2015 Annual and Corporate Responsibility Report
Statkraft’s Annual and Sustainability Report 2015 is an online report that can be accessed on:
http://www.statkraft.com/annualreport2015
The present document contains a compilation of the information posted in the online report, prepared for the purpose of reporting in a format compatible with the submission of United Nations Global Compact’s Communications on Progress. Page 03 Page 127 Annual Report Corporate Responsibility Report Årsrapport 2015 Statkraft AS Content
Part 1 About Statkraft
06 Letter from the CEO 07 Statkraft in facts and figures 09 Statkraft around the world
Part 2 Report from the Board of Directors
12 Report from the Board of Directors 35 Declaration from the Board and CEO 36 Statkraft Group Management
Part 3 Financial Statements
38 Group Financial Statements 39 Statement of Comprehensive Income 40 Statement of Financial Position 41 Statement of Cash Flow 42 Statement of Changes in Equity 43 Notes
88 Statkraft AS Financial Statements 89 Income statement 90 Balance Sheet 91 Statement of Cash Flow 92 Notes 107 Auditor’s Report
110 Corporate Responsibility 111 Ambitions and goals 112 CR Statement 120 Auditor’s Statement
Read the full report at: annualreport2015.statkraft.com Providing Pure Energy
Statkraft’s history began 120 years ago when the Norwegian government purchased its first waterfall and decided to develop hydropower. Since then, Statkraft has grown into an international provider of renewable energy, with 4200 employees in more than 20 countries. Financial key figures
Statkraft AS Group Unit 2015 2014 2013 2012 (restated) 2011 From the income statement Gross operating revenues NOK mill 53 094 52 254 49 564 37 550 22 449 Net operating revenues NOK mill 20 090 25 805 24 246 18 352 17 161 EBITDA NOK mill 10 214 17 631 16 047 10 492 9 795 Operating profit NOK mill 3 814 13 560 13 002 5 559 6 218 Share of profit from associates NOK mill 683 661 1 101 871 898 Net financial items NOK mill -5 318 -6 283 -11 592 2 341 -3 642 Profit/loss before tax NOK mill -821 7 937 2 511 8 771 3 466 Net profit/loss NOK mill -2 369 3 892 208 4 551 40 Items excluded from underlying business Unrealised changes in value energy contracts* NOK mill 609 2 396 3 288 -1 030 -1 152 Non-recurring items NOK mill -3 610 2 053 125 -2 224 -1 035 Underlying business** Gross operating revenues NOK mill 50 578 48 348 47 458 38 910 22 377 Net operating revenues NOK mill 19 255 20 602 20 545 19 207 18 187 EBITDA NOK mill 10 169 12 132 12 444 11 347 10 880 Operating profit NOK mill 6 815 9 111 9 589 8 813 8 405 From the balance sheet Property, plant & equipment and intangible assets NOK mill 117 029 102 638 104 779 91 788 88 331 Investments in associates NOK mill 19 388 19 027 16 002 15 924 15 080 Other assets NOK mill 40 488 46 152 32 906 38 195 41 514 Total assets NOK mill 176 905 167 817 153 687 145 907 144 925 Total equity NOK mill 88 340 88 059 71 107 62 350 65 655 Interest-bearing debt NOK mill 44 606 36 744 40 377 40 625 37 287 Capital employed, basic 1) NOK mill 91 089 82 244 82 985 71 282 62 546 Cash flow Net change in cash flow from operating activities NOK mill 8 639 6 898 8 106 10 290 9 521 Dividend for the year to owner (incl. non-controlling interests) NOK mill 5 157 74 3 094 4 293 9 400 Depreciation, amortisation and impairment NOK mill 6 401 4 071 3 045 4 933 3 564 Cash and cash equivalents NOK mill 9 056 12 663 7 685 5 440 8 605 Unused drawing rights NOK mill 15 200 14 200 14 200 14 205 14 200 Investments Maintenance investments 2) NOK mill 1 970 2 368 1 980 1 811 1 129 Investments in increased capacity, fixed assets 3) NOK mill 7 797 7 525 11 303 7 327 5 217 Investments in shareholdings 4) NOK mill 3 790 1 287 62 2 583 1 923 Financial variables Interest-bearing debt ratio 5) % 33.6 29.4 36.2 39.5 36.2 Equity ratio 6) % 49.9 52.5 46.3 42.7 45.3 Long-term rating - Standard & Poor’s A- A- A- A- A- Long-term rating - Moody’s Baa1 Baa1 Baa1 Baa1 Baa1 Key figures, accounts EBITDA-margin, accounts 7) % 19.2 33.7 32.4 27.9 43.6 EBITDA-margin, underlying 7) % 20.1 25.1 26.2 29.2 48.6 ROACE before tax 8) % 7.9 11.0 12.5 13.0 13.9 Net return on investments in associated companies 9) % 3.5 3.5 6.9 5.5 5.6 Tax rate 10) % -188.5 51.0 91.7 48.1 98.8 Key figures, upstream business Production cost hydropower*** 11) Øre/kWh 8.1 7.8 7.5 7.8 7.3 Production capacity**** TWh 58.7 53.7 51.2 50.4 50.1 Production, actual TWh 56.3 56.0 55.9 60.0 51.5 Installed capacity***** MW 17 758 17 161 16 630 16 055 15 800 Key figures, downstream business****** Energy delivered through grid to end-user 12) TWh 7.0 6.9 7.3 7.2 7.1 Distribution grid capital (NVE capital) 13) NOK mill 3 288 2 858 2 743 2 685 2 690 Total volume supplied, electricity customers TWh 13.3 12.6 13.0 13.2 11.9 Distric heating supplied TWh 0.8 0.8 1.0 1.0 0.8 Market variables System price, Nord Pool EUR/MWh 21.0 29.6 38.1 31.3 47.2 Spot price, European Energy Exchange EUR/MWh 31.7 32.8 37.8 42.6 51.1 Electricity consumption in the Nordic market TWh 379 375 382 385 376 Electricity generated in the Nordic market, actual TWh 394 385 380 399 371 Statkraft`s share of Nordic electricity production % 13.1 13.5 13.3 15.0 13.9
The 2012 financial statements are restated due to change in accounting principles. For 2011, only the balance sheet is restated. * Exclusive of trading and origination ** Adjusted for unrealised changes in values of energy contracts and material non-recurring items *** Including consolidated companies (not associates) in the Nordics, Germany and the UK **** Exclusive of gas power and district heating ***** Includes the share of consolidated companies and the associated gas power companies Herdecke and Naturkraft ****** Key figures include consolidated companies (not associates) in the Nordics
1) Property, plant & equipment 4) Purchase of shares as well as equity increase in other companies 9) Share of profit from associates * 100 + intangible assets Investments in associates + receivables 5) Interest-bearing debt * 100 + inventories Interest-bearing debt + equity 10) Tax expense * 100 - provisions for liabilities Profit before tax - taxes payable 6) Total equity * 100 - other interest-free liabilities Total assets 11) Production cost, incl. property tax and depreciation, excl. + provisions for dividend payable (NGAAP) sales costs, overhead, net financial items and tax 7) Operating profit before depreciation * 100 Normal output from power plants under own management 2) Book value of maintenance investments to sustain current Gross operating revenues generating capacity 12) Preliminary estimate for year 2015 8) Operating profit * 100 3) Book value of investments to expand generating capacity Average capital employed, basic 13) Key figures used to calculate the revenue ceiling. Published at www.nve.no
Non-financial key figures The following tables present Statkraft's most significant results within the areas of environmental impact, society, employees, and health and safety for the period 2011-2015. More detailed results can be found in the corporate responsibility statement.
Power generation and district heating production Unit 2015 2014 2013 2012 2011 Installed capacity power generation 1) MW 16 778 16 401 16 041 16 257 15 764 Of which hydropower MW 13 464 13 273 12 886 13 522 13 249 Of which wind power 2) MW 647 488 514 528 321 Of which gas power 2) MW 2 600 2 600 2 600 2 178 2 178 Of which bio power MW 67 40 40 29 16 Installed capacity, district heating MW 838 760 674 710 666 Capacity under development, power generation 1), 3) MW 909 1 262 1 673 1 701 1 811 Of which hydropower MW 873 5) 1 016 1 172 910 1 037 Of which wind power 2) MW 36 247 500 361 344 Of which gas power 2) MW 0 0 0 430 430 Capacity under development, district heating MW 21 23 8 91 112 Power generation, actual 1) TWh 56.3 56.0 55.9 60.0 51.5 Of which hydropower TWh 52.7 53.4 52.6 57.6 46.0 Of which wind power 2) TWh 2.5 1.7 1.4 0.8 0.8 Of which gas power 2) TWh 0.5 0.5 1.5 1.5 4.6 Of which bio power TWh 0.3 0.3 0.3 0.1 0.1 District heating TWh 1.1 1.0 1.1 1.1 0.9 Proportion of renewable power generation 4) % 99.1 99.1 97.3 97.5 92.1 1) Includes Statkraft’s shareholdings in subsidiaries where Statkraft has a majority interest. 2) Includes the jointly controlled Herdecke (Germany), Kårstø (Norway), Scira and WUKI (United Kingdom) power plants. 3) Includes projects with an investment decision. 4) Non-renewable production covers gas power and share of district heating based on fossil fuel. From 2015 the waste used in the incineration plant in Trondheim is defined as input for waste heat and therefore counted as renewable. 5) The Cetin project is included in the figures, but is currently suspended. Emissions and environmental incidents Unit 2015 2014 2013 2012 2011 1) Emissions of CO2 equivalents Tonnes 257 600 313 300 469 600 483 900 1 161 900 Environmental incidents Serious environmental incidents Number 0 0 0 0 0 Less serious environmental incidents Number 228 159 127 128 185 1) Statkraft’s ownership is >50%. Contribution to society Unit 2015 2014 2013 2012 1) 2011 Distribution of value created Dividend 2 ) NOK mill 1 604 5 600 0 4 000 4 900 The Norwegian state and municipalities 3) NOK mill 3 665 6 059 4 291 5 891 4 987 Lenders NOK mill 5 740 7 143 11 830 3 123 1 630 Employees NOK mill 3 107 2 667 2 788 2 720 2 453 The company NOK mill -3 376 -2 392 -274 321 -4 517 1) As from 1 January 2013 Statkraft has implemented IFRS 11 Joint Arrangements. The effect of this is that some companies that prior were using the equity method now are using proportionate consolidation. Figures for 2012 have been restated to reflect Statkraft's financial position and results based on IFRS 11. 2) Includes dividend and Group contribution from Statkraft AS to Statkraft SF. 3) Includes taxes, property tax, licence fees and employer's contribution. Business ethics and anti-corruption Unit 2015 2014 2013 2012 2011 Whistleblower cases registered by Statkraft corporate audit Number 12 5 2 0 0 Employees and recruitment Unit 2015 2014 2013 2012 2011 Employees 31. 12 Number 4 170 3 731 3 734 3 615 3 414 Percentage of women Total % 23 24 23 24 23 In management positions % 23 22 22 21 20 Among new employees % 26 25 23 29 23 Preferred employer 1) Business students Ranking 53 48 43 33 30 Technology students Ranking 7 7 7 7 7 1) Ranking among final-year students and professionals, as defined and measured in the annual Universum Graduate Survey for Norway and the Universum Professional Survey for Norway respectively. Health and safety Unit 2015 2014 2013 2012 2011 Fatalities, consolidated operations 1) Employees Number 0 0 0 0 0 Contractors Number 0 3 1 2 1 Third parties Number 0 0 1 2 0 Fatal accidents, associated activities 2) Employees Number 0 0 0 0 1 Contractors Number 0 1 0 0 3 Third parties Number 0 0 0 0 0 Lost-time injury rate 3), 4) Employees Frequency 3.3 3.0 2.4 3.7 4.5 Contractors Frequency 3.6 3.7 4.2 3.8 3.4 Injury frequency 3), 5) Employees Frequency 5.6 5.6 6.8 6.6 10.0 Contractors Frequency 6.0 5.4 6.3 6.4 6.2 Absence due to illness % 3.0 2.8 2.9 3.1 3.4 1) Activities where Statkraft has > 50% ownership. 2) Activities where Statkraft has 20 - 50% ownership. 3) Includes activities where Statkraft has > 20% ownership. 4) Lost-time injuries per million hours worked. 5) Injuries per million hours worked.
Statkraft’s 120th anniversary was kicked off in June 2015 with more than 800 guests from around the world gathering at the Norwegian Opera and Ballet in Oslo. The anniversary was then duly celebrated throughout Statkraft's organisation, as seen here from Oslo, London in the UK, Sauda, Cheves in Peru and Istanbul in Turkey. Letter from the CEO
The development of supply and demand in the world’s energy markets has strongly affected prices through 2015. The oil price has plummeted from a level of around 100 USD per barrel in 2014 to below 40 USD per barrel at year-end 2015. This has impacted prices downwards on other fuels such as coal and gas, which contributed to pull down power prices in the continental power market. The development has also influenced the Nordic power market, already significantly affected by strong hydrology and a growing power surplus. Nordic power prices were as a result on their lowest level in 15 years.
The market development has led to declining revenues and The Norwegian Parliament decided in December 2015 to impairments for many European energy companies, including increase its dividend expectations from Statkraft in the coming Statkraft. Statkraft is nevertheless uniquely placed with a low years. Together with the decline in market prices, this led to a cost position, world class assets and strong competence within revised strategy and a reduced investment plan. As a result, energy management, operation and maintenance. In addition, Statkraft is now entering a phase with consolidation and we have a solid portfolio of long term contracts in the Nordics targeted growth. Statkraft will in the short term prioritize and an increasing share of contracted revenues in growth investments to refurbishments and maintenance of Nordic markets outside Europe that contributes to stabilize our cash hydropower plants, 1000 MW onshore wind power in Central- flow. Norway, some international hydropower projects, expansions of existing district heating systems and development of new New disruptive technologies drive the development within a low capital business models. wide range of industries, including the energy sector. oing forward we see deployment of more renewable capacity. Statkraft is a robust company with a strong strategic position There is also increased momentum in distributed energy. and a competent workforce. We will strengthen the focus on In order to benefit from this development, Statkraft will cost efficiency in all operations and continue to adapt the continue to explore and develop low capital business models organization and activities to the market opportunities and our in a transforming market. financial capacity. We will continue to deliver what the world needs: Pure energy. In Paris, the world’s political leaders agreed to keep global temperature increase "well below" 2°C and to pursue efforts to limit the increase to 1.5°C. This ambition needs to be followed up with concrete actions all over the world. Norway has a better starting position than most countries, through political stability, a highly educated workforce, an advanced economy and an almost entirely renewable power system. Increased electrification and increased use of biofuels in the transport Christian Rynning-Tønnesen sector are central to further decarbonizing the Norwegian President and CEO energy consumption. This will give opportunities for Statkraft.
STATKRAFT ANNUAL REPORT 2015 6 Statkraft in facts and figures
Statkraft in facts and figures shows that the Group delivered robust results from operations despite a challenging market situation. Acquisitions in Chile and Brazil, new production capacity and significant contribution from market activities helped to partially offset the negative effects from lower power prices and decreased production in the Nordics. Statkraft invested more than NOK 13 billion in 2015. More than a half of this was in new generating capacity. With a total production of 56.3 TWh, Statkraft is the second largest producer of electric power in the Nordics and Europe’s largest supplier of renewable energy.
Power generation Statkraft’s production is determined by production capacity, demand, access to resources (hydrological balance and wind), spark spread (margin between power and gas price) and energy management. In 2015 the Group’s power production TWh totalled 56.3 TWh and 1.1 TWh of district heating. This 56.3 represents an increase of 0.3 TWh and 0.1 TWh respectively compared to year 2014.
Serious environmental incidents Injuries
per million 0 5.9 hours worked
There were no serious environmental incidents in the Group in There were no fatal accidents in Statkraft in 2015, but 39 of 2015. However, 228 minor environmental incidents were the registered accidents and near-misses were categorised as registered. Most of these were related to short-term breaches serious incidents. The indicator for total recordable injuries of river management regulations and minor oil spills. Reported (TRI) per million hours worked was 5.9 in 2015. In total 176 incidents had little or no impact on the environment. injuries were registered.
7 STATKRAFT ANNUAL REPORT 2015 Net operating revenues Statkraft’s revenues are generated by spot sales, contractual sales to the industry, financial trading, grid activities, district heating and power sales to end-users. In addition, the Group NOK delivers concessionary power to Norwegian municipalities. Net operating revenues in 2015 was NOK 20.1 billion, NOK 5.7 billion 20.1 billion lower than in 2014. The decrease was mainly driven by lower prices and production in Nordic hydropower segment as well as deconsolidation of the UK wind farms.
EBITDA Loss before tax
NOK NOK 10.2 billion 0.8 billion EBITDA (operating profit before depreciation and amortisation) The Group’s financial result was impacted by lower Nordic was NOK 10.2 billion in 2015. The Group’s EBTIDA stems power prices, lower Norwegian hydropower production, mainly from Nordic hydropower operations. impairments and negative currency effects. As a result the Group posted a loss before tax of NOK 0.8 billion in 2015. In 2014 the Group achieved profit before tax of NOK 7.9 billion.
ROACE, underlying
The Group had a return on average capital employed (ROACE) of 7.9% in 2015, 3.1% points lower than in 2014. % The decline was primarily related to lower operating profit, mainly due to lower Nordic power prices and lower Norwegian 7.9 hydropower production.
Investments Cash flow from operations
NOK NOK 13.6 billion 8.6 billion In total the Group invested NOK 13.6 billion in 2015. The Group generated a cash flow from operating activities of Approximately three fifths of this were made in new generating NOK 8.6 billion in 2015. This is 25% higher than in 2014. capacity. Maintenance investments were primarily in Statkraft monitors its ability to meet future liabilities through connection with Nordic hydropower, whereas investments in the target figure “Short-term liquidity”. At the end of 2015 the shareholdings were related to acquisitions made in target figure was within the target range of 1.5 to 4.0. International hydropower.
STATKRAFT ANNUAL REPORT 2015 8 Power plants and district heating plants in the Group as of 31.12.2015
Pro-rata1 Consolidated power plants
No. of plants Capacity (MW) No. of plants Capacity (MW)
POWER GENERATION
Hydropower 332 15 017 253 13 630
Norway 224 12 461 152 11 257
Sweden 60 1 268 60 1 268
Germany 10 262 10 262
UK 3 49 3 49
Turkey 2 122 2 122
Brazil 10 93 10 139
Peru 9 296 9 442
Chile 3 143 3 56
Nepal 1 23 1 34
Philippines 3 146
India 2 91
Laos 2 50
Panama 1 7
Zambia 2 5
Wind power 17 814 13 647
Norway 3 245 3 245
Sweden 6 319 6 319
Brazil 4 56 4 84
UK 4 194
Gas power 5 2 600 5 2 600
Norway 1 210 1 210
Germany 4 2 390 4 2 390
Bio power 2 40 2 40
Germany 2 40 2 40
Total power generation 356 18 471 273 16 918
DISTRICT HEATING
Norway 27 630 27 676
Sweden 4 164 4 164
Total district heating 31 794 31 840
1) Statkraft equity share
9 STATKRAFT ANNUAL REPORT 2015 TOTAL NUMBER OF POWER PLANTS/ STATKRAFT’S CAPACITY SYMBOLS: FACILITIES = Hydropower Power Power = Wind power generation 356 generation 18 471 MW = Gas power District District = Bio power heating 31 heating 794 MW = District heating
Statkraft around the world Since the founding of the company in 1895, Statkraft has installed capacity is in Norway with 70%, next is Europe excluding developed from a national company, focused on developing the Nordics with 17%, Sweden with 9% and the rest of the world Norwegian hydro power resources, into a multinational company with 5%. Statkraft also owns shares in 31 district heating facilities diversifying also into other sources of renewable energy. Today, in Norway and Sweden with a total installed capacity of 794 MW. with a total consolidated power generation of 56.3 TWh, Statkraft is the second largest supplier of electric power in the Nordics and The overview of consolidated plants shows the capacity of the Europe’s largest supplier of renewable energy. plants that Statkraft fully consolidates in its financial reporting according to IFRS. The difference between consolidated capacity The Group’s 356 power plants have a total installed capacity of and direct ownership (the pro-rata columns in the table) is mainly 18 471 MW (Statkraft’s share). Hydropower is still the dominant due to Statkraft’s investments in the companies BKK and Agder technology with 81% of installed capacity followed by natural gas Energi, both classified as associates according to IFRS. with 14%, wind power with 4% and bio-fuel with 0.2%. Most of the
STATKRAFT ANNUAL REPORT 2015 10 The Board of Directors of Statkraft
Halvor Stenstadvold Chair of Statkraft’s Audit Committee, Board member since 2003
Asbjørn Sevlejordet Employee-elected Board member, member of Statkraft’s Compensation Committee, Board member since 2014
Elisabeth Morthen Board member since 2014
Hilde Drønen Member of Statkraft’s Audit Committee, Board member since 2014
Olav Fjell Chair of the Board, Chair of Statkraft’s Compensation Committee, Board member since 2012
Vilde Eriksen Bjerknes Employee-elected Board member, Board member since 2014
Berit Rødseth Deputy Chair, Member of Statkraft’s Audit Committee, Board member since 2007
Thorbjørn Holøs Employee-elected Board member, member of Statkraft’s Audit Committee, Board member since 2002
11 STATKRAFT ANNUAL REPORT 2015 Report from the Board of Directors
Statkraft’s operating result was held back by the lowest Nordic power prices in 15 years. The contribution from the growth investments within International Hydropower increased and the market operations continued to deliver a significant contribution to the Group’s EBITDA. All segments contributed positively to the Group’s underlying EBITDA of NOK 10.2 billion. Impairments and negative currency effects under the financial items impacted the Group’s net profit, which amounted to a loss of NOK 2.4 billion.
Statkraft, TrønderEnergi and the European investor The Group has reduced its investment plans as a result of consortium Nordic Wind Power DA have joined forces to lower power prices and a revised dividend policy from the realise Europe's largest onshore wind power project in Norwegian Parliament. The main changes are that there Central-Norway. The six onshore wind farms will have a will be no new investments in offshore wind and some combined capacity of 1000 MW. Commissioning will be international hydropower projects will be postponed. completed in 2020.
STATKRAFT ANNUAL REPORT 2015 12 Key points Significant refurbishment of Nordic hydropower plants Decided to realise Europe’s largest onshore wind project in Central-Norway Strengthened international position through acquisitions in Brazil and Chile Reduced investment plan due lower prices and revised dividend policy
Health, safety and the environment security of supply and energy costs. This transition entails challenges, but will also create new business opportunities in There were no fatal accidents in Statkraft in 2015. renewable power production and sale of services and products to consumers and small-scale power producers. In many emerging The Group works systematically to avoid injuries and damage in markets strong economic growth is expected to result in high all activities. All serious incidents are subject to investigation and power demand growth. Several countries have a good basis for results from these investigations are used to facilitate and transfer developing new renewables, including hydropower. learning and experience across the organisation.
Statkraft’s competitive advantage Absence due to illness was 3.0% in 2015, and this is considered Over several years, Statkraft has emphasised developing the satisfactory. Group's strategic resources. These are resources which provide Statkraft with a competitive advantage and therefore form a basis The Group experienced no serious environmental incidents in for excess value creation compared to other companies. 2015. Statkraft's competitive advantage is primarily related to:
Values Unique assets and hydropower expertise The Group’s core values govern the activities and the employees’ Integrated business model and market expertise behaviour: Market-oriented and adaptable organisation
Competent. Use knowledge and experience to reach Furthermore, Statkraft has established attractive market positions ambitious goals and gain recognition as a leading company in emerging markets and wind power, areas which will play key Responsible. Create value while showing respect for roles in the future. employees, customers, the environment and society in general Unique assets and hydropower expertise Innovative. Seek new opportunities and develop creative Statkraft has production plants with low variable costs, long solutions lifespans and low carbon emissions. The hydropower plants are highly flexible and have a total storage capacity of about 40 TWh, The core values apply to all employees and others who represent 23% of the total European reservoir capacity. Based on solid Statkraft. market knowledge and integrated business processes, the plants enable Statkraft to optimise power production in relation to short, Strategy medium and long-term price fluctuations in the power market. Statkraft has developed and managed Norwegian hydropower Statkraft is a major hydropower company and has solid expertise since the origination of the business in 1895. When the company in key technical disciplines, especially within operation and was reorganised into a state-owned enterprise in 1992, its power maintenance. Statkraft is a large buyer of electro-mechanical production in Norway was 32 TWh. More than 20 years later, the hydropower equipment, providing opportunities for economies of Group is Europe’s largest generator of renewable energy, with an scale. annual production of 56.3 TWh in 2015. The Group has around 3800 full-time equivalents employed in more than 20 countries. Statkraft’s position is a result of growth over many years based on Integrated business model and market expertise Norwegian and international resources and expertise. The Statkraft has extensive experience from the European power ambition is to strengthen the position as a leading international market and has acquired cutting-edge expertise within market supplier of pure energy. The company is well positioned to analysis, production optimisation of flexible power plants and participate in Europe's transition to cleaner power production and energy trading. The company has a comprehensive system for to contribute with new, clean production in emerging markets. collection and processing of hydrological and other market data. Efficient data collection, models, systems and processes to The European power market has undergone major changes in prepare forecasts and exploit market fluctuations are important recent years, with flat demand, increased production from competitive advantages. Statkraft utilise expertise and assets intermittent new renewable generation and low prices. Rapid through an integrated business model where the market analyses deployment and reduced costs of new technologies such as form the basis for maintenance planning, power optimisation and onshore wind and solar, driven by direct and indirect subsidies market operations, both in the short and long term. The purpose of has reduced the profitability of conventional generation capacity. this business model is to utilise the market expertise in Statkraft expects that the EU will continue its development combination with the flexibility of the power plants to maximise towards a low-carbon energy system, with increased focus on production when power prices are high.
13 STATKRAFT ANNUAL REPORT 2015 The market presence in Europe provides valuable market European flexible power generation information to understand the future price formation in the Nordic Market operations area. This is important to operate the Norwegian hydropower Hydropower in emerging markets plants in the best possible manner. Wind power District heating Market-oriented and adaptable organisation Statkraft has developed a market-oriented organisation with broad European flexible power generation consists of the hydropower experience from deregulated markets. Within market operations, business in the Nordic region, Germany and the UK, as well as the company has shown an ability to adapt to changes in market the gas power plants, the subsea cable Baltic Cable and the bio- conditions. In 2011, Statkraft started to provide services in power plants in Germany. connection with handling market access for decentralised producers of renewable energy. The combination of an adaptable The European power market is undergoing major changes. In and business-oriented organisation, extensive knowledge of the addition, new specialised companies are entering other parts of power market as well as utilisation of synergies across the Group the value chain with new value propositions to the customer. has generated value. Going forward, the Group expects to see changes in the value chain and increasing requirements to remain competitive. New business opportunities have been created even though Statkraft has shown the ability to create value in this transition. power prices have been under considerable pressure in Europe, The energy trading activities will gradually increase to create new and our market operations activities have expanded in scope, business opportunities in a changing European market. In products and geographic extent. addition, Statkraft aims to develop market operations in selected international markets where the Group owns assets. Attractive positions established in emerging markets The company has succeeded in establishing positions in several Statkraft, SN Power and Agua Imara have in recent years emerging markets with high growth in power consumption and established businesses in markets with expected long-term good opportunities for hydropower development. Statkraft was an economic growth, increased need for environmentally friendly early investor in hydropower in emerging markets. More than energy and substantial hydropower potential. The aim is to twenty years have passed since the planning of hydropower strengthen the position in these emerging markets through investments abroad started. The first countries were Laos and profitable growth. Nepal. The goal was to apply Norwegian hydropower expertise internationally for profitable business development. Hydropower Within onshore wind power, the focus is on realising the wind development has a long-term perspective and Statkraft's project in Central-Norway. Within offshore wind power, Statkraft involvement is still in an early phase. will prioritise the Dudgeon construction. The Triton Knoll project will be developed, but Statkraft will not invest in this project or any The competitive position in emerging markets will be strengthened further offshore wind capacity. by using the competitive advantages it has accumulated in Europe to an even greater extent. Within district heating, the company will continue to develop the profitability of the existing portfolio and generate organic growth in Attractive positions established in wind power connection with existing plants in Norway and Sweden. Over time, Statkraft has developed a strong position within onshore wind power and has a substantial portfolio in Norway, In addition to these five focus areas, the Group will continue to Sweden and the UK. In 2002, the Group opened its first wind farm support sound development in the partly owned regional on Smøla, and has since developed solid expertise in all phases companies in Norway. Furthermore, Statkraft wants to strengthen from project development to operations and maintenance. innovation activities to increase its competitive advantages within the core activities and promote new business development. A position within offshore wind power has been established in the UK and Statkraft has been responsible for operation and Increased competitiveness - Strengthen and utilise core maintenance of the Sheringham Shoal wind farm since 2014. The expertise Dudgeon offshore wind farm (approximately 400 MW) off the UK Statkraft will strengthen and utilise the Group's core expertise, coast is under construction in partnership with Statoil and Masdar. exploit synergies across areas and develop a more international Due to changes in the dividend policy for the coming three years, company which adapts to local conditions and cultures. This will the investment plan has been adjusted and there will be no new strengthen competitiveness in emerging markets through transfer investments in offshore wind power. Statkraft will participate in the of expertise and simultaneously strengthen the Norwegian Triton Knoll project and the development of the Dogger Bank business through increased internationalisation. projects, but will not invest in these. Good project execution is a precondition for growth in emerging Strategic focus areas markets, while also executing the projects in a responsible and The ambition is to strengthen the position as a leading sustainable manner within the framework of strict HSE international provider of pure energy. Statkraft is well-positioned to requirements. A dedicated unit for projects and development has participate in Europe's transition to cleaner power production and been established within hydropower in emerging markets. The unit to contribute with new, clean production in emerging markets. The will be a preferred supplier of project and development services to following five strategic areas will be prioritised: all international hydropower projects in Statkraft and in the
STATKRAFT ANNUAL REPORT 2015 14 reorganised SN Power. This will facilitate more efficient use of resulted in less need for other power production. As a result of expertise across a common project portfolio. these two factors, power prices in Continental Europe are low and the price of carbon emissions has also fallen to a low level. Market and production Power prices in the Nordic region in 2015 were affected by higher- Most of Statkraft’s production is in the Nordic region, and 92% of than-normal temperatures and inflow. Temperatures in Norway the production took place in this market in 2015. The Group also and Sweden were on average 1.2 and 1.4 degrees above normal has consolidated production (the production of investments which respectively and inflow was 120% above normal in Norway and Statkraft fully consolidates in its accounts) in Germany, the UK, 122% above normal in Sweden. The average system price on Turkey, Brazil, Peru, Chile and Nepal. In other countries, the Nord Pool was 21.0 EUR/MWh, 29% lower than in 2014 and 46% Group is involved through associated companies and joint below the average for the 2010-2014 period. This was the lowest ventures. average yearly price since 2000.
These power markets reflect the global economic trend towards a Power prices in Germany were characterised by good access to mature European market with low growth, and emerging markets non-flexible power production (solar and wind power) as well as with higher growth. In recent years, the growth for emerging relatively low fuel prices. The average spot price (base) was markets has been somewhat lower than previously. In spite of 31.7 EUR/MWh, 4% lower than in 2014 and 24% below the differences in the markets, all are influenced by global trends such average for the 2010-2014 period. as the prices of oil, gas and coal, climate change and associated policies, falling costs for solar and wind power and increasing Power prices in the UK were influenced by an increase in the UK potential for distributed energy. carbon tax which offset lower gas and coal prices. The average spot price (base) was 55.8 EUR/MWh, 7% higher than in 2014 The European power market and 3% above the average for the 2010-2014 period. A weaker Power markets in Europe are influenced by stagnating demand EUR compared to GBP influenced the price development. and the fact that the growth in renewable production capacity has
15 STATKRAFT ANNUAL REPORT 2015 Power consumption in the Nordic region is relatively high per Statkraft’s consolidated production capacity consists of 76% capita compared with other European countries, as a result of the hydropower, 15% gas power, 5% district heating/bio power and combination of cold winters, high percentage of electrical heating 4% wind power. 70% of the capacity is in Norway, 10% in the and a relatively large percentage of power intensive industry. The Nordic region excluding Norway, 16% in Europe excluding the demand for power in 2015 was slightly higher than in 2014, both in Nordic region and 4% outside Europe. Norway and the Nordic region. Total production was 144.7 TWh in Norway and 393.8 TWh in the Nordic region, an increase of 2% in Statkraft’s production is determined by production capacity, both markets compared with 2014. Norway had a net export of demand, access to resources (hydrological balance and wind), power corresponding to about 10% of production, while the Nordic spark spread (margin between power and gas price) and energy region overall had a net export of about 4%. management. At the end of 2015, the consolidated installed capacity (the capacity that Statkraft fully consolidates in the Other power markets accounts) was 16 918 MW, with hydropower contributing The power prices in Turkey are mainly determined by the gas 13 630 MW, gas power 2600 MW, wind power 647 MW and bio price, as gas-fired generation accounts for almost half of the power 40 MW. Consolidated installed capacity for district heating country’s power production, as well as the hydrological conditions was 840 MW. Statkraft also has ownership interests in associated in the country. The average spot price (base) was 46 EUR/MWh, companies and joint operations with production capacity, and, a decline of 19% from the preceding year. The decline was 16% in overall, the Group has ownership interests in power plants with a local currency. total installed capacity of 18 471 MW power production and 794 MW district heating (Statkraft’s share of direct and indirect Power prices in India are still relatively low, about 50 USD/MWh, ownership). mainly due to substantial growth in new thermal capacity and generally lower consumption growth in recent years. In Peru, The demand for power varies throughout the day and year, and prices are low in the spot market, but Statkraft has entered into the power markets are dependent on the capacity that can be several contracts with different maturities at prices above the spot adjusted according to the demand. Statkraft has a large prices. In Chile, the hydrology situation has improved after several percentage of flexible production capacity, and combined with dry years in a row. Increasing penetration of solar and wind extensive analysis and production expertise, this contributes to power, grid congestions and lower fuel price levels have pushed consistent, sound management of the Group’s water resources. average spot price levels for the Central Interconnected System The Group has an advanced energy management process and down to about 80 USD/MWh. In Brazil, improved inflow and lower aims to have production capacity available in periods with high demand growth (impact from the economic recession) have demand. Statkraft’s large reservoir capacity with a combination of resulted in lower spot price levels compared with 2014. The seasonal and multiple-year reservoirs enables the Group to manage the water resources in a perspective spanning more than one year. Accordingly, production can be kept high in peak price periods, but can be kept lower in low-price periods. In 2015, Statkraft held back production due to the low prices.
The Nordic hydrological resource situation was relatively robust throughout the year and at year-end (week 52) the overall reservoir water levels in the Nordic region were 118% of the normal level. This corresponded to 98 TWh, which is 81% of the maximum reservoir capacity of 121 TWh. Statkraft’s reservoir levels were somewhat higher than this due to relatively low Norwegian hydropower production in 2015.
In 2015, the Group’s power production totalled 56.3 TWh (56.0 TWh), plus 1.1 TWh of district heating (1.0 TWh). Hydropower production totalled 53.1 TWh, which was on a par with 2014. Wind power production increased by 43% from the preceding year as a result of new production capacity. The market situation in Europe resulted in only marginal power production at Statkraft’s gas power plants. volume produced by the Brazilian assets is mainly sold on longer term PPAs through the regulated and the free market. In Nepal, Spot sales are trading of electric energy with production and power is sold through a power sales agreement with a fixed CPI- physical delivery taking place simultaneously at market price. The regulated price. price is typically stipulated for a short time interval, for example for every hour of the day. In 2015, the Group sold 31.6 TWh (33.3 Statkraft’s production TWh) in the spot market, which corresponds to 56% of the total Statkraft is the largest power producer in Norway. The Group is production (60%). the Nordic region’s second largest supplier of electric power, Europe’s largest supplier of renewable energy and one of the ten Statkraft is a major supplier to the power-intensive industry. In largest global producers of hydropower. 2015, the volume delivered under long-term contracts amounted
STATKRAFT ANNUAL REPORT 2015 16 to 21.6 TWh, of which 18.9 TWh went to the industry in the Nordic Statkraft-owned production capacity region. - direct and indirect ownership shares
The high contract coverage has a stabilising effect on Statkraft’s revenues. Most of the contract volume for Nordic industry runs until 2020.
In Norway, Statkraft is required to cede a share of the power production to counties and municipalities where the power is produced, so-called concessionary power. Explained briefly, the price for this power corresponds to the average production cost, which is significantly lower than the market price for power. The concessionary power volume amounted to 6.5% of the Group’s Nordic hydropower production in 2015.
17 STATKRAFT ANNUAL REPORT 2015 Statkraft’s activities
Key figures - consolidated operations
Statkraft Nordic Continental International Wind District Industrial Other Group Group hydropower energy and hydropower power heating ownership activities items trading Power production Installed capacity (MW) 5) 16 918 11 175 2 951 878 563 - 1 342 8 - 1), 2), 3) 2) 1), 2), 3) 2), 4) Production (TWh) 5) 56.3 43.5 1.1 3.6 2.2 - 5.5 0.4 -
District heating Installed capacity (MW) 840 - - - - 702 138 4) - - Production (GWh) 1 055 - - - - 967 88 - -
End-user sales Energy delivered, through grid to end-user (TWh) 5.7 - - - - - 5.7 - - Volume delivered, to electricity customers (TWh) 13.3 - - - - - 13.3 - -
Income statement (NOK mill.) Net operating revenues, underlying 19 255 10 923 2 763 1 574 658 464 2 985 718 -831 EBITDA, underlying 10 169 7 322 1 167 768 21 212 1 336 -668 11 Operating profit/loss, underlying 6 815 5 896 792 377 -312 49 793 -789 11 Operating profit/loss 3 814 6 427 346 -1 709 -2 062 49 1 152 -425 36 Share of profit from associated companies and joint ventures 683 - - -196 55 1 835 -12 -
Balance sheet (NOK mill.) Total assets 176 905 56 884 5 777 34 309 13 736 3 628 24 801 28 092 9 678 Investments 13 557 1 978 201 6 551 3 406 301 685 435 -
1) Excluding Baltic Cable (600 MW). 2) Excluding pumped-storage hydropower. 3) Including Emden 4, Robert Frank and Kårstø which are in cold reserve. 4) Skagerak Energi's share. 5) Includes the share of consolidated companies.
Statkraft’s segment structure is presented in accordance with how a higher average market price than other power companies in the Group management makes, follows up and evaluates its Norway. The effects of this competitive advantage is assessed decisions. The segments are Nordic hydropower, Continental through the key performance indicator «Realised price margin energy and trading, International hydropower, Wind power, District Norwegian hydropower», which measures the average price heating and Industrial ownership. Areas not shown as separate achieved by Statkraft compared to the rest of Norway. In 2015, the segments are presented under the heading Other activities. realised price margin was higher than the target.
Nordic hydropower Production costs in connection with hydropower are relatively low Nordic hydropower is by far the largest segment measured by in comparison with other types of power production facilities. To installed capacity and assets, as well as net operating revenues ensure that Statkraft maintains its long-term competitiveness the and results. The segment includes hydropower plants in Norway production costs are followed up through the key performance and Sweden. The production assets are largely flexible. The indicator «Total cost per kWh»1. In 2015, the cost was on a par segment’s revenues are mainly generated by selling power in the with the target. The low production costs are partly offset by spot market and on long-term contracts, the latter mainly to higher tax rates for Norwegian hydropower production through power-intensive industry in Norway. In Norway, Statkraft also resource rent taxation. delivers concessionary power. Multiple-year reservoirs and the flexibility of the power plants enable optimisation of power Availability is an important factor in optimising hydropower production in relation to the hydrological situation and price revenues, and Statkraft uses the key performance indicator situation. Nordic hydropower is therefore optimised over longer «Market-adjusted availability»2 to measure if Statkraft’s installed time periods than one year. capacity is available to produce when it is most profitable to do so. The most critical influenceable factor affecting this KPI is how The volume traded in the spot market can vary significantly effectively plant maintenance is performed. For 2015, the between years, depending on access to resources and production optimisation decisions. The management of Statkraft’s multiple- 1) Total cost per kWh: Production cost/normalised production volume 2) year reservoirs in Norway normally enables the Group to achieve Market-adjusted availability: Share of available installed capacity when market prices are higher than water value.
STATKRAFT ANNUAL REPORT 2015 18 availability for Nordic hydropower assets was higher than the Statkraft runs a dynamic asset management portfolio holding a target. varying amount of asset-backed positions for profit. The portfolio outperformed the Group’s added value target in 2015, but the Important events in 2015 Statkraft decided to invest contribution was at a lower level than in 2014. NOK 280 million in a full refurbishment of Øvre Røssåga power plant in Northern Norway. All major electromechanical Statkraft also engages in trading with financial standard contracts, components will be refurbished, and annual production will structured products and customised agreements for industry and increase by 50 GWh. commerce (origination). Revenues can vary substantially between periods and years. Statkraft monitors the performance in trading Elkem and Statkraft entered into a new long-term power and origination through the key performance indicator «Trading agreement for a period after year 2020. The new volumes will and origination ROCE». As for the dynamic asset management be delivered to Elkem’s smelters in Thamshavn in Nord- portfolio the Group’s target was reached in 2015, but the return Trøndelag County and in Salten in Nordland County. was somewhat lower than in 2014.
Financial performance The key performance indicators Important events in 2015 Statkraft launched a venture capital showed generally good results in 2015. In spite of the sound unit that will partner with dynamic start-ups. The venture capital operations, the segment’s underlying EBITDA fell by 17% to fund operates out of Düsseldorf and targets investment NOK 7322 million, compared with 2014. The decline was mainly opportunities across Europe. due to lower Nordic power prices and lower Norwegian hydropower production. Statkraft and Bharat Light and Power (BLP) signed a shareholders’ agreement for a new joint venture company in The segment’s underlying net operating revenues fell by India, Statkraft BLP Solar Solutions Pvt. Ltd. Statkraft and BLP NOK 1424 million, or 12%, compared with 2014. The decline was each hold 50% of the new company, which will develop solar primarily related to lower spot sales revenues due to lower Nordic installations. power prices and volume. The volume sold in the spot market was 11% lower and the average Nordic system price, in EUR/MWh, Naturkraft sent an application to the Norwegian Water was 29% lower than in 2014. The revenue effect of the fall in Resources and Energy Directorate for dismantling the gas-fired prices was somewhat offset by a weaker NOK against EUR as the power plant at Kårstø in Norway. average system price was 17% lower in NOK/MWh. The revenue from long-term contracts increased 8% due to slightly higher Financial performance The good performance shown by the volume, indexed price adjustments and weaker NOK against key performance indicators was reflected in the segment’s EUR. 43% of the segment’s production in 2015 was sold on long- underlying EBITDA. Despite the fall of NOK 387 million term contracts (39%), and this large share has a stabilising effect compared with 2014, an EBITDA of NOK 1167 million is on revenues. historically a strong result and approximately NOK 500 million higher than the average for the years 2010-14. The good result Operating costs were stable compared with 2014. A higher basis was partly related to the sale of EUA certificates. The decrease for depreciation due to the capitalisation of several projects compared with 2014 was mainly related to lower contribution throughout the year led to slightly higher depreciations. from the dynamic asset management portfolio, which showed exceptionally good results in 2014. Continental energy and trading Continental energy and trading includes gas power plants in The segment’s operating costs increased compared with 2014 Germany and Norway, hydropower plants in Germany and the UK mainly due to provisions for an onerous power purchase contract. and bio-based power plants in Germany, as well as Baltic Cable, the subsea cable between Sweden and Germany. The power International hydropower production is optimised in relation to the prices for input factors International hydropower operates in emerging markets with (fuel and carbon), hydrology and sales prices (power and green anticipated high growth and increasing need for energy. Statkraft certificates). The segment also includes trading and origination in is focusing on selected markets where the Group’s hydropower Europe, Brazil and India, as well as revenue optimisation and risk expertise can create value. The operations include the Group’s mitigation related to both the Continental and Nordic production hydropower activities in Southeast Europe, South America and activities. South Asia, as well as the 50% shareholding in SN Power. Investments are often made together with local partners or In order to mitigate risk in relation to uncertainty in future price and international investors. production volumes, Statkraft hedges the production revenues through financial power trading. The hedged percentage of the Production costs are followed up through the key performance production varies with market development expectations. indicator «Total cost per kWh»3. In 2015, the cost was within the target. Statkraft’s analysis activities have a key position in the overall trading activities. The analysis activities are based on collection Important events in 2015 Statkraft purchased 99.39% of the and processing of hydrological, weather and market data. This shares in the listed hydropower company Investments Empresa data is used to estimate future market prices and optimise Eléctrica Pilmaiquén in Chile. Statkraft’s flexible production. In addition to hedging activities 3) Total cost per kWh: Production costs/normalised production volume.
19 STATKRAFT ANNUAL REPORT 2015 Statkraft completed the acquisition of Desenvix in Brazil, Phase 2 of the Björkhöjden wind farm (126 MW) in Sweden was becoming majority owner with 81.3% of the shares, and finalised. changed the name to Statkraft Energias Renováveis. In August, the company completed the sale of two transmission lines. The Board of Directors decided to adjust Statkraft’s investment plan. The main change being that there will be no new The construction of the new hydropower plants Kargi (102 MW) investments in offshore wind power and the focus will be on in Turkey and Cheves (171 MW) in Peru were completed. managing positions in offshore wind to maximise the value of existing assets and projects. The security situation in Southeast Turkey has resulted in increased risk related to the Cetin project, and there have been Statkraft, TrønderEnergi and the European investor consortium major challenges related to project execution. Statkraft has Nordic Wind Power DA have joined forces to realise Europe's therefore decided to suspend the majority of the construction largest onshore wind power project in Central-Norway. The six works. This has led to an impairment and related costs of onshore wind farms will have a combined capacity of 1000 MW NOK 2086 million. Going forward, Statkraft will assess different and the total investment will amount to approximately alternatives for the project. NOK 11 billion. Construction will commence in the second quarter of 2016 and commissioning will be completed in 2020. Hydropower plants in India were written down by NOK 384 The wind farms will be built on the Fosen peninsula, on the million due to lower price expectations. island of Hitra and in Snillfjord, in a coastal area providing some of the best conditions for renewable energy production from Financial performance The segment’s underlying EBITDA wind in Europe. The projects' capacity is more than the current doubled compared with both 2014 and the average for the years total installed capacity of wind power in Norway. Once 2010-14. The increase was primarily related to the acquisitions completed and commissioned in 2020, the wind farms are and new power plants in operation. A weaker NOK against USD expected to generate 3.4 TWh power annually. also contributed positively. Wind power plants in Sweden were written down by The share of profit from associates and joint ventures amounted to NOK 1750 million as a result of expectations of lower power and a loss of NOK 196 million (loss of NOK 240 million). The loss in electricity certificate prices in the coming years. 2015 was primarily related to the impairments in India, while the loss in 2014 was mainly related to an impairment of an investment Financial performance In 2013 and 2014, the Wind power in Brazil. segment had an EBITDA of around NOK 500 million. The deconsolidation of the UK wind farms during 2014, lower Nordic Wind power power prices and business development costs in Norway and Wind power includes Statkraft’s investments in onshore and the UK have, however, reduced the EBITDA. These effects offshore wind power. The segment has onshore wind farms in were partly offset by new production capacity in Sweden and operation in Norway, Sweden and the UK, as well as an offshore good wind conditions and the segment’s EBITDA for 2015 was wind farm in operation and one under construction in the UK. The slightly above zero. revenues derive from sale of power at spot prices as well as revenues from support schemes. The share of profits from associates and joint ventures amounted to NOK 55 million with the UK offshore wind farm Sheringham The costs associated with wind power are followed up through the Shoal generating the profit. Compared with 2014 this was a target figure «Variable cost per kWh»4. Adjusted for currency reduction of NOK 308 million, which was primarily caused by a effects, the cost in 2015 was within the target for both onshore reversal of previous year’s impairment for Sheringham Shoal of and offshore wind. NOK 341 million in 2014.
District heating Availability is followed up through the target figure «Market- District heating operates in Norway and Sweden. The revenues in adjusted availability 5. The availability for both onshore and » Norway are influenced by power prices, grid tariffs and taxes. In offshore wind power was within the target. Sweden, they are determined by the alternative price that customers are faced with, and prices are either fixed or index Important events in 2015 Statkraft purchased half of the regulated. Waste, biomass, oil and gas are important input factors offshore wind power project Triton Knoll (up to 900 MW) off the in the production of district heating. coast of the UK from RWE Innogy. The two companies will develop the project up to the investment decision. At Group level, the performance is measured through the key performance indicator «Realised price margin»6. In 2015, the An investment decision was taken for Andershaw Wind Farm, a margin was better than the target. 36 MW onshore project in Scotland under the UK support scheme. The project is expected to be fully commissioned late 2016.
4) Variable cost per kWh: All variable production costs/normalised production volume. 5) Market-adjusted availability: Actual production / (Actual production + Estimated lost 6) Total contribution delivered from District Heating reported as cost per kWh of the production from production shutdown) actual volume supplied to customers.
STATKRAFT ANNUAL REPORT 2015 20 Important events in 2015 Statkraft bought 100% of the shares Other activities in Gardermoen Energi from Hafslund. Total installed capacity is Other activities include small-scale hydropower, innovation and 43 MW and annual production is approximately 54 GWh. Group functions.
A new gas boiler (16 MW) started operation in Harstad. Important events in 2015 Statkraft together with the other owners, Skagerak Energi, BKK and Agder Energi, sold Småkraft Statkraft signed an agreement for supply of surplus heat from to Germany based Aquila Capital. The gain was NOK 226 Lantmännen Cerealia in Moss and Moelven Van Severn in million for Statkraft and NOK 108 million for the associates BKK Namsos. and Agder Energi.
Financial performance The segment’s underlying EBITDA Statkraft purchased 100% of the shares in Södra Cell Tofte and continued to grow on the back of good operations in 2015 and established the biofuel company Silva Green Fuel in ended at NOK 212 million, a growth of 40% compared with cooperation with Södra Skogägarna Ekonomisk Förening 2014. The improvement was primarily due to better price and (Swedish forest owner association). higher volume on waste handling, high utilisation of base load, high availability and good fuel mix. Reduced costs and limited New segment structure from 2016 use of peak load contributed further to the improvement. The Group has adopted a new segment structure from 1 January 2016. The new segments are European flexible Industrial ownership generation, Market operations, International hydropower, Wind Industrial ownership includes management and development of power, District heating and Industrial ownership. Areas not Norwegian shareholdings, and includes the companies Skagerak shown as separate segments are presented under Other Energi, Fjordkraft, BKK, Istad and Agder Energi. The first two activities. The new segment structure is aligned with the companies are included in the consolidated financial statements, strategic initiatives and the new internal management reporting while the other three companies are reported as associated for the purpose of performance assessment and resource companies. Skagerak Energi’s activities are concentrated around allocation. the production of power, district heating operations, distribution grid operations, electrical entrepreneur activities and natural gas distribution. Fjordkraft’s activities are concentrated around the sale of electricity to private individuals and companies.
Important events in 2015 Skagerak Energi sold 51% of Skagerak Elektro to the Telemark Group.
BKK entered into a 10-year power sales agreement with Hydro, with an agreed delivery of 500 GWh per year for the period 2021-2030.
BKK and co-operating companies entered into contracts for the procurement of equipment and installation services for their automatic metering and control system projects covering 700 000 customers. Skagerak Nett has entered into similar contracts for their automatic metering project.
Financial performance The segment’s underlying EBITDA of NOK 1336 million was slightly lower than in 2014. The decline was primarily due to significantly lower power prices and slightly lower spot production. The decline was partly offset by higher contribution from end user business and long-term contracts.
The share of profit from associates and joint ventures amounted to NOK 835 million (NOK 535 million), mainly related to BKK and Agder Energi. The increase compared with 2014 was primarily related to positive unrealised value changes from energy contracts in Agder Energi. Gain of NOK 108 million for BKK and Agder Energi from the sale of Småkraft also contributed positively. The 2014 figures included gains of NOK 116 million from the sale of two subsidiaries in Istad.
21 STATKRAFT ANNUAL REPORT 2015 Financial performance7 operating profit. Unrealised changes in value of energy contracts and significant non-recurring items in consolidated activities are The lowest Nordic power prices since 2000, lower Norwegian explained in the section ”Items excluded from the underlying hydropower generation and deconsolidation of UK wind farms led operating profit”. Income statement elements after the operating to a drop in the Group’s EBITDA. Increased contribution from profit are analysed in accordance with the recorded result. acquisitions in Chile and Brazil and new generation capacity partly offset the decrease. Market operations contributed significantly to Return on investments the EBITDA, but at a lower level than in 2014. Operating Measured as ROACE8, the Group achieved a return of 7.9% in expenses were somewhat higher than in 2014, mainly due to the 2015, which was 3.1 percentage points lower than in 2014. The acquisitions, new assets and currency effects. decline was primarily related to lower operating profit, mainly due to lower Nordic power prices and lower Norwegian hydropower The share of profit from associated companies and joint ventures generation. was on a par with 2014, and the main contributors were the regional Norwegian companies BKK and Agder Energi. Underlying operating revenues
Impairments and negative currency effects under the financial Statkraft’s revenues are generated by spot sales, contractual items impacted the result for the year and 2015 ended with a net sales to the industry, financial trading, grid activities, district loss of NOK 2369 million. The currency effects were offset by heating and power sales to end-users. In addition, the Group currency translation effects in the equity. At the end of 2015, the delivers concessionary power. The fundamental basis for Group’s equity was at the same level as at the end of 2014. Statkraft’s revenues comprises power prices, energy optimisation and generation. The generation revenues are optimised through In the following, the emphasis will be on presentation of the result financial power trading, and the Group engages in trading from the underlying operations for items up to and including the activities and energy trading.
8) ROACE (%): (Operating profit adjusted for unrealised changes in the value of energy 7) Figures in parentheses show comparable figures for 2014 contracts and significant non-recurring item x 100 / average capital employed.
STATKRAFT ANNUAL REPORT 2015 22 Net operating revenues totalled NOK 19 255 million in 2015, 7% this business are low and therefore reduce the overall EBITDA lower than in 2014. The Nordic hydropower segment saw a margin. substantial decrease due to lower power prices and generation, whereas the Wind power segment’s revenues dropped as a result EBITDA (operating profit before depreciation and amortisation) fell of the deconsolidation of the UK wind farms. International by 16% from 2014 and the operating profit fell by 25%, to hydropower experienced a significant increase, primarily due to NOK 10 169 million and NOK 6815 million, respectively. The the acquisitions in Brazil and Chile. The other segments had minor Group’s EBITDA and operating profit are to a large degree generated changes in net operating revenues. by the Nordic hydropower segment, which contributed 72% (73%) and 87% (82%) of the total, respectively. Underlying operating expenses In total, the Group’s operating expenses increased by 8% Items excluded from the underlying operating profit compared with 2014. The increase related primarily to Total unrealised changes in value of energy contracts and acquisitions, new assets in operation and currency effects due to significant non-recurring items had a negative effect in 2015, and a weaker NOK against other currencies. amounted to NOK -3002 million (NOK 4449 million).
Underlying EBITDA and underlying operating profit Unrealised changes in value of energy contracts adjusted for in
9 the underlying operating profit amounted to NOK 609 million Historically, Statkraft has had high EBITDA margins as a result of (NOK 2396 million). The primary contributors to the positive profit low operating expenses for hydropower generation. From 2012, effect were embedded derivatives for bilateral industry contracts, the business activity where Statkraft offers market access for which showed positive development as a result of a weaker NOK small-scale producers of renewable energy started to affect the against EUR, and the financial risk reduction portfolio, which EBITDA margin. The contracts are recognised gross in the income showed positive development due to falling Nordic power prices. statement and therefore increase both the sales revenues and the energy purchase costs substantially. This business makes a positive contribution to the Group’s EBITDA, but the margins from
9) EBITDA margin (%): (Operating profit adjusted for unrealised changes in the value of energy contracts and significant non-recurring items x 100) / gross operating revenues adjusted for unrealised changes in the value of energy contracts and significant non- recurring items.
23 STATKRAFT ANNUAL REPORT 2015 Non-recurring items excluded from the calculation of the Share of profit from associated companies and joint underlying profit amounted to NOK -3610 million in 2015 ventures (NOK 2053 million). The Group has major shareholdings in the regional Norwegian power companies BKK, Agder Energi and Istad, as well as The gain from the sale of Småkraft adjusted for in the underlying shareholdings in companies outside Norway, where much of the profit was NOK 226 million. This does not include the gain of activity takes place through participation in partly-owned NOK 108 million in the associated companies BKK and Agder companies. Energi.
