Key Figu Energy Is Our Business

www.atel.eu Fax Tel. Olten CH-4601 Bahnhofquai 12 Aare-Tessin Ltd.forElectricity Head office: +41 6228673 +41 622867111 +41

Atel Finanzbericht 2006 Atel 112th Annual Report 2006 112 Energy isourbusiness th AnnualReport2006 Key Figures2006 * plus tradinginstandardisedproducts Employees* Total assets Total equity Net investments Group profit interest andtax(EBIT) Earnings before Release ofvalueadjustmentsonassets Depreciation depreciation andamortisation(EBITDA) Earnings beforeinterest,tax, Net revenue Energy sales(TWh) Atel Group Average tradingvolume Dividend Equity (attributabletoAtelshareholders) Net profit Low High Share priceat31.12. Nominal value Per share information Average numberoffull-timeequivalentemployees in CHFmn.orEUR in TWh as %oftotalassets as %ofnetrevenue as %ofnetrevenue Energy Services Energy

/ day

2005 (based onCHF) +/- variance –

2006 in% – 117.8 104.5 – 65.4 34.6 26.9 11.9 42.3 18.1 64.6 55.6 42.6 38.4 32.1 17.8 1.1 3.1 4.0 –

149.982 98.166 CHF mn. 8 8 7 2 1 7 8 – 33.7 2005 289 368 317 464 299 413 541 196 737 564 020 580 4.8 6.3 2005 –

+/- variance – 2006 in% 201.892 115.642 CHF mn. 13 11 8 9 3 1 1 1 9 – 37.7 119.3 2006 708 461 288 506 106 202 245 051 626 899 716 334 257 42.9 43.6 12.7 38.8 63.6 7.9 9.8

–

149.982 EUR mn. 98.166 5 8 4 1 1 4 5 1 2 1 – 33.7 2005 2005 355 368 705 585 127 010 535 543 193 267 349 476 137 777 135 100 650 270 895 CHF 4.8 6.3 28 –

201.892 115.642 EUR mn. 8 8 5 2 1 6 7 1 1 3 3 – 37.7 2006 2006 715 461 780 182 128 034 177 205 156 572 703 163 668 115 859 150 100 157 296 100 CHF 7.9 9.8 40

www.atel.eu Fax Tel. Olten CH-4601 Bahnhofquai 12 Aare-Tessin Ltd.forElectricity Head office: +41 6228673 +41 622867111 +41

/ day

2005 (based onCHF) +/- variance –

2006 in% – 117.8 104.5 – 65.4 34.6 26.9 11.9 42.3 18.1 64.6 55.6 42.6 38.4 32.1 17.8 1.1 3.1 4.0 –

149.982 98.166 CHF mn. 8 8 7 2 1 7 8 – 33.7 2005 289 368 317 464 299 413 541 196 737 564 020 580 4.8 6.3 2005 –

+/- variance – 2006 in% 201.892 115.642 CHF mn. 13 11 8 9 3 1 1 1 9 – 37.7 119.3 2006 708 461 288 506 106 202 245 051 626 899 716 334 257 42.9 43.6 12.7 38.8 63.6 7.9 9.8

–

149.982 EUR mn. 98.166 5 8 4 1 1 4 5 1 2 1 – 33.7 2005 2005 355 368 705 585 127 010 535 543 193 267 349 476 137 777 135 100 650 270 895 CHF 4.8 6.3 28 –

201.892 115.642 EUR mn. 8 8 5 2 1 6 7 1 1 3 3 – 37.7 2006 2006 715 461 780 182 128 034 177 205 156 572 703 163 668 115 859 150 100 157 296 100 CHF 7.9 9.8 40

Energy is our business

Founded in 1894, Aare-Tessin Ltd. for Electricity (Atel) Atel’s head office in Olten and in Prague trade in con- Atel delivers a wide variety of services for industrial and is Switzerland’s leading energy services provider, oper- ventional physical and financial products, and also in power plant engineering, energy transmission and com- ating throughout Europe. Today, Atel concentrates on coal, gas, oil and CO2 certificates. Competent analysts munications technology in Germany and Eastern two segments: Energy and Energy Services. The geo- and risk managers ensure that these trading activities Europe. Continuous expansion of the value chain will graphical areas in Europe on which it focuses are Swit- contribute significantly to the optimisation of purchas- enhance Atel’s already comprehensive range of services, zerland, Italy, Germany, France and Central and Eastern ing and selling prices. At the same time, the expansion adding future-oriented system and customer solutions. Europe. of Atel’s own generation capacities in Europe provides long-term support for its successful energy trading ac- Energy segment: productive harmony tivities. The close interaction between generating and Expertise and experience in trading and sales are trading activities enables Atel to optimise the manage- the keys to exactly satisfying the individual customers’ ment of its generation portfolio on a flexible, interna- needs. Atel comprehensively covers every link in the tional basis. value chain: its own generation facilities, established European trading, customer-oriented sales and market- Electricity sales: at home throughout Europe ing, and an extensive transmission system in the Swiss Progressive liberalisation is making the networking electricity hub. All of these factors combine to give Atel of energy competencies – across both sector and na- a pivotal role as a production-based energy trader in tional boundaries – more and more important to the Europe. competitiveness of companies and both private and public institutions. Atel’s broad energy portfolio, to- Power generation and grid: minimising risks gether with its experience and expertise, enables it to Atel pursues its objective of generating a reliable respond fully to these growing customer needs. With power supply through a combination of its own power over twenty sales companies and subsidiaries through- stations in Switzerland, Italy, the Czech Republic and out Europe, Atel is always a competent partner to its Hungary, interests in hydroelectric and thermal joint customers – wherever they are located. Tailor-made ventures, and long-term options to purchase output procurement strategies – from full power supply to from third-party generators. structured portfolios – help customers with the most diverse requirements to obtain the energy they need on The company’s ultimate goal, both for Switzerland the best possible terms. Consolidating existing national and for the rest of Europe, is to ensure a sustainable mix companies and establishing new subsidiaries are two of conventional and renewable energy sources – and to important mainstays of Atel’s corporate strategy. expand its generation portfolio. By diversifying its generation portfolio, both technologically and geographi- Energy Services segment: every aspect of energy cally, Atel reduces risks and also its unilateral depend- Atel’s Energy Services segment supports and rounds ence on primary fuels like gas and coal. In addition, Atel out its portfolio with a broad range of services encom- operates its own extra-high voltage network with stra- passing all aspects of electricity generation, transmis- tegically important North-South links. sion and applications. Leading the market in Switzer- land, the Atel Installationstechnik Group also covers the Trading: flexible response energy supply, traffic engineering and building services Atel generates over 80 per cent of its total sales else- segments in Italy. Through the GAH Group, an estab where in Europe. Teams of international traders at lished energy services company based in Heidelberg, Energy is our business

Editorial of the Chairman of the Board of Directors 4 Interview with the CEO 6 2006 in focus 9 The Energy West project 9 Annual General Meeting 9 Corporate Social Responsibility: Atel in dialogue 10 Corporate Governance 16 Group structure and shareholders 16 Capital structure 19 Board of Directors 19 Control and supervisory mechanisms 20 Executive Board 22 Remuneration, shareholdings and loans 22 Shareholders’ participation rights 26 Change of control and defensive measures 26 Auditors 27 Energy segment 30 Electricity trading and sales 32 Switzerland market 32 Southern Europe market 34 Central/Eastern Europe market 34 Western Europe market 35 Northern Europe market 35 Scandinavia market 36 Trading 36 Power generation and grid 40 Power generation Switzerland 40 Power generation Italy 43 Power generation Central/Eastern Europe 44 Grid 46 Energy Services segment 50 Southern/Western Europe – Atel Installationstechnik Group 52 Northern/Eastern Europe – GAH Group 54 Glossary 60 Addresses, dates, publication data 62 Financial Report 2006 separate section Barcelona

Visiting Barcelona means experiencing Gaudí. A landscape architect, artist and town planner, this turn- of-the-century master builder has probably left his mark on the Catalan capital more than anyone else. The eccentric buildings and organic sculptures are remarkably high-spirited, they radiate an exuberance and a succession of ever-changing visual challenges that never fail to amaze the beholder.

Every day a new challenge – this is an apt description of the work performed by Daniel Tews, 36, born in Germany with Italian roots. He is in charge of Atel Energía SA and responsible for the Iberian market. Developing the Atel subsidiary on the Iberian peninsula is a challenge he relishes. A much-travelled business economist, Tews applies enthusiasm, a good measure of pioneering spirit and a great deal of in-depth know-how to steadily strengthening Atel’s position in the highly competitive Spanish energy market.

With its presence in currently 25 countries, Atel is able to bring an exceptional stock of expertise to bear in the European energy market.

«EnergiewirtschaftAtel further consolidates wieder its im leading Rampenlicht» position

Barcelona

been devoting more attention to curing a reliable power supply. There interrelationships and structures in is a huge need for capital spending energy production and distribution. on both power stations and trans Developments in the markets, now mission lines. In addition, it is up to largely liberalised, have lagged be the politicians to send out clear, un hind expectations. Furthermore Ger equivocal signals, and to ensure that many has said that it will focus partic legal certainty and investment secu ularly on climate and energy policy rity exist at all levels. Failing that, during its EU presidency in 2007. there is a risk that desperately need ed investment will be subject to On the evening of 4 November further delays. 2006, in an incident that typified the situation in the European electricity In this connection it is clear at grid, the power failed in large areas both national and European level of Europe from Hamburg to Malaga, that climate and energy policy are for periods ranging from minutes to increasingly merging together. The several hours. Switzerland escaped central components of climate policy by the skin of its teeth. This incident are at the same time the mainstays of The subject of energy continued highlights the fact that the European energy policy. One example of this is

to gain importance during the year energy grid is tightly interconnected the CO2 problem, which can only be under review, on a global level and – which makes it vulnerable. It also solved by means of a sensible com for Switzerland and the rest of shows that the constant availability promise between climate and energy Europe alike. Worldwide energy con of electrical energy that we have policies. Here the general environ sumption is continuously rising, driv enjoyed for several decades, in any ment in Switzerland must be favour en by the thriving global economy quantity and on favourable terms, is able to investment and comparable and the increasing hunger for energy a privilege that we may no longer be with the rest of Europe. on the part of the major growth able to take for granted in future. nations like China, India and Brazil. The underlying factors are a shortage In 2006 the Swiss parliament Energy is becoming ever scarcer – and of generation capacities, an increase approved most of the measures nec ever more important as a factor in in consumption, and a transmission essary to open up the national mar power politics. grid that is reaching its limits, after ket in two stages and to formulate years of failure to expand in pace relations with the rest of Europe in Throughout Europe, energy – and with rising consumption. the field of energy. Both these fac electricity in particular – is becoming tors are crucial if Switzerland is to a central political issue. For quite Switzerland and the rest of Europe avoid becoming an isolated enclave, some time now, the authorities have therefore face huge challenges in se with an insecure power supply, amidst

E di t oria l

a homogeneous European electricity demand in the very recent past, when market. specific decisions had to be taken about the future of the group. Atel 2006 was a successful year for today is well placed to face the chal Atel. We made the most of the op lenges that the future will bring, portunities presented to us by a dy whatever these may be. namic environment, once more set ting new records for sales, revenue and profit. Atel further consolidated its position as a significant Swiss pow erhouse in the European energy mar ket, reaching the leading position in selected areas.

Headed by CEO Giovanni Leo Rainer Schaub nardi, the senior management team Chairman of the Board of Directors achieved these notable successes in a demanding environment. This would naturally have been impossible but for our highly qualified and motivat ed staff, now more than 8 000 strong – to whom I should like to express my gratitude, on behalf of the Board of Directors, for their tremendous com mitment. All in all, Atel is in good shape, and extremely efficient. I take this opportunity to express my par ticular thanks to those members of the Board of Directors who left office at the 2006 Annual General Meeting – especially, of course, to Walter Bürgi, our former Chairman. Their far-sight ed guidance in recent years has ena bled Atel to develop into a thriving company with roots throughout Europe. Their skills were in particular

Market«Bestens and gerüstet growth für opportunities: den Wettbewerb» all intact

Barcelona

the successful expansion of available How do you assess the situation generation capacities. That’s not some regarding the security of thing that goes without saying, be Switzerland’s electricity supply in cause generation capacities are a hot the medium to long term? topic at the moment. And once again, our Trading business unit made a sig If anything, the situation has be nificant contribution to our success – come even more acute. 2006 brought especially thanks to the skilled, coordi another sharp increase in electricity nated exploitation of the generation consumption in Switzerland – a fur capacities that are available to us. ther indication that the power short fall is coming sooner, and will be more Are you similarly positive about acute, than many studies have fore the Energy Services segment? cast. Even today, power station ca pacities are barely able to cope with Yes, the performance of the Ener the demand at peak periods – and gy Services segment was also gener soon they will no longer be able to. ally encouraging. Now that GA-Tec has been sold, the restructuring of How does Atel assess the potential Giovanni Leonardi, how will you the GAH Group in Heidelberg is virtu of the new renewable sources of remember the 2006 financial year? ally complete. The GAH Group also energy? succeeded in obtaining orders for I can describe the year in three a number of major projects, such as Reality doesn’t beat about the words: intense, interesting, inspiring. the planning, supply and assembly of bush. In 2005, solar and wind power Developments in the Energy seg high-pressure piping for the Neurath provided roughly 0.03 per cent and ment’s environment were positive: brown coal power station and project 0.01 per cent respectively of the elec rising consumption, rising prices. Fur work for the new nuclear power sta tricity consumed in Switzerland. Geo thermore we posted above-average tion in Finland. Each of these orders thermal energy – the great white results. Among other things, I put is worth several hundred million hope among the new renewable en this down to the fact that we moved francs. The individual divisions of ergy sources – suffered a major set quickly in the open European mar Atel Installationstechnik Ltd. (AIT) back to its development when the kets. We succeeded in further expan also operated at high capacity levels. Basel project was halted following ding our position. The commence AIT passed an important milestone the earth tremors in December. ment of business activity in Spain and when it tendered for the work on the the opening of new offices in Greece interior of the Gotthard base tunnel, Even if the optimistic expecta are particularly worthy of mention. which has a volume of more than tions placed in the result of billions of At the same time, we have continued 1.5 billion francs. francs in state subsidies were to prove

