2014
ANNUAL
REPORT
TRANSMITTING
VALUES
BY
TRANSMITTING
ENERGY.
VALUES ARE A PATH,
ENERGY IS POWER.
ELES provides a safe, reliable and uninterrupted electric power
transmission 24 hours a day. This is the Company’s mission,
which is based on the values of responsibility, commitment,
knowledge, reliability, cooperation and determination. The
values that guide the Company on the path of development and
which the Company is proud to convey – for a better quality of
life and growth of the society, a part of which ELES is and, more
importantly, ELES wants to be and co-create it.
4
1INTRODUCTION
1.1 Highlights from operations of ELES, d.o.o.
1.2 Significant business events in 2014 11
1.3Operating highlights of ELES in 2014 and objectives of the company in 2015
12
1.4Chief Executive Officer's address
14
1.5 Supervisory Board report
16
2PRESENTATION OF ELES
2.1 Company Profile
18
8
8
18
2.2 Registered Business Activities
19
2.3 ELES' Role in the Slovenia's and Europe's Electric Power System
20
2.4 Basic Data on the Transmission Network
21
2.5 Corporate Governance and Management
22
2.5.1
Supervisory Board
22
2.5.2
Other Committees
22
2.6 ELES Group
23
2.7 Business Policy and Objectives
24
2.7.1
Mission, Vision and Values
Analysis of the Environment and Its Impact on the Functioning of the Company
2.8
24
24
2.8.1
General economic environment and forecasts of economic trends
24
2.8.2
ELES’ management policies
25
2.8.3
Energy legal basis for the Company’s operation in 2014
25
3MANAGEMENT AND QUALITY SYSTEMS
3.1 Management Systems
3.2 Risk Management
3.3 Corporate Integrity
30
4OPERATIONS ANALYSIS
38
4.1 Report on Operation in 2014
32
34
37
40
4.1.1Grid Input and Grid Offtake
41
4.1.2
Transmission network loads
43
4.2 Significant Events in 2014 in the Field of Operation
44
4.3Investments
4.3.1
Investments into the electric power transmission network
46
46
4.4 Transmission Network Maintenance
51
4.5 Development and Research
52
4.6 Performance Analysis
53
4.7Performance in Terms of Comparison of Corrected Regulated Return and
4.8 Performance Criteria (Indicators)
Achieved Total Profit before Tax
59
63
4.8.1
Performance ratios
63
4.8.2
Economic and technical indicators
64
4.8.3
Technical indicators
65
5
5 IT AND TELECOMMUNICATIONS
68
6 SUSTAINABLE DEVELOPMENT
70
6.1 Comprehensive Human Resource Management
70
6.1.1
Employees in ELES, d.o.o
71
6.1.2
Employment of disabled persons
71
6.1.3
Education and training
72
6.1.4
Educational structure of employees
73
6.1.5Scholarships
73
6.1.6
Annual appraisal interviews
73
6.1.7
Satisfaction and commitment of employees
74
6.1.8
Family-Friendly Company Certificate
74
6.1.9
Employees absence
75
6.1.10 Relations between the employees and the Chief Executive Officer
75
6.1.11 Care for the employees and the related groups outside working time
75
6.1.12 Supplementary pension insurance for employees
76
6.1.13 Communication with employees
76
6.1.14 Occupational health and safety
76
6.2 Care for the environment
77
6.2.1
Environmental policy
77
6.2.2
Managing individual important environmental aspects
77
6.2.3
Achievements in the field of environmental protection
78
6.3 Care for Interest Activities – Social Responsibility
78
6.3.1
Communication with the local community and social responsibility
78
6.3.2
Communication with business partners
79
6.3.3
Communication with the media
79
6.3.4
Communication with the users
80
6.3.5
Communication with influential publics
80
7SIGNIFICANT POST REPORTING EVENTS
84
8 ENDORSEMENT OF THE ANNUAL REPORT
85
9FINANCIAL REPORT
88
9.1Statement on the Management's Responsibility and
9.2 Financial Statements
9.3 Notes to the Financial Statements
Corporate Governance Statement on Corporate Governance
88
90
96
9.3.1
Disclosure of Balance Sheet Items
100
9.3.2
Disclosures of Income Statement Items
116
9.3.3
Other Disclosures
120
10 LIST OF ABBREVIATIONS
132
6
01
RELIABILITY
ELES is aware of its essential function
and responsibilities in providing the safe
uninterrupted supply of quality electrical
energy so as to contribute to the
achievement of individuals’, companies’,
institutions’ objectives and the society
as a whole. Hence, ELES keeps to the
agreements in its daily work and all the
Company’s processes. Reliable, safe and
uninterrupted transmission of electricity
also means safe and quality lives of all
the Company’s stakeholders.
Jakov Fak,
Multiple world champion in
biathlon and Olympic bronze
medallist
7
8
1. INTRODUCTION
1.1 Highlights from operations of ELES, d.o.o.
INDICATORS
Year 2010
Year 2011
Year 2012
Year 2013
Annual plan
2014
Year 2014
Assets
527.6
547.0
611.3
623.9
640.8
656.3
Equity
397.7
399.1
381.5
381.7
386.8
382.3
Operating revenues
131.5
136.8
139.8
138.9
146.6
143.5
Operating expenses
124.8
125.8
130.7
130.7
131.0
133.3
Total revenues
131.8
137.2
140.7
140.8
147.2
147.3
Total expenses
125.3
132.0
135.7
133.5
132.7
135.3
Net profit or loss for the period
5.3
4.1
5.1
8.4
14.5
11.2
Operating profit (EBIT)
6.7
10.9
9.2
8.2
15.6
10.2
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
34.6
38.8
37.5
36.2
43.0
40.4
Investments (in million euros)
45.2
37.5
67.9
46.2
44.2
37.9
Return on equity (ROE) %
1.3
1.0
1.3
2.2
3.8
3.0
"Return on equity (ROE) %
(not in line with article 120 of the EA-1)"
4.9
10.5
10.5
7.7
6.8
7.0
Return on assets (ROA) %
1.1
0.8
0.9
1.4
2.3
1.8
"Return on assets (ROA) %
(not in line with article 120 of the EA-1)"
3.9
7.7
7.7
5.7
6.0
5.3
Operating efficiency ratio
1.054
1.087
1.070
1.062
1.119
1.077
"Operating efficiency ratio
(not in line with article 120 of the EA-1)"
1.193
1.314
1.431
1.306
1.292
1.281
"Value added per employee
(in thousand euros)"
106.0
119.8
118.4
122.8
128.3
128.9
533
530
530
538
522
532
FROM BALANCE SHEET (in miliion euros)
FROM INCOME STATEMENT (in million euros)
RATIO
NUMBER OF EMPLOYEES AS AT 31 December
Note: ratios are calculated pursuant to the items by way of applying Article 120 of the EA-1.
9
Revenues and expenses from operations and changes in net profit
EBIT and EBITDA
in million euros
150.0
in million euros
50.0
v MEUR
15.0
120.0
11.2
90.0
8.4
60.0
5.3
30.0
0.0
5.1
4.1
20102011201220132014
12.0
40.0
9.0
30.0
6.0
20.0
3.0
10.0
0.0
0,0
20102011201220132014
operating income
EBID - Operating profit
operating expenses
EBITDA - Earnings before interest, tax, depreciation and amortisation
Net profit for the year
Return on assets (ROA), equity (ROE) and operating efficiency
Return on assets (ROA), equity (ROE) and operating efficiency
(not in line with article 120 of the EA-1)
%
%
3.5
1.090
1.087
3.0
1.077
1.070
2.5
1.080
14.0
1.500
1.431
12.0
1.400
1.306
1.281
1.070
10.0
1.060
8.0
1.050
6.0
1.100
1.0
1.040
4.0
1.000
0.5
1.030
2.0
0.900
1.020
0.0
2.0
1.062
1.054
1.5
0.0
20102011201220132014
ROE
ROA
operating efficency
45.2
40.0
ROA
operating efficency
6.60
67.9
46.2
37.5
6.50
37.9
20.0
0.0
20102011201220132014
The average level of education of employees
in million euros
80.0
6.40
6.30
20102011201220132014
Investments
Reconstructions
Small investments
6.20
1.300
1.200
1.193
ROE
Investments
60.0
1.314
20102011201220132014
0.800
10
INTRODUCTION
OPERATING DATA 2014
Structure of grid input in 2014 as per month
Structure of grid offtake in 2014 as per month
Energy (GWh)
1.600
Energy (GWh)
1.600
1.400
1.400
1.200
1.200
1.000
1.000
800
800
600
600
400
400
200
200
0
JAN FEB MARAPR MAJ JUN JUL AVG SEP OKTNOVDEC
0
JAN FEB MARAPR MAJ JUN JUL AVG SEP OKTNOVDEC
nuclear power plant *
Direct consumers
thermal power plant **
Distribution
hydro power plant
PSHPP (pumping)
Note:
* 100-percent share of KNPP has been considered
** generation of RES and CPTEP has been considered
The highest and lowest daily grid offtake in 2014
Physical cross-border power flows with the neighbouring EPS in 2014
Energy (GWh)
2.100
A
494.2 GWh*
3,121.2 GWh**
1.800
Slovenj
Gradec
Murska
Sobota
Maribor
Ptuj
Jesenice
1.500
Velenje
Kranj
1.200
Celje
Kamnik
I
900
Trbovlje
LJUBLJANA
5,170.0 GWh*
600
CRO
Krško
Nova Gorica
Postojna
Novo mesto
117.1 GWh**
300
0
Time (h)
1 2 3 4 5 6 7 8 9 101112131415161718192021222324
The highest daily offtake
The lowest daily offtake
Kočevje
Pivka
Koper
4,281.7 GWh*
4,015.8 GWh**
Note:
* Input abroad: 9,945.9 GWh
** Offtake from abroad: 7,254.1 GWh
Calculated boarder virtual points are taken into consideration.
H
INTRODUCTION
11
1.2 Significant business events in 2014
90 YEARS OF ENERGY TRANSMISSION
APRIL
2014 was marked with the slogan »With respect to the past. With responsibility towards the future.« Indeed, 90 years of the transmission
network have passed. It all began with the first pioneers of electricity transmission in Laško, out of which the company ELES has grown.
Tradition and knowledge have been passed from generation to generation. The Fala-Laško Museum of electric power transmission preserves
and exhibits precious remains of our technical heritage and memories
of the development of electric power transmission activities in Slovenia.
• ELES Receives the Decision on the Trial Operation of the 2x400
kV Beričevo-Krško Transmission Line
More than 80-km-long transmission line, which brought the shortest and
most optimal pathway for the transmission of electricity from Posavje Region, which boasts the country’s largest electricity generation capacity, to
the centre of the country with the highest consumption, represents the
largest ELES’ investments in recent years. The project team performed work
on the transmission line with their own knowledge of project management
and supervision, pursuant to the high safety, technical and quality standards and good engineering practice, taking into consideration the existing
legislation. Therefore, the construction of the transmission line proves to be
even more important for ELES. In terms of start-up and functional tests the
transmission line was already connected to the transmission network on
18 November 2013, while on the basis of successful technical inspection,
the Ministry of Infrastructure and Spatial Planning issued to ELES, as the
investor, a decision on 20 April 2014 on the trial operation for a period of
six months. In the meantime it was necessary to carry out the first measurements of noise and electromagnetic radiation. After the completion of
the trial operation, the submission of relevant papers and documents and
relevant reports on initial measurements of noise and electromagnetic radiation, and a favourable opinion of the Agency for the Environment, the Ministry of Infrastructure issued an operating permit in 2015. Thus the project
of the construction of the transmission line was also officially completed.
JANUARY
• System Operators of Slovenia, Croatia and Bosnia-Herzegovina
Shall Ensure a Joint Reserve of Electricity
ELES, HOPS and NOS-BiH have ceremonially signed the Agreement on
the provision of a joint reserve in the Slovenia-Croatia-Bosnia&Herzegovina control block (SHB block) by way of which all three signatory countries shall more optimally and effectively utilize the resources available
to cover the needs of activation of reserve power in the SHB block, which
is managed by ELES. All participating system operators shall be able to
reduce the required volume of lease of reserve power in their own countries and thus take advantage of synergy effects, made possible by the
constructive cooperation in the joint control block, which also works with
the European Network of Transmission System Operators (ENTSO-E).
FEBRUARY
• Despite Severe Damage to the Transmission Network Due to
Glaze Ice/Sleet ELES Managed to Prevent the Worst
Due to the extreme weather conditions and the resulting large mechanical load on the lines with ice has led to serious damage to the
electric power transmission network of the Republic of Slovenia. Despite serious damage to the 220 kV Kleče-Divača transmission line,
400 kV Beričevo-Divača transmission line and some other sections
ELES succeeded in securing the transmission of electricity to large
electricity consumers and electric power distribution companies.
MARCH
• The New Energy Act Brings Important Novelties for ELES
The National Assembly adopted the new Energy Act, which in this area,
transposes the European legislation into our law. The aforementioned entails a new systemic Act which, in accordance with the third energy package introduces a new regulation of common rules for the internal market
with electricity and gas. The new Act sets forth the rules for the separation
and the certification of a transmission system operator for electricity and
settles the rules for the operation of the system operators; hence, also
for ELES. Moreover, Slovenian Sovereign Holding shall no longer manage
ELES but the Act passes the competence of managing the Company to
the Government and imposes the Government to regulate the legal basis
for the transfer of the management to the ministry or other body. Another important novelty introduced by the new Act entails ELES to distribute the responsibilities over the 110 kV network between ELES and
distribution, which up to now was not regulated in Slovenia. One of the
first regulations, which shall need to be adopted by the Government, is
the determination of criteria for the division of 110 kV system elements
between the transmission and distribution system operators.
MAY
• ELES Concluded an Important Pilot Project
ELES installed surge arresters and registrators of lightning strike on
2x110 kV Gorica-Divača transmission line, section Vrtojba-Sežana. On
this section the transmission line to wit crosses an area where it is difficult to achieve a low earthing resistance of pylons. In addition, the area
is exposed to atmospheric discharge, since the frequency of lightning in
the earth is very high. These are the main reasons why ELES decided to
increase the operational reliability of the transmission line by installing
surge arresters. In this pilot project ELES shall monitor events of lightning strikes and operation of surge arresters, which shall serve for further
analysis and the development of this type of transmission line technique
in Slovenia. In doing so, ELES shall also cooperate with the departments
within the Company as well as with external institutions abroad.
JUNE
• Elimination of Damage after the February Natural Disaster
Prior to Final Deadline
Theory of icing and de-icing upon warmer weather conditions has
proved to be true. Upon warming, which came after a week of icing
in February, the extent of damage was only in increase. After all the
inspections, which were carried out by ELES with its own teams and a
team of experts for steel structures, the true scale of the disaster was
revealed. When eliminating damage, 62 transmission line bays had to
be completely replaced, while further 31 transmission line bays were
50 percent damaged. Additional damage of individual elements of
steel structures was identified after a detailed inspection and during
the elimination of damage. Hence, 420 tonnes of steel structures, 250
kilometres of conductors, shielded cables and OPGW cables, over 1800
chains of hanging material and 9000 insulator units were replaced.
12
INTRODUCTION
The entire elimination of damage was run by the ELES’ experts.
Authorised institutions were further engaged to carry out supercontrol over the execution of the works, production and supply of steel
structures, geological monitoring and control of occupational safety.
The expertise of workers, organisation of construction sites, project
management and supervision were at a high level, allowing for complete elimination of damage to be completed before the set deadlines. The quality of the works carried out complies with all applicable
technical standards and regulations and applicable legislation.
ELES, which manages the electric power system of the RS, thus managed to ensure uninterrupted supply of electricity to all consumers
during both the February natural disaster and during the reconstruction of the transmission network as a result of the natural disaster.
SEPTEMBER
• Elektrofest Attracted 800 Young People to Ljubljana and Krško
The company GEN energija with its Council of Energy joined ELES, Milan
Vidmar Electric Power Research Institute, Faculty of Electrical Engineering at the already traditional event this year in Krsko. Together they were
expanded energy literacy among nearly 800 pupils at various locations
in Ljubljana and Krško. At the event the participants organised several
professional presentations by way of which they presented the area of
electric power engineering to the pupils. The main event of Elektrofest
in Ljubljana was the opening of the exhibition »Technical Heritage Over
Time« and »Development of Technologies for Overhead Lines.« In 2014,
ELES celebrated 90 years of electric power transmission paths, so its programme at the Elektrofest was marked with the development, which in
all these years was enabled by many technological inventions, while the
Company’s representatives presented to the pupils the state-of-the-art
technology, which has been developed on the foundations of history and
with which the Company manages the electric power system of the RS.
OCTOBER
• ELES Became the Ambassador of Corporate Integrity
Within the framework of the Slovenian Economic Summit in Brdo pri
Kranju, 28 Slovenian companies, including ELES, joined the circle of ambassadors of corporate integrity by signing the guidelines for integrity
in corporate management. By signing the document, the companies
committed to honour and strengthen the corporate integrity in their
operations and to promote the awareness of the importance of compliance with the legislation and the ethical standards as one of the key
principles of socially responsible conduct in the Slovenian economy.
NOVEMBER
• 5th Strategic Conference Marked by the New Strategic Business
Plan (Bohinjska Bistrica)
An overview of the strategic objectives of the Company revealed that
the vast majority of these objectives is also realised. A part of the
strategic conference, dedicated to the new eleven strategic objectives
to be achieved by 2020, entailed the presentation of these objectives and lay out of the first frameworks. This shall be followed by the
preparation of sub-objectives and activities related to the strategic
objectives of the Company or 2016-2020 SBP. The second day of the
conference was dedicated to raise awareness about corporate integrity and the presentation of minor offense responsibility and eventual
liability for damage related to public procurement.
DECEMBER
In December, ELES hosted the first reception for athletes, supported by ELES on their sports career path. Within the project of EN-LITE
Energy Literacy, supported by ELES since its inception, a guide for
strengthening energy literacy entitled 'Energy Literacy’ has been
published. The latter contains seven basic principles and fundamental
guidelines for energy education.
1.3 Operating highlights of ELES in 2014 and objectives of the company in 2015
Key operating highlights of ELES in 2014:
• With the main ceremony and numerous events for internal and external public ELES celebrated 90 years of the transmission paths.
• Despite the serious damage ELES managed to ensure uninterrupted
transmission of electricity to the consumption points of large consumers and distribution companies during the winter natural disaster.
The Company succeeded to repair before the deadline also seven
damaged transmission lines of all voltage levels, in a total length of
52 kilometres, which are essential for the operation of the electric
power system of the RS.
In 2015, the majority of the endeavours shall be focused on:
• the final realisation of the first ELES’ strategic business plan for the
period 2011-2015,
• creating a new Strategic Business Plan of the Company for the 20162020 period and commencement of its implementation by 2016,
• continued efforts to achieve excellence while respecting the target
values and act in accordance with the code of ethics and guidelines
of integrity in corporate management,
• complete renovation of the comprehensive model of risk management,
• further development of assets management with regard to risk management,
• proactive public relations,
• improving mutual relations among ELES’ employees,
• preparing for sustainability reporting as the basis for the growth of
the Company's reputation in the public,
• further introduction of methods for the effective human resources
management and development,
• creating a new Development Plan of the transmission network in the
Republic of Slovenia for the 2015-2024 and 2017-2026 period,
• adapting the operations to the new provisions of the Energy Act (EA-1),
• maintaining operations within the framework set forth by the Energy
Agency for the 2013-2015 regulatory period and which the Agency
shall set forth for the 2016-2018 period, taking into consideration the
guidelines and the corporate governance code issued by the capital
assets management of the Republic of Slovenia,
INTRODUCTION
• clarifying its positions and the eligibility of claims for higher regulatory
framework of operating and maintenance costs in relation to the
national regulator, following the completion of investments, and in
particular as a consequence of the statutorily prescribed acquisition
of elements of 110 kV electric power transmission network owned by
other legal entities,
• monitoring of guidelines and active participation in international associations in the field of operation of transmission system operators,
• completion and introduction of a new management system of the
electric power transmission network of the Republic of Slovenia,
• realization of priority strategic investments and reconstructions within the set deadlines, while providing adequate sources of financing;
special attention shall be paid to the implementation of the acquisition of certain elements of the 110 kV transmission network, which is
owned by other legal entities,
• effective management of the Company’s equity investments.
PRIORITY STRATEGIC INVESTMENTS AND
RECONSTRUCTIONS OF TRANSMISSION FACILITIES
ELES planned the investments into the transmission network for the medium-term 2015-2017 in line with the Development Plan of the Transmission System of the Republic of Slovenia for the period 2013-2022.
The starting points for a set of new and renovation investments were
prepared on the basis of ELES’ own analyses, the analyses of external
institutions, development criteria, the state of network and power system elements, taking into consideration the needs of generators and
consumers of electricity, as well as international agreements with a view
to ensuring a safe operation of transmission network.
In December 2014, ELES submitted a new development plan for the
2015-2024 period to the Ministry of Infrastructure, whereat the set of
investments is addressed in the light of the new basis, while the scope
and dynamics of investments in progress shall not be substantially
amended.
PRIORITY INVESTMENTS
The ten-year Transmission System Development Plan 2013-2022,
adopted by the Ministry of Infrastructure and Spatial Planning on 11
March 2014, envisages that investments with higher priority are to be
constructed first. The level of priority of an investment is determined
depending on the urgency of construction and its impact on the operational reliability of the Slovenia’s electric power system.
It should be noted that the current 10-year plan does not take into consideration the acquisition of the 110 kV transmission network elements
owned by other legal entities. The volume, dynamics and purchase price
of these elements shall have a priority impact on future investment or
reconstructive activities. The scope and dynamics of activities shall be
defined in accordance with provided volume of required financing.
Investments with the highest priority:
400 and 220 kV transmission lines:
• 2x400 kV Cirkovce–Pince transmission line;
• connecting 2x220 kV transmission line for 220/110 kV Ravne substation;
• 2x400 kV Podlog–Šoštanj transmission line.
13
400 and 220 kV substations and transformers (TR):
• 400 kV Cirkovce substation (connected with the investment into
400 kV Cirkovce–Pince) and transformation of 400/110 kV Cirkovce;
• 220/110 kV Ravne substation;
• introduction of direct transformation 400/110 kV (Cirkovce, Kleče
and Beričevo substations).
110 kV transmission lines:
• 2x110 kV Divača–Sežana–Vrtojba–Nova Gorica transmission line;
• 2x110 kV Brestanica–Hudo transmission line;
• 110 kV Koper–Izola–Lucija transmission/cable line;
• 2x110 kV Divača–Pivka–Ilirska Bistrica transmission line;
• 2x110 kV Divača–Koper transmission line
110 kV substations and transformers (TR):
• 110/20 kV Podvelka, Velenje, Tolmin, Slovenska Bistrica, Plave substations;
• 110 kV Hudo substation, Brestanica II transmission line bay;
• 110/20 (35) kV Pekre, Selce substations;
• Trbovlje TPP substation.
TAKEOVER OF ELEMENTS OF THE 110 KV TRANSMISSION
NETWORK OWNED BY OTHER LEGAL ENTITIES
In recent years, ELES has invested great efforts to take over parts of the
transmission network, which is owned by other entities of the Slovenia’s
electric power system (henceforth referred to as the EPS). Thus, ELES
gained ownership of some of the most important parts of the infrastructure of the transmission grid (400 kV switchyard at KNPP, 110/20 kV
Moste substation, 110/20 kV substation at Brestanica TPP, 110/20 kV
Dravograd substation, 110/20 kV substation at Mavčiče HPP and others) with joint investments with other companies into the renovations
of decrepit facilities and equipment. By way of acquisition, ELES also
took over the 110/20 kV substation at Trbovlje TPP in 2014. A boundary
between the transmission and other parts of the electric power network
is also established, and a clear responsibility for the operation of the
infrastructure is outlined for all these facilities.
The realisation of the acquisition of 110 kV elements shall for ELES entail:
• to use the investment funds,
• additional operation and maintenance costs,
• additional depreciation/amortisation expenses,
• additional outflows for the reconstruction of the acquired parts of the
network, and
• additional human resources, especially in the field of investments and
maintenance.
In 2014, ELES acquired 110 kV switchyard at Trbovlje Thermal Power
Plant. The latter plays an important regional role in the electric power transmission network of the Republic of Slovenia as it represents an
important point in the transmission of electricity generated by hydro
power plants on the middle and lower Sava River towards areas with
greater consumption of electricity in the central Slovenia. The purchase
of switchyard represents the beginning of the process of acquisition of
110 kV facilities, characterised by a transmission feature, yet which are
still not owned by the system operator.
14
CHIEF EXECUTIVE OFFICER'S ADDRESS
1.4 Chief Executive Officer's address
2014 –
in the Aftermath of Ice Grip
2014 witnessed the 90th anniversary of power
transmission in Slovenia, and this was celebrated
by several events, the major one of which - on 21
May 2014 at Ljubljana’s Beričevo substation also marked the inauguration of the 2x400 kV
Beričevo-Krško transmission line.
The largest natural disaster ever to hit Slovenia’s
power system occurred between 31 January and
2 February 2014 when icing affected more than
1,570 kilometres of the distribution system as well
as 52 kilometres of transmission network. Seven
transmission paths were damaged, hence the
400 kV Beričevo-Divača and Podlog-Beričevo
transmission lines, the 220 kV Kleče-Divača,
Beričevo-Podlog and Obersielach-Podlog transmission lines, and the 110 kV Cerkno-Idrija and Dravograd-Velenje transmission lines were damaged
and thus non-operational for a prolonged period.
Despite this catastrophe - which has no historical
comparison - ELES managed to ensure power
transmission to Slovenia’s regional distribution
companies and all consumers. In these extraordinary circumstances ELES demonstrated good organisation, co-ordination and rapid response, with
its own teams providing urgent repair works. The
Company also undertook the demanding procurement procedures for replacement equipment and
reconstruction work contractors in an extremely
short period of time, whilst respecting statutory
public procurement provisions. Repairs to damaged transmission lines were completed ahead
of deadlines, and the system was fully operational
again by the middle of June 2014.
Although priority was given to remedial works
during the first half of 2014, other pre-planned
projects continued, including groundwork for
the establishment of a 400 kV transmission line
connection with neighbouring Hungary, solving
problems related to the construction of a trans-
mission line around Renče, preparations for the
construction of the new ELES Technology Centre
in Beričevo, as well as gradual takeover of the
management of the entire 110 kV network, as
laid down by the new Energy Act of the RS. Mention should also be made of the further introduction of SUMO software together with smart-grid
and information system projects developed with
experts from the Milan Vidmar Institute and the
Faculty of Electrical Engineering at the University of Ljubljana. These new elements will support
real-time decisions in the operation of the power
transmission system, and, among other advantages, shall facilitate secure operation and a better
utilisation of the existing network.
The optimisation of network usage and the use of
alternative resources in the management of Slovenia’s transmission network are central to the Company’s investment policy. Indeed, such projects
and instruments further reduce operating costs
and network charges – which are now 16 percent
below their 2012 level and, in Slovenia, are among
the lowest in the EU. Further to this, ELES has the
second lowest cost per MWh transferred of all Europe’s transmission system operators.
The ERP comprehensive business management
system, which will become fully operational in
2015, is also among the range of measures being
introduced in order to further optimise operations.
ELES’ pre-tax profits in 2014 were the highest
since Energy Agency regulation, and at this point
I must emphasise the exceptional achievements
that have been made in relation to increasing
revenues and reduction in future expenses. Due
to the specificity of the regulatory methodology,
the effects are not taken into consideration in
the annual income statements. If I add up how
much these effects amount to the »hidden wellbeing« for the Slovenian end consumer of electricity, which is reflected in low network charges on
an annual basis in 2014 compared to the years
before 2010, the amount totals »staggering« 36
million euros. Other activities, undertaken by ELES
which are of benefit to the Republic of Slovenia
and the consumer, include:
• the January 2014 signing of a tripartite agreement between the Slovenian, Croatian and
Bosnian transmission system operators, which
succeeded in fairly splitting the burden of providing an additional 205 MW of tertiary reserve (as a consequence of the sixth unit of the
Šoštanj TPP coming on stream); the three national system operators also identified the Krško
NPP as the largest single generation unit across
their common territory. By way of this action,
Slovene consumers were saved an eleven-million-euro increase in annual network charges.
• further utilising investment in the phase-shifting transformer at Divača in the 2011-2014
period. Employing in-house expertise and without assistance from the state, ELES concluded
numerous bilateral transfer negotiations with
Austrian system operator APG and Italian system operator Terna, before the EU Commission
and the former EU Commissioner for Energy.
In comparison with previous years, ELES managed to:
• increase commercial import capacity from
Austria by 54 percent, thereby allowing additional imports from affordable areas of Germany and Austria for the needs of Slovenian
end consumers;
• increase commercial export capacities to
Italy by 76 percent, thereby providing the
Slovenian generators with greater access to
the market commanding the highest prices
in the EU;
• Record an additional 18 million euros in revenues over the 2011-2014 average on the basis
of the increase in commercial capacities.
INTRODUCTION
• In 2013, in co-operation with Austrian system
operator APG, ELES rolled out the Imbalance
Netting Co-operation (INC) Project. The utilisation of generation resources used in the implementation of secondary control is optimised
through netting deviations occurring within
the Austria control area and the Slovenia-Croatia-Bosnia block. Given the considerable price
divergences in the provision of secondary control capacity (APG pays much higher prices than
ELES), ELES earned a total of 17.6 million euros
in 2013 and 2014, or, on average, 8.8 million
euros per year. This sum is included in the accounts and thus directly reduces the costs of system balancing; it also indirectly reduces the burden on electricity consumers in Slovenia. ELES is
not obliged to undertake such activities, but the
general assessment was that it is necessary to
take advantage of all available possibilities to
lower prices through reducing overall costs.
Due to the aforementioned, the national regulator – the Energy Agency RS – has cut transmission
network charges by more than fifteen percent
over the past three years.
Enactment of the new Energy Act RS (EZ-1) entails that the rights of the state as founder (formerly exercised through such agencies as AUKN,
SOD and SDH) were re-transferred to the Government of the Republic of Slovenia. Transmission
system operation instructions will have to be revised within two years, and I think that we shall
have the final version ready in May 2015. ELES’
imminent takeover of Slovenia’s 110 kV network,
which is under the ownership of other legal entities, is yet another great organizational, personnel
and financial challenge which lies ahead.
At ELES’ 5th Strategic Conference, which took
place in November 2014, the Company adopted
the bases for its 2016-2020 Strategic Business
Plan, which will be finalised and submitted for ratification by the end of November 2015.
At the end of December 2014, despite some
uncertainties engendered by provisions of the new
Energy Act RS, ELES submitted its new 10-year
development plan for the 2015-2024 period to
Slovenia’s Ministry of Infrastructure.
In relation to the ELES Group of companies, I am
pleased that the operations of the Talum d.d. are
now stable and that the operator of Slovenia’s
sole energy exchange - BSP d.o.o.- continues to
achieve outstanding results. Much effort is being
put into the introduction of new business activities, particularly with regard to the development
of the Stelkom subsidiary’s telecommunications
and information technology business. Overall, and
following several disappointing years, the ELES
Group is returning to profit.
I could make mention of many other activities
that have marked 2014, but these are the highlights of ELES’ operational performance over the
past year, whilst the others are described in detail
within the Annual Report.
I am convinced that rich tradition, valuable experience, introduction of modern technologies, constant upgrading of knowledge and responsible
attitude towards environmental are the factors,
which shall continue to lead ELES along the path
to becoming one of the most successful power
transmission system operators in Europe.
In Ljubljana, on 31 March 2015
ELES, d.o.o.
Aleksander Mervar, M.Sc.
Chief Executive Officer
15
16
SUPERVISORY BOARD REPORT
1.5 Supervisory Board report
Mr. Marjan Ravnikar, M.Sc., Chairman of the
Supervisory Board, Mr. Igor Maher, Deputy
Chairman of the Supervisory Board, Mr. Matevž Marc, M.Sc. and Mr. Milan Krajnik, members of the Supervisory Board represented the
interests of the Company’s founder. Employee
representatives on the Supervisory Board during 2014 were Mr. Bogdan Trop and Mr. Jože
Senčar. The members of the Supervisory Board
revealed their memberships of other management and supervisory bodies of affiliated and
unaffiliated companies and, at the end of the
year also performed a self-assessment.
The Supervisory Board of ELES, d.o.o. held seven (7) regular sessions and one (1) correspondence session during 2014, at which 92 resolutions were adopted.
Supervisory Board sessions were for the most
part attended by all members.
The Audit Committee of the Supervisory Board,
chaired by Mr. Igor Maher and members Mr.
Marjan Ravnikar, M.Sc. and external member
Ms. Darinka Virant, held six (6) regular sessions
and four (4) extraordinary sessions and two (2)
correspondence sessions, which were attended
by all members.
The Committee for the development, strategy
and investment projects of ELES, chaired by Mr.
Matevž Marc, M.Sc., and members Mr. Bogdan
Trop and Mr. Jože Senčar held six (6) sessions,
which were attended by all members.
The Committee for the supervision of Talum’s
operations, chaired by Milan Krajnik, and members Mr. Bogdan Trop and Mr. Igor Maher, held
5 sessions, which were attended by all members.
In 2014, the Supervisory Board addresses current business decisions of the Company and
discussed monthly, quarterly, half-year and
nine-month the results of operations. The SB
also monitored the preparations for the takeover of the 110 kV network, which is to be carried
out on the basis of the Energy Act.
In 2014, ELES, d.o.o. (henceforth referred to
as the Company) regularly performed its functions and contents and the Supervisory Board,
in its supervisory function, ensured the conditions and directed the Company towards the
achievement of business and strategic objectives. The Supervisory Board has regularly reviewed the implementation of the Company’s
business plan, and given the circumstances,
which had a significant impact on the Company's operations (ice/sleet), assessed the Company's operations as good.
The Supervisory Board was regularly informed
of the endeavours of the Company in the resolution of the difficult situation in which the
Talum subsidiary found itself in 2011. In 2012,
the Agencija za Upravljanje Kapitalskih Naložb
(Capital Assets Management Agency of the
Republic of Slovenia, henceforth referred to as
CAMA) approved ELES’ guarantee towards Talum or its electricity supplier for the period from
2013 to 2015. By way of this decision, consent
was also given that on the basis of issued and
redeemed guarantees, ELES may turn its receivables arising from such guarantees into a longterm loan with the option of conversion into
share capital. The increase in share capital was
then performed at the general meeting of the
company Talum of 29 August 2014.
INTRODUCTION
The Supervisory Board of the Company also approved the issuance of the guarantee to Talum
d.d. for the purchase of electricity for the 2016 –
2018 period. The total guarantee is limited to a
maximum of 24.5 million euros. The Company
is committed to prompt notification of the
Supervisory Board on the granting of guarantees from the granted consent.
In its work, the Supervisory Board paid special
attention to maintaining high operational
reliability of the transmission network, and
with that the management, maintenance and
investment into the transmission network. The
Supervisory Board regularly monitored the progress of the elimination of the damage caused
by glaze ice/sleet in February 2014. The Supervisory Board also monitored the completion of
the construction of 2x400 kV Beričevo-Krško
transmission line, where irregularities were discovered in the execution of works in preceding
years and supported the CEO’s efforts to rectify
irregularities in order to protect the business interests of the Company.
Pursuant to the applicable Act Regulating Public Procurement in Water, Energy, Transport and
Postal Services the Supervisory Board was also
regularly informed of the changes in contracts
and the procedures in which all offers were rejected. The Supervisory Board was familiarised
with ELES’ 2013 Annual Report, with the external Auditor’s opinion and the 2013 Consolidated Annual Report of the ELES Group. On the
basis of the report provided by the Supervisory
Board Audit Committee, the Supervisory Board
endorsed the 2013 Annual Report together
with the Auditor’s opinion and the 2013 Consolidated Annual Report of the ELES Group with
the pertaining opinion of the Auditors.
In 2014, the Supervisory Board ordered an
external audit and legal review of selected
transactions. External contractors have made
recommendations for improving the operation.
The Audit Committee of the Supervisory Board
monitors the realisation of these recommendations for the Supervisory Board.
The Supervisory Board gave its consent to the
entry of ELES, d.o.o. in a joint venture of the TSC
association (TSCNET G.m.b.H with its registered
office in Germany).
The Supervisory Board reviewed and approved
the 2015 Annual Plan and the 2016-2017 business plan.
In Ljubljana, on 31 March 2015
Marjan Ravnikar, M.Sc.
Chairman of the Supervisory Board
ELES, d.o.o.
17
18
2. PRESENTATION OF ELES
As the system operator of this electricity transmission network, ELES
d.o.o, ensures the safe, reliable and uninterrupted transmission of electricity. ELES is the guardian of the Slovenia’s electric power system,
which is closely connected with the transmission networks of the neighbouring countries and integrated into the European energy system and
integrated into the European energy system. As experts in the field of
electric power engineering, ELES uses its knowledge and the application
of advanced technology to provide both suppliers and consumers with
quality energy transmission, and thus quality of life.
As the system operator of Slovenia’s transmission network ELES preserves balance between generation and consumption of electricity
within the transmission network within the transmission network 24
hours a day. With 538 employees and state-of-the-art technology, ELES
stands side by side with the most advanced European transmission system operators and achieves the standards of modern organisation.
Pursuant to the Slovenia’s energy legislation, ELES is responsible for the
design, construction and modernisation of the Slovenia’s high voltage
transmission network at three voltage levels – 400 kV, 220 kV and a
portion of the 110 kV voltage level. The development and upgrade of
the transmission network is planned in order to allow the integration of
new generation sources as well as a reliable and quality supply of large
consumers of electricity across the entire territory of Slovenia.
2.1 Company Profile
Company Name
Abbreviated Name
Registered Office
E-mail address
Website
Code of Main Business Activity
Founded
Registered at
Tax Identification Number (VAT)
Company Registration Number
Share Capital
Business Bank Account Numbers
Founder and Owner
Chief Executive Officer
ELES, d.o.o., Transmission System Operator
ELES, d.o.o.
Hajdrihova ulica 2, Ljubljana
info@eles.si
http://www.eles.si
35.120 transmission of electric power
November 1990
The District Court of Ljubljana, Entry No. 1/09227/00
SI20874731
5427223
177,469,515.70 euros
Nova Ljubljanska banka: 02924-0017900956
Banka Celje: 06000-0076621666
Unicredit Banka Slovenija: 29000-0052003012
Abanka Vipa: 05100-8012150406
Factor banka: 27000-0000166630 (do 16.6.2014)
The Republic of Slovenia, 100 % Owner
Aleksander Mervar , M.Sc.
19
2.2 Registered Business Activities
The main Company's activity is the electric power transmission with the activity code 35,120.
REGISTERED COMPANY'S ACTIVITIES PURSUANT TO THE STANDARD CLASSIFICATION OF ACTIVITIES
Code of Activity
Classification of Activity
35.120
Transmission of electric power
41.200
Construction of residential and non-residential buildings
42.220
Construction of utility projects for electricity and telecommunications
42.990
Construction of other civil engineering projects n.e.c.
43.210
Electrical installation
43.290
Other construction installation
58.140
Publishing of journals and periodicals
61.100
Wired telecommunications activities
61.200
Wireless telecommunications activities
61.300
Satellite telecommunications activities
61.900
Other telecommunications activities
64.200
Activities of holding companies
64.990
Other financial service activities, except insurance and pension funding n.e.c.
68.200
Renting and operating of own or leased real estate
71.129
Other engineering activities and related techical consultancy
71.200
Technical testing and analysis
72.190
Other research and experimental development on natural sciences and engineering
80.200
Security systems service activities
20
PRESENTATION OF ELES
2.3 ELES’ Role in the Slovenia’s and Europe’s Electric Power System
ELES interconnects four main participants in the Slovenia’s power transmission network; namely: power plants connected onto our transmission
network, which input their generated electricity into the transmission
network, international cross-border connections or countries with which
Slovenia exchanges electricity (i.e. Austria, Italy and Croatia), distribution
companies within SODO (electricity distribution system operator), as well
as five of the largest industrial consumers, i.e. direct consumers (steelworks and Talum), which offtake electricity from the transmission network.
