Natural gas – energy for the 21st century
Natural gas – energy for the 21st century
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vemex | FOREWORD
Dear business partners, employees and colleagues,
DEAR BUSINESS PARTNERS, EMPLOYEES AND COLLEAGUES,
On behalf of the VEMEX company I would hereby like to present you the annual report for 2011. The last twelve months have been significant for us in many ways. Firstly, we celebrated our tenth anniversary of successful business activity on the Czech market, during which we have provided gas supplies to our consumers for a full 5 years already. Secondly, we celebrated these two events in the year in which we also organized the 14th International European Business Congress. This event in Prague presented natural gas as a crucial, and at the same time, ecologically clean energy source for the future. A year ago we were enthusiastic about the trust placed in us by the EBC presidium when it offered us the task of organising the international congress for business elite under the auspices of the EBC. We can now state with certainty and pleasure that we have confirmed our strong position and that we are able to manage very demanding and complicated tasks with a high level of professionalism. Looking back through the history of our company over the years of its existence I am proud that I can say that the sense of responsibility and pressure to achieve results are what characterizes VEMEX s.r.o. These characteristics form an integral part of our corporate culture and are the basis on which to stay on top for a long time on the highly competitive market that exists in the Czech Republic in the sphere of electricity and gas supplies. We ourselves have been proving this for many years. Another significant event in 2011 was the purchase of a 51% stake in RSP Energie a. s., which does business on the electricity and gas markets. The acquisition resulted in the subsequent creation of the VEMEX Group that incorporated the aforementioned company under the name VEMEX Energie. I would like to thank all our partners for the confidence they placed in us. Particular thanks also goes to all the employees of VEMEX for their excellent work, endeavours and professionalism which form the basis of our success and good economic results in 2011.
In the past year VEMEX s.r.o .conituned to build on its success. In addition to increasing our sales we continued to expand into different segments of the Czech energy market. Through the acquisition of a controlling stake in what is now VEMEX Energie we currently supply gas and electricity to approximately 20 000 end customers in the residential and SME sectors. As a result VEMEX became a first Gazprom controlled company anywhere in the world to supply gas and electricity directly to households. We plan to actively increase our market share in our core and new market segments. Our goal is to become a fully integrated gas and power supplier on the Czech market, to be better able to meet the needs of our every customer. Currently our sales represent approximately 10% of the annual gas consumption in the Czech Republic. Continually increasing flows of LNG into continental Europe, uncertain macroeconomic prognosis and gas demand going forward, increasing gas hub activity, constantly changing regulatory framework are some of the many issues that our industry is faced with today. We at VEMEX currently feel comfortable with our market oriented business model which is supported by the long term contract with Gazprom export.
Vasily Dinkov Chief Operating Officer and Managing Director
Vladimir Ermakov Chief Executive Officer and Managing Director
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vemex | II. Basic data . III. Statutory body . IV. Ownership structure
Basic data Business name: Registered office: Legal form:
VEMEX s.r.o. Na Zátorce 43/9, 160 00 Praha 6 Limited Liability Company
Statutory body
Ownership structure
The company’s supreme statutory body is the general meeting, which is composed of all the partners. Below mentioned are the partners of VEMEX s.r.o.:
The share of the company owners as at 31st December 2011:
Date of registration of the company in the Commercial Register: April 25 2001 at Municipal Court in Prague, Section C, file 82955
GAZPROM Germania GmbH Centrex Europe Energy & Gas AG KKCG Oil & Gas B.V.
Identification number: 26448831 Tax identification number: CZ26448831
Two executive heads are the statutory bodies of the company; they execute the business management of the company. Their names are:
Line of business:
Vladimir Ermakov and Vasily Dinkov
gas trade
Tel.: +420 233 382 820 Fax: +420 221 181 162 Internet: www.vemex.cz E-mail:
[email protected]
Supervisory board is an established optional body, which supervises the activities of the executive head, carries out control proceedings and is authorized to access business and account books to check the data contained therein. The supervisory board also reviews the annual financial statement and submits its opinion to the general meeting.
VEMEX s.r.o. does not have a branch abroad.
The members of the supervisory Sergey Anatoljevič Emeliyanov Peter Scherger Dmitry Averkin Vyacheslav Krupenkov
board are as follows: chairman of the supervisory board member member member
The company also holds procuracy. Procuracy is a form of company representation granted by the general meeting. The company has collective power of attorney; both proxies need to provide their consent to procuracy: Ing. Vratislav Jonáš Kubínek Václav Lerch
GAZPROM Germania GmbH 50.14%
Centrex Europe Energy & Gas AG 33%
KKCG Oil & Gas B.V. 16.86%
The share owned by EW East-West Consult AG was sold to KKCG Oil & Gas B.V. on 20th December 2011 in accordance with a contract on a transfer of a business share.
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vemex | V. Organizational structure
Organizational structure Statutory and supervisory bodies of the company data Executive head: Vladimir Ermakov Managing Director In charge since 2001
General Meeting
Vasily Dinkov Managing Director In charge since 2010
Supervisory Board
Procuracy: Vratislav Jonáš Kubínek Holder of the procuracy In charge since 2011
Executive Board
IMS Representative
Václav Lerch Holder of the procuracy In charge since 2011
Chief Executive Officer/ Managing Director
Advisor for Slovak Business Development
List of the supervisory board members as at 31st December 2011
Chief Operating Officer/ Managing Director
Sergey Anatoljevič Emeliyanov Representative of Gazprom Export LLC, Moscow, Russian Federation Chairman of the supervisory board In charge as of: 1st February 2006 Peter Scherger Representative of GAZPROM Germania GmbH, Berlin, Federal Republic of Germany Member In charge as of: 13th December 2005 Vyacheslav Krupenkov Representative of GAZPROM Germania GmbH, Berlin, Federal Republic of Germany Member In charge as of: 19th October 2011 Dmitry Averkin Representative of Gazprom Export LLC, Moscow, Russian Federation Member In charge as of: 5th February 2009
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Organizational Structure of VEMEX s.r.o.
Proxy
Gas Sales Department
Gas Supply Portfolio, Logistics and Storage Dpt.
Finance Department
Customer Care Dpt.
Trading Dpt.
Accounting Dpt.
Invoicing
PriceAnalytics Dpt.
Risk Management Dpt.
Analysis Dpt.
Dispatching
Controlling Dpt.
Administration & HR Department
Marketing & PR Department
Treasury
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vemex | VI. Executive management of the company
Executive management of the company as at 31st December 2011
Vladimir Ermakov
Jaroslav Horych
Václav Lerch
Vasily Dinkov
Vratislav Jonáš Kubínek
Hugo Kysilka
Pavel Martínek
Jaroslav Čižinský
CEO / Managing Director In the company since 2001
COO / Managing Director In the company since 2010
Gas Sales Director in the company since 2006
Holder of the procuracy and Chief Financial Officer (CFO) In the company since 2009
Head of Customer Care Department In the company since 2005
Holder of the procuracy and Gas Supply Portfolio, Logistics and Storage Director In the company since 2008
Marketing Director In the company since 2004
Head of Treasury Department In the company since 2001
Tamara Nestěrenková Administration and HR Director In the company since 2002
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“There is a language in the world that everyone understands. It is the language of enthusiasm, of things accomplished with love and purpose, and as part of a search for something believed in and desired.“ {Paulo Coelho}
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vemex | VII. EVENTS OF 2011 | EBC CONGRESS
VEMEX brought giants to Prague, most noteably Gazprom
An event very unique and prestigious for our country was organized on 2nd - 3rd June 2011 in Prague by VEMEX s. r. o. The Czech capital welcomed significant European and global companies, including the Russian energy giant Gazprom, to the 14th International European Business Congress (EBC). The event was co-organized by Moravské naftové doly (MND) and RBS Bank. The central topic of the congress was the utilization of natural gas as the energy source for the 21st century. This is a very topical theme because the world is currently endeavouring to reduce emissions and energy companies are keen to contribute to this trend. This applies to gas power plants as well as to the use of natural gas for transport. Clean energy in the form of natural gas especially offers multiple opportunities for application in these two fields. Its utilization is a necessary part of global efforts to revitalize the environment.
