Annual Report 2015

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Annual Report 2015
VNG – Verbundnetz Gas Aktiengesellschaft
Highlights
VNG Group key financial data
2015
2014
EBIT*
€ million
–54
230
Earnings after tax
€ million
–53
184
Funds from Operations (FFO)**
€ million
224
238
Cash flow from operating activities***
€ million
376
270
Financial liabilities****
€ million
443
575
%
24
25
€ million
590
722
Equity ratio
Balance sheet equity
*
inclusive tax refund for exploration costs of VNG Norge
**FFO: Result for the period adjusted by non-cash-effective expenses and income as well as profits
and losses from the disposal of fixed assets
*** Prior year figures adjusted due to the application of DRS 21
**** Due to external financing partners
VNG Group key performance data
2015
2014
1,441
1,427
billion kWh
373
368
km
7,000
7,200
billion m³
2.5
2.7
Number of employees at year-end
Gas sendout
Length of pipeline system at year-end
Capacity of underground gas storage facilities
at year-end
Shareholders of VNG – Verbundnetz Gas Aktiengesellschaft
EWE Aktiengesellschaft, Oldenburg
74.21 %
VNG Verbundnetz Gas Verwaltungs- und
Beteiligungsgesellschaft mbH, Erfurt*
25.79 %
* Trustee for ten utilities and municipal companies (Annaberg-Buchholz | Chemnitz | Dresden |
Erfurt | Hoyerswerda | Leipzig | Lutherstadt Wittenberg | Neubrandenburg | Rostock)
As at December 31, 2015
Contents | Annual Report 2015
Contents
A
The VNG Group
5–15
The VNG Group
6
The fully consolidated companies of the VNG Group
7
Business Areas of the vng Group
8
B
Foreword of the Executive Board
17–19
C
Report of the Supervisory Board
21–23
D
Management Report and Group Management Report
for the 2015 Financial Year
25–43
A. The VNG Group undergoing a process of change
26
B. Background
26
C. The VNG Group—an overview
28
D. Review of operations in the business areas
30
E. Annual financial statements of VNG AG and consolidated financial
statements of the VNG Group
35
F. Group-wide management of opportunities and risks
39
G. Outlook
41
E
consolidated financial statements
45–72
Consolidated Balance Sheet as at December 31, 2015
46
Consolidated Income Statement for the Period
from January 1 to December 31, 2015
47
Notes to the Consolidated Financial Statements 2015
48
Breakdown and Development of Consolidated Fixed Assets
70
Auditor’s Report
72
The statement of changes in equity and the cash flow statement of the VNG Group are published by disclosure in the
company register.
The VNG Group
5–15
The VNG Group
The VNG Group, headquartered in Leipzig and employing about
1,400 people, is a horizontally and vertically integrated company
group of the European gas industry and has more than 20 fully
consolidated companies in eight countries. The core business,
natural gas, breaks down into four business areas: Exploration &
Production, Gas Trading & Service, Gas Transport and Gas Storage.
VNG – Verbundnetz Gas Aktiengesellschaft as the parent company of the VNG Group is also responsible for gas trading business.
VNG Norge AS concentrates on the exploration and production of
natural gas off the Norwegian and Danish coasts. ONTRAS Gastransport GmbH as an independent transmission system operator, markets Germany’s second largest high-pressure network
in an independent and non-discriminatory manner, while VNG
Gasspeicher GmbH offers storage capacities from several underground gas storage facilities in central and northern Germany
throughout Europe. Adjacent to the core business, companies of
the VNG Group also provide numerous products and services for
natural gas infrastructure and application.
vnggroup.eu
6
The VNG Group | Annual Report 2015
The fully consolidated companies
of the VNG Group
Exploration & Production VNG Norge AS, Stavanger, Norway
VNG Danmark ApS, Copenhagen, Denmark
Gas Trading & Service VNG – Verbundnetz Gas Aktiengesellschaft, Leipzig
BALANCE VNG Bioenergie GmbH, Leipzig
ECG Erdgas-Consult GmbH, Leipzig
ENERGIEUNION GmbH, Schwerin
G.EN. Gaz Energia Sp. z o.o., Tarnowo Podgórne, Republic of Poland
goldgas GmbH, Eschborn
goldgas GmbH, Vienna, Austria
HANDEN Sp. z o.o., Warsaw, Republic of Poland
Leipziger Biogasgesellschaft mbH, Leipzig
MBG Mitteldeutsche Biogasgesellschaft mbH, Leipzig
SPIGAS S.r.l., La Spezia, Italy
VNG Austria GmbH, Gleisdorf, Austria
VNG Energie Czech s.r.o., Prague, Czech Republic
VNG-Erdgascommerz GmbH, Leipzig
VNG Italia S.r.l., Bologna, Italy
VNG Polska Sp. z o.o., Tarnowo Podgórne, Republic of Poland
VNG Slovakia, spol. s r.o., Bratislava, Slovak Republic
Gas Transport ONTRAS Gastransport GmbH, Leipzig
GDMcom Gesellschaft für Dokumentation und Telekommunikation mbH, Leipzig
GEOMAGIC GmbH, Leipzig
INFRACON Infrastruktur Service GmbH & Co. KG, Leipzig
OSG ONTRAS Servicegesellschaft mbH, Leipzig
Gas Storage VNG Gasspeicher GmbH, Leipzig
As at December 31, 2015
7
EXPLORATION & PRODUCTION
Bjørnøya
44 LICENSES 42 in Norway ( ) and 2 in Denmark ( )
Hammerfest
Tromsø
Andenes
Harstad
1
6
Bodø
3
HYME
DRAUGEN
LICENSES AS OPERATOR
Sandnessjøen
NJORD
25
Namsos
4 PARTICIPATIONS IN PRODUCING FIELDS
Trondheim
2
Florø
BRAGE
8
3
Bergen
STAVANGER OSLO
Skagen
offices of VNG Norge
Ålborg
Kristiansand
2
4 FIELD DEVELOPMENTs
Århus
Esbjerg
Åbenrå
As at December 31, 2015
8
COPENHAGEN
office of VNG Danmark
Odense
Rønne
The VNG Group | Annual Report 2015
VNG NORGE AS
VNG Norge AS (VNG Norge) and its subsidiary VNG Danmark ApS
with head offices in Stavanger and Copenhagen have been exploring and producing gas and oil off the Norwegian and Danish coasts
since 2006. The development of VNG Group’s offshore commitment aims at an additional and sound resource base in the long
term. This involves new options for customer-oriented products
of the trading companies. The E&P companies of the VNG Group
are currently operating approximately forty licenses as well as
four participations in producing fields. Additional discoveries are
currently being brought to production readiness. In receiving the
renowned Rystad Energy’s Gullkronen award in the “Explorer of the
Year” category, the still young VNG Norge was certified as having
successfully established in the Norwegian E&P industry in 2015.
vng.no
9
Gas Trading & Service
9 SALES OFFICES IN GERMANY (
)
Berlin | Düsseldorf | Erfurt | Frankfurt a. M.
Hamburg | Kassel | Leipzig | Munich | Stuttgart
WHOLESALE ON EUROPEAN
SPOT AND FUTURES MARKETS
m
Procure
e nt fro m N O
(1)
o
Pr
(1)
cu
re
n
me
om
t fr
RU
rom RU
Procurement f
EUROPE-WIDE GAS SALES
(3)
(14)
LEIPZIG
Head office of VNG AG
(1)
(1)
Procurement from
RU
(2)
373 BILLION KWH GAS SENDOUT
(2)
Fully consolidated companies (number)
Supply
LNG terminal
Spot and futures markets
As at December 31, 2015
10
The VNG Group | Annual Report 2015
VNG – Verbundnetz Gas Aktiengesellschaft
As the parent company of the VNG Group, VNG – Verbundnetz Gas
Aktiengesellschaft (VNG AG) with its head office in Leipzig is also
responsible for gas trading business. With its trading companies
and further participating interests, the company is engaged in six
European countries, providing support to the entire customer base
ranging from utility companies, dealers, the industry, power plants
and commercial enterprises through to household customers (e. g.
through goldgas GmbH). Natural gas from highly diversified international sources forms the reference base of VNG AG. Long- and
medium-term procurement contracts are interrelated with trading
activities on the European spot and futures markets. The reliable,
market- and demand-oriented products and services together with
more than 50 years of industry experience provide the customers
of VNG AG with a high degree of security, flexibility and efficiency.
vng.de
11
Gas Transport
Network interconnection points of ONTRAS with
the European natural gas transport systems
GASPOOL market area
Transmission pipelines of ONTRAS
Trans-regional transmission pipelines
Flow direction
N
DA
ST
RE
D EU
PE
I PE
IPE II
OP
R PI
AM
EU R O P
EU R
NO
NORD
Greifswald
Dornum
Kamminke
G
RH
450 NETWORK INTERCONNECTION POINTS
Neubrandenburg
NEL
M
Steinitz
OPAL
NETRA
ID
AL
W
ED
AL
Berlin
Frankfurt/O.
JAGAL
GASPOOL hub
*
Dortmund
JAMAL
Gubin
Bobbau
Head office of ONTRAS
LEIPZIG
Lasów
STEGAL
AS
M EG
G
T4
Prague
L
NE
M EG A
Chemnitz
Sayda/Deutschneudorf
Hora Svaté Kateřiny
AL
Waidhaus
EG
AL
TE
NP
M
Lanžhot
Munich
7,000 km HIGH-PRESSURE PIPELINES
130 DOWNSTREAM NETWORK OPERATORS
As at December 31, 2015
12
* Trading partners who have a balancing group at their disposal in the GASPOOL market area can conduct trading transactions at the GASPOOL hub. The GASPOOL hub is not allocated
to any physical entry or exit point and enables the purchase
and sale of gas quantities without booking any capacity.
The VNG Group | Annual Report 2015
ONTRAS Gastransport GmbH
ONTRAS Gastransport GmbH (ONTRAS) with its head office in Leipzig is the independent transmission system operator in the VNG
Group. As co-founder and shareholder of the GASPOOL market
area, the company operates the pipeline network with a length of
more than 7,000 kilometres in the European gas transport system.
ONTRAS is responsible for all measures required for optimising,
strengthening, expanding and ensuring the security of supply in a
needs-based manner. ONTRAS’ core business is the marketing of
transport capacities at approximately 450 network interconnection points as well as the organisation of gas transports together
with the around 130 downstream network operators. In its service
company INFRACON Infrastruktur Service GmbH & Co. KG, ONTRAS
has additionally bundled network-related services for transport
customers, dealers, other network operators and connectees.
ontras.com
13
Gas Storage
4 UNDERGROUND GAS STORAGE FACILITIES
2.5 BILLION m WORKING GAS VOLUME
3
ETZEL
NE
RH
G
STORAGE LOCATIONS
L
Salt cavern
Former gas field
NETRA
AL
JAM
AL
W
ED
AL
JA
GA
L
ID
OPAL
M
BERNBURG
BAD LAUCHSTÄDT
KIRCHHEILINGEN
Head office of VGS
ST
M EG A
L
M EG
EG
AL
Leipzig
2 MARKET AREA CONNECTIONS
AL
(and 1 access to the Dutch network)
TE
NP
M
WORKING GAS VOLUME IN MILLION m³ 151
190
Etzel
Kirchheilingen
1,039
1,147
As at December 31, 2015
14
Bernburg
Bad Lauchstädt
EG
AL
The VNG Group | Annual Report 2015
VNG Gasspeicher GmbH
VNG Gasspeicher GmbH (VGS) with its head office in Leipzig operates storage facilities at four locations in central and northern
Germany. Across Europe the company markets 2.5 billion cubic
metres of storage capacity. All storage locations are connected to
the GASPOOL market area. The northern German Etzel location is
additionally linked with NetConnect Germany (NCG) and currently
with the Dutch transport network operator Gas Transport Services.
Customers are thus provided with secure access to major European trading markets. VGS unifies the entire know-how of underground gas storage—from the operation of storage facilities and
storage capacity marketing through to the execution and invoicing
of storage contracts. With its storage facilities and the flexible storage options for natural gas, biomethane and other synthetic natural
gas, VGS provides a significant infrastructure component in an
energy system being increasingly marked by renewable energies.
vng-gasspeicher.de
15
Foreword of the Executive Board
17–19
Foreword of the Executive Board
Dear shareholders and business partners, dear friends of the Company,
We have to state clearly that we have experienced a difficult year. We too have not been able to escape the
effects of the overall negative development of the market, and in consequence we have not achieved our
defined objectives in terms of earnings.
With a loss of approximately Euro 53 million, the earnings of the VNG Group were considerably lower than our
original expectations. It is true that the gas sendout of the Group, namely a total of 373 billion kilowatt hours,
was slightly higher than the corresponding prior year figure. However, as a result of the negative development
in market prices, sales of approximately Euro 9.4 billion were lower than the corresponding prior year figure.
There are numerous reasons for this unsatisfactory development. The market for natural gas is fiercely competitive and characterised by excess supply and declining margins. In addition, the market climate for E&P
business last year deteriorated considerably. The abrupt decline in oil prices, which was not foreseeable to
this extent, had a particularly negative impact on the results.
The value of the gas storage facilities—the security of supply—continues not to be remunerated to an adequate
extent in the current market and regulatory climate, low seasonal gas price differences restrict the opportunities for marketing the storage capacities. On the other hand, our Gas Transport business area has again
generated good and stable earnings. ONTRAS Gastransport GmbH has consistently utilised the opportunities
offered by the regulated network business, and has also developed service models in non-regulated business.
According to current estimates, the market climate and intensity of competition will remain challenging. In
the medium term, we will therefore also have to live with low raw material prices in the E&P business area
and low sales margins in the Gas Trading business area. It can also be assumed that the difference between
summer prices and winter prices for gas will continue to be low. The flexibility offered by gas storage facilities
will thus in future still not be reflected in adequate revenues in the Gas Storage business area.
How will we now respond in an entrepreneurial manner to these developments?
For this purpose, we are very precisely reviewing and analysing the strengths and weaknesses of every
business area and are re-evaluating risks and opportunities. We will be determined in setting the right
strategy with a view to future growth and earnings opportunities in the rapidly changing energy market. The
main objective will be to again improve the future viability and thus in particular the profitability of the VNG
Group. The VNG Group still enjoys a sound asset situation with a sound equity base and debt of manageable proportions. This will provide us with the necessary scope for setting the future direction of strategies.
The future of energy supplies is becoming smarter and more decentralised. Here, we have identified strategic
options for new business opportunities, innovative solutions and customised products. The world climate
conference in Paris has shown that the fight against climate change requires a wide range of instruments.
One of these instruments will be the increased use of the climate-friendly energy medium natural gas! With
their clear commitment to achieving a further reduction of carbon emissions, the signatory states have set out
guidelines within which modern gas applications will also have a place. They provide a unique combination
of climate friendliness, supply reliability and social acceptability. With these characteristics, natural gas
constitutes an essential link between the world of renewable energies and traditional energy generation.
18
Foreword of the Executive Board | Annual Report 2015
However, we will also develop new business opportunities. For this reason, we support convincing new ideas and
start-ups in the energy sector as a strategic investor with our VNG Innovation GmbH. The investments focus on
the following areas: Energy efficiency, energy storage, energy conversion, digitizing, mobility and sustainability.
The need to identify and analyse business ideas and to ensure that they can be utilised for business purposes requires extensive experience of the energy industry. We are very pleased that the VNG Group has the
appropriate know-how in this respect. This is not least the achievement of our highly qualified employees,
who this year have again provided excellent work and great commitment. We would like to explicitly thank
them for this, particularly in view of the changes which are about to take place.
As a result of the market conditions, we have decided to set up a program designed to boost profitability.
The aim is to ensure that the entire VNG Group has a better and more efficient position in the market. For this
purpose, organisational structures will be streamlined, and personnel expenses, non-personnel costs and
process costs will be reduced. Initial immediate measures have already resulted in considerable savings in
terms of costs. The virtually group-wide restructuring process will also result in a considerable reduction in
the headcount, which is to take place in a manner which is as socially acceptable as possible.