SCHEME OF PHYSICAL FLOWS OF ELECTRICITY IN THE SLOVENIA’S ELECTRIC POWER SYSTEM
HSE
SENG
DEM
GEN-ENERGIJA
TET
OVE
EL GOR
unit
HESS
TE-TOL
SEL
EL LJ
EL MB
EL PR
SODO (Slovenia’s electricity distribution system operator)
KIDRIČEVO
RUŠE
50% NEK
TEB
Transmission grids
of neighbouring
countries
ELES,
Electricity Transmission System Operator
OVE+SPTE
EL CE
TEŠ
Energetika
Ljubljana,
ŠTORE
RAVNE
JESENICE
Offtake from the transmission network
CONNECTIONS WITH EUROPE
The Slovenia’s electric power system is closely connected to the transmission networks of the neighbouring countries and intertwined in the
European energy market. Together ELES makes up a large interconnected network that allows cross-border electricity trading. In particularly
Slovenia holds an extremely important geographical position in the
transmission of electricity.
It lies at the intersection of several transmission paths in the direction
of east-west and north-south, or at the intersection of three important
and very different electricity markets – the German market with cheap
sources of wind energy, the Balkan market, where there are low-cost
resources during the high hydrology and the Italian market with high
price of electricity and its largest importer.
Due to its specific geographical location, Slovenia is involved in three
different European electricity regions. This means that Slovenia connects both with the system operators of the neighbouring countries as
well as wider, larger systems in the context of regional and European
integration.
400 kV and 220 kV transmission lines connect Slovenia with Austria,
400 kV and 220 kV transmission lines with Italy and two 400 kV, two
220 kV and three 110 kV transmission lines with Croatia. There are
currently no interconnection between Hungary and Slovenia, but a
2x400 kV connection between Cirkovce-Pince is planned.
PRESENTATION OF ELES
21
2.4 Basic Data on the Transmission Network
energijo (to so Avstrija, Italija in Hrvaška) in distribucijska podjetja v okELES povezuje štiri glavne udeležence na slovenskem elektroenergetYEAR 2014
viru SODO ter pet večjih porabnikov t.i. neposredni odjemalci (železarne
skem prenosnem omrežju in sicer: na naše prenosno omrežje priključene
Transmission line 110 kV
in Talum), ki električno energijo prevzemajo iz omrežja.
elektrarne, ki vanj oddajajo proizvedeno električno energijo; mednarLength
of
transmission
lines
(km)
1846
odne čezmejne povezave oz. države, s katerimi izmenjujemo električno
Number of power system transformers
Transmission line
Length of transmission lines (km)
Number of power system transformers
Transmission line
Length of transmission lines (km)
Number of power system transformers
6
220 kV
328
10
400 kV
669
11
Total ELES, d.o.o.
Length of transmission lines (km)
Number of power system transformers
2843
27
The total system length of ELES’ transmission lines amounts to
2,843 km, of which 13.3 km are underground power cables. The Company operates 31 facilities across the transmission network; 27 of these
are transmission system substations, one is a switching substation, one
is a transformer station and two power supply stations. Including the
1,200 MVA capacity phase-shift transformer at Divača, ELES’ 27 power
system transformers have an aggregate power of 5,804.5 MW. ELES’
optical network is 1618 km long.
Source: Image of continental Europe, ENTSO-E
22
PRESENTATION OF ELES
2.5 Upravljanje in vodenje družbe ELES
Public enterprise ELES d.o.o. is managed by the General Meeting, the
Supervisory Board and the Chief Executive Officer.
GENERAL MEETING
Pending the adoption of the new EA-1 (22 March 2014) the Republic of
Slovenia, as the sole shareholder, has administered its founder's rights
through Slovenska odškodninska družba d.o.o. (SOD).
CHIEF EXECUTIVE OFFICER
Chief Executive Officer of a public enterprise is responsible for managing operations and activities of the public enterprise, represents it and
is responsible for the legality of its operations. Chief Executive Officer
abides by the Rules on the method of management of the company
ELES.
OPENNESS OF OPERATIONS
After this date, the management rights, held by the Republic of Slovenia, as the sole owner, passed from the SOD to the Government of the
RS and the competent ministry in part which refers to the energy.
Chief Executive Officer and Supervisory Board are responsible for the
implementation of the principle of public activities of a public enterprise
in a way that the general public are timely and fully informed of the
operation, business, development and other circumstances and events
that affect the safety of supply of consumers with electricity.
2.5.1 Supervisory Board
Pursuant to the Act on the Establishment of the Public Enterprise ELES,
d. o. o., the Supervisory Board is comprised of six members. Four members are appointed by the founder, while two members are representatives of employees, who are appointed by the ELES’ Works Council.
The members of the Supervisory Board are appointed for a term of four
years and may be re-appointed. The Supervisory Board is obliged to
report on its work to the founder at least once a year.
Supervisory Board ELES, d.o.o.
Chairman
Deputy
Members
Representatives of Employees
Marjan Ravnikar, M.Sc.
Igor Maher
Milan Krajnik
Matevž Marc, M.Sc.
Jože Senčar
Bogdan Trop
2.5.2 Other Committees
Supervisory Board Audit Committee
Chairman
Member
External member
Igor Maher
Marjan Ravnikar, M.Sc.
Darinka Virant
Committee for the development, strategy and investment projects
Chairman
Representatives of Employees
Matevž Marc, M.Sc.
Jože Senčar
Bogdan Trop
The Committee for the supervision of TALUM's operations
Chairman
Milan Krajnik
Member
Igor Maher
Representative of Employees
Bogdan Trop
PRESENTATION OF ELES
23
2.6 ELES Group
The ELES Group of companies comprises of the parent company ELES,
d.o.o. (henceforth referred to as ELES) and its subsidiaries Talum d.d.,
Trgel d.o.o. and Stelkom d.o.o..
BSP, Southpool, Regionalna Energetska Borza, d.o.o. is presented as a
jointly-controlled company, but ELES does not perform full consolidation (in consolidation the said company is regarded as an affiliated
company), because ELES does not have a controlling influence neither
in the ownership nor in its management.
Significant equity connections of ELES, d.o.o., as at 31 December 2014
Parent company ELES, d.o.o.
Founder and Owner
Ownership stake
The Republic of Slovenia
100%
Subsidiaries
Company
Registered Office
Main Business Activity
Ownership stake
Company
Registered Office
Main Business Activity
Ownership stake
Company
Registered Office
Main Business Activity
Ownership stake
Talum, d.d., Kidričevo
Tovarniška cesta 10, Kidričevo
Production of aluminum, aluminum alloys and aluminum products
84.71%
Trgel, d.o.o. (the company is currently dormant)
Hajdrihova ulica 2, Ljubljana
Provision of services of electricity trading
100%
Stelkom, d.o.o.
Špruha 19, Trzin
Provision of electronic communication services
56.26%
Jointly-controlled company
Company
Registered Office
Main Business Activity
Ownership stake
BSP Southpool, Regionalna Energetska Borza, d.o.o.
Dunajska cesta 156, Ljubljana
Auctions and brokerage services for the Slovenian electricity market
50%
Affiliated company
Company
Registered Office
Main Business Activity
Ownership stake
Eldom, d.o.o.
Vetrinjska ulica 2, Maribor
Janitorial services and tourism facility management, cleaning services and
upkeep of premises, food and catering services, tourism and reception
services.
25%
24
PRESENTATION OF ELES
2.7 Business Policy and Objectives
2.7.1 Mission, Vision and Values
RESPONSIBILITY
COOPERATION
Through prudent development, planning and the construction of a
modern transmission system as well as the permanent maintenance,
ELES co-creates an energy-efficient and friendly environment with
respect to all involved stakeholders: its employees, consumers, the
nature and the environment, local communities and the society as a whole.
At any given moment, ELES is in favour of openness, integration, team
spirit and the search for the best solutions for the common good both
among the ELES’ colleagues as well as the active involvement of external stakeholders. Only then can ELES effectively fulfil its mission and act
for the benefit of all, for a better today and tomorrow.
ENTHUSIASM
COMMITMENT
With a positive attitude to the work, which ELES successfully performs
together with its colleagues on the basis of experience, professionalism
and diligence, and with a positive attitude towards the colleagues and
the Company, ELES helps co-create an atmosphere conducive to proactive endeavour and achievement of the tasks and looks forward to
joint achievements.
Patiently and uncompromisingly, ELES is committed to achieving the
best results, fulfilling its mission and striving for long-term development
and maintenance of the electric power transmission system of the
Republic of Slovenia. This system represents the backbone of organisations in all sectors and is therefore a prerequisite for the economic
progress of Slovenia.
KNOWLEDGE
Through consideration of best practice, together with the ongoing
acquisition and sharing of knowledge and expertise acquired through
years of experience, and with the strive to innovate, ELES builds expertise, improves its performance and remains committed to finding the
best solutions for continuous improvement of the quality of electric
power transmission.
RELIABILITY
ELES is aware of its essential function and responsibilities in providing
the safe uninterrupted supply of quality electrical energy so as to contribute to the achievement of individuals’, companies’, institutions’
objectives and the society as a whole. Hence, ELES keeps to the agreements in its daily work and all the Company’s processes. Reliable, safe
and uninterrupted transmission of electricity also means safe and quality lives of all the Company’s stakeholders.
2.8 Analysis of the Environment and Its Impact on the Functioning of the Company
2.8.1 General economic environment and forecasts of economic trends
Indicators for the Republic of Slovenia
2013
014
forecast 2015
GDP (real growth, %)
-1.0
2.5
2.4
Employment (growth, %)
-1.5
0.7
0.8
Unemployment (rate %)
10.1
9.7
9.2
Inflation (%)
0.7
0.5
-0.2
Average gross salary in the RS (nominal growth, %)
-2.0
1.2
1.1
Average gross salary in the RS (real growth, %)
-2.0
1.0
1.1
Labour productivity-GDP per employee (real growth, %)
0.5
1.8
1.5
Gross fixed-capital formation
1.9
5.8
4.8
Source: Spring forecast of economic trends 2015, www.umar.gov.si
PRESENTATION OF ELES
25
2.8.2 ELES’ management policies
ELES, d.o.o. is 100 percent owned by the Republic of Slovenia and was
until 22 March 2014 managed through Slovenska odškodninska družba
(Slovenian Compensation Company, SOD). Since the adoption of the
new EA-1, ELES has been managed by the Government of the Republic
of Slovenia, while the Company's operations are monitored by the Ministry responsible for energy (MzI). At the same time, ELES is regulated
by the Energy Agency of the Republic of Slovenia (AGEN-RS) and the
national Energy Act as well as European energy legislation.
Key strategic ELES’ management policies are:
1.Compliance with target values, performance of employees in accordance with the Code of Ethics and Guidelines of integrity in corporate
management with the aim of achieving an appropriate level of business excellence.
2.Efficient management of natural resources and the introduction of
efficient human resources management.
3.In addition to the overall supervision of the operation of 400 and
220 kV transmission network, assume also the overall supervision of
the entire meshed 110 kV network in the RS.
4.Lease of ancillary services at comparable prices of the neighbouring
TSOs; in relation to new technology, based on technical-economic criteria, transition to the greatest possible autonomy.
Investments in cross-border transmission capacities, justify the
5.
amount of NTC towards the neighbouring TSOs – pursuant to the
national interest of the RS.
6.Operations in a specific regulatory framework and ensuring profit to
the owner according to the regulatory methodology.
2.8.3 Energy legal basis for the Company’s operation in 2014
In its operations in 2014, ELES respected the following legal basis:
• Directive 2009/72/EC of the European Parliament and of the Council
concerning common rules for the internal market in electricity
• Regulation (EC) No 714/2009 of the European Parliament and of the
Council of 13 July 2009 on conditions for access to the network for
cross-border exchanges in electricity
• Energy Act,
• Companies Act,
• Construction Act,
• Spatial Management Act,
• Spatial Planning Act,
• Act regarding the siting of spatial arrangements of national significance in physical space,
• Code of Obligations,
• Law of Property Code,
• Land Register Act,
• Employment Relationship Act,
• Public Procurement Act,
• Act Regulating Public Procurement in Water, Energy, Transport and
Postal Services,
• Legal Protection in Public Procurement Procedures Act,
• Environmental Protection Act,
• General Administrative Procedure Act,
• Administrative Dispute Act,
• Public Information Access Act,
• Integrity and Prevention of Corruption Act,
• Non-litigious Civil Procedure Act,
• Enforcement and Securing of Civil Claims Act,
• Decree on the method of provision of an electricity TSO operator service of general economic interest,
• Decree on maintenance works for the public benefit in the energy
sector,
• Decree on green public procurement,
• Decree on the energy infrastructure,
• Decree on the terms and conditions and methods of borrowing by
legal entities from article 87 of the Public Finance Act,
• Act determining the methodology for charging for the network
charge, the methodology for setting the network charge, and the criteria for establishing eligible costs for electricity networks,
• System operating instructions for electricity transmission network,
• General conditions for the supply and consumption of electricity in
Slovenian transmission grid.
The participants in the electricity market are electricity generators, electricity traders and distributors, supplying electricity to consumers. From
power plants electricity is transmitted to consumer through the transmission and distribution networks for which are the responsibility of the
system operators.
26
PRESENTATION OF ELES
GENERATORS
G1
G2
PHYSICAL FLOW
G3
. ..
MARKET
ORGANISER
REGULATED
TRADER
GN
TRANSMISSION SYSTEM
OPERATOR
SUPPIER 1
DISTRIBUTION SYSTEM OPERATOR 1
SUPPIER 2
DISTRIBUTION SYSTEM OPERATOR 2
SUPPIER 3
DISTRIBUTION SYSTEM OPERATOR 3
CONTRACTS
ON THE USE
OF THE
NETWORK
CONTRACTS
ON THE SUPPLY
CONSUMERS
L2
L1
L3
. ..
LN
Figure: Supply Model
GENERATION
TRADING
MARKET ACTIVITIES
Figure: Electricity market
TRANSMISSON
DISTRIBUTION
NON-MARKET ACTIVITIES
SUPPLY
MARKET ACTIVITIES
PRESENTATION OF ELES
REGULATION OF THE ENERGY AGENCY
The periods when power supply interruptions were a part of everyday
life, are almost forgotten. Nowadays electricity is considered a good
which is taken for granted. Few are events that remind us that this is
not so, that the electric power network is vulnerable and that only with
prudent construction and maintenance of network, and high expertise
a reliable supply of electricity may be ensured.
ELES acts as a public enterprise for the benefit of electricity consumers.
ELES' basic task is to transmit electricity through 400, 220 and 110 kV
high-voltage network from power plants to all low-voltage distribution
network, where electricity distributors of to feed industrial facilities, public infrastructure and housing. In this way electricity flows in each even
the most remote corner of Slovenia.
Service of electricity transmission is understandable associated with
costs. The transmission network is to be maintained, updated regularly
and strive for sustainable development that ensures the design and construction of new facilities.
In addition to concern for the transmission network infrastructure ELES
is entrusted by law to another professionally responsible task, namely
the coordinated management of the operation of all electrical devices
and components. With the modern national control centre in Ljubljana
and three regional control centres in Maribor; Beričevo and Nova Gorica
ELES connects, monitors and remotely manages the Slovenia’s transmission network, which is through the networks of the neighbouring
Austria, Italy and Croatia, and in the future also Hungary, closely integrated into Europe the electric power network.
But for the average user (electricity bill payer) it does not matter what
kind of problems the transmission network operator is facing and which
power plants are operating. It is only important that all of their devices
connected to the electric power supply, function uninterruptedly.
ELES is the only one in Slovenia that provides the service of electric power transmission. However, this does not mean that the price of their services may be freely determined. On the contrary, in addition to our own
awareness of the mission, prudent and cost-effective work, part of our
operations and costs is carefully monitored by the national regulator
the Energy Agency (hereinafter AGEN-RS). The Agency sets forth, which
costs incurred in ELES are eligible and which are not. The Agency thus
sets forth the network charge for the use of the transmission network or
the amount of financial resources within which ELES needs to finance
and carry out all statutory tasks.
DETERMINATION OF THE ELIGIBLE OPERATING COSTS
The network charge and eligible operating costs of ELES are set forth
for the current three-year regulatory period. The main eligible cost is the
cost of operation and maintenance of the network, because only with
regular maintenance the network can be maintained in good condition.
Other costs, crucial for the smooth functioning of ELES are costs related to the allocation of cross-border capacities, the costs of purchasing
electricity to cover losses in the network, the costs of ancillary services,
depreciation/amortisation and the costs of equity, which the Agency
recognises in the form of a regulated return. Breakdown of eligible costs
by category in 2014 is shown in the Figure below.
Eligible costs in 2014 (%)
15 %
ELES is aware that the network user expects quality service for their
money, so ELES is obliged to ensure that consumer does not remain
without electricity when maintenance work on transmission lines and
transformer stations is carried out. At the same time the consumer
should not feel the negative effects of the natural disasters, for example, at last year's ice, and other events that can affect and impair the
operation of the transmission network.
Unfortunately, also advanced technology does not allow for electricity
to be stored in large quantities, so it is ELES’ job to regulate the electric
power generation at any time so that the power plants generate exactly
as much as is required by consumers at any given time. If this condition
is not met, the electric power quality deteriorates. Visual indicator is a
disruptive flickering of electric bulbs, and most certainly a worse quality of voltage has a negative impact on other electrical appliances that
people use in their everyday lives. In every moment ELES needs to input all electricity generated into the electric power network and transmit said electric power to consumers. Hence, the network needs to be
sufficiently diverse since at times the nuclear power plant and thermal
power plants are operating, yet when the weather conditions for the
generation of electricity from renewable energy resources proves better,
the major part of electricity is generated by hydro power plants, solar
power plants, and also wind farms in the future.
27
25 %
1%
25 %
22 %
11 %
operation and maintenance costs
losses of electricity
costs of CBTC allocation
ancillary services
amortisation
costs of equity
28
PRESENTATION OF ELES
THE SOURCES OF REVENUES
FOR FINANCING THE ELES’ ACTIVITIES
Regulated revenues in 2014 (in %)
33 %
The network users pay for the costs incurred by way of money order
form for electric power, whereat the cost arising from the use of the network or network charge are shown separately from the cost of electric
power generation and consumption. However, the payments of domestic end consumers do not suffice to cover the total eligible costs. Second
most important are the revenues arising from auctions, which are also a
very important source of revenues as regards the amount.
The latter is created at auctions, where cross-border transmission capacities for electricity trading are allocated. Our network does not only
serve as a network to provide electricity supply to domestic consumers,
but also as a transit network of traders, who buy and/or sell electricity
abroad. At the same time ELES successfully makes use of the fact that
our transmission network is situated in the strategically important area,
i.e. between the area with low electricity price and the area with high
electricity cost, thus allowing ELES that 34 percent of the ELES’ operating revenues in 2014 were generated at auctions for cross-border
transmission capacities. The Slovenian consumers of electricity are thus
revealed as much as possible of charges which would otherwise have to
cover, and they are also provided with high-quality electric power supply.
The network charge, which is charged to electricity consumers, has decreased in the last period, while the portion of revenues arising from the
sale of cross-border capacities at auctions continues to grow compared
to the network charge, as evidenced by the graphics hereunder.
Portion of revenues arising from the rights to use CBTC at
auctions in the revenues arising from the network charge (in %)
in %
70.0
in %
100.0
92.7
85.3
60.0
90.0
80.0
76.7
50.0
54.4
40.0
44.8
30.0
58.0
57.2
60.0
50.0
48.4
40.0
30.0
20.0
24.9
10.0
0.0
70.0
20.0
10.0
200620072008200920102011201220132014
0.0
Revenues arising from the network charge for the transmission network
Revenues arising from the use of CBTC at auctions
Portion of revenues arising from the use of the transmission network
4%
39 %
24 %
Network charge for the transmission network
Revenues arising from auctions
Network charge for ancillary services
Other revenues
SUPERVISION OVER THE ELIGIBLE COSTS
Upon completion of the financial year, the Agency assesses the eligibility of costs incurred. If the eligible costs are higher than revenues,
the Company may record a negative profit, and vice versa, if revenues
exceed the eligible costs, the profit of the Company is positive.
Last year ELES recorded a surplus of revenues over eligible costs.
In 2014, the surplus amounted to 26,084 thousand euros.
The actual eligible costs in 2014 were 8 percent lower than the projected costs of the regulatory framework (RF). Compared with the plan
the costs of equity, the costs of electricity to cover losses in the system
and the cost of ancillary services were lower. While the costs of equity
reduced due to slower pace of investments, the reduction in other costs
resulted from the ELES’ efforts to achieve the most favourable price to
purchase electricity for the implementation of ancillary services and to
cover losses in the system. If the cost of electricity for losses and costs
of ancillary services had been identical to the planned ones, a surplus
would have amount to 7,376 thousand euros. This means that the network charge would be higher by this amount. Regulatory practice implemented by the Agency, does not stimulate ELES for its efforts to reduce
costs and it does not recognise any incentives.
Surpluses arise from the auction revenues. In accordance with the
European legislation ELES needs to use the revenues arising from auction in a strict appropriate manner. Revenues arising from auction may
be used to ensure the availability of cross-border capacities, to finance
investments in cross-border capacities in the current year or to finance
planned investments in cross-border capacities. If the revenues arising
from auction are not used for these purposes, they may be used to
reduce network charges, which AGEN-RS takes into consideration when
setting the network charges.
PRESENTATION OF ELES
29
Revenues arising from auctions and their use in 2014 (in %)
5%
95 %
for tariffs
for investments
In the 2014, the revenues arising from auctions were used for the following purposes:
in thousand euros
Use of revenues arising from auctions
Use of revenues arising from auctions for availability of CBTC
Use of revenues arising from auctions for investments into CBTC
2014
0
2,428
Surplus, decrease in network charge in the upcoming years
26,084
Lower network charge in the current year
21,566
Realised revenues arising from auctions
50,079
Surpluses are not included in the income statement for the current
financial year but are recorded on the internal account in the
Company’s books. Moreover, the appropriation of revenues arising
from auction for investments into CBTC is also recorded.
30
02
COOPERATION
At any given moment, ELES is in
favour of openness, integration,
team spirit and the search for the
best solutions for the common good
both among the ELES’ colleagues
as well as the active involvement of
external stakeholders. Only then can
ELES effectively fulfil its mission and
act for the benefit of all, for a better
today and tomorrow.
BTC City Cycling Teams,
the only Slovenian women's
cycling teams (Polona Batagelj,
Urška Žigart, Urša Pintar)
31
32
3. MANAGEMENT AND
QUALITY SYSTEMS
3.1 Management Systems
ELES has implemented a management system to run its business processes and operations. The management system is constantly improved in
accordance with international standards.
International standards
Quality Management System - Requirements
Environmental Management System - Requirements with guidance for use
Information Security Management Systems - Requirements
Occupational Health and Safety Management System
Conformity assessment - Requirements for the operation of various
types of bodies performing inspection
Risk Management - Principles and Guidelines
SIST EN ISO 9001:2008
SIST EN ISO 14001:2005
BS ISO/IEC 27001:2005
SIST-TS BS OHSAS 18001:2012
SIST EN ISO /IEC 17020:2012
ISO 31001:2009
ELES holds certificates issued by an independent body for the first four
subsystems; for the fifth one (Conformity Assessment) ELES obtained
appropriate accreditation.
Statement on operations management in accordance with the Companies Act, and on the other, serve as a starting point for continuous
improvement of processes.
In 2014, ELES’s focus in the field of management systems was ongoing
maintenance of systems and realisation of the strategic objective of
Business Excellence.
ELES carried out the assessment of process approach maturity in the
Company and found that, on average, the Company is between the second and the third level: the functions are still strong, but the process
borders are visible and growing in strength.
As regards the quality system, ELES continued with ongoing improvement of management and overhauling of business processes, paying
special attention to the assessment and searching for the right indicators of process effectiveness and efficiency.
ELES organised the fifth Strategic Conference in a row, which showed
that ELES has been very successful in the implementation of the first
ELES Strategic Business Plan for the 2011-2015 period. Few strategic
activities remained unrealised, but completing some of them also depends on the external environment. ELES has been monitoring and
publishing 24 strategic indicators, which will be followed by visualisation
and monitoring of process indicators.
For the first time ELES carried out a consolidated external assessment
of all certified management systems in full, i.e. quality management,
environmental management, occupational management of health and
safety and information security management.
Furthermore, for the first time ELES gathered statements of our sponsors as regards the control of work processes and regulations which,
on the one side, represent the basis for the Chief Executive Officer’s
Maturity of business process orientation in ELES, d.o.o.
Integration
CORPORATE
GOVERNANCE
Perception
4
Relationship
3
Competences
Behaviour
2
1
Process
model
Management
style
0
Team
work
Methodology
Employees
Preparedness for
changes
Focusing on
consumers
Responsibility
33
The process approach still contains a number of gaps, especially in
terms of knowledge, realisation of the sponsors’ role, process administrators and organisational culture, which will be addressed anon.
ELES prepared and assessed the application for Business Excellence in
accordance with the EFQM 2013 model and established that realisation
of the objective (450 points in 2015) is achievable. On the one hand,
progress was noticed in comparison with the previous year, but on the
other opportunities for improvement were detected, which will be systematically implemented.
In addition to performing regular activities, ELES actively participated in
organisations for the promotion of quality and excellence, especially in
the Slovenian Association for Quality and Excellence.
In the field of information security management, an assessment
of information risks was carried out for the first time in 2014 by way
of using application support. So as to train and inform the employees
of potential risks and safety controls for prevention of incidents, the
E-education web portal was used to present new contents. A safety
check of the information system in ELES was performed, wherein special
emphasis was paid to e-mail servers. ELES participated in the preparation of project documentation for the implementation of video surveillance at the Company’s premises, while in the field of technical security,
ELES participated in the project engineering phase for the construction
of the new business building in Beričevo.
Number of assessed risks as per individual assessments
221
In 2014, ELES was very active in the field of risk management. The ELES
risks catalogue was prepared in March. A definition of corporate integrity risk management was prepared in April. Based on the Company’s
strategic objectives, the purchasing procedure for application support
of all the risks which are managed in the Company (strategic, corporate,
information and environmental risks, as well as occupational health and
safety risks) was carried out in May. In the field of corporate risks, the
application support was adapted to the requirements of ELES. The last
test was successfully completed in September 2014. In July and August,
the sponsors and administrators reported on the status of realisation
and efficiency of management measures from the risks catalogue, as
well as on the important changes in the structure of risks and measures. Due to the scope and priorities related to the implementation of
ERP, the updating of the risks catalogue (which was planned with the
implementation of the new application support) was postponed from
November to the first quarter of 2015.
The first catalogue of assessments of risks related to occupational
health and safety was prepared and adopted within the framework
of occupational health and safety management system and the
Statement on Safety with Risk Assessment together with the Health
Analysis and Assessment of Risk for Job Positions in ELES were updated.
164
67
41
11
1
2
3
4
5
24
6
10
5
4
6
1
2
6
2
8
9
10
12
15
16
20
25
Figure illustrates the number of assessed IT risks across the entire Company in the
range of 1- 25, with 25 being the highest risk. Materiality for the measures is in
the assessment of 9 and more. A sample derives from the SBR application.
Within the framework of crisis management system, a proposal for
the new Rules for appointing the transmission system operator as a
coordinator in the preparation, definition and implementation of tasks
for the operation of defence system during a state of emergency, war
or crisis in the field of electric power industry was prepared. Moreover, ELES updated the plan for the implementation of national crisis
response measures and adopted the new Act Defining Job Positions
for Carrying out Tasks in Wartime. The starting points for determining
buildings which will have the status of critical infrastructure of national importance were prepared and the Plan for Physical and Technical
Security updated. The renovation of the flood warning system at Golica
HPP commenced. In 2014 ELES was in charge of conducting a study on
the process of restoring an electric power station without relying on the
external transmission network (a black start).
34
MANAGEMENT AND QUALITY SYSTEMS
3.2 Risk Management
Risk management form an integral part of the Company’s business
strategy, so that even in uncertain economic conditions ELES can
ensure stable operations and achieve the objectives set. It is based on
the profession’s good practice, while its periodical update ensures the
adequacy of the risk structure and the measures taken with regard to
the objectives and operations’ circumstances.
Prominent novelties from 2014 which importantly affect the management
of operations are related to the entrance of ELES into the circle of ambassadors of corporate integrity and the development of this system in the
Company, new management system for the electric power system, management of the integration of RES and integration of the ŠTPP 6 into the
network, as well as comprehensive management of IT and telecommunications in the field of business by implementing the new information system.
The most important risks are related to the Company’s core activity of a
system operator, i.e. the provision of a stable and quality transmission of
electricity. Among the most important risks identified were the risks pertaining to system operation, risks relating to the construction and maintenance
of the transmission network, as well as the risks arising from assets management. Amongst the latter, the risks arising from the regulatory framework
dominate due to the uncoordinated objectives of the regulator, the Energy
Agency of the Republic of Slovenia (AGEN-RS) and the owner which directly
influences the Company’s main activity, and hence its business results.
When recognising and addressing risks and setting tolerance levels, ELES
takes into consideration not only the importance of the Company’s
activities, but also the requirements which a public enterprise meets
while conducting activities as a transmission system operator.
In doing so, ELES monitors the realisation of measures and assesses
their efficiency.
Improvement in risk management after defining measures
1,0
0,8
0,6
0,4
0,2
0,0
Manage- PUSP
ment
POS
PIPO
PITK
PPD
ELES
Despite the defined measures, certain risks continue to exceed the tolerance level, but the reasons for that can be found outside of the Company. ELES pay special attention to them and the strategic risks.
Strategic risks are prominent risks that influence decisively on both
the fundamental TSO activity as well as on the business performance of
the public enterprise. Their management is ensured by taking measures
in the field of process and by monitoring the management hierarchy,
while their adequacy is verified at the Company’s Strategic Conference.
The graph below shows the structure of the risks per business areas
within the group of strategic risks of the Company.
Structure of risks in the Company’s strategic risks
JN
11 %
MANAGEMENT
18 %
Distribution of risks as per category
90
PPD
16 %
57
PUSP
20 %
7
low 1-5
medium 6-10
PIPO
11 %
high 12-20
By defining measures per areas of business ELES importantly reduces
the exposure of the company’s operations to the risks, both for the Company’s core activity as well as for achieving business performance and
compliant operations.
Risk as per business areas and total for the company
200
150
100
50
0
Manage- PUSP
ment
POS
PIPO
PITK
PPD
Total
POS
24 %
In addition to the strategic risks, the Company also has 18 defined main
groups of risks in six business area.
MANAGEMENT AND QUALITY SYSTEMS
35
MANAGEMENT OF INDIVIDUAL RISK GROUPS
In addition to the strategic risks, the Company has defined 18 defined groups of risks in six business fields:
1. Management risk
a. Corporate integrity risks
b. Human resources risks
c. Public relations risks
d. Management systems risks
2. Assets and projects management risks
a. Regulatory risks for the sustainable development of the Company
b. Risks of planning, development, selection of technology and methods
c. Project management risks
d. Analytics, diagnostics assets appropriation risks
e. Property risks
3. System operation risks
a. Operation and management risks
b. Risks of allocation of cross-border transmission capacities
c. Risks of ancillary services provision
4. Transmission network infrastructure risks
a. Construction of transmission network risks
b. Maintenance of transmission network risks
5. Risks of supporting activities
a. Procurement of goods and services risks
b. Financial risks
6. IT and telecommunications risks
a. IT risks in business processes
b. Telecommunications risks for system operation
1. Management risks
a.Human resources risks
In order to successfully fulfil its mission, the Company needs a sufficient number of competent and motivated employees, which ELES
ensures by providing planned training in technical fields, as well as
with acquiring different functional knowledge and the development
of corporate culture. The risks in this field are mitigated by implementing different tools for effective human resource management
and professional and personal development of our personnel.
b.Public relations risks
To manage these risks, ELES defined a system of internal, external and
corporate communications, recognising the importance of an adequate flow of information within the Company and the importance of
good public image of the Company and its mission due to the sensitivity of the public regarding the TSO activity and the related interventions into the environment. To manage these risks, the Company has
defined the system of proactive external and corporate communication. The Company have established crisis communication measures
to be implemented in case of any extraordinary events.
c.Corporate integrity risks
By approaching the circle of ambassadors of corporate integrity in
2014, the Company has been actively developing a system of measures to ensure operations in accordance with the legislation, ethical
standards and good practices as the fundamental principle of socially
responsible operations. In relation thereof, zero tolerance to fraud
and illegal acts is crucial. The latter is defined in the Company’s Code
of Ethics and the Rules for the Management Systems.
d.Management system risks
Management systems ensure coordination and compliance of
internal management rules with external legislation and documented
Company operations. Risks in this field are managed with competent
personnel and ongoing monitoring and improvements of system
operation by using internal and external assessments.
2. Assets management risks
a.Regulatory risks for the sustainable development of the Company
ELES performs the public service of the TSO, and is included in the
international interconnection regarding the transmission of electricity.
Therefore, the regulatory risks relate to both the national and European
Community law. Amongst the first risks, the most important risks are
the risks of changes in the field of responsibilities, requirements and
conditions for the implementation of ELES’ activities and resolving relationships with network users. The risks arising from the European Community legislation are related to the access to cross-border transmission capacities and the realisation of the priority projects of common
interest. Both risk groups are managed with the processes in individual
areas.
b.Risks of planning, development, selection of technology and methods
The most substantial risks in the planning and development are
related to the achievement of the Company’s objectives, the reduction of business and technical risks and the realization of the development program. Hence, the planning measures are improved on
both the development and maintenance segments of the transmission network, while the Company monitors the financial risks related
to the purchase, maintenance and assets write-off.
c.Project management risks
In the field of comprehensive project management, ELES continuously improves the measures for planning, implementation and completion of projects, as well as the risk management during IT support
development which is carried out through the reform of the business
informatics system.
d.Analytics, diagnostics and assets appropriation risks
Inadequate consideration of the analysis and diagnostics results,
subjective interpretations, cross-views of the analysis and diagnostics
results and thus related inappropriate response which may lead to
poor decisions in the field of investment and maintenance is being
mitigated with constant improvement of methodological approaches
and information support.
36
MANAGEMENT AND QUALITY SYSTEMS
e.Property risks
In addition to the cost and effect analysis and a number of internal
measures implemented to ensure efficient operation in this field, the
Company manages property risks on electric power devices, buildings
and other Company property with insurance with the insurance company.
3. System operation risks
a.Operation and management risks
The most important risk in the management and operation of the system is untimely or inappropriate response to extraordinary operational
events, but also due to the increasingly changeable conditions in the
European network and due to the integration of renewable sources
of energy (especially wind and solar energy), all of which may lead to
critical operation conditions and local or global collapse in the electric
power system. To manage these kinds of risks, implementing the new
electric power management system in 2014 was of essential importance, as well as the inclusion of ELES into the European Network of
Transmission System Operators to provide reliable operation, co-founding of the company to ensure regional safety of operation and continuous training of operational staff.
b.Risk of allocation of cross-border transmission capacities
Risk management arising from the allocation of cross-border transmission capacities is one of the key factors in ensuring the stability in the
electricity market. Therefore, in cooperation with the partner system
operators and auction offices, ELES developed appropriate procedures
and alternative procedures for the allocation of cross-border transmission capacities that virtually eliminate this risk, as well as reduce the risk
of loss of auction revenues due to the inability to carry out auctions.
c.Risks of ancillary services provision
Significant risks in system operation are associated with the provision
of ancillary services due to a lack of supply or poor quality, which are
a consequence of the smallness and characteristics of the Slovenia’s
electric power system and market. ELES manages the aforementioned by taking an active approach to domestic providers of ancillary services, seeking synergies with neighbouring system operators,
cooperation agreements in the event of extraordinary circumstances
and participation in a collective provision and exchange of ancillary
services. Integration of the ŠTPP 6 into the electric power system
represents new circumstances and additional measures for ensuring
secondary control.
4. Tveganja infrastrukture prenosnega omrežja
a.Construction of transmission network risks
In this area, the risks of administrative and legal procedures come
into focus. These risks are mitigated by participating actively in the
preparation of laws and rules, as well as proactive cooperation with
all stakeholders in network construction. The risks of organisational
nature, associated with the appropriate personnel structure, technological equipment and investment engineering support, are mitigated
with the development and training of human resources and by
improving the overall project management with analytical support.
b.Maintenance of transmission network risks
Risks of maintaining the network are connected with the sufficient
and competent potential of maintenance personnel, maintenance
sources in normal and extraordinary situations, civil-law relations in
the maintenance of infrastructure and acquisition of infrastructure
from other companies in the electric power system. ELES controls the
latter by pursuing an active personnel policy, education and training,
improvement of the system of health and safety at work, active participation in the law making process and with the engagement of legal
and communications experts.
5. Risks of supporting activities
a.Financial risks
In order to manage the financial risks, liquidity and credit risks,
interest rate risks and risks related to lack of financial discipline, the
Company prepared systematic and effective measures. The liquidity
risk is managed by the annual monthly and daily cash flow planning,
while credit risk is managed by insuring as large share of receivables
as possible and by reviewing the financial status of all the new and
existing business partners. It is also helpful to manage the control of
the accounts receivable and their consistent collection. ELES hedges
itself against the risk of interest rate changes by applying the derivate financial instruments. To manage interest rate risks, the Company has adopted a strategy to continuously evaluate the accuracy
and efficiency of their selection. The risks of the banks’ financial
indiscipline are managed through the regular monitoring of the
banks’ credit rating, taking into consideration the principle of dispersion of funds deposited as per individual commercial banks and by
choosing a short-term deposit.
b.Procurement of goods and services risks
ELES manages the procurement of goods and services risks by setting forth detailed procedures and defined responsibilities, which are
updated with the measures and instructions from the management.
A particular attention is devoted to the timely preparation of tender
documents, containing well-defined technical terms and conditions
and respecting the deadlines for the implementation of public procurement, as stated in the adopted Company’s Annual Plan and Public Procurement Plan.
6. IT and telecommunications risks
a.IT risks in business processes
ELES is aware of the importance of IT for uninterrupted business
operations and its development. In order to mitigate the dominant
IT risks, such as unauthorised access or system intrusion, access risks
and reliability of IT systems, a number of different measures were
introduced, such as the duplication of critical systems, preventive
replacement of the old hardware and software, management of the
disaster recovery centre, a single communication point for IT service
users (ITC service centre), as well as preventive measures such as the
system for recognition and prevention of intrusion (IDS/IPS), mechanisms for comprehensive system monitoring /SCOM../, firewalls and
anti-virus protection.
MANAGEMENT AND QUALITY SYSTEMS
b.Telecommunications risks for system operation
The risk related to the construction and maintenance of telecommunications networks, which are necessary for the management of the
electric power system with the required 99.99 percent availability of
services and redundancy is being managed with a three-year and
37
strategic planning by taking into consideration good practice,
depreciation period of equipment and market analysis, as well as
by following the development of telecommunications services and
a joint service centre for ensuring the appropriate level of IT and
telecommunications services.
3.3 Corporate Integrity
In the corporate integrity system, which comprises the compliance of
Company’s operations with the legislation, good business practices and
high ethical standards towards all stakeholders in the business world,
the main emphasis is on preventive action, which ELES endeavours to
ensure by implementing the institute of the authorised person for corporate integrity:
• with preliminary determination and assessment of the state of risks
for corporate integrity and by proposing improvements to measures
for their management;
• with increased awareness of the importance of corporate integrity
by providing training and information to the personnel as regards
corporate integrity risks, since it is the employees who are primarily
responsible for compliance and ethical operations of the Company;
• systematic and independent control of efficient implementation of
measures for managing corporate integrity risks in terms of their prevention, restriction of occurrence and repetition;
• effective disclosure and appropriate sanctioning of violations of corporate integrity, wherein it is important that the employees have the
opportunity to report violations and inadequacies through the system of internal (anonymous) notifications or use the opportunity to
merely ask questions regarding compliance of conduct in daily Company operations.