Natural gas is the fuel of the 21st century This was the topic of the main speech to the congress as presented by Alexey Borisovicz Miller, Chairman of the Board of Gazprom. The number of wind turbines and solar panels in Europe keeps growing, however the energy from these renewable resources fluctuates in the electricity network. Gas fired power plants are the optimal solution to cover this fluctuation with stable and natural energy. As far as transport is concerned Mr Miller outlined other significant opportunities for the use of natural gas, which, if compared to diesel oil and petrol that are used in existing aggregates, produces lower emissions of carbon dioxide and is cheaper by half. A. B. Miller also pointed out that the current use of natural gas in European transport is not really adequate. “The use of road transport is going to increase in the future, however, legislation relating to
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vemex | VII. EVENTS OF 2011 | EBC CONGRESS
the environment is going to be tightened, including the transition to the Euro 6 emission standard. All this will give new impulses to use of natural gas as a fuel, especially for cargo transport. Demand for natural gas as a propellant may rise to 80 billion cubic meters a year in the next twenty years, which is ten times more than current consumption” stated Alexey Borisovicz Miller. The start of the EBC was marked by the start of a car rally whereby all the vehicles were propelled by natural gas. This so called Blue Corridor event saw the participants journey from Prague to Greifswald. Spectators were presented with new road transport possibilities which use the cleanest fuel from an ecological point of view. VEMEX presented its own project In relation to the main theme of the congress, VEMEX s.r.o. presented its own interesting project too. The objective was to disprove fears that natural gas reserves could be exhausted in a few decades, in a similar way to the case of oil. The project presented estimates of the reserves of the blue gold in natural gas deposits in western Siberia, the technology of natural gas mining and the experiences of eye witnesses on the spot that confirm the future of this resource for the operation of the global economy. The EBC was established in 1997 in the German city of Bonn with the objective to support and extend cooperation among members of the Organization for Security and Co-operation in Europe. The president of the EBC is Alexey Borisovicz Miller.
Vladimir Ermakov, Chief Executive Officer and Managing Director of VEMEX s.r.o. presents a gift to Alexey Miller, Chairman of the Board of Gazprom and President of the European Business Congress. 98
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vemex | VII. EVENTS OF 2011 | EBC CONGRESS GALA EVENING
EBC CONGRESS GALA EVENING
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vemex | VII. EVENTS OF 2011 | EBC CONGRESS GALA EVENING
The elite of the business world met at the gala evening held in the Spanish Hall of Prague Castle, which was the climax of the two-day talks of the 14th International European Business Congress.
Overgas Dear Vladimir Ivanovicz, I would hereby like to thank you, on behalf of myself and the other representatives of Overgas who participated in the Annual General Meeting of the European Business Congress in June 2011, for the cordial hospitality extended to us during the course of the event. The interest you showed and the effort you put into the event contributed to an unrepeatable atmosphere, the establishment of useful business contacts and close cooperation between the participants at the congress. I would also like to take this opportunity to highlight the existing contacts between our companies and reaffirm our excellent cooperation. Kind regards Sašo Dončev Executive Director Overgas Inc., a.s.
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vemex | VII. Events of 2011 | the Blue Corridor
The Blue Corridor event demonstrated the propulsion of cars in the 21st Century
VEMEX s.r.o. was one of the main organizers of the Blue Corridor event which aims to popularize vehicles propelled by compressed natural gas. The seven day rally of cars started ceremoniously on 2nd June 2011, which also marked the first day of the 14th International European Business Congress. The route of the Blue Corridor event took participants from the Czech Republic across Germany to their final destination, the town of Greifswald. This destination was chosen due to the fact that it is the location where the Nord Stream offshore natural gas pipeline, which will carry natural gas from Gazprom to the European Union, will end. During the course of the journey from Prague there were stopovers in Leipzig, Wolfsburg (with a visit to the Volkswagen car factory) and Berlin, with a whole series of planned events that presented the economical, safe and environmentally friendly propellant used in the cars. The Blue Corridor event was a platform for renowned car companies of serially manufactured cars to introduce them to the public. In addition, this was also an opportunity for providers of filling technologies and other companies dealing with the issue of vehicles run on natural gas to present themselves. In this way the event suitably supported the main topic of the Prague session of the European Business Congress, the focus on natural gas as the energy source for the 21st century. The Blue Corridor event which took place under the auspices of the 14th International European Business Congress was organized by VEMEX s.r.o., in conjunction with E.ON - Ruhrgas and Gazprom Moskva. The participants not only included leading Czech gas companies, but also Finnish Gasum, Gazprom Germania and Kamaz and Iveco from the Russian Federation.
Alexey Borisovicz Miller of Gazprom, Chairman of Management Committee, started the seven-day rally Blue Corridor on 2nd June in front of the Intercontinental Hotel.
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vemex | VII. Events of 2011 | The expedition to Siberia
Overgas: Dear Mr Ermakov,
Location with trillions of cubic meters of gas Siberian deposits have made a huge impression
on the occasion of the completion of the 2011 Blue Corridor rally, which started on 2nd June 2011 in Prague at the Intercontinental Hotel, I would like to express my gratitude to you and your colleagues on behalf of E.ON Ruhrgas AG for the excellent preparation and execution of the event in Prague, as well as for your participation in the course of the whole rally event. The efficient and successful cooperation with your colleagues H. Kysilka, K. Kachlíková, T. Tutová and N. Loktionov was a pleasant experience for us. Their huge contribution and motivation contributed not only to the successful start of the rally but also created a dignified framework for the 14th Annual General Meeting of the European Business Congress. Please, pass on our thanks to your employees. Kind regards Friedhelm Heinz Wannagat Head of Technical Cooperation with countries of Eastern Europe E.ON Ruhrgas AG Head of the working group Energy Savings and Efficiency of the European Business Congress Acquainting selected clients with one of the world’s largest deposits of natural gas, showing them the technologies and people that stand behind the extraction of Russian gas and its supplies to the Czech Republic, this was the objective of an expedition to western Siberia organized by VEMEX s.r.o. in the spring of 2011. The centre of the region, Novy Urengoy, was hostile tundra just 36 years ago. The people there are accustomed to really harsh conditions; during winter they have difficulty finding the mercury in the thermometer, as temperatures drop below minus 60 degrees Celsius. In spite of these conditions a town has grown up there with over 100 thousand inhabitants.
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vemex | VII. Events of 2011 | The expedition to Siberia
The Jamal Peninsula is the second largest deposit of natural gas in the world and the entire 80% of natural gas comes from this very region. The Czech Republic consumes 8 billion m3 of natural gas a year. This represents only a fraction of the amount extracted from the Zapolarnoye deposit, a place only accessible on the basis of a special permit. Last year they extracted up to 140 billion m3 of natural gas with plans for this year to extract 220 billion. The largest energy companies in the region, Gazprom Dobycza Urengoy and Gazprom Dobycza Jamburk, have built a complete infrastructure there at a cost of RUB 137 billion roubles. Gas is extracted from 46 bore holes. The site includes a gas cleaning station with the largest capacity in the world, a connection to the transit natural gas pipeline and a facility for the two thousand people who stay and work there. They work for a month then have a month off. The facility has a gym, body-building centre, sauna, shop, canteen and the Internet. Despite the fact that Gazprom extracts 550 billion m3 of natural gas every year, which is approximately 15% of world consumption, the reserves of natural gas in western Siberia do not seem to be dwindling very quickly. Surveys executed by experts have shown that these reserves are enormous. Verified reserves amount to only 4.3 trillion m3, however estimates are much higher. The available gas should suffice not only for decades, but for hundreds of years to come. “There is a huge amount of work, self-denial and obstacles to be overcome when it comes to the extraction of gas. It goes without saying that this also requires large financial investments as well as immense skills and knowledge. I would like to thank all the employees at Gazprom who made it possible for us to see it all with our own eyes,” said Vladimir Ermakov, Chief Executive Officer of VEMEX s.r.o.
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vemex | VII. Events of 2011 | Ten years of VEMEX on the Czech market
Ten years of VEMEX on the Czech market VEMEX s.r.o. has been operating in the Czech Republic for the past 10 years. Since its establishment in 2001 the company has focused on the energy industry. After two years the company obtained a licence for trading in natural gas and electricity. In 2005 two significant companies doing business in the gas industry on the German and Austrian markets and a Swiss investment company joined forces with VEMEX s.r.o., which spurred the development of the company. The company secures natural gas supplies through its long-term contract with Gazprom Export Moscow. The contract was concluded in the spring of 2006, a year later another long-term contract for the period 2008-2012 was signed with an option to extend the cooperation. VEMEX s.r.o. has built up an infrastructure that secures the operation of the company and the full provision of energy supplies to consumers. This includes a special focus on the sales dispatching unit which is in constant contact with the supplier, consumers and other components incorporated in the process of energy supplies. Within its business activities the company is dedicated to its customers, which includes consumers from many branches of industry. In addition, VEMEX s.r.o. also relies on its subsidiary, VEMEX Energie a.s., with delivery of gas and electricity to minor consumers and households. VEMEX is a member of the European Business Congress, the International Association of Commercial and Scientific-Technical Cooperation of Gas Companies, the Chamber for Economic Cooperation in the Commonwealth of Independent States and the Czech-German Chamber of Commerce. It also takes part in the negotiations of the intergovernmental committees at the Ministry of Industry and Trade and has established the European Business Academy Prague-Berlin. VEMEX has strengthened its position in the energy market Last year VEMEX s.r.o. completed the purchase of 51% of the shares of RSP Energie a. s., which was renamed VEMEX Energie a.s. in November 2011. Thanks to this investment the company has significantly strengthened its position in the energy market. The new company sells natural gas and electricity to more than 16 thousand households and minor consumers.
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vemex | VII. Events of 2011 | Ten years of VEMEX on the Czech market
VEMEX celebrated an important anniversary VEMEX s.r.o. celebrated its tenth anniversary in style in the restaurant in Strahov Monastery. All employees drank a toast to the further successful performance of the company in the energy business, whilst both Vladimir Ermakov, Executive Director and General Manager of the company, and Vasily Dinkov, Executive Director and Managing Director of the company, thanked them all on the spot for their endeavours and work over the course of the previous years.
