ANNUAL REPORT 2011 - DONG Energy

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notes 32 Credit and market risks DKK million Clearing centres AAA/Aaa AA/Aa A/A BBB/Baa Other total 2011 3,430 8,350 5,226 8,621 1,471 9,078 36,176 2010 7,153 7,097 4,883 8,212 357 7,897 35,599 Credit risks The table above provides an overview of the credit quality of the market value of derivative fi nancial instruments, cash and bond portfolios and trade receivables at 31 December 2011 in the DONG Energy Group based on the individual counterparty’s ratings with Standard & Poor’s and Moody’s. The amounts stated do not include any collateral and therefore do not refl ect the actual credit risk. Like previous years, DONG Energy’s counterparty risks are concentrated on companies with a rating of A/A or above. The AA/Aa and A/A categories cover trading with large international energy companies and banks. Such trading is regulated under standard agreements, such as EFET and ISDA agreements, which feature credit rating and netting provisions. The AAA/Aaa category covers DONG Energy’s position in Danish AAA-rated mortgage bonds. The value of trading at clearing centres decreased signifi cantly compared with 2010, whereas the other categories increased. This refl ected a combination of changed trading activity in connection with hedging of DONG Energy’s market risk and market value changes in relation to the date of conclusion of each transaction determined at 31 December. The ‘Other’ group predominantly consists of trade receivables from customers, such as end users and PSO customers. Further details of the Group’s risk management are provided in the chapter on Risk and risk management on pages 44-49 of Management’s review. market risks The market risk on commodities primarily relates to portfolio management and trading activities. The Group is exposed to two types of energy risk: fl uctuations in market prices and fl uctuations in volumes due to the fl uctuating needs of the underlying business. By virtue of its day-to-day activities, the Group is exposed to fl uctuations in the prices of gas, oil, electricity, coal and CO2 108 112 COnsOliDatED finanCial statEmEnts – DONG ENERGY GROUP ANNUAL ANNUAL REPORT REPORT 2011 2011 and, to a lesser extent, other commodities. The Group trades actively in these commodities in the relevant markets to hedge and optimise its supply requirements and secure the Group’s supply chain. In this connection, the Group uses derivatives to hedge its positions. The sensitivity analysis below shows the effect of market value changes assuming a relative price change at 31 December 2011. The illustrated effect on profi t comprises fi nancial instruments that remained open at the balance sheet date and have an effect on profi t in the fi nancial year in question. Besides derivative fi nancial instruments on commodities and currency, fi nancial instruments in this context include receivables and payables in foreign currencies. It should be noted that the illustrated sensitivities only comprise the Group’s fi nancial instruments and therefore exclude the effect from contracts concluded under which physical delivery of the underlying assets is made, as these are not recognised as fi nancial instruments in accordance with IAS 39. The sensitivity thus only comprises the derivative fi nancial instruments and not the physical contracts they hedge. The implementation of business performance has made the Group more sensitive to changes in commodity prices and exchange rates in the statement of comprehensive income, but has reduced its sensitivity in equity. The fi nancial instruments that form part of the sensitivity analysis are fi nancial instruments and fi nancial contracts measured at market value and the Group’s receivables, cash and trade payables and its external fi nancing such as bank loans and bond loans. Net investments and associated hedging of net investments in foreign subsidiaries are not included, as the effect of the sum of the investment and the hedging is considered to be neutral to price changes. For further details of the Group’s net investments and hedging of same, reference is made to note 33.
