2 Consolidation

Scope of consolidation

The present consolidated financial statements encompass the financial statements of Repower AG and all investments where Repower holds, directly or indirectly, more than 50 per cent of the votes or can exercise control in some other way. These investments are fully consolidated. Associated organisations and joint ventures are included in the financial statements in accordance with the equity method.

Overview of subsidiaries, associates and joint ventures

All subsidiaries, associates and joint ventures with the exception of Grischelectra AG, which closes its accounts on 30 September, close their accounts at the end of the calendar year.

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

In contrast to the share capital held, Repower exercises 30 per cent of the votes in Grischelectra AG and on the basis of contractual arrangements controls Grischelectra AG in conjunction with Canton Graubünden.

Under the contractual arrangements governing the interest in Kraftwerk Morteratsch AG, all relevant decisions must be made unanimously. Kraftwerk Morteratsch AG is a joint venture.

Changes in the ownership interests without loss of control

Repower Wind Deutschland GmbH, Repartner Wind GmbH (formerly Repower Wind Prettin GmbH) and Repower Wind Lübbenau GmbH merged with effect 1 January 2017, with Repartner Wind GmbH absorbing the other companies.

In the 2017 financial year Repower sold another 6 per cent of its interest in Repartner Produktions AG to the shareholder EKZ. The cash inflow of TCHF 5,721 is offset against minority interests of TCHF 2,902. The difference of TCHF 2,819 was allocated to the majority shareholder’s capital. Repower likewise sold 0.1 per cent of its interest to Swibi AG. Minority interests of TCHF 6 are offset against sales proceeds of TCHF 24. The difference of TCHF 18 was allocated to the majority shareholder’s capital.

In 2016 Repower sold another 2 per cent of its interest in Repartner Produktions AG to outside energy utilities. The cash inflow of TCHF 2,046 is offset against minority interests of TCHF 1,842. The difference of TCHF 204 was allocated to the majority shareholder’s capital.

Consequences of the loss of subsidiary control

In 2017 the companies Elbe Beteiligungs AG in Liquidation, Energia Eolica Pontremoli S.r.l., Repower Trading Česká republika s.r.o. v likvidaci, S.C. Repower Vanzari Romania S.R.L., Repower Serbia d.o.o. - u likvidaciji and Repower Hrvatska d.o.o. u likvidaciji were liquidated. Translation losses of TCHF 19 from accumulated translation differences were reclassified directly to retained earnings.

In the 2016 financial year the fully consolidated companies connecta ag and Repower Furnizare Romania S.r.l. were sold.

The components of the balance sheets of the companies sold related to:

With the disposal of Repower Furnizare Romania S.r.l., translation gains of TCHF 5 from accumulated translation differences were reclassified to retained earnings.

SEI S.p.A., Repower Macedonia DOOEL Skopje and Repower Adria d.o.o. were liquidated. This resulted in translation losses of THCF 297 to be reclassified.

Consolidation method

Capital consolidation is done in accordance with the purchase method. When an entity is purchased, its assets and liabilities as of the date of acquisition are revalued in accordance with uniform group principles. Any remaining goodwill (the difference between the purchase price and the share of equity) is capitalised and amortised over five years or a maximum of 20 years. Assets and liabilities and income and expenses at fully consolidated entities are integrated in their entirety in the consolidated financial statements. Minority interests in the equity and minority interests in the profits of fully consolidated entities are stated separately.

Intragroup receivables and liabilities, income and expenses and investments are netted out and interim gains eliminated. Investments in associates and joint ventures are accounted for using the equity method.

Conversion of foreign currencies

Each group company determines the functional currency in which it draws up its individual financial statements. Company financial statements in foreign currencies are converted as follows: assets and liabilities at the closing rate on the balance sheet date, equity at historical rates. The income and cash flow statements are converted at the average rate for the year. The resulting translation differences are recognised directly in equity. On the disposal of entities, the translation differences attributable to them are reclassified in the consolidated statement of changes in equity from accumulated translation differences to retained earnings.

Foreign currency transactions contained in the individual financial statements of consolidated entities are converted at the relevant daily rate, and foreign currency balances are converted on the closing date at the closing rate on the balance sheet date. The resulting differences in rates are recognised in profit or loss.

The following exchange rates were used for the most important foreign currency:

Cash flow statement

The cash and cash equivalents fund forms the basis of the consolidated cash flow statement. Cash flow from operating activities is calculated by the indirect method.