By signing the Slovenian guidelines for integrity in corporate management, together with 27 other respectable Slovenian enterprises, ELES
has joined the circle of ambassadors of corporate integrity.
The Company also signed the Declaration on Fair Business by the United Nations Association of Slovenia for Sustainable Development. ELES is
a member of the European Institute of Compliance and Ethics.
In this way, ELES has committed to respect and strengthen corporate
integrity in its operations and spread the awareness on the importance of conducting business in compliance with the law and ethical
standards as one of the fundamental principles of socially responsible
operations in the Slovenian economy. Consequently, ELES will adopt the
Rules on Corporate Integrity whose purpose is to ensure zero tolerance
to fraud, illegal and unethical acts of the Company’s chief executive
officer and employees.
Based on these Rules, the Company shall also adopt:
• the Rules on Controlling and Ensuring Corporate Integrity to determine the procedures for appointment and operations of the person
authorised for corporate integrity, regular monitoring to ensure corporate integrity, processing of notifications of violations of corporate
integrity, protection of identity of persons reporting violations of corporate integrity, compulsory reporting and internal communication
on the state of corporate integrity;
• the Catalogue of corporate integrity risks (a detailed plan of corporate integrity), which is the key tool for prevention and with which
the occurrence of corporate integrity risks is managed and prevented.
In cooperation with all of the stakeholders, the Management shall ensure that the relevant regulations on ensuring corporate integrity shall
be gradually implemented by the subsidiaries as well.
38
03
COMMITMENT
Patiently and uncompromisingly,
ELES is committed to achieving the
best results, fulfilling its mission and
striving for long-term development
and maintenance of the electric
power transmission system of
the Republic of Slovenia. This
system represents the backbone
of organisations in all sectors and
is therefore a prerequisite for the
economic progress of Slovenia.
Miha Podgorni,
ultramarathon athlete
who ran Spartathlon
39
40
4. OPERATIONS ANALYSIS
4.1 Report on Operation in 2014
Pursuant to the energy legislation, ELES is responsible for safe and reliable management, development, construction and maintenance of the
400 kV, 220 kV and a portion of the 110 kV transmission networks. ELES
plans, builds and maintains the Slovenia’s transmission network strategically, responsibly and sustainably.
By managing the entire Slovenia’s transmission network, ELES ensures a
safe, reliable and uninterrupted electricity transmission. Our mission is to
provide for coordinated operation with the neighbouring and all other
networks that are united in the European Network of Transmission
System Operators (ENTSO-E).
In 2014, two events strongly affected the area of operation of the
Slovenia’s electric power system. These are the February ice/sleet and
connection of block 6 of the Šoštanj Thermal Power Plant to the transmission network.
Glaze ice/sleet affected a large part of Slovenia, but in spite of this, ELES
successfully “defended” Slovenia against electric eclipse of unimaginable proportions. Any natural disaster of such dimensions reminds us
once again of our vulnerability and everything we have to or can do to
defend unintended consequences and ensure a continuous supply of
electricity to all consumers. Thus, from this natural disaster the Company draw a lot of knowledge, experience and new ideas on how to
prevent any re-effects of natural disasters.
Connecting ŠTPP 6 is in several respects a historic event. It is the largest
thermal power block in Slovenia and at the same time, considering that
half of the KNPP belongs to Croatia, also our greatest power. It has also
increased the already high need for ancillary services in Slovenia. ELES
prepared well both for new operating conditions of the Slovenia’s EPS
and for the challenges related to the provision of adequate quantity
and quality of ancillary services. Based on long-term partnership the
Company – together with the neighbouring system operators – found
and created good solutions so that the Slovenian end-users will not bear
a greater financial burden due to the growing demand for ancillary services.
Development orientation of the EU for the transition to a low-carbon
society posed a great challenge to the system operator in Europe in the
past year. The latter entails the transition from the generation of conventional (fossil) power plants to a larger portion of the generation of
electricity from renewable energy resources (RES), such as in particular
wind and solar power plants. Intensive growth of renewable energy
resources has caused a constant fall in prices on electric power exchanges
since 2008. On the other hand, the retail price of electricity paid by
end consumers is constantly growing. The paradox that at first glance
seems illogical, but at the same time completely understandable, since
the end consumer pays through the final price of electricity also the
costs of subsidies and other benefits that enable a high proportion of
energy from RES. In this situation system operators are faced with the
challenge how to provide sufficient volume of ancillary services which
regulate frequency, voltage and other network parameters with which
the operational readiness of the network in racing condition is ensured
with unprofitable conventional power plants and the complete absence
of price signals for investment in new generating sources.
2014 will go down in history as one of the most important years. Yet not
due to the catastrophic ice, but because of the awareness how important the work of each employee is and, in particular, of the importance
of the participation of all sectors both at the Company level and at the
level of ELES’ neighbouring system operators as well as all the international associations that can provide reliable, efficient and uninterrupted
electricity supply.
41
4.1.1 Grid Input and Grid Offtake
In 2014, the total grid input amounted to 15,221 GWh, which is 1,227 GWh more than in 2013. Grid input of hydro power plants totalled 5,794
GWh, 3,367 GWh was input by thermal power plant, while the nuclear power plant totalled 6,060 GWh of electricity.
Grid input from 2005 to 2014 (in GWh)
Energy (GWh)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2005200620072008200920102011201220132014
Nuclear power plant *
Thermal power plants **
Note:
* 100-percent share of KNPP has been considered
** generation of RES and CPTEP has been considered
Hydro power plants
42
OPERATIONS ANALYSIS
In the last decade, the structure of grid input slightly changed. Over the
years hydro power plant grid input has increased due to the construction of additional power plants on the lower Sava River and favourable
hydrological conditions, while the grid input of thermal power plants
decreased significantly in the past year.
The structure of grid input in 2014 and 2013 (in %)
Year 2014
Year 2013
38 %
32 %
40 %
36 %
22 %
32 %
Nuclear power plant
Nuclear power plant
Thermal power plants
Thermal power plants
Hydro power plants
Hydro power plants
As usual, also in 2014 the largest portion of the total grid input was
contributed by Krško Nuclear Power Plant, namely 40 percent. KNPP is
followed by thermal power plants and hydro power plants which input
approximately 22 percent of the total grid input.
In 2014, the total grid offtake without losses amounted to 12,226 GWh,
of which direct consumers offtook 2,083 GWh, distribution 9,780 GWh
and pumped storage hydropower plant (PSHPP) for the purpose of
pumping 363 GWh. Compared to 2013 the offtake was lower by about
two percent.
Grid offtake from 2005 to 2014 (in GWh)
Energy (GWh)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2005200620072008200920102011201220132014
Direct consumers
Distribution
PSHPP (pumping)
OPERATIONS ANALYSIS
The ten-year average indicates that the amount of the grid offtake
varied with no apparent downward or upward trend, and in 2014
decreased by about 1 percent, from 12,340 GWh to 12,226 GWh in
comparison with 2004.
43
In 2009, the grid offtake decreased sharply compared to 2008, which
can be attributed to the adverse conditions in the economy, while an
upward trend was evident in 2010 and 2011. The PSHPP, which began
with the commercial operation in early 2010, and significantly higher
offtake of direct consumers significantly contributed to the increase in
offtake.
The structure of grid offtake in 2014 and 2013 (in %)
Year 2014
5%
17 %
Year 2013
78 %
5%
17 %
78 %
Direct consumers **
Direct consumers **
Distribution *
Distribution *
PSHPP (pumping) and losses
PSHPP (pumping) and losses
NOTE
* Distribution: Elektro Celje, d.d., Elektro Gorenjska, d.d., Elektro Ljubljana, d.d., Elektro Maribor, d.d., Elektro Primorska, d.d.
** Direct consumers: Kidričevo, Ruše, Štore, Ravne, Jesenice
In the last four years, the trend of grid offtake has not changed significantly.
4.1.2 Transmission network loads
Peak load consists of maximum hourly average of loads, which occurs
in the relevant year. In the last ten years the value of the peak demand
has not changed significantly. In the 2007-2009 period and in 2013, a
negative trend of peak load was recorded, whereas a positive trend was
determined in the 2010-2012 period and in 2014. Peak loads occur in
the winter months, while the hours of peak periods moved from afternoon to evening hours after 1997.
Transmission network peak loads from 2005 to 2014 (in MW)
P [MW]
2,100
1,800
1,500
1,200
900
600
300
0
2005200620072008200920102011201220132014
Peak load
In 2014, the peak load increased by approximately 2 percent in relation to the preceding year.
44
OPERATIONS ANALYSIS
4.2 Significant Events in 2014 in the Field of Operation
ANCILLARY SERVICES
In the same way, ELES also coordinated and improved the operation
with the Italian system operator Terna, where ELES further diversified
its portfolio of sources and limit operational risks with the new agreement for 100 MW of power reserve. With the cover or obligation NOS
BiH or serve as additional reserve units in TEB. The provisions of grid
codes, which are otherwise only in the preparation process, were applied
mutatis mutandis in both agreements, but it shows the development
and pro-active role of ELES in the future organisation of the European
network operation.
To ensure stable operation of the EPS the system operator must constantly balance the imbalances arising from differences between the
realisation of generation and consumption in Slovenia and as a result
of changes according to the exchange schedules between the neighbouring control areas. Ancillary services as well as integrated tools for
Imbalance Netting allow the system operator to balance said imbalances.
In the case of major imbalances the system operator must intervene in
the market by buying or selling a certain quantity of energy or engage
ancillary services in order to restore the balance between generation
and consumption, by way of which it replaces the missing active power
reserve in the control area.
INTER-SYSTEM BALANCING
With the cooperation between the Austrian system operator APG and
ELES in the field of inter-system netting of current imbalances (INC)
between Slovenia and Austria remarkable results were also achieved in
2014. By way of applying this mechanism that takes place in real-time
and exclusively in the context of free cross-border transmission capacities, ELES managed to reduce the costs of balancing the Slovenia’s EPS
by 11.6 million euros. This indirect effects also the electricity prices for
end consumers, since the costs of electricity suppliers are thus reduced.
Beside the financial benefits the technical aspect of such a cooperation
might be even more important for ELES as on one hand, the mechanism enables the reduction in the activated secondary power reserve,
so there are more reserves available in case of unexpected operational
events in the electric power system, while on the other hand, the control
units that are leased by the system operator to provide these services
are less burdened by constant changes in active power, which extends
their existence and improves the efficiency of their operation. Through
the INC mechanism ELES significantly relieved the extent of the activated secondary control in Slovenia, namely, by 31 percent in positive and
28 percent in negative direction.
After ELES carried out a long-term lease of the ancillary services for the
2014-2018 period in 2013 for the first time in history, it was also decided
last year to purchase additional long-term electricity product necessary
for the implementation of tertiary frequency control for the 2015-2018
period. Despite the fact that this is an important milestone in the history of the provision of ancillary services, the manner of managing the
increased demand for tertiary reserve as a result of the connection of
ŠTPP 6 to the transmission network is the highlight of 2014. By connecting and starting the trial operation of ŠTPP 6 and in accordance
with the rules of ENTSO-E the required volume of tertiary reserve power
increased by 205 MW. ELES prepared timely to such a change and in
January 2014 signed an agreement on joint provision of reserves in the
SHB block (Slovenia, Croatia and Bosnia and Herzegovina). By signing
this agreement ELES – together with Croatian and Bosnian partners –
committed to establish a common zone of balance and together provide the necessary volume of reserves in the area of Slovenia, Croatia
and Bosnia and Herzegovina. In this way the Company reduced the required volume of tertiary reserve in Slovenia from 553 MW to 256 MW;
however NOS BiH is currently not yet in a condition to provide the difference between 256 MW and 348 MW, so that the leased volume remains at the level of 348 MW. The burden of additional costs for the
Slovenian end consumers was thereby reduced by approximately 10
million euros annually.
The figure below shows the outline of financial benefits and volume
system balancing as per week in 2014, which were achieved by applying the INC mechanism and secondary control. The INC mechanism
largely complemented the system balancing through the activation of
secondary control, which proved to be more distinctive in the negative
direction due to long positions of balancing groups for the most part of
the year. At the same time the transmission capacity for exports from
Quantities/ GWh
Surplus / in thousand €
8
500
6
450
400
4
350
2
300
0
250
-2
200
150
-4
100
-6
-8
50
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
0
OPERATIONS ANALYSIS
Slovenia to Austria were rarely available in those moments. The scope
of financial benefit, which assesses the value of savings at the cost of
activation of secondary control of domestic providers, coincided with
energy prices on the market and was slightly higher in autumn and winter months, while in the spring and summer months fluctuated around
a relatively constant value.
CROSS-BORDER TRANSMISSION CAPACITIES
In terms of cross-border trade the increased generation of renewable
energy resources throughout Europe still represents a major challenge. If
the neighbouring system operators are faced with these issues directly,
the impact on ELES and Slovenian electricity market is more indirect and
is reflected in the reduction of transmission paths. Said demonstrated
as the most prominent problem in 2014 on the Austrian-Slovenian
border. For the Slovenian market and also wider Austrian market is an
extremely important source of cheap electricity. Hence, the amount of
free cross-border capacities at this border amounted to only 685 MW
instead of the planned 950 MW, which is 28 percent less than planned.
Since similar patterns were also observed on some other borders, which
in normal circumstances constitute important pathways for access to
the German market, the prices in Slovenia were on average constantly
hovering for 8-10 euros/MWh over the prices on the German market.
That the difference in average was not even higher, is certainly attributable to the extremely good hydrology throughout the year. This was
accompanied by an unprecedented increase in the NTC in the IT-SI
direction (+500 MW), which ELES managed to provide for 2014. The
move proved to be extremely important, since especially during weekends the Italian market is swamped with cheap electricity from RES.
Hence, imported 544 GWh of electricity was from Italy to Slovenia only
in 2014, which is 84 percent more than the 2011-2013 total. It should
be noted that this is not the case of imports, which would be the result
of extremely high prices on the Slovenian market and beyond (as was
typical in the past), but the result of extremely low prices in the Italian
market. Notwithstanding the aforementioned, close cooperation with
the neighbouring system operators remains extremely important for
ELES also in 2015.
45
FEBRUARY ICE IN TERMS OF OPERATION
Natural disaster – ice/sleet, which occurred on the last days of January
and the first days of February 2014, caused damage to the Slovenian
electric power system on a number of transmission lines of all voltage
levels. The transmission lines, which connect central Slovenia with the
rest of the network, were mainly damaged. The connectivity of this part
was weakened to such an extent that the basic supply of electricity to
the greater part of central Slovenia was under question.
The newly constructed 400 kV Beričevo-Krško I, II transmission line provided continuous power supply to the central Slovenia during the ice, so
it must be noted that without this transmission line Ljubljana and its surroundings would have sustained large-scale blackout. The event more
than confirmed the fact that the newly constructed transmission line is
of great importance for a reliable and quality power in Slovenia, in addition to the already important role from the standpoint of increased possibilities of cross-border exchanges of electricity with foreign countries.
ISLAND OPERATION OF NORTHERN PRIMORSKA REGION
Island operation is a special category of the electric power system
operation, where a part of the system is temporarily separated from the
rest of the electric power system. Technically, this kind of operation is
much more demanding and risky than operating in interconnection, but
the system operators need to be constantly prepared for such a way
of operation. Another challenge is the fact that the possibility of such
operation is extremely rare, making it difficult for the system operators
to obtain the relevant experience.
Knowing the operating characteristics of Northern Primorska and the
capacity of all partners involved enabled the Company to use islanding
mode of operation, which nowadays is established only exceptionally,
and thus eliminate the defects on the sole transmission link in this part
of Slovenia (2x110kV Ajdovščina-Divača I and II transmission line).
With a highly qualified staff and close collaboration of our business
partners the Company managed to ensure proper electricity supply
to the consumers in Northern Primorska despite several hours of an
island operation. At the same time the Company also gained additional
knowledge of the characteristics of island operation and perfected such
an operation of the Northern Primorska loop.
Figure: interrupted transmission links between Ljubljana and Primorska and Štajerska Region (marked white).
46
OPERATIONS ANALYSIS
4.3 Investments
Slovenia’s high voltage transmission network is composed of facilities on
three voltage levels: 400 kV, 220 kV and 110 kV. Among the transmission
facilities there are transmission lines, substations and switching substation. Together with the other equipment and information and communication technology, ELES thus ensures reliable operation of the system.
The basis for the development of the electric power transmission network of the Republic of Slovenia is the Transmission System Development Plan. Pursuant to the provisions of Article 30 of the EA-1, Article 27
of the Decree on the method for implementing public service obligation
relating to the activity of transmission system operator in the field of
electricity and Article 22 of the Directive 2009/72/EC of the European
Parliament and of the Council concerning common rules for the internal
market in electricity, ELES is obliged to prepare a development plan of
the transmission network every two years for the next ten-year period. In
2014, ELES prepared the Development Plan of Transmission System of
the Republic of Slovenia for the 2015-2024 period. The document was
submitted to the competent Ministry of Energy on 24 December 2014.
A carefully elaborated development plan follows the latest trends and
guidelines in the development of the electric power system in the context of ENTSO-E and is one of the input documents for a common European Ten Years Network Development Plan (TYNDP). The Development
Plan comprises an overview of the current status and the necessary
interventions in the transmission network of the Republic of Slovenia,
which will – given the projected construction of generation units, growth
in electricity demand, the expansion of the distribution network and the
projection of the development of the electric power system in Europe –
ensure reliable operation of the Slovenia’s EPS and the wider region and
ensure that the users will be guaranteed a reliable and quality supply of
electricity. The novelty of the document is the introduction of the four
visions of the future electricity consumption and its coverage with the
generation resources by the ENTSO-E TYNDP methodology. The visions
differ depending on the development of technical and technological
parameters, efficiency, efficient consumption of energy, introduction
of RES and other parameters that affect the scope of final energy consumption.
An important aspect of the new Development Plan is also that it is prepared on the basis of the policy of efficient assets management, which
ELES adopted and implemented in 2013. Efficient assets management
entails quality, risks, benefits and costs throughout the assets life
cycle. The system is focused on safe, reliable, sustainable, environmentally-friendly and efficient fulfilment of the network users’ requirements.
In accordance with the ten-year Development Plan and the Strategic
Plan, ELES plans the investments in electricity transmission facilities on
an annual and medium-term level.
The transmission system operator must demonstrate the cost-effectiveness and transparency of its operations. ELES dedicated a lot of attention to the aforementioned in 2014. The principles of efficient assets
management pursuant to ISO 55000 and British Standard PAS 55 were
integrated into ISO 9001 quality system.
4.3.1 Investments into the electric power transmission network
In 2014, ELES appropriated 37.9 million euros for investments, which is 14
percent less than planned. The reasons behind the deviations in realisation
from the 2014 Annual Plan were primarily of statutory nature, while other disadvantages were also the lengthy coordination procedures with local communities and inconsistencies in the land register. The total amount of investments
does not include free takeover Dekani in the amount of 2.6 million euros.
ELES appropriated 16.1 million euros for new investments, 19.3 million
euros for the renovations or reconstructions and 2.5 million euros for
minor investments.
OPERATIONS ANALYSIS
Investments as per groups
47
v MEUR
2013
2014
Annual plan
2014
Transmission lines
27.1
21.4
14.7
79
146
400 kV DV
22.7
8.7
5.4
38
161
220 kV DV
0.1
0.2
0.5
197
38
110 kV DV
4.2
12.5
8.7
294
143
12.6
6.8
5.8
54
117
400/x kV
8.2
3.2
2.7
40
119
220/x kV
0.0
0.0
0.0
45
110/x kV
4.4
3.5
3.1
81
115
3.
Major operational investments
1.1
1.5
5.6
142
27
4.
Secondary equipment
3.0
3.0
4.0
100
75
5.
Telecommunications
0.5
1.6
6.0
359
27
6.
Computer equipment
0.8
0.8
4.0
104
20
7.
Business buildings
0.1
0.2
0.5
211
33
8.
Development of new technologies
0.4
0.7
1.1
189
64
9.
Minor investments
0.8
1.9
2.7
241
73
10.
TOTAL
46.2
37.9
44.2
82
86
Investments and reconstructions
1.
2.
Substations
Index
r14/r13
Index
r14/LN14
Among the most strategically important investments and reconstructions in 2014 ELES realised the following activities:
in May 2014, had not been built in 2013, the Central Slovenia and Gorenjska Region would have remained without power supply during winter ice.
CONSTRUCTION OF TRANSMISSION LINES
The total investment amounted to 63 million euros, of which 3.1 million euros were invested into the project in 2014. The project is partly
financed by the European Investment Bank and the European Union
non-refundable funds.
In 2014, ELES completed one of its most strategically important
investments. On 18 November 2013 the 80.4-kilometer-long 2x400 kV
Beričevo–Krško transmission line was connected onto the network.
Technical inspection of the transmission line was completed on 20
April 2014, which was followed by a six-month trial operation. In the
meantime, the measurements of electromagnetic radiation, noise were
performed and access roads damaged after the winter of 2013/2014
reconstructed. Managing relations with municipalities under the Framework Agreement is in its final stage. ELES made partial adjustments to
the corrosion protection of pylons. Due to extremely bad weather conditions, the work continues in 2015. In 2015, the administrative body
issued an operating permit for the transmission line.
The transmission line provides electric power transmission from multiple
directions, thus increasing the safety, reliability and optimum operation
of the entire Slovenian electric power system. This ensures a higher quality of services for consumers. High utilization of the transmission line
significantly reduces also the losses in it. The 2x400 kV double-circuit
Beričevo-Krško transmission line also allows additional transmission
of electricity between the neighbouring countries, thereby improving
operating reliability of the entire region. In the case of major outages in
the electric power network, its transmission capacity allows an increase in
throughput of the network and the acquisition of a part of transit flows.
If the 2x400 kV Beričevo-Krško transmission line, which was inaugurated
ELIMINATION OF CONSEQUENCES OF THE NATURAL DISASTER
There was a severe meteorological disaster in the wider area of Slovenia
in February, which also caused major damage to the electric power system. High voltage transmission lines owned and operated by ELES were
not spared either. In the last days of January 2014, the area of western
Slovenia experienced heavy rain, which continued intermittently in early
February and caused icing due to the concurrent negative temperatures.
Icing was the most intense in the interior of Slovenia, between Primorska
and Notranjska Region. Later, the icing expanded less intensively also to
other areas of Slovenia.
Due to the very large local ice loads on ropes and steel structures of power
lines’ pylons major damage occurred on the pylons, which in some cases
even collapsed. At the same time there has also been damage to other
elements of power lines. With the thaw and the resulting melting and
falling of ice deposits, there were uneven load of structures, which
caused additional damage to the power lines.
A number of transmission lines were damaged. The extent of damage is
shown in the table on next page.
48
OPERATIONS ANALYSIS
The extend of damage
Pylon locations
damaged 100%
damaged - 30%
Length of
damaged
sections (m)
176
0
1
0
0
50,063
124
3
0
2,500
4,99
2x110 kV Dravograd-Velenje TN
19,043
46
2
0
1,200
6,3
110 kV Cerkno - Idrija TN
12,499
41
8
4
8,000
64,01
400 kV Beričevo - Divača TN
76,166
196
26
6
16,000
21,01
220 kV Kleče - Divača TN
66,400
177
23
21
24,000
36,14
220 kV Obersielach-Podlog TN
46,566
123
0
1
0
0
110 kV Ajdovščina-Idrija TN
28,350
119
0
0
3,180
8,88
Transmission network
Length (m)
Pylon locations
220 kV Beričevo - Podlog TN
63,179
400 kV Beričevo - Podlog TN
The table shows the number of completely demolished steel structures
and damaged lengths of the transmission line. All the transmission lines’
equipment was completely destroyed at the damaged sections, while
consoles of steel pylons were damaged on 220 kV Beričevo-Podlog and
220 kV Obersielach-Podlog transmission lines and protective rope with
fibre optic (OPGW) on 110 kV Ajdovščina-Idrija transmission line.
ELES’ transmission line teams immediately replaced consoles on 220 kV
Beričevo-Podlog and 220 kV Obersielach-Podlog transmission lines.
Moreover, ELES also carried out the replacement of OPGW on 110 kV
Ajdovščina-Idrija transmission line. On other facilities the protection
of transmission line pylons against further cascade demolition was carried out first. Operating measures promptly started so as to ensure that
all ELES’ substations had uninterrupted power supply for supplying the
entire territory of Slovenia with electricity. ELES immediately began
preparing the necessary project documentation for the facilities which
had been severely damaged with the collapse of a large number of
pylons and the complete destruction of transmission line equipment.
The preparation of project documentation entailed an inventory of necessary equipment and necessary works to restore the normal operating state
as well as the documentation for the execution of works. Public procurement for the supply of equipment was carried out and contractors selected.
Works entailed the removal of the destroyed equipment, construction
of new or reconstruction of the damaged transmission line pylons and
installation of the new transmission line equipment. Without the aforementioned measures, damaged transmission lines would not be operational.
All works were physically completed within two months. In accordance
with the applicable law on public procurement the procedures for the
supply of materials and execution of works were previously carried out l.
8.8 million euros were spent to eliminate the consequences of the natural disaster.
By analyzing events in icing conditions, which affected ELES’ facilities in
February 2014, we examined the adequacy of the design of transmission lines and the adequacy of maintenance. The overall assessment is
that damaged transmission lines were constructed in accordance with
% of damaged
section
the then applicable legislation. In all the years since their construction
the transmission lines were maintained in accordance with the internal
regulations, and ELES took all measures prescribed by law. The guidelines for further activities, which could prevent or limit the consequences
of possible future icing, were also drawn up.
In 2014 ELES continued with the procedures of obtaining the right to
build for the project of the construction of the 2x400 kV Cirkovce-Pince
transmission line, which commenced already in 2013. In 2014, 75
percent of easement agreements on agricultural and forest land and
53 percent of easement contracts on building land were obtained and
entered into the land registry.
The project for obtaining the building permit and the investment program were drawn up and revised. 95 percent of land and 90 percent for
the transmission line were obtained for the construction of the substation.
In accordance with the National Spatial Plan (NSP) preliminary geological
and archaeological research and project documentation for the establishment of habitats were completed. An application for obtaining environmental approval was submitted, which the Environment Agency refused or
requested modifications, which will be submitted in the first quarter of 2015.
The Cirkovce-Pince transmission line and switchyard at the Cirkovce substation shall facilitate the integration with the Hungarian transmission
network, thus increasing the operational reliability of the Slovenia’s electric power system, significantly increasing the capacity and reliability of
the transmission network in this part of the country, and also facilitating
access to electricity on eastern electricity markets. All of this shall result
in more favourable long-term electricity prices for the Slovenian consumers. In the event of operational problems, additional support shall also be
provided through the Hungarian transmission network. The new Cirkovce
substation shall also relieve the load of the existing Maribor substation.
The reconstruction of the 2x110 kV Brestanica-Hudo transmission
line is underway. On the section of the transmission line (approximately
5/6 of the transmission line route), where the work shall be carried out in
OPERATIONS ANALYSIS
accordance with the Decree on maintenance works for public interest in
the energy sector, ELES continued with the procedures of obtaining the
right to build also in 2014. By the end of the year, 97 percent of easement
contracts were obtained, geomechanical measurements were carried out
and a geological report was drawn up. On the section of the transmission
line, for which the National Spatial Plan was adopted (approximately 1/6
of the transmission line route), the procedures of obtaining the right to
build also commenced in the last third of 2014. By the end of the year,
89 percent of the easement agreements were obtained. In spite of the
adopted NSP civil initiative KS Otočec opposes the process of construction.
The reconstruction of this transmission line shall entail the upgrade of
the existing single-circuit into the double-circuit 110 kV transmission
line, which shall increase its transmission capacity. The reconstruction
is necessary because of the planned construction of a chain of hydro
power plants on the lower Sava River, development plans of the
Brestanica TPP as well as to ensure a reliable power supply of Dolenjska
and Bela Krajina Regions. It is estimated that the reconstruction shall
cost 12.7 million euros and will have been completed by 2016.
The project of installation of surge arresters and registrators of lightning
strike on 2x110 kV Gorica-Divača transmission line, Vrtojba-Sežana
section is completed. In order to increase the reliability of operation due
to atmospheric discharge in phases, 212 surge arresters and 30 registrators of lightning strike were installed on the chosen length of the
transmission line at 71 tranmission line bays. This shall be followed by
monitoring the number of lightning strikes in phases and possible failures of the transmission line.
The reconstruction of the 2x400 kV Divača-Beričevo-Podlog-Cirkovce
transmission line, transition from 220 kV to 400 kV; TL + OPGW + bay
is underway where in 2014 consultations with local communities were completed and comments and suggestions of residents of municipalities, over
which the northern and southern version of the transmission line, gathered.
After examining the routes north and south version, 12 sections were
identified with a total length of approximately 50 kilometres, where optimisations were examined with which the impact of transmission line on
the environment will reduce mainly in populated areas. Representatives
of civil initiatives were presented methods of calculations and measurements of electromagnetic radiation transmission lines. Monitoring
of the existing lines, 220 kV Kleče-Divača transmission line and 400 kV
Beričevo-Divača transmission line was carried. Weekly measurements
at several locations near the existing transmission lines were performed.
ELES prepared several responses to the comments and suggestions of civil
initiatives and individuals and attended several meetings with them. Most
of the activities carried out are also presented on the Company’s website.
CONSTRUCTION OF SUBSTATIONS
In 2013, ELES completed its investment into the 400/110 kV Krško substation. Two 400 kV Beričevo 1 and 2 transmission line bays were upgraded
for the 2x400 kV Beričevo-Krško transmission line to be connected. Hence,
the switchyard construction was completed. The technical inspection was
49
conducted on 15 April 2014, and on 16 May 2014 operating permit was
obtained. The entire investment totalled 14 million euros.
In 2013, the 400 kV KNPP switchyard was completely restored. During the overhaul of the KNPP, the last part of the 400 kV busbars was
renovated, the 400 kV Tumbri 1 and 2 bays were relocated and reconstructed and the relay house was also renovated. The reliability of the
switchyard with the reconstruction, thereby ensuring a high degree of
operational reliability of high-voltage devices for the smooth operation
of the KNPP. The technical inspection was conducted on 20 November
2014, and the operating permit received two days later. The total
investment amounted to 12.4 million euros.
In 2014, the reconstruction of 110 kV bays, 400 kV bays and 400 kV
switchyard was completed at the 400/110 kV Okroglo substation. The
majority of primary equipment, all secondary equipment and auxiliary
supply equipment was replaced and a comprehensive building reconstruction of bays and relay houses was carried out. By way of the renovation
of all technological equipment, the service life of the switchyard extended
and the operational reliability of the entire switchyard increased, and
consequently, also the reliability of power supply of the Gorenjska Region.
All works were completed for the reconstruction of the 110/20 kV Ilirska Bistrica substation in GIS implementation was also completed
in 2014. The technical inspection was conducted on 10 July 2014, and the
operating permit obtained a day later. The GIS switchyard is thus in normal operation. Beside ELES two other co-investors in the construction project of GIS switchyard were Elektro Primorska and SODO. With the reconstructed switchyard and modern high-tech equipment, the maintenance
costs shall be reduced. There shall also be a reduced possibility of defects,
while the reliability of supply in the region shall increase significantly.
MAJOR INVESTMENTS IN THE FIELD OF SYSTEM OPERATION
The construction of the new National Control Centre of RS (NCC)
In 2014, ELES continued with the project implementation of the new
energy management system in the National Control Centre (NCC). The
existing system, which is technologically less and less adequate, shall
be replaced with a new, so-called SCADA/EMS system of the Swedish
manufacturer ABB. The system shall allow for better control of both
domestic as well as neighbouring networks, the integration of new data
sources and application of advanced management functions.
The SCADA/EMS management system represents ELES’ core management centre and is the most important tool in the hands of ELES’
operators. The energy system shall be easier to manage in the operation
conditions with better control over the network and the use of more precise data. Among others, the new SCADA/EMS system also provides for a
better assessment of the situation throughout the modelled network and
the use of loads forecasts for the purposes of security analysis. Maximum
utilization of cross-border transmission capacities in safe operation conditions is thus provided. The new management system makes use of a
number of functions, among which there are also the following modules:
50
OPERATIONS ANALYSIS
• Module for voltage control, which is, considering the relatively poor
voltage situation in the network, one of the key acquisitions. It enables optimization of the voltage profile with the aim of reducing the
flows of reactive power and losses in the network, which has a significant impact on the system’s costs and, consequently, on the amount
of the final price of electricity for the end consumer;
• New training simulator as a tool for training of ELES’ operators. Operational changes require skilled and experienced experts who need to
withstand the difficult operation conditions in real time; therefore, a
lot of time is devoted to the training of operators.
The restoration of security, management and measurement systems at
the Okroglo substation and at the 110 kV switchyard Podlog substation were completed. The project of constructing a new control building
was finalized in Beričevo. Complete equipment for command and control
of this most important transmission station is now properly installed in the
control building. The building with its elevated control room also allows a
visual control of the switchyard. In 2014, a meter switchboard was also
upgraded, which will now among other things, also allow easy sharing of
and access to the meter measurement data to external partners.
TELEKOMUNIKACIJE IN INFORMACIJSKA TEHNOLOGIJA
Smart grids
Smart grids are investments which optimise the use of the existing
network to defy fluctuation (volatility) changes brought about by the
opening of the electricity market, deregulation and growing proportion
of diffuse sources in the network.
SUMO falls within the domain of smart grids and in 2012 it won the
highest, golden award for best Slovenian smart grid project. SUMO is a
modern information system to support real-time decisions in the operation of the transmission system. Among others, it allows better utilisation of the existing network and its secure operation while it gives to the
operator the information about network load for three hours in advance.
In 2014, ELES made some important steps in implementing and upgrading the SUMO system. To minimize the disastrous consequences caused
by ice, ELES’ energy in 2015 will be focused on the development of tool to
eliminate the consequences of icing on the transmission lines. Using DTR
(Dynamic Thermal Rating) algorithms and smart operation management
ELES shall strive to defy the ice, namely by heating conductors to the temperature that will prevent ice formation on a conductor. In this way ELES
shall avoid possible damage to transmission lines in the future.
In 2014, ELES and ISKRA Zaščite signed a contract on marketing and
distribution of SUMO software. Hence, ELES received a further confirmation that SUMO can be a success story beyond our borders. With
successful marketing ELES endeavours to obtain additional funding for
further development of both SUMO and other smart grid projects that
are being developed in ELES.
SECONDARY EQUIPMENT
(SECURITY, MEASUREMENTS, CONTROL SYSTEMS)
Security systems and control systems are the most vital parts of the network since even the slightest error in their operation means that the
consumer remains without electric power supply.
In the field of secondary systems in 2014 the busbars protection was
installed at 400 kV switchyard Podlog substation. This will significantly improve the operational safety of this part of the network, and
greatly reduce the risk of damage in extraordinary events both in this
part of the transmission network as well as at the ŠTPP. Within the connection of the new Block 6 of ŠTPP a parallel operation of Blocks 5 and
6 on the joint 400 kV transmission line was enabled with the installation of non-conventional protection of the transmission line scheme.
The content is presented in more details in Chapter 5.
DEVELOPMENT OF NEW TECHNOLOGIES
One of the important ELES’ strategic objectives is to establish a diagnostic and analytical centre. The purpose of the centre is monitoring the
state of devices in the network and all the information from the ELES’
information systems, which impact on this state. The establishment of
the centre is important to provide better security, reliability, availability,
uninterrupted operation of devices and services and a high-quality design
of the construction of the ELES’ transmission infrastructure. The basis
for the establishment of the centre are information systems, which are
already used by the Department for technologies and diagnostic and
other professional services in ELES. The integration of information systems in an integrated whole shall be implemented in parallel with the
establishment of diagnostic and analytical centre in accordance with the
plans. Additional functionality, which upgraded the system, will be added.
All the necessary investment and project documentation for the diagnostic and analytical centre project was prepared in 2014. A public procurement for the supply of equipment and the installation works was carried
out in the second and third quarter of 2014. A physical set-up commenced
at the provisional location of the Kleče substation in December 2014.
To monitor the work in the field ELES developed in cooperation with the
external providers a PSA application (Power Service Assistant) for use
on mobile devices. In 2014, a version for devices with Android operating
system was added to the version for devices with Windows Mobile operating system. This allows for the use on tablet PCs and smart phones.
The application assumes tasks from the IBM Maximo IT system, which
ELES uses to monitor the maintenance of electric power devices. Field
workers are thus provided with an overview of planned tasks, registration
of work performed and recording of defects on devices in the network.
With the help of this application the recorded defects may be additionally equipped with spatial information and photos, which makes it easier
to plan works for the elimination of such defects. The spatial part of the
application facilitates orientation and navigation in the area using the
GPS, which provides spatial data on the network, access and patrol routes.
The server part of the application has been supplemented with a part,
which allows the transfer of spatial data, while the transition to the new
database and the integration with the new ELES’ business information
system are underway.
OPERATIONS ANALYSIS
51
OPERATIONAL MONITORING
Within the scope of operational monitoring, EMR (electromagnetic radiation) monitoring was conducted on twenty-five electric power facilities (transmission lines and substations) in 2014. Measurements were
carried out are reports drawn up for these electric power facilities. EMR
values were below the prescribed limits set by the Decree on electromagnetic radiation in the natural and living environment.
In 2014, the operational monitoring of noise sources was carried out
at 400/110-220/110/35 kV Divača substation. Noise indicator values
were below the statutory limits laid down by the Decree on limit values
for environment noise indicators
4.4 Transmission Network Maintenance
One of the main activities of the company ELES is regular maintenance
of electric power transmission devices and facilities of 400 kV, 220 kV
and 110 kV voltage levels. Maintenance is carried out in four operational
centres for transmission network infrastructure, namely in Maribor,
Podlog, Ljubljana and Divača. Pursuant to the uniform guidelines and
objectives within their territorial areas the centres undertake work in
the field of control of the state of devices, preparation and preventive
maintenance of transmission lines and transformer stations, co-operation in the implementation of construction projects and other processes
relevant to the execution of maintenance work. The maintenance of
transmission devices and facilities comprises 2,067 kilometres of transmission lines (systemic length of 2,843 kilometres), 13.3 kilometres of
cable lines and 29 substations with pertaining transformers and other
high voltage transmission devices. Maintenance of electricity transmission devices is carried out according to the principles of preventive
maintenance, legislation in the field of occupational health and safety,
regulations and standards from the technical field and internal instructions. In the context of maintenance, corrective maintenance is also
carried out in terms of eliminating the consequences of extraordinary
events, such as defects and natural disasters.
In 2014, all the necessary maintenance work was carried out. Extraordinary maintenance was carried out mainly due to extraordinary events,
especially the elimination of consequences of ice in the first half of 2014.
With the cooperation of all transmission network infrastructure centres
(TNIC) the consequences of ice were eliminated on 400 kV BeričevoDivača, 400 kV Beričevo Podlog, 220 kV Kleče-Divača, 220 kV BeričevoPodlog, 220 kV Obersielach-Podlog, 110 kV Idrija-Cerkno, 220 kV Obersielach-Podlog and 2x110 kV Sl. Gradec-Velenje I transmission lines.
In addition to the routine and extraordinary maintenance, certain electrical installation works within the framework of reconstructions and
new constructions were carried out, such as the replacement of OPGW
on 110 kV Ajdovščina-Idrija transmission line (from bay 88 to bay 101),
electrical installation works on 110 kV Ptuj-Breg transmission line –
replacement of bay 8 and bay 9 at Ptuj Lake and the replacement of
insulation and hanging material on 2x110 kV Okroglo-Jeklarna.