The figures for International hydropower were impacted by There was an impairment of wind power in Sweden of impairments in both 2015 and 2014. In 2015, there was an NOK 1750 million as a result of expectations of lower power and impairment of NOK 384 million in India due to an expectation of electricity certificate prices in the coming years. lower power prices, while, in 2014, there was a write-down in Brazil of NOK 360 million. Contribution from SN Power increased due There was an impairment related to the construction of the Cetin to the start-up of the Bajo Frio hydropower plant in Panama in 2015. hydropower plant in Turkey of NOK 2086 million. This was split into NOK 1297 million as impairment and NOK 789 million as The share of profits for Wind power included a reversal of previous other operating expenses. years’ impairment of NOK 341 million in 2014. Otherwise, the share of profit improved due to the deconsolidation of the Sheringham Shoal Unrealised changes in value of energy contracts wind farm from the end of 2014. NOK mill. 2015 2014 Long term contracts 2 097 1 429 Nordic and Continental Dynamic Asset The improvement for Industrial ownership was mainly related to Management Portfolio -30 -317 positive unrealised value changes from energy contracts in Agder End-users 38 14 Energi. Gain from the sale of Småkraft also contributed positively. Energy purchases -1 681 1 298 Other/eliminations 184 -27 Share of profit/loss from associates and joint ventures Unrealised changes in value not NOK mill. 2015 2014 included in underlying profit 609 2 396 International hydropower -196 -240 Unrealised changes in value included Wind power 55 363 in underlying profit -261 206 Industrial ownership 835 535 Unrealised changes in value presented in the Other -10 3 profit and loss statement 348 2 602 Associates 683 661
Financial items The decrease in financial income was primarily related to gains Significant non-recurring items linked to the SN Power transaction in 2014. NOK mill. 2015 2014 Gain from sale of assets 226 2 767 Financial expenses increased mainly due to loss in relation to Impairments and related expenses -3 836 -1 050 step-up acquisition of Desenvix. Pension scheme changes - 280 Trial related to Saurdal power plant - Net currency effects amounted to a loss of NOK 3445 million (loss consession power - 56 of NOK 4791 million), mainly as a result of a weaker NOK against Significant non-recurring items -3 610 2 053
STATKRAFT ANNUAL REPORT 2015 24 EUR. The effects mainly stem from internal loans and currency Cash flow hedging contracts. Most of these effects are offset by translation The Group generated a cash flow from operating activities of effects in the equity. NOK 8639 million in 2015 (NOK 6898 million), an increase of 25% compared with the previous year. Financial items NOK mill. 2015 2014 Interest income 378 267 Net income, adjusted for non-cash effects, was Other financial income 43 592 NOK 11 167 million (NOK 9762 million), including changes in Financial income 421 859 short and long term items. The changes in short and long-term Interests expense -1 322 -1 226 items had a positive effect of NOK 4651 million (NOK -1746 Other financial expenses -736 -83 million). The change in short-term items was mainly related to working capital, cash collateral and provision related to Financial expenses -2 058 -1 309 impairment in Turkey. Taxes paid were NOK -3062 million Net currency effects -3 445 -4 791 (NOK -3593 million) and dividends received from associated Other financial items -237 -1 043 companies and joint ventures were NOK 534 million (NOK 729 Net financial items -5 318 -6 283 million).
Net currency effects Net investments10 amounted to NOK -9834 million (NOK -5450 NOK mill. 2015 2014 million). This was primarily investments in property, plant and Currency hedging contracts and short term equipment totalling NOK -8720 million, acquisition of shares in currency positions -1 794 -733 Pilmaiquén in Chile of NOK -1928 million, in Desenvix in Brazil of Realised -1 675 -80 NOK -911 million and divestment of Småkraft of NOK 1337 Unrealised -119 -654 million. Loans in foreign currency -838 -724 Realised -306 284 The net liquidity change from financing amounted to NOK -2603 Unrealised -532 -1 008 million (NOK 3168 million). New debt totalled NOK 14 409 million Internal loans, joint ventures and associates -813 -3 332 (NOK 1917 million), while repayment of debt was NOK -11 864 Realised -2 635 980 million (NOK -3900 million). Dividend and Group contribution Unrealised 1 822 -4 312 amounted to NOK -5157 million, primarily from Statkraft AS to Net currency effects -3 445 -4 791 Statkraft SF. Realised -4 616 1 183 Unrealised 1 171 -5 974 Currency exchange rate effects on cash and cash equivalents amounted to NOK 190 million.
Taxes Statkraft monitors its ability to meet future liabilities through the The recorded tax expense was NOK 1548 million target figure “Short-term liquidity”11, and at the end of 2015, the (NOK 4045 million). The decrease in tax expense was mainly due target figure was within the target range of 1.5 to 4.0. to a net loss before tax in 2015, while there was a profit before tax in 2014. Financial structure
Resource rent tax decreased by NOK 311 million compared with The main objectives of the Group’s capital structure management 2014 due to lower power prices and hydropower generation, but at are to maintain a reasonable balance between solidity and the NOK 1481 million, it still constitutes a major part of the Group’s tax ability to expand, and to maintain a strong credit rating. The most expense. The majority of the tax expense was related to Norway.
10) Net investments include investments paid at the end of the quarter, payments received from sale of non-current assets, net liquidity out from the Group upon acquisition of activities and repayment and disbursement of loans. 11) Short-term liquidity: (OB liquidity capacity + forecast incoming payments next 6 months) / (debt due and dividend next 6 months + (limit x forecast disbursements from operations / Investments next 6 months).
25 STATKRAFT ANNUAL REPORT 2015 free debt was NOK 18 994 million (NOK 20 662 million) at the end of 2015.
At the end of the year, Statkraft’s equity totalled NOK 88 340 million, compared with NOK 88 059 million at the start of the year. This corresponds to 49.9% of total assets (52.5%).
Financial strength and rating It is important to Statkraft to maintain its credit rating with the two major rating agencies Standard & Poor’s and Moody’s. An important key figure monitored by Statkraft in relation to credit rating is the cash flow from operations in relation to net interest- bearing debt. Statkraft AS has a current credit rating of A- (negative outlook) from Standard & Poor’s and Baa1 (stable outlook) from Moody’s. See note 6.
Investments In accordance with the Group’s strategy, the project activity level has been high the last years, especially within wind and hydropower. Going forward, however, the Group’s investment Debt and interest rates programme will be scaled down due to lower power prices and the % Share 31.12.2015 Interest rate 2015 changes in the dividend policy. NOK 36% 4.8 % EUR 44% 2.9 % In total, Statkraft invested NOK 13 557 million in 2015, of this GBP* 15% 0.8 % NOK 3237 million was invested in Norway. Approximately three USD 3% 5.6 % fifths of the total investments were made in new generating BRL 2% 8.2 % capacity. Maintenance investments are primarily in connection Floating rate 60% with Nordic hydropower. The largest investments in new capacity Fixed rate 40% are in connection with wind power in Sweden and the UK, as well * Debt in GBP is synthetically converted from NOK through financial instruments, and as international hydropower. does not include credit margin. important target figure for the Group’s management of capital structure is long-term credit rating.
Tools for long-term management of capital structure are primarily comprised by the drawdown and repayment of long- term liabilities and payments of share capital from/to the owner. The Group is not subject to any external requirements with regard to the management of capital structure other than those relating to the market’s expectations and the owner’s dividend requirements.
The Group endeavours to obtain external financing from different capital markets. When raising loans, Statkraft seeks to ensure an even repayment profile, and the current maturity profile is in line with this objective. New loans are planned in accordance with the liquidity forecast, investment decisions and sale of assets.
At the end of 2015, net interest-bearing debt12 amounted to NOK 35 036 million, compared with NOK 23 638 million at the beginning of the year. The increase was primarily related to new investments, payment of dividend and debt in acquired companies in Chile and Brazil. The net interest-bearing debt-equity ratio was 28.4%, compared with 21.2% at year-end 2014.
Long-term interest-bearing debt from Statkraft SF to Statkraft AS amounted to NOK 400 million at the end of the year.
Current assets, except cash and cash equivalents, amounted to NOK 18 883 million (NOK 21 780 million) and short-term interest-
12) Net interest-bearing debt: Gross interest-bearing liabilities – bank deposits, cash in hand and similar excluding restricted funds – short-term financial investments.
STATKRAFT ANNUAL REPORT 2015 26 Risk management on business models and risk management. Consequently, Statkraft places significant emphasis on the interrelationship Statkraft is exposed to risk throughout the value chain. The most between the various markets. The Group's hedging strategies important risks are related to market operations, financial are regulated by limits on the positions’ volume and value, and management, project execution, operating activities and by criteria for evaluating new contracts against expected framework conditions. revenues and downside risk. The portfolio is constantly adjusted in relation to our current perceptions of future prices and the Integrated corporate risk management company’s own generation capacity. Growth and increased internationalisation together with dramatic changes in the energy sector set stricter requirements for risk Statkraft's activities in energy trading and services consist of management in the investment portfolio. Statkraft has a central both trading with standard products on energy exchanges and Investment Committee to improve risk handling in relation to sale of services or products adapted to the individual customer. individual investments and across the project portfolio. The risk New products and services typically have a short lifetime management is an integrated part of other governance through a compared with other activities before profitability is reduced as a risk-based system for the corporate management's follow-up of result of competition from other players or regulatory the business areas. The Group's overall risk profile is concluded amendments. Risk is handled through mandates covering raw by the Corporate Management and is reported to the Board of materials, geographical areas and duration. An independent risk Directors. management function ensures objectivity in the assessment and handling of risk. Market risk in energy markets Statkraft is exposed to significant market risk in relation to the Sales activities are exposed to uncertainty in the sales price to generation and trading of power. Revenues from power retail customers and companies, as well as the purchase price in generation are exposed to volume and power price risk: the wholesale market. Statkraft limits the net exposure by securing symmetry between customers and purchases in the Both power prices and production volumes are impacted by wholesale market and by using financial instruments. District weather and precipitation volumes, while electricity prices heating operations are also exposed to market risk through depend on production, consumption and transmission uncertain fuel prices (waste, oil, gas, electricity prices and conditions in the electricity market. others) and prices to customers. However, the fact that prices to Power prices are also impacted by gas, coal and oil prices, customers are linked to fuel prices means that net exposure to the price of carbon quotas, support regimes and introduction price changes is limited. of new power production technology. Financial risk Statkraft manages market risk in the energy markets by trading The central treasury department coordinates and manages the physical and financial instruments in multiple markets. Increased financial risk associated with foreign currencies, interest rates integration of the energy markets is having a significant impact and liquidity, including refinancing and new borrowing. Statkraft
RISK EXPOSURE THROUGH THE VALUE CHAIN
REGULATORY FRAMEWORK AND COUNTRY RISK ACROSS PEOPLE MANAGEMENT FINANCIAL ASPECTS THE VALUE CHAIN Taxes and competition legislation Roles and Leadership Interest rate and EU and EEA regulatory framework responsibilities Strategy, policy and currency National laws and regulations Skills and procedures Funding/liquidity Licences, concessions knowledge Organisation and Counterparty risk Support regime resources related to financial Government, parliament Partnership counterparties Country culture Company culture Guarantees
RISK IN THE Energy optimisation and Distribution/retail Development Construction Production VALUE CHAIN trading customer
Market risk Currency risk Currency and interest Hydrology Power and fuel prices rate risk Power prices, fuel Volume risk associated prices, carbon quota with consumption prices Interest rate risk for distribution grid revenues
Counterparty risk Counterparty risk Counterparty risk Counterparty risk in Counterparty risk related to related to investments sales and power commitments trading
Operational and Claims for Damage to property, Damage to property, health Fines, claims for Damage to property, compensation, loss health and the or the environment, human compensation, human health or the environment, project risk of reputation environment, human error and system failure, error, system failure fines and loss of reputation error and system fines and loss of reputation and loss of reputation failure, delays, budget overruns and loss of reputation
27 STATKRAFT ANNUAL REPORT 2015 is exposed to interest risk through external financing and All projects in Statkraft implement systematic risk assessments. distribution grid revenues. The Group is exposed to currency risk This takes place through each project: through: Having an allocated project reserve for larger investments Integration between the Nordic and the Continental power Implementing follow-up and reporting of factors of market importance for project implementation The Group's energy trading in EUR Evaluating and planning measures to mitigate risk in the Financing project Other cash flows related to foreign subsidiaries and associated companies The most critical aspects are in connection with development of Statkraft's international activities. Major attention is devoted to Currency and interest risk are regulated by means of mandates. development of sound systems for learning, establishing barriers Forward currency contracts, interest rate swaps, forward interest and ensuring compliance to avoid delays, cost overruns and rate agreements and debt in foreign currency are the most undesirable incidents. Statkraft has a joint corporate project unit important instruments. The liquidity risk in Statkraft is related to to further reduce risk in relation to project execution. the deviation between the maturity profile of financial liabilities and the cash flows generated by the assets. The liquidity risk Estimates of the possible financial consequences of the total can mainly be handled through good borrowing sources, credit operational risk, as well as significant individual risks that are facilities and minimum requirements for the Group's cash and central drivers to the Group's overall risk profile, are included in cash equivalents. the reporting of the overall risk at Group level.
Statkraft is exposed to credit and counterparty risk through Other risk energy trading and investment of surplus liquidity. The credit Statkraft's activities in Norway are influenced by framework rating of all counterparties is evaluated before contracts are conditions such as taxes, fees, regulations, grid regulations, signed, and exposure vis-à-vis individual counterparties is changes in mandatory minimum water level and other limited by mandates based on their credit rating. Market risk in requirements stipulated by the Norwegian Water Resources and the energy markets and other financial risk, as well as exposure Energy Directorate (NVE), as well as general terms and in connection with the issued mandates, are followed up by conditions stipulated for the energy industry. These framework independent middle office functions and regularly reported to the conditions can influence Statkraft's production, costs and Corporate Management and the Board of Directors. revenues.
Operational risk The framework conditions in the individual countries in Europe All processes throughout the value chain are exposed to are a result of international processes that will be important for operational risk. The operational risk is greatest within Norwegian power plants. With its international involvement, implementation of our investment projects and operational Statkraft is also directly exposed to national framework activities. This may result in: conditions, tax levels, licence terms and public regulation in other countries. Statkraft therefore greatly emphasises the Injury to the Group's employees, contractors or third parties uncertainty in relation to the future development of these factors Harm to the environment when making investment decisions. Possible changes in the Damage and losses related to own and third-party political landscape are considered continuously, and maintaining production plants and other assets an open dialogue and establishing good relationships with Damage to reputation decision-makers in all relevant arenas are emphasised. Financial loss Statkraft's international investments involve both heightened Statkraft's first priority is to execute development activities and country risk and partner risk. Statkraft assesses risk for each operations in a responsible manner. Risk management at early country individually and compares countries in each region. stages of the development for an investment project has turned Partner risk is assessed at an early stage in order to confirm the out to be an important success factor. necessary integrity and management structure. Statkraft is Statkraft has insurance coverage for all significant types of committed to ensuring that all parts of the Group comply with damage or injury, in part through the Group’s own insurance Group standards within HSE and ethics. The standards have company Statkraft Forsikring. been set out and made available in the Group's Code of Conduct. The standards are also communicated to all partners Statkraft manages operational risk through detailed procedures and suppliers. for activities in all operational units and various types of contingency plans. Furthermore, Statkraft has a comprehensive Statkraft is also exposed to security and corruption risk, which is system for registering and reporting hazardous conditions, discussed under «Corporate Responsibility». undesirable incidents and damage and injuries. Such cases are analysed continuously to prevent and limit any consequences, Changing environment and to ensure that we can follow up causes and implement the Climate change, technology development and changed necessary measures. consumer behaviour is of importance for all the risks described above and are important drivers for changes in framework
STATKRAFT ANNUAL REPORT 2015 28 conditions and political decisions. The increased uncertainties of The Board of Directors has the overall responsibility for a well- the energy markets represent both threats and opportunities. To functioning ICFR system in the Group. The main elements of the exploit these opportunities (or avoid the loss of not exploiting ICFR system are risk assessment, evaluation of control design, them) Statkraft strives to adapt to the changing environment by continuous performance and monitoring, self-assessment and developing skilled leaders, having sufficient flexibility and review and reporting. adaptability in our business models and decision processes, and continuously monitor the technology development and identify In 2015, Statkraft implemented a new support system, GRC tool, potential business opportunities or threats. for the ICFR process. The system will, amongst others, facilitate efficient monitoring of control performance. Internal control The overall management system, «The Statkraft Way», ensures Innovation a good control environment and contributes to achieving the The main purpose of innovation in Statkraft is to develop and Group’s goals and intentions. Internal control requirements have strengthen competitive advantages in the core activities and to been incorporated into the relevant internal control area, for identify and promote new business development opportunities. instance HSE, ethics, ICT, corporate responsibility and financial In addition, innovation is an important measure with regards to reporting. long-term competence building and securing good future framework conditions for renewable energy generation. In 2015, Corporate Audit is an important part of the organisation in terms about NOK 195 million was expensed on various innovation of evaluating and improving the effectiveness of the activities. organisation's governance, risk management and internal control. Corporate Audit’s responsibilities are defined by the Statkraft’s innovation logic Board of Directors and perform its activities with the purpose to: All innovation activities are continuously followed up to ensure relevance and benefits. The following logic forms the basis for Increase awareness related to governance, risk balancing investments between short-term and long-term management and control issues innovation activities in the Group: Provide recommendations based on cost-benefit evaluations Anchor responsibility and ownership in such a way that Innovation logic agreed solutions are implemented Novel Share experiences across the organisation Follow-up implementation of audit recommendations
Corporate Audit is authorised full, free, and unrestricted access to any of Statkraft records, physical properties and personnel Conceptual pertinent to carrying out audit engagements. All employees are maturity requested to assist Corporate Audit in fulfilling its roles and responsibilities. Head of Corporate Audit has free and unrestricted access to the Board of Directors and the Audit Mature Committee. The Audit Committee and the Head of Corporate Audit hold minimum one meeting per year without the presence Short Time horizon Long of the Group Administration. 0-1 year >10 years Exploration Technology analyses R&D programs Internal control over financial reporting Market innovations Improvement Statkraft has a system for Internal Control over Financial Reporting (ICFR) to ensure reliable and timely financial information in the monthly, quarterly and annual reports. The Improvement work addresses daily challenges and usually ICFR is based on the COSO 2013 framework for internal control, yields quick results. These projects focus on existing plants/ published by the Committee of Sponsoring Organizations of the equipment and optimal resource utilisation. Treadway Commission. Market innovation is focused on exploiting new business The ICFR system ensures reliable and timely financial opportunities in a transforming energy market. These activities information. All subsidiaries are required to comply with the have a relatively short time perspective and are related to ICFR requirements as described in «The Statkraft Way» and in development of products and services. Statkraft’s finance manual. The same applies for associated companies, joint operations and joint ventures where Statkraft is Statkraft Ventures was established in 2015. The venture fund is responsible for the bookkeeping and financial reporting. If a third an innovation and growth tool with focus on business models in party is responsible for the bookkeeping and the statutory and around distributed generation and management. reporting of the partly owned company, the responsible segment shall perform compensating controls. Research and development (R&D) programmes are established to strengthen Statkraft’s competitive advantages in core business, and have a longer time perspective. Statkraft has
29 STATKRAFT ANNUAL REPORT 2015 multiple-year R&D programmes within hydropower, wind power, • Water management bio-energy and climate change. • Biodiversity • Climate change mitigation, adaptation and preparedness Exploration activities have been established with the purpose • Business ethics and anti-corruption of evaluating and qualifying technologies and solutions which in the long term can form the basis for new insight or activity in Below is a brief summary of Statkraft’s work and results in the Statkraft. corporate responsibility area in 2015.
Technology analysis is used to monitor the global technology Management of corporate responsibility developments and trends in the energy sector. Technology costs The Group’s fundamental principles for sustainable, ethical and for technologies Statkraft operates in today, as well as for socially responsible behaviour are described in Statkraft’s Code competing technologies are analysed. Special attention is given of Conduct. The Code applies to all companies in the Statkraft to potential game changers. Group and to all individuals who work for Statkraft, regardless of location. Statkraft’s business partners are expected to adhere to Prioritisation and value creation equivalent standards and Statkraft has also corresponding Each innovation project in Statkraft is initiated from an requirements for the Group’s suppliers. operational or strategic business rationale. Estimates of the R&D programme portfolio show an average value potential of several The procurement process is designed to ensure the follow-up of times the project cost. Through thorough selection processes suppliers at different stages of the process. Risk areas are each project is evaluated according to its potential for cost- identified at an early stage, and high-risk areas are followed up reduction, increased efficiency or income, reduced risk of closely throughout the procurement process. unexpected cost or likelihood for improving the future regulatory framework for our technologies. Where cost-benefit calculations Ethical and sustainable behaviour is a line responsibility in are possible, the value potential is used to guide the selection Statkraft. With a view to ensuring that all employees follow the and funding of the projects. Group’s ethical standards, systems are in place to provide employees with the necessary guidance and advice to uphold Main exploration initiative - biofuel desired behaviour. Principles and requirements associated with Producing and selling second generation biofuels to the corporate responsibility are an integrated part of Statkraft’s transportation sector is considered as a future renewable energy management system. The management system facilitates a business opportunity for Statkraft. Statkraft and Södra have structured and uniform handling of the Group’s corporate together established Silva Green Fuel AS with the objective of responsibility, and the system is regularly evaluated to tailor it to producing second generation biofuel from forest feedstock. The new expectations, contexts and challenges. Several aspects of ambition is to develop a demonstration plant at Tofte, Norway corporate responsibility performance are followed up through within 2020. If constructed, the plant is expected to produce 50- Group scorecards and in regular business reviews for each 150 million litres of biodiesel based on Norwegian feedstock. business area. Statkraft’s corporate responsibility is also a part Such a plant, and subsequently others, would represent a of Corporate Audit’s scope of work. significant contribution towards Norway’s ambition of reducing transportation-related GHG-emissions. Having adequate expertise in all areas associated with corporate responsibility is a critical success factor in terms of achieving the Corporate Responsibility Group’s goals. Statkraft works actively to build expertise, develop training plans and transfer experience across the Statkraft is committed to act in a sustainable, ethical and socially organisation, and corporate responsibility is an integrated topic responsible manner. The goal is to have safe operations where in the introduction programme for new employees. people, communities, the environment and our assets are protected. Statkraft’s Code of Conduct emphasises that employees have both the right and responsibility to report concerns or breaches In order to operationalise these commitments, Statkraft takes of the rules through the line organisation or to the Group’s guidance from globally recognised initiatives and standards, independent Whistle-blower Channel, which is managed by including the OECD’s Guidelines for Multinational Enterprises and Corporate Audit. The Whistle-blower Channel is also available IFC’s Performance Standards on Social & Environmental for externals. In 2015, 12 reported concerns were handled by Sustainability. Statkraft is a member of the UN Global Compact Corporate Audit. Four of those concerns were reported by and complies with its ten principles relating to human rights, externals. Corporate Audit is responsible for performing labour rights, environment and anti-corruption. Statkraft’s external corporate investigations in situations when such investigations reporting on initiatives and performance within corporate are needed. In 2015, Corporate Audit has handled three responsibility is based on the Global Reporting Initiatives preventive investigations and two investigations as a response guidelines (GRI G4). As part of the corporate responsibility to reported concerns. The concerns reported in 2015 mainly reporting process, a materiality analysis was completed in 2015 covered the areas of business ethics as well as human rights where the following material aspects were identified as most and labour rights. central:
• Safety and safeguarding of people • Human rights
STATKRAFT ANNUAL REPORT 2015 30 Environment and climate types of injuries, TRI, was 5.9 (5.5). In total 176 injuries were Statkraft’s environmental ambition is to support a global registered (170), of which 104 were lost-time injuries among the transition towards a low-carbon economy by providing Group’s employees and contractors (106). In addition, 11 400 renewable and sustainable energy solutions. Continued growth unsafe conditions (9459) and 3850 near-misses were recorded in based on international good practice for environmental 2015 (989). management are key elements to achieve this ambition. Statkraft has decided to only invest in renewable energy in the In 2015, Statkraft has reinforced resources to develop a more future. Statkraft has in 2015 been positioned as one of the mature and proactive approach to health and safety. A step leading peers with regard to environmental management by change programme has been launched to support this process. Oekom Research Corporate Rating. New KPIs to increase focus on serious injuries are rolled out from January 2016. Additional leading indicators to increase In 2015, Statkraft has worked strategically with the Water management and employee engagement in HSE activities will be Framework Directive in order to enhance coordination of the implemented in 2016 and the “CEO’s HSE award” has been company’s actions related to water management in Norway, launched to inspire activities that contribute to improved HSE Sweden and Germany. This work will continue in 2016. results. HSE training programmes for operation and projects are being developed through Statkraft Academy and will be launched Statkraft's core activities have a long time perspective and and implemented in 2016. climate change will influence both operations and business opportunities significantly. Statkraft has chosen a specific A number of emergency drills were conducted in 2015 in various climate scenario as input to the Group's long-term strategy work areas which incorporate experiences from safety and security to account for this. In 2015, Statkraft joined the World Bank’s situations both in Norway and abroad. Carbon Pricing Leadership Coalition, a broad voluntary initiative that aspires to work for the successful implementation of carbon Absence due to illness in Statkraft is at a stable low level and was pricing worldwide. 3.0% in 2015 (2.8%). All Norwegian companies in the Group have entered into a cooperation agreement on a More Inclusive There were no serious environmental incidents in the Group in Working Life (Inkluderende Arbeidsliv), with active follow-up of 2015. However, 228 minor environmental incidents were absence and adaptation of the work as needed. registered (159). Most of these were related to short-term breaches of river management regulations and minor oil spills. Security Reported incidents had little or no impact on the environment. In Statkraft, the area of security encompasses personnel security, physical security, IT system security and information security. In 2015, Statkraft’s electricity consumption was 1031 GWh Statkraft takes a comprehensive approach to security topics and (899 GWh). In geographies where applicable, electricity follows international good practice for security management. consumed has been certified as renewable in accordance with RECS (Renewable Energy Certificate System). Statkraft’s In 2015, overall country threat assessments have been produced emissions of greenhouse gases were 257 600 tonnes of CO2 for all countries with Statkraft presence or interests, and updated equivalents (313 300 tonnes). Furthermore, Statkraft generated security risk assessments have been performed for key locations. 61 400 tonnes of hazardous waste from power and district Statkraft’s interests in Turkey are followed up particularly, and the heating production (60 400 tonnes). The waste was treated in situation in the country and the region is continuously monitored accordance with applicable regulations. Most of this (80%) was and assessed. residual products from Statkraft’s waste incineration plant. Statkraft has, along with other energy companies, established a Health and safety new company, Kraftcert. The company co-operates with Norcert Statkraft is focusing on health and safety in every workplace and and other security authorities and will have as its main objective to project, and the overall target is zero accidents with serious strengthen the utility sector’s ability to resist cyberattacks. In injuries. Leadership commitment, a proactive attitude towards addition, Statkraft has improved operational abilities to detect and health and safety, robust planning of projects and clear safety handle security incidents. expectations is crucial to achieve this objective. Human rights There were no fatal accidents in Statkraft in 2015, but 39 of the Statkraft takes its corporate responsibility to respect human rights registered accidents and near-misses were categorised as seriously and its work is guided by the internationally recognised serious incidents (with or with the potential for serious injuries) UN’s Guiding Principles on Business and Human Rights. (30). Six of the accidents resulted in serious injuries, and another 33 incidents had the potential for serious consequences. Serious During 2015, Statkraft has launched several initiatives to strengthen incidents are investigated according to defined procedures to its management systems and performance in the human rights area. ensure learning across the organisation. Most of the serious This included participation in the OECD Norwegian National Contact accidents and near-misses in 2015 were associated with Point’s pilot project on Human Rights Due Diligence and a high-level operation of vehicles, heavy machinery and lifting operations. human rights assessment aimed at identifying its most salient human rights impacts. The rate for lost-time injuries, LTI was 3.5 among Statkraft employees and contractors in 2015 (3.4), while the rate for all
31 STATKRAFT ANNUAL REPORT 2015 Statkraft’s approach to human rights management is based on the internal investigation related to the subsidiary acquired in 2015. principles of integration and mainstreaming of human rights This investigation is not finalized. considerations into existing processes and systems, for instance those related to health and safety, security, environment, social Social impact issues or human resources. Statkraft’s power generation can have significant impact on local communities. Considerable efforts are made to avoid, reduce or In 2012, a complaint against Statkraft was lodged before the OECD’s mitigate negative impact and at the same time to enhance direct Norwegian and Swedish National Contact Points in connection with and indirect benefits and development opportunities for the development of wind power in Sweden. Mediation took place stakeholders. Interventions are a result of consultations with all between Jijnjevaerie Sámi Village and Statkraft in 2014 and was affected stakeholders in accordance with good international concluded without agreement. The Final Statement from the OECD practices and standards, based on International Finance National Contact Points was issued on 9 February 2016, thereby Corporation Performance Standards on Social & Environmental concluding on and closing the case. The National Contact Points Sustainability. have not found any grounds for concluding that Statkraft has failed to comply with the OECD Guidelines. They pointed to some areas In 2015, the largest social mitigation programmes and where there is room for improvement, including that Statkraft can development initiatives were carried out for Devoll (Albania) and work in a manner that even more clearly promotes indigenous Cetin (Turkey) projects in the construction phase, focusing on people’s rights and the implementation of the guidelines. The infrastructural improvements and livelihood programmes. For National Contact Points recommended that the parties show Cheves (Peru) and Kargi (Turkey) projects, social programmes renewed will to negotiate an agreement on the further development have been initiated for the operational phases to address any of the wind power projects. outstanding issues and to promote good relations with communities. Business ethics and anti-corruption work Statkraft has zero-tolerance for corruption and is committed to Employees and organisation upholding high ethical standards. With increased activity in Statkraft believes that strengthening and leveraging core markets exposed to corruption, Statkraft places significant competence is fundamental to how the company creates value. emphasis on a strong ethical business culture and on developing Statkraft therefore works to establish global processes and ways robust anti-corruption measures. of working within key areas like large project execution, operations and maintenance of power stations, energy Statkraft’s anti-corruption programme includes a process of management, and trading and origination. The company is mapping risks and gaps in each of Statkraft’s business areas. The organised to further support this, with individual business areas process has involved interviews with approximately 10% of staff having global responsibility for these processes. Over the last across the company and most senior managers were involved in year, the company has had a particular focus on strengthening final discussions. This is done with the aim to develop customised capabilities in large project execution, and the Power Generation solutions for training, controls and other corruption-prevention business area has made significant efforts and progress in measures. Focus for 2015 has been expanding the work related to establishing a global operating model for operations and integrity checks of business partners, strengthening controls in maintenance. critical processes and tailored training and guidance.
A training programme on business ethics and anti-corruption has Having a highly competent and engaged workforce is strategically been adopted as part of the anti-corruption programme, where important for Statkraft. In 2015, Statkraft Academy was launched employees have received mandatory training, adjusted to the in order to further strengthen the way Statkraft works with specific risks they face. The training employed a number of competence development. Statkraft Academy lays the foundation methods, including e-learning, classroom training and dilemma for an improved and more targeted approach to training, and discussions. The mandatory training will be refreshed every year makes all Statkraft training available in one point of contact or every second year depending on the risk profile of the globally. Statkraft offers own training in core business processes department. Specific training has been provided to senior such as operations and maintenance, energy management, and management at different levels. By the end of 2015, 68% of project management, as well as in important areas such as Statkraft’s staff has received tailored training on business ethics business ethics, safety, and leadership. and anti-corruption. An employee survey is carried out every year in Statkraft. The Statkraft has prepared practical guidelines that advise employees survey is used as a tool for monitoring employee engagement, a on how to handle ethical challenges. The guidelines are a source for identifying improvements areas within the organisation, supplement to governing documents, the existing anti-corruption and as an input to leadership development. The response rate in work manual and anti-corruption e-learning programme. These 2015 was 87%, and results indicate that Statkraft is a good place have been translated into different languages used by Statkraft to work and that the company has satisfied, committed and loyal employees. employees. The score on the overall indicator “Satisfaction & Motivation” was 73 of 100, which is above both the Norwegian Over the past years, Brazil has experienced several severe (70) and European (65) industry average. corruption cases. On this background, Statkraft has initiated an
STATKRAFT ANNUAL REPORT 2015 32 In Statkraft there is a close link between business goals and goals Statkraft follows the Norwegian State’s principles for sound for individual leaders and employees. The overall goals for the corporate governance, described in the White Paper Meld. St. 27 company are cascaded down to individuals and teams and (2013-2014) “Et mangfoldig og verdiskapende eierskap” (“Diverse discussed in the goal and development dialogues. and profitable State ownership”), and is subject to reporting requirements relating to corporate governance according to Statkraft has a focused and systematic approach to recruitment Section 3-3b of the Accounting Act. Furthermore, Statkraft applies and remains an attractive employer both among graduates and the Norwegian Code of Practice for Corporate Governance (NUES) experienced employees. The Group has a trainee programme within the framework established by the company’s organisation which enrolled eight new trainees with different backgrounds and and ownership. nationalities in 2015. Reference is also made to the separate description of corporate governance in the annual report on Statkraft’s website. Statkraft has a structured collaboration with local employee representatives and represented trade unions. In addition to national cooperation with trade unions, Statkraft has a European The work of the Board of Directors works council (Statkraft European Works Council, SEWC), with Harald Von Heyden left the Board of Statkraft on 1 December employee representatives from Norway, Sweden, Germany and 2015. There were no other changes in the Board’s composition in the UK. SEWC is an important forum where topics related to 2015. working life and labour rights are addressed and discussed with Statkraft’s management. The Board of Statkraft AS held eleven board meetings in 2015. The Board has a strong focus on daily operations and ongoing The Group supports and respects internationally recognised development projects. A significant part of the work of the Board labour rights wherever it operates. Relevant ILO conventions and of Directors in 2015 was in connection with development of EU directives have been included in the SEWC agreement with investments in accordance with the Group’s strategy. EPSU (European Federation of Public Service Unions), the federation for European unions within the energy industry. The Board has a Compensation Committee consisting of the chair of the Board and two of the Board members, and an Audit Committee consisting of four Board members. The Compensation Statkraft wants a diverse working environment and considers Committee held three meetings during the course of the year, equal treatment as tenet in its recruitment and HR policy. Statkraft while the Audit Committee held six. strives to attain an even gender distribution in the Group, and more women in managerial positions. At the end of 2015, 23% of the Group’s employees were female (24%), and the percentage Going concern of women in management positions was 23% (22%). The In accordance with the provisions of the Norwegian Accounting percentage of women among new employees in 2015 was 26%. Act, the Board of Directors confirms that the annual financial The percentage of women on Statkraft’s Board of Directors is statements have been prepared on the assumption that the 50%. The average salary for women compared with men in company is a going concern. Statkraft was 0.97 in 2015. The corresponding figure for management was 0.91. Profit allocation The parent company Statkraft AS suffered a net loss of At the end of 2015, the Group had 3795 full-time equivalents NOK 832 million in 2015 (loss of NOK 2442 million). (3348). The Group had employees in 15 countries, and 43% of the employees were located outside of Norway (34%). The The Board of Statkraft SF proposes that no dividend be disbursed average length of service was 10.8 years (11.8) and the from Statkraft SF for 2015. The Board of Statkraft AS proposes employee turnover was 4.6% (4.0%). the following allocation of the annual profit in Statkraft AS: Corporate Governance Coverage of loss Efficient and transparent management and control of the business Amounts in NOK mill. form the basis for creating long-term values for the owner, Net annual loss in Statkraft AS' company accounts -832 employees, other stakeholders and society in general, and, as a Coverage of loss for the year: result, contribute to sustainable and lasting value creation. The Allocated dividend from Statkraft AS to Statkraft SF 1 604 distribution of roles between the Norwegian state as the owner, Allocated to (+)/from (-) other equity -2 436 the Board of Directors and the Management of the company shall inspire confidence among stakeholders through predictability and The proposed dividend is deemed to be prudent based on credibility. Open and accessible communication from the company Statkraft AS’ equity and liquidity. will ensure that the Group maintains a good relationship with society in general and the stakeholders affected by the company’s activities in particular.
33 STATKRAFT ANNUAL REPORT 2015 Outlook
Low European power prices and a power surplus in the Nordic capacity in Central-Norway will establish Statkraft as one of the region have resulted in low Nordic power prices. However, a leading onshore wind players. significant share of the Group's power generation in several markets is sold through long-term power contracts which help to As a result of the lower power prices and the change in the stabilise the Group's revenues. Going into 2016, Statkraft’s owner’s dividend policy, Statkraft has adjusted the investment hydrological resource situation is robust. plan. The main changes are that there will be no new investments in offshore wind and the focus will be on maximising the value of In several emerging markets there is a rising demand for energy. existing assets and projects. In addition, some international Based on Statkraft’s core expertise, this provides opportunities hydropower projects will be postponed. For European flexible for value creation within renewable energy. The recent power generation, market operations and district heating there are acquisitions in Chile and Brazil and completion of new hydropower no significant changes, and Statkraft will continue to make plants in 2015 have strengthened Statkraft’s position and will investments in order to modernise its ageing hydropower plants in result in increased income from the Group’s international Norway and Sweden. operations. The development of 1000 MW of onshore wind
The Board of Directors of Statkraft AS Oslo, 16 March 2016
Olav Fjell Berit Rødseth Chair of the Board Deputy chair
Halvor Stenstadvold Elisabeth Morthen Hilde Drønen Director Director Director
Asbjørn Sevlejordet Vilde Eriksen Bjerknes Thorbjørn Holøs Director Director Director
Christian Rynning-Tønnesen President and CEO
STATKRAFT ANNUAL REPORT 2015 34 Declaration from the Board and CEO
We confirm to the best of our knowledge that the consolidated financial statements for 2015 have been prepared in accordance with IFRS as adopted by the EU, as well as additional information requirements in accordance with the Norwegian Accounting Act, and that the financial statements for the parent company for 2015 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the financial statements gives a true and fair view of the Company’s and Group’s assets, liabilities, financial position and result for the period viewed in their entirety, and that the board of directors’ report gives a true and fair view of the development, performance and financial position of the Company and Group, and includes a description of the key risks and uncertainties the companies are faced with.
The Board of Directors of Statkraft AS Oslo, 16 March 2016
Olav Fjell Berit Rødseth Chair of the Board Deputy chair
Halvor Stenstadvold Elisabeth Morthen Hilde Drønen Director Director Director
Asbjørn Sevlejordet Vilde Eriksen Bjerknes Thorbjørn Holøs Director Director Director
Christian Rynning-Tønnesen President and CEO
35 STATKRAFT ANNUAL REPORT 2015 Statkraft Group Management
Irene Egset EVP Corporate Staff. Responsibilities: Corporate communication, corporate office, CR & HSE, legal, public affairs and HR and employee relations.
Steinar Bysveen EVP Wind Power, Technologies and Strategy. Responsibilities: Wind power, innovation, district heating, industrial ownership and corporate strategy.
Christian Rynning-Tønnesen President and CEO
Hallvard Granheim EVP and CFO. Responsibilities: Finance, treasury, tax, corporate audit, procurement, investor relations, strategic finance and corporate transactions.
Hilde Bakken EVP Power Generation. Responsibilities: Power generation and asset development European flexible generation.
Asbjørn Grundt EVP International Hydropower. Responsibilities: International hydropower.
Jürgen Tzschoppe EVP Market Operations and IT. Responsibilities: Energy management, trading and origination and IT.
STATKRAFT ANNUAL REPORT 2015 36 Statkraft opened two hydropower plants in 2015; Cheves in Peru increased Statkraft’s annual generation of renewable energy in Peru by 840 GWh to about 2.5 TWh. Kargi is Statkraft’s second power plant in Turkey and increased Statkraft’s installed capacity in the country from 20 MW to 122 MW.
37 STATKRAFT ANNUAL REPORT 2015 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
38 Group Financial Statements STATKRAFT ANNUAL REPORT 2015 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Net financial items financial Net items financial Other effects currency Net expenses Financial income Financial ventures joint and associates from profit/loss of Share profit/loss Operating expenses Operating expenses operating Other fees licence and tax Property impairment and amortisation Depreciation, costs payroll and Salaries revenues operating Net costs Transmission purchase Energy revenues operating Gross revenues operating Other revenues Sales million NOK Group AS Statkraft Income Comprehensive of Statement Of which majority interest majority which Of interest non-controlling which Of income comprehensive Total income comprehensive Other obligation benefit defined of remeasurement to related tax Income obligation benefit defined of Remeasurement profit/loss: over recycle not will that income comprehensive other in Items year the in of disposed operations foreign to related effects translation currency Reclassification entities foreign translating on arising differences Exchange ventures joint and associates in recognised Items instruments financial of value fair in changes to related tax Income instruments financial of value fair the in Changes profit/loss: over recycle that income comprehensive other in Items INCOME COMPREHENSIVE OTHER interest majority which Of interest non-controlling which Of profit/loss Net expense Tax tax before Profit/loss 39 4, 22, 23 22, 4, 20 12, 4, 19, 20 19, 20 19, 16 15, 20 14, 4, 24 4, Note 21 19 19 18 17 13 4 4 4 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -16 276 -16 892 -31 20 090 20 094 53 586 51 -1 772 -1 369 -2 548 -1 318 -5 445 -3 058 -2 651 -4 679 -1 401 -6 545 -3 112 -1 3 814 3 507 1 4 525 4 391 4 761 6 138 6 -598 -821 -237 -133 -314 -937 2015 421 683 758 772 204 142 -12 246 -12 264 -25 10 284 10 560 13 805 25 254 52 246 48 -4 045 -4 283 -6 043 -1 791 -4 309 -1 493 -3 630 -1 071 -4 051 -3 185 -1 8 962 8 322 1 392 6 734 7 209 3 892 3 937 7 008 4 -704 -123 -907 2014 184 276 684 859 661 -69 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 443 3 439 6 093 5 616 2 088 6 816 7 823 3 556 9 306 3 546 9 808 7 308 99 199 19 027 12 433 12 663 34 444 56 361 23 876 88 059 18 796 27 438 49 790 29 968 133 374 167 817 167 817 31.12.2014 513 7 196 2 825 5 388 5 822 7 874 4 675 1 044 6 651 9 056 8 443 3 736 10 781 26 190 19 388 10 675 27 939 57 111 22 787 88 340 21 228 37 410 62 374 176 905 111 207 148 966 176 905 31.12.2015 Director Director Hilde Drønen Thorbjørn Holøs 31 21 32 28 22 23 25 28 26 27 28 29 31 28 Note 4, 24 16, 30 Deputy chair Berit Rødseth 40 Director Director Elisabeth Morthen Oslo, 16 March 2016 President and CEO Vilde Eriksen Bjerknes Christian Rynning-Tønnesen The Board of Directors of Statkraft AS Olav Fjell Chair of the Board Director Director Asbjørn Sevlejordet Halvor Stenstadvold STATKRAFT ANNUAL REPORT 2015
Equity and liabilities Other interest-free liabilities Derivatives Short-term liabilities Derivatives Long-term liabilities Short-term interest-bearing debt Taxes payable Non-controlling interests Equity Provisions Long-term interest-bearing debt EQUITY AND LIABILITIES Paid-in capital Retained earnings Cash and cash equivalents (including restricted cash) Current assets Assets Inventories Receivables Short-term financial investments Derivatives Other non-current financial assets Derivatives Non-current assets ASSETS Intangible assets Property, plant and equipment Investments in associates and joint ventures NOK million Statement Statement of Financial Position Statkraft AS Group CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Investments in property, plant and equipment and plant property, in Investments ACTIVITIES INVESTING FROM FLOW CASH activities operating from flow Cash Taxes associates from Dividend items short-term in Changes items long-term in Changes value in changes Unrealised loans internal on effect currency Realised ventures joint and associates from profit/loss of Share Power SN of restructuring from Profit ventures joint and associates shares, of sale from Profit/loss business of sale from Profit/loss impairment and amortisation Depreciation, assets non-current of disposal on Profit/loss tax before Profit ACTIVITIES OPERATING FROM FLOW CASH million NOK Group AS Statkraft Flow Cash of Statement 5) million. 55 NOK - reporting of the segment investment in as presented not Forsikring Statkraft by well asinvestments as 337 million NOK 2015of yearend yet paidasof not acquisition cost of the part 329 million, of NOK companies aquired the in cash to due mainly is This reporting. 4) million. 105 NOK 3) 2) 1) cash Restricted facilities overdraft Unused lines credit committed Unused 31.12 equivalents cash and Cash 01.01 equivalents cash and Cash equivalents cash and cash on effects rate exchange Currency equivalents cash and cash in change Net activities financing from flow Cash interests non-controlling to subsidiary in issue Share paid contribution Group and Dividend increase Capital debt of Repayment debt New ACTIVITIES FINANCING FROM FLOW CASH activities investing from flow Cash companies other in investments regarding Considerations parties third from loans of Repayment parties third to Loans Group the from outflow liquidity net Power, SN of Restructuring Group the from outflow liquidity net combinations, Business Group the to inflow liquidity net divestments, Business assets non-current of sale from Proceeds Included in cash and cash equivalents are NOK 420 million related to joint operations as of year end 2015. year end operations asof joint to related 420 million NOK are equivalents cash and cash in Included showninthesegment millionlowerthanforinvestments inothercompanies 611 NOK companiesare in other and investment purchase asset combinations, business in Investments are divested companies in the cash byStatkraft.Consolidated loansprovided repayment of is 354 million million whereofNOK 1796 NOK are divestments business from received Cash Investments in the cash flow are NOK 1047 million lower than investments in fixed assets in the segment reporting due to acquisition of assets not paid as of year end 2015. as ofyearend of assetsnotpaid acquisition reporting dueto in thesegment fixed assets in than investments lower million 1047 NOK are flow cash the in Investments term items. of changesinshort aspart beenshown effects have these periods, a separateline.Previous on are shown loans internal from effects currency Realised 1) 5)
1) 2) 3) 4)
4)
41 22, 23 22, 29, 34 29, Note 21 20 24 29 29 31 31 5 5 5 4 5 5 5 A+B+C C A B STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -11 864 -11 13 000 13 663 12 409 14 -2 889 -2 720 -8 062 -3 308 -1 -3 797 -3 603 -2 157 -5 834 -9 1 691 1 639 8 241 4 635 2 401 6 2 200 2 056 9 -407 -683 -221 -821 -289 2015 628 152 534 410 471 190 43 9 - - - - 12 000 12 663 12 -3 900 -3 450 -5 801 -8 593 -3 694 -1 559 -2 2 200 2 685 7 616 4 168 3 000 5 917 1 688 4 898 6 412 4 071 4 937 7 -765 -100 -770 -980 -661 -564 2014 362 225 390 729 -74 -74 -17 -52 -69 -80 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY -26 -69 -72 Total 318 276 184 142 204 772 758 equity -907 -123 -704 -839 -937 -314 1 506 3 892 7 734 7 577 6 138 4 391 -2 369 -5 907 88 340 71 107 10 284 88 059 - - - - 5 -7 18 23 Non- -12 -42 -14 -75 -72 406 120 318 756 684 668 227 -133 -307 -598 8 443 7 769 1 322 7 823 -1 424 interests controlling - - -12 -86 149 204 772 637 750 276 160 585 -925 -273 -907 -128 -629 5 732 4 525 3 209 7 066 8 962 7 350 -5 600 -1 772 79 898 63 338 80 235 of parent to owners Attributable - - - - -12 -86 149 204 772 637 276 160 585 equity -925 -273 -907 -128 -629 5 732 4 525 3 209 7 066 8 962 -5 600 -1 772 22 787 14 328 23 876 Retained ------86 Accu- 772 mulated 5 732 6 504 7 066 6 980 4 654 -2 327 11 158 translation differences ------12 Other 637 160 585 equity -273 -629 3 209 2 740 -1 407 -5 600 -1 772 14 622 18 316 21 641 ------
Other 149 204 276 -925 -572 -907 -128 -759 reserves -2 993 -1 662 -2 421 42 ------750 capital Paid-in 7 350 57 111 49 011 56 361 1) capital of NOK 750 million from owner took place in December 2015.
