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AL ANDALUS WIND POWER, S.L.
Financial Statements for the year ended 31 December 2011 and Directors' Report
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AL ANDALUS WIND POWER, S.L. BALANCE SHEET AT 31 DECEMBER 2011 (Expressed in euros)
The accompanying Notes 1 to 19 are an integral part of the balance sheet at 31 December 2011.
A S S E T S Notes 2011 2010
NON-CURRENT ASSETS 341,971,618 361,485,840
Intangible assets 5 3,150,300 3,264,693
Administrative concessions 3,150,300 3,264,693
Property, plant and equipment 6 327,912,838 349,779,054
Land and buildings 327,912,838 349,779,054
Deferred tax assets 12,4 10,908,480 8,442,093
CURRENT ASSETS 65,744,138 94,007,912
Inventories 462,858 462,858
Trade and other receivables 3,476,685 7,205,407
Trade receivables for sales and services 7 3,471,223 6,822,562
Receivable from Group companies and associates 7 - 327,981
Sundry accounts receivable 7 - 54,864
Other accounts receivable from public authorities 12 5,462 - Current investments in Group companies and associates 34,862,857 45,026,858
Other financial assets 7 34,862,857 45,026,858
Current financial investments 14,669,160 10,886,829
Other financial assets 7 14,669,160 10,886,829
Cash and cash equivalents 8 12,272,578 30,425,960
TOTAL ASSETS 407,715,756 455,493,752
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AL ANDALUS WIND POWER, S.L. BALANCE SHEET AT 31 DECEMBER 2011 (Expressed in euros)
E Q U I T Y A N D L I A B I L I T I E S Notes 2011 2010
EQUITY (30,925,704) (15,736,613)
Shareholders' equity 10 (5,472,584) 3,961,604
Share Capital 17,155,410 17,155,410
Reserves 736,941 736,941
Previous years’ earning (13,930,747) (7,509,142)
Profit/(Loss) for the year (9,434,188) (6,421,605)
ADJUSTMENTS FOR CHANGES IN VALUE (25,453,120) (19,698,217)
NON-CURRENT LIABILITIES 404,457,068 411,762,928
Non-current liabilities 320,054,792 325,665,447
Bank borrowings 11 283,693,190 297,525,137
Derivatives 9 and 11 36,361,602 28,140,310
Non-current liabilities to Group companies and associates 62,615,420 62,615,420
Non-current liabilities to Group companies and associates 11 62,615,420 62,615,420
Deferred tax liabilities 21,786,856 23,482,061
CURRENT LIABILITIES 34,184,392 59,467,437
Current liabilities 19,871,414 44,512,167
Bank borrowings 11 19,871,414 44,512,167
Current liabilities to Group companies and associates 8,474,162 6,263,511
Current liabilities to Group companies 11 8,474,162 5,981,661
Other financial liabilities 11 - 281,850
Payable to suppliers 5,838,816 8,691,759
Payable to suppliers - Group companies 11 3,791,567 3,801,556
Sundry accounts payable 11 2,040,350 4,885,298
Other accounts payable to public authorities 12 6,899 4,905
TOTAL EQUITY AND LIABILITIES 407,715,756 455,493,752 The accompanying Notes 1 to 18 are an integral part of the balance sheet at 31 December 2011.
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AL ANDALUS WIND POWER, S.L. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2011 (Expressed in euros)
Notes 2011 2010
CONTINUING OPERATIONS
Revenue 14.1 35,184,127 38,290,074
Capitalised expenses of in-house work on assets 7 314,412 -
Procurements (441,696) (193,171)
Other operating income - 361,281
Staff costs 14.3 (161,018) (41,861)
Other operating expenses 14.4 (9,320,714) (8,912,043)
Depreciation and amortisation charge 5 and 6 (22,295,021) (22,272,676)
OPERATION INCOME 3,280,091 7,231,604
Finance income 14.2 137,771 54,735
Finance costs 14.2 (16,895,274) (16,460,062)
FINANCIAL PROFIT/(LOSS) (16,757,503) (16,405,327)
PROFIT/(LOSS) BEFORE TAX (13,477,412) (9,173,723)
Income tax 12 4,043,224 2,752,118
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERAT IONS (9,434,188) (6,421,605)
PROFIT/(LOSS) FOR THE PERIOD (9,434,188) (6,421,605)
The accompanying Notes 1 to 18 are an integral part of the income statement for 2011.
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AL ANDALUS WIND POWER, S.L.
STATEMENT OF CHANGES IN EQUITY (Expressed in euros) A) STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR T HE YEAR ENDED 31 DECEMBER 2011
2011 2010
PROFIT/(LOSS) PER ABRIDGED INCOME STATEMENT (9,434,188) (6,421,605)
Income and expense recognised directly in equity
Cash flow hedges (15,958,830) (11,922,776)
Tax effect 4,787,649 3,576,833
TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQU ITY (11,171,181) (8,345,943)
Transfers to profit or loss
Cash flow hedges 7,737,540 9,213,262
Tax effect (2,321,262) (2,763,979)
TOTAL TRANSFERS TO PROFIT OR LOSS 5,416,278 6,449,283
TOTAL RECOGNISED INCOME AND EXPENSE (15,189,091) (8,318,265)
The accompanying Notes 1 to 19 are an integral part of the statement of changes in equity for 2011.
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AL ANDALUS WIND POWER, S.L. B) STATEMENT OF CHANGES IN TOTAL EQUITY FOR THE YEA R ENDED 31 DECEMBER 2011
Registered
share capital Reserves
Previous years’
earning Profit/(Loss) for the year
Adjustments for changes
in value Total
Beginning balance at 31 December 2010 17,155,410 736,941 (7,509,142) (6,421,605) (19,698,217) (15,736,613)
Capital increases - - - - - -
Distribution of 2010 profit/(loss) - - (6,421,605) 6,421,605 - -
Recognised income and expense - - - (9,434,188) (5,754,903) (15,189,091)
Balance at 31 December 2011 17,155,410 736,941 (13,930,747) (9,434,188) (25,453,120) (30,925,704)
Registered
share capital Reserves
Previous years’
earning Profit/(Loss) for the year
Adjustments for changes
in value Total
Beginning balance at 31 December 2009 16,995,663 736,941 (3,926,923) (3,582,219) (17,801,557) (7,578,095)
Capital increases 159,747 - - - - 159,747
Distribution of 2009 profit/(loss) - - (3,582,219) 3,582,219 - -
Recognised income and expense - - - (6,421,605) (1,896,660) (8,318,265)
Balance at 31 December 2010 17,155,410 736,941 (7,509,142) (6,421,605) (19,698,217) (15,736,613)
The accompanying Notes 1 to 19 are an integral part of the statement of changes in equity for 2011.
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AL ANDALUS WIND POWER, S.L. CASH FLOW STATEMENT 2011 (Expressed in euros) 2011 2010
A) CASH FLOWS FROM OPERATING ACTIVITIES 1. Profit/(Loss) before tax (13,477,412) (9,173,723) 2. Adjustments to Profit/(loss): 38,990,797 38,678,003
a) Depreciation and amortisation (+) 22,295,021 22,272,676 c) Finance costs 16,895,021 16,460,062 g) Finance income (-) (137,771) (54,735)
3. Changes in working capital 9,403,049 1,873,728 a) Inventories (+/-). - - b) Trade and other receivables ( +/-) 3,728,722 3,764,838 c) Other current assets ( +/-) 8,527,270 5,914,686 d) Payable to suppliers (+/-) (2,852,943) (7,805,796)
4. Other cash flows from operating activities: (12,539,221) (16,587,119) a) Interest payable (-). (12,676,992) (16,641,854) c) Interest received (+). 137,771 54,735
5. Cash flows from operating activities (+/-1+/2+/-3+/-4) 22,377,214 14,790,889
B) CASH FLOWS FROM INVESTING ACTIVITIES 6.Investments payables(-): (314,412) (5,503,935)
c) Property, plant and equipment (314,412) (174,145) g) Other assets - (5,329,790)
7. Proceeds from disposals (+): - - 8. Cash flows from investing activities (7-6) (314,412) (5,503,935)
C) CASH FLOWS FROM FINANCING ACTIVITIES 9. Proceeds and payments relating to equity instruments: - - 10. Proceeds and payments relating to financial liabilities: (40,216,184) (4,256,282) a) Issues
2. Bank borrowings (+) - 6,699,174 b) Refund and repayment of
2. Bank borrowings (-) (14,134,388) (10,955,456) 3. Borrowing from Group companies and associates (+) (26,081,796) - 11. Dividends paid and remuneration relating to other equity instruments: - 159,747
c) Capital increase - 159,747
12. Cash flows from financing activities (+/-9+/-10-11) (40,216,184) (4,096,535)
D) EFFECT OF CHANGES IN EXCHANGE RATES - -
E) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVAL ENTS (+/-5+/-8+/-12+/-D) (18,153,382) 5,190,419 Cash and cash equivalents at beginning of year 30,425,960 25,235,541 Cash and cash equivalents at end of year 12,272,578 30,425,960
The accompanying Notes 1 to 19 are an integral part of the cash flow statement for 2011.
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AL ANDALUS WIND POWER, S.L. Notes to Financial Statements for the year ended 31 December 2011 1. Company activities
AL-ANDALUS WIND POWER, S.L. was incorporated in Madrid on 20 April 2007 before Madrid notary Mr. Ignacio Manrique Plaza under number 3,901 of his notary record under the name GALEASA, ENERGIAS AMBIENTALES DE GALICIA, S.L, which was changed in Madrid on 4 October 2007 before Madrid notary Mr. Segismundo Álvarez Royo-Villanova, under number 9,619 of his notary record. The Company's current registered office is at calle Cardenal Marcelo Spínola, nº 10, 28016 (Madrid). The Company object is the promotion, management, design, construction, operation and maintenance of facilities engaged in the production of alternative and renewable energies. The production, sale and/or operation of the energy generated by the facilities described above and, where appropriate, avail itself of the current and/or future legislation to promote the production of alternative and renewable energies. The performance of studies, consulting, projects, research and development services related to the aforementioned services. On 15 November 2007, the share capital was increased with a share premium through a non-monetary contribution with a charge to various financial investments. On 27 December 2007, and effective for accounting purposes on 1 January 2007, Al-Andalus Wind Power, S.L., P.E. Santa Ana, S.L., Sistemas Energéticos Serón, S.A.U., Sistemas Energéticos Tíjola, S.A.U., Sistemas Energéticos Tinadas, S.A.U., P.E. El Colmenar II, S.L., P.E., La Noguera, S.L., P.E. Las Vegas, S.L., P.E. Los Isletes, S.L. and Agrupación Eólica Granadina, S.L. were merged by absorption. This merger qualified for the special mergers and absorption tax regime. Consequently, the balance sheets and income statements of the absorbed companies are included in those of the absorbing company, using the same amounts which would have been recognised in them. Information regarding the mergers and the tax benefits contributed by the absorbed companies were included in the financial statements for 2007.