The volume of devices and facilities increased by 21 percent on average in comparison with the number of maintenance staff in the control
centres in the last five years, and by 2 percent compared to 2013.
The largest increase, by 8 percent, was recorded in 2012-2013 period,
mainly due to the merger of Nova Gorica TNIC and Divača TNIC.
TNIC burden (volume of devices based on the number of people)
faktor
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
20072008200920102011201220132014
MB
PO
LJ
DI
NG
Average
52
OPERATIONS ANALYSIS
4.5 Development and Research
The European Network of Transmission System Operators for Electricity
Network (ENTSO-E), whose members are also the experts from ELES, established a special working group called Asset Implementation Management
and thus began to actively encourage the transmission companies to introduce modern approaches to efficient assets management. These are a key
factor to the successful Company’s operations, for they constitute the basis
for ensuring the safety, reliability, availability, continuity of services as well
as quality design for the construction of transmission infrastructure.
In 2014, ELES carried out a number of activities related to the operation
of the electric power transmission system and its expansion thereof.
Hence, twenty studies were commissioned that have addressed the
pressing problems of earthing and occupational safety, as well as the
development problems and network operation, which include voltage
conditions, asymmetries in transmission lines and flicker reduction.
ELES developed a strategy for managing the real estates, which will
enable the review and updating of records of real property, establishment of control over the costs and revenues arising from real estates,
optimisation of costs and revenues and record of easements for the
entire network owned by ELES.
Pursuant to the Energy Act (EA-1) ELES, as the owner of building, device
or network forming the infrastructure, is obliged to perform regular and
major maintenance and adequately insure against damage. In 2014,
an inventory and evaluation of the energy infrastructure for the needs
of property insurance were carried out. Public procurement was carried
out on the basis of these data and three-year contracts were signed
with the selected insurance companies for the insurance of engineering accountability and liability insurance of measurement laboratory,
general liability, fire, earthquake and machinery breakdown insurance
and car insurance. For effective communication and conduct of the proceedings in the case of loss events a permanent working group was also
appointed to safeguard the assets of the company ELES.
In 2014, ELES prepared a proposal of the project from the field of smart
grid to be included in the list of projects of common interest in 2015.
All projects, which shall be approved by the European Commission and
inserted in the PCI list, shall be eligible for EU financial assistance in the
form of grants for studies, works and development of smart grids and
shall be available to the proposer of projects of common interest as a
part of the Connecting Europe Facility (CEF).
The instrument allows for the preparation and implementation of projects
of common interest within the trans-European energy networks policy.
This instrument provides financing to the projects aimed at establishing
the missing connections in Europe’s energy networks, which contributes
to the completion of the EU single market. The objective is the provision
of cost-effective and timely implementation of priority energy networks,
increasing the security and reliability of supply, increasing the market
integration, ensuring greater competition and flexibility of the system
and facilitating the transmission of energy from renewable resources to
warehouses and consumers. In 2014, ELES responded to the first call for
tenders of the CFE programme. ELES entered with the project of common
interest “One-Way Connection Slovenia-Italy”, namely with a study entitled
“Examining and validating the optimal technologies for SI-IT underwater
and ground HVDC cableline”. The project envisages the establishment of
one-way connection between Slovenia and Italy with between 300 and
500 kV voltage level and 1,000 MW of transmission capacity. The project
of the new inter-state one-way connection between the Republic of Slovenia and Italy is expected to increase transmission capacities between the
two countries and also enable a higher integration of both the electricity
market between Italy and Slovenia as well as the wider region. The project
shall contribute to the elimination of restrictions on the Slovenian-Italian
border and an increase in the reliability and safety of electricity supply
in both countries. An increase in energy transmission across the Slovenian transmission network is also expected. By eliminating cross-border
restrictions the project shall indirectly impact on a greater integration of
renewable energy resources, greater socio-economic benefit and increase
in the reliability of the transmission network.
PROJECTS OF COMMON INTEREST
Projects of common interest are the energy infrastructure projects of European interest, which in addition to the great importance from the standpoint
of the national economy represent the key projects for the development of
a European energy network, establishment of the internal electricity market
and pursue of the objectives of European energy policy. As the European
Commission amends the list of PCI every two years, ELES commenced with
the process of preparing a new, second list of projects of common interest
in 2014. The new list of PCI shall include new projects, which shall be identified as necessary from the perspective of the needs of the evolving market
and the needs of the EU. The projects, which shall prove to be unrealisable,
shall be temporarily or permanently withdrawn from the list. ELES proposed
five candidates-projects for the second list of PCI: 2x400 kV Cirkovce-Pince
transmission line, transition of 220 kV network to 400 kV Beričevo-Divača,
transition of 220 kV network to 400 kV Beričevo-Podlog, transition of 220 kV
network to 400 kV Podlog-Cirkovce and one-way connection Slovenia-Italy.
The first priority is the construction of Cirkovce-Pince transmission line, while
other projects are in the study phase.
STUDIES IN 2014
This year the focus was on studies in the context of the reparation of
Development strategy of the Slovenia’s electric power system and
Development Plan of the transmission network of the Republic of Slovenia in the 2015-2024 period. A detailed forecast electricity consumption,
including a forecast of economic development of the Republic of Slovenia,
was prepared. The possibility of inclusion of diesel generators in the system reserve was analysed, an application for assessing current generation
of solar power plants was made and the state of startup of aggregates
without external power supply (black start) in Slovenia was analysed. The
possibility of compacted implementation of 2x400 kV Beričevo-Divača
transmission line was analysed and the remaining service life of transformers in the 400/220/110 kV levels was identified and the impact of changes
in technical legislation in the course of construction of electric power facilities analysed. Beside the aforementioned, the implementation of some
of the basic activities of the project SUMO (System for the Determination
of the Operating Limits) continued and the initial study for the project
OPERATIONS ANALYSIS
WAMPAC (Wide Area Monitoring, Protection & Control) was also completed. The latter are two technologically very demanding projects, which are
expected to position ELES in the wider European and global environment.
ELES again participated in an international comparative study of system
operators ITAMS (International Transmission Asset Management Study),
which compares the process of asset management and economic and technical efficiency. Contact with the best in the industry enables ELES to transfer
best practices from the world into the Company. ELES introduced a proven
methodology for the classification of investments according to business
factors, taking into consideration the risks. The methodology shall enable
transparent prioritisation of investment portfolio in the Company’s plans.
53
NON-REFUNDABLE FUNDS
In 2014, ELES responded to the first call to tender for the Connecting
Europe Facility, namely with project of common interest One-Way Connection Slovenia-Italy. The European Commission granted 200,000
euros of non-refundable funds to ELES to carry out studies for the project.
In 2014, ELES together with a consortium of international partners
responded to the call to tender of the EU programme for research and
development, Horizon 2020. The European Commission approved
ELES’ project BioEnergyTrain and the Company awarded a grant in the
amount of 110,000 euros for the implementation thereof.
4.6 Performance Analysis
v MEUR
Year
2013
Year
2014
Annual plan
2014
Index
r14/r13
Index
r14/p14
1
2
3
4(2/1)
5(2/3)
135.2
139.5
143.6
103
97
Net profit or loss for the period (in million euros)
8.4
11.2
14.5
133
77
Operating profit (EBIT) (in million euros)
8.2
10.2
15.6
125
66
Financial result (in million euros)
-1.2
-0.8
-1.2
67
73
Key achievements from ELES' operations
Net sales revenues (in million euros)
Note: ratios are calculated pursuant to the items by way of applying Article 120 of the EA-1
Performance analysis and financial statements have been compiled in
accordance with Article 120 of the EA. Pursuant to Article 120 of the
EA the revenues from the CBTC are deferred in the long-term accrued
costs and deferred revenues for the purposes of investing in cross-border transmission capacities, while they are partly included in the income
statement for the current financial period.
NET PROFIT OR LOSS
ELES recorded a net profit in the amount of 11.2 million euros, which
was 33 percent or 2.8 million euros higher than in 2013.
Total revenues and expenses and net profit or loss (in million euros)
150.0
11.2
12.0
10.0
145.0
8.4
8.0
140.0
6.0
135.0
4.0
130.0
125.0
2.0
2013
Total revenues
Total expenses
2014
In 2014, the net profit was 23 percent lower than planned due to the
occurrence of unforeseen business events, such as write-offs of fixed assets
resulting from the February natural disaster and other write-offs, additional provisions for severance payments and jubilee awards (actuarial calculation), higher costs, such as increased depreciation/amortisation due to
additional activations of investments and reconstructions, unused annual
leave and surpluses of working hours and other costs, interests on the actuarial calculation and increase in the deferral of revenues from cross-border
capacities in accordance with the calculation of discrepancies of the AGENRS regulatory framework. In the Annual Report 2014 the net profit in 2013
is lower than in the Annual Report 2013 for the revision of the wage costs
for unutilised annual leave in the amount of 1.1 million euros. Hence, the
2014 net profit is 33 percent higher than the net profit recorded in 2013.
Deferral of revenues by 1,332 thousand euros increase by other revenues, which in the calculation of discrepancies are taken into consideration for covering depreciation of CBTC assets that have been financed
by proceeds from the auctions. These other revenues were not realised
because ELES does not include in its records all assets financed by auction revenues as does the AGEN-RS. The difference is in the unrecorded
assets prior to 2010.
0.0
Net profit or loss for the period
In 2014, ELES estimated that it shall fully resolve the issue of compensation payment by Triglav Insurance Company arising from ice/sleet damage. ELES assumed that the compensation would amount to 3,712.1
thousand euros. The actual revenues received from insurance company
54
OPERATIONS ANALYSIS
in the form of a compensation in 2014 amounted to 1,931.1 thousand
euros; however, ELES shall unfortunately have to instigate legal actions
for the remaining part. Taking into consideration the total compensation to net profit would be higher by 1,781 thousand euros.
If the event the deferrals pursuant to Article 102 of the EA-1 were not
taken into consideration, the total revenues achieved would amount to
174.5 million euros. Taking into consideration all revenues from CBTC,
the net profit in 2014 would amount to 33.6 million and would thus be
4 percent lower than in the preceding year.
In 2014, 28.3 million euros of revenues from CBTC were deferred and
recorded on long-term accrued costs and deferred revenues in accordance with Article 120 of the EA-1. Total revenues were recorded in the
amount of 147.3 million euros.
Structure of total revenues and expenses in 2014
Total revenues structure in 2014
Total expenses structure in 2014
1%
2%
2%
0%
97 %
98 %
Operating revenues
Operating expenses
Financial revenues
Financial expenses
Other revenues
Other expenses
In 2014, ELES recorded 147.3 million euros of total revenues, of which
97.4 percent arose from operating revenues. Financial revenues arose
primarily from interests on deposits, while other revenues arose from
the compensation received for property insurance due to ice/sleet.
ELES recorded total expenses in the amount of 135.3 million euros. The
operating expenses accounted for 98.5 percent in the structure of total
expenses, while the financial expenses accounted only for 1.5 percent.
Financial expenses were primarily incurred in connection with the longterm EIB loan and interests from actuarial calculations of jubilee awards
and severance payments.
Structure of operating revenues and expenses 2014
Operating expenses structure in 2014
Operating revenues structure in 2014
52 %
0%
2%
2%
1%
95 %
48 %
Revenues from the use of transmission network
Sale oof ELES’ services
Capitalised own services
Other operating revenues
Expenses from the use of transmission network
Costs of operation and maintenance with depreciation/amortisation
Other operating expenses
OPERATIONS ANALYSIS
The majority of ELES’ operating revenues recorded (95.5 percent) arose
from the use of transmission network or operations with electricity. Other revenues were obtained from the sale of services, primarily from the
revenues arising from the sale of telecommunications services.
55
Total revenues and expenses from the use of the transmission
system and the difference from the use of the transmission
network (in millions euros)
160.0
140.0
In the structure of the operating expenses, the expenses arising from
the use of the transmission network accounted for 47.6 percent, while
the operation and maintenance costs including depreciation/amortisation accounted for 52.3 percent. The aforementioned together with
other operating expenses were recorded in the amount of 69.7 million
euros, of which the costs of material, services and other operating
expenses totalled 13.3 million euros, the depreciation/amortisation costs
amounted to 30.2 million euros, and the labour costs to 26.2 million euros.
ANALYSIS AS PER TYPE OF RECORDED REVENUES AND
EXPENSES ARISING FROM THE USE OF THE TRANSMISSION
NETWORK
So as to perform its activities of transmission system operator, ELES generates the majority of its operating revenues from network charge for
the transmission network, revenues from the cross-border transmission
capacities (CBTC), and – to a lesser extent – from the ITC compensation revenues and other electric power-related revenues. The revenues
arising from the network charge may be used to cover costs of purchasing electricity to cover losses in the network and to cover operation and
maintenance costs, which include also a regulated return. The costs of
ancillary services and system balancing costs are offset and are covered
in the incurred amount from the revenues arising from ancillary services
and revenues from balancing the system.
120.0
100.0
80.0
70.0
73.6
60.0
40.0
20.0
0.0
2013
2014
Revenues from the use of transmission network
Expenses from the use of transmission network
Difference arising from the use of transmission network
In 2014, the generated difference between the revenues and
expenses from the use of the transmission network amounted to
73.6 million euros. The revenues from use of the transmission network
were recorded in the amount of 137.1 million euros. These revenues
increased in comparison with the preceding year due to higher revenues
from system balancing and higher revenues from allocated right to use
CBTC. The expenses arising from the use of the transmission network
(especially the costs of system balancing) recorded in 2014 were 1 percent
higher than in the preceding year and amounted to 63.5 million euros.
Revenues and expenses from the use of the transmission network in 2014 as per type (in millions euros)
Revenues from the use of transmission network structure in 2014
10 %
Expenses from the use of transmission network structure in 2014
16 %
23 %
2%
2%
3%
1%
23 %
26 %
51 %
43 %
Network charge for the transmission network
Costs of ancillary services
Ancillary services and reactive energy
Costs of purchase of electricity to cover losses
Revenues from the ITC transit
Costs of balancing the system
Revenues from balancing the system
Costs of CBTC allocation
Revenues from allocated CBTC (auctions)
Other costs
Other revenues
56
OPERATIONS ANALYSIS
REVENUES FROM NETWORK CHARGE FOR THE
TRANSMISSION NETWORK AND THE COSTS OF
PURCHASING ELECTRICITY TO COVER LOSSES
In 2014, ELES generated 58.7 million euros of revenues from the
network charge for the transmission network, which – based on
the transmitted volume of electricity – the Company receives from the
direct consumers (steelworks) and end consumers (from SODO or electricity distributors). The latter is 7 percent lower than last year, due to
lower consumption and reduction of tariffs.
In 2014, the offtake of electricity in the Republic of Slovenia totalled
12,402.8 GWh, and was thus 8.8 GWh lower than in 2012. The offtake
of distribution companies and direct consumers decreased.
In addition to cover the costs of operation and maintenance, the revenues from the network charge for the transmission network are appropriated to cover the costs of purchasing electricity to cover losses
incurred in the network. In 2014, the costs of purchasing electricity to
cover losses amounted to 14.7 million euros, and thus levelled with the
preceding year. Losses in the transmission network are dependent on
the technical parameters of system elements (impedance of transmission lines, losses in the windings and core transformers).
REVENUES FROM THE NETWORK CHARGE FOR THE
ANCILLARY SERVICES AND COSTS OF ANCILLARY SERVICES
The recorded costs of lease of ancillary services, which in 2014 amounted
to 32.6 million euros, were covered in the same amount with the
revenues from the network charge for ancillary services. In the regulatory field these services are necessary for the normal functioning of the
electric power system, namely for the frequency control, voltage control,
maintenance of balance between the generation and consumption,
system management, setting up the system after an outage, discharging congested lines, providing power to cover losses and start-up of the
selected aggregates with no external power supply. In 2014, these costs
were 6 percent lower than the previous year.
REVENUES FROM ITC COMPENSATION
In 2014, the revenues from the ITC compensation were recorded in the
amount of 4.8 million euros, and were thus higher than those recorded in the preceding year as well as planned for the said period (by 20
percent). These revenues are set forth with the ITC mechanism on the
basis of an agreement between European transmission system operators. They are designed to cover the costs of the transmission network
caused by external causes (“wild” flows).
REVENUES AND COSTS OF BALANCING THE SYSTEM
Pursuant to the legislation (the Energy Act), ELES is obliged to balance
the Slovenia’s electric power system in the event of imbalance between
consumption and generation of electricity and in the event of eventual
unforeseen operational events in the network, such as outages. ELES
purchases electricity and at the same time sells the surplus of balancing
energy; recorded costs are covered in the same amount by revenues
from balancing. Balancing costs were recorded in the amount of
14.4 million euros and were thus 26 percent higher than in the preceding
year. The last year’s substantial decrease was influenced by the successful approach of intra-system balancing of current imbalances between
Slovenia and Austria. The approach brings benefits in both the technical
as well as economic filed, which reflected in lower costs with an impact
on the price reduction and thus a decrease in price burden of all end
consumers (households, companies) of electricity in Slovenia. In 2014,
positive effects on revenues may be observed with the introduction of
the INC mechanism (Imbalance Netting Cooperation) with APG in April.
REVENUES FROM THE CROSS-BORDER TRANSMISSION
CAPACITIES
ELES generates a large portion of operating revenues from the interventions in cross-border exchanges of electricity. Pursuant to Article 120 of
the EA the Company – for the purpose of investing in cross-border transmission capacities – ELES deferred 28.3 million euros of revenues arising
from the CBTC, while 21.7 million euros were taken into consideration
in the accounting period.
Revenues from allocated CBTC (auctions) in 2014 (in million euros)
21.7
28.3
deferred
included in result
In connection with the operation of the auction houses (CAO, CASC,
TSC) and the allocation of CBTC the costs in the amount of 1.4 million euros were incurred in 2014.
OTHER REVENUES AND EXPENSES FROM OPERATIONS
WITH ELECTRICITY
Other revenues were recorded in the amount of 2.2 million euros. They
consist primarily of extraordinary revenues from ancillary services
(penalties), revenues from the sale of electricity due to the state in the
system - MEAS and imbalances of the ELES’ balancing group. Other
expenses are related to the costs of imbalances from the balancing
group schedules, the costs of membership in the BSP Exchange and the
costs of the MEAS system.
57
OPERATIONS ANALYSIS
ANALYSIS OF COMPANY'S FINANCIAL POSITION
At the end of 2014, the Company’s assets amounted to 656.3 million euros and increased by 32.4 million euros or 5 percent compared to 2013.
in thousand euros
Assets
31 Dec 2014
31 Dec 2013
Index
1
2
3(1/2)
565,607.0
559,027.9
101
A.
Long-term fixed assets
B.
Short-term assets
80,330.2
63,662.6
126
C.
Deferred costs (expenses) and accrued revenues
10,383.3
1,230.1
844
D.
Total assets (A+B+C)
656,320.5
623,920.7
105
24,667.3
17,611.1
140
Off-balance assets
The largest increase in long-term assets was recorded in fixed assets - by
2 percent, and amounted to 469.9 million euros due to higher investments in electric power facilities, property and easement rights.
Long-term financial investments totalled 92.2 million euros and thus the
total amount was not significantly different from last year. The largest
portion of long-term investments account for the share in the company
Talum, which amounts to 78.5 million euros, which increased by 8.4
million euros in 2014 compared to 2013 due to the conversion of longterm loans to Talum into long-term financial investment. The latter also
influenced on the reduction in long-term loan from guarantee granted
to Talum in the aforementioned amount. ELES has thus acquired
84.71-percent stake in Talum. Other guarantees to Talum for the 20162018 period are given in the amount of 24.5 million euros, while pursuant to a decision of the Supervisory Board said guarantees are recorded
in the off-balance sheet records only in the amount of EUR 10 million.
At the end of 2014, short-term assets amounted to 80.3 million euros
and were higher than last year, primarily because of the bank deposits
redeemable at notice (over 30 days) increased from 8 million euros to
23 million euros. In the structure of short-term assets short-term operating receivables accounted for 38.9 percent, or 31.3 million, short-term
loans to others (deposits redeemable at notice over 30 days) accounted
for 28.6 percent or 23 million euros and cash and cash equivalents for
29.3 percent or 23.6 million (of which the balance of deposits redeemable at banks up to 30 days amounted to 23.1 million euros), while the
rest represent the stocks of material.
Short-term deferred costs and accrued revenues amounted to 10.4 million euros, and thus increased by 9.2 million euros compared to last year
mainly due to deferred revenues of appropriated funds for the purchase
of switchyard.
in thousand euros
Liabilities
31 Dec 2014
31 Dec 2013
Index
1
2
3(1/2)
A.
Equity
382,325.0
381,694.3
100
B.
Provisions and long-term accrued costs and deferred revenues
173,488.9
132,386.3
131
C.
Long-term financial and operating liabilities
60,987.8
67,701.8
90
Č.
Short-term financial and operating liabilities
37,595.0
40,707.1
92
D.
Accrued costs (expenses) and deferred revenues
1,923.8
1,431.1
134
E.
Total liabilities (A+B+C+D+E)
656,320.5
623,920.7
105
24,667.3
17,611.1
140
Off-balance liabilities
58
OPERATIONS ANALYSIS
Balance sheet structure
Assets structure in 2014
Assets structure in 20143
10 %
12 %
0%
2%
86 %
90 %
Long-term fixed assets
Long-term fixed assets
Short-term assets
Short-term assets
Deferred costs (expenses) and accrued revenues
Deferred costs (expenses) and accrued revenues
The structure of balance sheet at the end of 2014 did not change significantly compared with the preceding year. Prevailing among assets are
long-term assets (86.2 percent), of which fixed assets account for 71.6
percent and long-term financial investments for 14 percent.
Liabilities structure in 2014
Liabilities structure in 2013
21 %
27 %
9%
11 %
7%
6%
0%
0%
61 %
58 %
Equity
Equity
Provisions and long-term accrued costs and deferred revenues
Provisions and long-term accrued costs and deferred revenues
Long-term financial and operating liabilities
Long-term financial and operating liabilities
Short-term financial and operating liabilities
Short-term financial and operating liabilities
Accrued costs (expenses) and deferred revenues
Accrued costs (expenses) and deferred revenues
OPERATIONS ANALYSIS
In the structure of liabilities equity accounted for 58.3 percent and provisions and long-term accrued costs and deferred revenues accounted
59
for 26.4 percent (the increase resulted from the deferred revenues from
the allocated CBTC in accordance with Article 120 of the EA-1).
in million euros
Cash Flow Statement
1.1.-31.12.2013
Denarni izid v obdobju je znašal 0,3 milijonov EUR. Prebitek prejemkov
iz1.poslovanja
je from
bil dosežen
višini 73,6 milijonov EUR, v družbi smo
Net cash flow
operatingv activities
večino izdatkov namenili za pridobitev osnovnih sredstev 37,9 milijonov
2. Net cash outflow used in investment activities
1.1-31.12.2014
Indeks
EUR ter za izdatke pri financiranju
za izplačilo deleža
1
2 v dobičku lastniku
3(1/2)
v višini 9,1 milijonov EUR. Končno
stanje
denarnih
sredstev
je
bilo
23,6
62.0
73.6
119
milijona EUR.
-44.2
-52.9
120
3. Net cash used in financing activities
-12.9
-20.4
Financial result in the period (1-2-3)
4.9
0.3
23.2
23.6
CLOSING BALANCE OF CASH AND CASH EQUIVALENTS
157
102
4.7
Performance in Terms of Comparison of Corrected Regulated Return and
Achieved Total Profit before Tax
Paragraph 3 of Article 119 of the EA-1 reads as follows: »The method of
establishing and specifying eligible costs shall encourage the cost-effective operations of the electricity system operator and enable it to attain
a return higher than that set out in the regulatory framework if the eligible costs savings result from the operator’s endeavours to increase its
cost-effectiveness. If the electricity system operator incurs costs exceeding the eligible costs, the difference shall be offset against the regulated
return on assets«.
Three years ago ELES set a goal – to equalize corrected regulated
return and total profit before tax. The term “corrected regulated return”
is defined as a regulated return determined on the basis of a applicable methodology of the Energy Agency, minus the financing statement,
which does not take into consideration financial expenses from impairments and write-offs of financial investments, unless financial investments were realized on the basis of the founder’s decision (financial
investments in NLB, d.d. and NKBM, d.d. bank in the case of ELES).
The purpose of this section of the Annual Report is to explain in detail
the following terms from the aforementioned Article 119 of the EA-1, in
conjunction with the achieved results of the company ELES:
• if the costs are higher than eligible costs, the difference is offset
against the regulated return,
• higher regulated return, if eligible cost savings result from the operator’s endeavours, and
• how do determine eligible costs.
ACHIEVING A CORRECTED REGULATED RETURN IN THE
PERIOD FROM 2008 TO 2014
Regulated return is intended for covering financial expenses, expected
return on equity and corporate income tax.
In 2014, ELES achieved the best result in the last seven years. Total profit
before tax was recorded in the amount of 75.6 percent. Comparing the
nominal difference of 2014 with 2008, it may be seen that the result
is better by more than 24 million euros. Regulated return was further
corrected by the set depreciation/amortisation and return, which is not
covered in the formed accrued costs and deferred revenues prior to
1 January 2010 due to the problem, which is described in detail in
the Annual Report 2013. Together with them the difference for 2014
amounts to just over 5.9 million euros. The data are presented in the
table below and in the Figure.
in thousand euros
calculation items
Year 2008
Denarni
v obdobju
je znašal 0,3 milijonov EUR. Prebitek prejemkov
correctedizid
regulated
return
10,683.1
izprofit
poslovanja
je bil dosežen v višini 73,6 milijonov EUR, v družbi
smo
-9,172.2
before tax
večino
izdatkov
namenili
za pridobitev
sredstev 37,9 milijonov
- financial
investments
write-off
pursuantosnovnih
to the founder's
0.0
decision
- approved depreciation/amortisationand return - network
0.0
surpluses prior to 1 Jan.2010
corrected profit before tax
nominal difference
achieving corrected regulated return
Year 2009
Year 2010
Year 2011
Year 2012
Year 2013
Year 2014
EUR ter za izdatke
izplačilo deleža
v dobičku17,913.4
lastniku
10,642.9
12,190.4pri financiranju
13,401.6 za12,994.5
16,981.0
v višini 9,1 milijonov
Končno stanje
denarnih8,348.8
sredstev je11,975.0
bilo 23,6
5,059.7
6,537.7 EUR.5,176.0
2,212.2
milijona EUR.
0.0
1,232.7
2,759.2
4,537.5
0.0
0.0
0.0
0.0
0.0
0.0
1,566.8
1,566.8
-9,172.2
2,212.2
6,537.7
9,713.5
7,818.9
11,148.3
13,541.8
-19,855.3
-8,430.7
-5,652.7
-3,688.1
-5,175.6
-5,832.7
-4,371.6
-85.9%
20.8%
53.6%
72.5%
60.2%
65.7%
75.6%
60
OPERATIONS ANALYSIS
in thousand euros
2008
0,0
2009
2010
2011
-5,000,0
72.5%
53.6%
-10,000,0
2012
2013
60.2%
65.7%
2014
v%
100.0
75.0
20.8%
-15,000,0
75.6%
50.0
25.0
0,0
-25.0
-50.0
-20,000,0
-85.9%
-25,000,0
-75.0
-100.0
achieving corrected regulated return - nominal in thousant euros
achieving corrected regulated return - in %
The result obtained for 2014, shown in the previous Table, was further
analysed. Business events, which reduced the total operating profit in
the light of the year of origination, were broken down. More than half
of the latter originated prior to 1 January 2014 (3.2 million euros out
of 5.94 million euros). If only those events that occurred as a result
of operations in 2014 are considered, ELES achieved 81.6 percent of
the corrected regulated return. If legal claim towards Triglav Insurance
Company (1.8 million euros) is added, ELES achieved as much as 93.8
percent of the corrected regulated return. The claim refers to the difference of unrecognised damage caused by ice in 2014. ELES recorded
additional costs and investments. In particular, unplanned costs affect
the achievement of the total profit or loss.
in thousand euros
Seq.
no.
Year 2014
correction
calculation items
effects prior
to 1 Jan 014
1.
RF - return
2.
financing
3.
corrected RF - return: +1-2
17,915.0
14,671.4
15,218.6
4.
Income statement profit before tax
11,975.0
11,975.0
11,975.0
5.
deficit of corrected RF - return: +4-3
-5,940.0
-2,696.4
-3,243.6
5.1.
achieving corrected RF - return: 3 : 4
66.8%
81.6%
78.7%
5.2.
achieving corrected RF - return including legal claim towards ZT (1,780.9)
76.8%
93.8%
90.4%
4.
the actual costs of operation and maintenance
41,957.6
5.
RF
34,251.9
- costs of operation and maintenance
- uncontrolled costs
6.
other revenues
- capitalised own services
- 10% unregulated revenues
- damages
Year 2014
18,754.0
839.0
31,317.6
2,934.3
5,053.6
2,245.6
398.6
1,617.9
- AM from capitalised services
138.2
- damage
653.4
- legal claim ZT 1.9 million euros
-
7.
Difference: +5 +6 - 4
-2,652.1
8.
Other
-3,287.9
- recognised, uncovered return
-936.8
-936.8
- recognised, uncovered AM
-630.0
-630.0
- unused annual leave 2014
-187.5
- unused annual leave balance prior to 1 Jan 2014
9.
-2,652.1
-187.5
-
-1,144.4
-1,144.4
- corrections in 2013
-532.4
-532.4
- other corrections
143.2
143.2
-
-5,940.0
-2,696.4
-3,243.6
Total: +7 + 8
OPERATIONS ANALYSIS
HIGHER REGULATED RETURN IF ELIGIBLE COSTS SAVINGS
RESULT FROM THE OPERATOR’S ENDEAVOURS
In the Table below a comparison between the regulatory framework following the conclusions of the Energy Agency and achieved costs of the
company ELES is listed. The comparison for 2014 is particularly interesting. In 2014, ELES’ costs are 6.1 million euros lower than the regulatory
framework. On the other hand, the total profit before tax decreased by
5.9 million euros. Net difference thus amounts to 12 million euros. The
difference arose mainly from lower costs of leasing ancillary services and
61
electricity to cover losses in the transmission network, which were realized with the signing of the tripartite agreement between ELES, HOPS
and NOS BiH, as well as due to successful negotiations with domestic
suppliers of ancillary services for the 2014 -2018 period. The existing
methodology of the Energy Agency fails to respect the statutory provision of Paragraph 3 of Article 119, which states that »shall encourage the
cost-effective operations of the electricity system operator and enable it
to attain a return higher than that set out in the regulatory framework«.
in thousand euros
Seq.
no.
calculation items
1.
recognised costs
2.
realised costs
3.
difference: +2-1
COMPARISON OF METHODOLOGIES FOR SETTING THE NETWORK
CHARGE OF SYSTEM OPERATOR OF THE ELECTRICITY NETWORK
AND SYSTEM OPERATOR OF THE GAS PIPELINE NETWORK
Achieving a corrected regulated return primarily depends on how the
Energy Agency set forth the regulated scope of the so-called »Operating and maintenance costs«. The Table below shows the nominal and
real (deflation by the cumulative growth coefficient of cost of living in
the RS) values of the recognized costs of operation and maintenance
Year 2010
Year 2011
Year 2012
Year 2013
Year 2014
96,818
104,590
107,853
112,285
122,009
113,634
108,384
114,603
115,298
115,923
16,816
3,794
6,749
3,013
-6,086
(seq.no. 3 - nominal and seq.no. 8). In real terms, the 2014 cost are at
the same level as in 2011. The Company believes that such a regulation
is problematic for ELES, especially if the changes in the volume of the
transmission network are analysed, which have a direct impact on the
actual costs. Indices of expansion of the transmission
• increase in the transmission line bays: index 107,
• increase in the length of the transmission lines: index 123.
in thousand euros
Seq.
no.
calculation items
1.
RF operation and maintenance costs
2.
operation and maintenance costs - covered from other revenues
3.
recognised operation and maintenance costs
4.
Year 2010
Year 2011
Year 2012
Year 2013
Year 2014
23,399
25,890
26,088
27,361
27,197
3,604
3,709
3,794
3,453
3,809
27,003
29,599
29,882
30,814
31,006
RF uncontrolled operation and maintenance costs
983
2,133
4,137
3,690
3,417
5.
total recognised operation and maintenance costs
27,985
31,732
34,020
34,504
34,424
6.
growth in the cost of living
1,000
1,022
1,020
1,027
1,007
7.
comulative growth in cost of living
1,022
1,042
1,071
1,078
8.
adjustment to 2010 - RF operation and maintenance costs
23,399
25,333
25,026
25,557
25,227
9.
adjustment to 2010 - recognised operation and maintenance costs
27,003
28,962
28,666
28,783
28,761
10.
adjustment to 2010 - total recognised operation and
maintenance costs
27,985
31,049
32,635
32,229
31,930
62
OPERATIONS ANALYSIS
The Figure below shows a comparison between all the members of
ENTSO-E for consumers on the HV network, with maximum connected
load of 40 MW and 5,000 hours of consumption/year – for 2013. It may
be established that ELES has practically the lowest cost.
From 2010 onwards ELES has been carrying out analysis of comparisons between ELES and eight comparable system operators, members
of ENTSO-E. According to the analyses carried out, ELES records the second lowest revenues per transmitted MWh of electricity and one of the
lowest costs per transmitted MWh of electricity.
Components of the unit transmission tariffs
Euro per MWh
40
35
30
25
20
15
10
5
0
Other regulatory charges
Losses
System Services
Infrastructure
AT
0.00
0.53
1.63
2.97
BE
6.45
0.61
2.71
2.46
BA
0.00
1.32
1.40
2.88
BG
8.39
0.00
1.41
2.13
HR
0.01
1.68
1.97
7.74
CY
0.00
0.00
7.80
8.60
CZ
0.00
0.81
4.35
4.90
DK
28.44
1.63
0.90
6.16
EE
0.00
1.63
0.03
3.54
FI
0.10
1.02
1.00
2.95
FR
0.22
0.83
0.44
4.07
DE
0.84
0.81
2.34
5.94
GB
0.38
0.00
2.18
7.69
GR
6.00
1.10
0.42
5.14
The methodology to regulate the system operator of the electricity and
gas network was presented in detail on pages 43 to 45 of the document
»ELES Medium-Term Business Plan 2015 to 2017« (adopted at the Supervisory Board Session in December 2014). Methodology for setting
the network charges for the use of the gas transmission network is more
favourable than the methodology for setting the network charges for
the use of the electricity transmission network.
HU
0.00
0.41
3.31
3.74
IE
0.00
1,53
9.56
4.14
IS
0.00
0.44
0.27
6.07
IT
0.00
0.44
3.17
7.03
LV
0.00
1.07
0.19
5.03
LT
0.00
1.37
1.60
5.60
LU
1.25
0.23
1.74
1.82
MK
0.50
1.28
2.41
0.73
NL
0.00
0.46
1.01
1.57
NI
0.00
1.45
7.02
5.52
NO
0.00
0.50
0.40
3.52
PL
1.77
0.90
2.61
3.17
PT
8.20
0.72
1.74
6.60
RO
3,94
0.79
3.35
4.16
RS
0.03
1.54
0.53
1.49
SK
0.00
1.14
6.75
9.36
SI
2.78
0.00
0.34
1.39
ES
0.13
0.60
5.53
5.76
SE
0.00
1.26
0.26
2.47
CH
4,89
0.65
5.22
5.14
ELES made a calculation of the increase in regulated operation and
maintenance costs of ELES for 2014 compared to 2011 taking into consideration the provisions of the methodology for the gas transmission
network, which relate to the determination of regulated operation and
maintenance costs. The differences are shown in the Table below. If
ELES were recognized higher operation and maintenance costs, ELES
would in 2014 reached the total profit in the amount of corrected
regulated return.
in thousand euros
Seq.
no.
RF-increase in operation and maintenance costs in 2014 compared to 2011
1.
- increase recognised by the Agency (2014 compared to 2011)
1.307
2.
- calculation ELES (own methodology)
2.785
3.
- calculation ELES pursuant to the methodology of Gas Transmission System Operator
6.123
4.
difference: 1-2
-1.478
5.
difference: 1-3
-4.816
For the new regulatory methodology for 2016 to 2018 ELES expects the
Energy Agency to:
• equalize the methodology of setting the operation and maintenance
costs to the methodology of the system operator of the gas network
(which in our opinion is correct), and
Year 2014
• in doing, to take into consideration the principle stated in Paragraph
4 of Article 119 of the EA-1: »In setting out the eligible costs, the
Agency shall bear in mind the electricity system operator’s obligation
to improve its performance by a factor set by the Agency in a general
act, taking account of the planned general economic productivity
and the efficiency of the electricity system operator based on comparative efficiency analyses«.
OPERATIONS ANALYSIS
4.8 Performance Criteria (Indicators)
4.8.1 Performance ratios
Seq.
no.
As at 31 Dec 2013
RACIOS
As at 31 Dec 2014
in thousand
euros
Ratio
in thousand
euros
Ratio
equity /
381,694.3
61.2
382,325.0
58.3
liabilities
623,920.7
debts/
108,408.9
liabilities
623,920.7
Financing ratios
1.
Equity financing ratio in %
2.
Debt financing ratio in %
3.
Long-term financing ratio in %
total equity, long-term debt and provisions/
581,782.5
liabilities
623,920.7
656,320.5
17.4
98,582.8
15.0
656,320.5
93.2
616,801.7
94.0
656,320.5
Investment ratios
1.
Fixed assets investment ratio in %
fixed assets (at net book value)/
459,359.4
assets
623,920.7
2.
Long-term investment ratio in %
fixed assets (net book value) + long-term
financial investments + long-term operating
receivables/
555,235.1
assets
623,920.7
equity /
381,694.3
fixed assets (at net book value)
459,359.4
73.6
469,877.2
71.6
656,320.5
89.0
562,253.1
85.7
656,320.5
Horizontal financial structure ratios
1.
Equity to fixed assets ratio
2.
Short-term ratio
3.
Quick ratio
4.
Acid test ratio
short-term assets /
63,662.6
short-term liabilities
40,707.1
liquid assets + short-term receivables/
61,113.2
short-term liabilities
40,707.1
liquid assets/
31,221.4
short-term liabilities
40,707.1
operating revenues/
138,865.4
operating expenses
130,712.2
0.831
382,325.0
0.814
469,877.2
1.564
80,330.2
2.137
37,595.0
1.501
77,820.3
2.070
37,595.0
0.767
46,570.0
1.239
37,595.0
Efficiency ratios
1.
Operating efficiency ratio
1.062
143,479.4
1.077
133,256.6
Profitability ratios
1.
Net return on equity (ROE) in %
net profit or loss in the financial year /
average equity
2.
Net return on assets (ROA) in %
1.A.
Net return on equity (ROE) in %
without applying Article 120 of the EA-1
net profit or loss in the financial year /
average assets
net profit or loss in the financial year /
average equity
2.A.
Net return on assets (ROA) in %
without applying Article 120 of the EA-1
net profit or loss in the financial year/
average assets
3.
Dividends to share capital ratio
total dividends paid for the financial year/
average share capital
8,445.5
2.2
377,385.9
8,445.5
1.4
617,613.6
34,840.9
11,229.3
1.8
33,559.3
7.0
479,420.3
5.7
616,641.1
10,000.0
3.0
638,559.1
7.7
454,015.8
34,840.9
11,229.3
376,395.0
33,559.3
5.3
638,559.1
0.026
377,385.9
9,063.0
0.024
376,395.0
Investment activity ratio
1.
