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A LETTER OF PRESIDENT OF THE BOARD
Dear Sirs and Madams
I am honored to provide you the annual report summarizing activities of Ostrowski Zakład Ciepłowniczy S.A. for 2008. In 2008, the Company achieved good financial results. Like previous years weather had a great impact on the sale. Fortunately, this time the influence was beneficial for the company.
In the year 2008 sale income increased by 28% and sale outcome was 3.217 thousand zlotys higher than in previous year. Most of all, the income growth was due to sale of electric energy generated in ORC system and due to gaining, for the first time, profits from sale of “green” certificates being awarded for generating the energy from renewable sources and from sale of “yellow” certificates for generating the energy in cogeneration.
In 2008 we finished modernization of K3 boiler, which purpose was increase in efficiency of combustion process and reduction of pollution emitted to atmosphere. There was also a modernization of meter circuit recording electric energy being generated in cogeneration unit Centrax. Effectiveness and operational reliability of production devices give us the possibility to increase profitability and prepares the Company for future functioning. Those activities will be continued in following years. I am sure that directions of development defined by the Board of Ostrowski Zakład Ciepłowniczy S.A. will let to take full advantage of Company’s economical and technical potential.
With best regards
President of the Board
Zenon Musialski
CONTENTS
I. VISION AND MISSION..........................................................................................................................5
II. GENERAL INFORMATION. ..................................................................................................................6
1. MANAGEMENT OF THE COMPANY. ................................................................................................................... 6 2. PERSONEL. ............................................................................................................................................................... 9
III. FINANCIAL AND ECONOMIC ANALYSIS. ......................................................................................11
1. PERSPEKTYWY ROZWOJU. CHARAKTERYSTYKA CZYNNIKÓW ISTOTNYCH DLA ROZWOJU. ................. 11 2. OPIS ISTOTNYCH CZYNNIKÓW RYZYKA I ZAGROśEŃ. ................................................................................... 12 3. FINANCIAL RESULT ANALYSIS. ............................................................................................................................ 13
IV. MARKET AND SUPPLY SOURCES......................................................................................................21
1. THERMAL ENERGY ................................................................................................................................................ 22 2. ELECTRIC ENERGY. ............................................................................................................................................... 25 3. PERFORMANCE, INSPECTION, ADVISEMENT AND TRADE SERVICES. ........................................................ 26 4. PRODUCTION FUELS SUPPLY. ............................................................................................................................. 27 5. MARKET DEVELOPMENT...................................................................................................................................... 28
V. SYSTEMS OF ENERGY SUPPLY...........................................................................................................29
1. ENERGY SOURCES................................................................................................................................................ 29 2. HEAT SYSTEM..........................................................................................................................................................30 3. HEAT CENTRES. ...................................................................................................................................................... 30
VI. INVESTMENT........................................................................................................................................32
VII. FINANCIAL STATEMENT. ....................................................................................................................33
Annual report 2008
5
I. VISION AND MISSION.
We tend to raise a company that will take significant position on heat market in Ostrów Wielkopolski area. We want to make its mark with offering the highest quality of goods and services and with professional and skilled service.
MISSION
Our target is a modern company that offers its clients a high
standard and quality of goods and services with preservation of
business ethics.
VISION
We aim to create a company that will take significant position on local market and which will maximally use its potential according to customers’ needs and company’s investment abilities.
Annual report 2008
6
II. GENERAL INFORMATION.
Ostrowski Zakład Ciepłowniczy S.A. is company belonging to municipal companies holding HOLDIKOM S.A. and E.ON Sverige AB. In municipal companies holding, except of OZC S.A., there are also :
- WODKAN Przedsiębiorstwo Wodociągów i Kanalizacji S.A. (water supply and sewage systems) - Zakład Oczyszczania i Gospodarki Odpadami MZO S.A., (purification and waste management) - Miejski Zakład Komunikacji SA., (municipal transport services) - Miejski Zakład Gospodarki Mieszkaniowej Sp. z o.o., (municipal housing management) - Targowisko Miejskie S.A. , (municipal market) - Miejski Zakład Zieleni Sp. z o.o. (municipal greenery services)
Ostrowski Zakład Ciepłowniczy OZC S.A. carries on activity in the scope of generation, transmission, distribution and trade turnover of heat and generation and distribution of electric energy. The company functions on the basis of following concessions given by president of URE (The Energy Regulatory Office):
1. Heat generation – decision No WCC/241- ZTO-B/203/W/OPO/2008/AJ dated November the 24th, 2008.
2. Heat transmission and distribution - decision No PCC/255-ZTO-A/203/W/OPO/2008/AJ dated November the 24th, 2008.
3. Heat turnover - decision No OCC/83-ZTO/203/W/OPO/2007/ZJ dated May the 10th, 2007
4. Electric energy generation decision No WEE/68B/203/W/3/2008/PW dated March the 17th, 2008.
5. Electric Energy distribution – decision No DEE/66/203/W/OPO/2008/AJ dated April the 3rd, 2008 r.
6. Electric energy turnover – decision No OEE/539/203/W/OPO/2009/AJ dated 10 of March 2009.
Moreover OZC SA offers services in the scope of construction and modernization of heating systems.
Heat prices are being calculated according to rules of Energetic Law and so called tariff decree, and they are being presented in tariffs approved annually by President of URE. Present tariffs were approved in 18.09.2008.
Central Source of heat and electric energy OZC S.A. is heat and power plant with power installed 100,6 MW, in which there work boilers being fed with coal, gas, oil, biomass, a gas turbine and ORC system. Heating system consists of heating network 51,2 km and 897 heating centers. Except for heating system OZC SA operates 12 local boiler houses in southern Wielkopolska. For energy generation OZC SA uses ecological fuels and energy saving technologies.
1. MANAGEMENT OF THE COMPANY.
GENERAL MEETING For day 31of December 2008 shareholders of OZC S.A. own: HOLDIKOM S.A. – Poland - 51, 0% shares in share capital E.ON SVERIGE AB -Sweden- 48, 6 % shares in share capital REMAINDERS- 0, 4%
All shares of Ostrowski Zakład Ciepłowniczy SA are ordinary shares to the holder and do not give the owners special control rights. There are no limitations in assignment of ownership of stocks or in implementing voting rights for issuer shares.
In 2008 year OZC SA did not issue any stocks. In the company there are no programs of workers shares.
OZC SA does not have any information about contracts that in the nearest future can change the proportions of shares by present shareholders and covenantees.
Annual report 2008
7
SUPERVISORY BOARD SINCE 01.01.2008 TO 16.01.2008.
1. Bartosz Ziółkowski 2. Håkan Hagström 3. Piotr Horodyski 4. Mariusz Majkut 5. Dorota Misiak 6. Marek Cichy 7. Dawid Sztandera
SINCE 16.01.2008 TO 31.12.2008.
1. Bartosz Ziółkowski 2. Håkan Hagström 3. Cybulski Jacek 4. Mariusz Majkut 5. Dorota Misiak 6. Marek Cichy 7. Dawid Sztandera
BOARD Zenon Musialski – 01.01.2008 - 31.12.2008 President of The Board . Alina Tomaszewska – 01.01.2008 - 31.12.2008 Executive. Roman Cegielny – 03.09.2008 – 31.12.2008 Executive . In view of appointing new Executive, Technical Manager in September 2008, there has been introduced a new company organization chart .
Annual report 2008
8
Organization Chart
GENERAL SHAREHOLDRES MEETINGGENERAL SHAREHOLDRES MEETING
SUPERVISORY BOARDSUPERVISORY BOARD
MANAGEMENT BOARDMANAGEMENT BOARD
EXECUTIVEEXECUTIVEAccountant GeneralAccountant General
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TKTK EKEK11NZNZNPNPTCTCTGTGTETE NONO
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PRESIDENT OF THE BOARDPRESIDENT OF THE BOARD
EXECUTIVEEXECUTIVETechnical Technical ManagerManager
DTDT
Annual report 2008
9
In OZC SA Company there are no contracts with Managers that would foresee compensation in case of their resignation or dismissal from work. Value of managing and supervisory parties is described in note 43 in financial statement of the Company.