This process will demand a lot of our employees and will require a high degree of flexibility. At the end of
these exertions, there will be a company with a new focus, whose strategy, structures and processes aim
to achieve innovation and efficiency. A company which will be able to provide a robust response to market
requirements with even greater willingness to take on change.
Dear shareholders, we would like to thank you again for the great trust which you have shown us in these
difficult times. In 2016, we expect to see a return to positive results, also due to the implementation of the
program for boosting profitability. Nevertheless, the current year will again not be easy. Changes require
time and endurance. However, we are convinced that we are moving in the right direction, and will press on
ahead with the necessary adjustments in a planned and consistent manner.
Dr Karsten Heuchert
Chairman of the
Executive Board
Hans-Joachim Polk
Board Member,
Infrastructure/Technical Affairs
Bodo Rodestock
Board Member,
Finance/Human Resources
19
Report of the Supervisory Board
21–23
Report of the Supervisory Board
The Supervisory Board has been provided by the Executive Board, regularly, comprehensively and promptly
in written and verbal form regarding the development and the situation of the Company as well as regarding
major business transactions. On the basis of these reports and the information provided, the Supervisory
Board has supervised senior management and in particular has considered and received extensive advice
regarding the development of the business areas, the financial situation of the Company, issues of financial,
investment and personnel planning as well as all measures which, according to the articles of incorporation,
require the approval of the Supervisory Board.
In the 2015 financial year, the Supervisory Board held a total of five meetings. The individual meetings
focused on the results of operations of the Company, the reasons for the deterioration of the annual result
as well as the measures taken by the Executive Board in order to boost profitability. The Supervisory Board
has focused strongly on the earnings situation and the countermeasures initiated by the Executive Board.
The Supervisory board has also intensively considered the strategic direction of the Company presented by
the Executive Board.
The meetings of the Supervisory Board have also focused on the acquisition of production licenses in the
Norwegian Sea, the participation in various exploration activities in the Norwegian Sea and the Gas Trading
activities of VNG, and in particular management of gas trading agreements. The Company’s other investment
involvement, including restructurings under company law, has also been extensively discussed. The Supervisory Board has approved the disposal of one company and the acquisition of further shares in one company.
On the basis of these discussions and also the reports and information provided by the Executive Board, the
Supervisory Board has verified the adequacy of senior management.
PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Leipzig, has audited the
annual financial statements and consolidated financial statements prepared by the Executive Board for
the period ending December 31, 2015 as well as the combined management report and Group management
report for the 2015 financial year, including the accounting records as well as compliance with the accounting
obligations in accordance with Article 6b (3) EnWG, and has awarded them an unqualified auditor’s report.
An audit in accordance with Article 53 Haushaltsgrundsätzegesetz (HGrG—The German Budgetary Principles
Act) has also been carried out for VNG – Verbundnetz Gas Aktiengesellschaft. The audit reports have been
handed to all members of the Supervisory Board. The Supervisory Board has noted and approved the results
of these audits.
The Supervisory Board has audited the annual financial statements and consolidated financial statements
as well as the combined management report and Group management report, and has noted and analysed
the report regarding the audit in accordance with Article 53 HGrG. Following the definitive result of its audit,
no objections are to be raised. The auditor attended the accounts meeting of the Supervisory Board and
reported to the Supervisory Board on the main results of the auditor’s audit. The Supervisory Board has
approved the annual financial statements and consolidated financial statements prepared by the Executive
Board for the period ending December 31, 2015. The annual financial statements have thus been adopted.
The member of the Executive Board responsible for Trading, Prof. Dr Klaus-Dieter Barbknecht, laid down
his Executive Board mandate as of the end of March 31, 2015, and stepped down from the Executive Board
of VNG. Since April 1, 2015, Dr Karsten Heuchert has also been responsible for Trading until further notice.
22
Report of the Supervisory Board | Annual Report 2015
In the extraordinary meeting of the Supervisory Board on April 14, 2015, the Supervisory Board appointed
Mr. Oliver F. Hill as general agent of VNG – Verbundnetz Gas Aktiengesellschaft. Mr. Hill provides Dr Heuchert
with support for carrying out his management duties in the Executive Board Trading division.
Messrs. Hans-Joachim Gornig, Vyacheslav Krupenkov and Matthias Warnig laid down their Supervisory Board
mandates as of the end of August 26, 2015.
Dr Sanders laid down his office as Chairman of the Supervisory Board as of the end of September 30, 2015.
He also stepped down from the Supervisory Board as of the end of October 19, 2015.
The Supervisory Board wishes to thank the members of the Supervisory Board who have stepped down for
the excellent cooperation carried out within an atmosphere of mutual trust, and also wishes to thank them
for their major commitment.
Pursuant to a resolution of the shareholders’ meeting of October 26, 2015, Messrs. Dennis Rohde, Kristof
Ogonovski, Thiemo Röhler and Alexander Freiherr von Ledebur were appointed as members of the Supervisory Board.
Mr. Ulf Heitmüller was elected as the Chairman of the Supervisory Board in the Supervisory Board meeting
on November 10, 2015.
The Supervisory Board Leipzig, March 8, 2016
Ulf Heitmüller
Chairman
23
Management Report and
Group Management Report
for the 2015 Financial Year
25–43
Management Report and Group Management
Report for the 2015 Financial Year
A. The VNG Group undergoing a process
of change
The challenges facing the energy sector have become
even more intense last year. The development of the
overall market climate has resulted in a significant
impact on earnings in virtually all business areas of the
VNG Group. With annual losses of approximately € 53
million for the VNG Group and approximately € 102
million for VNG AG, earnings were considerably lower
than the corresponding prior year profit of the VNG
Group (€ 184 million) and VNG AG (€ 224 million), and
also fell below the Group’s own earnings expectations.
The reasons for these losses are to be seen mainly
in the developments in the overall market climate.
The dramatic decline in oil prices has had a negative
impact especially on E&P business. The low seasonal
gas price differences (summer-winter spread) limited
the marketing opportunities in the field of gas storage,
and had a negative impact on the results of portfolio management in the wholesale sector. In addition,
declining sales margins also had a negative impact on
trading results. The current price developments have
also meant that adjustments have had to be made in
the balance sheet in relation to individual assets in the
storage and E&P business areas. On the other hand,
within a stable regulatory environment, the Gas Transport business area again made a considerable positive
contribution to results of VNG AG and the VNG Group.
The entire energy industry is currently undergoing a
far-reaching process of change, because there is not
expected to be any substantial improvement in the
medium term to the still difficult economic climate.
Nevertheless, future energy policy is providing opportunities for the flexible, reliable, cheap and clean
energy medium natural gas, and the VNG Group will
take advantage of these opportunities. This will be
achieved by way of setting new strategic directions for
the VNG Group and also by way of consistently unlocking all potential with the aim of achieving a sustainable
improvement in earnings. In order to take advantage
of these opportunities even more consistently, the
VNG Group last year started a programme designed
to improve profitability, and has already implemented
26
initial measures. The aim of the programme is to open
up new business opportunities in the short to medium
term, to reduce personnel expenses and non-personnel
costs and also to create efficient personnel and organisation structures. One of the core tasks within this
process of adjustment will be to involve the employees
in shaping the future of the VNG Group.
B. Background
1.Economic background
Considerable increase in intensity of competition. The
overall market climate within which the VNG Group
is operating is characterised by fierce competition,
volatile price movements and considerable pressure
to implement change. The VNG Group is facing the
challenges in an increasingly dynamic market climate
which has now been completely liberalised. The situation is exacerbated by the fact that the German and
also Pan-European gas send-out market is tending to
contract. It is true that, due to weather conditions, gas
consumption particularly for heat generation in the first
half of 2015 increased by approximately 5 per cent
compared with the prior year, and was thus higher than
the growth of approximately 1.3 per cent reported for
German primary energy consumption. However, due
to the growth in renewable energies, there continues
to be a decline in electricity production using natural
gas. An increasing supply of electricity combined with
falling prices has meant that natural gas has become
less competitive in the power station market, and this
trend will continue in the medium term. In addition,
increasing energy efficiency tends to result in lower
demand for natural gas, accompanied by a simultaneous increase in the intensity of competition. In the
medium term, there is expected to be structural oversupply. On the supply side, the buyer market is characterised by fierce price competition.
Slight economic growth. The economic development
in Germany was similar to that in the prior year. Gross
domestic product in Germany expanded by 1.7 per
cent. For 2016, the economic institutions are expect-
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
ing to see growth of 1.6 per cent for gross domestic
product for Germany, and also expect a slightly lower
level for the Eurozone.
Considerable price movements. The VNG Group is
exposed to a wide range of market-related factors,
which may have an impact on the overall development
of business and also the valuation of major assets. In
particular, there was a further decline in the prices of
oil and gas in the 2015 financial year. The level of interest rates continued to be very low. There have been
significant changes in the exchange rates relevant for
the VNG Group, namely the Norwegian Krone (NOK) and
the US Dollar (USD). The Euro and NOK have weakened
considerably compared with the USD. The NOK has also
weakened against the Euro.
Strengthening of downward trend in the oil market.
Following an abrupt decline in the price of oil and a preliminary low seen in January 2015, the price recovered
to almost USD 70/barrel by the beginning of May. However, as it became evident that the market expectations
of a rapid decline in the existing excess supply would
not be met, concerns regarding a considerable slowdown in the rate of economic growth in China and also
the agreement reached in the nuclear dispute with Iran
resulted in a fundamental turnaround in sentiment.
The price of oil came under further pressure, falling
to a level below USD 40/barrel by the end of the year,
a level which was last seen in the year 2004. For the
whole of 2015, the average price for Brent was approxi­
mately USD 54/barrel, compared with more than USD
99/barrel in 2014. The oil price has continued to fall
at the beginning of 2016, and has already fallen below
a level of USD 30/barrel.
Gas prices also lower than the prior year level. The fall
in prices in European gas trading observed in 2014
initially did not continue in the first half of 2015. At
the end of January 2015, there was an unexpected
turn­around on the gas market. The fact that some
Russian deliveries failed to materialise and also the
limitation of Dutch production volumes resulted in a
market restriction and high levels of storage withdrawals. Spot and forward prices rose appreciably and, in
the European spot market, remained above the level
of € 21/MWh for a long time during the summer. How-
ever, a good supply situation and the fact that cold
temperatures failed to materialise meant that spot
prices fell below the level of € 15/MWh in the second
half of the year. Forward prices followed the downward
trend on the spot markets and came under additional
pressure in the expectation of additional deliveries of
liquid natu­ral gasgas (LNG). On the Dutch trading point
TTF, the leading market in continental Europe, the dayahead prices in 2015 were overall approximately € 20/
MWh on average, and were thus lower than the corresponding prior year figure of approximately € 21/MWh.
Low seasonal gas price differences. The seasonal gas
price differences which are important for the management and valuation of storage capacities continue to
decline. Considerable storage withdrawals in February
and March resulted in a significant increase in prices
for the summer of 2015 and thus in a further decline in
the summer-winter spread (SWS) in the first half of the
year. Following a temporary recovery, the SWS continued to decline gradually in the second half of the year
in view of expectations of additional LNG deliveries
starting in spring 2016. Towards the end of the year,
the spread was only just above the level of € 1/MWh,
and was thus only slightly higher than the variable
storage costs.
2. Energy policy
Incentives for the heat market. German energy policy
continues to be very much characterised by the further development of the electricity market. With the
adoption of the amendment to the Co-Generation Act
(Kraft-Wärme-Kopplungsgesetz), the German government met the long-standing requirement for planning
reliability for the operators of co-generation units. The
amendment will benefit existing gas co-generation
units and also the construction of new smaller units.
The German government has also outlined measures
in the heat market which are intended to comply with
the national objective of reducing greenhouse gases.
For instance, the Federal Ministry for Industry and
Energy (Bundesministerium für Wirtschaft und Energie; BMWi) has published a new “Incentive Programme
Energy Efficiency”. The primary aim of this programme
is to promote the launch of fuel cells in boiler rooms.
27
With the “Energy Efficiency Strategy Building”, the
BMWi has also presented an overall strategy for future
energy policy for buildings. The aim is to achieve a virtually climate-neutral building stock by the year 2050.
Debate concerning storage regulation. A study commissioned by the BMWi was used in 2015 as the basis
for discussing various instruments and models for
adjusting the regulatory framework for gas storage
facilities. The German government, which continues
to be convinced of a high degree of supply reliability
in Germany, has announced a range of measures for
2016.
Discussions concerning European energy union. The
EU Commission has published a concept for creating
an “integrated, reliable, competitive and sustainable
European energy system”. By the year 2030, the Commission intends to ensure harmonised conditions in
the fields of supply reliability, internal energy market,
energy efficiency, decarbonisation as well as research
and development between the member states.
Commitment to fewer emissions worldwide. At present, it is not possible to foresee the specific impact
of the resolutions of the World Climate Conference
in Paris on the policy of the German government.
However, with their clear commitment to achieving a
further reduction in carbon emissions, the signatory
countries have laid down guidelines within which the
climate friendly energy medium natural gas will also
be able to play an important role.
C. The VNG Group—an overview
1.Strategic orientation
Intensification of strategy process. Natural gas will
play a key role for reliable, economic and environmentally friendly energy supplies. Despite the difficult
climate, the VNG Group, with its four business areas
E&P, Gas Trading, Gas Storage and Gas Transport, has
a good starting base which will enable it to achieve
reasonable earnings in future by way of setting new
28
strategic directions. Accordingly, in the course of an
intense strategy process, the strategies of the various
business areas will be scrutinised, factors of success
will be examined and strategic options as well as
new business opportunities will be further developed
for the future focus of the VNG Group. The aim is to
achieve a sustainable improvement in the earnings
situation. A sound business model with good credit
standing and a balanced risk-return profile is again a
major basis for the activities of the VNG Group, particularly for access to the capital markets and trading partners and thus for a high degree of room for
manoeuvre and scope for action.
Increasing challenges in E&P business. In view of the
huge decline in raw material prices, there are increasing challenges to develop E&P activities as part of
the growth strategy to form a self-sustaining business with stable long-term contributions to earnings
for the VNG Group. The sustainable strengthening of
the asset portfolio comprising gas and oil production
licences will be carried out gradually, initially by way
of participating in licensing rounds, by way of successfully transferring projects from exploration right
through to development and production and also by
way of investments in deposits which have already
been developed. The VNG Group is concentrating on
Norway and neighbouring regions with its subsidiaries VNG Norge AS (VNG Norge) and VNG Danmark ApS
(VNG Danmark).
Stabilisation of wholesale activities and expansion of
end user activities. The trading activities of the VNG
Group concentrate on wholesale activities which
mainly reflect the activities of the VNG AG. These
comprise traditional distribution business with redistributors, public utilities, industrial and power station
users and management of the portfolio of purchasing
and sales agreements as well as transport and storage
capacities. ENERGIEUNION GmbH also assures access
to the German wholesale electricity market and benefits from established portfolio management services
in energy trading. Further contributions to earnings in
the wholesale sector are provided by group companies in Italy, Austria, Poland, the Czech Republic and
Slovakia. In addition to wholesale activities, end user
business is becoming increasingly important for the
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
earnings of the VNG Group—in particular via goldgas
GmbH (goldgas). With further companies in Austria
and Poland, the Group has an end user portfolio in
Germany and abroad. Minority participations particularly in the end user field also make contributions to
net trading income.
Focus on high-capacity storage facilities. In the market
climate which is currently difficult for storage operators, the VNG Group is focusing on its core stock
of high-capacity and economic storage facilities.
As a response to the demand situation, the storage
products are further developed and costs are further
optimised. As the third-largest storage operator in Germany, VNG Gasspeicher GmbH (VGS) will continue to
take advantage of opportunities which become available, in order for instance to utilise the infrastructure
as storage facilities for renewable energies. The effects
of potential regulatory measures designed to maintain
supply reliability in the German gas market are also
taken into consideration.