Realized to planned investments ratio
in %
realized investements and reconstructions/
46,213.9
planned investements and reconstructions
62,014.9
Note: ratios are calculated pursuant to the items by way of applying Article 120 of the EA-1
74.5
37,944.2
44,247.5
85.8
63
64
OPERATIONS ANALYSIS
In 2014, the equity financing ratio decreased to 58.3 percent, the debt
financing ratio also decreased and stood at 15 percent due to higher
long-term accrued costs and deferred revenues (as a result of deferred
revenues from the CBTC). Higher long-term accrued costs and deferred
revenues influenced on higher long-term financing ratio, which stood
at 94 percent. Fixed asset investment ratio was slightly lower than in
2013 (73.6 percent) mainly due to lower investments in fixed assets.
With the exception of equity to fixed assets ratio the horizontal financial
structure ratios were higher compared to the preceding year due to an
increase in short-term operating receivables due by Talum or the conversion thereof into Talum’s share capital and higher liquid assets. The
operating efficiency ratio (1.077) slightly increased. The profitability
ratios, ROE and ROA, were higher compared to the preceding year due
to higher net profit recorded in 2014, while taking into consideration all
revenues from the CBTC (not in line with Article 120 of the EA-1), ROE
and ROA were slightly lower due to lower net profit.
4.8.2 Economic and technical indicators
2013
Indicators
Formula
Normalised length of transmission
network per employee
(normalised length of network in km) /
(number of employees)
OPEX per transmitted electricity
(operating costs*( in million euros)) /
in thousand
euros
(transmitted electricity
(in the unit of time) in MWh)
MWh
(operating costs*( in million euros))/
in thousand
euros
130.7
(normalised length of network in km)
km
911.8
OPEX per the length of transmission
network
Investments per normalised length
of transmission network
Investments per transmitted
electricity
Operating revenues per transmitted
electricity
km
Value
Calculation
Value
Calculation
911.8
1.772585004
911.8
1.763704592
514.4
(investments (in million euros)/
130.7
517.0
0.000006163
21,208,705
46.2
(normalised length of network in km)
in thousand
euros
(transmitted electricity
(in the unit of time) in MWh)
MWh
(operating revenues Art. 120 of the
EA-1 applied)/
in thousand
euros
(transmitted electricity
(in the unit of time) in MWh)
MWh
46.2
0.143356215
21,208,705
0.000006010
133.3
0.146146724
911.8
0.050684253
37.9
0.041614604
911.8
0.000002179
21,208,705
138.9
133.3
22,171,890
911.8
(investments (in million euros))/
2014
37.9
0.000001711
22,171.890
0.000006548
143.5
0.000006471
22,171,890
OPEX= operating expenses= operating costs
Transmitted electricity in the unit of time is electricity offtaken by domestic consumers and transmission over the Slovenian border to Italy, Austria and Croatia.
OPERATIONS ANALYSIS
65
4.8.3 Technical indicators
2013
Indicators
Formula
ENS (energy which would be supplied from
the system if there was no interruption)
(Pk - power at which the
electricity supply was interrupted,
expressed in MWh) X
Value
2014
Calculation
Value
Calculation
MWh
384.9
52,400.7
16.15
2,252.7
(Dk - the period of time during
which the electricity supply was
interrupted, expressed in hours)
AIT (Average interruption time on the
transmission network reflects the time
period
(ENSi, volume of unsupplied
electricity at »i« interruption in
MWh) X
min
when the supply of electricity was
interrupted per user and year) =
60*Sum i ENSi/PT
(PT - average power of the
electric power system in MWh,
which derives from transmitted
MW
electricity in one year / 8,760
hours)
h
(transmitted electricity in the unit
of time)/
MWh
(normalised length)
km
Portion of losses per transmitted electricity
(losses)/
MWh
306,647
(transmitted electricity in MWh)
MWh
21,208,705
LF
(average transmitted power)/
MW
Transmitted electricity per normalised
length of transmission network
(peak power in a time interval)
1,429.8
1,395.7
8,760
8,760
21,208,705
23,260.2596
911.8
2,421.1
3,523.1
22,171,890
24,316.6154
911.8
0.014458565
303,496
0.013688334
22,171,890
0.68719718
2,531.0
0.74294012
3,406.8
For calculation of AIT the transmitted electricity offtaken by domestic consumers is taken into consideration so as to determine the average power of the electric power system.
Transmitted electricity in the unit of time is electricity offtaken by domestic consumers and transmission over the Slovenian border to Italy, Austria and Croatia.
66
04
KNOWLEDGE
Through consideration of best
practice, together with the
ongoing acquisition and sharing
of knowledge and expertise
acquired through years of
experience, and with the strive to
innovate, ELES builds expertise,
improves its performance and
remains committed to finding
the best solutions for continuous
improvement of the quality of
electric power transmission.
Snežana Rodić,
the most successful Slovenian
athlete in the triple jump
67
68
5. IT AND
TELECOMMUNICATIONS
In 2014, ELES established a new field for providing information technology and telecommunications services.
The field is organised in cooperation with three technical services or
departments as well as the customer and service support. Due to successful cooperation in this sector, all of the organisational rules were
updated; they are now compliant with the IT Infrastructure Library
methodological framework and ensure successful support, development
and provision of services.
In the field of the provision of ICT services, ELES achieved its set objectives and fulfilled users’ expectations.
IT
and
Telecommunications
Telecommunications and
TC Infrastructure
Department
Business IT Service
Department
ITC
Service Centre
IT Infrastructure
Services Department
By providing information technology and communication services (ITC)
to external users and marketing of excess telecommunications capacities through the subsidiary Stelkom d.o.o., the Company managed to
render more than 70 additional services on the market, which resulted
in additional revenues in the amount of more than 1.5 million euros.
The past year was marked by the following events:
• Glaze ice/sleet – in the beginning of 2014, Slovenia suffered an
extreme natural weather phenomenon called glaze ice, which severely
damaged the Company’s energy and ITC infrastructure. As a result
of this natural disaster, five optical connections were cut off on the
affected transmission lines which are the property of ELES. In spite of
this, ELES managed to preserve the operation of all critical communication lines and all telecommunications services which are required
to support the management and monitoring of the electric power
system of the Republic of Slovenia.
• Cyber Europe 2014 – successful participation in the trans-European
exercise which was performed in order to determine the level of overall readiness in the event of a cyber-attack on IT and telecommunications systems in electric power companies.
In the past business year ELES invested a lot of energy and knowledge
into achieving the Company’s strategic objectives and efficient implementation of investments, of which the following need to be highlighted:
• reduction of heterogeneity of the existing TC networks and updating
of the SDH network for the needs of EMS, especially in the context of
taking over 110 kV transmission lines;
• implementation of the ICT management processes in accordance
with the ITIL framework and their automatisation with the MAXIMO
system;
• implementation of the ITC service centre;
• implementation of the standard ERP information system – in the
business year ELES continued activities for implementing the standard business-information system. The integration of the new ERP system with other key systems, but especially with the MAXIMO system,
was carried out;
• development and updating of information, communication and
reporting services – establishing a system for publishing announcements on the ENTSO-E for transparency.
69
8133
service
requests
in
2014
30000
registered
accesses to
ITC
Service
Centre
6.5 hour is
average time
of
solving an
incident
4.5 (5) is the
assessment
of users
satisfaction
70
6. SUSTAINABLE DEVELOPMENT
6.1 Comprehensive Human Resource Management
When it comes to human resource management and ensuring their
professional and personal development, 2014 was a breakthrough year,
because ELES began to gradually implement the strategic goal adopted
in 2011: Comprehensive human resource management (hereinafter
referred to as the CHRM). The CHRM is aimed at developing a healthy
work environment, to facilitate development and well-being of the
employees, increase efficiency and motivation of the employees, develop
appropriate relationships between the employees and the Company,
ensure efficient tools for managing personnel and increase satisfaction
and positive energy within the Company. The content of the CHRM
project and the objective of its realisation are to improve human
resource processes and systems, as well as to implement modern
human resource tools. The latter will facilitate efficient human resource
management (HRM) and human resource development (HRD).
The CHRM project is divided into several sub-projects. In May and June,
annual appraisal interviews with 498 workers (93.6 percent of all our
employees) were carried out. By implementing the annual appraisal
interviews ELES shall ensure monitoring of realisation or non-realisation
of the Company’s objectives on various levels of the Company. They
will help the Company to implement systematic planning of personnel
development in the professional and personal sense. In October 2014,
the organisational climate in the Company, as well as satisfaction of
the employees and organisational culture were measured and 18 values
of ELES classified as perceived by the Company’s employees. 413
employees or 78.1 percent of all employees participated in the anonymous assessment. By the end of 2014 and within the framework of
the CHRM project, ELES created the foundation of the competence
model for its implementation into the operations of the Company, and
began to design the concept of the knowledge management system.
The latter includes preparing a document for five complete units: from
establishing the ELES Academy, introduction of the inheritance policy,
establishing active mentorship, establishing the central library – INDOK –
to enabling access to specific kinds of knowledge.
Due to the changes in the content related to operations of the Company’s certain services, ELES implemented some changes to the Rules
on the Organisation of ELES, d.o.o., which came into force on 1 January
2015. The Department for Maintaining Relations with the Regulator
was established and the existing Planning and Analyses Department
was renamed into Controlling Department and Financial Support Department was renamed into Calculation and Settlements Department.
With the amendment to the Act on the Systemisation of Types of Work
and Job Positions in ELES, d.o.o., simplifications in the classification of
certain job positions were introduced. When it comes to the required
professional education for an individual job position, the priority education for the candidate who wishes to apply for the published vacancy
can now be determined.
Based on the changes to the aforementioned acts ELES coordinated the
Annex to the Collective Agreement in ELES with both representational
trade unions (ELES-SDE and ELES-KNSS). The latter was signed at the
end of 2014 by the ELES’ Chief Executive Officer and the Presidents
of both trade unions. Important novelties relate to the rights which are
now defined in greater detail, as well as to the obligations of employees
and the employer in the case of absence from work and the pertaining
wage compensation, promotion of employees, calculation for being at
stand-by at home, mentorship and solidarity assistance. The content of
the Statement on Transport to-from Work was amended and shall allow
better control of the submitted data.
The members of the representative trade unions of ELES as well as the
members of the Works Council participated in the preparation and coordination of the aforementioned acts and with whom the Company
organised a joint consultation.
71
6.1.1 Employees in ELES, d.o.o.
Data of employees
2013
2014
Number of employees as at31 December
538
532
Average number of employees in a year
533
530
Average age
46 years
46 years
Average years of employment
22 years
22 years
Share of male employment
79%
80%
Share of female employment
21%
20%
Employees with permanent employment
529
528
Employees with temporary employment
9
4
535
530
3
2
3.3%
3.8%
49.1%
50.4%
Employees with full-time employment
Employees with part-time employment
Portion of disabled employees
Share of employees
with at least higher professional education
At the end of 2014, the Company employed 532 workers, which is six (6) or
1.1 percent less than at the end of 2013 and ten (10) more than planned.
The average age of the employees is 46 years and this has not changed
in the last year. The same holds true for the average length of service,
which is 22 years.
In the last year, the share of male employees rose from 79 to 80 percent.
Of the 7 percent of employees who are employed in top management
positions (sector directors, heads of services, heads of centres), there
are 2 percent of women or a little less than a third of employees in top
management positions.
At the end of the year, 99 percent of all employees were employed for
an indefinite period of time; 99.5 percent were employed full time and
only two (2) or 0.5 percent part-time.
The educational structure has been improving year-on-year. At the end
of 2014, more than half of the employees have some form of higher
education.
EMPLOYEE TURNOVER
ELES has a low level of employee turnover. In 2014, the Company
employed nine (9) new employees, of which five (5) were for an indefinite period of time and four (4) for a definite period of time or for
the period of their apprenticeship. Fifteen (15) workers terminated their
employment relationship in 2014, of which ten (10) retired.
6.1.2 Employment of disabled persons
As of 31 December 2014, ELES employed eighteen (18) disabled persons
of the third category and two (2) disabled persons of the second category.
Most of the disabled persons work in the transmission network infrastructure centres (TNIC).
In accordance with the 6 percent quota for employing disabled persons
as prescribed by law, ELES ought to have employed in average 32 disabled
persons. Because this quota was not achieved, the Company had to pay
a contribution in the amount of 87,833 euros to encourage employment
of disabled persons in accordance with the applicable law.
The Company managed to provide suitable job positions for employees
who had received the decision stating the category of their disability from
the Pension and Disability Insurance Institute of the Republic of Slovenia.
72
SUSTAINABLE DEVELOPMENT
6.1.3 Education and training
ELES is aware that in order to successfully carry out its core operations
the Company needs professionally educated and trained personnel
who are able to quickly adapt to the new technological and legislative
requirements of the business environment in which it operates.
Hours and costs of training
2013
2014
Number of training hours
4,938
6,756
220,470
238,244
9
13
Total costs of training/education (in euros)
Hours of training per employee
Costs of training per employee (in euros)
410
Success of employees in their part-time study
16
13
11
6
3
1
2013
448
In 2014, 6,756 hours of training for the employees were performed,
which is 37 percent more than in the previous year. In most cases an
external form of training was organised.
In average each of the employees received 13 hours of training. Training took place in different forms – from seminars, courses and conferences to legally prescribed training in the field of carrying out professional tasks (e.g. those who handle energy devices). A large share of the
training comprised theoretical and practical professional training from
the field of occupational health and safety.
In 2014, the cost of training amounted to 238,244 euros, which
accounted for 94 percent of the planned amount.
PART-TIME STUDY
The Company continues to allow the employees to pursue higher formal education. The Company paid study fees for all of its employees
who decided for studying while working and enabled them to take sabbatical leave to prepare for the exams. In 2014, three (3) of the employees decided to pursue higher education, thus joining the thirteen (13)
other employees who study part-time. Six (6) employees successfully
completed their studies and obtained a higher level of professional education. In 2014, sixteen (16) employees were included in the part-time
study programme.
2014
Total no. of employees studying part-time
Newly included in part-time study
Concluded part-time study
Sabbatical leave
2013
2014
Hours of sabbatical leave
2,976
1,604
229
100
Used sabbatical leave per employee,
who studies (in hours)
TRAINING
Frequent communication with foreign business partners requires good
knowledge of foreign languages from the Company’s employees. In
2014, 32 of the employees attended different courses of foreign languages; the English courses were the most popular, followed by courses
in German, French and Italian. The participants attended 2,131 course
hours, which on average means 66 course hours per employee.
In the beginning of 2014, directors, sector directors, assistants to sector directors and heads of departments (50 people in total) attended
workshops on how to successfully conduct annual appraisal interviews.
SUSTAINABLE DEVELOPMENT
73
6.1.4 Educational structure of employees
Number of employees as per title and education
Educational structure
Number of
employees as at 31
Dec 2013
Number of
employees as at 31
Dec 2014
Doctor's degree
7
7
Master's degree
35
37
University degree
159
156
3-year higher
professional education
63
68
3-year higher
professional education
2-year higher
professional education
100
102
2-year higher
professional education
Secondary school
108
102
66
60
538
532
Educational title
Other
Total employees
Doctor’s degree
Master’s degree
1,3 %
1,3 %
7,0 %
6,5 %
29,3 %
29,6 %
University degree
12,8 %
11,7 %
19,2 %
18,6 %
19,2 %
20,1 %
Secondary school
Other
11,3 %
12,3 %
Year 2014 = 532 employees
Year 2013 = 538 employees
6.1.5Scholarships
ELES endeavours to connect with young people who are interested in
working for the Company and includes them in certain activities already
during their study. In 2014, three (3) students received scholarships
from ELES, which preserved the number of scholarship-holders on the
same level as in the preceding years. ELES is aware that it is important
to allow young people to carry out professional practice in the field of
electric power and at the same time ensure a database of candidates
which represent a potential selection for employing future experts. In
2014, the Company enabled twenty-one (21) persons to carry out the
compulsory professional practice within the Company, of which thirteen
(13) were secondary school pupils and eight (8) students.
A system of summer work for children of the Company’s employees
was established. These children, as pupils and students, help within the
Company during the summer months when ELES’ employees take their
annual leave. This kind of work opportunity was used by thirty-seven
(37) children of the Company’s employees.
6.1.6 Annual appraisal interviews
In 2014, ELES implemented annual appraisal interviews in accordance
with the strategic goals of the CHRM. While the Company did carry out
such annual appraisal interviews in the past, this was never performed in
such a systematic way. By introducing the new business information system ERP into Company’s operations this activity shall become regular.
which were obtained in 2014 by means of conducting annual appraisal
interviews, together with the results of analyses of assessing the organisational climate, satisfaction of the employees and organisational culture, shall present an excellent basis for the implementation of suitable
activities for dealing with the employees.
The analyses of annual appraisal interviews shall, in addition to other HRM and HRD tools which are gradually being implemented into
the Company’s operations by SURKVZD, enable preparation of career
paths of the employees. The data from the detailed analyses shall enable the Company to prepare appropriate content for training of members of top management for working with their employees. The data
In 2014, the annual appraisal interviews were successfully performed
with 514 employees (97 percent of all employees). The annual appraisal
interviews were not conducted with 18 employees (3 percent of all
employees) for a variety of reasons (maternity leave, retirement,
working abroad, termination of the employment relationship and
longer sick leave).
74
SUSTAINABLE DEVELOPMENT
6.1.7 Satisfaction and commitment of employees
The results of assessing satisfaction of employees in October 2014
Satisfaction with opportunities for promotion
5.55 %
Satisfaction with salary
5.27 %
Satisfaction with the overall atmosphere among employees
5.00 %
Satisfaction with director of the field
4.94 %
Satisfaction with interpersonal relations
4.89 %
Satisfaction with status in our company
4.87 %
Satisfaction with line manager
4.84 %
Satisfaction with the atmosphere in my working group
4.77 %
Satisfaction with the measures taken for “Family Friendly Company”
4.74 %
Satisfaction with the Chief Executive Officer
4.64 %
Satisfaction with training opportunities
4.52 %
Satisfaction with colleagues
4.41 %
Job satisfaction
4.25 %
Satisfaction with working conditions (equipment, facilities)
4.17 %
Satisfaction with working time
4.09 %
Satisfaction with job stability
3.78 %
0
The survey included 413 or 78.1 percent of all employees. The results
of the survey showed that in general the employees are very satisfied in
the Company (with job stability, working time, working conditions, etc.)
1
2
3
4
5
6
The employees chose the highest marks for their satisfaction with job
stability or employment security, followed by satisfaction with working
hours and working conditions. The lowest marks were given to opportunities for promotion within the Company
The total average including all aspects of satisfaction of employees amounted to 4.67, which is a very high figure that exceeds the Slovenian average.
6.1.8 Family-Friendly Company Certificate
In 2010, ELES obtained the basic Family-Friendly Company and in 2013
the full Family-Friendly Company Certificate which confirms the responsible
conduct of the Company towards its employees. A Family-Friendly Company
(FFC) is a principle of organisational management which ensures shortterm and long-term positive effects of harmonising professional and private
lives of the employees. Before the Company received the full Family-Friendly
Company Certificate, it had to successfully implement fourteen (14) measures for easier coordination of professional and family life of its employees.
The adopted measures are used in accordance with the ELES guidelines for
operating like a FFC company, which were further amended in 2014. The
Company continued to implement the established measures, such as fixed
core working time, providing gifts for new-borns and participation of relatives of the employees in occasional work activities in the Company. ELES
also began to implement three (3) new measures. The measure of “Child
Time Bonus” was updated in 2014 and parents of first-graders can take a
day off on their first day of school. Parents who were introducing their children to kindergarten could use a bonus of 16 additional free hours in the
first week and 360 children were happy to see Father Frost and his presents
in the pre-New Year period. Based on the aforementioned measures the
Company would like to further develop the Company’s values and, consequently, strengthen the commitment of the employees to the Company.
USING PARENTAL LEAVE AND GIFTS AT BIRTH
ELES provides social security to young families by allowing the
Company’s young employees to use all available forms of parental
leave. After the end of maternity leave, young mothers can, as a rule,
continue their career path at the same job position they held before
going on maternity leave. ELES provides financial aid in the amount of
500 euros for each new-born of the Company’s employees.
Parental leave and gifts at birth
2013
2014
No. of women on maternity leave (105 days)
3
2
No. of women on child nursing and care leave
(up to 260 days)
8
5
No. of men on child nursing and care leave
(up to 260 days)
0
2
28
16
Hours of paternity leave
2,176
1,372
Gifts at birth (in euros)
14,000
9,000
The number of men on paternity leave
(15 days + up to 75 days)
SUSTAINABLE DEVELOPMENT
75
6.1.9 Employees absence
Sickness compensation
chargeable to the
company
Sickness compensation
chargeable to Health
Insurance Institute of
Slovenia
Total sickness
compensation
Proportion of sickness
compensation in the
working hours fund
(in %)
2009
22,795
13,728
36,523
3.1
2010
22,435
18,575
41,010
3.6
2011
22,599
14,810
37,409
3.4
2012
20,764
13,763
34,527
3.1
2013
23,586
23,114
46,700
4.3
22,435.8
16,798.0
39,233.8
3.5
22,159
21,630
43,789
4.0
YEAR / working hours
average from 2009 to 2013
2014
Due to sick leave 43,789 working hours were lost in 2014, which represents 4 percent of the total annual working hours (i.e. of regular work). This is
6.2 percent less than in 2013 and 11.6 percent more than the average in the period between 2009 and 2013.
6.1.10 Relations between the employees and the Chief Executive Officer
In 2014, the Company continued with regular meetings between the
ELES’ Chief Executive Officer and the Works Council and representative
trade unions of the Company. By doing so, the Company ensures mutu-
al exchange of information and inclusion of representatives in the operations of ELES, which allows efficient direct solving of matters for which
the Works Council and trade unions are competent.
6.1.11 Care for the employees and the related groups outside working time
The holiday capacities of the Company are aimed at ensuring conditions
for relaxation and recreation, as well as maintenance of psycho-physical
abilities of the workers. If the holiday capacities are not occupied by the
Company’s employees, they may also be rented by third parties who
would like to spend their holidays there. ELES has holiday capacities in
thermal spas, the mountains and at the seaside.
The holiday capacities of the Company are located in the Republic of
Slovenia and the Republic of Croatia at the following locations: Čatež
thermal spa, Banovci thermal spa, Golte, Portorož, Krk, Barbariga, Mali
Lošinj, Stinica, Pag, Poreč and Rab.
The Company’s employees are also active in ELES’ Sports Association
established on 29 October 2002. In the beginning, the Sports Association had 68 members, but in 2014 their number rose to 336. The Sports
Association includes the Company’s employees and retired employees.
The basic purpose of the Association is to enable socialising of its members whilst engaging in sports and recreational activities on amateur
level. It also develops the character traits of its members, popularises
sports and recreational activities, takes care of especially talented
sportsmen and helps the less enthusiastic members to achieve better
results. The Sports Association encourages the employees to engage in
sports and recreational activities, it organises competitions of its mem-
bers, participates in competitions within the framework of the Slovenian
electro power industry, participates in competitions abroad with similar
associations and organises trips to important sports events. To facilitate easier and better operation, the Sports Association has organised
sections which operate in accordance with the expressed interest of its
members. The Association has the following sections: badminton, bowling, ninepins, cycling, basketball, table tennis, football, volleyball, darts,
swimming, mountaineering, fishing, skiing, shooting, chess, cross-country skiing and tennis.
Reports on activities and work of the ELES Sports Association in
2014:
• skiing – Mt. Krvavec,
• skiing – Austria III,
• sports weekend in Poreč (Croatia),
• trekking – 12 planned treks
(4 treks were cancelled, 8 successfully carried out),
• Elesijada – Divača,
• meeting with the Mavrir Sports Association,
• activities in sports halls
(Podlog, Ljubljana – badminton, tennis, bowling in Ljubljana and
Maribor, swimming - Maribor), fitness.
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SUSTAINABLE DEVELOPMENT
6.1.12 Supplementary pension insurance for employees
In December 2001, ELES joined the voluntary supplementary pension insurance scheme for employees in order to ensure greater social security after
their retirement. In accordance with the applicable pension plan of voluntary
supplementary pension insurance, the Company pays from 60–100 percent
of the maximum amount of premium, which in 2014 represented 5.844 percent of the monthly salary per employee. The amount of payment depends
on the age group of the employee and whether the employee pays the difference to the maximum amount of premium on their own. The Company
pays 100 percent of the premium for workers above 45 years of age.
Supplementary pension insurance (SPI)
2013
2014
Number of employees included in SPI
at the end of the year
516
521
Portion of employees included in SPI
96%
98%
876,960
922,142
50,726
42,765
Total premium paid by ELES (in euros)
Total premium paid by employees (in euros)
6.1.13 Communication with employees
More and more important information which all of the Company’s employees must know is sent by email. Nearly all of the Company’s employees receive such mail.
In 2013, ELES began to publish an internal newsletter “Naše omrežje”
(Our Network), which informs the employees on the current topics that
are not only business in nature.
Each year the Company’s employees attend a social sports event Day
of the Company in order to strengthen the Company’s team spirit and
loyalty.
Regular meetings of the Chief Executive Officer with the representatives of
the Works Council and the representative trade unions ensure better flow
of information and inclusion of representatives of the employees into the
Company’s operations and direct solving of matters they are competent for.
ELES maintains contact with the Company’s retired employees by inviting them to different events, such as the New Year gathering and Day of
the Company. They also remain active in our Sports Association.
Information on the operations of ELES and other electric power companies are available in the online and printed form of the magazine “Naš
stik” (Our Connection).
6.1.14 Occupational health and safety
ELES fulfils all obligations prescribed by law related to occupational health
and safety of its employees. The Company is bound to this by the obtained
Occupational Health and Safety Management System in accordance with
the BS OHSAS 18001:2007 standard.
In April 2014, the ELES’ Chief Executive Officer adopted the Safety Statement with Risk Assessment, Revision no. 2 for ELES. By adopting this
Statement, the Company adopted the proposed programme for fulfilling
the requirements on occupational health and safety and to reduce risks and
harmful effects (established in the assessment) to the lowest possible level.
To successfully implement the programme, the Company ensured all of the
required professional assistance, as well as appropriate funds.
Obligations related to protecting health and lives of the Company’s employees are realised with consistent implementation of activities in the field
of theoretical and practical training of employees for safe work, preventive
medical examinations, arranging and adapting the working environment and
training, as well as encouraging the employees to take care of their health.
Despite the implementation of all the measures throughout the year, five
(5) injuries at work were recorded. All injuries were minor and of mechanical
nature (bruises, scratches, cuts, sprains and suchlike.) Due to these injuries in
2014, workers were absent from the work process for 464 working hours.
The data on the number of injuries at work for 2014 in comparison with 2013,
as well as the average number of injuries in the 2009-2013 period, markedly
deviates in terms of the reduced number. In 2014, the Company recorded 54
percent less injuries at work in comparison with the aforementioned average
in the period. Even more positive is the data on the number of lost working
hours as a result of injuries at work in 2014, which is lower from the aforementioned average in the period by 78 percent.
A markedly positive trend related to injuries at work in 2014 is a consequence
of increased activities in the field of health and safety training and informing
the employees of the importance of ensuring the implementation of health
and safety measures at their work place.
INJURIES AT WORK
Year
Number of injuries
Number of lost
working hours
2009
16
3,267
2010
7
984
2011
10
1,592
2012
11
2,240
2013
10
2,632
10.8
2,143
5
2,522 ( 464 )*
average from 2009 to 2013
2014
* Note: 2,522 is the number of working hours lost in 2014 and is the sum of working hours lost due to injuries at work in 2014 and lost working hours as a result of
injuries at work in 2013; 464 lost working hours is a consequence of only injuries
that occurred 2014.
77
SUSTAINABLE DEVELOPMENT
6.2 Care for the environment
Environmental protection is an activity for the protection and conservation of nature. Within the framework of the Company’s care for the
environment, ELES would like to burden the air, water and soil as little
as possible. Environmental protection is one of the fundamental rights,
obligations and responsibilities of all the Company’s employees.
6.2.1 Environmental policy
ELES employs a comprehensive approach to the environment, which is
part of the business and developmental company policy. The Company
is aware that an efficient and successful system for environmental management brings advantages, such as fewer burdens on the environment,
reduced material costs, improved working conditions, increased level of
customer trust and greater respect for the Company in the society.
All of the Company’s employees participate in the implementation of
the environmental policy, as well as all of the Company’s suppliers of
equipment and contractors who provide services in the construction
and renovation of electric power facilities. By improving the effects of
environmental protection, ELES takes into consideration the principles
of sustainable development and does not leave the future to chance.
6.2.2 Managing individual important environmental aspects
Although the Company whose core activity is the transmission of electric power is not a large polluter of the environment, effects of operation
of the Company’s facilities, such as noise and electromagnetic radiation
and changing the natural environment after the construction of new
transmission lines routes, may be perceived.
When determining locations for transmission lines the Company chooses
the most appropriate routes and adapts the final appearance of the
transmission lines to the characteristics of the surrounding landscape.
The existing transmission line pylons are maintained with environmentally-friendly protective coating.
Increased noise in the vicinity of junctions is reduced with additional
sound insulation in settlements and by implementing modern materials
and equipment for their maintenance.
Pursuant to the applicable legislation the Company also carries out
refurbishment of outdoor lighting of the Company’s facilities in order to
reduce light pollution.
In cooperation with the authorised organisations ELES regularly performs measurements of the electromagnetic radiation on the Company’s facilities. All of the measurements performed so far have confirmed
that even radiation right underneath the strongest transmission lines or
in the vicinity of substations do not exceed the legally prescribed values.
The Company separates waste, save drinking water and electricity and
send the used toners and print cartridges for ecologically appropriate
further processing and to be used as recycled materials.
When clearing the transmission line routes, wood waste occurs and
information thereof is submitted to the parties interested in removing
this waste and using it in the production of biomass.
Mixed trade waste for the period from 2007 to 2014
kg
500
euros
50
473.83
450
45
400.20
400
368.42
350
300
28.20
27.45
36.23
339.25
35.94
36.46
339.09
40
35
34.34
30
23.43
250
37.04
25
228.78
200
20
190.61
153.35
150
15
100
10
50
5
0
2007
2008
2009
2010
2011
2012
2013
2014
0
Quantity of mixed trade waste per employee in kg
Cost of mixed trade waste management per employee in euros
Calculation: Quantity per employee = quantity of MTW/average no. of employees; Cost per employee = cost of MTW/average no. of employees
Note: Quantity of mixed trade waste decreases year-on-year.
The used toners and print cartridges are sent to the company authorised for their recycling. In 2014, 310 kilograms of toners and print cartridges
were collected. The authorised company destroyed 56 kg and the rest was recycled.
78
SUSTAINABLE DEVELOPMENT
6.2.3 Achievements in the field of environmental protection
For its endeavours in the field of environmental management, the Company obtained the environmental certificate SIST EN ISO 14001:2005: Environmental Management System – requirements with instructions for use.
When it comes to environmental management system, ELES as a socially
responsible Company endeavours to minimise its effects on the environment. This applies to the positioning of the Company’s facilities into the
environment, as well as to managing possible emissions. In 2014, ELES
continued with the refurbishment of outdoor lighting of the Company’s
facilities in order to reduce light pollution in accordance with the legislation by way of which the Company managed to save quite a lot of energy.
After the completion of the project, the total consumption of energy for
outdoor lighting was 2/3 lower than before the refurbishment, which
entails an assessed saving of 450 MWh on annual level. In its environmental programmes the Company pursues the objectives for reducing
the use of drinking water, gradually carries out energy-efficient refurbishment of its facilities (the energy-efficient refurbishment was completed
at Maribor Regional Management Centre in 2014) and replaces old vehicles with energy-saving vehicles. In 2014, ELES also purchased two hybrid
vehicles and plans to purchase more in the future. In all of the Company’s
units waste is consistently separated so as to facilitate the highest level of
recycling possible, yet the Company also endeavours to reduce the quantity of waste. The toxic gases in the Company’s air-conditioning devices
were replaced with more appropriate ones.
6.3 Care for Interest Activities – Social Responsibility
ELES is realising the expectations of the general public and of its owners –
the Company remains socially responsible and actively cares for the
social and natural environment in which the Company operates. ELES
manages the Company in a responsible manner in order to achieve its
strategic objectives and at the same time implement responsible operations based on social responsibility.
the public. The Company’s objectives are to establish a positive dialogue
and ensure transparent provision of information to different stakeholders. When it comes to communication, the Company pays special
attention to communicating important business decisions and novelties to
its employees, local communities, business partners, the media, financial
public, the state as its owner, the Energy Agency as the market regulator.
In the field of communication, the Company takes care of systematic,
transparent and continuous communication with individual segments of
For more on communication with the employees please turn to Chapter
6.1.13.
6.3.1 Communication with the local community and social responsibility
COMMUNICATION WITH THE LOCAL COMMUNITY
Local communities in which ELES builds and maintains electric power
facilities are an important partner of the Company, with which the Company establishes and strengthens important partnership relations and
trust. In 2014, in the field of including local communities, ELES implemented a number of novelties related to communication, especially related to the project of transition from the 220 kV network to the 400 kV
network Beričevo–Divača. On the local level, the Company supports different local associations, institutions and other organisations. In 2014,
ELES paid special attention to helping the local communities affected
by the glaze ice/sleet.
In 2015, ELES shall continue to improve the quality of life in the broadest sense of the word. At the end of 2014, the Company published all
of our sponsorship and donated funds on the ELES company website in
accordance with the Public Information Access Act.
Sponsorships and donations by purpose
8%
2%
SPONSORSHIP AND DONATION FUNDS
ELES’ responsibility towards the social and natural environment (in
which the Company’s intervenes) is mirrored with strategically planned
sponsorships wherein the Company takes into consideration the principle of balance, economic benefit and appropriate dispersion. In 2014,
ELES sponsored different organisations in the field of culture, sports, science and education, thus importantly contributing to their operations.
Since the Company creates added value for the Company and improves
the quality of life, ELES is also active in the field of donating funds. With
charity donations in 2014, ELES supported individuals who needed help,
organisations and humanitarian and environmental projects.
18 %
51 %
21 %
Humanitarian Action
Education and Science
Sports and Recreation
Culture
Environmental Protection
SUSTAINABLE DEVELOPMENT
79
6.3.2 Communication with business partners
In line with good business practices, ELES pursues to have good communication with its business partners. In addition to employing a personal
approach, business partners and other electric power companies are
informed of the ELES activities with the online and printed form of the
magazine “Naš stik” (Our Connection). In 2013, ELES began to publish
our internal newsletter “Naše omrežje” (Our Network), which informs
on the current topics that are not only business in nature. 2014 was
marked with opening of the 2x400 kV Beričevo–Krško transmission line
and celebration of the 90 years of transmission line routes, i.e. from the
beginning of construction of the first transmission line to today. For this
purpose, ELES published a brochure and presented a video commemorating both important milestones in the Company operations.
6.3.3 Communication with the media
When it comes to communication with the media, ELES uses a wide palette of tools: press release conferences, round tables on energy topics,
different consultations and other events related to energy. The Company communicates openly and proactively with the media.
COOPERATION IN THE DEVELOPMENT OF THE ELECTRIC
ENERGY FIELD
In accordance with their mission “to retain the leading role”, the professionals from ELES regularly attend discussions on the energy future of
Slovenia. In 2014, the Company actively participated at a professional level and contributed to the development and promotion of expert
knowledge in the field of electric power and the related fields.
As lecturers and debaters, the Company’s participants actively participated on professional energy events and conferences related to the
Company’s mission and operations, as well as the field of electric energy in Slovenian and foreign organisations.
SPREADING ENERGY LITERACY
ELES is very aware of the importance of energy literacy. Knowing and
understanding the energy and energy supply are important bases for
responsible creation of energy future. The latter is an important public
topic which is discussed within the Company and the media with a number of content emphasises and motives, as well as differing knowledge
bases on energy and energy supply. Unsurprisingly, misunderstandings
do occur and even conflicts when it comes to energy priorities. Energy
literacy contributes to strengthening the common base of understanding and awareness of the importance of energy for our daily lives and
the real chances of satisfying our needs for energy.
ELES gives prime attention to energy literacy of children and youth.
Understanding the importance of activities performed by ELES is of key
importance for increasing the social acceptability of our operations and
the related concrete projects.
To the established electric power companies and institutions, such as
ELES, Milan Vidmar Electric Power Research Institute and Faculty of Electrical Engineering and Computer Science, GEN energija joined in September 2014 at the science festival Elektrofest. In addition to Ljubljana,
nearly 800 pupils were receiving energy literacy lessons in Krško, in the
World of Energy by GEN energija. Within the framework of the event, the
participants prepared several professional sets to educate pupils in the
field of electric power. The central event of Elektrofest in Ljubljana was the
opening of ELES’s exhibition “Technical Heritage through Time” to commemorate the 90 years of routes for the transmission of electric power.
ELES spreads energy literacy with different learning tools and books. The
Company also sponsors the international programme of Eco Schools –
Eco Quiz for Secondary Schools within the framework of which the Company educates youth on energy.
As the main supporter in the field of strengthening energy literacy, ELES
has been cooperating from the very beginning in the international project EN-LITE, which is also supported by the Energy Directorate at the
Ministry of Infrastructure. The project objective is to increase interest
for energy themes and their understanding between the pupils, students, researchers, teachers and professors (mentors), representatives of
non-governmental organisation and the media, and to simultaneously
encourage their constructive, knowledge-based inclusion into creating
energy future (i.e. energy concepts, strategies, policies and implementation projects). In the long-term, with this project ELES wishes to support
creators of policies in the preparation and adoption of realistic national
low carbon energy strategy, which is based on science and professionally
articulated facts. In the future, together we shall strengthen the formal
and informal forms of education to ensure energy literacy of children
and youth, which shall ensure their active and knowledge-based inclusion into creating low carbon future of Slovenia and Europe.
At the end of 2014, within the framework of EN-LITE, ELES also published
the manual called Energy Literacy. In accordance with the American original, the manual offers a comprehensive and multidisciplinary presentation of energy literacy. It comprises seven core principles and six to eight
basic guidelines for each core principle. The ambition of this manual is
not only to present many themes, but to point out those which are the
most important for the citizens and to encourage their energy literacy.
To celebrate the 50th anniversary of the Biennial of Slovene Visual
Communications, the Museum of Design and Architecture in cooperation with ELES, the main partner of the Biennial, in 2014 organised an
international competition and exhibition “Prenašamo energijo – BIO 50”
(We Transmit Energy – BIO 50). With the competition and exhibition,
ELES strived – in the commemoration of the 90th anniversary of transmission line routes – to encourage thinking about energy transmission
with different types of the public. The Company received nearly 1,200
photographs from all over the world, which presented the different viewpoints related to the transmission of energy.
80
SUSTAINABLE DEVELOPMENT
6.3.4 Communication with the users
ELES communicates with its users by way of different communication
channels, the key ones being:
• snail mail,
• electronic mail (info@eles.si) – at this address the Company receives
offers of different companies, as well as other letters of users,
• the Company’s website http://www.eles.si, where users can access
information on Company operations and read the latest news,
• the Company’s website where annual reports, which are one of the
most important ways for communicating with the financial public,
are published.
6.3.5 Communication with influential publics
Communication with influential publics is of key importance for the
Company’s operations. Since the Company is state-owned, the influential publics include the ministry competent for energy matters. At the
same time the Company is bound by the regulatory framework set forth
by the Energy Agency, which is why regular and open communication is
essential for the successful operation of the Company.
SUSTAINABLE DEVELOPMENT
81
82
05
RESPONSIBILITY
Through prudent development,
planning and the construction of
a modern transmission system as
well as the permanent maintenance,
ELES co-creates an energy-efficient
and friendly environment with
respect to all involved stakeholders:
its employees, consumers, the
nature and the environment, local
communities and the society as a
whole.
Benjamin Savšek,
World silver medalist and
European champion in
canoe on whitewater
83
84
7. SIGNIFICANT
POST REPORTING EVENTS
From the date of the financial statements until the date of preparation of this report no events have been identified that would affect the truthfulness and fairness of the financial statements presented for 2014.