I n t er v iew W I T H T H E C E O

Market and growth opportunities: all intact

accurate, this would have only a mod placing fossil fuels, and that tends to At the end of the year Atel est effect on the traditional mix of 60 increase electricity consumption. proposed the construction of two per cent hydro and 40 per cent nuclear. new nuclear power stations in So we’re left with only imports or Switzerland. Nonetheless Atel is involved new power stations in Switzerland in renewable energy generation. to make good the electricity shortfall? We made our position perfectly clear. As far as gas-fired combined Certainly, we have invested in two Correct. Except that imports are cycle power stations are concerned, wind farms in Sicily and in small hy not a sustainable solution. The cross- the federal government must come droelectric stations in northern Italy. border capacities of existing power up with viable long-term proposals

It’s not only from an environmental lines, which are in any case limited, for CO2 tax, like those in our neigh viewpoint that this makes sense. Leg are subject to short-term political in bouring countries – and it must do so islation in Italy enables us to back up fluence. Besides, Europe will soon fast. That means exempting gas-fired our investment in operating terms. In need all its energy itself. We are go combined cycle power stations from

Switzerland we have established a ing to have to solve our energy prob the CO2 tax and capping any com new company, Atel EcoPower AG, to lem ourselves. pensation measures at a tolerable handle our increased commitment to level. renewable sources – principally small How about new power stations? hydroelectric stations. Let me say a Now to nuclear power stations. word about energy efficiency and The options for making good the The Department assumes that it takes energy saving as contributions to impending electricity shortfall are up to 25 years to complete a nuclear meeting the electricity shortfall. We gas-fired, coal-fired or nuclear power power station, from conceptiual plan support all sensible measures to en stations. It will be up to the politi ning to commissioning. That’s ludi courage the efficient use of energy. cians and the public to determine the crous. The objective must be to cut This includes energy saving, as long general framework for the necessary that period by half. The federal au as it involves no undue restrictions on capital spending. thorities ought to face up to their re the individual liberty of people and sponsibilities and send a clear signal companies. In the final analysis, this Atel already operates all three that the approval procedure for new field has considerable potential for types of power station, so we under nuclear power stations is going to be our Energy Services segment. stand all three technologies. Given streamlined. That would put condi the need to close the electricity gap tions here on a par with the rest of Does saving energy necessarily on a sustainable basis and in accord Europe, enabling us to take our share mean consuming less electricity? ance with sound environmental and of the responsibility. Discussions over economic principles, we believe that the last few months have shown that Only to a certain extent. Saving nuclear power is an indispensable politicians and civil servants are be energy also means, in particular, re option for Switzerland. coming more aware of the situation.

PINroT ERj eVkI t E Wenergie W I T H T H W Ees Ct E O

Barcelona

Back to Atel as a whole: transmission markets, and on plant What will the company be focusing engineering throughout Europe. I on during the coming year? must make special mention of capital investment in grid expansion, and in Naturally we shall continue to de generation facilities: not just thermal vote much of our time and effort to power stations, but also renewable the planned merger of Atel with EOS. energies – particularly wind power Besides that, we shall closely study and biomass. the various options for new major power stations in Switzerland – and take further steps if we deem it ap propriate to do so. We are also plan ning selective investments in addi tional generation capacities in all our major markets. Overall we again think the Energy segment will face increased competition throughout Europe, while electricity consump tion will continue to rise. This combi nation offers us many opportunities for growth, and our staff will not let them slip through their fingers.

What about the Energy Services segment?

Here, too, the general outlook is positive. AIT will concentrate on con tinuing to expand its business profit ably, especially in traffic engineering. We also expect new market opportu nities in Switzerland as measures to increase energy efficiency become more and more important. Finally GAH will concentrate on the fast- growing energy generation and

T HE ENERGY WES T P R O J EC T

ANNUA L G E N E R A L M E E T ING 2006 in focus

The Energy West project deliver its verdict during the first half 111th Annual General Meeting of 2007. The acquisition of the 55.6% stake The 111th Annual General Meet in Motor-Columbus Ltd. (MC) from In consequence of the legal pro ing was held on 27 April 2006. In the UBS by a predominantly Swiss con ceedings relating to the mandatory light of changes to the shareholder sortium was completed on 23 March public offer, the restructuring of Atel structure, Atel shareholders consent 2006. The consortium consists of a and Motor-Columbus into a simpli ed to various changes in the Board group of Atel shareholders including fied holding company structure was of Directors. Dr. Walter Bürgi, Chair EOS Holding, EDF Alpes Investisse not able to be carried out in 2006, as man, and Dr. Heinrich Steinmann did ment Sàrl, Elektra Birseck (EBM), Elek originally planned. They have also not offer themselves for re-election. tra Baselland (EBL), the Canton of delayed preparatory work for the Rolf Büttiker, Ulrich Fischer and Urs Solothurn, IBAarau AG (IBA), Aziende planned industrial merger of Atel/MC B. Rinderknecht retired. Dr. Marcel Industriali di Lugano SA (AIL) and with EOS and the Swiss activities and Guignard and Dr. Giuliano Zuccoli Wasserwerke Zug AG (WWZ). assets of EDF. The merger is impor were re-elected for a further term of tant for all parties involved and the office. Dr. Dominique Dreyer, Philippe Following the completion of the intention is still to complete it with Huet, Jean-Philippe Rochon, Hans E. share purchase contracts, Motor- effect from the end of 2007 and to Schweickardt and Dr. Alex Stebler Columbus Ltd. made Atel sharehold launch the new company at the be were elected as new members of the ers who were not members of the ginning of 2008. The aforementioned Board. Atel’s Board of Directors elect consortium a mandatory public offer group of Atel shareholders and EOS ed Dr. Rainer Schaub, already a mem to acquire their shares in exchange Holding would each hold 30 % of the ber, as its new Chairman, Christian for shares in Motor-Columbus. This new company, while EDF Alpes Inves Wanner as Vice-Chairman and Alain offer was completed on 27 July 2006. tissement Sàrl would hold 25 %. How Moilliet as Secretary. Ernst & Young Motor-Columbus was offered a total ever, the aim of meeting these dates AG was reappointed as statutory and of 16 640 Atel shares in exchange for is becoming increasingly more diffi group auditors for a further one-year MC shares, equivalent to 0.55% of cult and they cannot be regarded as term as prescribed in the Articles Atel’s share capital. On 4 September certain. of Association. The Annual General 2006 an Atel shareholder filed a com Meeting approved the Annual Re plaint to the Supreme Administrative port, the annual accounts and the Court with the Federal Court. This com consolidated accounts for 2005, dis plaint contested the order of the Fed charged the members of the Board eral Banking Commission of 4 July of Directors from liability and adopt 2006 confirming that the consor ed the Board of Directors’ proposal tium’s mandatory share exchange for the appropriation of retained offer complied with stock exchange earnings. law. The Federal Court is expected to

Atel imin dialogueDalog

The future of successful compa ing sustainable business develop nies is based on an unimpaired envi ment. This attitude is evidenced by ronment and a healthy society. A via the encouraging results of the last fi ble society, in its turn, needs successful nancial year, and by our expectations companies that accept their responsi for the financial year to come. bilities, planning and acting for the long term. These close links between A continuous dialogue at all levels business, society and the environ ment find their expression in the prin Regular, transparent dialogue with ciples of corporate social responsi shareholders and investors is ren bility, a central component of Atel’s dered still more important by the hot business philosophy. Besides a corpo topic debate about energy supplies rate strategy designed to achieve going on at both national and Euro profitable growth in the long term, pean level. Atel has always main this also includes various initiatives tained a dialogue with its capital pro and programmes for a sustainable, viders: at numerous events in Swit secure, balanced energy supply, zerland and abroad that serve to the preservation of jobs, transparent increase understanding of the com communication with all stakeholder pany and the sector, and also by issu groups – and a wide variety of initia ing publications and other forms of tives to ensure that modern working media about the energy business and and environmental standards are the company’s future orientation and maintained at all Atel’s facilities in objectives. Europe. With over 30 sales-companies and Transparent communication with branches throughout Europe, Atel is capital providers always close to its customers in both segments. Atel is also involved in Energy is at the beginning of a a large number of cross-border pan- long-term, complex value chain. It is European partnerships, which – to essential for the viability of our entire gether with the concomitant geo national economy. As an energy ser graphical and cultural links with local vices provider operating throughout and national markets – helps main Europe, Atel is conscious of its obliga tain a constant exchange of ideas, tion to safeguard profits in the long experience and knowledge. This cre term, while at the same time pursu ates a fertile breeding ground for so

10 corpora t e socia l responsibi l i t y

Pyrenees

lutions that meet customer needs Atel has for many years pursued and satisfy tested, uniform standards an active, transparent information and – while at the same time taking ac communication policy, conducting a count of the idiosyncrasies of the var constant dialogue with the media, ious regional markets. Atel thus em political and commercial bodies and phasises the importance of the spirit the public at large. The last few years of partnership, which is also central have brought massively increased in to its corporate values, on a daily ba terest in central questions like the se sis. In order to put down roots and curity of supply, the future of power intensify cooperation at a local level, generation and the advancing liber Atel regularly supports social organi alisation of the energy sector. This sations and sports clubs – such as the has given Atel many and diverse op Csepel Wrestling Club in Hungary, for portunities for active participation in example, and the Junior Team of the the social discussion, and for collabo Kladno Ice Hockey Club in the Czech ration with the various political, com Republic – as well as a wide range of mercial and social players in search of social institutions. the best possible solutions. In the last financial year Atel’s broad specialist Atel is also involved in a number expertise and unambiguous positions of activities designed to intensify enabled it to continue to play an im technology transfer between indus portant role, both in debates on en try and research, to make energy sys ergy policy and in helping to devise a tems even more efficient, and – in just, modern environment in the en conjunction with a number of sector ergy field. Many of Atel’s specialists partners – to amplify fundamental contributed their extensive knowl matters relating to future energy edge and experience to projects run supplies and the electricity market. by national and international bodies Atel is a member of swisselectric, the and specialist groups. Swiss Association of Electricity Sup pliers, which promotes research into A culture of respect, trust and future-oriented electricity projects. openness Atel and its partners in swisselectric contribute valuable expertise – and Most of Europe’s electricity and gas up to ten million Swiss francs a year – markets are opening up, but not at a to applied research and development uniform pace – and the bodies of reg in all energy-related fields. ulation to which they are subject are

11 Pyrenees

equally varied. This reflects the accel of its staff is a high priority for Atel. erating pace of change in society and Last year the company trained over the worlds of business and politics. 550 trainees throughout Europe. Atel’s staff know all about change: at ever-decreasing intervals they are Secure jobs are also the result of a having to question familiar struc smoothly functioning quality man tures, processes and tasks and to re agement system. They are one indi define them. Staff at all levels of the cation of a responsible company. And company maintain an attitude of re Atel is certainly that. For several spect, trust and openness towards years, for example, the Csepel power each other and this results in a healthy station complex in Hungary has been willingness to perform. Flexible man receiving international awards for its agement structures ensure that per exemplary workplace safety. It goes sonal strengths are developed to the without saying that all Atel’s produc maximum possible extent, as well as tion facilities have the most modern motivating individuals to pursue life equipment, ensuring rigorous safety long learning. standards – and have obtained certif icates attesting to their impeccable Education and training are central quality management. mainstays in Atel’s human resources policy. They take account of the Environmental and economic fact that every member of staff is sustainability in everyday practice unique. The future viability of our society As a company that is active through is crucially dependent on the security out Europe, Atel attaches particular of our energy supply. This imposes a importance to intercultural coopera heavy responsibility on Atel towards tion and the opportunities that it cre society as a whole, which the com ates. One example: Atel is the main pany fulfils throughout Europe with sponsor of the Swiss teams in the an clear ideas and positions – and by act nual International Physics Olympiad. ing in accordance with them. Atel re This gives talented young people lies on a balanced mix of convention from all over the world the opportu al and renewable energies to meet nity to put their knowledge and abil the soaring global demand for ener ities to the test in an international gy tomorrow and the day after, keep arena. Preparing the next generation ing all options open. With this prag

12 corpora t e socia l responsibi l i t y

matic approach, Atel acknowledges stantial technical and operational ex the tenets of both environmental pertise in new technologies, making and economic sustainability – and a further contribution to a sustaina hence of a coherent, future-oriented ble energy supply. energy policy.

With over 6 000 employees in the Energy Services segment, Atel has access to an impressive body of ex pertise – particularly in the field of renewable energies. Throughout Eu rope, these experts build the most modern biomass and solar power stations, implement energy efficien cy measures and connect wind farms to existing grids.

With regard to climate protec tion, the achievement of the Kyoto objectives and increased energy effi ciency, Atel further increased its com mitment to the economically viable use of renewable energies during the year under review. 50 million francs was provided for the promotion of small hydroelectric power stations in Switzerland, and Atel EcoPower AG was established.