Network activities in a stable climate. ONTRAS Gastransport GmbH (ONTRAS) plays a major role in the
Gas Transport business area of the VNG Group. As a
transmission network operator, ONTRAS guarantees
reliable gas transport in excess of 7,000 kilometres
of pipelines and approximately 450 interconnection
points. The economic success of transport activities is
very much determined by the regulatory conditions. In
the infrastructure field, the expansion of network-related service activities and the development of innovative solutions in connection with renewable energies
means that it is possible for added value to be created
beyond regulated business.
The fully consolidated companies of the VNG Group
Exploration & Production VNG Norge AS, Stavanger, Norway
VNG Danmark ApS, Copenhagen, Denmark
Gas Transport
ONTRAS Gastransport GmbH, Leipzig
GDMcom Gesellschaft für Dokumentation und
Telekommunikation mbH, Leipzig
GEOMAGIC GmbH, Leipzig
INFRACON Infrastruktur Service GmbH & Co. KG, Leipzig
OSG ONTRAS Servicegesellschaft mbH, Leipzig
Gas Storage
VNG Gasspeicher GmbH, Leipzig
Gas Trading & Service
VNG – Verbundnetz Gas Aktiengesellschaft, Leipzig
BALANCE VNG Bioenergie GmbH, Leipzig
ECG Erdgas-Consult GmbH, Leipzig
ENERGIEUNION GmbH, Schwerin
G.EN. Gaz Energia Sp. z o.o., Tarnowo Podgórne,
Republic of Poland
goldgas GmbH, Eschborn
goldgas GmbH, Vienna, Austria
HANDEN Sp. z o.o., Warsaw, Republic of Poland
2. Investment portfolio of the VNG Group
The investment portfolio reflects the strategic focus of
the VNG Group, and was continued to be optimised
in the 2015 financial year. Details of changes are set
out in the notes to the financial statements of VNG AG
and the VNG Group. The respective group companies
are managed by the business areas.
Leipziger Biogasgesellschaft mbH, Leipzig
MBG Mitteldeutsche Biogasgesellschaft mbH, Leipzig
SPIGAS S.r.l., La Spezia, Italy
VNG Austria GmbH, Gleisdorf, Austria
VNG Energie Czech s.r.o., Prague, Czech Republic
VNG-Erdgascommerz GmbH, Leipzig
VNG Italia S.r.l., Bologna, Italy
VNG Polska Sp. z o.o., Tarnowo Podgórne, Republic of Poland
VNG Slovakia, spol. s r.o., Bratislava, Slovak Republic
29
3. Personnel development in the VNG Group
Important employer in the region. As of December
31, 2015 the VNG Group employed a total of 1,441
persons in the parent company and in the fully consolidated companies. This means that the Group continues to be a major employer in the region and beyond.
The slight increase in the number of employees
compared with 2014 is due to growth for the stable
business of ONTRAS and for the still expanding VNG
Norge. On the other hand, the number of employees
at VNG AG is declining. The following table sets out
the development in the headcount of the VNG Group
and VNG AG1):
1,600
1,400
1,378
1,343
1,440
1,427
1,441
of Gas Trading, Gas Storage and the Group functions.
This reduction is to be carried out in a manner which
is as socially responsible as possible, and will also
include semi-retirement arrangements which have
already been agreed.
Involvement of employees in the process of change.
One of the core tasks of this process of adjustment will
be to retain highly motivated employees with excellent training for the Group, to encourage them and to
involve them in shaping the future of the VNG Group.
With their skills and achievements, they constitute the
most valuable resource for the future success of the
company.
Corporate governance statement. In accordance with
§ (Article) 289a HGB, the “corporate governance statement” is disclosed on the web site of VNG AG.
1,200
1,000
D. Review of operations in the business areas
800
692
600
393
400
395
408
394
a)Business development
200
0
2011
VNG AG
2012
2013
2014
2015
VNG Group
Efficient structures necessary. The significant changes
in overall conditions mean that it is also necessary for
the existing personnel and organisation structure to
be adjusted to the needs of the market. Steps were
taken last year to create efficient structures and thus
to achieve savings in personnel expenses, non-personnel costs and process costs. The adjustment
process will be continued in 2016 and will require
employees to be extremely flexible and willing to
take on new or changed tasks. However, the virtually
group-wide restructuring process will also result in
considerable reductions in headcount in the areas
1)
30
1. Gas Trading
at year end
Fierce competition resulting in low margins. The
excess supply on the European trading markets has
again resulted in a decline in the price level. The completely liberalised gas market is extremely competi­
tive; this has had a further negative impact on the
attainable margins and means that the compensation
for structuring and flexibility services is still inadequate. These tougher conditions have had a negative
impact on the wholesale result of the VNG Group and
VNG AG. In addition, the lower gas prices have meant
that it was necessary for a considerable write-down on
inventories to be recognised as a result of reference
date factors.
Gas Trading facing up to the competition. In contract
negotiations, customers are focusing on the wholesale
prices which are evident on the market. At the same
time, customer wishes are now considerably more
complex and contract durations are shorter than it
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
has been the case in the past. On the sales side, the
continuous development of customised products and
services is strengthening the competitive position. In
addition, on the purchasing side, the business area is
undertaking further efforts to improve purchase conditions, reduce infrastructure costs and also adjust
cost structures. The continuing further development of
trading and portfolio management systems is to guarantee portfolio management with the optimum use of
capital, utilising the European spot and futures markets. The business area is able to access the Group’s
many years of know-how on the German and European wholesale markets. In addition, the programme
designed to boost profitability aims to achieve more
efficient structures and processes in order to further
strengthen competitiveness.
Increase in send-out on the wholesale markets. The
gas send-out of the VNG Group in the 2015 financial year totalled 373 billion kWh, which was slightly
higher than the corresponding prior year figure (368
billion kWh). Whereas there was a further increase in
send-out to trading companies, there was a decline in
send-out to industrial and power-station customers.
The corresponding figure for redistributors and end
users is slightly higher than the corresponding prior
year level. In 2015, gas send-out was broken down as
follows compared with 2014:
Client groups
2015
2014
102.9
99.6
Redistributors
billion kWh
Industry and power stations
billion kWh
42.0
49.0
Trading companies
billion kWh
222.3
214.7
End users
billion kWh
5.3
5.1
Of the total send-out of approximately 373 billion
kWh, 255 billion kWh is attributable to the European
spot and futures markets. The send-out in Germany
amounted to 84 billion kWh. The VNG Group has established a nationwide presence in all regions of Germany
with its nine sales offices. Other countries, and in particular Italy, Poland and Luxembourg, account for 34
billion kWh. The VNG Group has also established a
presence in other European countries, with its trading subsidiaries in Italy, Poland, the Czech Republic,
the Republic of Slovakia and Austria. The send-out of
VNG AG increased to 323 billion kWh (prior year: 310
billion kWh) in 2015 as a result of higher sales to trading companies.
Diversification in terms of procurement. The VNG
Group in the 2015 financial year procured a total of
370 billion kWh of natural gas (prior year: 365 billion kWh). Most of these volumes were procured
via VNG AG. The optimisation of the portfolio again
resulted in a higher level of sourcing via the spot and
futures markets. In addition, the volumes sourced
via long-term delivery agreements particularly from
Russian and Norwegian sources constituted a major
element of procurement. The gas sourcing of the VNG
Group is broken down as follows:
Sources
2015
2014
57.0
57.0
Russia
billion kWh
Norway
billion kWh
42.8
43.9
Spot/futures markets and other
billion kWh
269.9
263.6
Further growth in the end user segment. In addition
to wholesale activities, end user business is becoming increasingly important for the earnings of the VNG
Group. Retail business in the international trading
companies as well as goldgas SL GmbH represents
this part of the business area. In 2015, the process
of consolidating goldgas SL GmbH with its subsidiaries was completed by way of various new internal
allocations and adjustments. The company was also
renamed goldgas GmbH. In the electricity field, the
company achieved considerable growth and identified and analysed numerous investment projects for
external growth (distribution companies for electricity
and gas), and entered into purchase negotiations. The
aim is to utilise optimisation opportunities by way of
pooling customer support and billing activities. The
internal processes and IT systems were also further
improved in 2015. In view of the fact that competition
continues to become more intense, products and services are becoming increasingly important factors in
addition to the actual process of energy distribution.
goldgas has received further awards from well-known
portals for its customer orientation. The company has
31
also amended its image, which is now also reflected
in a new web site. The positive result for the year is in
line with expectations.
Optimisation of distribution channels. The retail business of goldgas will continue to be characterised by
active competition for new and existing customers
and also by the entry of new distribution companies
into the market. This is reflected particularly in high
price discounts and bonus payments, which are provided in order to acquire new customers in the market.
The process of economic optimisation of the distribution channels of goldgas is to be continued online,
via telesales and distribution partners. Priority will
continue to be given to the efficient maintenance of
existing customers. A further focus will be external
growth by way of acquiring other distribution companies.
Compliance with trading regulation requirements.
The VNG Group complies with the current reporting
obligations and the risk mitigation requirements of
EMIR (European Market Infrastructure Regulation).
VNG AG is also currently preparing to comply with the
requirements of REMIT (Regulation on Energy Market
Integrity and Transparency). The process of translating
MiFID II (Market in Financial Instruments Directive) into
national law is still ongoing.
Further development of the IT systems. The trading
business and the ongoing changes in the background
conditions are posing major challenges to the stability
and reliability of the business processes. With the further development particularly of the trading systems,
the VNG Group guarantees a high degree of process
reliability.
2.Exploration & Production
b) Opportunities and risks
a)Business development
Continuous monitoring of the overall portfolio. For
the VNG Group, the opportunities and risks arising
from gas trading operations result from the price fluctuations on the raw material markets. The positions
of purchasing and sales contracts are pooled, monitored and managed within the companies in an overall
portfolio. Taking account of natural hedging effects in
the portfolio, the Group also uses derivative financial
instruments to limit potentially negative changes to
results of the trading portfolio. The activities of the
business area are carried out within a risk-limiting
trading framework specified by the Group.
Broadly positioned on purchasing and sales side. VNG
AG has a structurally diversified and market-related
purchasing portfolio. The existing contracts are managed by the company itself or are used for assuring
distribution activities. On the sales side, the VNG
Group is developing new products and opening up
additional distribution channels in traditional wholesale business and also on the end user market. The
VNG Group also consistently uses the opportunities
which arise in spot and futures trading for optimising
its portfolios.
32
Downturn in earnings due to declining oil price. The
market climate for E&P business deteriorated considerably in the course of the 2015 financial year. In particular, the decline of oil prices has had a negative impact
on the result situation of VNG Norge, which is already
producing in the Njord, Brage, Hyme and Draugen fields
on the Norwegian continental shelf. In terms of results,
the specific aspect of the Norwegian tax system as well
as opposite exchange rate effects between the group
currency Euro and raw material prices which are quoted
in USD have provided a certain amount of compensation for this negative development in prices. Overall,
higher sales were generated compared with the prior
year because the production volumes from the Draugen
field which was acquired in 2014 were for the first time
included for a full 12-month period in the consolidated
financial statements. The dramatic decline in prices has
meant that considerable write-downs had have to be
recognised in the balance sheet in relation to individual
assets of the VNG Group and the figure recognised for
the participation of VNG Norge at VNG AG respectively.
However, at the end of the medium-term period, the VNG
Group expects to see oil prices gradually recover to a
level of up to USD 80/barrel by the year 2020.
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
Award for exploration success. At the end of the 2015,
VNG Norge held shares in 42 production licenses on
the Norwegian continental shelf and also shares in two
licenses in the western Danish North Sea via its subsidiary VNG Danmark. In six of its licences, VNG Norge
acts as the operations manager. For its successful drilling in 2014 in the Pil and Bue prospects, VNG Norge
received the Rystad Energy’s “Gullkronen Award” at
the beginning of 2015. In the category “Explorer of
the Year”, the company was recognised for its success
in the field of exploration. This is awarded annually
to companies, working parties or persons with excellent achievements on the Norwegian continental shelf.
In addition to the successful award of licenses, this
clearly underlines the fact that VNG Norge in Norway
is perceived to be a competent and capable partner
in the field of exploration and production business.
Consistent conversion of discoveries into production.
In order to develop the Ivar Aasen field, in which VNG
Norge owns a participation, the framework of the
future production platform has been installed and
work has started on sinking production drillings. Oil
production will probably commence in the fourth quarter of 2016. In the “Solsort” field unit, work started
on assessing the recovery of identified hydrocarbons
via the Hejre and Syd-Arne field. The first phase of
project planning for developing the promising Pil and
Bue discoveries was completed.
Drilling campaign in the area of the Pil and Bue discoveries. VNG Norge has carried out various exploration
and appraisal drillings in the area of the successful
Pil and Bue drillings. As the operation manager, VNG
Norge was able to identify additional resources with
the first drilling in the Boomerang prospect, and also
gained valuable knowledge for the further development of Pil and Bue. On the other hand, further
exploration drillings on the Lorry, Hagar and Portrush
prospects failed to identify any resources.
Research and development. VNG Norge carries out
research and development work for hydrocarbon
deposits which is typical for E&P business. Research
activities naturally focus on constantly improving the
process of prospecting for, developing and producing
such deposits.
b)Opportunities and risks
Balanced portfolio of licenses for diversifying the risks.
The VNG Group has a balanced portfolio of licenses
in the exploration phase and also increasingly in the
development and production phase. There are also
risks to be seen in unsuccessful exploration drillings.
As the licenses are increasingly further developed,
these risks tend to become less significant. The result
of the business area very much depends on the development of the market prices of natural gas and oil. It
is currently being assumed that the current pressure
on prices will continue in the medium term. Accordingly, with regard to management of the exploration
portfolio and also with regard to the development of
existing discoveries, the overriding aim will be to pursue only those projects which will also be financially
viable in a market climate with low raw material prices.
The underlying scenarios take account of the current
developments of the exchange rates and raw material
prices. Overall, with regard to the composition of its
portfolio, the VNG Group concentrates on prospects
where the risks are manageable, aims to achieve
shareholdings in licenses which are commensurate
for the level of risk involved, and also works together
with experienced partners within the framework of
syndicates.
Compliance with stringent standards. The company
has taken out standard insurance for the sector in
order to avoid environmental and accident risks. In
addition, cooperation with experienced operating
managers and companies plays a key role for complying with the environmental, health and safety
standards in Norway and Denmark which are stringent
in terms of an international comparison. VNG Norge
also guarantees compliance with these standards by
including internal regulations and regular training and
staff development.
3. Gas Storage
a)Business development
Storage capacities still exposed to fierce price pressure. The Gas Storage business area continues to
33
be confronted with a difficult market climate. For
instance, the difference between summer and winter prices for natural gas, which is a key indicator for
the value of flexibility and thus storage capacity, has
again declined significantly in recent months. With the
decline in seasonal price fluctuations, the storage fees
which are attainable on the market also continue to be
subject to fierce competitive pressure. The situation
is not likely to recover in the short to medium term.
Accordingly, it has again been necessary to recognise
impairments in relation to individual storage units.
Further assessment of the asset portfolio. The major
contribution made by natural gas storage facilities
towards ensuring reliable supplies, network stability
and portfolio optimisation is not being sufficiently
rewarded by storage customers as a result of the
excess supply of flexibility. VGS is therefore concentrating its activities on the economically sound
and efficient core portfolio. For the other assets, all
options are being impartially considered. Accordingly,
a decision has been taken to decommission the underground gas storage facility at the location in Buchholz.
Storage capacities fully booked. With its underground
gas storage facilities in Bad Lauchstädt, Bernburg,
Etzel and Kirchheilingen, VGS has a working gas volume of around 2.5 billion m³. The underground storage
facilities have been or are fully booked in the storage
year. Following the completion of the Etzel storage
facility at the end of 2014 and following the commissioning of the third and thus final cavern tranche, final
work will now be completed by 2016. In addition, VGS
is also involved in the development and operation
of the underground gas storage facility “Katharina”
together with Gazprom export LLC via Erdgasspeicher
Peissen GmbH. Initial cavities are already operating.