share
2) 3) A conversion of loan to Sale of Agua Imara in relation to the restructuring of SN Power Invest in June 2014 with an effect on equity of NOK 839 million. In June 2014, a conversion of loan to share capital of NOK 2350 million from owner took place. In December 2014, Statkraft SF made a capital increase of NOK 5000 million. STATKRAFT ANNUAL REPORT 2015 Capital increase Balance as of 31.12.2015 1) 2) 3) Dividend and Group contribution paid Business combinations/divestments Transactions with non-controlling interests Items in OCI that will not recycle over profit/loss: Estimate deviation pensions Income tax related to estimate deviation pensions Total comprehensive income for the period Reclassification currency translation effects related to foreign operations disposed of in the year Currency translation effects Changes in fair value of financial instruments Income tax rel. to changes in fair value of financial instruments Items recorded in other comprehensive income in associates and joint arrangements Net profit/loss Items in OCI that recycle over profit/loss: Dividend and Group contribution paid Business combinations/divestments Capital increase Balance as of 31.12.2014 The parent company has a share capital of NOK 33.2 billion, divided into 200 million shares, each with a par value of NOK 166. All shares have the same voting rights and are owned by Statkraft SF, which is a Norwegian state-owned company, established and domiciled in Norway. Statkraft SF is wholly owned by the Norwegian state, through the Ministry of Trade, Industry and Fisheries. On 23 June 2015 Statkraft’s general assembly approved a disbursement of NOK 5600 million as dividend to Statkraft SF. For the current year the board has proposed to pay a dividend of NOK 1604 million. Income tax related to estimate deviation pensions Total comprehensive income for the period Currency translation effects Items in OCI that will not recycle over profit/loss: Estimate deviation pensions Income tax rel. to changes in fair value of financial instruments Items recorded in other comprehensive income in associates and joint arrangements Reclassification currency translation effects related to foreign operations disposed of in the year Net profit/loss Items in OCI that recycle over profit/loss: Changes in fair value of financial instruments NOK million Balance as of 01.01.2014 Statement Statement of Changes in Equity Statkraft AS Group CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Note 21 Note 20 Note 19 Note 18 Note 17 Note 16 Note 15 Note 14 Note 13 Note 12 Note statement Income 11 Note 10 Note 9 Note 8 Note 7 Note 6 Note instruments and risk Financial 5 Note 4 Note 3 Note 2 Note 1 Note General statements financial consolidated the to notes of Index Group AS Statkraft Notes Taxes statement income the in recognised effects Unrealised items Financial expenses operating Other fees licence and tax Property Pensions equivalents full-time of number and costs Payroll purchase Energy revenues operating Other revenues Sales accounting Hedge instruments Financial risk liquidity and risk Credit risk market of Analysis Group the in risk Market structure capital of Management transactions other and combinations Business information Segment events Subsequent assumptions and estimates judgements, Accounting policies accounting significant of summary and information General Page 69 68 67 67 67 65 64 64 64 63 63 60 58 57 56 55 52 50 50 49 44 43
Note 39 Note 38 Note 37 Note 36 Note 35 Note 34 Note 33 Note information Other 32 Note 31 Note 30 Note 29 Note 28 Note 27 Note 26 Note 25 Note 24 Note 23 Note 22 Note sheet Balance Consolidated companies Consolidated parties Related Directors of Board the and management executive to paid Benefits auditors external to paid Fees Leases obligations and guarantees Pledges, etc. disputes Contingencies, liabilities current interest-free Other debt Interest-bearing Provisions equivalents cash and Cash Derivatives Receivables Inventories assets financial non-current Other ventures joint and Associates equipment and plant Property, assets Intangible STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Page 85 84 82 81 81 80 80 79 79 79 78 78 77 77 77 74 72 71 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY e the ent ost and both in mation share in t price iod, in eparate line s, dividends binations. , ownership ial statement ontrol and ule be when risk and dance with the . raft has are limited to is a type of . The elevant activities and contingent eflect new infor e joint control. Statkraft tions. Joint ventures are ity. The Group’s eement might lead to a ounts using the equity onsolidation method. and where the participants ecognised at cos pany, will as a r in accordance with a amortisation of excess value ets, liabilities ognised in accor . Joint ventures ed. If the accounting of a ontingent liabilities are Gain/loss from a transaction wher ear in order to r
ame financial statement line item ipants which hav action. Any differences between c aluation on that date. Correspondingly, new hareholder major . Each individual investment is assessed. ognised either at fair value or the ol and where significant decisions are made ognised. The transaction date is olidated accounts owners, are rec ompanies or entities where Statk action is measur Co-owned power plants, which are those power Power plants that are leased to third parties are e affected the v esented on the s ofit/loss after tax, adjusted for tion occurred, the Group will report preliminary values for ombinations of s y adjustments, and equity transac Joint ventures are companies or entities where Statkraft has ircumstances that existed as of the acquisition date, if cordance with the proportionate c ers of the power produced, as well as being responsible for ibution and the returns correspond to the participant’s share quired assets, liabilities and c The acquisition method is applied in business com ounting method. For Statkraft, this is expected to apply if the Associates are c the assets and liabilities. Temporary values are adjusted throughout the measuring period of maximum one y proportionate share of the identifiable net assets and liabilities the short term and long term financing of the com participants are not the sole off-takers of the production and not responsible for the obligation held by the entity. Joint ventures joint control with one or several other investors obtained about c received, currenc recognised in the consolidated accounts using the equity method. Associates the balance sheet and the profit/loss as shares in joint ventures liabilities acquired in the trans known, would hav assets and liabilities can be rec control has been transferred and normally coincides with the completion date. Non-controlling interests are rec assessment is done for each trans fair value for ac recognised as goodwill or recognised in income when the cost is lower. No provisions are recognised for deferred tax on goodwill. Transaction costs are recognised in the income statement when incurred. and any deviations from accounting policies, are presented on a s in the consolidated income statement. Such investments are classified as non-current assets in the balance sheet and are r significant influence. Significant influence is present when one or several investors do not have joint contr through various c associates are recognised in the consolidated acc method and are pr Leased power plants recognised in ac Leasing revenues are presented in other operating revenues, while expenses relating with the operations in the power plants are recorded under operating expenses. Acquisitions which the transac are the only buy incorporated in Statkraft’s cons method corresponding to the proportionate consolidation method. Co-owned power plants plants where Statkraft owns shares regardless of whether they are operated by Statkraft or one of the other proportionate consolidation method as joint operation. Sale of shares in a joint operation investment changes from being classified as a joint operation to be classified as a joint venture or associated company the gain and losses resulting from the transaction are recognised in the Group’s consolidated financ only to the extent of other parties interest in the joint operation. Hence, the carrying value of Statkraft’s remaining ownership is booked at continuity. In addition changed contractual rights and obligations relating to the underlying asset or debt and changes in the shareholders agr shift in the acc joint arrangements which have a legal form separating the participants from the assets and liabilities of the company so that the obligations the capital contr of the profit. In a joint venture company, decisions related to r must be unanimous between partic classifies its investments based on an analysis of the degree of c the underlying facts. This includes an assessment of voting rights structure and the relative strength, purchase and sale rights controlled by Statkraft and other shareholders must be made as to whether this is still a joint venture. The Group’s share of the companies’ pr adjusted for the accumulated share of the companies’ profit or los The consideration is measured at fair value on the transaction date, which is also the date when fair value of identifiable ass business combination is incomplete at the end of the reporting per whether equity interests in joint arrangements can be considered joint operations. Entities established to produce power Upon changes in underlying facts and circumstances, a new assessm 44
the debt national iciled in n is wholly ide - ipants , are ubsidiaries. ordance measured oup re- cises control. t its returns. To ies. cumstances ents comprise eceived to sell an . In joint Statkraft’s consolidated ust be in place which and liabilities vices. , Statkraft evaluates equity counts are based on these have contractual rights to the ant activities which ested in. The Gr ed on fair value of the ontrol over an investee where ly transaction between market e that would be r ough the Ministry of Trade and Industry. easuring its value in use in acc are joint arrangements where the epared in accordance with International ated in Oslo and the company has . ies. Inter-company transactions and inter- olidated from the date when the Group t important accounting policies used in the ent, agreements m ol over an entity shareholders and shareholder and operating ols an investee if facts and cir ol over the relev ontrol. Agreements between partic ash flow statement and notes prov idered to have c the company inv hip structure and relative strength, options power over the investee to affec The consolidated financial statem The income statement, statement of financial , including internal profits and gains and losses Joint operations or not it contr ement and presentation of assets onsidering whether control exists ions about the relevant activities require the unanimous en when acquiring assets and ser ounts have been prepared on the basis of the historical cost Historical cost is generally bas idiaries are cons ed by an investor being exposed to, or having rights to, General General information and summary of significant policies accounting Fair value is defined as the pric elow is a description of the mos omparative information in respect of the previous period. variable returns as a result of ownership or agreements entered into with the investee. When c controlled by Statkraft and other consent of the parties sharing c Joint operations achieves control and are excluded from the consolidation when control ceases. preparation of the consolidated accounts. These policies have been used in the same manner in all presented periods, unless otherwise stated. The consolidated acc principle, with the exception of certain financial instruments and derivatives measured at fair value on the balance sheet date. Historical cost indicate that there are changes to one or more of the elements of control. If necessary, the subsidiaries’ financial statements are adjusted to correlate with the Group’s accounting polic describing the rights and obligations in the joint operations will be decisive for STATKRAFT ANNUAL REPORT 2015 participants who have joint contr A subsidiary is an investee where Statkraft, as an investor, exer the extent that Statkraft is cons significantly affect returns from assesses whether eliminated. Subs assets and obligations for the liabilities, relating to the entity operations, decis consideration giv policies, with the exception of measuring net realisable value in accordance with IAS 2 Inventories and when m with IAS 36 Impairment of Assets the financial statements of the parent company Statkraft AS and s Control is achiev interests, voting rights, owners agreements. Each individual investment is assessed. Statkraft as an investor must have the ability to use its Statkraft owns less than 50 per c nonetheless give Statkraft contr Fair value asset or paid to transfer a liability in an order participants at the measurement date. The measurement of fair value is not contingent upon market prices being available or whether other valuation techniques have been applied. When determining fair value, the management must apply assumptions that market participants would have used in a similar valuation. Measur at fair value when presenting the consolidated ac B Financial Reporting Standards (IFRS) and interpretations from Inter SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The company’s head office is loc instruments listed on the Oslo Stock Exchange and London Stock Exchange. Basis of preparation of the financial statements financial statements have been pr Financial Reporting Interpretations Committee (IFRIC) as adopted by c GENERAL INFORMATION Statkraft AS (Statkraft) consists of Statkraft AS with subsidiar Note Note 1 Statkraft AS is a Norwegian limited company, established and dom Norway. Statkraft AS is wholly owned by Statkraft SF, which in tur owned by the Norwegian state, thr EU. Comparative figures position, statement of equity, c Consolidation principles company balances CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Note 1 continued 1 Note investments”, “av investments”, ar liabilities and assets Financial immediately. statement income as financial the from deduced or ar instruments Financial General instruments Financial entity. foreign the of rec are entity foreign a in investments net hedge to debt on rates exchange in changes from resulting losses and Gains items. financial under recognised are effects Currency rates. date sheet balance the at evaluated are items sheet balance the while date, transaction the on com in recognised are effects translation Currency year. the throughout rates exchange average acc consolidated for currency presentation the also is it and currency, functional operates company the where country the in currency local the normally currency, functional currency Foreign s balance the in recognised amount the of reduction a as treated is subsidy the sheet, balance the in recognised are that projects to related is subsidy the Where cover. to Wher sheet. balance and statement s is this of size s balance the in recognised not is revenue of shortfall or Excess rev tariff actual the and ceiling s income the in included Revenues recognis contracts financial and physical to relating value in changes Unrealised revenues. sales as presented c energy in trading financial and physical from revenues Realised r sale as classified are 39, IAS with accordance in recognised are that contracts financial and physical to relating value in changes Unrealised gains Realised statement. income the in gross presented generally revenues Energy reliably. measured be can consideration the and buyer the to transferred been substantially have goods the over control and risk the when recognised Revenues subsidiaries. of acquisition the to thos as same the are accounts the in ventures joint and companies ac of recognition the for applying principles The “financial assets “financial ins the of purpose and nature the of basis the on thr value fair at assets financial inc comprehensive ex spot the to translated are currency foreign in operations from s upon statement statem income the while December; subs the that activity the to related expenses the of reduction a statem income the in recognised directly are that ar Profits/losses ar ventures joint and associates Dividend differenc The year. the during generated revenues distr individual regim regulatory revenues grid Distribution revenue. sales as ar portfolios trading from losses revenue ceiling c ceiling revenue cos historical of party to the contractual provisions of the instrument. Initial rec Initial instrument. the of provisions contractual the to party accordanc in NOK as subsidiaries, expens operating property of Sale company. distributing the of assembly general the in approved been has dividend the of ac between difference the be will revenue of excess/shortfall An companies. the by operation efficient ensure to proceeds with the residual book v book residual the with proceeds sales the comparing by calculated is sale the from gain/loss the equipment, subsidies Public Energy Directorate (NVE). Each y Each (NVE). Directorate Energy balance sheet items are translated to NOK at the exchange rate as rate exchange the at NOK to translated are items sheet balance Dividends receiv Dividends Revenues from the sale of energy of sale the from Revenues ibution grid owner. Revenue ceilings are set partly on the basis the on partly set are ceilings Revenue owner. grid ibution tated in note 33. note in tated ough profit and loss as the trans the as loss and profit ough and liabilities are at fair value. Transaction c Transaction value. fair at are liabilities and ts, and partly on the basis of a norm. The norm is established established is norm The norm. a of basis the on partly and ts, sociated companies and joint ventures are translated into into translated are ventures joint and companies sociated heet. heet. , plant and equipment and plant , e recognised under other operating revenues and other other and revenues operating other under recognised e at fair value through profit or profit through value fair at e established by the Norwegian Water Resources and Resources Water Norwegian the by established e ounts. When preparing the consolidated accounts, foreign foreign accounts, consolidated the preparing When ounts. an be adjusted in the event of c of event the in adjusted be an ailable-for-sale financial assets financial ailable-for-sale ale of shareholdings in foreign c foreign in shareholdings of ale es respectively. es prehensive incom prehensive e with the current exchange rate method. This means that that means This method. rate exchange current the with e Energy revenues are recognised upon delivery, and delivery, upon recognised are revenues Energy . Statkraft AS us AS Statkraft . ome, and reclass and ome, Public subsidies Public Subsidiaries prepare their accounts in the company’s the in accounts their prepare Subsidiaries ed from companies from ed Distribution grid activities are subject to a to subject are activities grid Distribution enues comprises a revenue surplus revenue a comprises enues e, however, pres however, e, ed in accordance with IAS 39, ar 39, IAS with accordance in ed e recognised as income when the distribution distribution the when income as recognised e set or liability or set e recognised when the Statkraft becomes a becomes Statkraft the when recognised e tual income and allowed income. The The income. allowed and income tual alue of the sold operating asset. asset. operating sold the of alue ear, the NVE sets NVE the ear, es Norwegian kroner (NOK) as its as (NOK) kroner Norwegian es tatement correspond to the actual tariff tariff actual the to correspond tatement are included on a net basis in the income the in basis net a on included are e subsidies are c are subsidies e ent is translated using monthly weighted weighted monthly using translated is ent ified to the inc the to ified e and reclassified to the income the to reclassified and e
When selling property, plant and plant property, selling When loss”, “held-to- loss”, unless the instr the unless other than subs than other products and ser and products action cost is r is cost action quisition of ass of quisition ” and “loans and receivables”. receivables”. and “loans and ” ented net as sales revenues. revenues. sales as net ented ognised directly ognised hanges in deliver in hanges truments into the categories categories the into truments ent, the subsidy the ent, ompanies. Transac ompanies. ome statement upon sale upon statement ome e between the rev the between e a revenue ceiling for the the for ceiling revenue a onnected to activ to onnected osts are added to to added are osts maturity maturity ument is carried is ument ognition of of ognition ecorded in the the in ecorded the the idiaries, idiaries, ociated ociated idy is intended intended is idy vices are vices change rate rate change heet. The The heet. in e classified classified e e classified classified e is treated as treated is ontracts are ontracts evenues. y quality. quality. y /shortfall. /shortfall. and of 31 of e applied e enue tions tions
ities ities 45 quoted in an active market. Loans and receivables and Loans market. active an in quoted inst Financial 1) instruments financial of categories different of Measurement below. described are energy contracts traded via energy via traded contracts energy gross presented are values negative and positive respective with s on recognised are arrangements hedging to relating not Derivatives c c transaction attributable directly with together value fair at measured initially are assets The category. this in shareholdings classifies Statkraft categories. above the of any us cost amortised at measured are receivables and loans periods, subsequent In costs. receivables and Loans 2) ins financial the for adopted be to treatment accounting the and Statkraft for relevant are that categories The presented together with realised finance income and costs. and income finance realised with together presented ar derivatives rate interest and currency of value fair in Change respectively. purchases, energy and revenues sales as statement income the in recognised fair the in Changes sheet. balance settlem cash current the for used contr different of off set the to pr are Derivatives sheet. balance s balance and statement income the in derivatives of Presentation 11. note in accounting c operations foreign in investments net of hedges and hedges flow cash for changes value the while instr financial the of acquisition the behind intention the of basis the on identified are accounting hedge in instr the of term remains interest effective the where method, rate measur are liabilities financial costs transaction attributable directly including liabilities Financial 4) of. disposed is asset the before statement income the through reversed be cannot Impairment impairment. immediate an in result will value s is impairment the if statement inc the through impaired is amount carrying its than less is value inc comprehensive c with value fair at measured are inc not are which assets are sale for available as held Assets 3) statement. income the in recognised is loss impairment An instrument. the of term entire the over same the remains interest rec initial upon instruments that are designated as designated are that instruments instruments hedging as designated instruments Financial 10. note in detail more in described is assets such of value fair the of determination The eparate lines in the balance sheet under assets or liabilities. Der liabilities. or assets under sheet balance the in lines eparate hedge of description detailed more the also See income. omprehensive item, hedged the of value in change corresponding the meet will hange Physical contrac Physical normally fall outside the scope of IAS 39. 39. IAS of scope the outside fall normally for requirements own Statkraft’s contrac Physical trading. for held assets financial Other fluctuations. rate interest and currency to exposure Group’s the reduce and deriv rate interest and Currency term. short the in selling of purpose hav derivatives embedded not are Derivativ contract. stand-alone a were derivative the if as value fair at recognised and contract host the from separated are that derivatives embedded and derivatives, stand-alone both contrac Financial products that ar that products v of form the in options written contain or financially, settled are value, fair of basis the on up followed and managed are that and portfolios trading in included clas are products ognition with the addition of dir of addition the with ognition ument. ruments valued at valued ruments ing the effectiv the ing ome. Assets clas Assets ome. olume flexibility. olume e entered into as into entered e ts relating to the trading of energy-related products products energy-related of trading the to relating ts ts for the purchase and sale of energy-related energy-related of sale and purchase the for ts are measured at fair value on initial recognition recognition initial on value fair at measured are ts for the purchase and sale of energy-related energy-related of sale and purchase the for ts sified as derivatives. Energy der Energy derivatives. as sified are financial rec financial are ed at amortised c amortised at ed truments included in each of thes of each in included truments acts, and such set-off rights will actually be actually will rights set-off such and acts, ignificant or per or ignificant e interest rate m rate interest e ument. In a fair value hedge the v the hedge value fair a In ument. hanges in value r value in hanges ent during the terms of the contr the of terms the during ent esented net provided there is legal right right legal is there provided net esented will be recognised in other other in recognised be will value of energy derivatives are derivatives energy of value hedging instruments or hedged items items hedged or instruments hedging fair value through profit or loss or profit through value fair exchanges are presented net in the the in net presented are exchanges sified as held for sale where the fair fair the where sale for held as sified atives have been acquired to manage to acquired been have atives use or procurem or use STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT a result of mandates connected to to connected mandates of result a e mainly been ac been mainly e eivables or debt that is not not is that debt or eivables ectly attributable transaction transaction attributable ectly osts. Subsequently, the assets assets the Subsequently, osts. . In subsequent periods, periods, subsequent In . manent. Additional decline in decline Additional manent. ost using the effective interest interest effective the using ost strategic long- strategic ethod, where the effective effective the where ethod, the same over the entire entire the over same the ecognised in other other in ecognised are measured at fair value fair at measured are es in this category that that category this in es ent in own produc own in ent ivatives consist of of consist ivatives quired for the the for quired Financial Financial term term e categories categories e ome luded in luded e alue in the the in acts. All All acts. ivatives ivatives heet
tion tion FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY ed ed. ed in erable els for arrying costs ter. e ent are pected s ame e made and e added to ear and ed. Direct m ibutable are ment. ferred to e including e expected cost price. oup will obtain when the risks e’s present value, the other depreciable assets owing rate is us ent loss. For the purposes of ade. Intangible assets with indefinite ulating the leas ate that the asset might be impair tion capacity are recognised in the aintenance expenses, are recognis ing or bringing assets into a condition in alculated to consider whether an equired rate of return equal to the m ioning is not included in the value in use ets are grouped at the lowest lev ’s marginal borr ed, while other expenses that ar alues are taken into account in the e-limited licences, provisions ar traight-line basis over assets’ ex estments are recognised in the balance e term, the asset is depreciated over the hip have been substantially trans apitalised at the commencement of the lease ated in the same water resource and managed A cash-generating unit (CGU) is the lowest level at The individual plants. Wind turbines in a wind farm connected to a common ments. When calc A gas power plant normally constitutes a CGU unless two : , if there is no reasonable certainty that the Gr e controlled and optimised together so that revenues are not timated useful life of the asset and the lease term. Each plant together with associated infrastructur t cost in the lease is used if it is possible to calculate this. If this Property, plant, equipment and intangible assets that are Power plants loc Leases are recognised as finance lease agreements alculation. The difference between the carrying amount and recov ost. Expenses incurred after the operating asset has been taken into heet as facilities under construction. Cost includes directly attr osts including interest on loans. alculation of annual depreciation. Periodic maintenance is recognis alue, the recoverable amount is c ash flows discounted by using a r shorter of the es cannot be calculated, the company together to optimise power production. Wind power plants: transformer Gas power plants or more plants ar s Operating leases are mainly recognised as an expense on a straight-line independent of each other. District heating: Leases and returns incidental to owners implicit interes costs linked to establishing the lease are included in the asset’s The same depreciation period as for the company’s is used. However ownership by the end of the leas c assessing impairment losses, ass transmission lines. Biomass power plants: Segment is used as the lowest CGU for testing goodwill for impair Statkraft. Finance leases are c at the fair value of the leased asset or, if lower, at the present value of the minimum lease pay equipment includes fees for acquir use, such as ongoing repair and m in the income statement as incurr expected to increase future produc balance sheet. In the case of tim for decommissioning costs, with a balancing entry increasing the c amount of the relevant asset. Costs incurred for own plant inv c Depreciation is calculated on a s useful economic lives. Residual v c the balance sheet over the period until the time when the next maintenance round is scheduled. The depreciation period is adapted to the licence period. Estimated useful lives, depreciation methods residual values are assessed annually. Land including waterfall rights is not depreciated, as the assets deemed to have perpetual life if there is no right of reversion to state ownership. Impairment depreciated, are reviewed for impairment at the end of every quar When there are indications that future earnings cannot justify the carrying v allowance for impairment must be m useful life are not amortised, but tested for impairment once a y when events or circumstances indic The recoverable amount is the higher of the asset’s fair value les to sell and its value in use. Value in use is calculated as futur c market’s required rate of return for corresponding assets in the s industry. Provision for decommiss amount is recognised as an impair which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impair reviewed for possible reversal of the impairment at each reporting date. Cash-generating units which independent cash flows can be measured. The highest level of a CGU is a reported operating segment. CGU in Statkraft is defined as follows: Hydropower: which they can be used. Directly attributable borrowing costs ar c 46
an om anent
plant. ,
of the s e tax
m is ated by ontracts c y power e sheet ed tax e ource ents ulated a r probable ds and ted with e is set est offset m operating ompanies. /assets are asset will try of ed and are independent tax that ost less accumulated are recognised net dance with ordinary tax Balance sheet items is e resource rent revenues per power Research costs are expensed as erm t omprises taxes payable and changes . Income from green certificates rate is NOK 13/MWh. Income tax c ed as prepaid tax. apitalised to the extent that a future are expected to be realised within 12 evenue is calculated on the basis doing so have been met. Goodwill and enues per power plant from the 2006 and power subject to physical c Investments in production facilities and ted with resource rent. e includes, in addition to ordinar s arried forward with interest to free allowance is treated as a per ary differences between the accounting ent revenues from the same power evenue. Actual operating expenses erred tax assets ource tax paid. Any natural resour e interest rate set by the Minis e resource rent revenues for other truments in hedge accounting are . Taxes payable are calculated on the ulated for, and therefore does not affect the Natural resource tax is a profit- Intangible assets are carried at c Resource rent tax is a profit-dependent tax that is Income tax is calculated in accor Group companies that are engaged in energy generation in lassified as short-term when they alculation of deferred tax connec alculated at a rate of 31% of the net resource rent revenue gener ubsequent years, and is recognis omprehensive income is also recognised in other comprehensive alculated on the basis of tempor Note Note 1 continued c presented together with the hedging item. The first year’s repay relating to long-term liabilities are presented as current liability. Intangible assets the time the assets are available for use. The cost of property, plant and STATKRAFT ANNUAL REPORT 2015 intangible assets with an indefinite useful life are not amortis incurred. Development costs are c provided that these are expected to reverse in the same period. The same applies to deferred tax liabilities and deferred tax assets connec rent tax. Classification as short-term/long- derivatives that are hedging ins amortisation and accumulated impairment losses. Costs relating to intangible assets, including goodwill, are recognised in the balanc provided that the requirements for tested annually for impairment. Research and development costs economic benefit can be identified from the development of an identifiable intangible asset. Property, plant and equipment months after the balance sheet date. With the exception of the item other property, plant and equipment are recognised at cost less accumulated depreciation and impairment. Depreciation is charged fr plants. Negative resource rent rev Deferred tax assets linked to negative resource rent carry-forwar be realised within a time horizon of ten years. The applied rate is nominal tax rate of 33%. The tax- difference in the year it is calc Deferred tax liabilities and def resource rent tax. Deferred tax positions connected with income tax payable cannot be offset against tax positions connected with res c mentioned below, all other items are classified as long-term. Som income tax, natural resource tax and resource rent tax. Income tax in deferred tax liabilities/assets individual power plant’s production hour by hour, multiplied by the spot price for the corresponding hour. The actual contract price is applied for deliveries of concessionary power depreciation and a tax-free allowance are deducted from the calc revenue in order to arrive at the tax base. The tax-free allowanc each year on the basis of the taxable value of the power plant’s assets, multiplied by a normativ Finance. From 2007 onwards negativ plant can be pooled with positiv fiscal year or earlier years can only be carried forward with inter against future positive resource r deferred tax linked to other temporary differences are calculated on the basis of power plants where it is probable that the deferred tax and tax values and the tax effect of losses carried forward. Defer assets are recognised in the balance sheet to the extent that it is that the assets will be realised. Tax related to items recognised in other c income, while tax related to equity transactions is recognised in equity. Natural resource tax is calculated on the basis of the individual power plant’s average output over the past seven years. The tax be offset against the natural res that exceeds income tax can be c s Resource rent tax c each power plant. Resource rent r with a term exceeding seven year included in gross resource rent r Norway are subject to the special rules for taxation of energy c Taxes General The Group’s tax expense therefor rules, so that the tax rate applied is at any time the adopted. The tax expense in the income statement c c basis of the taxable income for the year. Deferred tax liabilities CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Note 1 continued 1 Note contracts Onerous connected with financial activities (cash collateral) are recognis are collateral) (cash activities financial with connected includes restric includes v realisable net and cost of lowest the at recognised are and business of course ordinary the financial settlem financial regarding made been have agreements contracts, power concessionary c a has Group the where exist to Pr low. very is payment of probability the unless Equity item. line this under presented fr similar and cash deposits, Bank sheet. balance s with bonds and equivalents cash and Cash method. out) first in, (first FIFO the or average weighted the with accordance in allocated is cost goods, inv specific to allocated is Cost amount. realisable net and ar and inventory s not obligation Inv as recognised business end-user and Generation- correspondingly. tim the at value fair as for accounted are certificates the thus, gov the by received be will grants the that likely considered also s conditions the meets Statkraft Assis Government ar certificates, CO and certificates Green Inventories ener as presented and consumption by measured are payments lease production, the with connected closely is use where plants production leased For term. lease the over basis concessionary power obligations is estimated and disclosed in note 30. 30. note in disclosed and estimated is obligations power concessionary future of value capitalised The statements. financial the in included not are contracts concessionary Such price. concessionary the and price spot the c established the with accordance in basis ongoing an on income as recognised is power concessionary of supply The (Stortinget). Parliament Norwegian the by stipulated authorities local to made are sales concessionary compensation and fees licence power, Concessionary contract. the from received be to expected benefits economic the exceed contract the under obligations the meeting provis as measured and recognised balanc the at obligation present s to required expenditure the of estimate best the is that amount c the probability lower With provision. the measure reliably to possible be also must It arisen. has obligation an that probable 50% than more is it where and event, past a of result a as obligation existing an is there where recognised only liabilities contingent and assets contingent Provisions, Assembly. General the by approved been have they once liabilities m the in purchased El-certificates market. the in certificates the purchases business end-user the certificates, delivering for obligation Group’s end- the in liability emission the settle to used El-c businesses. dis is asset The lik be to considered is It power. of production own to conditional Other inventories inventories Other Disclos and Grants Government for Accounting - 20 IAS to according cash flow statem flow cash transac expected less price sale v book the to according measured is liability the adjustment of other income. Accounting for CO for Accounting income. other of adjustment as for accounted is value in change The value. realisable net and production of time the at value fair of lowest the at considered are receivable the period, accounting one exceeds received are they to awarded are el-certificates the from period the If awarded. when inventory as for accounted are Certificates Green certificates and CO and certificates Green date. sheet balance statements are c are statements Dividends propos Dividends e considered as a government grant and are accounted for for accounted are and grant government a as considered e ted cash. The am The cash. ted alue. If the cer the If alue. ettled is measur is ettled closed as a receivable until the certificate is awarded. awarded. is certificate the until receivable a as closed onditions will be stated in the notes of the financial statements financial the of notes the in stated be will onditions ent in which Statkraft is invoic is Statkraft which in ent e measured at net realisable value. Net realisable value is value realisable Net value. realisable net at measured e ertificates received from own pr own from received ertificates lassified as equity. Dividends ar Dividends equity. as lassified ent and in note 29. Market settlements for derivatives derivatives for settlements Market 29. note in and ent hort residual ter residual hort entory in accordance with IAS 2 as they are held for sale in sale for held are they as 2 IAS with accordance in entory Other inventory are accounted for accounted are inventory Other tance. The mentioned certificates mentioned The tance. Obligations aris Obligations ed at the time of approval of the financial financial the of approval of time the at ed 2 2 certificates certificates held for sale are r are sale for held certificates tificates are held to settle the emission liability, liability, emission the settle to held are tificates Cash and cash equivalents includes certificates certificates includes equivalents cash and Cash entories where possible. For exc For possible. where entories ed at fair value of the El-certificate at the the at El-certificate the of value fair at ed e sheet date. sheet e et out by the gov the by out et tion cost. tion ount of restricted cash is specified below the the below specified is cash restricted of ount ontract under which the unavoidable costs of of costs unavoidable the which under ontract ms at the time of acquisition. The item also item The acquisition. of time the at ms oncessionary pric oncessionary are organised as organised are ions. An onerous An ions. gy purchases. gy ing under onerous under ing Green certificates, including el- including certificates, Green user business. To meet the the meet To business. user ed for the differ the for ed 2 alue of the certificates. Any Any certificates. the of alue ovisions are rec are ovisions certificates ar certificates oductions are as are oductions ernment. Further ernment. e reclassified as reclassified e om joint operations are also are operations joint om at statutory pr statutory at at the lowest of cost price cost of lowest the at e. In the case of certain certain of case the In e. are recognised as grants grants as recognised are contract is cons is contract two separate lines of of lines separate two contracts are contracts ecognised as ecognised
Each year, year, Each Provisions are Provisions ence between between ence e of production. production. of e e arket are arket ed in the the in ed hangeable ely that that ely ognised in an in ognised ernment and ernment ices ettle the the ettle such not not such current current more, it is it more, ure of of ure idered
47 annual financial statements. The interpretation was applied retros applied was interpretation The statements. financial annual Employees who hav who Employees years. 40 and 30 between of period a over paid be to required be normally will basis for resour for basis is period the for cost benefit retirement net The oper by covered are that schemes sc underfunded for liabilities benefit retirement Net value. fair at sheet balance the in recognised and assets current inc comprehensive other in recognised are data base or assumptions actuarial in changes to attributable losses and gains Remeasurement method. benefits accrued by calculated is date sheet balance r liability The reduced. proportionately benefits salary employee’s the of percentage a as set normally is benefit retirement The retirement. on receive will employee an that benefits retirement the defines that scheme prov the against c are power free lines telecommunications land, forests, to caused damage for parties other to paid is compensation addition, In land. and authorities government local and they as expensed are fees Licence Amendments to IFRS 13 Fair Value Measurement Measurement Value Fair 13 IFRS to Amendments 2015. January 1 Howev statements. effec an have may interpretation The occurs. legislation, relevant the by identified as payment, triggers that activity the when made be should liability the of recognition clar interpretation The etc. fines taxes, income to related levies st following The POLICIES ACCOUNTING IN CHANGES oper from flow cash provided as presented are companies associated from dividends and interest of payments and Receipts activities. financing under presented are interests non-controlling to and owner the to disbursed Dividends activities. financing and investments operations, from flow cash net activ operating by generated flow cash show to order in taxes before profit Group’s the with starts statement The method. indirect the using prepared been has statement flow cash The FLOW CASH OF STATEMENT accordanc in segments operating reports Group The SEGMENTS costs. payroll and salaries as expensed are payments The made. paym the once Statkraft for obligations further incurring without manager fund a to contributions fixed pays Group the where scheme benefit cos payroll other ar schemes overfunded for assets fund pension Net s pension the in benefits future of value present The assets. plan the of value fair the by reduced are that benefits retirement future the of value present the is scheme benefit defined the to relates which payments compensation annual the to connected obligations of value present The power. compensational provide to liability a or payments cash of form the take and recurring, partly and non-recurring partly are payments c pays Group The 17. note in disclosed and estimated is management makes management for a levy related to the company the to related levy a for obligation an recognise to when clarifies interpretation The Levies 21 IFRIC 2015. from Defined contribution schemes contribution Defined assets. fund pension on yield projected the and liability estimated the on interest the period, the during Defined benefit s benefit Defined Pensions ex operating other as recognised information that is periodically reviewed by the management and us and management the by reviewed periodically is that information management internal of basis the on identified been have segments ce allocation and key performanc key and allocation ce ision. lassified as prov as lassified ts, and comprises the total of the retirement benefits accrued benefits retirement the of total the comprises and ts, chemes andards and interpretations were adopted effectively effectively adopted were interpretations and andards ompensation to landowners for the right to use waterfalls waterfalls use to right the for landowners to ompensation . To be able to r to able be To . t on the accrual of expensed lev expensed of accrual the on t er, the interpretation did not have a material effect on the the on effect material a have not did interpretation the er, e not made full c full made not e , follows up and evaluates its decisions. The operating operating The decisions. its evaluates and up follows , A defined benefit scheme is a retirement benefit benefit retirement a is scheme benefit defined A A defined contribution scheme is scheme contribution defined A isions for liabilities. Annual payments are payments Annual liabilities. for isions . The capitalised value of futur of value capitalised The . ’s ordinary activ ordinary ’s penses, while non-recurring item non-recurring while penses, ities. The cash flow statement is statement flow cash The ities. eceive full retir full eceive ations are class are ations accrue and are paid annually to central central to annually paid are and accrue ontributions will have their retirement retirement their have will ontributions STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT hemes and non-funded non-funded and hemes ecognised in the balance sheet sheet balance the in ecognised included under s under included chemes accrued at the the at accrued chemes ement benefits, c benefits, ement ities. This does This ities. e review. e , etc. Compensation Compensation etc. , ified as long-ter as ified ies in interim financial financial interim in ies The amendment is amendment The e classified as non- as classified e e with how the Gr the how with e ifies that that ifies ent has been has ent e licence fees fees licence e not include not a retirement retirement a alaries and alaries divided into into divided pectively on pectively m liabilities. m ontributions ontributions s are offset offset are s ed as a as ed ome. and ations. a oup FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY e pact on have on ospective imarily t from the sets. The pecting to esulting from ervices to recognised itted. The tent of tive for annual shall not iods beginning oup's future periods. the same as in IAS 39. The standard applies for equires lessees to iods beginning on or after etrospective or a modified that IFRS 9 may easurement of pr timation of probable future fer of goods or s e information is based on a single accounting IASB has deferred indefinitely ses, an entity would assess a The amendment clarifies that he
e either a full r h reflects what the entity is ex elling or transferring assets to associates not expected to have material im e for annual per ash flow remains ombination with other deferred tax assets. er, is recognised only to the ex plementation is allowed. The new standard, that constitute a business, as defined in anuary 2016, with early adoption permitted. plementing the new standard will extensively ation of tax los ertain transition reliefs. The Gr iding comparativ IASB completed IFRS 9 in 2014. The standard pact the financial statements for its lessees to us aluation of the potential effects tricts the utilis ed tax asset in c sociates and Joint Ventures inciples for classification and m and liabilities for most leases IASB has issued IFRS 16, which r ing criteria for when hedge accounting can be applied i.e. the tive for reporting periods starting 1 January 2018 or later. et in combination with other deferred tax assets of the same ibution of assets ents. , hedge accounting and impairment of financial as assessment of a highly probable c increase the application of hedge accounting. The potential impac which replaces IAS 18 Revenue, is type. The amendments are effectiv Amendment to IAS 12 Income Taxes carrying amount of an asset does not limit the es management has begun considering how IFRS 16 will impact the Group's financial statem and joint ventures. The amendments clarify that the gain or loss r the sale or contr IFRS 3, between an investor and its associate or joint venture, is in full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business, howev unrelated investors’ interests in the associate or joint venture. These amendments may im Where tax law res 1 January 2017 and will be applied retrospectively. It is not expected that the amendments will have any material impact on the Group's financial statements. New standards and amendments issued not endorsed by the EU IFRS 9 Financial Instruments comprises new pr financial assets standard is effec application is required but prov compulsory. An ev the Group has been conducted in 2015. The new standard allows mor hedging instruments and hedged items to qualify for hedge accounting. However, qualify Statkraft does not expect that im implementation of IFRS 9 will be further elaborated i 2016 but it is not expected that the impact on the financial statements is material. IFRS 15 Revenue from Contracts with Customers all contracts with customers. The main principle is that an entity recognise income in a way that reflects the trans the customers with an amount whic receive from the transfer. IFRS 15 is effective for reporting per 1 January 2018 or later. Early im the Group’s financial statement. IFRS 16 Leases recognise assets model for all leases, with certain exemptions. The new standard will be effective from 1 January 2019 with limited early application perm new standard perm retrospective approach on transition for leases existing at the date of transition, with options to use c taxable profits and estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences. An entity assesses a deferr deferred tax ass the initial interest in a joint operation and the acquisition of any additional interests in the same joint operation and are prospectively effec periods beginning on or after 1 J the effective date of amendments to IFRS 10 and IAS 28 regarding how to recognise gains and losses when s Early implementation is allowed. Except for hedge accounting, retr Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in As 48
. also . IAS 19 ding to . e provided ing joint s margins) are defined located. distribution to ed on whether The ceived impediments to aterial impact on the easurement accor the relevant IFRS 3 of whether they The amendments, which will e not considered to be sale to held for e for segment liabilities. ating segments that have been current assets. Thus, the The amendments will be reported to the chief operating ation, in which the activity of the e that a joint operator accounting ding to IAS 32. The amendment The amendments to IAS 19 clarify binations will be applied retrospectively ospectively. It is not expected that the acteristics (e.g., sales and gros lassifications ar esentation and m iness, must apply cription of oper tribute the non- t in a joint oper es to defined benefit plans, bas ended to clarify that corporate bonds used to determine the imilar to the required disclosur lassification, pr ing their judgement in presenting their financial reports. tively and clarifies that an entity must disclose the ets that are no longer classified as held for sale. The andards and interpretations will be adopted effectively ersa). Such rec pectively, but did not have any m e for annual periods beginning on or after 1 January 2016, set or financial liability accor onstitutes a bus ents. eviously held interest in a joint operation is not remeasured on The changes give guidance when an entity reclassifies non- The amendments to IFRS 11 requir Note Note 1 continued They are effectiv judgements made by management in applying the aggregation criteria in IFRS 8.12, including a brief des the acquisition of an additional interest in the same joint operation while joint control is retained. In addition, a scope exclusion has been added to IFRS 11 to specify that the amendments do not apply when the parties shar changes require prospective application. Amendments to IFRS 3 Business Com discount rate should be issued in the same currency as the pension obligation is denominated in, rather than the country where the obligation is from 2016 and may thus impact the financial statements in further periods. Amendments to IAS 19 Employee Benefits STATKRAFT ANNUAL REPORT 2015 aggregated and the economic char for the acquisition of an interes control, including the reporting entity, are under common control of the same ultimate controlling party. The amendments apply to both the acquisition of used to assess whether the segments are "similar". The amendments clarifies that the reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is decision maker, s These amendments may impact the disclosures for operating segments Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests joint operation c principles for business combinations accounting. The amendments also clarify that a pr preparers exercis owners (or vice v change of the plan to sell or dis requirements of c the new disposal method are valid. Furthermore, the change clarifies that when the criteria for held for distribution is no longer met, the assets are to be presented as ass be applied prospectively, clarifies that contingent consideration classified as either assets or liabilities should be measured at fair value at each reporting date whether or not they fall within the scope of IAS 39 or IFRS 9. It is not expected that the amendments will have a material impact on the financial statements. Amendments to IFRS 8 Operating Segments applied retrospec how an entity should account for contributions made by employees of third parties that are linked to servic those contributions are dependent on the number of years of servic by the employee. These amendments has also been am This amendment must be applied pr amendments will have a material impact on the financial statements Amendments to IAS 1 Presentation of Financial Statements amendments aim at clarifying IAS 1 to address per clarification that the portfolio-exception includes all financial instruments within the scope of IAS 39 or IFRS 9. This is regardless as a financial as was applied pros financial statem with earlier application being permitted. Amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations current assets (or disposal groups) from held for The following st CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS ESTIMATES AND ASSUMPTIONS AND ESTIMATES 35. note in disclosed are leases on details Further asset. underlying the of use the control to right a conveys arrangement the and asset specific a on depends fulfilment its if lease a contains agreement purchase power A lease. a contains agreement purchase power a whether determining when made is Judgement agreements purchase Power 12. note in disclosed is revenues energy on information More capacity. generation its within are obligations sales the as long as generator a for purchases normal are NordPool at purchases day-to-day the that and gross nominated are independently, managed are purchases and sales that is judgement this for basis The recognition. gross for criteria the meets power of sale from income that management the of judgement the is It NordPool. revenue Energy 24. note in disclosed are arrangements joint in Investments venture. joint a is arrangement the arrangement, the of assets net the to rights has Statkraft When operations. joint as classified normally are company, the of financing term long and term short the for responsible being as well as produced, power the of buyers only the are participants the where and power produce to established Entities arrangement. joint the classify to order in evaluated are circumstances, and facts other including arrangement, joint a from arising obligations and Rights venture. joint a or operation joint a is arrangement arrangements Joint 7. note in disclosed are contracts energy on details Further exemption. use” “own of result a as definition the by covered not are that contracts those and instruments, financial as for accounted are that contracts the reviewed has Management gas. and power of sales and purchases physical for contracts to apply typically will This instruments). (financial derivatives are they if as for accounted be shall exemption, use” “own the by covered not are that contracts contracts energy Non-financial statements: financial consolidated the in recognised amounts the on effect significant most the have which judgements, following the made has management policies, accounting Group’s the applying of process the In JUDGEMENTS 2 Note goodwill and other intangibles with indefinite useful lives. useful indefinite with intangibles other and goodwill ventures, joint associates, in investments equipment, and plant property, to relevant most are estimates These schemes. support national and price market the reflect which paths, price long-term expected the and purposes extrapolation for used rate growth the volumes, production expected model, DCF the for used rate discount the to sensitive is amount recoverable The tested. being CGU the of performance asset’s the enhance will that investments future significant or to committed yet not is Group the that activities restructuring include not do and years five next the for budget the from derived are flows cash The model. DCF a on based is calculation use in value The asset. the of disposing for costs incremental less prices market observable or assets similar for length, arm’s at conducted transactions, sales binding from data available on based is calculation disposal of costs less value fair The use. in value its and disposal of costs less value fair its of higher the is which amount, recoverable its exceeds unit generating Impairment occur. they when assumptions the in reflected are changes Such Group. the of control the beyond are that arising circumstances or changes market to due change may however, developments, future about assumptions and circumstances Existing prepared. were statements financial consolidated the when available parameters on estimates and assumptions its based Group The below. described are year, financial next the within liabilities and assets of amounts carrying the to adjustment material a causing of risk significant a have that date, reporting the at uncertainty estimation of sources key other and future the concerning assumptions key The Impairment exists when the carrying value of an asset or cash or asset an of value carrying the when exists Impairment Accounting judgements, estimates and assumptions and estimates judgements, Accounting Statkraft both sells and purchases power through power purchases and sells both Statkraft Judgement is required in assessing whether a joint a whether assessing in required is Judgement According to IAS 39, non-financial energy non-financial 39, IAS to According 49 disclosures. further for 10 note See instruments. financial of value fair reported the affect could factors these to relating assumptions in Changes volatility. and risk credit risk, liquidity as such inputs of considerations include Judgements values. fair establishing in required is judgement of degree a feasible, not is this where but possible, where markets observable from taken are models these to inputs The model. (DCF) flow cash discounted the including techniques valuation using measured is value fair their markets, active in prices quoted on based measured be cannot position financial of statement the in recognised liabilities financial and assets financial of values fair the When instruments financial of measurement value Fair 16. note in disclosed are pensions on details Further 19. IAS with accordance in rate interest reference a as qualify that durations relevant with marked liquid and deep a represents bonds covered for market the that opinion the of is Statkraft OMF). - bonds (covered bonds corporate high-quality on based is rate discount The parameters. of range a across estimates and judgement of use the involves liabilities pension of calculation The Pensions equipment. and plant property, on information more contains 23 Note reviews. ongoing to subject are amount, carrying plant’s the of part as included are which obligations, decommissioning of Estimates depreciation. calculating in account into taken are values Residual expectations. the to changes any of event the in adjusted is and judgements, accounting and data historical experience, on based estimated is life useful Expected life. useful expected its over depreciated is equipment and plant Property, equipment and plant Property, 21. note in disclosed are taxes on details Further revenues. future to relating expectation of basis the on estimated is used be can revenues rent resource negative which over period The years. ten of period a within utilised be to expected amount the with sheet balance the in recognised are carry-forwards revenue rent resource to relating assets tax Deferred sheet. balance the in plants power Norwegian from revenues production from taxation rent resource with associated assets tax deferred recognises Group The utilised. be will they that probable is it that extent the to recognised are assets tax Deferred judgment. involves assets tax deferred of Recognition asset tax Deferred 5. note in disclosed are combinations business on details Further uncertainty. inherent with but experts, Group’s the by supported assumptions on based are life useful and value fair of estimates Management’s assumptions. and estimates method, valuation regards as judgements make to management requires valuation of type This liabilities. and assets acquired of value fair the of determination the in assist to advisors external independent uses Statkraft acquisitions, major For loss. or profit in recognised are values fair in Changes Statkraft. to transferred is control when time in point the at estimated be must interests ownership existing of value fair the stages, in achieved are combinations business If values. fair estimated their on based liabilities, and assets acquired to allocated is combinations business in paid Consideration combinations Business 30. note in disclosed is assets impaired to related expenses estimated cover to recognised provision A 23. note in explained further and disclosed are analysis, sensitivity a including CGUs, different the for amount recoverable the determine to used assumptions key The plants. power commissioned for included are investments maintenance Expected included. are management Statkraft’s by approved investments remaining construction, under equipment and plant property, of use in value the determining When STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY - - - 5 4 1 1 36 36 items Group -583 1 209 3 610 9 674 9 678 4 848 ed -2 992 -3 639
e ent of 68 16 -12 Other 120 247 167 561 728 718 138 226 -122 -789 -425 -437 activities 28 092 28 076 - - 48 ing items, unrealised 405 281 793 359 835 -544 6 092 6 140 2 985 1 152 1 986 9 604 Industrial 24 801 15 197 ownership - - 9 1 8 e is utilised to ensure an increas 10 18 49 49 50 ofitable growth. 272 626 635 464 -163 District heating 3 628 3 620 operates in emerging markets wher - 55 includes management and developm Wind -30 -24 101 724 700 658 power
-312 3 335 3 649 -2 083 -1 750 -2 062 -2 008 13 736 10 087 operates in Norway and Sweden. include small-scale hydropower and group functions.
include adjustment of non-recurr includes Statkraft’s operation and development in land- - 57 Inter- 104 377 -196 national 3 048 3 399 1 738 1 795 1 574 6 094 -1 688 -2 086 -1 709 -1 905 34 309 28 215 hydropower - - trategy where the Group’s expertis upply of renewable energy and pr effects on energy contracts excluding Trading and Origination, eliminations and unallocated assets. expected high growth and a substantial need for energy. Statkraft’s International hydropower international investments in hydropower are part of the Group’s long-term s s Wind power based and offshore wind power. The segment operates in Norway, Sweden and the United Kingdom. District heating Industrial ownership Norwegian shareholdings within the Group’s core business, as well as the end-user business in Fjordkraft. Other activities Group items wind farms with a combined capacity of 1000MW and will generate 3.4 TWh power annually. The total investment in the wind farms amounts to approximately NOK 11 billion. Construction will commence in Q2 2016 and commissioning will be completed in 2020. 43 25 13 133 792 346 346 -376 -310 -445 trading 5 777 2 763 5 764 30 026 29 716 energy and Continental 50 - - - - 698 531 ating Nordic any 1 280 9 621 2 550 5 896 6 427 6 427 -1 426 ed as m oup gy, as 56 884 12 171 10 923 56 884 oup hydropower 1) - - - 683 4 497 1 970 7 797 3 790 3 814 3 814 way and Sweden. Group -6 401 19 388 53 094 53 094 20 090 157 517 176 905 Statkraft AS e from 1 January 2016. flexible. esults for each of the segments. The includes gas power plants in Ger tion. isk mitigation activities related to both ordance with how the Group aller producers of renewable ener