Overgas: Dear Mr Ermakov On behalf of the management of OOO “Gazprom Export” and the Supervisory Board of VEMEX s.r.o. we congratulate you and the entire team at VEMEX s. r. o. on the tenth anniversary of the company’s activity on the market in the Czech Republic. Dear Mr Ermakov, as the founder of the company we deeply value your contribution. Your strategic thinking, enthusiasm and ability to unite experts and professionals willing to achieve shared objectives have helped VEMEX become a respected company on the energy market in the Czech Republic. Furthermore, your ability to establish working and friendly relationships within state and diplomatic circles contributes to the creation of a positive image not only for the Gazprom Group, but also for the whole of Russia in Europe. We believe that the establishment of the VEMEX Group, which includes the subsidiaries VEMEX Energie a.s. in the Czech Republic and VEMEX Energo s.r.o. in Slovakia, will solidify the current position of the company and help the dynamic development of activities in the course of the creation and implementation of new plans, in achieving new objectives and moving into new markets. In relation to this significant event and on the eve of Christmas and NewYear celebrations we wish all the employees of VEMEX s.r.o. good health, happiness, good humour and the fulfilment of all their wishes. We would also like to wish the employees of the subsidiaries strength and energy to successfully develop their activities so as to bolster the position and reputation of VEMEX on the market. Sergey Emeliyanov 1st DeputyDirector General OOO “Gazprom Export“, Chairman of VEMEX s.r.o. Supervisory Board
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“Guide people so that they meet challenges that are big enough to make a difference and small enough to win.“ {Michael LeBoeuf}
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vemex | VIII. Gas Sales Department
Gas Sales Department Gas Sales Director: Jaroslav Horych Natural gas sales in 2011 were characterised by a fight for a share of the gas market, a fight to maintain shares in sales and a fight to introduce new sales procedures. 2011 also saw customers increasing their efforts to find a supplier with a wide range price product packages linked to products on liquid markets. It was also the year when supply exceeded demand and the year which confirmed deviations in sales from price patterns. The year was a very successful one for VEMEX s.r.o. We managed to adapt to the new situation on the gas market and, most importantly, managed to offer new products. We successfully fulfilled the tasks set out for 2011 by concluding sales contracts in 2010, we managed to increase sales by concluding new short-term contracts and obtaining new customers in the course of the year. For 2012 we are preparing further measures that will satisfy the needs of our customers, with particular focus on end consumers of gas and customers buying gas to manufacture CNG.
Gas sales compared year-on-year 7,977,702 MWh
7,891,488 MWh 6,870,042 MWh
6,981,703 MWh
2,700,806 MWh
Year
2007
2008
2009
2010
2011
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vemex | IX. Gas Supply Portfolio, Logistics and Storage Department X. ADMINISTRATION AND HUMAN RESOURCES DEPARTMENT
Gas Supply Portfolio, Logistics and Storage Department
In 2011 VEMEX s.r.o. bought approximately 665.8 million m³ of natural gas, which represented an increase of 0.7% on the previous year. From the perspective of natural gas consumption in the Czech Republic, this corresponds to a market share of 8.2%.
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ADMINISTRATION AND HUMAN RESOURCES DEPARTMENT Gas Supply Portfolio, Logistics and Storage Director: Václav Lerch
Administration and Human Resources Director: Tamara Nestěrenková
The year 2011 was characterized by developing relationships with existing partners, with the establishment of new relationships with new partners too. The essential axis will remain the cooperation with our main suppliers: companies OOO “Gazprom Export” and “Gazprom Marketing&Trading Ltd.”. An important asset in the diversification strategy was the solidifying of relationships with Czech producers of natural gas – namely MND a.s. and LAMA Energy a. s. We purchased significant amounts of natural gas from these companies, which meant that VEMEX s.r.o. became one of the most important companies distributing gas from local extractors in the the Czech Republic.
In 2011 six new employees were taken on, of which four are specialists in their field. Within the framework of innovative methods of the Human Resources Department a new method of keeping the agenda regarding employees is being introduced. In 2011 the Human Resources, Law and Administration Department organized three meetings of the Supervisory Board and one General Meeting. The Human Resources, Law and Administration Department was responsible for the organization and execution of the 14th International European Business Congress, which took place on 2nd – 3rd June 2011. At the request of the Human Resources Department and under the authorization of the corporate management the teaching of languages was expanded. As part of the continuous improvement in the professional aptitude of employees various training sessions, seminars and other conferences were held in 2011, in which approximately 60% of employees participated. During 2011 the employees of VEMEX s.r.o. regularly participated, together with customers, in sports, cultural and other significant events.
Number of employees as at 31st December 2011 Employee category
Number of employees out of which: Managers Specialists Other employees
Total number Age of employees as at 31st December 2011 < 30
Education 30-40 40-50 > 50
High school
University
43
5
16
11
11
18
25
Out of which, still studying 9
9 26 8
3 2
2 11 3
3 6 2
4 6 1
11 7
9 15 1
1 7 1
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vemex | XI. Marketing and PR Department
Marketing and PR Department
• The Archive of the Office of the President of the Republic
The list of marketing activities and events undertaken by VEMEX s.r.o. during 2011 was again an abundant one. These included big corporate, sports and cultural events as well as charity projects too.
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On 2nd - 3rd June 2011 VEMEX s.r.o. organized the 14th Annual European Business Congress (EBC) in Prague. Major European and global companies participated in the congress, most notably Russian energy giant Gazprom. The keynote speech of the congress, which was co-organized by the marketing section, was presented by Alexey Borisovicz Miller of Gazprom, Chairman of the Management Committee, who spoke about natural gas as the fuel for the 21st century. In 2011 VEMEX also participated in the organization of the Blue Corridor, an event which aims to popularize vehicles propelled by compressed natural gas. The rally of vehicles was officially started on the first day of the 14th European Business Congress. In the Spring of 2011 the marketing section also organised an expedition to Siberia. The objective of the expedition was to acquaint selected clients with natural gas deposits and introduce them to the technologies and people who are behind the extraction of Russian natural gas and its supplies to our country. VEMEX s.r.o. also became a partner to the exhibition held in Prague Castle entitled “The Imperial Court under the Sceptre of the Romanov Family”. The exhibition was organized under the auspices of Václav Klaus, President of the Czech Republic, and Dmitry Medvedev, President of the Russian Federation, who ceremonially opened it. The CEOs of VEMEX were present at the opening ceremony too. VEMEX s. r. o. also continues to provide support to those who need it most – children from the children’s home in Planá and people suffering from mobility and communication disorders organized under the LOGO citizens’ association. On 8th November 2011 the Czech Gas Union organized the Autumn Gas Conference in the Spanish Hall in Prague Castle. The event took place under the auspices of Bohuslav Svoboda, Mayor of Prague and VEMEX s.r.o. Furthermore, 2011 was the year that saw the completion of the projects related to the opening of the CNG filling station in Ostrava-Muglinov and to the connection of the small filling facility at the seat of the company. Last year VEMEX s.r.o. started supporting the ice-hockey club HC Energie Karlovy Vary. The club used the financial donation for 2011 to support youth ice-hockey as well as for the operation of its premier league A team. On 10th - 12th November 2011 HC Energie Karlovy Vary ice-hockey club, supported by VEMEX, organized an international junior tournament called VEMEX CUP 2011. The first year of the tournament, which took place in the KV Arena, showcased quality junior ice hockey. “The VEMEX CUP tournament was a marvellous showcase for high-quality junior ice hockey. We would hereby like to thank each and everyone who helped us to organize this exceptional event” said Jiří Ryžuk, the main youth coach at HC Energie Karlovy Vary.
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vemex | XI. Marketing and PR Department . XII. The corporate lawyer XIII. A consultant for issues concerning Slovakia
The corporate lawyer
Overgas Re: Thank you for financial support and cooperation Dear Mr Ermakov, I would hereby like to thank you personally and the entire management of Vemex s.r.o. for the excellent cooperation that has been established between us and also for the very significant financial support provided to our club by your company during the course of the last premier league season 2011/2012. Mr Karel Holoubek, the club owner, would also like to add his appreciation. He deeply values the cooperation, the entry of your company into the ice hockey sphere in Karlovy Vary, and believes that the personal and professional bonds will be mutually solidified in the period to come. The support and cooperation provided by VEMEX s.r.o. in the form of financial contributions makes it one of the club’s TOP partners. The support is one of the most essential aspects for the club’s stability. We are therefore very grateful to VEMEX s.r.o. for providing for the stability and functioning of the club in today’s economically difficult times. The financial contribution has been used to develop and support youth ice hockey, which is the field in which the club excels, as well as “the operation” of the A team, which has to face great competition from the other premier league clubs. We believe that the mutual cooperation is also of benefit to the VEMEX Group and, if it is possible, we would like to continue it in the forthcoming season 2012/2013. We would therefore like to ask you to consider continuing our cooperation and that we will do our utmost to meet your expectations.
