Annual report 2012 - Gelsenwasser AG

2012
ANNUAL
FINANCIAL
REPORTS

GELSENWASSER AT A GLANCE
GELSENWASSER GROUP 2012 2011
Sales revenues Million € 1,058.3 866.5
Cost of sales Million € 834.6 614.6
Employee salaries and benefits Million € 100.1 101.9
Result before taxes on income Million € 95.9 103.5
Share capital Million € 103.1 103.1
Intangible assets and property, plant and equipment Million € 699.9 706.1
Investments Million € 32.5 34.1
EMPLOYEES TO 31.12.
Group 1,579 1,615
Consolidated 4,635 4,630
WATER SUPPLY
Sales Group Million € 255.4 255.4
Consolidated sales Million € 374.5 370.3
Water output Group Million m³ 239.9 239.4
Consolidated water output Million m³ 376.2 374.3
WASTE WATER DISPOSAL
Sales Group Million € 10.6 10.3
Consolidated sales Million € 278.3 265.9
Waste water quantity Group Million m³ 8.1 8.1
Consolidated waste water quantity Million m³ 204.4 204.9
NATURAL GAS SUPPLY
Sales Group Million € 766.3 563.5
Consolidated sales Million € 947.1 760.2
Natural gas quantity Group Million kWh 23,423 16,057
Consolidated natural gas quantity Million kWh 26,496 19,613
ELECTRICITY SUPPLY
Sales Group Million € 26.0 37.3
Consolidated sales Million € 396.6 366.2
Electricity output Group Million kWh 146 226
Consolidated electricity output Million kWh 2,602 2,495
GELSENWASSER-GROUP
GELSENWASSER AG, Gelsenkirchen
GELSENWASSER Dresden GmbH, Dresden
GELSENWASSER Energienetze GmbH, Gelsenkirchen
GELSENWASSER Projektgesellschaft mbH, Hamburg
GELSENWASSER Stadtwerkedienstleistungs-GmbH, Hamburg
Nantaise des Eaux Services SAS, Sainte-Luce-sur-Loire, France
NGW GmbH, Duisburg
Osmo GmbH, Hamburg
Städtische Werke Magdeburg Beteiligungs-GmbH, Gelsenkirchen
Vereinigte Gas- und Wasserversorgung GmbH, Rheda-Wiedenbrück
WESTFALICA GmbH, Bad Oeynhausen
GELSENWASSER-GROUP
The disclosures on the GELSENWASSER Group are based on a
group consolidated recording of all businesses and companies with
a share proportion of around 20%. The GELSENWASSER Group
ensures the water supply, waste water disposal and energy supply
in many German Federal states as well as in France, the Czech
Republic and Poland. Together with other business activities, Group
revenues of € 2.1 billion were achieved in 2012.

CONTENTS
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4
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88
89
SUPERVISORY BOARD, MANAGEMEN T BOARD
REPORT OF THE SUPERVISORY BOARD
CONSOLIDATED MANAGEMENT REPORT
OF GELSENWASSER AG AND THE GELSENWASSER GROUP
EXPLANATORY REPORT OF THE MANAGEMENT BOARD
ON TAKEOVER LAW DISCLOSURES
2012 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
OF GELSENWASSER AG
INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT
BALANCE SHEET
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
CONSOLIDATED NOTES
AFFIRMATION OF THE LEGAL REPRESENTATIVES
AUDIT CERTIFICATE

SUPERVISORY BOARD,
MANAGEMENT BOARD
P-. 2 || SUPERVISORY BOARD, MANAGEMENT BOARD

SUPERVISORY BOARD
MANAGEMENT BOARD
Dr Ottilie Scholz, Bochum
Chairwoman
Mayor
Guntram Pehlke, Dortmund
Deputy Chairman
Chairman of the Management Board
of Dortmunder Stadtwerke AG
Henning R. Deters, Essen
Chairman
Dr.-Ing. Dirk Waider, Krefeld
since 1 January 2013
Dr.-Ing. Bernhard Hörsgen, Essen
until 31 December 2012
Rainer Althans, Gelsenkirchen
Deputy Chairman
Full-time Chairman of the Works Council
of GELSENWASSER AG
Frank Baranowski, Gelsenkirchen
Mayor
Hans-Detlef Bösel, Madlitz-Wilmersdorf
Businessman
Klaus Franz, Bochum
Member of the Group Management
of ROCKWOOL INTERNATIONAL A/S
Senior Vice President Innovation & Business Development
Thomas Kaminski, Gladbeck
Full-time Deputy Chairman of the works Council
of GELSENWASSER AG
Manfred Kossack, Unna
Member of the Management Board
of Dortmunder Stadtwerke AG
Christina Leitner, Gelsenkirchen
Secretary
Jürgen Pellny, Duisburg
Operations Technician
Jörg Stüdemann, Dortmund
City Director and City Councillor
Bernhard Wilmert, Bochum
Spokesman of the Management
of Stadtwerke Bochum Holding GmbH
SUPERVISORY BOARD, MANAGEMENT BOARD || P. 3

REPORT
OF THE SUPERVISORY BOARD
P. 4 || REPORT OF THE SUPERVISORY BOARD

REPORT OF THE SUPERVISORY BOARD || P. 5

During the year the Supervisory Board was in continual contact
with the Management Board. The Supervisory Board regularly
advised the Management Board on running the company
as well as monitoring the management of the company. The
Management Board regularly, promptly and comprehensively
informed the Supervisory Board in verbal and written reports
about all important questions of corporate planning, strategic
orientation and development, the course of business and the
position of the company, including the risks and risk management
and compliance. On the basis of the reports of the
Management Board, all business procedures that require the
approval of the Supervisory Board according to the law and the
articles of association, as well as important matters relating
to the development of GELSENWASSER AG and the Group
companies, were dealt with in detail together with the Management
Board in regular meetings. Furthermore, the Chair of
the Supervisory Board was also immediately informed by the
Management Board about all other important business transactions
between meetings.
The Supervisory Board was included in all decisions of great
significance for the company and gave its approval as far as
was necessary. In the 2012 financial year the Supervisory
Board convened four times. The work of the Supervisory Board
is supported by three committees it has set up that prepare
meetings and resolutions of the Supervisory Board and also
make resolutions in place of the Supervisory Board in the case
of the Steering Committee within the context of legal approvals.
The Steering Committee convened five times, in particular to
prepare plenum meetings. The Audit Committee convened
twice. The Nomination Committee did not convene during the
year. The respective committee chairs reported regularly to the
plenum about the work of their committees. No member of
the Supervisory Board took part in fewer than half of the
meetings of the Supervisory Board. No conflicts of interest
occurred during the year.
The focus of the consultations in the Supervisory Board was
in turn the increasing regulatory and competitive pressure in
the energy and water markets. GELSENWASSER took part in
a wide range of tendering processes for energy concessions
with its own tenders, the conception of which was presented
to the Supervisory Board. The requirement made by awarding
authorities in many cases of taking a stake in network operations
was explored as both a competitive advantage for a
municipal company such as GELSENWASSER and also in its
specific effects on the tender concept. On this basis, it was
possible to achieve initial successes, such as in the Stolzenau,
Hünxe, Kalkar and Münsterland procedures. The judicial review
of the award decisions currently initiated on application by
competitors and their implementation, including the acquisition
of local electricity and gas distribution networks, will remain
issues explored by the Supervisory Board.
In the water sector, after discussions in the Supervisory Board,
it was possible to reach a settlement with the Town of Höxter
in arbitration proceedings about additional charges with reference
to the establishment of Stadtentwässerung Höxter
GmbH in 2009. More important financially was the establishment
of Wasserbeschaffung Duisburg GmbH, held equally
with Stadtwerke Duisburg, which ended a dispute lasting
several years about the supply of half the Duisburg urban area
from the waterworks containers, which was frequently the
subject of committee meetings. With regard to water supply,
these particularly dealt with the re-equipment of the waterworks
(held as an affiliated company) on the River Ruhr, primarily
with respect to the legal conditions and the effects of
such investments on the development of the water price.
In this respect, the repercussions of the strengthening of cartel
supervisory authority over end consumer prices in water supply
were included in the discussion. This has virtually taken the
place of the completed liberalisation and regulation of network
operations in the energy sector.
Consultations on foreign business in the Supervisory Board
focused on the tender to take over waste water disposal in
Bordeaux. After the award was given to another bidder it was
at least possible to achieve a refund of the costs for preparing
the tender. Due to the termination of the management contract
on which the Annaba project in Algeria was based, the Supervisory
Board was informed that arbitration proceedings had
been initiated before the International Chamber of Commerce
in Paris.
The Supervisory Board dealt with current changes to the
law and with compliance with the recommendations of the
German Corporate Governance Code. In particular, in accordance
with Figure 5.4.1 of the German Corporate Governance
Code, the Supervisory Board discussed and resolved on a
change to the targets for the composition of the Supervisory
Boards.
The Management Board met its reporting duties towards the
Supervisory Board during the year in full. The Supervisory
Board is convinced the Management Board has taken the
measures required in Section 91 (2) AktG for monitoring
and the early recognition of risks in a suitable form. It has subjected
the regular analyses on which this is based to its own
assessment.
P. 6 || REPORT OF THE SUPERVISORY BOARD

The annual financial statements and consolidated financial
statements of GELSENWASSER AG and the consolidated
management report and group management report for the
2012 financial year, including the monitoring system in accordance
with Section 91 (2) AktG submitted by the Management
Board, were audited by Dr. Bergmann, Kauffmann und Partner
GmbH & Co. KG firm of auditors and tax consultants,
Dortmund and issued with an unqualified audit certificate. The
financial statements, the management report, and the audit
report were sent punctually to all members of the Supervisory
Board. The submissions were in turn initially discussed first,
by the Audit Committee in the auditor’s presence and subsequently
by the Supervisory Board together with the auditor.
The auditor reported on the results of their audit overall and the
individual focal points of the audit, particularly the question
of whether there are any important weaknesses in the
inter nal control and risk management system related to the
accounting process. This is not the case. There were also
no other objections. The auditor provided information that
there were no circumstances that might give rise to a conflict of
interests.
Dr Bernhard Hörsgen was recalled as a member of the
Management Board on 31 December 2012 (end of the
contractual relationship). The results of his many years of work
in the role of the Technical Director of the Management
Board were greatly appreciated by the Supervisory Board. The
Supervisory Board would like to thank Dr Hörsgen for his
always exemplary cooperation and the vision with which
he guided the further development of the technical business
units of the company. With effect on 1 January 2013, Dr
Dirk Waider was appointed as Technical Director and mem -
ber of the Management Board for a five year period of office.
The Supervisory Board would like to thank the Management
Board, the members of the Works Council and all employees
of GELSENWASSER AG and its affiliated companies for
their commitment, the work they have done and for their good
and trustworthy cooperation.
Gelsenkirchen, 18 March 2013
GELSENWASSER AG - Supervisory Board
The Supervisory Board has reviewed the consolidated
mana gement report and the annual financial statements of
GELSENWASSER AG and the Group in detail, taking the
report of the Chair of the Audit Committee into account. After
the final result of this audit there were no objections whatever.
The Supervisory Board took note of the auditor’s report and,
on the basis of its own review, follows the results of the audit of
the annual financial statements.
Dr Ottilie Scholz
Chairwoman
In accordance with the recommendation of the Audit Committee,
the Supervisory Board agreed with the consolidated
management and Group report, the consolidated annual
financial statements and the annual financial statements of
GELSENWASSER AG. The annual financial statements are
thus approved.
The Audit Committee recommended to the Supervisory
Board that the Annual General Meeting select Dr. Bergmann,
Kauffmann und Partner GmbH & Co. KG firm of auditors and
tax consultants, Dortmund, as the auditor and consolidated
auditor for the 2012 financial year. Supported by this recommendation,
the Supervisory Board resolved to make a
corresponding recommendation to the Annual General
Meeting.
REPORT OF THE SUPERVISORY BOARD || P. 7