In company wasn’t any change in appointing and dismissing managers or in powers of managing
staff, especially the right to make decision about emission or repurchase of shares. Managing and supervisory staff do not have any shares of the Company nor in related entities.
2. PERSONEL. Average employment in 2008 in OZC SA was 85, 50 people. On January the 1st, 2008 in Ostrowski Zakład Ciepłowniczy there were employed 82 workers within contract of employment. At the end of 2008 there were 99 employees. Employment growth in relation to 2007 resulted, most of all, from leasing the part of Company “PLANT” Ltd in Bielsko Biała. 14 people working in this object are hired to April 30th, 2009.
Specified employment rate with division for working and office stands shows the table below:
EMPLOYMENT RATE AND STRUCTURE
(DATA FOR THE END OF CALENDAR YEAR)
2008 Specification
persons % Employment in all, therein: 99 100 Working –stands (blue collar workers) 71 71,7 Office stands (white collar workers (administration + technical supervisory)
28 28,3
Employment structure in 2008.
white collar workers
28%
blue collar workers
72%
Age structure of employees by the end of 2008:
Age interval Employees part
Up to 35 years 14 %
from 36 to 50 years 55 %
From 51 years old 31 %
Annual report 2008
10
Employment structure by age criterion in 2008.
till 35 years old14%
from 51years old31%
from 36 years til 50 years old
55%
Within the project cofinanced by European Union- European Social Fund- OZC S.A. signed a contract for a professional training for an unemployed relegated by Labor Office for profession: Specialist on Marketing and Trade (sale). After having finished the professional training, the person was hired for period corresponding to the training time.
The Board also supports students by organizing professional practice. In 2008 there were 6 students taking advantage of this possibility.
Since July 2008 to the end of November, OZC S.A. was engeging 4 intervention workers for carrying out works for local community.
For the 4th time in Hotel “Borowianka” in Ostrów Wielkopolski there was organized company picnic. By organizing such events Ostrowski Zakład Ciepłowniczy makes the crew get more integrated. Such meetings help to create better work climate in a work place. This climate, friendly approach of employees one to another, growth of mutual confidence and greater engagement in company’s business bring visible growth of effectiveness.
In 2008 the employees were raising their professional qualifications according to training plan. There was made an analysis of trainings effectiveness based on interviews, questionnaires and direct observation. Positive effect in the Company is employees' activity in reporting their professional training needs.
We have experienced and complete crew which engagement and high quality of work make the company to realize successfully customers’ needs and owners’ expectations.
Annual report 2008
11
III. FINANCIAL AND ECONOMIC ANALYSIS.
1. DEVELOPMENT PROSPECTS. CHARACTERISTICS OF FACTORS ESSENTIAL FOR DEVELOPMENT.
Development perspectives of the company were determined by The Board of Ostrowski Zakład
Ciepłowniczy S.A. The main target is minimization of total costs, work effectiveness growth and introduction of new production technologies. To achieve such a goal the Company must also use maximally its economical and technical potential in accordance with customers’ needs and investment possibilities.
The Company will continue activities leading to: - Revenues growth from gaining new recipients of system heat and electric energy; - Reduction of operating expenses; - Assurance of reliability of heat and electric energy supply for the customers; - High quality of rendered services; - Industrial safety; - Development of employees’ competence.
The chance for OZC S.A. is site planning of the city Ostrów Wielkopolski. Their realization gives the
Company possibilities of connection new, capital heat and electric energy recipients. Heat and power station “Ostrów” is the greatest heat source in the city. It gives the Company the
great advantage, which OZC S.A. is going to consequently take advantage of. FACTORS ESSENTIAL FOR DEVELOPMENT Participation in market and competition. Heat system OZC S.A. supplies heat for ca 45% citizens of Ostrów Wielkopolski. So the Company has the great part in local heat market. In the system heat market the Company has no significant competitor. Heat and Power Station “Ostrów” is the greatest heat source in Ostrów Wielkopolski. For the customers as competitive market we can take the market of primary heat carrying agents (coal, gas, electric energy). Customers. Possibilities of gaining new customers are determined by existing technical conditions: range and parameters of existing systems, and economical conditions: construction and system developments. Potentially, groups of new heat recipients are: existing buildings without central heating installation, existing buildings with coal, gas and oil boiler rooms, newly constructed buildings, individual houses, and buildings disconnected from heating system. Power ordered. OZC similarly as majority of heat generating enterprises registers power ordered decrease despite of ascending number of customers. This situation is caused by clients’ heating needs limitation, changing climate (milder winters) and rationalization of heat use by customers, connected with usage of modern, energy saving technologies, thermo-modernizations and measurement of supplies. Regular decrease of power ordered and heat sale drop are also connected with liquidation and restriction of industrial production in the area of Ostrów Wielkopolski. The Company brings on activities to gain new customers, which will partially compensate decrease in heat demand. However, there is a restriction connected with the range of given system and with lack of new, major recipients in the city. Site planning of the city give the Company chances for new connections oh heat and electric energy receivers. Legal normalization. OZC S.A. leads a business that according to law is under the license and ipso facto inspected and supervised by right authorities- The Energy Regulatory Office. The Company acts on the basis of Energy Law, Minister of Economy Decree on specified conditions of heating systems functioning, and Minister of Economy Decree on specified rules of forming and calculation of tariffs and clearance in virtue of heat requirement. In its activities the Company has to take into consideration changes in rules connected with our law adaptation to UE directives i.a. Directive No 2004/8/WE on cogeneration promotion and Directive No 2001/77/WE on production support on domestic market of electric energy generated from renewable energy sources. System of rights for CO2 emission trade. Year 2008 has started a long, 5 years lasting clearing period of union system of rights to CO2 emission trade (EU-ET). Decree of Ministry dated July 1st, 2008, has introduced National Plan of Rights Equipartition (Krajowy Plan Rozdziału Uprawnień - KPRU) for carbon
Annual report 2008
12
dioxide for energy sector. Average yearly rights pool determined by KPRU for Heat and Power Station “Ostrów” is 74.248 tones, which means 27 % reduction in respect to 2005- 2007 partition. New source of heat and energy cogeneration from biomass, block ORC, caused essential decrease of fine coal consumption. Moreover, according to law regulations concerning monitoring in the scope of EU-ETS, indicator of CO2 emission from pure biomass is zero. That is why, despite the minor number of rights given for EC “Ostrów” for 2008-2012, for entire 5 year period, there is foreseen a save of rights pool connected with savings in limits for each year.
As in recent years, in Heat and Power Station “Ostrów” being in system of rights for CO2 emission trade, there was introduced quantity and quality monitoring of fuels used, required by the law. Ecology. Ostrowski Zakład Ciepłowniczy SA as the entity running the business in energy sector is conscious of great meaning of environment protection. The company has been realizing the proecologic policy for many years- which is shown below, i.a.:
− Investments and modernizations allowing achieving ecological effect- primary fuels savings and limitation of air pollution emission (e.g. construction of cogeneration system ORC, biomass –fired, reconstruction of coal boilers in tight walls technology).
− Observing environmental law requirements connected with exploitation of energetic fuels combustion installation.
Licences integrated. Since the half of 2006 year, the largest installation owned by Heat and Power Station “Ostrów”, placed in Ostrów Wielkopolski at Grunwaldzka Street, 74- has been falling under the integrated license. The rules concerning integrated licenses are defined by Decree of Environment Protection Law dated April 27th, 2001. It puts the duty of achieving a license for exploitation of all installations that in view of kind and scale of activity operated can cause considerable pollution of individual environment elements or environment in total. In connection with changes that happened in Heat and Power Station “Ostrów” (modernization of coal boilers in tight walls technology, replacement of one (from 5) coal boiler with ORC cogenerative block biomass- fired) the Company applied for changing the integrated license. With decision of Ostrów Wielkopolski District Prefect, to the content of the integrated license from 2006 there have been introduced suitable changes and supplements. Moreover, the Company has the decision on permissible pollution emission for technological boiler in Kępno. For both objects there is conducted periodical monitoring of atmospheric pollution emission, and results obtained are used in calculating the charge for use of environment that the Company regularly contributes to Voivodeship Office in Poznań. Integrated Management System. In The Company there is entered and continuously improved integrated management system of quality, environment protection and industrial safety according to requirements of standards PN-EN ISO 9001:2001, PN-EN ISO 14001:2004 and PN-N-18001:2004. Efficient functioning of Integrated Management System gives the possibility of balanced company development, better labor organization, unequivocal work determination, competence and employees responsibility and their availability to satisfy customers’ needs, facilities in meeting law requirements and assurance of quick adjustment of internal regulations to changes proceeding in law system being in force.