JUDr. Zuzana Svrčková, employed by the company since 2001, responsible for legal issues of the company and providing complete legal consultancy and services.
A consultant for issues concerning Slovakia
VEMEX actively participated in compressed natural gas transport projects, which can significantly contribute to the protection of the environment.
Ing. Ladislav Bodnár, employed by the company since 2011
Vítězslava Fenclová Sales and Marketing Manager Miroslav Vaněk General Manager
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vemex | XIV. VEMEX Energie a. s. . XV. VEMEX Energo s. r. o.
VEMEX Energie a.s.
VEMEX Energo s.r.o.
The total number of consumption points of VEMEX Energie a.s.
08.11
09.11
10.11
11.11
1,314,684
07.11
1,227,617
06.11
1,188,786
05.11
998,974
895,480
04.11
1,000,143
889,635
03.11
963,456
815,275
02.11
805,094
01.11
699,505
12.11
Sales in USD
764,227
11.11
6,140
5,958
10.11
13,404
13,300
12,530
09.11
6,081
5,436
08.11
11,350
10,458
07.11
5,218
5,000
06.11
9,775
8,708
05.11
4,266
3,752
04.11
7,540
6,412
03.11
3,351
2,996
5,273
02.11
Year 2011
124
3,618
2,231
1,458
2,346
01.11
VEMEX Energie a.s. was incorporated in November 2011 after VEMEX s.r.o., a subsidiary of the Russian gas concern Gazprom, took over a controlling share in RSP Energy a.s. The original company was established in May 2009 and from the very beginning its core business was gas and electricity supplies, in particular to small enterprises and households. This business policy remains unchanged in the new era of the company. On 25th June 2009 the firm obtained a licence to operate on the local energy market. The strategy of VEMEX Energie is based on a wide product portfolio, which enables the company to recommend and offer each of its clients the most suitable supplies on the basis of price and the level of consumption. Moreover the company guarantees its clients the highest standards of service, including free consultancy. On 31st December 2011 VEMEX Energie had a total of 19 thousand customers of which over 15 thousand were households, almost 3 thousand small enterprises and 193 large companies. The company also supplies natural gas to more than 4,400 households, 1,600 small enterprises and approximately 130 large companies. The customer satisfaction in all segments is secured by 33 employees who provide support services. The firm also provides for customer feedback through a call centre which helps us to respond to clients’ suggestions and better meet their needs. With regards to the future, VEMEX Energie aims to increase its share of the Czech market. Its main focus being on the gas sector, and in particular medium size consumers.
Since its establishment in 2003 VEMEX ENERGO s.r.o. has focused on the Slovak energy sector. The company is a 100 % subsidiary of the Czech company VEMEX s.r.o. and is therefore part of one of the largest energy companies in the world, the Russian giant Gazprom. Thanks to this the company is in an excellent position to provide its customers with reliable supplies of Russian natural gas and, more importantly, offer a wide range of high quality services. The company fully entered the Slovak market on 1st January 2011 providing natural gas supplies to gas trading firms. By the end of last year the company was already supplying gas to several dozen Slovak consumers. The total volume of supplies for the year grew to approximately 31 million cubic meters. In addition to gas supplies, VEMEX ENERGO s.r.o. also plans to enter the Slovak wholesale electricity market as of 2013 and start to provide electricity to its customers. Via the combination of gas supplies and electricity supplies the company intends to provide its customers with a tailor-made approach, which will apply in particular to pricing. Whilst the focus in 2011 for VEMEX ENERGO s.r.o. was on creating a portfolio of end customers primarily within the corporate sector, the objective for the next period is not only to stabilize the current base but also to continue to increase its share of the Slovak energy market and improve the quality of the services it offers. Those services and customer support are currently secured by six employees in VEMEX ENERGO s.r.o.
12.11
Year 2011
125
“A good reputation is better than money.“ {Latin proverb}
126
vemex | XVI. Finance Department
Finance Department Finance Director: Vratislav Jonáš Kubínek In 2011 the auditor of the company was changed. PriceWaterhouseCoopers Audit, s.r.o. became the new auditor. In March 2011 the company gained the quality system certificate ISO 9001. The certificate was granted by TÜV NORD Czech, s.r.o. A due diligence process was carried out in VEMEX s.r.o. which was executed by a new partner, KKCG Oil & Gas B.V. Within the framework of the acquisition of the controlling amount of shares in RSP Energie a.s., VEMEX s.r.o. also executed a due diligence process in this company. The company began its investment activities in the utilisation of natural gas (CNG) in automobile transport. Nevertheless, it is not engaged in the actual research and development of natural gas utilisation. The number of staff in the Risk Management Department was increased. Risk management is performed using methodology and in cooperation with the main partner, GAZPROM Germania GmbH. The objective of risk management is to determine and assess tolerable risks based on mathematical models of the company’s customer portfolio. In the area of liquidity management VEMEX s.r.o. cooperates closely with its main partner, GAZPROM Germania GmbH. The objective of this cooperation is to prevent, to the maximum possible extent, all and any credit and liquidity risks applying to cash flow and ensure the company’s financial stability, even in the event of the occurrence of price risks. The company does not use investment instruments in line with the group’s financial policy.
129
vemex | XVI. Finance Department
independent AUDITOR’S REPORT
130
131
vemex | XVI. FINANCE DEPARTMENT
BALANCE SHEET
(in thousand Czech crowns)
Company name: VEMEX s.r.o. | Identification number: 26448831 | Legal form: s.r.o. | Primary business: Natural gas trading Balance sheet date: 31st December 2011 Date of preparation of the financial statements: 5th March 2012 Ref.
ASSETS
31.12.2011 Gross
a
b TOTAL ASSETS
A.
Receivables for subscribed capital
B.
Fixed assets
B.
I.
B.
I.
B.
II.
B.
II.
B.
III.
B.
III.
1.
C.
I.
C.
II.
C.
II.
C.
III.
C.
III.
C.
IV.
C.
IV.
D.
I.
D.
I.
132
2
3
31.12.2010
Ref.
LIABILITIES AND EQUITY
31.12.2011
31.12.2010
Net
a
b
5
6
4
TOTAL LIABILITIES AND EQUITY
1,124,023
(18,565)
1,105,458
953,047
A.
-
-
-
8,093
A.
I.
A.
I.
114,414
(15,982)
98,432
24,990
Intangible fixed assets
1,440
(645)
795
552
Software
1,440
(645)
795
552
A.
II.
Tangible fixed assets
15,462
(8,337)
7,125
7,145
A.
II.
Constructions
2,028
(285)
1,743
1,715
A.
III.
2.
Equipment
13,434
(8,052)
5,382
5,430
A.
III.
Long-term investments
97,512
(7,000)
90,512
17,293
A.
IV.
1.
Investments in subsidiaries Current assets
I.
1
Net
1.
C. C.
Provision
Inventories 1.
Raw materials
2.
Goods for resale
3.
Prepayments for inventory
97,512
(7,000)
90,512
17,293
A.
IV.
699,417
(2,583)
696,834
610,530
A.
V.
3,279
-
3,279
2,534
B.
8
-
8
5
B.
I.
-
-
-
1,788
B.
I.
3,271
-
3,271
741
Long-term receivables
50,267
-
50,267
46,300
B.
II.
Long-term advances paid
48,300
-
48,300
46,300
B.
II.
2.
Deferred tax asset
1,967
-
1,967
-
B.
III.
B.
III.
Short-term receivables
953,047
216,626
154,320
Share capital
241,000
241,000
1.
Share capital
241, 000
121,000
2.
Changes in share capital not yet registered
-
120,000
Capital contributions
-
(13,010)
1. 1. 1.
Assets and liabilities revaluation
-
(13,010)
Reserve fund and other reserves
9,297
3,985
Legal reserve fund
9,297
3,985
Retained earnings / Accumulated losses
(82,967)
(183,895)
Accumulated losses
(82,967)
(183,895)
Profit / (loss) for the current period Liabilities
1.
1,105,458
Equity
49,296
106,240
888,832
798,286 8,723
Provisions
21,304
1.
Income tax provision
13,694
-
2.
Other provisions
7,610
8,723
Long-term liabilities
1,635
2,311
Other liabilities
1,635
2,311
865,893
787,248 561,433
1.
Short-term liabilities
452,271
(2,583)
449,688
380,110
1.
Trade payables
16,123
335,688
(2,583)
333,105
360,188
2.
Liabilities - subsidiaries / controlling parties
91,115
-
Receivables - associates
96,246
-
96,246
914
3.
Liabilities to employees
8,187
5,656
10,337
-
10,337
9,564
4.
Liabilities for social security and health insurance
1,204
1,436
547
-
547
209
5.
Taxes and state subsidies payable
102,388
123,570
9,453
-
9,453
9,235
6.
Short-term advances received
102,929
92,089
543,200
2,386
747
678
Bank loans & overdrafts
-
4
Short-term bank loans and overdrafts
-
4
Accruals and deferred income
-
441
Accruals
-
441
1.
Trade receivables
2. 3.
Short-term advances paid
4.
