 2015:
Counterparty credit ratings
30%
■ 2015
25%
■ 2014
20%
15%
10%
5%
0%
AA
AA-
A+
A
A-
BBB+
BBB
In addition to credit limits based on credit ratings, DELTA uses
various other instruments to mitigate credit risk, including
standard contracts and standard terms of business, market
trading, end-user diversification, and additional collateral.
The creditworthiness of energy end-users is determined on
the basis of information from external data providers.
As regards existing customers, their payment record is also
taken into consideration when deciding whether or not to
enter into a supply contract. We have hedged our credit risk
exposure to some corporate end-users through credit
insurance.
Additional collateral in the form of a bank guarantee,
deposit or advance payment is requested where necessary.
92
BBB-
<BBB-
6. Inventories
(EUR 1,000)
Raw materials
31-12-2015
31-12-2014A
31-12-2014
75,626
78,716
91,915
CO2 rights
1,463
1,204
1,204
Consumables
7,155
5,975
5,975
Finished products
3,268
3,211
3,836
Goods for resale
3,811
4,389
4,389
TOTAL
91,323
93,495
107,319
Less: Provision for obsolescence
(2,350)
(1,066)
(1,001)
TOTAL INVENTORIES
88,973
92,429
106,318
Financial statements 2015 DELTA N.V.
93
Financial statements 2015
7. Receivables
31-12-2015
31-12-2014A
31-12-2014
TRADE RECEIVABLES
154,495
232,075
339,668
Corporate income tax
-
2,216
2,216
(EUR 1,000)
Other taxes
19,461
18,690
19,871
CURRENT TAX ASSETS
19,461
20,906
22,087
2,444
-
-
60,294
28,569
28,569
10
10
1,310
43,097
6,028
18,555
WORK IN PROGRESS FOR THIRD PARTIES
Cash not available on demand
Current portion of long-term loans granted
Other receivables, prepayments and accrued income
TOTAL OTHER RECEIVABLES
103,401
34,607
48,434
TOTAL RECEIVABLES (EXCLUDING DERIVATES)
279,801
287,588
410,189
Trade receivables decreased compared with the previous financial year
due to an increase in the proportion of exchanged-traded commodities
versus OTC trades. The same impact is visible in trade payables.
Movements in bad debt provision
(EUR 1,000)
31-12-2015
31-12-2014
20,083
BALANCE AS AT 1 JANUARY
20,451
Change in consolidation scope
(5,422)
-
Bad debts written off
(2,190)
(1,374)
Added/released
BALANCE AS AT 31 DECEMBER
1,427
1,742
14,266
20,451
Cash not available on demand comprises deposits relating to trading
activities. A provision for possible bad debts totalling EUR 14.3
million (2014: EUR 20.5 million) is recognised for trade receivables.
Aged analysis of trade receivables
(EUR 1,000)
AGE (IN DAYS)
< 30
31-12-2015
31-12-2014
145,780
319,022
31-60
4,269
15,925
61-90
914
4,038
91-120
504
1,262
17,294
19,872
> 120
TOTAL
168,761
360,119
Bad debt provision
(14,266)
(20,451)
TOTAL TRADE RECEIVABLES
154,495
339,668
The <30 days bracket includes an amount of EUR 82.7 million (2014:
EUR 150.6 million) in receivables connected with trading operations.
Settlement of these accounts always takes place within one month.
94
8. Cash
(EUR 1,000)
Deposits
31-12-2015
31-12-2014A
31-12-2014
52,502
63,005
87,022
Cash/Bank
186,474
63,307
70,822
TOTAL CASH
238,976
126,312
157,844
Cash includes not only cash but also cash equivalents
that can be converted into cash with no material risk of
impairment.
The amounts placed on deposit become available within
three months.
Financial statements 2015 DELTA N.V.
95
Financial statements 2015
9. Provisions
(EUR 1,000)
CARRYING AMOUNT AS AT 1 JANUARY 2014
TOTAL
ENVIRONUNPROFIMENTTABLE
RELATED CONTRACTS
74,196
Reversal of current portion of provision
85,430
10,199
29,033
2,910
1,664
41,624
Added
51,201
30
13,261
10,927
(2,763)
29,746
Interest added
21,091
2,715
4,352
154
9,747
4,123
Released
(9,213)
-
(7,491)
(2,565)
-
843
(93,154)
(7,339)
(37,414)
(1,257)
(29)
(47,115)
Other movements
7,941
217,916
OTHER
PROVISIONS
522,265
Utilised
89,010
EMPLOYEE DISMANTING
BENEFITS
COSTS
133,202
(8,606)
(8,047)
-
(89)
-
(470)
CARRYING AMOUNT AS AT 31 DECEMBER 2014
569,014
71,754
90,751
18,021
226,535
161,953
Current portion of provisions
(64,855)
(7,912)
(38,108)
(929)
(10,225)
(7,681)
CARRYING AMOUNT AS AT 31 DECEMBER 2014
504,159
63,842
52,643
17,092
216,310
154,272
64,855
7,912
38,108
929
10,225
7,681
Change in consolidation scope
(73,591)
(71,754)
-
(33)
-
(1,804)
Added
236,174
-
161,780
2,580
59,696
12,118
18,016
-
5,804
53
9,809
2,350
Reversal of current portion of provision
Interest added
Released
Utilised
Other movements
(4,233)
-
(3,890)
(248)
-
(95)
(97,325)
-
(44,035)
(1,594)
(491)
(51,205)
(664)
-
-
(16)
(648)
-
CARRYING AMOUNT AS AT 31 DECEMBER 2015
647,391
-
210,410
18,763
294,901
123,317
Current portion of provisions
(94,992)
-
(59,242)
(2,622)
(10,303)
(22,825)
CARRYING AMOUNT AS AT 31 DECEMBER 2015
552,399
-
151,168
16,141
284,598
100,492
The release of provisions scheduled within one year involving
an amount of EUR 95.0 million (2014: EUR 64.9 million) is
shown within current liabilities.
Use of inflation expectations
Provisions are measured using an expected annual inflation
rate of 2%. The ECB’s policy is to achieve an annual inflation
rate of 2% or just under 2%.
Use of discount rates
The description of provisions specifies the discount rate
used for each type of provision.
The discount rates used are based on IAS 37, which,
under Measurement of Provisions, stipulates that a pre-tax
discount rate should be used that reflects the current market
assessments of the time value of money and the risks specific
to the liability.
The discount rate should not factor in risks which are already
factored into the estimated future cash flows.
The discount rate is based on market interest rates
(from different sources), plus a mark-up that depends on the
nature, duration, amount and profile of the provision and
related cash flow.
96
Provisions amounting to more than EUR 5 million are
clarified below.
Unprofitable contracts
Due to strongly reduced spreads between electricity (sales)
and gas (consumption), a key tolling contract previously
signed with a CHP is no longer profitable, and a provision for
unprofitable contracts has been recognised. Withdrawals are
made annually to offset the accumulated negative gross
margin. Any profit made by the production unit involved is
added to the provision annually because of the causal link
between the investee’s profit and the costs paid by DELTA.
The provision is reviewed each year in the light of developments
on the electricity and fuel markets, relevant legislation, and
contractual agreements. Movements in electricity and fuel
prices are based on the independent Pöyry mid-price curves
(see below).
As regards the gas portfolio, a separate review of related
gas operations was conducted, given the strong correlation
between the different contracts, production facilities, and
transport assets, The main combined portfolio is the Gas Flex
Portfolio, which consists of gas purchases (contracts and market
trading) for use as a fuel to generate power, and related
transmission and storage capacity. The review also factored
in the anticipated proceeds from gas-fired energy production
at the Sloe power plant, and optimisation of contracted
transmission and storage capacity. Movements in gas and
electricity prices are based on the Pöyry Q4 mid-price curves.
The costs of transmission and storage capacity are based on
long-term contractual arrangements. The optimisation
returns on transmission and storage contracts is based on
historical returns, combined with previously contracted
positions at the balance-sheet date and estimated future
returns. Due to the continued fall in market prices and fewer
possibilities for optimising our assets, we were required to
recognise a provision for the Gas Flex Portfolio in 2015.
Anticipated movements in electricity, gas and CO2 prices
constitute the main uncertainty affecting this provision.
The future price curves used were obtained from the
independent firm of Pöyry and involved Q4 mid prices.
Pöyry is a leading consulting firm that publishes solid
quarterly reports on price curve trends that are frequently
used by companies within the industry. Its models do not
anticipate a market recovery (in the sense that profits can be
made) until 2020; meaning that margins will remain under
severe pressure and cash outflows will be considerable in
the coming years, due to the obligations arising from the
Gas Flex Portfolio. Forward trading prices represent best
estimates of market prices in the coming years, but they are
highly volatile and do not support the long-term price vision
and correlations between fundamentals that are necessary
to calculate the level of this long-term provision. At the
balance-sheet date, forward curves (for both gas and
electricity) exceeded the prices included in the Pöyry curves
for 2016 and 2017. Forward prices for 2018 and 2019 were
lower than the prices expected on the basis of Pöyry data.
The need to recognise a provision for the Gas Flex Portfolio
became clear in mid-2015. Based on the price curves and
contractual situation, the provision amounted to EUR 187.5
million at that point. The provision was updated at the end
of the year. The latest Pöyry price curves show improved
spreads (the difference between electricity and gas prices)
compared with Q2 due to the fact that gas prices fell more
strongly than electricity prices. In addition, the maintenance
contract for the Sloe power station was amended and the
duration of the tolling contracts with both tolling companies
adjusted accordingly.
Other gas-related operations comprise the sale of gas to
end-users (retail and business) and intermediaries, and the
operation of combined heat and power plants, to the extent
that the latter category is gas-fired and generates electricity.
The review showed that there was no need to recognise a
provision for unprofitable contracts for any of these
(combined) operations.
No provision is required for the tolling contract with the
nuclear power plant. The review was conducted on the basis
of the existing tolling contract, the operation and investment
plan for the nuclear plant until 2033, the positions locked
in at the balance-sheet date, and Pöyry’s recent electricity
mid-price curves.
Volatility in the electricity and gas markets creates a high
level of uncertainty for our financial position going forward,
both in terms of our profits, cash flows, the level of the
provision, and the need to recognise provisions for other
production assets. Strong movements in prices may lead to
significant changes being made to the provision for
unprofitable contracts.
