Annual Report
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ANNUAL REPORT 2010 This is where energy is born! MISSION Reliable, e cient, diversi ed energy solutions satisfying the needs of our customers both at present and in the future. VISION Modern and innovative energy company, a recognised European market player. LONGTERM STRATEGIES Augmenting corporate values Ensuring the quality of service for the clients (transmission system operators, suppliers, customers) Diversifying power generation by using local and renewable energy sources Increasing operational e ciency Creating new organisational culture 2 Annual Report, 2010 This is where energy is born! LIETUVOS ENERGIJA AB Chief Executive O cer’s report The year 2010 was very signi cant and exceptionally productive for the Lithua- nian energy sector. During the year, work was carried out towards the achieve- ment of the main goal of Lithuania and other Baltic States – a market that is func- tioning successfully, is reliable, e cient, competitive, environmentally friendly and integrated into the energy system of Continental Europe. In 2010, conditions for the achievement of Lithuania’s energy independence were created. Lietuvos energija AB is no exception – the year was full of essential changes and challeng- es for the company. Lietuvos energija AB took up signi cant challenges in 2010. Upon closure of the Ig- nalina Nuclear Power Plant (INPP), local generation capacities have been strength- ened and the power sector have been restructured according to the provisions of the EU‘s Third Energy Package. BaltPool UAB – the Lithuanian electricity exchange was established and started operations, with Lietuvos energija AB becoming its ac- tive participant. The reorganisation completed in 2010 had a considerable impact on the company. In line with EU requirements, a restructuring of the Lithuanian power sector com- panies enabled the formation of a clear and sound system of four functional units: power generation, transmission, distribution, and servicing of the sector‘s compa- nies. 2010 saw important changes in the structure of Lietuvos energija AB. The general meeting of the shareholders of Lietuvos energija AB held on 14 May 2010 charged the Board with the responsibility for drafting the terms and conditions of the com- pany‘s spin-o whereby operations and assets related to power transmission were separated from the company. On 1 December 2010, the company divested itself of the functions of a transmission system operator and the transmission system‘s as- sets. Operations not related to the energy generation and supply were transferred to Data Logistics Center UAB, NT Valdos UAB, and Technologijų ir Inovacijų Centras UAB. Lietuvos energija AB became an energy generation, supply, import, export and trade company. The restructuring of the energy sector companies was aimed at increasing the overall system‘s e ciency, making the sector more transparent, and protecting the customers’ interests. The energy generation unit, based on Lietuvos energija AB together with the power plants Lietuvos elektrinė AB, Kruonis Hydro Pumped Storage Plant (Kruonis HPSP) and Kaunas Hydroelectric Power Plant (Kaunas HPP), was formed with the purpose 3 Annual Report, 2010 This is where energy is born! of concentrating the generation capacities. By forming a single unit of energy gene- ration companies, Lietuvos energija AB achieved the strategic objectives set for the Company for 2010. Last year, organisational structures of the Company‘s branches – Kruonis Hydro Pumped Storage Plant and Kaunas Hydro Electric Power Plant and of its subsidia- ry – Lietuvos elektrine AB underwent reorganisation. Corporate functions such as nance, procurement, legal, administration, human resources and communications were transferred to Lietuvos energija AB. Management and administration were concentrated in Elektrėnai, including the transfer of the headquarters, in order to ensure a more e ective and transparent management of the corporate business processes, to reducecosts, and to form a team of best specialists. In 2010, construction of a 455 MW combined cycle gas turbine unit (Unit 9) of Lie- tuvos elektrine AB proceeded at a rapid pace. Essential project works such as the delivery of all the main equipment for the unit to the site and the commencement of installation works were carried out. Upon completion of the planned work, gas consumption by Unit 9 of Lietuvos elektrinė AB will be 30% lower compared with other units of the plant currently in operation. Unit 9 will be put into operation in September 2012. Consolidated income of Lietuvos energija Group totalled LTL 1.277 million and net pro t – LTL 124 million in 2010. That year Lietuvos Energija AB earned pro t of LTL 46 million, which is 60% more than in 2009. In 2010, power generation