The development work will probably last until 2024.
VGS with innovative ideas in competition. VGS is facing
up to the competition on the German storage market
with its know-how which it has established over many
decades in the field of establishing and operating
storage facilities and also with the development of
innovative, customer-related products and services.
The online platform “easystore” provides storage customers with an independent, quick and easy method
34
of individually configuring a suitable combination of
working gas volume as well as entry and exit capacities. VGS also offers its customers various gas transition points. In this way, storage capacities can now
also be recorded directly at the virtual trading points.
b) Opportunities and risks
Improving efficiency. The intensity of competition has
had various consequences, including an increasing
percentage of short-term storage bookings. The fact
that market prices are volatile and simultaneously
declining has resulted in uncertainty for the future
marketing of storage capacities and the revenues
attainable with these capacities. The VNG Group is
facing up to this development by means of product
innovations, demand-oriented investment decisions
as well as measures designed to improve efficiency. In
response to the demand situation, the cost structures
are being further optimised and the organisation is
being restructured to reflect the needs of the market.
Within the context of reliable supplies in the German
gas market, the possible impact of potential market
intervention is also being assessed. There are also
opportunities for the existing infrastructure to be
used as a storage facility for renewable energies. In
the storage facilities operated jointly with partners,
VGS aims to achieve mutually acceptable solutions
for financial optimisation of the projects in the course
of commercial negotiations with its project partners.
If the negotiations have not produced a result, VGS
considered that it was compelled to initiate arbitration
proceedings in order to enforce its claims which are
currently still pending.
High safety standards. The constant maintenance and
monitoring of the underground gas storage facilities
on the basis of technical rules and internal regulations
and also the regular assessment of the condition of
all underground and overground installations guarantee a high technological safety standard which
is also consistent with mining law. Annual training
plans designed to ensure the ongoing qualifications
of employees and service providers of VGS as well as
regular internal and external audits also guarantee
stringent quality standards.
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
4.Gas Transport
a)Business development
Independent transport network operator ONTRAS. In
a stable climate, the Gas Transport business area was
again able to make a considerably positive contribution to the result of VNG AG and the VNG Group. The
development of business is determined by ONTRAS
which is organised in the form of an independent and
fully equipped network operator.
ONTRAS in incentive regulation. Since 2010, ONTRAS
has been subject to incentive regulation. As was the
case for the first period of regulation, 100 per cent
efficiency has again been certified for ONTRAS for the
period 2013 to 2017.
Development and expansion of the network. In the
Lausitz region, ONTRAS is constructing two new gas
pipelines each with a length of approximately 35 kilometres. The aim is to improve the energy infrastructure
and provide long-term reliable natural gas supplies
in individual regions of Brandenburg and Saxony.
Furthermore, ONTRAS and the other German transmission network operators are obliged to prepare a
joint network development plan (“NEP“) every year so
that they will be able to continue to guarantee supply
reliability in future. The NEP 2015 which was finally
available in binding form at the end of 2015, does
not contain any network expansion obligations for
ONTRAS. At present, the transmission network operators are drawing up the NEP 2016 on the basis of the
scenario framework confirmed by the Federal Network
Agency in December 2015.
b)Opportunities and risks
ONTRAS in regulation. The economic development in
the Gas Transport business area very much depends
on the regulatory conditions and the resultant permissible revenue caps. With regard to the planned
amendment to the incentive regulation, ONTRAS does
not expect to see any major changes to the overall
conditions.
ONTRAS in competition. ONTRAS continues to take
advantage of the opportunities offered by the regulated transport market, and also takes advantage of
the possibilities of rendering services in the non-regulated energy infrastructure field. For this reason,
the transmission network operator pooled its entire
service activities in 2015 in its subsidiary INFRACON
Infrastruktur Service GmbH & Co. KG. ONTRAS has
also identified opportunities in the development and
further development of national and international
cooperations with other network operators. In order
to strengthen its leading market position as a transmission network operator in the field of integrating
renewable energies, ONTRAS has joined the European
Green Gas initiative. The aim of this initiative is to support carbon-neutral energy supply by the year 2050.
ONTRAS is also involved in the Dena project “Powerto-gas potential atlas for Germany”.
Technical safety is guaranteed. ONTRAS continuously
carries out any necessary refurbishment and modernisation work on its technical installations in order to
guarantee maximum reliability within the network and
thus ensure its contractual obligation with regard to
supplying the downstream networks and end users
with gas. Technical safety and the availability of the
transmission network with its corresponding installations were also guaranteed at all times throughout
2015.
E. Annual financial statements of VNG AG
and consolidated financial statements
of the VNG Group
Core objectives of financial strategy. The guiding principles of the VNG Group define the common values of
partnership, openess, entrepreneurship and responsibility as key aspects of economic success in these
challenging times. This is the basis on which the VNG
Group and the Group’s business areas are managed
on the basis of key financials (EBIT incl. tax refund;
earnings after taxes) as well as further financials indicators. The core objectives of the financial strategy are
as follows: An adequate dividend for shareholders,
35
the avoidance of risks posing a threat to the company,
the generation of positive cash flows and an adequate
return as well as the assurance of sound creditworthiness.
Earnings expectations have not been met. The difficult market situation has had a considerably negative
impact on the overall development of business. This
is reflected particularly in the earnings parameters,
which had been affected by considerable impairments and, unlike the situation in the prior year, do
not include any significant positive one-off effects.
With regard to the impact of impairments on earnings,
please refer to the notes to the financial statements of
VNG AG and of the VNG Group. Notwithstanding these
exceptional factors, VNG AG and the VNG Group overall
fell below their own earnings expectations also with
their operations. The exceptional factors have had a
negative impact on results, but have not had the same
impact on the funds from operations. Accordingly, the
cash flow from operations, which additionally benefitted from changes in working capital has also been
used for repaying financial liabilities. The VNG Group
and also VNG AG continue to enjoy a sound asset
situation with a sound equity ratio. The indicators
of the VNG Group and VNG AG which are relevant for
management purposes have developed in detail as
follows in the 2015 financial year:
VNG Group
VNG AG
2015
2014
2015
2014
EBIT incl.
tax refund
€ million
–54
230
–98
253
Earnings
after taxes
€ million
–53
184
–102
224
Funds from
operations *
€ million
224
238
82
317
Cash flow
from operating
activities **
€ million
376
270
20
–31
Financial
liabilities ***
€ million
443
575
370
501
%
24
25
33
32
Equity ratio
*FFO: Result for the period adjusted by non-cash-effective expenses and
income as well as profits and losses from the disposal of fixed assets
** Prior year figures adjusted due to the application of DRS 21
*** Due to external financing partners
36
1.VNG Group
a)Earnings situation
The VNG Group reports a net loss of € 53 million for
the 2015 financial year, whereas it had generated a
net income after tax of € 184 million in the prior year.
The developments in earnings in the business areas
varied, as was the case in prior years. Gas Transport
again made a very positive contribution to the Group
result. On the other hand, in Gas Trading segment, the
net trading income of operations failed to match the
prior year figure, and also fell below the company’s
own expectations. As a result of the further decline in
gas prices, it was necessary to recognise an impairment to gas inventories as of the reference date. In
Gas Storage segment, risk provisioning recognised
in relation to storage assets again had a negative
impact on earnings. In the E&P business area, the
result was affected by costs incurred in connection
with the exploration activities, 78 per cent of which
are refunded by the Norwegian state. The considerable changes in the price of oil also meant that it was
necessary for impairments to be recognised in relation to production licenses and property, plant and
equipment. On the other hand, production from the
Draugen field which was acquired in the prior year had
a positive impact on the results of the business area.
The development of individual items of the income
statement is shown in the following:
Sales amounted to approximately € 9.4 billion, despite
higher volume sales, and was lower than the corresponding prior year figure (€ 10.0 billion) because
the average sales prices which were achieved declined
compared with the prior year period as a result of the
market price developments. The development in cost
of materials reflected the development in sales.
Compared with the prior year period, depreciation
and amortisation increased as a result of the higher
volume of impairments recognised in relation to the
storage and E&P assets.
The income from participating interests mainly reflects
associated companies recognised using the at-equity
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
valuation. Due to the change in the portfolio of partici­
pating interests and lower contributions to earnings
made by the participating interests, earnings had
declined compared with the prior year.
The factors described above as well as the reduction in
other operating income, which in the prior year mainly
reflected the one-off income from the disposal of the
participating interest Erdgasversorgungsgesellschaft
Thüringen-Sachsen mbh (EVG), resulted in a much
lower EBIT 2) of the VNG Group (€ –54 million) compared with the prior year.
Net interest income has improved compared with
the prior year. This is due mainly to a lower average
borrowing requirement and a lower level of interest
rates. Interest income was also generated by means
of loans to participating interests. On the other hand,
the interest expenses in connection with the creation
of provisions have increased and have had a negative
impact on net interest income.
In addition to tax income arising from tax refunds,
current tax expenses as well as income from deferred
taxes have affected the tax result. Compared with the
prior year, considerably higher deferred tax income
has been generated particularly in connection with
the impairments.
b)Financial situation
2015
2014
€ million
41
28
€ million
376
270
Thereof:
Funds from operations (FFO)
€ million
224
238
Thereof:
Other payments from current
32
Cash and cash equivalents at
the beginning of the period
Cash flow from operating
activities
€ million
152
Cash flow from investing
activities
€ million
–155
11
Cash flow from financing activities
€ million
–236
–266
Changes due to exchange rate
and consolidation-related factors
€ million
0
–2
Cash and cash equivalents at
the end of the period
€ million
26
41
2)
Due to the developments of operating business, the
FFO has declined by approximately € 14 million compared with the prior year. This decline, which is moderate in comparison with the result, is due to the fact
that the FFO in both years were not affected by one-off
effects. Compared with the FFO of VNG AG, the FFO of
the VNG Group are higher, as they contain the cash-effective results of all fully consolidated subsidiaries
which, particularly in the case of ONTRAS and VGS, are
also higher than the investment income recognised in
the separate financial statements. The cash flow from
operating activities3) is approximately € 106 million
higher than the corresponding prior year figure, and
amounted to approximately € 376 million. This is due
to the changes in working capital and the fact that the
resultant amount of capital tied up was considerably
lower.
Cash outflows within the cash flow from investing
activities amounted to a net amount of approximately
€ 155 million. The investments mainly relate to the
network and exploration activities as well as loans
paid out to EPG. Higher investment payments were
incurred in the prior year, particularly in connection
with the acquisition of the Draugen field. On the other
hand, inflows have been reported in the prior year from
the sale of shares in EVG. Cash-effective dividends of
participating interests (€ 29 million; prior year period:
€ 38 million) and interest received (€ 3 million; prior
year period: € 5 million) are disclosed within the cash
flow from investing activities.
Within the cash flow from financing activities, the
VNG Group repaid financial liabilities of approximately
€ 132 million to external financing partners, and made
interest payments of approximately € 31 million (prior
year period: € 34 million). A dividend of € 73 million
was paid to the shareholders for the prior year.
The companies in the VNG Group were solvent at all
times. Credit lines of approximately € 1.2 billion were
available as of December 31, 2015.
3)
incl. tax refund for exploration costs of VNG Norge
ue to the application of DRS 21, dividends and interest received as well as
D
outflows for creating cover funds are attributable to cash flow from investing
activities. Outflows for interest payments are shown under cash flow from
financing activities.
37
c)Net assets
The balance sheet structure of the VNG Group changed
as follows compared with the prior year:
Assets
Equity and liabilities
€ 2,470 million
Fixed assets 43 %
Current assets 49 %
Deferred tax assets 7 %
Other assets 1 %
Dec. 31, 2015
€ 2,847 million
40 %
€ 2,847 million
24 %
25 % Equity
76 %
75 % Liabilities
54 %
6 %
Dec. 31, 2014
Compared with the prior year reference date, the balance sheet total of the VNG Group declined by approximately € 377 million (13 per cent) to € 2,470 million.
This is due to the impairments recognised in relation
to fixed assets in the storage and E&P business areas.
The stocks of stored gas in current assets have also
declined compared with the prior year. The lower market prices have also had an impact on the extent of
inventories and receivables, also reflecting the lower
level of gas send-out in December due to the weather
conditions. The development in assets has resulted in
a shift in balance sheet ratios in favour of fixed assets.
Compared with the prior year reference date, the equity
ratio of the VNG Group has declined only slightly,
namely by one percentage point to 24 per cent.
2. VNG AG
a)Earnings situation
With EBIT of € –98 million (prior year period: € 253
million) and earnings after taxes of € –102 million
(prior year period: € 224 million), VNG AG has reported
a significant decline in earnings. This is due mainly to
38
€ 2,470 million
Dec. 31, 2015
Dec. 31, 2014
an impairment recognised in relation to the shares in
VNG Norge. As is the case in the consolidated financial
statements, the negative price development on the
business areas of Gas Trading and Gas Storage has
also had a negative impact in the financial statements
of VNG AG. In addition, the disposal of the shares
in EVG also had a positive impact on the results of
VNG AG in the prior year.
b) Financial situation
2015
2014
€ million
9
4
€ million
20
–31
Thereof:
Funds from operations (FFO)
€ million
82
317
Thereof: Other payments
from other operating
Cash and cash equivalents
at the beginning of the period
Cash flow from operating
activities
€ million
–62
–348
Cash flow from investing
activities
€ million
354
44
Cash flow from financing
activities
€ million
–378
–8
Cash and cash equivalents
at the end of the period
€ million
5
9
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
In line with the development in overall earnings, the
FFO of VNG AG have declined to approximately € 82
million. In addition, in the prior year, much higher
results of the subsidiaries had a positive impact on
the FFO. However, unlike the situation regarding the
result for the year, the FFO are not affected by the
non-cash-effective exceptional factors. The changes
in working capital and the resultant reduction in the
amount of capital tied up have resulted in a higher
cash flow from operating activities4) compared with
the prior year. The cash flow from investing activities very much reflects the payment inflows from
profit transfers and dividends from subsidiaries and
other equity participations, which at € 393 million
were higher than the corresponding prior year figure
(€ 288 million). As was the case in the prior year, the
cash outflows for investments (a net figure of € 54
million; prior year period: € 267 million) mainly comprised payments of equity and loans to subsidiaries.
The cash flow from investing activities includes interest received of € 15 million (prior year period: € 23
million).
The cash inflows from operating activities in conjunction with the high cash flow from investing activities
were used for repaying liabilities due to external
financing partners. The cash pool liabilities have
also declined. Interest payments of € 22 million were
made in the 2015 financial year (prior year period:
€ 25 million). The dividend payment for the prior year
of € 73 million is also included in the cash flow from
financing activities.
c)Net assets
The balance sheet total has declined by € 622 million
(23 per cent) compared with the prior year to € 2,143
million. This is due to the adjustment to the value of
shares in VNG Norge’s fixed assets. In addition, as
was the case in the consolidated financial statements,
a decline in storage inventories compared with the
prior year as well as lower market prices have resulted
4) Due to the application of DRS 21, dividends and interest received as well as
outflows for creating cover funds are attributable to cash flow from investing
activities. Outflows for interest payments are shown under cash flow from
financing activities.
in a decline in current assets. The development in
assets has resulted in a shift in balance sheet ratios
in favour of fixed assets.
Compared with the prior year reference date, the
decline in the balance sheet total has resulted in the
equity ratio improving slightly by one percentage point
to 33 per cent.
There have been no major events after the reporting
date.
F. Group-wide management of opportunities
and risks
Risk diversification by means of strategic positioning.