As a result of this merger, Al-Andalus Wind Power, S.L., became the owner of the various wind farms: P.E. El Colmenar II, P.E. Serón I, P.E. Serón II, P.E. Tijola, P.E. La Noguera, P.E. Santa Ana, P.E. Las Vegas and P.E. Los Isletes. At 31 December 2011, all of the wind farms are in operation. The Company object is the construction and subsequent operation, including the sale of the electricity obtained, of wind farms located in the provinces of Almeria, Cadiz and Albacete. The activities that compose the company object may be carried out by the Company, either directly or indirectly, and through its ownership of other companies with an identical or similar company object. The Company belongs to a group of companies (ACS Group) which is managed in accordance with the Group's criteria. The ACS Group company Urbaenergía, S.L. is the primary shareholder of the Company which is in turn 100% owned by the ACS Group company Cobra Gestión de Infraestrucutras. Regulatory Framework The special regime electricity production business in Spain is regulated by Spanish Electricity Industry Law 54/1997, of 27 November, and by the subsequent implementing regulations which are as follows: - Royal Decree 436/2004, in force from 1 April 2004 to 1 June 2007.
The system instituted by Royal Decree 436/2004, with regard to the economic regime of the facilities qualifying under it, establishes the annual option of choosing one of the following regimes:
a) to sell its electricity production at a single regulated tariff for all of the programming periods; or
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b) to sell its electricity production freely on the market through a bid system managed by the market operator, through the bilateral trading system, or through forward arrangements or a combination of all of them. In such case, the electricity sale price will be the price established in the wholesale electricity market, managed by OMEL and REE (pool minus deviations), or the price freely negotiated by the facility owner, supplemented by the incentive, the premium and by the reactive energy supplement.
Facilities which use a non-manageable primary energy, which is the case of the facilities the Company owns, do not have the right to a supply guarantee remuneration when they choose to sell energy at market price. Facilities which were definitively registered prior to 1 January 2008 will have the right to receive a supplement for continued supply with regard to voltage dips for a maximum period of five years and until 31 December 2013, provided that they have the necessary equipment. The Company currently has certified all of the investments in voltage dips necessary and, therefore, complies with this law.
- Royal Decree 661/2007, in force from 1 June 2007. The remuneration framework supporting renewable energies under
the special regime for facilities which were registered in the pre-assignment register at 28 January 2012 is currently regulated by this Royal Decree. This Royal Decree stipulates two tariff regimes for wind-powered facilities; the market price option through a representative where upper limits ("ceilings") and lower limits ("floors") are established at the aggregate price (market price plus the premium) applicable to the sale of energy on the market; and the tariff option in which the regulated tariff is received. The facilities may choose the sale option for periods of no less than one year.
Likewise, Royal Decree 661/2007 recognises in its transitional provision one that wind farms, among others, which started up prior to 1 January 2008 have the right to maintain the premiums and incentives established under the previous regime (RD 436/2004, of 12 March) until 31 December 2012 in the market price sale option.
- In addition, Royal Decree 6/2009, of 30 April, introduces the pre-assignment system such that it limits the pre-assigned
facilities to the amounts and premiums set forth in RD 661/2007, as well as for those established going forward once the objectives of the 2020 Renewable Energies Plan are reached.
- The objective of Royal Decree 1614/2010, of 7 December, is to modify and regulate matters related to electricity
production from solar thermal and wind technologies, in a deficit control scenario. The main developments are the establishment of a limit on the equivalent operating hours entitled to a premium for solar thermal and wind power technologies, the obligation of the solar thermal energy industry to sell at a regulated tariff for the 12 months following the entry into force of the RD, or the start-up of the plant, if it were subsequent thereto and a 35% reduction of the premiums for wind power technology qualifying under RD 661/2007 and for the period between the approval of the RD and 31 December 2012.
- On 28 January 2012, Royal Decree-Law 1/2012 was published in the Official State Gazette (Boletín Oficial del Estado,
BOE), taking effect on the same day, which eliminated the pre-assignment remuneration process and the economic incentives for new facilities which produce electricity from cogeneration, renewable energy sources and waste. The El Colmenar II wind farm qualifies under Royal Decree 436/2004, pursuant to transitional provision one of Royal Decree 661/2007, which regulates the production of electricity under the special regime, since it started up prior to 1 January 2008. The wind farm sells its energy at market price. The Abuela Santa Ana, Serón I, Serón II, Tíjola, La Noguera, Las Vegas and Los Isletes wind farms qualify under Royal Decree 661/2007, of 28 May 2007. The Abuela Santa Ana, Serón I, Serón II, Tíjola and La Noguera wind farms sold at market price in January and February 2011 and from March at the regulated tariff, the Los Isletes wind farm sold at market price from January to June 2011 and from July onward at the regulated tariff and the Las Vegas wind farm sold at tariff for all of 2011. With regard to the Company's wind farms and in relation to the regulatory changes established in Royal Decree 1614/2010, it must be taken into account that the premium reduction did not affect the Company's wind farms since their start-up was prior to 1 January 2010 and they qualify for transitional provision of Royal Decree 661/2007 described above. Likewise, in relation to the limitation of hours, the directors consider that they do not affect the Company's facilities. Royal Decree 1/2012 effects, among others, the facilities under the special regime which had not been registered in the pre-assignment register at 28 January 2012. Since all of the Company's facilities had been registered in the aforementioned register prior to the date indicated, the new regulatory framework does not affect the profitability or recoverability of the Company's facilities.
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The regulatory changes were taken into account in the Company's business plan and, in accordance with the opinion of its Directors, they do not substantially modify the recoverability of the investors. The business plan includes the on-going management of the assets and the achievement of profitability within the framework of the indefinite administrative authorisations granted.
2. Basis of presentation of the abridged financial statements
2.1) Regulatory financial reporting framework applicable to the Company
These financial statements were prepared by the sole director in accordance with the regulatory financial reporting framework applicable to the Company, which consists of:
a) The Spanish Commercial Code and all other Spanish corporate law. b) The Spanish National Chart of Accounts approved by Royal Decree 1514/2007 and its industry adaptations. c) The mandatory rules approved by the Spanish Accounting and Audit Institute in order to implement the Spanish
National Chart of Accounts and its supplementary rules. d) All other applicable Spanish accounting legislation.
2.2) Fair presentation
The financial statements, which were obtained from the accounting records of AL ANDALUS WIND POWER, S.L., are presented in accordance with Royal Decree 1514/2007 approving the Spanish National Chart of Accounts and, accordingly, present fairly the Company's equity, financial position and results of operations.
These financial statements at 31 December 2011, which were formally prepared by the Company’s sole director, will be submitted for approval by the sole shareholder, and it is considered that they will be approved without any changes. The abridged financial statements for 2010 were approved by the shareholders on 19 May 2011. 2.3) Going concern principle of accounting The Farms currently being operated by the Company have not yet reached the optimum profitability established in the business plan and, consequently, the Company suffered a loss for the year which was greater than expected leading to an equity deficit at 31 December 2011. In this context, as indicated in Notes 10 and 11.2, the Company's shareholders have granted a long-term participating loan to it for the purpose of restoring the equity balance. As a result, since the Company also has the financial support of the Group to which it belongs for its normal course of business and taking into account that in accordance with the Company's business plan it expects to generate future funds, the sole shareholder submits the financial statements in accordance with the going concern principle of accounting. 2.4) Accounting policies The financial statements were prepared in accordance with the generally accepted accounting principles and measurement bases described in Note 4. All obligatory accounting principles with a material impact on the abridged financial statements were applied. 2.5) Key issues in relation to the measurement and estimation of uncertainty In preparing the accompanying financial statements estimates were made by the Company's sole director in order to quantify certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following: - The useful life of the property, plant and equipment (Note 4.1). - Impairment of non-current assets (Note 4.1). - The fair value of certain financial instruments (Note 4.3). - The recovery of deferred tax assets recognised (Note 4.4).
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Although these estimates were made on the basis of the best information available at the date of preparation of these financial statements on the events analysed, events that take place in the future might make it necessary to change these estimates in coming years. Changes in accounting estimates would be applied prospectively, recognising the effects of the change in estimates in the financial statements. 2.6) Comparative information The information relating to 2011 included in these notes to the financial statements is presented for comparison purposes with that relating to 2010.
2.7) Joint property entity
The Company participates in the joint property entity “Promotora Zede Arcos”. At 31 December 2011 and 2010, however, the Company did not include its 8.31% ownership of the aforementioned joint property entity in its financial statements due to its understanding that the effect that its proportional inclusion would have would be entirely immaterial, as can be seen below in the analysis of the figures from the most recent financial statements from 31 December 2006:
(Thousands of euros)
Promotora Zede Arcos
Total assets 10,974 Sales 1,046 Profit/(Loss) for 2006 (Loss) (19)
2.8) Grouping of items
Certain items in the balance sheet, income statement, statement of changes in equity and cash flow statement are grouped together to facilitate their understanding; however, whenever the amounts involved are material, the information is broken down in the related notes to the financial statements.
2.9) Changes in accounting policies
In 2011 there were no significant changes in accounting policies with respect to those applied in 2010.
2.10) Correction of errors
In preparing the accompanying financial statements no significant errors were detected that would have made it necessary to restate the amounts included in the financial statements for 2010.