acts (excluding Trading and Origination) m dinary results, adjusted for the unrealised includes hydropower plants in Nor Subsequent Subsequent events Segment information The Statkraft AS Group figures are booked amounts. egments have been identified on the basis of internal management effects arising from energy contr STATKRAFT ANNUAL REPORT 2015 Investments in shares Depreciation, amortisation and impairment Maintenance investments and other investments Investments in new production capacity and joint ventures Other assets Total assets 1) Balance sheet 31.12.15 Investments in associates Operating profit Share of profit/loss from associates and joint ventures Profit before financial items and tax Operating profit, underlying Unrealised value changes energy contracts Significant non-recurring items Operating revenues external, underlying Operating revenues internal, underlying Gross operating revenues, underlying Net operating revenues, underlying and Norway, hydropower plants in Germany and the UK and bio-based power plants in Germany. It also includes Baltic Cable AB, the owning entity of the subsea cable between Sweden and Germany, Trading and Origination, market access for s well as revenue optimisation and r Segments NOK million 2015 Accounting specification per segment Continental energy and trading s a basis for resource allocation and key performance review. The Gr and material non-recurring items. The segments are: Nordic hydropower These production assets are mainly the Continental and Nordic produc information that is periodically reviewed by the management and us underlying results consist of or reports operating segments in acc management makes, follows up and evaluates its decisions. The oper We are presenting the underlying r Investment in wind power project in On Central-Norway 23 February 2016 it was announced that Statkraft, TrønderEnergi and the European investor consortium Nordic Wind Power DA will realise Europe's largest onshore wind power project in Central-Norway. The joint operation company Fosen Vind DA will be the owner of the wind farms and Statkrafts shareholding in the company is 52.1 %. The project comprises six onshore Statkraft’s segment reporting is in accordance with IFRS 8. The Gr Note Note 3 Note 4 has adopted a new segment structur CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Maintenance investments and other investments other and investments Maintenance impairment and amortisation Depreciation, assets Total assets Other ventures joint and associates in Investments 31.12.14 sheet Balance tax and items financial before Profit ventures joint and associates from profit/loss of Share profit Operating items non-recurring Significant contracts energy changes value Unrealised underlying profit, Operating underlying revenues, operating Net underlying revenues, operating Gross underlying internal, revenues Operating underlying external, revenues Operating 2014 million NOK Segments continued 4 Note No external customers account for 10% or more of the Group’s operating revenues. operating Group’s the of more or 10% for account customers external No customers significant regarding Information 31.12. of as assets Non-current external revenues Sales 2014 31.12. of as assets Non-current external revenues Sales 2015 million NOK areas Geographical activity. or facility production the for origin of country the of basis the on allocated are and tax deferred except assets intangible and equipment and plant property, of consist assets Non-current activities. or assets generating of origin geographical the of basis the on allocated are revenues sales External area geographical per Specification 12. note to made is Reference product per Specification information. further See note23for above. amountinthetable in the included which are million 789 NOK regarding Cetinof expenses operating accrued are there 1) Total items non-recurring Significant Origination and Trading excl. contracts, energy changes value Unrealised million NOK items: non-recurring of Specification shares in Investments capacity production new in Investments Impairments consist of write-down of non-current assets regarding Swedish wind farms (NOK 1750 million) and Cetin hydropower plant in Turkey (NOK 1297 million).Inaddition, plant inTurkey(NOK1297 hydropower Cetin and million) (NOK 1750 farms Swedish wind assets regarding non-current of write-down of consist Impairments Impairments assets of sale on Gain change scheme Pension power concessionary - plant power Saurdal to related Lawsuit 1) Statkraft AS Statkraft 167 817 167 790 148 Group 19 027 19 220 14 560 13 560 13 805 25 254 52 254 52 -4 071 -4 1 287 1 525 7 368 2 661 - - - 1) hydropower Statkraft AS Statkraft 55 054 55 054 55 500 10 500 10 347 12 563 13 617 10 -1 324 -1 1 673 1 478 1 545 1 478 7 945 2 Nordic 101 166 101 730 115 439 48 246 48 586 51 Group - - - 51 Continental energy and energy 26 173 26 448 26 trading 5 560 5 560 5 174 2 174 2 234 1 973 2 -320 -275 925 17 85 16 - - - 57 276 57 004 21 744 56 501 19 Norway hydropower 22 599 22 642 15 national -1 191 -1 029 -1 1 126 1 073 3 957 6 006 1 004 1 -240 -789 -937 Inter- 148 888 65 - 1 Germany 14 720 14 918 16 4 688 4 790 4 10 533 10 3 197 3 461 7 072 3 707 1 344 1 358 1 064 1 108 1 power -490 Wind 159 363 850 258 -14 - 1 heating District 3 380 3 373 3 23 734 23 681 25 -142 Sweden 309 398 597 595 -3 001 -3 836 -3 610 -3 1 840 1 686 1 25 22 13 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT - - 2015 7 7 3 9 2 226 609 - - ownership Industrial 23 838 23 852 14 8 986 8 482 1 007 3 526 6 504 6 -498 354 470 535 948 920 -52 80 22 2 10 448 10 1 641 1 240 5 300 3 UK activities 25 183 25 183 25 Other -106 -644 -644 -663 137 651 659 505 154 -27 67 46 - - - 13 828 13 215 25 -1 050 -1 5 443 5 033 3 4 449 4 767 2 053 2 396 2 21 670 21 666 21 Other -2 053 -2 391 -2 051 -4 2014 280 4 449 4 476 4 622 2 674 6 Group items 56 - - - - - 4 5 5 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
a s ive idiary. pany ol from e aft and ough fixed r ences W. The tablishing of NOK hased 100% e of de- c value of ely, of the new company. The owner illion and an estimated contingent gi AS (District Heating). The com tion represents a change of contr pany has to be calculated. At realisation elop and construct the offshore wind farm ecycling amount through comprehens 50% of Triton Knoll Offshore Wind Ltd. ompany to an investment in a subs elated to long-term power purchas ts of a gain of NOK 301 million on the ed on forest raw material at the industrial On 2 November 2015, Statkraft pur On 6 February 2015, Statkraft, along with Södra On 12 February 2015, Statkraft and RWE Innogy GmbH onsideration of NOK 127 million. Net assets as of 30 June 2015 in alues from the transaction are r orresponding positive/negative r OINT ARRANGEMENTS 2015 underlying net asset in BRL, and a loss on accumulated translation differences of NOK 772 million. Gardermoen Energi AS area housing the former cellulose factory at Tofte in Hurum. Statk Triton Knoll, which may have an installed capacity of up to 900 M agreements (intangible asset) of NOK 1549 million, power plants ( any negative or positive effect from accumulated translation differ Green Fuel AS, organised as a joint venture, with the goal of es Statkraft paid NOK 86 million for its shareholding in Triton Knoll. 1007 million, offsetting of a liability of NOK 189 million, fair previous ownership of NOK 1749 m c Desenvix totalled NOK 1639 million. The preliminary allocation of excess v asset) of NOK 721 million, associated company of NOK 81 million and goodwill of NOK 455 million. According to IFRS 10, the transac an investment in an associated c A transaction that entails a change of control in accordance with IFRS 3 is treated as a realisation and require that a gain/loss at the tim recognition of the associated com has to be presented as a loss/gain in the income statement and a c income, resulting in a zero effect in equity. The estimated accounting effect of de-recognition of the associated company is a net loss 471 million. The net loss consis of the shares in Gardermoen Ener has a yearly production of 54 GWh. There were no excess values. J Silva Green Fuel AS Skogägarna Ekonomisk Förening (Södra), established the company Silv future production of biofuel bas Södra own 51% and 49%, respectiv have injected NOK 50 million into the company as seed capital. Triton Knoll entered into an agreement to dev offshore wind farm is located off the eastern coast of England. Thr this agreement, Statkraft secures 52
e of ed quired e for the ior to the purchase 81.3% of tablishment of Silva old the subsidiary ets as of 23 April 2015 totalled NOK s On 23 April 2015, Statkraft On 13 July 2015, Statkraft aft AS, which has been transferr illion at takeover, in addition to the illion. Statkraft still holds one of the . Some of the shares in Småkraft AS r e of assets. The total cost pric illion, which mainly relates to the ansaction was NOK 226 million and is hows an excess value of NOK 2257 alue and nominal value of the deferred entures. Total gain for Statkraft, including On 6 February 2015 during the es Business Business combinations and other transactions On 22 December 2015, Statkraft s ompleted its purchase of 35% of the shares of Desenvix Energias ompleted its purchase of the listed hydropower company Empresa hares was NOK 1948 million. Net as tructure of Steinsvik Kraft AS is the same as for Småkraft AS pr ale. STATKRAFT ANNUAL REPORT 2015 Renováveis (SKER). The transaction increased Statkraft’s ownership interest from 46.3% to 81.3%. The estimated total cost price for after the transaction date. Desenvix Energias Renovàeis S.A. c the shares was NOK 3071 million, and consists of cash payment of NOK Renovàeis S.A. in Brazil and changed the name to Statkraft Energias million, mainly allocated to regulation plants (fixed asset). The analysis also gives goodwill of NOK 605 m profit from associates and joint v into a new established company Steinsvik Kraft AS. The ownership s Eléctrica Pilmaiquén S.A. in Chile. The total cost price for 98.18% of the s -272 million. The negative value in equity is related to an earlier of non-controlling interest, where the excess values were booked against equity. The acquisition analysis s difference between net present v gain in associates, was NOK 334 m power plants from the sale of Småk Statkraft Tofte AS tax on excess values. An additional 1.2% shareholding has been ac s BUSINESS COMBINATIONS 2015 Green Fuel AS, Statkraft acquired all shares in Statkraft Tofte AS, previously Södra Cell Tofte AS. The acquisition of the shares in Statkraft Tofte AS is recognised as purchas purchase of shares in Statkraft Tofte AS was NOK 220 million. Net assets in the company totalled NOK 153 m SALE AND RESTRUCTURING OF BUSINESS IN 2015 Småkraft AS booked in other operating revenues identified excess value of operating equipment of NOK 67 million. Empresa Eléctrica Pilmaiquén S.A. c Note Note 5 Småkraft AS. The gain from the tr were owned through associates (Agder Energi AS and BKK AS). The gain in associated companies was NOK 108 million and is booked in shar CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Majority interests Majority which Of goodwill excluding assets, acquired net of value Fair value excess Net value excess on tax Deferred value excess Gross associates in Investments equipment and plant Property, assets Intangible to: attributable value, excess of Identification below) table (see assets acquired net of value Book cost acquisition Total consideration Contingent shareholdings recognised previously of value Fair Cash million NOK Consideration interests non-controlling of Measurement acquisition following rights/shareholding voting Total acquisition the through acquired rights/shareholding Voting date Acquisition 2015 in combinations business for price cost of Allocation continued 5 Note 1) tax after profit net 2015 figure Proforma revenue operating gross 2015 figure Proforma date acquisition since profit net to Contribution date acquisition since revenue operating gross to Contribution shareholding recognised previously of derecognition from Gain/loss receivables acquired of value nominal Gross receivables acquired of value Fair acquisitions the with connection in payments cash Net companies acquired in equivalents cash and Cash equivalents cash and cash in cost and Consideration cost acquisition of elements Non-cash cost acquisition Total placing private of value the in increase including assets, acquired of value Net assets acquired of value Net interests non-controlling and Liabilities liabilities interest-free Other liabilities interest-bearing Long-term assets Acquired assets Current Receivables Inventory equivalents cash and Cash assets Non-current assets non-current Other associates in Investments equipment and plant Property, assets Intangible assets acquired net of value Book million NOK 2) 1) Goodwill transaction the through majority the by acquired assets, acquired net of value Fair cost acquisition Total Total interests Non-controlling Information for Gardermoen Energi AS included in Other column is based on unaudited financial statements. Profit disclosed for the corresponding company is profit beforetax. companyisprofit thecorresponding for disclosed unaudited financialstatements.Profit basedon is Other column in included AS Energi Gardermoen for Information column. in Other included is AS Gardermoen Energi and AS Tofte Statkraft of Purchase liabilities. assets and of theacquired valuation the final the completionof pending be provisional to deemed is price purchase of allocation The 1) 1) 1) 1) 53 Pilmaiquén S.A. Pilmaiquén Pilmaiquén S.A. Pilmaiquén Proportionate 23.04.2015 Empresa Empresa 98.18% 98.18% Eléctrica Eléctrica 1 344 1 948 1 369 1 344 1 369 1 641 1 257 2 281 2 948 1 948 1 1 927 1 948 1 948 1 279 1 346 1 003 1 -616 -272 -272 -272 605 151 114 322 322 115 224 343 322 911 -24 -81 -41 25 21 21 92 ------1) Renovàeis S.A. Renovàeis Proportionate Renovàeis S.A. Renovàeis 13.07.2015 Desenvix Desenvix 81.31% Energias Energias 2 616 2 071 3 218 3 616 2 218 3 579 1 351 2 549 1 639 1 071 3 749 1 195 1 1 031 1 040 2 071 3 639 1 639 1 695 1 008 4 734 3 706 2 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -772 35% -152 -471 455 601 721 127 693 339 178 178 934 234 442 274 178 206 517 305 -16 81 97 97 - 1) Other Other Other 238 238 238 238 238 170 238 238 211 239 239 170 170 313 226 211 1) 2) 1) 68 68 68 32 12 14 14 27 90 53 14 88 88 -9 -3 ------1 -1 388 -1 2 889 2 218 3 040 2 258 5 537 1 537 1 027 3 668 5 825 4 705 3 060 1 199 4 257 5 825 4 198 4 825 4 288 3 676 4 070 3 525 1 537 1 257 5 749 1 381 3 -242 -471 Total Total 877 465 513 513 329 349 755 843 513 329 206 517 397 626 127 -61 81 1 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY - - 91 91 91 91 27 59 59 -19 -27 ira. N/A 137 110 118 118 the 50% 100% essed estment quisition was NOK hanged entures. 14.09.2014 Andershaw Wind Power in the UK. Statkraft owns 40% of e Energy Ltd (Scira), which owns al came in addition to the accounting m es in the company Andershaw Wind urement of remaining shares in Sc s the sale from 50% to 40% of the to the acquisition had been ass ets with NOK 137 million. and joint ventures. See note 24 for ess value was mainly identified in and assumed liabilities in the ac . On 14 September 2014, Statkraft UK Ltd. . On 25 November, Statkraft sold 20% of its hares in the company Scira Offshor howed the total realised gain from hareholding in the company, as well as currency gains on the inv ompany were reversed. This rever hares which Statkraft owned prior onnection with tangible fixed ass Scira after the sale. The accounting gain from sale of the shares 283 million and was recorded as other operating revenue. The gain s s in Statkraft’s ownership period. The sale entailed that Statkraft c the accounting method for Scira, from joint operations to joint v This meant there was no new meas gain and was NOK 341 million. The reversal was recorded as share of profit from associated companies further information. BUSINESS COMBINATIONS 2014 Andershaw Wind Power Ltd acquired the remaining 50% of shar Power Ltd. for a purchase price of NOK 59 million. The fair value of the s at fair value and gains of NOK 69 million had been recorded as other financial items. Procured assets were assessed at fair value. Exc c Scira Offshore Energy Ltd s Sheringham Shoal offshore wind far On the basis of the transaction in Scira, previous impairments in the c 54 ara ale ed as
, eserve fund, as alue of olling oduction tment in illion. See note 24 for further . The net cash effect as a result of a subsidiary, the Group’s cash r , SN Power AS, owned by Statkraft and the onshore wind farms Alltwalis enue. The gains recognised were On 30 July, the sale of 49% of the shares in Wind On June 6th, the agreement between Statkraft and 1) As a result of calculated deferred tax liabilities, a technical goodwill of NOK 27 million has been estimated. hares was recognised at NOK 874 m STATKRAFT ANNUAL REPORT 2015 Goodwill 1) Total acquisition cost Fair value of net acquired assets, acquired by the majority through the transaction Majority interests Non-controlling interests Total Fair value of net acquired assets, excluding goodwill Of which Gross excess value Deferred tax on excess value Net excess value Identification of excess value, attributable to: Intangible assets Property, plant and equipment Fair value of previously recognised shareholdings Total acquisition cost Book value of net acquired assets (see table below) Consideration NOK million Cash Voting rights/shareholding acquired through the acquisition Total voting rights/shareholding following acquisition Measurement of non-controlling interests Allocation of cost price for business combinations in 2014 Acquisition date well as disbursing NOK 60 million to the new SN Power. As Agua Im had been reduced by NOK 300 million. The effect of the transaction on total equity was a decline of NOK 839 million, related to non-contr a joint venture. The gain of NOK 1063 million was recorded as other information. related to transfer of business in the Philippines and transfer of Agua Imara to SN Power AS, respectively the transaction was that Statkraft had paid NOK 410 million to Nor was no longer part of the Group as of 0.3 TWh per year was implemented at a sale price of about NOK 2 billion on 15 August. The net gain of NOK 1213 million was recognis other operating revenue. Wind UK Invest Ltd. UK Invest Ltd (WUKI), which owns Baillie and Berry Burn in the UK, was concluded. Following the transaction, WUKI went from being a subsidiary to being an inves from 100% to 51% and an adjustment from carrying value to fair v the 51% share which Statkraft still owns. The fair value of remaining s SALE AND RESTRUCTURING OF BUSINESS IN 2014 SN Power AS Norfund 50% each. The gains related to the restructuring are NOK 455 million, recognised as other financial income, and NOK 108 million recognised as other operating rev Note Note 5 continued Norfund to restructure SN Power AS was completed. The agreement lead to incorporation of a new company interests in Agua Imara. See note 24 for further information. Statkraft Suomi Oy. Sale of the power plants in Finland with a pr operating revenues. The gain showed realised gains from the downs CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Fair value of acquired receivables acquired of value Fair acquisitions the with connection in payments cash Net companies acquired in equivalents cash and Cash receivable of Sale equivalents cash and cash in cost and Consideration cost acquisition of elements Non-cash cost acquisition Total placing private of value the in increase including assets, acquired of value Net assets acquired of value Net interests non-controlling and Liabilities liabilities interest-free Other liabilities interest-bearing Long-term assets Acquired assets Current Receivables equivalents cash and Cash assets Non-current equipment and plant Property, assets Intangible assets acquired net of value Book million NOK continued 5 Note Net interest-bearing liabilities interest-bearing Net investments financial short-term and cash restricted excluding equivalents, cash and Cash debt interest-bearing Current debt interest-bearing Long-term million NOK structure capital of management in included capital of Overview requirements. dividend owner’s the and expectations market’s the to relating those than other structure capital of management the to regard with requirements external any to subject not is Group The markets. capital various from financing external obtain to endeavours Group The owner. the from/to capital share of payments and liabilities long-term of repayment and draw-down the of primarily consist structure capital the of management long-term for tools The rating. credit strong a maintaining as well as expand to ability its ratio, debt/equity company’s the between balance reasonable a maintain to is structure capital its of management Group’s the of aim main The 6 Note tax after profit net 2014 figure Proforma revenue operating gross 2014 figure Proforma date acquisition since profit net to Contribution date acquisition since revenue operating gross to Contribution shareholding recognised previously of derecognition from Gain/loss receivables acquired of value nominal Gross Management of capital structure capital of Management 55 Statkraft’s target is to maintain its current rating current its maintain to is target Statkraft’s Moody’s. from outlook) (stable Baa1 and Poor’s & Standard from 2016) February 26 on stable from negative to outlook (revised A- of rating credit long-term a has AS Statkraft rating. credit long-term is structure capital of management Group’s the for figure target important most The 2015. in structure capital of management the governing guidelines and targets Group’s the in changes no were There Note 29 31 31 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 35 036 35 410 37 -9 570 -9 7 196 7 2015 Andershaw Wind Power Wind Andershaw -13 106 -13 23 638 23 438 27 9 306 9 2014 118 -19 -19 69 74 17 59 59 34 34 15 13 13 ------9 9 2 2 2 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY ia, om eign e ated ies than inated in a ities. ient tual and acts with d Risk and ates. The pes of encies as elation to ed and acts run r and foreign ate tability in isk has been aft therefore e is primarily connected idiaries and associates in foreign ess activities for power purchas t of the Trading and Origination orresponding currency exposure andates for Trading and Origination and other currency exposures in iddle-office function. Responsibility for c exposure related to cash flows fr aft’s main power exchange is EUR, and luded within the origination activ oducts are typically power contr . The majority of the contracts in the y e sheet risk related to investments in tion with energy sales revenues, r and financial trading on power ing specified limits for Value-at- orporate management. ulate the maximum potential loss ency and interest rate risk is followed up acts are recognised at fair value in elated to shareholdings in foreign k and interest rate risk. Statkr ompany’s loan portfolio. Forward exchange t rate management framework has been Statkraft incurs currency risk in the form of Statkraft’s interest rate exposur ontinuously by the independent m trategy is regularly reported to c urrency. urrency. Balance sheet risk is r ubsidiaries. There is also balanc ome associated companies. tructured products. Structured pr urrencies. Trading transportation capacity across borders and vir urrency are primarily used to reduce the risk involved in trading tructured products and contracts established based on a mix between fixed and floating interest r rate contracts are also used to hedge cash flows denominated in for c s incurs when trading energy on other exchanges with other currenc EUR. Statkraft hedges its currenc power sales of physical contracts floating interest percentage shall be in the 25-75% interval. The part of the portfolio exposed to fixed interest rates shall have a remaining maturity of at least five years. The strategy for managing interest rate r financing, coupled with the aim of a certain stability and predic finance costs. Compliance with the limit for curr c entering into and following up the various positions has been separ and is allocated to separate organisational units. The interest r exposure per currency in relation to established frameworks in the finance s a tailor made profiles, long-term contracts or power contracts in different c agreements with minor producers of renewable energy in Scandinav c Statkraft’s methods for managing these risks are described below: Foreign exchange risk investments and dividend from subs s The settlement currency for Statk all contracts that are entered into on the power exchange are nom accordance with the company’s financial strategy. Economic hedging is achieved by using financial derivatives and loans in foreign cur hedging instruments. Few of the hedging relationships fulfil the requirements of hedge accounting in accordance with IAS 39. Interest rate risk to its debt portfolio. An interes established based on an objective of achieving the most cost-effic Origination activities include buying and selling both standardis s Quoted, liquid contracts pertaining to system price, area prices c s portfolio have a duration of up to five years, though some contr until 2022. Statkraft has allocated risk capital for the Trading and Origination business. Clear guidelines have been established limiting the ty products that can be traded. The m activities are adhered to by apply Profit-at-Risk. Both methods calc portfolio can incur, with a given probability factor over a given period of time. The credit risk and operational risk are also quantified in r the allocated risk capital. All Trading and Origination contr accordance with IAS 39. Market ac Germany and in the UK, are not par activities. DESCRIPTION OF FOREIGN EXCHANGE AND INTEREST RATE RISK Statkraft is exposed to two main types of risk as regards the finance activities: foreign exchange ris employs interest rate and foreign currency derivatives to mitigate these risks. Interest rate swaps, currency- and interest rate swaps and forwar exchange rate contracts are used to achieve the desired currency interest rate structure for the c transaction risk, mainly in connec EUR and thus exposed to EUR. A c exchanges, investments, dividends power plant contracts are also inc 56 ent tfolios acts is tfolios ibility ical esholds s tion ontracts alue of ate profit. ability term e than five urrency in order to ed in the ontracts et risk, and imulations of and has a entered into gy and for Trading and tificates, gas and 2, coal, gas and oil eldorf, Istanbul, Rio de Janeiro, San s hed for all portfolios. Respons ading activities in Oslo, Trondheim, ent is to identify threats and ts. The market risk in these contr tfolios take trading positions in the ts, as well as profit on non-standardised izon for these contracts is less factors. The management portfolios ward markets, in addition to phy eign currency. The following sec . acts in the trading portfolio hav ontracts are based on volume thr arket risks. The Group’s risk management , coal, gas and oil products. oup’s objectives will be met. acts for power, CO ears. . Internal guidelines controlling the level of pertise, financial strength and development e portfolio revenues and reduce the risk imarily relate to prices of ener Statkraft has various portfolios
2 products, as well as green cer As a power producer, Statkraft has Market Market risk in the Group andates to enter into financial c ontracts. ears. The contracts are measured at fair value in accordance with IAS arious scenarios for relevant risk onsist mainly of financial contr ontracts. In general, the time hor ontracts have different duration, where the longest runs until 2030. The ontains a more detailed description of the various types of mark ommodities, interest rates and for levels in Statkraft as a whole. Statkraft performs financial trades plans. The purpose of risk managem energy and energy-related produc STATKRAFT ANNUAL REPORT 2015 Francisco and New Dehli. The por The trading activities involve buying and selling standardised and liquid products. Power and CO related to future prices for power income statement as part of normal purchase and sale. Nordic and Continental dynamic asset management portfolios Statkraft has one Nordic and one Continental dynamic asset managem generate values in futures and for products. The contracts are traded on energy exchanges and by bilateral c y 39. Trading and Origination Origination that are managed independently of the Group’s expected power production. The Group has tr Stockholm, London, Amsterdam, Düs market with the aim of realising profit on changes in the market v oil products are traded. The contr maturities ranging from 0 to 5 y c c are recognised at fair value, other contracts entered into for own use do not qualify for recognition in the balance sheet and are recognis portfolio, managed in Oslo and in Düsseldorf, respectively. The objective of these portfolios is to optimis production and trading. M related to available production. The risk is quantified using s v c Financial contracts and embedded derivatives in physical sales c price of some of these sales obligations are indexed to foreign c c c physical power sales agreements with industrial customers in the Nordic region. These contracts stabilise Statkraft’s revenues. The long- and raw materials such as metals Statkraft enters into financial power contracts, physical power c and physical gas purchase contrac opportunities for the Group, and to manage the overall risk level to provide reasonable assurance that the Gr As a power producer, Statkraft is exposed to market risk related to price on energy and commodities. Within energy trading, Statkraft has por DESCRIPTION OF PORTFOLIOS IN ENERGY TRADING and willingness to take risks, ex In Statkraft, market risk will pr how these are managed. that reduce market risk, as well as portfolios within decided mandates where Statkraft accepts a degree of market risk in order to gener Risk management in energy trading in Statkraft focuses on total por for the continual monitoring of granted mandates and frameworks lies with independent organisational units. The frameworks for trading in both financial and physical contracts are continually monitored. A description of the energy portfolios in Statkraft can be found below: Long-term contracts RISK AND RISK MANAGEMENT OF FINANCIAL INSTRUMENTS GENERALLY Statkraft is engaged in activities that entail risk in many areas policy is based upon assuming the right risk based on the Group’s Note Note 7 unified approach to the Group’s m rather than individual contracts market exposure have been establis CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Total market risk market Total effects Diversification effects diversification before risk market Total heating district and activities end-user in risk Market revenues grid distribution in risk Market positions currency and rates interest in risk Market activities) access market (excl. portfolios Origination and Trading in risk Market hedging) and risk price spot risk, (volume optimisation energy in risk Market million NOK risk market of Specification cour the during date sheet balance the at positions of risk market the with connected results, expected dev i.e losses, potential all covering of probability 95% a have r market for targets Statkraft’s Board. the and management Group as well as portfolios business and results net expected from deviations as risk quantifies Group The heating. district and business end-user and revenues dis positions, rate interest and currency portfolios, Origination its optimisation, energy within risk market up follows Statkraft 8 Note Total sector Public Industry banks savings and Commercial million NOK category debtor per bonds – investments financial Short-term 2) swaps. rate interest from interest fixed receive Statkraft reflect that currency swaps.Negativefigures and combined interestrate rate swapsand interest rate adjustmentsin interest account into take also years between 1) 2014 interest fixed Total 2015 interest fixed Total BRL in Debt GBP in Debt USD in Debt EUR in Debt SEK in Debt NOK in Debt million NOK portfolio debt rate interest Fixed 2) 1) BRL rate, interest average Nominal GBP rate, interest average Nominal USD rate, interest average Nominal EUR rate, interest average Nominal SEK rate, interest average Nominal NOK rate, interest average Nominal currency by interest of Specification 2) portfolio. structurefortheGroup’sdebt currency to achievethedesired Statkraft usestheseswaps swaps, since and currency rate interest combined from effects includes currency by debt of 1) Total BRL in Debt GBP in Debt USD in Debt EUR in Debt SEK in Debt NOK in Debt million NOK currency by debt of Specification percentage a as effect Diversification methods. statistical using calc are interrelatedness their and instruments/prices underlying c these in included is risk Market (value-at-risk). level confidence given alculations, which are used both in the follow-up of the busines the of follow-up the in both used are which alculations, Management of foreign exchange risk and interest rate risk are presented in more detail in note 7. in more detail in are presented risk interest rate and risk exchange foreign of Management split currency swaps.The and interestrate ofcombined currency effect debt andthe interest-bearing long-term on instalment first-year debt, interest-bearing long-term Includes note 7. in more detail in are presented risk interest rate and risk exchange foreign of Management currency swaps. and interestrate and combined swaps debt, interestrate interest-bearing long-term on instalment first-year debt, interest-bearing long-term Includes note 7. in more detail in are presented risk interest rate and risk exchange foreign of Management of currency swaps.Specifications and interestrate ofcombined currency effect debt andthe interest-bearing long-term on instalment first-year debt, interest-bearing long-term Includes Analysis of market risk market of Analysis at Group level as part of repor of part as level Group at 1) 2) 1) s 1) 2) 1) e of a year. Uncertainty in the the in Uncertainty year. a of e 1) 2) 1) Trading and Trading tribution grid tribution iations from from iations s ulated ulated ting to to ting areas with a with isk shall isk 0-1 year 0-1 16 535 16 612 24 530 12 6 542 6 363 5 57 95 82 - c account into takes also analysis The mandates. the of utilisation maximum expected an or exposure actual of form the take can exposure The taken into account. into taken interes prices, power e.g. between cor the where risk, market total and areas specified the in risk y exposures beyond one year, only the uncertainty relating to the c the to relating uncertainty the only year, one beyond exposures with contracts For year. one is calculations the for period time The million, which is at the same lev same the at is which million, 2222 NOK at calculated was 2015 December 31 of as risk market Total The diversification effect emerges effect diversification The Future interest rate adjustments rate interest Future orrelation, both within the indiv the within both orrelation, calculations. the in reflected is ear 1–3 years 1–3 -1 447 -1 278 -3 3 175 3 460 1 2015 250 155 204 167 58 38 - - 3–5 years 3–5 8 142 8 947 6 345 5 250 1 2014 212 101 208 143 72 39 - - el as last year. last as el idual areas and between the areas the between and areas idual 5 years and more and years 5 as the difference between total m total between difference the as t rates and currency exchange rates is rates exchange currency and rates t Mod. duration Mod. STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 12 987 12 11 277 11 389 41 424 19 8.20% 0.80% 5.60% 2.90% 1.20% 4.80% 2 222 2 532 2 529 1 6 633 6 827 4 914 4 141 1 542 6 284 1 12% -310 3.51 1.32 2.67 2015 2015 2015 906 634 892 11 50 30 17 11 - 2015 Av. interest rate (%) rate interest Av. 2015 r elation elation urrent urrent . . 34 484 34 389 41 424 19 987 12 484 34 898 13 381 11 1.64% 2.31% 1.88% 1.60% 4.80% 3.30% 0.90% 5.30% arket arket 1 141 1 542 6 284 1 804 5 910 2 177 2 349 2 375 1 -172 2014 2014 2014 Total 491 869 7% n/a 11 50 30 25 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY uch 2014 443 . 6 093 party -1 088 or 12 432 12 433 12 663 44 064 42 977 ed value of the been basis and have also is gy k 2015 513 7 874 9 056 -1 725 11 325 10 675 39 444 37 720 guarantees are used, the parent etimes used when entering into s the guarantee must be an luded in the Group risk management. 25 28 27 29 31 ent company guarantees, the ollateral is settled on a weekly ure limits are monitored continuously Note posure with the probability of the ounterparties for financial ener posure corresponds to the recognis onsidered to be very low. Cash c ontracts. ompany is assessed by using ordinary internal credit assessments ounterparty will be classified in the same category as the issuer alculated and reported for all relevant units, in addition to being onsolidated at Group level and inc heet. The extent to which relevant and significant collateral has c parent company guarantees are som internationally rated commercial bank which meets minimum rating requirements. When parent company c Subsidiaries will never be rated higher than the parent company. In cases involving bank guarantees and par guarantee. The individual counterparty expos of financial assets, which are found in the various notes to the balance s provided, is presented below. Counterparty exposure in connection with these agreements are c will therefore not always be settled at period end. There could therefore be an outstanding credit risk at the period end. Similar agreements been established for individual c In order to reduce credit risk in connection with investments, bank agreements. The bank which issues c and reported regularly to the management. In addition, the counter risk is quantified by combining ex individual counterparty defaulting. The overall counterparty ris c c Statkraft’s gross credit risk ex 58 ical s , s liquidity, e a right ial are ettlement ettled each (cash eivables . Statkraft idered to be very low. For all other e, amount and duration. edit rating. The counter-parties . The internal credit rating is based on by not fulfilling its obligations ial energy contracts which are s ontracts are subject to limits for 1)
Credit Credit risk and liquidity risk Consists of NOK 1614 million which is interest-bearing and NOK 110 million which is interest-free ollateral). redit rating. ounterparties. In the event of default, the netting agreements giv ettled. If a contractual counterparty experiences payment problem pecific procedures are applied. See note 10 for more information. ounterparty with regards to volum ounterparty using an internal cr onsidered to be limited. Historically, Statkraft’s losses on rec ales, when investing surplus liquidity and when trading in financ financial key figures. Bilateral c STATKRAFT ANNUAL REPORT 2015 Cash collateral Net exposure credit risk 1) Cash and cash equivalents Gross exposure credit risk Exposure reduced by cash collateral: Derivatives Receivables Short-term financial investments NOK million Gross exposure credit risk: Other non-current financial assets s s the limits are stipulated for the individual counterparty using an internal c Statkraft has entered into agreements relating to interim cash s of the market value of financial derivatives with counterparties c Investment of surplus liquidity is mainly distributed among institutions rated BBB (Standard & Poor’) or better. For investment of surplus have been limited. The counterparty risk for financ through an energy exchange is cons energy contracts entered into, the limits are stipulated for the individual c allocated to different categories c Statkraft has netting agreements with several of its energy trading c to a final settlement where all future contract positions are netted and s CREDIT RISK Credit risk is the risk of one party to a financial instrument inflicting a financial loss on the other party Note Note 9 assumes counterparty risk in connection with energy trading and phy instruments. The total risk of counterparties not being able to meet their obligations is c CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Interest payments Interest loans other and subsidiaries in loans external on Instalments markets non-Norwegian in raised loans on Instalments market Norwegian the from loans bond on Instalments SF Statkraft from debt on Instalments million NOK liabilities long-term external schedule, Maturity sur Group’s the of investment the as needs financing future plan to prepared are forecasts Liquidity trading. energy with connection in guarantees to c minimum to relating requirements s r forecasts, liquidity tools: following the employing by minimised c by payments cash to relation in Fur assets. its by generated flows cash the with coincide not do obligations financial its of terms the because risk liquidity a assumes Statkraft obligations. current its meet to assets insuffic has Group the that risk the is risk liquidity Group’s The RISK LIQUIDITY continued 9 Note Total derivatives 2014 derivatives Total 2015 derivatives Total derivatives currency foreign and rate- Interest derivatives Energy million NOK below. table the in shown periods time the to allocated are values non-discounted the flows, cash the of timing the of understanding the for decisive are dates due contractual where value, market negative with derivatives For sheet. balance the in derivatives as presented are which derivatives, financial of number significant a has Group The period per derivatives of value non-discounted of Allocation 2014 schedule maturity Total 2015 schedule maturity Total liquidity The derivatives. financial and contracts power financial hort-term liquidity target figures, liquidity reserve requirements reserve liquidity figures, target liquidity hort-term ollaterals in connection with tr with connection in ollaterals plus liquidity. liquidity. plus thermore, Statkraft assumes liquidity risk liquidity assumes Statkraft thermore, ash in hand and requirements relating relating requirements and hand in ash ient liquid ient ading both both ading risk is risk , , eporting of of eporting well as well 0-1 year 0-1 0-1 year 0-1 8 285 8 940 5 432 1 297 4 6 145 6 797 3 445 1 353 2 211 59 - - the collateral required by energy exchanges in connection with tr with connection in exchanges energy by required collateral the in fluctuations significant with cope to established been has guarantee A also to act as a buffer against v against buffer a as act to also fac credit unused and placements s objectiv The scorecard. balanced its cover to ability Statkraft’s s for figure target individual An flows. cash Group’s the in volatility the reduces significantly guarantee The contracts. power financial atisfactory liquidity reserve cons reserve liquidity atisfactory 1–2 years 1–2 1–2 years 1–2 5 801 5 700 7 267 1 199 6 1 405 1 235 861 201 660 - - 2–3 years 2–3 2–3 years 2–3 7 159 7 215 1 978 238 775 666 364 302 - - - future obligations, is included in the Group’s Group’s the in included is obligations, future hort-term liquidity capacity, whic capacity, liquidity hort-term olatility in the Group’s cash flows. flows. cash Group’s the in olatility es relating to Statkraft’s desir Statkraft’s to relating es isting of available cash in hand, financial financial hand, in cash available of isting ilities to cover e.g. refinancing risk, and risk, refinancing e.g. cover to ilities 3–4 years 3–4 3–4 years 3–4 1 178 1 383 7 784 4 000 1 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 967 232 400 562 598 447 151 4–5 years 4–5 4–5 years 4–5 6 577 6 718 3 000 3 519 199 762 178 98 80 - - 5 years and later and years 5 5 years and later and years 5 e for a for e h reflects reflects h ading 11 255 11 986 22 184 16 2 482 2 036 1 862 1 891 1 050 3 971 65 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
al ts and
y e the and ted for urve is tion, the edit r whereby on quoted and quoted ontracts ices in different wap interest rate) is used s erved market interest rates (swap d prices from relevant commodity ounted to net present value. The future against calculations made by the c titutions. If quotes are not available for h as metal, gas, petroleum produc s adjusted for the expected inflation. izon quoted, the price curve is adjusted atives. The market interest rate c waps and combined interest rate and ontracts extend beyond the horiz Shares and shareholdings are valued at Certificates and bonds are valued at listed contracts are priced based on the forward price of EU are valued at forward price and adjusted for inflation Several energy contracts have pr 2 Statkraft has energy contracts where the contract price is CO The market interest rate curve ( contracts 2 urrency swaps, is determined by discounting expected future cash flows ubject to a test of reasonablenes ounterparties to the contracts. ecurities are valued by discounting expected future cash flows. ash flows are discounted using obs oal. These are valued using forwar urrencies. Quoted foreign exchange rates from The European Centr urrency. If there are no quotes for the entire time period in ques tipulated on the basis of the publicised swap interest rates. A c urcharge is added to the market interest rate curve in cases wher redit risk is relevant. This applies to all external bilateral c lassified as assets and liabilities. c expected future cash flows are dis Raw materials c Allowance (EUA) quotas and Certified Emmision Reduction (CER) quotas. For time horizons beyond the hor for expected inflation. Green certificates from the last noted price quotation. Foreign currency c The fair value of interest rate s to present value through the use of observed market interest rates c FAIR VALUE OF SHORT-TERM FINANCIAL INVESTMENTS Certificates and bonds prices. Shares and shareholdings FAIR VALUE OF LONG-TERM LIABILITIES, FIRST YEAR’S INSTALMENT ON LONG-TERM LIABILITIES AND LOANS TO ASSOCIATES The fair value is calculated on the basis of valuation techniques c interest rate curve) adjusted upwards to account for credit risk exchange rates. on energy exchanges, the price is indexed against raw materials suc exchanges and major financial ins the entire contract delivery period, the commodity prices are adjus inflation based on the most recent quoted price in the market. CO c Bank (ECB) are used in the valuation of contracts denominated in foreign c interest parity is used to calculate exchange rates. Interest rates as the basis for discounting deriv s s c FAIR VALUE OF CURRENCY AND INTEREST RATE DERIVATIVES quoted exchange rates from ECB. The valuation of forward currenc exchange contracts is based on quoted exchange rates, from which the forward exchange rate is extrapolated. Estimated net present value is s quoted prices where such are available and the securities are liquid. Other s prices are unavailable. If the c 60 uch ed as ial arket e sheet hanges isation e not all , e own et prices ical well as e sheet, energy k s ivatives ash flows total ts are tipulated on in the ay have ategorised quoted on waps, Financial instruments used Within energy trading, financial
swaps and forward exchange e evaluated at fair value with c ial hedging strategy. The hedging ent without necessarily reflecting the ameters that have been applied in the y ivatives recognised in the balanc gy trading and financial activities. In acts. Financial instruments are us h, short-term financial investments and ate has been changed from fixed to ted production volume. Financial e used as hedging instruments in ons beyond the period for which there eflected in the accounts. Becaus gy-related financial products, as a significant part of Statkraft’s e being reflected in the accounts ates on energy exchanges, where s e adjusted for expected inflation. e on the balance sheet date. The m in energy trading Financial Instruments Energy exchange contracts are valued at official discounted alued using the official closing r losing rates on the balance sheet date. hanges in value for financial instruments may result in volatility in the ombined interest rate and currenc ontracts. Financial derivatives ar Several electricity contracts refer to area prices. These contrac STATKRAFT ANNUAL REPORT 2015 financial hedging relationships ar v For other bilateral power contracts, the expected cash flow is s whenever these are available. The fair value of other energy der has been calculated by discounting expected future cash flows. Below is a description of assumptions and par determination of fair value. Power price the basis of a market price curv price curve is stipulated on the basis from official closing rates energy exchanges. For time horiz are official quotes, the prices ar FAIR VALUE OF ENERGY DERIVATIVES The fair value of energy derivatives are derived from quoted mar c c income statement without fully reflecting the financial reality. market value of energy- and ener of future revenues from the expec the effect of changes in value of financial energy derivatives m major effects on the income statem c accordance with the Group’s financ objects are considered to be assets in foreign currency, future c or loan arrangements measured at amortised cost. For selected loan arrangements where the interest r floating (fair value hedging), hedging of some net investments in foreign units and cash flows, hedging is r c exist. Separate models are used for regional prices where official closing . instruments in energy trading mainly consist of financial and phy position and results. Most of the financial instruments can be c instruments are used in the Trading and Origination activity. The Trading and Origination activity is managed independently of the Group’s production. Its main objective is to achieve profit from changes profit from non-standardised contr part of the Group’s financial hedging strategy for continuous optim agreements relating to purchase and sale of power, gas, oil, coal, carbon quotas and green certificates. Der are shown as separate items and ar production of power does not qualify for recognition in the balanc underlying business. Financial instruments in financial activities in financial activities primarily consist of loans, interest rate s Financial instruments account for addition, Statkraft has other financial instruments such as accounts receivable, accounts payable, cas equity investments. Financial instruments Note Note 10 balance sheet and are of material importance for the Group’s financ into the two main categories; ener in value recognised in the income statement. As the Group’s futur CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Interest-free debt to Statkraft SF Statkraft to debt Interest-free payable taxes Indirect payable Accounts debt short-term Other facilities Credit SF Statkraft to debt interest-bearing Short-term debt long-term on instalment year’s First collateral cash to connected Debt debt other and subsidiaries in debt External markets non-Norwegian in issued Debt market Norwegian the in issued Bonds SF Statkraft to debt interest-bearing Long-term cost amortised at liabilities Financial Total deposits cash and Cash receivables Other collateral cash to related Receivables associates to loans Short-term receivable Accounts receivables long-term other and Bonds associates to Loans cost amortised at assets Financial million NOK cost amortised at recognised liabilities and Assets continued 10 Note Total derivatives rate interest and Currency derivatives Energy value fair at liabilities Financial Total securities and shares Other assets financial Available-for-sale Total bonds notes, promissory certificates, funds, market Money investments financial Short-term derivatives rate interest and Currency derivatives Energy value fair at assets Financial million NOK 2014 Total derivatives rate interest and Currency derivatives Energy value fair at liabilities Financial Total securities and shares Other assets financial Available-for-sale Total bonds notes, promissory certificates, funds, market Money investments financial Short-term derivatives rate interest and Currency derivatives Energy value fair at assets Financial million NOK 2015 data. market observable on based not is which liability or asset the for Data 3: Level prices. from derived i.e. indirectly, or prices, as i.e. directly, either liabilities or assets for observable are which 1, Level in included prices quoted the than data Other 2: Level liabilities. or assets identical for markets active in prices quoted Non-adjusted 1: Level levels: following the has hierarchy value fair The measurements. the of preparation the in used input the of importance the reflects which hierarchy value fair a using by measurements value fair classifies company The measurement value fair for level among divided value, fair at recognised liabilities and Assets Total liabilities interest-free Other 61 Note Note Note 32 32 32 32 31 31 31 31 31 31 31 31 31 29 27 27 27 27 25 25 28 28 25 29 28 28 28 28 25 29 28 28 Recognised value Recognised Fair value measurement at period-end using: period-end at measurement value Fair using: period-end at measurement value Fair 4 262 4 061 3 594 1 -55 387 -55 166 -27 Level 1 Level 1 Level 26 236 26 -6 857 -6 362 -1 560 -2 000 -1 508 -4 614 -1 794 -2 050 -7 443 758 550 513 530 -45 -45 -77 -77 8 506 8 398 1 477 2 903 5 642 2 974 4 41 41 75 75 -400 335 -63 -11 - - - - 2015 -2 Fair value Fair -57 085 -57 449 -28 26 479 26 -6 857 -6 362 -1 560 -2 000 -1 598 -4 614 -1 794 -2 299 -7 -9 561 -9 930 -6 631 -2 028 -6 823 -4 205 -1 8 506 8 398 1 477 2 903 5 662 2 197 5 9 381 9 312 4 069 5 325 7 739 2 586 4 Level 2 Level 2 Level -477 335 -63 -11 2015 43 43 40 40 -2 - - - - STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Recognised value Recognised -1 256 -1 256 -1 020 -3 020 -3 2 294 2 294 2 471 3 471 3 -46 552 -46 651 -16 Level 3 Level 3 Level 27 967 27 -6 878 -6 058 -1 864 -1 120 -1 897 -6 088 -1 597 -3 791 -6 143 143 9 602 9 164 2 665 2 427 7 254 1 756 4 -200 -400 100 ------2014 -8 - Fair value Fair -10 863 -10 015 -50 193 -19 Fair value Fair value Fair 15 936 15 389 12 155 28 -6 930 -6 933 -3 125 -9 823 -4 302 -4 878 -6 058 -1 864 -1 120 -1 041 -7 088 -1 597 -3 455 -7 3 061 3 312 4 120 8 739 2 587 8 602 9 164 2 665 2 427 7 254 1 944 4 -200 -513 443 257 257 550 513 100 2014 84 84 -8 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2 13 16 2014 Total 137 283 594 844 487 ents -864 -682 2 602 1 038 1 705 1 038 m 6 647 7 118 8 476 1 125 9 601 4 302 2 346 ontract -7 014 -4 412 -1 058 e row in e ivatives, Net value Net value h set a 37 316 10 781 10 675 10% increase om - - - 94 79 - - 1 110 pledged pledged 2015 -15 1 614 1 725 2 477 2 477 Financial collateral Financial collateral 347 961 307 -473 1 308 2 275 -1 256 -2 071 -3 020 -3 532 -1 256 fair value 10% reduction ------Financial liabilities at and interest rate derivatives ar e if a party is bankrupt or has defaulted . Cash collaterals received or pledged y 1 20 20 13 atives are booked gross for each c not offset in not offset in -23 Note 137 -570 balance sheet balance sheet 2 294 1 207 3 614 2 850 2 294 fair value Netting agreements, Netting agreements, Financial assets at amount amount Booked Booked 8 587 2 739 4 302 4 823 9 125 7 196 11 326 10 675 37 410 10 781 - - 9 9 eparated in assets and liabilities riteria of offsetting in the statement of the financial position. ounterpart, normally a bank. Financial collateral can also be cas ide on a restricted bank account to cover forthcoming interest pay s Termination can occur for instanc in the balance sheet. Financial collateral is typically cash collateral payments to/fr c and instalments on a loan. In the tables, the energy, currenc s are booked net per counterpart and presented as current assets/liabilities, regardless of the lifetime of the corresponding derivative. The der both current and non-current, are therefore presented on the sam the table above. on the agreement. Such close-out netting does not in itself meet the c Currency and interest rate deriv 7 732 7 740 6 258 7 732 7 740 6 258 62 Amount offset Amount offset and when uch 4 831 7 196 2 748 16 933 12 033 16 865 37 410 17 039 16 318 19 066 et and the Gross amount Gross amount s 27 28 28 31 31 32 28 28 Note e to mitigate exposure to credit loss by ed on various types of master for instance same currency and v eable right to offset the asset and the ial instruments where there are netting c ash flows between the two parties for 2015 for 2014 ertain conditions are met, such as offsetting is permitted in the jurisdiction of the counterparty. c STATKRAFT ANNUAL REPORT 2015 liability, and intends to settle on a net basis or realise the as agreements setting the standard terms and conditions between the two parties. In general, the master netting agreements permit netting of payments and involve offsetting c allowing set-offs when an agreement is terminated, provided that s liability simultaneously. For energy derivatives, futures and spot transactions, Statkraft has agreements with counterparties bas maturity. The master agreements further ser Short-term interest-bearing debt Other interest-free liability The tables show a reconciliation of gross amounts, booked amounts Energy derivatives Currency and interest swaps Total derivatives (current and non-current) Long-term interest-bearing debt Financial liabilities NOK million net value (net exposure) of financ agreements or similar. A financial asset and a financial liability are presented net in balance sheet when Statkraft has a legally enfor Currency and interest swaps Total derivatives (current and non-current) Receivables Financial assets NOK million Energy derivatives The effects are not symmetrical due to volume flexibility in the contracts that reduce the downside. NETTING AGREEMENTS NOK million Net effect from power prices Net effect from gas prices Net realised gain (+)/loss (-) Sensitivity analysis of factors classified to Level 3 Unrealised changes in value, incl. currency translation effects Additions Moved from Level 3 Closing balance 31.12.2014 Net realised gain (+)/loss (-) Opening balance 01.01.2014 Unrealised changes in value, incl. currency translation effects Additions Moved from Level 3 Closing balance 31.12.2015 Assets and liabilities measured at fair value based on Level 3 NOK million Opening balance 01.01.2015 Energy contracts Financial items Total Note Note 10 continued Total unrealised changes in value NOK million CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS bought or sold on the spot market. market. spot the on sold or bought hydropower its optimises Statkraft 2) 1) instruments hedging of value fair Total operations foreign in investments net in used instruments Hedging hedging flow cash in used instruments Hedging hedging value fair in used instruments Hedging million NOK instruments hedging of value Fair ins hedging and object hedging the of terms critical The EURIBOR. 6-month and 3-month floating to fixed from counterparties the as banks major with into entered million, 1200 EUR of value nominal a with swaps rate interest are instruments hedging The million. 1200 EUR of value nominal fix issued are objects hedging The instruments hedging as designated as the and relationships, hedging des been have bonds Issued hedges. hedging value Fair 11 Note 2) 1) revenues Sales Other contracts energy hedging Currency heating District activities End-user grid Distribution activities) access market (excl. Origination and Trading Portfolio Management Asset Dynamic Continental and Nordic contracts Long-term prices statutory at sales Concessionary certificates green including sales, spot Physical million NOK s to obligations contractual physical has Statkraft that event the In into. contrac of irrespective done is This prices. spot future expected av of value the of assessment an dis trading, financial industry, fr come revenues sales Statkraft’s 12 Note inefficiency Hedge risk hedged the to relation in objects, hedging on (-) (+)/loss gain Net instruments hedging on (-) (+)/loss gain Net million NOK hedging value fair on information Other statement. income the in recognised is inefficiency The assumed. is efficiency hedging 90–110% and same, the approximately heating and power sales to end-us to sales power and heating upply power that deviate from ac from deviate that power upply The value represents the currency effects from financial instruments. Currency effects are recognised in other comprehensive income. are recognisedinothercomprehensive Currency effects instruments. financial from effects currency the represents value The income. comprehensive in other recognised are value fair financial instruments.Changes in of value fair the represents value The Statkraft has a number of physical contractual obligations of varying duration to both Norwegian and international customers. Norwegian and both duration to varying obligationsof contractual physical of number a has Statkraft prices. at concessionary municipalities to power supply to obligations has Statkraft Hedge accounting Hedge Sales revenues Sales
2) Three loan arrangements are treated as fair value fair as treated are arrangements loan Three tribution grid operations, as well as district district as well as operations, grid tribution ailable water in relation to actual and actual to relation in water ailable s tual output, the difference is either either is difference the output, tual generation in the Nordic area bas area Nordic the in generation . The agreements swap interest r interest swap agreements The . om spot sales, contract sales to the the to sales contract sales, spot om ed-interest rate bonds with a total total a with bonds rate ed-interest ociated interest rate swaps have been have swaps rate interest ociated ers. . trument are deemed to be to deemed are trument ignated as hedging objects in the the in objects hedging as ignated 1) 1) ts entered entered ts 2) ate ate ed on ed 63 Necessary spot purchases are rec are purchases spot Necessary m 2647 NOK that is hedging the of effect accumulated The income. c The included. is Ltd UK Statkraft in investment net the of hedging the in production in the form of purchas of form the in production underly the optimise to used are contracts financial and Physical exceptions minor some are There hedged. flows cash of accounting hedging flow Cash m 883 NOK is 2015 year the for hedging the of effect The 2015. of comprehensiv other in recognised sy in million 220 GBP addition, In Centre. Treasury Statkraft in Statkraft. in segments different the between revenues sales of split the about details more for 4 note See thes of description detailed more S.A. Pilmaiquén Eléctrica Empresa in debt to related comprehensiv other in recognised inv net the of hedging as designated is debt external AS’ Statkraft operation foreign in investments net of Hedging urrency effects of this debt are r are debt this of effects urrency subsidiaries, including the newly acquired company acquired newly the including subsidiaries,
As a general rule, the Group does Group the rule, general a As e contracts. contracts. e ecognised in other comprehensive other in ecognised e and sales positions. See note 7 for a for 7 note See positions. sales and e e income as a negative effect. negative a as income e end the at effect negative a as income e orded as a correction to power s power to correction a as orded STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 51 586 51 071 10 858 34 -1 969 -1 270 -2 3 781 3 -456 -310 -272 456 612 689 983 829 281 346 2015 2015 2015 20 - EUR 1000 million of of million 1000 EUR not use hedge use not nthetic debt debt nthetic ing estment estment -1 764 -1 illion ales. 48 246 48 174 31 illion is illion
-209 -834 4 002 4 722 9 207 985 -55 2014 2014 2014 643 966 818 655 349 -11 -73 -2 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2014 2014 2014 2014 498 384 114 150 3 510 4 008 4 310 3 427 2 403 3 051 3 421 3 348 17 527 25 264 2015 2015 2015 2015 164 455 438 444 3 545 3 572 3 795 1 052 1 507 4 064 3 070 2 499 24 758 31 892 64 1) 1) Payroll costs and number of full-time equivalents Energy purchase Other Other operating revenues 1) Pension costs are described in further detail in note 16. Other energy purchase includes energy purchase related to activities where Statkraft provides market access to smaller producers of renewable energy as well as unrealised Other operating revenues in 2015 include a gain of NOK 226 million related to the sale of the subsidiary Småkraft. In 2014 the corresponding line included a gain of NOK 1213 million STATKRAFT ANNUAL REPORT 2015 Number of full-time equivalents as of 31.12. 1) Average number of full-time equivalents Group Employers' national insurance contribution Pension costs Other benefits Total NOK million Salaries Note 15 Total 1) energy purchase, see note 35. NOK million Gas purchase End-user activities Other energy purchase Note 14 1) related to sale of hydropower plants in Finland and gain related to sale of shares in UK wind power plants at a million.total of NOK 1346 See note 5 for further information. NOK million Revenue from rental of power plants Other operating revenues Total Note Note 13 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS an annual premium and are respons are and premium annual an (SPK) Fund Pension National entitlements. pension years’ three least at have they provided entitlement pens of 66% than benefits pension lower in result may which expectancy, life for adjusted benefit pension their get will later or 1943 in born Those 12G. to up salary, pensionable of 66% to amounting benefits pension provide schemes retirement coor are benefits scheme Pension s r the and Agreement Transfer Fund Nor the Act, Fund Pension Service ac in schemes pension occupational companies Norwegian Group’s the in Employ companies. insurance in as well as funds pension own (SPK), c risk entails also scheme contribution the pensions, retirement to addition In 12G. and 7.1G between salary pensionable the of 18% and (G), amount bas Scheme’s Insurance National the of 7.1 to up salary pensionable the of 6% are contributions The scheme. contribution defined a is 2014 January 1 from Norway in companies owned wholly in employees schemes contribution defined both cover and statutes, local with acc in established been have schemes benefit pension Statkraft’s 16 Note that qualify as discount rate according to IAS 19. IAS to according rate discount as qualify that 2) 1) disability and mortality for factors Demographic (G) amount basic Scheme’s Insurance National the of Adjustment pensions current of Adjustment adjustment Salary yield projected and rate Discount used are assumptions following The ar SPK the from benefits Pension retir before leave who Employees Schem Insurance National Norwegian schem pension retirement early Norwegian the under 62 of age the com the of majority The pensions. cover schemes benefit defined The schem pension their organised have schemes benefit defined Funded Statk schemes contribution Defined c defined are schemes benefit pension new All schemes. benefit defined ervice pensions. pensions. ervice overage. schemes. ontribution The discount rate is based on high quality corporate bonds (OMF). Statkraft is of the opinion that the OMF market represents a deep and liquid marked with relevant durations relevant with and liquidmarked represents adeep OMF market the opinion that of the is Statkraft bonds(OMF). corporate quality high on based is rate discount The localconditions. assumptions adaptedto apply entities entities. Foreign Norwegian for apply assumptions The Pensions Companies with schemes in the SPK pay SPK the in schemes with Companies 2) e guaranteed by the Norwegian state. Norwegian the by guaranteed e ement age receive a deferred pens deferred a receive age ement panies also offer early retirement from from retirement early offer also panies dinated with the benefits provided by the the by provided benefits the with dinated wegian Public Pension Service Pens Service Pension Public wegian ionable income. income. ionable retirement, disability and surv and disability retirement, egulatory framework governing public governing framework egulatory ible for the financing of the sc the of financing the for ible c Fund Pension National the in es Norwegian companies in the Group Group the in companies Norwegian participate in public service public in participate ordance with the Norwegian Public Norwegian the with ordance e. At maximum accrual, the the accrual, maximum At e. r 1) aft’s pension scheme for new for scheme pension aft’s and ivor ordance heme. heme. e. e. ion ic ees ion
65 5 or 10-year duration. In this s this In duration. 10-year or 5 3, 1, with bonds in invested were assets the though as simulated is assets fund pension the of management but asset-based, not is scheme SPK The entitlements for the year are calculated using the accrued benefits accrued the using calculated are year the for entitlements Apr 30 closed was agreement This 12G. exceeding income pensionable their of portion that of 66% to equivalent pension disability and retirement Nor securities, interest-bearing foreign and Norwegian of portfolio diversified a in assets pension the placed have companies insurance companies insurance and funds Pension was (SPK) Fund Pension National the in scheme benefit pension The maturity. to held s ex for adjusted are sheet balance the in liabilities pension Net pres and schemes benefit defined calculations Actuarial entitlements. pension years’ three least at have they provided 12G, above scheme the for entitlement pension deferred a receive age agr closed the of members Existing 2012. pens whose employees all provides that agreement pension a into entered have Norway in companies Group schemes benefit defined Unfunded managers. asset external through properties loans secured shares, foreign and adjustments. y the during income comprehensive other in recognised gain actuarial The year. the of end the at data salary and numbers c alary increases until retirement age. Calculations are based on s on based are Calculations age. retirement until increases alary Januar 1 employees new for losed ear is mainly due changes in ass in changes due mainly is ear Present value of accrued pension entitlements for for entitlements pension accrued of value Present imulation it is assumed that the bonds are bonds the that assumed is it imulation ent value of accrued pension accrued of value ent umptions for discount rate and s and rate discount for umptions to members, hedge funds and funds hedge members, to eement who leave before pensionable before leave who eement y ionable incomes exceed 12G with a with 12G exceed incomes ionable 2014. 2014. STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT In addition to the above, some above, the to addition In K2013/IR73 The pension funds and funds pension The 31.12.2015 2.25% 1.50% 2.50% 2.50% pected future future pected K2013/IR73 31.12.2014 wegian taff taff method. method. alary 2.50% 1.75% 2.75% 2.20%
il FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY - - 5 -1 % 62 52 38 21 2014 2014 2014 2014 2014 2014 2014 -27 -14 -11% -11% 282 228 114 611 323 282 228 777 157 166 312 857 421 -157 -269 -269 -140 -110 2 181 1 354 6 385 4 663 1 722 2 655 2 655 6 095 6 996 4 117 4 663 3 385 4 663 2 968 9% 1 % 12% - - Adjustment of G 99 74 23 50 69 35 2015 2015 2015 2015 2015 2015 2015 -99 -25 276 899 473 297 152 375 444 580 242 238 297 152 -134 -167 -590 -182 -105 4 896 3 524 4 896 2 210 2 011 1 429 5 961 4 896 1 065 1 887 2 125 6 996 6 541 4 663 -1 % -7% -16% 7% 1 % Salary adjustment 15% -1 % 23% 21% 1 % -20% -16% Discount rate 66 see note 25 liability as of 31.12. Sensitivity analysis upon changes in assumptions Increase (+)/decrease (-) in net pension cost defined benefit schemes for the period Increase (+)/decrease (-) in gross defined pension STATKRAFT ANNUAL REPORT 2015 Employer payments Total pension cost - see note 15 Employers' national insurance contribution Net pension cost defined benefit schemes Defined contribution schemes Interest expenses Projected yield on pension assets Scheme changes Employee contributions Pension cost recognised in the income statement Defined benefit schemes NOK million Present value of accrued pension entitlements for the year Actuarial gains and losses recognised in other comprehensive income NOK million Accumulated actuarial gains and losses recognised in other comprehensive income before tax 31.12 Other Fair value of pension assets 31.12 Pension assets comprise Equity instruments Interest-bearing instruments Total contributions Paid benefits Currency translation effects Fair value of pension assets 31.12 Fair value of pension assets 01.01 Net change in assets due to additions/disposals Projected yield on pension assets Actuarial gains/losses Gross defined benefit pension liabilities 31.12 Movement in the fair value of pension assets for defined benefit pension schemes NOK million Scheme changes Actuarial gains/losses Paid benefits Currency translation effects Defined gross benefit pension liabilities 01.01 Net change in liabilities due to additions/disposals Present value of accrued pension entitlements for the year Interest expenses Of which net pension liability - see note 30 Movement in defined benefit pension liability NOK million Present value of accrued pension entitlements for unfunded defined benefit schemes Employers' national insurance contribution Net pension liabilities in the balance sheet Of which net pension asset - NOK million Present value of accrued pension entitlements for funded defined benefit schemes Fair value of pension assets Net pension liability for funded defined benefit schemes Employees Pensioners Breakdown of net defined benefit pension liability Note Note 16 continued Number of employees and pensioners covered by defined benefit schemes CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Rent payments Compensation parties third by operated plants Power Materials services third-party of Purchase million NOK 18 Note was amount corresponding the 2014, adjustm the to relating regulations the with accordance in 4.0% of rate interest an at discounted es is statements financial annual the in for provided not are that obligations fee licence future Group’s the of value present The thereafter. year fifth every and granted was licence the after years five January 1 on place taking adjustment first the with Index, Price Consumer the with line in adjusted are fees Licence Total fees Licence tax Property million NOK 17 Note Net financial items financial Net Total assets financial on gain/loss and Impairment securities and derivatives on losses and gains Net items financial Other effects currency Net Total expenses financial Other costs borrowing Capitalised expenses interest Other debt external expenses Interest expenses Financial Total income financial Other income Interest income Financial million NOK 2015 19 Note 2) 1) Total expenses operating Other Insurance Travel Marketing IT Other operating expenses includes costs of NOK 789 million related to impairment in Turkey. See note 23 for further information. further for See note23 in Turkey. to impairment related 789 million NOK of costs includes expenses operating Other and otherservices. expenses entrepreneur consultants, includes mainly services third-party of Purchase Other operating expenses operating Other fees licence and tax Property Financial items Financial 2) 1) NOK 9627 million with an interes an with million 9627 NOK Fair value through value Fair profit or loss or profit -3 323 -3 024 -3 -232 -232 -88 -88 21 21 - - - - - t rate of 3.2%. of rate t 67 Amortised -1 699 -1 234 -1 322 -1 Assessment basis Assessment -621 -165 266 156 123 -13 33 cost - - - ent of licence fees, annual compensation and funds etc. In In etc. funds and compensation annual fees, licence of ent Available for sale for -4 -4 -4 ------1 679 1 338 1 1 302 1 465 1 4 651 4 341 141 191 129 239 347 164 267 407 2015 2015 method -713 -723 -723 Equity 10 10 ------STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT timated at NOK 8633 million, million, 8633 NOK at timated 421 200 234 234 -13 -13 Bank ------5 318 -5 445 -3 058 -2 410 -1 1 630 1 319 1 -236 -232 -736 -178 3 493 3 367 1 266 421 378 311 Total 2014 2014 174 132 169 123 246 325 113 280 563 43 -4 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY -83 -14 Total 267 592 859 360 -14 -73 Total 655 818 -159 9 722 4 002 -1 426 -1 309 -4 791 -1 028 -1 043 -6 283 -1 028 -4 791 33 121 48 246 -25 264 - -2 -46 ------971 612 -38 -38 8 294 3 988 1 183 197 197 Realised Bank -905 -747 33 121 46 942 -26 561 2014 - 14 -27 -13 206 -317 ------1 429 1 304 1 298 -5 974 -1 028 -4 412 512 512 512 Unrealised Equity method -4 20 Total 281 829 -232 3 781 -3 445 10 071 36 604 51 586 ------31 892 -14 -14 -14 for sale Available - -26 311 -118 7 974 1 044 3 743 -4 624 Realised 36 604 49 558 -30 211 2015 - - - 59 81 -83 cost 140 360 -972 -121 -816 -2 285 -2 961 Assessment basis - Amortised -4 38 -30 138 68 -215 -206 2 097 2 028 1 171 1 308 -1 681 Unrealised - - - - - 11 11 -454 -454 -3 072 -1 600 -1 028 -1 028 profit or loss Fair value through Unrealised effects recognised in the income statement Total unrealised effects Other financial items Net gains and losses on derivatives and securities Impairment and gain/loss on financial assets Eliminations Total sales revenues Energy purchase Net currency effects Nordic and Continental Dynamic Asset Management Portfolio Trading and Origination (excl. market access activities) End-user Other sales revenues NOK million Sales revenues Long-term contracts STATKRAFT ANNUAL REPORT 2015 Note 20 Total Net financial items Other financial items Net gains and losses on derivatives and securities Impairment and gain/loss on financial assets Other financial expenses Total Net currency effects Interest expenses external debt Other interest expenses Capitalised borrowing costs Other financial income Total Financial expenses NOK million Financial income Interest income Note Note 19 continued 2014 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Tax included in receivables - see note 27 note see - receivables in included Tax carryforwards tax resource Natural tax Prepaid million NOK receivables in included Tax sheet balance the in payable Taxes years previous from payable taxes Net payable tax rent Resource payable tax resource Natural payable tax Income million NOK sheet balance the in payable Taxes statement income the in expense Tax contributions group of net tax deferred in Change tax payable years previous to related Corrections payable tax Withholding payable tax rent Resource payable) tax resource natural (including payable tax Income million NOK statement income the in expense tax The 21 Note without tax effect entail recycling of currency translation effects, depreciations on added values and changes in value of equity instruments. ofequity in value andchanges added values on depreciations translation effects, currency of recycling entail effect tax without 2) 1) rate tax Effective expense Tax differences permanent Other assets tax deferred unrecognised in Change years previous to relating Changes income Tax-free associates from profit of Share rates tax in Change differences rate tax Foreign tax rent Resource of taxes on Effect 27% of rate nominal a at expense tax Expected tax before Profit million NOK rate tax effective and rate tax Norwegian nominal of Reconciliation Other permanent differences are mainly non-deductible expenses and items included in the profit and loss statement without tax effect. Items included in the profit and loss statement loss profit and in the included Items effect. lossstatementwithouttax profit and in the and itemsincluded expenses non-deductible mainly are differences permanent Other Turkey. Sweden and in impairments to related is mainly assets tax deferred unrecognised in Change Taxes 2) 1) 69 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -188.5 % -188.5 2 825 2 481 1 548 1 481 1 1 548 1 356 1 -222 -821 -255 -122 -195 -185 -198 562 520 395 591 358 429 352 751 -66 -46 2015 2015 2015 2015 42 15 51.0 % 51.0 4 045 4 483 2 143 2 937 7 546 3 792 1 045 4 792 1 435 1 -810 -178 -509 508 239 245 319 604 831 512 306 -76 2014 2014 2014 2014 78 78 - - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2014 352 298 292 451 187 -435 -755 -682 -227 -184 -282 -279 8 525 2 715 8 137 1 298 9 435 6 609 2 509 6 708 1 471 8 180 31.12.15 31.12.14 -2 564 -2 244 - - - - - 20 11 54 -98 245 -147 -242 -406 -349 1 545 1 331 companies companies and sale of and sale of Acquisitions Acquisitions - - -3 81 44 2015 -26 -15 -35 Other Other 314 180 353 239 233 353 162 -142 -172 -287 -148 -279 income income comprehensive comprehensive -7 71 -51 380 132 125 186 199 581 114 512 -161 -405 -320 -255 -588 statement statement Tax expense Tax expense in the income in the income 292 451 635 750 -682 -227 -605 -215 1 291 8 116 6 609 2 509 6 708 1 471 8 180 6 654 1 963 6 824 01.01.15 01.01.14 -2 244 -2 358 70 2) 2) 1) 1) 1) 1) Tax assets related to negative resource rent tax carryforward that are estimated used within the next ten years, are recognised in the balance sheet. Normal production and curve price The Group also has deferred tax assets not recognised in the balance sheet. This mainly relates to Germany with not recognised deferred tax assets of NOK 1040 million as of STATKRAFT ANNUAL REPORT 2015 Translation differences Changes in fair value of financial instruments Total deferred tax recognised in other comprehensive income Deferred tax recognised in other comprehensive income NOK million Remeasurement of pension obligations 31.12.2015 (NOK 1213 million as of 31.12.2014). 2) expectations for the next ten years form the basis for the calculation of expected future taxable profit. Off-balance sheet deferred tax assets related to negative resource rent tax. carryforward amounted to NOK 1336 million as of 31.12.2015 (NOK 1594 million as of 31.12.2014) Total net deferred tax liability Of which presented as deferred tax asset, see note 22 Of which presented as deferred tax liability, see note 30 1) Other long-term items Tax loss carryforward/compensation Deferred tax, resource rent tax Negative resource rent tax carryforward NOK million Current assets/current liabilities Property, plant and equipment Pension liabilities Of which presented as deferred tax liability, see note 30 Deferred tax, resource rent tax Negative resource rent tax carryforward Total net deferred tax liability Of which presented as deferred tax asset, see note 22 Property, plant and equipment Pension liabilities Other long-term items Tax loss carryforward/compensation NOK million Current assets/current liabilities The following table provides a breakdown of the net deferred tax liability. Deferred tax assets and deferred tax connected with various tax subjects/regimes are presented separately in the balance sheet. Deferred tax assets are recognised in the balance sheet to the extent that it is probable that these will be utilised. Note Note 21 continued BREAKDOWN OF DEFERRED TAX CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS development activities in connection with existing plants/energy existing with connection in activities development gener include sources energy new to relating activities Research 31.12 at Balance disposals on amortisation/impairment Accumulated Impairment Amortisation effects translation Currency subsidiary a of disposal on Derecognised Disposals assets non-current to/from Transferred combinations business from Additions Additions 01.01 at Balance 2015 million Nok acquisitions. 3) 2) 1) Total Other Goodwill asset tax Deferred million NOK 22 Note with NOK 104 million and NOK 102 m 102 NOK and million 104 NOK with per also Group the preservation, and optimisation energy of fields the within methods new develop and knowledge new gain to order In c that areas other or technologies developm and research Group’s The DEVELOPMENT AND RESEARCH lifetime economic Expected 31.12 at Balance 31.12 of as impairment and amortisation Accumulated 31.12 Cost 31.12 at Balance disposals on amortisation/impairment Accumulated Impairment Amortisation effects translation Currency subsidiary a of disposal on Derecognised Disposals assets non-current to/from Transferred combinations business from Additions Additions 01.01 at Balance 2014 million Nok 4) 31.12 at Balance 31.12 of as impairment and amortisation Accumulated 31.12 Cost Includes rights in connection with leasehold improvements for power plants transferred from Statkraft SF and excess values related to physical power sales agreements from to physicalpowersales related and excessvalues from StatkraftSF plants transferred for power improvements leasehold with connection in rights Includes businesses. of acquisitions through valueidentified rest isexcess with deferredtax.The associated goodwill technical mainly is amount The 21. note in detail more in presented is tax Deferred Impairment is related to Swedish wind farms. wind Swedish to related is Impairment 3) 2) 4) Intangible assets Intangible 1) ould provide a basis for future ac future for basis a provide ould ent activities are focused on inv on focused are activities ent illion, respectively. illion,
See note 23 for further information. for further 23 note See sources. Research and development activities carried out in 2015 and 2014 are expensed are 2014 and 2015 in out carried activities development and Research sources. al research projects. These projec These projects. research al tivities/projects. tivities/projects. estigating potential new energy s energy new potential estigating 71 ts are intended to provide further provide to intended are ts ources and developing existing plants and technologies. technologies. and plants existing developing and ources Goodwill Goodwill 1 550 1 115 2 550 1 060 1 1 116 1 -565 -160 -517 -231 599 599 599 824 -50 34 17 26 27 ------0 4 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 10–22 years 10–22 knowledge on knowledge 2 974 2 762 3 974 2 859 1 368 1 822 5 974 2 550 1 298 1 1 368 1 703 1 368 1 395 1 Other Other -788 -318 -202 -335 -156 2015 forms research and research forms 323 -31 -24 -40 -17 77 63 39 -1 - - - - 7 -1 353 -1 1 967 1 819 2 967 1 219 2 524 4 877 5 524 4 919 2 967 1 439 3 368 1 471 1 Total -852 -388 -161 -284 -202 2014 Total 340 599 -40 -67 -31 -24 77 90 27 43 - - - 7 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY - - -7 Total Total 202 266 708 150 360 -704 -375 9 160 6 775 3 685 9 019 3 270 2 146 19 152 -1 875 -3 289 -2 920 -2 981 -1 050 99 199 14 241 99 199 99 199 -44 335 -51 418 -12 601 143 533 111 207 162 625 111 207 101 269 1) 1) ------4 n/a n/a 72 -10 277 493 538 372 388 105 407 -141 -699 -300 -515 Other Other 4 912 5 456 8 490 5 456 5 455 1 102 5 640 9 354 5 640 -3 034 -1 364 -3 714 - - - - - n/a n/a -13 -99 -66 under under 150 360 266 Plants Plants -166 -202 5 192 1 043 6 249 1 065 8 727 8 727 -5 355 -1 416 -1 050 -1 077 -1 297 -2 275 14 367 13 111 14 188 13 111 13 111 11 002 -10 300 construction construction ------4 86 84 78 228 312 253 299 -219 -138 -291 -770 4 077 6 813 1 080 14 241 19 152 -2 602 -3 692 -4 804 29 035 26 920 30 612 26 920 26 920 38 321 43 125 38 321 Properties, Properties, bridges and bridges and quay facilities quay facilities mountain halls, mountain halls, buildings, roads, buildings, roads, illion in 2014). The largest projects were ------2 n/a n/a estments primarily relate to the Nordic hydropower and 35 -53 -54 hore). e investments and other investments. Maintenance -565 2 023 1 442 2 669 1 442 1 442 1 388 2 669 1 388 -1 228 -1 281 ed borrowing costs of NOK 266 million) and intangible third parties third parties operated by operated by Shareholdings Shareholdings in power plants in power plants ------n/a n/a grid grid 86 31 12 39 34 -33 250 105 320 331 542 -251 -292 facilities facilities 3 444 3 677 9 058 3 677 3 677 4 618 4 618 -5 382 -5 855 10 473 Distrbution- Distribution- 72 - - - - - 2 etc. etc. n/a n/a -95 344 552 182 -160 -309 -843 2 555 3 578 1 236 1 806 1 856 1 189 -8 670 -1 171 -1 508 Turbines, Turbines, 27 425 25 202 46 460 25 202 25 202 27 969 51 980 27 969 -21 258 -24 011 generators generators ------7 n/a n/a -7 48 483 160 123 654 844 plants plants -122 -588 -629 1 765 1 743 -8 665 -9 478 23 392 32 057 23 392 34 022 24 544 20 062 24 544 23 392 Regulation Regulation 2) 2) 3) 3) isted of both investments in new generating capacity, maintenanc amounted to NOK 1970 million (NOK 2368 million in 2014). The inv estments in new capacity amounted to NOK 7797 million (NOK 7525 m Property, plant and equipment Other mainly includes district heating plants, buildings, office and computer equipment, electro-technical installations and vehicles Other mainly includes district heating plants, buildings, office and computer equipment, electro-technical installations and vehicles Most of the disposal of accumulated depreciation and impairment is related to disposal of subsidiaries. The amount consists mainly of waterfall rights. Most of the disposal of accumulated and depreciation impairment is related to disposal of subsidiaries. The amount consists mainly of waterfall rights. Balance at 31.12 1) 2) 3) Book value 31.12 of assets with infinite useful life Cost 31.12 Accumulated depreciation and impairment as of 31.12 Impairment Accumulated depreciation/ impairment on disposals Balance at 31.12 Capitalised borrowing costs Currency translation effects Depreciation Transferred between asset classes Transferred from intangible assets Disposals Derecognised on disposal of a subsidiary 2014 Balance at 01.01 Additions Additions from business combinations NOK million Balance at 31.12 1) 2) 3) Book value 31.12 of assets with infinite useful life Cost 31.12 Accumulated depreciation and impairment as of 31.12 Accumulated depreciation/ impairment on disposals Balance at 31.12 Capitalised borrowing costs Currency translation effects Depreciation Impairment Transferred between asset classes Transferred from intangible assets Disposals Derecognised on disposal of a subsidiary Balance at 01.01 Additions Additions from business combinations NOK million 2015 hydropower plants in Turkey, Albania and Peru and wind farms in Sweden (onshore) and the UK (offs STATKRAFT ANNUAL REPORT 2015 INVESTMENTS IN 2015 The addition in 2015 of property, plant and equipment worth NOK 9160 million (excluding capitaliz assets worth NOK 340 million, cons investments and other investments ASSETS PLEDGED AS SECURITY TO COUNTERPARTIES Statkraft has pledged property, plant and equipment as security to counterparties. Please see note 34 for more information. Industrial ownership segments. Inv Note Note 23 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS certain. more becoming are negotiations and assessments ongoing the of outcome the as change may figures The million. 1297 NOK of loss impairment an recognise to appropriate most is it that determined has management processes these of outcome the to related uncertainties significant the to Due forward. project the moving for solution sustainable a find to effort current its continue will management The works. construction the of majority the suspend to decided Statkraft 2015, December 15 On project. Cetin the for indicator impairment an considered was execution project to related challenges and Turkey South-East in situation security the year-end At Europe East South in construction under plants Power 2015. December 31 of as reached conclusions the to change a in result may forward going assumptions these to Changes million. 500 NOK approximately in result will tax) (before point percentage one of rate discount the in change A million. 730 NOK approximately in result will % 10 of price power future the in change A capital. of cost and prices power future in changes to sensitive particularly are use in values estimated The cost. and revenue future to relating made are assumptions use, in value expected the calculating When million. 1750 NOK to amounts Sweden in assets wind on charge impairment total The Sweden. in portfolios development wind the to related recognised is million 220 NOK of charge impairment an addition, In assets. operational the to related million 1530 NOK of impairment an show calculations impairment The assets. operating and greenfield Swedish the of flow cash future the on impact negative significant a had have prices cert el lower and prices energy lower of combination The Sweden in parks Wind market. relevant the in technology of type this in investments on tax after earnings of expectation Statkrafts represents rate discount The model. tax before theoretical the to equal are calculated amount recoverable the that means This flows. cash calculated Sweden. in parks wind for 6.6% of tax after rate discount nominal a on based is use in value Calculated occurred. has loss impairment an whether on indication an is analysis marked term long The schemes. support including assets generating power for streams income other and prices power on implication their and uncertainties, and trends market of analysis systematic a is This present. is company the where markets the in purpose investment and strategic for analyses market term long the of update annual an performs Statkraft present: are situations following the of more or one where assets to given is attention Special basis. quarterly a on issues impairment any of informed are committee Audit The impairment. earlier of reversal regarding performed are procedures Analogue statement. financial the in recognised is loss impairment an amount, revocable than higher is value carrying if and made be will calculations identified, are indicators If specialists. group’s and segments the by discussed and analysed are loss impairment an to rise give might that Indicators quarterly. reviewed is asset an of value carrying the impair to need the procedures reporting ordinary the with accordance In 2014. in million 1050 NOK to compared million, 3081 NOK of total a by impaired are equipment and plant property, 2015, In 2015 IN IMPAIRMENT continued 23 Note – communication equipment communication – centre operating – equipment control – voltage) (high switchgear – transformer/generator – installations Electrotechnical quays and bridges Roads, facilities Underground installations mechanical other – valve) (turbine, generators – trenches pipe – installations Mechanical systems Tunnel dams other – dams concrete dams, riprap – Dams Land rights Waterfall years: previous with compared schedules depreciation in changes material no been have There below. provided is assets various the of lives economic useful the of specification detailed more A EQUIPMENT AND PLANT PROPERTY, OF LIVES USEFUL Impairment loss is assessed earlier assessed is loss Impairment uncertain is execution project or unclear environment regulatory declining, is outlook Market minimal is amount recoverable and value book between difference The Depreciation period (years) period Depreciation perpetual perpetual 73 10 15 15 35 40 75 75 15 40 40 75 30 75 Gas power plant transformers plant power Gas systems cooling Water generators steam and Gas watercraft Small equipment Construction Vehicles equipment and Furnishings equipment computer and Office fixtures Miscellaneous permanent less – permanent – installations fixed Other offshore – land-based – turbines Wind etc.) (admin Buildings voltage high switchgear, – transformer – facilities grid Distribution Whereas the tax effects are considered in the in considered are effects tax the Whereas STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Depreciation period (years) period Depreciation 20–25 20–25 20–25 25–50 35–40 20-22 10 12 10 20 25 35 8 5 3 5 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 99 Total Total 204 640 851 -501 -534 -478 -729 -123 1 184 1 127 5 596 3 332 1 722 1 139 6 236 3 679 -1 217 19 027 19 388 16 002 19 027 -1 -2 -7 37 32 19 57 -65 -19 Other Other 148 281 323 193 2 136 1 528 1 528 2 136 2 748 1 266 1 200 4 132 -2 386 ------8 omplexity, the -4 -5 87 60 14 -32 971 971 125 874 1 067 Wind UK Wind UK Invest Ltd. Invest Ltd. ------1 Scira Scira 123 125 296 352 1 980 1 980 2 399 1 505 Offshore Offshore Energy Ltd. Energy Ltd. 2) ------S.A -4 68 19 80 78 -11 -31 178 S.A -168 -374 1 567 1 567 1 648 Energias Energias -1 484 Desenvix Desenvix Renováveis Renováveis ------Ltd. Ltd. -8 -6 84 37 92 30 946 388 946 700 875 Power Power -375 Malana Malana Company Company ------SN SN 22 89 -62 535 348 130 372 74 2 645 2 645 3 084 1 651 Power AS Power AS - - - - - 76 -14 -66 -66 333 596 314 251 Agder Agder -324 -149 -323 4 136 3 848 2 109 3 848 4 117 2 043 Energi AS Energi AS - - - - - 86 -14 -14 279 335 138 -399 -144 -200 1 818 5 207 4 928 2 211 4 928 5 272 2 197 1 818 BKK AS BKK AS 1) 2) 1) material associated companies and joint ventures are shown in the table below. Based on size and c is a company domiciled in India through which Statkraft, in cooperation with Bhilwhara Group, owns and operates the Associates Associates and joint ventures has its renewable energy operations in emerging markets in Southeast Asia, Africa and Central America. The Group’s activities include As of 13 July 2015 Statkraft became majority shareholder with 81.3% in Desenvix and the company is no longer accounted for as an associate. The impairment in Scira from 2011 of NOK 341 million was reversed in due 2014, to successful operations and positive results the latest quarters. The shares in Desenvix was impaired with NOK 373 million. wasThe impairment made due financing as well to challenging as postponement of profitable projects. The shares in Malana and Allain Duhangan has been impaired with NOK 384 million due to a permanent downward shift in prices in the Indian market. STATKRAFT ANNUAL REPORT 2015 hydropower plant Malana and Allan Duhangan. The company’s activities are production, sale and transmission of electric power. Wind UK Invest Ltd. (WUKI) owns the land-based wind farms Alltwalis, Baillie and Berry Burn in the UK. Scira Offshore Energy Ltd. (Scira) owns the offshore wind farm Sheringham Shoal in the UK. Statkraft has pledged parent company guarantee to Scira of NOK 1263 millions. See note 34 for pledges, guarantees and obligations. 2) DESCRIPTION OF THE ACTIVITIES IN SIGNIFICANT ASSOCIATES AND JOINT VENTURES BKK AS has operations in Western Norway, with its core activities being production, sale and transmission of electric power. BKK also sell consultation and contracting services, and offers customers broadband, district heating and joint metering of electricity. Agder Energi AS has operations in Southern Norway, with its core activities being production, trading and transmission of electric power, as well as other energy-related services. SN Power AS production, trading and transmission of electric power, as well as other energy-related services. The Group is a leading commercial investor and developer of hydropower projects in emerging markets. Malana Power Company Ltd. Excess value 31.12.2014 Of which unamortised waterfall rights 1) Currency translation effects Items recorded in other comprehensive income Closing balance 31.12 Share of profits Amortisation of excess value/Impairment Capital increase Dividend NOK million Opening balance 01.01 Investment/sales 1) 2) 2014 Closing balance 31.12 Excess value 31.12.2015 Of which unamortised waterfall rights Dividend Currency translation effects Items recorded in other comprehensive income Investment/sales Share of profits Amortisation of excess value/Impairment Capital increase 2015 NOK million Opening balance 01.01 Information concerning Statkraft’s Note Note 24 following companies are considered material: CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Gross operating revenues operating Gross liabilities Long-term liabilities Short-term assets Non-current assets Current million NOK 2014 income comprehensive Total profit Net revenues operating Gross liabilities Long-term liabilities Short-term assets Non-current assets Current million NOK 2015 12. IFRS with accordance in operations companies’ the of 100% to apply figures The companies. associated significant for information financial summarised presents table following The COMPANIES ASSOCIATED SIGNIFICANT FOR INFORMATION FINANCIAL continued 24 Note Statkraft Agder Energi Vind DA Vind Energi Agder Statkraft DA Kraftselskap Sira-Kvina AS Kraft Røldal-Suldal AS Naturkraft KG Co. & GmbH Herdecke, Kraftwerksgesellschaft AB Harrsele DA Vind Fosen Ltd. Forewind Ltd. Wind Offshore Dudgeon Tyssefaldene Aktieselskabet Companies OPERATIONS: JOINT Ltd. Invest UK Wind Co & GmbH Kollweiler Windpark Ltd. Farms Wind Offshore Knoll Triton Ltd. Pte Solutions Solar BLP Statkraft AS Power SN AS Fuel Green Silva Ltd. Energy Offshore Scira Ltd. Company Power Malana AB Röan HPC AB Edsox HPC AB Byske HPC AB Ammerån HPC S.A Higuera La Hidroelectrica S.A Confluencia La Hidroelectrica Ltd Power Hydro Dugar Ltd. Power Hydro Duhangan Allain VENTURES: JOINT Name 11. IFRS in indicated as method consolidation proportionate the with accordance in treated are operations joint as classified Companies statements. financial consolidated the in method equity the using recognised are associates and ventures joint as classified companies in Shares ASSOCIATES AND OPERATIONS JOINT VENTURES, JOINT income comprehensive Total profit Net 1) 2) 3) 1) 1) 1) Renováveis S.A Renováveis Desenvix Energias 2 402 2 593 4 637 518 243 -63 -63 Kristiansand Sirdal Suldal Tysvær Hagen Vännäs Oslo London London Tyssedal London Düsseldorf London Dehli New Oslo Oslo London Dehli New Stockholm Stockholm Stockholm Stockholm Santiago Santiago Pradesh Himachal Dehli New office Registered 75 11 412 11 403 17 697 18 BKK AS BKK AS BKK 1 167 1 730 3 961 1 963 1 455 1 958 3 965 7 915 5 232 2 775 846 Energi AS Energi AS Energi 13 924 13 668 14 8 267 8 029 9 629 3 494 2 516 1 178 1 486 8 431 9 747 4 045 4 Agder Agder 769 998 SN Power AS Power SN AS Power SN 1 579 1 397 8 978 1 799 9 401 1 126 152 670 272 229 267 46 35 72 Shareholding Company Company 62.00% 46.70% 50.00% 50.00% 50.57% 50.10% 25.00% 30.00% 60.17% 51.00% 20.00% 50.00% 90.00% 50.00% 51.00% 40.00% 49.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 43.10% 1 364 1 544 1 4.79% Malana Malana Power Power STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 108 250 267 -17 -17 20 20 42 76 93 79 84 Ltd. Ltd. Energy Ltd. Energy Ltd. Energy 13 705 13 783 14 Offshore Offshore 1 237 1 237 1 515 1 368 9 705 1 759 9 141 755 256 256 886 Scira Scira 60 Voting share Voting Invest Ltd. Invest Ltd. Invest 62.00% 46.70% 50.00% 50.00% 50.57% 50.10% 25.00% 30.00% 60.17% 51.00% 20.00% 50.00% 90.00% 50.00% 51.00% 40.00% 49.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 43.10% Wind UK Wind UK Wind 1 914 1 571 4 448 2 362 4 4.79% 161 261 293 406 297 370 30 30 14 14 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 6.64% 2.20% 7.00% 10.60% 88.00% 70.00% 82.50% 48.60% 65.00% 50.00% 65.00% 33.33% 50.00% 70.00% 50.00% 60.17% 88.00% 73.10% 73.48% 45.50% 49.90% 35.00% 50.10% 49.00% 30.00% 50.00% 29.75% 50.00% 100.00% Voting share Shareholding 7.00% 50.00% 29.75% 50.00% 88.00% 70.00% 82.50% 48.60% 65.00% 50.00% 65.00% 33.33% 50.00% 70.00% 50.00% 60.17% 88.00% 73.10% 73.48% 45.50% 49.90% 35.00% 50.10% 49.00% 30.00% 100.00% Shareholding 76 Caçador City London Porsgrunn Registered office Aurland Kvinnherrad Rauma Stockholm Sørfold Rennebu Eidfjord Surnadal Eidfjord Askim Tinn Meløy Surnadal Odda Vik Stockholm Suldal Kristiansand Bergen Skien Trondheim Molde Colombo 6) 5) 7) 4) Statkraft owns 33.3% of Solbergfoss, but controls 35.6% of the production. Statkraft controls 71.4% of the production from the Tysso II power plant. Statkraft’s total shareholding is 73.48% of which Skagerak Energi AS’ shareholding is 1.49%. The shareholder’s agreements indicate joint control. Statkraft owns 8.74% of the shares in Røldal-Suldal Kraft AS, which in turn owns 54.79% of the Røldal-Suldal plants. Statkraft’s indirect shareholding in the power plant is thus 4.79%. Statkraft’s total shareholding is 46.7% of Skagerak which Energi AS’ shareholding is 14.6%. Statkraft’s total shareholding is 100% of which Skagerak Energi AS’ shareholding is 14.94%. STATKRAFT ANNUAL REPORT 2015 Båtfors Forsmo Selfors Statkraft has appropriation rights in power plants also owned by other players. These rights are treated as joint operations and recognised with Statkraft’s share of the revenues, expenses, assets and liabilities. Overview of appropriation rights: Name None of the companies have observable market values in the form of listed market prices or similar. APPROPRIATION RIGHTS 5) 6) 7) Viking Varme AS 1) 2) 3) 4) Nividhu (Pvt) Ltd. Passos Maia Energética S.A. Spittal Hill Windfarm Ltd. BKK AS Energi og Miljøkapital AS Fosen Vind AS Istad AS ASSOCIATES: Agder Energi AS Vikfalli Volgsjöfors Ulla-Førre Stegaros Svartisen Svorka Tyssefaldene Leiro Nordsvorka Sima Solbergfoss Gäddede Kobbelv Kraftverkene i Orkla Assets Aurlandsverkene Folgefonn Grytten Note Note 24 continued Name CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS 26 Note Total securities and shares Other sale: for Available 1) Total receivables long-term other and Bonds associates to Loans cost: amortised at Measured million NOK 25 Note Recognised as loss for the year the for loss as Recognised Total receivables Other receivable Accounts million NOK 2014 year the for loss as Recognised Total receivables Other receivable Accounts million NOK 2015 receivables of analysis Maturity interest-bearing which Of Total receivables Other collateral cash to related Receivables carryforwards tax resource Natural tax Prepaid associates to loans Short-term receivable Accounts million NOK 27 Note Total quotas Carbon certificates Electricity value: realisable net at measured certificates Green million NOK Total value realisable net and price cost of lowest the at measured are inventories Total Other parts Spare value: realisable net and price cost of lower the at Measured The amount includes net pension asset. See note 16. note See asset. pension net includes amount The Inventories assets financial non-current Other Receivables 1) Not yet due yet Not Not yet due yet Not 11 811 11 4 820 4 990 6 979 9 372 4 608 5 77 Receivables overdue by overdue Receivables by overdue Receivables Less than Less than Less Recognised value Recognised 90 days 90 days 90 440 114 326 419 201 218 1 044 1 169 100 875 298 578 68 2015 More than More than More 10 675 10 90 days 90 days 90 2 812 2 398 1 477 2 903 5 197 122 279 200 520 335 7 874 7 617 7 642 2 974 4 2015 76 79 42 257 2015 Cost price Cost 845 316 529 Receivables overdue Receivables overdue Receivables STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Recognised value Recognised and impaired and impaired and 1 875 1 299 1 2 088 2 -14 -14 213 119 576 -2 -2 94 - - 2014 12 433 12 675 10 433 12 Cost price Cost 5 007 5 427 7 772 4 903 5 767 2 164 2 665 2 427 7 093 6 009 6 254 1 756 4 1 808 1 167 1 Total Total 100 641 2014 2014 78 84 2 - 5 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2014 2014 2014 122 122 724 375 389 122 2014 2014 2014 -238 -108 9 602 3 061 2 577 4 187 3 754 4 366 4 187 1 862 2 450 4 187 1 569 5 616 6 816 1 569 -1 607 -1 152 -2 781 -2 272 -2 618 -2 403 -4 527 -2 618 -2 618 -3 556 -7 308 12 663 32 32 85 2015 2015 2015 550 348 494 275 898 2015 2015 2015 -753 -297 -875 -129 4 285 2 201 4 675 6 651 2 201 8 506 9 056 3 655 4 285 2 833 5 753 4 285 1 841 -2 084 -3 736 -5 388 -3 427 -2 231 -2 084 -2 862 -1 961 -2 084 78 1) Cash and cash equivalents Derivatives net position group Includes NOK 420 million and NOK 86 million respectively in 2015 and 2014 from companies reported as joint operations under IFRS 11. STATKRAFT ANNUAL REPORT 2015 Cash collateral for financial derivatives rate swaps, combined interest rate and currency swaps and forward exchange contracts. The table below shows net payments at year end to counterparties, who will eventually be repaid. See notes 27 and 31. NOK million Cash collateral Cash collateral comprises mostly of payments made to/from counterparties as security for the net unrealised gains and losses that Statkraft has on interest NOK million Deposit account in connection with power sales on energy exchanges Total 1) Book value of cash and cash equivalents pledged as security to/from counterparties The following amounts in cash and cash equivalents are pledged as security to/from counterparties: NOK million Cash and cash deposits Money market funds, certificates, promissory notes, bonds Total Note 29 - Current liabilities Total Of this: - Non-current assets - Current assets - Long-term liabilities Energy derivatives Currency and interest rate derivatives Total Total Derivatives - NOK million - Non-current assets - Current assets - Long-term liabilities - Current liabilities Combined interest rate and currency swaps Total Of this: Currency and interest rate derivatives - net position NOK million Interest rate swaps Forward exchange rate contracts - Long-term liabilities - Current liabilities Total Of this: - Non-current assets - Current assets Nordic and Continental Dynamic Asset Management Portfolio Energy purchase contracts Other contracts and eliminations Total Energy derivatives - net position NOK million Long-term contracts Trading and Origination (excl. market access activities) Note Note 28 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Total debt short-term Other SF Statkraft to Debt facilities Credit collateral cash to connected Debt debt long-term on instalment year’s First debt interest-bearing Short-term million NOK 31 Note 23. note See also morecertain. becoming negotiations are assessments and ongoing the of outcome the as significantly change may forward theprovision project movingthe for finding asustainablesolution to significant uncertaintiesrelated Due the project. Cetin the to related uncertainties the and 2) Sweden. plants in power 1) provisions Total provisions Other Decommissioning liabilities Pension tax Deferred million NOK 30 Note 1) Total liabilities interest-free Other SF Statkraft to Debt payable taxes Indirect payable Accounts million NOK 32 Note combinations. business and loans currency foreign on rates exchange in changes the by explained mainly are changes Other million. 2545 NOK to amounted 2015 in borrowing net Group’s The debt interest-bearing Total Total debt other and subsidiaries in debt External markets non-Norwegian in issued Debt market Norwegian the in issued Bonds SF Statkraft to Debt debt interest-bearing Long-term Included in other provisions are liabilities in connection with equity instruments. In addition to this, a provision of NOK 789 million is made due to the situation inTurkey tothe millionismadedue provision ofNOK789 a this, to addition In equity instruments. connection with in liabilities are provisions other in Included wind plants inGermanyand to gaspower related mainly is to time-limitedconcessions,and right the has Statkraft when arise typically provisions Decommissioning Of other interest-free liabilities NOK 3952 million are accrued, not due interest-free liabilities in 2015. In 2014 this amounted to NOK 4617 million. 2014 thisamountedtoNOK4617 in2015.In interest-free liabilities due accrued, not million are 3952 NOK liabilities interest-free other Of Interest-bearing debt Interest-bearing Provisions Other interest-free liabilities interest-free Other 2) 1) 1) 79 Note 16 21 27 166 27 228 21 10 781 10 606 44 410 37 2 794 2 050 7 196 7 000 1 614 1 508 4 166 9 125 2 435 9 6 857 6 362 1 560 2 400 502 2015 2015 2015 63 11 2 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 36 744 36 438 27 651 16 796 18 9 808 9 878 6 058 1 864 1 597 3 791 6 306 9 120 1 088 1 897 6 620 7 655 2 180 8 400 200 342 2014 2014 2014 8 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2014 2014 -11 373 362 2 525 2 052 1 181 1 283 4 517 27 480 30 005 34 521 2015 2015 -26 281 255 1 067 1 616 4 162 2 328 1 479 36 263 29 773 32 101 As of 31 December 2015, the carrying value of the pledged assets in Statkraft Energi AS totalled NOK 5150 million, and a total of NOK 1937 million in other subsidiaries, mainly Statkraft IH Invest Group. Pledged assets in Statkraft IH Invest Group consist of property, plant and equipment to ensure compliance of long term debt.. Fjordkraft has available overdraft facilities amounting to NOK 1200 million, being pledged in trade receivables at a maximum of NOK 600 million. No funds were drawn at 31 December 2015. 80 1) Pledges, guarantees and obligations Contingencies and disputes Whereof the most material guarantees are regarding energy purchase of NOK 15 381 million and to suppliersliabilities of NOK 6 857 million. STATKRAFT ANNUAL REPORT 2015 Total guarantees in subsidiaries Total guarantees Parent company guarantees Guarantees in NASDAQ OMX Stockholm AB and other energy exchanges Other Other Total guarantees in Statkraft AS 1) The Statkraft Group has the following off-balance-sheet guarantees: NOK million Parent company guarantees GUARANTEES Under certain circumstances local authorities and publicly owned energy companies are entitled to a share of the output from power plants belonging to Statkraft in return for paying a share of the construction costs. To finance the acquisition of such rights, the local authorities/companies have been granted permission to pledge the power plant as security. The mortgage debt raised by the local authorities under this scheme totals NOK 1065 million. In addition, other subsidiaries have a total of NOK 1446 million in pledged assets. PLEDGES Note 34 DISPUTES The Group is involved in a number of legal proceedings in various forms. While acknowledging the uncertainties of litigation, the Group is of the opinion that based on the information currently available, these matters will be resolved without any material adverse effect individually or in the aggregate on the Group's financial position. For legal disputes, in which the Group assesses it to be probable (more likely than not) that an economic outflow will be required to settle the obligation, provisions have been made based on management’s best estimate. Statkraft AS has received a notice of reassessment from Norwegian tax authorities regarding its income tax returns for fiscal years 2008 - 2014 relating to its investment in the subsidiary Statkraft Treasury Centre SA in Belgium. The notice is of a preliminary nature with a number of reservations and it is therefore not possible to quantify any potential exposure. Statkraft disagrees that there is a legal basis for any reassessments, and has made no provision for potential tax liabilities. BRAZIL On 13 July 2015, Statkraft acquired a controlling interest in the Brazilian company Desenvix Energias Renováveis S.A. which subsequently changed name to Statkraft Energias Renováveis. Over the past years, Brazil has experienced several severe corruption cases. On this background, Statkraft has initiated an internal investigation related to the subsidiary acquired in 2015. The investigation is ongoing and it is at this stage not possible to predict the outcome of the investigation. NOK million Cumulative excess revenue transferred to subsequent years Cumulative revenue shortfall transferred to subsequent years Net excess/shortfall of revenue Excess/shortfall of revenue distribution grid operations, closing balance CONTINGENCIES In distribution grid business, differences can arise between the revenue ceiling determined by the Norwegian Water Resources and Energy Directorate (NVE) and the amount actually invoiced as grid rental charges. If the invoiced amount is lower than the revenue ceiling, a shortfall of revenue arises, and if the invoiced amount is higher than the ceiling, excess revenue arises. Excess/shortfall of revenue will even out over time as the actual invoicing is adjusted. Revenues are recognised in the accounts based on actual invoicing. Accumulated excess/shortfall of revenue as shown in the table below is recognised in future periods. Note Note 33 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS follows: as were services other and auditing for paid VAT) (excluding fees total The million. 0.5 NOK to amounts 2015 for subsidiaries Brazilian the of audit for auditors external to paid Fees subsidiaries. Brazilian from except requirements, auditing to subject subsidiaries all audits and auditor Group’s Statkraft the is AS Deloitte 36 Note 2015. end year by agreements lease financial no has Statkraft million. 6120 NOK non-canc to relation in payments lease minimum future of total The 35 Note obligations off-balance-sheet following the has Group Statkraft The OBLIGATIONS CONTRACT continued 34 Note the sustainability report. sustainability the theattestationof associated withtherestructuringInternational Hydropowersegmentand procedures and control quality relate to 2014 in services other for fees the in items main The 1) Total services Other services consultancy Tax services attestation Other auditing Statutory thousand NOK purchases energy as presented are acc market offering is Statkraft Total leases Other Vehicles agreements rental Property million NOK manner: following the in specified and period the in expensed rent Lease-related Total leases Other Vehicles agreements rental Property million NOK The main items in the fees for other services in 2015 relate to assistance to map various existing processes and procedures, and the attestation of the sustainability report. sustainability theattestationof procedures,and existingprocessesand map various assistanceto 2015 relateto in services other for fees the in items main The c agr service regarding Obligation million. 576 EUR at estimated responsibility a involves which plants hydropower two of operation and construction development, the to relating agreement license A CO purchase to agreements Long-term Obligation related to early term early to related Obligation million. 2542 NOK of plants power gas ustomers regarding power sales c sales power regarding ustomers 1) Fees paid to external auditors external to paid Fees Leases ess to smaller renewable energy pr energy renewable smaller to ess , see notes 12 and 14. The lease agreements have durations ranging from 1 to 17 years and the rent paid for 2015 was 2015 for paid rent the and years 17 to 1 from ranging durations have agreements lease The 14. and 12 notes see , ination compensation payables to to payables compensation ination eements and similar related to to related similar and eements ontracts of NOK 0,8 million. 0,8 NOK of ontracts 2 quotas. the end of the period the of end the : oducers. Some of these activities these of Some oducers. Within 1 year of year 1 Within ellable leases for each of the following period is: period following the of each for leases ellable 143 132 81 10 1 611 million. 611 s pr average an and GWh 85 around of volume total a had settlement financial with contracts the 2015, of end the At time. of period settlem financial on agree however can parties The indefinite. as Concessionar settlement. financial or delivery physical upon place takes settlement the whether of regardless conces stipulated with accordance concessionar recognises Group The CONTRACTS POWER CONCESSIONARY Energy of 10,6 øre/kWh. For the r the For øre/kWh. 10,6 of Energy ettlement, the estimated fair value at 31 December 2015 is around NOK NOK around is 2015 December 31 at value fair estimated the ettlement, after the end of the period the of end the after Between 1 and 5 years 5 and 1 Between Minimum lease Minimum are defined as leases with variable lease payments, and payments, lease variable with leases as defined are 753 735 176 150 11 18 7 9 26 980 26 050 19 2 874 2 240 3 815 1 2015 More than 5 years after years 5 than More emaining contracts with financial financial with contracts emaining y s the end of the period the of end the power contracts are normally regarded normally are contracts power ionary power prices upon deliver upon prices power ionary y power as normal buying and selling in selling and buying normal as power ice from the Ministry of Petroleum of Ministry the from ice STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Variable lease Variable
1 207 1 167 1 40 8 8 - - - Sublease payments Sublease ent for a for ent 23 958 23 365 14 y 4 583 4 455 3 554 1 , , 2 104 2 034 2 and 2014 Total 24 24 48 21 - - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 1) 9 11 11 10 11 10 11 11 11 Salaries 38 528 314 048 411 871 Pensions 2 537 708 1 142 185 1 029 604 1 030 759 1 242 989 5 021 403 2 830 557 2 984 903 3 114 049 2 992 036 3 455 551 2 076 426 1 649 494 Participation in board meetings and other benefits e shown above. No benefits paid to the ------49 150 30 550 30 550 65 850 Committee 171 722 189 559 129 248 165 965 153 250 193 756 114 594 Compensation Benefits in kind 1) ------Audit Bonus 66 600 91 900 66 600 66 600 Committee 320 000 410 000 350 000 355 000 390 000 320 000 ined. The Executive Vice Presidents are employed in m Board Salary 82 477 000 336 000 277 000 277 000 277 000 277 000 277 000 277 000 277 000 4 849 680 2 320 997 2 445 655 2 598 084 2 483 786 2 871 795 1 690 577 1 534 901 remuneration ial benefits from other companies in the same Group other than thos ial functions has been provided. For 2015, total salaries and other as of year-end 2015 NOK 42 million. The corresponding accrual in 2014 was NOK 33 e eligible for bonus. 3) 4) 2) 3) 2) eived any compensation or financ idents for 2015, which will be paid in 2016, is not finally deter compensation for Statkraft AS is ial services beyond normal manager 1) Benefits Benefits paid to executive management Boardand the of Directors The year’s accounting cost for the pension whichscheme reflects the period during which the individual has been an executive employee. Øistein Andresen resigned as Executive Vice President on 7 June, 2015. Jürgen Tzschoppe was appointed Executive Vice President on 8 June, 2015. Harald von Heyden left the Board of Directors on 1 December, 2015. Jürgen Tzschoppe was appointed Executive onVice President 8 June, 2015. Bonus earned in 2014, but disbursed in 2015. Jon Brandsar resigned as Executive Vice President on 4 February 2016 and has been replaced by Irene Egset. Øistein Andresen resigned as Executive Vice President on 7 June, 2015. STATKRAFT ANNUAL REPORT 2015 For 2015, the total pension costs for executive management were NOK 7 747 692. In 2014 the corresponding amount was NOK 7 683 931. Jürgen Tzschoppe, Executive Vice President 1) 2) 3) Steinar Bysveen, Executive Vice President Hilde Bakken, Executive Vice President Asbjørn Grundt, Executive Vice President Øistein Andresen, Executive Vice President Christian Rynning-Tønnesen, President and CEO Hallvard Granheim, Executive Vice President Jon Brandsar, Executive Vice President NOK 291 700 and NOK 110 250, respectively. The respective amounts in 2014 were NOK 2 664 100, NOK 282 450 and NOK 106 800. Pension costs – executive management NOK The Board has no remuneration agreements other than the directors’ fee and remuneration for participation in committee work, nor have any loans or surety been granted to directors of the Board. Total remuneration paid to the Board, Audit Committee and Compensation Committee in 2015 was NOK 2 752 000, Thorbjørn Holøs, employee-elected director Vilde Eriksen Bjerknes, employee-elected director Asbjørn Seveljordet, employee-elected director 1) Halvor Stenstadvold, director Harald von Heyden, director Elisabeth Morthen, director Hilde Drønen, director NOK Olav Fjell, chair Berit J. Rødseth, deputy chair Statkraft AS. Total accrued bonus Remuneration to the Board, Audit Committee and Compensation Committee as well as participation in Board meetings 4) The Group management has not rec Øistein Andresen, Executive Vice President Jürgen Tzschoppe, Executive Vice President 1) 2) 3) Steinar Bysveen, Executive Vice President Hilde Bakken, Executive Vice President Asbjørn Grundt, Executive Vice President million. The accrual includes all employees in Statkraft AS that ar NOK Christian Rynning-Tønnesen, President and CEO Hallvard Granheim, Executive Vice President Jon Brandsar, Executive Vice President Statkraft is organised into business units and support functions. The managers of these units report to the Group management, which comprises the executive vice presidents (EVPs) and the President and CEO. Salary and other benefits – executive management Note Note 37 additional compensation for spec executive management amounted to NOK 24 124 419. The corresponding amount in 2014 was NOK 23 675 701. Bonus for the Executive Vice Pres CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS c broadband of coverage and phone newspapers, car, company a with elements variable Other salary. base gross of bonus annual The goals. individual salary Fixed payment. variable a and salary fixed c determining for basis the forms Statkraft, in practices reward internal with together information, This compensated. are market labour c then is survey annual An utilised. is methodology used widely and r that system assessment position c offer to is policy Statkraft’s accordingly. designed managem executive to remuneration other and salary for guidelines remuner executive of development contr will Statkraft of Board The 2015 – EXECUTIVES SENIOR TO REMUNERATIONS OTHER AND SALARIES REGARDING STATEMENT BOARD’S THE continued 37 Note s bonus a has Group the salary, fixed the to addition In salary Variable considered. also are employees other of increases s average the regulation, salary annual the deciding When position. c offering of policy Statkraft’s s corpor and CEO and President The policy remuneration executive on Report as is Committee the of mandate The Committee. Compensation separate a established has Statkraft of Board The Organisation other and salaries deciding Upon position. ommunication in accordance with es with accordance in ommunication c agains assessment an as well as – market the and position pecific ompensation. similar how evaluating onducted, heme for the corporate executives corporate the for heme upon. upon. c the for salaries the for recommendations his regarding Committee cons should CEO and President The employer. an as attractiveness and competitiveness reputation, Group’s the for importance particular of matters concern these that deems Committee the that extent the to Group Statkraft the employees for compensation to relating issues specific with Deal Statkraft. in management executive the for similar and agreements employment and pension, systems, bonus salary, to relating issues fundamental the all of treatment Board’s the Prepare c other and pay executive on statement Board’s the Prepare c and salary CEO’s and President tr Board’s the prepare year a Once orporate executives and Group’s auditor before they are decided are they before auditor Group’s and executives orporate executives. senior to paid ompensation The fixed salary is determined bas determined is salary fixed The Other variable elements include ar include elements variable Other ompetitive conditions, but not tak not but conditions, ompetitive ompetitive terms, but not take a leading a take not but terms, ompetitive ibute to a moderate, but competitive competitive but moderate, a to ibute remunerations in Statkraft, an ex an Statkraft, in remunerations ly ranked positions in the Norwegian the in positions ranked ly anks positions according to a rec a to according positions anks ation in Statkraft. Principles and Principles Statkraft. in ation has a maximum disbursement of 25% of disbursement maximum a has ate executives shall receive both a both receive shall executives ate follows: based on financial, operational and operational financial, on based tablished standards. tablished onditions of employment. of onditions eatment of items relating to the the to relating items of eatment ult the Compensation Compensation the ult ed on an assessment of the the of assessment an on ed r angements angements e a leading a e ternal ternal ognised t t alary ent are ent in 83 CEO is 6 months. For corporate ex corporate For months. 6 is CEO arrangements Severance employees. new to closed is arrangement the company the or executive the age, of years 62 reached has employee the after time any at where, agreements are These 62. of age the corpor and CEO and President the including 12G, over salary annual per vesting 30-year entire the during SPK of part been have they 2016 is NOK 4 930 000, with other with 000, 930 4 NOK is 2016 CEO and President Terms, employees. new to closed is arrangement the r executive regarding policy The 2004. June 28 of companies and enterprises owned employ the for Guidelines the with agreem These period. payment the inc other receives employee the if rules established to according m paid be shall amount The period. y 2 than more After months. 3 of r executive regarding policy The age. retirement agreed-upon the until 50% to up of hours working and – pay executive’s the of 75% of salary a with position another offered be should executive the right, this further without position executive res to request to right mutual a c agreements change Position established. been also has 12G over s to relating coverage disability Group 12G. over salary ordinary s clos was scheme This executives. sc The 2003. in 12G above income pr salary, annual their of 66% to right the with earliest, the at years 65 of age retirement a have executives corporate other The period. v 30-year entire the during SPK of part been has he that provided Pensjonsfor Gjensidige in plan contribution defined a established plans Pension Work Environment Act (Arbeidsmiljøloven) for protection against dis against protection for (Arbeidsmiljøloven) Act Environment Work the in rights employee’s the waives agreement The above. mentioned than deadline shorter a with employer the by given is notice if employer cer and CEO and President the For months. 6 is notice of us be can that established been has system salary additional an but pens retirement new established no retirem a has Rynning-Tønnesen, Christian CEO, and President The (SPK). Fund Pension Government the in plan benefit defined closed a has and s a to entitled is employee the termination, of right this uses employer the If s a guaranteeing signed been have s pension a established Statkraft receiv will and years, 67 of age orporate executives have agreements regarding change of position after after position of change regarding agreements have executives orporate sav pension private upplementary everance payment of up to 12 months’ salary in excess of agreed notice notice agreed of excess in salary months’ 12 to up of payment everance For wholly owned Norwegian subsidiaries, Statkraft has Statkraft subsidiaries, Norwegian owned wholly For The mutual period of notice for the President and President the for notice of period mutual The Fixed salary paid to the President and CEO for for CEO and President the to paid salary Fixed The President and CEO and certain certain and CEO and President The ign, or be requested to resign, fr resign, to requested be or ign, e a pension of 66% of his annual s annual his of 66% of pension a e emuneration has now been amended and amended been now has emuneration emuneration has also been changed, and changed, been also has emuneration ears of employment, the employer the employment, of ears c justification. If any of the par the of any If justification. heme funded out of current incom current of out funded heme ed to new employees in 2012. Ther 2012. in employees new to ed ment conditions of managers in s in managers of conditions ment terms as set out in this statem this in out set as terms ecutives, there is a mutual notic mutual a is there ecutives, ings. Additional salary is set at 18% of of 18% at set is salary Additional ings. heme included all employees with an with employees all included heme ents are entered into in accordanc in into entered are ents pecial severance pay from the the from pay severance pecial tain corporate executives, agreem executives, corporate tain onthly. Severance pay shall be r be shall pay Severance onthly. ion scheme for annual salary over salary annual for scheme ion STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT ovided that that ovided ties exercise ties om his om alaries ome within within ome iod. s ent. esting esting alary, alary, ikring AS AS ikring ’s period ’s e period e tate- educed e for for e m ed for for ed ent ent ate ate e is e e ents ents 12G, 12G, issal. issal. has FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 1 61 2014 2014 257 376 303 349 5 028 1 019 1 070 1 220 2 948 5 600 ommercial terms and - 44 40 2015 2015 409 346 749 852 1 230 1 798 1 604 1 528 5 409 tricity production or resold on the market. Volumes elated parties are conducted at c tate, but their size, neither individually nor combined, have The individuals stated in note 37 are members of the executive management or the Board and are also related parties of Statkraft. The table below shows transactions with related parties classified as associates or joint ventures that have not been eliminated in the consolidated financial statements. 84 torate. Other transactions with r ial terms. Transmission costs to Statnett are mainly grid tariff. The prices in this market es controlled by the Norwegian s hown above includes purchase of gas used either in the Group’s elec contracts negotiated at commerc overed in note 31, there are no other significant balance items between Statkraft AS and Statkraft SF. m Related Related parties ignificance for Statkraft’s financial statements. onditions. STATKRAFT ANNUAL REPORT 2015 c s
Except for interest-bearing debt c The energy purchase from Statoil s are stipulated by the Norwegian Water Resources and Energy Direc Statkraft also has transactions and balances with other enterpris Taxes payable to Norwegian authorities Dividend and Group contribution from Statkraft AS to Statkraft SF Financial expenses include: Interest expences to Statkraft SF Tax expenses include: Operating expenses include: Property tax and licence fees to Norwegian authorities Net operating revenues includes: Energy purchases from Statoil Transmission costs to Statnett and prices are based on long-ter Gross operating revenues include: Concessionary sales at statutory prices Administrative services provided to Statkraft SF The shares in Statkraft AS are all owned by Statkraft SF, which is a company wholly owned by the Norwegian State NOK million Liabilities at the end of the period Significant transactions with the owner and companies controlled by the owner NOK million Revenues Expenses Receivables at the end of the period All subsidiaries, associates and joint arrangements stated in note 24 and note 39 are related parties of Statkraft. Intercompany balances and transactions between consolidated companies are eliminated in Statkraft’s consolidated financial statements and are not presented in this note. Note Note 38
CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Statkraft Asset Holding AS Holding Asset Statkraft Shpk. Albania Statkraft AS 2 Vind Smøla S.L. Spania Photovoltaics and Energies Renewable AS Vind Kjøllefjord AS Vind Hitra Name subsidiaries consolidated in Shares 39 Note Statkraft IH Invest AS Invest IH Statkraft GmbH Germany Statkraft AS Forsikring Statkraft AB Energy Financial Statkraft A.S. Enerji Statkraft AS Energi Statkraft Toptan Enerjisi Elektrik Statkraft AS Invest Carbon Statkraft Statkraft Vind AB Vind Statkraft AB Värme Statkraft AS Holding US Statkraft AB Sweden Statkraft BV Markets Statkraft SAS France Statkraft Statkraft IH Holding AS Holding IH Statkraft AS Brasil Statkraft GmbH Deutschland Solar Statkraft GmbH Markets Statkraft Kargı A.S. Enerji Çetin A.S. Enerji Çakıt A.S. Elektrik Anadolu AS Varme Statkraft AS Tofte Statkraft AB Cable Baltic Statkraft Södra Vindkraft AB Vindkraft Södra Statkraft AB II Vind SCA Statkraft AB Vind SCA Statkraft AB Leasing Statkraft LLC US Statkraft AB Harrsele AB Gidekraft Sh.A. Hydropower Devoll Statkraft Holding Singapore Pte. Ltd. Pte. Singapore Holding Statkraft Ltda. Investimentos Statkraft GmbH Ventures Statkraft GmbH Trading Statkraft EOOD Europe East South Statkraft SRL Romania Statkraft GmbH Services Financial Markets Statkraft GmbH Knapsack Holding Statkraft GmbH Herdecke Holding Statkraft AS Fjernvarme Stjørdal AS Energi Gardermoen Knapsack Power GmbH & Co KG Co & GmbH Power Knapsack AB EM Vindpark AB Vindarrende Södra Statkraft AB Elnät Vind SCA Statkraft Himal Power Ltd. Power Himal S.A. Renováveis Energias Statkraft Ltda. Brasil do Energia Statkraft Kızılırmak Monel Monjolinho Energética S.A. Energética Monjolinho Monel S.A. Renováveis Energias Energen S.A. Energética Seabra S.A. Energética Horizonte Novo S.A. Energética Macaúbas S.A. Moinho S.A. Rosa Santa S.A. Laura Santa Ltda. Elétricos Sistemas de O&M Enex S.A. Esmeralda GmbH Verwaltungs Power Knapsack Consolidated companies Consolidated Enerji A.S. Enerji Satıs¸ Ltd. S¸irketi Ltd. WP OA WP WP Segment IH IH CT IH, IH IH IH CT CT CT CT CT CT CT CT CT CT CT CT OA CT IH IH IH IH IH DH DH DH OA CT WP NH, CT, CT CT WP WP WP WP WP WP WP WP DH CET CET NH NH WP NH, IH CT CT NH,OA IH IH IH IH IH IH IH IH IH IH IH IH IH 1) Norway Norway Norway Sweden Norway Turkey Norway Sweden Sweden Sweden Sweden Sweden Sweden Sweden Sweden Sweden USA Norway Sweden Sweden Sweden Albania Netherlands The France Norway Albania Norway Spain Norway Norway Country Nepal Netherlands The Norway Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Norway Germany Germany Germany Bulgaria Romania Germany Germany Germany Germany Germany Germany Germany Norway Sweden Turkey Turkey Turkey Turkey Turkey Norway 85 Oslo Trondheim Oslo Malmö Oslo Istanbul Oslo Stockholm Växjö Stockholm Stockholm Stockholm Stockholm Stockholm Stockholm Kungsbacka Francisco San Oslo Stockholm Stockholm Stockholm Tirana Amsterdam Lyon Oslo Tirana Oslo Malaga Oslo Oslo office Registered Kathmandu Amsterdam Oslo Florianopolis Florianopolis Florianopolis Florianopolis Florianopolis Florianopolis Florianopolis Florianopolis Barueri Florianopolis Florianopolis Florianopolis Florianopolis Oslo Oslo Düsseldorf Düsseldorf Düsseldorf Sofia Bucuresti Düsseldorf Düsseldorf Düsseldorf Düsseldorf Düsseldorf Düsseldorf Düsseldorf Oslo Stockholm Istanbul Istanbul Istanbul Istanbul Istanbul Trondheim Statkraft Varme AS Varme Statkraft AS Energi Statkraft AS Energi Statkraft AS Energi Statkraft AS Statkraft AS Statkraft AS Statkraft AB Vindkraft Södra Statkraft AB Vindkraft Södra Statkraft AB Vind Statkraft AB Vind Statkraft AB Vind SCA Statkraft AB Vind Statkraft AB Vind Statkraft AS Holding Asset Statkraft AS Holding Asset Statkraft AS Holding US Statkraft AS Holding Asset Statkraft AB Sweden Statkraft AB Sweden Statkraft AS Holding Asset Statkraft BV Markets Statkraft AS Holding Asset Statkraft AS Holding Asset Statkraft AS Statkraft AS Statkraft AS Statkraft AS Statkraft AS Statkraft AS Statkraft company Parent Statkraft Holding Singapore Pte. Ltd. Pte. Singapore Holding Statkraft AS Holding IH Statkraft AS Invest IH Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft S.A. Renováveis Energias Statkraft Ltda. Investimentos Statkraft Ltda. Investimentos Statkraft AS Brasil Statkraft AS Holding IH Statkraft AS Statkraft GmbH Germany Statkraft GmbH Markets Statkraft GmbH Markets Statkraft GmbH Markets Statkraft GmbH Markets Statkraft GmbH Markets Statkraft KG Co & GmbH Power Knapsack GmbH Knapsack Holding Statkraft GmbH Markets Statkraft GmbH Markets Statkraft GmbH Germany Statkraft AS Statkraft AS Statkraft AS Statkraft A.S. Enerji Statkraft A.S. Enerji Statkraft A.S. Enerji Statkraft A.S. Enerji Statkraft AS Statkraft AS Varme Statkraft STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Shareholding and Shareholding voting share voting 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 57.07% 95.00% 81.31% 81.90% 85.00% 90.10% 90.10% 60.00% 60.00% 50.57% 90.10% 70.00% FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2) - -3 31 37 599 2014 3.15% 7 735 3 758 2 521 98.99% 66.62% 55.00% 67.00% 51.00% 40.00% 11 492 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% voting share Shareholding and - Skagerak Energi Group -3 30 910 602 2015 2 381 7 343 4 603 11 946 - N/A 52 2014 1 809 3 369 5 579 1 197 1) 17 279 11 700 Statkraft AS Statkraft AS Statkraft AS Parent company Statkraft Holding Singapore Pte. Ltd. Statkraft Holding Chile Pte. Ltd. Statkraft Chile Inversiones Electricas Ltd. Empresa Eléctrica Pilmaiquén S.A. Empresa Eléctrica Rucatayo S.A. Empresa Eléctrica Pilmaiquén S.A. Empresa Eléctrica Pilmaiquén S.A. Statkraft Chile Inversiones Electricas Ltd. Statkraft Chile Inversiones Electricas Ltd. Statkraft Holding Singapore Pte. Ltd. Statkraft Holding Singapore Pte. Ltd. Statkraft Holding Peru Pte. Ltd. Statkraft Peru Holding S.AC. Statkraft Holding Singapore Pte. Ltd. Statkraft Holding Singapore Pte. Ltd. Statkraft AS Statkraft Industrial Holding AS Fjordkraft AS Statkraft Industrial Holding AS Skagerak Energi AS Skagerak Kraft AS Skagerak Kraft AS Skagerak Energi AS Skagerak Energi AS Skagerak Energi AS Skagerak Varme AS Statkraft AS Statkraft AS Statkraft UK Ltd. Statkraft UK Ltd. Statkraft Energy Ltd. SKIHI Group - N/A -38 2015 -784 3 223 6 805 1 139 33 068 26 263 Oslo Beograd Bergen Registered office Amsterdam Santiago Santiago Santiago Santiago Santiago Santiago Santiago Santiago Kathmandu Amsterdam Lima Lima New Dehli New Dehli Oslo Oslo Trondheim Porsgrunn Porsgrunn Porsgrunn Hjartdal Porsgrunn Porsgrunn Porsgrunn Skien Brussels London London London London 86 Norway Serbia Norway Country The Netherlands Chile Chile Chile Chile Chile Chile Chile Chile Nepal The Netherlands Peru Peru India India Norway Norway Norway Norway Norway Norway Norway Norway Norway Norway Norway Belgium United Kingdom United Kingdom United Kingdom United Kingdom 1) IO IO IO OA WP, CT WP CT CT WP CT OA IH IH IH IH IH IH IH IH IH CT IH IO IO IO IO IO IO IO Segment IH IH IH IH IH 3) Transrucatayo S.A 2) Empresa Eléctrica Rucatayo S.A. Eléctrica del Sur S.A. Hidrotransmision del Sur S.A. Statkraft Peru S.A. Empresa Eléctrica Pilmaiquén S.A. Statkraft Chile Tinguiririca SCC Statkraft Market Services Chile S.A. Grunnåi Kraftverk AS Sauland Kraftverk AS Skien Fjernvarme AS Statkraft Peru Holding S.AC. Statkraft Chile Inversiones Electricas Ltd. Skagerak Kraft AS Skagerak Naturgass AS Skagerak Nett AS Skagerak Varme AS Statkraft Holding Peru Pte. Ltd. Statkraft India Pvt. Ltd. Statkraft Markets Pvt. Ltd. Trondheim Kraft AS Statkraft Holding Nepal Ltd. Statkraft Holding Chile Pte. Ltd. Rheidol 2008 Trustees Ltd. Statkraft Energy Ltd. Andershaw Wind Power Ltd. Fjordkraft AS Skagerak Energi AS NH: Nordic hydropower, CT: Continental trading, energy and IH: International hydropower, WP: Wind power, DH: District heating, OA: IO: Industrial ownership, Other activities. Fjordkraft AS is owned by Statkraft Industrial Holding AS (3.15%), Skagerak Energy AS (48%) and BKK AS (48.85%). Steinsvik Kraft is AS owned by 20% by Skagerak Kraft AS, 20% by Agder Energi AS and 20% by BKK AS. Statkraft AS owns 40% directly. SKIHI Group was established as a part of the restructuring of old SN Power in 2014 and is own by Statkraft with 81.3% and Norfund 18.7%. Table based on annual report. STATKRAFT ANNUAL REPORT 2015 1) 2) Equity - of which accumulated non-controlling interests Dividend disbursed to non-controlling interests Net cash flow from operating activities Total comprehensive income - of which allocated to non-controlling interests Assets Debt NOK million Gross revenues Non-controlling interests’ share of the Group’s activities There are significant non-controlling shareholdings in SKIHI Group and Skagerak Energi Group. Steinsvik Kraft AS 1) 2) 3) Statkraft Vind Holding AS Statkraft Western Balkans d.o.o. Statkraft Treasury Centre SA Statkraft UK Ltd. Statkraft Industrial Holding AS Name Note Note 39 continued The last turbine in Björkhöjden wind farm was installed in November 2015. The wind farm consists of 90 turbines with an estimated energy production of 800 GWh per year. Sandefjord district heating plant was opened by CEO Christian Rynning- Tønnesen in February 2015, and is one of Norway’s most modern and environment-friendly plants.