We use a discount rate of 3.50% for long-term provisions and
3.25% for provisions that a have shorter remaining duration
(less than four years). In 2014, the balance sheet carried only
a short-term provision for unprofitable contracts, at a discount
rate of 4.25%.
Employee benefits
These provisions are recognised so as to be able to meet
existing future financial obligations.
Under the terms of the collective agreement, employees are
paid long-service benefits. From the start date of employment,
a provision is recognised for these benefits, based on past
years of service, expected price and pay rises and probability
of dismissals, invalidity and mortality rates. On the basis of
the “own risk bearer” principle, a liability is recognised for
unemployment benefits that are already in payment.
The provision also covers liabilities for the employer-paid
portion of health insurance costs for post-active staff,
employees’ widows, and active staff, and liabilities to continue
to pay the salaries of employees who, at the balance-sheet
date, were expected to remain partly or fully unfit for work
due to illness or disability.
The discount rate is 3.5% (2014: 4,5%).
This provision also covers liabilities relating to staff redundancies in connection with the closure of EPZ’s conventional
power station on 31 December 2015. The provision covers
the expected costs of terminating the employment contracts,
support and coaching expenses, and direct reorganisation
costs.
Demolition of energy generation units
This provision covers the costs of future demolition of units
once they stop operating. The expected ultimate demolition
costs are based on the findings of periodic studies, allowing
for price developments, recent insights, and an estimate of
potential environmental impacts.
The provision for the demolition of the nuclear power plant is
structured in such a way that demolition work on the power
plant can start as soon as it stops operating in 2034,
in accordance with the arrangements made with central
government under the Borssele Nuclear Power Station
Agreement.
The provisions are discounted at a rate of 3.5% (2014: 4.5%).
Financial statements 2015 DELTA N.V.
97
Financial statements 2015
Other provisions
Other provisions comprise:
Provision for processing and storage costs
This provision covers current existing obligations. It is
determined as the present value of the estimated future
processing and storage costs, less the estimated present
value of the residual products released in future and the net
value of the amounts payable and receivable. The discount
rate is 3.5% (2014: 4.5%).
Pension liabilities
Pension liabilities in the Netherlands
Nearly all employees of DELTA Group’s Dutch-based
operations are members of the ABP pension fund (Stichting
Pensioenfonds ABP).
The ABP plan is a multi-employer plan. The members bear
nearly all of the actuarial and investment risks in the plan.
Employers taking part in this plan have no obligation to
make supplementary contributions in the event of a funding
shortfall.
Our obligations are limited to paying contributions as determined by the fund. The ABP Board of Trustees determines
this contribution annually, based on its own data and with
98
due observance of the parameters and requirements set by
the regulator, the Dutch Central Bank (De Nederlandsche
Bank). The obligation to pay contributions ensues from DELTA’s
participation in the fund during the year and not from its
participation in previous years. For reporting purposes,
the ABP plan is classified as a defined contribution plan.
The contributions are therefore recognised as an expense
and no further explanatory notes are required.
Pension liabilities abroad
Indaver provided defined benefit plans for employees of the
Indaver holding company and some of its subsidiaries that
were part of the Indaver group before 1 July 2007. With the
sale of Indaver, DELTA Group had no foreign pension liabilities
at 31 December 2015.
Indaver pension liabilities
(EUR 1,000)
31-12-2015
31-12-2014
Pension liabilities
-
39,104
TOTAL PENSION LIABILITIES
-
39,104
10. Movements in long-term debt
(EUR 1,000)
CARRYING AMOUNT AS AT 1 JANUARY
Change in consolidation scope
Repayments
31-12-2015
31-12-2014
577,271
688,202
(24,652)
-
(223,898)
(132,078)
Movements in cross-border leases
-
8
Loans drawn down
-
20,000
2,542
1,139
331,263
577,271
Current portion
(70,978)
(67,318)
LONG-TERM DEBT
260,285
509,953
Release of capitalized costs
Long-term debt comprises amounts owed to credit institutions,
EUR 121,3 million of which falling due after more than five
years. At 31 December 2015, long-term debt carried an
average rate of interest of 1.6% (2014: 1.5%). DELTA has
EUR 200 million worth of corporate standby credit facilities
with five banks. No security has been provided for these
facilities. At the balance-sheet date, no withdrawals were
made under these facilities.
Financial statements 2015 DELTA N.V.
99
Financial statements 2015
11. Non-current liabilities
11.1 Other non-current liabilities
(EUR 1,000)
31-12-2015
31-12-2014A
31-12-2014
Deferred tax liabilities
13,122
19,167
64,375
Deferred revenue
61,676
55,766
84,880
Other non-current liabilities
24,252
22,952
43,007
TOTAL OTHER NON-CURRENT LIABILITIES
99,050
97,885
192,262
Deferred tax liabilities
Deferred tax liabilities comprise valuation differences between
the commercial balance sheet and tax balance sheet.
Deferred tax liabilities arise mainly from past acquisitions.
When a share interest is acquired, property, plant and
equipment and intangible assets are stated at fair value.
Fair-value adjustments are not allowed for tax purposes,
necessitating the recognition of a deferred tax liability for
fair value adjustments to the assets acquired.
The deferred tax liabilities arise from:
(EUR 1,000)
Intangible assets
Property, plant and equipment
FVA
31-12-2015
31-12-2014
-
1,813
16,607
90,715
-
(116)
Other
(3,485)
(28,037)
TOTAL
13,122
64,375
A considerable part of deferred tax liabilities comprise
property, plant and equipment and intangible assets relating
to the DELTA Com B.V. fiscal unity. After consulting the Dutch
Tax Authority, DELTA transferred its production and supply
operations to this fiscal unity as of 1 January 2014.
Deferred revenue
In 2014 deferred revenue partly comprised prepayments
received for waste to be processed by Indaver. The total
sum also comprises prepayments received for investments
in grid operations (in line with IFRIC 18).
The fiscal unity’s (i.e. DELTA Com B.V.’s) deferred tax assets
and liabilities are netted. In measuring net deferred tax
liabilities, consideration was given to the extent to which the
temporary differences would produce expected economic
benefits and whether temporary differences would be settled
net or simultaneously (partly in view of the statutory time
limits on netting).
In line with the previous financial year, the joint valuation of
deferred tax assets and liabilities by and within DELTA Com
B.V. did not lead to a deferred tax item being recognised for
unrealised changes in the value of derivatives and trading
contracts under IAS 39/32.
Other non-current liabilities
These comprise N.V. EPZ’s liability for the costs of the final
nuclear fuel load located in the reactor core when the
nuclear power station comes to the end of its lifespan.
The liability shown is based on the known nuclear fuel costs
for the final fuel load at year-end 2015, and determined as
the present value (at a discount rate of 3.5%) of the
estimated future value of the remaining core, including
reprocessing and storage costs.
100
11.2 Movements in other non-current liabilities
(EUR 1,000)
VALUE AT 1 JANUARY
Change in consolidation scope
Release of deferred tax liability (through income)
Other changes in deferred tax liability
2015
2014
192,262
346,648
(94,377)
-
(6,047)
199
-
3,486
Movements in deferred tax liabilities
(6,047)
3,685
Release of deferred income (trough income)
(1,675)
(8,836)
Deffered income
Change in put option Indaver
Other movements
TOTAL
7,585
6,335
-
(156,905)
1,302
1,335
99,050
192,262
Financial statements 2015 DELTA N.V.
101
Financial statements 2015
12. Current liabilities
31-12-2015
31-12-2014A
31-12-2014
166,683
235,733
313,626
1,657
661
3,474
68,721
75,411
86,154
Deferred revenue
-
-
15,612
Construction contracts in progress
-
-
147
94,992
55,875
64,855
(EUR 1,000)
Trade payables
Current tax liabilities
Other current tax liabilities
Current portion of provisions
Current portion of long-term debt
Indaver put option
Accruals and deferred income
Other current liabilities
Bank borrowings
TOTAL CURRENT LIABILITIES (EXCLUDING DERIVATIVES)
Trade payables decreased compared with the previous
financial year due to an increase in the proportion of
exchanged-traded commodities versus OTC trades.
The same impact is visible in trade receivables.
102
70,978
47,318
67,318
-
-
138,732
48,168
63,130
84,467
119,146
110,448
290,517
-
35,823
141,533
451,199
514,098
915,918
Other current tax liabilities mainly comprise VAT payable.
Current tax liabilities also comprise wage tax and social
security contributions, corporate income tax, and energy
taxes payable. In addition to other current liabilities and
accruals and deferred income, current liabilities also include
repayments on long-term loans and withdrawals from
provisions scheduled for 2015.
The value of unused days of leave is also shown within
this item.
Financial statements 2015 DELTA N.V.
103
Financial statements 2015
Off-balance sheet assets and liabilities
A summary of off-balance sheet assets and liabilities is given
below, to the extent that they have an estimated (potential)
impact on the profit or loss in excess of EUR 5 million.
A. Operational
Energy, energy production and commodities contracts
DELTA’s risk management policy aims to actively control the
risk exposures arising from its production assets and longterm procurement contracts. Positions arising from trading
activities are controlled through a strictly enforced system of
limits, using both financial and energy derivatives, including
swaps, options and forwards.
Sales contracts included in the portfolio comprise energy
supplies to end-users and trading partners and associated
financial instruments. At the balance-sheet date, sales contracts
were worth EUR 887 million (2014: EUR 1,411 million).
Procurement contracts included in the portfolio comprise
production and purchase contracts with trading partners and
associated contracts for financial instruments. At the
balance-sheet date, procurement contracts were worth
EUR 2,325 million (2014: EUR 3,039 million).
Financial instruments are measured on the basis of market
values, having regard to transactions entered into for
purposes of physical commodities trading. Major contracts
involve existing tolling liabilities for power stations, related
fuel purchases, and gas transmission and storage capacity
in the Netherlands. Loss-making tolling liabilities already
provided for in the balance sheet at 31 December are not
included in the liabilities referred to in this section.
A number of trading contracts entail the obligation to
provide additional collateral if the company's credit rating is
downgraded to non-investment grade. The related exposure
was EUR 138 million.
Investment commitments
At 31 December 2015, financial commitments related
to investments stood at around EUR 75.5 million (2014:
EUR 55.9 million).