3. Allocation of profit/(losses)
The allocation of 2011 loss proposed by the Company’s sole director is as follows:
Euros Profit/(Loss) for 2011 (Loss) 9,434,188 Allocation of profit/(loss): Previous years’ earning 9,434,188
3.1) Restrictions on the distribution of dividends As stated in Note 11, in accordance with the financing agreement entered into with various financial institutions, there are restrictions on the distribution of dividends to shareholders, unless the conditions established in provision 14 is met. The provisions are:
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- A Debt-Service Coverage Ratio of more than 1.1 in the annual verification of the audited data corresponding to the previous year.
- No early maturity event has arisen and the distribution to shareholders does not give rise to any of the aforementioned events.
- Any other significant debts owed by the borrowers which have matured have been settled in full, including those arising from the main credit facility.
- The first instalment of the main credit facility has been repaid. - The debt service reserve account is funded at any given time according to that envisaged in the financing agreement. In all cases, the distribution to the shareholders will be made with the limit of the balance contained in the account restricted to servicing the debt at 31 January of each year.
4. Accounting Policies
The principal measurement bases applied by AL ANDALUS WIND POWER, S.L. in preparing its financial statements, in accordance with the Spanish National Chart of Accounts, were as follows: 4.1) Intangible assets
This account includes the positive difference arising from the merger which took place in 2009 as a result of the
Company's merger with several investees. This merger goodwill was credited to intangible assets as it corresponded mainly to the increase in value of the
concession, administrative authorisations of certain of the farms developed by the Companies (administrative concession, see Note 5).
These assets are amortised on a straight-line basis over the period in which it is estimated that they will contribute to the
obtainment of profit by the Group according to the following breakdown: The Group recognises any impairment loss on the carrying amount of these assets as indicated in Note 4.2
below.
4.2) Property, plant and equipment
Property, plant and equipment are initially recognised at acquisition cost and are subsequently reduced by the related accumulated depreciation and by any impairment losses recognised. Property, plant and equipment upkeep and maintenance expenses are recognised in the income statement for the year in which they are incurred. However, the costs of improvements leading to increased capacity or efficiency or to a lengthening of the useful lives of the assets are capitalised. For non-current assets that necessarily take a period of more than twelve months to get ready for their intended use, the capitalised costs include such borrowing costs as might have been incurred before the assets are ready for their intended use and which have been charged by the supplier or relate to loans or other borrowings directly attributable to the acquisition or production of the assets. In-house work on non-current assets is measured at accumulated cost (external costs plus in-house costs, determined on the basis of in-house materials consumption, labour and general manufacturing costs calculated using absorption rates similar to those used for the measurement of inventories). The Company depreciates the cost of its property, plant and equipment using the straight-line method over the years of estimated useful life of the assets, the detail being as follows:
Years of Estimated Useful Life Administrative concessions
30
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Years of Estimated Useful Life Construction and installation work
18
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Impairment of property, plant and equipment At the end of each year, the Company performs an impairment test to determine the possible existence of impairment loss that might have reduced the recoverable amount of the assets to below their carrying amount. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately. Taking into account the performance of the wind farms and the current regulatory framework (see Notes 1 and 17) the sole director considers that there is no impairment at 31 December 2011, in accordance with future compliance with the Company's business plan. 4.3) Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases. Payments under operating leases are recognised as expenses in the income statement when incurred.
4.4) Financial instruments 4.4.1) Financial assets The financial assets held by the Company are classified in the following categories:
a) Loans and receivables: financial assets arising from the sale of goods or the rendering of services in the ordinary
course of the Company's business, or financial assets which, not having commercial substance, are not equity instruments or derivatives, have fixed or determinable payments and are not traded in an active market. Interest income is calculated in the year in which it accrues on a time proportion basis.
Initial recognition Financial assets are initially recognised at the fair value of the consideration given, plus any directly attributable transaction costs. Subsequent measurement Loans and receivables and held-to-maturity investments are measured at amortised cost. At least at each reporting date the Company tests financial assets not measured at fair value through profit or loss for impairment. Objective evidence of impairment is considered to exist when the recoverable amount of the financial asset is lower than its carrying amount. When this occurs, the impairment loss is recognised in the income statement.
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In particular, the Company calculates valuation adjustments relating to trade and other receivables, by taking into account the date on which the receivables are due to be settled and the solvency of the debtors. The Company derecognises a financial asset when it expires or when the rights to the cash flows from the financial asset have been transferred and substantially all the risks and rewards incidental to ownership of the financial asset have been transferred, such as in the case of the outright sale of assets, factoring of trade receivables in which the Company does not retain any credit or interest rate risk, sale of financial assets under an agreement to repurchase them at their fair value or the securitisation of financial assets in which the transferor does not retain any subordinated debt, provide any type of guarantee or assume any other type of risk. However, the Company does not derecognise financial assets, and recognises a financial liability for an amount equal to the consideration received, in transfers of financial assets in which substantially all the risks and rewards of ownership are retained, such as in the case of bill discounting, with-recourse factoring, sales of financial assets under an agreement to repurchase them at a fixed price or at the selling price plus interest and the securitisation of financial assets in which the transferor retains a subordinated interest or any other kind of guarantee that absorbs substantially all the expected losses. The Company derecognises financial liabilities when the obligations giving rise to them cease to exist. 4.4.2) Financial liabilities Financial liabilities include accounts payable by the Company that have arisen from the purchase of goods or services in the normal course of the Company’s business and those which, not having commercial substance, cannot be classed as derivative financial instruments. Accounts payable are initially recognised at the fair value of the consideration received, adjusted by the directly attributable transaction costs. These liabilities are subsequently measured at amortised cost. Liability derivative financial instruments are measured at fair value, following the same criteria as for financial assets held for trading described in the previous section. The Company derecognises financial liabilities when the obligations giving rise to them cease to exist. 4.4.3) Hedging financial instruments The Company uses derivative financial instruments to hedge the risks to which its business activities, operations and future cash flows are exposed. Basically, these risks relate to changes in interest rates. The Company arranges hedging financial instruments in this connection, mainly IRS (Interest Rate Swaps). In order for these financial instruments to qualify for hedge accounting, they are initially designated as such and the hedging relationship is documented. Also, the Company verifies, both at inception and periodically over the term of the hedge (at least at the end of each reporting period), that the hedging relationship is effective, i.e. that it is prospectively foreseeable that the changes in the fair value or cash flows of the hedged item (attributable to the hedged risk) will be almost fully offset by those of the hedging instrument and that, retrospectively, the gain or loss on the hedge was within a range of 80-125% of the gain or loss on the hedged item. In 2011 and 2010, the Company used only cash flow hedges. In hedges of this nature, the portion of the gain or loss on the hedging instrument that has been determined to be an effective hedge is recognised temporarily in equity and is recognised in the income statement in the same period during which the hedged item affects profit or loss, unless the hedge relates to a forecast transaction that results in the recognition of a non-financial asset or a non-financial liability, in which case the amounts recognised in equity are included in the initial cost of the asset or liability when it is acquired or assumed. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the year.
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The fair value of the hedging financial instruments used by the Company (interest rate swaps) is calculated by discounting future settlements between fixed and floating interest rates to their present value, in line with implicit market rates, obtained from long-term interest rate swap curves. Implicit volatility is used to calculate the fair values of caps and floors using option valuation models. The derivatives arranged by the Company at 31 December 2011 met all the requirements indicated above to qualify as hedges and, therefore, the changes in the fair value of these derivative financial instruments for the year ended 31 December 2011 were recognised under “Valuation adjustments” in equity. 4.5) Cash and cash equivalents This heading includes the cash on hand, in bank current accounts and the deposits and temporary acquisitions of assets which meet all of the following requirements: • They are convertible into cash. • At the acquisition date, their maturity was no more than three months. • They are not subject to a significant risk of changes in value. • They are part of the Company's ordinary cash management policy. For cash flow purposes, the temporary overdrafts which form part of the Company's cash management are charged to cash and cash equivalents. 4.6) Income tax
Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). The current income tax expense is the amount payable by the Company as a result of income tax settlements for a given year. Tax credits and other tax benefits, excluding tax withholdings and pre-payments, and tax loss carryforwards from prior years effectively offset in the current year reduce the current income tax expense. The deferred tax expense or income relates to the recognition and derecognition of deferred tax assets and liabilities. These include temporary differences measured at the amount expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and their tax bases, and tax loss and tax credit carryforwards. These amounts are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences, except for those arising from the initial recognition of goodwill or of other assets and liabilities in a transaction that is not a business combination and affects neither accounting profit/(loss) nor taxable profit (tax loss). Deferred tax assets are recognised to the extent that it is considered probable that the Company will have taxable profits in the future against which the deferred tax assets can be utilised. In order to determine the amount of the deferred tax assets which may be recognised, the sole director estimates the amounts and the dates on which the future tax gains will be obtained and the reversal period of the temporary tax differences. Deferred tax assets and liabilities arising from transactions charged or credited directly to equity are also recognised in equity. Deferred tax assets and liabilities arising from transactions charged or credited directly to equity are also recognised in equity. The deferred tax assets recognised are reassessed at the end of each reporting period and the appropriate adjustments are made to the extent that there are doubts as to their future recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that they will be recovered through future taxable profits.
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The Company is included in the consolidated tax group, the head of which is ACS Actividades de Construcción y Servicios, S.A.
4.7) Income and expense
Revenue and expenses are recognised in profit or loss for the year on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Revenue is measured at the fair value of the consideration received, net of discounts and taxes. Revenue from sales is recognised when the significant risks and rewards of ownership of the goods sold have been transferred to the buyer, and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. Revenue from the rendering of services is recognised by reference to the stage of completion of the transaction at the end of the reporting period, provided the outcome of the transaction can be estimated reliably. Interest income from financial assets is recognised using the effective interest method and dividend income is recognised when the shareholder’s right to receive payment has been established. Interest and dividends from financial assets accrued after the date of acquisition are recognised as income.
4.8) Related-party transactions The Company performs all its transactions with related parties on an arm's length basis. Also, the transfer prices are adequately supported and, therefore, the Company’s sole director considers that there are no material risks in this connection that might give rise to significant liabilities in the future.