2. DESCRIPTION OF ESSENTIAL RISK AND HAZARDS FACTORS. Risk of fuel prices change. Ostrowski Zakład Ciepłowniczy S.A. uses hard coal, natural gas and wood for energy generation. Changes in prices of these fuels are bounded with state policy and the Company has no impact for their growth. Fuels make ca. 60% of costs and every price increase of fuel negatively affects the Company’s profitability. Essential risk factor in the range of fuels supply is coal supply limitation resulting from situation in mining industry: technical and geological problems. Risk of energy law changes. Decree of Energy Law and executive acts of this decree form national energy policy, determine rules and conditions of fuels and energy supply and determine executive authorities for energy and fuels management. Frequent changes in regulations in this scope make difficulties in revenues planning in virtue of sale of thermal energy cogenerated both from gas and ecologic fuels. Risk of changes in thermal power demand. In former years there occurred a decrease in heat demand. This process is mainly connected with thermo- modernization of housing resources, industry transformation, and loss reduction in heat transfer.
Annual report 2008
13
The company carries on activities in order to gain new customers that will partially compensate reduction in heat demand. However, there is limitation related to the range of the system and lack of new, great recipients in the city area. Housing plans of the city bring the possibility of new connections of heat and energy recipients. Risk of financial standing of recipients. The Company has diversified customers. In municipal heat system there predominate housing recipients. Within the “ready heat” service- industrial recipients are significant. Financial standing of customers and their receivables payment ability is crucial for financial standing of OZC S.A. and is a subject of systematic monitoring.
3. FINANCIAL RESULT ANALYSIS.
Ostrowskiego Zakładu Ciepłowniczego S.A. Balance sheet.
Current year 2008 Previous year 2007 Change Contents
TPLN % TPLN % % 1 2 3 4 5 2/4
83 428
60 82 115
937
316
21 078
7 632 7 555 5 499
392
80
0 79
1
0
20
7 7 6 0
84 743
80 83 431
939
293
18 304
4 351 7 042 6 470
441
82
0 81
1
0
18
5 7 6 0
98
75 98
100
108
115
175 107
85 89
ASSETS
Fixed assets
• Intangible fixe assets • Tangible fix assets • Long term investments • Long term accurals and
deferred income
Current assets • Stocks • Credit and claims • Short term investments • Accurals
TOTAL ASSETS 104 506 100 103 047 100 101
75 105
12 174 26 095
2 369 30 528
3 939
11 423
5 853
12 130
72
12 25
2 29
4
11 6
12
72 955
12 174 25 817
2 392 30 918
1 654
11 511
6 610
12 471
71
12 25
2 30
2
11 6
12
103
100 101
99 99
238
99
96
97
LIABILITIES
Equity
• Paid-in share capital • Supplementary capital • Reserve capital • Profit • Net profit Long term liabilities Short term liabilities Accurals
TOTAL LIABILITIES 104 511 100 103 047 100 110
Annual report 2008
14
ASSETS- COMPANY’S PROPETY Investment in 2008 mainly concerned modernization of the further coal boiler with the technology of “tight walls” in the Heat and Power Plant “Ostrów” and modernization of connections, pipelines and heat centres.
Value of fix assets put into operation in last years is presented below:
• in the year 2006 5 000 • in the year 2007 27 614 • in the year 2008 2 930
Fix assets put into operation in last 2006-2008.
0
5000
10000
15000
20000
25000
30000
2006 2007 2008
Passives –sources of finance.
Structure of company capitals for last 3 years is presented in the below diagram
YEAR 2008 TPLN
2007 TPLN
2006 TPLN
EQUITY 12 174 12 174 12 174
Supplementary capital 26 095 25 817 24 471
Reserve capital 1 340 1 340 1 340
Reserve capital from fixed assets revaluation
1 029 1 052 1 189
Profit 30 528 30 918 31132
Total
71 166 71 301 70 306
Profit and loss statement.
In 2008 Company’s revenues from sales increased by 28%, while costs increased by 18%, which gave better results on sales by 3.217thousand zlotys. Increase in sales result is due to increase in electric energy sales and obtaining certificates of electric energy origin that compensate the producer the part of costs of electric energy generation with usage of high- technology and renewable energy sources.
Annual report 2008
15
Higher level of variable costs comes, most of all, from gas and coal prices growth and increase in fuels consumption connected with starting up new ORC block.
Operational result was higher by 3 107 thousand zlotys than in previous year. In 2008 the company achieved a net profit of 3 939 thousand zlotys, in 2008 the result was higher by 138%, compering year 2007 that was on the level 654 TPLN.
ANALYTICAL PROFIT AND LOSS STATEMENT OF
OSTROWSKI ZAKŁAD CIEPŁOWNICZY S.A.
No Contents Current year 2008 TPLN
Previous year 2007 TPLN
Change
1 2 3 4 (3-4) TPLN
3/4 %
1 2
Sales of service Cost of service
36 755 30 946
28 682 26 164
8 073 4 782
128 118
3 Gross sales
5 809 2 518 3 291 231
4 Selling costs, general and administrative costs
2 428 2 354 74 103
5 Sales 3 381 164 3 217 2 062
6 7
Other operational revenue Other operation expenses
1 555 398
1 596 329
-41 69
97 121
8 Operating activity result 4 538 1 431 3 107 317
9
10
Other operating revenue Operating expenses
432 156
578 0
-146 156
75 0
11 Operating profit and loss 4 814 2 009 2 805 240
12 Gross result 4 814 2 009 2 805 240
13 Tax 880 355 520 246
14 Net profit 3 934 1 654 2 285 238
Revenues.
Revenue in 2008 increased by 25, 6% compared to 2007. Income from sale of thermal energy from municipal heating system are higher by 9, 1% than in previous year. The increase in revenues in 2008 in this section comes from lower external temperatures than in 2007 and taking under service a boiler house from EC”PLANT” Co in 4th quarter of 2008, and heat sale for EKK WAGON Co. Revenues from sale of electricity increased by 23,6%. The Company gained for the first time revenues from sale of property rights of electricity origin certificates. Increase in revenues from electricity sale was due to new power block put into service in 2007.
Annual report 2008
16
REVENUES STRUCTURE IN YEARS 2007-2008
Revenues structure in years 2006-2008.
0
5
10
15
20
25
30
35
40
45
2006 2007 2008
TP
LN
financial revenues
other operation revenues
outside service revenues
materials
cerificates of origin
electric energy
ready heat
Heat
Expenses
Costs by type in 2008 increased by 18% compared to 2007. Material and energy costs increased by 22, 9%. Growth in this position comes from fuel prices advance (mainly coal- advance by 27%) and higher production of heat and energy
Also costs of outer services increased by 62, 3% and depreciation by 10% as a result of business expansion and putting to use ORC block.
Types of revenues 2008 TPLN
Structure %
2007 TPLN
Structure %
Heat sale 23 563 61 21 598 70
“ready heat” services sale 2 443 6 2 297 7
Electric Energy sale 4 210 11 3 406 11
Electric energy certificates of origin 4 850 13 0 0
Materials sale 452 1 665 2
Outside services revenues 1 238 3 716 2
Oher operation revenues 1 555 4 1 596 6
Financial revenues 432 1 578 2
TOTAL 38 742 100 30 856 100
Annual report 2008
17
COSTS IN CONFIGURATION TYPE
Contents Year 2006
TPLN Structure %
TPLN Year 2007
TPLN Structure
%
Materials and energy consumption 20 696 62 16 834 60
Outside services 1 685 5 1 038 4
Taxes and charges 1 556 5 1 496 5
Salaries 3 559 11 3 230 11
Employees social benefits 890 3 857 3
Depreciation 4 066 12 3 675 13
Other expenses 447 1 414 2
Heat energy purchase 311 1 595 2
TOTAL 33 210 100 28 139 100
Costs in configuration type in years 2006-2008.