CONSOLIDATED
MANAGEMENT REPORT
OF GELSENWASSER AG AND THE GELSENWASSER GROUP
P. 8 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 9

CONTENTS CONSOLIDATED MANAGEMENT REPORT
Page Chapter
12 1 BASIC INFORMATION ABOUT THE GROUP
12 1.1 Group structure and business activities
12 1.2 Sales markets and competitive position
12 1.2.1 Sales markets
12 1.2.2 Competition on the energy market
13 1.2.3 New contracts concluded in the water sector
13 1.3 Corporate targets
14 1.4 Company internal control system
14 2 ECONOMIC REPORT
14 2.1 Overall economic conditions
14 2.1.1 Water/waste water conditions
14 2.1.1.1 Conditions for water and waste water services
15 2.1.1.2 Tightening of the European Directive for materials in water planned
15 2.1.2 Energy conditions
15 2.1.2.1 Natural gas exploitation from unconventional sources –
Federal Environmental Agency and NRW Ministry of the Environment submit report
16 2.1.2.2 Concessions
16 2.1.2.3 Regulatory management
17 2.1.2.4 Energy price development
17 2.2 Sector development
17 2.2.1 Water
18 2.2.2 Energy
18 2.3 Course of business
18 2.3.1 Procurement activities
18 2.3.2 Water and energy volumes
18 2.3.2.1 Water
18 2.3.2.2 Gas
19 2.3.2.3 Electricity
19 2.3.3 Employees
19 2.3.4 Consolidated statement of the Management Board
19 2.4 SITUATION
19 2.4.1 Results of operations
19 2.4.1.1 Revenue development
19 2.4.1.2 EBIT and consolidated net income
20 2.4.1.3 Development of segment results
20 2.4.2 Financial position
20 2.4.2.1 Financial management
20 2.4.2.2 Capital structure and capital resources
21 2.4.2.3 Investments
22 2.4.3 Net assets
22 2.5 Financial and non-financial performance indicators
23 2.6 Annual financial statements of GELSENWASSER AG
23 2.6.1 Results of operations
24 2.6.2 Financial position
25 2.6.3 Investments
25 2.6.4 Net assets
25 3 EVENTS AFTER THE REPORTING PERIOD
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Page Chapter
25 4 FORECAST, OPPORTUNITIES AND RISK REPORT
25 4.1 Forecast report
25 4.1.1 Expanded conditions
26 4.1.2 Expected corporate development
26 4.1.3 Investments
26 4.1.4 Forward-looking statements
26 4.2 Risk and opportunities report
26 4.2.1 Risk management system
26 4.2.1.1 General
27 4.2.1.2 Gas business
28 4.2.2 Financial instruments
28 4.2.3 Risk position
31 4.2.4 Opportunities
33 4.2.5 Accounting related internal control system
34 5 CORPORATE GOVERNANCE STATEMENT
34 5.1 Corporate governance report and declaration of compliance
34 5.1.1 Corporate governance report
34 5.1.2 Wording of the current declaration of compliance
35 5.2 Corporate management practices
35 5.3 Management Board and Supervisory Board
35 5.3.1 Composition and manner of working of the Management Board
36 5.3.2 Composition of the Supervisory Board
36 5.3.3 Targets of the Supervisory Board with reference to its composition
37 5.3.4 Manner of working of the Supervisory Board
37 5.4 Committees of the Supervisory Board
37 5.4.1 Composition of the committees
37 5.4.2 Manner of working of the committees
38 6 TAKEOVER RELEVANT DISCLOSURES
38 6.1 Provisions on the appointment and recall of members of the
Management Board and amendments to the articles of association
38 6.2 Authorisations of the Management Board with reference to issuing and
repurchasing equities
38 6.3 Composition of the share capital
38 6.4 Change-of-control clauses
38 7 MAIN FEATURES OF THE REMUNERATION SYSTEMS OF THE
MANAGEMENT BOARD, SUPERVISORY BOARD AND WORKS COUNCIL
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 11

1 BASIC INFORMATION ABOUT THE GROUP
1.1 GROUP STRUCTURE AND BUSINESS ACTIVITIES
Including the parent company, the consolidated companies
include a total of ten subsidiaries and 38 companies valued
using the equity method.
The parent company, GELSENWASSER AG, is a stock
exchange listed German public limited company (Aktiengesellschaft)
registered in Germany with its headquarters in
Gelsenkirchen, Willy-Brandt-Allee 26. The company is entered
in the commercial register of Gelsenkirchen District Court under
HRB 165.
In addition to the Group parent company GELSENWASSER
AG, the following are included in the consolidated financial
statements as fully consolidated subsidiaries:
• GELSENWASSER Dresden GmbH, Dresden
• GELSENWASSER Energienetze GmbH, Gelsenkirchen
• GELSENWASSER Projektgesellschaft mbH, Hamburg
• GELSENWASSER Stadtwerkedienstleistungs-GmbH,
Hamburg (formerly GELSENWASSER 3. Beteiligungs-
GmbH, Hamburg)
• Nantaise des Eaux Services SAS, Sainte Luce-sur-Loire/
France
• NGW GmbH, Duisburg
• Osmo GmbH, Hamburg
• Städtische Werke Magdeburg Beteiligungs-GmbH,
Gelsenkirchen (since 1 August 2012)
• Stadtwerke Oranienburg GmbH, Oranienburg
(until 24 January 2012)
• Vereinigte Gas- und Wasserversorgung GmbH,
Rheda-Wiedenbrück
• WESTFALICA GmbH, Bad Oeynhausen.
Due to the different interest positions at shareholder level
with reference to the future strategic orientation and further
development of Stadtwerke Oranienburg GmbH (SWO), at
the end of the previous year GELSENWASSER had decided to
dispose of the shares in SWO. An offer was made to the
co-shareholder of SWO, the Town of Oranienburg, to acquire
all the shares amounting to 64.9% with effect on 1 January
2012. This offer was accepted by the co-shareholder on
24 January 2012.
GELSENWASSER AG and its fully consolidated subsidiaries
(together the GELSENWASSER Group) supply their customers
– households, businesses, public institutions and industry –
with drinking and process water as well as with natural gas and
district heat. Furthermore, the companies carry out tasks in
waste disposal, electricity supply and offer highly varied services
with an affinity to supply.
Wasser und Gas Westfalen GmbH & Co. Holding KG, Bochum,
a joint venture of Stadtwerke Bochum Holding GmbH and
Dortmunder Stadtwerke AG, held 3,194,401 shares in
GELSENWASSER AG via Wasser und Gas Westfalen GmbH
on 31 December 2012. This corresponded to a share of
92.93% of the share capital and the voting rights.
1.2 SALES MARKETS AND COMPETITIVE POSITION
1.2.1 SALES MARKETS
The focal points of the domestic supply area are the Ruhr
region, the Münsterland, the Lower Rhine, East Westphalia
and neighbouring Lower Saxony. The supply area of the
French subsidiary Nantaise des Eaux Services SAS (NES),
Sainte Luce-sur-Loire, focuses on North and West France as
well as on the region around Paris and the overseas departement
Guadeloupe. In addition, GELSENWASSER AG holds
stakes in companies in the Czech Republic and in Poland.
1.2.2 COMPETITION ON THE ENERGY MARKET
Intensive competition at all levels of the supply chain continues
to dominate the energy market. Pure distribution margins have
collapsed heavily in all segments. Through intensive competition
distribution margins are falling further. Nevertheless, new
market participants appear regularly, so that established
municipal utilities among others are also significantly expanding
their distribution activities and are offering energy in their
surroundings or even nationwide. It is also recognisable, however,
that first market participants are having financial difficulties
and some business concepts are not sustainable. It can be
repeatedly read in the press that some cheap providers have
got into payment difficulties and are partly threatened with
insolvency. Other market participants who have expanded
regional distribution activities are also cutting these back
successively. Additional market participants, who have partly
been on the market longer, are also changing their business
models and are orienting themselves from low margins to
significantly expanded margins in order to keep themselves
on the market in the medium term. Via energiehoch3, the
GELSENWASSER Group has a built up a cautious but clear
positioning in energy distribution via a purely internet platform
and is building this up further successively in small steps.
P. 12 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

It has been possible to compensate for the customer losses
of the GELSENWASSER Group caused by competition in
existing business by gains outside existing business. In particular,
volume compensation by new acquisitions of industrial and
commercial customers has led to pleasing volume sales. We
assume this positive trend can also be reached in 2013.
The sales area in the electricity sector is significantly more
characterised by the so-called energy transformation in Germany.
Through the disproportionate and unplanned high addition
of photo-voltaic capacities, there is currently a high range
of electricity that has to be given priority in acceptance. This
has led to a fall in prices on the procurement market and has
influenced the cost effectiveness of conventional generation
plants. Furthermore, there are considerable bottlenecks in the
electricity sector, which are a result of the quickly developed
overcapacities. There are currently overshooting political influences
that are leading to a rapid price rise for the end
consumer market. The proportion of electricity that can
currently be influenced has since fallen below 30 %. Despite
falling electricity prices on the procurement market, almost all
electricity providers in Germany had to pass on considerable
price rises to customers at the turn of the year. These price
rises have resulted from political influences. The German Renewable
Energies Act deduction alone has been increased
from 3.6 ct to 5.3 ct. Furthermore, additional support measures
are being financed by pushing the costs onto end customers.
Thus, for example, the increased CHP deduction,
the special customer costs share from Section 19 StromNEV
and the newly introduced offshore costs share (Section 17
EnWG). Currently there is considerable discussion in the electricity
sector about capacity markets, because the regular power
stations, such as gas power stations, that are actually necessary,
cannot be operated cost effectively under today’s
conditions. GELSENWASSER has no appreciable generation
capacities in the electricity sector so that GELSENWASSER
acts purely as a supplier here. The correspondingly increasing
cost items were punctually passed on to customers. In its
sales markets GELSENWASSER has been able to stabilise its
electricity position despite the price adjustments. This also
applies to the important subsidiaries NGW and WESTFALICA.
In this connection the introduction of a two-year fixed price
product has been received positively by the market, which is
pleasing.
1.2.3 NEW CONTRACTS CONCLUDED IN THE
WATER SECTOR
In the water sector it was possible to conclude contracts with
four municipal distribution partners in 2012 and contracts were
extended/concluded with nine industrial/special customers.
It was thus possible to continue to secure total volumes of 5.4
million m 3 p.a.
1.3 CORPORATE TARGETS
In 2012 the grid-bound markets for energy and water supply
and for waste water provision, particularly in its regulatory
framework, changed further. This had effects on the corporate
targets and focal points of the work of GELSENWASSER AG.
It is intended to consolidate the course of the company on four
supporting pillars in future. This includes strengthening the
water and waste water divisions as well as the decentralised
generation structures, expanding the value creation chain
towards the customer and intensifying business activities in
communal services.
In the water sector GELSENWASSER continues to work intensively
at institutional level with other players on developing
transparency-creating and efficiency-strengthening measures
and implementing these in the sector. In addition to costing
guidelines and the customer balance, this also includes participating
in benchmarking in NRW.
It is intended to contribute the specialist know-how of GELSEN-
WASSER even better to the operational business in future
through customer-specific products, for example, in industry.
In waste water too GELSENWASSER AG and the Group’s
companies are active members of the benchmarking initiative
aquabench. GELSENWASSER also actively co-developed the
costing guideline. Furthermore, there are efforts further to
develop energy efficient sewer plants through specific projects.
In the energy sector the requirements of the energy transformation
are the dominating issue. GELSENWASSER is attempting
to meet these challenges at various levels.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 13