4.9) Provisions and contingencies When preparing the financial statements, the Company’s sole director made a distinction between: a) Provisions: credit balances covering present obligations arising from past events, the settlement of which is likely to
cause an outflow of resources, but which are uncertain as to their amount and/or timing. b) Contingent liabilities: possible obligations that arise from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of one or more future events not wholly within the Company's control. The financial statements include all the provisions with respect to which it is considered that it is more likely than not that the obligation will have to be settled. Contingent liabilities are not recognised in the financial statements but rather are disclosed in the notes to the financial statements, unless the possibility of an outflow in settlement is considered to be remote. Provisions are measured at the present value of the best possible estimate of the amount required to settle or transfer the obligation, taking into account the information available on the event and its consequences, recording the adjustments which arise as a result of the update of these provisions as a finance cost as it accrues.
4.10) Current/non-current classification
Balances are classified as non-current and current in the accompanying balance sheet. Current balances include balances which the Company expects to sell, consume, pay or realise during its normal operating cycle. The remaining balances are classified as non-current.
4.11) Company actions which impact the environment
Any operation, the main aim of which is to prevent, reduce or repair environmental damage is considered to be an environmental activity. Investments made in connection with environmental activities are measured at acquisition cost and are capitalised to non-current assets in the year in which the related expenses are incurred.
The costs arising from the business activities aimed at protecting and improving the environment are accounted for as an expense of the year in which they are incurred. The costs incurred on items of property, plant and equipment the purpose of which is to minimise the environmental impact and protect and improve the environment are recognised as an addition to property, plant and equipment.
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4.12) Termination benefits
Under current labour legislation, the Company is required to pay termination benefits to employees terminated without just cause. Termination benefits that can be reasonably quantified are recognised as an expense in the year in which the decision to terminate the employment relationship is taken. The Company's sole director does not expect any significant dismissals or terminations to arise and, accordingly, no provision was recognised in this connection in the accompanying balance sheet at 31 December 2011.
5. Intangible assets
The breakdown of the balance of “Intangible Assets” in the balance sheets at 31 December 2011 and 2010 is as follows (in euros): 2011
Balance at 31/12/2010
Additions or charges for
the year
Balance at 31/12/2011
Administrative concessions 3,431,797 - 3,431,797 Total administrative concessions 3,431,797 - 3,431,797 Accumulated depreciation (167,104) (114,393) (281,497) Total accumulated depreciation (167,104) (114,393) (281,497) Total intangible assets 3,264,693 (114,393) 3,150,300
2010
Balance at 31/12/2009
Additions or charges for
the year
Balance at 31/12/2010
Administrative concessions 3,431,797 - 3,431,797 Total administrative concessions 3,431,797 - 3,431,797 Accumulated depreciation (52,711) (114,393) (167,104) Total accumulated depreciation (52,711) (114,393) (167,104) Total intangible assets 3,379,086 (114,393) 3,264,693
These amounts arose as merger goodwill and were allocated to intangible assets: grid connection rights, wind studies and administrative authorisations and licences for the start-up of certain wind farms. The wind farms to which they were allocated were the following:
Net carrying amount
Administrative concessions distribution
31/12/2010 31/12/2011
P.E. LAS VEGAS 944,866 911,220
P.E LA NOGUERA 1,246,550 1,202,812
P.E. LOS ISLETES 1,073,277 1,036,268
TOTAL 3,264,693 3,150,300
At 31 December 2011 and 2010 the aforementioned wind farms were operating (see Notes 1 and 6).
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6. Property, plant and equipment
The breakdown of the balance in “Property, Plant and Equipment” in the balance sheets at 31 December 2011 and 2010 is as follows:
(euros) 31/12/2010 Additions and charges
for the year 31/12/2011
Cost:
Plant
P.E. SANTA ANA 58,374,302 - 58,374,302 P.E. SANTA ANA (EXPANSION) 17,390,989 - 17,390,989 P.E. TIJOLA 59,653,272 - 59,653,272 P.E. EL COLMENAR II 36,330,262 - 36,330,262 P.E. SERON 75,636,880 - 75,636,880 P.E. SERON II 15,340,960 - 15,340,960 P.E LA NOGUERA 50,707,870 314,412 51,022,281 P.E. LAS VEGAS 36,248,996 - 36,248,996 P.E. LOS ISLETES 43,087,357 - 43,087,357 392,770,889 314,412 393,085,301
Accumulated depreciation:
Plant
P.E. SANTA ANA (9,171,863) (4,296,348) (13,468,211) P.E. TIJOLA (7,326,598) (3,357,864) (10,684,462) P.E. EL COLMENAR II (5,626,466) (2,046,924) (7,673,390) P.E. SERON (9,285,697) (4,235,184) (13,520,881) P.E. SERON II (1,999,545) (865,392) (2,864,937) P.E LA NOGUERA (3,656,161) (2,867,660) (6,523,821) P.E. LAS VEGAS (3,450,587) (2,049,900) (5,500,487) P.E. LOS ISLETES (2,474,918) (2,461,356) (4,936,274) (42,991,835) (22,180,628) (65,172,463)
Net carrying amount 349,779,054 (22,180,628) 327,912,838
(euros) 31/12/2009 Additions and charges
for the year 31/12/2010
Cost:
Plant
P.E. SANTA ANA 58,374,302 - 58,374,302 P.E. SANTA ANA (EXPANSION) 17,390,989 - 17,390,989 P.E. TIJOLA 59,653,272 - 59,653,272 P.E. EL COLMENAR II 36,156,118 174,145 36,330,262 P.E. SERON 75,636,880 - 75,636,880 P.E. SERON II 15,340,960 - 15,340,960 P.E LA NOGUERA 50,707,870 - 50,707,870 P.E. LAS VEGAS 36,248,996 - 36,248,996 P.E. LOS ISLETES 43,087,357 - 43,087,357 392,596,744 174,145 392,770,889
Accumulated depreciation:
Plant
P.E. SANTA ANA (4,875,515) (4,296,348) (9,171,863) P.E. TIJOLA (3,968,734) (3,357,864) (7,326,598) P.E. EL COLMENAR II (3,579,542) (2,046,924) (5,626,466) P.E. SERON (5,072,767) (4,212,930) (9,285,697) P.E. SERON II (1,134,153) (865,392) (1,999,545) P.E LA NOGUERA (1,606,261) (2,049,900) (3,656,161) P.E. LAS VEGAS (582,927) (2,867,660) (3,450,587) P.E. LOS ISLETES (13,562) (2,461,356) (2,474,918) (20,833,461) (22,158,374) (42,991,835)
Net carrying amount 371,763,283 (22,332,519) 349,779,054
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The start-up dates for each of the farms were the following:
Start-up date
P.E. SERÓN 29/12/2008
P.E. SERON II 17/07/2008
P.E. TIJOLA 22/10/2008
P.E. EL COLMENAR 22/02/2008
P.E. SANTA ANA 12/09/2008
SANTA ANA EXPANSION 25/08/2009
P.E. LOS ISLETES 30/12/2009
P.E. LAS VEGAS 23/02/2009
P.E. LA NOGUERA 01/08/2009
There are no fully amortised assets under the Company's property, plant and equipment at 31 December 2011 and 2010.
The Company takes out insurance policies to cover the possible risks to which its property, plant and equipment are
subject. At 2011 and 2010 year end these risks were adequately covered. To secure compliance with the obligations arising from the financing agreement described in Note 11, the Company
definitively assigned to the lenders all of the collection and other rights and the guarantees arising from the plant construction, operation, maintenance and refurbishment agreements, management and administration services, as well as land use and energy sale and purchase agreements and indemnities for the insurance policies taken out by the Company.
7. Current financial assets
The detail of the financial assets at 31 December 2011 and 2010 is as follows:
(euros) 2011 Current financial assets
Trade receivables for sales and services 3,471,223 Other accounts receivable from public authorities (Note 12) 5,462 Other financial assets_ Current accounts with Group companies (Note 7.1) 34,862,857 Other financial assets_ Guarantees and deposits (Note 7.2) 14,669,160
53,008,702
(euros) 2010 Current financial assets
Trade receivables for sales and services 6,822,562 Receivable from Group companies and associates (Note 7.1) 327,981 Sundry accounts receivable 54,864 Other financial assets_ Current accounts with Group companies (Note 7.1) 45,026,858 Other financial assets_ Guarantees and deposits (Note 7.2) 10,886,829
63,119,094
7.1.) Current financial investments in Group companies and associates This heading includes the current accounts with Group companies and associates, the detail of which at 31 December 2011 and 2010 is as follows:
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2011
(euros) VAT credit
facility Other current
accounts Current tax (Note 12) Total
Cobra Gestión de Infraestructuras, S.L.U. 2,236,832 - - 2,236,832
Cobra Instalaciones y Servicios, S.A. - 29,765,853 - 29,765,853
ACS Actividades de Construcción y Servicios, S.A. - - 2,860,172 2,860,172
Total tax receivables 2,236,832 29,765,853 2,860,172 34,862,857
2010
(euros) VAT credit
facility Other current
accounts Current tax (Note 12)
Trade receivables Total
Cobra Gestión de Infraestructuras, S.L.U. 14,621,146 - - -
14,621,146
Cobra Instalaciones y Servicios, S.A. - 27,991,475 - -
27,991,475
Energías Ambientales de Vimianzo, S.A. - 33,300 - -
33,300
Parque Eólico La Boga, S.L. - 2,965 - -
2,965
Urbaenergía,S.L. - 66,755 -
327,981 394,736
ACS Actividades de Construcción y Servicios, S.A. - - 2,311,217 - 2,311,217
Total tax receivables 14,621,146 28,094,495 2,311,217
327,981 45,354,839
Effective 1 January 2008, the Company availed itself of the value added tax consolidated tax regime, and ACS Actividades de Construcción y Servicios, S.A. is the parent of the Group.
7.2.) Current financial investments This heading includes the Company's deposits and guarantees. The detail at 31 December 2011 and 2010 is as follows:
2011
(euros) Beginning balance Additions Derecognitions Transfers
Ending balance
Debt service reserve fund 10,120,001 4,489,827 - - 14,609,828 Short-term guarantees given 543,690 - (487,664) - 56,026 Promotora Zede Arcos, CB deposit 223,138 - (219,832) - 3,306
Total 10,886,829
4,489,827
(707,496) - 14,669,160
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2010
(euros) Beginning balance Additions Derecognitions Transfers Ending balance
Guarantees given 10,310 -
(10,310) - - Debt service reserve fund 4,780,829 5,328,862 - - 10,120,001 Short-term guarantees given - 543,690 - - 543,690 Promotora Zede Arcos, CB deposit - 336,630 (113,492) - 223,138
Total 4,791,139
6,209,182
(123,802) - 10,886,829
This heading is comprised mainly of the deposit made by the Company in relation to the debt service reserve fund amounting to EUR 14,609,828 and EUR 10,120,001 in 2011 and 2010, respectively. This fund will be maintained until all of the payment obligations arising from the financing agreement described in Note 11 have been settled.