0
5
10
15
20
25
30
35
2006 2007 2008
TP
LN
heat energy purchase
other expenses
depreciation
employees social benefit
salaries
taxes and charges
outside services
materials and energy consumption
To present a full picture of the company potential, expenses in calculation type, i.e. divided on performed activity are presented below .
Annual report 2008
18
COSTS IN CALCULATING CONFIGURATION
Contents Year 2008 TPLN
Year 2007 TPLN
Value of sold materials and goods in purchase prices 368 616
Heat and powerplant „Ostrów” 22 729 19 736
Comission boiler houses with the range of „ready heat” agreement 3 786 1.983
Heat Distribution Network, terminals and installations 1 878 1 786
Heat centres 1 119 1 078
Management and administarion 2 159 2 112
Outside serv bice expenses 755 370
Costs of sale 269 242
Heat energy purchase 311 595
Total 33 374 28 518
Costs in calculation type in years 2006-2008.
0
5
10
15
20
25
30
35
40
2006 2007 2008
TPLN
heat energy purchase
costs of sale
outsider service expenses
management and administration
heat centre
heat distribution Network, terminalsand installations
comission boiler houses with the rangeof ready heat agreement
Heat and Power Plant Ostrów
value of sold materials and goods inpurchase price
Annual report 2008
19
Performance ratio PERIOD
Specification 2008 TPLN
2007 TPLN
2006 TPLN
Net profit 3 934 1 654 3 643
cash flow (net profit + depreciation) 8 000 5 329 7 304
Sales revenues 36 755 28 682 27 953
Total assets 104 506 103 047 93 978
Circulating assets 21 078 18 304 28 141
Equity 75 105 72 955 73 950
Long-term outside capitals 3 476 - -
Short-term outside capitals 5 869 6 110 5 612
Total amount of shares 1 217 1 217 1 217
Dividend 1 400 2 435 2 192
Gross profit 4 814 2 009 4 529
Paid interests 152 0 0
PROFITABILITY RATIOS
Profit from sale total= Nett profit/total revenues (%)
10,7 5,8 13,0
Sale profitability=cash flow/sale (%) 21,8 18,6 26,1
Assets’ profitability (ROA)=profit nett/total assets%)
3,8 1,6 3,9
Assets’ profitability (ROA)=cash/assets(%)
7,7 5,2 7,8
Profitability of equity (ROE)=net profit/equity(%)
5,2 2,3 4,9
Profitability of equity ROE=cash/equity. 10,7 7,3 9,9
return on commited capital (ROCE) =EBIT/commited capital (%)
6,0 2,0 4,9
LIGUIDITY RATIO
Current Cash flow ratio/ current assets/ current liabilities
3,6 3,0 5,0
DEBT COVERAGE RATIO
Intrest coverage ratio= (Gross profit+ Intrest paid)/intrest paid
32,7 0 0
Ownership of the company charge= total fixed assets/Total obligations
11,2 16,3 16,7
Coverage of the ownership of the comapny with equity=equity/total fixed assets
0,7 0,7 0,8
CAPITAL MARKET RATIO
EPS= net profit per 1 share =net profit /number of issued shares
3,2 1,4 3,0
P/E= relation of price to profit per 1 share=Market price per 1 share/EPS
18,2 58,8 16,3
Dividend per 1 share in PLN =dividend/shares held
1,2 2,0 1,8
Dividend ratio= dividend per 1 share/ Market price per 1 share(%)
2,0 2,5 2,7
Paid dividend ratio= dividend per 1 share /EPS(%)
35,6 147,2 60,2
Annual report 2008
20
Additional economic-financial information.
In 2008 the Company did not entered any contracts in the meaning of 1 pt.3 annex No1 for Regulations of CeTO traffic. Simultaneously, the Company does not have any information about agreements among shareholders.
The company did not take nor granted any loans or credits, did not give any securities. The company did not publish any financial result forecast for 2008.
In 2008 there were no any factors or unpredicted events, which could have had an influence on activity of the Company or profits gained.
Below there is some information about organizational and capital connections of the Company with other entities.
Entity Seed capital Held shares value Shares in share capitall
ZEC Skwierzyna Sp.z o.o
1 834 TPLN 937 TPLN 51%
In 2008 OZC Limited did not invest in stocks and shares, financial instruments, intangible fixed
assets or Real estate. No capital investments beyond related entities were made as well. In 2008 transactions, whose single or total value exceeds the amount of 500 000 €. did not appear.
Annual report 2008
21
IV. MARKET AND SUPPLY SOURCES.
As multi-energy company Ostrowski Zakład Ciepłowniczy Joint-Stock Company delivers heat energy for district heating, hot water, heat for technology and production as well as electricity. Company delivers also services in scope of building of new heat networks and reconstruction of existing ones both for the institutional and individual clients. Ostrowski Zakład Ciepłowniczy operates on energy market in Ostrów Wielkopolski and South Wielkopolska.
In 2008, similar like previous years, energy from district heating was the most dominant product, generating 64% of company revenue.
Over the last years the Company has developed some products, such as:
- district heating
- “Ready heat”
- electric energy
- service
Particular products in sale revenues.
services and others 5%
electric energy 24%
ready heat 7%
heat from district thermal system
64%
Strategic recipients in year 2008.
Other recipients56% Energa S.A.
9%
Delphi S.A.2%
Wodkan S.A. 3%
Drop S.A. Kepno 4%
Ostrowska Spółdzielnia
Mieszkaniowa26%
Annual report 2008
22
Monthly sales of products in 2008 are presented as below:
Monthly sales of products in 2008.
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
1 2 3 4 5 6 7 8 9 10 11 12month
TP
LN
District heating Ready heat Electric energy
1. THERMAL ENERGY
1.1 THERMAL ENERGY FROM DISTRICT HEATING NETWORK.
In 2008 district heating system operated as based on heat source- Heat and Power Generating Plant (Elektrociepłownia Ostrów) and district heating network in Ostrów Wielkopolski and in November and December OZC S.A. rented thermal station PLANT at Wrocławska Street
Heat recipients growth during lat three years:
Recipients number in year 2006-2008.
1650170017501800185019001950200020502100
2006 2007 2008
Re
cip
ien
ts n
um
be
r
Heat recipients structure is presented below:
- block of flats occupants: Ostrów Housing Co-operative Society (Ostrowska Spółdzielnia Mieszkaniowa, Municipal Housing Administration Establishment Ltd., other housing co-operatives and housing communities,
Annual report 2008
23
- detached house occupants (422 recipients), - block of flats occupants with individual contracts (1065 recipients) , - industrial plants: Delphi Automotive Technology Systems, Process Control Company ZAP S.A.,
SPOMAX, European Railway Consortium Wagon ltd. Company. - public institutions and trade companies.
Heat recipients.
others 25%
housing 58%
hausing settled according to heat
meaters 3%
industrial plants 11%
datached houses 3%
Heat sale from district heating system in year 2008 according to sales in particular months is presented below:
Heat sale from district heating in year 2008.
0
20000
40000
60000
80000
100000
120000
1 2 3 4 5 6 7 8 9 10 11 12
month
GJ
Annual report 2008
24
Just for comparison heat sale and outside temperature in recent years is presented below:
Heat sale and average outside temperaturein years 2003-2008.
0
100000
200000
300000
400000
500000
600000
700000
800000
2003 2004 2005 2006 2007 2008
GJ
0
1
2
3
4
5
6
7
outside temperature
GJ outside temperature
Heat energy generated in particular heating periods strictly depends on outside temperature.
Change ordered power in 2008.
Total reduction of heating system power demand in the city in 2008 amounted 8,263 MW, where of: - new connections +1,721MWt - EKK Wagon ltd. company connection +10MW - decline of ordered power -3,623 MW - increasing of ordered power +0,168 MW The main reason for that was: thermo modernization, saving. 1.2 „READY HEAT”
The essence of “Ready Heat” is to take over total control and and responsibility in production and
delivery of thermal energy by energy-efficient environmental friendly technologies. This service aims at thermal energy production and delivery for central heating, hot water and ventilation needs according to previously fixed price and time. The product is oriented at owners or administrations of buildings which have local heat generation plants in Ostrów Wielkopolski as well as in Ostrów region.