85
8. ENDORSEMENT OF THE
ANNUAL REPORT
Pursuant to Article 60 of the Companies Act the Management guarantees that the Annual Report of ELES, d.o.o. is compiled and shall be published
in accordance with the Slovenian Accounting Standards and the Companies Act, safe for that part which pertains to the acknowledgement of revenues, where the Management respected the provisions of Article 120 of the EA-1.
In Ljubljana, on 31 March 2015
ELES, d. o. o.
Aleksander Mervar, M.Sc.
Chief Executive Officer
86
06
ENTHUSIASM
With a positive attitude to the work,
which ELES successfully performs
together with its colleagues on the
basis of experience, professionalism
and diligence, and with a positive
attitude towards the colleagues
and the Company, ELES helps cocreate an atmosphere conducive
to proactive endeavour and
achievement of the tasks and looks
forward to joint achievements.
Marin Medak,
the youngest head of rowing
team across the Atlantic and the
only oarsman in the world to row
over the Southern Mediterranean
in winter conditions
87
88
9. FINANCIAL REPORT
9.1 Statement on the Management’s Responsibility and Corporate Governance
STATEMENT ON THE MANAGEMENT'S RESPONSIBILITY
In endorsing the financial statements for the year ended 31 December 2014 and the pertaining notes to the financial statements, the Management
of ELES, d.o.o. confirms that they have been compiled in accordance with the appropriate accounting guidelines, the accounting estimates were
drawn up pursuant to such principles as prudence and due diligence and the financial statements present a true and fair reflection of the results of
the financial situation as well as the operations of ELES, d.o.o. in 2014.
The Management is responsible for the appropriate management of accountancy, for adopting appropriate measures to protect the Company’s
property and other assets and for preventing and detecting any misuse and other irregularities, and confirms that the financial statements and
pertaining notes are presented on the basis of accounting assumption, which takes into consideration the principle of going concern and in line
with the applicable legislation and Slovenian Accounting Standards, safe for the part pertaining to the acknowledgement of revenues whereat the
Management Board respected the provisions of Article 120 of the EA-1 and the opinions issued by the Institute of Public Administration and the
Tax Administration of the Republic of Slovenia.
STATEMENT ON CORPORATE GOVERNANCE
The Management of ELES and its Supervisory Board declare that the ELES’ Chief Executive Officer and the Members of the Supervisory Board
respected the corporate governance principles and endeavoured for their implementation in the Company.
The Management declares that in its operations complies with the Corporate Governance Code for Companies with Capital Assets of the State,
which has been in force since December 2014.
In Ljubljana, on 31 March 2015
ELES, d. o. o.
Aleksander Mervar, M.Sc.
Chief Executive Officer
89
90
FINANCIAL REPORT
9.2 Financial Statements
BALANCE SHEET
in euros
ASSETS
31 Dec 2014
31 Dec 2013
A.
Long-term assets
565,606,964
559,027,925
I.
Long-term fixed assets
48,113,999
35,288,984
Intangible fixed assets and long-term deferred costs and accrued revenues
48,113,999
35,288,984
1. Long-term property rights
421,763,200
424,070,393
Tangible fixed assets
200,317,914
196,773,077
1. Land and buildings
14,909,472
14,633,772
a) Land
185,408,442
182,139,305
b) Buildings
193,693,918
196,332,379
2. Equipment and spare parts
76,235
93,887
3. Other tangible fixed assets
27,675,133
30,871,050
4. Tangible fixed assets being acquired
25,241,981
28,722,329
2,433,152
2,148,721
0
0
Investment properties
92,167,923
91,242,192
Long-term financial investments
80,720,261
72,112,676
1. Long-term financial investments save loans
79,024,063
70,631,235
a) Shares and equity interests in the Group
450,000
450,000
b) Shares and equity interests in associates
1,246,198
1,031,441
0
0
11,447,662
19,129,516
11,447,662
19,129,516
207,991
4,633,555
0
0
207,991
4,633,555
3,353,851
3,792,801
80,330,207
63,662,637
II.
a) Tangible assets under construction or in production
III.
IV.
b) Advances for acquisition of fixed assets
c) Other shares and equity interests
2. Long-term loans
a) Long-term loans given to companies in the Group
V.
Long-term operating receivables
1. Long-term operating receivables due by companies in the Group
2. Long-term operating receivables due by others
VI.
Deferred tax assets
B.
Short-term assets
II.
Inventories
2,509,875
2,549,461
1. Materials
2,509,875
2,549,461
Short-term financial investments
23,000,000
8,000,000
1. Short-term loans
23,000,000
8,000,000
Short-term operating receivables
31,250,348
29,891,807
3,792,069
1,163,688
22,615,953
20,329,394
4,842,326
8,398,725
III.
IV.
1. Short-term operating receivables due by companies in the Group
2. Short-term accounts receivables
3. Short-term operating receivables due by others
V.
Cash and cash equivalents
23,569,984
23,221,369
C.
Deferred costs(expenses) and accrued revenues
10,383,284
1,230,107
656,320,455
623,920,669
24,667,269
17,611,054
ASSETS
Off-balance assets
FINANCIAL REPORT
91
in euros
LIABILITIES
31 Dec 2014
31 Dec 2013
A.
Equity
382,324,963
381,694,327
I.
Called-up capital
177,469,516
177,469,516
1. Share capital
177,469,516
177,469,516
II.
Capital reserves
156,936,162
156,936,162
III.
Revenue reserves
43,317,791
42,756,327
8,018,666
7,457,202
2. Other revenue reserves
35,299,125
35,299,125
IV.
Revaluation adjustment surplus
-4,971,860
-3,436,225
V.
Retained earnings
0
0
VI.
Net profit (or loss) for financial year
9,573,354
7,968,547
B.
Provisions and long-term accrued costs and deferred revenues
173,488,900
132,386,325
1. Provisions for pensions and similar liabilities
4,811,363
3,932,626
2. Other provisions
1,883,253
1,870,974
3. Long-term accrued costs and deferred revenues
166,794,284
126,582,725
C.
Long-term financial and operating liabilities
60,987,799
67,701,814
I.
Long-term financial liabilities
60,164,469
67,243,661
777,647
7,344,045
53,210,966
55,622,475
6,175,856
4,277,141
749,713
403,520
0
0
749,713
403,520
73,617
54,633
1. Legal reserves
1. Long-term financial liabilities to companies in the Group
2. Long-term financial liabilities to banks
3. Other long-term financial liabilities
II.
Long-term operating liabilities
1. Long-term operating liabilities to companies in the Group
2. Long-term operating liabilities arising from advances
III.
Deferred tax liabilities
D.
Short-term financial and operating liabilities
37,595,002
40,707,063
II.
Short-term financial liabilities
12,659,034
12,970,151
1. Short-term financial liabilities to companies in the Group
7,070,000
6,992,627
2. Short-term financial liabilities to banks
5,589,034
5,977,524
24,935,968
27,736,912
32,175
1,407
18,163,964
21,485,612
211,228
973,829
4. Other short-term operating liabilities
6,528,601
5,276,064
Accrued costs (expenses) and deferred revenues
1,923,791
1,431,140
656,320,455
623,920,669
24,667,269
17,611,054
III.
Short-term operating liabilities
1. Short-term operating liabilities to companies in the Group
2. Short-term accounts payable
3. Short-term operating liabilities arising from advances
E.
LIABILITIES
Off-balance liabilities
92
FINANCIAL REPORT
INCOME STATEMENT
ITEM
1.
in euros
2014
2013
Net sales revenues
139,465,504
135,195,625
a. on domestic market
120,916,019
114,955,561
18,549,485
20,240,064
0
0
b. on foreign market
2.
Changes in inventories and work-in-progress
3.
Capitalised own products and services
2,383,795
2,625,245
4.
Other operating revenues
1,630,056
1,044,539
143,479,355
138,865,409
Costs of goods, materials and services (a + b)
76,073,337
74,646,260
a. Costs of goods, materials sold and costs of materials used
30,609,031
27,649,261
b. Costs of services
45,464,306
46,996,999
Labour costs (a + b + c + d)
26,210,922
26,617,464
a. Costs of wages and salaries
19,789,685
19,275,710
b. Costs of pension insurance contributions
2,594,315
2,486,204
c. Costs of contributions and other taxes on wages and salaries
1,434,764
1,350,886
d. Other labour costs
2,392,158
3,504,664
Write-downs (a + b + c)
30,202,965
27,998,824
a. Depreciation and amortisation expenses
29,206,517
27,392,498
996,373
596,129
75
10,197
769,358
1,449,649
10,222,773
8,153,212
Financial revenues from equity interests
43,082
280,826
c. Fianancial revenues from equity in other companies
43,082
54,686
0
226,140
Financial revenues from loans
637,693
1,161,974
b. Financial revenues from loans given to copmanies in the Group
153,517
428,912
b. Financial revenues from loans given to others
484,176
733,062
Financial revenues from operating receivables
532,606
124,434
b. Financial revenues from operating receivables due by others
532,606
124,434
34,413
1,232,679
2,013,814
1,530,487
418,408
238,093
1,595,406
1,292,394
Financial expenses arising from operating liabilities
4,657
51,946
c. Financial expenses arising from other operating liabilities
4,657
51,946
OPERATING REVENUES (1+2+3+4)
5.
6.
7.
b. Revaluated operating expenses for intangible and tangible fixed assets
c. Revaluated operating expenses associated with current assets
8.
Other operating expenses
OPERATING PROFIT (1+2+3+4-5-6-7-8)
9.
d. Financial revenues from other investments
10.
11.
12.
Financial expenses arising from impairment and investment write-offs
13.
Financial expenses arising from financial liabilities
b. Financial expenses arising from received bank loans
d. Financial expenses arising from other financial liabilities
14.
15.
Other revenues
2,599,260
351,471
16.
Other expenses
7,569
2,500
17.
Corporate Income Tax
0
0
18.
Deferred taxes
-745,700
1,191,242
19.
NET PROFIT FOR THE FINANCIAL YEAR (1+2+3+4-5-6-7-8+9+10+11-12-13-14+15-16-17-+18)
11,229,261
8,445,547
FINANCIAL REPORT
OTHER COMPREHENSIVE INCOME STATEMENT
93
in euros
ITEM
Profit or loss for the financial year
2014
2013
11,229,261
8,445,547
0
0
-1,296,535
1,725,817
0
0
-239,100
0
9,693,626
10,171,364
Changes in revaluation surplus of intangible and tangible fixed assets
Net change in fair value of available-for-sale financial assets transferred to P/L
Foreign currency translation differences for foreign operations
Other comprehensive income
TOTAL COMPREHENSIVE INCOME
STATEMENT OF CHANGES IN EQUITY
Statement of changes in equity for the period from January to December 2013
CHANGES OF PARTICULAR
TYPE OF EQUITY
in euros
Share
capital
Capital
reserves
Legal
reserves
Other
revenue
reserves
Equity
revaluation
adjustment
Profit
brought
forward
Net profit
(or loss) for
financial
year
I/1
II
III/1
III/5
IV
V/1
VI/1
VII
177,469,516
156,936,162
6,980,203
40,432,395
-5,162,042
0
4,866,730
381,522,964
Total
equity
A.
Opening balance as at
1 Jan 2013
B.1.
Changes in ownership
equity - transactions
with owners
g)
Dividends paid
-5,133,270
-4,866,730
-10,000,000
Total B.1.
-5,133,270
-4,866,730
-10,000,000
9,539,990
9,539,990
B.2.
Total comprehensive
income for the financial
year
a)
Entry of net profit/loss for
the financial year
d)
Revaluation surplus of
financial investments
1,725,817
Total B.2.
1,725,817
B.3.
Changes in equity
a)
Distribution of net profit
for the period to other
equity components
b)
Distribution of net profit
for the period to other
equity components
based on a decision of
the Management and
Supervisory Board
476,998
Total B.3.
476,998
0
7,457,202
35,299,125
C.
Closing balance as at
31 Dec 2013
Accumulated profit
177,469,516
156,936,162
-3,436,225
1,725,817
9,539,990
11,265,807
-476,998
0
0
-476,998
0
0
9,062,990
382,788,770
0
9,062,990
9,062,990
94
FINANCIAL REPORT
Statement of changes in equity for the period from January to December 2014
CHANGES OF PARTICULAR
TYPE OF EQUITY
A.
Opening balance as at
31 Jan 2013
b)
Value adjustments
A.2
A.2. Opening balance in
the reporting period as
at 1st January 2014
B.1.
Changes in equity
a)
Dividends paid
Share
capital
Capital
reserves
Legal
reserves
Other
revenue
reserves
Equity
revaluation
adjustment
Profit
brought
forward
Net profit
(or loss) for
financial
year
Total
equity
I/1
II
III/1
III/5
IV
V/1
VI/1
VII
177,469,516
156,936,162
7,457,202
35,299,125
-3,436,225
0
9,062,990
382,788,770
-1,094,443
-1,094,443
7,968,547
381,694,327
177,469,516
156,936,162
7,457,202
Total B.1.
B.2.
Total comprehensive
income for the financial
year
a)
Entry of net profit/loss for
the financial year
d)
Revaluation surplus of
financial investments
e)
Other comprehensive
income of the reporting
period
in euros
35,299,125
-3,436,225
0
0
-9,062,990
-9,062,990
-9,062,990
-9,062,990
11,229,261
-1,296,535
-239,100
Total B.2.
-1,535,635
11,229,261
9,693,626
9,062,990
-9,624,453
0
B.3.
Changes in equity
a)
Distribution of net profit
for the period to other
equity components
b)
Distribution of net profit
for the priod to other
equity components
based on a decision of
the Management and
Supervisory Board
561,463
Total B.3.
561,463
0
0
9,062,990
-9,624,453
0
8,018,665
35,299,125
-4,971,860
0
9,573,355
382,324,963
0
9,573,355
9,573,355
C.
Opening balance as at
31 Jan 2013
Accumulated profit
177,469,516
156,936,162
FINANCIAL REPORT
CASH FLOW
POSTAVKA
95
in euros
1-1.-31.12.2014
1-1.-31.12.2013
A.
CASH FLOW FROM OPERATING ACTIVITIES
a.
Items of operating activities
38,615,638
35,291,114
Operating revenues and financial revenues from operating receivables
141,725,076
135,274,866
Operating expenses save amortization (depreciation) and financial expenses
-103,109,438
-98,624,665
Corporate Income Tax and other taxes not included in operating expenses
b.
Changes to net current assets as in items of balance sheet
Opening less closing operating receivables
-1,359,087
34,995,458
26,698,717
3,223,347
1,155,090
Opening less closing deferred costs and accrued revenues
-652,413
692,044
Opening less closing deferred tax receivables
438,950
0
0
0
Opening less closing assets held for sale
Opening less closing inventories
39,586
-223,336
Closing less opening operating liabilities
-3,080,776
-6,015,357
Closing less opening accrued costs and deferred revenues and provisions
35,026,764
31,079,959
Closing less opening deferred tax liabilities
0
10,317
73,611,096
61,989,831
Inflows from investment activities
569,001
6,038,816
Revenues from investments activities
524,451
1,216,660
0
0
Revenues from disposal of tangible fixed assets
44,550
0
Revenues from disposal of investment property
0
0
Revenues from disposal of long-term financial investments
0
4,822,156
c.
Net cash flow operating revenues/liabilities (a+b)
B.
CASH FLOW FROM INVESTMENT ACTIVITIES
a.
Revenues from disposal of intangible assets
Revenues from disposal of short-term financial investments
b.
0
Outflows pertaining to investment activities
Acquisition of intangible assets
Acquisition of tangible fixed assets
Acquisition of investment property
0
0
-53,474,492
-50,226,482
-7,758,002
-23,964,931
-30,578,990
-18,707,887
0
0
Acquisition of long-term financial investments
-137,500
-7,553,664
Acquisition of short-term financial investments
-15,000,000
0
c.
Net cash (inflows and outflows) used in investment activities (a+b)
-52,905,491
-44,187,666
C.
CASH FLOW FROM FINANCING ACTIVITIES
a.
Inflows from financing activities
0
0
Inflows from paid-in capital
0
0
Inflows from an increase in long-term financial liabilities
0
0
Inflows from an increase in short-term financial liabilities
0
0
-20,356,990
-12,930,487
-1,894,000
-1,530,487
0
0
b.
Outflows pertaining to financing activities
Outflows from interests pertaining to financing activities
Repayment of capital
Repayment of long-term financial liabilities
-2,800,000
0
Repayment of short-term financial liabilities
-6,600,000
-1,400,000
-9,062,990
-10,000,000
c.
Dividends paid
Net cash used in financing activities (a+b)
-20,356,990
-12,930,487
D.
Closing balance of cash and cash equivalents
23,569,984
23,221,369
348,615
4,871,678
23,221,369
18,349,691
Financial result in the period (sum of Ac, Bc and Cc)
Opening balance of cash and cash equivalents
96
FINANCIAL REPORT
9.3 Notes to the Financial Statements
REPORTING ENTITY
ELES d.o.o. Ljubljana has its registered office at Hajdrihova 2 in Ljubljana.
The financial year corresponds to the calendar from 1 January 2014 to
31 December 2014.
The annual reports of the companies in the Group and the consolidated
financial statements are available for inspection at the registered office
of the parent company ELES d.o.o., Ljubljana, Hajdrihova 2.
STATEMENT ON CONFORMITY
The Company compiles its financial statements pursuant to the Slovenian Accounting Standards (SAS) and the Companies Act-1. The provisions of the Slovenian Accounting Standards are directly applied when
items are presented and evaluated, safe for the part pertaining to the
acknowledgement of revenues whereat the Management Board
respected the provisions of Article 120 of the EA-1. The accounting
guidelines and bases for evaluation are presented with notes to
individual items of the financial statements.
BASIS FOR THE PREPARATION OF THE
FINANCIAL STATEMENTS
The financial statements are presented on the basis of fundamental
accounting assumptions which take into consideration the principles of
accrual (safe for the acknowledgement of revenues) and going concern.
The criteria of understandability, relevance, reliability and comparability
were applied when the accounting guidelines and financial statements
were complied and when the accounting was performed. Sufficient assurance is thus made for the financial statements to be accurate and to
comply with all legal requirements. The principle of prudence is taken
into consideration thus indicating that the disclosed profits recorded as
at 31 December 2014 have already been realised, and that all foreseeable risks ad losses recorded in the 2014 financial year or in previous
financial years have already been taken into consideration.
CORRECTION OF MATERIAL PRIOR PERIOD ERROR
Deferred costs of unused annual leave of employees
In preparing the financial statements for 2014, the Company executed
a correction in accordance with IAS 8 from the deferred costs of unused
annual leave and surplus of hours of the employees as at 31 December
2013. The adjustment was performed with the adjustment of comparable data in the financial statements for 2013. The Company acknowledged (charge) in the 2013 net profit the costs of unused annual leave
in the amount of 1,094,443 euros. In accordance with the aforementioned the Company carried out the proper conversion of accounting
data for 2013 as shown in the table below.
in euros
Effect on Balance Sheet
Equity
Net profit for financial year
Short-term operating liabilities
Other short-term operating liabilities
Reporting in 2013
after correction
Correction
Reporting in 2013
381,694,327
-1,094,443
382,788,770
7,968,547
-1,094,443
9,062,990
27,736,912
1,094,443
26,642,469
5,276,064
1,094,443
4,181,621
v EUR
Effect on Profit and Loss
Labour costs
Net profit for financial year
Reporting in 2013
after correction
Correction
Reporting in 2013
26,617,464
1,094,443
25,523,021
8,445,547
-1,094,443
9,539,990
FINANCIAL REPORT
a.) Functional and presentation currency
Functional and presentation currency
b.) Conversion of foreign currencies
Transactions in foreign currencies are converted into euros at the
exchange rate on the transaction date. Cash and cash equivalents and
liabilities denominated in foreign currencies at the end of the financial
year are converted into euros at the then applicable exchange rate.
Exchange differences are acknowledged in the income statement.
c.) Intangible and tangible assets
Upon initial acknowledgement, the intangible and tangible assets are
recorded at their procurement value. The procurement value is composed of costs, which may be directly attributed to the acquisition of
the individual asset.
Upon initial acknowledgement, the Company revaluates the intangible
and tangible assets at cost model less accumulated depreciation/amortisation adjustment and accumulated losses due to impairment.
The Company estimates that the book values are recorded at least
at the level of recoverable value and therefore no impairments were
required.
Any subsequent expenses in relation with the intangible assets and
expenses of replacing a particular part of fixed asset are acknowledged
at the assets’ book value when it is probable that future economic
benefits associated with the operation of this part shall inflow. All other
expenses (e.g., routine maintenance) are acknowledged in the income
statement as expenses when incurred.
Depreciation/amortisation and useful life
The method of straight-line depreciation is applied. Depreciation/amortisation is calculated individually per particular tangible fixed assets and
intangible assets by way of applying the adopted straight-line depreciation rates. The applied depreciation/amortisation rates of tangible
fixed assets and long-term intangible assets are based on the estimated
useful life of assets.
in %
Classes of tangible fixed assets
Easements
Depreciation rate
1%
Construction structures
1.3%-8%
Equipment
2%-25%
Computer equipment
Mobile phones
Small inventories
10%-33.33%
50%
20%-50%
Depreciation/amortisation of small tools in use with the duration
of above one year and with a value of up to 500 euros is calculated
collectively.
97
The useful life of each tangible fixed asset or an intangible asset depends on the expected physical wear, the expected technical obsolescence, the expected economic obsolescence and the expected statutory
and other restrictions of use. As the useful life of tangible assets the
Company takes into consideration a period which would be the shortest
for each of the aforementioned factors.
The useful lives and residual values are reviewed (measured) at least
once a year, i.e. on the balance sheet date. The useful life of tangible
fixed assets is longer than one year.
d.) Long-term financial investments
Long-term financial investments in shares and stakes in subsidiaries,
affiliated companies and jointly-controlled entity are valued at their
procurement value.
Long-term financial investments in shares and stakes in other companies are classified under financial assets available for sale. The Company
measures and valuates them as follows:
• long-term investments in shares and stakes of companies not listed
on a stock exchange, and their fair value may not be reliably evaluated since the range of reasonable fair value estimates is significant
and the probability of the various estimates may be hard to assess,
are valued at procurement value;
• equity investments in companies listed on the stock exchange are
valued at fair value through equity.
Derivative financial instruments and hedge accounting
Derivative financial instruments are valued at fair value, which is determined based on discounted cash flows. In case of positive valuation,
derivative financial instruments are disclosed under assets, while in the
event of negative evaluation these derivative financial instruments are
recorded under liabilities.
The method of acknowledging profits and losses arising from changes
in fair values depends on whether the derivative financial instrument is
regarded as an instrument for hedging, and the type of hedging. Hedge
accounting is applied when certain conditions are fulfilled.
ELES uses derivative financial instruments to hedge future cash flows
which are attributable to the liabilities.
A part of the profit or loss arising from the cash flow hedging instrument, which is determined as an effective hedge, is acknowledged
directly in other comprehensive income. Any ineffective portion of profit
or loss is acknowledged immediately in the income statement under the
item net loss/profits from financial assets and liabilities held for trading.
Amounts acknowledged directly in equity are reclassified from other
comprehensive income to profit or loss in the periods when the hedging
of envisaged transaction affects profit or loss.
98
FINANCIAL REPORT
When a hedging instrument expires, it is sold. When the hedging no
longer meets the conditions for a hedge accounting, any cumulative
profit or loss arising from the hedging instrument is acknowledged separately, directly in other comprehensive income and accumulates in
equity until the announced transaction is acknowledged in profit or loss.
If it is no longer expected that the announced transaction shall occur,
the related cumulative profit or loss that was acknowledged directly in
other comprehensive income, is immediately transferred to the income
statement.
Loans are valued at settlement value taking into consideration the
applicable interest rates.
At the end of each financial year, the Company reviews the need for
impairment of long-term financial investments. If there is evidence for
an impairment of financial investments, the financial investment needs
to be revaluated due to impairment. Impairment of investment in a
subsidiary equals the amount by which the book value of the investment exceeds the recoverable value of the investment.
The recoverable value is:
• a fair value less the sale costs, or
• a value in use (the current value of estimated surplus of future revenues over expenditure, which is expected to occur in the continuing
use of the asset and from its disposal at the end of its useful life),
depending on which of the later is higher.
e.) Receivables
Upon just expectation that receivables shall be paid, all receivables are
recorded at the outset in the amount that proceed from the pertinent
documentation.
Those receivables for which it is presumed that settlement shall not be
accomplished in due time or in the entire amount, are listed as doubtful
receivables. Furthermore, if legal proceedings have been instigated in
relation to their collection, they are shown as disputed receivables.
The value adjustment of receivables is performed on the basis of the
evaluation of recoverability of individual receivable. When the write–
off of receivable is justified by a corresponding document, it is charged
against such established value adjustment of receivables. Subsequent
increases in receivables increase operating (other) revenues or financial
revenues, while the reductions increase (other) expenses.
Once a year, before the completion of the annual financial statement,
the Company reviews receivables.
For the accounts receivables which remained unpaid on due date,
adjustments are made to their value chargeable to revaluated operating expenses, namely according to the following rules:
• at the end of the financial year a value adjustment is made to receivables of small values which remain unpaid within 60 days after the
due date. If they remain unpaid, such receivables are removed from
the books after three years. Receivables of smaller values are those,
whose value is lower than the court fee charged for proposal and
decision on execution pursuant to the Court Fees Act,
• value adjustment is made to other receivables of higher values on the
individual basis as to the (payment assessment of) receivable,
• immediately after the proceedings have been instigated value
adjustment is made for the entire value of receivables for which execution, compulsory settlement or bankruptcy proceedings have been
instigated.
Deferred tax assets are acknowledged for amounts of corporate income
tax, which shall be recoverable in future periods, and which are a result
of deductible temporary differences, and unused tax losses and unused
tax credits brought forward to future periods. They are acknowledged
only when it is probable that taxable profits shall be available against
which deductible temporary differences, unused tax losses and tax credits may be utilized and are not discounted.
f.) Inventories
A purchase of material is recorded as inventories and is valued at its
procurement value, which comprises of other accompanying costs. The
inventories of materials are valued pursuant to the moving average
price method.
The use of material is valued according to the moving average prices in
the period of use.
At the end of the financial year, the value of inventories is reviewed
that does not exceed the value calculated according to the most recent
procurement prices. The last procurement price is the price of an item of
material purchased in the last quarter of the financial year.
Inventories are revaluated due to impairment if their book value significantly exceeds their net realizable value.
g.) Short-term financial investments
Upon initial acknowledgement short-term financial investments are
valued at their fair value. Short-term financial investments relate to
loans and, upon initial acknowledgement, these loans are valued at settlement value applying the effective interest method.
h.) Cash and cash equivalents
Upon initial acknowledgement, an item of cash is recorded in an amount
that proceeds from the pertinent documentation, after examining that
it has such a nature. Cash and cash equivalents consist of deposits up to
three months held at banks, cash in hand and cash for specific purposes.
FINANCIAL REPORT
99
In compliance with legal regulations, collective agreement and internal
rules the Company is required to pay jubilee awards to its employees
and severance payments upon their retirement. The long-term provisions are created for that purpose. There are no other pension liabilities.
The value of long-term provision is the present value of the expenses
required for settling the long-term liabilities identified as at the balance
sheet date, taking into consideration the risks and uncertainties.
Article 120 of the Energy Act (EA-1 Official Gazette 17/2014) sets forth
as follows:
(1) The electricity system operator shall identify deviations from the
regulatory framework for particular years shown as a surplus or
deficit from network charges and shall disclose the established deviations in the notes to the accounts.
(2) A surplus of regulated annual revenue over the actual annual
eligible costs of the electricity system operator shall be deemed
the surplus from network charges. It shall be disclosed as the
surplus of the total annual amount of the charged network charges
(minus the deficit from the network charges from the previous
years, or plus the surplus from network charges from the previous
years) plus the amount of other annual revenue from electricity
system operator activity over the amount of actual annual eligible
costs.
(3) The electricity system operator shall use the network charges surplus as the payment for the electricity system operator service of
general economic interest for the following year or years; therefore,
the surplus of the network charges shall be disclosed as overpaid
amounts in the year of the regulatory period in which the surplus
is established. In setting the network charges for the subsequent
regulatory period, the Agency shall take the surplus from network
charges into account as network charges already charged in previous periods.
l.) Long-term accrued costs and deferred revenues
The Company acknowledges long-term accrued costs and deferred
revenues for long-term deferred revenues in the event the latter shall
cover the estimated expenses in a period longer than one year.
Considering the foregoing, ELES in 2010 decreased (deferred) revenues
from the cross-border transmission capacities (CBTC) allocated at auctions (the surplus of network charges) and recorded the latter under
long-term accrued costs and deferred revenues.
m.) Liabilities
Long-term liabilities are separated into the financial and operating liabilities. Long-term and short-term liabilities are measured at settlement
cost using the effective interest method.
Operating revenues are revenues from sales and other revenue associated with products and services. Capitalized own services represent services for the Company’s own investments which ELES performed by itself,
instead of an external contractor. Other operating revenues consist of
revenues from the reversal of provisions and revenues from the sales of
fixed assets, or revaluated operating revenues arising from the disposal
of tangible fixed assets and intangible assets as surpluses of sales value
over their book value.
i.) Short-term accrued and deferred items
Short-term deferred costs and accrued revenues include costs deferred
in short-term and accrued revenues, while the short-term accrued costs
and deferred revenues include short-term accrued costs and revenues
deferred in short-term.
j.) Equity
The Company’s equity comprises share capital, capital reserves, which
are created on the basis of general equity revaluation adjustment, profit
reserves, revaluation surplus and net profit or loss recorded in 2014.
k.) Provisions
Provisions are acknowledged when the Company has legal or indirect
obligations arising from past events, and which may be valued reliably
and it is probable that an outflow of sources, which enable economic
benefits, shall be necessary when the liability is settled.
The fair value of debts is reviewed at least once a year. Accrued interests
of long-term debts, intended for investments are recorded pursuant to
the provisions of the SAS so that the interests on the loan during construction is attributed to the investment in progress.
Liabilities for deferred tax are acknowledged when the assets are revaluated, while no adjustments are made in the calculation of corporate
income tax. Should the revaluation surplus from the revaluation
increase, the calculated liability for deferred tax is recorded directly
against the revaluation surplus and does not affect the profit or loss of
the Company. Deferred tax liabilities are not discounted.
n.) Acknowledgement of revenues
Revenues are acknowledged when an increase in economic benefits in
the accounting period is connected to an increase in assets or a reduction in debt and the increase may be measured reliably. Revenues and
increases in assets or reduction in liabilities are acknowledged simultaneously.
o.) Financial revenues
Financial revenues are revenues from investment activity. They arise
in relation to long- and short-term financial investments as well as in
connection with operating receivables. They break down into financial
revenues which do not depend on profit or loss (interests received) and
financial revenues which depend on profit or loss (dividends received).
p.) Acknowledgement of expenses
Expenses are acknowledged when the decrease in the commercial or
economic benefits during the accounting period is related to a decrease
in assets or an increase in liabilities, and when said decrease may be
measured reliably.
100 FINANCIAL REPORT
r.) Operating expenses
Operating expenses equal the accrued costs in the accounting period.
Revaluated operating expenses are acknowledged when appropriate
revaluation is carried out.
Revaluated operating expenses of intangible and tangible fixed assets
represent loss due to impairment where the recoverable value of these
assets is lower than their book value and their book value is reduced to
the recoverable value.
s.) Financial expenses
Financial expenses are expenses arising from financial investments
write-downs and write-offs, financial liabilities and operating liabilities
t.) Deferred tax formation
Deferred tax assets are recorded using the balance sheet liability
method for temporary differences arising between the tax bases of
assets and liabilities as well as their book values. Deferred tax is determined using tax rate applicable as at the balance sheet date, and which
is expected to be used when the deferred tax assets are realized or the
deferred tax liability is settled.
A deferred tax asset is acknowledged in the extent for which it is probable that the availability of future taxable profits against which the
deferred tax asset can be utilized in the future.
u.) Cash flow statement
The cash flow statement is prepared using the indirect method, Format II.
The data on the non-cash transactions are not included in the cash flow
statement. The cash and cash equivalents include cash in bank accounts
and short-term bank deposits redeemable at notice of up to 90 days.
9.3.1 Disclosure of Balance Sheet Items
INTANGIBLE ASSETS AND LONG-TERM DEFERRED COSTS AND ACCRUED REVENUES
in euros
Intangible assets
31 Dec 2014
31 Dec 2013
Long-term property rights
48,113,999
35,288,984
Total intangible assets
48,113,999
35,288,984
Long-term intangible assets include investments in acquired long-term
property rights, of which the easements (22,786,116 euros) and investment in the Golica PSHPP (7,821,425 euros) account for the largest
portion, while the software represents the remnant part. 20 percent of
material rights of the Golica PSHPP (Austria) appertain to ELES.
Until 2013 easements were a part of the transmission line construction work. In 2013, easements were transferred to intangible assets.
In 2014, a transfer of value of the easement contracts was performed,
namely from tangible fixed assets - investments in progress to intangible assets in the amount of 7,568,405 euros, namely through the
investments that have not yet been completed. As at 31 December
2014 all easements are thus recorded as intangible assets.
FINANCIAL REPORT 101
in euros
Intangible fixed assets and
long-term deferred costs and
accrued revenues
Long-term property
rights
Easements
Intangible fixed asstes
being aquired
Total
39,755,639
23,164,959
735,933
63,656,532
Increase
2,315,601
131,827
6,452,441
8,899,869
Decrease
544,746
0
0
544,746
Transfer of the investments
activation
0
0
1,141,867
1,141,867
Transfer of the entry
0
0
7,568,405
7,568,405
41,526,494
23,296,786
13,614,912
78,438,193
28,088,527
279,021
0
28,367,548
Increase
0
0
0
0
Decrease
544,746
0
0
544,746
2,269,742
231,650
0
2,501,391
29,813,523
510,671
0
30,324,194
31 Dec 2013
11,667,112
22,885,938
735,933
35,288,984
31 Dec 2014
11,712,971
22,786,116
13,614,912
48,113,999
Procurment value
31 Dec 2013
31 Dec 2014
Value adjustment
31 Dec 2013
Depreciation/amortization
31 Dec 2014
Net book value
Increase in the procurement value of property rights resulted from the
capitalised information system, namely investments into smart grids
(819,780 euros), upgrading of Maximo with the computerization of
operational processes (428,646 euros), Golica PSHPP – participation
(190,420 euros), metering measurement system (189,202 euros),
TC network for EMS (183,679 euros) and easement rights on 2x400 kV
Beričevo-Krško and 2x110 kV Beričevo-Trbovlje transmission lines
(131,827 euros) and other software capitalisation (software packages).
The decrease in the procurement value and the adjustments of property rights arose from the write-offs of software.
Increase in intangible assets under construction or in production arose
from an increase in the value of the software and easement rights from
investments not yet completed, while the decrease was a result of the
capitalisation of the software and easement rights.
TANGIBLE FIXED ASSETS
Tangible fixed assets
in euros
31 Dec 2014
31 Dec 2013
14,909,472
14,633,772
Buildings
185,408,442
182,139,305
Equipment and spare parts
193,693,918
196,332,379
Other tangible fixed assets
76,235
93,887
25,241,981
28,722,329
2,433,152
2,148,721
421,763,200
424,070,393
Land
Tangible assets under construction or in production
Advances for acquisition of fixed assets
Total tangible fixed assets
102 FINANCIAL REPORT
Changes in the value of tangible fixed assets
in euros
Other
tanglible
fixed assets
Tanglible
fixed assets
under construction or
in production
Advances for
acquisition
of fixed
assets
TOTAL
Land
Buildings
Equipment
and spare
parts
14,633,772
413,677,393
507,724,781
1,106,045
28,722,329
2,148,721
968,013,040
Increase:
275,700
30,760,297
16,799,651
50,996
38,438,665
803,969
87,129,278
direct increase
275,700
12,124,828
16,322,666
50,996
38,438,665
803,969
68,016,823
Tanglible fixed assets
Procurment value
31 Dec 2013
transfer of the entry
0
18,635,469
476,986
0
0
0
19,112,455
Decrease:
0
22,515,073
11,459,640
46,514
41,919,013
519,537
76,459,777
direct decrease
0
3,558,180
11,304,078
46,514
257,155
519,537
15,685,464
transfer of the investments activation
0
0
0
0
34,093,453
0
34,093,453
transfer of the entry
0
18,956,893
155,562
0
7,568,405
0
26,680,860
14,909,472
421,922,617
513,064,792
1,110,527
25,241,981
2,433,152
978,682,541
31 Dec 2014
Value adjustment
31 Dec 2013
0
231,538,088
311,392,402
1,012,158
0
0
543,942,648
Increase:
0
13,831,739
471,028
0
0
0
14,302,767
direct increase
0
0
0
0
0
0
0
transfer of the entry
0
13,831,739
471,028
0
0
0
14,302,767
Decrease:
0
16,857,695
11,205,808
46,388
0
0
28,109,891
direct decrease
0
2,704,532
11,056,203
46,388
0
0
13,807,124
transfer of the entry
0
14,153,163
149,605
0
0
0
14,302,767
Depreciation/amortization
0
8,002,043
18,713,252
68,522
0
0
26,783,817
31 Dec 2014
0
236,514,175
319,370,874
1,034,292
0
0
556,919,341
31 Dec 2013
14,633,772
182,139,305
196,332,379
93,887
28,722,329
2,148,721
424,070,392
31 Dec 2014
14,909,472
185,408,442
193,693,918
76,235
25,241,981
2,433,152
421,763,200
Net book value
Tangible fixed assets comprise land, buildings, equipment and small
inventories, spare parts, assets under construction or in production and
advances.
In 2014, a transfer of value of the easement contracts was performed,
namely from tangible fixed assets - investments in progress to intangible assets in the amount of 7,568,405 euros, namely through the
investments that have not yet been completed. After the transfer of
entry all easements are thus recorded as intangible assets. Other
transfers of entry refer to fixed assets which have been divided from one
larger fixed asset into several component parts.
The actual increase in the procurement value arises mainly from the
capitalisation of new investments and reconstructions of transmission
lines and substations.
Buildings
The following most important capitalisations of buildings influenced on
the increase in the procurement value of the buildings:
• 2x400 kV Beričevo-Krško (3,413,077 euros), 2x110 kV Dravograd-Ravne I + II + OPGW (405,725 euros), 2x110 kV Krško-Hudo transmission lines, rise of 8-11 bays (239,586 euros), 2x110 kV
Črnuče-Kleče, reconnection of Črnuče substation to another system
at 25 bay (204,529 euros), etc.;
• substations: Okroglo substation (339,229 euros), Beričevo substation
(306,314 euros);
• elimination of the consequences of natural disaster in 2014
(4.756.685 euros), the implementation of Article 35 of the EZ-1
on the 110 kV network (680,231 euros), anticorrosion protection
(384,332 euros) and suchlike.
The decrease in the procurement value and value adjustment resulted
from the write-downs due to capitalisation of the upgraded fixed assets
(reconstructions of transmission lines, natural disaster, buildings, bays, etc.).
FINANCIAL REPORT 103
Equipment
The increase in the procurement value of primary and secondary equipment and spare parts were mainly influenced by the increase in the
2x400 kV Beričevo-Krško (909,135 euros), Podlog substation (699,033
euros), Beričevo substation (491,039 euros), Okroglo substation
(407,595 euros) and elimination of consequences of the natural disaster in 2014 (4.023.689 euros), implementation of Article 35 of EZ-1 on
the 110 kV network (736,271 euros) and other capitalisations.
The decrease in the procurement value of the equipment and value
adjustment resulted from the write-offs upon the capitalisation of upgraded
fixed assets (TC software components, high-voltage equipment, power
transformer, computer equipment, etc.) as well as inventory write-offs.
