Gamesa Corporación Tecnológica, S.A. and Subsidiaries Composing the GAMESA Group
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Gamesa Corporación Tecnológica, S.A. and Subsidiaries composing the GAMESA Group Auditors’ Report Consolidated Financial Statements for the year ended 31 December 2011 prepared in accordance with International Financial Reporting Standards Consolidated Directors' Report Translation of a report originally issued in Spanish based on our work performed in accordance with the audit regulations in force in Spain and of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 36). In the event of a discrepancy, the Spanish-language version prevails. Auditor’s report on consolidated annual accounts This version of our report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation To the Shareholders of Gamesa Corporación Tecnológica, S.A. We have audited the consolidated annual accounts of Gamesa Corporación Tecnológica, S.A. (Parent Company) and its subsidiaries (the Group), consisting of the consolidated balance sheet at 31 December 2011, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes to the consolidated annual accounts for the year then ended. As explained in Note 2.a, the Directors of the Parent Company are responsible for the preparation of these consolidated annual accounts in accordance with the International Financial Reporting Standards as endorsed by the European Union, and other provisions of the financial reporting framework applicable to the Group. Our responsibility is to express an opinion on the consolidated annual accounts taken as a whole, based on the work performed in accordance with the legislation governing the audit practice in Spain, which requires the examination, on a test basis, of evidence supporting the consolidated annual accounts and an evaluation of whether their overall presentation, the accounting principles and criteria applied and the estimates made are in accordance with the applicable financial reporting framework. In our opinion, the accompanying consolidated annual accounts for 2011 present fairly, in all material respects, the consolidated financial position of Gamesa Corporación Tecnológica, S.A. and its subsidiaries at 31 December 2011 and the consolidated results of its operations and consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards as endorsed by the European Union, and other provisions of the applicable financial reporting framework. On 24 February 2011 other auditors issued their audit report on the consolidated annual accounts for 2010, which expressed an unqualified opinion. The accompanying consolidated Directors’ Report for 2011 contains the explanations which the Parent Company’s Directors consider appropriate regarding the Group’s situation, the development of its business and other matters and does not form an integral part of the consolidated annual accounts. We have verified that the accounting information contained in the consolidated Directors’ Report is in agreement with that of the consolidated annual accounts for 2011.Our work as auditors is limited to checking the consolidated Directors’ Report in accordance with the scope mentioned in this paragraph and does not include a review of information other than that obtained from the accounting records of Gamesa Corporación Tecnológica, S.A. and its subsidiaries. PricewaterhouseCoopers Auditores, S.L. Originally signed by Ricardo Celada Partner February 23, 2012 Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 36). In the event of a discrepancy, the Spanish-language version prevails. Gamesa Corporación Tecnológica, S.A. and Subsidiaries composing the GAMESA Group Notes to the Consolidated Financial Statements for the year ended 31 December 2011 1. Formation of the Group and its activities The Company Gamesa Corporación Tecnológica, S.A. (hereinafter “the Company” or “GAMESA”) was incorporated as a public limited liability company on 28 January 1976. Its registered office is located at Parque Tecnológico de Bizkaia, Edificio 222, Zamudio (Vizcaya - Spain). Its company object is the promotion and development of companies through temporary ownership interests in their share capital, for which it can perform the following transactions: • Subscription of shares or other equity investments in unlisted companies engaging in business activities. • Acquisition of the shares or other equity investments mentioned in the preceding point. • Subscription of fixed-income securities issued by the companies in which it has ownership interests or the grant of participating and other loans to these companies for a term exceeding five years. • Direct provision to investees of counselling, technical assistance and other similar services related to the management of investees, to their financial structure or to their production or marketing processes. • Grant of participating loans for the acquisition of newly-built vessels which are intended for commercial shipping or fishing and not for sports or recreational activities or other private use in general. All the activities which make up the aforementioned company object may be carried on in Spain or abroad, and may be carried on either directly (totally or partially) by GAMESA, through the ownership of shares or other equity investments in companies with an identical or a similar company object. GAMESA may not carry on any business activity for which the applicable legislation provides for specific conditions or limitations unless it fully meets such conditions. The Company's bylaws and other public information on the Company may be consulted on the website www.gamesacorp.com and at its registered office. In addition to the operations carried on directly by it, GAMESA is the head of a group of subsidiaries that engage in various business activities and which compose, together with the Company, the GAMESA Group (“the Group” or “the GAMESA Group”). Therefore, in addition to its own separate financial statements, the Company is obliged to present consolidated financial statements for the Group including its interests in joint ventures and investments in associates. The companies that form part of the Group are listed in the Appendix. 6 The GAMESA Group currently operates as a manufacturing group and principal supplier of cutting-edge products, facilities and services in the renewable energy industry, structured in the following business units headed by the respective Group companies: Company Main line of business Gamesa Eólica, S.L. (Sole-Shareholder Manufacture of wind generators (WTGSs) Company) Gamesa Energía, S.A. (Sole-Shareholder Development, promotion and sale of wind farms Company) Information on the environment- In view of the business activities carried on by the GAMESA Group, it does not have any environmental liability, expenses, assets, provisions or contingencies that might be material with respect to its equity, financial position and results. Therefore, the directors did not include any specific disclosures relating to environmental issues in these notes to the consolidated financial statements. 2. Basis of presentation of the consolidated financial statements and basis of consolidation a) Basis of presentation- The consolidated financial statements for 2011 of the GAMESA Group were formally prepared: • By the directors of GAMESA, at the Board of Directors Meeting held on 22 February 2012. • Since 2005, in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, including the International Accounting Standards (IASs) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and by the Standing Interpretations Committee (SIC). The consolidated financial statements have been prepared on a historical cost basis, as modified by the revaluation of available-for-sale financial assets and financial assets and liabilities (including derivatives)at fair value through profit and loss. The principal accounting policies and measurement bases applied in preparing the GAMESA Group's consolidated financial statements for 2011 are summarised in Note 3. • Taking into account all the mandatory accounting policies and rules and measurement bases with a material effect on the consolidated financial statements. • So that they present fairly the consolidated equity and consolidated financial position of the GAMESA Group at 31 December 2011, and the consolidated results of its operations and its consolidated cash flows in the year then ended. • On the basis of the accounting records kept by GAMESA and by the other Group companies. However, since the accounting policies and measurement bases used in preparing the Group's consolidated financial statements for 2011 (IFRSs) could differ from those used by the Group companies when preparing their individual financial statements in accordance with local standards, the required adjustments and reclassifications were