Specification of purchase agreements at 2015
(EURm)
Tolling agreement (nuclear power plant EPZ, BMC)
SALE AGREEMENTS
COSTS OF SALE AGREEMENTS
-
2,306
Electricity (customers)
631
-
Gas (customers resp. sourcing)
250
10
Derivatives
TOTAL
Tolling liabilities for the nuclear power plant comprise EPZ's
own fuel obligations. EPZ has entered into long-term purchasing
contracts to meet its fuel requirements. About half of its fuel
requirement, in terms of both value and volume, is covered
by contracts that run until the end of the unit's useful life.
The itemisation presented above does not include net
liabilities arising from the Gas Flex Portfolio and the Elsta
power station. These are recognised in the balance sheet
within the provision for unprofitable contracts.
104
6
8
887
2,325
Underlying gross nominal liabilities were EUR 1,359 million
for the Gas Flex Portfolio (tolling charges, transmission and
storage costs) and EUR 73.4 million for the Elsta power plant.
Borssele Agreement
In 2006 an agreement was reached with central government
to extend the service life of the nuclear power station until
2033. As part of the agreement, arrangements were also made
in terms of the efforts which DELTA (and Essent) were to make
to embrace and provide technical and financial support for new
renewable energy developments. In addition to purchasing
an interest in Sustainable Energy Technology (SET) Fund C.V.,
these commitments also comprise investments in additional
innovative projects. In 2012, DELTA took an interest in
Sustainable Energy Technology (SET) Fund II C.V.
At the balance-sheet date, the remaining commitment to SET
Fund and SET Fund II was EUR 3.7 million. There is also a
reinvestment commitment in relation to earlier exits from the
Funds worth EUR 3.3 million.
on 1 January 2001. Under Section 2 of the Act, Dutch power
generation companies are jointly liable for the costs arising
from, inter alia, contracts for gas and electricity imports
entered into by NEA (formerly SEP). These stranded costs are
allocated to the different power generation companies
according to a formula adopted at the time by the Herkströter
Commission. For EPZ, this comes down to a sizeable 28.5%
share. In recent years, these stranded costs have largely
been settled by commuting import contracts for the supply of
electricity. Taking into account NEA’s remaining shareholders’
equity, the decision was made to continue current policy and
not to recognise a provision for stranded costs.
Stranded costs
The Transitional Act for the Electricity Generation Industry
(Overgangswet elektriciteitsproductiesector) came into force
DELTA has issued and received financial collateral as security
for transactions it has entered into:
B. Collateral and guarantees
TERM IN YEARS
(EUR 1,000)
< 1 year
1 - 5 years
> 5 years
Total
COLLATERAL
Collateral granted for associates and joint ventures
-
-
-
-
Other collateral granted
3,419.3
2,800.0
55,655.3
61,874.6
TOTAL COLLATERAL GRANTED
3,419.3
2,800.0
55,655.3
61,874.6
TERM IN YEARS
(EUR 1,000)
< 1 year
1 - 5 years
> 5 years
Total
COLLATERAL RECEIVED
Collateral received for associates and joint ventures
-
-
-
-
Other collateral received
31,067.3
32,848.5
128,572.1
192,487.9
TOTAL COLLATERAL RECEIVED
31,067.3
32,848.5
128,572.1
192,487.9
Financial statements 2015 DELTA N.V.
105
Financial statements 2015
Main collateral granted
DELTA has issued guarantees to the Zeeland provincial
authorities for financial obligations relating to the capping
of the Koegorspolder and North and Central Zeeland landfill
sites. These guarantees involve a total amount of EUR 22.3
million. Similarly, DELTA has issued EUR 24.6 million worth
of guarantees to the Zuid-Holland provincial authorities for
the costs of capping the Derde Merwedehaven landfill site
in Dordrecht. These guarantees will be taken over by
KatoenNatie, who has bought DELTA’s share interest in
Indaver, but negotiations about this issue are still ongoing.
We have received a counter guarantee from the buyer.
The contract for the sale of the shares in Indaver provides for
two ‘Specific Indemnities’ concerning the settlement of
taxes, both in the order of the total selling price of the share
interest in Indaver.
Main collateral received
Collateral received comprises EUR 177 million (2014:
EUR 172.8 million) in bank and other guarantees received,
mainly in connection with DELTA’s trading activities.
EPZ received 15.5 million (70% share) in collateral,
mainly in connection with advance fuel payments (2014:
EUR 21.1 million/70% share).
C. Lawsuits and claims
With the decision issued by the Dutch Supreme Court on
26 June 2015, it is clear that the group prohibition imposed
under the Independent Grid Management Act (Wet
onafhankelijk netbeheer; WON) is not in violation of the
European Treaty.
Following the Supreme Court’s referral of the case, DELTA lodged
an appeal with the Amsterdam Court of Appeal arguing that
the group prohibition is in violation of the European Convention
for the Protection of Human Rights and Fundamental Freedoms.
The Court of Appeal is expected to hand down its decision in
the autumn of 2016.
DELTA has also in recent years been involved in two separate
lawsuits filed by its former solar power business partners.
Although the District Court has found in favour of DELTA, our
former business partners are continuing to pursue their
cases. One of these cases is now before the Dutch Supreme
Court, following an interim decision by the Court of Appeal.
Closing arguments in the other case before the Court of
Appeal are scheduled to take place in June 2016. It is unclear
when both cases will finally be decided on. A negative ruling
in any further proceedings may influence the buyout price
agreed with our former partners. However, we are confident
that the outcome of both cases will be positive.
The receiver in the bankruptcies of the bio diesel entities
that were DELTA group companies until 2010 was unable to
complete their administration during the year. DELTA still has
a sizeable claim against the estate in connection with a loan
previously granted to the bankrupt company.
106
Financial statements 2015 DELTA N.V.
107
Financial statements 2015
Notes to the
consolidated income
statement
13. Revenue
2015
2014A
2014
Electricity supply
809,876
881,981
881,981
Gas supply
257,052
268,450
268,450
Electricity and gas transport
107,311
106,411
106,411
81,321
80,983
80,983
-
-
517,041
(EUR 1,000)
Cable, internet and telecommunications
Waste management and environmental services
Other revenue
TOTAL REVENUE
Organic growth in revenue from Internet and telephony
services continued in 2015. Despite the reduced statutory
tariff for transmission services, revenue remained at an
acceptable level, driven mainly by end-of-year settlements.
Total revenue from gas and electricity supplies to domestic
and small-business users is partly estimated as staggered
meter readings are taken throughout the year (similar to
2014). Electricity and gas supply and trading declined due
14. Cost of sales
DELTA buys part of its electricity requirement from Elsta and
BMC Moerdijk, both of which are related parties (and recognised
as joint arrangements for reporting purposes) in which DELTA
owns a share interest. The electricity is procured largely on a
cost-plus basis. Cost of sales is adjusted for movements in
gains or losses on the provisions for unprofitable contracts.
108
43,120
72,518
75,970
1,298,680
1,410,343
1,930,836
to lower prices and lower sales volumes. The fall in revenue
was also largely driven by the non-consolidation of Indaver.
Revenue is generated mainly in the Netherlands.
In previous years, when DELTA owned a share interest
in Indaver, revenue was also generated outside the
Netherlands. Revenue currently achieved outside the
Netherlands is non-material.
15. Other operating income
Other gains mainly comprise payments received from third
parties for services rendered and compensation payments
for losses.
16. Fair value gains or losses on the trading portfolio
DELTA uses derivatives to hedge price and currency risks
arising from energy commodity contracts (electricity, gas,
coal, and oil). More specifically, the company applies cash-flow
hedging, which involves entering into hedges to mitigate its
exposure to variability of existing and future cash flows that
could ultimately affect profit or loss.
The hedges are allocated to a specific risk relating to a
balance-sheet item or highly probable forecast transaction.
The effective portion of fair value changes is recognised in
equity and shown within the hedge reserve. The cumulative
amounts recognised in equity are taken to the income
statement in the same period as the hedged transaction.
Movements in the value of the contract portfolio that are not
hedged (non-effective hedges) is recognised as a fair value
change in profit or loss.
In 2015 movements in energy prices led to a net loss on
the fair value of the contract portfolio of EUR 50.1 million,
EUR 4.3 million of which was expensed and EUR 54.4 million
of which was recognised in equity.
Financial statements 2015 DELTA N.V.
109
Financial statements 2015
17. T hird-party services, materials and other
external charges
(EUR 1,000)
Third-party work and services
Consumption of materials
Other external charges
TOTAL
Third-party work and services mainly comprises costs
associated with electricity, gas and digital infrastructure.
They also comprise ICT costs. A large part of external
charges relates to the operations of EPZ and Sloe. Costs of
materials used by EPZ and Sloe amounted to EUR 4.1 million
in 2015, costs for third-party services came to EUR 22.0
million, and other external charges totalled EUR 4.8 million.
110
2015
2014A
2014
77,542
86,600
187,361
8,557
7,836
61,880
19,633
19,162
26,756
105,732
113,598
275,997
18. Staff costs
(EUR 1,000)
Salaries
2015
2014A
2014
101,848
104,791
187,659
Social securities contributions
11,807
15,383
31,061
Pension charges
12,071
10,990
21,442
Other staff costs
8,934
14,539
19,990
134,660
145,703
260,152
STAFF COSTS
Capitalised staff costs
TOTAL
(5,358)
(2,108)
(2,108)
129,302
143,595
258,044
Number of employees (FTEs) as at 31 December
1,621
1,646
3,182
Average number of FTEs (related to the above total staff costs)
1,635
1,657
3,189
FTE average per segment
2015
Energy
Corporate
EPZ
Waste management
Grids and Networks
607
58
334
636
TOTAL
1,635
FTE average: geographical
2015
The Netherlands
1,635
Foreign
TOTAL
The number of FTEs employed by DELTA, including all FTEs
under the joint arrangements (N.V. EPZ and Sloe Centrale B.V.)
totalled 1,786 (2014: 1,813).
In 2014 pension charges comprised EUR 3.9 million in
defined benefit schemes, including those operated by
Indaver.
1,635
DELTA is ‘own risk bearer' in terms of its financial obligations
under the Dutch Unemployment Benefit Act (Werkloosheidwet; WW). This means that it remits no unemployment benefit
contributions to the UWV social security payment agency,
and that unemployment benefits paid to former employees
will be claimed back from DELTA.