Atel took an 85 per cent stake in two small hydroelectric power sta tions in Piemont, Italy, and a 49 per cent stake in the construction and operation of two large wind farm power stations in Sicily. Atel is thus continuing to expand its already sub

13 Bordeaux

“Mascaret” is the name given to the powerful tidal wave, the so-called tidal bore that occurs in the Gironde estuary and along its two merging rivers, the Garonne and the Dordogne. Picturesque waterways, archaic tidal forces and the mild climate are typical of this long-established wine region that has long forged trading links with the rest of the world through the seaport of Bordeaux.

Immersed in the finer aspects of French wines since his childhood, Denis Cazes, 40, is a Bordelais through and through. Saint-Emilion, Pauillac, Médoc… this charming Atel Energie SAS Sales Manager can recount a personal story for every château. An intimate relationship with the region and its people is put to good professional use by our qualified marketing specialist, for example when he provides his customers in the region with long-term and efficient solutions for their energy supply needs.

Backed by more than 110 years of experience in the energy business, Atel is the competent partner for a sustainable and future-oriented supply of electric power.

Corporate Governance

Bordeaux

The principles and rules for the divisions: Energy Switzerland, Energy rope with its sales and trading com Corporate Governance of the Atel Southern/Western Europe and Ener panies in Germany, Poland, Hungary, Group are set out in the company’s gy Northern/Eastern Europe. All three the Czech Republic, Slovakia, Slovenia, Articles of Association, its Organisa divisions have their own power sta Croatia, Serbia, Bulgaria, Romania, tional Regulations, the Executive tions, affiliated companies and local Macedonia and Greece. The Scandi Board Regulations, the group guide sales companies. navia market is covered by Atel subsid lines and the organisation chart, iary Energipartner. The Trading busi which illustrates relationships be The Energy Switzerland Division ness unit in Central/Eeastern Europe tween affiliated companies. They are covers sales in the Switzerland mar is part of Prague subsidiary Atel Ceská regularly reviewed by the Board of ket, thermal and hydroelectric power republika, s.r.o. Atel’s power stations Directors and Executive Board, and generation in Switzerland, and those in the Czech Republic and Hungary adapted where necessary. The follow parts of the Swiss electricity grid that are also managed from Prague. ing statements are made in accord belong to Atel. ance with the Corporate Governance The Energy Services segment de Information guidelines of the SWX The Energy Southern/Western livers services related to all aspects of Swiss Exchange. Europe Division services its market ter the generation, distribution and use ritory through sales subsidiaries Atel of energy. Group structure and shareholders Energia S.r.l. in Milan, Atel Energie SAS in Paris and Atel Energia AS in Barce The Southern/Western Europe Re Aare-Tessin Ltd. for Electricity (Atel) lona. Atel’s own power stations, to gion Division consists principally of is an energy company operating gether with its interest in Edipower the companies in Switzerland, Italy throughout Europe, with core com in Italy and power-station projects in and the Czech Republic that belong petencies in power generation, elec France, also belong to this division – to Atel Installationstechnik Ltd. Its tricity trading and sales, and energy as does Atel Trading, which actively services: Building Services/Technical

services. Atel has significant genera trades in electricity, gas, coal and CO2 Facilities Management, Energy Sup tion facilities in Switzerland, Italy, certificates on all the major electri ply Technology and services for small Hungary and the Czech Republic. It al city exchanges in Western Europe. er power stations. so has its own transmission and distri bution networks. Atel is divided into The Settlement and Systems De The Northern/Eastern Europe Re two segments for Energy and Energy partment handles the commercial gion Division consists of the compa Services. and technical settlement of trading nies in Germany, Poland, the Czech and sales transactions. Republic, Hungary, Austria and Bel In the Energy segment Atel com gium that belong to the GAH Group in bines power generation and grid op The Energy Northern/Eastern Eu Heidelberg. The GAH Group provides eration with trading and sales. The seg rope Division covers markets in Cen services in the fields of Energy Gener ment is subdivided into the following tral/Eastern Europe and Northern Eu ation, Energy Transmission Techno

16 Chief Executive Officer

G. Leonardi* logy, Communications Technology Financial Management and Industrial Plant Engineering. Services** Services***

K. Baumgartner* H. Saner* Financial Services is a group-level functional division. It consists of Ac Energy Energy Energy Energy counting and Reporting, IT, Control Switzerland Southern/ Northern/ Services Western Europe Eastern Europe ling and Planning, Risk Management, H. Niklaus* A. M. Taormina* R. Frank* H. Niklaus* Taxes, Treasury and Insurance. The In ternal Audit function is also assigned Switzerland Southern Europe Central/Eastern Southern/ market market Europe Western Europe to this division for organisational market region purposes. The Management Services A. Widmer S. Colombo Dr. A. Stolz P. Limacher functional division includes Human Thermal Western Europe Northern Europe Northern/ Resources, Communications, Legal Power Market Market Eastern Europe Services, the Organisation and Cor Generation region porate Development Department, P. Hirt P. Hamamdjian Dr. H. Clever W. Konrad

Public Affairs and the General Secre Hydro Trading Scandinavia tariat. Power market Generation J. Aeberhard Dr. D. Brunner R. Frank Stock-exchange listing There has been no change in the Grid Power Trading share capital of the parent company, Generation

Aare-Tessin Ltd. for Electricity, Dr. M. Zwicky R. Sturani Dr. A. Stolz based in Olten, which remains at CHF 303 600 000 (3 036 000 registered Settlement Power General Management and Systems Generation shares, each with a nominal value of Functional Division Business Division CHF 100). The registered shares are Dr. R. Schroeder S. Wolf Business Unit listed on the SWX Swiss Exchange

under international securities identi * Member of the Executive Board fication number ISIN CH0001363305. The company’s market capitalisation ** Corporate Accounting + Reporting, Corporate Taxes, Corporate Treasury + Insurance, Corporate Planning + Controlling, Corporate Risk Management, at the end of 2006 was CHF 9.41 bil Corporate IT, Corporate Internal Audit lion (calculation: closing price on 31 December 2006 multiplied by the *** Corporate Public Affairs, Corporate Communications, Corporate Legal, number of shares in issue = CHF 3 100 Corporate Human Resources, Corporate Development + Organisation, Secretary General x 3 036 000 registered shares). Date: 31 December 2006

17 Bordeaux

Società Elettrica Sopracenerina SA, Major shareholders of record are Swiss minorities consortium. This Locarno has share capital of CHF listed in the Financial Report on page consists of EBM (Elektra Birseck, 27 500 000, of which Atel holds 59.5 %. 51. A diagram showing the principal Münchenstein), EBL (Elektra Basel It is also listed on the SWX Swiss Ex shareholders of MC/Atel is presented land, Liestal), the Canton of Solo change (ISIN CH0004699440), and its below. thurn, IBAarau, AIL (Aziende Indus market capitalisation at the end of triali di Lugano SA) and WWZ (Wasser 2006 was CHF 312.95 million (calcula Majority shareholders in Aare werke Zug AG). tion: closing price on 31 December Tessin Ltd. for Electricity are required 2006 multiplied by the number of under the Swiss Stock Exchange and The consortium agreement gov shares = CHF 284.5 x 1 100 000 regis Securities Trading Act to take part in erns the merger of Aare-Tessin Ltd. tered shares). a public purchase offer (no opt-out for Electricity with the operating clause). A consortium, or sharehold components of EOS Holding SA and The principal consolidated group ers agreement exists, to which the possibly the Swiss activities of EDF, companies are listed in the Financial parties are EOS Holding (Lausanne), mutual pre-emption rights and cor Report on pages 68 to 72. EDF International (Paris) and the porate governance.

Atel 59.1 Motor-Columbus 36.9 EDF

14.9 EBM 31.5 EOS Holding

7.9 EBL 7.1 Atel

5.8 AEM Milano 4.8 AIL

5.0 Canton of Solothurn 3.3 Canton of Solothurn

2.2 IBAarau 2.8 EBM

5.1 Various (free float) 2.1 WWZ

1.3 EBL

0.4 IBAarau

4.9 EnBW

5.0 Various (free float) Percentage participations

18 corpora t e go v ernance

Cross-shareholdings Atel Group’s consolidated financial rectors left office at the Annual Gen Aare-Tessin Ltd. for Electricity holds statements and on page 56 for those eral Meeting: Dr. Walter Bürgi (Chair 5.96 % of AEM S.p.A., which in turn of Aare-Tessin Ltd. for Electricity. man) and four ordinary members: holds 5.8 % of Atel. Atel is represent Rolf Büttiker, Dr. Heinrich Steinmann, ed on the AEM Board of Directors by Shares Urs B. Rinderknecht and Ulrich Fischer. Antonio M. Taormina, who is a mem Every share represented at an An Dr. Dominique Dreyer, Philippe Huet, ber of the Atel Executive Board – nual General Meeting of Aare-Tessin Jean-Philippe Rochon, Hans E. Schwei while AEM’s representative on the Ltd. for Electricity is entitled to one ckardt and Dr. Alex Stebler were Atel Board of Directors is Dr. Giuliano vote. There are no restrictions on trans elected as new members of the Board. Zuccholi, Chairman of the Board of ferability or voting rights. The com Directors of AEM S.p.A. and its dele pany has no participation certificates Other activities and interests gated chief executive officer. or convertible bonds outstanding. Members of the Board of Direc tors’ CVs and professional back Capital structure Board of Directors grounds, together with information on their other activities, can be found Share capital The Board of Directors of the Atel on Atel’s website: www.atel.eu/bod. Unchanged since 1992, the share Group is responsible for its overall capital of Aare-Tessin Ltd. for Elec guidance and its strategic orienta Members are elected for a three- tricity is CHF 303 600 000, divided tion, as well as for supervising the year term of office and are eligible into 3 036 000 registered shares, each Executive Board. for re-election. A member elected mid with a nominal value of CHF 100. term to replace a previous member The shares are fully paid-up. Atel has Members of the Board of Directors completes his predecessor’s term of no authorised or authorised but un The Board consists of twelve mem office. The new members of the Board issued capital. bers of the Board of Directors, none of Directors were elected individually of whom exercises any executive in an open ballot at the Annual Gen Capital changes functions within the company. The eral Meeting on 27 April 2006. The Statement of Changes in Equi members of the Board are listed on ty can be found in the Financial Re page 20 of the 2006 Annual Report in The Board of Directors constitutes port, on page 14 for the Atel Group’s the table headed «Board of Directors». itself. Each year it elects a Chairman consolidated financial statements and Vice-Chairman from among its and on page 78 for those of Aare- The Board of Directors was par members, and a Secretary who need Tessin Ltd. for Electricity. tially renewed after the change of not be a member of the Board. control following the consortium’s The Statement of Changes in Equi acquisition of the majority interest in The Board of Directors met ten ty for 2004 can be found in the 2004 Motor-Columbus from UBS. The fol times during the year under review. Financial Report, on page 13 for the lowing members of the Board of Di The average duration of each meeting

19 Bordeaux

was four hours. The Chairman deter Control and supervisory on which they propose to concen mines the agenda for Board of Direc mechanisms trate in future. The Internal Audit tors’ meetings after consultation with function submits an annual audit the CEO. Any member of the Board of The Executive Board reports an programme to the Board of Directors Directors may make a written request nually to the Board of Directors on for its approval, and subsequently for a particular item to be included on strategic, medium-term and annual reports periodically on its findings the agenda. Prior to meetings, the objectives and on progress towards and recommendations, together with members of the Board of Directors re their achievement. During the year their implementation. The Board of ceive documentation that enables them the Executive Board reports quarter Directors receives an annual written to prepare for items on the agenda. ly and at each meeting on the course report on the situation and develop of business, the extent to which ob ments in group-wide risk manage The members of the Executive jectives are being achieved and other ment and its most important constit Board normally attend meetings of important developments. The exter uents. The report presents principles the Board of Directors in an advisory nal auditors submit a Management and limits, details compliance with capacity. They leave the meeting if Letter to the Board of Directors and them, and contains information on the Chairman so directs. make an oral presentation on the re planned expansion. sults of their audit and the matters Resolutions of the Board of Direc tors are passed by a majority of vot ing members present. In the event of a tie, the Chairman has the casting vote. Should conflicts of interest arise, the relevant member(s) leave(s) Board of Directors the meeting. Minutes are kept of dis First elected Term of office ends cussions and resolutions of the Board Dr. Rainer Schaub, CH-Binningen, Chairman 1996 2008 of Directors. These are distributed to Christian Wanner, CH-Messen, Vice-Chairman 1996 2008 members and approved at the fol Marc Boudier, FR-Sèvres 2001 2007 lowing meeting. Between meetings Dr. Hans Büttiker, CH-Dornach 1988 2008 any member may ask the CEO for in Dr. Marcel Guignard, CH-Aarau 1988 2009 formation on the company’s business Urs Steiner, CH-Laufen 2004 2007 and, with the Chairman’s authorisa Dr. Giuliano Zuccoli, IT-Sesto San Giovanni 2003 2009 tion, on individual transactions. Any Dr. Dominique Dreyer, CH-Fribourg 2006 2009 member may request the Chairman Philippe Huet, FR-Paris 2006 2009 to arrange for him to inspect books Jean-Philippe Rochon, FR-Paris 2006 2009 and files where this is necessary for Hans E. Schweickardt, CH-Neerach 2006 2009 the performance of his duties. Dr. Alex Stebler, CH-Nunningen 2006 2009

