9 Disclosures of interests in other entities

TYPE OF INTEREST AND NUMBER

Changes in the ownership interests without loss of control

Elbe Finance Holding Verwaltungs-GmbH and Repower Deutschland GmbH merged with effect 1 January 2016, with Repower Deutschland GmbH absorbing the other company. The company that disappeared with the merger was wholly owned by the Group before the combination. In the 2016 financial year the assets and liabilities of Elbe Finance Holding GmbH & Co. KG were merged with Elbe Beteiligungs AG in liquidation.

In the 2016 financial year Repower sold another 2 per cent of its interest in Repartner Produktions AG to outside energy utilities. The net cash inflow of TCHF 2,046 is offset against minority interests of TCHF 1,402. The difference of TCHF 644 was allocated to the majority shareholder’s capital.

Consequences of the loss of subsidiary control

In the 2016 financial year the companies connecta ag and Repower Furnizare România S.r.l. were sold. SEI S.p.A., Repower Macedonia DOOEL Skopje and Repower Adria d.o.o. were wound up. For these disposals a translation loss of TCHF 1,327 net was reclassified to profit or loss (see Note 25).

Change in associates

In the 2016 financial year the associate Rhiienergie AG was sold.

SUBSIDIARIES

List of fully consolidated companies as at 31 December 2016 and 2015.

Key: 
E  Energy business
C  Customer (supply/sales)
RE Real estate
G Generation company
H Holding or purchase rights
S Services
PC Project company

The date of the financial statements of the subsidiaries on which the group financial statements are based is consistent with the date of the consolidated financial statements.

Ovra electrica Ferrera SA, Trun, is a power plant company in which the local municipality holds a 51 per cent stake. The Repower Group bears full operating responsibility for this company via Repower AG, and sells 100 per cent of the energy generated on the market. The Repower Group thus exercises overall control and Ovra electrica Ferrera SA is fully consolidated.

The following overview provides information on the subsidiary with significant non-controlling interests:

Key figures for subsidiary with significant non-controlling interests

ASSOCIATES AND JOINT VENTURES

Partner plants classified as associates are listed under associated partner plants. The other holdings categorised as associates form the group designated as other associates. Both classes are accounted for using the equity method.

Key:
E Energy business
C Customer (supply/sales)
GC Grid company
G Generation company
H Holding or purchase rights
S Services

Repower’s holdings in the AKEB and KHR partner plants amount to only 7 per cent and 6.5 per cent respectively. Repower does, however, have the binding right of nomination of a mandate and can make use of this guaranteed seat on the Board of Directors to be involved in the financial and business policy decisionmaking processes of the partner plants.

Investments in associates changed as follows:

Investments in associates and joint ventures

Part of the net investment in associate Swisscom Energy Solutions AG is a loan extended to Swisscom Energy Solutions AG recognised under other financial assets. The pro-rata loss of TCHF 6,451 in excess of the carrying value of the holding was netted with the existing loan.

Disposals amounting to TCHF 3,779 related to the sale of the interest in Rhiienergie AG in the Market Switzerland segment. This resulted in income of TCHF 98 that is disclosed under financial income. The transaction resulted in a cash inflow of CHF 3,877.

In 2016 Repower joined forces with Reichmuth Infrastruktur Schweiz KGK to establish Kraftwerk Morteratsch AG for the construction and operation of the Morteratsch hydropower plant. The establishment of the company in cash entailed investment of TCHF 100 on Repower’s part. Reichmuth has financed 90 per cent of the company and Repower 10 per cent. Under the terms of the agreement, all relevant decisions have to be made unanimously. Kraftwerk Morteratsch AG is a joint venture.

In 2016 an impairment requirement was identified at Aerochetto S.r.l., assigned to the Market Italy segment, with an impairment loss of TCHF 1,463 recognised in the consolidated financial statements under the share of results of associates. The reason for the impairment is that the expected revenues on wind power fail to cover the pro-rata value of the interest. The generation asset is valued on the basis of its value in use calculated on a discounted cash flow basis. The pro-rata value in use comes to TCHF 2,745. WACC before tax is 10.1 per cent.

In 2015 an impairment requirement was identified at Aerochetto S.r.l., assigned to the Market Italy segment, with an impairment loss of TCHF 198 recognised in the consolidated financial statements under share of results of associates. The impairment was the result of a decline in expected revenues on wind power due to lower energy prices, and lower night-time output in an effort to reduce noise emissions. The generation asset is valued on the basis of its value in use calculated on a discounted cash flow basis. An impairment test yielded a value in use of TCHF 4,961 for the asset. WACC before tax is 11.2 per cent.

Associated partner works, other associates and joint ventures are each presented together.

Key figures for associated partner plants

Key figures for other associates

Key figures for joint ventures

Reconciliation of the share of equity of associates and joint ventures at 31 December

JOINT OPERATIONS

Key:
H Holding or purchase rights

Grischelectra AG is classified as a joint arrangement. The company’s business is selling electricity procurement rights. Based on the interest of 11 per cent and other votes granted through a guaranteed proxy, Repower manages the company together with Canton Graubünden. Repower procures 100 per cent of the energy bundled in Grischelectra AG from hydropower in return for reimbursement of the generation costs. From an economic perspective, Repower is indirectly responsible for Grischelectra’s liabilities. The holding in Grischelectra was classified as a joint operation. In contrast to the shares held, Repower includes 100 per cent of the company assets, debts, expenses and earnings in its consolidated financial statements.