87 STATKRAFT ANNUAL REPORT 2015 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
88 Statkraft Statkraft AS Financial Statements STATKRAFT ANNUAL REPORT 2015 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Profit for the year the for Profit expense Tax tax before Profit items financial Net derivatives and currency unrealised and realised Net securities unrealised and realised Net costs Financial income Financial associates and subsidiaries in investments from Revenues profit Operating expenses Operating expenses operating Other Depreciation cost related and Payroll revenues Operating million NOK company parent AS Statkraft statement Income Transfer to (+)/from (-) (+)/from to Transfer payable Dividends year the for profit of Allocation other equity other 89 7, 20, 22 20, 7, 8, 22 8, 22 8, 22 8, 22 8, Note 5, 6 5, 15 15 10 22 9 8 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -2 436 -2 020 -4 969 -1 355 -1 620 -1 1 604 1 133 7 2015 -832 -362 -470 -837 -825 -727 367 577 783 -68 -8 042 -8 442 -2 212 -3 387 -2 004 -5 855 -1 427 -1 463 -1 5 600 5 431 5 2014 -825 -811 -591 770 468 638 -61 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 295 100 872 1 641 8 433 1 619 9 560 3 979 2 210 4 748 6 315 97 268 16 402 27 581 53 543 57 522 23 875 26 957 39 776 50 839 107 737 135 318 135 318 31.12.2014 319 110 633 766 2 192 2 399 1 245 5 471 1 629 2 652 45 143 19 140 11 188 17 292 54 293 55 922 34 641 38 060 40 552 139 125 101 019 121 833 139 125 31.12.2015 Director Director Hilde Drønen Thorbjørn Holøs 9 10 11 14 15 15 16 Note 19, 22 18, 22 19, 22 12, 22 13, 22 19, 22 19, 22 3,17,22 3, 17,22 Deputy chair Berit Rødseth 90 Director Director Elisabeth Morthen Oslo, 16 March 2016 President and CEO Vilde Eriksen Bjerknes Christian Rynning-Tønnesen The Board of Directors of Statkraft AS Olav Fjell Chair of the Board Director Director Asbjørn Sevlejordet Halvor Stenstadvold STATKRAFT ANNUAL REPORT 2015
Other interest-free liabilities Short-term liabilities Equity and liabilities Long-term liabilities Short-term interest-bearing debt Derivatives Equity Provisions Long-term interest-bearing debt Derivatives EQUITY AND LIABILITIES Paid-in capital Retained earnings Current assets Assets Receivables Derivatives Cash and cash equivalents Derivatives Other non-current financial assets Non-current assets Assets Deferred tax asset Property, plant and equipment Investments in subsidiaries, associates and joint ventures NOK million Balance Balance Sheet Statkraft AS parent company CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS CASH FLOW FROM INVESTING ACTIVITIES INVESTING FROM FLOW CASH activities operating from flow Cash items short-term other in Changes received dividend and contribution Group effects cash no with contribution group and dividend from income Booked items long-term in Changes years previous from write-downs of Write-downs/reversal paid Taxes value in changes Unrealised Depreciation equipment and plant property, of sale on Profit/loss subsidiary in shares of sale on Profit tax before Profit ACTIVITIES OPERATING FROM FLOW CASH million NOK company parent AS Statkraft Flow Cash of Statement Unused overdraft facilities overdraft Unused lines credit commited Unused 31.12 equivalents cash and Cash 01.01 equivalents cash and Cash equivalents cash and cash in change Net activities financing from flow Cash paid contribution Group and Dividend deposit Capital debt of Repayment debt New pool cash in Changes ACTIVITIES FINANCING FROM FLOW CASH activities investing from flow Cash associates and subsidiaries in Divestments associates and subsidiaries in reduction Capital associates and subsidiaries in Investments equipment and plant property, in Investments
91 Note 10 10 23 14 14 8 8 A+B+C C B A STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -35 126 -35 187 -11 28 975 28 13 000 13 891 12 921 14 421 10 -5 793 -5 126 -7 017 -9 137 -1 -4 089 -4 840 -4 611 -7 4 290 4 069 2 1 000 1 471 5 560 9 -119 -470 2015 450 258 -92 68 -3 - - 12 000 12 -3 483 -3 913 -2 779 -3 884 -1 431 -5 212 -3 1 000 1 560 9 853 4 707 4 000 5 195 1 242 5 088 9 595 4 844 1 230 4 -201 -334 -472 2014 -67 -66 61 1 - - - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 101 101 101 102 102 102 103 103 104 104 106 106 Page Receivables Cash and cash equivalents Equity Provisions Interest-bearing debt Other interest-free liabilities Derivatives Fees paid to external auditors Obligations and guarantees Related parties Transactions Subsequent events Note 13 Note 14 Note 15 Note 16 Note 17 Note 18 Note 19 Note 20 Note 21 Note 22 Note 23 Note 24
92 93 94 95 95 96 96 98 98 99 100 100 101 Page Significant accounting policies Market risk Market and liquidity risk analysis Hedge accounting Payroll costs and number of full-time equivalents Pensions Other operating expenses Financial items Taxes Property, plant and equipment Shares in subsidiaries and associates Other non-current financial assets STATKRAFT ANNUAL REPORT 2015 Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Index of notes to the consolidated financial statements Notes Statkraft AS parent company CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS economic life are depreciated acc depreciated are life economic transactions equity to related Tax future. the in realised be will assets the that probable is it extent the to sheet balance the in recognised ar assets tax Deferred forward. carried losses of effect tax the and values tax and accounting the between differences temporary of basis s s schemes contribution Defined - Pensions assets. fund pension on yield -projected liability estimated the on interest the period, the during accrued benefits retirement the of total the comprises and costs, payroll and as classified are schemes overfunded for assets fund pension Net s pension the in benefits future of value present The assets. plan the of value fair the by reduced are that benefits retirement future the of value present the is scheme benefit defined the to relates which sheet balance the in recognised liability The c employee’s the of percentage a as Gains/losses accounting. of basis as recognised are companies other year the during income as recorded c of expensing while earned, when estim initial the from deviate may figures actual the but basis, v book the affect that estimates estimates in Uncertainties PRINCIPLES CLASSIFICATION AND VALUATION GAAP). (Norwegian Norway gener and Act Accounting the with accor in prepared been have AS Statkraft for accounts annual The 1 Note c v nominal at sheet balance the in recognised are loans Long-term longer no impairment the for basis v reduc the when impaired are but cost, at valued are assets Fixed liabilities. long-term and current classify to criterias Corresponding assets. current as classified are months c clas are use or ownership lasting debt and assets of valuation and Classification equity. in recognised tax Deferred year. the for income taxable the of basis the on calculated are payable Taxes liabilities/assets. rules tax ordinary with accordance Taxes costs. payroll and salaries as c c under included is period the for cost benefit retirement net The liabilities. s non-funded and schemes underfunded for liabilities benefit retirement c rec are data base or assumptions actuar in changes to attributable losses and gains Remeasurement method. benefits accrued by calculated is year 40 and 30 between of period a over paid be to required be normally will contributions benefits, retirement nor is benefit retirement The retirement. on receive will employee an that benefits retirement the defines that scheme benefit retirement schemes benefit Defined - Pensions expenses. or revenues operating as treated are equipment subsidiar from contributions group and Dividends principle. accrual plac takes services and goods of sale from revenues of Recognition costs of expensing and income of recognition for Principles for rendered are accounts the when time the at estimate best The orrected for any unamortised ear unamortised any for orrected trans be to expected not is alue 12 within repaid be will that Receivables assets. current as lassified tax deferred in changes and payable taxes comprises tatement m been has payment the once ompany the for obligations further incurring without manager fund a to ontributions c c Net value. fair at sheet balance the in recognised and assets urrent proportionately benefits retirement their have will ontributions heme is a retirement benefit schem benefit retirement a is heme long-term as classified are operations by covered are that hemes Statkraft AS is subject to tax on profits that is calculated in calculated is that profits on tax to subject is AS Statkraft Significant accounting policies accounting Significant The accounts are based on assumptions and assumptions on based are accounts The c alue of assets, liabilities, inc liabilities, assets, of alue hemes accrued at the balance sheet date date sheet balance the at accrued hemes itory. Impairment is reversed when the the when reversed is Impairment itory. s liabilities/assets are calculated on the the on calculated are liabilities/assets ognised directly against equity. against directly ognised from sale of property, plant and plant property, of sale from ording to schedule. to ording ly redemption penalty or discount. discount. or penalty redemption ly ified as fixed assets. Other ass Other assets. fixed as ified exists. Fixed assets with limited useful useful limited with assets Fixed exists. ally accepted accounting principles in principles accounting accepted ally . The tax charge in the income the in charge tax The . salary. To be able to receive full full receive to able be To salary. osts takes place in accordance with the the with accordance in place takes osts income in accordance with the c the with accordance in income when earned, while dividends fr dividends while earned, when s . Employees who have not made full full made not have who Employees . e where Statkraft AS pays fixed fixed pays AS Statkraft where e A defined benefit scheme is a is scheme benefit defined A ade. The payments are expensed are payments The ade. A defined contribution contribution defined A Assets intended for for intended Assets ome and costs. costs. and ome ates. e only e is reduced. reduced. salaries and the the and are used are tion in tion ets are ets m m alue, alue, non- dance ies are ies ally set set ally ial
the the e om ash 93 Receivables income. financial as treated is received Dividend method. cost the with accordance in treated are investments shareholdings and investments share Long-term ex to deemed normally is influence is influence Controlling principles. operational and financial over influence controlling has AS Statkraft where companies are Subsidiaries ventures joint and companies associated subsidiaries, in Investment sheet. balance the in hours own recognising when excluded are costs administration equipment and plant Property, incur. they when and as expensed are expenses costs development and Research establishment. of time the financial assets or long-term financial liabilities if the remaining term is term remaining the if liabilities financial long-term or assets financial as classified are derivatives rate Interest receivables. or debts hedged on interest as way same the in accrued are instruments hedging ar that derivatives rate Interest result. financial the in included ar that derivatives rate Interest c been has derivative rate interest the whether on depends losses and gains of Recognition portfolio. debt Group’s the to exposure rate interest adapt derivatives rate Interest item. hedging the with together presented are der some of exception the with classification, such for guidelines general the with accordance in performed is derivatives of Classification transaction. trading a or transaction hedging a as defined either is financ of treatment accounting The -r year’s first The debt. interest fixed for cost) (amortised method interes effective the with accordance in recognised are discount debt Long-term v estim Best not. than likely more liabilities Contingent c s equivalents cash and Cash v market at evaluated are assets current as classified equivalents investments financial Short-term ev individual of basis the on made alloc Loss loss. expected of deduction the after value nominal at shar voting the of 50% to 20 from c disburs the and capital invested of repayment represents part excess the purchase, the after profits r of share the exceeds dividend the If it. allocated subsidiary the year same the in income as recognised are received disbursements other and Dividends exists. longer no impairment the for basis the when rever is Impairment transitory. considered be cannot that reasons is value in reduction the when done is Impairment necessary. been has impairment unless shares the for cost at valued is investment The m owns company the when achieved cos attributable directly of solely consists cost acquisition The oper regular starts equipment or plant property, the time the from basis straight-line a on depreciated and sheet balance the in recognised balanc the in recognised are loans Shor value. fair and cost of lower the at valued are assets Current accordance with the lowest value principle. Unrealised losses or losses Unrealised principle. value lowest the with accordance hedge in instruments hedging are that agreem the into entering Upon agreements. the into entering behind M terms. residual short with bonds and certificates includes also s v FINANCIAL DERIVATIVES AND HEDGING AND DERIVATIVES FINANCIAL hares control of a company together with another party. another with together company a of control hares s has AS Statkraft where ompanies companies Associated sheet. balance the in investment the of alue lassified as a hedging instrument and, if applicable, the type of hedging. hedging. of type the applicable, if and, instrument hedging a as lassified alue. sheet. balance the in recognised are ollateral) connec derivatives for ettlements epayments relating to long-term debt are presented as current liabilities. current as presented are debt long-term to relating epayments Accounts receivable and other rec other and receivable Accounts Borrowing costs and early redemption penalty or penalty redemption early and costs Borrowing Contingent liabilities are recognised if settlement is settlement if recognised are liabilities Contingent Statkraft AS uses interest rate derivatives to to derivatives rate interest uses AS Statkraft The line item cash and cash equiv cash and cash item line The e not hedging instruments are rec are instruments hedging not e ates are used when calculating s calculating when used are ates ements received are deducted from deducted are received ements es. Joint ventures are where Statk where are ventures Joint es. Property, plant and equipment ar equipment and plant Property, aluations of each receivable. each of aluations ted with financial activities (c activities financial with ted e sheet at nominal received amount at at amount received nominal at sheet e ist where the company owns or controls controls or owns company the where ist ial instruments follows the intention intention the follows instruments ial Shares, bonds, certificates and certificates bonds, Shares, ignificant influence. Significant Significant influence. ignificant ore than 50% of the voting shares voting the of 50% than ore Own research and development development and research Own STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT - accounting, where the derivatives derivatives the where accounting, eivables are recognised are eivables All long-term long-term All ts. Indirect Indirect ts. e defined as defined e long-term long-term
ash t rate rate t normally etained etained gains are gains arket arket ations are ations ettlement ettlement ivatives ivatives orded in orded alents alents ations. ations. s alue. t-term t-term ed e due to to due the the r that that are ent, it it ent, aft aft . . FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
ists elation hieving eign ets. rated ements. s e to be as the value e a . ollateral. tain stability ting a financial aft AS assumes r and the overall exposure that ex y e financing requirements. The liquidity om the banking market. Drawdown The cash flow statement has been plus liquidity and when trading in der to show cash flow generated by ent and functions as a buffer in r . There are established exposure limits ded in the balance sheet. net in the financial statements isk because the terms of its financial e years. The strategy for managing ts. The currency positions that ar to a financial instrument inflic Money items denominated in foreign currency are valued at the ounterparty risk when placing sur urrency effects are presented as urrency are translated using the exchange rate at the transaction date. ompany’s result for the year in or onditions observed for the currenc The part of the portfolio exposed to fixed interest rates shall hav BBB (Standard & Poor’s) or better obligations are not matched to the cash flows generated by its as reserve is a tool for risk managem loss on the other party by not fulfilling its obligations. Statk financial instruments. Placement of surplus liquidity is mainly divided among institutions with individual counter-parties, which are used for short-term plac For financial derivatives, credit risk is reduced by using cash c Statkraft AS assumes a liquidity r facilities have been established to secure access to short-term financing. Liquidity forecasts are prepared as an important part of the daily liquidity management and for planning futur to the liquidity forecast. CREDIT RISK Credit risk is the risk of a party c Cash collateral is settled on a weekly basis and will therefore not always be settled on 31 December. Therefore there could be an outstanding credit risk at year-end. of the financial derivative’s change in value which is related to hedged risk. When hedging future cash flows, the unrealised gains and losses of the hedging instruments are not recor Currency exchange rate on the balance sheet date. Realised and unrealised c financial income or financial cost. Transactions denominated in for c Cash flow statement principles prepared using the indirect method. The statement starts with the c regular operating investing and financing activities respectively remaining maturity of at least fiv interest rate risk has been established based on an objective of ac the most cost-efficient financing, coupled with the aim of a cer and predictability in finance cos entered into are assessed on an ongoing basis, given the market c for that currency in the Group. LIQUIDITY RISK Statkraft AS has good borrowing opportunities from the Norwegian and international money markets and fr The carrying value of the hedged asset or liability is adjusted for 94 aft r in on with e ash o used acts are om ework
ome to ents of eholdings oordinates ivatives ognised at fair ure is primarily ial derivatives designated as e maturity. Interest rate derivatives in and other currency exposures in plit between fixed and floating interest tatement as financial income or are valued at fair value. Changes elationships fulfil the requirem t rate swaps are accrued together tion with investments and other c and financial trading on energy elating to currency, interest rates and currency derivatives in line with entage shall be in the 25-75% interval. c Statkraft AS incurs foreign exchange risk in the In order to hedge against fluctuations in the foreign Statkraft AS interest rate expos Market risk The accounting treatment of financ
onnected to its debt portfolio. An interest rate management fram ompany’s loan portfolio. Forward exchange rate contracts are als alue. alue are recorded in the income s urrency rates, Statkraft AS uses tatement when settling loans befor onnection with loans that have been repaid are normally cancelled. Gains STATKRAFT ANNUAL REPORT 2015 rates. The floating interest per c has been established based on a s accordance with the company’s financial strategy. Exposure is hedged by using financial derivatives and loans in foreign currencies as hedging instruments. Few of the hedging r used to achieve the desired currency and interest rate structure for the c to hedge cash flows denominated in foreign currency. Foreign exchange risk form of transaction risk in connec flows in foreign currencies. Balance sheet risk is related to shar in foreign subsidiaries. Statkraft AS hedges its currency exposure related to cash flows fr power sales of physical contracts exchanges, investments, dividends hedge accounting. Interest rate risk Statkraft AS uses interest rate and foreign currency instruments FOREIGN EXCHANGE AND INTEREST RATE RISK Risk management is about assuming the right risk based on the Statk Group’s ability and willingness to take risks, expertise, solidity and development plans. The purpose of risk management policy is to identify threats and opportunities for the Group, and to manage the risk towards an acceptable level. The central treasury function in Statkraft AS c and manages the financial risks r liquidity of the Group. A more detailed explanation of how these ar managed will be provided in the following. manage the company’s interest rate and foreign exchange exposure. Interest rate and currency swaps and forward exchange rate contr financial costs. Hedging underlying loans. Currency derivatives c whether the currency derivative has been classified as a hedging instrument and, if applicable, the type of hedging. Currency der v hedging instruments is recorded in line with the principles for the hedging types asset hedging and cash flow hedging. In the event of hedging of assets or liabilities in the balance sheet, the derivative is rec v approved financial policy. Recognition of gains and losses depends longer longer than one year. Gains and losses are recognised in the inc and losses from cancelled interes RISK AND RISK MANAGEMENT OF FINANCIAL INSTRUMENTS IN GENERAL s c which are not hedging instruments Note 2 Note 1 continued CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Debt in GBP in Debt EUR in Debt NOK in Debt million NOK portfolio debt rate interest Fixed GBP rate, interest average Nominal EUR rate, interest average Nominal SEK rate, interest average Nominal NOK rate, interest average Nominal currency by interest of Specification portfolio. debt company's the for structure currency desired toachievethe swaps,sinceStatkraftusestheseswaps rateandcurrency from combinedinterest currency includeseffects by debt of Specifications swaps. currency 1) Total GBP in Debt EUR in Debt SEK in Debt NOK in Debt million NOK currency by debt of Specification 3 Note Hedge inefficiency Hedge risk hedged the to relation in objects, hedging on (-) (+)/loss gain Net instruments hedging on (-) (+)/loss gain Net million NOK hedging value fair on information Other instruments hedging of value Fair million NOK instruments hedging of value Fair instruments hedging The million. 5500 NOK and million 780 EUR of value nominal total a with bonds fixed-interest issued are objects hedging The instruments. hedging as designated been have swaps rate interest associated the and relationships, hedging the in objects hedging as designated been have loans bond Issued hedges. value hedging value Fair 4 Note 2014 schedule repayment Total 2015 schedule repayment Total swaps currency and rate interest combined of effect Currency debt Other markets non-Norwegian in issued Debt market Norwegian the in issued Bonds agreement) back (back-to- SF Statkraft to debt on Instalments million NOK schedule Repayment swaps. interest rate interest from fixed receive that Statkraft Negative figuresreflect portfolio. debt company’s the to exposure rate toadaptinterest ratederivatives usesinterest Statkraft debt, since connectionwith seen in must be and currencyswaps interest rate combined and swaps rate Interest swaps. 1) 2014 interest fixed Total 2015 interest fixed Total The specification includes long-term interest-bearing debt, the first-year installment on long-term interest-bearing debt and the currency effect of combined interest rate and combined interest effect of and thecurrency debt long-terminterest-bearing installment on first-year the interest-bearing debt, long-term includes specification The The specification includes long-term interest-bearing debt, first-year installment on long-term interest-bearing debt, interest rate swaps and combined interest rate and currency and interestrate and combined swaps debt, interestrate interest-bearing long-term installment on first-year interest-bearing debt, long-term includes specification The Market and liquidity risk analysis risk liquidity and Market Hedge accounting Hedge Statkraft AS treats some loan arrangements as fair as arrangements loan some treats AS Statkraft 1) 1) 0-1 year 0-1 6 676 6 191 4 297 4 -108 - - 2 1–2 years 1–2 4 292 4 201 6 199 6 - - - 2 95 income statement. The hedges expire during the period 2016-2022. period the during expire hedges The statement. income the in recognized is inefficiency The assumed. is efficiency hedging 110% 90– and same, the approximately be to deemed are instrument hedging and object hedging the of terms critical The NIBOR. or EURIBOR month 6- and 3-month floating to fixed from rate interest swap agreements The counterparties. the as banks major with into entered million, 5500 NOK and million 780 EUR respectively of value nominal a with swaps rate interest are 2–3 years 2–3 0-1 year 0-1 15 984 15 276 24 486 12 6 542 6 248 5 5 861 5 ------Future interest rate adjustments rate interest Future 1–3 years 1–3 3–4 years 3–4 -1 909 -1 369 -3 2 533 2 460 1 6 204 6 784 4 000 1 400 20 - - - 3–5 years 3–5 4–5 years 4–5 38 410 38 059 19 809 12 0.80% 2.90% 4.90% 7 467 7 533 6 282 5 251 1 542 6 5 926 5 000 3 000 3 2015 2015 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT ------5 years and later and years 5 5 years and later and years 5 1 175 1 -572 2015 2015 572 - 18 814 18 184 16 4 562 4 510 9 660 4 850 4 7 791 7 050 3 -421 - - 1 30 546 30 410 38 167 27 347 11 546 30 410 38 059 19 809 12 546 30 466 14 917 10 0.80% 3.30% 0.90% 5.50% 1 594 1 542 6 699 4 Total Total -140 -529 2014 2014 2014 2014 136 400 464 25 -4 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
il 78 48 29 isk 436 591 446 474 2014 2014 are alary
the In addition to the above, some e at least three years’ pension ed agreement who leave the company 87 35 esent value of accrued pension data at the end of the year. ionable incomes exceed 12G with a umptions for discount rate and s 491 114 727 492 510 y 2015 2015 Present value of accrued pension entitlements heme above 12G, provided they hav ear is mainly due changes in ass c entitlements for the year are calculated using the accrued benefits The actuarial gain recognised in other comprehensive income during the y adjustments. Statkraft AS is obligated to and does fulfil the requirements of the act regarding mandatory occupational pension scheme (“Lov om obligator before pensionable age receive a deferred pension entitlement for tjenestepensjon”). Unfunded defined benefit schemes Group companies in Norway have entered into a pension agreement that provide all employees whose pens retirement and disability pension equivalent to 66% of that portion of their pensionable income exceeding 12G. The agreement was closed 30 Apr 2012. Existing members of the clos s entitlements. Actuarial calculations for defined benefit schemes and pr method.Net pension liabilities in the balance sheet are adjusted for expected future salary increases until retirement age. Calculations based on staff numbers and salar 96 ic not of the ion the . The aft’s pension scheme for new r The pension benefit scheme in the losed 1 January 2014. The defined 1) Pensions Payroll Payroll costs and number of full-time equivalents Pension costs are described in further detail in 6.note imulations it is assumed that bonds are held to maturity. overs. STATKRAFT ANNUAL REPORT 2015 Norwegian early retirement pension scheme. Pension benefits from SPK are guaranteed by the Norwegian state (Section 1 of the Pens the companies also offer early retirement from the age of 62 under asset based, but management of the pension fund assets is simulated as though the assets were invested in Norwegian government bonds. In s benefit schemes cover retirement, disability and survivor pensions employees in wholly owned companies in Norway from 1 January 2014 is a defined contribution scheme. The contributions are 6% of the pensionable salary up to 7.1 of the National Insurance Scheme’s bas Funded defined benefit schemes National Pension Fund (SPK) was c retirement schemes provide pension benefits amounting to 66% of pensionable income, up to 12G, with maximum accrual. The majority Act). Companies with schemes in the SPK pay an annual premium and are responsible for the financing of the scheme. The SPK scheme is Defined contribution schemes Statk Note 6 Average number of full-time equivalents Number of full-time equivalents as of 31.12 1) Remuneration to the Chairman and the Board of Directors are disclosed in note 37 in the Group accounts. amount (G), and 18% of the pensionable salary between 7.1G and 12G. In addition to retirement pensions, the contribution scheme also entails risk c Employers' national insurance contribution Pension costs Other benefits Total NOK million Salaries Note Note 5 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Net pension costs pension Net contribution insurance national Employers' changes Scheme contributions Employee assets pension on yield Projected costs Interest year the for entitlements pension accrued of value Present million NOK statement income the in recognised cost Pension schemes benefit defined by covered Pensioners schemes contribution defined by covered Employees schemes benefit defined by covered Employees schemes benefit by covered pensioners and employees of Number 1) disability and mortality for factors Demographic (G) amount basic Scheme’s Insurance National the of Adjustment pensions current of Adjustment adjustment Salary yield projected and rate Discount used are assumptions following The continued 6 Note Accumulated actuarial gains and losses recognised in other comprehensive income before tax 31.12 tax before income comprehensive other in recognised losses and gains actuarial Accumulated million NOK income comprehensive other in recognised losses and gains Actuarial liabilities pension Net contribution insurance national Employers' schemes benefit defined unfunded for entitlements pension accrued of value Present schemes benefit defined funded for liability pension Net assets pension of value Fair schemes benefit defined funded for entitlements pension accrued of value Present million NOK liability pension benefit defined net of Breakdown costs pension Total payments Employers schemes contribution Defined The discount rate is based on high-quality corporate bonds (OMF). bonds corporate high-quality on based is rate discount The 1) 97 K2013/IR73 31.12.2015 2.25% 1.50% 2.50% 2.50% 2015 2015 2015 2015 114 172 176 336 211 713 326 299 634 933 -10 16 98 26 80 88 -6 8 - STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT K2013/IR73 31.12.2014 2.50% 1.75% 2.75% 2.20% 2014 2014 2014 2014 339 807 311 397 452 849 141 343 -53 -17 99 48 41 37 75 37 -6 7 5 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 8 - -2 16 46 30 49 57 -11 -17 415 115 132 811 291 120 468 2014 2014 2014 2014 2014 2014 -772 -230 1141 4 290 5 431 -1 855 -2 978 -1 252 -5 004 -2 387 -1 180 -1 427 -1 844 7 24 18 38 42 23 -27 -20 367 122 143 577 119 680 448 110 139 825 503 312 2015 2015 2015 2015 2015 2015 -167 6 630 7 133 -4 020 -1 160 -1 355 -2 068 -1 969 -3 614 -1 109 98 1) 1) Financial items Other Other operating expenses Purchase of third-party services mainly includes and consultants other services. At year-end the security situation in South-East Turkey and challenges related to project execution was considered an impairment indicator for the Cetin project. On 15 December STATKRAFT ANNUAL REPORT 2015 Net financial items Gains and losses derivatives, realised Gains and losses derivatives, unrealised Total Net realised and unrealised currency and derivatives NOK million Currency gains and losses, realised Currency gains and losses, unrealised Write-downs in 2014 was mainly related to shares in Statkraft Germany GmbH and Statkraft Enerji A.S., due to revalutaion of underlying operations in Germany and delay of inproject Turkey. Total 1) 2015, Statkraft decided to suspend the majority of the construction works. Mainly due to the situation of the Cetin project, the value of shares in Statkraft Enerji A.S. has been written down with NOK 2827 million. The write-down is based on a valuation of the various investments in the subsidiary. Previous write-downs of shares in Statkraft Germany GmbH has been partly reversed in 2015 with NOK 759 million. This is based on a valuation of the company, with a breakdown of valuations of each cash generating unit, adjustment for working capital and debt, and multiplied with the NOK/EUR closing rate 31.12.2015. NOK million Write-downs/reversal of write-downs from previous years Gain on sale of shares in Småkraft Gains and losses on securities, realised and unrealised Total Net realised and unrealised securities NOK million Interest expense to group companies Interest expenses external debt Other financial costs Other financial income Total Financial costs NOK million Interest income from group companies Interest income Group contribution Total Financial income Revenues from investments in subsidiaries and associates NOK million Dividend from group companies Note 8
Other operating expenses Total 1) IT expenses Marketing Travel expenses Insurance NOK million Purchase of third-party services Materials Rent Note Note 7 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS The following table provides a breakdown of the net deferred tax. Deferred tax assets are recognised in the balance sheet to the extent it is probable that these that probable is it extent the to sheet balance the in recognised are assets tax Deferred tax. deferred net the of breakdown a provides table following The tax deferred Breakdown rate tax Effective expense Tax net differences, permanent Other rates tax in Changes years previous impairment of Impairment/reversal tax Withholding years previous to relating Changes income Tax-free of: taxes on Effect 27% of rate nominal at expense tax Expected tax before Profit million NOK rate tax effective and rate tax nominal of Reconciliation statement income the in expense tax Total tax deferred in Change tax Withholding years previous for assessment tax to relating Correction million NOK following the comprises expense tax The 9 Note Deferred tax (+)/deferred tax asset (-) asset tax (+)/deferred tax Deferred equity in directly Recognised income in Recognised (-) asset tax (+)/deferred tax Deferred rate tax Applied (-) asset tax (+)/deferred tax deferred Total forward carry loss tax and differences temporary Total liabilities Pension equipment and plant Property, items term long Other Derivatives liabilities assets/current Current million NOK utilised. be will Taxes as of 31.12 of as 01.01 of as 99 -4 222 -4 -1 245 -1 641 -1 245 -1 981 -4 -77% -109 -168 -127 -470 25% -712 2015 2015 2015 362 558 362 353 353 104 -42 92 43 -2 6 3 6 3 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT -1 641 -1 641 -1 079 -6 238 -5 212 -3 -774 -807 27% -807 24% -770 -308 -867 -770 -774 2014 2014 2014 469 -60 -52 -69 -74 87 -2 4 6 6 - FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY - 4 4 1 - 76 92 95 18 44 80 28 49 -61 -68 146 123 345 483 515 319 102 150 -196 Total 1 570 7 730 3 453 16 180 14 295 21 490 17 542 17 838 101 019 100 673 Carrying value - - - - 3) 1 8 1 1 -5 -3 -6 12 16 -26 -28 -24 620 878 2445 1221 3 404 1 603 1 106 - - - -4 11 42 49 49 Net profit 2014 - - 3) 1 1 14 39 28 13 85 92 135 190 645 171 331 4 136 5 280 8 326 5 405 15 756 15 418 59 432 11 063 Plants under construction 4 50 Equity 31.12.2014 -61 -68 472 466 270 -196 3–8 years 81.90% 40.00% 50.10% 50.00% 62.00% 70.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% voting share fixtures and fittings Shareholding and Operating equipment and Oslo Oslo Oslo Oslo Oslo Oslo Oslo Oslo Oslo Oslo Oslo 100 Tirana Bergen Malaga Tysvær London Istanbul Istanbul Brussels Belgrade Stockholm Düsseldorf Kristiansand Registered office Satıs¸ Ltd. Sirketi 2) 4) 4) 4) 1) Investments in subsidiaries, associates and joint ventures Property, plant and equipment A shareholder’s agreement indicates joint control in Statkraft Agder Energi Vind DA. The financial statements 2015 for most subsidiaries and associates have not been finalised. See footnote 4) for exceptions. Based on annual accounts for 2015. Steinsvik Kraft AS is owned 20% by Skagerak Kraft AS, Agder Energi AS and BKK AS. AS ownsStatkraft 40% directly. 2) 3) 4) Total associates and joint ventures Total 1) Fosen Vind AS Naturkraft AS Statkraft Agder Energi Vind DA Steinsvik Kraft AS Total subsidiaries Associates and joint ventures Statkraft UK Ltd. Statkraft Vind Holding AS Statkraft Western Balkans d.o.o. Statkraft Germany GmbH Statkraft Industrial Holding AS Statkraft IH Invest AS Statkraft Treasury Centre SA Statkraft Energi AS Statkraft Enerji A.S. Statkraft Financial Energy AB Statkraft Forsikring AS Statkraft Albania Shpk. Statkraft Asset Holding AS Statkraft Carbon Invest AS Statkraft Elektrik Enerjisi Toptan Kjøllefjord Vind AS Renewable Energies and Photovoltaics Spain S.L. Smøla Vind 2 AS NOK million Shares in subsidiaries Hitra Vind AS Accumulated depreciation and impairment 31.12 Carrying value 31.12 Depreciation for the year Period of depreciation Disposals Transferred from assets under construction Cost 31.12 NOK million Cost 01.01 Additions STATKRAFT ANNUAL REPORT 2015
Note 11
Note Note 10 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS c provis no 2015 December 31 of As Total receivables Other companies group from receivables Short-term receivable pooling cash Group collateral cash to related Receivables receivable Accounts million NOK 13 Note Total loans and shares Other companies Group to Loans million NOK 12 Note Norwegian state, through the Ministry of Trade, Industry and Fisheries. and Industry Trade, of Ministry the through state, Norwegian the by owned wholly is SF Statkraft Norway. in domiciled and established company, state-owned Norwegian a is which SF, Statkraft by owned are and rights voting same the have shares All 166. NOK of value par a with each shares, million 200 into divided billion, 33.2 NOK of capital share a has company parent The 1) 15 Note million. 000 1 NOK of overdraft bank a and million 000 13 NOK of facilities drawing committed unused has AS Statkraft derivatives financial for collateral Cash million NOK 17. and 13 notes See repaid. be eventually will who counterparties, from end year at payments net shows below table The contracts. exchange forward and swaps currency and rate interest combined swaps, rate interest on has AS Statkraft that losses and gains unrealised net the for security as counterparties to/from payments is collateral Cash collateral Cash Total bonds notes, promissory certificates, funds, market Money deposits cash and Cash million NOK 14 Note Equity as of 31.12.15 of as Equity contribution Capital 2015 Dividends pensions gains/losses Actuarial 2015 for Profit 31.12.14 of as Equity contribution Capital 2014 Dividends pensions gains/losses Actuarial 2014 for Profit 31.12.13 of as Equity million NOK ontribution from subsidiaries. subsidiaries. from ontribution The capital contribution was settled against a receivable Statkraft SF had of NOK 750 million. NOK 750 of had SF Statkraft receivable a against settled was contribution capital The Receivables assets financial non-current Other Equity equivalents cash and Cash 1) ion for bad debt has been identified. Short-term receivables from receivables Short-term identified. been has debt bad for ion Share capital Share 33 200 33 000 33 600 30 101 2 400 2 200 ------Paid-in capital Paid-in Share premium Share 21 077 21 527 20 577 15 account 4 950 4 550 ------Group companies comprise dividends and group and dividends comprise companies Group Other paid-in Other 11 188 11 140 19 050 19 7 582 7 008 1 477 2 5 471 5 921 4 capital -863 2015 2015 2015 2015 105 550 16 90 16 16 16 ------STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT Retained earnings 12 185 12 -1 604 -1 600 -5 442 -2 1 629 1 979 3 -832 -164 86 - - 16 402 16 -1 579 -1 55 922 55 522 57 378 58 -1 604 -1 600 -5 442 -2 9 560 9 061 3 499 6 819 4 722 8 668 2 433 8 349 8 equity 7 350 7 2014 2014 2014 2014 Total -832 -164 148 750 45 84 86 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 9 - - 65 33 38 550 807 872 400 118 2014 2014 2014 6 315 6 671 1 088 1 121 6 791 5 600 30 896 39 776 16 651 23 875 63 651 44 52 53 11 26 25 140 559 713 766 400 2015 2015 2015 1 604 2 399 4 297 1 000 1 614 7 050 75 193 33 603 40 552 27 166 34 641 102 1) Other interest-free liabilities Interest-bearing Interest-bearing debt Provisions Pension liabilities are described in further detail in note 6. STATKRAFT ANNUAL REPORT 2015 Total Indirect taxes payable Dividends payable Debt to Group companies Other interest-free liabilities NOK million Accounts payable Note 18 Statkraft’s net borrowing in 2015 amounted to NOK 7310 million. Other changes are mainly explained by the changes in group cash pooling debt and changes in exchange rates on foreign currency loans. Total Total interest-bearing debt Debt to Statkraft SF (back-to-back agreement) Bonds issued in the Norwegian market Debt issued in non-Norwegian markets Other debt Other short term debt Total Long-term interest-bearing debt Credit facilities Group cash pooling debt Debt related to cash collateral Short-term debt to Group companies NOK million Short-term interest-bearing debt First year’s instalment of long-term debt Note 17 Total 1) NOK million Pension liabilities Other provisions Note 16 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Total swaps currency and rate interest Combined contracts rate exchange Forward swaps rate Interest derivatives rate interest and Currency million NOK assets current – Derivatives Total swaps currency and rate interest Combined contracts rate exchange Forward swaps rate Interest derivatives rate interest and Currency million NOK assets non-current – Derivatives derivatives: rate interest and currency of value fair and value Accounting agreements rate interest and Currency note. policies accounting the in described as purpose the on depend will Accounts purposes. different for derivatives financial in trades Statkraft 19 Note sustainability report. sustainability of the attestation and Segment associated withrestructuringoftheInternationalHydropower procedures and control quality relate to 2014 in services other for fees the in items main The of thesustainabilityreport. and theattestation and procedures, processes existing map various to assistance relateto in 2015 services other for fees the in items main The 1) Total services Other services consultancy Tax services attestation Other auditing Statutory thousand NOK follows: as were VAT) (excluding AS Statkraft for services other and auditing for paid fees total The auditor. Group’s Statkraft the is AS Deloitte 20 Note achieved. are accounting hedge for requirements the whether on depending principle, value lowest the at or hedging as for accounted are and management risk of part are swaps, currency and rate interest combined of portion interest the including swaps, rate interest The contracts. the to counterparties the by made calculations against reasonableness of test a to subjected is value present extrapolated. Estimated is rate exchange forward the which from rates, exchange quoted on based is contracts exchange currency forward of valuation The ECB. from rates exchange quoted and rates interest market observed of use through value present to flows cash future expected discounting by determined is swaps, currency and rate interest combined as well as swaps, rate interest of value fair The 1) Total swaps currency and rate interest Combined contracts rate exchange Forward swaps rate Interest derivatives rate interest and Currency million NOK liabilities current – Derivatives Total swaps currency and rate interest Combined contracts rate exchange Forward swaps rate Interest derivatives rate interest and Currency million NOK liabilities long-term – Derivatives Fair value does not include accrued interests. accrued include not does value Fair 1) Derivatives Fees paid to external auditors external to paid Fees 103 Carrying Value 1 116 1 323 1 2 192 2 793 1 652 2 31.12.2015 633 633 110 110 367 212 33 - - - - value 1 116 1 323 1 082 1 064 1 7 735 7 753 2 876 3 192 2 793 1 652 2 2015 Fair 449 633 470 110 485 684 422 367 212 33 1) - STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 31.12.2014 Carrying Value 1 491 1 619 1 619 1 4 748 4 114 1 623 3 210 2 719 100 100 11 - - - - - value 7 446 7 421 3 569 2 748 4 114 1 623 3 210 2 491 1 344 2 619 1 2014 Fair 601 855 719 724 852 260 100 492 11 - 1) 2 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 8 1 1 - - - - 84 93 66 64 62 21 41 55 27 22 216 409 327 108 601 2014 4 290 1 141 5 431 7 9 8 5 - 80 75 32 68 56 52 45 25 22 88 27 197 452 345 151 696 122 481 2015 6 630 7 133 104 NOK million Related parties Obligations and guarantees Statkraft AS sells intra-group services from centralised service centres Dividends and group contributions are accrued through Statkraft AS’ own shareholdings Statkraft AS is also the borrower for the majority of the Group’s external borrowings and is the owner of the cash pooling facilities. The central treasury function in Statkraft AS coordinates and manages the financial risks relating to currency, interest rates and liquidity of the Group. Directly owned subsidiaries, see specification in note 11 Other group companies, see specification in note 39 to the Consolidated Financial Statements The parent company of the Group, Statkraft SF Associated companies, see specification in note 11 Group management and the board of directors, see specification in note 37 to the Consolidated Financial Statements STATKRAFT ANNUAL REPORT 2015 Statkraft Energi AS Statkraft IH Invest AS Other Total Financial income from group companies Statkraft Asset Holding AS Statkraft Markets GmbH Smøla Vind 2 AS Statkraft IH Invest AS Total Statkraft Energi AS Statkraft Industrial Holding AS Statkraft Financial Energy AB Hitra Vind AS Statkraft UK Ltd. Total Dividend and group contribution from group companies Other operating expenses Statkraft Energi AS Statkraft Markets GmbH Statkraft Sverige AB Other Total Statkraft IH Invest AS Statkraft UK Ltd. Statkraft Markets GmbH Statkraft Varme AS Income statement - Operating revenues Statkraft Energi AS All intra-group transactions are conducted at market terms. Transactions and balances within the Group are presented in the table below: Transactions with subsidiaries and associated companies relate mainly to the following: The Company’s related parties are considered to be: Note 22 Statkraft AS has guarantees and off-balance-sheet obligations totaling NOK 32 101 million. Of this, NOK 29 773 million concerns parent company guarantees. Statkraft AS leases office buildings in Lilleakerveien 4 and 6 in Oslo and Sluppenveien 17B in Trondheim. The lessors are Mustad Eiendom AS and Kjeldsberg Sluppen ANS respectively. The lease agreements in Oslo expire in 2028 for Lilleakerveien 6, and 2028 with an option to prolong for ten plus ten years for Lilleakerveien 4. The annual lease totals NOK 94 million for the Oslo premises. The lease agreement in Trondheim expires in 2030 with an option to prolong for 5 years. The annual lease totals NOK 7 million for the Trondheim premises. Statkraft AS has committed funding of Cetin and Kargi project in Turkey of TRY 244 million, but has not booked an obligation to pay any capital deposit to Statkraft Enerji A.S. Note Note 21 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Baltic Cable AB Cable Baltic AS Holding Asset Statkraft assets Current Derivatives GmbH Markets Statkraft AS Energi Statkraft assets financial non-current Other AS Holding Asset Statkraft to Loan AS Energi Statkraft to Loan assets Non-current million NOK - sheet Balance Total Other AS Invest IH Statkraft GmbH Markets Statkraft Ltd. UK Statkraft AS Energi Statkraft SA Centre Treasury Statkraft AS Holding Industrial Statkraft SF Statkraft companies group to costs Financial continued 22 Note Current interest-bearing debt to Group companies Group to debt interest-bearing Current SF Statkraft to Debt debt pooling cash Group Other AS Holding Industrial Statkraft AS Energi Statkraft Ltd. UK Statkraft AB Sverige Statkraft GmbH Markets Statkraft AS Invest IH Statkraft SA Centre Treasury Statkraft liabilities Current Derivatives GmbH Markets Statkraft AB Leasing Statkraft AS Energi Statkraft SA Centre Treasury Statkraft debt interest-bearing Long-term agreement) (back-to-back SF Statkraft to Debt liabilities Long-term Derivatives Other GmbH Markets Statkraft AS Energi Statkraft AS Invest IH Statkraft companies group receivables Short-term Other AS Holding Asset Statkraft GmbH Markets Statkraft AS Holding Industrial Statkraft AS Energi Statkraft receivable pooling cash Group AS 2 Vind Smøla AS Energi Statkraft AB Sverige Statkraft AS Vind Kjøllefjord 105 19 050 19 800 10 33 603 33 937 13 1 008 1 250 8 5 044 5 011 1 509 1 976 2 178 4 947 4 582 7 835 6 2015 202 785 152 249 212 400 400 234 152 185 483 21 54 17 37 23 11 12 16 18 19 44 11 11 13 24 31 42 78 1 - - - - 9 1 9 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 30 896 30 894 11 1 121 1 121 1 955 3 866 9 944 1 727 2 819 4 494 4 722 8 162 1 524 7 349 8 349 8 2014 510 400 400 135 117 247 47 11 35 47 18 27 72 27 26 20 41 20 52 61 61 -1 ------1 2 1 9 6 7 6 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY - 5 3 5 2 - - 75 31 103 170 379 5 608 5 623 8 4 3 3 6 - 99 64 25 21 34 217 1 606 1 656 106 Subsequent events Transactions STATKRAFT ANNUAL REPORT 2015 On 23 February 2016 it was announced that Statkraft, TrønderEnergi and the European investor consortium Nordic Wind Power DA will realise Europe’s largest onshore wind power project in Central-Norway. The subsidiary Statkraft Vind Holding AS owns 52.1 % of the joint operation company Fosen Vind DA, which will be the owner of the wind farms. See note 3 in the Group accounts for further information. Note 24 Note 23 Statkraft AS sold its shares in the subsidiary Småkraft AS in December 2015. The gain from the transaction was NOK 119 million and is booked as a financial item. Statkraft AS still holds one of the power plants from the sale of Småkraft AS, which has been transferred into a new established company, Steinsvik Kraft AS. The ownership structure of Steinsvik Kraft AS is the same as for Småkraft AS prior to the sale. Guarantees related to group companies are listed in note 21. In 2015 and 2014 the subsidiary Statkraft Treasury Centre SA has reduced its share capital by NOK 28 731 million and NOK 8956 million. The amounts have been paid to Statkraft AS, and the cost price of the shares in Statkraft Treasury Centre SA has been reduced correspondingly. In 2014 Statkraft AS has transferred its shares in Statkraft Värme AB, Statkraft France SAS, Statkraft Suomi OY, Statkraft Vind AB and SN Power AS to Statkraft Asset Holding AS as capital contribution of NOK 5082 million. In addition the shares in Statkraft Sverige AB have been sold to Statkraft Asset Holding at a price of NOK 11 016 million. The sale has been offset by converting the recivables arisen of NOK 2766 million to equity in Statkraft Asset Holding AS. The remaining receivables of NOK 8250 million were converted to long-term interest-bearing receivables. The interest rate on the receivables is equivalent to a six- month NIBOR + 0.9475%. The value of the shares in Statkraft Asset Holding AS has been reduced with NOK 4963 million, equivalent to the difference between the sales price and the booked value of the shares of Statkraft Sverige AB. Other Current interest-free liabilities to Group companies Statkraft Energi AS Statkraft Trading GmbH Statkraft Markets GmbH Statkraft Treaury Centre SA Other Derivatives Statkraft SF Statkraft IH Invest AS Statkraft Leasing AB Statkraft Industrial Holding AS Note Note 22 continued Statkraft Treasury Centre SA Statkraft Energi AS CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Auditor’s Report Auditor’s
107 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
108 STATKRAFT ANNUAL REPORT 2015
Statkraft works systematically to reduce social and environmental impact from its activities. Here is an example from Kargi in Turkey, where beekeeping is just one of a number of new businesses Statkraft supports in an effort to restore livelihoods. Statkraft participates in several international fora where climate and energy policy is shaped, and even arranges the annual Climate Roundtable with participants from around the world representing business, research, politics and interest organisations.