Estimated receivables
5.
Other receivables
193,600
-
193,600
181,586
7.
Estimated payables
1.
Financial assets Cash in hand
369
-
369
136
8.
Other payables
2.
Cash at bank
193,231
-
193,231
181,450
B.
IV.
Prepayments and accrued income
310,192
-
310,192
309,434
B.
IV.
11,058
-
11,058
7,907
C.
I.
299,134
-
299,134
301,527
C.
I.
1.
Prepaid expenses
2.
Accrued income
1. 1.
133
vemex | XVI. FINANCE DEPARTMENT
INCOME STATEMENT Ref.
Statement of changes in shareholders’ equity
(in thousand Czech crowns)
Year ended 31st December 2011
DESCRIPTION
a
b
I. A.
Accounting period
(CZK’000)
2011
2010
1
2
As at 1st January 2010
Sales of goods
4,812,666
4,492,745
Cost of goods sold
4,593,550
4,283,893
219,116
208,852
+
Gross profit
II.
Sales of production
4,074
-
Sales of own products and services
4,074
-
60,230
45,858
4,233
3,697
II.
1.
B.
Cost of sales
B.
1.
Raw materials and consumables
2.
Services
+ C.
55,997
42,161
Added value
162,960
162,994
Staff costs
72,842
65,287
1.
Wages and salaries
55,773
50,154
2.
Emoluments of board members
2,855
4,149
3.
Social security and health insurance costs
12,621
9,492
4.
Other social costs
1,593
1,492
D.
Taxes and charges
169
78
E.
Depreciation of fixed assets
G.
Increase / (decrease) in operating provisions
C.
IV.
Other operating income
*
Operating result
IX.
Gain on revaluation of securities and derivatives
H.
Other operating charges
2,520
1,428
(1,663)
(4,152)
2,094
2,841
1,142
(3,814)
90,044
107,008
-
1,489 -
L.
Loss on revaluation of securities and derivatives
1,624
M.
Increase / (decrease) in financial provisions
7,000
-
Interest income
1,027
506
Interest expense
333
197
-
4,653
5,008
671
X. N. XI.
Other financial income
O.
Other financial expense *
Financial result
Q.
Tax on profit or loss on ordinary activities
Q.
1. 2. **
R.
134
- current - deferred
(12,938)
5,780
15,010
6,548
16,977
6,548
(1,967)
-
Profit or loss on ordinary activities after taxation
62,096
106,240
Extraordinary charges
12,800
-
*
Profit / (loss) on extraordinary items after taxation
(12,800)
-
***
Net profit / (loss) for the financial period
49,296
106,240
***
Net profit / (loss) before taxation
64,306
112,788
Registered capital
Legal reserve fund
Capital funds
Retained earnings (loss)
Total
121,000
-
(13,010)
(179,910)
-
3,895
-
(3,985)
-
Increase of share capital
120,000
-
-
-
120,000
Net profit/(loss) for 2010
-
-
-
106,240
106,240 154,320
Contribution to reserve fund
As at 31 December 2010
(71,920)
241,000
3,985
(13,010)
(77,655)
Contribution to reserve fund
-
5,312
-
(5,312)
-
Difference from revaluation (real value)
-
-
13,010
-
13,010
st
-
-
-
49,296
49,296
As at 31st December 2011
Net profit/(loss) for 2011
241,000
9,297
-
(33,671)
216,626
Balance at 31st December 2011
241,000
9,297
0
(33,671)
216,626
135
vemex | XVI. FINANCE DEPARTMENT
Notes to financial statements Year ended 31st December 2011
Cash flow statement Year ended 31
st
1. General information
December 2011
(CZK’000)
2011
2010
Cash flows from operating activities Net profit/(loss) on ordinary activities before tax
77,106
112,788 (18,310)
A.1
Adjustments for non-cash movements:
8,997
A.1.1
Depreciation/amortisation of fixed assets
2,520
1,428
A.1.2
Change in provisions
5,337
(19,429) (309)
A.1.5
Net interest expense/(income)
(694)
A.1.6
Other non-cash movements
1,834
-
A*
Net cash flow from operating activities before tax and changes in working capital
86,103
94,478
A.2
Working capital changes:
14,808
37,202
A.2.1
Change in receivables and prepayments and accrued income
23,546
(178,686)
A.2.2
Change in short-term payables and accruals and deferred income
(7,993)
217,730
A.2.3
Change in inventories
A**
Net cash flow from operating activities before tax
(745)
(1,842)
100,911
131,680
A.3
Interest paid
A.4
Interest received
(198)
(195)
72
A.5
506
Income tax on ordinary activities paid
(9,825)
-
A***
Net cash flow from operating activities
90,960
131,991
(82,962)
(22,761)
1.1. Introductory information about the Company Vemex s.r.o. (“the Company”) was incorporated on 25 th April 2001 and has its registered office at Na Zátorce 43/9, Prague 6. The Company’s primary business activity is trading with natural gas. Identification number of the Company is 26448831. Statutory Representatives as at 31st December 2011: Mr. Vladimir Ermakov Since 25th May 2001 Mr. Vasily Dinkov Since 11th November 2010 The proxy holders as at 31st December 2011: Mr. Vratislav Jonáš Kubínek Since 26th May 2011 Mr. Václav Lerch Since 26th May 2011 Mr. Jaroslav Čižinský 6th May 2006 - 26th May 2011 Mr. Pavel Martínek 6th May 2006 - 26th May 2011
The members of the Supervisory Board as at 31st December 2011 were as follows: Name Position Mr. Sergey Anatoljevič Emeliyanov Chairman Since 1st February 2006 Mr. Dmitry Averkin Member Since 5th February 2009 Mr. Vyacheslav Krupenkov Member Since 19th October 2011 Mr. Peter Scherger Member Since 13th December 2005 Mrs. Tamara Nestěrenková Member 13th December 2005 - 19th October 2011 The highest authority of the Company is the general shareholders meeting. The statutory body of the company constitutes the statutory representatives, who manage the company along with proxy holders. The proxy holders are empowered to represent the company in cooperation. In order to express agreement, the approval of both proxy holders is needed. The Company has a supervisory board. Organizational Structure of VEMEX s.r.o.:
General Meeting
Cash flows from investing activities B.1
Acquisition of fixed assets
B.2
Proceeds from the sale of fixed assets
B.3
Loans to related parties
B***
Net cash flow from investing activities
-
-
(94,377)
-
(177,339)
(22,761)
Supervisory Board
Proxy
Chief Executive Officer
Cash flows from financing activities C.1
Change in long- and short-term liabilities
C.2
Changes in equity:
C.2.1
Cash inflow from the increase of share capital
C***
Net cash flow from financing activities
136
90,300
(143,880)
8,093
111,907
8,093
111,907
98,393
(31,973)
12,014
77,257
Cash and cash equivalents as at the beginning of the year
181,586
104,329
Cash and cash equivalents as at the end of the year
193,600
181,586
Net increase/(decrease) in cash and cash equivalents
Advisor for Slovak Business Development
Executive Board
Chief Operating Officer
Gas Sales Director
Portfolio of gas supply, logistics and storage
Finance
Customer Care Dpt.
Trading Dpt.
Invoicing
PriceAnalytics Dpt.
Analysis Dpt.
Dispatching
Accounting Dpt.
Risk management Dpt.
Administration & HR
Controlling Dpt.
Marketing & PR
Treasury
137
vemex | XVI. FINANCE DEPARTMENT
2. Accounting policies 2.1. Basis of preparation The financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the Czech Republic. 2.2. Intangible and tangible fixed assets All intangible (and tangible) assets with a useful life longer than one year and a unit cost of more than CZK 60 ths (CZK 30 ths) are treated as intangible and tangible fixed assets. Purchased intangible and tangible fixed assets are initially recorded at cost, which includes all costs related to their acquisition. Intangible and tangible fixed assets are amortised (depreciated) by applying the straight-line method over their estimated useful lives. The depreciation (amortisation) plan is updated during the useful life of the intangible and tangible fixed assets based on the expected useful life. A provision for impairment is created when the carrying value of an asset is greater than its estimated recoverable amount. The estimated recoverable amount is determined based on expected future cash flows generated by the certain asset. Repair and maintenance expenditures of tangible fixed assets are expensed as incurred. Technical enhancement of intangible and tangible fixed assets with a cost of more than CZK 60 ths or CZK 40 ths is capitalised. 2.3. Shares in controlled entities and shares in entities where the Company has significant influence Shares in controlled entities consist of shares in entities which are either controlled or managed by the Company (“Subsidiary”). Shares in entities where the Company has a significant influence represent shares in entities which are not controlled or managed by the Company, but where the Company can exercise significant influence (“Associate”). Starting 1 January 2011, the shares in subsidiaries and associates are valued at the purchase price respecting a potential decrease in value. Up until 31 December 2010, the shares in subsidiaries and associates had been valued using the equity valuation method. Under this method, the share is valued at the purchase cost which is then adjusted to reflect the actual value of the Company’s share of the subsidiary’s or associate’s net assets as at the balance sheet date. Revaluation of the share is accounted for in equity. The results of this change in the valuation method are described in Notes 4 and 6. 2.4. Inventories Purchased inventories are stated at the lower of cost and net realisable amount. Cost includes all costs related with its acquisition (mainly transport costs, customs duty, etc.). The first-in-first-out method is applied for all disposals.