Within the framework of “ready heat” following boiler house were operated:
1. Nowe Skalmierzyce:
- a boiler house with total capacity of 2 MW, which is a result of being fired by straw and coal 2 boilers, located in 24 Kaliska Street
- a boiler house with capacity of 0,400 MW , which is a result of being fired by oil and biomass in 2
- boilers, located in 5 Mickiewicza Street
2. Opatówek:
- a boiler house with total capacity of 0,800 MW, which is a result of being fired by coal and wood in two boilers, located in 4b Szkolna Street
Annual report 2008
25
- a boiler house with total capacity of 0,140 MW, which is a result of being fired by natural gas, located in 4b Jana Street
3. Ostrów Wielkopolski:
- a boiler house with total capacity of 0,170 MW, which is a result of being fired by natural gas in one boiler, located in 64 Zębcowska Street
- a boiler house with total capacity of 0,200 MW, which is a result of being fired by natural gas in one
boiler, located in 54 Rejtana Street
4. Raszków:
- a boiler house with total capacity of 0,0650 MW, which is a result of being fired by coal and wood in 3 boilers, located in 22b Polna Street
5. Masanów:
- a boiler house with total capacity of 0,060 MW, which is a result of being fired by coal in 1 boiler, located in 40 Lipowa Street
6. Lewkowiec:
- a boiler house with total capacity of 0,650 MW, which is a result of being fired by coal in two boilers, located in Lewkowiec number 68.
7. Gorzyce Wielkie:
- a boiler house with total capacity of 0,075 MWt, which is a result of being fired by coal in one boiler, located in 31 Szkolna Street
8. Kotłownia w Kępnie:
- a boiler house with total capacity of 7, 25 MW, which is a result of being fired by coal in three boilers, located in 7 Wrocławska Street
9. Kotłownia w Psarach:
- a boiler house with total capacity of 0,350 MW, which is a result of being fired by coal and wood in two boilers, located in 2 Leśna Street.
2. ELECTRIC ENERGY.
Product “electric energy” is a result of generating electric energy in cogeneration system in Heat and Power Station “Ostrów” based on gas turbosystem and ORC turbosystem. Electric energy was directed to 3 recipients i.e. ENERGA OBRÓT S.A. In Kalisz, WODKAN Przedsiębiorstwo Wodociągów i Kanalizacji S.A. in Ostrow Wielkopolski and Sklejka - EKO SA in Ostrow Wielkopolski. WODKAN S.A. was buying the electric energy directly for feeding the water treatment station, intermediate pumping station and waste treatment for Ostrów Wielkopolski. Whereas Sklejka – EKO S.A. in 2008 was buying electric energy for production purposes.
Annual report 2008
26
Electric energy in year 2008.
ENERGA S.A. 59%
WODKAN S.A. 14%
OZC S.A. 16%
SKLEJKA - EKO S.A. 11%
Sale of electric energy in recent years is presented below:
Sale of electric energy in monthly system in years 2006-2008.
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
1 2 3 4 5 6 7 8 9 10 11 12
2006
2007
2008
3. PERFORMANCE, INSPECTION, ADVISEMENT AND TRADE SERVICES.
Services realized in recent year included the wide scope of works connected with:
- Workmanship and realization of thermal centers; - Workmanship and realization of internal installations of central heating and usable hot
water - Trade of materials and devices for realization of investment connected with systems,
thermal centers and internal installations constructing. Services were being realized in the range of central heating and usable hot water installation within
the framework of offer so called “heat in your flat”. Those services were being realized in complex and were very popular among the citizens of Ostrów Wielkopolski. Works were being made most of all in buildings owned for Miejski Zakład Gospodarki Mieszkaniowej (City Housing Administration), housing communities and private owners.
Incomes from trade of installation materials amounted to 451 TPLN. In 2008 we realized 101 service projects for the amount of 744 TPLN.
Annual report 2008
27
On the diagram there is shown the number of installations accounted individually in particular years
Number of performed instalations in years 2002-2008.
549620
693
11641092
986
842
0
200
400
600
800
1000
1200
1400
2002 2003 2004 2005 2006 2007 2008
Important form of activity within the framework of heat supply from municipal heat system was the service “heat in your flat”, realized for tenants of many-families buildings. In 2008 we made 87 connections in many-family buildings.
This service is a connection of farther recipients, especially in the city center, also an individual settlement of particular apartments according to indication of heat gauges.
4. PRODUCTION FUELS SUPPLY. Main suppliers of OZC SA.:
1. PGNiG S.A. – 27% Incomes from sale. 2. Trading company „TOWARZYSTWO WĘGLOWE” Sp. z o.o. – 19% Incomes from sale. 3. Sklejka – Eko SA – 8% Incomes from sale. Companies supply production materials on the basis of commercial contracts. Trading company „TOWARZYSTWO WĘGLOWE” Sp. z o.o. was selected in unrestricted bidding. In The scope of gas supply The Company is dependant to PGNIG, which is a monopolist in national scale, supplies take place on the basis of long-term contracting.
Suppliers structure in general in 2008.
Sklejka-Eko S.A. 9%
Others8%
PGNiG31%
Towarzystwo Węglowe
22%
Pozostałe30%
Annual report 2008
28
PARTICULAR FLUELS CONSUMPTION IN 2008.
Small coal
coal EKORET
Natural gas
Oil
Straw
Briquete
Biomass Boiler house
t t m3 l t t t
Heat and power plant „Ostrów
16 900 9 173 689 19 282
PLANT 3 400
Nowe Skalmierzyce Kaliska street
597 67 105
Nowe Skalmierzyce Mickiewicza street
10 550 142
Raszków Polna street
203
Malfarb - Lewkowiec
95
Opatówek Szkolna street
183 25
Opatówek św Jana street
13 102
Zębcowska -gas 46 609
Rejtana - gas 19 244
Masanów - school 19
Gorzyce school 26
Kępno - DROP 2 732
Psary 82 5
TOTAL 23 629 608 9 252 644 10 550 67 277 19 282
5. MARKET DEVELOPMENT.
In connection to housing development in 2008 there was another municipal building connected on Klasztorna Street. As a result of Company’s activities in 2008 there were made systems and 34 heat terminals for total length 1900 running meters. To the system there were connected 15 single houses, 11 business recipients, 6 housing cooperatives and 87 flats.
Gain in power ordered in virtue of new connections amounted 1,721MW. Connecting by the end of 2008 a new recipient EKK WAGON Ltd resulted in notable increase of power ordered by 10 MW.
We had executed all needs in this scope. Connection works lasted to the end of 2008. Realization of new connections depends also on our marketing activities, which we assess as proper and compatible with market needs.
Annual report 2008
29
V. SYSTEMS OF ENERGY SUPPLY.
1. ENERGY SOURCES.
Thermal system OZC S.A. was fed: - from January to December production from Haet and Power Palant “Ostrow”. - additional in January and February from “PLANT” Ltd.. - in November and December production from Heat Plant Wrocławska street.
GENERATION AND PURCHASE OF THE HEAT ENERGY IN YEAR 2008
Months
Outside Temp.
oC
PLANT Ltd. GJ
Participation % PLANT Ltd.
in Q
EC OSTRÓW
GJ
Water wastage
t
Total Q GJ
t/h
January 3,5 6 955 6,4 101647,9 1 280,5 108 602,9 996,6
February 4,9 5 730 6,3 84 725,7 841,5 90 455,7 964,3
March 5,3 0 0,0 92 613,1 496,5 92 613,1 921,1
April 9,8 0 0,0 60 504,8 212,6 60 504,8 716,5
May 15,2 0 0,0 22 933,7 512,6 22 933,7 338,0
June 19,6 0 0,0 15 756,0 428,5 15 756,0 281,3
July 21,1 0 0,0 15 042,3 775,2 15 042,3 255,0
August 19,6 0 0,0 13 539,9 473,3 13 539,9 264,5
September 14,7 0 0,0 29 034,5 591,6 29 034,5 483,7
October 11,5 0 0,0 53 326,5 831,8 53 326,5 744,5
November 6,7 25 413 39,4 64 471,4 921,9 89 884,4 777,1
December 2,2 35 373 44,3 79 812,2 613,7 115 185,2 1 271
Total from the beginning of the year
73 471
633 408 7 980 706 879
Comparision of sources participation in generating in years 2002-2008.