With four business areas, the VNG Group has established a position in relation to the product natural
gas. The purpose of this strategic positioning is to
promote risk diversification, and also enables the
Group to take advantage of the opportunities within
a dynamic market environment. The Group responds
promptly to current changes in the financial and legal
conditions of its core business, and the potential
opportunities and risks are identified and evaluated
(with regard to the opportunities and risks of the individual business areas, please refer to the comments
in section D).
Group-wide risk management. For ensuring that there
is a permanent balance between opportunities and
risks, the VNG Group has an extensive risk management system in which all business areas and group
companies are integrated. The principles of group
risk management are implemented in the individual companies and business areas on the basis of
company-specific risk management regulations and
transparent reporting.
Systematic recording and evaluation of opportunities
and risks. In addition to the operational measures
and monitoring of risks, a comprehensive inventory
is carried out twice every year; this inventory systematically records, evaluates and aggregates all opportunities and risks. There is also an ad-hoc reporting
39
system on the basis of defined benchmarks guaranteeing that changes in the opportunity/risk portfolio
are recognised at an early stage.
Monitoring and management of the portfolio of participating interests. The earnings forecasts which are
regularly updated by the participating interests are
included in the reporting system. The value of the
participating interests is continuously monitored.
In the case of major fully-consolidated participating
interests, the Group has introduced instruments and
procedures of functional management which enable
the VNG Group to focus on its objectives and also
which enable opportunities and risks to be identified at an earlier stage. The VNG Group observes all
relevant markets of its participating interests, and is
also able to respond promptly to risks if necessary as
a result of its presence on the executive bodies of the
companies. Impairments are recognised if there are
any future risks to results with an impact on the value
recognised for the participating interests.
Group-wide compliance management. The VNG Group
has a Group-wide compliance management system
(CMS). The aim of this system is to ensure that the
conduct of all employees complies with all legal
requirements so as not to pose a risk to the confidence of customers, business partners, shareholders
and the public in the VNG Group. In addition to organisational precautions and guidelines, there is also an
extensive reporting system as well as goal-oriented
training for employees. The effectiveness and adequacy of the CMS were assessed and certified in 2015
by an auditing company. Accordingly, the principles
and measures of the CMS are suitable, with adequate
reliability, for ensuring the timely recognition of risks
of significant violations of laws and internal regulations in the fields of the prevention of corruption, cartel law and trade regulation within the VNG Group, and
are also suitable for preventing such irregularities.
Certified integrated management system. VNG AG also
has a certified integrated management system with
the elements of quality, environmental and information security. The reliability of the work procedures
and the adequate implementation of all standards
are regularly monitored.
40
Systematic financial risk management. The financial
risk structure of the VNG Group is virtually unchanged
compared with last year. The VNG Group is exposed
particularly to risks arising from changes in raw
material prices, exchange rates and interest rates as
well as credit risks. The fundamentally conservative
approach of the company is reflected in its systematic financial risk management system. The functions
of trading, clearing and financial risk controlling are
segregated within the Group’s organisation.
Hedging of price, currency and interest rate risks. The
sole purpose of the derivative standard financial
instruments used within the framework of financial
risk management is to hedge existing risks of underlyings. Commodity futures are used for managing
price risks arising from gas purchasing and sales
contracts. For daily measurement and monitoring of
these risks, statistical risk measures are used and
the potential changes in the present value of the trading portfolio are limited. All currency exposures of the
VNG Group are, where possible, concentrated and
completely hedged at VNG AG. Contracts with Group
companies outside the Eurozone are concluded in
the domestic currency of such companies. The main
instruments used for hedging purposes are currency
futures and natural portfolio hedge effects. VNG AG
operates an active policy of interest rate risk management, with regular evaluation of all interest rate
risks. Derivative financial instruments are also used
for this purpose.
Financing assured. The Group’s solvency is guaranteed at all times as a result of adequate liquidity reserves in the form of committed credit lines
and also as a result of optimised allocation of the
Group’s internal liquidity. The core elements of
financing are a sound syndicate loan line and borrower’s note loans with various financing partners.
At the beginning of the financial year, VNG AG was
successfully able to refinance its syndicate loan
line of approximately € 1.3 billion for a further five
years. The rolling liquidity planning covering several
years regularly establishes the future peak financing requirement which, as of the reference date, was
always covered by adequate sources of finance even
in risk scenarios.
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
Increase in number of business partners reflected
in credit risk management. The main credit risks are
attributable to the continued increase in the number of
gas supply and trading agreements with national and
international business partners. Credit risks also arise
from financial instruments agreed for the purpose of
hedging currency, raw material price and interest rate
risk positions. The rating assessment of our business
partners (customers and suppliers, trading partners as
well as financial institutions) is evaluated and continuously monitored within the framework of established
credit risk management on the basis of available information and using standard market procedures. The
standard hedging instruments (e. g. guarantees) and
credit insurance for factoring are used selectively for
managing credit risks.
Foreseeable risk position. Apart from the general risks
associated with business, there are no indications at
present of any risks which might have a sustainable
and significantly negative impact on the net assets,
financial position and results of operations of VNG AG
and the VNG Group.
G. Outlook
The market continues to be challenging. There will not
be any fundamental recovery in the low raw material
prices, distribution margins and seasonal gas price
differences in the short to medium term. The competition on a market which is tending to contract will also
become more intense. Accordingly, it is not possible
to assume that there will be any substantial improvement in the economic conditions particularly for the
business areas Gas Trading, Gas Storage and E&P in
the near future.
Review of the strategic direction. The ongoing market
turmoil means that it will be essential for the strategic
direction of the VNG Group to be reviewed. The VNG
Group has already initiated this process. Accordingly,
strategies of the various business areas will be scrutinised, factors of success will be examined and strategic options as well as new business opportunities will
be developed for the future focus of the VNG Group.
Previous activities will be put up for negotiation if they
do not meet the necessary profitability requirements.
Convincing new business ideas in the energy sector
are for instance supported by the newly established
VNG Innovation GmbH as a strategic partner of start-up
companies.
Implementation of measures in order to boost profit­
ability. The programme which was started last year to
boost profitability will also be continued with great
intensity. Initial immediate measures have already
resulted in significant cost savings. Further efficiency
and earnings potential is to be unlocked in the short
to medium term. This process will include leaner structures and processes as well as a significant reduction
in the number of personnel.
Improvement in earnings expected for 2016. Gas
Transport activities are again expected to report stable results in future. The challenging market situation
will continue to have an impact in the other business
areas. In particular, the very uncertain development
in raw material prices is having a significant influence
on the short- and medium-term earnings situation.
Recovery in Gas Trading is only expected to take place
slowly by way of further improvements to purchasing
conditions and also by way of focusing on customer
groups and business models providing strong returns.
The process of establishing profitable E&P business
will continue to require considerable volumes of funding in the course of the next few years, taking account
of the internal financing resources of the VNG Group.
As part of the process of implementing the programme
designed to boost profitability, effects designed to
improve results are expected to be seen from 2016
onwards. Overall, positive results again for VNG AG
and the VNG Group are expected for 2016. Earnings
are also expected to improve because last year was
affected by considerable one-off effects. Possible settings of new strategic directions might also have a considerable impact on the net assets, financial position
and results of operations.
Investment activity will continue to be high. In the
course of the next few financial years, investments will
continue to focus on maintaining profitability in the
41
transport field and also on expanding E&P activities
with the aim of assuring future growth opportunities.
Further investments are also planned for expanding
end user business in Gas Trading. As has been the
case in the past, the extent of the anticipated cash
flow from operating activities may be subject to significant fluctuations as a result of the development
in working capital in trading business as of the reference date, and will continue to have a significant
influence on group debt. For 2016, the level of debt
is expected to increase mainly as a result of the high
levels of investment activity. On the other hand, the
equity ratio, which is a measure of creditworthiness,
is expected to be stable.
Change in group of shareholders. In the fourth quarter
of 2015, EnBW Energie Baden-Württemberg AG signed
an agreement regarding the purchase of the shares in
VNG AG held by EWE Aktiengesellschaft. The acquisition is not yet effective due to conditions precedent.
Willingness to change in the future. The future energy
policy will offer major opportunities of significantly
improving the earnings situation. New business
opportunities and efficient structures as well as well
trained, experienced and highly motivated employees are essential in this respect. The VNG Group has
for this purpose initiated a process of change within
the company and is thus setting the right course in a
difficult market situation. The VNG Group is convinced
that it will thus be able to meet the major challenges.
42
Management Report and Group Management Report for the 2015 Financial Year | Annual Report 2015
43
consolidated financial statements
45–72
Consolidated Balance Sheet as
at December 31, 2015
Assets
Notes
Dec. 31, 2015
T€
Dec. 31, 2014T€
74,835
109,555
II. Property, plant and equipment
720,316
760,364
III. Financial assets
279,396
258,745
1,074,547
1,128,664
A. Fixed assets
I. Intangible assets
B. Current assets
I. Inventories
1
255,853
378,109
II. Receivables and other assets
2
917,288
1,105,652
25,503
40,738
1,198,644
1,524,499
III. Cash and cash equivalents
C. Special loss item from provisions formed pursuant to Article
17 (4) DMBilG [DM Balance Sheet Act]
D. Prepaid expenses
E. Deferred tax assets
3
F. Surplus resulting from asset offsetting and capitalised
4
2,219
2,594
10,481
10,403
184,503
180,676
0
627
2,470,394
2,847,463
Notes
Dec. 31, 2015
T€
Dec. 31, 2014
T€
5
328,000
328,000
Equity and Liabilities
A.Equity
I.Subscribed capital
II.Retained earnings
6
316,042
205,437
III. Profit participation capital
7
772
695
IV.Equity difference from currency conversion
8
V. Consolidated balance sheet loss/profit
B.Special items
3,975
183,605
590,357
721,712
2,565
3,624
C.Provisions
9
490,135
469,975
D.Liabilities
10
1,330,414
1,550,948
6,377
20,638
11
50,546
80,566
2,470,394
2,847,463
E.Deferred income
F.Deferred tax liabilities
46
–1,648
–52,809
Consolidated Financial Statements | Annual Report 2015
Consolidated Income Statement for the Period
from January 1 to December 31, 2015
Notes Jan. 1 to Dec. 31, 2015 Jan. 1 to Dec. 31, 2014
T €
T €
1. Sales
12
2. Changes in work in progress
3. Work performed by the Company and capitalised
4. Other operating income
5. Cost of materials
9,402,655
9,977,949
1,197
55
4,031
2,782
110,167
307,783
9,518,050
10,288,569
14
9,137,389
9,721,314
13
6. Personnel expenses
15
122,886
122,762
7. Depreciation and amortisation expense
16
216,692
143,439
8. Other operating expenses
17
161,770
144,064
9. Financial result
18
–24,148
–6,202
–144,835
150,788
93,661
34,427
1,635
1,465
–52,809
183,750
0
–145
–52,809
183,605
10. Loss/profit on ordinary activities
11. Income from taxes on income
12. Other taxes
13. Consolidated net loss/net income for the year
14. Profit or loss attributable to other shareholders
15. Consolidated balance sheet loss/profit
19
47
VNG – Verbundnetz Gas Aktiengesellschaft, Leipzig
Notes to the Consolidated Financial Statements 2015
I. General notes
The consolidated financial statements of VNG – Verbundnetz Gas Aktiengesellschaft, Leipzig (VNG), have been
drawn up in accordance with the provisions of the German Commercial Code [Handelsgesetzbuch—HGB], the
German Stock Corporation Act [Aktiengesetz—AktG], the Act on the Preparation of Deutschmark Financial Statements [D-Markbilanzgesetz—DMBilG] and the German Accounting Standard [Deutscher Rechnungslegungs
Standard—DRS]. The consolidated financial statements for the period ending December 31, 2015 have been
drawn up as “fast close” financial statements. In particular, the reduction in the time available for preparing the
financial statements has led to the use of estimating procedures in December 2015. The estimates concerned
were made on the basis of all information available at the time when the financial statements were drawn up.
For clearer and more effective presentation, individual items of the balance sheet and the income statement
are grouped together. These items are explained in these notes. The notes to the balance sheet and income
statement items required by law and the notes which may either be presented in the balance sheet itself or in
the notes to the financial statements are presented separately in these notes.
The income statement has been prepared using the nature of expense method in accordance with Article 275
(2) HGB.
Information concerning the consolidated group
German companies included in the Group:
Share
Direct
%
1
100.00
BALANCE VNG Bioenergie GmbH, Leipzig
2
100.00
goldgas GmbH, Eschborn 1)
3
100.00
ONTRAS Gastransport GmbH, Leipzig
4
100.00
VNG-Erdgascommerz GmbH, Leipzig
5
100.00
VNG Gasspeicher GmbH, Leipzig
6
100.00
ECG Erdgas-Consult GmbH, Leipzig
7
100.00
ENERGIEUNION GmbH, Schwerin
8
100.00
GDMcom Gesellschaft für Dokumentation und Telekommunikation mbH, Leipzig
9
100.00
GEOMAGIC GmbH, Leipzig
10
100.00
INFRACON Infrastruktur Service GmbH & Co. KG, Leipzig
11
100.00
Leipziger Biogasgesellschaft mbH, Leipzig
12
100.00
MBG Mitteldeutsche Biogasgesellschaft mbH, Leipzig
13
100.00
OSG ONTRAS Servicegesellschaft mbH, Leipzig
1)
48
Name and registered office of the company
Indirect
%
Formerly goldgas SL GmbH, Eschborn.
Consolidated Financial Statements | Annual Report 2015
Foreign companies included in the Group:
Share
Direct
%
Name and registered office of the company
Indirect
%
14
100.00
VNG Austria GmbH, Gleisdorf (Austria)
15
100.00
VNG Energie Czech s.r.o., Prague (Czech Republic)
16
100.00
VNG Italia S.r.l., Bologna (Italy)
17
100.00
VNG Norge AS, Stavanger (Norway)
18
100.00
VNG Polska Sp. z o.o., Tarnowo Podgórne (Republic of Poland)
19
100.00
VNG Slovakia, spol. s r.o., Bratislava (Slovak Republic)
20
100.00
G.EN. Gaz Energia Sp. z o.o., Tarnowo Podgórne (Republic of Poland)
21
100.00
goldgas GmbH, Vienna (Austria)
22
100.00
HANDEN Sp. z o.o., Warsaw (Republic of Poland)
23
100.00
SPIGAS S.r.l., La Spezia (Italy)
24
100.00
VNG Danmark ApS, Copenhagen (Denmark)
Associated companies valued at equity in the consolidated financial statements
German associated companies:
Share
Direct
%
Name and registered office of the company
Direct
%
25
50.00
Heizkraftwerk Halle-Trotha GmbH, Halle (Saale)
26
20.00
GasLINE Telekommunikationsnetzgesellschaft deutscher Gasversorgungsunternehmen mbH & Co. KG, Straelen
27
50.00
Erdgasspeicher Peissen GmbH, Halle (Saale)
28
40.00
Untergrundspeicher- und Geotechnologie-Systeme Gesellschaft mit beschränkter
Haftung, Mittenwalde
29
25.10
EMB Energie Mark Brandenburg GmbH, Potsdam
30
24.60
MITGAS Mitteldeutsche Gasversorgung GmbH, Halle (Saale)
31
23.38
Stadt- und Überlandwerke GmbH Luckau-Lübbenau, Luckau
Foreign associated companies:
Share
Direct
%
32
Name and registered office of the company
Indirect
%
49.00
Nitrianska teplárenská spoločnosť, a.s., Nitra (Slovak Republic)
49
The balance sheet and income statement to be disclosed for major associated companies in accordance with
DRS 8 have been submitted electronically to the operator of the Federal Gazette, and can be obtained via the
company register (www.unternehmensregister.de).