8. Cash and cash equivalents
The detail of the assets classified under "Cash and cash equivalents" at 31 December 2011 and 2010 is as follows:
(euros) 2011 Cash and cash equivalents Cash equivalents 11,699,371 Demand deposits 573,207 12,272,578
(euros) 2010 Cash and cash equivalents Cash equivalents 30,492,106 Demand deposits (66,146) 30,425,960
The balance under "Cash equivalents" relates to investments of one-off cash surpluses in various current financial assets for a period of no more than three months, mainly government debt repos, Eurodeposits and bank promissory notes, on which an average return of 0.80% and 0.70% was obtained in 2011 (2010: 0.70%).
9. Derivative financial instruments The detail of the financial liabilities classified under “Derivatives and Other” at 31 December 2011 and 2010 is as follows:
(euros) 2011 Long term:
Hedging derivatives 36,361,602 36,361,602
(euros) 2010 Long term:
Hedging derivatives 28,140,310 28,140,310
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The Company uses derivative financial products mainly to eliminate or significantly reduce the interest rate risk related to the syndicated loan and, therefore, they are considered hedging transactions. These products were arranged to hedge the risk of fluctuations in the interest rate on the syndicated loan taken out on 13 July 2007 which is described in Note 11.1. At 31 December 2011 and 2010, the Company had arranged transactions which related, basically, to interest rate swaps, the detail being as follows:
(euros) 2011 2010
Notional amount (euros) .Banesto .BBVA .Caixa .Natixis
223,309,842 55,827,461 55,827,461 55,827,460 55,827,460
233,910,632 58,477,658 58,477,658 58,477,658 58,477,658
Date arranged 17/07/2007 17/07/2007 Effective commencement date 13/07/2007 13/07/2007 Maturity date 13/07/2019 13/07/2019 Strike 4.874% 4.874% Indicator 6-month Euribor 6-month Euribor
The Company met the requirements described in Note 4 on measurement bases in order to classify the financial
instruments detailed as hedges. At 31 December 2011 and 2010, the fair values of these financial instruments are reflected in financial assets and financial liabilities as follows:
(euros) 2011 2010 Non-current liabilities - Derivatives (Receivable) .Banesto .BBVA .Caixa .Natixis
36,361,602 9,090,401 9,090,400 9,090,401 9,090,400
28,140,310 7,035,078 7,035,077 7,035,078 7,035,077
36,361,602 28,140,310
The notional amount of the financial swap is reduced in a manner similar to the principal of the syndicated loan mentioned above and its final maturity is 13 July 2019.
10. Equity and shareholders’ equity 10.1) Share capital
At 31 December 2011 and 2010, the share capital was EUR 17,155,410 comprised of 694,551 fully subscribed and paid indivisible shares of EUR 24.70 par value each and the detail of the shareholding was as follows:
(euros) % Ownership Shares
Urbaenergía, S.L. (ACS Group) 66.2 459,787 Energía y Recursos Ambientales, S.A. (ACS Group) 33.8 234,764 Total 100 694,551
10.2) Legal reserve
Under the Consolidated Spanish Corporate Enterprises Law (Ley de Sociedades de Capital), 10% of net profit must be transferred to the legal reserve until the balance of this reserve reaches 20% of the share capital.
The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount.
Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose.
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10.3) Equity situation
In accordance with Article 363 of the Consolidated Spanish Corporate Enterprises Law, the company will be dissolved when losses incurred reduce its equity to less than one-half of its share capital, unless capital is increased or decreased by a sufficient amount, and provided that the Company does not need to declare insolvency.
In accordance with Royal Decree-Law 10/2008, the valuation adjustments arising from cash flow hedges which are pending recognition in the income statement do not need to be recognised in equity for the purposes of profit distribution, capital reductions and obligatory dissolution. Furthermore, transitional provision three of Law 16/2007 on accounting reform stipulates that the participating loans regulated in article 20 of Royal Decree-Law 7/1996 are considered equity for the purposes of capital reductions and the liquidation of companies. Thus, despite the equity deficit at 31 December 2011, due to the participating loan granted by the shareholders of the Company (Note 11.2), the Company's equity for the purpose of article 363 of the Spanish Corporate Enterprises Law, is that detailed below and, therefore, the Company is not subject to dissolution at 31 December 2011.
Thousands Euros
Equity as per the financial statements at 31/12/2011 (30,925,704) Minus adjustments for changes in value from cash flow hedges 25,453,120 Plus subordinated participating loan (Note 11.2) 20,173,547
Equity at 31 December 2011 for the calculation stipulated in article 363 of the Spanish Corporate Enterprises Law 14,700,963
11. Financial liabilities
The detail of “Financial Liabilities” at 31 December 2011 and 2010 is as follows:
2011
(euros)
Bank borrowings
Group companies and related parties Derivatives Other
Total (Note 11.1) (Notes 11.2 and 11.3) (Note 9) (Note 11.3)
Non-current financial liabilities
Accounts payable 283,693,190 62,615,420 36,361,602 - 382,670,212
Current financial liabilities
Accounts payable 19,871,414 8,474,162 - - 28,345,576
Payable to suppliers - 3,791,567 - 2,047,249 5,838,816
Total 303,564,604 74,881,149 36,361,602 2,047,249 416,854,604
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2010
(euros) Bank
borrowings
Group companies and related parties
Total Derivatives and other
Accounts payable
Non-current financial liabilities
Accounts payable 297,525,137 62,615,420 28,140,310 388,280,867
Current financial liabilities
Accounts payable 44,512,167 5,981,661
55,379,126
Other financial liabilities - 281,850 - 281,850
3,801,556 4,885,298 4,885,298 Payable to suppliers
Total 342,037,304 72,680,487 28,140,310 4,885,298 448,827,141
11.1) Bank borrowings
The detail of “Bank Borrowings” at 31 December 2011 and 2010 is as follows: 2011
(euros) Short Term Long Term Total
Syndicated loan 13,873,992 283,872,458 297,746,450 Debt arrangement expenses - (179,268) (179,268) Interest payable 5,997,422 - 5,997,422
19,871,414 283,693,190 303,564,604
2010
(euros) Short Term Long Term Total Syndicated loan 14,134,388 297,746,450 311,880,838 Debt arrangement expenses - (221,313) (221,313) VAT credit facility payable 26,081,796 - 26,081,796 Interest payable 4,295,983 - 4,295,983
44,512,167 297,525,137 342,037,304
The investment in the wind farms operated by the Company was financed through a project finance structure. These financing structures are applied to projects capable in their own right of providing sufficient guarantees to the participating financial institutions with regard to the repayment of the funds borrowed to finance them. The project's assets are financed, on the one hand, through a contribution of funds by the developers, which is limited to a given amount, and on the other, generally of a larger amount, through borrowed funds in the form of long-term debt. The debt servicing of these credit facilities or loans is supported mainly by the cash flows to be generated by the project in the future and by security interests in the project's assets. In 2007 the Company entered into a financing agreement (syndicated credit facility) with a mortgage commitment and a pledge on rights of up to EUR 323,000,000 with Banco Español de Crédito, S.A. (agent bank), Banco Bilbao Vizcaya Argentaria, S.A., Caja de Ahorros y Pensiones de Barcelona, Instituto de Crédito Oficial and Natixis (sucursal en España) to finance the construction and start-up of the wind farms described in Notes 1 and 5. This credit facility accrues interest
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at a floating rate which is calculated in addition to the reference interest rate (Euribor) plus a spread which varies based on the annual debt service coverage ratio with a final maturity scheduled for 2027. In 2011 the Company did not may any drawdown on the syndicated credit facility and amortised EUR 14,050,298. On 29 July 2011, the partial assignment and modifying novation of the financing agreement was signed and the main change to the financing agreement was a 1.5 increase in the annual debt service coverage ratio for grounds for termination. In accordance with the financing agreement, in addition to the basic obligation to repay the principal, interest, fees and taxes, the Company undertakes to comply throughout the term of the agreement with the obligations detailed in provision 14, section 2 (affirmative covenants), among which the following are included:
- Not to dispose, sell, mortgage or encumber in any other way any of the assets or items of its property plant and equipment, either as a whole or one or various assets, for an amount greater than EUR 500,000 (according to the acquisition's carrying amount) throughout the term of this agreement.
- Maintain a senior debt/equity ratio equal to or less than 85 per cent throughout the term of the loan. - Maintain a DSCR greater than 1.05. - The long-term syndicated credit facility shall be amortised beginning 13 January 2010 in accordance with the following schedule:
TRANCHE A TRANCHE B TRANCHE BEI 13 January 13 July 13 January 13 July 13 January 13 July
2012 3,432,575.43 3,929,104.84 95,241.72 109,018.64 2,941,293.39 3,366,757.79 2013 3,929,104.84 4,179,109.89 109,018.64 115,955.39 3,366,757.79 3,580,981.26 2014 4,179,109.89 4,448,485.79 115,955.39 123,429.61 3,580,981.26 3,811,803.16 2015 4,448,485.79 4,696,674.83 123,429.61 130,315.97 3,811,803.16 4,024,470.52 2016 4,696,674.83 4,994,199.00 130,315.97 138,571.20 4,024,470.52 4,279,412.01 2017 4,994,199.00 4,642,799.65 138,571.20 128,821.12 4,279,412.01 3,978,306.14 2018 4,642,799.65 4,370,851.05 128,821.12 121,275.52 3,978,306.14 3,745,279.77 2019 4,370,851.05 4,660,354.48 121,275.52 129,308.21 3,745,279.77 3,993,348.47 2020 4,660,354.48 5,019,320.58 129,308.21 139,268.23 3,993,348.47 4,300,938.10
2021 5,019,320.58 5,307,461.99 139,268.23 147,263.13 4,300,938.10 4,547,839.72 2022 5,307,461.99 5,588,036.67 147,263.13 155,048.08 4,547,839.72 4,788,257.58 2023 5,588,036.67 5,970,762.32 155,048.08 165,667.35 4,788,257.58 5,116,206.22 2024 5,970,762.32 6,346,223.91 165,667.35 176,085.07 5,116,206.22 5,437,930.44 2025 6,346,211.20 6,195,645.80 176,085.07 171,907.06 5,437,930.44 5,308,903.60
2026 - - 8,967,863.09 9,625,825.39 - - 2027 - - 9,625,825.39 9,571,494.53 - -
In addition, the Company obtained a VAT credit facility for a maximum amount of EUR 60,000,000 from Banco Español de Crédito, S.A., Banco Bilbao Vizcaya Argentaria, S.A., Caja de Ahorros y Pensiones de Barcelona, Instituto de Crédito Oficial and Natixis (sucursal en España), to finance the VAT tax payable during the construction of the farms and which must be settled in full when any deposit of any amount is made into the Company's VAT account. This loan bears annual interest tied to six-month Euribor plus a spread of 0.45%. At 13 July 2011 EUR 26,081,796 of the VAT credit facility was amortised after which it was fully amortised.