20 corpora t e go v ernance

Audit Committee and Nomination tend meetings of the AC. The AC has Division of responsibilities and Remuneration Committee met twice since it was constituted. The Board of Directors has given Two new Board committees were the CEO responsibility for the Atel established in mid-year: the Audit Nomination and Remuneration Group’s overall operating manage Committee (AC) and the Nomination Committee ment. The CEO is Chairman of the Ex and Remuneration Committee (NRC). The Nomination and Remunera ecutive Board and has delegated tion Committee (NRC) consists of Hans some of his management responsibil Audit Committee Schweickardt (Chair) and four ordi ities to members of the Executive The AC consists of Marc Boudier nary members: Marc Boudier, Dr. Hans Board. (Chair) and three ordinary members: Büttiker, Dr. Rainer Schaub and Chris Dr. Dominique Dreyer, Dr. Marcel tian Wanner. The Organisational Regulations Guignard and Urs Steiner. and Executive Board Regulations The role of the NRC is to support govern the competencies and division The role of the AC is to support the Board of Directors in fulfilling its of tasks between the Board of Direc the Board of Directors in fulfilling its supervisory duty with regard to suc tors and the CEO/Executive Board. supervisory obligations, and especial cession planning on the Board of Di ly in monitoring and assessing the rectors and Executive Board, group- The CEO is authorised, among activity and independence of the wide compensation policy, and fixing other things, to make autonomous internal and external auditors, the the contractual terms and terms of decisions with regard to non-budget control system, accounting, risk man employment for the CEO, Executive ed transactions up to a value of CHF agement, compliance and corporate Board and Heads of Business Units. 5 million. The Regulations give the governance. CEO a substantially higher authority The NRC submits proposals to the limit for energy transactions. The AC submits proposals to the Board of Directors for its approval, Board of Directors for its approval, and at each meeting of the Board it Information and control mecha- and at each meeting of the Board it reports orally on its activities, resolu nisms vis-à-vis the Executive Board reports orally on its activities, resolu tions, conclusions and recommenda The Executive Board keeps the tions, conclusions and recommenda tions. The minutes of the NRC are cir Board of Directors informed of impor tions. The minutes of the AC are cir culated to members of the Board of tant events on an ongoing basis. Finan culated to members of the Board of Directors for their information and as cial reports are prepared quarterly. Directors for their information and as a basis for Board resolutions. The NRC a basis for Board resolutions. The AC held six meetings in 2006 following As a rule, members of the Execu also submits an annual report to the its constitution. As a rule its meetings tive Board attend meetings of the Board of Directors summarising the are attended by the CEO. Board of Directors to supply any infor AC’s activity during the year under mation it may require. They leave the review. As a rule the CEO and CFO at meeting if the Chairman so directs.

21 Mirambeau

Risk management considers mar Organisation ket, credit and transaction risk. The The following organisational and Board of Directors receives an annual personnel changes have taken place: written report on the situation and developments in group-wide risk Since 1 April Herbert Niklaus, who management and its most important was already Head of the Energy Swit constituents. The report presents zerland Division, has also been re principles and limits, details compli sponsible for the Energy Services Di ance with them, and contains infor vision. In this capacity he succeeded mation on planned expansion. A cen Stefan Hatt, who left the group on tral Risk Management Committee, the same date. reporting to the CFO, sets limits for individual areas based on the results On 1 February 2006 Thomas Bruder of its analysis. stepped down as chief executive of ficer of GAH Anlagentechnik Heidel The Board of Directors, at the AC’s berg GmbH and left the company. He request, approves audit planning and was succeeded as chief executive of the summary report annually. Corpo ficer by Wilhelm Konrad, who also rate Internal Audit reports directly to continued to head the Energy Trans the Chairman of the Board. Individ mission and Communications Tech ual audit reports are submitted to nology Division. the Chairman and (in summary form) to the AC. Corporate Internal Audit Piero Manzoni took up his post as engages an adviser independent of the new chief executive officer of the external auditors for its work. Atel Energia S.r.l. in Milan on 1 April 2006. Executive Board Remuneration, shareholdings Members of the Executive Board and loans are listed on pages 24/25 of the Annual Report. Information on their Members of the Board of Direc other activities and interests can be tors receive fixed remuneration and found on Atel’s website: www.atel. a lump-sum expense allowance which eu/management. is based on a graduated scale for the Chairman and other Board members. No management contracts exist. The amount of remuneration is de

22 corpora t e go v ernance

termined by the Board of Directors cial year was the Chairman, with on application by the NRC. CHF 256 833. This consists of his fee as Chairman of the Board plus addi The remuneration of Executive tional remuneration of CHF 140 000 Board members consists of base sala in recognition of the extraordinary ry and a bonus linked to company work he performed, especially in and personal targets. The bonus paid connection with the changes in the in the reporting year is based on the shareholder structure of Atel and prior year’s performance. The amount Motor-Columbus. of remuneration for members of the Executive Board is determined by Executive Board the NRC. No share or share option Remuneration paid to Executive schemes exist for the Board of Direc Board members in 2006 totalled CHF tors or Executive Board. 6.6 million, including the remunera tion of those members who left of Board of Directors fice during the financial year. Execu Members of the Board of Direc tive Board members are entitled to a tors’ remuneration in the 2006 finan company car. The amount of the bo cial year totalled approximately CHF nus is determined by the annual re 2.3 million, including approximately sults and by personal achievement. In CHF 1.2 million paid to those Mem the year under review the variable bers of the Board of Directors who component was equal to 50 per cent left office at the AGM. In accordance of total salary excluding any special with the regulations in force, depart remunerations. According to the in ing Members of the Board of Direc formation available to us, Executive tors were paid all fees due until the Board members held a total of 16 end of their current terms of office. registered shares in Aare-Tessin Ltd. for Electricity at 31 December 2006. According to the information available to us, Members of the Board No other fees or remuneration of Directors held a total of 122 regis were paid to members of the Board tered shares in Aare-Tessin Ltd. for of Directors or Executive Board mem Electricity at 31 December 2006. bers.

The highest paid member of the Board of Directors in the last finan

23 Bordeaux

Executive Board The Executive Board consists of six members.

CVs of the Executive Board members, together with information on their other activities, can be found on the Atel website: www.atel.eu/management.

24 corpora t e go v ernance

Giovanni Leonardi (third from left) Herbert Niklaus (third from right)

CEO Head of Energy Switzerland Dipl. El.-Ing. ETHZ and of Energy Services Swiss national Dipl. El.-Ing. ETHZ Born 1960 Swiss national With Atel since 1991, CEO since 2004; Born 1955 Member of the Board of Directors of With Atel since 1996, member of the Società Elettrica Sopracenerina SA, Locarno Executive Board since 2005

Antonio M. Taormina (far right) Heinz Saner (far left)

Head of Energy Southern/Western Europe Head of Management Services Dipl. Math. ETHZ Lic. iur., solicitor and notary Swiss and Italian national Swiss national Born 1948 Born 1957 With Atel since 1999 as a member of the With Atel since 1988, member of the Executive Board; Executive Board since 2004 Member of the Board of Directors of Società Elettrica Sopracenerina SA, Locarno Reinhold Frank (second from left)

Kurt Baumgartner (second from right) Head of Energy Northern/Eastern Europe Graduate engineer Head of Financial Services, CFO German national Lic. rer. pol. Born 1955 Swiss national With Atel since 2006 as member of the Born 1949 Executive Board With Atel since 1975, member of the Executive Board since 1992

25 Bordeaux

Shareholders’ participation rights Change of control and defensive measures Every share represented at an An nual General Meeting is entitled to Mandatory offer one vote. There are no restrictions on Majority shareholders in Aare transferability or voting rights. The Tessin Ltd. for Electricity are required only quotas applicable at Annual under the Swiss Stock Exchange and General Meetings are those set out in Securities Trading Act to take part in the Swiss Code of Obligations. a public purchase offer (no opt-out clause). The Articles of Association Annual General Meetings are con contain no other protective measures. vened in accordance with the rules set out in the Swiss Code of Obligations. Change-of-control clauses Directors who step down before Agenda their terms of office are expired in Shareholders’ participation rights consequence of a change of control are governed by law and the compa are paid the fees to which they would ny’s Articles of Association. The Ar be entitled as directors until the end ticles of Association can be down of their terms of office. loaded from: www.atel.eu/articles- of-association. The contracts of employment of Executive Board members contain Shareholders may call for a partic the usual change-of-control clauses: ular item to be included on the agen if the contract of employment is ter da provided that they represent minated within twelve months of a shares with a nominal value of at change of control, the person affect least CHF 1 million. Such requests ed shall be paid severance compensa must be submitted at least 50 days tion equal to one year’s remunera before the Annual General Meeting. tion. Registered shares must be entered in the share register at least one week before the Annual General Meeting, otherwise their holders will not be entitled to vote.

26 corpora t e go v ernance

Auditors its meetings. It did so on one occasion during the year under review. Ernst & Young Ltd., Zurich, has served as statutory and group audi Information policy tors of Aare-Tessin Ltd. for Electricity Atel keeps its shareholders, poten since 2002. The statutory and group tial investors and other stakeholder auditors are each appointed at the groups fully, promptly and regularly Annual General Meeting for a one- informed through its annual, interim year term of office. Their perform and quarterly reports, at annual me ance and fees are reviewed annually. dia and financial analysts conferenc Ernst & Young Ltd.’s current lead au es and at General Meetings. Our com dit partner has been in charge of the munication channels are completed Atel audit since 2004. In the 2006 fi by our constantly updated website – nancial year, Ernst & Young Ltd. re www.atel.eu – and by press releases ceived fees of approximately CHF 3.3 detailing important events. Contact million as statutory and group audi addresses are set out on pages 62 / 63 tors. Fees paid for additional audit- of the Annual Report. Key dates for related, tax and general advisory ser the current financial year are listed vices totalled approximately CHF 2.1 on page 63. million.

External audit information mechanisms The Audit Committee (AC) is the supervisory body for the external au ditors. The external auditors report to the AC at least once a year on the audits they have conducted and the resulting findings and recommenda tions. The AC agrees the audit plans with the external auditors in advance and assesses their work. The external auditors prepare a Management Let ter for the full Board of Directors once a year. The AC may at any time invite the external auditors to attend

27 Paris

The name itself is a chanson. Its seductive melody evokes the stylish boulevards and colourful parks and gardens, the picturesque cafés and restaurants of this sparklingly hectic city on the river Seine. Two centuries ago, enterprising Paris restaurateurs invented the bistro, a quick-service eatery. Little did they realise then, that the bistro would become the quintessential venue for romantic tête-à-têtes in a relaxing ambience.

Management assistant Nora Zekri, 29, spends a large part of her typical working day attending to a diverse range of activities and administrative functions. This charming young woman with Algerian roots is familiar with the contrasting features of the city and enjoys the cultural riches Paris has to offer. And she is equally familiar with the varied needs and activities of her in-company contacts in virtually all the Atel Energie SAS departments. With her diplomatic approach and personal commitment she makes a significant behind-the- scenes contribution to smooth and successful operations.

As a production-based energy trader, Atel applies made-to-measure procurement strategies to satisfy the most diverse customer requirements.

Paris

Productive harmony

As an electricity trading specialist with its own power stations in Switzerland and other European countries, Atel offers its customers a comprehensive range of services. The Energy segment includes electricity trading and sales, power generation and transmission.

For industrial and major custom- Sicily and small hydroelectric power ers, the Swiss electricity market in stations in Piemont was announced 2006 was again dominated by rising in the autumn. energy prices. The cold winter and various exchange transactions led to For the Western Europe region Energy procurement 1996– 2006 higher supply volumes, yet again in- the 2006 financial year was dominat- Not including speculative transactions creasing sales volume and revenue ed by continuing increases in reve- alike. The opening of the Swiss elec- nue and market shares in France. Atel tricity exchange has given Atel an ad- Energie SAS is constructing a gas- ditional trading platform. The launch fired combined cycle power station, of the new schedule-balance group which will give it generation capaci- system had a positive effect on mar- ties of its own within the foreseeable ket momentum during the year un- future. der review. Leading position in Eastern Renewable energies in southern European electricity trading Europe The integration of trading spe- In Italy the benign economic sit cialist Entrade into the Central/East- uation gave Atel an encouraging ern Europe market business unit led financial year. Atel Energia S.r.l. to a further increase in end-customer bought Italian energy supply compa- business during the year. The positive ny Energ.it in 2006, successfully es- economic trend throughout the re- tablishing itself in the growth market gion helped Atel to further strength- n Foreign market of small industrial enterprises. At the en its position as the leading electric- n Switzerland market same time fuel procurement contin- ity trader from Poland to Greece. In n Central/Eastern Europe Power Generation n Southern Europe Power Generation ues to grow in strategic importance. Germany Atel succeeded in increas- n Switzerland Power Generation The acquisition of two wind farms in ing both sales volume and revenue,

30 ENERGY SEGMENT

Energy sales 1996–2006 Not including speculative transactions

as well as broadening its customer will be significant in terms of energy base. In Scandinavia Energipartner policy. These affect the Electricity AS in Oslo managed to hold its own Supply Act, the Water Conservation against strong competition. The Act and the Nuclear Energy Liability trend towards flexible energy prod- Act. It is yet to be decided how the ucts for companies and urban utili- networks operated by the major ties continued during the year under Swiss electricity groups are to be- review. come part of the new national grid company, Swissgrid. The impending Atel Trading: a record result electricity shortfall will add new ur- Yet again, the Trading business gency to the discussion of new major unit ended 2006 with a record result power stations in future years. – substantially exceeding its target n Trading for the year. Atel’s continued expan- In Central and Eastern Europe, n Northern Europe market sion of its coal and gas business took sustained economic growth and the n Central/Eastern Europe market n Southern Europe market it one step further along the road continuing EU integration process n Power Exchange Switzerland (wholesale) from electricity trader to energy trad- offer Atel further attractive opportu- n Regional Suppliers Switzerland er. The main contributors to this suc- nities for growth. In France the con- cess were Power Trading, with option struction of a new generation facility, Energy sales 2002–2006 trading in new markets, and the de- scheduled for the end of 2007, will Standard transactions completed velopment of new structured prod- further consolidate Atel’s position – ucts. In parallel to the success of the while the Italian electricity market Trading unit, the Settlement and Sys- will complete its liberalisation proc- tems business unit also posted new ess on 1 July 2007, creating new mar- record volumes and transaction quan- ket opportunities for Atel. tities in 2006 – with an extraordi- narily low error rate. Settlement and Systems successfully introduced the schedule-balance group system and cross-border auctions.