86,9% 91,5% 92,7% 91,0% 91,2% 89,6% 82,22%
9,54%2,1%3,9%4,9%10,3% 4,9% 1,6%
8%8%3%4%3% 4% 7%
0%
20%
40%
60%
80%
100%
120%
2002 2003 2004 2005 2006 2007 2008
Pa
rtic
ipa
tion
in g
en
era
ting
[%
]
ECM Ostrów PLANT Ltd. Gotowe Ciepło
Annual report 2008
30
HEAT AND POWER PLANT „OSTRÓW”.
In Heat and Power Plant Ostrów following heating appliances worked in 2008:
- 4 water boilers with capacity of 50 MW, - a gas turbine Centrax KB 7 with a waste-heat boiler with capacity of 11,6 MW for heat
production and 5,2 MW and generator 5,2 MW for electric energy, gas GZ_50-fired - ORC system with oil boiler Maxxtec, total capacity of 9MW and Turboden turbogenerator for
electric energy production, capacity 1,5 MW. In ORC system is generated from wooden chips. - water boiler Standardkessel with heat capacity of 15 MW, with oil-burner. - water boiler Standardkessel with heat capacity of 15 MW, with universal burners gas GZ-50
burner and oil. Being aware of our importance as a strategic energy supplying company we were well prepared to
the heating period. All the planned repairs and inspection works had been done. We have also realized all planned renovation and modernisation and finished the investment in ORC system.
2. HEAT SYSTEM. Heating sytem is an important element of district heating system. OZC S.A. operate aerial and underground as preinsulated. They are
a) main DN 400 – 150 mm b) distribution type pipelines and connection DN 150 – 25 mm
District heating pipeline has a total length of above 51,2 km. Within the investment we made and modernized 30 connections to blocks in Kujawska, Gimnazjalna, Dalibora, Batorego, Kolejowa Streets. We modernized heat system DN 150 in the area of former military unit in Wojska Polskiego Street and modernization of system with connections from DN 65÷25 in Moniuszko Street. In the year rise in preinsulated system was 1900 meters.
Development of preinsulated pipelines lenght.
1300 mb
1900 mb
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2007 2008
3. HEAT CENTRES.
There are followings heat centers in Ostrów heat distribution system:
- single - functional - heating medium only for central heating needs - double - functional - heating medium for central heating and hot water needs - multi - functional - heating medium for central heating, hot water, ventilation and technology
needs.
Annual report 2008
31
In 2008 in heating system there were 897 heat centers working, whereof 318 in single houses. We replaced central heating and hot water installations in buildings at: − Strzelecka 72 Street − Królowej Jadwigi 4 Street
Ammount of heat centres operated by OZC S.A.
254
295335
352 371388 399 409
0
50
100
150
200
250
300
350
400
450
2001 2002 2003 2004 2005 2006 2007 2008
Nu
mb
er
of
he
at
ce
ntr
es
Heat centres with weather gauges.
248289
323 340359 376 387 397
0
50
100
150
200
250
300
350
400
450
2001 2002 2003 2004 2005 2006 2007 2008
Nu
mb
er
of
he
at
ce
ntr
es.
Annual report 2008
32
VI. INVESTMENT.
Fundamental investing aim in the Company is growth of its market value. Investments are focused on development, proecology, modernization and replacement of capital assets. The aim of last two is growth of efficiency, availability and lowering failure frequency of production sets. In 2008 In Heat and Power Plant “OSTRÓW” there were finished following investments:
− Modernization of K3 boiler. There was new blast air box with grate manufactured, boiler in tight walls technology produced, two economizers were assembled. − Modernization of measurement set recording electric energy generated in cogeneration unit Centrax.
INVESTMENT TASKS IN 2008
No. Name of Project
Expenses planned in budget in
2008 TPLN
Costs incurred to 31.12.2008
TPLN
A Heat and Power Plant Ostrów 1 7 90 1 699
B Heat system and centers - new 2 177 1 155,3
C Modernization of c.w.u. in Kępno boiler hause 20 17
D Investment purchase and recovering and
others 290 256,9
E Investment total 4 277 3 128,2
Annual report 2008
33
VII. FINANCIAL STATEMENT. BALANCE Ostrowski Zakład Ciepłowniczy S.A. prepared as at 57 Wysocka street December 31, 2008 63-400 Ostrów Wielkopolski
ASSETS 31.12.2008. 31.12.2007 LIABILITIES 31.12.2008 31.12.2007
A. . Fixed assets 83 428 289,20 65 837 392,42 A. Equity 75 100 310,81 72 954 936,96
I. Intangible fixed assets 60 433,36 126 852,95 I. Paid-in share capital 12 174 200,00 12 174 200,00
1.Completed projects
II. Supplementary capital 26 095 190,30 25 817 384,00
2. Goodwill
III. Revaluation capital 1 027 844,16 1 051 253,44
3. Other Intangible assets 60 433,36
126 852,95 IV. Reserve capital 1 340 265,33 1 340 265,33
4. Prepayment in advance of intangible assets
V. Profits kept
30 528 250,62 30 917 404,17
II. Tangible fix assets 82 114 642,34
64 530 009,97 VI. Profit (loss) from the current period
3 934 560,40 1 654 430,02
1 Fixed assets 81 851 505,80
59 584 794,08 B.Long term liabilities 11 423 577,03 11 511 351,85
a) land 2 103 850,27
2 103 850,27 1. for related entities
b) buildings 37 849 915,88
32 501 410,52 2. for remaining entities 11 423 577,03 11 511 351,85
c) machines and equipment
40 628 321,98 23 647 912,93 a) loans
3 476 000,00 3 912 000,00
d) means of transport 672 013,05
620 595,37 b) issue of debt
instruments
e) other fixed assets 597 404,62
711 024,99 c) leasing liabilities
2 Fixed assets in advance 263 136,54
1 754 071,49 d) other liabilities 3. Prepayment in advance
for fixed assets 0,00
3 191 144,40 e) long term liabilities
III. Long term debtors 0,00
0,00 f) Provision for
deferred income tax 6 969 238,61 6 520 627,61
1 from related entities
g) Provision for social
security premiums 978 338,42 1 078 724,24
2. from other entities
h) other provinsions
IV. Long-term investments 936 677,50
939 197,50 C. Short term liabilities 5 869 322,29 6 110 045,54
1. Property
1. For related entities 37 852,88 33 424,69
2. Investments in related entities
936 677,50 936 677,50
a) for deliveries and services over period
37 852,88 33 424,69
3. Loans
b) other
4. Up to kept assets
2. For remaining entities 5 831 469,41 6 076 620,85
5. Assets from sale 0,00 2 520,00 a) loans
436 000,00 448 000,00
V. Long term accruals and deferred income
316 536,00 241 332,00
b) issue of debt instruments
1. Deferred income tax 316 536,00
241 332,00 c) leasing liabilities
2. Other accruals
d) other financial
liabilities
B Short term Current assets 21 078 294,47
28 141 140,27 e) other short term
financial liabilities
I. Stocks 7 631 508,68 4 350 297,34 f) for deliveries and
services over period 2 205 89,25 1 670 175,02
Annual report 2008
34
1.Raw materials 5 295 261,12 4 304 139,53
g) prepayment for deliveries
2. Unfinished goods and goods in progress
h) bill of exchange obligations
3. Ready goods i) tax, duties, and
social security premiums 1 375 995,99 1 183 151,55
4. Goods for resale 2 336 247,56
j) payroll payment 210 112,17 184 197,64
5. Payments in advance for delivery
0,00 46 157,81 k)other
1 418 073,10 2 505 456,90
II. Short term credits 7 555 587,87 7 041 733,64
l provisions for social benefits
186 198,90 85 639,74
1. Liabilities from related entities
256 202,91 304 515,99 ł) pozostałe rezerwy
a) ) for deliveries and services
256 202,91 304 515,99 D Accruals
12 113 373,54 12 470 561,73
b) other 1. Profit related 12 113 373,54 12 470 561,73 2 Credits from remaining
entities 7 299 384,96 6 737 217,65
2. Other 0,00 0,00
a) for deliveries and services
6 184 114,96 5 252 973,84 E. Liabilities connected with fixe asstets for sale
b taxes, duties and social security and health payments
828 470,00 1 063 255,00
c) from legal institution
d) other 286 800,00 420 988,81
III Short term tangible assets 5 499 363,08 6 470 176,45
1. Finance assets in fair
value, through finance result 0,00 0,00
a) in related entities 0,00 0,00
Related parties
- equities
- other securities
- loans 0,00 0,00 - other short -term
financial assets
b) in remaining entities
- other short term financial assets
2Loans
3. Up to kept assets
4. Assets to sale
5. cash and cash
equivalents 5 499 363,08 6 470 176,45
- cash in hand and at bank
40 363,08 58 176,45
- other means of
payment 5 459 000,00 6 412 000,00
other cash assets IV. Short term accruals and deferred income
391 834,84 441 329,61
- expenses related 173 873,31 104 681,40
- orher 217 961,53 336 648,21
TOTAL ASSETS 104 506 583,67 103 046 896,08 LIABILITIES TOTAL 104 506 583,67 103 046 896,08
Annual report 2008
35
PROFIT AND LOSS STATEMENT.