IFRS does not allow a general provision to be recognised for
these liabilities. Instead, DELTA determines for each entity
whether current recourse obligations as at the balance-sheet
date provide a reason for recognising a separate provision.
Financial statements 2015 DELTA N.V.
111
Financial statements 2015
Remuneration of DELTA N.V.’s Executive Board members
registered with the Chamber of Commerce
The remuneration policy for Executive Board members was
adopted by the General Meeting, in line with the Supervisory
Board’s proposal.
The guiding principle of DELTA N.V.’s remuneration policy is
that it should allow the company to offer a competitive pay
package to attract and retain people with the right expertise
and experience.
The members of the Executive Board are employed on a
permanent basis and appointed for a four-year term.
Their employment contracts are drafted accordingly and,
in addition to a minimum six-month notice period to be
observed by the employer, provide for severance pay
amounting to a maximum of one year’s salary in line with
the Dutch Corporate Governance Code.
The Supervisory Board determines the remuneration of
Executive Board members annually. Since 2010 the median
level of executive pay in the Netherlands has been the
benchmark for determining the CEO’s total remuneration
package. This means that half of comparable positions at
peer companies are paid more and the other half are paid
less, on the basis of the Hay Group’s job evaluation framework. Since 2005 the benchmark for the CFO’s remuneration
has been Q3, meaning that 25% of comparable positions at
peer companies are paid more and 75% are paid less.
No variable pay was agreed with our CEO, Arnoud Kamerbeek.
In 2015 the employment contract with our CFO, Frank Verhagen,
was amended and the variable pay component deleted.
The Executive Board members are covered by the same
pension plan applicable to all the company’s other
employees, administered by Stichting Pensioenfonds ABP.
Executive Board remuneration
2015
2014
Gross basic annual salary
520,000
383,870
Taxed expense allowances
12,500
15,583
Compensation accrual pension
90,058
-
Pension contributions by employer (ABP)
(EUR)
A. KAMERBEEK (CEO)
24,169
-
Pension contributions by employer
-
69,344
Variable remuneration
-
-
646,727
469,067
330,000
280,000
6,600
19,364
Compensation accrual pension
49,330
-
Pension contributions by employer (ABP)
17,813
-
Pension contributions by employer
-
60,233
Variable remuneration
-
77,700
403,743
437,297
TOTAL
F. VERHAGEN (CFO)
Gross basic annual salary
Taxed expense allowances
TOTAL
Some of the information for 2014 as shown in the table was
restated to allow comparability with the 2015 financial year.
DELTA also operates an optional company car scheme for both
Executive Board members. Mr Kamerbeek used this scheme
from 16 January 2014 until 20 May 2015. Mr Verhagen was
provided with a company car for both full years.
The costs involved in Mr Kamerbeek’s company car were
EUR 7,377 in 2015 (2014: EUR 14,680). The costs for
Mr Verhagen were EUR 18,557 (2014: EUR 17,969).
112
CEO stepped down in 2016
Arnoud Kamerbeek retired from his position as CEO of DELTA
N.V. in March 2016.
His severance pay was not included in his remuneration for
2015 and will instead be expensed in 2016.
19. Depreciation, amortisation and impairment
(EUR 1,000)
2015
2014A
2014
7,325
9,708
12,959
-
-
95,129
103,289
105,786
173,058
INTANGIBLE ASSETS
Amortisation
Impairment
PROPERTY, PLANT AND EQUIPMENT
Depreciation
Impairment
Third-party contributions released
TOTAL
-
-
410
(5,375)
(5,699)
(5,699)
105,239
109,795
275,857
The impairment of intangible assets in 2014 mainly comprised
the difference between the selling price less costs of disposal
and the carrying amount of the share interest in Indaver.
Financial statements 2015 DELTA N.V.
113
Financial statements 2015
20. Other operating expenses
2015
2014A
2014
Added to provision for bad debts
1,427
1,304
1,742
Other operating expenses
1,207
616
633
(EUR 1,000)
Added to other provisions
11,192
12,960
13,903
TOTAL OTHER OPERATING EXPENSES
13,826
14,880
16,278
Other operating expenses also comprises the remuneration
paid to members of the company’s Supervisory Board.
Additions to other provisions mainly comprise additions to
provisions for EPZ in relation to the nuclear power station.
Remuneration of the Supervisory Board in 2015
As of 1 January 2011, the Supervisory Board consists of
a chairperson and four members.
Their annual remuneration is as follows:
Supervisory Board chairperson
EUR 43,700
Supervisory Board members
EUR 27,300
Audit, Risk & Compliance Committee members
EUR 5,500
Nomination & Remuneration Committee members
EUR 3,300
The chairperson receives no additional remuneration for
membership of the Audit, Risk & Compliance Committee
or the Nomination and Remuneration Committee.
The total remuneration of the Supervisory Board members
came to EUR 140,677 in 2015 (2014: EUR 154,685),
as shown below:
Specification compensation Supervisory Board
(EUR)
2015
2014
SESSION
Mr. drs. ing. C. Maas
43,700
20,925
since 16 May 2014 until 16 May 2018
Mrs. drs. A.M.H. Schöningh MBA
30,600
27,810
since 17 May 2013 until 17 May 2017
Mr. mr. M. van 't Noordende
6,825
-
since 25 September 2015 until 25 September 2019
Mr. ir. G. van Harten
6,825
-
since 25 September 2015 until 25 September 2019
since 25 September 2015 until 30 March 2016
8,200
-
Mr. B.P.T. de Wit, MA
Mr. drs. E.M. Robbe RA
20,475
31,050
since 1 January 2011 until 25 September 2015
Mr. drs. ing. J. Bout
24,052
32,400
since 1 January 2011 until 25 September 2015
Mr. ir. D. van Doorn
-
32,400
since 21 June 2010 until 26 September 2014
Mr. J.G. van der Werf
-
10,100
since 2001 until 1 May 2014
140,677
154,685
TOTAL
114
21. Share of profits in joint ventures and associates
This comprises DELTA’s share of profits in joint ventures
and associates.
22. Net finance income/(expense)
(EUR 1,000)
External finance income
2015
2014A
2014
2,855
2,237
2,977
External finance expense
(15,869)
(16,905)
(24,311)
Interest added to provisions
(18,016)
(18,229)
(21,090)
(601)
9,696
9,688
(31,631)
(23,201)
(32,736)
Other finance income/(expense)
TOTAL FINANCE INCOME/(EXPENSE)
Finance expenses were EUR 13.0 million in 2015 and included
the charges on the separated loans for the Sloe power plant
and Netwerkbedrijf during the year and amounts withdrawn
by DELTA N.V. under the RCF until 19 June. External interest
charges were EUR 16.9 million in 2014. The decline in finance
expenses was driven mainly by the fact that DELTA N.V. did
not withdraw any amounts under the RCF after 19 June.
The difference in other finance income/(expense) is explained
by the fact that the Borssele Nuclear Plant Dismantling Fund
generated a substantially lower return in 2015.
Financial statements 2015 DELTA N.V.
115
Financial statements 2015
23. Corporate income tax
(EUR 1,000)
2015
2014A
(5,878)
(1,178)
CORPORATE INCOME TAX RECOGNIZED IN PROFIT OR LOSS
Current income tax charge
Defrerred tax
(24,964)
(9,588)
INCOME TAX EXPENSE
(30,842)
(10,766)
Relating to discontinued operations
INCOME TAX EXPENSE REPORTED IN THE STATEMENT OF PROFIT OR LOSS
2,437
-
(28,405)
(10,766)
CURRENT INCOME TAX CHARGE
Reconciliation of the tax base and the accounting profit resulting
in the current income tax:
Accounting profit before tax (including discontinued operations)
(79,868)
52,510
Participation exemption
(53,755)
(41,117)
Temporary differences relating to the valuation of assets
Temporary differences relating to the valuation of provisions
Other non-deductible expenses and differences
Tax loss carry forward
55
743
114,480
(28,375)
555
510
(14,851)
(5,097)
Unvalued tax loss carry forward
57,568
30,727
DOMESTIC TAX BASE
24,184
9,900
Current corporate tax rate for profitable amount under € 200,000
20.00%
20.00%
Current corporate tax rate for profitable amount over € 200,000
25.00%
25.00%
Tax expense current year
(6,034)
(2,475)
156
1,297
(5,878)
(1,178)
Differences in respect to prior years
CURRENT INCOME TAX CHARGE
MOVEMENT IN DEFERRED TAX ASSETS AND LIABILITIES
The deferred tax results from differences between the accounting value and
the bookvalue for tax purposes as well as from the valuation and usage of tax loss carry forward.
Valuation of tax loss carry forward current year
Usage of recognised tax loss carry forward
Deferred tax relating to temporary differences
Revaluation of tax losses
Differences in respect to prior years
DEFERRED TAX
116
-
3,283
(3,013)
(4,755)
42
(11,943)
(22,180)
6,459
187
(2,631)
(24,964)
(9,588)
Reconciliation of statutory tax to effective tax
31-12-2015
(EUR 1,000)
Tax expense using statutory rate
Net profit before taxes
AMOUNTS
31-12-2014A
%
19,967
(79,868)
AMOUNTS
(13,129)
52,510
25%
Statutory tax rate (NL)
25%
10,949
8,082
12
12
Effect of non taxable revenues and non tax deductible expenses
(amongs other goodwill)
(686)
(3,104)
Effects of the revaluation of valued tax losses and the utilisation
of unvalued tax losses
(12,972)
(1,281)
Effect estimated insufficiant tax loss carry forward
(48,410)
-
Effects from prior periods
182
(1,354)
Other increases or decreases
116
8
(30,842)
(10,766)
Effect of the participation exemption
Effect of 20% rate for profitable amount up to € 200,000
TAX EXPENSE USING EFFECTIVE RATE
%
24. Assets held for sale and discontinued operations
Treatment of the sale of the waste operations and wind farm
In 2015 DELTA sold its 75% share interest in Belgian-based
waste treatment company Indaver and its share interest in
a large wind farm. Both operations were sold as at 1 January
2015, with the price of the shares being determined as at
1 January. Title to the shares in Indaver was transferred on
19 June 2015. The buyer paid EUR 4.9 million in interest for
the period from 1 January until 19 June 2015.