Outlook European energy markets will continue to become more open and integrated in 2007. In Switzerland several impending legal amendments

31 Paris

Sustained growth

• Increased electricity sales in Switzerland • Moving into SME business in Italy • Increasing growth opportunities in the Central/Eastern Europe market • Power generation in France within reach • Trading exceeds last year’s record result.

Switzerland market Switzerland. As in the previous year, sharply higher primary energy prices, Broader sales base the growing energy shortage and The development of the Swiss higher market prices for electricity market in 2006 was very encourag- pushed wholesale prices up in Swit- ing. Once again both sales and mar- zerland as well. gins rose. The economic environment remained positive, and this combined Introduced in December 2005, the with the long, cold winter of 2005/06 schedule-balance group system for to increase supply volumes by more the use of the transmission grid trig- than three per cent. A number of at- gered increased market momentum tractive exchange transactions ex- in the year under review. panded the segment’s sales base in

Further information: Overview Energy segment www.aare-strom.ch +/- variance www.aek.ch 2005 – 2006 in % 2005 2006 2005 2006 www.aem.it (based on CHF) CHF mn. CHF mn. EUR mn. EUR mn. www.aem.torino.it Energy sales (TWh) 17.8 98.166 115.642 98.166 115.642 www.aen.ch Net revenue 38.4 7 020 9 716 4 535 6 177 www.atel-energie.de Segment profit 138.6 365 871 236 554 www.ecoswitch.de as % of net revenue 73.1 5.2 9.0 5.2 9.0 www.edipower.it Net investments in tangible fixed www.eex.de and intangible assets 17.0 112 131 72 83 www.egt-energiehandel.de Number of employees as www.energipartner.no at balance sheet date 6.8 1 451 1 549 1 451 1 549 www.energit.it plus trading in standardised products www.powernext.fr in TWh 34.6 149.982 201.892 149.982 201.892 www.repower.ch www.ses.ch in CHF mn. or EUR mn. 65.4 8 289 13 708 5 355 8 715

32 ENERGY SEGMENT ELECTRICITY TRADING A N D S A L E S

The opening of the Swiss electric- Contrary to the original inten- prepared – and much in demand as ity exchange and the commencement tions, the proposal to open up the a partner in Switzerland. of operations by Swissgrid will also market for small customers will now boost momentum in the market. The be put to an optional referendum. Stable regional development Swiss electricity exchange provides Parliament has also resolved to intro- Even though its supply volumes

Atel with an additional platform for duce a CO2 tax at the beginning of are virtually unchanged from the trading transactions. And it will in- 2009. In Atel’s view, the upper cham- previous year, Società Elettrica So- crease transparency in market prices. ber’s decision not to exempt power pracenerina (SES), Locarno, achieved As a result, market signals can be ex- generated by gas-fired power sta- a slightly higher operating result pected to have a greater influence on tions from the CO2 tax will be highly 2006. This positive development can end-customer prices. Some two years detrimental to investment. be attributed to better margins and later than planned, Swissgrid – the rigorous cost management. Major national grid company established by Yes to renewable energies developments last year included Atel and six other leading Swiss ener- Atel EcoPower AG was estab- the acquisition of distribution net- gy groups back in May 2004 – took lished during the year under review works in the upper Blenio valley over the coordination of the grid, a to promote renewable energies. The (Campo Blenio and Ghirone) and function that used to be carried out company has already taken a stake in the increase in its stake in Senco by Etrans. Now it has the responsibil- Entegra Wasserkraft AG, which com- Holding SA. ity for operating the entire Swiss missioned a new small hydroelectric high-voltage grid. power station in eastern Switzerland The closure of the Tenero paper at the end of October 2006. In Ticino mill will reduce supply volumes by Setting the political course Atel holds a stake in Senco Holding some 20 GWh next year, but im- At political level, parliament car- SA through its subsidiary Sopracene- proved margins will minimise the im- ried out a number of amendments rina SA. Senco currently has three fa- pact on the operating result. Supply to the Electricity Market Bill during cilities in Ticino with a total output of volumes are expected to rise in con- the year under review that will have 3.6 megawatts. Six more facilities are sequence of revived interest in the serious consequences. Though both planned in various valleys in Ticino, old Monteforno site, and this will chambers accepted the step-by-step each with an output of 1 megawatt. partly make up for the loss of the pa- liberalisation of the electricity mar- Atel has made 50 million francs avail- per mill. The central objectives of SES ket, the upper chamber took a differ- able for renewable energies in Swit- for next year will again be negotiat- ent view from that of the National zerland. ing with local authorities on the re- Council – deciding that as well as ma- newal of licences and the acquisition jor individual customers, SMEs are al- 2007 will be dominated by the im- of more small distribution networks. so to have market access if they form pending opening-up of the market. The projected local authority merg- cooperatives drawing at least 100 With its activities in open markets ers in the Leventina valley will occupy megawatt-hours. throughout Europe, Atel is ideally significant management time.

33 Paris

Atel Versorgungs AG (AVAG) post ducted successfully. The healthy eco- gies, acquiring interests in two small ed slightly higher sales. 2006 was the nomic climate in Italy had an extreme hydroelectric power stations in Pie- first full year in which the general ly positive impact on the volume mont and two wind farms in Sicily. reduction in the electricity price im- of transactions. Energy consumption plemented on 1 October 2005 was re- was accordingly high, both in the Building up a gas procurement flected in the income statement. In hot summer of 2006 and during the organisation is another promising addition to the eleven licensing au- winter. development in gas business. In fu- thorities with interests in AVAG, a ture Atel Energia will consolidate its new business model based on a net- Moving into SME business in Italy positioning throughout the value work lease has been developed with Atel Energia’s expanded organi- chain, from gas purchasing to energy four authorities. 2006 was the fifth sation and the optimisation of its var- generation and sales. The Italian elec- year in which the operational man- ious structures and processes enabled tricity market will be 100 per cent lib- agement of AVAG, together with the company to react appropriately eralised from 1 July 2007, making it Städtische Betriebe Olten (sbo), was to altered needs in the Italian elec- possible to supply individual house- provided by Aare Energie AG (a.en). tricity market. A new building in holds. Atel Energia is ready to exploit Milan was acquired to accommodate these market opportunities and to AEK Energie AG can look back on its growing staff. In certain market take advantage of increasing elec- a successful 2006 financial year. In situations during the year under re- tricity consumption. contracting operations, a number of view, Atel was able to export electric- attractive projects were realised last ity from Italy. This trend is likely to Central/Eastern Europe market year, mostly using wood pellets as continue. Italy is gradually transform- fuel. Production and sales of the ing itself from a classic energy-im- Leading electricity trader wood pellets provided by subsidiary porting country to a partial exporter. The positive economic trend AEK Pellet AG were encouraging. Price differences between Italy and throughout Central and Eastern its neighbours are still high. Europe continued in the year under Southern Europe market review. In parallel, the region moved Atel Energia’s acquisition of Ital- closer to Western European energy A successful year ian multi-utility company Energ.it markets – a positive factor for Atel’s Atel can look back on a successful during the year under review brought growth in those markets. Active in year in Italy, even though higher fuel the company into the fast-growing all energy markets from Poland to prices increased power generation SMALL market segment (small indus- Greece, Atel further consolidated its costs. Significant contracts were trial enterprises). Atel Energia’s cus- position as a leading electricity trad- signed with major customers and tomers were formerly major individ- er in this market. The integration of consortia, and the customer portfolio ual companies and syndicates, but its Entrade, a trading specialist and was selectively expanded. Imports of portfolio now includes SMEs. Atel subsidiary, into the Central/Eastern electricity into Italy were also con- has also moved into renewable ener- Europe market business unit high-

34 ENERGY SEGMENT ELECTRICITY TRADING A N D S A L E S

lighted perceptible synergy effects in as of Central and Eastern Europe – is the construction of a 400 MW gas- the expansion of end-customer busi- likely to grow at an above-average fired combined cycle power station ness and short-term portfolio optimi- rate. In the years to come there will at any of three possible locations, sation business. End-customer busi- be a pronounced energy shortage in taking an important step towards its ness in the Czech Republic and Hun- the south of the region. objective of generating its own pow- gary was further expanded. Both Atel er in France. Planning permission Energia Kereskedo´´ Kft. in Hungary Progressive liberalisation and the could be granted during 2007. The and Atel Ceská republika, s.r.o. in extension of trading opportunities electricity generated will be market- the Czech Republic have established throughout the region provide Atel ed by Atel’s subsidiary in Paris. The themselves among the largest retail- with the perfect environment for investment requirement is put at ers to end-customers in their respec- growth. The Central/Eastern Europe EUR 240 million. tive markets. In Slovakia and Greece business unit expects its business op- end-customers were supplied for the portunities to continue to expand. Given that energy consumption is first time. Atel Hellas took on extra forecast to rise in both France and staff in 2006, and developments in Western Europe market Spain, the Western Europe business the end-customer and electricity unit expects to increase both revenue trading segments enabled it to make Power generation in France and profitability in 2007. The deregu- a significant contribution to the bot- within reach lation of the Spanish energy market tom line. Atel’s Western Europe business is expected to continue and France is unit commenced activities in France to see complete market liberalisation Atel Polska succeeded in repeat- in January 2002 and in Spain in Janu- from July 2007. ing its outstanding 2005 result, con- ary 2006. Since then Atel Energie SAS firming its position as one of the has expanded its sales business, and it Northern Europe market leading trading organisations in the is now the largest independent ener- Polish market. Subsidiary companies gy supplier in France – second only to Customer base further expanded were established in Serbia, Romania, the sector giant Eléctricité de France In Germany, the largest and most Bulgaria and Macedonia to meet lo- (EDF). Revenue showed a sustained competitive energy market in conti- cal legal requirements. As business increase in the 2006 financial year, nental Europe, Atel’s business per- expanded, the number of employees and additional market shares were formance remains positive. Atel En- increased. gained in France. Atel established a ergie AG increased both sales volume foothold on the Iberian peninsula and revenue during the year under Atel expects the continued inte- when it opened its Atel Energia SA review, as well as further expanding gration of the new EU members to subsidiary in Barcelona. This soon its customer base. New delivery con- generate sustained economic growth. concluded its first contracts. The fo- tracts were concluded, and major At the same time, energy consump- cus was on industrial customers. Atel contracts with existing customers tion – especially in the southern are- Energie SAS has filed a proposal for were extended.

35 Paris

The performance of Atel’s part- they will connect any new power sta- ended 2006 with another record re- ner companies is also most encourag- tion and will no longer cite grid bot- sult, significantly exceeding its tar- ing. In the teeth of intense compe tlenecks as a reason for refusing to gets. Coal and gas trading both ex- tition they succeeded in improving do so. panded. Trading is transforming their market positions, increasing more and more from an electricity their contributions to overall profits. Scandinavia market trader into an energy trader. As in the previous year, 2006 was dominated by electricity price rises. Integration continues apace Power Trading continued to make However, prices were volatile. All the Energipartner AS Oslo continued progress, with option trading in new European markets, including Germa- the process of integrating with the markets, the development of new ny, are currently debating the need Atel Group. This generated histori structured products, the introduction

to reduce CO2 emissions. Regulations cally significant earnings, and Energi- of intra-day trading, the expansion to achieve this are pending, which partner more than held its own in a of capacity trading and the introduc- makes improving planning reliability dynamic market environment. Ener- tion of implicit auctions at a high one of the principal challenges. Falls gipartner’s financial products are en- level. Commodity Trading also ex- in the price of crude oil, and subse- joying increasing market popularity. panded. Continued growth in trad-

quently of gas, were not fully reflect- The trend away from conventional ing of CO2 certificates, expansion of ed in electricity prices. full supply contracts towards flexible, gas trading in the United Kingdom market-dependent energy products and on the continent and the expan- The market for structured energy and services for companies and ur- sion of coal trading are particularly procurement also continued to grow. ban utilities continued. The Scandi- worthy of note. Atel was able to sign its first long- navian energy market in 2006 was term coal-linked supply contracts, characterised by a period of extreme The influence of banks and hedge thus implementing structured pro- drought. Prices in the Nordic region funds trading for their own account curement concepts where the elec- rose, sometimes exceeding German was much more noticeable than in tricity price depends in part on coal. levels. Beginning in September, pric- past years. It also became clear dur- es fell back to levels significantly being the year under review that elec- Easier grid access low German energy prices, mainly tricity trading and sales are going to As a result of the political discus- because the autumn was very mild be increasingly difficult for resellers sion surrounding the strong market and wet. in future. There are two reasons: position of established supply com- the sideways movement of electricity panies in Germany, network opera- Trading prices in the forward market, and in- tors have become less reluctant to creased volatility in the spot market. give new generation facilities access Another record result Heavy demands are being made on to the grid. The major national net- Trading can look back on an ex- technical specialists and systems as work operators have announced that tremely successful financial year. It they have to react ever faster to ex-

