Enlight Renewable Energy Ltd. Consolidated Financial
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ENLIGHT RENEWABLE ENERGY LTD. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 ENLIGHT RENEWABLE ENERGY LTD. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 TABLE OF CONTENTS Page AUDITORS’ REPORT REGARDING THE AUDIT OF THE 2 CONPOTNENTS OF INTERNAL CONTROL OVER FINANCIAL REPORTING AUDITORS’ REPORT – AUDIT OF THE ANNUAL FINACIAL STATEMENTS FINANCIAL STATEMENTS: Consolidated statements of financial position 4-5 Consolidated statements of profit or loss and other comprehensive income 6-7 Consolidated statements of changes in equity 8-10 Consolidated statements of cash flows 11-13 Notes to the Consolidated financial statements 14-113 AUDITORS’ REPORT TO THE SHAREHOLDERS OF ENLIGHT RENEWABLE ENRGY LTD. Regarding the audit of the components of internal control over financial reporting in accordance with Section 9B(c) to the Israeli Securities Regulations (Periodic and Immediate Reports), 1970 We have audited components of internal control over financial reporting of Enlight Renewable Energy Ltd. and its subsidiaries (hereinafter – “the Company”), as of December 31, 2017. These components of internal control were set as explained in the next paragraph. The Company’s Board of Directors and Management are responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of components of internal control over financial reporting included in the accompanying periodic report for the above date. Our responsibility is to express an opinion on the components of internal control over financial reporting based on our audit. Components of internal control over financial reporting were audited by us according to Audit Standard No. 104 of the Institute of Certified Public Accountants in Israel “Audit of the internal Control Components over Financial Reporting” (hereinafter – “Audit Standard 104”). These components are: (1) entity level controls, including controls over the preparation process and closing of the financial reporting and general controls of information systems; (2) controls over the revenues process; (3) controls over the projects process; (all of these together are called the “audited control components”. We conducted our audits in accordance with Audit Standard 104. This standard requires that we plan and perform the audit to identify the audited control components and to obtain reasonable assurance whether these control components have been maintained effectively in all material respects. The audit includes obtaining an understanding of internal control over financial reporting, identifying the audited control components, assessing the risk that a material weakness exists in the audited control components, as well as review and assessment of effective planning and maintaining of these audited control components based on the estimated risk. Our audit, for those audited control components, also included performing such other procedures as we considered necessary under the circumstances. Our audit referred only to the audited control components, unlike internal control of all material processes over financial reporting, and therefore our opinion refers only to the audited control components. In addition, our audit did not take into account the mutual influences between the audited control components and those which are not audited, and therefore our opinion does not take into account such possible effects. We believe that our audit provides a reasonable basis for our opinion in the context described above. Due to inherent limitations, internal control over financial reporting in general and components of internal controls in particular, may not prevent or detect a misstatement. Also, making projections on the basis of any evaluation of effectiveness is subject to the risk that controls may become inadequate because of changes in circumstances, or that the degree of compliance with the policies or procedures may be adversely affected. In our opinion, based on our audit, the company effectively maintained, in all material respects, the audited control components as of December 31, 2017. We also audited the Company's consolidated financial statements as of December 31, 2017 and 2016 and for each of the three years in the period ended December 31, 2017, in accordance with auditing standards generally accepted in Israel, and our report, of March 27, 2018 included an unqualified opinion on these financial statements, based on our audit and the reports of the other auditors. Brightman Almagor Zohar & Co. Certified Public Accountants Member of Deloitte Touche Tohmatsu Limited Tel Aviv, March 27, 2018 - 2 - AUDITORS’ REPORT TO THE SHAREHOLDERS OF ENLIGHT RENEWABLE ENRGY LTD. We have audited the consolidated statements of financial position of Enlight Renewable Energy Ltd. and its subsidiaries (hereinafter – "the Group") as of December 31, 2017 and 2016, and the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the three years of the period ended December 31, 2017. These financial statements are the responsibility of the Company’s Board of Directors and Management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of subsidiaries, whose assets included in consolidation constitute approximately 23.88% and approximately 4.5% of total consolidated assets as of December 31, 2017 and 2016, respectively, and whose revenues included in consolidation comprise approximately 10%, approximately 0% and approximately 0% of total consolidated revenues for the years ended December 31, 2017, 2016 and 2015, respectively. The financial statements of those companies were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to amounts included for those companies, is based on the reports of the other auditors. We conducted our audit in accordance auditing standards generally accepted in Israel, including those prescribed by the Israeli Auditors (Mode of Performance) Regulations, 1973. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Company’s Board of Directors and management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, based on our audit and on the reports of the other auditors, the above-mentioned financial statements present fairly, in all material aspects, the financial position of the Company and its subsidiaries as of December 31, 2017 and 2016, and the results of their operations, changes in equity and cash flows for each of the three years in the period ended December 31, 2017, in conformity with International Financial Reporting Standards (IFRS) and the provisions of the Securities Regulations (Annual Financial Statements) – 2010. We have also audited in accordance with standard No. 104 of the Institute of Certified Public Accountants in Israel “Audit of the Internal Control Components over Financial Reporting”, as amended, internal control components over financial reporting of the company as at December 31, 2017, and our report in March 27, 2018 included an unqualified opinion on the effectiveness of those components. Brightman Almagor Zohar & Co. Certified Public Accountants Member of Deloitte Touche Tohmatsu Limited Tel Aviv, March 27, 2018 - 3 - ENLIGHT RENEWABLE ENRGY LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As of December 31, 2017 2016 Note NIS in thousands Assets Current assets Cash and cash equivalents 5A 114,494 153,122 Cash restricted as to use 5B 34,828 12,093 Financial assets at fair value through profit or loss 27C 69,232 62,700 Trade receivables 6 8,940 7,398 Other accounts receivable 7 7,851 8,167 Current maturities of financial assets in respect of concession arrangements 9 41,712 41,101 Total current assets 277,057 284,581 Non-current assets Cash restricted as to use 5B 57,617 38,596 Other accounts receivable 1,836 63 Deferred costs in respect of projects 80,633 40,602 Deferred borrowing costs 28,499 2,844 Advances on account of acquisition of shares 30A(5) - 6,066 Financial assets in respect of concession arrangements 9 1,002,303 1,039,851 Property, plant and equipment, net 11 412,828 116,003 Intangible assets, net 12 126,324 69,439 Deferred taxes 18 1,565 344 Total non-current assets 1,711,605 1,313,808 Total assets 1,988,662 1,598,389 - 4 - ENLIGHT RENEWABLE ENRGY LTD. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Continued) As of December 31, 2017 2016 Liabilities and equity Note NIS in thousands Current liabilities Credit and current maturities of loans from banks and other financial institutions 15 40,770 48,503 Trade payables 13 29,607 6,238 Other payables 14 43,832 36,318 Current maturities of bonds 16 15,221 15,221 Current maturities of convertible bonds 16 1,559 1,147 Current maturities of loans from other credit providers 15 8,868 7,883 Total current liabilities 139,857 115,310 Non-current liabilities Bonds 16 159,519 175,808 Convertible bonds 16 2,958 17,216 Loans from banks and other financial institutions 15 862,821 727,288 Loans from other credit providers 15 152,629 161,151 Loans