138
2.5. Receivables Receivables are stated at nominal value less a provision for doubtful amounts. A provision for doubtful amounts is created on the basis of an ageing analysis and individual evaluation of the credit worthiness of the customers. Receivables from related parties have not been provided for. 2.6. Foreign currency translation Transactions denominated in a foreign currency are translated and recorded at the rate of exchange ruling as at the transaction date. Cash, receivables and liabilities balances denominated in foreign currencies have been translated at the exchange rate published by the Czech National Bank as at the balance sheet date. All exchange gains and losses on cash, receivables and liabilities balances are recorded in the income statement and are shown in the financial statements in aggregate. Balances of accrued expenses and accrued income denominated in foreign currencies have been translated at the exchange rate published by the Czech National Bank as at the balance sheet date. 2.7. Financial derivatives Financial derivatives, which include currency trading and other financial derivatives, are valued at the purchase cost in the beginning and are then re-measured to fair value. Fair values are derived from market prices, models of discounted cash flow or option valuation models. All derivatives are disclosed under “Other receivables”, providing that they have a positive fair value; or under “Other payables”, if their fair value is negative. Embedded derivatives are not disclosed separately. Changes in the fair value of financial derivatives held for trading are disclosed as gains or losses from a revaluation of securities and derivatives. 2.8. Revenue recognition Sales are recognised as at the date the services are rendered and are stated net of discounts and Value Added Tax. Revenues from sales of natural gas are invoiced and accounted for on a monthly basis as accrued income. The amount accrued is based on the volume of gas transported. A settlement takes place in the following month and is netted off with the aforementioned accrued income. Unbilled gas deliveries are disclosed in total estimated amount under “Accrued income“. This receivable is partly covered by advance payments received from individual customers, which are disclosed under short-term liabilities. A net value of receivables/payables arising from the unbilled gas (see Note 5) is the final net value, which is close to the real receivables/payables towards customers.
2.9. Purchase of natural gas Purchase costs of natural gas are invoiced and accounted for under accruals on a monthly basis in accordance with the amount of gas transported and nominations placed in market operator’s evidence (OTE, a.s.). A settlement takes place in the following month and is netted off with the aforementioned accruals. 2.10. Leases The costs of assets held under both finance and operating leases are not capitalised as fixed assets. Lease payments are expensed evenly over the life of the lease. Future lease payments not yet due are disclosed in the notes but not recognised in the balance sheet. 2.11. Provisions Provisions are recognised when the Company has a present obligation, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. The Company creates provisions for untaken holiday and unpaid remuneration and bonuses to employees. In the event that the Company does not file a tax return for the corporate income tax as at the balance sheet date, a tax payable from the corporate income tax is disclosed in provisions. If corporate income tax advances paid are higher than the tax payable as at the balance sheet date, the difference is disclosed under short-term receivables. 2.12. Deferred tax Deferred tax is recognised on all temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax asset is recognised if it is probable that sufficient future taxable profit will be available against which the asset can be utilised.
2.15. Changes in classification and disclosure Changes in classification were made in the comparative period figures if such changes increased the information value of the financial statements. The following changes were made in the financial statements for the year ended 31 December 2011: • Natural gas sales, invoiced in December 2010, were disclosed under “Trade receivables” as at 31 December 2010. They were reclassified to “Accrued income” in the amount of CZK 301,527 ths. • The Company chose to exercise its right under Decree 500/2002 Coll, paragraph 58, section 2 and disclosed FX gains and losses net under “Other financial expenses” as at 31 December 2011. The Company also made a change in comparative figures for 2010 and reclassified CZK 97,171 ths from “Other financial revenues” to “Other financial expenses”. 2.16. Subsequent events The effects of events, which occurred between the balance sheet date and the date of preparation of the financial statements, are recognised in the financial statements in the case that these events provide further evidence of conditions that existed as at the balance sheet date. Where significant events occur subsequent to the balance sheet date but prior to the preparation of the financial statements, which are indicative of conditions that arose subsequent to the balance sheet date, the effects of these events are disclosed, but are not themselves recognised in the financial statements.
2.13. Related parties The Company’s related parties are considered to be the following: • Parties, of which the Company is a subsidiary or an associate, directly or indirectly, and other subsidiaries of these parties; and/or • Members of the Company’s or parent company’s statutory and supervisory bodies and management and parties close to such members, including entities in which they have a controlling or significant influence; and/or • Subsidiaries and associates and joint-venture companies. Material transactions and outstanding balances with related parties are disclosed in Note 13. 2.14. Cash flow statement The Company has prepared a cash flow statement using the indirect method. Cash equivalents represent short-term liquid investments, which are readily convertible for a known amount of cash.
139
vemex | XVI. FINANCE DEPARTMENT
(CZK’000)
4. Shares in controlled entities
Intangible fixed assets
Tangible fixed assets
2011
2011
2010
2010
Net book value as at 1st January
552
289
7,145
Additions
695
399
2,049
5,070
(452)
(136)
(2,069)
(1,293)
Disposals
-
-
-
-
Changes in provisions for impairment
-
-
-
-
795
552
7,125
7,145
Amortisation / Depreciation
Net book value as at 31st December The Company uses assets under finance lease contracts that are recorded as tangible fixed assets in the financial statements after the expiration of the lease and ownership transfer. Outstanding fu-
3,368
ture amounts payable on existing finance lease contracts as at 31st December 2011 were CZK 2,312 ths (as at 31st December 2010: CZK 2,988 ths).
As at 31st December 2011:
Number of shares
Notional value
Purchase cost (CZK ths)
Accounting Share value (%) (CZK ths)
(CZK’000)
VEMEX ENERGO s. r. o. (Bratislava, Slovakia)
Lease payments paid Payable within one year
31st December 2010 1,854
1,178
676
676
Payable after one year
1,636
2,312
Total amount of lease payments from current contracts (paid and payable) :
4,166
4,166
Lease payments payable in future periods arising from financial lease contracts are disclosed under “Trade payables“.
Dividend income 2011 (CZK ths)
-
EUR 706,639
17,293
17,504
100
EUR (236)
EUR (47)
-
255
CZK 200 ths
80,008
80,008
51
CZK (19,061)
CZK (76,014)
-
Domestic VEMEX Energie a.s. (Prague, Czech Republic) Total
97,512 90,512
During April 2011, a subsidiary named Gas Invest a.s. was deleted from the Commercial Register. Because Gas-Invest, a.s. was liquidated, the revaluation of long-term financial investments in the amount of CZK 12,800 ths, which occurred in 2009, was cancelled. In August 2011, the Company purchased a 51% share in RPS Energie a. s., which was then renamed to VEMEX Energie a.s. An impairment was As at 31st December 2010:
-
7,000
Residual value 31st December 2011
Negative equity* (ths)
Foreign
Impairment Lease payments from current financial lease contracts:
2011 loss* (ths)
Number of shares
Notional value
Purchase cost (CZK ths)
* not audited
3. Intangible and tangible fixed assets
created for this financial investment as at 31st December 2011 in the amount of CZK 7,000 ths, which represents the difference between the market price of the investment and the purchase cost. The market price was derived using models of future cash-flow for the mid-term horizon. There are no differences between the percentage of ownership and voting rights in any of the subsidiaries.
Accounting Share value (%) (CZK ths)
2010 loss* (ths)
Negative equity* (ths)
Dividend income 2010 (CZK ths)
Foreign VEMEX ENERGO s. r. o. (Bratislava, Slovakia)
-
706,639 EUR
17,293
17,293
100
EUR (253)
EUR 189
-
24
500,000
12,800
-
100
CZK (52)
0 tis. Kč
-
Gas-Invest a.s. - in liquidation (Prague, Czech Republic)
14
50,000
18
5,000
38
250
Total Provision Residual value There are no differences between the percentage of ownership and voting rights in any of the subsidiaries. In accordance with CZ GAAP, the Company does not prepare consolidated financial statements. The consolidating company is Gazprom
140
17,293
-
(17,293) Germania GmbH residing in Germany. In accordance with Decree 500/2002, paragraph 62, section 3, the Company doesn’t have to consolidate its subsidiaries based on materiality.
141
* not audited
Domestic
vemex | XVI. FINANCE DEPARTMENT
5. Receivables Unsettled receivables as at 31st December 2011 have not been secured and none of them are due for another more than 5 years. The overdue receivables as at 31st December 2011 amounted to CZK 38,606 ths (as at 31st December 2010: CZK 14,225 ths). The allowance for doubtful accounts as at 31st December 2011 was CZK 2,583 ths (as at 31st December 2010: CZK 2,583 ths).