36 ENERGY SEGMENT ELECTRICITY TRADING A N D S A L E S

ternal events. The market can there- pacities and electricity exchanges – fore be expected to consolidate, so not to speak of the political and legal there is likely to be a slight fall in the framework – are all in a state of flux. number of Atel’s direct counterparts. Conversely, the number of customers Settlement and Systems seeking Atel’s advice should rise. Auctions increase in importance The strong price correlation be- The Settlement and Systems busi- tween the primary energy markets ness unit is handling new record for coal, gas and oil in combination volumes and transaction quantities. with trading in CO2 certificates was Power settlement is supported by the confirmed during the year under re- introduction of the new Energy Set- view, as was the price trend in elec- tlement and Statistics System. The in- tricity trading. Atel Trading benefit- tegration of the trading system sce- ed during the year under review from narios of Atel Energia in Milan and the fact that the availability of Atel’s Atel Energy GmbH in Niedergösgen/ own power stations was far greater Prague made further progress, and than it had been in the previous year. the contract for the new trading sys- However, there were unmistakable tem (EIP project) was signed. With capacity bottlenecks at national bor- the introduction of schedule-balance ders. Grid bottlenecks are increasing groups in Switzerland and of cross- the influence of independent trans- border auctions, the trading business mission system operators on forward, has changed for good. day-ahead and intra-day trading. 2007 is expected to bring further Outlook strong growth in power settlement The sideways movement of elec- business. tricity prices in the forward market looks set to end in 2007. Price fluctu- ations in the spot market will continue to increase, and accordingly the need for hedging products can be expected to rise. Atel Trading must continue to develop, adapting itself to the complex, changing environment. Generation facilities, transmission ca-

37 Lyon

Set between the hills of the Dauphiné region and the valley of the Rhône, and bordered by the wine pro- ducing regions of Beaujolais and Côtes du Rhône, Lyon is the third-largest city in France – and a metropolis of fine cuisine. Star chefs such as Paul Bocuse and the Troisgros brothers have raised the culinary profile of this former first city of ancient Gaul far beyond the frontiers of France. Simple, fresh and authentic: this is their gastronomic credo, and the delectable consequences of their culinary contributions have long permeated beyond the typical bouchons of Lyon.

The work performed by Brice Bornet, 29, Atel Energie SAS Sales Manager for the extensive Rhône region, may justly be likened to genuine nouvelle cuisine. The qualified trading specialist is a master of the finer aspects of cross-border energy trading, and is intimately familiar with the increasingly complex field of power generation and consumption. Yet he nevertheless provides his customers with offers and solutions that are custom-designed, straightforward and simple.

By progressively expanding its trading activities, Atel is able to help its customers significantly optimise their energy procurement and distribution costs.

Lyon

Well-placed to face the future

• Renovation and expansion projects in pumped storage • Preliminary project for a gas-fired combined cycle power station in the Valais • New gas-fired power station commissioned in the Czech Republic • Capital investment in wind farms and small hydroelectric power stations

Power generation Switzerland maintenance and repair costs in hydroelectric power stations will rise in Rising demand for hydroelectric the years to come, thus increasing power generation costs. Renewal costs dur- Once again, flexible hydroelectric ing the year under review also reflect power was in great demand in 2006. steep rises in steel prices. However, The reasons for this were the increas- higher generation costs were covered ing requirements throughout Europe by higher market prices. Customers for peak and balancing energy, to- are exhibiting an increasing readi- gether with the growing importance ness to pay more for environmentally of the debate about climate change harmless hydroelectric power. in connection with power generation. Hydroelectric power as renewa- “Nant de Drance” – pumped storage ble energy is thus an important trump The project for the “Nant de card in Atel‘s generation portfolio. Drance” underground pumped storage power station in the Lower Valais Affiliated companies’ hydroelec- made further progress towards the Further information: tric power stations suffered no signif- point at which an application for www.atel-csepel.hu icant technical problems in 2006 – planning permission will be filed. A www.atel-mt.cz but low river flows and reservoir lev- joint development with the Federal www.eckg.cz www.etrans.ch els meant that despite this, power Swiss Railways (SBB), this project www.khr.ch generation at the beginning of the would involve the construction of a www.kkg.ch www.kkl.ch hydrological year was below aver- pumped storage power station in a www.kwz.ch age. Several generating companies cavern between the two existing res- www.refuna.ch www.swisselectric.ch saw the lowest production figures ervoirs, Emosson and Vieux Emosson. www.swissgrid.ch since their commissioning. Overall, With turbine and pump output of

40 ENERGY SEGMENT p o wer generati o n and grid

600 megawatts, the power station Expanding nuclear power remains struction of new nuclear power sta- would generate around 1 500 million an option tions in Switzerland a serious option kWh of peak energy annually. Other The two nuclear power stations at in the coming years. Existing power renewal and expansion projects that Gösgen and Leibstadt reached their stations are already barely able to made further progress in 2006 in- 2006 generation targets. Each of meet demand at peak times. But the clude the modernisation of the them underwent an inspection and current political and legal frame- Flumenthal power station, the re- a fuel change. Now that the Federal works are a disincentive to capital building of the control room at the Council has approved the disposal- spending on major power stations. Navizence power station (Kraftwerke certification system for high-level The upcoming handling of the Feder- Gougra AG), the rebuilding of the radioactive waste, the system now al Nuclear Safety Inspectorate Bill is Inn communal power station and the covers all waste. also an important issue. diversion of water from the Lugnez into the facility belonging to Kraft- The impending shortfall in Swiss During 2006 Atel and Cimo SA werke Zervreila AG. Small power sta- electricity supply will make the con- jointly conducted the preliminary tions all over Switzerland are also being purchased and developed. “Nant de Drance” project diagram During the year under review the upper chamber of Parliament continued its consideration of amendments to the Swiss Water Conservation Act. These would improve the framework for hydroelectric generation. The proposal is to replace the current rig- id regulations governing residual water by a flexible system, enabling better use to be made of water power. If, however, the “Living Water” popular initiative submitted in the summer of 2006 were to be accepted, it would lead to a marked reduction in usable hydropower potential and to noticeable operating restrictions.

41 Paris

Power generation in Switzerland

Atel’s own hydroelectric power stations Holdings in hydroelectric joint ventures incl. purchase rights Holdings in thermal joint ventures

Hydroelectric power stations Switzerland Power Power Atel generation generation Atel share holding Capacity GWH GWH Variance GWh Company in % MW average 2005/2006 in % 2005/2006 Atel Hydro AG* 100,0 92 500 507 1,4 507 Atel Hydro Ticino SA 100,0 60 100 83 – 17,0 83 Aarewerke AG 10,0 43 230 204 – 11,3 21 Blenio Kraftwerke AG 17,0 391 882 467 – 47,1 79 Electra-Massa AG 11,5 340 543 550 1,3 63 Electricité d’Emosson SA 50,0 360 860 643 – 25,2 322 Energie Electrique du Simplon SA 1,7 42 234 211 – 9,8 18 Engadiner Kraftwerke AG 22,0 410 1 377 1 088 – 21,0 239 Kraftwerke Ryburg-Schwörstadt AG 25,0 110 761 703 – 7,6 176 Kraftwerke Gougra AG** 54,0 159 639 596 – 6,7 388 Kraftwerke Hinterrhein AG 9,3 651 1 397 832 – 40,4 77 Kraftwerke Zervreila AG 30,0 250 554 367 – 33,8 110 Maggia Kraftwerke AG 12,5 626 1 350 785 – 41,9 98 Total Atel share 2005/2006 (prior year 2 483) 2 181 * Exkluding BKW share KW Flumenthal ** Energy purchase right of 65%

Thermal power stations Switzerland Power Power Atel generation generation Atel share holding Capacity GWH GWH Variance GWh Company in % MW average 2006 in % 2006 Kernkraftwerk Gösgen-Däniken AG 40,0 970 7 383 8 099 9,7 3 240 Kernkrafwerk Leibstadt AG 27,4 1 165 7 913 9 367 18,4 2 567 Total 2006 15 296 17 466 5 807

42 ENERGY SEGMENT p o wer generati o n and grid

project and the invitation to tender for the construction of a 55 MW gas- fired combined cycle power station at Monthey in the Valais. Costing 90 million francs, it will supply three chemical companies with electricity and steam.

Power generation Italy

Moving into renewable energies A substantial rise in domestic power generation capacity reduced the capacity utilisation of Atel’s Ital- ian generation portfolio in 2006. But the Italian market remains attractive, because there is still strong demand for flexible energy generation. Tech- nical problems at the Sermide and Vercelli facilities caused a number of outages.

The main event during the year under review was the move into power generation with renewable energies. Atel secured a majority interest in two small hydroelectric power stations in Piemont, while in Sicily it has a stake in the construction and operation of two wind farms. This com- Power generation in Italiy mitment is a contribution by Atel to Atel’s own thermal power stations climate protection and the achieve- Holdings in thermal power stations ment of the Kyoto targets. At the Holdings in hydroelectric same time it means that Atel has power stations Wind power generator gone some way towards meeting the (under construction) legal requirement to generate some Small hydroelectric power stations

43 Paris

Hydroelectric power stations Italy of its electricity from renewable Power Power Atel generation generation sources (Certificati verdi). holding Capacity GWh GWh Variance Company in % MW average 2006* in % Edipower S.p.A., Nucleo di Mese 16 377 1 030 709 – 31,0 Consolidating these acquisitions Edipower S.p.A., Nucleo di Tusciano 16 96 198 218 10,0 in the southern region will make Edipower S.p.A., Nucleo di Udine 16 309 689 609 – 12,0 heavy organisational demands on Total 2006 1 536 * 100%, excluding production of CIP 6 and mini-hydro facilities the company during 2007. The quest for additional generation capacities in Italy to support the sales organisa- Thermal power stations in Italy tions will be systematically continued Power Atel generation in 2007. holding Capacity GWh Company in % MW* 2006* Edipower S.p.A., Brindisi 16 640 2 633 Power generation Central/Eastern Edipower S.p.A., Chivasso 16 1 140 5 563 Europe Edipower S.p.A., Piacenza 16 860 3 222 Edipower S.p.A., S. Filippo 16 1 280 3 919 Edipower S.p.A., Sermide 16 1 140 6 022 New gas-fired power station Edipower S.p.A., Turbigo 16 1 230 1 752 commissioned in the Czech Republic Novel S.p.A. 51 100 639 The new gas-fired power station Atel Centrale Termica Vercelli S.r.l. (ACTV) 95 50 305 Total 2006 24 055 at the Kladno power station complex * 100%, including “Emergenza gas” generation was completed and commissioned in 2006. With an output of 43 megawatts, this modern facility mainly provides peak-load capacities and energy for the Czech Republic’s national grid. This expansion at Kladno consolidates Atel’s position as one of the Czech Republic’s largest independent producers of electricity and heat. Atel has acquired a further eleven per cent stake in both the ECK Generating s.r.o. (ECKG) power station complex and Energetické cen- trum Kladno s.r.o., which are now wholly-owned subsidiaries.

44 ENERGY SEGMENT p o wer generati o n and grid

Thermal power stations Central/Eastern Europe Performance in 2005 was already excellent, and during the year under Power Power review the three Eastern European Atel Capacity Capacity generation generation holding electric thermal electricity heating generation facilities again exceeded Company in % MWe MWth 2006 GWh 2006 TJ* Csepel I + II, Budapest 100,0 389 162 1 661 1 266 their target results. Output at Csepel Kladno Energy Businesses (ECKG) 100,0 385 272 1 485 1 259 and Kladno was excellent once more, Zlín Energy Businesses** 100,0 50 320 176 1 548 and Atel also benefited from the Total 2006 3 322 4 073 sharp increase in electricity prices in * Heating output only into the heating distribution system (i.e. without heating generated and used for power generation) the Czech Republic. Furthermore, ** Formerly Moravské Teplárny 2006 was the first year in which the Zlin Energy Business was part of Atel’s Central and Eastern Europe portfolio, and this also contributed to the good result.

Markets in the countries of Cen- tral and Eastern Europe can be expected to continue to be liberalised and opened up. Atel expects to face tough competition from major Euro- pean energy supply companies and established national players. There will also be challenges from authorities and political forces in the EU and Hungary in connection with the sta- tus of Atel’s long-term supply contracts. The overall outlook for these markets remains good, and Atel will continue in 2007 to pursue every opportunity presented to it in the East- ern European market for growth, expansion and acquisitions, in both generation and capacity. Power generation in Hungary and the Czech Republic

Atel’s own thermal power stations

45 Geneva

Grid de Drance” pumped storage power Outlook station in the Lower Valais were also Construction of the new 50 KV Several new lines completed made in 2006. A feasibility study for Klus substation for AVAG, Onyx and Atel Transmission Ltd. can look the renewal of the Airolo-Lavorgo AEK Energie AG is scheduled for back on an extremely successful 2006. line in the Upper Ticino was com 2007. Atel Transmission Ltd. will add One highlight was the replacement pleted. a 132 kV/16.7 Hz branch to the exist- of the pylon on Mittelplatten, the ing line between All’Acqua and Airo- highest point of the 380 KV Lavorgo- Atel Transmission Ltd. led work- lo for the Federal Swiss Railways (SBB) Mettlen transmission line. 17 support ing groups concerned with planning in 2007. In Arbedo the 220 KV line ing structures on the same line were the medium-term expansion of trans will be moved out of the construction also replaced. Located in the vicinity regional networks in the northern area. of Morschach on Lake Lucerne, they and southern Jura, and with the Swiss dated back to 1948/1949 and were national grid as a whole. During the All the partners involved are high- heavily corroded. year under review Atel Transmission ly interested in constructing a 380 KV Ltd. was also involved in a working transmission line stretching from The Bickigen-Wangen section of group established by the owners of Chamoson to Lavorgo. Atel Transmis- the new 220 KV Bickigen–Flumenthal the interconnected systems to design sion Ltd. has already completed the line was completed. The construction a model for calculating grid costs in Nufenen line, an important section of the second section of this line, accordance with the future Electricity of this link. Work on planning the from Wangen to Flumenthal, is sched- Supply Act. Mörel-Ulrichen and Airolo-Lavorgo uled for 2007 – so that from the end sections will speed up in 2007. of 2007 the Solothurn region will be Preparatory work for the national supplied by two independent 220 KV grid company, Swissgrid, which start- The further renovation of the links, one from Gösgen and the other ed operating at the end of 2006, was 380 KV Lavorgo-Mettlen line is still from Bickigen. most demanding in terms of time blocked by objections. The next steps and effort. It required the parties to in the process have been initiated, During the year under review the participate in drafting a voluminous but when a construction permit will new 50 KV substation at Lachmatt set of agreements and to cooperate be issued is anybody’s guess. near Pratteln was completed for Atel in the preparation of the Swissgrid Versorgungs AG (AVAG). management manual. These docu- High levels of capital investment ments govern collaboration between throughout the world – and particu- Sundry planning and coordination Swissgrid and the owners of the larly steep rises in the prices of steel work transmission systems. and copper – have led to significant Preparations for the application price increases for electrical plants. for planning permission for the net- This trend can also be expected to work link from the proposed “Nant continue in the years to come.