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11.2) Payables to Group companies and related parties
The following is a breakdown of the current and Non-current liabilities to Group companies and associates:
2011
(euros) Loans with
shareholders Supplier Interest payable Total
Urbaenergía, S.L. 41,551,629 1,040,636 5,579,080 48,171,345
Centro de Control Villadiego, S.L. (Cecovi) - 122,923 - 122,923
Energía y Recursos Ambientales, S.A. 21,063,791 2,448,008 2,895,082 26,406,881
Aldebarán, S.M.E, S.A. - 180,000 - 180,000
Total accounts payable 62,615,420 3,791,567 8,474,162 74,881,149
Non-current liabilities 62,615,420 - - 62,615,420
Current liabilities - 3,791,567 8,474,162 12,265,729
2010
(euros) Loans with
shareholders Supplier Current account
Interest payable Total
Urbaenergía, S.L. 41,551,629 995,208 - 3,787,293 46,334,130
Aldebarán SME, S.A. - 287,110 - - 287,110
Andasol 1, Central Termosolar Uno, S.A. - 7,062 - - 7,062
Centro de Control Villadiego, S.L. (Cecovi) - 262,566 - - 262,566
Energía y Recursos Ambientales, S.A. 21,063,791 2,249,610 231,850 2,194,368 25,739,619
Parque Eólico Marmellar, S.L. - - 50,000 - 50,000
Total accounts payable 62,615,420 3,801,556 281,850 5,981,661 72,680,487
Non-current liabilities 62,615,420 - - - 62,615,420
Current liabilities - 3,801,556 281,850 5,981,661 10,065,067
Subordinate loans with shareholders: - On 23 March 2006, Parque Eólico Santa Ana, S.L., signed a credit facility with Energía y Recursos Ambientales, S.A.
for a maximum amount of up to EUR 4,000,000.
- On 6 April 2006, Parque Eólico El Colmenar II, S.L. signed a loan agreement with Urbaenergía, S.L. for a maximum amount of up to EUR 4,000,000. On the same date, Sistemas Energéticos Serón, S.A., Sistemas Energéticos Tíjola, S.A., and Sistemas Energéticos Tinadas signed two credit facilities with Energía y Recursos Ambientales, S.A. each one for a maximum amount of up to EUR 4,000,000.
- On 18 May 2006, Parque Eólico La Noguera, S.L., Parque Eólico Las Vegas, S.L. and Parque Eólico Los Isletes, S.L.
all signed two credit facilities with Urbaenergía, S.L. for a maximum amount of up to EUR 4,000,000.
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- On 13 July 2007, Sistemas Energéticos Serón, S.A., Sistemas Energéticos Tíjola, S.A., Sistemas Energéticos Tinadas,
S.A., Parque Eólico La Noguera, S.L., Parque Eólico Las Vegas, S.L., Parque Eólico El Colmenar II, S.L., Parque Eólico Santa Ana, S.L. and Parque Eólico Los Isletes, S.L., the financial institutions guaranteed pursuant to the syndicated loan and Energía y Recursos Ambientales, S.A. and Urbaenergía, S.L. signed the obligation agreement with the developers in which, among other obligations, the developers undertook the obligation to contribute funds to the project companies. Likewise, on this same date, the aforementioned credit facilities and loan agreement were novated in accordance with the terms of the developer´s agreement and they all became subordinated debt.
- After the merger by absorption mentioned in Note 1, the Company subrogated the absorbed companies by universal
succession in relation to the rights and obligations of the aforementioned novation agreements. - On 24 June 2008, the modifying novation of the subordinated debt agreements was carried out and, as a result, the
amount of the subordinated debt was increased by EUR 12,200,000, setting the new subordinated debt limit at EUR 44,200,000.
- The subordinated debt agreements were drawn down by EUR 42,441,873 at 31 December 2011 and accrue interest at
the same rate as the financing agreement entered into with banks described in Note 11.1) above. The principal of the subordinated loan must be repaid in full at the final maturity date, 22 December 2027. However, the
Company may amortise the subordinated debt early, totally or partially, provided that it meets the subordination conditions. At 31 December 2011, the shareholders have stated that they do not require a partial maturity of the subordinated loan over the coming 12 months and, therefore, the debt is classified as non-current.
On 23 December 2009, the Company's shareholders signed an additional subordinated debt agreement amounting to
EUR 20.173.547 to expand Parque Eólico Santa Ana. On 23 December 2010, the aforementioned subordinated debt agreement was novated and became a participating loan (see Note 10.3).
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Payable to suppliers The balance under "Payable to suppliers" mainly relate to the purchase of supplies and works carried out on property,
plant and equipment. 11.3) Sundry accounts payable and other payables to Group companies
The detail of “Payable to suppliers” at 2011 and 2010 year end is as follows:
EQUITY AND LIABILITIES
2011
Payable to suppliers - Group companies (Note 11.2) 3,791,567 Sundry accounts payable 2,040,350 Other accounts payable to public authorities (Note 12) 6,899
5,838,816
EQUITY AND LIABILITIES
2010
Payable to suppliers - Group companies (Note 9) 3,801,556 Sundry accounts payable 4,885,298 Other accounts payable to public authorities (Note 12) 4,905
8,691,759 Deferred payment to suppliers for commercial transactions
In relation to the disclosures required by additional provision three of Law 15/2010, of 5 July, for these first financial statements prepared since the entry into force of the aforementioned law on 31 December 2011, there were balances payable to suppliers that were past due by more than the maximum legal payment period amounting to EUR 389,335.
This balance relates to suppliers which, due to their nature, are trade payables to suppliers of goods and services, such that the information includes data relating to “Current liabilities - Payable to suppliers - Group companies” and “Current liabilities - Sundry accounts payable” in the balance sheet.
The maximum legal payment period applicable to the Company according to Law 3/2004, of 29 December, establishing measures combating late payment in commercial transactions and in accordance with the transitional provisions established in Law 15/2010, of 5 July, is 85 days between the entry into force of the law until 31 December 2011.
The following table includes the volume of payments made during the year and the volume of payments made during the period established under the law.
Payments made and payable at the closing date of the balance sheet
31/12/2011
Amount Distributed %
Within maximum legal period 3,098,178 29.86%
Other 7,277,108 70.14%
Total payments in the year 10,375,286 100%
Deferred payments which at year end exceed the maximum period 389,335 19.21%
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12. Tax matters
Under current legislation, taxes cannot be deemed to have been definitively settled until the tax returns filed have been reviewed by the tax authorities or until the statute-of-limitations period, currently established at four years, has expired.
12.1) Current tax receivables and payables Tax receivables
(euros) 2011 2010 Withholdings and prepayments 5,462 -
Total 5,462 - Tax payables
(euros) 2011 2010 Personal income tax withholdings 2,813 1,420 Social security costs 4,086 3,485
Total 6,899 4,905 12.2) Calculation of income tax
Since its incorporation, the Company has filed consolidated tax returns as part of the ACS Group. For 2011 income tax expense purposes the calculations for each company in the tax group were made individually. The reconciliation of the accounting profit/(loss) for 2011 and 2010 to the corresponding taxable base amount and current income tax is as follows:
2011 Euros Total
Accounting profit/(loss) for the year before tax (13,477,412) Accelerated depreciation 4,342,551 Taxable base amount (9,134,861) Tax rate of 30%
2,348,019
Withholdings and prepayments Other items
(1,916,543) 509,019
Income tax receivable 548,955
2010 Euros
Total
Accounting profit/(loss) for the year before tax (9,173,723) Taxable base amount (9,173,723) Tax rate of 30%
2,752,118
Withholdings and prepayments Other items
(1,176,901) 736,000
Income tax receivable 2,311,217
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The current income tax was recognised as an accounts receivable from ACS Actividades de Construcción y Servicios, S.A. The balance with ACS Actividades de Construcción y Servicios, S.A. at 31 December 2011 includes the amount receivable for 2010 income tax filings (EUR 2,311,217), as well as the current year (EUR 548,955).
12.3) Income tax expense The income tax expense for 2011 and 2010 was calculated as follows:
Thousands of euros 2011 2010
Profit/(Loss) before tax (13,477) (99,174)
Tax loss multiplied by 30% 4,043 2,752
Total 4,043 2,752
12.4) Deferred tax assets The deferred tax assets relate to the tax effect of the value of the derivative hedging instrument at year end:
2010 Increases 2011 Value derivatives 8,442,093 2,466,387 10,908,480 Total deferred tax assets 8,442,093 2,466,387 10,908,480
The deferred tax assets indicated above were recognised because the Company's directors considered that, based on their best estimate of the Company's future earnings, including certain tax planning measures, it is probable that these assets will be recovered.