In the area of decentralised energy supply GELSENWASSER
is in discussions with municipalities and project developers
about various projects in onshore wind. At the beginning of
2012, through the establishment of the joint venture GENREO
with the Olfen municipality, the foundations were laid for future
municipal energy supply. GELSENWASSER also has also been
dealing with the issues of biogas and hydro-electric power.
Internally, the company’s competences were further developed
in system technology in order to be able to meet the challenges
of increasingly decentralised generation sourcesas well.
In the classic areas of energy supply GELSENWASSER was
also able to post success through its network company
GELSENWASSER Energienetze GmbH (GWN) and will become
an electricity network operator in future through its concession
acquisitions in Stolzenau and Kaarst.
The reporting systems for actual and planning calculations
combine strategic and operational elements promptly in a
target oriented manner. These are supported by ad-hoc or
measure-oriented communication.
The central controlling key performance indicator and measurement
variable of the GELSENWASSER Group to assess value
development is the EBIT (Earnings before interest and taxes).
2 ECONOMIC REPORT
2.1 OVERALL ECONOMIC CONDITIONS
2.1.1 WATER/WASTE WATER CONDITIONS
2.1.1.1 Conditions for water and waste water services
In municipal services GELSENWASSER works together with its
municipal utility provider investments on building up the service
spectrum in a targeted manner and, for this purpose, it has
drawn up a corresponding project. Thus GELSENWASSER
is consistently following the target postulated in the past of
further developing not only GELSENWASSER AG, but also
the Group’s companies in their areas of activity.
EU Commission draft for statutory regulation
of awarding concessions in the final round
European influence on shaping the framework of the water
sector is tending to grow, as is the case in other areas. For
GELSENWASSER, in addition to specific specialist guidelines
in protecting bodies of water and water quality, this tendency
primarily concerns shaping public procurement law.
1.4 COMPANY INTERNAL CONTROL SYSTEM
In order to be able to ensure its existence in shifting markets,
GELSENWASSER uses a value oriented management system
to control and run the Group.
The target here is increasing the value of the company systematically
and continually – through profitable, sustainable
growth and by concentrating on business fields that offer
sustainable development chances with reference to their competitiveness
and efficiency.
The central instrument for this is integrated controlling. With
this controlling concept GELSENWASSER coordinates and
controls individual corporate activities and divisions. Coordination
is done as part of annual planning. Here, basic decisions
about investments, innovations, tapping markets and other
projects are disclosed in their effects on corporate development
and challenged. Through the planning process, which
runs bottom-up at GELSENWASSER while complying with
outline conditions, the decentral areas of responsibility are
supported and integrated, and Group-wide transparency is
created.
The questions of to what extent traditional German concessions
for water supply not open to tender should be subject
to tender in future and to what extent municipalities can claim
exceptions under the heading “in-house transactions” in intermunicipal
cooperation are of particular significance here.
Despite a negative vote by the European Parliament in May
2010 on the basis of the so-called Rühle Report against legislation
on service concessions, the European Commission submitted
a draft directive in December 2011, the final vote on
which in the European Parliament, in the Council and once
again in the EU Commission is expected in the second
quarter of 2013. The deadline for implementing the directive in
German law will then be two years.
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2.1.1.2 Tightening of the European Directive
for materials in waters planned
As part of the “Subsidiary Directive of the Water Framework
Directive on Environmental Quality Standards“ (“priority materials“),
a supplement to the positive list is currently being formulated
that will in part set higher requirements for the water
quality in bodies of water than the drinking water regulation.
The draft will be voted on at European level. The targets to be
complied with in bodies of water are partly so strict that it has
to be considered whether the materials concerned should be
phased out in the environment. As a result, in Germany and
also in NRW there are discussions about possibly introducing
a fourth treatment stage in waste water treatment to improve
water quality (“aquatic ecosystem”).
In May 2012 positive noises could still be heard in the media
that EXXON surveyors had come out in favour of demonstration
projects. In addition, the Federal Institute for Geosciences
made it known that gas deposits from unconventional sources
were greater than had previously been assumed. This then
changed at the beginning of September 2012, when the
Federal Environmental Agency and the NRW Ministry of the
Environment published their reports on the environmental
effects of fracking in unconventional natural gas sources.
Both expert reports prove that too few well-founded scientific
findings are available to date to be able to assess the risk of this
exploitation technique precisely. This confirms the scepticism
of GELSENWASSER all along the line.
Constructing the fourth treatment stage would lead to further
energy and financial burdens in waste water treatment, burdens
that still have to be weighed up. GELSENWASSER is
committing itself to implement the possible new requirements
with a sense of proportion i.e. only focusing on waste water
treatment and spreading the burdens equally across all waste
water customers.
2.1.2 ENERGY CONDITIONS
2.1.2.1 Natural gas exploitation from unconventional
sources – the Federal Environmental Agency and
NRW Ministry of the Environment submit report
As early as two years ago GELSENWASSER first pointed out
the dangers to drinking water that could occur from fracking in
unconventional natural gas sources. In contrast to conventional
gas fields the rock porosity is lower here, so that exploitation
without the controversial procedure or the use of chemicals,
so-called additives, is hardly possible.
It can be assumed that the bedrock has to be thoroughly
perforated with an extremely high number of drill holes, which
has particularly frightened critics in NRW – containing even
more dangerous chemicals than the additives used in fracking.
In NRW there are deposits in the Aachen district, the northern
Ruhr region and the Münsterland as coal gas and in the
southern and north eastern outlying regions as shale gas.
German environment minister Peter Altmaier and also the
North Rhine Westphalia environment minister Johannes
Remmel therefore declared to the press independently of each
other that in their assessment there should not be any fracking
for the time being.
The use of chemicals that could endanger ground water is
particularly problematic. About 25 % of the additives used in
300 fracking drill holes in Germany were accessible and could
be assessed. The biocides included were classified as in part
extremely hazardous to water in particular. A high potential
hazard also has to be expected in part for conceivable replacement
materials. Therefore both reports advise against
using the procedure in water protection areas and also wide
area fracking. There are also uncertainties with regard to disposing
of the waste water that would be created.
Both reports recommend transparent decision-making processes
including the public, as well as disclosing the chemicals
to be used. The Federal Environmental Agency study also
includes proposals to amend mining and administrative law.
According to the report, possible environmental effects should
be given more consideration in future and it should be obligatory
to include the water authorities in all approval procedures.
In the opinion of the NRW surveyors, a greater focus on the
environmental effects could be achieved in the form of transparent
regional planning procedures, for example.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 15