(CZK’000) Receivable related to unbilled gas Advances received Net value of receivables
142
6. Equity Shareholders:
Receivables from related parties are addressed in note 13. Long-term advances paid in the amount of CZK 48,300 ths (2010: 46,300 ths) represent financial guarantees deposited with OTE, a.s., a gas and electricity market operator. Receivables and payables arising from unbilled deliveries and advances received The Company accounted for the following amounts of unbilled gas deliveries and advances received relating to gas sold: 31st December 2011
31st December 2010 299,134
301,527
(102,929)
(92,089)
196,205
209,438
(%)
31 December 2011
31 December 2010
KKCG Oil & Gas B.V. / EW East-West Consult AG*
16.86
16.86
Centrex Europe Energy & Gas AG
33.00
33.00
GAZPROM Germania GmbH Total
50.14
50.14
100.00
100.00
* the share owned by EW East-West Consult AG was sold to KKCG Oil & Gas B.V. on 20 December 2011 in accordance with a contract on a transfer of a business share. The legal reserve fund is created from the profit of the Company according to law and may not be distributed to shareholders, but may be used to offset losses only. On 25th March 2011, the general meeting of shareholders approved the 2010 financial statements and decided about the allocation of 2010
profit in the amount of CZK 106,240 ths. On 1st January 2011, there was a change in the valuation method of financial investments to the purchase cost method. Because of this change, the assets revaluation in the amount of CZK 13,010 ths was accounted for back to financial investments.
143
vemex | XVI. FINANCE DEPARTMENT
7. Provisions (CZK’000) Provision for holidays not taken Income tax provision Provision for unpaid remunerations and bonuses to employees Total provisions A payable for 2010 corporate tax was disclosed under “State-tax payable and subventions” in a total amount of CZK 6,548 ths, see Note 10.
8. Payables and commitments 31st December 2011
31st December 2010 6,062
2,866
13,694
-
1,548
5,857
21,304
8,723
Trade and other payables have not been secured against any assets of the Company and not due after more than 5 years. The Company does not have any overdue payables related to social or health insurance or any other overdue payables to tax authorities or other state institutions. The overdue trade payables as at 31st December 2011 amounted to CZK nil (as at 31st December 2010: CZK 517 ths).
Payables to related parties are addressed in note 13. State-tax payables and subventions primarily represent tax payable related to VAT in the amount of CZK 95,443 ths (2010: 109,493 ths). Short-term advances received represent advances collected from customers for sales of gas, see Note 5. Estimated payables represent mainly unbilled gas purchases for December 2011. In 2010, the unbilled gas was disclosed under trade payables. As at 31st December 2011, the Company was contractually obligated to build a CNG filling station. The station was commissioned in January 2012.
144
145
vemex | XVI. FINANCE DEPARTMENT
9. Financial derivatives
10. Income tax
The fair value of financial derivatives is disclosed under “Other receivables”, providing that it is positive for the Company, or under “Other payables”, in case it is negative.
The income tax expense can be analysed as follows:
(CZK’000)
(CZK’000)
31st December 2011
31st December 2010
Fair value Positive
Notional value
Negative
Fair value Positive
Negative
Notional value
Currency forwards
4
59,335
1,620
78,788
Derivatives held for trading total
4
59,335
1,620
78,788
Changes in fair value of derivatives held for trading are disclosed in the income statement. The Company uses financial derivatives in accordance with its risk management strategy as effective hedging instruments. Hedge accounting cannot be applied to these instruments because they do not fulfil
146
2011
2010
Current tax expense (19%)
16,971
6,548
Deferred tax expense
(1,967)
-
Adjustment of prior year tax expense based on final CIT return Total income tax expense A potential net deferred tax asset of CZK 1,657 ths as at 31st December 2010 has not been recognised as it is not probable that future taxable
6
-
15,010
6,548
profit will be available against which the unused tax credits can be utilised. The 19% rate has been used for its calculation.
the criteria set forth by CZ GAAP rules. These derivatives are therefore classified as held for trading in the above table.
147
vemex | XVI. FINANCE DEPARTMENT
11. Revenue analysis
12. Employees Staff costs (CZK’000)
Revenue from operating activities can be analysed as follows: (CZK’000)
2011
2011
2010
Members of management
Domestic - Gas sales (commodity) - Gas transport - Gas distribution Total revenue from operating activities
148
4,470,281
4,165,351
21,271
20,929
321,114
306,465
4,812,666
4,492,745
Average number of employees during the year 2010
35,405
2011 34,431
2010 9
9
Other staff
20,368
15,723
29
22
Total
55,773
50,154
38
31
The Company’s management includes statutory bodies, other directors and managers directly subordinated to them. The Company gives loans to its employees based on an internal guideline. The amount of loans to employees was CZK 9,449 ths as at 31st December 2011 (31st December 2010: CZK 7,584 ths). There is no interest charged on these loans; however, non-monetary income in the amount of 3% p.a. is included in employees’ tax returns.
Employees who can use company cars for private purposes increase their tax base by 1% of the car’s purchase price. This is in accordance with Act 586/1992 Coll., paragraph 6, section 6. The employer contributes to private pension insurance of employees in the amount of 4% of gross salary, CZK 2 ths maximum.
149
vemex | XVI. FINANCE DEPARTMENT
13. Related party transactions Loans payable
Currency
Gazprom Germania GmbH
EUR
-
Loans receivable
Currency
-
Vemex Energie a.s.
EUR
3,000,000
77,400
27th June 2012
3.569%
Vemex Energo s.r.o.
CZK
17,850,522
17,851
30 June 2012
4.200%
(CZK’000) Revenues
Type of transaction
2011
VEMEX ENERGO s.r.o.
Loan interest
370
269
VEMEX Energie a.s.
Loan interest
564
Recharge of operating expenses RSP
306 1,240
269
Total
2010
(CZK’000) Costs
Type of transaction
VEMEX ENERGO s.r.o.
Gas purchases
Gazprom Germania GmbH
Services Interest from loans
2011
Amount (CZK’000) 3,500 000
Amount
90,300 Amount (CZK’000)
No loans were given to statutory representatives, members of the supervisory board or shareholders in 2011 or 2010.
2010 195,908
-
3,710
13,680
114
-
Centrex Europe Energy & Gas AG
Services – guarantees
550
794
EW East-West Consult AG
Services – guarantees
550
550
OOO Gazprom Export
Gas purchases
Total
Amount
517,868
1,307,205
718,700
1,322,229
Due date
Interest rate
30th March 2012 Due date
3.569% Interest rate
th
Total remuneration for the statutory directors was CZK 240 ths (2010: CZK 140 ths.). Total remuneration for the members of the supervisory board was CZK 2,855 ths (2010: CZK 4,149 ths.). This remuneration is part of the staff costs.
The following related party balances were outstanding as at: (CZK’000) Receivables
Type of transaction
VEMEX ENERGO s.r.o.
Loans receivable Unpaid loan interest
Vemex Energie a.s.
Loans receivable Unpaid loan interest
Gazprom Marketing & Trading Ltd.
31st December 2011
31st December 2010
17,851
874
431
41
77,400
-
564
-
Trade receivables
20,141
5,828
Trade receivables
25,554
-
141,941
6,743
Total (CZK’000) Liabilities
Type of transaction
Gazprom Germania GmbH
Loans payable Unpaid loan interest
31st December 2011
31st December 2010
90,300
-
815
-
Trade payables
698
1,136
Gazprom Marketing & Trading Ltd.
Trade payables
137,306
271,621
VEMEX ENERGO s.r.o.
Trade payables
22,142
-
OOO Gazprom Export
Trade payables
Total
150
24,285
175,180
275,546
447,937
151
vemex | XVI. FINANCE DEPARTMENT
14. Fees paid and payable to the audit company
16. Subsequent events
The total fees paid and payable for statutory audit of financial statements performed by the audit company PricewaterhouseCoopers Audit, s.r.o. amounted to CZK 540 ths (fees paid for statutory audit of financial statements performed by the audit company Deloitte Audit s.r.o. for 2010: CZK 459 ths).
No events have occurred subsequent to year-end that would have a material impact on the financial statements as at 31st December 2011. 5th March 2012
15. Contingent liabilities The Company received bank guarantees from the following banks: • • •
The Royal Bank of Scotland N.V. in the amount of CZK 189,365 ths and EUR 7,030 ths (2010: CZK 151,715 ths and EUR 4,663 ths) Fortis Bank SA/NV in the amount of CZK 99,730 ths (2010: CZK nil) Komerční banka a.s. in the amount of CZK 50 ths and EUR 100 ths (2010: CZK nil)
The Company has the following credit lines with its bank accounts: with The Royal Bank of Scotland up to CZK 230 million; the overdraft was not used in 2011 nor in 2010. With Evropsko-ruska banka a.s. up to CZK 50 million; the overdraft was not used in 2011 nor in 2010. The Interest rate on both overdrafts is set based on PRIBOR. The management of the Company is not aware of any other significant unrecorded contingent liabilities as at 31st December 2011 and 2010.