12.5) Deferred tax liabilities The detail of “Deferred tax liabilities” at 31 December 2011 and 2010 is as follows:
2010 Decreases 2011 Adjustment to the taxable base amount arising from the application of accelerated depreciation to investments in property, plant and equipment which generate employment 23,482,061 (1,695,205) 21,786,856 Total deferred tax liabilities 11,248,828 (1,695,205) 21,786,856
2009 Decreases 2010
Adjustment to the taxable base amount arising from the application of accelerated depreciation to investments in property, plant and equipment which generate employment 27,033,361 (3,551,300) 23,482,061 Total deferred tax liabilities 27,033,361 (3,551,300) 23,482,061
The amount recognised under "Deferred tax liabilities" at 31 December 2011 and 2010 corresponds to 30% of the amortisation for tax purposes in addition to the amortisation for accounting purposes, which amounts to EUR 72,622,853 and EUR 78,273,537, respectively, pursuant to additional provision 11 of Royal Legislative Decree 4/2004, of 5 March, approving the Consolidated Spanish Income Tax Law and regulating accelerated depreciation of investments in new items of property, plant and equipment related to economic activities which generate employment. The Company complies with the requirements necessary to apply the aforementioned law.
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12.6) Years open for review by the tax authorities and tax audits In relation to the years open for review of the various taxes applicable to the operations of AL ANDALUS
WIND POWER, S.L., there might be contingent tax liabilities which cannot be objectively quantified, since they would depend on the outcome of the tax audits of the open years beginning from 2007 (inclusive) for income tax, and from 2008 (inclusive) for all other taxes. No additional material liabilities that might have a material impact on equity are expected to arise for the Company as a result of an audit of the years open for review.
The system for determining transfer prices is adequately designed with a view to complying with tax legislation.
Therefore, transfer prices are adequately supported and there are no material risks in this connection. Since the Company files consolidated tax returns, its tax loss carryforwards have been offset by the rest of the group
included in the scope of consolidation. 13. Guarantee given to third parties At 31 December 2011 and 2010, AL ANDALUS WIND POWER, S.L. had provided bank guarantees to third parties
mainly for the purpose of securing certain of its normal business operations, the detail being as follows:
(euros) 2011 2010 MEFF Services, S.A. 150,000 520,000
Tíjola Municipal Council 525,110 525,110
Turrillas Municipal Council 532,115 532,115
Lucainena de las Torres Municipal Council 40,665 40,665
Abrucena Municipal Council 275,375 275,375
Fiñana Municipal Council 1,218,138 1,218,138
Medina Sidonia Municipal Council 494,000 494,000
Jerez de la Frontera Municipal Urban Planning 583,000 583,000
Public works and the environment. Head of the motorway operations department - Provincial Government of Almeria
66,237 66,237
Serón Municipal Council 818,437 818,437
Pozo Lorente Municipal Council 104,436 104,436
Department of Industry, Energy and the Environment of the Castilla la Mancha Autonomous Community Government
121,150 121,150
Jerez de la Frontera Municipal Council 27,261 27,261
Total 4,955,924 5,325,924
The guarantees outstanding at 31 December 2011 are not expected to give rise to liabilities additional to those recognised
in the Company's financial statements at that date.
14. Income and expense
14.1) Revenue
The sales relate in full to electricity generated in Spain which is billed to Operador del Mercado Ibérico de Energía-Polo Español, S.A., MEFF Services, S.A. and to Comisión Nacional de la Energía, S.A. Income is recognised net of the possible energy purchases made due to the fact that the Company does not act as an intermediary in the energy market, since the economic basis of the transaction is not a sale in and of itself but rather a regulatory mechanism to reconcile supply and demand. Thus, the revenue reflects the income form the energy actually produced.
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14.2) Finance income and costs The finance income relates to the placement of cash surpluses and interest from current accounts.
2011 2010
Finance income 137,771 54,735 The detail of the finance costs is as follows:
2011 2010
Interest on subordinated debt 2,492,501 2,197,014
Interest on bank loan 6,417,128 4,718,460
Interest on VAT credit facility 223,762 319,286
Interests on the derivative 7,737,540 9,213,262
Fee and commission expense 24,343 12,040
TOTAL 16,895,274 16,460,062
14.3) Staff costs
The following items are recognised under "Staff costs":
2011 2010
Wages and salaries 124,316 31,890
Social security costs 36,702 9,971
TOTAL 161,018 41,861 The average number of employees at the Company in 2011 and 2010, by category, was as follows:
Categories
2011
2010 Senior executives Line personnel and middle management Clerical staff Manual workers
- 4 - -
- 1 - -
Total 4 1
Also, the headcount at the end of 2011 and 2010, by category and gender, was as follows:
2011 2010
Categories
Men
Women
Men
Women Senior executives Line personnel and middle management Clerical staff Manual workers
- 3 - -
- 1 - -
- 1 - -
- - - -
Total 3 1 1 - At 31 December, there were no disabled employees.
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14.4) Other operating expenses The detail of “Other operating expenses” in the accompanying income statements for 2011 and 2010 is as follows:
Euros
Item 2011 2010
Rent and royalties 1,218,119 1,850,910
Independent professional services 338,518 226,066
Insurance premiums 385,755 136,991
Banking services 55,744 34,787
Advertising, publicity and public relations - -
Supplies 340,558 305,956
Other services 4,863,455 5,364,477
Taxes other than income tax 2,118,565 992,856
Total 9,320,714 8,912,043 "Other services" mainly includes the amount corresponding to the expenses for the farm's operations and maintenance
services provided by Aldebarán SME, S.A., Energía y Recursos Ambientales, S.A. and Urbaenergía S.L. amounting to EUR 156,744, EUR 2,435,706 and EUR 1,164,761 in 2011 (see Note 14.1) and by Aldebarán SME, S.A., Energía y Recursos Ambientales, S.A. and Urbaenergía S.L. amounting to EUR 444,315, EUR 1,619,767 and EUR 1,122,357 in 2010.
At the end of 2011 the Company had contracted with tenants for the following minimum lease payments, based on the
leases currently in force, without taking into account the charging of common expenses, future increases in the CPI or future contractual lease payment revisions (in euros):
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Nominal value
Operating leases Minimum lease payments 2011
Within one year 1,480,000 Between one and five years 5,920,000 Over five years 32,560,000
Total 39,960,000
15. Related-party transactions 15.1) Related-party transactions and balances
The transactions with shareholders and other and related parties in 2011 and 2010 were as follows: 2011
Euros Overheads and O&M expenses
Financial expenses
Energía y Recursos Ambientales, S.A. 3,199,414 700,714 Urbaenergía, S.L. 1,164,761 1,791,787 Aldebarán SME, S.A. 336,774 -
Centro de Control Villadiego, S.L. 281,911 -
TOTAL 4,982,830 2,492,501 2010
Euros Overheads and O&M
expenses Financial expenses
Energía y Recursos Ambientales, S.A. 1,492,175 714,718 Urbaenergía, S.L. 280,263 1,430,496 Aldebarán SME, S.A. 444,315 - Centro de Control Villadiego, S.L. 311,289 -
TOTAL 2,528,042 2,145,215 15.2) Remuneration of the sole director and senior executives
The sole director did not receive any remuneration in 2011 or 2010.
The Company has not granted any loans or advances to its sole director and it does not have any pension obligations to him. The sole director has not received any advances or loans from the Company, nor has the Company provided him with any guarantees. The Company does not have senior executives. The aforementioned functions are performed by the Group to which it belongs.
16. Information on the environment
In view of the business activities carried on by the Company, it does not have any environmental liability, expenses, assets, provisions or contingencies that might be material with respect to its equity, financial position or results.
35
Therefore, no specific disclosures relating to environmental issues are included in these notes to the financial statements for 2011.
17. Other disclosures 17.1) Fees paid to auditors The fees for audit services provided to the Company amounted to:
Description Euros
2011 2010 Services provided by the
auditor and by related companies
Services provided by the auditor and by related
companies
Audit services 19,266 19,266
Other attest services 1,000 1,000
Total audit and related services 20,266 20,266
18. Events after the reporting period
On 1 February 2012, Royal Decree-Law 1/2012 was approved eliminating the economic incentives for new facilities that were not pre-assigned which produce electricity from cogeneration, renewable energy sources (wind powered) and waste. The sole director considers that this Royal Decree will not have a significant impact on the Company. On 11 May 2012, in a deed executed before Madrid notary Mr. Segismundo Álvarez Rollo Villanova, under number 2,122 of his notary record, the appointment of Mr. Antonio Gómez Zamora as sole director of the Company is revoked. On the same date in a deed executed before Madrid notary Mr. Segismundo Álvarez Rollo Villanova, under number 2,108 of his notary record, Mr. Ramón Jiménez Serrano was appointed as an individual representative of the sole director of Energías y Recursos Ambientales, S.A. On 30 March 2012, Royal Decree-Law 12/2012 was approved introducing a general limit on the deduction of finance costs which, in practice, becomes a specific rule for the timing of recognition, permitting their deduction in future years, in a similar manner to that of the offset of tax losses. The sole director considers that the Royal Decree will not have a significant impact on the Company since it has the financial support of the Group to which it belongs (see Note 1).
19. Other disclosures 19.1) Information on the nature and level of risk of financial instruments
The Company's financial risk management is centralised in its financial department, which has established the mechanisms required to control exposure to interest rate and exchange rate fluctuations and credit and liquidity risk. The main financial risks that affect the Company are as follows:
Price risk
Electricity production from renewable energies in Spain revolves around a law which establishes the option of remunerating the sale freely at market price. The Company is exposed to fluctuations in the market price of electricity (pool price). However, a percentage of these prices are composed in reference to regulated tariffs (premium, incentive and reactive energy supplement) and the risk of long-term fluctuation is noticeably reduced because it is tied to various conditions.
36
Regulatory change
The Company's activities are subject to a wide range of government regulations. Any changes to these regulations could affect activities and earnings (see Note 1).
Its electricity production from renewable energies is subject to a comprehensive law on tariffs and other aspects of its activities in Spain. The introduction of new laws or regulations, or the amendment of existing laws and regulations, could have an adverse or positive effect on the business activities and the results of operations.
Also, the current legislative framework governing the tariff review system, including the remuneration of electricity generated, constitutes the main support mechanism for the development of these renewable sources.
Other external factors with an impact on the Company's business activities
The Company's business activity is influenced by weather, an external factor which may adversely affect its operations, results and financial situation.
Credit risk:
In general, the Company holds its cash and cash equivalents at banks with high credit ratings.
Liquidity risk:
The Company, for the purpose of ensuring liquidity and enabling it to meet all the payment obligations arising from its business activities, has the cash and cash equivalents disclosed in its balance sheet, together with the credit and financing facilities, in accordance with the project finance structure, detailed in Note 11 and it has the financial support of the Group to which it belongs mentioned in Note 2.2.
