Page 48 - Annual Report KELAG Group 2018
P. 48

Uncertainties also exist with respect to the interpretation of complex tax regulations, changes in
           tax  laws,  and  the  amount  and  timing  of  future  taxable  income.  Given  the  wide  range  of
           international  business  relationships  and  the  long-term  nature  and  complexity  of  existing
           contractual  agreements,  differences  arising  between  the  actual  results  and  the  assumptions
           made, or future changes to such assumptions, could necessitate future adjustments to tax income
           and expense already recorded.

           Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that
           taxable income will be available against which the losses can be utilised. Significant management
           judgement is required to determine the amount of deferred tax assets that can be recognised,
           based upon the likely timing and the level of future taxable income together with future tax
           planning strategies (see Note 16).

           Any contingent liabilities are regularly assessed in terms of their likelihood of occurrence. If the
           probability  of  an  outflow  of  resources  embodying  economic  benefits  is  not  high  enough  to
           require the recognition of provisions and is not remote either, the relevant obligations are to be
           disclosed  as  contingent  liabilities. The  estimates  are  made  by the experts  responsible,  taking
           market-related inputs into account (where possible).

           In these financial statements, provisions are measured based on assumptions and estimates as of
           the reporting date (Notes 23 and 27). The major factors here were the expectations regarding the
           future  development  of  energy  prices,  the  success  of  negotiations  and  the  discount rate. The
           discount rate for provisions due in between one and five years is 0.75% (prior year: 0.75%), for
           provisions due in more than five years it is 1.50% (prior year: 1.50%).

           Provisions  for  measures  for  power  plants  relate  to  official  regulations  and  other  legal
           requirements, such as the implementation of the EU Water Framework Directive and pending
           damage claims. Accounting provisions for sediment management measures, which are necessary
           for  the  business  and  envisaged  by  the  authorities,  are  also  recognised  under  this  item.  Any
           obligations  arising  from  the  acquisition  of  assets  for  environmental  protection  reasons  are
           recorded as subsequent acquisition costs in non-current assets in accordance with IAS 16.11. This
           resulted in a total amount recorded in the KELAG Group’s books and records of EUR 19.3m (prior
           year: EUR 9.4m).

           The company has several long-term natural gas storage agreements with different terms expiring
           between 2020 and 2027. Storage capacity remains under economic pressure due to a significant
           change in the market model (e.g., accounting on a daily basis for small customers), because sales
           can be structured in their entirety via the market. Due to these facts, there are onerous contracts
           in terms of IAS 37.10. The loss of EUR 6.5m (prior year: EUR 7.7m) to be provisioned from these
           contracts is the cost of meeting the natural gas storage contract obligations net of the income
           recoverable from the storage capacities.
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