GELSENWASSER welcomes the evidence of the two new
reports and resulting conclusions drawn from them by
politicians. Now it depends on practical implementation,
because 23 fields of untapped gas deposits have since been
approved and it can be expected that the gas companies will
look for alternatives for their exploration. The approval authorities
need clear rules here – therefore GELSENWASSER has
committed itself to an extension of the fracking moratoriums,
closing gaps in knowledge, transparent procedures and nationwide
harmonisation of permit practice and setting standards.
Safe supply of drinking water is the top priority for
GELSENWASSER. Where any risk remains, in water protection
areas for example, there should be neither natural gas exploitation
from unconventional sources nor fracking. When using
surface water for drinking water procurement, such as from the
Ruhr, this sacrifice of gas has to be extended to the whole river
catchment area.
2.1.2.2 Concessions
The time coincidence of the expiry of a range of concession
agreements is currently intensively occupying the municipalities
that are inviting tenders, previous concession holders, new
interested parties and a variety of consultants. Both electricity
and gas concessions are affected. Due to the high capital commitment
and the long term use of the assets required for this,
these concessions have long terms, typically 20 years.
In the corresponding award procedures, all participants must
consider on the one hand, that a variety of rules in part not fully
coordinated with each other have to be complied with and on
the other, the municipalities inviting tenders have to deal with
the question of taking over the concessions.
The GELSENWASSER Group sees this development as an opportunity
and a challenge. With its municipal background
GELSENWASSER can offer contracts as a concession partner
that meet municipal interests without tying municipalities to
long term investments for which they have to be responsible. If
the structure of a municipality and political policy formation
speak in favour of including the municipality in awarding the
concession as a concession holder, GELSENWASSER offers a
variety of flexible solutions to be able to meet the partner’s
wishes here as well.
2.1.2.3 Regulatory management
In order to be able to react early and appropriately to changes
in the legal framework and to the requirements of the Federal
Network Agency for Electricity, Gas, Telecommunications, Post
and Railways (BNetzA), a regulatory management organisation
has been set up for gas network operations at GELSENWAS-
SER Energienetze GmbH.
The network costs last authorised before the start of the 1st
regulatory period also form the basis for the revenue cap in
2012. The annual adjustment is carried out as planned, including
on the basis of the declining path in incentive regulation and
other factors influencing the revenue cap. An important part of
reducing the revenue cap compared to the previous year resulted
from the consequences of Section 5 (3) ARegV. This
regulation demands a reduction in network payments, because
two years ago the permitted revenues were exceeded by 5%,
largely as a result of the weather. The reduction corresponded
to the amount revenues were exceeded by in 2010. The provision
correspondingly formed in 2010 was utilised so that there
was no negative effect on results in 2012.
As concession grantors municipalities thus have a double role;
they can be bidders and providers. Defining clear – legally
unobjectionable – award criteria here is very demanding.
Nevertheless the issue of returning services to the municipalities
is a current issue. Economic, political and many other
aspects have to be weighed up and frequently expert partners
have to be sought.
The so-called expansion factor flowed into the revenue cap on
the request of the BNetzA. This takes expansion investments
by GWN over the past few years into account.
2012 was also characterised by presenting costs and additional
data as part of a costs audit by the BNetzA to set the
revenue cap in the 2nd regulatory period from 2013 to 2018.
The cost level recognised for the 2nd regulatory period has increased
in comparison with the 1st regulatory period. The
BNetzA has announced that the setting of the calendar year
revenue cap to be derived from this will only be handed down
provisionally to put network operators in a position to calculate
the final network payments for 2013 by 31 December 2012.
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From the EnWG amended in August 2011, on 1 April 2012
the shortened supplier change procedure in accordance with
Section 20a, which now also makes supplier changes possible
during a month, was to be implemented. Furthermore, on
1 October 2012 Cooperation Agreement V came into force,
which has once again had the result that all supplier framework
agreements were adjusted.
Preparations were made to start electricity network operations
for the Stolzenau concession area in order to ensure a takeover
of activities that is as smooth as possible in 2013.
In 2012 the requirements in the regulatory environment also
increased further. Not only the frequent changes to the legal
framework, but also the setting and changes to the guidelines
for carrying out network operator activities, including setting
deadlines, have led to additional resources being tied up and
to a sustainably high level of IT projects. Furthermore, due
to the processes introduced, GWN has been faced with growing
requirements from transport customers, which have to be
taken into account. Regulatory recognition of the costs caused
by this outside the base year has not been generally secured.
2.1.2.4 Energy price development
During the year the heating oil price in euros/100 litres was
largely above the price level in 2011. It merely fell briefly below
the 2011 level in June and November. Heating oil is largely
oriented on the crude oil price (in US dollars/barrel). The euro-
USD exchange rate then also plays a role in the quotation in
euros/100 litres. The price for crude oil was influenced primarily
by slowing economic growth in China, tensions in the Middle
East and the economic crises in the USA and in the Eurozone.
The latter was also decisive in determining the relation between
the euro and the US dollar.
In the gas sector a downwards trend has been observable
in the standard product “Calendar Year 2013” (Cal 13) since
the end of June 2012, whereby the course of the price
has been characterised by high volatility. While crude oil was
identified as a main influencing factor in the first half of 2012,
the price for Cal 13 was frequently oriented on the spot price
and month ahead in the second half of the year. In the past
the price level of these contracts was mainly influenced by the
temperature. This year, in addition the partly highly volatile
flows of the Norwegian producers were observed to be an
important influencing factor.
The electricity futures market has been in a downwards trend
since the end of February 2012. The euro crisis, very low CO 2
prices and the growing influence of renewable energies had
greater effects on the price for the base load of Calendar Year
2013 than gas and oil prices. In addition, the fall in the coal
price since mid-August put pressure on the electricity price.
Sales prices in the gas sector remained constant during
the year. There was a rise in the price in the electricity sector on
1 January 2013. The main reason for this was an increase in
statutory deductions. In particular, the Renewable Energies
Act charge and network payments have risen sharply.
2.2 SECTOR DEVELOPMENT
Sector development in the area of grid-bound services followed
the trend of the past few years.
2.2.1 WATER
In the water sector the political discussion about water prices
has not yet ended. After several formal cartel proceedings
against water supply companies, including considerable demands
for lower prices, the water sector is working further
on suitable instruments that will answer questions about
transparency and efficiency better than had previously been
the case. With direct contributions of GELSENWASSER’s
specialist expertise, the instruments customer balance and
costing guidelines at national level were created, among
others. In 2013 every effort was made in a procedure analysis
to verify rational business operations. At state level it was
possible further to develop the state benchmarking project in
cooperation with the environment and economic ministry and
to give this instrument special significance. Now in dialogue
with politicians, through an intensification of cooperation, the
decisive sector associations have to work on a possible mutual
line for the further approach to this question. The amendment
of the act on restrictions of competition (GWB), which equates
costs control with the previously applied cooperative market
principle in an important point, also offers as good a basis for
this as a report from the Federal Ministry for the Environment,
Nature Conservation and Nuclear Safety/Environment Ministry
and the instruments prepared by the water sector itself that
have already been mentioned. Nevertheless, there remains
both an economic and communicative risk for GELSENWAS-
SER in the water price discussion.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 17

The situation also remains challenging for GELSENWASSER
with regard to the quantity delivered. Sustained water savings
and demographic change are further contributing to reducing
consumption quantities. At EU level attempts are being made
to systemise the trend towards dealing sparingly with water further
through the Blueprint Strategy.
2.2.2 ENERGY
The discussion about the energy transformation in Germany
was initially dominated by the withdrawal from nuclear energy
and thus the associated need for capacity adjustments and
the necessity to prepare new generation capacities. The rapid
addition of photovoltaic facilities and the stronger positioning
of wind energy facilities, both onshore and offshore, are leading
to further heightening of transport discussions. Furthermore,
the energy market in Germany has since been characterised by
around 20 % of electricity generation coming from fluctuating
sources. The result of this is that achieving a balance between
demand and generation will become increasingly difficult.
Storing electricity has not yet reached any appreciable market
maturity to date. Due to the significantly declining procurement
prices, the cost effectiveness of storage measures cannot
currently be foreseen, so GELSENWASSER tends to assume
that further overcapacities will be created in generation that
cannot be allocated to any sensible use. Due to this problem,
GELSENWASSER assumes that the capacity market discussion
that has begun will gain momentum and that politicians
will definitely take regulatory measures here. The consequences
of this are not yet foreseeable.
The main issues in energy policy discussions at the moment
are developing both renewable energies and the necessary infrastructure
and measures to increase efficiency. For gas as an
energy source, it is not recognisable at the moment that it is
being actively included in the energy policy discussion. This is
despite precisely this energy source being ascribed great significance
as the lowest CO 2
fossil energy source by GELSEN-
WASSER with high flexibility.
Due to further regulation in the gas sector and thus the associated
consolidation of market areas, a bottleneck situation
occurred in Southern Germany in February 2012. The effects
were interpreted as much lower in 2012, however, than the
effects in 2009 when there were delivery difficulties through
transit countries. The renegotiations of the large import companies
with the supplying countries on long term contracts led
to an obvious easing in the gas market, primarily in bordercrossing
prices.
GELSENWASSER has positioned itself with tight market orientation
in both divisions in the past few years and is thus best
placed for further uncertainties in development.
2.3 COURSE OF BUSINESS
2.3.1 PROCUREMENT ACTIVITIES
Last year GELSENWASSER concluded an import contract with
the Norwegian producer Statoil for the first time. Further negotiations
are taking place to deepen and further develop supply
relations with Norway’s largest gas and oil extractor.
2.3.2 WATER AND ENERGY VOLUMES
2.3.2.1 Water
The water deliveries of the GELSENWASSER Group in 2012
of 239.9 million m 3 were 0.5 million m 3 higher than those
of the previous year (239.4 million m 3 ). Adjusted by the NES
and SWO quantities, volumes were 0.9 million m 3 below
the comparable figure from the previous year. The volumes
of the industrial customer group increased by 0.5 million m 3 .
The cause for this was increased power station demand, which
was, however, compensated for by lower demand from the
iron and metal industry, the chemical industry and from mining.
The decline in volumes in the household customer sector
was largely caused by weather conditions.
2.3.2.2 Gas
Gas volumes increased during the year by 45.9 % to 23.4 TWh.
The rise in volumes is largely attributable to the expansion
of the gas trading activities of GELSENWASSER AG. Thus
at 19.6 TWh, resales were 7.3 TWh in total above the previous
year’s value. Without considering the volumes of the trading
business and from central gas procurement, total volumes
have increased by 54 million kWh. In the household and small
commercial consumer sector, gas delivered was 2.1 % above
the previous year’s value at 3.2 TWh. Adjusted by SWO, this
rise amounted to 4.4% and was largely caused by the weather
conditions. In the industrial sector volumes fell by 2.2% to 615
million kWh.
P. 18 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

2.3.2.3 Electricity
Electricity volumes fell by 35.2% to 146.2 million kWh during
the year. This decline in volumes resulted exclusively from
the disposal of SWO, which was still included last year with
104.5 million kWh. Adjusted by SWO, which was disposed
of in January 2012, electricity volumes rose by 20.8%.
2.3.3 EMPLOYEES
On 31 December 2012 1,579 people were employed in the
GELSENWASSER Group. Without taking into account Stadtwerke
Oranienburg GmbH, which has since been deconsolidated,
the number of employees has risen by 59 compared
with 31 December 2011. The increase primarily resulted from
the order related staff increases at Nantaise des Eaux Services
SAS, the development of the energy business field (electricity)
and the takeover of additional tasks as part of new business
activities.
At 59 the number of apprenticeship places offered is significantly
above the previous year’s level.
2.4 SITUATION
2.4.1 RESULTS OF OPERATIONS
INCOME STATEMENT OF 1 JANUARY TO 31 DECEMBER
in Million € 2012 2011 2010
Revenue 1,058.3 866.5 702.3
Cost of sales – 834.6 – 614.6 – 438.6
Employee salaries and benefits –100.1 – 101.9 – 92.0
Depreciation and amortisation expense – 35.4 – 37.0 – 35.3
Other expenses and income – 24.0 – 41.4 – 0.9
NET CASH FROM OPERATING
ACTVITIES 64.2 71.6 135.5
Investing activities 35.7 37.3 30.4
Financial income – 4.0 – 5.4 – 6.5
Taxes on income – 0.3 – 1.1 – 0.4
PROFIT FOR THE YEAR 95.6 102.4 159.0
Dividends to non-majority shareholders – 0.7 0.3
DIVIDENDS TO THE SHAREHOLDERS
OF GELSENWASSER AG 95.6 101.7 158.7
2.3.4 CONSOLIDATED STATEMENT
OF THE MANAGEMENT BOARD
The operational business has developed positively. Sales
for the Group were significantly higher than the previous year
and above plan. The most important reason for this was the
renewed expansion of gas trading activities. Although the
Group EBIT of € 99.9 million was significantly lower than in
the previous year (-€ 9.0 million), it exceeded the expected
EBIT by € 16.3 million. It was also possible to exceed the
planned profits transfer by € 3.1 million.
During the year GELSENWASSER met its financial obligations
at all times due to strong cash flow from business activities,
positive cash flows from investment activities and the resulting
rise in liquid assets. No external borrowings were necessary at
all.
With an equity ratio of 70 %, GELSENWASSER has a strong
equity base. It was possible to increase the coverage of fixed
assets with long term capital once again in comparison with
2011.
2.4.1.1 REVENUE DEVELOPMENT
Revenues rose by a total of € 191.8 million to € 1,058.3 million.
Here gross revenues from gas sales mainly rose as part of
the central gas procurement system that has existed since
the 2008/2009 financial year with greatly expanded trading
activities by GELSENWASSER AG by € 200.9 million to
€ 756.8 million. The rise in revenues from water sales by
€ 7.3 million to € 215.6 million largely resulted from price
effects in the special customers sector. Gross revenues from
electricity sales fell by € 12.5 million to € 29.0 million due to
the sale of Stadtwerke Oranienburg GmbH (SWO). Adjusted
by SWO it was possible to increase gross electricity sales by
€ 5.7 million, mainly as a result of growth in volumes. Other
revenues fell by € 4.6 million to € 80.9 million, while natural
gas/electricity tax was reduced by € 0.7 million to € 24.0
million.
2.4.1.2 EBIT and consolidated net income
The increased revenues during the year and the other operating
income, which improved strongly due to the financial
settlements for a land waiver as part of land consolidation
proceedings, compared with significantly higher burdens on
results from disproportionately increased costs of sales. Thus
there was a reduction in the result of operating activities of
€ 7.4 million to € 64.2 million.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 19