Other companies in accordance with Article 313 (2) No. 4 HGB
Share
Direct
%
Indirect
%
Net income or
loss for the year
€
€
–673
1) 3) 4)
VNG Vertriebs-GmbH Thüringen/Bayern,
Erfurt
34,995
0
1) 2)
GasLINE TelekommunikationsnetzGeschäftsführungsgesellschaft deutscher
Gasversorgungsunternehmen mbH, Straelen
62,261
1,077
5) 6)
835,614
21,648
1) 5)
30,062
0
1) 5) 7) 8)
2,800,000
0
1) 9)
100.00
VNG Innovation GmbH, Leipzig
34
100.00
20.00
Equity capital
124,327
33
35
Name and registered office of the company
36
100.00
EnergieFinanz GmbH, Schwerin
37
100.00
goldgas UK Ltd., London (England)
38
100.00
VNG-Erdgastankstellen GmbH, Leipzig
39
50.00
lictor GmbH, Leipzig
170,987
43,855
5) 6)
40
50.00
Robotron|ECG solutions GmbH, Dresden
309,227
60,644
5) 6)
41
49.00
PROMETHEUS - Gesellschaft für Erdgas­
anwendungsanlagen mbH, Leipzig
108,650
6,391
5) 6) 7)
42
37.34
caplog-x GmbH, Leipzig
646,597
446,597
5) 6)
43
35.00
SPIGAS CLIENTI S.r.l., La Spezia (Italy)
285,139
176,251
6) 10)
44
32.00
store-x Storage Capacity Exchange GmbH,
Leipzig
451,194
151,194
5) 6)
Not included in accordance with Article 296 (2) HGB.
There is a profit and loss transfer agreement with VNG.
3)
Figures taken from the short financial year as at December 31, 2015.
4)
Before preparation of the annual financial statements.
5)
Figures taken from the annual financial statements as at December 31, 2014.
6)
Not valued at equity in accordance with Article 311 (2) HGB.
7)
Subscribed capital partly outstanding and not called-up, figure refers to paid-up capital.
8)
Converted at middle rate on December 31, 2014.
9)
There is a profit and loss transfer agreement with VNG-Erdgascommerz GmbH.
10)
Figures taken from the annual financial statements as at September 30, 2014.
1)
2)
II. Information concerning the consolidation methods
Reference date
The consolidated financial statements as well as the separate financial statements of the companies included
in the Group have been prepared for the period ending December 31, 2015.
50
Consolidated Financial Statements | Annual Report 2015
Consolidation principles
Fully consolidated companies
The separate financial statements of the subsidiaries included in the consolidated financial statements of VNG
are prepared in accordance with the statutory regulations and uniformly in accordance with the accounting
principles applicable at VNG. In order to guarantee uniform accounting principles, reconciliation statements
(commercial balance sheet II) are prepared for the foreign subsidiaries included in the Group.
The capital of the subsidiaries is consolidated in accordance with the revaluation method specified in Article
301 HGB. There are no material differences between the carrying amount method in accordance with Article 301 (1) Sentence 2 No. 1 HGB (old version) which was applied until the year 2003 and the revaluation
method. In accordance with Article 309 (1) HGB, the goodwill resulting from initial consolidation is written
down over the expected useful life of the assets; up to and including the 2009 financial year, such goodwill
was netted against retained earnings in accordance with Article 309 (1) Sentence 3 HGB (old version). If the
differences are attributable to profits retained in previous years, they have been allocated to the retained
earnings of the Group.
The initial consolidation of the goldgas Group in 2013 has resulted in goodwill of 14,179 T€, which has been
written down over a period of two years.
Receivables, liabilities as well as expenses and income between the companies included in the consolidated
financial statements are netted against each other. Intercompany profits and losses are eliminated.
Currency conversion in the Group is carried out in accordance with Article 308a HGB. The financial statements
of foreign subsidiaries are accordingly converted using the modified reference date rate method in order to be
included in the consolidated financial statements.
VNG Innovation GmbH, Leipzig, was founded in the past financial year. In accordance with Article 296 (2) HGB,
it has not been included in the consolidated financial statements due to its minor importance for the net assets,
financial position and results of operations of the Group.
With economic effect as from January 1, 2015, goldpower GmbH, Eschborn, was merged with and into goldgas
SL GmbH (now goldgas GmbH), Eschborn.
In accordance with Article 296 (2) HGB, VNG-Erdgastankstellen GmbH, Leipzig, was deconsolidated due to its
minor importance for the net assets, financial position and results of operations of the Group.
Associated companies
The carrying amount method in accordance with Article 312 (1) Sentence 1 HGB is used for the initial equity
valuation of all companies. Any goodwill resulting from initial integration is written down as scheduled over
a useful life of five years. In accordance with Article 312 (2) HGB in conjunction with Article 309 (1) HGB (old
version), the goodwill which resulted up to December 31, 2009 is amortised as scheduled over a useful life
of 20 years.
51
The carrying amount of the goodwill was 24,333 T€ as at the balance sheet date. The liability differences
of 1,682 T€ were allocated to the retained earnings of the Group to the extent that they result from profits
retained in previous years. Intercompany profits or losses were eliminat-ed only in the case of upstream
transactions; DRS 8 has not been applied in the case of down-stream transactions. The valuation methods
applied for the associated companies have not been adjusted to the valuation principles applicable at VNG.
The companies caplog-x GmbH, Leipzig, lictor GmbH, Leipzig, Robotron|ECG solutions GmbH, Dresden, and
store-x Storage Capacity Exchange GmbH, Leipzig, were for the first time not accounted for using the equity
method in accordance with Article 311 (2) HGB due to their minor importance for the net assets, financial
position and results of operations of the Group. The above companies are shown under participating interests
on the reference date and valued in accordance with the historical cost method at the equity value as at the
time of transfer pursuant to DRS 8. As at September 23, 2015, the shareholding ratio in SPIGAS CLIENTI S.r.l.,
La Spezia (Italy), was increased by 25 percentage points to 35 per cent. Valuation at equity in accordance
with Article 311 (2) HGB is not applied to this company either.
As at October 8, 2015, InterTransGas GmbH i.L., Leipzig, was liquidated. In addition, VNG Italia S.r.l., Bologna
(Italy), sold all of its shares in BLUEFIN S.r.l., Bologna (Italy), (50 per cent) with effect as from December 10, 2015.
III. Accounting and valuation principles
Fixed assets
Gas production licenses and capitalised exploration costs are recognised with their purchase costs less performance-related amortisation (units of production method). Costs incurred for geological and geophysical
surveys are recognised immediately in the income statement. The Company took advantage of the option specified in Article 248 (2) HGB for capitalising self-created intangible assets for exploration costs. Accordingly,
exploration costs are recognised with their costs of production in accordance with Article 253 (1) Sentence 1
in conjunction with Article 255 (2a) Sentence 1 HGB. The Company capitalises all exploration costs which are
capable of being capitalised and which are incurred in the financial year in which oil or gas reserves which
will probably be commercially viable are discovered. Goodwill is written down over the probable useful life.
The remaining intangible assets are valued with their purchase costs less straight-line amortisation. The
underlying standard useful lives are between three and five years.
Property, plant and equipment are carried at procurement or production cost taking into consideration
appropriate overheads in accordance with Article 255 (2) HGB. Buildings and other structures are valued at
procurement or production cost with straight-line depreciation. Technical plant and machinery, and other
equipment, fixtures, furniture and office equipment were generally depreciated following the declining-balance method up to and including the 2009 financial year. Upon the first-time application of the German
Financial Reporting Modernisation Act [Gesetz zur Modernisierung des Bilanzrechts—BilMoG] as at January
1, 2010, VNG exercised the option allowed by Article 67 (4) Sentence 1 of the Act Introducing the German
Commercial Code [Einführungsgesetz zum Handelsgesetzbuch—EGHGB], to continue the previous valuations
and to apply declining-balance depreciation. If straight-line depreciation had been applied in 2015, additional
depreciation of 2,108 T€ would have resulted. Since 2010, newly-acquired assets have been depreciated
using the straight-line method. The depreciation periods for tangible assets correspond to the expected useful life of the assets which is based on the useful life determined by tax regulations in the case of domestic
52
Consolidated Financial Statements | Annual Report 2015
subsidiaries. Investment grants received in previous years have been allocated to a special item, which is
reversed in instalments in line with commercial law depreciation.
Building cost subsidies are deducted from assets. Low-value assets with a value of less than 150 € are fully
charged as an expense in the year of addition. A collective item is formed for low-value assets of property, plant
and equipment with a value above 150 € but not exceeding 1,000 €. This collective item is written down over
a period of five years on a straight-line basis.
If the fair values of individual items of property, plant and equipment are lower than the corresponding carrying
amounts, additional impairments are recognised if the reduction in value is probably of a permanent nature. If
the reasons for the write-downs are no longer applicable, corresponding write-ups are recognised.
Shares in affiliated companies and other participating interests are recognised at their purchase cost. Shares in
associated companies are measured at the lower of their equity value or fair value. The equity value is based on
financial statements which are prepared in accordance with the accounting policies of the HGB. In accordance
with Article 312 (5) Sentence 1 HGB, no adjustments are made to the uniform accounting policies in the Group.
Loans are recognised with their nominal value.
Current assets
Raw materials, consumables and supplies are valued at average cost. The last-in first-out (Lifo) method
using the monthly inventory layer principle and taking into consideration the strict lower-of-cost-or-market
principle in accordance with Article 253 (4) HGB was applied for gas inventories stated as merchandise. Work
in progress was recognised at production costs required to be capitalised.
Emission rights received for no consideration (market value of 257 T€) are carried at a memo value. They
will be used up for planned emissions up to 2016. Emission rights acquired for a consideration are carried
at the lower of cost or market value on the closing date and will be used up for respective emissions in 2016.
Receivables and other assets are shown at principal. Reasonable allowance is made for irrecoverable individual accounts. A percentage of outstanding accounts was deducted to cover the general credit risks.
Provisions
Provisions are recognised for uncertain liabilities at the amount which will probably be required on the basis
of reasonable commercial assessment. Provisions cover all foreseeable risks.
Provisions with a term of more than one year are discounted over their remaining term using a discount rate in
accordance with the average market interest rates of the past seven financial years. For discounting, the average
discount rates published by Deutsche Bundesbank under a statutory instrument are used in accordance with
Article 253 (2) Sentence 4 HGB.
Provisions for pensions and similar obligations are determined on the basis of actuarial reports using the
projected unit credit method. Provisions for pensions are valued on the basis of the “Richttafeln 2005 G” (actuarial tables) of Prof. Dr Klaus Heubeck taking into consideration future salary increases for different groups of
53
persons of 4 per cent p. a., 3 per cent p. a. or 0 per cent (for employees under semi-retirement arrangements)
and pension increases of 1.75 per cent p. a. Pension obligations are discounted in accordance with Article
253 (2) Sentence 2 HGB at the average market interest rate for an assumed remaining term of 15 years (3.89
per cent p. a.; previous year’s reporting date 4.54 per cent p. a.).
Before being transferred to an insurance company, the obligations from pensions and similar obligations of an
affiliated company were netted against the asset items which serve the exclusive purpose of settling liabilities
relating to old-age pensions and similar obligations and which are protected against access by third parties
(cover funds). The cover funds are measured at their fair value.
Provisions for semi-retirement obligations are formed on the basis of the block model for semi-retirement
agreements entered into as at the balance sheet date. For recognition in accordance with German commercial
law, the top-up amounts were fully charged as an expense due to their nature. Semi-retirement provisions are
valued in accordance with actuarial principles on the basis of an interest rate of 3.89 per cent p. a. (previous
year’s reporting date 4.54 per cent p. a.) and the “Richttafeln 2005 G” (actuarial tables) of Prof. Dr Klaus Heubeck. Annual wage and salary increases of 3 per cent have been assumed for determining the semi-retirement
provisions.
For provisions which had to be created in the DM opening balance sheet due to the initial application of Article
249 (1) Sentence 1 HGB, a special loss item from provisions formed has been shown on the assets side of the
balance sheet; this is depreciated in accordance with the utilisation or reversal of these provisions.
In the income statement, additions to provisions, to the extent that provisions of this type were recognised
for the first time, were recognised on the basis of the net presentation principle.
The effects on profit or loss arising from the change in the discount rate are disclosed in the financial result.
Liabilities
Liabilities are stated at the amounts required to settle the obligations.
Currency conversion
Foreign currency transactions are valued at the spot middle exchange rate prevailing at the time of first entry.
Long-term receivables denominated in foreign currencies are, where required, written down on the basis of the
lower spot middle exchange rate as at the balance sheet date (following the principle that unrealised exchange
losses are to be recognised, whereas unrealised exchange gains are not to be recognised). Short-term foreign
currency receivables (with a remaining term of one year or less) as well as cash and cash equivalents and
other current assets denominated in foreign currencies are converted at the spot middle exchange rate as at
the balance sheet date.
Payables denominated in foreign currencies are carried at the spot middle exchange rate as at the date when
the payable arose. Long-term payables denominated in foreign currencies are, where required, carried on the
basis of the higher spot middle exchange rate as at the balance sheet date (following the principle that unrealised exchange losses are to be recognised, whereas unrealised exchange gains are not to be recognised).
54
Consolidated Financial Statements | Annual Report 2015
Short-term foreign currency payables (with a remaining term of one year or less) are converted at the spot
middle exchange rate as at the balance sheet date.
Contingent liabilities denominated in foreign currencies are converted at the spot middle exchange rate on
the balance sheet date.
Deferred taxes
Deferred taxes are formed for differences between the balance sheet valuations in the commercial and tax
balance sheets to the extent that such differences will probably be eliminated in future financial years with an
impact on tax. In addition, deferred tax assets are formed on accumulated losses carried forward if it is expected
that such losses will be set off against income within the next five years. Deferred tax assets and deferred tax
liabilities are shown as non-netted figures.
The calculation of the deferred tax assets and deferred tax liabilities is based on the relevant tax rate of the
respective group companies.
IV. Notes to the consolidated balance sheet
Fixed assets
Fixed assets shown in the balance sheet and changes in the fixed assets are detailed in the statement of changes
in fixed assets (appendix to the notes).
Current assets
(1) Inventories
Dec. 31, 2015
T €
Dec. 31, 2014
T €
Raw materials, consumables and supplies
7,909
8,688
Work in progress
2,916
1,719
243,818
367,221
799
100
Merchandise
Emission rights
Advance payments made
411
381
255,853
378,109
The application of the Lifo method resulted in a difference in the sense of Article 284 (2) No. 4 HGB of 21,524
T€ as at December 31, 2015 (December 31, 2014: 33,855 T€). Depreciation in accordance with Article 253 (4)
HGB was recognised in the amount of 51,472 T€ (December 31, 2014: 37,302 T€).
55
(2) Receivables and other assets
Trade receivables
(thereof with a remaining term of more than one year)
Accounts receivable from affiliated companies
Accounts receivable from companies with which the Company is connected by a
participating interest
Other assets
(thereof with a remaining term of more than one year)
Dec. 31, 2015
T €
Dec. 31, 2014
T €
725,284
952,776
0
0
1,167
1,045
48,800
18,545
142,037
133,286
510
6
917,288
1,105,652
Of the figure shown for accounts receivable from affiliated companies, trade receivables account for 1,148 T€
(December 31, 2014: 1,036 T€) and taxes account for 19 T€ (December 31, 2014: 9 T€).
In addition, accounts receivable from companies with which the Company is connected by a participating
interest are composed of trade receivables in the amount of 47,400 T€ (December 31, 2014: 18,545 T€) and
interest receivables of 1,400 T€ (December 31, 2014: 0 T€).
The other assets include accounts receivable from the Finanzamt (revenue authorities) due to input tax refund
claims in the amount of 253 T€ which legally arise only after the balance sheet date (December 31, 2014:
206 T€).
(3) Deferred tax assets
Deferred tax assets are attributable to temporary differences between figures shown in balance sheets, tax
loss carry forwards as well as other tax differences which are allowable abroad. The temporary differences are
mainly attributable to the different figures shown in commercial balance sheets and tax balance sheets for the
intangible assets, property, plant and equipment, inventories, receivables and other assets, the provisions
for pensions and similar obligations as well as the other provisions and the liabilities. Company-individual tax
rates of 19–78 per cent have been used as the basis of calculating the deferred tax assets.