In 2014 DELTA recognised an impairment loss on its share
interest in Indaver, based on fair value less costs of disposal
(i.e. the selling price eventually received). The selling price
did not vary from the carrying value at 31 December 2014.
DELTA no longer had independent control of Indaver during
the year and hence had no risk exposure to Indaver’s
performance up until the sale.
It was agreed with the buyer that, in the event of a sale,
operating income would inure to its benefit, meaning that
Indaver’s results recognised in assets held for sale in DELTA’s
financial statements would have to be impaired directly.
Since DELTA had no share in the results until the time of
the sale and the treatment of such results and necessary
impairment would provide no further insight, the decision
was made to present the information as if Indaver was sold
on 1 January 2015.
The same applies to the wind farm's results.
In accordance with IFRS 5.33 and IAS 7.40, condensed
versions of the 2014 balance sheet, income statement
and cash flow statement for the sold business units are
presented below:
Financial statements 2015 DELTA N.V.
117
Financial statements 2015
Condensed balance sheet and income statement in 2014 of sold items
(EUR 1,000)
BALANCE SHEET
Fixed assets
943,490
Equity *
Current assets
137,977
Minority interest
Cash
TOTAL
31,532
1,112,999
Provisions
465,354
41,426
65,260
Long-term debt
138,344
Current liabilities
402,615
TOTAL
1,112,999
* incl. intercompany-loan to Windpark Kreekraksluis
(EUR 1,000)
INCOME STATEMENT
Sales
520,493
Gross margin
393,847
Operating expenses
(351,546)
Impairment Indaver
(92,762)
Net finance income (expense)
Share in results of joint ventures and associates
Profit before tax
(9,535)
7,658
(52,338)
Corporate income tax
(5,193)
Non-controlling interests
(5,290)
Impairment Indaver
24,195
Profit for the year
(38,626)
Other comprehensive income:
IAS 19
Hedge reserve
Translation reserve
Joint ventures and associates
Minority interest
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
(3,442)
992
32
(39)
611
(1,846)
(40,472)
Condensed cash flow in 2014 of sold items
(EUR 1,000)
Cash flow from operating activities
83,376
Cash flow from investing activities
(35,228)
Cash flow from financing activities
(47,725)
EVOLVEMENT CASH DURING THE YEAR
118
423
The proceeds from the sale of the two business units totalled
EUR 474.6 million and were received in free cash in 2015.
An additional EUR 4.9 million was received from the buyer of
the Indaver shares in connection with the delayed payment
of the purchase price.
The proceeds from the sale of Windpark Kreekraksluis B.V.
are recognised in discontinued operations. The comparatives
for 2014 show the financial information for Indaver as well
as the wind farm. The interest received in connection with the
delayed payment of the purchase price for Indaver is recognised
in profit from discontinued operations.
Also in 2015, expenses were recognised for assets and
liabilities of DELTA Industriële Reiniging B.V. which had not
been included in its sale in 2013 (EUR 0.2 million).
The proceeds received from the sales transactions are shown
in the consolidated cash flow statement within disposal of
group companies and associates (net of cash disposed of).
The combined effect of the above activities on DELTA’s
income statement was as follows:
2015
2014A
2014
Profit before tax
15,862
(32,791)
642
Income tax
(2,437)
(5,193)
-
PROFIT FOR THE YEAR
13,425
(37,984)
642
(EUR 1.000)
In 2014 an impairment loss was recognised on the Goodwill
Indaver line item in Delta Group’s balance sheet, As a result,
the carrying amount of its 75% share interest in the Indaver
Group at 31 December 2014 equalled the agreed selling price
less costs of disposal. Accordingly, no proceeds from the
sale of Indaver were recognised in discontinued operations
in 2015. Discontinued operations in 2014 largely comprised
the final settlement of a subsidy for one of the company’s
solar power operations.
Financial statements 2015 DELTA N.V.
119
Financial statements 2015
Notes to the
consolidated cash flow
statement
The cash flow statement has been prepared according to the
indirect method. Given that a number of items in the income
statement and balance sheet generate no direct cash-flow
effects, cash flows for these items have been neutralised.
This essentially concerns three items:
• Treatment of derivatives
Fair value gains and losses on the trading portfolio lead to
current and non-current movements in assets and liabilities
in the balance sheet. Some of these gains and losses are
also partly included in the operating profit or loss, and some
in the hedge reserve as part of group equity.
However, none of these changes generate a direct cash flow.
This is why all changes are recognised in the cash flow from
operating activities so that positive and negative changes
cancel each other out.
• Share of profits in joint ventures and associates
Share of profits in joint ventures and associates is only partly
distributed as dividends. The undistributed profits lead to an
increase in the entity’s shareholders’ equity and, accordingly,
to a movement in financial fixed assets in DELTA’s balance
sheet. The decision was therefore made to recognise only
the actual dividends received in the cash flow.
• Corporate income tax
Profit after tax takes into account not only corporate income
tax payable on the pre-tax profit, but also deferred tax assets
and liabilities arising from unused tax losses and the agreement
with the Dutch Tax and Customs Administration regarding
the opening balance sheet for tax purposes in 1998.
Because they generate no actual cash flows, movements in
deferred tax assets and liabilities are eliminated from the
cash flow.
120
Post-balance-sheet events
No post-balance-sheet events were identified.
Financial statements 2015 DELTA N.V.
121
Financial statements 2015
Consolidated companies
COMPANY
MAIN
ACTIVITY
HEADQUARTERS
INTEREST IN
COMPANY*
VOTING
RIGHTS
31-12-2015 31-12-2014
Zeeuwse Netwerkholding N.V.
Grids and networks Middelburg
100%
100%
DELTA Netwerkbedrijf B.V. (starting Jan 4, 2016: Enduris B.V.) Grids and networks Middelburg
100%
100%
100%
DELTA Infra B.V.
100%
100%
100%
Infrastructural
Middelburg
100%
DNWG Staff B.V.
Other
Middelburg
100%
100%
100%
DELTA Infra Water B.V.
Other
Middelburg
100%
100%
100%
DELTA Com B.V.
DELTA Energy B.V.
DELTA Ficus Holding B.V.
DELTA Pipe B.V.
Energy
Middelburg
100%
100%
100%
Energy
Middelburg
100%
100%
100%
Energy
Middelburg
100%
100%
100%
Energy
Middelburg
100%
100%
100%
100%
Deltius B.V.
Energy
Ritthem
100%
100%
Windpark Kreekraksluis B.V.
Energy
Middelburg
n/a
100%
n/a
DELTA Tolling Sloe B.V.
Energy
Middelburg
100%
100%
100%
DELTA Saefthinge N.V.
Energy
Doel, Belgium
99.9%
99.9%
99.9%
Limo Energie Nederland B.V.
Energy
Middelburg
100%
100%
100%
Litro Energie Nederland B.V.
Energy
Middelburg
100%
100%
100%
DELTA Energy Belgium N.V.
Energy
Doel, Belgium
99.9%
99.9%
99.9%
Windpark Barrepolder B.V.
Energy
Middelburg
100%
100%
100%
DWK II B.V.
Energy
Middelburg
100%
n/a
100%
DELTA Comfort B.V.
Multimedia
Middelburg
100%
100%
100%
DELTA Kabelcomfort Netten B.V.
Multimedia
Middelburg
100%
100%
100%
ZeelandNet B.V.
Multimedia
Kamperland
100%
100%
100%
Bergen op Zoom 100%
100%
100%
DELTA Industriële Reiniging B.V.
DELTA Investerings Maatschappij B.V.
Other
Middelburg
100%
100%
100%
DELTA Onroerend Goed Ontwikkelingsmaatschappij B.V.
Other
Middelburg
100%
100%
100%
Stichting DELTA Zeeland Fonds
Other
Middelburg
100%
100%
100%
DELTA Development & Water B.V.
Middelburg
100%
100%
100%
Triqua B.V.
Wageningen
100%
100%
100%
DELTA Biovalue B.V. (declared bankrupt)
DELTA Biovalue Nederland B.V. (declared bankrupt)
Eemshaven
Eemshaven
100%
100%
100%
100%
100%
100%
Eemshaven
100%
100%
100%
DELTA Solar B.V.
Middelburg
100%
100%
100%
Sunergy Investco B.V.
Middelburg
100%
100%
100%
DELTA Biopat B.V. (declared bankrupt)
* Shareholding of the parent company in the entity.
122
COMPANY
MAIN
ACTIVITY
HEADQUARTERS
INTEREST IN
COMPANY*
VOTING
RIGHTS
31-12-2015 31-12-2014
Indaver N.V.
Waste
Belgium
n/a
75%
n/a
Indaver Participaties N.V.
Other
Belgium
n/a
99.9%
n/a
Indaver Logistics N.V.
Waste & Transport
Belgium
n/a
99.9%
n/a
Indaver Medical Services N.V.
Other
Belgium
n/a
99.9%
n/a
Indaver Italia S.R.L.
Waste
Italy
n/a
100%
n/a
Indaver Ireland Ltd
Waste
Ireland
n/a
100%
n/a
Indaver Energy Ltd
Other
Ireland
n/a
100%
n/a
Indaver Nederland B.V.
Other
the Netherlands
n/a
100%
n/a
Indaver Gevaarlijk Afval B.V.
Waste
the Netherlands
n/a
100%
n/a
Indaver Personeel B.V.
Other
the Netherlands
n/a
100%
n/a
Indaver ARP B.V.
Waste
the Netherlands
n/a
100%
n/a
Indaver Compost & Biomassa B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Bio Energie B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Groencompost B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Compost B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Impex B.V.
Waste
Produval bvba
Zeeuwse Reinigingsdienst B.V.
Waste
Waste
's-Gravenpolder n/a
Westerlo, Belgium n/a
100%
100%
n/a
n/a
Terneuzen
n/a
99%
n/a
Indaver Verwerking B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Recycling B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Perex B.V.
Waste
Terneuzen
n/a
100%
n/a
Indaver Afvalberging B.V.
Waste
Terneuzen
n/a
100%
n/a
Derde Merwedehaven B.V.
Waste
Terneuzen
n/a
100%
n/a
Stortplaats Koegorspolder B.V.
Waste
Terneuzen
n/a
100%
n/a
Stortplaats Noord en Midden Zeeland B.V.