The investment result (result investments capitalised at equity
and result of other investments) of € 35.7 million was € 1.6
million below the previous year’s value. The decline is largely
attributable to the equity valuation of KGE - Kommunale Gasspeichergesellschaft
Epe mbH & Co. KG.
This led to the EBIT of € 99.9 million being € 9.0 million below
the previous year’s EBIT. But the expected EBIT was exceeded
by € 16.3 million or, when adjusted for special effects, by
€ 6.1 million.
Financial income improved by € 1.4 million to - € 4.0 million.
One of the causes of this was the discontinuation of 2011 interest
expenses of SWO of € 1.0 million.
Taxes on income reduced by € 0.8 million to € 0.3 million. After
taking taxes on income into account, the profit for the year
of the Group amounted to € 95.6 million and was thus € 6.8
million below the previous year’s value of € 102.4 million.
The dividends for the shareholders of GELSENWASSER AG
during the year amounted to 100%, i.e. € 95.6 million (2011 €
101.7 million and € 0.7 million (dividends of non-majority shareholders).
In comparison with the previous year’s forecast, both the EBIT
and the profit were significantly improved. The unplanned financial
settlements for land waiver and an improved result in water
sales were mainly responsible for this development.
2.4.1.3 Development of segment results
The development of segment results is presented in the consolidated
notes.
2.4.2 FINANCIAL POSITION
2.4.2.1 Financial management
GELSENWASSER uses cash pooling as an instrument to control
its liquidity long term and to optimise payment flows within
the Group. In addition, financial management serves to retain
and optimise the financing capability of the Group as well as to
minimise financial risks.
2.4.2.2 Capital structure and capital resources
CAPITAL STRUCTURE
IN Million € 31.12.2012 % 31.12.2011 % 31.12.2010 %
Share capital 103.1 7 103.1 7 103.1 7
Capital provisions 32.2 2 32.2 2 32.2 2
Retained earnings 609.6 42 600.9 39 588.8 40
Cumulative other consolidated income 75.4 5 91.7 6 80.3 5
DIVIDENDS OF THE SHAREHOLDERS OF GELSENWASSER AG 820.3 56 827.9 54 804.4 54
Shares of non-majority shareholders – 0 10.4 1 10.4 1
Grants 201.5 14 204.5 13 221.1 15
EQUITY AND SIMILAR FUNDS 1,021.8 70 1,042.8 68 1,035.9 70
Pension provisions 154.2 11 151.6 11 150.6 10
Tax provisions 5.1 0 4.0 0 4.0 0
Other provisions 7.0 0 6.8 0 6.0 0
Financial payables 20.9 0 3.0 0 27.0 2
Other payables 0.3 0 0.5 0 0.7 0
Deferred taxes 11.4 1 1.1 0 4.0 0
NON-CURRENT LIABILITIES 180.9 12 167.0 11 192.3 12
Other provisions 31.7 2 35.8 2 33.0 2
Financial payables 10.9 1 28.9 2 18.5 1
Trade payables and other payables 219.9 15 220.5 14 203.1 14
Payables available-for-sale – 0 45.5 3 – 0
CURRENT LIABILITIES 262.5 18 330.7 21 254.6 17
BALANCE SHEET TOTAL 1,465.2 100 1,540.5 100 1,482.8 100
P. 20 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

A detailed insight into the financial position is given by the cash
flow statement and the consolidated notes.
CONSOLIDATED CASH FLOW STATEMENT
IN MILLION € 31.12.2012 31.12.2011 31.12.2010
Cash flows from operating activities 152.9 155.9 118.2
Cash flows from investing activities 5.7 – 31.1 – 56.0
Cash flows from financing activities – 108.6 – 136.8 – 87.7
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 50.0 – 12.0 – 25.5
Change to cash and cash equivalents caused by merger – 0.1 –
Cash and cash equivalents at the beginning of the year 53.1 65.0 90.5
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 103.1 53.1 65.0
The following depiction shows fixed assets continue to be fully
covered by long term equity and borrowings.
IN MILLION € 31.12.2012 31.12.2012 31.12.2012
Assets 897.8 899.6 994.4
Financial assets and other
non-current receivables 216.4 230.6 224.0
NON-CURRENT ASSETS 1,114.2 1,130.2 1,218.4
Equity 820.3 838.3 814.8
Grants 201.5 204.5 221.1
SHORTFALL WITH EQUITY
AND SIMILAR FUNDS – 92.4 – 87.4 – 182.5
Non-current provisions 177.7 163.5 164.6
Non-current liabilities 3.2 3.5 27.7
COVERAGE WITH
NON-CURRENT CAPITAL 88.5 79.6 9.8
Rating 2012 GELSENWASSER
and Wasser und Gas Westfalen (WGW)
As expected, the rating agency Standard & Poor’s gave
GELSENWASSER and WGW an issuer rating of A-, as in the
previous year.
GELSENWASSER and WGW were evaluated together in the
rating procedure. It was investigated whether WGW via
GELSENWASSER is in a position to make the contractual
interest and repayments.
In addition to commercial and technical key performance indicators,
the business model and also the economic and political
environment was taken into account. The stability of the
GELSENWASSER cash flows made a decisive contribution to
the good result.
The next review is due in the first half of 2013. GELSENWAS-
SER is confident that the previous rating will be confirmed.
2.4.2.3 Investments
During 2012 investment volumes fell compared to the previous
year by € 1.6 million to € 32.5 million. Investments in property,
plant and equipment and in intangible assets fell by € 0.7
million to € 31.0 million. This included € 15.0 million for the
pipeline network, € 5.5 million for plants under construction
and € 4.7 million for fixtures and equipment. Investments in
financial assets including investments capitalised at equity
reduced by € 0.9 million to € 1.5 million.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 21

2.4.3 NET ASSETS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
in MILLION € 31.12.2012 % 31.12.2011 % 31.12.2010 %
Non-current assets 1,114.2 76 1,130.2 73 1,218.4 82
Current assets 351.0 24 410.3 27 264.4 18
ASSETS 1,465.2 100 1,540.5 100 1,482.8 100
Liabilities and equity 1,021.8 70 1,042.8 68 1,035.9 70
Non-current liabilities 180.9 12 167.0 11 182.3 13
Current liabilities 262.5 18 330.7 21 254.6 17
LIABILITIES 1,465.2 100 1,540.5 100 1,482.8 100
The balance sheet total fell by 4.9% to € 1,465.2 million during
the year.
Non-current assets fell by € 16.0 million to € 1,114.2 million.
€ 12.5 million of this related to financial asserts and € 4.7
million to property, plant and equipment. The proportion of
non-current assets to the balance sheet total was 76%.
Equity and similar funds were € 21.0 million below the pre -
vious year’s value. The reason for this is the decline of the
cumulative other concessions due to the reduction of the fair
market value of an investment with no effect on net income and
grants, while retained earnings increased by € 8.7 million. In
addition, with the sale of the shares in SWO, the shares of
the sole minority shareholder were omitted.
Non-current assets fell in comparison with the previous year
by 14.5% to € 351.0 million; their share of the balance sheet
total was 24%. The decline mainly consisted of the items
available-for-sale assets (– € 76.6 million), trade receivables
and other receivables (– € 23.3 million) and financial assets
(– € 15.2 million). Trade receivables include part payments
received for delimited not yet read/metered consumption of
customers settled. The receivables shown below are those of
the previous year due to the end of the reporting period. In
contrast, cash rose by € 50.0 million.
Further explanations can be found in the consolidated notes.
2.5 FINANCIAL AND NON-FINANCIAL PERFORMANCE
INDICATORS
GELSENWASSER controls the operating business with the
EBIT key performance indicator.
In addition to the result of operating activities, the EBIT includes
the investment result consisting of the result of at equity
accounted investments and the other investment result.
Non-current assets were 91.7% covered by equity and similar
funds and financed over 100% by non-current capital.
The Group EBIT is explained in Chapter 2.4.5 consolidated
profit and the EBIT of GELSENWASSER AG in Chapter 2.7.1.1
Net income. There are additional disclosures in the EBIT of
the segments in the consolidated notes.
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2.6 Annual financial statements of GELSENWASSER AG
STATEMENT OF FINANCIAL POSITION
IN MILLION € 31.12.2012 31.12.2011
Property plant and equipment and
intangible assets 251.5 248.3
Financial assets 277.2 282.1
NON-CURRENT ASSETS 528.7 530.4
Inventories 13.6 12.4
Receivables 178.2 199.5
Cash 99.9 51.9
CURRENT ASSETS 291.7 263.8
Accrued items 10.6 13.0
ASSETS 831.0 807.2
Equity 341.6 337.6
Grants 43.6 45.5
Provisions 221.0 263.6
Payables 220.6 141.2
Accrued items 4.2 19.3
LIABILITIES 831.0 807.2
INCOME STATEMENT
IN MILLION € 2012 2011
Revenue 936.8 753.1
Cost of sales – 782.4 – 562.8
Employee salaries and benefits – 75.0 – 68.8
Depreciation and amortisation expense – 18.6 – 19.6
Investments 56.8 52.5
Other expenses and income – 19.6 – 58.2
NET CASH FROM OPERATING ACTIVITIES 98.0 96.2
Extraordinary expenses – 5.9 – 0.4
Taxes (including trade tax assessment) – 6.9 – 8.8
Profit transferred due to a profit transfer
agreement – 81.2 – 83.0
PROFIT FOR THE YEAR 4.0 4.0
Allocations to other retained earnings – 4.0 – 4.0
RETAINED EARNINGS – –
The complete financial statements of GELSENWASSER AG,
issued with an unqualified audit certificate by Dr. Bergmann,
Kauffmann und Partner GmbH & Co. KG firm of auditors
and tax consultants, Dortmund, have been submitted to
the Electronic Federal Gazette. They can be requested as a
reprint from GELSENWASSER AG.
2.6.1 RESULTS OF OPERATIONS
Sales revenues increased
The sales revenues of GELSENWASSER AG rose by a
total of € 183.7 million to € 936.8 million. Here the gross
revenues from gas sales, largely caused by the central gas
purchasing of GELSENWASSER AG, were, at € 681.8 million,
€ 198.8 million above the previous year’s level. Revenues
from water sales rose by € 8.7 million to € 192.7 million. The
main cause was price effects in the special customer sector.
Electricity revenues increased by € 1.6 million to € 17.1
million. Other sales revenues fell, mainly due to lower services
revenues, by € 24.5 million to € 53.5 million. This
largely concerns sales revenues due to the completion of the
central waste water treatment facility in the Horst plant of
Ruhr Oel GmbH in 2011. Natural gas/electricity tax rose by
€ 0.9 million to € 8.3 million.
Result of ordinary business activities below
the previous year’s level
The increase in sales revenues from gas sales contrasted
with disproportionately increased delivery costs. The changes
to inventories show the completion of the waste water treatment
facility mentioned above.
The rise in employee salaries and benefits by € 6.1 million
primarily resulted from higher allocations to pension provisions
and pay scale pay rises.
The investment result increased by € 4.3 million to € 56.8
million. Of this increase € 4.1 million was due to consolidated
companies.
The increase in the balance of other expenses and income
of € 38.6 million to – € 19.6 million is attributable among others
to the completion of the central waste water treatment
facility that has already been mentioned, increased income
from futures to hedge gas procurement and the financial
settlement of land waivers as part of land consolidation procedures.
The result of ordinary business activities increased, mainly
due to the circumstances outlined, by € 1.8 million to € 98.0
million.
At the beginning of the year there was still a difference of
€ 5.9 million from the changed valuation of pension commitments
in accordance with the German Accounting Law
Modernisation Act (BilMoG), which was fully applied and
recorded under extraordinary expenses.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 23