Market risk (includes interest rate, foreign currency and other price risks):
Both the Company's cash and its bank borrowings are exposed to interest rate risk, which could have an adverse effect on financial profit or loss and cash flows. Therefore, Company policy is to ensure that at least 54% of its bank borrowings at any given time are tied to fixed interest rates.
19.2) Detail of investments in companies engaging in similar activities and of the activities carried on by the sole director as independent professionals or as employees. At 31 December 2010, the director did not held any investments in non-Group companies engaging in an activity that is identical, similar or complementary to the activity that constitutes the Company’s object. Additionally, the sole director discharges the following functions at companies engaging in an activity that is identical, similar or complementary to the activity that constitutes the Company’s object.
Antonio Gómez Zamora
Name of Company
Company activities
Position Al-Andalus Wind Power, S.L. Aldebarán Servicios de Mantenimiento Eólico, S.A. Aldeire Solar, S.L. Aldeire Solar-2, S.L.
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A.
37
Name of Company
Company activities
Position Altomira Eólica, S.L. Andasol-3 Central Termosolar Tres, S.L. Andasol-4 Central Termosolar Cuatro, S.L. Andasol-5 Central Termosolar Cinco, S.L. Andasol-6 Central Termosolar Seis, S.L. Andasol-7 Central Termosolar Siete, S.L. Berea Eólica, S.L. Calvache Eólica, S.L. Carta Valley Wind Power USA, LLC Cobra Termosolar USA, S.L. Cobra Solar del Sur, S.L. Cobra Sun Power USA, INC Centro de Control Villadiego, S.L. Desarrollos Energéticos Asturianos, S.L. Desarrollos Energéticos Riojanos, S.L. El Chaparral Wind Power, S.L. El Otero Wind Power, S.L.
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Eyra Wind Power USA, Inc. Individual appointed to discharge the functions of the sole director, Cobra Instalaciones y Servicios, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Termosolar USA, S.L. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Chairman of the Board of Directors Chairman of the Board of Directors Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L.
38
Name of Company
Company activities
Position El Recuenco Eólica, S.L. El Robledo Eólica, S.L. Electra de Montanchez, S.A. Energía Sierrezuela, S.L. Energía y Recursos Ambientales, S.A. Energía y Recursos Ambientales Internacional, S.L. Energías Alternativas Eólicas Riojanas, S.L. Energías Ambientales de Soria, S.L. Energías Renovables de Ricobayo, S.A. Manchasol-1 Central Termosolar Uno, S.L. Manchasol-2 Central Termosolar Dos, S.L. Eólica del Guadiana, S.L. Eólica Majadillas, S.L. Eólica Torrellana, S.L. Extresol-1, S.L. Extresol-2, S.L. Extresol-3, S.L.
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of a member of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Cobra Instalaciones y Servicios, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Member of the Board of Directors Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Member of the Board of Directors Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the
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Name of Company
Company activities
Position Eyra Instalaciones y Servicios, S.L. Eyra Wind Power USA, INC Garby Aprovechamientos Energéticos, S.L. Infraestructuras Energéticas y Medioambientales Extremañas, S.L. La Caldera Energía Burgos, S.L. Parque Eólico Bandelera, S.L. Parque Eólico Buseco, S.L. Parque Eólico Valdecarro, S.L. Parque Eólico Donado, S.L. Parque Eólico La Boga, S.L. Parque Eólico Las Tadeas, S.L. Parque Eólico Marmellar, S.L. Parque Eólico Monte das Augas, S.L. Parque Eólico Monte dos Nenos, S.L. Parque Eólico Rodera Alta, S.L. Parque Eólico Santa Catalina, S.L.
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Instalaciones y Servicios, S.A. Sole director Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Joint director Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A. Joint director Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.A.
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Name of Company
Company activities
Position Parque Eólico Sierra de las Carbas, S.L. Parque Eólico Tesosanto, S.L. Parque Eólico Valcaire, S.L. Parque Eólico Valdehierro, S.L. Parques Eólicos de la Región de Murcia, S.A. Recursos Ambientales de Guadalajara, S.L. Red Top Wind Power, LLC Riansares Eólica, S.L. Ribagrande Energía, S.L. Sociedad de Generación Eólica Manchega, S.L. Somozas Energías Renovables, S.A. Torre de Miguel Solar, S.L. Urbaenergía, S.L. Urbaenergía Instalaciones y Servicios, S.L. Valdelagua Wind Power, S.L. Energías Renovables Andorranas, S.L. Extresol 4, S.L.
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Renewable energies
Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Member of the Board of Directors Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Eyra Wind Power USA, Inc. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Joint director Individual appointed to discharge the functions of a member of the Board of Directors, Urbaenergía, S.L. Individual appointed to discharge the functions of the joint director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the sole director, Cobra Instalaciones y Servicios, S.A. Individual appointed to discharge the functions of the sole director, Cobra Instalaciones y Servicios, S.A. Individual appointed to discharge the functions of the sole director, Urbaenergía, S.L. Individual appointed to discharge the functions of the sole director, Energía y Recursos Ambientales, S.L. Individual appointed to discharge the functions of the
41
Name of Company
Company activities
Position Serrezuela Solar II, S.L. Parque Eólico La Val, S.L. Parque Eólico Cortado Alto, S.L.
Renewable energies
Renewable energies
Renewable energies
sole director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the joint director, Cobra Sistemas y Redes, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A. Individual appointed to discharge the functions of the chairman of the Board of Directors, Energía y Recursos Ambientales, S.A.
Ramón Jiménez Serrano
Name of Company
Company activities
Position
Técnicas de Desalinización de Aguas, S.A.
Construction of all types of public and private works
Sole director
Depuradoras del Bajo Aragón, S.A. Construction and operation of a water-treatment plant
Board member
Hydro Management, S.L. Desalination of seawater, exploitation of aquifer resources and water treatment
CEO
Sociedad Aguas Residuales, Pirineos, S.A.
Construction and operation of infrastructures for waste water treatment
Board member
Planta de Tratamiento de Aguas Residuales Taboada, S.A. (Peru)
Treatment and management of all types of natural resources
Chairman
Cotefy, S.A. de C.V. Construction and operation of industrial facilities
Board member
Tedagua México, S.A. de CV. Construction of all types of public and private works
Sole director
Golden State Tedagua Environmental Corporation, S.A.
Infrastructures, concessions and constructions Sole director (Tedagua, S.A.)
Cobra Infraestructuras Internacional, S.A.
Gas installations Sole director (Cobra Instalaciones y Servicios, S.A.)
Tedagua Renovables, S.L. Treatment and management of all types of natural resources
Sole director (Tedagua, S.A.)
Tedagua Internacional, SL Construction of all types of public and private works
Sole director (Tedagua, S.A.)
Tedra Australia PTY LTD Water desalination, distribution and treatment Board member
Infraestructuras Energéticas Aragonesas, S.L.
All types of construction work Sole director (Cobra Instalaciones y Servicios, S.A.)
42
Name of Company
Company activities
Position
Energías Ambientales de Guadalajara, S.L.
Renewable energies Sole director (Urbaenergía, S.L.)
Agua Tratada de Hermosillo, S.A. de C.V.
Water desalination, distribution and treatment Board Member
Sociedad Aragonesa de Estaciones Depuradoras, S.A.
Water desalination, distribution and treatment Board Member (Cobra Concesiones, S.L.)
Cobra Ingeniería de Montajes, S.A. All types of construction and engineering work Sole director (ACS Servicios, Comunicaciones y Energía, S.L.)
Cobra Thermosolar Plants, INC Solar thermal facilities Board member
Cobra Energy Investment, LLC Investment company Chairman
Cobra Great Island Limited Industrial facilities Chairman
Planta de Reserva Fría de Generación de Eten, S.A.
Electricity generation and transmission Board member
Central Solar Termoeléctrica Cáceres, S.L.
Construction and operation of the solar thermal plant in Caceres
Sole director (Cobra Concesiones, S.L.)
Serrezuela Solar II, S.L. Development and promotion of energy projects Joint director (Cobra Concesiones, S.L.)
Torre de Miguel Solar, S.L. Promotion, management, design, construction and maintenance of facilities engaged in the production of renewable energies
Joint director
Escal UGS, S.L. Oil and gas storage Board member
AL ANDALUS WIND POWER, S.L. DIRECTORS’ REPORT
Business performance and situation of the Company In the year ended 31 December 2011, the Company recognised EUR 35,056,844 in revenue and made a loss of EUR 9,434,188. In 2011 the Company will continue with its business activity and expects that it will perform positively. Research and development activities The Company did not allocate any of its funds to activities of this nature during the year. Acquisition of treasury shares In 2011 the Company did not acquire any treasury shares and no treasury shares were held at year end.
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Information on the environment The Company's business activity is aimed at preserving and caring for the environment. The production of energy from renewable sources contributes directly to decreasing CO2 levels in the atmosphere and helps combat climate changes. In addition, apart from the costs incurred to install the wind farms and other production facilities, no investment was made in specific projects to protect the environment. Allocation of profit/(losses) The allocation of 2011 profit/(loss) proposed by the Board of Directors and pending approval by the shareholders consists of transferring it to: - Prior years' losses EUR 9,434,188 Events after the reporting period On 1 February 2012, Royal Decree-Law 1/2012 was approved eliminating the economic incentives for new facilities that were not pre-assigned which produce electricity from cogeneration, renewable energy sources (wind) and waste. The directors consider that this Royal Decree will not have a significant impact on the Company. On 30 March 2012, Royal Decree-Law 12/2012 was approved introducing a general limit on the deduction of finance costs which, in practice, becomes a specific rule for the timing of recognition, permitting their deduction in future years, in a similar manner to that of the offset of tax losses. The directors consider that the Royal Decree will not have a significant impact on the Company since it has the financial support of the Group to which it belongs (see Note 1).
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AL ANDALUS WIND POWER, S.L.
PREPARATION OF THE FINANCIAL STATEMENTS Madrid, 25 May 2012
The sole director of AL ANDALUS WIND POWER, S.L. prepares these financial statements for the year ended 31 December 2011 which will be submitted to the Shareholders' Meeting for definitive approval.
The sole director,
________________________________________ Energía y Recursos Ambientales, S.A. Represented by: Mr. Ramón Jiménez Serrano