Vladimir Ermakov Statutory Representative
152
Vasily Dinkov Statutory Representative
153
“Finding the right course between courage and caution is the greatest of arts.“ {Tomáš Baťa}
154
vemex | XVII. Report on Relations
Report on relations Report on Relations According to Section 66a (9) of Act no. 513/1991 Coll. Commercial Code for the Accounting Period 2009 of VEMEX s.r.o. In accordance with the provision of Section 66a (9) of Act no. 513/1991 Coll., Commercial Code, as subsequently amended, and in view of the fact that VEMEX s.r.o. (hereinafter referred to as “the Company”), as the controlled entity, did not conclude any control agreement, which would come into force force in 2011, the Company prepared a report on relations (hereinafter referred to as “Report”) between the Company and the controlling entities and between the Company and other entities controlled by the same controlling entities (hereinafter referred to as “Related Entities”) for the accounting period 2011, provided that the Company is familiar with these related entities. The shareholders of the Company may familiarize themselves with this Report within the same time period and under the same conditions as given for the Company’s financial statements. 1. Information on the Controlled Entity Business name: VEMEX s.r.o. Registered office: Prague 6 - Bubeneč, Na Zátorce 43, PSČ 160 00 2. Relevant accounting period The Report was prepared for the accounting period 1st January 2011 31st December 2011. 3. Structure of shareholders in the accounting period Unless it is proved according to Section 66a of the Commercial Code that another person has at its disposal the same or a higher percentage of the voting rights, it shall be assumed that a person who has at its disposal at least 40% of the voting rights in a legal entity is the controlling person. During the accounting period 1st January 2011 – 31st December 2011, the Company was controlled by the following companies: 3.1. Controlling entity - direct control Business name: GAZPROM Germania GmbH Registered office: Berlin, Markgrafenstrasse 23, Country: Germany Registered capital: 50.14 % of VEMEX s.r.o. 3.2. Controlling entity - indirect control Business name: OOO Gazprom Export Registered office: Moscow, Strastnoy Boulevard 9 Country: Russia Registered capital: 100.00 % of GAZPROM Germania GmbH, or Business name: Gazprom OAO Registered office: Moscow, 16 Nametkina ul. Country: Russia Registered capital: 100.00 % of OOO Gazprom Export
4. Other related entities The Company asked the above mentioned controlling entities to provide the Company with a list of all entities that were under the control of the same controlling entities during the relevant accounting period. This Report was prepared by the Company based on information obtained from the controlling entities and other information available. Relations and capital shares of entities within the relevant line of Gazprom Group as of 31st December 2011 are shown on the last page of this Report. 5. List of contracts concluded and effective within the accounting period The contracts listed below were concluded between the Company and related entities. No detriment occurred from performance of either these contracts or contracts concluded in the preceding accounting periods. For that reason there was no need to arrange for settlements of detriment or to conclude contracts on their settlement. The total value of fulfillment received or provided between the Company and its related entities is presented in Notes to the financial statements of the Company for 2011, section 13. The following contracts, possibly other legal acts and measures, were concluded or made in the interest of or at the instigation of the related entities during the accounting period 1st January 2011 - December 2011. Entity
Subject of contract
GAZPROM Germania GmbH, Germany
Contract on Provision of Services
Gazprom Marketing & Trading, Great Britain
Contract on Gas Purchase
VEMEX ENERGO s.r.o., Slovakia
Contract on Gas Purchase
OOO Gazprom Export, Russia
Contract on Gas Purchase
GAZPROM Germania GmbH, Germany
Loan Contract (received)
VEMEX ENERGO s.r.o., Slovakia
Loan Contract (granted)
VEMEX Energie a.s., Czech Republic
Loan Contract (granted)
Some of the transactions with related entities are not realized yet because they are based on concluded contracts for placed orders. The Company neither paid nor received dividends in the relevant accounting period. 6. Other legal transactions undertaken in the interest of or at the instigation of the related entities During the year 2011 GAZPROM Germania GmbH provided the Company with a guarantee in the form of a “Letter of Comfort”, for the purpose of obtaining a bank guarantee for a revolving credit line, up to EUR 2,757.7 thousands.
157
vemex | XVII. Report on Relations . XVIII. Data relating to persons responsible for annual report
Data relating to persons responsible for THE annual report
Organizational chart of the direct-relationship line of the Company within the Gazprom OAO Group as of 31st December 2011 Gazprom OAO Moscow (RU) 100 %
Vladimir Ermakov responsible for the annual report Vasily Dinkov responsible for the annual report Vratislav Jonáš Kubínek responsible for the financial part of the annual report Hugo Kysilka responsible for compiling the annual report
OOO Gazprom Export Moscow (RU) 100 % GAZPROM Germania GmbH Berlin (DE) 100 % 100 % Gazprom Marketing & Trading Ltd London (GB)
VEMEX s.r.o. Prague (CZ)
51 %
100 % VEMEX Energie a.s. Prague (CZ)
Further, the Company provided its subsidiary Vemex Energie a.s. with a guarantee for the purpose of a bank loan guarantee, up to EUR 1,030 thousands and CZK 17,500 thousands. No legal acts in the interest of the controlling entity or of the controlled entity or other entities controlled by the same controlling entity were made during the accounting period, or if there were any legal acts relating to the above mentioned entities, those were general legal procedures made under the terms of legal acts by the controlled entity in relationship to the controlling entity in its capacity as shareholder of the controlled entity. 7. Other measures in the interest of or at the instigation of the related entities No measures in the interest, or at the instigation, of the controlling entity or entities controlled by the same controlling entity were taken within the accounting period, except for general measures taken by the controlled entity in relationship to the controlling entity in its capacity as shareholder of the controlled entity. 8. Performance provided and losses arising to the controlled entity and method of their settlement There is no loss arising in the controlled entity from the above-mentioned performance provided, contracts, other legal actions, other measures or from other fulfillment received or provided. 9. Confidential information All information and facts that are the business secrets of the controlling, controlled or other related entities is confidential, together with all the information that any of the related entities determines as being confidential. Furthermore, all information relating to the business, either stand-alone or in connection with other information or facts that could be considered sensitive and may be harmful to related entities, is confidential.
158
The above mentioned persons undersign that the information in their audited annual report corresponds to facts and that no important circumstances have been omitted. The above mentioned persons furthermore undersign that the final financial statement was approved by an auditor and that the statement of the auditor is in accordance with the reality.
50,14 %
VEMEX ENERGO s.r.o. Bratislava (SK)
To prevent loss to the controlling entity, this report does not include information of such character, pursuant to Section 51 of Act no. 513/1991 Coll., Commercial Code. 10. Final declaration The report was prepared by the Board of Directors of the controlled entity, Vemex s.r.o. and it was presented to the Supervisory Board and the auditor, who will perform an audit of the financial statements. With respect to its legal obligation, the controlled entity will issue an annual report; the report on relationships will be included as an appendix. The Managing Directors of the Company declare that they prepared this report based on information currently available or information that could be obtained with due managerial care and that the information listed in particular parts of this report is true to their knowledge. The annual report will be submitted to the Collection of Documents of the Commercial Register kept by the Regional Court in Prague. Prague, March 20th, 2012
Vladimir Ermakov Chief Executive Officer and Managing Director
Vasily Dinkov Chief Operating Officer and Managing Director
Vladimir Ermakov CEO / Managing Director
Vasily Dinkov COO / Managing Director
Hugo Kysilka Marketing Director
Vratislav Jonáš Kubínek CFO
159
vemex | XIX. AUDITOR’S REPORT
AUDITOR’S REPORT
160
161
vemex | XX. REPORT OF THE SUPERVISORY BOARD OF VEMEX s.r.o. . XXI. CONTENTS, IMPRINT
REPORT OF THE SUPERVISORY BOARD OF VEMEX s.r.o.
CONTENTS, IMPRINT
I. Introduction by CEOs 86 II. Basic Data 88 III. Corporate Bodies 89 IV. Owners‘ Structure 89 V. Organisational Structure 90 VI. Corporate Executive Management 92 VII. Important Events in 2011 97 VIII. Gas Sales Department 117 IX. Gas Supply, Logistics and Storage Department 118 X. Administration and HR Department 119 XI. Marketing and PR Department 120 XII. The Corporate Lawyer 123 XIII. A Consultant for Issues concerning Slovakia 123 XIV. VEMEX Energie 124 XV. VEMEX ENERGO 125 XVI. Financial Department 129 XVII. Report on Relations 157 XVIII. Data about Persons Responsible for the Annual Report 159 XIX. Auditor‘s Report 160 XX. Report of the Supervisory Board of Vemex s.r.o. 162 XXI. Contents, Imprint 162
Annual Report 2011 VEMEX s.r.o. Registered Office: Na Zátorce 43/9, 160 00 Praha 6 Phone: +420 233 382 820 Fax: +420 221 181 162 Internet: www.vemex.cz E-mail:
[email protected] Coordinator: Mgr. Klára Kachlíková Production and graphic processing: Corporate Publishing, s.r.o. www.copu.cz Translation into English: SOPHIA, jazykové služby s.r.o Texts: Martin Kavka, Petra Vychodilová Czech proofreading: Petra Vychodilová English proofreading: SOPHIA, jazykové služby s.r.o. Design: Vladimír Trčka Client service manager: Ditta Dvořáčková Photography: Tereza Melicharová
162