Taxes (including trade tax assessment) fell by € 1.9 million to
€ 6.9 million. Here the trade tax assessment from the consolidation
taxation relationship with WGW declined by € 0.9 million
and other taxes by € 1.0 million.
The result after taxes amounted to € 85.2 million (2011
€ 87.0 million). The profits transfer to WGW amounted to
€ 81.2 million (2011 € 83.0 million). After the profits transfer
a profit for the year of € 4.0 million remains, which has been
allocated to retained earnings.
2.6.2 FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
IN MILLION € 31.12.2012 % 31.12.2011 % 31.12.2010 %
Share capital 103.1 12 103.1 13 103.1 14
Capital provisions 32.2 4 32.2 4 32.2 4
Retained earnings 206.3 25 202.3 25 198.3 26
Grants 43.6 5 45.5 6 47.5 6
LIABILITIES AND EQUITY 385.2 46 383.1 48 381.1 50
Pension provisions 152.7 18 142.1 18 141.1 19
Tax provisions 3.0 0 3.2 0 3.2 0
Other provisions 9.0 1 10.0 1 10.8 1
Other payables and accrued items 0.2 0 0.5 0 2.6 0
NON-CURRENT LIABILITIES 164.9 19 155.8 19 157.7 20
Other provisions 56.3 7 108.3 13 71.7 10
Bank borrowings – 0 – 0 – 0
Advance payments/trade payables 66.7 8 3.3 0 20.9 3
Payables to affiliated companies and companies in which an investment is held 139.1 17 117.5 15 94.9 13
Other payables and accrued items 18.8 3 39.2 5 26.2 4
CURRENT BORROWINGS 280.9 35 268.3 33 213.7 30
BALANCE SHEET TOTAL 831.0 100 807.2 100 752.5 100
The following depiction shows the coverage of non-current
tied assets by the non-current equity and borrowings available.
IN MILLION € 31.12.2012 31.12.2011 31.12.2010
Assets 528.7 530.4 525.2
Other asset items and accrued items 15.5 17.0 19.0
NON-CURRENT ASSETS 544.2 547.4 544.2
Equity 341.6 337.6 333.6
Grants 43.6 45.5 47.5
SHORTFALL OF EQUITY AND SIMILAR FUNDS – 159.0 – 164.3 – 163.1
Non-current provisions 164.7 155.3 155.1
Non-current liabilities 0.2 0.5 2.6
COVERAGE/SHORTFALL OF NON-CURRENT CAPITAL 5.9 – 8.5 – 5.4
P. 24 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

2.6.3 INVESTMENTS
Investment volumes in 2012 fell by € 0.7 million to € 25.2
million. Investments in property, plant and equipment remained
unchanged at € 23.7 million. This included € 10.8
million for advance payments made and plant under construction,
€ 5.3 million for the pipeline network and € 3.8 million
for fixtures and equipment. Investments in financial assets
amounted to € 1.5 million. Here the increase in the investment
in novogate GmbH and the increase in capital at
GENREO - Gesellschaft zur Nutzung regenerativer Energien in
Olfen mbH and the acquisition of shares in WBDU Wasserbeschaffungsgesellschaft
Duisburg mbH should be mentioned.
2.6.4 NET ASSETS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
IN MILLION € 31.12.2012 % 31.12.2011 % 31.12.2010 %
Non-current assets 528.7 64 530.4 66 525.2 70
Other assets and accrued items 15.5 2 17.0 2 19.0 3
NON-CURRENT TIED ASSETS 544.2 66 547.4 68 544.2 73
Current tied assets 286.8 34 259.8 32 208.3 27
ASSETS 831.0 100 807.2 100 752.5 100
Equity and similar funds 385.2 46 383.1 48 381.1 51
Non-current payables 164.9 20 155.8 19 157.7 21
Current payables 280.9 34 268.3 33 213.7 28
LIABILITIES 831.0 100 807.2 100 752.5 100
The balance sheet total of GELSENWASSER AG rose by
2.9% during the financial year to € 831.0 million. Non-current
tied assets fell below the previous year‘s value by 0.6% at
€ 544.2 million; the proportion of the balance sheet total
amounted to 66%.
Current tied assets rose on the previous year by 10.4% to
€ 286.8 million. Their proportion of the balance sheet total
amounted to 34%. The rise mainly resulted from the increase
in cash and cash equivalents as well as receivables from
affiliated companies. An opposing development was posted
in trade receivables.
3 EVENTS AFTER THE REPORTING DATE
After the end of the 2012 financial year to date no events of
significance to the GELSENWASSER Group have occurred.
4 FORECAST, OPPORTUNITIES
AND RISK REPORT
4.1 FORECAST REPORT
4.1.1 EXPANDED CONDITIONS
While climate change and the energy transformation
dominate public discussion, electricity and gas supply in
Germany has made great strides towards a competitive
market. At the end of 2012 end customers were able to
choose between on average 74 gas providers – the degree of
competition was thus around 25% higher than at the end of
2011. Despite this continual increase, the degree of competition
in the gas market is still much lower than in the
electricity market. For households that want to change their
energy provider, there are often more than 125 or more alternatives
to the local utility provider. Furthermore, a rising in tensity
of competition can also be seen in the readiness of customers
to change provider, a readiness which rose further for both
electricity and gas in 2012.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 25

In electricity generation in particular, the energy transformation
is drawing a significant reordering of the energy supply structure
in Germany in its wake. As the central building block of
the energy transformation, renewables posted a record year
in 2012. Renewable energy generation made up around one
third of the electricity mix – wind energy continues to be the
leading energy source here. This increasingly decentrally oriented
energy generation is leading to a recognisable decline in
the capacities of the large suppliers.
4.1.2 EXPECTED CORPORATE DEVELOPMENT
Next year the GELSENWASSER Group expects an EBIT
slightly below the current result (which has been adjusted for
special effects). GELSENWASSER AG also expects a somewhat
lower profits transfer than in 2012.
The water sales of the GELSENWASSER Group will probably
fall in 2013 due to the lower quantities taken by the chemical
industry, power stations, the iron and metal industry and the
adjacent utility companies. The contribution made by the water
segment will probably follow this development.
Gas volumes rose significantly in comparison with the previous
year. The additional volumes mainly resulted from increased
futures business in central gas procurement. Due to the continued
competitive intensity and price wars on the gas market,
GELSENWASSER assumes that the quantities accepted will
show a downwards development in 2013 compared to 2012.
The contribution is expected to be the same size as in 2012.
In the electricity sector GELSENWASSER has succeeded
in optimally using the changed opportunities in the market.
This has led to an appreciable increase in the number of
electricity customers and electricity volumes (adjusted for
SWO). By expanding its customer base, GELSENWASSER will
also increase electricity volumes and the contribution from
electricity sales in the next few years.
In corporate investment, acquisitions are planned in the next
few years with the aim of expanding and securing the core
business fields. GELSENWASSER expects lower contributions
in this sector in 2013 than in 2012.
4.1.3 INVESTMENTS
In the planning period until 2017 investment volumes of
€ 250 million are foreseen for the GELSENWASSER Group
including € 170 million for investments in property, plant and
equipment and € 80 million for financial investment. The focus,
with around € 84 million, is on expanding and renewing
the water and gas pipeline network. Investments of € 51.4
million are planned for 2013, including € 34.1 million on
property, plant and equipment and € 17.3 million on financial
investments.
4.1.4 FORWARD LOOKING STATEMENTS
The statements on future development made in the forecast
report relate to assumptions and estimates from information
available to GELSENWASSER at the time of reporting. These
statements are subject to risks and uncertainties and therefore
the actual results can differ from the expected results. Therefore
no guarantee can be accepted for these disclosures.
4.2 RISK AND OPPORTUNITIES REPORT
4.2.1 RISK MANAGEMENT SYSTEM
4.2.1.1 General
The main target of the risk management system of GELSEN-
WASSER AG is securing the success of the company long
term and also of corporate targets by continually identifying,
monitoring and controlling all important corporate risks. For
this purpose risk management goes beyond fulfilment of the
statutory guidelines of KonTraG (Act for Corporate Controls
and Transparency) and, as a standardised management process,
makes an important contribution to the sustainable
development of the company. There is an additional focus on
recognising opportunities and the development potential that
can be derived from these.
The risk management system consists of a variety of building
blocks that are integrated throughout the structure and process
organisation of GELSENWASSER AG. Thus the risk
management system is an integral part of business processes
and corporate decision-making. The basic building block is
formed by risk directives, which set binding standards for all
staff throughout the Group. The risk software based on these
Group directives guarantees uniform recording and evaluation
of all identifiable risks, also making possible ongoing monitoring
and controlling of risks, opportunities and associated measures.
By integrating the risk management system into the management
processes of GELSENWASSER AG, it is ensured that
P. 26 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