109 STATKRAFT ANNUAL REPORT 2015 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
110 Corporate Corporate Responsibility STATKRAFT ANNUAL REPORT 2015 CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Human rights Human people of safeguarding and Safety aspect Material www.statkraft.com. on posted Report Responsibility Corporate full the see – aspects other than review comprehensive and detailed more a given be will aspects material these reporting, of terms In analysis. this of result a as identified were aspects Six expectations. stakeholder considering includes which G4), (GRI Initiative Reporting Global the to according conducted was analysis materiality The Statkraft. to aspects responsibility corporate central most the identifying of aim the with 2015 in conducted been has analysis materiality A Statkraft. for important are responsibility corporate of aspects All aspects material Responsibility Corporate for goals and Ambitions corruption anti- and ethics Business preparedness and adaptation mitigation, change Climate Biodiversity management Water activities business all in practices unethical and corruption prevents actively Statkraft footprint climate low a maintain to continuously seeks and system energy sustainable and friendly climate more a to transition the to contributes Statkraft impact of areas our in resilience ecological facilitates and challenges, biodiversity to approach precautionary a supports Statkraft practice management water sustainable and responsible a with company a as recognised is Statkraft Rights Human and Business on Principles Guiding UN the to according acts Statkraft culture safety value-based a and approach systematic a through people to injuries or harm prevents actively Statkraft statement Ambition 2020 towards Goals operation of areas all in control) flood and scarcity (e.g. availability water on change climate of effects the of understanding improved on based management water sustainable Demonstrate self-restrictions and concessions our in requirements hydropeaking and limits flow- levels, water of follow-up systematic and handling adequate and proactive Ensure impacts rights human salient our on including communication, and dialogue stakeholder Strengthen level project at including mechanisms, grievance our known better make and Strengthen rights human on program training of implementation adequate Ensure projects international and major by starting accordingly, practices our improve and process) diligence due rights (human management rights human to related expectations national and international increasing to related developments Follow wide corporate applied are incidents from learnings that Ensure management security for capabilities and processes Improve performance guide and measure to indicators lagging and leading of balance a Utilize measures preventative and activities risk high on focus the Strengthen leadership safety provide levels all at managers that Ensure key business processes business key for controls and requirements in reflected is ethics business how of adequacy the Improve processes risk high on focus particular with risks, ethics business and anti-corruption of handling corporate-wide adequate ensure to Continue breaches and concerns of reporting of culture the strengthen to Continue anti-corruption on focus with ethics business in training complete employees All Contribute to scientific methods for assessing the climate impact of our business our of impact climate the assessing for methods scientific to Contribute assumptions climate company-wide on based accordingly, opportunities business new evaluate to continue and assets our all affects change climate how understanding common Further changes induced change climate incorporate to order in analysis strategic and market our Improve stakeholders relevant to pricing, carbon on including perspectives, Statkraft’s provide appropriate, as and, business our on policies climate international and national of impact the of understanding the Further operation and development project in handling adequate and biodiversity, on impacts our of understanding Increased areas protected legally in presence and habitats critical fauna, and flora of species red-list e.g. biodiversity, of handling systematic on performance of communication and tracking Enhanced 111 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 8 0 0 0 0 8 40 19 6.5 3.2 0.2 8.4 2.1 208 454 902 109 100 128 514 674 334 596 164 500 2013 2013 2013 2013 70.1 29.9 12.4 27.1 53.9 80.3 16.2 70.3 18.8 88.4 24.3 1 673 2 600 1 340 3 009 1 673 1 172 16 041 12 886 11 272 0 0 0 0 13 23 23 40 9.4 9.2 1.9 3.0 0.2 100 247 158 126 859 119 147 488 760 305 596 164 2014 2014 2014 2014 12.5 10.0 68.1 72.1 16.8 78.4 21.6 80.5 19.6 80.9 15.9 1 262 1 016 1 262 2 600 1 511 2 761 16 401 13 273 11 823 0 0 0 0 0 0 0 0 0 0 5) 5) 36 21 21 67 9.7 9.5 3.7 3.9 0.4 100 909 100 809 647 838 617 675 164 2015 2015 2015 2015 90.3 69.8 17.1 80.5 19.5 15.2 80.2 15.5 2 600 1 587 2 863 873 84.6 16 778 13 464 11 711 % % % % % % % % % % % % % % % % % % % MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW MW Unit of measurement Unit of measurement Unit of measurement Unit of measurement 112 1), 4) 1), 4) 1) 1) 2) 2) 3) 3) 3) 3) 3) 3) Of which small-scale hydropower Of which small-scale hydropower Norway Other Nordic countries Other Nordic countries Other European countries Rest of the world Of which wind power Of which gas power Norway Of which hydropower Norway Other Nordic countries Norway Other Nordic countries Other European countries Rest of the world Of which gas power Of which hydropower Of which wind power Other Nordic countries Other European countries Rest of the world Norway Bio power Norway Other Nordic countries Hydropower Wind power Gas power Other Nordic countries Other European countries Rest of the world Norway Norway Other Nordic countries Of which wind power Of which gas power Of which bio power Of which hydropower STATKRAFT ANNUAL REPORT 2015 Capacity under development per geography, district heating Capacity under development per geography, power generation Capacity under development per technology and geography Capacity under development per technology, power generation Capacity under development per geography, district heating Capacity under development, district heating Capacity under development per geography, power generation Capacity under development, power generation Capacity under development per technology and geography Installed capacity per geography, district heating Installed capacity per geography, power generation Installed capacity per technology, power generation Installed capacity per technology and geography Installed capacity per geography, district heating Installed capacity per geography, power generation Installed capacity, district heating Installed capacity per technology and geography Installed capacity power generation Power generation and district heating production Corporate Responsibility Statement CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Power generation per geography per generation Power technology generationper Power geography and technology per production heating district and generation Power geography per heating District geography per generation Power heating district Renewable generation power Renewable heating District generation Power geography and technology per production heating district and generation Power 7) renewable. as counted therefore and heat waste 6) 5) 4) 3) 2) 1) plants power Bio plants heating District plants power Gas plants thermal of Efficiency geography per heating District Ratio of net energy output (electricity and heat) against gross energy input. Efficiency is reported per plant. isreported Efficiency input. gross energy against heat) and (electricity output energy net of Ratio for defined asinput is inTrondheim used intheincinerationplant the waste 2015 From fuel. fossil on based heating of district and share power gas covers production Non-renewable suspended. currently is but figures, the in included is project Cetin The powerplants. Kingdom) (United WUKI and (United Kingdom) Scira (Norway), Kårstø (Germany), Herdecke controlled jointly the Includes interest. majority has a Statkraft subsidiaries where in shareholdings Statkraft’s Includes Includes projects with an investment decision. investment an with projects Includes MW. <10 capacity Installed Bio power Bio power Gas power Wind Hydropower countries Nordic Other Norway world the of Rest countries European Other countries Nordic Other Norway power bio which Of power gas which Of power wind which Of hydropower which Of Other Nordic countries Nordic Other Norway world the of Rest countries European Other countries Nordic Other Norway Of which small-scale hydropower hydropower small-scale which Of 3) 3) 6) 6) 7) 2) 113 1) 1) Unit of measurement of Unit measurement of Unit Unit of measurement of Unit TWh TWh TWh TWh TWh TWh TWh TWh TWh TWh TWh TWh TWh % % % % % % % % % % % % % % % 30 - 31 - 30 99 - 71 59 - 43 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 12.9 78.9 93.6 44.4 94.7 99.1 52.7 56.3 19.9 80.1 2015 2015 2015 6.0 2.3 0.5 0.9 4.4 0.2 0.8 3.4 1.3 7.2 1.1 0.3 0.5 2.5 0.4 30 - 31 - 30 90 - 85 59 - 43 10.0 82.9 95.4 46.4 83.6 99.1 53.4 56.0 20.5 79.5 2014 2014 2014 3.9 3.2 0.5 0.9 3.0 0.2 0.8 2.2 1.8 5.6 1.0 0.3 0.5 1.7 0.3 85 - 100 - 85 30 - 31 - 30 43 - 59 - 43 27.4 72.6 80.7 94.1 45.1 97.3 52.6 55.9 2013 2013 2013 5.4 4.1 9.7 0.5 2.7 2.5 0.3 0.8 2.3 5.4 1.1 0.3 1.5 1.4 0.3 82 3 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 2) 8 0 0 1 8 - - - - 27 53 20 70 47 12 273 2013 2013 2013 2013 1 200 2 400 2013 77 200 31 200 52 600 86 300 28 800 57 500 317 800 469 600 357 600 913 100 in the jointly 2 2 8 0 0 6 0 0 - - - - 46 12 64 267 473 2014 2014 2014 2014 2014 5 500 2 000 64 000 44 500 39 600 55 500 26 200 29 300 936 400 313 300 197 300 1 799 200 4 1 0 5 8 0 0 0 0 0 0 2) 2) 3) 4) 5) 19 14 46 13 5 2 6 101 408 61 2015 2015 2015 2015 2015 2015 2015 12 7 000 1 300 3 600 13 000 50 900 26 000 44 700 21 500 23 200 523 000 139 600 376 400 257 600 188 800 1 080 000 kg kg Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number kg/MWh kg/MWh kg/MWh Unit of measurement Unit of measurement Unit of measurement Unit of measurement Unit of measurement Unit of measurement Unit of measurement 114114 1), 2) 1) emissions from the production process. Includes also Statkraft’s share of production and emissions of CO 2 1) 2) 1) 3) 4) from affiliated gas power plants 5) 1) 1) emissions 6 2) 1), 2) equivalents, consolidated activities equivalents 2 2 -quotas 2 -quotas, consolidated activities 2 from fuel consumption from the Group’s and machinery. equipment 2 Of which rest of the world Of which Norway Of which other Nordic countries Of which other European countries Of which from halon emissions Of which from fuel consumption Of which from business travel Of which from gas power plants Of which from district heating plants Of which from SF -equivalent emissions per MWh generated, total -equivalent emissions per MWh generated, gas power -equivalent emissions per MWh generated, district heating emissions 2 2 2 6 Of which in Norway Of which in other Nordic countries Of which in other European countries Of which in the rest of the world Other European countries Rest of the world Norway Other Nordic countries Of which in the rest of the world Of which inNorway Of which in other Nordic countries Of which in other European countries Impacted protected rivers Anadromous fish Catadromous fish Impacted national salmon rivers This indicator is new in 2015. Limited to natural parks and nature or wildelife reserves. Includes red list species with habitat areas by Power impacted Generation's operations in Sweden. Includes red list species with habitat areas by Internationalimpacted Hydro's operations in Albania, Turkey, Peru, Chile, Nepal and Brazil. This indicator is new in 2015. Includes species defines as red list species by either International Union for Conservation of Nature (IUCN) or national authorities. Includes red list species with habitat areas by Skagerakimpacted Energi's operations. Includes salmon, inland trout, sea trout, grayling and eel. Includes salmon in Norway and eel in Sweden. Impact entails change of waterflow, water levels or other living for conditions fish. SN Power is not included. Statkraft’s ownership is >50%. From 2015 the waste used in the incineration plant in Trondheim is defined as input for wasteand heat therefore counted as renewable with zero emissions of greenhouse gases. Includes Statkraft’s share of production and direct fossil CO CO Comprises air travel and mileage reimbursements for private vehicle use in the Norwegian operations. Statkraft’s share. Statkraft’s ownership is >50%. Fossil share of emissions. From 2015 the waste inused the incineration plant in inputTrondheim is defined as for waste heat and therefore counted as renewable with zero emissions STATKRAFT STATKRAFT STATKRAFT ANNUALANNUALANNUAL REPORT REPORT REPORT 201520152015 1) 2) Operational sites in, or adjacent to, protected areas 4) 5) Operational sites in, or adjacent to, protected areas 1) 2) 3) Red list species Red list species with habitat in areas impacted by Statkraft's operations in: Stocking of fish roe 1) 2) Fish cultivation Restocking of fish and smolt 1) 2) Impacts on watercourses Impacted river courses with: Interventions on nature and biodiversity 1) controlled power plants Herdecke (Germany), (Norway), Scira Kårstø (United Kingdom) and WUKI (United Kingdom). Allocated CO 2) Allocated CO Relative greenhouse gas emissions CO CO CO 1) 3) 4) 5) SF Halon emissions 1) 2) of greenhouse gases. Emissions of CO Emissions of CO Climate Greenhouse gas emissions 114 115
CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS pollution Air consumption resource and Energy Statkraft has been temporarily exempted from the requirements to phase out halon as an explosion suppression medium in transformer rooms. transformer in medium suppression explosion an as halon out phase to requirements the from exempted temporarily been has Statkraft Halon SF Inventories 2) 1) water Process fuel Other fuel Fossil Electricity Consumption 1) waste Other waste Hazardous Waste Waste NO SO air to Emissions Includes process water (cooling water) in gas fired power plants, bio power plants and district heating plants. plants anddistrict power bio plants, power fired gas in water) (cooling water process Includes and machinery. equipment own for fuel of consumption Includes Consists of slag, filter dust and filter cake. filter and dust filter slag, of Consists 6 2 x from district heating plants heating district from Bio fuel Bio plants power bio for Waste plants heating district for Waste fuel Engine oil Fuel plants heating district gas, Fuel plants power gas-fired gas, Natural operations other which Of heating district for boilers electric which Of power pumped-storage which Of Of which residual non-hazardoues waste non-hazardoues residual which Of waste separated which Of waste hazardous other which Of plants power bio from which Of plants incineration waste from which Of plants power bio from which Of plants heating district from which Of plants power gas from which Of 2) 1) 1) 115 Unit of measurement of Unit measurement of Unit Unit of measurement of Unit measurement of Unit Mill. Nm Mill. Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes GWh GWh GWh GWh m kg kg 3 3 349 100 349 200 264 700 227 27 088 27 502 14 12 000 12 200 49 400 61 2 126 2 438 3 506 3 031 1 2 000 2 900 9 980 3 300 8 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 2015 2015 2015 2015 138 858 104 334 513 91 35 75 0 5 350 000 350 700 409 400 205 28 578 28 223 13 11 200 11 400 47 400 60 2 126 2 817 1 712 3 2 000 2 700 5 700 7 750 1 2014 2014 2014 2014 155 668 899 155 293 514 95 76 66 16 0 1 361 200 361 1 168 746 168 764 285 495 225 32 000 32 600 53 400 86 452 31 390 10 2 300 2 500 6 800 8 126 2 937 2 810 5 2013 2013 2013 2013 770 286 415 173 874 173 204 591 882 48 87 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 0 0 0 0 B A- 30 87 17 B+ B+ 127 117 237 482 2013 2013 2013 2013 2013 2013 -274 2 788 4 291 3 503 3 369 3 045 1 101 11 830 18 635 49 564 28 740 20 824 17 779 18 635 3 0 0 0 B B B A- 420 859 661 684 165 159 171 2014 2014 2014 2014 2014 2014 4 071 2 667 7 143 5 600 6 059 3 546 2 959 -2 392 52 254 29 942 22 312 18 241 19 077 19 077 0 0 0 B B A 56 B+ 279 421 683 100 228 200 2015 2015 2015 2015 2015 2015 -598 6 401 9 038 3 107 5 740 1 604 3 665 2 825 2 390 -3 376 53 094 37 655 15 439 10 740 10 740 Rating Rating Rating Rating Number Number Number Number NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million Unit of measurement Unit of measurement Unit of measurement Unit of measurement Unit of measurement Unit of measurement 116 1) 1) 1) 2) 1) Of which in Norway Of which in other Nordic countries Of which in other European countries Of which in the rest of the world Change in equity Interest Dividend Taxes Gross salaries and benefits Environmental Environmental management Products and services Eco-efficiency Includes dividend and Group contribution from Statkraft AS to Statkraft SF. Includes taxes, property tax, licence fees and employers’ contribution. Taxes payable in the balance sheet. Includes energy purchases, transmission costs and operating expenses. Environmental assessement from the rating company Oekom research AG. Rating from E- to A+ (highest), where rating B- aboveand is considered as leading by Oekom research. STATKRAFT ANNUAL REPORT 2015 1) Taxes Total The company Total wealth distributed 1) 2) Distribution of value created Employees Lenders/owners Minority interests Values for distibution 1) Depreciation, amortisation and impairment Net value added Financial income Share of profit from associates Gross operating revenues Paid to suppliers for goods and services Gross value added Value creation Fines for non-compliance with environmental legislation These incidents had little or no environmental impact. Penal sanctions, environment Penal sanctions for non-compliance with environmental legislation (restituation time <1 year). Unwanted envionmental situation: A situation that could have lead to a negative environmental impact if not corrected. Most of the less serious environmental incidents in 2015 concern short-term breaches of the river management regulations and minor oil spills. Definitions: Serious environmental incidents: An incident that causes significant negative environmental impact, i.e. permanent or severe damage (restituation time >1 year). Less serious environmental incident: An incident that causes a negative environmental impact that is not considered significant Less serious environmental incidents Unwanted environmental conditions 1) Environmental incidents and issues Serious environmental incidents Environmental Environmental assessment result, total Environmental Environmental assessment and compliance Environmental assessment Contribution to society CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS 2) 1) (SAIDI) duration outage power Average (SAIFI) frequency outage Power outage Power supply electricity of Stability 1) most the receive which municipalities ten the Total, Total contribution Tax 1) rights human to related breaches legal for Fines rights human to related breaches legal for sanctions Penal rights human - sanctions Penal 2) 1) people indigenous of rights involving consultations ongoing with projects of Number people indigenous with Consultations rights Human 2015. for new is indicator This 1) years 2 last the in anti-corruption on training received have that positions management senior in people of Percentage years 3 last the in anti-corruption on training received have that employees of Percentage anti-corruption on Training 2015. for new is indicator This 1) activities Statkraft to related partners, business Statkraft’s amongst laws anti-corruption of violation reported and Confirmed employees Statkraft amongst laws anti-corruption of violation reported and Confirmed activities Statkraft to related partners, business Statkraft’s amongst law anti-corruption of violation suspected of incidents Reported employees Statkraft amongst law anti-corruption of violation suspected of incidents Reported law anti-corruption of Violation 1) ethics business to related breaches legal for Fines ethics business to related breaches legal for sanctions Penal ethics business sanctions, Penal audit corporate Statkraft by registered cases Whistleblower cases Whistleblower anti-corruption and ethics Business System average interruption duration index (measured based on IEEEstandard). on (measured based index duration interruption average System standard). IEEE on based (measured index frequency interruption average System authorities. thelocal directlyto fees paid licence and tax resource natural tax, property Includes Penal sanctions for legal breaches on discrimination, property rights, forced labour/child labour, freedom of association. labour, freedomof forced labour/child property rights, discrimination, on breaches legal for sanctions Penal Chile. and Norway in consultations ongoing Includes 2015. for new is indicator This Penal sanctions imposed for breaches of laws and regulations related to accounting fraud, price cooperation and corruption. and fraud, pricecooperation to accounting related regulations laws and of breaches for imposed sanctions Penal Nore og Uvdal og Nore Narvik Tokke Meløy Eidfjord Odda Rana Suldal Hemnes Vinje 1) to Norwegian municipalities Norwegian to 1) 1) 1) 2) 1) 1) 1) 1) 1) 117 Unit of measurement of Unit measurement of Unit Unit of measurement of Unit measurement of Unit measurement of Unit Unit of measurement of Unit measurement of Unit measurement of Unit NOK million NOK NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK million NOK Percentage Percentage NOK milion NOK Number Number Number Number Number Number Number Number Index Index 1 523 1 2015 2015 92.4 1.50 2015 2015 2015 2015 2015 2015 110 6 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 12 45 47 62 63 66 79 81 88 98 90 68 10 15 2) 0 0 0 0 0 0 115.8 518 1 2014 1.75 2014 2014 2014 2014 109 53 46 61 63 63 78 82 91 96 0 0 5 0 0 1 518 1 2013 85.8 1.34 2013 2013 2013 2013 107 54 63 61 65 76 83 96 96 0 0 - 0 0 2 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY 7 6 73 86 92 43 35 13 97 76 17 23 25 19 23 18 22 25 12 17 11 14 44 23 26 20 60 5.3 50 205 708 367 2013 2013 2013 2013 0.67 10.9 0.92 0.96 1.05 0.76 1.08 0.85 0.92 0.87 0.47 3 734 2 454 7 4 44 74 87 88 48 28 18 14 25 14 23 57 97 75 14 45 24 25 20 24 16 22 24 12 21 16 2014 2014 2014 2014 216 663 382 0.90 0.93 0.98 0.70 1,02 0.90 0.94 0.70 0.74 1.15 11.8 11.4 3 731 2 470 7 8 5 50 26 16 22 55 73 88 81 53 37 97 61 15 44 23 26 20 25 14 23 26 15 20 17 29 6.6 222 737 846 2015 2015 2015 2015 0.97 0.96 1.05 0.85 1.07 0.91 0.96 0.91 0.77 0.89 10.8 4 170 2 365 % % % % % % % % % % % % % % % % % % % % Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio Years Years Number Number Number Number Number Number Number Number Ranking Ranking Ranking Ranking Scale 0-100 Unit of measurement Unit of measurement Unit of measurement Unit of measurement 118118 1) among 2) 1) 1) Technology professionals Business students Technology students Business professionals Result Response rate In the rest of the world In Norway In other Nordic countries In other European countries In other Nordic countries In other European countries In the rest of the world In Norway In the rest of the world In Norway In other Nordic countries In other European countries In other Nordic countries In other European countries In the rest of the world In Norway Average service time Average service time for employees resigned or dismissed Of which in the rest of the world Of which in Norway Of which in other Nordic countries Of which in other European countries New managers Full-time employees Part-time employees In Group Management In the Statkraft Board of Directors New employees In management positions Total From Statkraft’s internal annual organisation and leadership evaluation survey. Statkraft’s score can be compared with the European Employee Index Norway 2015 result of 70. Ranking among final-year students and professionals, as defined and measured in the annual Universum Graduate Survey for Norway and Survey forthe Universum Professional Average salary for women in relation to average for men. Excluding retirements. STATKRAFT STATKRAFT STATKRAFT ANNUALANNUALANNUAL REPORT REPORT REPORT 201520152015 Norway respectively. 1) 2) Ranking as preferred employer Organisation and leadership evaluation Employees who have completed the performance and career development review 1) Statkraft as employer Equal salaries, managers Equal salary Equal salaries, employees Gender equality Percentage of women Trainees employed 31.12 Nationalities represented among Statkraft's employees 1) Service time Apprentices employed 31.12 Full-time employees 31.12 Staff turnover rate Employees 31.12 Labour Labour practices Employees 118 119
CORPORATE RESPONSIBILITY STATKRAFT AS GROUP FINANCIAL STATEMENTS Contractors Employees Injuries 2) 1) Associates operations Consolidated Fatalities safety and Health Fines for non-compliance with health and safety legislation safety and health with non-compliance for Fines legislation safety and health with non-compliance for sanctions Penal safety and health sanctions, Penal total absence, Sickness absence Sickness 5) 4) 3) 2) 1) occurrences Unwanted accidents Near conditions Hazardous accidents near and conditions Hazardous 1) consequences permanent or term long for potential with accidents Near consequences permanent or term long for, potential or with, Injuries incidents Serious 5) 4) 3) 2) 1) total Statkraft, parties Third Activities where Statkraft has 20 - 50% ownership 50% - 20 has Statkraft where Activities ownership. 50% > has Statkraft where Activities Number of unwanted occurances per year and employee and year per occurances unwanted of Number accidents. near and conditions Hazardous in personalinjuries. resulted have could that incidents unforeseen Recorded risk. safety personal involving matters Recorded ownership. 20% > has Statkraft where activities Includes 2015. for new is indicator This work-related injuries. to due absence recorded of days of Number work assignments. need foralternative treatmentor absence,medical in which resulted injuries Includes absence. without and with injuries, Work-related injury. of the day the beyond absence extending in resulted have which injuries Work-related Total recordable injuries per million hours worked. hours million per injuries recordable Total ownership. 20% > has Statkraft where activities Includes Total recordable injuries (TRI) (TRI) injuries recordable Total worked hours million per injuries Lost-time (LTI) injuries Lost-time worked hours million per days Lost days Lost worked hours million per injuries recordable Total (TRI) injuries recordable Total worked hours million per injuries Lost-time (LTI) injuries Lost-time party Third Contractors Employees party Third Contractors Employees Of which long-term absence (more than 16 days) 16 than (more absence long-term which Of less) or days (16 absence short-term which Of worked hours million per injuries recordable Total worked hours million per injuries Lost-time Injuries worked hours million per injuries recordable Total 1) 2) 5) 4) 3) 1) 2) 4) 1) 2) 2) 3) 3) 1) 119 Unit of measurement of Unit measurement of Unit Unit of measurement of Unit measurement of Unit measurement of Unit measurement of Unit Lost-days rate Lost-days Frequency NOK milion NOK TRI rate TRI rate TRI TRI rate TRI Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number Number LTI rate LTI rate LTI rate LTI % % % 5) 11 400 11 3 850 3 0.84 2015 2015 2015 2015 2015 2015 106 781 3.5 6.0 3.6 5.6 3.3 1.6 1.4 3.0 5.9 STATKRAFT ANNUAL REPORT 2015 REPORT ANNUAL STATKRAFT 63 63 70 41 27 12 0 0 0 0 0 0 0 0 0 9 459 9 0.55 2014 2014 2014 2014 2014 566 989 3.4 5.4 3.7 5.6 3.0 1.5 1.3 2.8 5.5 90 63 39 80 43 2 0 1 0 0 3 0 0 0 1 531 1 415 9 0.56 2013 2013 2013 2013 2013 124 498 104 1.4 1.6 2.9 6.5 3.4 6.3 4.2 6.8 2.4 83 32 37 0 0 1 0 0 0 1 1 0 FINANCIAL STATEMENTS GROUP STATKRAFT AS CORPORATE RESPONSIBILITY
120 STATKRAFT ANNUAL REPORT 2015 Auditor’s Auditor’s Statement Statkraft is a significant player in international markets where energy and energy-related products are bought and sold.
121 STATKRAFT ANNUAL REPORT 2015 Design: Tangram Design AS Photo: Jarle Nyttingnes Statkraft/People&Power Shutterstock
Paper: 300gr Scandia + 115gr Profi Matt Copies: 1000 Print: CopyCat AS Annual Report 2015 Statkraft AS
Statkraft AS PO Box 200 Lilleaker NO-0216 Oslo Tel: +47 24 06 70 00 Fax: +47 24 06 70 01 Visiting address: Lilleakerveien 6
Organisation no: Statkraft AS: 987 059 699
www.statkraft.com
The massive expansion of Norwegian hydropower started in the 1950s, and the oldest plants are now in need of upgrades. Statkraft is currently conducting major reinvestment projects in Norway, for example at the Røssåga plants which are undergoing both refurbishment and expansion work. Corporate Responsibility Report 2015 CORPORATE RESPONSIBILITY REPORT 2015 128
Content 129 Corporate Responsibility 129 Corporate Responsibility in Statkraft
131 Management of Corporate Responsibility 131 The Statkraft Way 132 Supplier follow-up 133 Stakeholder dialogue 133 Statkraft’s corporate responsibility reporting 135 Ambitions and goals
137 Environmental impact 137 Ambitions and goals 139 Statkraft offers renewable and sustainable energy solutions 140 Environmental management in Statkraft 140 Environmental activities in Statkraft 142 Statkraft and the climate 144 Consumption, emissions, discharges and waste
145 Health and safety 145 Ambitions and goals 146 Accidents 147 Health and safety work in Statkraft
149 Security
150 Business ethics and anti-corruption
152 Role in society 152 Economic value creation 153 Innovation 154 Stakeholder engagement 154 Collaboration with NGOs 154 Social issues and local development
155 Corporate Responsibility in development projects 155 Devoll Hydropower Project – Hydropower in Albania 156 Cheves Hydropower Project – Hydropower in Peru 156 Khimti Hydropower Project – Hydropower in Nepal
158 Statkraft’s employees 158 Statkraft’s employees
160 Human rights
161 Corporate responsibility statement 161 Scope of statement 161 Statkraft’s Corporate Responsibility Statement 162 Auditor’s statement
163 Global Reporting Initiative (GRI) 163 About GRI 163 Statkraft’s GRI Index
177 UN Global Compact 177 About Global Compact 177 Statkraft’s Global Compact Index CORPORATE RESPONSIBILITY REPORT 2015 129
Corporate Statkraft shall exercise corporate responsibility in all its activities. In brief, this means that we shall deliver electricity based on environment-friendly Responsibility sources of energy, use sustainable, safe and efficient production methods, and behave in a responsible and ethical manner.
This part of the annual report presents Statkraft’s work, management system and performance in the area of corporate responsibility for 2015, describing challenges and activities within areas such as environment, health and safety, human rights, labour issues and anti-corruption.
Corporate We shall operate sustainably and develop our business in a way that adds value Responsibility to its shareholder and the countries and local communities in which we operate. in Statkraft In order to succeed, we must work in a structured and systematic manner on all issues relating to corporate responsibility and integrate this work in all relevant processes in the company, such as purchasing, acquisitions, project development and operation of our assets.
Our corporate responsibility work is founded on internationally recognised initiatives and standards such as the UN Global Compact and IFC’s Performance Standards on Environmental & Social Sustainability.
Statkraft’s fundamental principles for sustainable, ethical and socially responsible behaviour are described in Statkraft’s Code of Conduct. The Code of Conduct applies to all companies in the Statkraft Group and to all individuals who work for Statkraft, regardless of location. This includes employees at all levels, board members, hired personnel, consultants and others who act on behalf of or represent Statkraft. Business partners are expected to adhere to standards that are consistent with Statkraft’s ethical requirements.
The construction of the Cheves Hydropower Project in Peru was completed in 2015. Involving local society in the planning Corporate responsibility is a central and integrated part of Statkraft’s management system. of the project has been important in order to create local The management system facilitates a structured and uniform handling of the Group’s corporate acceptance and involvement. responsibility, and the system is regularly evaluated to be tailored to new expectations, business environments, and challenges.
Climate and the environment
Statkraft’s environmental ambition is to provide renewable, sustainable and robust climate energy solutions. 99% of the Group’s power and district heating production in 2015 was based on renewable energy sources, and new investments are now exclusively made within renewable energy. However, renewable power generation might also affect the environment. Environmental impact assessments are undertaken for all relevant business activities, and our goal is always to find environmentally responsible solutions.
Statkraft established a climate research programme in 2013. The climate programme includes obtaining updated climate forecasts and facilitating unified handling of climate challenges.
Health and safety
In Statkraft, health and safety has the highest priority, everywhere and always. The goal is zero work-related injuries. In an effort to reach this goal, the Group works systematically to establish a value-based safety culture based on transparency and continuous improvement. The Group’s management and follow-up of health and safety are based on international good practice.
Incidents with a high risk for serious consequences are investigated in a structured manner, and learnings from the incident are shared across the organisation. CORPORATE RESPONSIBILITY REPORT 2015 130
Security
Statkraft takes a comprehensive approach to security, preparedness and crisis management and follows international good practice. In Statkraft, the umbrella term security encompasses four areas; personnel security, physical security, IT system security and information security.
In 2015, overall country threat assessments have been produced for all countries with Statkraft presence or interest, and updated security risk assessments have been performed for key locations.
Human rights
Statkraft acknowledges its corporate responsibility to respect human rights and this is something the Group takes seriously. The United Nations Guiding Principles on Business and Human Rights are reflected in Statkraft’s management system and project management tools.
Ethics and anti-corruption
Statkraft has committed to a high ethical standard and business culture, with zero tolerance for corruption. With increased activity in markets exposed to corruption, Statkraft places significant emphasis on a strong ethical business culture and on developing robust anti-corruption measures.
A risk assessment and mapping of need related to improvements in relation with preventative measures in each of Statkraft’s business areas was concluded in 2015. Furthermore, a new two-year cycle of training on business ethics and anti-corruption has been rolled-out.
Social issues
As a power provider, we have a very long-term perspective, which emphasises the need to develop sustainable solutions. We seek to establish a regular and open dialogue on sustainability issues with host communities and other stakeholders and we facilitate such dialogue and interaction in all project development and operations. CORPORATE RESPONSIBILITY REPORT 2015 131
Management Follow-up and management of Statkraft’s corporate responsibility is an integrated part of the company’s management system, The Statkraft Way. of Corporate Statkraft’s fundamental principles for acting in a sustainable, ethical and Responsibility socially responsible manner are described in Statkraft’s Code of Conduct.
The Statkraft Way The Statkraft Way, Statkraft’s management system, is based on the Group’s vision, values, Code of Conduct and business model. It contains both briefly formulated policies and more detailed specifications and supporting documents. Corporate responsibility is a key topic in The Statkraft Way.
Statkraft shall operate in accordance with applicable laws and regulations in all countries where we have activities and adhere to internationally recognised standards and guidelines. We focus Launch of The Statkraft Way our work towards creating a work culture in accordance with our principles and which promotes November 2014 good business practice.
Statkraft’s fundamental principles for acting in a sustainable, ethical and socially responsible Always refer to the intranet for updated documents manner are described in Statkraft’s Code of Conduct. The Code of Conduct applies to all individuals who work for Statkraft, and Statkraft’s business partners are expected to have standards that are consistent with Statkraft’s ethical requirements. Statkraft has prepared corresponding guidelines for the Group’s suppliers.
Corporate responsibility is an integrated part of Statkraft’s management system, The Statkraft Way. The management system facilitates structured and coordinated handling of the company’s corporate responsibility, and the system is regularly evaluated to adapt it to new expectations and challenges. Detailed descriptions of how to safeguard Statkraft’s corporate responsibility for different areas can be found in requirements and supporting documents.
➔➔ Statkraft’s Code of Conduct ➔➔ Group policy: Corporate responsibility and HSE ➔➔ Group policy: People, leadership and communication
Statkraft is a member of the UN Global Compact and is committed to following up this initiative and its ten principles. Furthermore, Statkraft bases its conduct on internationally recognised initiatives and standards, including principles from the OECD’s Guidelines for Multinational Enterprises and IFC’s Performance Standards on Environmental and Social Sustainability. The OECD’s guidelines present recommendations from governments to multinational companies in relation to responsible business conduct, while IFC’s standards provide guidelines for sustainable behavior throughout the value chain.
Corporate responsibility throughout
Corporate responsibility is a line responsibility in Statkraft. This means that each individual unit has an independent responsibility to conduct activities in a responsible manner and that follow-up of topics such as health and safety, anti-corruption, human rights and environmental impact are incorporated in relevant processes, projects and tasks in each individual unit.
At Group level, Statkraft has a dedicated staff to follow-up the company’s work and performance as regards corporate responsibility on an overall level. This staff has an advisory role vis-à-vis the business units and ensures that corporate responsibility is properly discharged in the Group’s management and reporting system.
Corporate social responsibility in development projects
Statkraft has a model for implementing major development projects, mergers and acquisitions which ensures a unified approach to for example corporate responsibility from an early phase and through stepwise decision processes. The model’s basic principle is that each main decision must be accompanied by documented information on a number of stipulated topics, including corporate responsibility, as part of the decision basis. CORPORATE RESPONSIBILITY REPORT 2015 132
Emergency preparedness
Emergency preparedness plans have been prepared for all operative units in the Group and focus especially on protecting life and health, avoiding negative environmental impact and securing the company’s assets. Emergency drills are held regularly on different levels in the organisation so that unexpected, serious situations will be handled in a suitable manner.
Performance follow-up
Statkraft has KPIs at Group level for the areas of environment and health and safety, and results are reviewed regularly in both the Corporate management and the board of directors. In addition, relevant challenges and results within all topics associated with corporate responsibility are discussed in regular Business Reviews (meetings between the CEO and each business/staff unit).
In its work, the Group Audit considers to what extent the requirements and guidelines for discharging corporate responsibility have been implemented and adhered to in the organisation. This takes place through focused audits and as part of more wide-ranging efforts.
Statkraft has a Group-wide reporting system for registration and follow-up of non-compliances and potential improvements. The system facilitates structured handling of measures and deadlines, analysis of causal links and learning across the organisation.
Supplier follow-up Statkraft sets clear requirements for all suppliers and follows up risk topics throughout the procurement process.
Statkraft’s supplier code of conduct
Statkraft has developed a version of Statkraft’s Code of Conduct which is especially aimed at the Group’s suppliers. This document describes the Group’s requirements for suppliers as regards protection of the environment, human rights, labour rights and labour standards, health and safety and anti-corruption. Statkraft’s suppliers are informed about the Code of Conduct and other relevant requirements during the procurement processes and contract signing.
Follow-up of suppliers
Statkraft has implemented a risk based tool that identifies and follows up risk topics throughout the procurement process. The procurement process is designed to ensure the follow-up of suppliers at different stages of the process. Risk areas are identified at an early stage, and high risk areas are followed up closely throughout the procurement process. CORPORATE RESPONSIBILITY REPORT 2015 133
Stakeholder dialogue Statkraft communicates in an open and active manner with all those affected by our activities. Important partners in this dialogue include the owner, elected officials on all levels, employees, local communities, rights holders, customers, suppliers, local and regional authorities, voluntary organisations and the media.
Dialogue with local communities and host municipalities
Statkraft emphasises a direct and predictable dialogue with all host municipalities. In Norway, annual meetings are held with all host municipalities, where Statkraft provides information about ongoing and coming activities, opening up for discussion about topics important for the individual municipality.
It is particularly important to provide information and ensure transparency in the early stages of development projects. In line with national licensing processes and international guidelines, Statkraft holds open meetings and hearings, providing information about development plans and topics relevant for those affected by the project. Such topics may include expropriation, future job opportunities and environmental impacts resulting from the project.
Dialogue with non-profit organisations
Statkraft participates in several national and international forums for the purpose of discussing and influencing energy policy. These forums include Energy Norway, Eurelectric, World Business Council for Sustainable Development (WBCSD) and the International Hydropower Association (IHA).
Statkraft also cooperates with non-profit organisations and has cooperation agreements with the Red Cross, environmental organisations such as the Norwegian Society for the Conservation of Nature, Bellona and WWF, in addition to a conference partnership with Zero.
Competence and training Good corporate responsibility competence among managers and employees is an important factor for Statkraft to achieve its goals. Relevant corporate responsibility topics have been incorporated in training programmes for both new employees and managers. Introductions are given, both as regards overall requirements and individual responsibilities, and more focused training in safety requirements in the workplace, anti- corruption work and environmental and social impact as a result of Statkraft’s activities. The projects sets a particular focus on health and safety training, and Statkraft has developed web-based courses that are available, and in some cases mandatory, for both employees and contractors. Efforts are particularly directed towards raising expertise in and understanding of anti-corruption work throughout the organisation. Class room trainings, anti-corruption manuals and e-learning tools are available and tailored dilemma training sessions are held when needed.
Statkraft’s corporate Statkraft annually reports the most important corporate responsibility challenges responsibility reporting facing the Group, as well as measures and performance. The report is based on GRI’s recommendations
Statkraft’s corporate responsibility reporting is based on the recommendations of the Global Reporting Initiative (GRI). GRI’s recommendations include both indicators for several topic areas, as well as ten reporting principles which e.g. concern identifying important topics and implementing the actual reporting process.
Statkraft systematically gathers information in order to present an annual status and most important results for areas such as climate and the environment, health and safety, security, anti-corruption work and follow-up of human rights. All relevant business units report on both quantitative and qualitative indicators. We believe these indicators capture the most important aspects as regards corporate responsibility in the Group, while also taking into account reporting requirements and expectations from our stakeholders. CORPORATE RESPONSIBILITY REPORT 2015 134
Statkraft’s corporate responsibility reporting describes the most important topics and results on the Group level. More information on special topics and individual projects can be found on Statkraft’s website.
Materiality analysis, ambitions and goals
In 2015, Statkraft performed a materiality analysis to identify the corporate responsibility issues that are most important to the company. The analysis was based on the principles described in GRI’s Technical Protocol, and it was approved by Statkraft’s auditor (Deloitte AS). The materiality analysis included identifying key stakeholders and their most important aspects related to corporate responsibility and workshops with representatives from Statkraft’s organisation to identify the most material aspects for Statkraft.
All aspects of corporate responsibility are important for Statkraft, but the analysis identified the following six aspects as most significant for Statkraft:
➔➔ Safety and safeguarding of people ➔➔ Human rights ➔➔ Water management ➔➔ Biodiversity ➔➔ Climate change mitigation, adaptation and preparedness ➔➔ Business ethics and anti-corruption
Materiality assessment High Water management Safety and safeguarding Provide and promote of people renewable energy sources Biodiversity Climate change mitigation, adaption and Business ethics Labour rights and anti-corruption Economic contribution preparedness to society Human rights Landscape and land use management Local community impact Human capital Security of development Responsible supply chain employement Resource use, waste and pollution
Diversity and equal opportunity
Asset and information security
Occupational health Importance to Statkraft’s stakeholders Importance to Statkraft’s
Production ef ciency
Low Importance to Statkraft High
The six aspects identified as material will be given a more detailed and comprehensive review that other topics. Ambitions and goals towards 2020 have been prepared for these aspects, and a status for 2015 is also presented. CORPORATE RESPONSIBILITY REPORT 2015 135
Ambitions and goals All aspects of corporate responsibility are important for Statkraft. A materiality analysis has been conducted in 2015 with the aim of identifying the most central corporate responsibility aspects to Statkraft. The materiality analysis was conducted according to the Global Reporting Initiative (GRI G4), which includes considering stakeholder expectations. Six aspects were identified as a result of this analysis. In terms of reporting, these material aspects will be given a more detailed and comprehensive review than other aspects – see the full Corporate Responsibility Report posted on www.statkraft.com.
Material aspect Ambition statement Goals towards 2020
Safety and Statkraft actively ➔➔ Ensure that managers at all levels provide safety safeguarding prevents harm or leadership of people injuries to people ➔➔ Strengthen the focus on high risk activities and through a systematic preventative measures approach and a ➔ value-based ➔ Utilize a balance of leading and lagging indicators safety culture to measure and guide performance ➔➔ Improve processes and capabilities for security management ➔➔ Ensure that learnings from incidents are applied corporate wide
Human rights Statkraft acts ➔➔ Follow developments related to increasing according to the international and national expectations related UN Guiding Principles to human rights management (human rights due on Business and diligence process) and improve our practices Human Rights accordingly, starting by major and international projects ➔➔ Ensure adequate implementation of training program on human rights ➔➔ Strengthen and make better known our grievance mechanisms, including at project level ➔➔ Strengthen stakeholder dialogue and communication, including on our salient human rights impacts
Water Statkraft is ➔➔ Ensure proactive and adequate handling and management recognised as a systematic follow-up of water levels, flow- company with a limits and hydropeaking requirements in our responsible and concessions and self-restrictions sustainable water ➔➔ Demonstrate sustainable water management management based on improved understanding of the effects of practice climate change on water availability (e.g. scarcity and flood control) in all areas of operation
Biodiversity Statkraft supports ➔➔ Enhanced tracking and communication of a precautionary performance on systematic handling of approach to biodiversity, e.g. red-list species of flora and biodiversity fauna, critical habitats and presence in legally challenges, and protected areas facilitates ecological ➔➔ Increased understanding of our impacts on resilience in our biodiversity, and adequate handling in project areas of impact development and operation
The table contiunues on the next page CORPORATE RESPONSIBILITY REPORT 2015 136
Material aspect Ambition statement Goals towards 2020
Climate change Statkraft contributes ➔➔ Further the understanding of the impact of mitigation, to the transition to a national and international climate policies on our adaptation and more climate friendly business and, as appropriate, provide Statkraft’s preparedness and sustainable perspectives, including on carbon pricing, to energy system and relevant stakeholders seeks continuously ➔➔ Improve our market and strategic analysis in order to maintain a low to incorporate climate change induced changes climate footprint ➔➔ Further common understanding how climate change affects all our assets and continue to evaluate new business opportunities accordingly, based on company-wide climate assumptions ➔➔ Contribute to scientific methods for assessing the climate impact of our business
Business Statkraft actively ➔➔ All employees complete training in business ethics ethics and anti- prevents corruption with focus on anti-corruption corruption and unethical ➔➔ Continue to strengthen the culture of reporting of practices in all concerns and breaches business activities ➔➔ Continue to ensure adequate corporate-wide handling of anti-corruption and business ethics risks, with particular focus on high risk processes ➔➔ Improve the adequacy of how business ethics is reflected in requirements and controls for key business processes
Verification of corporate responsibility information
Statkraft’s external auditor verifies the Group’s corporate responsibility reporting. The auditor’s work is based on the ISAE 3000 assurance standard, and the conclusion for the work is set out in the auditor’s statement. CORPORATE RESPONSIBILITY REPORT 2015 137
Environmental Statkraft offers renewable and sustainable energy solutions, which is how we help meet one of the greatest challenges of our day: global warming. impact At the same time, all power production is associated with different forms of interventions in nature. Systematic environmental management in line with good international practice will minimise and compensate for the negative environmental impact of the Group’s activities.
Ambitions and goals In 2015, Statkraft performed a materiality analysis to identify the sustainability issues that are most important to the company and its stakeholders. Three of the issues identified were: Climate change mitigation, adaption and preparedness, Biodiversity and Water management. Ambition, goals and status for 2015 is presented below.
Material aspect Ambition statement Goals towards 2020
Climate Statkraft contributes ➔➔ Further the understanding of the impact of change to the transition to a national and international climate policies on our mitigation more climate friendly business and, as appropriate, provide Statkraft’s adaption and and sustainable perspectives, including on carbon pricing, to preparedness energy system and relevant stakeholders seeks continously ➔➔ Improve our market and strategic analysis in order to maintain a low to incorporate climate change induced changes climate footprint ➔➔ Further common understanding how climate change affects all our assets and continue to evaluate new business opportunities accordingly, based on company-wide climate assumptions ➔➔ Contribute to scientific methods for assessing the climat impact of our business
Biodiversity Statkraft supports ➔➔ Enhanced tracking and communication of a precautionary performance on systematic handling of approach to biodiversity, e.g. red-list species of flora and biodiversity fauna, critical habitats and presence in legally challenges, and protected areas faciliates ecological ➔➔ Increased understanding of our impacts on resilience in our biodiversity, and adequate handling in project areas of impact development and operation
Water Statkraft is ➔➔ Ensure proactive and adequate handling and management recongnised as a systematic follow-up of water levels, flow- company with a limits and hydropeaking requirements in our responsible and concessions and self-restrictions sustainable water ➔➔ Demonstrate sustainable water management management practice based on improved understanding of the effects of climate change on water availability (e.g. scarcity and flood control) in all areas of operation CORPORATE RESPONSIBILITY REPORT 2015 138
2015 status on goals related to Climate change mitigation, adaptation and preparedness
The possible effects of climate change on Statkraft’s Nordic hydropower assets are well understood. Statkraft has adapted regional climate models to assess probable future changes in precipitation and temperature, which affect water values and production possibilities. Operational and investment decisions are based on such assessments.
Statkraft has used IPCC/UNFCCC and other scientific data as basis to decide upon one global warming scenario. This scenario is used in the Nordics to assess the effects of climate change on our assets.
Outside the Nordics, our understanding of climate change effects is not so detailed. Several R&D projects have therefore focused on this issue. For non-Nordic assets we conduct hydrological impact studies and also assess future water availability to understand future implications on balancing water needs for energy production, ecosystem services and environment.
Statkraft has had a strategic collaboration with the Norwegian Meteorological Institute since 2009, and is also involved in a number of R&D projects supported by the Norwegian Research Council.
Statkraft also assesses and develops tools to evaluate potential greenhouse gas emissions from our hydropower reservoirs. This is done in collaboration with leading research institutes, other industry actors and industry associations such as IEA and IHA.
Statkraft continuously follows national, EU and global climate policy developments to assess the possible impact on our business. We have provided direct input to policy processes in Norway and the EU, and also participated in relevant public consultations. Statkraft joined the World Bank Carbon Pricing Leadership Coalition in 2014 with the goal to establish carbon pricing as the core approach to decarbonization on a global level, and participates in other international partnerships to promote international carbon markets. Statkraft established a new office in California for carbon trading in 2015 and is directly involved in various markets for carbon related products in order to contribute with product development and enhance the development of carbon markets.
2015 status on goals related to Biodiversity
Statkraft acknowledges that its core business – wind- and hydro power – has an impact on biodiversity and ecosystems. Biodiversity issues, including red-list species and protected areas, are therefore mapped and evaluated before an investment decision is made. In project operations, Statkraft works systematically with biodiversity issues where such action is warranted. Any impacts on biodiversity defined as serious, less serious or unwanted environmental incidents are reported through Statkraft’s non-conformity system.
As part of our efforts to effectively manage biodiversity issues, Statkraft has previously developed a geo-reference database for for red-listed species and critical habitats. The system is intended to act as an information database to ensure that potential impacts are followed up and evaluated systematically. The system is still a pilot, focusing on Statkraft’s Norwegian operations.
Biodiversity is one of the prioritized areas for Statkraft’s environmental R&D strategy. Impacts on ecosystem services, development of new holistic tools for improved management in regulated systems, and impacts on habitat fragmentation through two way fish migration are some examples of recent R&D projects related to biodiversity. CORPORATE RESPONSIBILITY REPORT 2015 139
2015 status on goals related to Water management
Sustainable water management and impacts from project development and operations is a central part of project leader course. Furthermore, any breach on water levels, minimum flow or self-restrictions linked to hydropeaking requirements is reported through the non-conformity system and evaluated.
To further increase our knowledge and potentially reduce our impacts on the environment and use of water as a natural resource Statkraft invests in specific and selected research programs and projects, both nationally and internationally. Important R&D topics related to water management includes hydropeaking and environmental impacts and mitigation measures, technical design of hydropower operation in northern regions, climate effects on the hydropower sector and water availability, and GHG emissions from reservoirs and reservoir operation.
Statkraft offers renewable Statkraft is Europe’s largest producer of renewable energy, and in 2015, over and sustainable energy 99% of the company’s power production was based on renewable energy sources. Statkraft’s ambition is to support a global transition towards a low-carbon economy solutions by offering renewable and sustainable energy solutions. In addition, all activities shall be planned and implemented in line with good international practice.
Environment-friendly portfolio
In 2015, over 99% of Statkraft’s power production was based on renewable energy sources, and more than 93%, or 52.7 TWh, came from hydropower. As a technology, hydropower has many advantages, including high efficiency, long lifetime and high flexibility. The large, Norwegian water reservoirs enable us to produce electricity even when there is little inflow. This flexibility is particularly important in combination with inflexible technologies, for example hydropower in combination with wind power.
Development and operation of hydropower plants facilitate multiple uses of watercourses and regulation plants, Examples of such use include irrigation, water supply, transport and recreation. In addition, flood control using reservoirs is an important safety measure in many areas. Such use of our installations will in all probability be even more important in the future when we face the consequences of the climate changes.
Wind power is a renewable technology with few environmental effects and almost no emissions. Power generation and district heating (Statkraft's share) TWh The tendency is towards larger turbines, higher towers and fewer turbines in each wind farm. 70 This is considered to be a positive development as regards environmental effects. 60
50
40 The Group’s non-renewable energy production includes gas-fired power and a small part of the
30 district heating production.
20 10 Gas power is by many considered a transitional technology. The technology generates carbon 0 2011 2012 2013 2014 2015 emissions, but the emissions are substantially lower than for coal-based power plants. Hydropower Wind power Gas power Statkraft’s gas power plants in Germany operate only as peak load producers and, like District heating hydropower, therefore contribute to flexibility in the European energy markets. Knapsack I and II are two of Europe’s most modern and efficient gas-fired power plants, but due to high gas prices, low carbon prices and large growth in inflexible power production (solar and wind power), Statkraft’s gas power production has been significantly reduced in recent years. CORPORATE RESPONSIBILITY REPORT 2015 140
Environmental Environmental management is an integrated part of Statkraft’s management management in system and covers all business units and activities. The environmental management system shall ensure a systematic approach to the environmental Statkraft work, with key activities being identification of environmental risk, establishment of goals and action plans, implementation of measures and follow-up of results.
Statkraft’s environmental management system is based on the principles of ISO 14001:2004. Statkraft’s contractors are also subject to the Group’s environmental requirements, and these are therefore incorporated in all contracts where relevant.
The Group’s development projects are planned and implemented in line with good international practice and the work is based on the IFCs Performance Standards on Environmental & Social Sustainability. In accordance with these standards, Statkraft sets requirements relating to comprehensive impact analyses and environmental follow-up plans which are updated throughout the project process. These documents are published on the projects’ websites and thereby made available to external stakeholders.
External assessment of environmental performance
Statkraft’s environment KPI on the Group’s score card consisted of an environmental assessment prepared by an external rating agency (Oekom Research AG). The assessment includes a broad set of criteria covering environmental management, power production and energy efficiency, and provides an understanding of how the world around us rates our efforts and in which areas we should aim to improve. The use of a rating agency also makes it possible to compare with other companies, both in our own and other industries.
The 2015 assessment resulted in the rating B+, which corresponds to good international practice in the Oekom Corporate Rating.
Cooperation agreements
Statkraft has entered into strategic partnership agreements with the three environmental organisations Norwegian Society for the Conservation of Nature, Bellona and WWF. The overall purpose of the agreements is to benefit from each other’s expertise and develop the best energy solutions.
Environmental activities Statkraft’s core business areas are hydropower and wind power. Neither of these in Statkraft technologies generates significant emissions or discharges, but both cause interventions in ecosystems and the landscape. The objective is always to make interventions as gentle as possible, and adapt them to local conditions.
Hydropower and the environment
Rivers and river systems are important, both as elements of the landscape and as ecosystems. Watercourses play an important role in both droughts and floods, and also have a multi-purpose value for people in the form of recreation, transport and as water supply to households, industry and agriculture. The development and operation of hydropower plants must therefore take into account many interests.
Statkraft’s goal in all activities is to achieve sustainable water management, and our environmental efforts in relation to river systems and fish are comprehensive. Examples Djupa, Hardangervidda. Statkraft is adding gravel to the river of such efforts include environmentally adapted operation of the power plants, laying down bed to improve spawning conditions for the fish. Photo: Jon Aarbakk suitable spawning and smolt growth substrate, fish restocking, egg planting, construction of fish ladders and improvement of thresholds and migration barriers. CORPORATE RESPONSIBILITY REPORT 2015 141
The overall objective for this work is to achieve sustainable and self-recruiting fish populations. Many of these measures are imposed by licence, but Statkraft also implements voluntary measures, often in close cooperation with landowners and local organisations. Statkraft operates two out of three Norwegian gene banks for salmon, nine fish cultivation facilities and is a large producer of stocking fish and fish eggs in Norway and Sweden.
Statkraft carries out out comprehensive studies of affected river systems. In Norway, the main focus is on salmon and trout, while Sweden and Germany have seen an increasing focus on conserving eel populations. Eel are very vulnerable to turbine injuries when migrating from regulated rivers, and Statkraft is involved in several projects and has implemented various Chip which is implanted into the eels. It sends a signal to migromat when eels start to migrate. Running of the solutions to meet this challenge. In Sweden, eel are now moved downstream of power plants landside turbine can be reduced and blades can be opend manually, while in Germany a system has been developed to control turbines and stop them as wide as possible in order to facilitae migration. when the eel migrate.
Overview of river systems influenced by Statkraft’s activities
In Norway, the licence terms for many power plants are now under revision, aiming to update the environmental terms to current standards. Reviews are ongoing in the Tokke/Vinje, Røssåga, Folla/Vindøla, Svorka, Altevatn, Aura, Langvatn og Bjerke/Plura river systems.
The EU’s Water Framework Directive is a set of regulations developed to ensure comprehensive management of European water resources based on the ecosystems. In Norway, these regulations have been incorporated into the Framework for water management (the Water Regulations). In 2015 Statkraft has worked strategically with the Water Framework Directive in order to enhance coordination of the company’s actions related to water management in Norway, Sweden and Germany. This work will continue in 2016.
The following case illustrates Statkraft’s approach to environmental management in connection with hydropower:
➔➔ Ume water course, Sweden - Water and environment with life and ecological quality
Wind power and the environment
Both onshore and offshore, Statkraft’s wind power developments are facing environmental challenges. Birds are a recurring topic, both due to the risk of birds colliding with the turbines, and because wind farms can drive certain bird species away from their natural habitats or form barriers to important migration routes.
Establishing wind farms with the associated infrastructure can influence living conditions for plants and animals, particularly in the construction phase. It is therefore important to find solutions that are well adapted to the individual location, and to avoid construction activity in particularly vulnerable periods. Noise and landscape aesthetics are also topics that are carefully considered when establishing new wind farms. The wind park on Smøla. Photo: Bjørn Iuell Offshore, the impact on the marine environment is a particularly challenging topic, not least as there is currently little knowledge about the consequences for sea mammals, fish and benthic fauna. There are a lot of indications that negative effects occurr mainly in the construction phase, and that offshore wind farms may also benefit the environment in the longer term. A wind farm resting on the seabed can e.g. provide shelter for fish fry and create good growth areas for fish and other organisms.
Since 2005, Statkraft has been involved in R&D activities at the Smøla wind farm to look into how white-tailed eagles and the local variety of willow ptarmigan are affected by the wind farm, and specifically what can be done to avoid collisions between birds and turbines.
A doctoral thesis presented in 2014 concluded that although Statkraft’s activities in Smøla have had an effect on the white-tailed eagles’ reproductive success within and in close proximity to the wind farm, the overall population of white-tailed eagles in the area is still robust and growing. Population studies of white-tailed eagles in the Smøla area indicate that most of CORPORATE RESPONSIBILITY REPORT 2015 142
the couples which previously bred inside the wind farm area have now found new territories away from the wind farm.
The research that Statkraft and several partner organisations are conducting in Smøla includes using contrast paint and UV-light on the turbines and rotor blades to increase visibility and thereby reducing the risk of collisions between the birds and the turbines. This is the only project in the world where scientific tests of this kind has been performed in full scale. The results of the project are expected in 2016. The research on birds and wind power in Smøla has been ongoing for nearly ten years, resulting in a significant amount of new knowledge about the interaction between eagles and wind power. The knowledge that the research has generated The white-tailed eagle population is followed closely on Smøla. Only a few eagle couples now breed inside the is useful, not only to Statkraft, but also for other operators of on- and offshore windpower. wind farm. However, this has not resulted in a noticeable decline in the number of white-tailed eagles in the area. Photo: Bjørn Iuell Other technologies and the environment
Statkraft is also involved in activities using other technologies, primarily production of gas power (Germany), production of biopower (Germany), production of district heating (Norway and Sweden), grid distribution (Norway) and some gas distribution (Norway through Skagerak Energi).
Gas power results in carbon and NOx emissions, and discharge of cooling water. NOx can impact air quality and contribute to overfertilisation, while discharge of cooling water can impact biodiversity in nearby river systems. Statkraft’s gas power plants are some of Europe’s most modern power plants, with high efficiency, good treatment facilities and low emission and discharge risk. They are located in industrial areas where the additional impact from our plants has little environmental impact.
The link below provides an overview of energy efficiency in Statkraft’s gas power plants, district heating plants and bio power plants:
Overview of energy efficiency
The operation of district heating plants and bio power plants generates NOx emissions, and district heating plants also emit SOx, which can contribute to acidification of river systems. The amount of SOx emitted varies with the energy source used. Emission and discharge figures are carefully followed up to ensure that the plants comply with their licences.
For district heating plants that use waste as fuel, there may also be challenges in the form of odours, and the activity generates large volumes of wasted treated as hazardous waste.
Environmental challenges in connection with grid activities are primarily related to radiation from power lines and landscape impact, which in turn can change visual qualities and the opportunities for recreational activities in the area.
For gas distribution, the risk lies primarily in gas leakages. This distribution is subject to detailed guidelines and controls covering environmental, health and safety risks.
Statkraft and the climate Statkraft offers clean and sustainable energy solutions and in this manner supports a global transition to a low-carbon economy. Climate change and global warming are among the greatest challenges of our day, and the UN Climate Panel’s fifth Assessment Report issued in 2013-2014 confirm that the global climate changes are anthropogenic. The IPCC has previously pointed out that increased use of renewable energy may be the single most important measure against climate change.
Statkraft’s Climate Advisory Panel
Statkraft’s activities have a very long perspective and climate change will influence both operations and business opportunities significantly, e.g. through influencing energy sources (precipitation, run-off and wind) and through changes in the political framework. CORPORATE RESPONSIBILITY REPORT 2015 143
In order to meet the challenges caused by climate change, Statkraft has established an internal, cross-disciplinary workgroup, Statkraft’s Climate Advisory Panel (CAP). The Climate Advisory Panel’s main mission is to coordinate the Group’s efforts in relation to climate issues, and raise the Group’s understanding of climate issues.
Based on information from international processes and key climate issue forums, as well as internal analyses of the climate situation, Statkraft has chosen a specific climate scenario as a starting point for the Group’s long-term strategy work.
In some locations, climate change will result in more water, in other locations less. Statkraft A broad group of scientists, business executives, NGO leaders and politicians gathered at Statkraft’s conference can contribute to dampening the effects of climate change by using its own installations for e.g. center Vang Gård in Norway to find new solutions to flood control. In dry countries, reservoirs can also be used for irrigation and water supply. climate change.
Corporate Management adapted a climate policy statement in 2014 which states that Statkraft’s most important contribution in relation to climate change is contributing to the transition towards a low-carbon society and the development of a climate resilient economy. Statkraft’s most important contribution is to – in a sustainable manner – produce renewable and flexible energy which can facilitate more variable energy sources (solar and wind). Statkraft’s climate assessments are to be based on research, in-depth analysis and scientific evidence. Central to this is the IPCC assessments and the UN climate convention.
Statkraft’s climate programme
Statkraft’s assessments and adaptations in relation to climate changes shall be based on international expertise and recognised research results. On this background, Statkraft has established a research programme which focuses on the development of business-specific climate knowledge and will contribute to adapt the global climate models to planning and operation.
The climate programme works closely with Statkraft’s Climate Advisory Panel and has two main objectives:
➔➔ understanding the physical impact of climate change and recommend possible adaptations ➔➔ contributing to development of scientific methods which can be used to consider how climate change will affect Statkraft commercially
The programme will run over several years and has a budget of NOK 10 million per year.
Statkraft’s emissions of greenhouse gases
Most of Statkraft’s portfolio is more or less emission-free hydropower and wind power Greenhouse gas emissions Tonnes CO2 equivalents production, and the Group’s emissions of greenhouse gases are therefore relatively low. The 2,000,000 majority of the Group’s total emissions of greenhouse gases come from the gas power plants in
1,500,000 Germany. For Statkraft’s consolidated power production emissions of CO2 equivalents amounted to 313 000 million tonnes in 2014 and 257 600 million tonnes in 2015. This corresponds to a 1,000,000 relative emission of CO2 equivalents of 6 kg/MWh in 2014 and 5 kg/MWh in 2015.
500,000 The Group buys ordinary carbon quotas in the international carbon quota market to compensate 0 2009 2010 2011 2012 2013 2014 2015 for greenhouse gas emissions from that part of the business that is not subject to mandatory Gas power District heating plants Accidental emissions of SF and halon Fuel consumption quota schemes. This applies to emissions related to fuel consumption, business travel and Business travel ₆ any accidental emissions of the greenhouse gases halon and SF6. In 2015, the emissions from
these sources amounted to 55 800 tonnes of CO2 equivalents.
Emission quota and green energy trading
Statkraft actively sells certified electricity from renewable sources to distribution companies that want to or are required to supply their customers with green electricity. Statkraft sources and markets these certificates under Europe-wide schemes as well as national schemes in the UK, Italy, Poland and in Norway/Sweden. CORPORATE RESPONSIBILITY REPORT 2015 144
Statkraft is also engaged in trading emissions worldwide. We actively trade the major carbon currencies and deal with compliance companies looking to satisfy their obligations under the European Emission Trading System (EU ETS). With new carbon markets developing worldwide, we increase focus on our international activities.
Consumption, emissions, Statkraft’s activities cause only a limited extent of waste production, emissions discharges and waste and discharges. Data for the Group’s energy consumption, emissions and discharges, waste volumes and environmental incidents are reported in the corporate responsibility statement.
Electricity consumption
In 2015, electricity consumption in Statkraft was 1031 GWh, of which 80% was used for pumped-storage hydropower. Electricity use in the Group is certified as renewable in accordance with RECS.
Local pollution
Statkraft faces few challenges as regards local pollution. The greatest environmental risk is associated with oil spills from vehicles, construction equipment and production equipment.
Sandefjord district heating plant was opened by CEO Routines are implemented for registration of equipment containing oil, and the use of bio oils Christian Rynning-Tønnesen in February 2015, and is one and switching to equipment with water-lubricated bearings also help reduce the risk of oil spills. of Norway’s most modern and environment-friendly plants. There were no oil spills with permanent damage to the external environment in 2015. There can be local challenges associated with noise and dust in connection with transport and construction, and we have also experienced challenges with odours and ash emissions from the district heating plants.
Waste handling
Statkraft’s operations generated about 61 400 tonnes of hazardous waste in 2015. More than 93 % of this was residual products from the biomass plant in Germany and the district heating plant in Trondheim, which mainly uses waste as energy source. In addition, 12 000 tonnes of other waste was generated. Statkraft goal is to separate as much as possible of the generated waste at source, and 82% of the waste (hazardous waste not included) was source separated in 2015.
Environmental incidents
Environmental incidents are recorded and followed up systematically throughout the Group and reported regularly to the management and board of directors. No serious environmental incidents have been registered since 2008. In 2015, 228 minor environmental incidents with little or no impact on the environment were reported. Most of them concerned short-term breaches of the river management regulations for hydropower plants and minor oil spills. CORPORATE RESPONSIBILITY REPORT 2015 145
Health and safety Safety is our top priority in Statkraft and our objective is zero serious injuries for our own employees as well as for contractor personnel, suppliers, partners and third parties. The desired safety culture shall permeate the entire organisation and be characterised by transparency and a desire to learn - both from our own mistakes and from successful improvement measures.
Ambitions and goals In 2015, Statkraft performed a materiality analysis to identify the corporate responsibility aspects that are most material to the company. One of the aspects is “Safety and safeguarding of people”, and ambitions, goals and status for 2015 are presented here.
Material aspect Ambition statement Goals towards 2020
Safety and Statkraft actively ➔➔ Ensure that managers at all levels provide safety safeguarding prevents harm or leadership of people injuries to people ➔➔ Strengthen the focus on high risk activities and through a systematic preventative measures approach and a ➔ value-based safety ➔ Utilize a balance of leading and lagging indicators culture to measure and guide performance ➔➔ Improve processes and capabilities for security management ➔➔ Ensure that learnings from incidents are applied corporate wide
Status 2015 for health and safety targets
Safety considerations are firmly embedded with the company’s senior management. Identified ambitions and goals show that personnel safety has a very strong focus.
The key figures for health and safety were revised in 2015 and greater attention has now been given to high-risk incidents. New, leading indicators have also been developed and will be implemented in 2016. The new indicators will measure management and employee health and safety commitment by logging relevant activities such as completed health and safety inspections, risk assessments, transfer of experience or suggested improvements that will contribute to increased safety.
In December 2015, the “CEO’s HSE award” was launched. The award will contribute to improve the health and safety results. The award will recognise excellent health and safety work and good, innovative solutions that can be implemented across the Group. The first “CEO’s HSE award” will be announced in the second half of 2016.
In 2015, Statkraft launched a project to develop “life saving rules” in order to strengthen the company’s focus on high-risk activities and preventive measures. The purpose of the project is to identify and implement specific safety rules for selected high-risk activities. The rules will be suitable for communication at all levels of the organisation, and will be supported by efficient tools for roll-out and follow-up.
Securing of personnel is an increasing challenge for Statkraft. New personnel security requirements were introduced in 2015. The requirements include a clarification of roles and responsibilities as well as the process for assessing risk. Such assessments have been completed for key locations in 2015 and will continue in 2016.
Sharing of knowledge and experiences across the organisation is essential for good health and safety performance. Sharing of good practices and learning from incidents that have occurred are important for the organisation to improve its performance. Lessons learned from all serious incidents are made available to the organisation and discussed in the Group’s health and safety network. CORPORATE RESPONSIBILITY REPORT 2015 146
Adequate competence is a prerequisite for a good safety culture. Training courses are therefore provided within multiple areas. Examples of this include online courses in health and safety work, both at basic and operative level, and more comprehensive health and safety training as part of Statkraft’s project manager training.
Accidents Overall, 104 lost-time injuries and 176 total injuries were recorded among Statkraft’s employees and contractors in 2015. This corresponds to an injury frequency rate (TRI) of 5.9 and lost time injury rate (LTI) of 3.5.
Fatalities Fatalities Number 6 There were no work related fatalities in Statkraft in 2015. 5 4 Injuries 3
2 The LTI (number of lost-time injuries per million working hours) was 3.3 among Statkraft’s
1 employees, while LTI among Statkraft’s contractors was 3.6. Correspondingly, the TRI (number
0 of injuries per million working hours) among Statkraft’s employees was 5.6 and 6.0 among 2011 2012 2013 2014 2015 Statkraft’s contractors. In total, 176 injuries were recorded for Statkraft’s employees and Contractors, subsidiaries Employees, subsidiaries Third parties, associates Contractors, associates contractors, 104 of which were lost-time injuries.
In 2015, six accidents occurred that resulted in serious injury. Another 33 accidents and near accidents had a serious injury potential. Such incidents are subject to investigation in order to identify the cause, course of events and preventive measures. Experience and knowledge from such incidents are shared across the organisation.