46 ENERGY SEGMENT p o wer generati o n and grid

Atel Transmission Ltd. has fol- lowed government and parliamenta- ry debates on the Electricity Supply Act and the ownership of the transmission grid with interest, and will make arrangements to prepare for the foreseeable changes.

Atel lines in the high-voltage grid

380 kV 220 kV Atel’s own power lines, holdings, long-term rights

Limited-duration transport right Third parites Upgrading Substations International connections of Atel and partners

47 Martigny

Far above the regional centre of Martigny in the Swiss Canton of Valais, there stands an arch dam, 180 metres high and 555 metres long, which retains some of the water from the nearby Mont Blanc range in an artificial lake – the Lac d’Emosson. Surrounded by snow-covered Alps, this is Switzerland’s second largest storage reservoir. It provides enough electric current to satisfy the lighting needs of a town with a population of 100 000. Completed more than 30 years ago, the impressive structure is a must-see for tourists from all over the world.

Samuel Berger, 29, is the master of this huge body of water. He is in charge of the sluice gates of the reservoir operated by Electricité d’Emosson, an Atel company. It goes without saying that Berger – a trained electrician from Collonges – no longer opens and closes the sluice gates by hand as in days gone by. The water that enters and exits the storage power station is controlled by means of sophisticated software directly from the control centre in La Bâtiaz. Environmental aspects – the safety of people and nature – are afforded special consideration: the Lac d’Emosson plays a crucial role in protecting the Rhône valley from flooding.

With its portfolio of major hydroelectric power stations in Europe’s Alpine water reservoir, Atel helps to ensure stable prices and reduce risk potential in the electricity market.

Martigny

Every aspect of energy

Atel’s Energy Services segment is a well-established, ex- perienced service partner. The Atel Installationstechnik Group, Zurich, and the GAH Group, Heidelberg, cover Switzerland, Northern Italy, Northern and Eastern Europe, meeting all customer needs in the areas of energy supply, communications technology, industrial plant engineering, building services and technical facilities management.

Good capacity utilisation thanks to ideal addition, complementing the the economic recovery existing activities of the AIT Group. The increasing pace of the recovery in the Swiss economy during the Trend reversal in Germany year under review led to good capac- With economic growth signifi- ity utilisation in the field of building cantly stronger than in the previous services. There was more investment, year, both the GAH Group’s business especially in housing construction, fields turned in a positive overall per- the retail sector and public trans- formance in 2006. The Energy Trans- port. Despite this encouraging up- mission and Communications Tech- turn in capital spending by institu- nology Division also benefited from tions and the public sector, the long- rising capital investment in electricity awaited price recovery failed to networks and from maintenance con- materialise in 2006. As in the year be- tracts for the electricity distribution fore, the Atel Installationstechnik network. Group (AIT) completed a number of notable acquisitions, further consoli- There was increased demand for dating its position as the leading high-voltage overhead lines, trans- provider in the Swiss energy services former stations and services for dis- sector. The purchase of Indumo AG tribution networks. The Industrial makes Atel the largest industrial au- and Power Plant Engineering Division Further Information: tomation provider. The takeover of performed well, particularly helped

www.gah-gruppe.de Luwa Schweiz AG, a ventilation and by demand from abroad for nuclear www.group-ait.com air-conditioning specialist, is another engineering.

50 ENERGY SERVICES SEGMENT

Outlook The AIT Group currently sees potential for development in 2007 in building services and energy supply technology. Growth opportunities in energy supply technology are heavily dependent on the level of capital spending in the public sector.

The GAH Group also expects 2007 to deliver further growth impetus. A crucial factor here is likely to be the potential demand arising from capital investment in new power stations by energy suppliers.

Overview Energy Services segment +/- variance 2005 – 2006 in % 2005 2006 2005 2006 (based on CHF) CHF mn. CHF mn. EUR mn. EUR mn. Order intakes 15.0 1 595 1 834 1 030 1 166 Net revenue 4.0 1 564 1 626 1 010 1 034 Segment profit 16.0 25 29 16 18 as % of net revenue 12.5 1.6 1.8 1.6 1.8 Net investments in tangible fixed and intangible assets 10.3 39 43 25 27 Number of employees as at balance sheet date – 1.1 7 198 7 119 7 198 7 119

51 Martigny

Continued growth

• Full capacity utilisation in energy supply fuelled by the Lötschberg Alpine transit project • Brisk construction and invest ment activity by institutions and the public sector in Switzer- land and Italy

Atel Installationstechnik Ltd.

BulidingServices/ Energy Supply Major projects Technical Facilities Technology Management

Atel TB Kummler + Romandie Ltd. Matter Ltd. Vernier Zurich

Atel impianti Ltd. Mauerhofer + Zuber Ltd. Savosa Renens

Atel Building Elektroline a.s. Technology Ltd. Zurich CZ-Prague

Atel Building Tech- nology West Ltd. Olten

Indumo Ltd.

Buchs (AG)

Atel Sesti S.p.A.

IT-Milan

AIT Group business fields

n Bulding Services and Management n Energy Supply Technology

Other foreign facilities: Milan (IT), Vaduz (FL), Prague (CZ)

52 ENERGY SERVICES SEGMENT S O UTHERN/WESTERN EUR o p E

Increasing market momentum in in capital spending was particularly ing particularly on increasing market Switzerland and Italy towards the noticeable in housing construction share in building services and traffic close of 2005 largely continued into and retailing. Cantons in western engineering. Future growth will de- 2006, leading to encouragingly high Switzerland, in particular, spurred pend largely on capital spending by capacity utilisation in building servic- the upturn in public transport. The the public sector. One of AIT’s central es over the year as a whole. In Italy long-awaited price recovery failed objectives is to serve its customers the major projects secured in 2005 to materialise, however. But the re- with quality and flexibility. gave the segment an excellent activi- quirements of numerous profession- ty level, and order books were boost- al building owners are clear: first and ed by a number of new contracts. The foremost, they demand quality and installation of the contact line for adherence to schedules. the major Lötschberg Alpine transit project, on which the energy supply Tenders for railway technology division had been working to capaci- in the Gotthard base tunnel ty from the beginning of 2006, was Atel Installationstechnik Ltd. (AIT) completed. Performance was also en- successfully completed the installa- couraging in the other areas of ener- tion of the contact line in the major gy supply technology, including East- Lötschberg Alpine transit project at ern Europe. the end of October. More than 80% of the low voltage installation work Organic and acquisition-driven had been completed by the end of revenue growth the year. Much of the growth achieved was driven by the acquisitions of Luwa Jointly with its three partners, the Schweiz AG (ventilation and air con- AIT Group submitted the Transtec ditioning) and Indumo AG (industrial consortium’s tender for providing automation). Further growth came railway technology for the Gotthard from various companies purchased in base tunnel on 21 August 2006, with- 2005. In addition, organic growth en- in the time limit. While leading this abled the group to increase revenue consortium, the AIT Group is also by more than 15 %. bidding for the 16.7 Hz overhead line and the 50 Hz power supply. This encouraging performance was assisted by construction and in- Stimulus from the public sector vestment activity, both institutional Atel Installationstechnik will pur- and in the public sector. The increase sue continued growth in 2007, focus-

53 Emosson

GAH Group

Industrial Plant and Engineering Division Energy Transmisssion/Communication Technology Division

Kraftanlagen München GmbH ECM Ingenieur-Unternehmen für GA Leitungsbau Süd GmbH GA-com Telekommunikation und Energie- und Umwelttechnik Telematik GmbH Munich Munich Fellbach Bietigheim-Bissingen

Kraftanlagen Hamburg GmbH Ingenieurbüro Kiefer&Voss GmbH Frankenluk Energieanlagenbau Digi Communication Systeme GmbH GmbH Hamburg Erlangen Bamberg Gifhorn

Kraftanlagen Heidelberg GmbH Kamb Elektrotechnik GmbH GA Energieanlagenbau GmbH te-com Telekommunikations- Technik GmbH Heidelberg Ludwigshafen Hohenwarsleben Backnang

Kraftanlagen Nukleartechnik Caliqua Gebäudetechnik GmbH GA Leitungsbau Nord GmbH DIGICOS Sp. z o. o. GmbH Heidelberg AT-Wiener Neudorf Hannover PL-Poznan

Franz Lohr GmbH Elektro Stiller GmbH

Ravensburg Ronnenberg

Kraftszer Kft. GA-Magyarország Kft.

HU-Budapest HU-Törökbálint

REKS Plzen s.r.o.

CZ-Pilsen

EMS s.r.o.

CZ-Ceská Lìpa

Leitungsbau Ges.m.b.H.

AT-Linz

54 ENERGY SERVICES SEGMENT N O RTHERN/EASTERN EUR o p E

Improved result

• GAH divisions forge ahead • Demand stimulus in all areas • Further growth opportunities in 2007

Against the backdrop of the engineering. The GAH Group secured strongest economic growth in Ger- another order for nuclear water cir- many for six years, the performance culation piping systems in the new of both the GAH business divisions – Olkiluoto 3 nuclear power station in Energy Transmission and Communi- Finland. cations Technology, and Industrial and Power Plant Engineering – was gen- In acquiring major projects, we erally positive in 2006. They both im- saw stronger demand for conven- proved their operating results. An tional power plant and chemical/ upturn in capital spending on power petrochemical plant engineering. supply systems and the maintenance contracts awarded for the electricity During 2006 demand was also distribution network triggered rising fuelled substantially by industry, demand from energy suppliers. De- where capital investment increased mand grew for high-voltage overhead as domestic demand picked up and lines, transformer stations and servic- exports rose. es for distribution networks. Energy suppliers in Germany say they intend Simplified structure to invest some 13 billion in the power In the 2006 financial year the GAH supply system between now and 2012. Group successfully completed the process of consolidation that it had Power stations in demand begun the year before. During 2005, There was encouraging demand in order to be able to concentrate on for both conventional power stations its two future-oriented core business and for those meeting the require- fields, the GAH Group sold one man- ments of the Renewable Energies ufacturing company, two process en- Act. Demand from other countries gineering companies, and GA-tec Ge- continued to grow solidly for nuclear bäude- und Anlagentechnik GmbH,

55 Sion

engaged in technical building facilities. This had the effect of consolidating the group. With its simplified corporate structure, it is now well posi- tioned for the future.

On the political plane, the year under review brought positive signs from the energy summit of the Ger- man energy supply companies and from the federal government. Repre- sentatives of the electric power industry announced substantial capital investment at the summit, designed to make good the impending electricity shortfall and to secure elec tricity generation and distribution. In consequence of the recent decision by the Federal Network Agency to reduce charges for grid usage, the energy suppliers’ future investments in electricity networks will be lower.

Outlook The GAH Group anticipates continued improvement in the economic climate in Germany during 2007. Cap- ital spending in the sectors where the GAH Group operates is expected to gain more momentum. Investments GAH Group facilities in new generation facilities planned by energy suppliers will increase po- n Company head office tential demand in the years ahead. n Branches, offices By 2012 energy suppliers will have Other foreign facilities: spent between 33 and 40 billion on re Brussels (BE), Budapest (HU), Törökbálint (HU), newable energies, and another 17 bil Wiener Neudorf (AT), Schwechat/Mannswörth (AT)

56 ENERGY SERVICES SEGMENT N O RTHERN/EASTERN EUR o p E

lion has been earmarked for conventional power stations. The Industrial and Power Plant Engineering Divi- sion must seize opportunities that arise elsewhere in Europe and – in conjunction with system suppliers – elsewhere in the world. Energy Trans- mission and Communications Tech- nology will continue to expand in Eastern Europe (the Czech Republic and Hungary) during 2007.

In specific terms, the objectives that this GAH division has set itself in- clude increasing its shares of the market for domestic power line construction at all voltage levels, and main- taining its share of the market for underground pipeline construction. It also plans to systematically expand power line construction in Eastern European electricity business. Exist- ing partnerships in communications technology will be extended. In In- dustrial and Power Plant Engineering the GAH Group will redouble its ef- forts to secure orders for the construction of major power stations in 2007. It will also focus on expansion in nuclear engineering, consolidating its operations in renewable energies, and on exploiting whatever opportunities present themselves: in industrial media supply and in plant engineering for the chemical and petrochemical industries.