Risk Price change Effect on profi t before tax At 31 December 2011 At 31 December 2010 Effect on equity before tax Effect on profi t before tax Effect on equity before tax Oil +10% 751 - 867 (427) -10% (719) - (923) 522 Gas +10% (1,572) - (17) - -10% 1,572 - 17 - Electricity +10% (636) - 523 (308) -10% 599 - (524) 308 Coal +10% 25 - (173) 176 -10% (25) - 173 (176) USD +10% 393 - (152) 1,531 -10% (393) - 152 (1,531) GBP +10% (369) (94) 17 156 -10% 369 94 (17) (156) NOK +10% (205) (5) (282) 21 -10% 205 5 282 (21) SEK +10% 75 (3) 70 (43) -10% (68) 3 (70) 43 EUR +10% (535) - (1,479 (75) -10% 535 - 1,479 75 Other +10% 2 9 - - -10% (2) (9) - - Interest +100 basis points (237) 448 (482) 279 DONG ENERGY DONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDatED finanCial statEmEnts 109 113 notes
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MOVING ENERGY FORWARD ANNUAL REPORT
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More reliable and clean energy DONG
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More reliable and clean energy Mode
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Q3 17 August signing of Eur 1.3 bil
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ifrs statement of comprehensive inc
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un Global Compact principle Climate
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Spearheading the development of the
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Waste is a valuable resource It is
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DONG Energy involves local operator
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The ambitious business strategy mea
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DONG Energy contributes to green gr
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The photo shows the Siri platform i
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The photo shows the construction of
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The photo shows one of the Group’
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Strong market insight from experien
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The photo shows a meter technician
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monthly average 2011 2010 ∆ Oil,
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Net finance costs amounted to DKK 0
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New presentation of profit for the
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Non-financial performance The Group
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volumes Generation from wind and hy
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was brought back online in October
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Further information on DONG Energy
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DONG Energy has a diversified loan
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Market and credit risks The Group
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isk and risk policy Exposure and he
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isk and risk policy Exposure and he
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Environment As an energy company, D
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Under Danish legislation, the Group
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information and communication DONG
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lars nØrBy JOHansEn Deputy Chairma
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pOul arnE niElsEn b. 1944. Joined t
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Page 69 and 70: DKK million Note Business perfor ma
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Page 93 and 94: DKK million Goodwill Cost at 1 Janu
Page 95 and 96: The main criteria used for determin
Page 97 and 98: DKK million Land and Impairment tes
Page 99 and 100: 17 Associates and other securities
Page 101 and 102: 19 Receivables DKK million 2011 201
Page 103 and 104: 20 Construction contracts DKK milli
Page 105 and 106: Hybrid capital due 3005 Hybrid capi
Page 107 and 108: Change in temporary differences in
Page 109 and 110: 25 Loans and borrowings DKK million
Page 111 and 112: 27 Income tax receivable and payabl
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Page 115: Other capital transactions with non
Page 119 and 120: Categories of fi nancial instrument
Page 121 and 122: securities 2011 DKK million Nominal
Page 123 and 124: trading portfolio, economic hedging
Page 125 and 126: Hedging of net investments in forei
Page 127 and 128: 35 Lease commitments 2011 DKK milli
Page 129 and 130: As a condition for approval of its
Page 131 and 132: 39 Events after the reporting perio
Page 133 and 134: Regulated companies that operate ac
Page 135 and 136: do not satisfy the criteria for hed
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Page 139 and 140: eporting enterprise operates. Trans
Page 141 and 142: CO 2 emissions allowances Allocated
Page 143 and 144: Deferred tax is measured using the
Page 145 and 146: Definitions of performance highligh
Page 147 and 148: significant licences and hydrocarbo
Page 149 and 150: 42 Company overview Segment/company
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Page 161 and 162: fInancIal stateMents 2011 PARENT CO
Page 163 and 164: DKK million Note 2011 2010 profit f
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DKK million Share capital Hedging r
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01 Basis of reporting The parent co
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04 Staff costs DKK million 2011 201
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06 Finance income DKK million 2011
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09 Property, plant and equipment DK
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12 Equity Share capital composition
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14 Loans and borrowings DKK million
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18 Financial risks DONG Energy A/S
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19 Financial instruments maturity a
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fair value hierarchy of financial i
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22 Related party transactions tradi
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Independent Auditor’s Report To t
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coMPany announceMents IN 2011 Compa
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glossaRy relatively low (off-peak).
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ANNUAL REPORT 2011 - DONG Energy

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