Ostrowski Zakład Ciepłowniczy S.A. From 01.01.2008 to 31.12.2008 57 Wysocka Street 63-400 Ostrów Wielkopolski comparative figures
Specification Current year
2008 Previus year
2007
OPERATING ACTIVITY
A. Net sales and sales equivalents 36 960 721,87 28 919 317,56
- from related entities 1 942 042,89 1 633 420,92
I. Net sales of services 35 992 586,20 27 421 899,55
II. Changes in service value (increase – positive value, decrease negative value)
69 191,91 9 763,81
III. Cost of service rendered on own account 136 331,38 227 393,16
IV. . Net sales of fixes assets 762 612,38 1 260 261,04
B. Operating expenses 33 579 436,40 28 755 450,81
I. Depreciation 4 066 499,46 3 675 136,00
II. Materials and energy 20 695 477,38 16 834 062,57
III. External services 1 685 423,21 1 037 862,95
IV. Taxes and charges, including:: 1 556 342,47 1 496 019,56
- Excise duty 472 100,00 456 321,00
V. Salaries 3 559 470,77 3 230 002,71
VI. Social security and other benefits 890 422,60 856 735,83
VII. Other costs 446 574,14 414 122,65
VIII. Cost of fixed assets sold 679 226,37 1 211 508,54
C. Profit (loss) from sale (A-B) 3 381 285,47 163 866,75
D. Other operating revenue 1 554 630,05 1 596 540,83
I. Gain profit from sale of non-financial fixed assets 16 736,00 80 253,40
II. Subsides 971 670,39 1 209 869,07
III. Interests 76 017,79 40 617,17
IV. Other operating revenue 490 205,87 265 801,19
E. Other operating expenses 398 000,79 329 359,48
I. Losses from sale of non-financial fixed assets 0,00 0,00
II Revaluation of non-financial assets 129 543,27 19 990,90
III Intrests 2 100,00 2 657,25
IV. Other operating expenses 266 357,52 306 711,33
F. Operating profit and loss on operating activities (C+D-E) 4 537 914,73 1 431 048,10
Annual report 2008
36
G. Financial revenue 431 931,27 577 924,92
I. Dividends and profit participation 0,00 0,00
II. Interest 431 931,27 577 924,92
III. profit from sales of investments 0,00 0,00
IV. Revaluation of investments 0,00 0,00
V. Other revenues 0,00 0,00
H. Financial expenses 155 780,60 0,00
I. Interest 151 596,18 0,00
II. Loss from sales of investments 0,00 0,00
III. Revaluation of investments 0,00 0,00
IV. Other expenses 4 184,42 0,00
I. Profit (loss) on ordinary activities (F+G-H) 4 814 065,40 2 008 973,02
J. Extraordinary activities (J.I.-J.II.) 879 505,00 354 543,00
L. Gross profit (loss) (K-/+L) 3 934 560,40 1 654 430,02
CEASED ACTIVITY
L. Gross profit (loss) from ceased activities
M. Net profit (loss) for financial year (M-/+N)
Profit/loss per share ( in PLN ) 3,23 1,36
Profit/loss per share from continued activity 3,23 1,36
Profit/loss per share from continued activity and ceased activity
Annual report 2008
37
PROFIT AND LOSS STATEMENT. Ostrowski Zakład Ciepłowniczy S.A. 57 Wysocka street From 01.01.2008 to 31.12.2008 63-400 Ostrów Wielkopolski calculation type
SPECIFIICATION
Current year
31.12.2008
Previous year
31.12.2007
OPERATING ACTIVITY
A Net revenues from sales of products, goods and materials, including: 36 755 198,58 28 682 160,59
I. Net revenues from sales of products 35 992 586,20 27 421 899,55
II. Net revenues from sales of materials 762 612,38 1 260 261,04
B. Cost of products, goods and materials sold, including: 30 946 027,16 26 163 677,64
I. Manufacturing cost of products sold 30 266 800,79 24 952 169,10
II. Value of goods and materials sold 679 226,37 1 211 508,54
C. Gross profit (loss) on sales (A-B) 5 809 171,42 2 518 482,95
D. Costs of sales 1 554 630,05 1 596 540,83
I. Gross profit from sale on non-financial fixed assets 16 736,00 80 253,40
II. Subsides 971 670,39 1 209 869,07
III. Interests 76 017,79 40 617,17
IV. Other operating revenues 490 205,87 265 801,19
E. Costs of sale 268 940,68 242 362,99
F. General and administrative costs 2 158 945,27 2 112 253,21
G. Other operational revenue 398 000,79 329 359,48
I. Loss profit from sale on non-financial fixed assets 0,00 0,00
II. Revaluation of non-financial assets 129 543,27 19 990,90
III. Interests 2 100,00 2 657,25
IV. Other operating costs 266 357,52 306 711,33
H. Profit (loss) on business activities ( C+D-E-F-G) 4 537 914,73 1 431 048,10
I. Financial revenues 431 931,27 577 924,92
I Dividend and profit sharing
II. Intrests 431 931,27 577 924,92
III. Gain on disposal of investments 0,00
IV. Revaluation of investments
V. Other financial revenues 0,00 0,00
J. Financial Expenses 155 780,60 0,00
Annual report 2008
38
I. Intrests 151 596,18 0,00
II. Loss on disposal of investment
III. Revaluation of investments
IV. Other financial expenses 4 184,42 0,00
K. Profit (loss) before tax (H+I-J) 4 814 065,40 2 008 973,02
L. Corporate income tax 879 505,00 354 543,00
M. Profit (loss) on operating activity (K-/+L) 3 934 560,40 1 654 430,02
CEASED ACTIVITY
N. Profit (loss) on ceased activity
O. Net profit (loss) for financial year (M-/+N)
Profit/loss per share ( in PLN ) 3,23 1,36
Profit/loss per share from continued activity 3,23 1,36
Profit/loss per share from continued activity and ceased activity
Annual report 2008
39
CASH FLOW STATEMENT.