Waste
Terneuzen
n/a
100%
n/a
Waste
Terneuzen
n/a
100%
n/a
Waste
Terneuzen
n/a
100%
n/a
Other
Terneuzen
n/a
100%
n/a
Indaver Portugal SA
Waste
Portugal
n/a
100%
n/a
Indaver Schweiz AG
Other
Switzerland
n/a
100%
n/a
Indaver UK Ltd
Waste
UK
n/a
100%
n/a
Indaver Deutschland GmbH
SAV Zweite Beteiligungs GmbH & Co. KGHIM GmbH
Other
Other
Germany
Germany
n/a
n/a
51%
94.90%
n/a
n/a
Indaver Waste to Energy B.V.
Depmer B.V.
Indaver Afval & Milieu Personeel B.V.
AVG Abfall-Verwertungs-Gesellschaft GmbH
Gareg Umwelt-Logistik GmbH
HIM GmbH
Waste
Germany
n/a
99.74%
n/a
Waste & Transport
Germany
n/a
100%
n/a
Waste
Germany
n/a
93.83%
n/a
Panse Wetzlar Entsorgung GmbH
Waste & Transport
Germany
n/a
100%
n/a
DE Ingenieurgesellschaft mbH
Other
Germany
n/a
100%
n/a
N.V. EPZ
Energy
Borssele
70%
70%
70%
Sloe Centrale Holding B.V.
Energy
Vlissingen
50%
50%
50%
Energy
Vlissingen
100%
100%
100%
Grids and networks Goes
50%
n/a
50%
SLECO Centrale nv
Waste
Belgium
n/a
50%
n/a
Svex nv
Waste
Belgium
n/a
50%
n/a
JOINT ARRANGEMENTS
Joint operations
DELTA Energy B.V.:
Sloe Centrale B.V.
DELTA Netwerkbedrijf B.V. (starting Jan 4, 2016: Enduris B.V.)
TeslaN B.V.
Indaver N.V.:
* Shareholding of the parent company in the entity.
Financial statements 2015 DELTA N.V.
123
Financial statements 2015
Non-consolidated companies
COMPANY
MAIN
ACTIVITY
HEADQUARTERS
INTEREST IN
COMPANY*
VOTING
RIGHTS
31-12-2015 31-12-2014
JOINT ARRANGEMENTS
Joint Ventures
DELTA Energy B.V.:
Sloewind B.V.
Energy
Middelburg
50.00%
50.00%
50.00%
Windpark Distridam vof
Energy
Terneuzen
n/a
50.00%
n/a
PVNed Holding B.V.
Energy
Middelburg
50.00%
50.00%
50.00%
PVNed B.V.
Energy
Arbel N.V. (Belgium)
PVNed UK Ltd
Energy
Energy
Middelburg
Mechelen, Belgium
100.00%
99.90%
100.00%
99.90%
100.00%
99.90%
BMC Moerdijk B.V.
Energy
UK
100.00%
100.00%
100.00%
Moerdijk
50.00%
50.00%
50.00%
n/a
Sloe Centrale 3 B.V.
Energy
Middelburg
50.00%
n/a
Windpark Kloosterboer B.V.
Energy
NPG Willebroek N.V.
Windpark Kloosterboer II Beheer B.V.
Energy
Energy
Middelburg
50.00%
Antwerpen, Belgium 50.00%
50.00%
50.00%
50.00%
50.00%
Middelburg
50.00%
n/a
50.00%
Waste
Belgium
n/a
50.00%
n/a
Gesellschaft für die Verwertung von Sonderabfallen
mbH& Co. KG
Waste
Germany
n/a
50.00%
n/a
Gesellschaft für die Verwertung von Sonderabfallen
mbH
Waste
Germany
n/a
50.00%
n/a
Indaver N.V.:
Wips N.V.
HIM GmbH:
Indaver Bio Energie B.V.:
Ecofuels B.V.
Waste
Well, Limburg
n/a
50.00%
n/a
Waste
Well, Limburg
n/a
100.00%
n/a
Evides N.V.
Water
Rotterdam
50.00%
50.00%
50.00%
Elsta B.V.
Energy
Middelburg
25.00%
25.00%
25.00%
Elsta B.V. & Co C.V.
Energy
Middelburg
24.75%
24.75%
24.75%
Grids and networks Middelburg
33.33%
33.33%
33.33%
Grids and networks Middelburg
100.00%
100.00%
100.00%
Grids and networks Middelburg
33.33%
33.33%
33.33%
Grids and networks Vught
100.00%
100.00%
100.00%
Grids and networks Middelburg
66.67%
66.67%
66.67%
Laarakker Landbouw B.V.
DELTA N.V.:
* Shareholding of the parent company in the entity.
ASSOCIATES
DELTA Netwerkbedrijf B.V. (starting Jan 4, 2016: Enduris B.V.):
Zebra GasNetwerk B.V.
Zebra Activa B.V.
Zebra Pijpleiding vof
Entrade Pipe B.V.
Zebra Pijpleiding vof
DELTA Energy B.V.:
Windpark Neeltje-Jans B.V.
Energy
Veere
40.00%
40.00%
40.00%
Windpark Zeeland 1 B.V.
Energy
Vlissingen/
Kapelle-Schore
40.00%
40.00%
40.00%
WT I B.V.
Other
Amersfoort
40.00%
40.00%
40.00%
Energy
Middelburg
49.50%
n/a
49.50%
DELTA Windpark Kloosterboer II B.V.
Windpark Kloosterboer II C.V.
124
COMPANY
MAIN
ACTIVITY
HEADQUARTERS
INTEREST IN
COMPANY*
VOTING
RIGHTS
31-12-2015 31-12-2014
Indaver N.V.:
IHM cvba
Waste
Belgium
n/a
30.00%
n/a
Ibogem cvba
Waste
Belgium
n/a
35.12%
n/a
Intercommunale vereniging Verko N.V.
Waste
Belgium
n/a
39.90%
n/a
Ecowest N.V.
Other
Belgium
n/a
42.61%
n/a
Indaver Participaties N.V.
Sita Decontamination Services N.V.
Waste
Belgium
n/a
26.00%
n/a
Ecov N.V.
Other
Belgium
n/a
50.00%
n/a
Ivago cvba
N.V. Brussel Compost
Waste
Belgium
n/a
49.90%
n/a
Waste
Belgium
n/a
40.00%
n/a
Waste
Wijster
n/a
20.00%
n/a
Indaver Nederland B.V.:
AZN Holding B.V.
B.V. Grondbezit AVI Moerdijk
Other
Moerdijk
n/a
100.00%
n/a
B.V. Grondbezit AVI Moerdijk II
Other
Moerdijk
n/a
100.00%
n/a
N.V. AZN
Waste
Moerdijk
n/a
100.00%
n/a
Grids and networks The Netherlands
2.47%
1.65%
2.47%
Other
The Netherlands
5.00%
5.00%
5.00%
49.93%
OTHERS
DELTA Netwerkbedrijf B.V. (starting Jan 4, 2016: Enduris B.V.):
Energie Data Services Nederland B.V.
DELTA N.V.:
Synergia Capital Partners B.V.
DELTA Investerings Maatschappij B.V.
Sustainable Energy Technology Fund C.V.
Other
The Netherlands
49.93%
49.93%
Sustainable Energy Technology Fund II C.V.
Other
The Netherlands
20.54%
54.22%
20.54%
Business Park Terneuzen B.V.
Other
The Netherlands
15.00%
15.00%
15.00%
Zeeland Airport B.V.
Other
The Netherlands
18.80%
18.80%
18.80%
N.V. EPZ:
B.V. NEA
Energy
Arnhem
28.50%
28.50%
28.50%
Electrorisk Verzekeringsmaatschappij N.V.
Energy
Arnhem
n/a
4.13%
n/a
Vliegasunie B.V.
Energy
Nieuwegein
14.29%
14.29%
14.29%
KSG Kraftwerks-Simulator-Gesellschaft mbH
Energy
Germany
2.05%
2.05%
2.05%
GfS Gesellschaft für Simulatorschulung mbH
Energy
Germany
2.05%
2.05%
2.05%
Energy
The Netherlands
1.00%
n/a
1.00%
Waste
Belgium
n/a
34.96%
n/a
Windpark Kloosterboer II Beheer B.V.
Windpark Kloosterboer II C.V.
Indaver N.V.:
Vlar Papier N.V.
Ecowest N.V.
Waste
Belgium
n/a
11.93%
n/a
Ivvo cvba
IVIO cvba
Waste
Belgium
n/a
3.46%
n/a
Ecluse cvba
Waste
Belgium
n/a
33.33%
n/a
Waste
Belgium
n/a
33.33%
n/a
Waste
Germany
n/a
0.036%
n/a
Sleco Centrale N.V.:
Ecluse cvba
Indaver Deutschland GmbH:
GSB Sonderabfall-Entsorgung Bayern GmbH
* Shareholding of the parent company in the entity.
Financial statements 2015 DELTA N.V.
125
Financial statements 2015
126
Company financial
statements 2015
Financial statements 2015 DELTA N.V.
127
Financial statements 2015
Company balance sheet as at 31 december 2015 (before profit appropriation)
(EUR 1,000)
REF. NO.
31-12-2015
31-12-2014
415
864
10,594
11,907
ASSETS
NON-CURRENT ASSETS
Intangible assets
Property, plant and equipment
Financial assets
Investements in subsidiaries
3
217,780
837,768
Other investments
3
349,344
341,969
Receivables from subsidiaries
3
17,928
68,490
Loans to other investment entities
3
457
457
Other loans
3
47
60
Deffered tax assets
4
29,188
58,897
614,744
1,307,641
625,753
1,320,412
CURRENT ASSETS
Receivables from subsidiaries
Other receivables
349,917
5
203,112
2,482
2,770
352,399
205,882
CASH
114,916
419
TOTAL
1,093,068
1,526,713
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Shareholders' equity
6
1,041,482
1,100,608
Profit/(loss) for the year
6
(110,710)
3,760
PROVISIONS
7
930,772
1,104,368
2,867
1,396
NON-CURRENT LIABILITIES
Other non-current liabilities
8
-
174,497
-
174,497
CURRENT LIABILITIES
Payables to subsidiaries
Other payables
TOTAL
128
9
147,967
157,322
11,462
89,130
159,429
246,452
1,093,068
1,526,713
Company income statement
(EUR 1,000)
Profit/(loss) on parent company activities
Share in profits/(losses) of subsidiaries, joint ventures and associates
PROFIT/(LOSS)
2015
2014
(33,211)
(559)
(77,499)
4,319
(110,710)
3,760
Notes to the company financial statements
DELTA N.V. is the Dutch-based holding company of a number
of group companies involved in generating, transmitting and
supplying energy and providing Internet and cable services.