(4) Surplus resulting from asset offsetting and capitalised
The pension obligations of an affiliated company, for which provisions have to be created, which so far had been
offset against cover funds (pension fund) in accordance with Article 246 (2) Sentence 2 HGB were transferred
to an insurance company in 2015.
The income from cover funds which had until then been recognised (59 T€) has been netted against the interest payments (215 T€) in accordance with Article 246 (2) Sentence 2 HGB. The resultant balance of 156 T€ is
included in the financial result under “Interest payable and similar charges”.
Equity
The breakdown and development of equity are detailed in the statement of changes in equity.
56
Consolidated Financial Statements | Annual Report 2015
(5) Subscribed capital
The share capital of the parent company is € 328 million and consists of 128,000,000 no-par-value shares.
(6) Retained earnings
Statutory reserve pursuant to Article 150 (2) AktG
Other retained earnings
Dec. 31, 2015
T €
Dec. 31, 2014
T €
32,800
32,800
283,242
172,637
316,042
205,437
Pursuant to a resolution of the ordinary general meeting of April 14, 2015, the amount of 73,000 T€ was
distributed as a dividend to the shareholders out of VNG’s cumulative profit for the 2014 financial year. The
remaining consolidated cumulative profit was paid into the other retained earnings.
(7) Profit participation capital
At one affiliated company, a further 307 (December 31, 2014: 188) profit participation rights were issued in
the 2015 financial year at a nominal value of 250 € each. The purpose of issuing profit participation rights is
to enable senior executives to participate in the success of the company.
(8) Equity difference from currency conversion
The equity difference from currency conversion (–1,648 T€) is due to the conversion of the consolidated foreign
currency financial statements of the subgroup of VNG Polska Sp. z o.o., Tarnowo Podgórne (Republic of Poland),
VNG Energie Czech s.r.o., Prague (Czech Republic), VNG Norge AS, Stavanger (Norway), and VNG Danmark ApS,
Copenhagen (Denmark).
Liabilities
(9) Provisions
Dec. 31, 2015
T €
Dec. 31, 2014
T €
Provisions for pensions and similar obligations
24,340
22,595
Provisions for taxes
14,356
26,998
Other provisions
451,439
420,382
490,135
469,975
In accordance with Article 28 (1) Sentence 2 EGHGB, provisions for indirect pension obligations to be met by
an assistance fund were not shown on the balance sheet. The difference between the present values of the
pension obligations of the assistance fund and the cash and cash equivalents held by the assistance fund as
at December 31, 2015 was 3,975 T€.
57
The other provisions mainly comprise obligations for shutting down underground storage facilities, pipelines and drilling rigs. Additionally, provisions for outstanding invoices, risks in connection with gas business, human resources,
restructuring and other uncertain liabilities were created.
(10) Liabilities
Dec. 31, 2015
Remaining term Remaining term
up to 1 year more than 5 years
(prev. year)
(prev. year)
Dec. 31, 2014
T€
T€
T€
T€
Liabilities to banks
359,971
115,060
4,639
495,496
(116,295)
(36,733)
Advance payments
15,029
15,029
0
(27,818)
(0)
714,329
0
Trade payables
Liabilities to affiliated companies
Liabilities to companies with which the Company is connected by a participating interest
Other liabilities
(thereof taxes)
(thereof social security contributions)
714,695
(812,775)
(0)
3,004
3,004
0
(742)
(0)
10,484
10,484
0
227,231
33,080
1,330
1,330,414
(11,126)
(0)
86,451
127,515
(57,920)
(131,976)
33,080
0
(37,253)
(0)
1,330
0
(1,571)
(0)
944,357
132,154
(1,026,676)
(168,709)
27,818
814,125
742
11,126
201,641
37,253
1,571
1,550,948
The liabilities to affiliated companies relate to investment transactions within the framework of cash management (1,417 T€; December 31, 2014: 34 T€), trade payables (777 T€; December 31, 2014: 674 T€), loss
transfers as a result of profit and loss transfer agreements (777 T€; December 31, 2014: 1 T€) and outstanding
contributions (33 T€; December 31, 2014: 33 T€).
Liabilities to companies with which the Company is connected by a participating interest concern outstanding
capital contributions not called up (8,200 T€; December 31, 2014: 8,200 T€) and trade transactions (2,284
T€; December 31, 2014: 2,926 T€).
As was the case last year, borrower’s note loans of 76,000 T€ were disclosed under the other liabilities. Liabilities of 5,471 T€ due to the Finanzamt (revenue authorities) (December 31, 2014: 9,663 T€) legally arise
only after the closing date.
Loan liabilities of 10,771 T€ are mainly secured by property register charges.
58
Consolidated Financial Statements | Annual Report 2015
(11) Deferred tax liabilities
Deferred tax liabilities are mainly attributable to temporary differences resulting from different figures shown in
commercial balance sheets and tax balance sheets for intangible assets and property, plant and equipment as
well as the non-recognition for tax purposes of the special loss item from provisions formed pursuant to Article
17 (4) DMBilG. Company-individual tax rates of 19–78 per cent have been used as the basis of calculating the
deferred tax liabilities.
Contingencies
Contingent liabilities to be reported pursuant to Article 251 HGB amount to 1,560 T€. They relate to a guarantee
for an associated company.
According to our current state of knowledge, no claims are expected to arise from the contingent liability, as
the underlying obligation will probably be met by the company concerned.
Other financial obligations
The other financial obligations pursuant to Article 314 (1) No. 2a HGB amount to € 67 million. These chiefly
concern obligations arising from leasing/rental and service agreements and obligations for the use of transport and storage capacities in the 2016 financial year. VNG has undertaken long-term purchase commitments
with gas suppliers to cover gas demand. In addition, payment obligations exist in connection with the order
commitment.
V. Notes to the consolidated income statement
(12) Sales
Sales were chiefly accounted for by income from the gas business: 90 per cent of sales were realised in Germany,
and 10 per cent were realised in other European countries. For the sake of simplicity, sales on the spot/futures
markets have been completely allocated to domestic sales.
(13) Other operating income
The other operating income includes foreign currency translation income of 4,715 T€ (2014: 6 T€).
Income attributable to other accounting periods (10,619 T€) is also disclosed; this mainly relates to credit
notes for previous years.
Income of 573 T€ results from the appreciation of fixed assets.
59
(14) Cost of materials
Cost of raw materials, consumables and supplies and purchased merchandise
Cost of purchased services
2015
T €
2014
T €
8,955,178
9,566,818
182,211
154,496
9,137,389
9,721,314
In the financial year, exploration costs of 74,364 T€ were incurred; of this figure, 16,923 T€ has been capitalised.
(15) Personnel expenses
Wages and salaries
Social security costs, pensions and assistance expenses
2015
T €
2014
T €
100,733
101,569
22,153
21,193
122,886
122,762
Personnel expenses include expenses incurred for pensions totalling 4,825 T€ (2014: 4,932 T€).
(16) Depreciation and amortisation expense
Non-scheduled depreciation in accordance with Article 253 (3) Sentence 3 HGB was recognised in the amount
of 113,730 T€ (2014: 57,978 T€). This is mainly attributable to the depreciation of storage and production
facilities as well as exploration licenses due to the reduction in value which is probably of a permanent nature.
(17) Other operating expenses
Other operating expenses include expenses of 13,972 T€ (2014: 18,694 T€) resulting from currency conversion.
(18) Financial result
Income from participating interests
Profit/loss from associated companies
2014
T €
1,626
2,369
12,466
31,549
Income from loans carried as fixed assets
2,462
1,773
Interest receivable and similar income
(thereof income of 0 T€ from affiliated companies; previous year 2 T€)
1,882
3,208
Income from absorption of losses
Expenses from absorption of losses
Amortisation of financial assets
Interest payable and similar charges
60
2015
T €
0
8
819
47
0
14
41,765
45,048
–24,148
–6,202
Consolidated Financial Statements | Annual Report 2015
Interest payables include an amount of 13,186 T€ (2014: 10,706 T€) with respect to the compounding of
interest on provisions.
(19) Taxes on income
In addition to trade and corporation tax, this item includes income of 34,851 T€ (net) due to the change in
deferred taxes as well as a tax refund of the Norwegian state for exploration costs of VNG Norge in the amount of
66,916 T€. Taxes on income include a figure of 7,708 T€ for tax income attributable to other accounting periods.
The following tax reconciliation statement has been prepared in accordance with DRS 18.
2015
T€
2014
T€
–146,470
149,323
45,406
–46,290
Income due to different foreign tax charges
70,614
47,891
Income due to tax-free income
10,810
13,880
Cost due to expenses not deductible for tax purposes
–13,507
–22,945
Cost due to temporary differences and losses for which no deferred taxes
were recognised (previous year: income)
–28,597
47,118
7,708
–5,573
Tax reconciliation statement
Result before taxes on income
Tax reconciliation statement
Group tax rate: 31.0%
Reconciliation:
Tax income attributable to other accounting periods (previous year: tax expense)
Income due to other tax effects
Recognised income of taxes on income
1,227
346
93,661
34,427
VI. Valuation units in accordance with Article 254 HGB
a) Valuation units using derivative financial instruments
Within the scope of its business activities, the VNG Group is exposed to currency, interest rate and price risks.
These are hedged chiefly using derivative financial instruments. All the derivatives are OTC transactions with
contract parties of sound financial standing in the banking sector. They include currency futures, interest rate
swaps and commodity swaps. The use of derivatives is subject to uniform standards and stringent internal
monitoring and is limited to hedging the business operations of the VNG Group and related investments
and financing transactions. The objective of using derivative financial instruments is to reduce fluctuations
in profit and inflows and outflows of cash caused by changes in exchange rates, interest rates and market
prices. The use of derivative financial instruments for speculative purposes is not permitted.
Derivative financial instruments are normally used for hedging underlying transactions in the case of receivables or payables denominated in foreign currencies and planned transactions in foreign currencies, and
61
for hedging interest rate risks in connection with loans and risks of price changes under gas purchase and
sales contracts. Where the statutory requirements are met, hedge accounting in accordance with Article 254
HGB is applied. The effective portions of hedges are presented in the balance sheet in accordance with the
net hedge presentation method. The effectiveness of hedge relations is reviewed by appropriate methods
(especially the critical term match method and the dollar offset method) both prospectively and retrospectively as at each balance sheet date. The basis for the effectiveness of a hedge is the agreement between
the parameters of the underlying and hedging transaction which are relevant to valuation. Loss peaks are
recognised as expenses, while gain peaks are not recognised.
As at the balance sheet date, the VNG Group held derivative financial instruments with reference to currencies,
interest rates and commodity prices.
Dec. 31, 2015
Face value
Dec. 31, 2015
Positive fair values
Dec. 31, 2015
Negative fair values
T€
T€
T€
216,484
1,205
910
224,500
2,261
2,018
543,845
11,540
100,898
984,829
15,006
103,826
Currency derivatives
Currency futures
Interest rate derivatives
Interest rate swaps
Commodity derivatives
Commodity swaps
The fair value of derivative financial instruments depends on the development of the underlying market factors. Individual fair values were determined on the basis of market data as at the balance sheet date using
accepted market methods. Currency futures are carried at the futures exchange rate as at the balance sheet
date. The fair values of commodity swaps are determined by discounting future cash flows. Futures exchange
rates are determined from current exchange rates using the premiums and discounts for futures. Interest rate
swaps are valued using recognised analysis methods on the basis of the interest rate structure curve as at the
balance sheet date.
Valuation units for hedging against foreign currency risks
A loan receivable in the amount of NOK 603 million as at the balance sheet date was hedged against the risk of
changes in the NOK exchange rate by a micro-hedge. For the loan, currency future contracts with a face value of
63,474 T€ were concluded with a term corresponding to the earliest repayment date of the loan (underlying) in
2016. The currency futures had a positive fair value of 751 T€ as at the balance sheet date. A loan receivable
in the amount of DKK 142 million as at the balance sheet date was also hedged against the risk of changes in
the DKK exchange rate by a micro-hedge. The currency future contract concluded for this purpose had a face
value of 18,990 T€; the fair value was 0 T€. Furthermore, a loan receivable in the amount of USD 101 million as
at the balance sheet date was hedged against the risk of changes in the USD exchange rate by a micro-hedge.
The currency future contracts concluded for this purpose had a face value of 91,959 T€; the negative fair value
was 761 T€.
62
Consolidated Financial Statements | Annual Report 2015
Loans receivable totalling PLN 91 million as at the balance sheet date were also hedged against the risk of
changes in the PLN exchange rate by a micro-hedge. The currency future contracts concluded for this purpose
had a face value of 21,504 T€; the positive fair value was 102 T€.
The contrary changes in the values of the loans receivable and the currency future contracts offset each other
as the underlying and the hedging transactions are exposed to the same foreign currency risk. The underlying
and hedging transactions are denominated in the same currency as the loans receivable in NOK, DKK, USD
and PLN as of the due date are offset by payables in NOK, DKK, USD and PLN respectively at a fixed NOK/
Euro, DKK/Euro, USD/Euro or PLN/Euro exchange rate.
To hedge currency risks connected with pending transactions in gas trading business, currency future contracts with a face value of 16,315 T€ were concluded with external partners. The terms of these contracts
were in accordance with the expected due dates of the underlying transactions. As at the balance sheet date,
the currency futures had a positive fair value of 352 T€ and a negative fair value of 126 T€.
Furthermore, currency future contracts were concluded for hedging bank balances in PLN with a face value
of 4,242 T€; the negative fair value was 23 T€.
Valuation units for hedging against interest rate risks
Interest rate swaps in the amount of 74,500 T€ have been used for financial liabilities in order to participate
in the declining interest rate level. The term of the fixed-interest loans concerned expires in 2018. In addition,
variable-interest financial liabilities in the amount of 75,500 T€ were hedged over time against the risk of
interest rate changes by means of interest rate swaps. The term of the loans concerned expires in 2018 and
2020 respectively. In accordance with the amount of the loans, the interest rate swaps have a face value of
150,000 T€. The interest rate swaps form a micro-hedge with the loans in each case. The effectiveness of
the hedges is reviewed prospectively and retrospectively. As cash inflows and outflows offset each other,
the interest rate swaps are not recognised in the balance sheet. Positive fair values of 2,261 T€ are opposed
by negative fair values of 1,152 T€ as at the balance sheet date.
In addition, the fixed-interest financial liabilities combined to form a valuation unit in the amount of 74,500 T€
and the fixed-interest receiver swaps were hedged against a renewed rise in interest rates by means of fixedinterest payer swaps. These derivatives were not included in the valuation unit and had a negative fair value
of 866 T€ as at the balance sheet date.
Valuation units for hedging against commodity price risks
Commodity futures in the form of commodity swaps with a face value of 542,186 T€ were concluded as microhedges to minimise price risks in connection with gas purchase and sales contracts. The agreed purchasing
prices for quantities to be purchased in 2016 are fixed by means of commodity swaps with a face value of
460,146 T€. Positive fair values of 8,350 T€ are opposed by negative fair values of 96,184 T€ as at the balance sheet date. In addition, existing fixed price in gas delivery agreements have been hedged by means of
commodity swaps with a face value of 82,040 T€. These commodity swaps have terms until 2016. Positive fair
values of 2,478 T€ are opposed by negative fair values of 4,714 T€ as at the balance sheet date. Furthermore,
63
oil price swaps with a face value of 1,659 T€ were used to hedge against price risks at portfolio level. This derivative was not included in a valuation unit and had a positive fair value of 712 T€ as at the balance sheet date.
b) Valuation units for physical electricity and gas trading transactions
Risks from electricity and gas trading transactions for one subsidiary arise from price fluctuations on the
respective trading markets. As part of a portfolio creation process, the risk positions arising from individual
contracts for purchasing and selling electricity and gas have been aggregated to form an overall risk position
for each trading type and calendar year; this position is continuously monitored and effectively managed.