by Lietuvos elektrinė AB amounted to 1.9 TWh, i. e. doub- led as compared with the year 2009. Kruonis HPSP generated 0.75 TWh (nearly 18% more compared with 2009) and Kaunas HPP – 0.446 TWh (28% more compared with 2009). Generation at all the power plants controlled by Lietuvos energija AB accounted for 30% of the national requirement. As an active participant in the electricity exchange, in 2010 Lietuvos energija AB sold 5.062 TWh of power to the domestic market (public suppliers and other in- dependent suppliers), imported 1.172 TWh from Belarus, Estonia and Latvia, and exported 0.186 TWh to Finland, Estonia and Latvia. In 2011 the Company is continuing to carry out the tasks outlined in the National Energy Independence Strategy. In order to increase the national energy security and protect customers’ interests, power generation capacities will be increased, use of renewable sources of energy will be expanded, and thermal energy generation from biomass will be developed. Specialists working at the company are of criti- cal importance for the performance of these tasks, therefore, development of sta competences, i. e. training and skills improvement courses will remain the focus of attention. Lietuvos energija AB will continue its cooperation with universities whose students are potential employees of the Company. In order to duly and e ectively perform its functions, the company will continue pri- oritising technological and scienti c advancement and intensive innovation. Being a socially responsible company, the Lietuvos energija AB is committed to creating a working environment that enables each employee to develop and to acquire new skills. On behalf of Lietuvos energija AB, I wish to express my gratitude to the company’s employees, partners and clients whose work has been conducive to signi cant changes in the national energy sector. Contribution by each of you is very important in achieving the energy independence of Lithuania. Dalius Misiūnas Chief Executive O cer LIETUVOS ENERGIJA AB 4 Annual Report, 2010 Elektrėnai, April 29, 2011 LIETUVOS ENERGIJA AB CONSOLIDATED AND COMPANY‘S FINANCIAL STATEMENTS FOR THE YEAR 2010 prepared according to International Financial Reporting Standards, as adopted by the European Union, presented together with the independent auditors‘ report LIETUVOS ENERGIJA AB Company code 220551550, Elektrinės g. 21, LT-26108 Elektrėnai TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS’ REPORT 3 - 5 CONSOLIDATED ANNUAL REPORT 6 - 45 FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION 46 - 47 STATEMENTS OF COMPREHENSIVE INCOME 48 - 49 STATEMENTS OF CHANGES IN EQUITY 50 - 51 STATEMENTS OF CASH FLOWS 52 NOTES TO THE FINANCIAL STATEMENTS 53 - 115 The financial statements were approved by the General Director, Director of Finance and Administration Department and Chief Financier on 4 April 2011. 2 3 4 5 LIETUVOS ENERGIJA AB Business ID 220551550, Elektrinės g. 21, LT - 26108 Elektrėnai CONSOLIDATED ANNUAL REPORT as of 31 DECEMBER 2010 All amounts in LTL’000 unless stated otherwise LIETUVOS ENERGIJA AB AND ITS SUBSIDIARIES CONSOLIDATED ANNUAL REPORT FOR THE FINANCIAL YEAR 2010 This Consolidated Annual Report of Lietuvos energija AB (hereinafter referred to as the “Company“ or “Lietuvos energija AB“) and its subsidiaries (the Company and its subsidiaries hereinafter referred to as the “Group“) has been prepared by the administration of the Company and approved by the Board in accordance with Section V, Article 25 of the Republic of Lithuania Law on Financial Statements of Companies and Section III, Article 9 of the Republic of Lithuania Law on Consolidated Financial Statements of Companies as well as according to resolution of the Securities Commission of the Republic of Lithuania “Concerning Approval of the Regulations on the Preparation and Submission of Periodic and Additional Information“ No. 1K-3 of 23 February 2007 as amended on 14 February 2008. 1 General Information about the Group 1.1 Accounting period covered by the Consolidated Annual Report The Consolidated Annual Report of the Group has been prepared for the financial year 2010. 1.2 Companies forming the Group and contact details thereof (name, legal form, date and place of registration, business ID, registered office address (and address of place of business if different), telephone and fax numbers, email and website addresses) As of 31 December 2009, the Company had direct control over the following subsidiaries: Energetikos pajėgos UAB, Kauno energetikos remontas UAB, Kruonio investicijos UAB, LITGRID AB, Energijos tiekimas UAB, InterLinks UAB, and Public Institution National Energy Training Centre (VšĮ Respublikinis energetikų mokymo centras). These subsidiaries were wholly-owned by the Company (100% of shares). The Company also held the majority of