Annual Report SET Swiss Energy Trading AG

Transcription

1 Annual Report 20 SET Swiss Energy Trading AG

2 Editorial SET structure and main trading figures Foreword by the Chairman of the Board Swiss Energy Trading AG (SET) became fully independent on 1 October 20, following installation of the front desk and back office at Grütlistrasse 44 in Zurich the previous summer. Since 1 October, SET has been working autonomously without the support of VNG Verbundnetz Gas Aktiengesellschaft (VNG) or the VNG front desk in Leipzig. This means that the groundwork for gas trading has been completed and the agreed business plan can now be put into practice. The foreseen combination of earnings consisting of a fixed fee from Swissgas (Swiss Company for Natural Gas Limited), services to the regional companies and a small amount of own account trading promises sustainable success and we hope to start seeing the desired positive results in the near future. In order to increase the activities and in particular the productivity of SET, the company needs a stronger equity basis. For the management and executives of SET, the limited equity basis is currently the most restricting parameter. We hope that during 2012 those decisions will be made within the Swiss gas industry which are indispensable for the further growth of SET and for its future success. To conclude, I would like to thank my colleagues on the board of directors, especially René Bautz, Delegate to the Board, and Nicolai von Kistowski, Head of Trading, together with his team. Sincere thanks also to Oliver Hill and all representatives of VNG. Swissgas and its shareholders GVM, EGO, Gaznat and EGZ founded SET together with German VNG at the beginning of Since January 20 until the end of September 20, SET has operated through the VNG trading platform. On October 1, 20, SET started its own trading platform and since then all trading has been managed solely by SET. The principal purpose Trading of gas commodities Purchase and sales of gas volumes for the Swiss natural gas companies involved on the European spot markets (presently NCG, in the future other trading points are envisaged) In the future, trading of other commodities JAN FEB MAR Front office in Zurich APR MAY JUN JUL AUG SEP OCT NOV DEC MWh Where useful to both parties, close cooperation was established between SET and Swissgas. As can be seen from the annual report, the services of SET are used to varying degrees, but most constantly by Gasverbund Mittelland AG and Gaznat SA. The board of directors has thoroughly investigated the possibility and in particular the risks of a limited amount of own account trading. For the moment, it has been decided to allow strictly controlled own account trading for the period of one year, subject to stringent risk requirements. The board s decision on this issue was based on the excellent work of the risk committee comprising specialists from the regional companies, gas distributors and VNG. This expansion of business activities is essential for the company to recruit and keep employees with suitably high professional qualifications. Dr. Christoph Stutz Chairman of the Board Main facts Headquarters: Zurich Foundation: February 2009 Shareholders: Swissgas and VNG Share capital: 40 mil. The first three quarters of the year 20 were dedicated to the building and creating of a professional trading house, to be able to start trading without the support of VNG on October 1, 20. Since then, a significant increase in the traded volume has been reached, documenting the high service-level of SET. The main reason for founding SET was to provide the Swiss regional companies with trading services. The graph above illustrates that a professional trading house providing services to the regional companies was missing; SET filled this gap and became an important partner for Swiss gas companies. However the overall turnover decreased slightly in comparison to 2010, from approximately 7 mil. EUR to around 100 mil. EUR, more than half of the turnover of 20 has only been traded since October 1, 20 due to the development of new trading activities. The reason for the smaller volumes is also relatively warm winter in comparison with

3 Development and main advantages of SET Shareholder structure, BoD and management SET vision and strategy One of the main tasks of SET in 20 was to relocate trading from the VNG service provider to its own front desk in Switzerland. In order to set up the relevant concept, systems and operating structures, important milestones were defined and tracked during last year. A trading software was fully tested and implemented during the first half of the year. The setting-up of compliance, credit and risk management, analysis and back- and front-office structures were completed and experienced staff were hired so that the trading floor could be successfully started on October 1, 20. SET continued negotiating EFET General Agreements with more counterparties which led to increased traded volume with counterparties outside Switzerland. Two shareholders, Swissgas and VNG, form a strong partnership to provide SET with both know-how and experience. In a framework where deregulating the energy markets is an objective to be achieved, short-term markets dramatically changed over the past years. These changes were characterised in the gas sector by a progressive decoupling of oil-indexed long-term contract prices and spot market prices. Since the opening of the trading floor, trading activities have been rising remarkably. SET was not only providing an increasing amount of services to the regional companies but also developed trading relationships with new counterparties. SET has been very active in creating innovative products for the shareholders to contribute to the optimisation of their portfolios. SET is growing very quickly and it has become a notable player in the European gas market. The main advantage of SET is its knowledge of shareholder portfolios and the skillset it possesses in optimisation and trading. 4 Swissgas was established in The purpose of the company working in partnership with regional companies is to procure natural gas for Switzerland in all its forms, to transport it to the regional companies and to safeguard natural gas-related interests in Switzerland and abroad. VNG is an international group of companies headquartered in Leipzig, Germany, and a reliable supplier of natural gas from Norwegian, Russian and other sources to major users and municipal distributors in Europe. VNG has been active in the natural gas sector for over 50 years. Today, VNG is Germany s third largest gas importer and ranks among Europe s top ten. In this current ever-evolving environment, the Swiss gas companies wanted to be prepared for future challenges on the supply market and consequently decided to set up a trading company. Swiss Energy Trading (SET) mission aims at enabling Switzerland to access gas market places more easily, supporting the trading activities of the Swiss gas utilities in an ever more challenging and competitive environment, and helping the gas industry to continue to develop and implement custom-made services for the sectors of large consumers and power generation using natural gas. The Board of Directors of SET is constituted by members of the shareholders and the regional companies. Six meetings were held in the year 20. SET s mission is to develop and secure short-term supply through physical products, hedging products and other products such as virtual storages. The management of SET went through some changes in 20; Dr. Christian Plüss was replaced as managing director at the end of April by Mr. René Bautz. We thank Dr. Christian Plüss for his great involvement in the start-up phase of the company. President of SET is Dr. Christoph Stutz and Head of Trading Nicolai von Kistowski. After the relocation of its headquarters in Zurich, SET became fully operational on October 1, 20. SET shall turn into a diversified trading entity, fully integrated into the European market by 2013, whose core business will include not only back-toback trading but also own book trading. The services to business partners will be diversified and will especially encompass the following areas: Commodities Market analysis Portfolio management Buying and selling gas volumes on spot markets Hedging products, structured products Arbitration services between the markets The Reach of Hydrocarbons Crude oil Reserves 43 + non-conv. Resources Natural gas 64 + non-conv > 200 > 1,000 The reach hydrocarbons, in particular natural gas, has significantly increased in the last few years, due to the finds of un ressources. SET is committed to the highest standards of services for its customers and will develop the largest possible synergies within the Swiss gas industry. 5 Years