57 Frutigen

Far beneath the Swiss Alps, between tranquil Frutigen in the Bernese Oberland and the small Valais town of Raron with its landmark castle hill, one of the world’s longest railway tunnels awaits the passage of the first high-speed trains. Over 34 km long, the Lötschberg base tunnel is close to operational. It is part of the central section of a European north-south traffic artery.

Now that the tunnel cladding and the track system have been completed, the focus is on Jan Villringer, 33, Construction Supervisor with Kummler + Matter, an Atel company. Together with his team, this enthusias- tic sportsman is installing the overhead power lines in an around-the-clock process. The team must work to the highest standards of precision: the specially designed catenary system has to withstand extreme pressure waves and an aggressively humid environment. Trains travelling at speeds of up to 250 km/h will eventually thunder through the high-speed tunnel.

With decades of experience in energy supply, traffic engineering and building services, Kummler + Matter appropriately complements Atel’s extensive portfolio of energy services.

Base load energy clear power stations generate base control area, between Swiss balance load energy. areas and with control areas outside Base load energy is the basic elec- Switzerland, exclusively via schedule tricity demand that exists every day, Peak energy messages to the SBG system. This en- around the clock. In Switzerland, sures reliable electricity deliveries, base load energy is supplied by run- Peak energy is the proportion of based on European standards, for of-river and thermal (nuclear) power daily electricity needs where demand domestic and foreign electricity trad- stations. exceeds the basic level. Heavy swings ers. ETRANS successfully introduced in peak demand are primarily met by the SBG system for Swiss power ex- Hydroelectric power generation highly controllable storage power change companies on 14 December stations located in the Alps. 2005. Electricity generated in power stations using water power. Portfolio management Spot market

Merchant line The active management at a cen- The market for electricity transac- tral location of various products trad- tions that relate to a particular peri- A cross-border line that increases ed in the market in order to achive od of time when the electricity is de- the transit capacity between two a sustained increase in profits within livered or drawn, with the objective neighbouring grids. The additional a predefined risk/reward ratio, tak- of building up or balancing trading capacity can be used solely by inves- ing account of additional boundary positions. tors in the line, increasing the invest- conditions. ment incentive. Storage power station Repowering Nuclear power station Storage power stations are hydro- Replacing old power stations with electric power stations fed by at least Nuclear power stations are a type modern, highly efficient and thus one mountain reservoir. They can be of thermal power station. Nuclear more profitable facilities. brought into operation within a few power stations generate heat for the minutes if required. Their output is a steam circuit from the controlled fis- Schedule-balance group system function of (a) the difference in alti- sion of uranium atomic nuclei, which (SBG system) tude between the reservoir and the also gives rise to radioactive fission powerhouse, and (b) the turbine flow products. Nuclear power stations The schedule-balance group sys- rate. Storage power stations meet therefore incorporate multiple con- tem is used to implement energy approximately one third of Switzer- tainment zones to prevent hazards schedules in Switzerland. Electrical land’s electricity needs. to the surrounding environment. energy is exchanged over the Swiss Like run-of-river power stations, nu- transmission grid within the Swiss

60 glossary

Thermal power generation synchronised grid that technically stretches from Jutland to Greece and Electricity generated in thermal from Morocco to Poland. They cur- power stations (nuclear, coal-fired, rently supply 400 million people an- gas-fired or oil-fired). nually with approx. 2 100 TWh.

Tolling agreement

The tolling agreement governs the relationship between power station operators and their partners (tol- lers). The partners provide the fuel, draw the generated power and market it, whereas power station operators are solely responsible for the availability, operation and technical renewal of the facilities, for which they are paid accordingly by the tol- lers.

UCTE

The Union for the Co-ordination of Transmission of Electricity (UCTE) in Brussels coordinates the interests of transmission system operators in more than 20 European countries. Their common aim is to guarantee the safe operation of the grid. UCTE’s members are 35 transmission system operators in 20 European countries. Its Swiss members are Atel, BKW, EGL Grid, EOS, ETRANS and NOK.

The companies working together in UCTE jointly run the world’s largest

61 Switzerland ECKG Generating, s.r.o. Hungary Aare-Tessin Ltd. for Electricity Dubská, Teplárna Atel Csepeli Áramtermeo Kft. Bahnhofquai 12 P.O. Box 201 Dohány utca 12 CH-4601 Olten CZ-272 01 Kladno 1 HU-1074 Budapest Tel. +41 62 286 71 11 Tel. +420 312 644 853 Tel. +36 1 429 1030 Fax +41 62 286 73 73 Fax +420 312 644 850 Fax +36 1 268 1536 www.atel.eu www.eckg.cz www.atel-csepel.hu

Atel Trading Atel Energetika Zlín s.r.o. Atel Energia Kereskedo˝ Kft. Bahnhofquai 12 tr. T. Bati 650 Szabadság tér 7 CH-4601 Olten CZ-760 01 Zlín HU-1054 Budapest Tel. +41 62 286 71 11 Tel. +420 577 521 111 Tel. +36 1 886 34 00 Fax +41 62 286 76 80 Fax +420 577 523 538 Fax +36 1 886 34 01 www.atel-trading.eu www.atel-mt.cz www.atel-energia.hu

Atel Installationstechnik Ltd. France Italy Hohlstrasse 188 Atel Energie SAS Atel Energia S.r.l. CH-8026 Zurich 8–10, rue Villedo Via Montalbino, 3 Tel. +41 44 247 40 00 FR-75001 Paris IT-20159 Milan Fax +41 44 247 41 15 Tel. +33 1 53 43 84 20 Tel. +39 02 433 351 www.group-ait.com Fax +33 1 53 43 84 29 Fax +39 02 433 351-66 www.atel-energie.fr www.atel-energia.it Austria Atel Austria GmbH Germany Atel Energia S.r.l. Palais Esterhazy Atel Energie AG Via Vittorio Emanuele Orlando 83 Wallnerstrasse 4/MT 37 Franz-Rennefeld-Weg 2 IT-00100 Rome AT-1010 Vienna DE-40472 Düsseldorf Tel. +39 06 454 78 61 Tel. +43 1 535 30 66 Tel. +49 211 17 18 06-0 Fax +43 1 535 30 66 11 Fax +49 211 17 18 06-90 Macedonia www.atel-austria.at www.atel-energie.de Atel Skopje LLC ul. «Borka Talevski» br. 40/1–3 Bulgaria Atel Energie AG MK-1000 Skopje Atel Bulgaria Ltd. Lennéstrasse 1 Tel. +41 52 620 15 40* 36 Patriarh Evtimii Blvd., entr. 2, fl. 4 DE-10785 Berlin BG-1000 Sofia Tel. +49 30 2639 299-0 Norway Tel. +41 52 620 15 40* Fax +49 30 2639 299-90 Energipartner AS www.atel-energie.de Christian Frederiks plass 6 Croatia NO-0154 Oslo Atel Hrvatska d.o.o. GAH Anlagentechnik Heidelberg GmbH Tel. +47 22 81 47 00 Vijenac 7 Im Breitspiel 7 Fax +47 22 81 47 01 HR-1000 Zagreb DE-69126 Heidelberg www.energipartner.no Tel. +41 52 620 15 40* Tel. +49 62 21 94 10 Fax +49 62 21 94 25 48 Poland Czech Republic www.gah-gruppe.de Atel Polska Sp. z o.o. Atel CZ, s.r.o. al. Armii Ludowej 26 Husova 5 Greece PL-00-609 Warsaw CZ-110 00 Prague 1 Atel Hellas S.A. Tel. +48 22 579 65 25 Tel. +420 224 401 124 150, lera Odos Fax +48 22 579 65 27 Fax +420 224 401 541 GR-122 42, Athens www.atel-polska.pl Tel. +30 210 3467 384 Atel Ceská republika, s.r.o. Fax +30 210 3467 274 Romania Ovocny trh 8 Atel Energy Romania S.R.L. CZ-117 19 Prague 1 23 Popa Petre str., District 2 Tel. +420 221 720 111 RO-20802, Bucharest Fax +420 221 720 999 Tel. +41 52 620 15 40* www. atel-energy.cz

*Business unit contact in Switzerland

62 A d D resses , D A T E S , PUBLICATION DATA

Serbia Published by : Atel d.o.o., Beograd Aare-Tessin Ltd. for Electricity, Olten 16a Palmoticeva Street YU-11000 Belgrade Design and text : Tel. +41 52 620 15 40* Prime Communications AG, Zurich Slovakia Atel Slovensko s.r.o. Photos : Hodzovo nam. 2 Christian Ammann SK-816 25 Bratislava Tina Steinauer Tel. +420 221 720 080 Printing : Slovenia Dietschi Print & Medien AG, Olten Atel Energija d.o.o. Miklosiceva 26 The 2006 Annual Report is published in German, French, Italian SI-1000 Ljubljana and English. The 2006 Financial Report is published in German and Tel. +386 1 439 87 50 Fax +386 1 439 10 65 English. The German original text is authoritative.

Spain Atel Energia SA c/Balmes 89 ES-08008 Barcelona Units Tel. +34 93 45 22 474 Fax +34 93 45 22 472 Currency CHF Swiss francs CZK Czech krone Contacts EUR Euro HRK Croatian krone Investor Relations Kurt Baumgartner, CFO HUF Hungarian forint Tel. +41 62 286 71 11 NOK Norwegian krone Fax +41 62 286 76 67 PLN Polish zloty [email protected] ROL Romanian leu SIT Slovenian tolar Corporate Communications SKK Slovakian krone Martin Bahnmüller USD US dollar Tel. +41 62 286 71 11 Fax +41 62 286 76 69 th. thousand [email protected] mn. million bn. billion

Dates Energy

26 April 2007 2007 Annual General kWh kilowatt hour Meeting MWh megawatt hour (1 MWH = 1 000 kWh) May 2007 Quarterly Results 1/2007 GWh gigawatt hour (1 GWH = 1 million kWh) August 2007 Interim Report 2007 TWh terawatt hour (1 TWh = 1 billion kWh) November 2007 Quarterly Results 3/2007 TJ terajoule (1 TJ = 0,2778 GWh) February 2008 Press announcement on 2007 annual results Power March 2008 Balance sheet media kW kilowatt (1 kW = 1 000 watts) conference MW megawatt (1 MW = 1 000 kilowatts) 24 April 2008 2008 Annual General Meeting GW gigawatt (1 GW = 1 000 000 megawatts) MWe electrical megawatts MWth thermal megawatts

63 From Barcelona to Olten

Energy is not just a physical state to the trading specialist in Lyon and variable: it is also what drives our en- the sluice-keeper in Emosson is their tire economic and social develop- day-to-day commitment and their ment. Atel’s founding fathers knew motivation to do their best for the that, and they lived by the guiding company. For Atel’s success is based principle of this annual report “Ener- on the intelligent, productive harmo- gy is our business”. They built one of ny of more than 8 000 people, work- the largest Swiss power stations ing today for the company through- above Aarburg. In November 1896, out Europe. They are the key to what when it was commissioned, they we do today and what we shall con- brought electric lighting to the town tinue to do in the future: providing a of Olten for the first time. secure, efficient and sustained energy supply. Today Aare-Tessin Ltd. for Elec- tricity (Atel) is one of Europe’s leading energy companies. With over thirty sales companies and subsidiaries, Atel is firmly rooted in all the continent’s important energy markets. Geographical and cultural proximity to its various regional markets has been a mainstay of the company’s development since time immemorial, creating a constant, fruitful exchange of opinions, ideas and experience that crosses national borders and lan- guage barriers alike.

The photographic documentation of a journey from Barcelona via Bordeaux, Paris and Lyon to Olten, portrays Atel employees in various different fields of activity. What links the manager of the Barcelona office

64 T ravel report

1 2 3

4 5 6

65 ATEL IN EUROPE

As a leading energy services provider operating throughout Europe, Atel generates, trades and sells electricity, and also provides a broad range of energy services covering all aspects of energy and its applications.

Subsidiaries and branches n Energy segment n Energy Services segment n Power generation n Electricity trading (exchange/OTC market)

66 www.atel.eu Fax Tel. Olten CH-4601 Bahnhofquai 12 Aare-Tessin Ltd.forElectricity Head office: +41 6228673 +41 622867111 +41

/ day

2005 (based onCHF) +/- variance –

2006 in% – 117.8 104.5 – 65.4 34.6 26.9 11.9 42.3 18.1 64.6 55.6 42.6 38.4 32.1 17.8 1.1 3.1 4.0 –

149.982 98.166 CHF mn. 8 8 7 2 1 7 8 – 33.7 2005 289 368 317 464 299 413 541 196 737 564 020 580 4.8 6.3 2005 –

+/- variance – 2006 in% 201.892 115.642 CHF mn. 13 11 8 9 3 1 1 1 9 – 37.7 119.3 2006 708 461 288 506 106 202 245 051 626 899 716 334 257 42.9 43.6 12.7 38.8 63.6 7.9 9.8

–

149.982 EUR mn. 98.166 5 8 4 1 1 4 5 1 2 1 – 33.7 2005 2005 355 368 705 585 127 010 535 543 193 267 349 476 137 777 135 100 650 270 895 CHF 4.8 6.3 28 –

201.892 115.642 EUR mn. 8 8 5 2 1 6 7 1 1 3 3 – 37.7 2006 2006 715 461 780 182 128 034 177 205 156 572 703 163 668 115 859 150 100 157 296 100 CHF 7.9 9.8 40