the topicality of risk reporting is guaranteed at all times and
risks identified in turn are taken into account as possible plan
deviations in controlling, so that corresponding counter measures
can be initiated in good time.
Evaluating and monitoring known risks and identifying new
risks are carried out decentrally in the GELSENWASSER Group
in the line departments. Risk officers and the person responsible
for risk in the respective line departments evaluate and
report risks in accordance with the dual control principle in
a six monthly software-supported report cycle to the Risk
Management functional unit. This unit checks the data received,
prepares it and makes it available to the Risk Management
Committee.
The Risk Management Committee consists of twelve heads
of department and representatives of Internal Audit and risk
management. In a regular cycle the committee discusses the
current risk position of the GELSENWASSER Group every six
months. The results are subsequently reported to the Management
Board and the Supervisory Board of GELSENWAS-
SER AG.
In the event of any significant change to a risk outside the
reporting appointments, a standardised ad-hoc report process
made to the positions responsible mentioned above will take
place. In special cases an ad-hoc committee will review if
there is a possible disclosure requirement in accordance with
Section 15 (1) WpHG (German Securities Trading Act) and it
will then make a recommendation in this respect to the
Management Board. All ad-hoc processes are an integral component
of the risk directive and are also documented as
obligatory for all staff.
4.2.1.2 Gas business
In the past financial year the volatility on the international
gas markets continued. In particular, new gas extraction
techniques increasingly asserted themselves sustainably,
changing market conditions. The fierce competition and regulatory
interventions by legislators also demanded great
flexibility and ever more new contract structures in procuring,
trading and distributing gas. These changes mean a great
challenge for risk management.
GELSENWASSER controls the risk management of gas risks
using an enclosed modular system of various building blocks.
The basic framework is formed by the Group’s own directive,
in which trading partners’ requirements and the functioning of
the various trading limits are depicted in addition to the gas
business processes. The limits given ensure that all activities in
the gas business field can only move within the parameters
set. Risk controlling monitors compliance with all limits on
a daily basis. It also carries out a deeper analysis of trading
activities and reports these results to the Risk Committee.
The Risk Committee, to which those responsible from the
corporate departments Commercial Control, Distribution and
Strategy belong, as well as people appointed from gas
procurement, gas trading and risk controlling, convenes once
a month. The Committee.is responsible for monitoring trading
activities in the gas sector and for the further development
of the risk systems. It discusses the current analyses,
evaluates risk relevant questions and issues releases for tra -
ding partners and persons trading for GELSENWASSER AG.
In addition, the Risk Committee is responsible for adjusting
the limits of the risk directive, if necessary, and for amending
the risk directive.
Internal Audit regularly reviews the risk management system of
GELSENWASSER AG, at least once a year. Risk management
is also part of the annual audit processes of the auditor. In
the last financial year Internal Audit carried out two audits of
the risk management system and contributed an additional
analysis of all processes as part of the risk inventory for discussion
in the Risk Management Committee.
In the last financial year the Risk Committee held twelve regular
meetings. In the event of decisions subject to a deadline,
e.g. for approving new trading partners or authorising new
procurement contracts, the consent of the Committee was
also brought about by minuted circular resolution memoranda.
In such cases risk controlling always includes a corresponding
risk calculation and makes a recommendation in this respect.
Risk and opportunity reporting covers GELSENWASSER AG
and the corporation companies. Risks that are identical in
content are presented in total for the whole Group and are
explained according to company if required.
The decisions and action recommendations of the Risk
Committee are brought to the attention of the Management
Board of GELSENWASSER AG and the Risk Management
functional unit.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 27

4.2.2 FINANCIAL INSTRUMENTS
The primary target of all risk policy decisions in relation to
procurement, trading, distribution, storage management and
transport management is security of supply for end and transfer
customers. Furthermore, as part of the risk strategy
GELSENWASSER strives to realise additional contributions
through carrying out optimisation transactions.
The overall portfolio of GELSENWASSER AG consists on the
one hand, of standard trading products or roadmaps and on
the other, of individual, flexible procurement and transfer contracts,
as well as physical gas quantities in storage facilities.
The contractual prices are fixed prices, market prices or linked
to the oil price.
Risks can result from central gas procurement transactions
due to quantity related flexibilities, reference price related
variable procurement and settlement prices with a connection
to various commodities, procurement and delivery locations
differing from each other as well as different contract terms.
The gas portfolio is hedged against the remaining value change
risk using derivative financial instruments.
These hedging transactions are swaps, for which, according
to the item, GELSENWASSER pays a monthly fixed price in
euros and receives an index dependent price or the other
way round (receives a fixed price in euros and pays an index
dependent price). For this purpose reference periods and
indices (e.g. gas oil, fuel oil, extra light heating oil, super light
heating oil, TTF) are selected analogous to their underlying
transaction. Thus hedging transactions and the underlying
transactions are subject to the same risk.
Remaining risks are identified, quantified and analysed by
active risk management. Furthermore, these are regularly
reported to corporate management and action recommendations
on risk control are made.
Underlying and hedging transactions are depicted in a
valuation unit in the annual financial statements of GELSEN-
WASSER AG under commercial law in accordance with
Section 254 HGB. In this manner the financial hedging relationship
is also reflected in the balance sheet.
4.2.3 RISK POSITION
General
The financial crisis in the EU continued to influence the overall
economic environment in the past financial year. While Germany
was able to avoid negative growth trend at the start of the
financial year, the dynamism of economic development in the
second half of the year also noticeably slowed there in the
second half of the year. The important economic research
institutes and the German government have corrected their
growth forecasts for 2012 and 2013 downwards. There is only
disagreement over the question of how badly the economic
weakening of the formerly so robust German real economy will
be hit. In particular, the fiscal policy decisions of the European
Central Bank (ECB) will decisively influence future economic
growth in Germany. Most opinion has warned that a too expansive
monetary policy by the ECB will be reflected medium
term in rising inflation rates.
As an energy supply company, the economic growth development
of the German domestic economy is of great significance
to GELSENWASSER. Fluctuations in economic growth, particularly
in the industrial and commercial customer sectors, lead
to effects on volumes of gas, electricity and water and burden
the result. Fears of inflation and unemployment can also create
uncertainty among private consumers and sustainably disrupt
the consumption of private households, which is normally
relatively independent of economic growth.
From the current point of view GELSENWASSER expects
the economic growth situation to remain very tense in the
medium term. In particular, the unsolved financial crisis in the
EU will decisively characterise growth developments and does
not currently allow any optimistic forecasts to be made. Only
the fact that the German economy and particularly private
consumption in Germany are presenting themselves as much
more robust than in the rest of the Eurozone is raising hopes of
a less deep dent in growth in the coming months. Although
GELSENWASSER has prepared itself well for fluctuations in
economic growth and has taken corresponding counter measures,
negative effects on the business result cannot generally
be ruled out.
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Risks in the energy sector
GELSENWASSER is subject to considerable margin and
volume risks in the gas and electricity segment. Due to the
great competitive pressure there is the danger of a loss of
large customers and margin losses due to price adjustments.
Simultaneously, numerous different distribution activities are
necessary to acquire new customers and to keep existing
customers. These distribution activities are associated with
considerable costs.
Weather related volumes risks arise from distributing gas in
particular. Thus the gas consumption of private households
depends on the temperature to a high degree and is thus
subject to seasonal fluctuations. Because demand for gas is
higher in the colder months than in warmer months, warm
winters in particular can severely disrupt demand for gas and
lead to lower volumes. In order to limit such risks, GELSEN-
WASSER has developed a great deal of know-how in weather
data and volume forecasts. Using this knowledge and with
the help of weather models over many years, the gas procurement
behaviour of end customers can be forecast very
precisely. With the help of this information, GELSENWASSER
can better plan gas procurement and correspondingly optimise
procurement contracts. Weather related volume risks are also
passed on to upstream suppliers to a great extent through
flexible procurement contracts.
Due to the time delay between the purchase and sale of
gas, price risks arise for GELSENWASSER. The higher the
volatility of gas prices in the market, the greater the price
risks associated with gas trading. To hedge such risks
GELSENWASSER uses derivative financial instruments, with
the help of which gas prices are hedged and the risks
correspondingly limited. The general conditions for using
these instruments are anchored in the directive for gas trading.
For this purpose it is exactly regulated when hedging transactions
have to be carried out and which parameters they
can move between. Compliance with these conditions is
strictly monitored every day by risk controlling. All hedging
transactions are presented monthly in total and discussed
in the Risk Committee. The staff entrusted with settling
these transactions are appointed by the Risk Committee and
trained accordingly.
Detailed explanations of the use of derivative instruments
can be found in the notes to the consolidated financial statements
or in the notes of the individual financial statements.
GELSENWASSER has invested in various gas storage pro -
jects whose management is associated with risks. Last year
the importance of such gas storage fundamentally changed.
In addition to regulatory interventions the general market
environment has altered. Thus the gas price difference between
the warm months in summer and the cold winter months
can hardly be recognised. This simple business with gas storage,
which consisted of putting gas into storage cheaply in
summer and taking it out again in winter at a high price level
no longer exists and puts every former cost effectiveness
calculation into question. For GELSENWASSER these facts
mean a considerable risk potential. Due to the storage contracts
concluded long term in particular, risks could also rise
further in future and burden the result. In comparison with the
2011 financial year the risk position has not significantly
changed. It is all the more important at this point to integrate
new possibilities for storage use. GELSENWASSER limits the
risks through secondary use of the storage facilities. Portfolio
optimisation in particular offers a very good possibility to optimise
gas purchasing and gas distribution. The portfolio management
of GELSENWASSER AG further optimised this procedure
in the past and it was very successfully used in the past
financial year.
Furthermore, the retention of corresponding gas storage
capacities represents an important building block in guaranteeing
supply security for the customers of GELSENWASSER.
In the past financial year in particular, the necessity of storage
capacities during a long cold period in February was correspondingly
shown. In addition the supply of end customers
would also be guaranteed at all times in the event of a longer
lasting supply bottleneck from the most important source
regions.
The risk of possible repayments arises from court judgments
on the issue of gas price adjustments for special contract
customers. GELSENWASSER evaluated this risk some time
ago and has adjusted to current developments. The court judgment
has shown itself to be difficult and lengthy so that corresponding
provisions have been formed. In comparison with the
previous year the risk position including the probability of its
occurrence has risen. The cause for this in particular was a
report by the Advocate General of the European Court of
Justice. In her report the Advocate General recommends the
Court dismisses disputed price change clauses in gas
contracts for special contract customers. The Advocate
General’s reports usually have great significance for the judgments
of the European Court of Justice.
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 29