The portfolio has been created in line with the Group specifications for risk management and the risk manual
of the Company. A documented, adequate and functioning risk management system exists for monitoring
and managing the overall risk position for each trading type. The trading framework, responsibilities as well
as controls are fixed. Trading is carried out within specified limits which are defined and monitored daily by
organisationally independent entities.
The Company creates valuation units in accordance with Article 254 HGB at the portfolio level for pending
physical electricity and gas trading transactions. The risk-compensating effect of the purchasing and sales contracts of the respective trading type in the trading period is summarised in the portfolios; open risk positions
are measured on the basis of fair value. The fair values depend on the development of the underlying market
factors. Fair values were determined on the basis of market data as at the valuation date using accepted market
methods. Purchasing and sales contracts are measured on an hourly basis with an hourly price-forward curve
(HPFC) generated on the basis of the market data available as at the final trading day of the year. This valuation
of the contracts is netted, and results in the pending position recognised on the closing date.
The following pending transactions were included in the portfolio valuation units as of the balance sheet date:
Face value
T€
Electricity
Purchasing contracts
109,355
Sales contracts
110,388
Gas
Purchasing contracts
58,174
Sales contracts
58,202
The net hedge presentation method is used for showing the effective portions of the valuation units in the
balance sheet; in this method, opposite changes in value in the balance sheet and income statement which
balance each other out are disregarded. If the valuation of the open risk positions of the pending purchasing
and sales contracts included in the electricity and gas portfolios result in negative balances, provisions are
created and recognised in the income statement in order to cover these loss peaks, with due consideration
being given to the principle of imparity. Positive balances are not recognised in the balance sheet.
From the subsidiary’s perspective, there were on balance positive fair values of 113 T€ on the closing date for
pending transactions of the portfolio valuation unit electricity for the years 2016 to 2018 (December 31, 2014:
64
Consolidated Financial Statements | Annual Report 2015
39 T€). For the portfolio valuation unit gas, there was a negative fair value for pending transactions of 23 T€
for 2016, and positive fair values to a total amount of 47 T€ for the years 2017 and 2018. Accordingly, it was
necessary for provisions for potential losses of 23 T€ to be recognised as at the balance sheet date.
VII. Cash flow statement
The cash flow statement was prepared in accordance with the principles of DRS 21; the previous year’s figures
were adjusted accordingly.
The cash and cash equivalents of 25,503 T€ comprise cash in hand and cash at banks of all German and
foreign companies included in the consolidated financial statements. Liquid assets of 2,961 T€ are subject
to restrictions.
VIII. Other disclosures
Employees
The parent company VNG employed an average of 403 persons in the 2015 financial year. This figure included
396 white-collar workers, six blue-collar workers and one assistant/student trainee. In addition, the Company
employed an average of eleven persons in the passive phase of semi-retirement and ten vocational trainees.
The average number of employees at the companies fully consolidated in the consolidated financial statements
was 1,046. Of this figure, 940 were white-collar workers, 102 were blue-collar workers and four were assistants/
student trainees. At the fully consolidated companies, an average of 32 persons was in the passive phase of
semi-retirement and eleven persons were vocational trainees.
Fees and services of the auditor
On April 14, 2015, the ordinary general meeting of VNG appointed PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft as the auditor. The total audit fees charged for the 2015 financial year comprise
the fees for auditing the consolidated financial statements as well as for the audit of the financial statements of
VNG and its German subsidiaries to the amount of 542 T€. The fees for other certification or valuation services
amounted to 290 T€. Furthermore, a figure of 7 T€ related to tax consultancy services.
65
Members of the Executive Board
Dr Karsten Heuchert Chairman of the Executive Board/Trading Department
(since April 1, 2015)
Prof. Dr Klaus-Dieter Barbknecht
Hans-Joachim Polk
Bodo Rodestock
Board Member Trading (until March 31, 2015)
Board Member Infrastructure/Technical Affairs
Board Member Finance/Human Resources
Members of the Supervisory Board
Ulf Heitmüller
Chairman (since November 10, 2015)
Head of Trading of EnBW Energie Baden-Württemberg AG
Dr Heiko Sanders
(until October 19, 2015)
Chairman (until September 30, 2015)
Former Member of the Executive Board of EWE Aktiengesellschaft
Holger Hanson
1st Vice-Chairman
(Chairman from September 30 to November 10, 2015)
Chairman of the Board of Management of Neubrandenburger Stadtwerke GmbH
Peter Leisebein
2nd Vice-Chairman
Chairman of the General Works Council of
VNG – Verbundnetz Gas Aktiengesellschaft
Günther Boekhoff
Honorary Mayor of the City of Leer
Matthias Brückmann
Chairman of the Executive Board of EWE Aktiengesellschaft
Joachim Ebert
Telecommunications Systems Engineer at GDMcom Gesellschaft für
Dokumentation und Telekommunikation mbH
Hans-Joachim Gornig
Former Managing Director of GAZPROM Germania GmbH
(until August 26, 2015)
Johannes Hegewald
Foreman in the compressor station of the Bad Lauchstädt underground
storage facility at VNG Gasspeicher GmbH
Dr Torsten Köhne
Chairman of the Executive Board of swb AG
Vyacheslav V. Krupenkov
General Manager of GAZPROM Germania GmbH
(until August 26, 2015)
Alexander Freiherr von Ledebur
Investment management of EWE Aktiengesellschaft
(since October 26, 2015)
Christina Ledong
Deputy Chair of the General Works Council of
VNG – Verbundnetz Gas Aktiengesellschaft
Detlef Nonnen
Former Commercial Director of eins energie in sachsen GmbH & Co. KG
Kristof Ogonovski
Speaker of the local Oldenburg Chamber of Industry and Commerce
(since October 26, 2015)
Josef Rahmen
66
Former Chairman of the Board of Management of
LVV Leipziger Versorgungs- und Verkehrsgesellschaft mbH
Consolidated Financial Statements | Annual Report 2015
Andreas Reichelt
Pipeline System Technology Officer at ONTRAS Gastransport GmbH
Dr Reinhard Richter
Managing Director of DREWAG Stadtwerke Dresden GmbH
Dennis Rohde
Member of the German Bundestag
(since October 26, 2015)
Thiemo Röhler
Attorney-at-law
(since October 26, 2015)
Dr Benno Seebach
Head of Strategic Network Planning at ONTRAS Gastransport GmbH
Petra Steuer
Scheduling employee at ONTRAS Gastransport GmbH
Björn Thümler
Member of the Regional Parliament of Lower Saxony
Matthias Warnig
Managing Director of Nord Stream AG
(until August 26, 2015)
Dr Jochen Weise
Senior Advisor of Allianz Capital Partners GmbH
Emoluments of board members
The total emoluments of the Executive Board of VNG – Verbundnetz Gas Aktiengesellschaft, Leipzig, for the
2015 financial year amounted to 934,931.02 € (2014: 2,506,033.33 €). The total emoluments of retired Execu­
tive Board members and their surviving dependants in the 2015 financial year amounted to 1,081,702.33 €
(2014: 661,759.25 €). Provisions for ongoing pensions to former Executive Board members and their surviving dependants amount to 12,991,334.00 € (2014: 10,827,059.00 €). A provision of 112,300.00 € (2014:
202,084.40 €) was formed in the 2015 financial year for the emoluments of the Supervisory Board.
Notification in accordance with Article 20 (6) AktG
VNG Verbundnetz Gas Verwaltungs- und Beteiligungsgesellschaft mbH, Erfurt, notified us, in accordance
with Article 20 (1) AktG, that it directly holds more than one-fourth of the shares and voting rights in VNG.
EWE Aktiengesellschaft, Oldenburg (EWE), notified us, in accordance with Article 20 (4) AktG, that it directly
holds the majority of the shares and voting rights in VNG.
Weser-Ems-Energiebeteiligungen GmbH, Oldenburg, and Ems-Weser-Elbe Versorgungs- und Entsorgungsverband Beteiligungsgesellschaft mbH, Oldenburg, as well as Ems-Weser-Elbe Versorgungs- und Entsorgungsverband, Oldenburg, notified us, in accordance with Article 20 (4) AktG, that they indirectly hold the majority of
shares and voting rights in VNG, as the shares and voting rights held by EWE in VNG are attributable to them
pursuant to Article 16 (4) AktG. EWE is a dependent company of Weser-Ems-Energiebeteiligungen GmbH,
Oldenburg, and, via the latter, it is indirectly a dependent company of Ems-Weser-Elbe Versorgungs- und
Entsorgungsverband Beteiligungsgesellschaft mbH, Oldenburg, and Ems-Weser-Elbe Versorgungs- und
Entsorgungsverband, Oldenburg.
67
Consolidated financial statements
EWE prepares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), as to be applied in the EU, for the largest and smallest group of companies. The consolidated
financial statements of EWE, in which VNG has so far been included as an associated company, are electroni­
cally submitted to the operator of the Federal Gazette and can be obtained via the company register (www.
unternehmensregister.de).
Leipzig, January 22, 2016
VNG – Verbundnetz Gas Aktiengesellschaft
The Executive Board
Dr Heuchert
68
Polk
Rodestock
Consolidated Financial Statements | Annual Report 2015
69
Breakdown and Development of
Consolidated Fixed Assets
Procurement/production cost
Disposals Changes due
to equity
from consolivaluation
dated group
Transfers
Jan. 1, 2015
Currency
differences
Additions
Changes
from
deconsoli­
dation
Disposals
T€
T€
T€
T€
T€
T€
T€
T€
I. Intangible assets
1. P
urchased concessions, industrial property and similar rights
and assets, and licenses in such
rights and assets
55,680
2
5,386
0
7,322
0
0
3,293
2. Gas production licenses
87,228
–5,096
0
0
0
0
0
0
3. Exploration costs
47,049
–3,392
16,923
0
421
0
0
0
4. Advance payments made
5. Goodwill
2,655
0
1,216
0
62
0
0
–2,498
14,811
0
0
0
0
0
0
0
207,423
–8,486
23,525
0
7,805
0
0
795
II. Property, plant and equipment
1. Land,
land rights and buildings
including buildings on third-party
land
2. Technical plant and machinery
3.Other equipment, fixtures, furniture
and office equipment
4. A
dvance payments made and
assets under construction
120,594
5
697
0
1,370
0
0
2,852
2,295,645
–11,870
55,870
0
31,873
3,077
0
59,635
51,848
–504
5,530
0
6,637
7
0
1,302
209,361
–3,421
76,335
0
3,465
192
0
–64,584
2,677,448
–15,790
138,432
0
43,345
3,276
0
–795
885
0
125
2,800
0
0
0
0
160,414
32,773
0
12
115
500
0
0
7,886
815
0
54
–15,128
0
–846
846
65,600
0
51,200
0
10,800
0
0
0
32
0
324
0
9
0
0
0
259,704
12
52,264
2,800
19,510
54
–15,128
0
3,144,575
–24,264
214,221
2,800
70,660
3,330
–15,128
0
III. Financial assets
1. Shares in affiliated companies
2. P
articipations in associated
companies
3. Participating interests
4. Loans to companies with which
the Company is connected by a
participating interest
5. Other loans
70
Consolidated Financial Statements | Annual Report 2015
Depreciation/amortisation
Dec. 31, Jan. 1, 2015
2015
Carrying amounts
Additions
Currency
differences
Disposals
Disposals
from consolidated
group
Transfers
Appreciation
Dec. 31,
2015
Dec. 31,
2015
Dec. 31,
2014
T€
T€
T€
T€
T€
T€
T€
T€
T€
12,276
T€
T€
57,039
43,404
7,502
2
7,228
0
0
6
43,674
13,365
82,132
41,426
46,149
–5,443
0
0
0
0
82,132
0
45,802
60,159
0
0
0
0
0
0
0
0
60,159
47,049
1,311
0
0
0
0
0
0
0
0
1,311
2,655
14,811
13,038
1,773
0
0
0
0
0
14,811
0
1,773
215,452
97,868
55,424
–5,441
7,228
0
0
6
140,617
74,835
109,555
122,778
74,207
8,273
0
1,309
0
684
0
81,855
40,923
46,387
2,364,330
1,773,724
122,690
–6,642
29,304
1,127
4,247
567
1,863,021
501,309
521,921
51,532
37,935
5,317
–377
6,593
4
–139
0
36,139
15,393
13,913
214,034
31,218
24,988
–3
68
0
–4,792
0
51,343
162,691
178,143
2,752,674
1,917,084
161,268
–7,022
37,274
1,131
0
567
2,032,358
720,316
760,364
3,810
0
0
0
0
0
0
0
0
3,810
885
136,669
33,262
575
384
0
0
0
0
0
253
0
14
0
0
0
0
575
117
136,094
33,145
159,839
32,389
106,000
0
0
0
0
0
0
0
0
106,000
65,600
347
0
0
0
0
0
0
0
0
347
32
280,088
959
0
0
253
14
0
0
692
279,396
258,745
3,248,214
2,015,911
216,692
–12,463
44,755
1,145
0
573
2,173,667
1,074,547
1,128,664
71
The consolidated financial statements presented herein are an abridged version. With regard to the complete set
of consolidated financial statements and group management report, which is combined with the management
report of the Company, the following auditor’s report was issued:
Auditor’s Report
We have audited the consolidated financial statements prepared by VNG – Verbundnetz Gas Aktiengesellschaft,
Leipzig, comprising the balance sheet, the income statement, statement of changes in equity, cash flow statement
and the notes to the consolidated financial statements, together with the Group management report, which is
combined with the management report of the Company, for the business year from January 1 to December 31, 2015.
The preparation of the consolidated financial statements and the combined management report in accordance
with German commercial law is the responsibility of the Company’s Board of Managing Directors. Our responsibility is to express an opinion on the consolidated financial statements and the combined management report
based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § (Article) 317 HGB [“Handelsgesetzbuch”: “German Commercial Code”] and German generally accepted standards for the audit of financial
statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those
standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in
accordance with [German] principles of proper accounting and in the combined management report are detected
with reasonable assurance. Knowledge of the business activities and the economic and legal environment of
the Group and expectations as to possible misstatements are taken into account in the determination of audit
procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the
disclosures in the consolidated financial statements and the combined management report are examined primarily
on a test basis within the framework of the audit. The audit includes assessing the annual financial statements
of the companies included in consolidation, the determination of the companies to be included in consolidation,
the accounting and consolidation principles used and significant estimates made by the Company’s Board of
Managing Directors, as well as evaluating the overall presentation of the consolidated financial statements and
the combined management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with the legal
requirements and give a true and fair view of the net assets, financial position and result of operations of the Group
in accordance with [German] principles of proper accounting. The combined management report is consistent
with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and
suitably presents the opportunities and risks of future development.
Leipzig, January 22, 2016
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
(sgd. Rainer Altvater)
Wirtschaftsprüfer (German Public Auditor)
72
(sgd. ppa. Werner Horn)
Wirtschaftsprüfer (German Public Auditor)
73
IMPRINT
Published by
VNG – Verbundnetz Gas Aktiengesellschaft | Braunstrasse 7 | 04347 Leipzig | Germany
Corporate communication
Bernhard Kaltefleiter Contact
Phone +49 341 443-0 | Fax +49 341 443-1500
[email protected] | www.vng.de
Editorial deadline
February 5, 2016
Design, layout and production
Militzer & Kollegen GmbH
Reproduction and printing
Sepio GmbH, Leipzig
photographs
Dirk Brzoska (S. 1) | EnBW (p. 23) | Jörg Gläscher (p. 19) | Michael Handelmann (p. 19)
Helge Hansen/VNG Norge (p. 1) | Jeibmann Photographik (p. 1) | Eric Kemnitz (p. 1)
VNG – Verbundnetz Gas Aktiengesellschaft
Braunstrasse 7 | 04347 Leipzig | Germany
Postfach 24 12 63 | 04332 Leipzig | Germany
Phone +49 341 443-0 | Fax +49 341 443-1500
[email protected] | www.vnggroup.eu/press-conference
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