The company’s functional currency is the euro. Unless otherwise
stated, all amounts are presented in thousands of euros.
DELTA N.V. used the option available under Part 9, Book 2,
of the Dutch Civil Code to prepare the company financial
statements in accordance with the International Financial
Reporting Standards used in the consolidated financial
statements, with the exception of equity-accounted group
companies and investments. The company income statement
is presented in abridged form in accordance with Section
402, Title 9, Book 2, of the Dutch Civil Code.
Accounting policies
Associates and joint ventures are measured according to the
equity method and stated at net asset value (in accordance
with IFRSs applied to the consolidated financial statements),
adjusted for goodwill paid on acquisition and less any
impairment losses on goodwill. In the comparatives for
2014, no account is taken of non-controlling interests and
the Indaver put option, which is shown within other current
liabilities in the consolidated financial statements.
Relevant adjustments are made to the value of the group
company concerned. In 2015 DELTA sold its 75% share
interest in Belgian-based waste treatment company Indaver.
For the other accounting policies, please refer to the notes
to the consolidated financial statements.
Financial statements 2015 DELTA N.V.
129
Financial statements 2015
Notes to the company balance sheet
1. Intangible fixed assets
TOTAL
SOFTWARE
CARRYING AMOUNT AS AT 1 JANUARY
1,515
1,515
Depreciation
(651)
(651)
864
864
(EUR 1,000)
2014
CARRYING AMOUNT AS AT 31 DECEMBER
Depreciation period in years
5
2015
CARRYING AMOUNT AS AT 1 JANUARY
Depreciation
CARRYING AMOUNT AS AT 31 DECEMBER
Depreciation period in years
130
864
864
(449)
(449)
415
415
5
2. Property, plant and equipment
(EUR 1,000)
TOTAL
LAND AND
BUILDINGS
PLANT AND
EQUIPMENT
OTHER
ASSETS
ASSETS UNDER
CONSTRUCTION
THIRD-PARTY
CONTRIBUTIONS
2014
22,287
16,914
4,940
962
91
(620)
Investments
CARRYING AMOUNT AS AT 1 JANUARY
-
-
-
-
-
-
Depreciation
(1,476)
(617)
(845)
(57)
-
43
Disposals
(8,904)
(8,859)
-
(45)
-
-
CARRYING AMOUNT AS AT 31 DECEMBER
11,907
7,438
4,095
860
91
(577)
CARRYING AMOUNT BEFORE DEDUCTION OF
CONTRIBUTION THIRD-PARTY CONTRIBUTIONS
12,484
7,438
4,095
860
91
Accumulated depreciation and impairment
59,994
18,203
35,287
6,504
ACQUISITION COST AS AT 31 DECEMBER
72,478
25,641
39,382
7,364
91
2015
11,907
7,438
4,095
860
91
Investments
CARRYING AMOUNT AS AT 1 JANUARY
108
-
-
-
108
-
Depreciation
(1,303)
(593)
(608)
(53)
(91)
42
Disposals
(577)
(118)
-
-
(118)
-
-
CARRYING AMOUNT AS AT 31 DECEMBER
10,594
6,845
3,487
689
108
(535)
CARRYING AMOUNT BEFORE DEDUCTION OF
CONTRIBUTION THIRD-PARTY CONTRIBUTIONS
11,129
6,845
3,487
689
108
Accumulated depreciation and impairment
60,043
18,240
35,299
6,504
ACQUISITION COST AS AT 31 DECEMBER
71,172
25,085
38,786
7,193
108
0 - 40
7 - 40
5 - 15
n/a
Depreciation periods in years
Property, plant and equipment mainly comprises investments
in premises. In the 2014 comparatives, the sale of buildings
to DELTA Infra B.V. is shown within disposals.
Financial statements 2015 DELTA N.V.
131
Financial statements 2015
3. Financial fixed assets (excluding tax assets)
TOTAL
INVESTMENTS IN
SUBSIDIARIES
OTHER RECUIVABLES
FROM
INVESTSUBSIMENTS
DIARIES
1,346,124
952,987
332,052
Reversal of current portion
425
-
Acquisition/grant of loans
18,131
4,319
Disposals/repayments/dividends
(76,879)
Movements in hedge reserve
(45,320)
(EUR 1,000)
CARRYING AMMOUNT AS AT 31 DECEMBER 2013
Share in profits
Other movements
CARRYING AMMOUNT AS AT 31 DECEMBER 2014
Reversal of current portion
Acquisition/grant of loans
Share in profits
Disposals/repayments/dividends
RECEIVABLES
FROM
OTHER
INVESTMENTS
OTHER
RECEIVABLES
60,619
457
9
-
-
285
140
-
-
17,981
150
-
(32,937)
37,256
-
-
-
(37,902)
(27,743)
(10,110)
(434)
(690)
(45,320)
-
-
-
-
1,944
940
404
-
(1)
601
1,248,744
837,768
341,969
68,490
457
60
-
-
-
-
-
-
243
-
-
143
100
-
(77,499)
(116,013)
38,514
-
-
-
(505,699)
(422,900)
(32,063)
(50,000)
(100)
(636)
Movements in hedge reserve
(48,816)
(48,816)
-
-
-
-
Other movements
(31,417)
(32,259)
924
(705)
-
623
CARRYING AMMOUNT AS AT 31 DECEMBER 2015
585,556
217,780
349,344
17,928
457
47
The sale of DELTA’s 75% share interest in waste treatment
company Indaver was recognised in 2015. The hedge reserve
declined during 2015.
132
4. Deferred tax assets
Deferred tax assets arise from differences between the
carrying amount in the financial statements and the
corresponding tax base. Deferred tax assets also comprise
unused tax losses.
5. Short-term receivables
(EUR 1,000)
Trade receivables
Total current taxes
Other receivables, prepayments and accrued income
Current portion of long-term loans granted
Other receivables
TOTAL
31-12-2015
31-12-2014
110
395
2,035
2,079
327
286
10
10
337
296
2,482
2,770
Financial statements 2015 DELTA N.V.
133
Financial statements 2015
6. Statement of changes in equity
(EUR 1,000)
CARRYING AMOUNT AS AT 31 DECEMBER 2013
Profit appropriation for 2013
Payment of dividend
Other changes
TOTAL
PAID-UP
CAPITAL
STATUTORY
RESERVE
HEDGE
RESERVE
REVALUATION
RESERVE
OTHER UNAPPRORESERVES
PRIATED
PROFIT
1,168,077
6,937
214,866
(34,658)
(4,724)
910,868
74,788
-
-
-
-
-
54,788
(54,788)
(20,000)
-
-
-
-
-
(20,000)
(2,148)
-
(5,052)
1
(2,587)
5,490
-
Movement in hedge reserve
(33,692)
-
-
(33,692)
-
-
-
Corporate income tax effect
(11,629)
-
-
(11,629)
-
-
-
3,760
-
-
-
-
-
3,760
1,104,368
6,937
209,814
(79,978)
(7,311)
971,146
3,760
-
-
-
-
-
(11,240)
11,240
Net profit for 2014
CARRYING AMOUNT AS AT 31 DECEMBER 2014
Profit appropriation for 2014
Payment of dividend
(15,000)
-
-
-
-
-
(15,000)
Movement in hedge reserve
930
-
(37,970)
(32)
8,052
30,880
-
Movement in hedge reserve
(48,816)
-
-
(48,816)
-
-
-
-
-
-
-
(110,710)
171,844 (128,826)
741
990,786
(110,710)
Net profit/(loss) for 2015
CARRYING AMOUNT AS AT 31 DECEMBER 2015
(110,710)
-
930,772
6,937
The statutory reserve comprises undistributed profits of
associates and is therefore not freely distributable. This also
applies to the hedge reserve, which should be seen in relation
to unrealised income from fair value changes in derivatives
used for hedging purposes.
In 2014 other non-distributable reserves comprised the foreign
currency translation reserve (in connection with translation
differences) and re-measurements of defined benefit liabilities
under IAS 19 Employee Benefits.
134
Both reserves relating to the share interest in Indaver were
terminated in 2015. The remaining balance concerns the
revaluation reserve, which is also non-distributable.
Other movements comprise changes in equity of nonconsolidated associates.
For an explanation of changes in equity, please refer to the
consolidated financial statements.
7. Provisions
(EUR 1,000)
TOTAL
EMPLOYEE
BENEFITS
OTHER
PROVISIONS
CARRYING AMOUNT AS AT 31 DECEMBER 2013
3,493
3,493
-
Reversal of current portion of provisions
2,107
741
1,366
Added
112
112
-
Interest added
154
154
-
Released
(139)
(139)
Utilised
(509)
(509)
-
(1,811)
(1,811)
-
3,407
2,041
1,366
(2,011)
(645)
(1,366)
1,396
1,396
-
Other movements
CARRYING AMOUNT AS AT 31 DECEMBER 2014
Kortlopend gedeelte van voorzieningen
CARRYING AMOUNT AS AT 31 DECEMBER 2014
Reversal of current portion of provisions
2,011
645
1,366
Added
1,769
1,769
-
Interest added
Released
53
53
-
(248)
(248)
-
Utilised
(329)
(329)
Other movements
(118)
(118)
-
CARRYING AMOUNT AS AT 31 DECEMBER 2015
4,534
3,168
1,366
(1,667)
(301)
(1,366)
2,867
2,867
-
Current portion of provisions
CARRYING AMOUNT AS AT 31 DECEMBER 2015
At 31 December 2015, long-term provisions only comprised
employee benefits.
Under the terms of the collective agreement, DELTA pays its
employees long-service benefits. From the start date of
employment, a provision is recognised for these benefits,
based on past years of service, expected price and pay rises
(at an average rate of 2%) and probability of dismissals,
invalidity and mortality rates. The discount rate is 3.5%
(2014: 4.5%).
Financial statements 2015 DELTA N.V.