Ostrowski Zakład Ciepłowniczy S.A. 57 Wysocka street From 01.01.2008 to 31.12.2008 63-400 Ostrów Wielkopolski indirect method
Wyszczególnienie Za bieŜący rok obrotowy 2008
Za poprzedni rok obrotowy 2007
A. Operiting activity cash flow
I. Profit (loss) nett 3 934 560,40 1 654 430,02
II. Total adjustment -237 798,10 5 080 207,48
1. Depreciation 4 066 499,46 3 675 136,00
2. Exchange gains (losses)
3. Interest and profit sharing (dividend) 356 352,88 577 924,92
4. Profit (loss) on investment activities -8 733,98 -74 553,40
5. Change in provisions 448 784,34 20 685,76
6. Change of state of inventory -3 281 211,34 2 259 219,59
7. Change in receivables -9 078,33 -247 372,18
8. Change in short-term liabilities excluding credits and loans -337 124,02 258 938,95
9. Counted income tax 454 261,00 659 600,00
10. Paid income tax -967 872,00 -741 516,00
11. Change in prepayments and accruals -959 676,11 -1 308 860,56
12. Other adjustments 0,00 1 004,40
III. Cash flow from operatiing activity (I+II). 3 696 762,30 6 734 637,50
B. Cash flows from investments
I. Inflows 19 256,00 5 700,00
1. Disposal of intangible and tangible fixed assets 16 736,00 5 700,00
2. Disposal of investments in real property and in intangible assets
3. From financial assets, including:
a) in related entities
b) in other entities
- sales of financial assets 2 520,00
- dividends and profit sharing
- repayment of granted long-term loans
- interests
- other inflows from financial assets
4. Other inflows from investment activities
II. Outflows 3 127 738,19 22 743 626,69
1. Purchase of intangible, legal and fix assets 3 127 738,19 22 743 626,69
2. Investment in real property and intangible and legal assets
3. For financial assets, including: 0,00 0,00
a) in related entities
b) in other entities 0,00 0,00
- purchase of financial assets
- long-term loans granted
Annual report 2008
40
4. Other outflows from investment activities
III. Net cash flows from investment activities (I-II) -3 108 482,19 -22 737 926,69
C. Cash flow from finance activity
I. Inflows 645 292,40 11 236 617,80
1. Net inflows from issuance of shares and other capital instruments and from capital contributions
2. Credits and loans 0,00 4 360 000,00
3. Issuance of debt securities
4. Other inflows from financial activities 645 292,40 6 876 617,80
II Outflows 2 204 385,88 3 012 764,92
1. Purchase of own shares
2. Dividend and other payments to shareholders 1 400 033,00 2 434 840,00
3. Profit distribution liabilities other than profit distribution payments to shareholders
4. Repayment of credits and loans 448 000,00
5. Redemption of debt securities
6. Payment of other financial liabilities
7. Payment of liabilities arising from financial leases
8. Interests 356 352,88 577 924,92
9. Other outflows from financial activities
III. Cash flow from finance activity (I - II) -1 559 093,48 8 223 852,88
D. Total net cash flows (A.III. + B.III + C.III) -970 813,37 -7 779 436,31
E. Balance sheet change in cash, including: -970 813,37 -7 779 436,31
- change in cash due to exchange differences
F. Cash opening balance 6 470 176,45 14 249 612,76
G. Closing balance of cash (F+D), including: 5 499 363,08 6 470 176,45
Annual report 2008
41
SETTELMENT OF CHANGED IN EQUITY Ostrowski Zakład Ciepłowniczy S.A. prepared as at 57 Wysocka street December 31, 2008 63-400 Ostrów Wielkopolski
SPECIFIICATION
Current year
2008
Previous year
2007
I. Opening balance of equity 72 954 936,96 70 307 021,96
- adjustments of fundamental errors and changes in accounting principles
I.a. Opening balance of equity after adjustments 72 954 936,96 70 307 021,96
1. Opening balance of share capital 12 174 200,00 12 174 200,00
1.1. Changes in share capital 0,00 0,00
a) increase (due to)
- issuance of shares
b) decrease (due to)
- redemption of shares
1.2 Closing balance of share capital 12 174 200,00 12 174 200,00
2. Opening balance of called up share capital
2.1. Changes in called up share capital 0,00 0,00
a) increase (due to)
b) decrease (due to)
2.2. Closing balance of called up share capital 0,00 0,00
3. Opening balance of own shares
a) increase (due to)
b) decrease
3.1. Closing balance of own shares 0,00 0,00
4. Opening balance of supplementary capital 25 817 384,00 24 471 489,13
4.1 Changes in supplementary capital 277 806,30 1 345 894,87
a) increase (due to) 277 806,30 1 345 894,87
- issue of shares above face value
- from profit distribution (statutory) 132 351,76 291 414,88
- from profit distribution (above the statutory minimum value) 122 045,26 916 431,17
- liquidation of revaluated fixed assets 23 409,28 138 048,82
- other
b) decrease ( due to ) 0,00 0,00
- loss coverage
- tangible fixed assets disposal
- other 4.2 Closing balance of supplementary capital
26 095 190,30 25 817 384,00 5. Opening balance of revaluation reserve
1 051 253,44 1 189 302,26 5.1. Changes in revaluation reserve
-23 409,28 -138 048,82
Annual report 2008
42
a) increase (due to) 0,00 0,00
- from profit distribution (statutory)
- profit share
- other b) decrease (due to)
23 409,28 138 048,82 - sales of tangible fixed assets
23 409,28 138 048,82 - other
5.2. Closing balance of revaluation reserve
1 027 844,16 1 051 253,44 6. Opening balance of other reserve capitals
1 340 265,33 1 340 265,33 6.1. Changes in other reserve capitals
0,00 0,00 a) increase (due to)
0,00 0,00 - from profit distribution
b) decrease (due to)
0,00 0,00 - expenses according to resolutions
- other
6.2. Closing balance of other reserve capitals
1 340 265,33 1 340 265,33 7. Kept profits
7.1 Opening balance of kept profits 30 917 404,17 31 131 765,24
- adjustments of fundamenta errors
7.2. Opening balance of kept profits, after adjustments 30 917 404,17 31 131 765,24 a) increase due to
0,00 0,00 - distribution of previous years’ profit
b) decrease (due to)
- elimination ST 389 153,55 214 361,07
- puroposes for reserve capital 389 153,55 214 361,07
7.3 Opening balance of kept profits
7.4. Opening balance of kept losses 30 528 250,62 30 917 404,17
- errors adjustments
7.5 Closing balance of previous years’profit (loss), after adjustments
a) increase (due to) 0,00 0,00
- previous’ years loss brought foward 0,00 0,00
b) decrease due to
- loss cover 0,00 0,00
- other
7.6. . Closing balance of previous years’profit (loss 0,00
7.7. Closing balance of previous years’profit (loss) 30 528 250,62 30 917 404,17
8. Opening balance of net result 1 654 430,02 3 642 686,05
a) increase (due to) 0,00 0,00
b) decrease (due to) 1 654 430,02 3 642 686,05
- dywidend 1 400 033,00 2 434 840,00
-purposes for reserve capitall 254 397,02 1 207 846,05
-purpopses for kept profits 0,00 0,00
8.1.Opening balance of net result 0,00
9. Net result 3 934 560,40 1 654 430,02
a) Net profit 3 934 560,40 1 654 430,02
b) Net loss (negative value) 0,00 0,00
c) write-offs on profit (negative value)
Annual report 2008
43
II. Closing balance of equity 75 100 310,81 72 954 936,96
III. Equity including proposed profit distribution (loss coverage)
Ostrów Wielkopolski, February 2009.
Alina Tomaszewska Zenon Musialski Roman Cegielny
Executive President Executive Chief accountant Technical director
Annual report 2008
44
STATEMENTS OF THE MANAGING BOARD OF OSTROWSKI ZAKŁAD CIEPŁOWNICZY S.A.
1.To the best of their knowledge the Managing Board declares that yearly financial reports and comparative data were made in accordance with legally binding rules of accounting. Moreover, they truly, honestly, and clearly reflect the material and financial situation of the issuer and its financial result. The Managing Board report contains the actual state of development and achievements as well as the situation of the issuer including the description of risk and dangers. 2. The Managing Board declares that the subject entitled to audit the financial report and responsible for auditing the yearly financial report was chosen in accordance with the rules of law. Moreover, the above-mentioned subject and chartered accountants who audited the financial reports fulfilled the conditions to issue an objective and independent opinion on the audit in accordance with legally binding national regulations. 3. Ostrowski Zakład Ciepłowniczy S.A obeys the rules of corporation order introduced by virtue of the Supervisory Board and The Managing Board of CeTO S.A. resolutions in February 2005. The rules of functioning of the company authorities are defined in the company statute and company regulations. The General Assembly of Shareholders had a stable set of regulations with detailed description of rules concerning having sessions and passing resolutions. The Supervisory Board and The Issuer’s Managing Board have stable set of regulations and they function in accordance with them.
Alina Tomaszewska Zenon Musialski Roman Cegielny
Executive President Executive Chief accountant Technical director