Write-offs from the natural disaster (ice/sleet) that affected transmission lines in 2014 amounted to 6,824,170 euros at the procurement
value of the transmission lines, and to 5,818,144 euros after the revaluation adjustment or to 1,006,026 euros at the present value.
Arising from the acquisition of intangible and tangible fixed assets,
ELES – as at 31 December 2014 – recorded contractual obligations in
the years ahead in the amount of 28,371,096 euros from the already
signed contracts on investments and reconstructions, which remained
partly unexecuted.
Receivables for advances given for fixed assets are primarily secured
with bank guarantees.
Fixed assets of the Company are free of any encumbrances.
Increase in intangible and tangible fixed assets in 2014
in euros
New investments in 2014 financial year
40,877,404
Decrease with write-offs
-1,358,803
Advances for tangible fixed assets
284,431
Depreciation/amortisation in the financial year
-29,285,209
Total increase in long-term intangible and tangible fixed assets
10,517,823
The carrying value of intangible assets and tangible fixed assets recorded as at 31 December 2014 increased by 10,517,823 euros in comparison
with the balance as at 31 December 2013.
LONG-TERM FINANCIAL INVESTMENTS
Long-term financial investments
1.
2.
Stakes and shares in the Group
Decrease
31.12.2013
79,024,063
8,392,828
0
70,631,236
8,392,828
78,519,174
Trgel, d.o.o.
100.0
9,870
9,870
Stelkom, d.o.o.
56.26
495,020
495,020
50,000
Stakes and shares in affiliated companies
25.0
50.0
0
0
50,000
0
0
400,000
50,000
400,000
1,246,198
Other long-term investments
70,126,346
50,000
400,000
Joint ventrue
400,000
249,171
34,413
1,031,440
Allocation office (CAO)
12.5
62,500
62,500
Allocation office CASC
8.33
285,000
285,000
Allocation office (CAO SEE)
10.0
27,808
27,808
Allocation office (TSC NET)
8.33
137,500
Holiday facilities
Informatika d.d.
Shares in banks and insurance companies
5.
Increase
84.71
BSP SouthPool
4.
31.12.2014
Talum, d.d.
ELDOM, d.o.o.
3.
in euros
Ownership
stake (in %)
4.5
137,500
0
66,365
66,365
90,008
90,008
577,017
111,671
34,413
499,759
Long-term loans given to companies in the Group
11,447,662
0
7,681,854
19,129,516
Long-term loan (Talum)
11,447,662
7,681,854
19,129,516
Total long-term financial investments
92,167,923
7,716,267
91,242,192
8,641,999
104 FINANCIAL REPORT
Shares and stakes in the companies in the Group
• Talum d.d.
The investment in Talum accounts for the largest portion of the
investments. ELES holds an 84.71 percent ownership stake in the
company Talum. Shares are not listed on the stock exchange. As at
31 December 2014 the value of said investment in ELES amounted to
78,519,174 euros. In 2014, recapitalisation of Talum was performed
in the amount of 8,392,828 euros and ELES’ share thus increased
from 83.44 percent ownership stake to 84.71 percent ownership
stake.
Pursuant to the SAS 3.25 it is necessary to assess on cut-off date
of the balance sheet whether there is an objective evidence of any
eventual impairment of financial investments. Should any such evidence exist, the financial investment needs to be revaluated due to
impairment. The impairment of investment in the subsidiary equals
the amount by which the book value of the investment exceeds the
recoverable amount of the investment.
For the purpose of determining the recoverable amount of the investment fair value was appraised for financial reporting purposes; impairment test of the financial investment. The appraisal was performed
by a certified appraiser of companies’ value and was performed in
accordance with the SAS 3.25. and in accordance with the IAS 36
(related to IAS 27 and IAS 39). Basis for the cash flow projections are
based on plans of the company Talum d.d..
The results of the appraisal show that the value of the investment
of ELES is lower in all the evaluation methods applied, namely: the
present value of future cash flows, value in use, the net asset value
at the closure of operations and net asset value in the conservation
of activities.
Since the total value of the ELES’ investment (investment together
with long-term loan) with an ownership share of 84.71 percent of
the Talum’s equity is lower than the estimated recoverable amounts,
impairment of assets is not required.
The value of guarantees from electricity, which are recorded on longterm loans in the amount of 11,447,662 euros, represents a part of
the long-term financial investments. A part of this value arises from
the discounted value of guarantees for future payments of electricity
in the amount of 7,847,647 euros as apparent from Item 7 of the
Decision of the ELES’ General Meeting No.: 4-28/2012-226 of 28 November 2012, which was adopted by CAMA on behalf of the founder
of ELES, i.e. the Government of the RS, while a part of the already
called upon guarantees in the amount of 3,600,015 euros. A debt
equity swap is envisaged for the aforementioned amounts.
Unrealised guarantees are recorded on the basis of the solution
from IAS 39. ELES discounted future liabilities with an interest rate
amounting to 3.43 percent.
• TSCNET Services GMBH I.G.:
In 2014, ELES paid 8.33 percent interest in the amount of 137,500
euros in the company, which was founded by the system operators in
Central Europe for strengthening the security of the entire transmission system.
• Stelkom, d.o.o.:
Since 2013 ELES holds a majority 56.26-percent stake in Stelkom
d.o.o.. As at 31 December 2014 the total value of ELES’ investment
amounted to 495,020 euros.
• Družba Trgel, d.o.o. is dormant. ELES holds a 100-percent stake. ELES
intends to regularly liquidate the company Trgel d.o.o..
DATA ON SUBSIDIARIES, AFFILIATED COMPANY AND JOINTLY-CONTROLLED COMPANY
1.
Trgel, d.o.o., Hajdrihova 2, Ljubljana
Stelkom, d.o.o. , Špruha 1, Trzin
ELES'
investment
Ownership
stake (in %)
105,351,202
-4,560,748
78,519,174
84.71
12,169
-156
9,870
100.0
2,233,667
9,161
495,020
56.26
1,581,098
559,541
400,000
50.00
256,301
47,125
50,000
25.00
Jointly-controlled company
BSP - Regionalna energetska borza, Dunajska c.156, Ljubljana
3.
2014 profit
or loss
Subsidiaries
Skupina Talum, d.d., Kidričevo , Tovarniška cesta 10
2.
in euros
Equity
2014
Affiliated company
ELDOM, d.o.o., Vetrinjska 2, Maribor
Taking into consideration the available data on the operations of subsidiaries, affiliated company and jointly-controlled company for 2014, ELES
estimates that for each individual investment there are no signs which would require impairment of the investments.
FINANCIAL REPORT 105
Shares and stakes other companies
in euros
Shares in banks and insurance companies
31 Dec 2013
Increase
Decrease
31.12.2014
1.
Shares in Banka Celje
34,413
0
-34,413
0
2.
Shares in Banka Koper
4,103
0
0
4,103
3.
Shares in Triglav Insurance Company
461,244
111,671
0
572,914
Total shares in banks and insurance companies
499,760
111,671
-34,413
577,017
Following the decision of the Bank of Slovenia on emergency measures,
ELES wrote-off and eliminated from the accounting records 290 ordinary share of Banka Celje in the amount of 34,413 euros.
The value of shares of Triglav Insurance Company increased by 111.671
euros (taking into consideration the quoted share price as at 31 December 2014), which was recorded through equity in the revaluation surplus.
LONG-TERM OPERATING RECEIVABLES
in euros
Long-term operating receivables
31 Dec 2013
Decrease
Increase
31 Dec 2014
Receivables for sold apartments
3,084
3,084
0
0
Value adjustment of receivables
925
925
0
0
1,856,861
1,648,870
0
207,991
122,885
122,885
0
0
Receivables for dividends (Talum, d.d.)
2,651,650
2,651,650
0
0
Total long-term operating receivables
4.633.555
4.425.564
0
207.991
Guarantees given for investments, judicial deposits
Receivables for reimbursement of overpaid charges for the use of construction land
Long-term receivables for sold apartments arose from housing loans to
employees and were transferred to short-term receivables, since they
will be repaid in 2015.
Unpaid dividends of the company Talum from 2007 were transferred to
short-term receivables. Following the decision of the General Meeting
these dividends will be paid by 30 June 2015.
The remaining securities for investment into Beričevo-Krško were also transferred to the short-term receivables, because the investment is completed.
DEFERRED TAX ASSETS
in euros
Derivative
financial
instruments
Jubilee awards
and severance
payments upon
retirement
Revaluation
of financial
investments
and receivables
Unused
investment
allowance
Total
765,559
404,815
677,294
1,945,133
3,792,801
In debit (credit) of profit or loss
0
43,124
-21,484
-767,340
-745,700
acknowledged receivables for deferred tax
0
67,655
0
0
67,655
reversal of receivalbe for deferred tax
0
-24,531
-21,484
-767,340
-813,355
change due to change in tax rate
0
0
0
0
0
In debit (credit) of equity
284,539
22,211
0
0
306,750
acknowledged receivables for deferred tax
284,539
22,211
0
0
306,750
reversal of receivalbe for deferred tax
0
0
0
0
0
change due to change in tax rate
0
0
0
0
0
1,050,098
470,150
655,810
1,177,793
3,353,851
Deferred taxes
Opening balance as at 1 Jan 2014
Closing balance as at 31 Dec 2014
In 2014, the largest increase was recorded in deferred tax assets arising
from derivative financial instruments, namely as a result of an increase
in negative surplus from revaluation in accordance with their fair value
as at 31 December 2014.
Deferred tax assets arising from undrawn allowances have been
reduced due to the decrease in the value of undrawn allowances.
Deferred tax assets are formed at 17 percent tax rate.
106 FINANCIAL REPORT
INVENTORIES
Inventories
Materials
Small inventories
Total inventories
The Company records the inventory of the material intended for the
maintenance of fixed assets and small inventories. The Company estimates that the book value of inventories is at least equal to the amount
of their net realizable value. ELES has no inventories pledged.
in euros
31 Dec 2013
Increase
Decrease
31 Dec 2014
2,496,087
0
26,420
2,469,667
53,374
0
13,166
40,207
2,549,461
0
39,586
2,509,875
At the regular annual inventorying material in the amount of 22,060
euros was written off due to the unserviceableness. Surplus of material
in the amount of 698 euros was identified.
SHORT-TERM FINANCIAL INVESTMENTS
in euros
Short-term financial investments
31 Dec 2014
31 Dec 2013
1. Short-term deposits held at banks
23,000,000
8,000,000
Total short-term financial investments
23,000,000
8,000,000
Short-term financial investments are primarily comprised of deposits held at banks over 91 days at an interest rate of 0.51 percent to 0.65 percent
per annum.
SHORT-TERM OPERATING RECEIVABLES
in euros
Short-term operating receivables
1. Short-term operating receivables due by companies in the Group
2. Short-term accounts receivables
3. Receivables arising from the overpaid income tax
Total short-term operating receivables
Short-term receivables due by the companies in the Group are the
receivables arising from the operations with electricity. Short-term
accounts receivables represent the receivables from the operations with
31 Dec 2014
31 Dec 2013
3,792,069
1,163,688
22,615,953
20,329,394
4,842,326
8,398,725
31,250,348
29,891,807
electricity on the domestic and foreign markets. Other short-term receivables are mostly receivables for input VAT.
in euros
Gross
value
Revaluation
adjustments
Net value
31 Dec 2014
3,792,069
0
3,792,069
2. Receivables from use of transmmission network at home
19,452,125
-1,943,554
17,508,571
3. Receivables from use of transmmission network abroad
6,247,801
0
6,247,801
29,491,995
-1,943,554
27,548,441
Short-term accounts receivables
1. Companies in the Group
Total short-term accounts receivables
in euros
Revaluation adjustment of accounts receivables
Opening balance as at 1 January
Revaluation adjustment in financial year
Settlement of receivables, final write-off of receivables
Closing balance as at 31 Dec
2014
2013
2,184,748
2,194,714
75
6,875
241,269
16,841
1,943,554
2,184,748
FINANCIAL REPORT 107
in euros
Gross
value
Revaluation
adjustments
Net value
31 Dec 2014
237,857
0
237,857
2,987,813
0
2,987,813
42,167
0
42,167
Receivables arising from the overpaid income tax
104,911
0
104,911
Other receivables
555,970
0
555,970
Advance payments associated with current assets
913,607
0
913,607
4,842,326
0
4,842,326
31 Dec 2014
Secured
Unsecured
3,792,069
680,698
3,111,371
2. Receivables from the use of transmmission network at home
17,508,571
10,226,932
7,281,639
3. Receivables from the use of transmmission network abroad
6,247,801
0
6,247,801
27,548,441
10,907,630
16,640,811
100.00%
39.59%
60.41%
Short-term operating receivables due by others
Receivables for interests
Receivables for input VAT
Reimbursement for contributions on salaries
Total short-term operating receivables due by others
in euros
Short-term accounts receivables
1. Companies in the Group
Total short-term accounts receivables
Portion of secured receivables
The Company has 39.59 percent of receivables secured. Out of 60.41
percent of the unsecured receivables the majority appertains to the
receivables arising from the use of network abroad, while the lower
portion appertains to the receivables arising from the domestic use
of network. The Company has secured receivables from the use of the
transmission network (network charge) with blank bills of exchange.
Receivables arising from the allocated cross-border capacities, sold
at daily and weekly auctions, are covered by the advance deposits on
deposit accounts, while the rights sold at monthly auctions are paid with
advances. Based on experience from the preceding years, the individual
groups of receivables that were not secured were collected and paid.
As at 31 December 2014 ELES recorded 7.30 percent or 2,011,021
euros of receivables due. Receivables are not pledged.
CASH AND CASH EQUIVALENTS
in euros
Cash and cash equivalents
31 Dec 2014
31 Dec 2013
0
0
Bank balance of bank account
478,656
665,497
Deposits redeemable at notice
23,091,328
22,476,444
0
79,428
23,569,984
23,221,369
Cash in hand
Cash for specific purposes
Total cash and cash equivalents
Deposits redeemable at notice represent the majority of cash and cash
equivalents. The interest rate of deposits redeemable at notice range
from 0.10 percent to 0.25 percent.
In 2014, ELES had no agreed bank overdraft on its transaction account
at the bank. As at 31 December 2014 ELES had no obligations arising
from the aforementioned.
SHORT-TERM DEFERRED COSTS AND ACCRUED REVENUES
Deferred costs (expenses) and accrued revenues
Short-term deferred costs
VAT arising from received advances
Short-term accrued revenues
Total deferred costs and accrued revenues
in euros
31 Dec 2013
Increase
Decrease
31 Dec 2014
237,117
0
19,983
217,133
8,587
0
8,587
0
984,404
9,181,747
0
10,166,151
1,230,107
9,181,747
28,570
10,383,284
Short-term deferred costs and accrued revenues increased by receivables from short-term accrued revenues for the connected load for Avče PSHPP-Soške elektarne in the amount of 8,500,764 euros.
108 FINANCIAL REPORT
EQUITY
in euros
Equity
31 Dec 2013
Increase
Decrease
31 Dec 2014
Share capital
177,469,516
0
0
177,469,516
Capital reserves
156,936,162
0
0
156,936,162
Revenue reserves
42,756,327
561,464
0
43,317,791
Revaluation adjustment surplus
-3,436,225
0
1,535,635
-4,971,860
Retained earnings
9,062,990
0
9,062,990
0
0
9,573,354
0
9,573,354
382,788,770
10,134,818
10,598,625
382,324,963
Net profit (or loss) the financial year
Total equity
As at 31 December 2014, the equity amounted to 382,324,963 euros.
The equity increased by:
• legal reserves in the amount of 5 percent of profits in 2014, i.e.
561,463 euros;
• opening balance of the net profit of the previous year was adjusted-corrected to 1,094,443 euros for the value of unused annual leave
employees as at 31 December 2013, which is explained in the correction of error from previous periods;
• profit in 2014 amounted to 11,229,261 euros, which is reduced by
the aforementioned 5 percent statutory reserves and error correction.
• accumulated profit in 2014 amounted 9,573,355 euros.
Capital or undistributed profit in 2013 decreased by Decision of the
Assembly of the Republic of Slovenia for the distribution of profits to the
owner in the amount of 9,062,990 euros.
Change in revaluation surplus arose from:
• the reduction in the revaluation surplus in the amount of 1,389,222
euros from derivative financial instruments (interest rate swap and
interest rate collar) to hedge against the variability in cash flows due
to changes in interest rates of the long-term loan (EIB). The valuation
was carried out on the basis of performed evaluations of the value as
at 31 December 2014;
• the increase in the value of shares of Triglav Insurance Company in
the amount of 111.671 euros taking into consideration the surplus
adjustment from revaluation of deferred tax.
• the reduction in the revaluation surplus arising from the actuarial
deficit in the amount of 239,100 euros by taking into account
deferred tax assets.
in euros
Revaluation surplus
31 Dec 2013
Changes
31 Dec 2014
Revaluation surplus of long-term financial investments
-3,381,592
-1,277,552
-4,659,144
Revaluation surplus of long-term financial investments
356,131
111,670
467,801
-3,737,723
-1,389,222
-5,126,945
0
-239,100
-239,100
Value adjustment of revaluation surpluses for deferred tax
-54,633
-18,983
-73,616
Value adjustment of revaluation surpluses for deferred tax
-54,633
-18,983
-73,616
-3,436,225
-1,535,635
-4,971,860
Derivative financial instruments
Actuarial deficit
Total
Profit/loss account, recorded based on consumer price index
Equity as at 1 Jan 2014
Distribution of profit to the owner
Base for revaluation
in euros
381,694,327
9,062,990
372,631,337
Revaluation:
0.2 % increase in consumer prices
Net profit (or loss) after revaluation
-760,368
11,989,629
FINANCIAL REPORT 109
PROVISIONS AND LONG-TERM ACCRUED COSTS AND DEFERRED REVENUES
Provisions and long-term accrued costs and deferred revenues
in euros
31 Dec 2013
Increase
Decrease
31 Dec 2014
1. Provisions for pensions and similar liabilities
3,932,626
999,348
120,611
4,811,363
Provisions for severance payments
2,826,333
747,685
15,973
3,558,045
Provisions for jubilee awards
1,106,292
251,663
104,638
1,253,317
2. Other provisions
1,870,974
147,087
134,808
1,883,253
Provisions for eventual liabilities arising from claims (lawsuits)
1,870,974
147,087
134,808
1,883,253
126,582,725
41,795,312
1,583,753
166,794,284
Long-term deferred revenues from CBTC - for investments
54,513,921
2,428,292
1,344,687
55,597,526
Long-term deferred revenues from CBTC - for tariffs
70,351,931
26,084,491
0
96,436,422
0
6,967,840
0
6,967,840
1,716,873
6,314,689
239,066
7,792,496
132,386,325
42,941,747
1,839,172
173,488,900
3. Long-term accrued costs and deferred revenues
Long-term deferred revenues from - commitment twd SENG network
Other accrued costs and deferred revenues
Total provisions and long-term accrued costs and deferred revenues
Provisions for jubilee awards amounted to 1,106,293 euros (31 December 2013), and 1,253,318 euros (31 December 2014).
1.Provisions for pensions and similar liabilities
Provisions for severance payments upon retirement decreased by their
use and increased by the provisions pursuant to actuarial calculation.
The provisions for jubilee awards increased on the basis of actuarial calculation and decreased by the payments.
Provisions amount to estimated future payments for severance payments and jubilee awards discounted at the balance sheet date. The calculation was made for every employee by taking into account the cost of
severance payments upon retirement and the cost of all expected jubilee awards until retirement. The discount rate amounts to 2.15 percent
per annum. To the extent that the discount rate fell by 0.5 percent, the
provisions for severance payments would increase by 194,531 euros and
the provisions for jubilee awards by 54,411 euros. To the extent that the
discount rate increased by 0.5 percent, the provisions for severance pay
would decrease by 178,295 euros and the provisions for jubilee awards
by 50,532 euros. Future long-term wage growth is set at 2 percent per
year. To the extent that future wage growth increased by 0.5 percent per
year, the provisions for severance payments would increase by 201,326
euros, while the provisions for jubilee benefits would remain unchanged.
To the extent that future wage growth decreased by 0.5 percent, the
provisions for severance payments would decrease by 186,207 euros,
while the provisions for jubilee benefits would remain unchanged. The
calculation uses projections prepared by a certified actuary.
Estimated cash flows from expected payments of jubilee awards in
2015 amount to 117,555 euros and from the expected severance payments upon retirement in 2015 351,607 euros.
2.Other provisions
Provisions for potential liabilities for claims (lawsuits) rose by new claims
in the amount of 147,087 euros and decreased by settled claims in the
amount of 134,808 euros.
3.Long-term accrued costs and deferred revenues
In 2014, long-term accrued costs and deferred revenues:
• increased by the EU funds received for the TEN-E for investment in
the 2x400kV Beričevo-Krško in the amount of 3,616,611 euros and
decreased by amortisation/depreciation in the amount of 85,352
euros;
• increased by the free-of-charge assets obtained for the Dekani
switchyard in the amount of 2,698,079 euros (and decreased by
amortisation/depreciation), which ELES obtained free-of-charge from
the Slovenian railways;
• increased by the assets appropriated for connected load of the Avče
PSHPP in the amount of 6,967,840 euros, which shall be used for the
purchase of switchyard (provision of the EA-1);
• increased by the long-term deferred revenues from cross-border
transmission capacities (CBTC) which shall be used to finance investments in cross-border capacities and/or to cover future costs, if so set
forth by the AGEN-RS with the tariffs for the next regulatory period.
In 2014, they were newly created in the amount 28,332,781 euros in
accordance with Article 120 of the Energy Act;
• decreased by 1,164,687 euros of accrued amortisation/depreciation
of capitalised fixed assets, which were financed from revenues from
cross-border transmission capacities.
3 a. Regulatory framework
Pursuant to the Act determining the methodology for charging for the
network charge, the methodology for setting the network charge, and
the criteria for establishing eligible costs for electricity networks (Official Gazette of RS, Nos.: 81/2012 112/2013, henceforth referred to as
the Act), the Energy Agency of the Republic of Slovenia (AGEN-RS) set
forth a regulatory framework for the 2013-2015 regulatory period. The
regulatory framework is a value determination of the planned eligible
costs (which include the costs of equity in the form of a regulated return
on assets), planned revenues from network charge and other sources of
financing as per individual year of the regulatory period as well as surpluses or deficits arising from network charge from the preceding years.
110 FINANCIAL REPORT
The AGEN-RS supervises the implementation of the regulatory framework. In the context of supervision, the transmission system operator
(ELES) is obliged to identify deviations from the regulatory framework
for each financial year. Such deviations reflect in the surplus or deficit of
the network charge.
Deviations from the regulatory framework are established as follows:
1.between the actual and planned sources for covering eligible costs,
namely for:
a) network charge, and
b) other revenues;
2 between the actual and planned eligible costs, namely for
a) controlled costs of operation and maintenance,
b) uncontrolled costs of operation and maintenance,
c) costs of electricity for covering losses,
d) depreciation/amortisation costs,
e) costs of ancillary services, and
f) regulated return on assets.
The actual eligible costs and actually realized sources for covering
eligible costs are established on the basis of implementing criteria and
parameters as set forth in Appendix 1 of the Act.
Surplus (or deficit) is determined by way of deducting the actual eligible
costs, referred to in Item 2 of the preceding paragraph, from the actual
sources for covering eligible costs, referred to in Item 1 of the preceding
paragraph. In calculating the surplus (deficit), the deviations between the
actual and planned costs are deducted from the deviations between the
actual and planned sources for covering eligible costs, whereat the planned
surplus/deficit of network charge in the regulatory period or balancing of
network charge in the regulatory period and surpluses from the preceding
years as sources for covering costs need to be taken into consideration.
in euros
YEAR 2014
1.
Eligible costs of TSO (from 1.1. to 1.6)
Planned RF
Actual
Deviations from RF
1
2
3=2-1
140,901,482
129,169,908
-11,731,574
30,968,216
31,317,587
349,371
1,479,397
2,934,294
1,454,897
1
Controlled operation and maintenance costs
2
Uncontrolled operation and maintenance costs
3
Costs of electricity for network losses
17,567,259
14,687,821
-2,879,438
4
Depreciation/amortisation
27,412,892
28,873,169
1,460,277
5
regulated return on assets
26,373,718
18,753,958
-7,619,760
6
Costs of ancillary services
37,100,000
32,603,079
-4,496,921
145,216,771
153,452,178
26,097,009
58,724,581
30,979,224
2.
Sources for covering eligible costs (2.1-2.2+2.3)
1
Other revenues
27,745,357
2
Surplus of network charge from the 2010-2011 period*
-17,861,602
3
Network charge (1-2.1+2.2-3), of which:
99,609,812
94,727,597
-4,882,215
- network charge for the transmission network
63,578,063
58,676,544
-4,901,519
- network charge for ancillary services
36,031,749
36,051,053
19,304
4,315,289
24,282,270
37,828,583
3.
Surplus / deficit of network charge (balancing) (2-1)
3a.
Planned surplus / deficit of network charge (balancing)
0
4,315,289
-17,861,602
3b.
Surplus / deficit of network charge save for interests
4.
Interests
5.
Surplus / deficit arising from network charge (balancing) (3b + 4)
6.
Increased surplus in contrast to the surplus of 2013
7.
Surplus for the correction of tariffs (5+6)
8.
Deferred revenues for investments into CBTC
9.
Decreased deferred revenues for corrections of internal account 2013
10.
Total deferred revenues (7+8+9)
4,315,289
24,282,270
24,282,270
0
1,449,803
1,449,803
4,315,289
25,732,073
25,732,073
352,416
26,084,489
2,428,292
-180,000
28,332,781
* Note: Surplus in network charge in the 2010-2011 period is covered by ELES’ surpluses balance; hence, it was not considered when calculating the surplus of 2014.
FINANCIAL REPORT 111
in euros
TSO's eligible costs (from 1.1. to 1.6)
Surplus arising from the 2010-2011 period
Sources for covering eligible costs (2.1-2.2+2.3)
140,901,482
129,169,908
-11,731,574
153,452,178
26,097,009
17,861,602
145,216,771
37,828,583
-17,861,602
Planned surplus / deficit arising from network charge (balancing)
Surplus
Pursuant to the provisions of Article 120 of the Energy Act (Official Gazette of RS, No.: 17/2014), the surplus is regarded as an overpayment of
network charge. Surplus represents ELES’ liability to consumers of electricity. ELES thus defers revenues of the current year for the amount of
the surplus of revenues over eligible costs and records it on a long-term
accrued costs and deferred revenues. Such a method of recording was
also delivered by the Institute of Public Administration in its legal opinion.
Pursuant to the Regulation (EC) No.: 714/2009 on conditions for access
to the network for cross-border exchanges in electricity (EU Official Journal, 14 August 2009) ELES needs to defer from its net profit/loss also a
part of revenues arising from the allocated cross-border transmission
capacities (CBTC), namely the amount of revenues with which the
investments in the CBTC were financed. Pursuant to the Regulation the
revenues from the allocated CBTC need to be spent for:
a.ensuring actual availability of allocated capacity, and/or
b.maintaining and increasing the interconnection capacities through
the investments into the network, in particularly, with new interconnection transmission lines.
In the event the revenues may not be used efficiently for the aforementioned purposes, such revenues – with an approval of the AGEN-RS –
may be used as revenue, which the regulators take into consideration
when approving the methodology for charging the network tariffs and/
or setting of the network tariffs. The remnant revenues are transferred
onto a separate internal account until they may be used for the purposes set forth under the aforementioned Items a and b.
Pursuant to the provisions of the EA-1 and EC Regulation No.: 714/2009
as well as Article 85 of the Act, ELES deferred the revenues arising from
the CBTC allocated in 2014 in the amount of 28,333 thousand euros.
The said amount is deferred in the long-term to a part with which the
Company financed investments in the CBTC in 2013 (2,428 thousand
euros) and to a part with which the liabilities towards the electricity consumers or investments into the CBTC (26,084 thousand euros) shall be
covered in the forthcoming periods. Special internal account was reduced
180 thousand euros based on the correction made by AGEN-RS for 2013.
Notes to the use of revenues arising from the CBTC
Surplus of revenues arising from the CBTC shall be used in the future
regulatory years for investments into the CBTC, to reduce tariffs for net-
4,315,289
4,315,289
24,282,270
24,282,270
work charge or to cover higher regulated expenses, which shall not be
covered by the annual revenues arising from network charge.
ELES has applied the principle for determining surplus of revenues arising from the CBTC since the enforcement of Article 46 (a) of the Energy
Act in 2010. Before that the surpluses had not been recorded under the
accrued costs and deferred revenues since there was no legal basis for
any such recording. The auditing profession (the Slovenian Institute of
Auditors) delivered its opinion in relation to Article 46 (a) of the EA and
actions taken by auditors. The auditing profession believes that Article
46 (a) of EA or Article 120 of the EA-1 are contrary to the SAS, or that
a decrease in revenues recorded in the current year for the identified
surpluses over the eligible costs and the regulated return prescribed by
the regulation is inconsistent with the SAS; hence, the auditors deliver
an qualified opinion on the financial statements in accordance with the
SAS yet they do not express any opinion on the regulatory framework.
Notes to the Table below:
• Costs arising from revenues from the CBTC (seq. no.: 2) comprise the
costs of implementation of auctions and the estimated operation
and maintenance costs as well as depreciation/amortisation relating
to the CBTC. The latter were set forth by AGEN-RS and they are covered with the revenues from the CBTC, while they do not encumber
network charge or are not charged to domestic consumers.
• Revenues from the tariffs or network charge (seq. no.: 6) is the difference between the regulated amount of all costs, increased by the return, and the realized network charge revenues from liable persons in
the Republic of Slovenia, and are covered against the revenues from
CBTC in the current year.
• AGEN-RS, unlike ELES, maintains in its official records also the balance of network charge surpluses recorded prior to 2010. Pursuant
to the AGEN-RS’ records the balance of surplus as at 31 December
2009 amounted to 19,861,845 euros (seq.no. 9), while by taking into
consideration the corrections in surplus recorded in the 2006-2009
period in the amount of 1,355,042 euros, the balance of surplus
totals 18.506.803 euros. It is important to emphasise that the entire
surpluses from revenues arise from revenues from the CBTC.
• AGEN-RS included a surplus of revenues from 2010 and 2011 into the
2013-2015 regulatory framework as a source to cover eligible costs
with a regulated return and deems that the remainder of the assets is
spent, while the surplus from 2012, 2013 and 2014 remains unused.
112 FINANCIAL REPORT
Appropriation of assets arising from the CBTC revenues from 2006 to 2014
in euros
Realization
ITEM / YEAR
1. Revenues from the sale of CBTC at
auctions
2. Costs sustained from the revenus
arising from CBTC
a. costs of operation and maintenance
of CBTC
b. depreciation/amortization
3. Avilable revenues from the allocated
CBTC (1-2)
Total
20102014
2007
2008
2009
2010
2011
2012
2013
2014
12,871,421
25,203,619
32,545,017
32,953,584
28,505,212
37,117,647
61,172,903
48,325,403
50,079,119
0
1,742,528
2,813,674
3,730,993
4,602,510
5,583,261
6,854,740
25,327,706
17,040,511
1,237,793
1,123,931
2,063,203
3,603,623
4,584,374
5,855,853
18,468,777
14,043,850
504,735
1,689,743
1,667,790
998,887
998,887
998,887
6,858,929
2,996,661
25,203,619
32,545,017
32,953,584
28,505,212
37,117,647
61,172,903
12,871,421
4. Redispaching
5. Investments in cross-border
transmission capacities
a. Phase-shifting transformer station on
the Slovenia-Italy border
b. 2x400 kV Beričevo-Krško transmission
line
c. 2x400 kV Cirkovce-Pince transmission
line and 400/110 kV Cirkovce substation
d. 2x400 kV Okroglo (Slovenia)-Udine
(Italy) transmission line
e. 2x400 kV Divača-Beričevo-Podlog
transmission line (conversion from 220 kV
to 400 kV)
f. 400/110 kV Krško subtation, second TR
g. 400/110 kV Okroglo substation, phaseshifting transformer station
h. Beričevo substation - completion of
transmission line bays at 400 kV Krško I+II
i. 400/110 kV Cirkovce substation (primary
and secondary equipment)
j. 400 kV Divača-Redipuglia transmission
line
k. Beričevo substation (replacement of
high-voltage equipment)
l. 220 kV Kleče-Divača transmission line,
SM 68 - 69, SM replacement
m. 400 kV KNPP switchyard
n. 400 kV Beričevo-Divača transmission
line, replacement of temporary OPGW
Separate internal account for planned
investments into the CBTC
Internal account utilisation
Total
20062014
2006
48,325,403
50,079,119
328,773,925 225,200,284
328,773,925 225,200,284
5,040
0
37,852,962
2,884,652
6,974,301
5,980,741
31,235,090
95,445
755,976
2,505,689
6,518,907
2,224,314
2,005,218
415,149
35,555
317,400
88,016
130,436
13,588
78,939
67,657
280
31,960
49,542
136,594
2,434,820
17,530,941
29,373,735
2,248,293
105,280,443
57,568,529
34,592,200
2,505,689
11,813,316
9,131,155
1,532,859
33,640,918
22,892,479
516,954
309,172
3,817,272
4,871,737
10,086,542
9,645,571
1,468
9,117
275,755
826
447,350
287,166
25,743
28,662
19,032
55,414
518,338
342,068
1,021,497
963,514
1,585,302
195,984
2,077,283
317,208
271,808
4,633,721
0
2,862,283
0
815,547
347,876
123,324
47,279
1,776,718
961,171
154,612
1,594,292
1,765,879
1,748,904
1,996,052
1,562,629
1,874,435
881,347
187,356
0
7,582,972
28,304
7,582,972
28,304
12,180,000
12,180,000
-6,533,500
-6,533,500
-6,533,500
442,692
16,975
433,423
1,474,130
993,088
881,347
88,499
187,356
1,330,222
28,304
3,000,001
3,130,999
121,750
12,180,000
6. Revenues arising from tariffs or
network charge
6,213,554
-1,659,516
16,272,827
6,865,754
6,546,246
2,856,200
6,839,478
16,161,521
21,746,338
81,842,402
54,149,783
7. Residual assets in the current year
(3-4-6-5-8)*
6,657,867
-12,732,354
10,573,864
15,382,536
11,375,715
26,243,366
29,947,744
2,785,107
26,084,489
116,318,334
96,436,421
-6,074,487
4,499,377
19,881,913
31,257,628
57,500,994
87,448,738
8. Comulative of the residual assets
90,233,845 116,318,334
9. D ifference between the balance
recorded and bookkeeping balance
of ELES
10. Residual assets pursuant to AGENRS records
19,881,913
17,863,602
36,409,411
18,431,579
43,593,675
116,298,267
*Note: The difference between the cumulative records amounts to 20,067 euros and derives from the correction of reconciliations for the period from 2006 to 2009,
which was performed by ELES, but not the Agency.
FINANCIAL REPORT 113
LONG-TERM LIABILITIES
Long-term liabilities
Long-term financial liabilities
Long-term operating liabilities
Deferred tax liabilities
Total long-term liabilities
Long-term financial liabilities
• Liabilities from long-term loan, which ELES received in 2010 from the
European Investment Bank (EIB) in the amount of 63,000,000 euros
for financing investments. As at 31 December 2014, the balance of
long-term portion of the loan amounted to 53,210,966 euros. The
maturity of the loan is 25 years with the included two-and-a-halfyear moratorium and a 6M EURIBOR +0.35 percent interest rate. The
loan is not secured since ELES is 100 percent state-owned company;
hence, the state is subsidiary liable for the Company’s liabilities in
accordance with the Energy Act (EA).
• Liabilities arising from derivative financial instruments to hedge
against the variability in cash flows of two-thirds of long-term loan
obtained at the EIB increased by 1,898,714 euros and amounted to
6,175,855 euros. Liabilities are intended to hedge against the risk of
changes in cash flow with a variable interest rate. They are valued at
fair value and internal value of interest rate swap and interest rate
collar as the present discounted value of net cash flows (rational and
unbiased estimate of the market value of the measured instrument)
as at 31 December 2014.
• Liabilities from guarantees to subsidiary Talum in the amount of
777,647 euros result from the founder’s decision of 28 November
2012, where the founder agrees with the issue of the ELES’ guarantee for the supply of electricity to ELES’ subsidiary Talum. Since in the
present case ELES shall – pursuant to the Decision of the founder –
convert the receivable arising from the redeemed guarantees into the
in euros
31 Dec 2013
Increase
Decrease
31 Dec 2014
67,243,661
0
7,079,192
60,164,469
403,520
346,193
0
749,713
54,633
18,984
0
73,617
67,701,814
365,177
7,079,192
60,987,799
loan given and convert the latter into equity, the Company applied
the solutions of the IAS 39 for the acknowledgement of said business
event in the financial statements, and recorded the long-term liabilities in the amount of the discounted value of guarantees envisaged
for payment in the period from 1 January 2016 onwards (until then).
The off-setting entry of the liability is the increase in long-term financial investment in subsidiary Talum d.d.. The long-term financial liability from guarantees in the amount of 777,647 euros is due in 2016.
Long-term operating liabilities arise from advances received. Said
liabilities include also security for the elimination of defects within the
warranty period as well as supplier’s assets withheld pursuant to the
contracts.
The long-term deferred tax liabilities arise from the revaluation of
investment value, namely the shares of Triglav Insurance Company at
fair value. The investment is recorded under long-term investments,
available-for-sale assets. Shares are quoted on the stock exchange, so
they are revaluated at quoted market price as at 31 December 2014.
The valuation effect reflects in an increase in the revaluation surplus.
Upon an eventual sale, the revenues shall be classified as taxable
income. The revaluation surplus increased by the recorded deferred tax
assets. Deferred tax liabilities amount to 73,617 euros and compared to
last year increased in the amount of 18,984 euros.
in euros
DEFERRED TAX LIABILITIES
Opening balance as at 1 Jan 2014
In debit (credit) of profit or loss
In debit (credit) of equity
Acknowledged liabilities for deferred tax
Closing balance as at 31 Dec 2013
2014
54,634
0
18,984
0
73,617
114 FINANCIAL REPORT
SHORT-TERM LIABILITIES
Short-term liabilities
in euros
31 Dec 2014
31 Dec 2013
Short-term financial liabilities
12,659,034
12,970,151
Short-term operating liabilities
24,935,968
27,736,912
Total short-term liabilities
37,595,002
40,707,063
31 Dec 2014
31 Dec 2013
32,175
1,407
18,163,964
21,485,612
Electricity suppliers - domestic
8,111,750
8,238,967
Electricity suppliers - aborad
1,891,899
3,094,039
Suppliers of fixed assets - domestic
5,465,632
7,260,606
Suppliers of current assets - domestic
2,071,067
2,171,332
54,592
24,547
Electricity exchanges in kind
569,024
696,121
Short-term liabilities for advances
211,228
973,829
Other short-term operating liabilities
6,528,601
5,276,064
To employees
1,959,555
2,014,094
To the State
1,073,816
832,827
2,317
5,456
1,959,989
1,329,245
24,935,968
27,736,912
in euros
Short-term operating liabilities
Short-term liabilities to the companies in the Group
Short-term operating liabilities to suppliers:
Suppliers of current assets-affiliated companies
From operations on third party account
Other liabilities
Total short-term operating liabilities
Short-term financial liabilities consist of:
• short-term portion of the long-term loan from the EIB, which is due in
2015, and amounts to 5.589.034 euros,
• liabilities arising from guarantees to subsidiary Talum pursuant to the
founder’s decision of 28 November 2012, where the founder agrees
with the issue of the ELES’ guarantee for the supply of electricity
to ELES’ subsidiary Talum. The short-term liabilities are recorded in
the amount of the discounted value of the guarantees envisaged
for payment within one year from the balance sheet date in the
amount of 7,070,000 euros. The off-setting entry of the liability is the
increase in long-term financial investment in subsidiary Talum d.d..