135
Financial statements 2015
8. Non-current liabilities
(EUR 1,000)
Carrying amount as at 1 January
Reversal of current portion
Loans drawn down
Repayments
31-12-2015
31-12-2014
174,497
240,624
36,818
41,818
-
20,000
(213,398)
(91,818)
2,083
691
-
211,315
Repayments due in the current year
-
(36,818)
LONG-TERM DEBT
-
174,497
Other movements
136
9. Current liabilities (excluding group companies)
31-12-2015
31-12-2014
Trade payables
2,617
4,787
Current tax liabilities
2,396
2,680
-
36,818
Current portion of provisions
1,667
2,012
Other
4,782
7,010
Total other payables
6,449
45,840
-
35,823
11,462
89,130
(EUR 1,000)
Current portion of non-current liabilities
Bank borrowings
CARRYING AMOUNT AS AT 31 DECEMBER
Other payables comprise, inter alia, the current portion
of the provisions, the current portion of borrowings,
and outstanding supplier accounts.
No current portion of borrowings was recognised at
31 December 2015, the long-term loan having been
repaid in 2015.
Current tax liabilities comprise VAT and energy tax payable.
Financial statements 2015 DELTA N.V.
137
Financial statements 2015
Off-balance sheet liabilities
A summary of off-balance sheet liabilities is given below,
to the extent that they have an estimated (potential) impact
on the profit or loss in excess of EUR 5 million.
Main collateral granted
DELTA has issued guarantees to the Zeeland provincial
authorities for financial obligations relating to the capping
of the Koegorspolder and North and Central Zeeland landfill
sites.
These guarantees involve a total amount of EUR 22.3 million.
Similarly, DELTA has issued EUR 24.6 million worth of
guarantees to the Zuid-Holland provincial authorities for the
costs of capping the Derde Merwedehaven landfill site in
Dordrecht. These guarantees will be taken over by KatoenNatie, who has bought our share interest in Indaver, but
negotiations about this issue are still ongoing. DELTA has
received a counter guarantee from the buyer.
The contract for the sale of the Indaver shares provides for
two ‘Specific Indemnities’ concerning the settlement of
taxes, both in the order of the total selling price of the share
interest in Indaver.
Lawsuits and claims
With the decision issued by the Dutch Supreme Court on
26 June 2015, it is clear that the group prohibition imposed
under the Independent Grid Management Act (Wet
onafhankelijk netbeheer; WON) is not in violation of the
European Treaty.
Following the Supreme Court’s referral of the case, DELTA
lodged an appeal with the Amsterdam Court of Appeal arguing
that the group prohibition is in violation of the European
Convention for the Protection of Human Rights and
Fundamental Freedoms. The Court of Appeal is expected
to hand down its decision in the autumn of 2016.
DELTA has also in recent years been involved in two separate
lawsuits filed by its former solar power business partners.
Although the District Court has found in favour of DELTA,
our former business partners are continuing to pursue their
cases. One of these case is now before the Dutch Supreme
Court, following an interim decision by the Court of Appeal.
Closing arguments in the other case before the Court of
Appeal are scheduled to take place in June 2016. It is unclear
138
when both cases will finally be decided on. A negative ruling
in any further proceedings may influence the buyout price
agreed with our former partners. However, we are confident
that the outcome of both cases will be positive.
The receiver in the bankruptcies of the bio diesel entities
that were DELTA group companies until 2010 has requested
further information in connection with several – potential –
claims against the entities. It is unclear at this point whether
this will have any financial implications for DELTA.
403 Declarations
DELTA N.V. has filed a statement with the Chamber of
Commerce as required under Section 403, Book 2, of the
Dutch Civil Code, assuming joint and several liability for
debts arising from legally binding transactions of the
following subsidiaries as at the balance-sheet date.
•
•
•
•
•
•
•
•
•
•
•
•
•
DELTA Comfort B.V.
DELTA Energy B.V.
DELTA Ficus Holding B.V.
DELTA Infra B.V.
DELTA Kabelcomfort Netten B.V.
DELTA Onroerend Goed Ontwikkelingsmaatschappij B.V.
DELTA Pipe B.V.
DELTA Tolling Sloe B.V.
DELTIUS B.V.
LIMO Energie Nederland B.V.
LITRO Energie Nederland B.V.
ZeelandNet B.V.
DELTA Com B.V.
On that basis, and on the grounds of annual authorisation
statements from the shareholders filed with the Chamber
of Commerce, these companies are exempt from using the
prescribed format in preparing their financial statements.
Fiscal unity
DELTA N.V. heads a fiscal unity for VAT purposes. DELTA N.V.
and its subsidiaries that are members of this fiscal unity are
jointly and severally liable for the fiscal unity’s tax debt.
Zeeuwse Netwerkholding B.V. and its subsidiaries constitute
a separate fiscal unity for VAT purposes.
Financial statements 2015 DELTA N.V.
139
Financial statements 2015
Notes to the company income statement
In 2015 DELTA N.V. employed an average number of 634 FTEs
(2014: 652 FTEs).
For details of the remuneration of DELTA N.V.’s Executive
Board members, please refer to note 18 (Staff costs) to the
consolidated financial statements.
(EUR 1,000)
Audit of DELTA Group Annual Reports
Other analysis assignments
Tax consultancy
Other non-analysis services
TOTAAL
No performance-related fees were paid.
140
For details of the remuneration of DELTA N.V.’s Supervisory
Board members, please refer to note 20 (Other operating
expenses) to the consolidated financial statements.
Auditors’ fees
In 2015 DELTA N.V. paid the following fees for its
consolidated companies:
DELOITTE ACCOUNTANTS BV
2015
2014
428
511
17
39
OTHER PARTS OF
DELOITTE NETWORK NLD
2015
TOTAL
2014
2015
2014
-
-
428
511
-
-
17
39
-
-
39
12
39
12
11
55
271
43
282
98
456
605
310
55
766
660
Signed for approval:
Executive Board
Supervisory Board
F. Verhagen
C. Maas, Chairman
Ms. A.M.H. Schöningh, Vice Chairman
G. van Harten
M. van ‘t Noordende
Middelburg, 6 April 2016
Financial statements 2015 DELTA N.V.
141
3
Other information
Other
information
142
Profit appropriation
Profit appropriation according to the Articles of Association
Article 39 of the Articles of Association provides for the
appropriation of profits as follows.
1.Any loss reported in the income statement, as included in
the adopted financial statements, shall be taken to the
general reserves. If these reserves hold insufficient funds
to cover such loss, the remainder of the loss shall be
charged to any profits achieved in future years.
3.The General Meeting may declare one or more interim
dividends and/or make other interim distributions,
provided that the requirements of Article 105, Book 2,
paragraph 2, of the Dutch Civil Code are satisfied on the
evidence of an interim statement of financial position
as referred to in Article 105 of Book 2, paragraph 4,
of the Dutch Civil Code.
2.If the income statement, as included in the adopted
financial statements, reports any profit, the Supervisory
Board may use such profit to add funds to the general
reserves. Any profit remaining shall be at the disposal of
the General Meeting.
Proposed dividend payout to shareholders
(EUR 1,000)
Distributable profit (Art. 39.2 Articles of Association)
Negative result for the year
Interim dividend charged to the other reserves (Art. 39.3 Articles of Association)
Withdrawal from other reserves
PROPOSED DIVIDEND PAYOUT TO SHAREHOLDERS
2015
2014
-
3,760
(110,710)
-
-
11,240
(110,710)
-
15,000
Other information
143
Other information
Independent auditors’ report
For the independent auditor's report see the Dutch version
of the annual report 2015.
144
Statement
Code of Conduct Compliance Statement for Suppliers, including Metering Companies for which they are responsible,
regarding the retail use of metering systems that can be read remotely.
Names of legal entities:
DELTA Energy B.V. and DELTA Comfort B.V.
Place of registered office:
Middelburg, The Netherlands
Period:
1 January 2015 until 31 December 2015
For the proper delivery of their services, DELTA Energy B.V. and DELTA Comfort B.V. use meter data obtained from retail metering
systems that can be read remotely. In addition to the Personal Data Protection Act (Wet bescherming persoonsgegevens),
Dutch energy suppliers and the metering companies for which they are responsible have drawn up a code of conduct for the
use, registration, sharing and storage of data obtained from retail metering systems that can be read remotely.
DELTA N.V., duly represented by its director Frank Verhagen, acting in his capacity as a director of DELTA Com B.V., DELTA Com B.V.
acting in its capacity as a shareholder of DELTA Energy B.V. and as a shareholder of DELTA Comfort B.V., hereby declares that,
to the best of their knowledge, DELTA Energy B.V. and DELTA Comfort B.V. were in compliance with the rules and obligations set
out in the Code of Conduct for Suppliers of Smart Meters during the period stated above.
Middelburg, The Netherlands, 6 April 2016
Signed
F. Verhagen
Executive Board of DELTA N.V.
Other information
145
4
DELTA in key figures
DELTA
in key figures
146
DELTA in key figures
(EUR million)
2015
2014
REVENUE
1,299
1,931
810
882
of which:
Electricity supply
Gas supply
257
269
Electricity and gas transport
107
106
81
81
Cable, internet and telecommunications
Waste management and environmental sevices
-
517
44
76
252
818
Operating result
(64)
33
Profit before tax
(96)
-
Other revenue
FINANCES
Gross margin
Profit after tax
EBITDA
Group equity (excluding dividend)
Balance sheet total
(111)
4
49
312
931
1,146
2,684
3,665
-3.6%
1.5%
RATIOS
Return on investment
Return on equity attributable to the shareholders
-11.9%
0.3%
Equity ratio
34.7%
31.3%
5.0
15.0
Interest coverage ratio
DELTA in key figures
147
Definitions of financial ratios
Return on invested capital (ROIC)
Operating profit + interest income from financial fixed assets
+ share of profits or losses in joint ventures and associates,
divided by capital employed x 100%.
Capital employed
Sum total of non-current assets and net working capital as
at the balance-sheet date.
Return on equity (ROE)
Net profit attributable to DELTA N.V.’s shareholders, divided by
shareholders’ equity attributable to DELTA N.V.’s shareholders.
Equity ratio
Group equity divided by total assets x 100%.
Interest coverage ratio
Operating profit + depreciation/amortisation charges + interest
income, divided by net external finance income or expense.
148
DELTA N.V.
Afdeling Corporate Communicatie
en Public Affairs
Poelendaelesingel 10
4335 JA Middelburg
[email protected]
149