4 Annual accounts as of December 31, 20 BALANCE SHEET Current assets Liquid assets Accounts receivable (close companies and shareholders) Other accounts receivable Advance payments Prepaid expenses Total current assets Fixed assets Activated flotation costs Furnishings, telecommunication, software Non paid-in share capital Total fixed assets Total assets ASSETS INCOME STATEMENT Sales of gas Fees Financial earnings Various earnings Total revenues Purchase of gas Operating expenses Services Financial expenses Insurance/fees Depreciations Taxes Total expenses Annual profit/loss REVENUES EXPENSES LIABILITIES AND EQUITY Current liabilities Accounts payable (close companies and shareholders) Other accounts payable Accounts received in advance Provisions Total current liabilities Equity registered shares at a nominal value of each Loss carried forward from previous year Annual profit/loss Total equity Total liabilities and equity

5 Swiss Energy Trading SET SET Swiss Energy Trading AG Grütlistrasse 44 P.O. Box 205 CH-8002 Zürich Tel. +41 (0) Fax +41 (0)

6 Report of the statutory auditors With the annual accounts as of 31 December 20 of SET Swiss Energy Trading AG, Zurich To the Annual General Meeting of SET Swiss Energy Trading AG, Zurich Report of the statutory auditors on the annual accounts In our capacity as statutory auditors, we have examined the annual accounts, here attached, of SET Swiss Energy Trading AG, consisting of balance sheet, income statement and appendix for the business year ending on 31 December 20. Responsibility of the Managing Board Responsibility of the statutory auditors The Managing Board is responsible for drawing up the annual accounts in accordance with legal provisions and the articles of incorporation. This responsibility includes the setting-up, implementation and maintenance of an internal controlling system in order to draw up annual accounts that are free from essential incorrect data caused by breaches or errors. For this purpose, the Managing Board is responsible for the choice and application of appropriate accounting methods and the taking of relevant preventive measures. It is our responsibility to give an audit report, based on our audit of the yearly accounts. We have carried out our audit in accordance with Swiss law and Swiss auditing standards. According to these standards, we have planned and carried out our audit in such a way that we are sufficiently certain that the annual accounts are free from essential incorrect data. An audit includes the implementation of auditing procedures to obtain auditing proof in respect of the amounts and other details given in the annual accounts. The choice of auditing procedures is left to the discretion of the auditor. This includes an audit of the risks of essential incorrect data in the annual accounts due to breaches or errors. In auditing these risks, the auditor takes the internal controlling system into account, inasmuch as it is significant for the drawing-up of the annual accounts, in order to determine the audit procedures necessary according to circumstances, but does not make an evaluation of the effectiveness of the internal controlling system. The audit also includes the evaluation of the effectiveness of the accounting methods used, the plausibility of the valuations made, as well as an appraisal of the overall presentation of the annual accounts. We are of the opinion that the auditing proof obtained by us is a sound and appropriate basis for our audit opinion. Audit opinion In our opinion, the annual accounts for the business year ending on 31 December 20 correspond to Swiss law and the articles of incorporation. Report on the basis of further legal provisions We confirm that we fulfil the legal conditions of certification according to the Audit Supervision Act (ASA) and of independence (Art. 728 Swiss Code of Obligations) and that no essential facts exist that are incompatible with our independence. According to Art. 728a Sec. 1 3 of the Swiss Code of Obligations and Swiss Audit standard 890, we confirm that an internal controlling system for the drawing-up of the annual accounts exists, according to the provisions of the Managing Board. We recommend the acceptance of the annual accounts attached. Zurich, May 31, 2012 Ernst & Young Ltd Felix Ort Certified audit expert (Leading auditor) representing Christian Koller Business economist FH Appendix as of 31 December 20 Risk evaluation During its meeting of 26 November 20, the Managing Board considered all aspects, including management, of the risks arising from the Business Plan.