To hedge its guarantee obligations pursuant to the Guarantee Agreement, concluded between companies ELES, Talum and HSE, ELES
submitted to HSE 8 blank bills of exchange with an irrevocable and
unconditional mandate to fill out and redeem bills of exchange in
accordance with the provisions of the signed Agreement.
The largest portion of short-term operating liabilities appertain to
accounts payable, namely the liabilities arising from the use of the
transmission network and operating liabilities towards the domestic
suppliers, especially for fixed assets and current assets.
As at 31 December 2014 ELES had no outstanding liabilities.
ELES’ suppliers, both for energy as well as fixed and current assets did
not require any financial collateral. To insure proper performance of
contractual obligations, ELES received bank guarantees as a part of
contracts on the provision of ancillary services and to cover losses of
electricity sustained during the transmission through the transmission
network (HSE, EFT, TE-TOL and Elektro Energija).
FINANCIAL REPORT 115
SHORT-TERM ACCRUED COSTS AND DEFERRED REVENUES
Short-term accrued costs and deferred revenues
Accured costs
Deferred revenues
VAT od paid advances
Total short-term accrued costs and deferred revenues
Short-term accrued costs and deferred revenues comprise:
• accrued costs of consulting and financial expenses to hedge against
the change in interest rate, which influenced on the increase and decrease,
in euros
31 Dec 2013
Increase
Decrease
31 Dec 2014
324,343
20,439
0
344,782
1,099,195
422,465
0
1,521,659
7,603
49,748
0
57,350
1,431,140
492,651
0
1,923,791
• short-term deferred revenues, whereat such an increase and a
decrease resulted from the invoices issued by ELES for allocated
cross-border transmission capacities in 2014, while a small portion
appertained to deferred revenues from the EU projects, and
• VAT on paid advances for fixed assets.
OFF-BALANCE SHEET TOTAL
Off-balance sheet items
in euros
31 Dec 2014
31 Dec 2013
13,384,045
16,327,831
1,250,000
1,250,000
Construction land write-off
4,162
4,162
Obligation to pay for the right to build
4,140
4,140
24,921
24,921
Guarantee's Talum
10,000,000
0
Off-balance sheet total
24,667,269
17,611,054
Received guarantees for elimination of defects
Loan guarantee (BSP Regional Electricity Exchange)
Charges for the use of construction land
As at 31 December 2014 ELES records in the off-balance sheet total:
• guarantees received from suppliers for the elimination of defects;
• obligations arising from the guarantee to BSP regionalni energetski
borzi d.o.o. (BSP Regional Energy Exchange, d.o.o.) for a long-term
loan in the amount of 1,250,000 euros. The pentalateral agreement
on the implementation of day-ahead market coupling at the Slovenian-Italian border expired at the end of 2013. Upon the renewal of
the agreement for 2014, BSP, d.o.o. took the key role of counterparty
in the financial settlement on the Slovenian side. So as to ensure a
sufficient amount of sources to provide for VAT at daily settlements
of liabilities BSP, d.o.o. had to raise a framework loan in the amount
of 2,500,000 euros at UniCredit Bank, whereat ELES together with
the company Borzen d.o.o. acted as a joint and several guarantor
for repayment of the loan; each in the amount of 1,250,000 euros.
To hedge its guarantee obligations under the agreement, ELES submitted the bank 4 blank bills of exchange with the statement and
authorisation to redeem the guarantees.
• liability arising from guarantees the subsidiary company Talum for
the purchase of electricity in the period from 2016 to 2018 in the
amount of 10,000,000 euros. The decision on the guarantee was
adopted by the Supervisory Board of ELES in 2014, which also set
that the total guarantee may amount to a maximum of 24,500,000
euros. Until 31 December 2014 the signed agreements on guarantee
totalled 10,000,000 euros.
116 FINANCIAL REPORT
9.3.2 Disclosures of Income Statement Items
TOTAL REVENUES
Revenues
in euros
2014
2013
143,479,355
138,865,409
2. Financial revenues
1,213,381
1,567,234
3. Other revenues
2,599,260
351,471
147,291,996
140,784,114
1. Operating revenues
Total revenues
In 2014, total revenues were recorded in the amount of 147,291,996 euros.
In 2014, the amount of deferred revenues from the allocated CBTC
amounted to 28,332,781 euros. ELES recorded the latter in total under the long-term accrued costs and deferred revenues in the form of
long-term deferred revenues for the purposes of financing investments
into cross-border transmission capacities. Without observing Article 120
of the Energy Act, the operating revenues of 2014 would amount to
170,647,449 euros.
OPERATING REVENUES
Operating revenues
in euros
2014
2013
Net sales revenues
139,465,504
135,195,625
a. on domestic market
120,916,019
114,955,561
arising from the use of transmission network
118,343,781
112,479,418
2,572,238
2,476,143
b. on foreign market
18,549,485
20,240,064
arising from the use of transmission network
18,549,485
20,240,064
Changes in inventories and work-in-progress
0
0
Capitalised own products and services
2,383,795
2,625,245
Other operating revenues
1,630,056
1,044,539
Total operating revenues
143,479,355
138,865,409
other revenues
Operating revenues were recorded in the amount of 143,479,355 euros and were 3 percent higher than those recorded in 2013. The majority of the operating revenue (95 percent) arose from the use of the transmission network in the domestic and foreign markets, while other revenues arose from ELES’
other activities.
in euros
Other operating revenues
Revenues from reversal of provisions
Use of deferred revenues for investements
Revenues connected to products and services
Revaluated operating expenses
Total other operating revenues
2014
2013
293,722
310,227
1,164,687
369,790
127,097
304,306
44,550
60,216
1,630,056
1,044,539
FINANCIAL REVENUES
Financial revenues
in euros
2014
2013
43,082
280,826
Financial revenues from loans
637,693
1,161,974
Financial revenues from operating receivables
532,606
124,434
1,213,381
1,567,234
Financial revenues from equity interests
Total financial revenues
In 2014, the financial revenues were recorded in the amount of
1,213,381 euros and were lower than those recorded in 2013. Financial
revenues consist of financial revenues arising from shares in the profits
of others (dividends of the Insurance Company), revenues from granted
loans (deposits held at banks) and default interests due by customers.
FINANCIAL REPORT 117
OTHER REVENUES
Other revenues
Other revenues
Other revenues were recorded in the amount of 2,599,260 euros and
thus increased in comparison with the preceding year. Other revenues
consist of revenues arising from the compensations received from
in euros
2014
2013
2,599,260
351,471
insurance companies, subsidies, penalty payments and other revenues.
Of the total amount, the compensation of the insurance company arising from the natural disaster (ice/sleet) accounts for 1,931,088 euros.
TOTAL EXPENSES
Expenses
in euros
2014
2013
133,256,582
130,712,197
2,052,884
2,815,112
Other expenses
7,569
2,500
Total expenses
135,317,035
133,529,809
Operating expenses
Financial expenses
In 2014, total expenses amounted to 135,317,035 euros and were up 1 percent primarily due to higher expenses from the use of the transmission
network and higher operating expenses.
OPERATING EXPENSES
Operating expenses
in euros
2014
2013
Costs of goods, materials and services
76,073,337
74,646,260
Labour costs
26,210,922
26,617,464
Write-downs
30,202,965
27,998,824
769,358
1,449,649
133,256,582
130,712,197
Other operating expenses
Total operating expenses
In 2014, operating expenses amounted to 133,256,582 euros and were thus 2 percent higher in comparison with 2013 due to higher expenses from
the use of the transmission network (the cost of purchasing electricity to cover losses and costs of balancing the system).
in euros
Structure of costs as per function groups
2014
2013
Production costs of goods sold
85,586,501
78,737,174
Sales costs
34,316,991
36,738,314
Administration expenses
13,353,090
15,236,709
133,256,582
130,712,197
Total costs as per function groups
in euros
Costs of goods, material and services
2014
2013
29,500,697
26,393,206
Costs of material
1,108,334
1,256,055
Costs of services
45,464,306
46,996,999
Total costs of goods, material and services
76,073,337
74,646,260
Procurement value of material sold
118 FINANCIAL REPORT
The costs of goods, materials and services were recorded in the amount
of 76,073,337 euros and were thus higher due to higher costs from the
use of the transmission network. The costs of procurement value were
higher as a result of the higher costs of purchasing electricity to cover
losses and the costs of balancing the system. The costs of material were
lower than those recorded in 2013 primarily due to the costs of material
for routine maintenance. The costs of services were lower due to lower
costs of routine and major maintenance of fixed assets. Beside the aforementioned the latter consist of the costs of operation and maintenance
as well as the costs associated with the operation of the auction houses.
in euros
Labour costs
2014
2013
16,285,778
15,771,154
3,503,907
3,504,556
922,142
876,960
Other labour costs
1,773,936
2,011,685
Employer's contributions arising from salaries and wages, allowances, fringe benefits
3,106,937
2,960,129
618,222
1,492,979
26,210,922
26,617,464
Costs of wages and salaries
Costs of contributions and other taxes on wages and salaries
Costs of supplementary pension insurance
Provisions for severance payments upon retirement and jubilee awards
Total labour costs
In 2014, labour costs amounted to 26,210,922 euros and were thus 1.5 percent lower than those recorded in 2013 mainly due to the correction of
employees’ salaries for unused annual leave in the amount of 1,094,443 euros.
in euros
Write-downs
Depreciation and amortisation expenses
Revaluated operating expenses for intangible and tangible fixed assets
Revaluated operating expenses associated with current assets
Total write-downs
2014
2013
29,206,517
27,392,498
996,373
596,129
75
10,197
30,202,965
27,998,824
In 2014, the write-downs (depreciation costs and operating expenses from revaluation) amounted to 30,202,965 euros and were thus 7.9 percent
higher than those recorded in 2013. A larger portion of these resulted from the write-downs of parts of the transmission lines due to the natural
disaster (ice/sleet).
in euros
Depreciation and amortisation expenses
2014
2013
Depreciation/amortisation of intangible fixed assets
2,501,391
2,313,855
Depreciation/amortisation of buildings and transmission lines
7,993,881
7,118,694
18,642,722
17,855,452
68,523
104,497
29,206,517
27,392,498
Depreciation/amortisation of equipment and spare parts
Depreciation/amortisation of small inventories
Total depreciation and amortisation expenses
OTHER OPERATING EXPENSES
Other operating expenses
in euros
2014
2013
Long-term provisions
147,087
959,603
Other operating expenses
622,271
490,046
Total other operating expenses
769,358
1,449,649
Other operating expenses were recorded in the amount of 769,358
euros and were thus considerably lower than those recorded in 2013.
In 2014, 147,087 euros of long-term provisions from legal actions (lawsuits) were further formed. Other operating expenses consist of also
other operating expenses such as compensations for clearing of routes,
charges for the use of construction land, contributions for promoting
employment of the people with disabilities, court costs and other costs.
FINANCIAL REPORT 119
FINANCIAL EXPENSES
in euros
Financial expenses
Financial expenses arising from impairment and investment write-offs
Financial expenses arising from financial liabilities
Financial expenses arising from operating liabilities
Total financial expenses
In 2014, financial expenses amounted to 2,052,884 euros and consist of write-offs of financial investments in Banka Celje shares in the
amount of 34,413 euros. Financial liabilities to banks, which arise from
interest rate hedging instruments of long-term loan granted by the EIB,
amounted to 1,475,591 euros (interest rate collar and swap), interests
2014
2013
34,413
1,232,679
2,013,814
1,530,487
4,657
51,946
2,052,884
2,815,112
arising from actuarial calculation in the amount of 119,814 euros, while
the interests arising from the loan amounted to 418,408 euros.
Financial expenses from operating liabilities arise from other financial
expenses (costs of managing bank guarantees).
OTHER EXPENSES
Other expenses amounted to 7,569 euros and consist of expenses for reimbursement to tenders for the filed revisions of public procurement.
RELATION BETWEEN TAX EXPANSE AND ACCOUNTING PROFIT OR LOSS
Tax expense
in euros
2014
2013
11,974,961
8,348,748
Decrease in revenues
-169,533
-58,061
Decrease in expenses
1,955,948
2,185,541
Increase in expenses
-121,141
-7,396,296
-13,640,235
-2,973,188
Tax base
0
0
Tax rate
17%
17%
0
0
Gross profit before taxes
Reliefs
Corporate income tax
The decrease in revenues in the amount of 169,533 euros represents
the revenues from dividends (43,082 euros) and revenues from the
recoveries of receivables, impairment of which was tax unrecognized
(126,451 euros).
The increase in expenses in the amount of 121,141 euros represent the
previously non-deductible depreciation expenses (55,003 euros), previously tax non-deductible provisions (53,319 euros) and other expenses
(13,819 euros).
Decrease in expenses in the amount of 1,955,948 euros represent the
costs arising from the employment (1,098,892 euros), the costs of
provisions for jubilee awards and severance payments received upon
retirement (369,018 euros), the costs of donations (210,338 euros), the
entertainment and representation costs (84,725 euros), the costs of the
Supervisory Board (77,207 euros), non-deductible depreciation costs
(25,277 euros) and other costs (90,491 euros).
Tax reliefs in the amount of 13,640,253 euros represent a relief for
supplementary pension insurance of employees (922,142 euros), investment allowances (12,383,006 euros), relief for disabled employees
(177,204 euros), relief for donations (150,950 euros) and other reliefs
(6,933 euros).
120 FINANCIAL REPORT
COMPUTATION OF NET PROFIT
in euros
Net profit
Revenues
Expenses
Difference
143,479,355
133,256,582
10,222,773
Financial profit / loss
1,213,381
2,052,884
-839,503
Other profit / loss
2,599,260
7,569
2,591,691
Operating profit
Total gross profit
11,974,961
Corporate Income Tax
0
Deferred taxes
Net profit
-745,700
146,546,296
-745,700
135,317,035
11,229,261
In 2014, the net profit for the accounting period was recorded in the amount of 11.229.261 euros.
COMPUTATION OF ACCUMULATED PROFIT
Accumulated profit
Net profit for the financial year
in euros
2014
2013
11,229,261
8,445,547
561,464
477,000
Profit / loss from previous periods
Change in legal reserves
Change in other revenue reserves
Error correction - unused annual leave
1,094,443
Total accumulated profit
9,573,354
In 2014, the accumulated profit amounted to 9,573,354 euros, which
is up 20.1 percent on 2013. In accordance with Article 230 of the
Companies Act, ELES created legal reserves in the amount of 477,000
euros and covered the correction from undrawn annual leave and
excess hours in the amount of 1,094,443 euros.
7,968,547
The Management Board proposes to the General Meeting an allocation
of the total accumulated profit in the amount of 9,573,354 euros in
other profit reserves.
9.3.3 Other Disclosures
SEPARATE ACTIVITIES
Beside the main activity of electricity transmission, ELES performs also
some other supplementary activities. In 2014, ELES recorded the business events for these activities separately and compiled separate financial statements for the purposes of supervising the performance of these
activities.
Separate activities account for 1.5 percent of the total revenues of the
Company; hence, they are not disclosed in details.
The basis for the preparation of the separate financial statements are
the criteria established under the Transparency of Financial Relations
and Maintenance of Separate Accounts for Different Activities Act (ZPFOLERD) for the recording of non-regulated activities (recording of the
generated revenues, expenses, receivables and liabilities arising from
non-regulated activities) and preparation of an income statement and
balance sheet, which were adopted by the ELES’ Supervisory Board.
The criteria for the preparation of separate income statement and balance sheet are as follows: each of these activities is recorded at its cost
object; it includes direct costs that may be directly attributed to activities, while corresponding keys are prepared for other items (salaries, depreciation).
Non-regulated activities of the Company are: holiday activity, holding
activity, rental of apartments and commercial premises, publication of
the “Naš Stik” magazine and marketing of free telecommunications (TC)
services.
In 2014, net profit or loss of the non-regulated activities recorded a loss
in the amount of 910,328 euros. The loss arose from higher operating
expenses, which within the non-regulated activities is covered from other
revenue reserves.
FINANCIAL REPORT 121
Income Statement as per separate activities for 2014
ITEM
in euros
Regulated
business
activities
Non-regulated
business
activities
TOTAL
1
2
3 (1-2)
I
OPERATING REVENUES
141,424,137
2,055,218
143,479,355
II
OPERATING EXPENSES (1+2+3+4)
130,172,899
3,083,683
133,256,582
1.
Costs of goods, materials and services (a + b)
75,010,527
1,062,810
76,073,337
a) Costs of goods, materials sold and costs of materials used
30,609,031
0
30,609,031
b) Costs of services
44,401,496
1,062,810
45,464,306
2.
Labour costs
25,368,494
842,428
26,210,922
3.
Depreciation / amortisation and write-offs
29,025,847
1,177,118
30,202,965
4.
Other operating expenses
768,031
1,327
769,358
III
OPERATING PROFIT (I-II)
11,251,238
-1,028,465
10,222,773
5.
Financial revenues
1,016,782
196,599
1,213,381
6.
Financial expenses
2,018,471
34,413
2,052,884
7.
Other revenues
2,599,260
0
2,599,260
8.
Other expenses
7,569
0
7,569
IV
GROSS PROFIT BEFORE TAXES (III+5-6+7-8)
12,841,240
-866,279
11,974,961
9.
Corporate Income Tax
-44,049
44,049
0
10.
Deferred taxes
-745,700
0
-745,700
V
NET PROFIT (OR LOSS) FOR THE FINANCIAL YEAR (IV-9+10)
12,139,589
-910,328
11,229,261
122 FINANCIAL REPORT
Balance Sheet as per separate activities for 2014
in euros
Regulated
business
activities
Non-regulated
business
activities
TOTAL
1
2
3 (1-2)
467,069,587
98,537,377
565,606,964
ITEM
ASSETS
A.
Long-term fixed assets
B.
Short-term assets
71,609,355
8,720,852
80,330,207
C.
Deferred costs (expenses) and accrued revenues
10,383,284
0
10,383,284
ASSETS (A+B+C)
549,062,226
107,258,229
656,320,455
Off-balance assets
24,667,269
0
24,667,269
99,171,818
382,324,963
LIABILITIES
A.
Equity
283,153,145
B.
Provisions and long-term accrued costs and deferred revenues
173,488,900
C.
Long-term financial and operating liabilities
60,155,519
832,280
60,987,799
Č.
Short-term financial and operating liabilities
30,340,870
7,254,132
37,595,002
D.
Accrued costs (expenses) and deferred revenues
1,923,791
0
1,923,791
549,062,225
107,258,230
656,320,455
24,667,269
0
24,667,269
LIABILITIES (A+B+C+D+E)
Off-balance liabilities
173,488,900
NOTES TO THE LAW ON FINANCIAL TRANSACTIONS
ELES fulfils the criteria of financial adequacy. In 2014, the Company
had no accounts frozen. In the context of financial functions and
pursuant to the Financial Transactions Act as well as operating policies,
ELES monitors and manages the financial risks, which the Company is
exposed to during its operations.
REMUNERATION OF THE MEMBERS OF THE SUPERVISORY BOARD AND MANAGEMENT BOARD
(Item 18 of Article 69 of the Companies Act (ZGD-1))
Remuneration of Members of the Supervisory Board and Management Board
Member of the Management Board - Chief Executive Officer
Employees employed under individual contracts
Members of the Supervisory Board - external members and members of auditors commission
Members of the Supervisory Board - ELES' employees
Total remuneration of Members of the Supervisory Board and Management Board
in euros
2014
2013
101,974
96,053
2,738,628
2,156,359
101,012
121,008
39,105
46,431
2,980,719
2,419,851
The table shows the income paid during the period 1-12/2014.
The Company has no receivables arising from advances, guarantees and loans given to the members of the Management Board, members of the
Supervisory Board and members of the Audit Committee of the Supervisory Board.
REMUNERATION OF MEMBERS OF THE MANAGEMENT BOARD OF ELES, d.o.o. (Recommendation No. 12 of SOD)
Salary
Work
performance
Holiday bonus
Training
Memberships
Supplementary pension
insurance
Benefits
gross
97,452
0
0
610
0
2,819
5,010
net
48,689
0
0
Name and
surname
Aleksander Mervar
in euros
The table shows the income paid during the period 1-12/2014.
FINANCIAL REPORT 123
REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD AND AUDIT COMMITTEE OF ELES, d.o.o.
(Recommendation No. 12 of SOD)
Name and surname
in euros
Gross
Net
Education
Memberships
Insurance
Marjan Ravnikar
24,472
17,798
0
0
7
Igor Maher
26,771
19,470
0
0
7
Milan Krajnik
20,779
14,359
753
0
7
Matevž Marc
20,038
13,821
753
0
7
Darinka Virant
9,443
6,868
Jože Senčar
17,590
12,793
0
0
0
Bogdan Trop
21,295
15,488
0
0
0
140,388
100,597
1,507
0
27
External members:
Internal members:
Total remuneration
The Table shows the calculated remuneration in the period 1-12/2014.
REMUNERATION OF AUDITORS
In 2014, the contractual value of auditing services amounted to 13,000 euros, namely 11,500 euros for the annual report and 1,500 euros for the
consolidated annual report. In 2013, the amount totalled 13,000 euros.
TRANSACTIONS WITH RELATED ENTITIES
(Disclosures Pursuant to Article 38 of the Energy Act and Items 12 and 13 of Article 69 of the Companies Act (ZGD-1))
Disclosures of transactions with subsidiaries
Talum
Talum
Receivables from the electricity transmission
Receivables for dividends
Receivables for interests
in euros
31.12.2014
680,698
2,651,650
156,324
Receivables for long-term loans
3,600,015
Total receivables
3,488,672
Revenues from eletricity transmission in 2014
3,346,368
Revenues from interest
153,517
Total revenues
3,499,885
Gross turnover with electricity (on behalf of foreign account)
7,307,686
Short-term liabilities from guarantees
7,069,999
Long-term liabilities from guarantees
777,647
Total liabilities
Long-term loan given
7,847,646
11,447,662
Stelkom
In 2014, the Company recorded revenues in the amount of 1,571,280 euros and expenses in the amount of 57,334 euros. As at 31 December 2014,
Stelkom recorded the receivables totalling 459,720 euros and liabilities in the amount 32,174 euros.
Trgel
There were no transactions with the company Trgel.
124 FINANCIAL REPORT
OTHER NOTES TO ARTICLE 70 OF THE COMPANIES ACT-1
EXPOSURE TO FINANCIAL RISKS
Liquidity Risk
in euros
Balance sheet item
Book value
Contractual
cash flows
Due in 2015
Due in 2016
Due in
2017-2036
Received loans
58,800,000
62,062,669
5,893,845
3,089,086
53,079,738
749,713
749,713
-
-
749,713
Other long-term financial liabilities
14,023,503
14,023,503
777,647
-
13,245,856
Short-term accounts payable
18,196,139
18,196,139
18,196,139
-
-
5,206,905
5,206,905
5,206,905
-
-
82,952,757
86,215,426
29,296,889
3,089,086
53,829,451
Other long-term operating liabilities
Other short-term operating liabilities
Total
The book value of the EIB loan amounts to 58,000,000 euros, which was
received in 2010. The maturity of the loan is 25 years with the included twoand-a-half-year moratorium and a 6M EURIBOR as at 31 December 2014
(0.171percent) + 0.35 percent. The loan is not secured since ELES is 100
percent state-owned company; hence, the state is subsidiary liable for the
Company’s liabilities in accordance with the Energy Act (EA). The amounts
due under the loan in addition to the principal also include interests.
ELES settles its liabilities as they arise and the Company had no outstanding liabilities as at 31 December 2014.
So as to insure a proper performance of contractual obligations, ELES
received bank guarantees as a part of contracts on the provision of ancillary
services and to cover losses of electricity sustained during the transmission
through the transmission network (HSE, EFT, TE-TOL and Elektro Energija).
Credit Risk
Item
in euros
Book value as at 31 Dec 2014
Long-term loans
11,447,662
Short-term loans
23,000,000
Accounts receivables
26,408,022
Other short-term receivables
4,842,326
Other long-term operating receivables
207,991
Total
Long-term loans arising from guarantees provided to the subsidiary
Talum following the decision of the founder of 28 November 2012 where
the founder agrees to ELES’ issue of guarantees for electricity supply to
Talum. A part of the loan is realised in the amount of 3,600,015 euros and
will be converted into equity of the company ELES in Talum. A part of the
loan in the amount of 7,847,647 euros is not realised and is recorded as
a liability. To hedge its guarantee obligations pursuant to the Guarantee
Agreement, concluded between companies ELES, Talum and HSE, ELES
submitted to HSE 8 blank bills of exchange with an irrevocable and unconditional mandate to fill out and redeem bills of exchange in accordance
with the provisions of the signed Agreement.
65,906,001
Deposits held at banks are short-term loans given.
Accounts receivables are secured in the amount of 39.59 percent with
blank bills of exchange.
Other short-term operating receivables are receivables arising from
taxes and receivables towards other institutions and do not pose any
major risks.
Dividends to the company Talum, which are not secured, are also
recorded under short-term receivables.
FINANCIAL REPORT 125
Interest Rate Risk
in euros
Financial instruments at fixed interest rate
Financial assets
34,447,662
Financial liabilities
7,847,647
Financial instruments at variable interest rate
64,975,856
Financial assets
Financial liabilities
The Company holds all financial assets (loans given) at a fixed rate and
are not exposed to major risks. These are: the loan granted to the subsidiary company Talum and short-term deposits held at banks.
64,975,856
Financial liabilities to Talum from the guarantees have a fixed interest
rate, while the obligations arising from the received long-term loan from
EIB and liabilities arising from derivative financial instruments (interest
rate collars and interest rate swaps), intended for hedging against interest rate risk, have a variable interest rate.
A Sensitivity Analysis with Respect to Financial Risks
Analysis was based on long-term loan given by the EIB and the loan-related derivative financial instruments to hedge against the changes in interest
rates. Hedging is established in the amount of two thirds of the loan value.
in euros
Company's expenses
Item
Decrease by 100 b.p.
Increase by 100 b. p.
Instruments at variable interest rate
137,350
-406,778
Interests for long-term loan
-206,026
610,166
-68,676
203,388
Total
NOTES TO THE DEVIATIONS FROM THE ACCOUNTING STANDARDS
In its income statement for 2013 and 2014 the Company did not
acknowledge all the revenues from the cross-border transmission capacities (CBTC), yet applied the provision of Article 120 of the Energy Act.
Since Article 120 is inconsistent with the Slovenian Accounting Standards (SAS) as regards the acknowledgement of revenues, the deferral of
revenues deviates from the provisions of the SAS.
Deviation from the accounting standards
Influence of deferred revenues arising from CBTC
in euros
2014
2013
Deferred revenues - Article 46 (a) of the EA (decrease in sales revenues)
28,332,781
32,158,843
Transfer to revenues in the financial year
-1,164,687
-369,790
Corporate income tax reduction due to deferred revenues from CBTC
-5,605,410
-3,448,561
767,340
-1,945,133
22,330,024
26,395,359
Deferred tax change due to deferred revenues from CBTC
Sum of lower net profit and equity
126 FINANCIAL REPORT
INCOME STATEMENT AND BALANCE SHEET (without applying Article 120 of the EA-1)
ITEM
1.
2013
Net sales revenues
167,798,285
167,354,468
a. on domestic market
132,532,459
114,955,561
35,265,826
52,398,907
0
0
2,383,795
2,625,245
465,369
674,749
170,647,449
170,654,462
Costs of goods, materials and services (a + b)
76,073,337
74,646,260
a. Costs of goods, materials sold and costs of materials used
30,609,031
27,649,261
b. Costs of services
45,464,306
46,996,999
Labour costs (a + b + c + d)
26,210,922
26,617,464
a. Costs of wages and salaries
19,789,685
19,275,710
b. Costs of pension insurance contributions
2,594,315
2,486,204
c. Costs of contributions and other taxes on wages and salaries
1,434,764
1,350,886
d. Other labour costs
2,392,158
3,504,664
Write-downs (a + b + c)
30,202,965
27,998,824
a. Depreciation and amortisation expenses
29,206,517
27,392,498
996,373
596,129
75
10,197
769,358
1,449,649
37,390,867
39,942,265
Financial revenues from equity interests
43,082
280,826
c. Fianancial revenues from equity in other companies
43,082
54,686
0
226,140
Financial revenues from loans
637,693
1,161,974
a. Financial revenues from loans given to companies in the Group
153,517
428,912
b. Financial revenues from loans given to others
484,176
733,062
Financial revenues from operating receivables
532,606
124,434
b. Financial revenues from operating receivables due by others
532,606
124,434
34,413
1,232,679
2,013,814
1,530,487
418,408
238,093
1,595,406
1,292,394
Financial expenses arising from operating liabilities
4,657
51,946
c. Financial expenses arising from other operating liabilities
4,657
51,946
b. on foreign market
2.
Changes in inventories and work-in-progress
3.
Capitalised own products and services
4.
Other operating revenues
OPERATING REVENUES (1+2+3+4)
5.
6.
7.
b. Revaluated operating expenses for intangible and tangible fixed assets
c. Revaluated operating expenses associated with current assets
8.
Other operating expenses
OPERATING PROFIT (1+2+3+4-5-6-7-8)
9.
d. Financial revenues from other investments
10.
11.
12.
Financial expenses arising from impairment and investment write-offs
13.
Financial expenses arising from financial liabilities
b. Financial expenses arising from received bank loans
d. Financial expenses arising from other financial liabilities
14.
in euros
2014
15.
Other revenues
2,599,260
351,471
16.
Other expenses
7,569
2,500
17.
Corporate Income Tax
5,605,410
3,448,561
18.
Deferred taxes
21,640
-753,891
19.
NET PROFIT (OR LOSS) FROM ORDINARY ACTIVITIES
(1+2+3+4-5-6-7-8+9+10+11-12-13-14+15-16-17-+18)
33,559,285
34,840,906
FINANCIAL REPORT 127
BALANCE SHEET
in euros
ASSETS
31 Dec 2014
31 Dec 2013
A.
Long-term fixed assets
564,429,172
557,082,792
I.
Intangible fixed assets and long-term deferred costs and accrued revenues
48,113,999
35,288,984
1. Long-term property rights
48,113,999
35,288,984
Tangible fixed assets
421,763,200
424,070,393
1. Land and buildings
200,317,914
196,773,077
14,909,472
14,633,772
185,408,442
182,139,305
2. Equipment and spare parts
193,693,918
196,332,379
3. Other tangible fixed assets
76,235
93,887
27,675,133
30,871,050
25,241,981
28,722,329
2,433,152
2,148,721
0
0
II.
a) Land
b) Buildings
4. Tangible fixed assets being acquired
a) Tangible assets under construction or in production
b) Advances for acquisition of fixed assets
III.
Investment properties
IV.
Long-term financial investments
92,167,923
91,242,192
1. Long-term financial investments save loans
80,720,261
72,112,676
a) Shares and equity interests in the Group
79,024,063
70,631,235
b) Shares and equity interests in associates
450,000
450,000
1,246,198
1,031,441
11,447,662
19,129,516
11,447,662
19,129,516
207,991
4,633,555
0
2,651,650
207,991
1,981,905
2,176,059
1,847,668
80,330,207
63,662,637
c) Other shares and equity interests
2. Long-term loans
a) Long-term loans given to companies in the Group
V.
Long-term operating receivables
1. Long-term operating receivables due by companies in the Group
2. Long-term operating receivables due by others
VI.
Deferred tax assets
B.
Short-term assets
II.
Inventories
2,509,875
2,549,461
1. Materials
2,509,875
2,549,461
Short-term financial investments
23,000,000
8,000,000
1. Short-term loans
23,000,000
8,000,000
Short-term operating receivables
31,250,348
29,891,807
3,792,069
1,163,688
22,615,953
20,329,394
4,842,326
8,398,725
III.
IV.
1. Short-term operating receivables due by companies in the Group
2. Short-term accounts receivables
3. Short-term operating receivables due by others
V.
Cash and cash equivalents
23,569,984
23,221,369
C.
Deferred costs(expenses) and accrued revenues
10,383,284
1,230,107
655,142,663
621,975,536
24,667,269
17,611,054
ASSETS
Off-balance assets
128 FINANCIAL REPORT
in euros
LIABILITIES
31 Dec 2014
31 Dec 2013
A.
Equity
507,680,233
484,719,573
I.
Called-up capital
177,469,516
177,469,516
1. Share capital
177,469,516
177,469,516
II.
Capital reserves
156,936,162
156,936,162
III.
Revenue reserves
41,334,138
41,334,138
8,507,813
8,507,813
2. Other revenue reserves
32,826,325
32,826,325
IV.
Revaluation adjustment surplus
-4,971,860
-3,436,225
V.
Retained earnings
103,352,992
77,575,076
VI.
Net profit (or loss) for financial year
33,559,285
34,840,906
B.
Provisions and long-term accrued costs and deferred revenues
21,454,953
7,595,809
1. Provisions for pensions and similar liabilities
4,811,363
3,932,626
2. Other provisions
1,883,253
1,870,974
3. Long-term accrued costs and deferred revenues
14,760,337
1,792,209
A.
Long-term financial and operating liabilities
60,987,799
67,701,814
I.
Long-term financial liabilities
60,164,469
67,243,661
777,647
7,344,045
53,210,966
55,622,475
6,175,856
4,277,141
749,713
403,520
0
0
749,713
403,520
73,617
54,633
1. Legal reserves
1. Long-term financial liabilities to companies in the Group
2. Long-term financial liabilities to banks
3. Other long-term financial liabilities
II.
Long-term operating liabilities
1. Long-term operating liabilities to companies in the Group
2. Long-term operating liabilities arising from advances
III.
Deferred tax liabilities
D.
Short-term financial and operating liabilities
63,095,887
60,527,200
II.
Short-term financial liabilities
12,659,034
12,970,151
1. Short-term financial liabilities to companies in the Group
7,070,000
6,992,627
2. Short-term financial liabilities to banks
5,589,034
5,977,524
50,436,853
47,557,049
32,175
1,407
18,163,964
21,485,612
211,228
973,829
32,029,486
25,096,201
1,923,791
1,431,140
655,142,663
621,975,536
24,667,269
17,611,054
III.
Short-term operating liabilities
1. Short-term operating liabilities to companies in the Group
2. Short-term accounts payable
3. Short-term operating liabilities arising from advances
4. Other short-term operating liabilities
E.
Accrued costs (expenses) and deferred revenues
LIABILITIES
Off-balance liabilities
FINANCIAL REPORT 129
INDEPENDENT AUDITOR'S REPORT
From the date the financial statements were complied until the date of preparation of this report no events were identified, which would affect the
truthfulness and fairness of the financial statements presented for 2014.
CONTINGENT LIABILITIES
ELES has no contingent liabilities that would not be properly covered and reported in the balance sheet as at 31 December 2014.
130 FINANCIAL REPORT
INDEPENDENT AUDITOR'S REPORT
FINANCIAL REPORT 131
132
10. LIST OF ABBREVIATIONS
AGEN-RS
Energy Agency of the Republic of Slovenia
GIS
Gas Insulated System
AP
Annual plan
GPS
Global Positioning System
BIO
Biennial of Design
GWh
Gigawatt hour
BS
Balance Sheet
HOPS
Croatian TSO
BSP
SouthPool Regional Energy Exchange
HPP
Hydro power plant
CA
Companies Act
HRD
Human Resource Development
CAMA
Capital Assets Management Company
HSE
Slovenian Power Plans Holding
CAO
Central Allocation Office
HSW
Health and safety at work
CAO SEE
Coordinated Auction Office in South East Europe
HVDC
High-voltage, direct current
CASC
Capacity Allocating Service Company
IAS
International Accounting Standards
CBTC
Cross-border transmission capacitates
IDC
Intrusion Prevention Systems
CHRM
Comprehensive Human Resource Management
INC
Imbalance Netting Cooperation
DCAR
Deferred costs and accrued revenues
ISO
International Organization for Standardization
DTR
Dynamic Thermal Rating
IT
Information technology
EA
Energy Act
ITAMS
International Transmission Asset Management Study
EBIT
Earnings before Interest and Taxes
ITC
International Transmission Capacity
EBITDA Earnings before Interest,
ITIL
Information Technology Infrastructure Library
Taxes, Depreciation and Amortization
ITTC
Information Technology and Telecommunications
EFQM
European Foundation for Quality Management
KNPP
Krško Nuclear Power Plant
EIB
the European Investment Bank
KNSS
Confederation of New Trade Unions of Slovenia
EMS
Energy Management System
kVKilovolt
ENTSO-EEuropean Network of Transmission System Operators for
LC
Local community
Electricity
MEAS
Mutual emergency assistance services
EP
Electric power
MEUR
Million euros
EPS
Electric power system
MHMan-hour
ERP
Enterprise Resource Planning
MVAVA (volt-ampere), M (mega),
ES
Energy system
ESS
Energy supply station
EU
European Union
EUR Euro
MWMegawatt
EURIBOR
Euro Interbank Offered Rate
MWAWA (watt ampere), M (mega),
FA
Fixed asset
GDP
Gross Domestic Product
measurement unit of nominal capacity
MvarM (mega), var,
measurement unit of reactive power
measurement unit of electric power
MzI
Ministry of Infrastructure
133
NA
National Assembly
SISlovenia
NCC
National Control Centre
SODSlovenska odškodninska družba
NKBM
Nova kreditna banka Maribor
NLB
Nova Ljubljanska banka
SODO
Electricity Distribution System Operator
NOS-BiH
Bosnian TSO
ŠTPP
Šoštanj Thermal Power Plant
NPP
Nuclear power plant
PSHPP
Pumped storage hydro power plant
NTC Net Transfer Capacity
SAS
Slovenian Accounting Standards
SAQE
Slovenian Association for Quality and Excellence
OECDThe Organisation for Economic Co-operation and
(Slovenian Compensation Company)
Development
SM
Transmission network bay
OPEX
Operating expenses
SUMO
System for the Determination of Operating Limits
OPGW
Optical Ground Wire Cable
RES
Renewable energy sources
PC
Public procurement
RS
The Republic of Slovenia
PCI
Project of Common Interest
TCTelecommunications
PIPO
Transmission Network Infrastructure Department
TL
Transmission line
PITK
IT and Telecommunications Department
TN
Transmission network
POS
System Operation Department
TNIC
Transmission Network Infrastructure Centre
PPD
Support Services Department
TPP
Thermal power plant
PUSP
Assets and Project Management Department
TS Transformer station
RCC
Regional Control Centre
TRTransformer
ROA
Return on assets
TSC
Transmission System Operator Security Cooperation
ROE
Return on equity
TSO
Transmission System Operator
PSA
Power Service Assistant
TTPP
Trbovlje Thermal Power Plant
RTPSubstation
TWh
Terawatt hour
SB
Supervisory Board
TYNDP
Ten Years Network Development Plan
SBP
Strategic business plan
VAT
Value added tax
SBR
Silver Bullet Risk
VD
Virtual devices
SCADA
Supervisory control and data acquisition
WAMPAC
Wide Area Monitoring Protection & Control
SCOM
System Center Operations Manager
ZPFOLERDTransparency of Financial Relations and Maintenance of
SDE
Trade Union of Workers in Energy in Slovenia
SDH
Synchronous Digital Hierarchy
SEA
Slovenian Environment Agency
SFBE
Slovenian Foundation for Business Excellence
SHB
Slovenia, Croatia and Bosnia and Herzegovina
Separate Accounts for Different Activities Act
ZUJF
Fiscal Balance Act
Ice Hockey Federation
of Slovenia
Slovenia men's national
ice hockey team
Mateja Šimic,
the only Slovenian
Olympic triathlon athlete
Photo: AV studio, Stanko Gruden, Primož Korošec,
Domen Grögl, arhiv ELES, STA // Design: AV studio