The injury frequency rate in Statkraft is stable, but not satisfactory with regard to the goal of no Total recordable injuries for employees and contrators Number per million hours serious injuries. 12
10
8 Registering unsafe conditions and near-misses
6 All accidents, near-misses and unsafe conditions are registered in a joint follow-up and analysis 4 tool. More than 10 000 incidents were registered in 2014. Both near-misses and unsafe 2 conditions are followed up in the same manner as actual accident situations, and conditions 0 2011 2012 2013 2014 2015 which recur or could have had serious consequences are subjected to analysis and follow-up LTI - employees TRI - employees in order to identify the chain of causation. This allows us to elevate expertise concerning LTI - contractors TRI - contractors work situations with a risk potential, which makes us better equipped for good planning and preventive measures that can reduce the risk of accidents. CORPORATE RESPONSIBILITY REPORT 2015 147
Health and safety Follow-up of health and safety is a line responsibility in Statkraft. This means that work in Statkraft each unit has an independent responsibility for efforts and follow-up relating to the health and safety performance. Ambitions and goals for health and safety are clearly embedded with the Corporate management.
Statkraft’s safety culture
Statkraft’s goal is zero serious injuries. This is a logical, yet ambitious goal. In order to reach this goal, Statkraft is working systematically to establish a value-based safety culture based on transparency, clarification of requirements and a desire for continuous improvement.
Focus areas for the Group’s health and safety work in 2015
In 2015, Statkraft formulated a new programme to strengthen the Group’s health and safety work. The programme contains for example new leading indicators for measuring the health
Example from Statkraft’s web-based health and safety course. and safety performance, improvement of the follow-up tool for health and safety in projects, increased focus on high-risk activities, training programmes for the senior management, new training modules for various target groups in the Group and critical review of group requirements. The programme was launched in the autumn of 2015, and most activities will be implemented in 2016.
Below follow some examples of ongoing follow-up and improvement activities in the various business areas:
➔➔ Wind Offshore has continued the effort to incorporate and implement health and safety in WO PROMAS (project management tool for Wind Offshore). The health and safety part of the tool is founded on best industry practice as well as our own experiences from operative wind farms and previous development activities. The tool will be used and developed further in Statkraft’s large wind power project in central Norway.
➔➔ The Optimum improvement programme will be continued for the business area Power Generation. This programme has addressed health and safety as one of several important improvement areas. Continuous learning, simplification and cooperation across technical disciplines, as well as increased focus on energy control and improved control over high-risk activities, are some of the measures identified for improving results. Increased construction activity in Norway will provide experience and contribute to developing the programme further.
➔➔ Wind Offshore is an active participant in the G9 Offshore Wind Health and Safety Association to increase expertise concerning risk activities in the offshore wind sector. Statkraft is a board member and also chairs the working group that is developing guidelines for working at heights in such projects. Statkraft is also participating actively in working groups for marine operations and lifting operations.
Health and safety expertise
Statkraft employees are given training in safety risk and working environment, adapted to their individual working situation. Health and safety is part of the introduction programme for new employees, as well as the Group’s management programmes. In addition, there is a basic, web-based course in Statkraft’s safety culture and work, which is available to all employees. Furthermore, there is a more extensive web-based health and safety course aimed at operative operation and project activities which for example reviews the identification of safety hazards, working at heights, handling mobile installations, traffic safety, electrical installations, planning and coordination of safety work and emergency preparedness work.
Statkraft’s project manager programme has a module which covers planning and coordination of health and safety work. This is a more extensive programme which consists of both classroom instruction and web-based training. CORPORATE RESPONSIBILITY REPORT 2015 148
Networks and industry associations
Statkraft is a member of several national and international networks and industry associations which follow up health and safety issues. These are important arenas where people can exchange experiences and acquire new health and safety knowledge in the utility industry. Examples of such networks and associations include:
➔➔ Energy Norway: Energy Norway is an industry association representing about 270 Norwegian companies engaged in generation, distribution and trading of electricity. Energy Norway works actively to improve health and safety work in the Norwegian energy industry.
➔➔ RenewableUK: RenewableUK is the leading industry association for wind power in the UK and works to develop industry guidelines for health and safety.
➔➔ International Hydropower Association (IHA): IHA is an international organisation promoting the role of hydropower in establishing sustainable energy solutions. IHA has developed the IHA Sustainability Guidelines, which is a framework to monitor the degree of sustainability for hydropower plants, including the health and safety aspect.
➔➔ G9 Offshore Wind Health and Safety Association: Statkraft is one of nine companies which established G9 in 2012 and which will promote health and safety for offshore wind power.
➔➔ National Safety Council of India: The National Safety Council has been established by the Indian government. Its task is to promote health and safety work at a national level in India.
The CEO is visiting the construction site at the Devoll hydropower project in Albania. Investigation of serious incidents Photographer: Agim Dobi All accidents, near accidents and hazardous conditions are registered in a group-wide reporting tool. This tool allows for analysis and efficient follow-up.
Serious incidents with, or with the potential for, serious consequences, are investigated or reviewed following a fixed procedure to reveal all aspects of the incident in order to determine the direct and underlying causes. This information is summarised in a report which is followed-up by responsible unit and by the relevant board. A brief version of the report is made available throughout the organisation to enable us to learn from mistakes and avoid recurrences.
Absence due to illness
Absence due to illness in Statkraft has been stable, and was 3.0 % 2015, which is within the goal of an absence due to illness rate lower than 3.5 %. All Norwegian companies in Statkraft have entered into Inclusive workplace (IA) agreements, with active follow-up of absence and adaptation of the work as needed by the employee. CORPORATE RESPONSIBILITY REPORT 2015 149
Security Statkraft works systematically on issues linked to security, emergency preparedness and crisis management. The handling of security issues is based on internationally recognised principles.
Statkraft takes a comprehensive approach to security topics and aims to comply with good international practice. In Statkraft, the area of security encompasses personnel security, physical security, IT system security and information security.
The Group’s guidelines for securing personnel and assets are based on national guidelines and internationally recognised principles.
Risk assessment
The security situation, as regards for example political instability, terrorism, sabotage and organised crime, is assessed continually in all areas where Statkraft has a presence. Such assessments are made both at the corporate level and by the individual unit. Statkraft’s interests in Turkey are followed up particularly, and the situation in the country and the region is continuously monitored and assessed.
Immediate measures will be considered upon changes in the security situation, for example reinforced security routines and travel restrictions.
Preparedness
All business units, country offices and operative units in Statkraft have established emergency preparedness plans in order to handle emergencies in a structured and systematic manner. In addition, there is an overall Group emergency preparedness plan describing procedures for notification, interaction, information sharing and communication in a crisis. The emergency preparedness plans are regularly revised, and regular drills are held on small and large scales.
Securing Statkraft’s assets
All of Statkraft’s buildings, plants and infrastructure are secured against unauthorised access. The purpose of this is to secure the Group’s assets against external threats and vandalism, but also to protect third parties against any safety risks in connection with the Group’s installations.
Statkraft is involved in development activities in countries and areas which can be politically unstable. This may result in an increased need for guards and security measures for people and assets. If the threat situation so warrants, this may involve armed guards. The provision of security will have to be in line with relevant principles of the Voluntary Principles for Security and Human Rights.
Information security
Statkraft’s work on information security will maintain confidentiality, integrity and access to the organisation’s information. In 2015, Statkraft implemented a number of measures to strengthen security and improve the company’s ability to detect and handle risks and incidents related to information security.
Statkraft has, along with other energy companies, decided to establish a new company, KraftCERT. KraftCERT cooperates with Norcert and other security authorities and its main objective is to strengthen the electric utility industry’s ability to detect and resist cyberattacks on the industry’s IT systems. In addition, Statkraft has established CSIRT (Computer Security Incident Response Team), with responsibility for following up notifications from for example KraftCERT, and operational handling of incidents related to IT security. CORPORATE RESPONSIBILITY REPORT 2015 150
Business ethics Statkraft is committed to ensuring a high level of integrity and has zero tolerance for corruption. With rising exposure in markets exposed to and anti-corruption corruption, Statkraft works actively to safeguard a sound internal business culture and develop robust anti-corruption measures.
Ambitions and goals
In 2015, Statkraft performed a materiality analysis to identify the sustainability issues that are most important to the company and its stakeholders. One of the issues identified was Business ethics and anti-corruption. Ambition, goals and status for 2015 is presented below.
Material aspect Ambition statement Goals towards 2020
Business ethics Statkraft actively ➔➔ All employees complete training in business ethics and prevents corruption with focus on anti-corruption anti-corruption and unethical ➔➔ Continue to strengthen th culture of reporting of practices in all concerns and breaches activities ➔➔ Continue to ensure adequate corporate-wide handling of anti-corruption and business ethics risks, with particulat focus on high risk processes ➔➔ Improve the adequacy of how business ethics BUSINESS ETHICS TOOL is reflected in requirements and controls for key Quick guide business processes Business partners: Contractors and Suppliers
2015 status on goals related to Business ethics and anti-corruption
All Statkraft employees complete training program in business ethics with focus on anti- corruption
A new two-year cycle of training on business ethics and anti-corruption was initiated in Q1 2015 for all staff employed in fully-owned entities. The training programme aims to ensure knowledge of relevant anti-corruption legislation, clarify Statkraft’s expectations, enhance preparedness to handle risks, and promote an ethical culture and increased reporting of concerns. The programme is composed of various elements, with classroom training or e-learning as
One of Statkrat’s guidance tools: a Quick Guide on mandatory for all. The combination of methods implemented in each business unit depends on business ethics in Statkraft. their risk profile, defined according the geography where staff are located and the function they hold. The content of the training was tailored to the various business units, to ensure relevance for their type of operations and risk exposure. The training has been provided in 5 different languages, with 100 separate training sessions in over 30 locations. Training had been offered to all staff in fully-owned entities, either classroom or e-learning.
Continue to strengthen the culture of reporting of concerns and breaches In the interest of promoting improved reporting of concerns, new procedures were adopted towards the end of 2014 which explain both how employees and others can present such reports, and how they will be handled. Training on these new procedures was incorporated in the business ethics and anti-corruption training programme rolled out in 2015. The development of new procedures and the roll-out of training efforts have contributed to improvements in reporting levels and in the understanding of how to handle such reports. Statkraft will continue its efforts in this area in order to further strengthen the culture of reporting.
Continue to ensure adequate corporate-wide handling of anti-corruption and business ethics risks, with particular focus on high risk processes A corruption risk assessment and gap analysis for all fully-owned entities was concluded in 2015, with the aim to increase the understanding of risks and to identify potential gaps in prevention. A ‘bottom up’ approach was taken, with interviews of 350 staff in 25 different locations, followed by workshops involving 185 middle- and senior-level managers. Feedback CORPORATE RESPONSIBILITY REPORT 2015 151
suggests that this process contributed to important improvements in the understanding of risks and increased commitment to implement preventative measures in the company. In 2015 Statkraft also undertook a risk assessment, gap analysis and benchmarking focused on sanctions.
Based on the analysis of risks, a set of recommendations for how to address the gaps were developed with corresponding implementation.
Improve the adequacy of how business ethics is reflected in requirements and controls for key business processes A number of new initiatives were implemented and/or initiated in 2015 to ensure that business ethics related risks are adequately addressed by requirements and controls in key business processes. This included dedicated preventions plans being developed for high risk entities; development of new corporate requirements for integrity due diligence reviews of business partners; and a new project focused specifically on the handling of fraud and corruption risks in financial related processes.
Our commitment
Statkraft’s commitment to a high level of integrity is clearly stated in the Code of Conduct, approved by the Board of Directors. Statkraft has also adopted detailed guidelines for business ethics and anti-corruption. Statkraft endorses the ten principles of the United Nations Global Compact, which include a clear standard for anti-corruption.
Challenging arena – clear position
Statkraft is present in a wide range of markets. Some of these rank high on Transparency International’s Corruption Perception Index, and particular care is taken to handle corruption risk in these markets. Statkraft works actively to ensure a sound internal business culture and develop robust anti-corruption measures.
In addition to the mandatory training roll-out in the organization in 2015 and other preventative measures undertaken, Statkraft has prepared practical guidelines that advise employees on how to handle ethical challenges. The guidelines are a supplement to governing documents, the existing anti-corruption work manual and anti-corruption e-learning programme. In order to ensure accessibility and promote understanding - documents have been translated to different languages used by Statkraft employees.
Whistleblower channel
Statkraft wants transparency surrounding dilemmas and ethical issues, and systems are in place to provide all employees with guidance and advice with regard to interpretation of Statkraft’s Code of Conduct and desired behaviour. Statkraft’s Code of Conduct emphasises that employees have both the right and duty to report breaches of legal or ethical obligations through the line organisation or the Group’s whistleblower channel, which is managed by the Head of Corporate Audit. The whistleblower channel was improved in 2014 and is now also open for external stakeholders. 12 whistleblower cases were registered by Statkraft Corporate Audit in 2015. CORPORATE RESPONSIBILITY REPORT 2015 152
Role in society Statkraft creates value, both directly and indirectly, in societies where we are present. In 2015, the Group’s economic gross value created amounted to NOK 15 439 million.
Economic value creation The Group’s financial gross value creation amounted to NOK 15 439 million in 2015 (22 312). Values created are distributed to a number of stakeholders, in Norway and abroad.
Social accounts ➔➔ Economic value creation: NOK 15 439 million ➔➔ Dividend to the state: NOK 1604 million ➔➔ Taxes and fees to the state and municipalities in Norway: NOK 3665 million
Tax contribution ➔➔ Tax contribution to Norwegian municipalities 1): NOK 1523 million ➔➔ Tax contribution to the ten municipalities that received the largest tax contributions: NOK 739 million (49%) ➔➔ Five municipalities receiving the largest tax contributions: −− Vinje – NOK 110 million −− Hemnes – NOK 98 million −− Suldal – NOK 88 million −− Rana – NOK 81 million −− Odda – NOK 79 million
Employment ➔➔ Number of employees as of 31 Dec. 2015: 4170 −− Of which in Norway: 2365 (57%) −− Of which abroad: 1805 (43%)
1) Includes property taxes, licence fees and natural resource tax CORPORATE RESPONSIBILITY REPORT 2015 153
Innovation The objectives for Statkraft’s innovation efforts are to develop and strengthen competitive advantages within the core business and develop new business opportunities. Innovation is also important in order to build competence and ensure future framework conditions. Multi-year R&D program have been established, closely linked to the Group’s strategic focus areas, hydropower, wind power and bio-energy.
Statkraft has also established a dedicated climate R&D program that will e.g. focus on developing business-specific climate knowledge and contributing toward ensuring that the global climate models are adapted to planning and operations.
Examples of innovation projects in 2015:
Bio-energy
Liquid biofuel is a research activity addressing the business opportunities in the bio-energy market.
Norway has an abundance of available biomass feedstock. While Norwegian electricity generation is almost 100% renewable, the Norwegain transport sector is dominated by fossil fuels. In February 2015, Södra and Statkraft established Silva Green Fuel AS. The first task is to qualify a cost-efficient technology for profitable production of second generation biofuels based on forestry raw materials. The aim is to implement the first industrial production plant at the industrial site at Tofte. In this way, Södra and Statkraft can become an important contributor towards achieving national and international targets to reduce greenhouse gas emissions from the transport sector.
R&D Climate
Water availability in the future Changes in water availability is one of the main risks to Statkraft’s international hydropower business. To increase the knowledge on this issue, Statkraft has initiated a project to address challenges regarding decreasing water resources, caused by climate change, competitive water demand and new regulations. In the first phase of the project existing information on historical trends, climate change predictions and governmental plans were mapped. The results for each of the seven countries in the study are used to identify knowledge gaps at present. These gaps are now covered by follow-up projects in the different countries to make sure we develop the knowledge and solutions we need for efficient hydropower in all our operations in new parts of the world.
Wind power
Reindeer and wind power Development of onshore wind power projects in areas with reindeer husbandry is especially complex and sensitive. Statkraft is involved in research projects in both Norway and Sweden to improve the knowledge about land use and the behaviour of semi-domestic reindeer. The aim is to find measures to avoid and reduce possible negative impacts on reindeer husbandry caused by wind power.
Hydropower
R&D solves problems related to hydropower operations The operation of Francis turbine at part load is associated with the formation of pressure pulsations that usually lead to restrictions for operation ranges. There is a number of reasons for operation at part load, such as grid frequency control or meeting minimum flow requirements. The troublesome flow conditions at part load operation can however be improved. A pressure pulsation reduction system (Diffcon) has been developed by Troms Kraft, Flow Design Bureau and Statkraft. By means of water injection directly into the draft tube, counteracting the natural spin of the water exiting the runner at part load, flow conditions have been improved and pressure pulsations reduced. The system has been successfully tested and proven at Svorka power station during 2015. CORPORATE RESPONSIBILITY REPORT 2015 154
The water footprint of hydropower Different methods have been used to establish a comparison of the water footprint for different technologies. A SINTEF-led project has been looking into the weaknesses of such methodologies, trying to develop new ones which incorporate multipurpose aspects of hydropower in areas with water scarcity. This is due to the fact that many reservoirs are used for multipurpose such as drinking water, irrigation and flood control. This might be equally important for electricity generation in many areas abroad. The new methods are gaining international acceptance and contributes to improve the image of hydropower sustainability.
Stakeholder engagement People, local communities and organisations can be directly or indirectly affected by Statkraft’s activities. We shall show respect for the local communities, societies and cultures in which we are present in all dialogue with stakeholders. We want to build trust in our company by engaging in open dialogue with stakeholders.
Active and long term involvement
As a power producer with long-term perspectives, it is in the interest of both Statkraft and our stakeholders to develop sustainable solutions. Success in this regard can best be achieved in open dialogue and interaction with those affected by the company’s activities. Important partners in this dialogue include the Owner, elected officials, villages physically affected by a project’s presence, employees, customers, suppliers, local and regional authorities, voluntary organisations and the media. Disclosure of relevant project information helps affected communities understand the risks, impacts and opportunities of the project.
Collaboration with NGOs Statkraft strives to build synergies through close collaboration with special interest organisations. The main purpose of the partnerships is to draw on each other’s expertise in common fields of work.
Statkraft has formal partnership agreements with WWF Norway, Bellona, the Norwegian Society for the Preservation of Nature and the Norwegian Red Cross. Statkraft also has a conference partnership with Zero.
Social issues and local Statkraft’s power production can have significant impacts on local communities development and individuals. Considerable efforts are made to avoid, reduce or mitigate negative impacts and at the same time to enhance direct and indirect benefits and development opportunities for stakeholders. Interventions are a result of consultations with all affected stakeholders in accordance with good international practices and standards, based on International Finance Corporation Performance Standards on Social & Environmental Sustainability and the UN Guiding Principles on Business and Human Rights.
In 2015, the largest social mitigation programs and development initiatives were carried out for Devoll and Cetin projects in the construction phase, focusing on infrastructural improvements and livelihood programs. An ongoing dialogue with local stakeholders and authorities is essential for ensuring cooperation and trust for compensation activities and development programs that offset losses of land, structures and natural resources. Improved market access, higher quality health and educational services and intensification of agricultural production are some of the programs. For the Cheves and Kargi projects, social programs have been initiated for the operational phases, including addressing any outstanding issues. CORPORATE RESPONSIBILITY REPORT 2015 155
Corporate As a power producer Statkraft is involved in several development projects in different parts of the world. Most of these are in emerging markets, but Responsibility in there are also substantial developments in Northern Europe for different development projects technologies. In the following sections we present examples of how we have addressed corporate responsibility in 2015.
Devoll Hydropower Project The Devoll Hydropower Project (Devoll HPP) in Albania consists of a cascade of – Hydropower in Albania hydropower plants along the Devoll River with a planned installed capacity of 256 MW. Production is estimated at 729 GWh/year.
➔➔ Ownership: Statkraft 100% ➔➔ Capacity: 256 MW ➔➔ Development phase: Under construction
There is currently a team of 25 on-site employees and consultants involved in managing environment and social affairs for the Devoll Project. The project prepared an Environmental and Social Management Plan in 2013 comprising all environmental and social mitigation measures and providing a general framework for resettlement, livelihood restoration, social development and environmental management as well as monitoring indicators. This plan is implemented through detailed Annual Implementation Plans and a detailed monitoring framework is established.
The main social impacts relate to the loss of agricultural and horticultural land - and the loss of livelihood associated with this impact - and roads. The project carried out a range of initiatives Family provided with goats for cheese production. in 2015 to compensate project affected households for these anticipated losses. The overall goal is to mitigate ahead of impacts, pre-empting any economic difficulties that could be faced by the local population at the time of inundation.
The main initiative is the implementation of the Livelihood Support and Development Program. The program provides various agricultural and livelihood inputs and technical assistance to households directly affected by the project. The focus is on providing in-kind support and technical assistance, for example, in the form of veterinarian services, fruit pruning, etc. As of the end of 2015, 248 agreements out of 291 households entitled for livelihood support (85%) have been settled, and provision of inputs to 201 project affected households (including e.g. olive and fruit trees, livestock and fodder; bee hives, water pumps and items of agricultural machinery) was provided. All input delivery is linked to the provision of regular technical assistance by DHP agricultural experts.
Construction of resettlement homes above Banja reservoir. A total of 15 relocation houses are currently under construction and handover is expected at the beginning of 2016. The houses are built of equal or better standard than impacted houses with thermal insulation, drinking water and electricity.
The main environmental impacts of the Devoll HPP relate to the changes in the hydrology of the Devoll River and the creation of two reservoirs. Water quality will be the focus of the improved urban waste management and sewage treatment for Gramsh town which is located at the end of the Banjë reservoir. Monthly water quality monitoring with more than 200 samples taken from 20 defined spots along the Devoll River is undertaken with 33 parameters on heavy metals, nutrients, and bacteriology. 4700 values were measured in 2015. Each quarter, samples for the analysis of phytoplankton, zooplankton, fish and fauna have been taken at six tonine locations along the river. CORPORATE RESPONSIBILITY REPORT 2015 156
Cheves Hydropower Project The Cheves hydropower project is Statkraft’s largest project in Peru. – Hydropower in Peru The project construction was completed in 2015 and officially opened on September 15th, 2015.
➔➔ Ownership: Statkraft 100% ➔➔ Capacity: 168 MW ➔➔ Development phase: Operation
The main corporate responsibility focus for the project has been, and will continue to be, ensuring a social license to operate by maintaining good relations with local government and surrounding communities, as well as conducting comprehensive environmental monitoring programs to comply with Peruvian legislation and international standards.
In 2015, an Environmental and Social Management Plan for Operation was prepared, describing the anticipated community development programs for the next three years, as well as the environmental monitoring related to water quality, biology, electromagnetic radiation (at substations and transmission lines) and other environmental parameters. The development programs focus on the areas of infrastructure development, capacity building/ Bank stabilisation measures above the Huauru dam ahead of operation. training, education, and business and technical development initiatives. In 2015 two studies, a Perception study and a Quality of life study, were carried out to assess the perception of the project in local communities. The Perception study asked for feedback on eight items, including “Cheves’ contribution to improve local conditions”, “Perception as to whether Cheves generates any local benefit” and “Degree of trust”. The highest score was related to degree of trust in the Cheves management, whilst the lowest score was related to whether local conditions have improved due to the presence of Cheves. The “Quality of Life” study for the affected communities was requested by the government as an Environmental Impact Assessment requirement. It contained 5 items, with the highest score for “Promotion of capacity building, especially production-related capacities” and the lowest “Help provided to new and existing businesses in the community”. Several targets have been adapted based on the results from the surveys, including giving priority to social investments in communities within the area of direct influence; implementing a community business development plan and providing support and training to local businesses. In addition, all outstanding issues from the construction Promotion of local products and businesses in the project period were closed, such as the revegetation of the disturbed sites and spoil areas with local area at opening of Cheves. cactus species. This was achieved by planting up to 115 % of the original planned seeds, taking into account natural mortality rates.
As requested by IFC, a former lender to the project, an Environmental Flow Management Plan will be implemented during the operational phase. The plan outlines complementary monitoring parameters for water quality, geomorphology, hydrobiology and vegetation.
Khimti Hydropower Project Statkraft has one asset in Nepal through the Himal Power Company in partnership – Hydropower in Nepal with BKK and Butwal Power Company, Nepal. Social programs form a key component to the successful operation and good relations with neighbouring communities, and this commitment was further manifested during the tragic events of the 7.8 magnitude earthquake in April 2015.
➔➔ Ownership: Statkraft 50.4% ➔➔ Capacity: 60 MW (378 GWh) ➔➔ Development phase: Operation since 2000
A number of successful programs have been initiated over the past 15 years and are now being handed over to communities and local officials in preparation for the relinquishing of 50% ownership to the Nepali Electricity Authority (NEA) as per the Power Purchase Agreement. This will bring to a conclusion a number of support programs and activities, but not without ensuring sustainability. CORPORATE RESPONSIBILITY REPORT 2015 157
➔➔ Community Self-Development Program: contribution and supervision of implementation of small-scale infrastructure projects, such as rural roads, water supply and irrigation systems, undertaken by communities. This program will continue but with gradually reduced financial support.
➔➔ Khimti Rural Electric Cooperative: support for the construction of two micro-hydro projects (1035 kW) and a rural distribution system covering 9,500 households in the region. Institutional support for setting up a cooperative that now has an agreement with the national utility and is self-sufficient through the collection of fees and sale of electricity.
➔➔ Khimti School: Project established a school for worker’s families and local communities Khimti project area – development of micro-hydro and local distribution systems. during construction and has continued to support education through scholarships, educational materials and administrative costs. The company is still involved and providing support but in a much reduced capacity as fees now cover about 50% of costs.
➔➔ Khimti Health Centre: Established to provide healthcare for the wider population and contribute to improved health standards. Statkraft has also supported a mobile health clinic which has also provided services in the region. Dhulikhel hospital is now in the process of taking over responsibility for the health centre.
Only minor damage was reported at the Khimti plant, confirming the quality of the engineering and construction work. The power plant was able to resume production shortly after inspections, thus being the main source of electricity for the capital after the earthquake. However, many of the communities in the vicinity of the project suffered greatly, with collapsed houses and damaged infrastructure and services. The owners of Himal Power Company Khimti primary school has provided a high standard of organized immediate emergency relief and shipped in essentials, such as tarpaulins, blankets education in the region. and food to those who had lost houses and were living in the open. A Post-Disaster Needs Assessment was conducted to identify areas of additional assistance to be funded by the Project which included restoration of houses and key community infrastructure, such as schools, irrigation channels and roads. CORPORATE RESPONSIBILITY REPORT 2015 158
Statkraft’s Statkraft is an attractive employer, and surveys show that the employees in the Group are among the most highly motivated in the industry. Statkraft employees works intently to maintain this position in the future.
Statkraft’s employees At the end of 2015, Statkraft had 4170 employees, and 43% of them worked outside Norway. Statkraft has employees in 16 countries, representing 44 nationalities.
We seek diversity when employing as this will strengthen the international development of Employees In Statkraft Number the Group by bringing in the necessary competence on national legislation and administrative 4500 4000 processes, language and local culture. 3500 3000 Statkraft strives to attain an even gender distribution in the Group, and more women in 2500 2000 managerial positions. 1500 1000 500 Percentage of female employees 23% 0 2010 2011 2012 2013 2014 2015 Norway Other Nordic countries Other European countries Percentage of female managers 23% Rest of the world Percentage of female new employees 26%
Percentage of women on Statkraft's board of directors 50%
Average service time in Statkraft is 10,8 years, while turnover in 2015 was 5 %.
An attractive employer
We recruit in a focused and systematic manner, and Statkraft is an attractive employer both among recent graduates and experienced employees.
The Universum Student Survey is Norway’s largest career, working life and future expectations survey among students. In the 2015 survey, engineering students ranked Statkraft seventh, while economics students ranked Statkraft as the 53rd most attractive employer.
Statkraft has established a two-year trainee program which is very popular among graduates. At the end of 2015, 15 trainees were employed within different business areas of the Group, both in Norway and abroad. Statkraft also has a trainee program for skilled workers.
Apprenticeships have been established in all parts of the Group for different types of trade certificates. By the end of 2015, 61 apprentices were working for Statkraft.
Leasdership development
Statkraft has its own corporate program for manager development. Leadership in Statkraft (LIS) is a basic course, while NEXT and Expand are aimed at experienced managers. In 2015, 50 managers participated in the Group’s management program, 34 in LIS and 16 in NEXT. The program are undergoing continuous development and adaptation to new challenges, not least those created by the Group’s international growth. Statkraft also has its own training program for project managers, and 219 employees participated in these programs in 2015.
Expertise development is followed up through appraisal interviews, and employees are, in addition to courses and further education, encouraged to seek internal rotation. CORPORATE RESPONSIBILITY REPORT 2015 159
Employee survey
An annual employee survey is held in Statkraft where all employees are asked to evaluate the Group’s organisation and management. The survey covered topics such as leadership, cooperation, working conditions and personal development. The purpose of the survey was to compare ourselves with other companies in the industry and make Statkraft a better place to work. As in previous years, the results of the 2015 survey were very good. As regards the indicator “Job satisfaction”, Statkraft’s score was 73, well above the Norwegian industry index (70).
Cooperation with trade unions
Statkraft aims for a close and structured cooperation with all represented trade unions. In addition, Statkraft has established a European works council (Statkraft European Works Council, SEWC), with employee representatives from Norway, Sweden, Germany and the UK. SEWC is an important cooperation forum for coordinating and implementing principles and guidelines as regards labour issues and labour rights in Statkraft.
The Group supports and respects internationally recognised labour rights wherever it operates. Relevant ILO conventions and EU directives have been included in the SEWC agreement with EPSU (European Federation of Public Service Unions), the federation for European unions within the energy industry. CORPORATE RESPONSIBILITY REPORT 2015 160
Human rights Companies have a corporate responsibility to respect human rights. Human rights situations in countries where Statkraft operates can be challenging. This is something the Group takes seriously.
Ambitions and goals – Human Rights
In 2015, Statkraft performed a materiality analysis to identify the sustainability issues that are most important to the company and its stakeholders. One of the issues identified was Human Rights. Ambition, goals and status for 2015 is presented below.
Material aspect Ambition statement Goals towards 2020
Human rights Statkraft acts ➔➔ Follow developments related to increasing according to the international and national expectations related UN Guiding Principles to human rights management (human rights due on Business and diligence process) and improve our practices Human Rights accordingly, starting by major and international projects ➔➔ Ensure adequate implementation of training program on human rights ➔➔ Strengthen and make better known our grievance mechanisms, including at project level ➔➔ Strengthen stakeholder dialogue and communication, including on our salient human rights impacts
Statkraft’s management on human rights has been guided by the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises since the adoption or revision of these instruments. Statkraft’s commitment in this area is reflected in the company’s Code of Conduct, which is adopted by the Board of Directors. The commitment to human rights is also reflected in the company’s Corporate Responsibility policy and HSE policy. Statkraft has over several years worked on integrating and operationalizing human rights into existing governing documents and processes.
In 2015, Statkraft has worked actively on strengthening its management framework for assessing and managing human rights issues. Statkraft has also participated in a national pilot project lead by the OECD Norwegian National Contact Point aimed at providing a methodology to conduct human rights due diligence processes. The project included general training on human rights and the UN Guiding Principles, risk mapping for right holders, management of human rights in the supply chain and promoted tools - including reporting tools - that can assist in human rights management. Statkraft has also conducted a high-level assessment of its governance structure on human rights as well as a review of its potential human rights impacts and further identification of its salient human rights impacts. This has led to the identification of possible improvement measures, which are being considered and prioritized for a roll-out in 2016.
Dispute related to development of wind power in Sweden
In 2012, a complaint against Statkraft was lodged before the OECD’s Norwegian and Swedish National Contact Points (NCPs) in connection with the development of wind power in Sweden. Mediation took place between Jijnjevaerie Sámi Village and Statkraft in 2014 and was concluded without agreement. The Final Statement from the OECD NCPs was issued on 9 February 2016, thereby concluding on and closing the case. The NCPs have not found any grounds for concluding that Statkraft has failed to comply with the OECD Guidelines. The statement did point to some areas for improvement, including that Statkraft/SSVAB can work in a manner that even more clearly promotes indigenous people’s rights and the implementation of the Guidelines. The NCPs further recommended that the parties show renewed will to negotiate an agreement on the further development of the wind power projects. CORPORATE RESPONSIBILITY REPORT 2015 161
Corporate Statkraft’s Corporate Responsibility Statement presents the results for the areas environment, health and safety, labour practices, human rights, ethics responsibility and contributions to society. statement
Scope of statement Statkraft reports annually on relevant topics associated with corporate responsibility. The reporting mainly follows the Group’s accounting principles for treatment of subsidiaries, partly-owned power plants and associated companies.
This means that data are collected from all companies where Statkraft is the majority owner, and these data are included in the statement in their entirety. However, data relating to health and safety are collected from all companies where Statkraft owns 20% or more.
The presented data should cover the entire Group, but this has not been possible for some indicators. Where this is the case, the issue is explained in the associated note. The notes also clarify some terms and explain major changes with regard to presented results.
Download and read Statkraft`s Corporate Responsibility Statement by clicking on Statkraft’s Corporate the following link: Responsibility Statement Statkraft’s corporate responsibility statement
CORPORATE RESPONSIBILITY REPORT 2015 162
Auditor’s statement
Deloitte AS Dronning Eufemias gate 14 Postboks 221 Sentrum NO-0103 Oslo
Tel: +47 23 27 90 00 Fax: +47 23 27 90 01
To the management of Statkraft AS Independent Auditor’s Report on the Statkraft Corporate Responsibility Report 2015 We have reviewed certain aspects of Statkraft Corporate Responsibility Report 2015 (“the Report”) and related management systems and procedures. The Report is part of the Statkraft Annual Report 2015 on the Internet (www.annualreport2015.statkraft.com). The Report includes the Corporate Responsibility Statement published also in the printed Statkraft Annual Report 2015. The Report is the responsibility of and has been approved by the management of Statkraft AS (“the Company”). Our responsibility is to draw a conclusion based on our review. We have based our work on the international standard ISAE 3000 “Assurance Engagements other than Audits or Reviews of Historical Financial Information”, issued by the International Auditing and Assurance Standards Board. The objective and scope of the engagement were agreed with the management of the Company and included those subject matters on which we have concluded below. Based on an assessment of materiality and risks, our work included analytical procedures and interviews as well as a review on a sample basis of evidence supporting the subject matters. We have performed interviews with management responsible for corporate responsibility aspects at corporate and at selected reporting units represented by Power Generation – Region South (Dalen, Norway), Wind Onshore UK, and International Hydropower’s head office in Oslo. We believe that our work provides an appropriate basis for us to provide a conclusion with a limited level of assurance on the subject matters. In such an engagement, less assurance is obtained than would be the case had an audit-level engagement been performed. Conclusions Based on our review, nothing has come to our attention causing us not to believe that: Statkraft has established management processes and systems to manage material aspects related to corporate responsibility, as described in the Report. Statkraft has applied procedures to identify, collect, compile and validate information for 2015 to be included in the Report, as described in the Report. Information presented for 2015 is consistent with data accumulated as a result of these procedures and appropriately presented in the Report. The management systems referred to above have been implemented and locally adopted as necessary at the reporting units that we have visited, as specified above. Information for 2015 from these units has been reported according to the procedures noted above and is consistent with source documentation presented to us. Statkraft applies a reporting practice for its corporate responsibility reporting aligned with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (version G4) reporting principles and the reporting fulfils in accordance level Core according to the GRI guidelines. The GRI Index presented in the Report appropriately reflects where information on each of the elements and indicators of the GRIs guidelines is to be found within the Statkraft Annual Report 2015 on the Internet.
Oslo, 16 March, 2016 Deloitte AS
Ingebret G. Hisdal State Authorized Public Accountant (Norway) Frank Dahl Deloitte Sustainability
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/no/omoss for a detailed description Registrert i Foretaksregisteret of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Medlemmer av Den Norske Revisorforening org.nr: 980 211 282
CORPORATE RESPONSIBILITY REPORT 2015 163
Global Reporting Global Reporting Initiative (GRI) is an independent organisation that, for almost 20 years, has worked to establish a standard for corporate reporting Initiative (GRI) of social responsibility and sustainable development.
Since 2002, Statkraft has issued systematic information in its annual report about strategy and performance in connection with corporate responsibility. From 2004, the reporting has been based on GRI’s guidelines and from 2010, on GRI’s guidelines prepared specifically for the electric utilities sector.
About GRI GRI develops industry-adapted guidelines for corporate reporting of sustainability and corporate responsibility. The guidelines define both reporting principles and general and industry-specific indicators.
GRI develops reporting tools
Global Reporting Initiative (GRI) is an independent organisation which, since it was established in 1997, has worked to create a more standardised format for corporate responsibility and sustainability reporting. The most recent main version of GRI’s sustainability reporting guidelines (G4) was published in 2013 and it is mandatory for reports published after december 2015. From 2009 guidelines prepared specifically for the electric utility sector (Electric Utilities Sector Supplement) have been available.
GRI G4 defines ten reporting principles. Four of these deal with establishing the scope and content of the report, while the other six address the quality of the information presented.
GRI G4 covers both general and industry-specific indicators for enterprise profile, economy, environment, working conditions, human rights, corporate citizenship and product responsibility. For all areas, companies must describe the governance and follow-up mechanisms that have been implemented.
Companies can choose between two reporting levels - Core or Comprehensive.
Statkraft’s GRI Index Statkraft’s corporate responsibility reporting is based on GRI’s sector specific guidance and recommendations, described in supplement G4 Sector Disclosures - Electric Utilities.
Statkraft has engaged Deloitte AS to conduct a review, in accordance with attestation standard ISAE 3000 “Assurance Engagements other than Audits or Reviews of Historical Financial Information” established by the International Auditing and Assurance Standards Board, to provide a limited level of assurance on Statkraft’s corporate responsibility reporting.
The auditor’s conclusion is presented in the Auditors report
Explanations Reported = The indicator is reported. Partly = The indicator is reported partly. EU = Indicator numbers starting with EU mean that the indicator is specific for the energy utilities sector. CORPORATE RESPONSIBILITY REPORT 2015 164
STRATEGY AND ANALYSIS REFERENCE STATUS
G4-1 Statement from the CEO Letter from the CEO Reported
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ORGANIZATIONAL PROFILE REFERENCE STATUS
G4-3 Name of the organization Statkraft AS Reported Statkraft in fact and figures
G4-4 Primary brands, products and/or services Report from the Board of Reported Directors
G4-5 Location of organization’s headquarters Oslo, Norway Reported Countries in which the organization’s operations Statkraft in fact and figures G4-6 Reported are located
G4-7 Nature of ownership and legal form Stateowned limited company Reported Statkraft in fact and figures
G4-8 Markets served Report from the Board of Reported Directors Financial key figures Scale of the reporting organization (employees, G4-9 Non-financial key figures Reported operations, net sales etc.) Statkraft in fact and figures Scale of the reporting organization (employees by CR statement: Labour G4-10 Reported contract and gender, region etc.) practices Report from the Board of Scale of the reporting organization (employees G4-11 Directors Partly covered by collective bargaining agreements) Statkraft’s employees Management of corporate G4-12 The organization’s supply chain Partly responsibility Report from the Board of Directors
G4-13 Significant changes during the reporting period Note 5: Business Reported combinations and other transactions Explanation of whether and how the precautionary Management of corporate G4-14 Reported approach or principle is addressed responsibility Corporate governance Externally developed sustainability related G4-15 Management of corporate Reported charters, principles, or other initiatives endorsed responsibility Management of corporate Memberships in associations and/or responsibility G4-16 Reported national/international advocacy organizations Health and safety work in Statkraft CR statement: Power G4-EU1 Installed capacity generation and district Reported heating production CR statement: Power G4-EU2 Net energy output generation and district Reported heating production See customer related information under: www.statkraft.com G4-EU3 Number of different customer accounts Partly www.skagerakenergi.no www.fjordkraft.no www.statkraftvarme.no Length of above and underground transmission Assessed as not material G4-EU4 and distribution lines indicator at group level. Allocation of CO2e emissions allowances or G4-EU5 CR statement: Climate Reported equivalent
CORPORATE RESPONSIBILITY REPORT 2015 166
T T L S TS S ST T S
perational structure of the organization cti ities rganisation eported
rocess for defining report content – rocess for Statkraft’s CR reporting eported defining report content rocess for defining report content – material Statkraft’s CR reporting eported spects
oundary of the report ithin the organisation Statkraft’s CR reporting eported
oundary of the report outside the organisation Statkraft’s CR reporting eported
planation of the effect of any re statements of orporate responsi ility eported information statement Statkraft’s CR reporting Significant changes from pre ious reporting orporate responsi ility eported periods statement
ST L T ST T S
Stakeholder groups engaged y the organization eport from the oard of dentification and selection of stakeholders irectors eported engaged Stakeholder dialogue Statkraft’s CR reporting pproaches to stakeholder engagement Stakeholder engagement ey topics and concerns raised through olla oration ith s stakeholder engagement
T L ST T S
eporting period 2015 eported
ate of most recent pre ious report nnual report eported
eporting cycle nnual eported
ontact point for questions regarding the report info statkraft com eported
“In accordance” option, GRI content index, and Auditor’s report Statkraft’s GRI index reference to the ternal ssurance eport eported
olicy and current practice ith regard to seeking e ternal assurance
ST T S
o ernance structure of the organisation orporate go ernance eported
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ICS A I GRI R R C S A S Corporate responsi i it in Statkraft a ues, princip es, standards and nor s, suc as G 5 anage ent of corporate Reported codes of conduct and codes of et ics responsi i it usiness et ics
CORPORATE RESPONSIBILITY REPORT 2015 168
SPECIFIC STANDARD DISCLOSURES CATEGORY: ECONOMIC
ASPECT: ECONOMIC PERFORMANCE REFERENCE STATUS Report from the Board of Directors G4-DMA Generic disclosures on management approach Corporate governance Risk management
Economic value creation
G4-EC1 Direct economic value generated and distributed CR statement: Contribution Reported to society
Report from the Board of Directors Financial implications and other risks and Risk management G4-EC2 opportunities for the organization's activities due Reported Ambitions and goals – to climate change Environment Statkraft and the climate
Coverage of the organization's defined benefit G4-EC3 Note 16: Pensions Reported plan obligations
ASPECT: INDIRECT ECONOMIC IMPACTS REFERENCE STATUS Corporate responsibility in Statkraft G4-DMA Generic disclosures on management approach Management of corporate responsibility Development and impact of infrastructure G4-EC7 CR in development projects Partly investments and services supported
Significant indirect economic impacts, including G4-EC8 CR in development projects Partly the extent of impacts
EU SECTOR SPECIFIC ASPECT: RESEARCH AND DEVELOPMENT REFERENCE STATUS Ambitions and goals – Environment G4-DMA Generic disclosures on management approach Statkraft and the climate Innovation
CATEGORY: ENVIRONMENTAL
ASPECT: ENERGY REFERENCE STATUS Management of corporate responsibility G4-DMA Generic disclosures on management approach Reported Environmental management in Statkraft Consumption, emissions, discharges and waste G4-EN3 Energy consumption within the organization CR statement: Energy and resource consumption
SPECIFIC STANDARD DISCLOSURES CATEGORY: ECONOMIC
ASPECT: ECONOMIC PERFORMANCE REFERENCE STATUS Report from the Board of Directors G4-DMA Generic disclosures on management approach Corporate governance Risk management
Economic value creation
G4-EC1 Direct economic value generated and distributed CR statement: Contribution Reported to society
Report from the Board of Directors Financial implications and other risks and Risk management G4-EC2 opportunities for the organization's activities due Reported Ambitions and goals – to climate change Environment Statkraft and the climate
Coverage of the organization's defined benefit G4-EC3 Note 16: Pensions Reported plan obligations
ASPECT: INDIRECT ECONOMIC IMPACTS REFERENCE STATUS Corporate responsibility in Statkraft G4-DMA Generic disclosures on management approach Management of corporate responsibility Development and impact of infrastructure G4-EC7 CR in development projects Partly investments and services supported
Significant indirect economic impacts, including G4-EC8 CR in development projects Partly the extent of impacts
EU SECTOR SPECIFIC ASPECT: RESEARCH AND DEVELOPMENT REFERENCE STATUS Ambitions and goals – Environment CORPORATE RESPONSIBILITY REPORT 2015 169 G4-DMA Generic disclosures on management approach Statkraft and the climate Innovation
CATEGORY: ENVIRONMENTAL
ASPECT: ENERGY REFERENCE STATUS Management of corporate responsibility G4-DMA Generic disclosures on management approach Reported Environmental management in Statkraft Consumption, emissions, discharges and waste G4-EN3 Energy consumption within the organization CR statement: Energy and resource consumption
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CORPORATE RESPONSIBILITY REPORT 2015 170
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CATEGORY: SOCIAL CATEGORY: SOCIAL SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK SUBCATEGORY:-CATEGORY: SOCIAL LABOR PRACTICES AND DECENT WORK
SUB-CATEGORY: LABOR PRACTICES AND DECENT WORK Statkraft’s employees Statkraft’s employees Statkraft’s employees
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Statkraft’s employees Statkraft’s employees Statkraft’s employees Statkraft’s emplyees Statkraft’s emplyees Statkraft’s emplyees
Statkraft’s employees
Statkraft’s employees Statkraft’s employees
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S S S S S S S a a eme t of orporate S S e er s los res o ma a eme t approa a a eme trespo s l ty of orporate a a eme t of orporate
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SUB-CATEGORY: HUMAN RIGHTS SUB-CATEGORY: HUMAN RIGHTS SUB-CATEGORY: HUMAN RIGHTS S SUB-CATEGORY: S HUMAN RIGHTS S S S S S S S S a a eme t of orporate S S e er s los res o ma a eme t approa a a eme trespo s l ty of orporate a a eme t of orporate
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S SS S S S SS S SS S S S S a a eme t of orporate
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S S S S S S S a a eme t of orporate S S e er s los res o ma a eme t approa a a eme trespo s l ty of orporate a a eme t of orporate
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S S S S S S S S S S S S S S a a eme t of orporate S S a a eme t of orporate e er s los res o ma a eme t approa respo s l ty a a eme t of orporate e er s los res o ma a eme t approa respo s l ty a a eme t of orporate e er s los res o ma a eme t approa ma respo s l ty r ts e er s los res o ma a eme t approa ma respo s l ty r ts ma r ts perat o s a s ppl ers e t f e as a perat o s a s ppl ers e t f e as a S ppl er follo p perat o ss f a t r sk a for s ppl ers e ts e t f e of for e as or a S ppl er follo p artly s f a t perat o s r sk a for s ppl ers e ts e t f e of for e as or a ma S ppl er r ts follo p artly s f a t omp lsory r sk la or for e ts of for e or ma S ppl er r ts follo p artly omp lsorys f a t r sk la or for e ts of for e or artly ma r ts omp lsory la or
S S S S S S S S S S S S S S S S S S a a eme t of orporate S S a a eme t of orporate e er s los res o ma a eme t approa a a eme trespo s l ty of orporate e er s los res o ma a eme t approa respo s l ty a a eme t of orporate e er s los res o ma a eme t approa respo s l ty ma r ts e er s los res o ma a eme t approa ma respo s l ty r ts ma r ts otal m er of e ts of olat o s ol ma r ts otal m er of e ts of olat o s ol ma r ts eporte otalr ts m er of e o s of e ts peoples of olat o sa a t o s ol take ma stateme t r ts ma r ts eporte r ts otal m er of e o s of e ts peoples of olat o sa a t o s ol take ma stateme t r ts ma r ts eporte eporte r ts of e o s peoples a a t o s take stateme t ma r ts
S SS SS S S S SS SS S S S SS SS S S S SS SS a a eme t of orporate S S a a eme t of orporate e er s los res o ma a eme t approa a a eme trespo s l ty of orporate e er s los res o ma a eme t approa respo s l ty a a eme t of orporate e er s los res o ma a eme t approa respo s l ty ma r ts e er s los res o ma a eme t approa ma respo s l ty r ts ma r ts otal m er a per e ta e of operat o s t at otal m er a per e ta e of operat o s t at otal a e ee m er s e t a per e ta e to ma r ts of operat o s re e s ort at ma r ts artly a e otal ee m er s e t a per e ta e to ma r ts of operat o s re e s ort at ma r ts artly a e mpa t ee assessme ts s e t to ma r ts re e s or ma r ts artly mpa t a e ee assessme ts s e t to ma r ts re e s or ma r ts artly mpa t assessme ts
S S S SS SS S S S S S SS SS S S S S S SS SS S S S S S SS SS a a eme t of orporate S S a a eme t of orporate e er s los res o ma a eme t approa a a eme trespo s l ty of orporate e er s los res o ma a eme t approa a a eme trespo s l ty of orporate e er s los res o ma a eme t approa respo s l ty ma r ts e er s los res o ma a eme t approa respo s l ty ma r ts ma r ts er e ta e of e s ppl ers t at ere s ree e er e ta e of e s ppl ers t at ere s ree e ma r ts artly er e ta e s ma of r ts e s ppl ers r ter a t at ere s ree e ma r ts artly s er e ta e ma of r ts e s ppl ers r ter a t at ere s ree e ma r ts artly ma r ts artly s ma r ts r ter a
S S S S S S S S S S S S S S S S S S S S S S a a eme t of orporate S S a a eme t of orporate e er s los res o ma a eme t approa a a eme trespo s l ty of orporate e er s los res o ma a eme t approa a a eme trespo s l ty of orporate e er s los res o ma a eme t approa respo s l ty ma r ts e er s los res o ma a eme t approa respo s l ty ma r ts ma r ts ma r ts m er of r e a es a o t ma r ts mpa ts ma r ts eporte m er of r e a es a o t ma r ts mpa ts ma stateme t r ts ma r ts eporte m er of r e a es a o t ma r ts mpa ts ma stateme t r ts ma r ts eporte m er of r e a es a o t ma r ts mpa ts eporte stateme t ma r ts
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SUB-CATEGORY: SOCIETY
S SUB-CATEGORY: S SOCIETY S S S S a a eme t of orporate S S respo s l ty a a eme t of orporate e er s los res o ma a eme t approa So al ss es a lo al e elopme trespo s l ty e er s los res o ma a eme t approa So al e elopme t ss es a lo al pro e ts e elopme t er e ta e of operat o s t mpleme te lo al So al e elopme t ss es a lo al pro e ts
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S S S S a a eme t of orporate S S
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S assesse for r sks relate to orr pt o a t e s ess et s eporte s f a t r sks e t f e s ess et s omm at o a tra o a t orr pt o S stateme t s ess eporte pol es a pro e res s ess et s omm at o a tra o a t orr pt o et s a a t orr pt o S stateme t s ess eporte pol es a pro e res et s a a t orr pt o s ess et s o f rme e ts of orr pt o a a t o s S stateme t s ess eporte take s ess et s o f rme e ts of orr pt o a a t o s et s a a t orr pt o S stateme t s ess eporte take et s a a t orr pt o S S S
S a a eme t of orporate S S respo s l ty e er s los res o ma a eme t approa a a eme s ess et s t of orporate respo s l ty e er s los res o ma a eme t approa ma r ts s ess et s S f a t f es a total m er of o mo etary ma stateme t r ts s ess
S sa t o s for o ompl a e t la s a et s a a t orr pt o eporte re lat o sS f a t f es a total m er of o mo etary stateme t s ess ma r ts
S sa t o s for o ompl a e t la s a et s a a t orr pt o eporte re lat o s stateme t ma r ts
S S S S S S S S S S S S a a eme t of orporate S S respo s l ty e er s los res o ma a eme t approa So al a a eme t ss es a of orporate lo al respo s l ty e er s los res o ma a eme t approa e elopme t So al ss es a lo al e elopme t S m er of r e a es a o t mpa ts o so ety e elopme t pro e ts artly
S m er of r e a es a o t mpa ts o so ety e elopme t pro e ts artly
SUB-CATEGORY: SOCIETY
S S S S a a eme t of orporate respo s l ty
e er s los res o ma a eme t approa So al ss es a lo al e elopme t e elopme t pro e ts
er e ta e of operat o s t mpleme te lo al So al ss es a lo al
S omm ty e a eme t mpa t assessme ts e elopme t artly a e elopme t pro rams e elopme t pro e ts
perat o s t s f a t a t al a pote t al S e elopme t pro e ts artly e at e mpa ts o lo al omm t es
m er of people p ys ally or e o om ally
spla e a ompe sat o roke o y e elopme t pro e ts artly type of pro e t
S S S a a eme t of orporate
e er s los res o ma a eme t approa respo s l ty s ess et s
otal m er a per e ta e of operat o s
S assesse for r sks relate to orr pt o a t e s ess et s eporte s f a t r sks e t f e
s ess et s omm at o a tra o a t orr pt o S stateme t s ess eporte pol es a pro e res et s a a t orr pt o
s ess et s o f rme e ts of orr pt o a a t o s S stateme t s ess eporte take et s a a t orr pt o
S S S a a eme t of orporate respo s l ty e er s los res o ma a eme t approa s ess et s ma r ts
S f a t f es a total m er of o mo etary stateme t s essCORPORATE RESPONSIBILITY REPORT 2015 176
S sa t o s for o ompl a e t la s a et s a a t orr pt o eporte re lat o s stateme t ma r ts
S S S S S S S a a eme t of orporate respo s l ty e er s los res o ma a eme t approa So al ss es a lo al e elopme t
S m er of r e a es a o t mpa ts o so ety e elopme t pro e ts artly
S S S S S S S S S a a eme t of orporate
e er s los res o ma a eme t approa respo s l ty e er s los res o ma a eme t approa respo s l ty Se r ty
SUB-CATEGORY: PRODUCT RESPONSIBILITY
S S S S S a a eme t of orporate respo s l ty e er s los res o ma a eme t approa respo s l ty e er s los res o ma a eme t approa ealt a safety Se r ty r es a fatal t es to t e p l ol stateme t ealt a r es a fatal t es to t e p l ol stateme t ealt a eporte eporte ompa y assets safety
S S S SS S S eport from t e oar of re tors e er s los res o ma a eme t approa re tors e er s los res o ma a eme t approa a a eme t of orporate respo s l ty stateme t Sta l ty of o er o ta e fre e y stateme t Sta l ty of eporte o er o ta e fre e y eporte ele tr ty s pply
stateme t Sta l ty of era e o ta e rat o stateme t Sta l ty of eporte era e o ta e rat o eporte ele tr ty s pply
S S S S S
Stateme t from t e etter from t e eporte
CORPORATE RESPONSIBILITY REPORT 2015 177
UN Global Compact Global Compact is a UN initiative which encourages businesses to commit to sustainable development.
About Global Compact UN Global Compact encourages businesses to promote activities and partnerships that contribute to meeting the UN’s goal of sustainable development.
Global Compact comprises ten fundamental principles relating to employee rights, human rights, protection of the environment and combating corruption. Companies that endorse Global Compact commit to supporting and respecting the ten principles and report their performance in the various areas annually. In 2011, Global Compact introduced a scheme where all members are classified in three categories; Learning Platform, Active level and Advanced level.
Global Compact is now the world’s largest initiative to promote corporate responsibility and has more than 12 000 members, including more than 8000 companies, from 170 countries.
Statkraft’s Global Since 2010 Statkraft has been a member of the UN Global Compact. Compact Index We believe that the Global Compact’s 10 principles are integrated into Statkraft’s strategy and daily operations and that the company’s corporate responsibility reporting satisfies the requirements to the category Active level. In the table below, references are given to Statkraft’s reporting on Global Compact’s 10 principles. CORPORATE RESPONSIBILITY REPORT 2015 178
HUMAN RIGHTS
PRINCIPLE DESCRIPTION REFERENCE Business should support and respect the Report from the Board of Directors protection of internationally proclaimed Corporate responsibility in Statkraft 1 human rights within their sphere of Management of corporate responsibility influence, and Human rights
make sure that they are not complicit in Management of corporate responsibility 2 human rights abuses. Human rights
LABOUR
PRINCIPLE DESCRIPTION REFERENCE 3 Business should uphold the freedom Report from the Board of Directors association and the effective recognition of Corporate responsibility in Statkraft the right to collective bargaining, Management of corporate responsibility Human rights Statkraft’s employees
4 the elimination of all forms of forced and Report from the Board of Directors compulsory labour, Corporate responsibility in Statkraft Management of corporate responsibility Human rights Statkraft’s employees
5 the effective abolition of child labour, and Report from the Board of Directors Corporate responsibility in Statkraft Management of corporate responsibility Human rights Statkraft’s employees
6 the elimination of discrimination in respect Report from the Board of Directors of employment and occupation. Corporate responsibility in Statkraft Management of corporate responsibility Human rights Statkraft’s employees
CORPORATE RESPONSIBILITY REPORT 2015 179
ENVIRONMENT
S eport from t e oar of re tors orporate respo s l ty Statkraft s ess s o l s pport a pre a t o ary 7 a a eme t of orporate respo s l ty approa to e ro me tal alle es ro me tal mpa t orporate respo s l ty e elopme t pro e ts
m t o s a oals ro me t Statkraft offers re e a le a s sta a le e er y ertake t at es to promote reater sol t o s 8 e ro me tal respo s l ty a ro me tal a t t es Statkraft Statkraft a l mate orporate respo s l ty e elopme t pro e ts
m t o s a oals ro me t e o ra e t e e elopme t a ff s o Statkraft offers re e a le a s sta a le e er y 9 of e ro me tal fr e ly te olo es sol t o s o at o
ANTI-CORRUPTION
S eport from t e oar of re tors s ess s o l ork a a st all forms of orporate respo s l ty Statkraft 10 orr pt o l e tort o a r ery a a eme t of orporate respo s l ty s ess et s
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