Risks in the water sector
In the water business segment GELSENWASSER is subject
to risks arising from a loss of water concessions. Concession
contracts are concluded between GELSENWASSER and
town/city councils and municipalities for long terms. Correspondingly
early risks from a non-extension of expiring
water concessions can be recognised and evaluated. GELSEN-
WASSER strives to extend expiring contracts as early as
possible. In the past it was possible successfully to continue
long term cooperation with town/city councils and municipalities.
GELSENWASSER sees its role not exclusively as a
water supplier, but much more as a socially committed partner
with great regional responsibility. Because the number of
expiring concession contracts currently, seen from a medium
term perspective, is lower than in the 2011 financial year,
the risk position within this medium time period of consideration
has correspondingly fallen.
GELSENWASSER has evaluated a risk that could arise from a
possible obligation to lower water prices for household
customers against a background of investigations under cartel
law for a long time. After the Federal Court of Justice con -
firmed the price reduction court order of the Hessian state
cartel authority against the water supplier of the city of Wetzlar,
enwag Energie und Wassergesellschaft mbH, in 2009, cartel
supervisory authority activities have also increased in other
German Federal states. GELSENWASSER actively participates
in a business comparison between around 100 providers in
North Rhine Westphalia (Benchmarking Water NRW). In addition
to the NRW ministries and the corresponding trade
associations, which act as the sponsors of the project, the
NRW state cartel authority is also included in the discussion
and content development of the benchmark.
GELSENWASSER has long done without tariff authority and
has a cost report prepared by an independent audit company
and sets the water price using an equally staffed arbitration
centre with an independent chair.
Due to the increasing dynamism of the cartel supervisory
authorities in NRW, GELSENWASSER has nevertheless adjusted
to the risk of a price reduction court order accordingly in
the past financial year.
Further risks in the water business segment arise from volumes
with industrial customers. Here both the expiry of industrial
customer contracts and also industrial structural change in
the supply area can negatively influence water volumes and
have effects on the business result. Demographic changes can
also influence the water volumes of household customers.
While the population forecasts for large parts of the supply area
predict slightly declining population figures, per head consumption
is also continuing to decline. Because the costs
structure of the existing supply network largely consists of
fixed costs, such changes can have direct effects on the
margin and thus on the result.
Political and legal changes can include considerable risk
potential, particularly in water acquisition. GELSENWASSER
has always claimed to meet the highest requirements of
drinking water quality. Due to the increase in pollutants in
untreated water and the change of statutory limits, additional
investments can be necessary or higher costs can be due in
treatment. Particularly the increase in pharmaceutical residues
and the utilisation of pesticides in agriculture could present
serious problems in future and make more cost intensive treatment
necessary.
Financial risks
GELSENWASSER holds a broadly diversified investment
portfolio, from which investment income flows. There is the
risk that investment income fails to materialise thus burdening
the business result. GELSENWASSER counters this risk by
actively managing every single company. The focus here is on
sustainable development of the investment based on an active,
trusting exchange of knowledge.
As part of investment activities there is also the risk that the
value of a company develops negatively. In such a case
GELSENWASSER would have to carry out corresponding
value impairments. At this point too attempts are made to limit
the risk as part of investment management on the basis of high
requirements as early as the selection of possible new share
purchases.
Default risks of various types arise from business relationships
with end customers and suppliers. Creditworthiness checks
of business partners and customers carried out within an
appropriate framework ensure early identification of potential
receivables defaults at this point. Simultaneously, regular
monitoring of creditworthiness protects GELSENWASSER
from the danger that trading partners cannot meet their delivery
commitments and secondly, also ensures supply security. In
addition to professional portfolio management, a procurement
structure spread across diversified and varied suppliers also
restricts the risks correspondingly at this point.
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Due to its business activities GELSENWASSER is subject
to direct financial risks. In addition to the price and default
risks already described, further market risks are evaluated in
the form of foreign exchange and interest risks. Interest rate
change risks, for example, arise from short term, usually
variable funds due to changes in the base rate of interest. In
order largely to rule out financial market risks, GELSENWAS-
SER relies on the good, continually checked creditworthiness
of its trading partners and the unrestricted market accessibility
of the financial products used.
As part of procuring external lending on the capital markets,
GELSENWASSER profits from constantly good creditworthiness.
Procuring external lending was possible at all
times during the past financial year.
Liquidity Management organises all the financial activities
described in the Group, thus ensuring that sufficient reserves
of cash and cash equivalents were always available and the
risk of threatened liquidity bottlenecks can be permanently
avoided.
Other risks
Information and communications systems are of central importance
to the business processes of GELSENWASSER AG.
Consequently, disruptions to these systems would have considerable
effects on business operations and on internal and
external processes. Maintaining and optimising these systems
is guaranteed by utilising internal and external specialists,
through technological backup measures and high security
standards and these are regularly reviewed. The increasing
risks, which arise, for example, from the continual availability of
IT systems and from data processing, are countered to a considerable
extent here.
GELSENWASSER operates technologically highly specialised,
networked facilities along the whole value creation chain. In
this manner damage to water network facilities or distribution
networks can occur, for example due to force majeure or
sabotage. GELSENWASSER counters these risks through
complex security and quality management. The target is
preventing malfunctions, disruptions and damage as far as
possible. The continual further development of processes,
techniques and procedures, as well as carefully maintaining
facilities and regularly training the staff, also contribute to significantly
reducing the risks. In the event of any damage nevertheless,
there is insurance cover to a financially sensible extent,
which is regularly reviewed for its need and cost effectiveness
and adjusted accordingly.
From the current point of view and from GELSENWAS-
SER AG‘s perspective, no risks are recognisable at all that
could threaten the company as a going concern medium term.
Opportunities and risks have not been offset.
4.2.4 OPPORTUNITIES
In addition to the risks outlined, GELSENWASSER also offers
extensive opportunities. Exploiting these opportunities can
bring considerable competitive advantages for GELSENWAS-
SER. The company sees active management of the opportunities
offered as a central component of a sustainable and
future oriented direction of business operations.
Managing both risks and opportunities has always been
closely associated. Thus all opportunities are recorded in the
same IT system in which risks are recorded. Any processes in
the course of recognising, evaluating, recording and following
up opportunities are standardised by the directive applicable
Group-wide and are fixed as mandatory. The evaluation date
and reporting of opportunities accompany the dates of the risk
inventory and the corresponding reporting deadlines and
groups of recipients of the risk reports.
GELSENWASSER is offered great opportunities by a further
development of investment activities and intensive cooperation
as a strategic partner for existing investments. GELSENWAS-
SER has already been able successively to expand the investment
portfolio in the past few years. For this purpose GEL-
SENWASSER always sees investing as a long term invest -
ment, where the financial investment is not exclusively at the
forefront, but much more the development of cooperation in
the association of companies of the GELSENWASSER Group
and the further development of the investment through active
operational management.
There is a close connection in content between investment
management and the possibility of focusing management
activities more abroad. There are also opportunities in developing
service and operational management agreements, e.g. for
municipalities or other municipal utilities. GELSENWASSER
profits from its many years of experience and wide ranging
specialist expertise here.
GELSENWASSER can profit from the temperature and weather
situation, particularly in winter months. Long cold periods make
gas volumes in private households rise and can thus have
positive effects on the business field’s result. In such weather
constellations GELSENWASSER can also gain additional income
from optimising its gas storage capacities, underlining
the necessity of the existing storage projects.
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In addition to the gas storage capacities available, GELSEN-
WASSER can draw on various other tools to optimise procurement
structures. The widely set procurement portfolio offers
the security, including in phases of high demand, of being
able to react flexibly in the event of supply bottlenecks or malfunctions.
Even in a market environment characterised by
external disruptions, there are thus good possibilities for
portfolio management to optimise gas purchasing and achieve
competitive advantages.
Through cooperation that was already successful in past years
with ewmr – Energie- und Wasserversorgung Mittleres Ruhrgebiet
– GELSENWASSER will also be offered good possibilities
to optimise its gas procurement in future as well.
Bundling all gas procurement activities in this manner represents
an opportunity to purchase gas in large quantities more
cheaply. Through a further development of procurement cooperation
that includes Group companies, GELSENWASSER
can further lift these quantity effects and contribute the experiences
and market knowledge collected in the whole
GELSENWASSER Group. In the last financial year GELSEN-
WASSER signed a gas import contract for procurement cooperation
with the Norwegian producer Statoil. This is the first
physical access of a municipal provider to one of the most
important natural gas producers in the world. This contract
offers GELSENWASSER and the cooperation partner the
possibility to purchase gas even more cheaply and to make it
independent of other gas suppliers. Moreover, this creates
the opportunity to offer gas procurement and the whole portfolio
management system as a service to third parties, thus
successfully using core competences on the market.
The energy transformation in Germany and the associated
increased interest of private households in electricity from
renewable energies and energy providers that act in an ecologically
sustainable manner offers several opportunities.
GELSENWASSER and its product portfolio in the water, gas
and electricity segments have always stood for a high degree
of environmental responsibility and great regional commitment
in the issue of environmental protection. By sensitising private
households to the type and manner of the acquisition of energy
and heat, GELSENWASSER can further strengthen its brand
positioning and, in particular, market the eco-electricity from
hydro-electric power distributed by GELSENWASSER.
In this connection there are also various innovation projects
that GELSENWASSER is currently pursuing with caution. The
focus is particularly on acquiring energy from wind power.
Biogas projects are also intended to contribute to a further
strengthening of expertise in renewable energies and to gain
information about to what extent such procedures can be
realised against the background of protecting nearby residents
and the environment.
In the experiences gained by these projects, GELSENWASSER
sees considerable potential to achieve competitive advantages
and to set itself apart from other providers. Simultaneously, if
successful, these projects could provide an answer to the
increasing demand on the market for electricity and heat from
renewable energies and sustainably consolidate the image of
the GELSENWASSER brand in connection with environmental
protection and regional responsibility.
While on the one hand GELSENWASSER is subject to the
risks already explained of a weakening in economic growth in
Germany, on the other, in the event of a recovery in economic
growth there will be good chances to increase volumes of
water, gas and electricity. While the Eurozone slid into recession,
particularly in the second half of 2012, Germany has
been able to resist this trend up to now. There are economic
assessments that assume there will merely be a small weakness
of growth in Germany and that the German economy will
recover relatively soon. GELSENWASSER will also profit from
such a scenario, because volumes of water and energy to
commercial and industrial customers can be very dependent
on economic growth. In the event of positive economic growth
data, there is the chance that commercial and industrial
customers will correspondingly increase production and higher
volumes of water and energy can be achieved. In such a
scenario it can also be assumed that the volumes of private
households would also not be sustainably disrupted. Although
demand from private households has always shown itself to
be relatively independent of economic growth, the occurrence
of higher unemployment can also badly impair volumes of
water, electricity and gas in this customer segment. A revival
in economic growth in Germany and also in the Eurozone
thus offers the chance of increasing volumes in the private
customer segment.
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4.2.5 ACCOUNTING RELATED INTERNAL
CONTROL SYSTEM
The basic task of external financial reporting is that the
annual financial statements, the consolidated financial statements
and the consolidated management report could contain
incorrect information that could influence decisions made by
its addressees. To limit such risks there is an accounting
related internal control system (ICS) at GELSENWASSER, the
target of which is identifying possible sources of error and
limiting the resulting risks.
The arrangement of the ICS arises from the organisation of
the planning and accounting process.
As part of the annual planning process, GELSENWASSER AG
and all Group companies prepare medium term plans consisting
of the balance sheet, income statement and finance
plan. These include the budget for the following year and
the preview for the four financial years following that. The subsidiaries‘
planning is approved in the annual general meeting
or Supervisory Board meetings, whereby the budget represents
binding targets for the company management. All
pproved medium term plans of the consolidated companies
are aggregated together with the planning of GELSENWAS-
SER AG taking into account consolidation bookings to the
Group medium term planning and then submitted to the Audit
Committee and the Supervisory Board of GELSENWASSER
AG for consultation and approval. The approved budgets for
GELSENWASSER AG and the GELSENWASSER Group are
deemed to be binding targets for the Management Board.
The organisational regulations in accounting ensure that business
transactions are recorded in full, promptly, correctly and
in the right period. Income statements are prepared for each
month by GELSENWASSER AG and the consolidated subsidiaries
and, after carrying out consolidation bookings, are
condensed into a Group income statement. Subsequently,
budget deviation analyses are prepared both for the individual
companies and for the Group. These analyses are reported to
the Management Board as part of an internal monthly finance
report. The Audit Committee and the Supervisory Board of
GELSENWASSER AG are informed quarterly of the course of
business in written submissions in addition to the regular reporting
at scheduled meetings. The half yearly financial report,
each prepared to 30 June of a year, is discussed with the Audit
Committee before publication.
GELSENWASSER AG and all consolidated subsidiaries, with
the exception of Nantaise des Eaux Services SAS (NES), record
and process all business transactions of the financial
and investment bookkeeping using the standard software
SAP R/3. Payroll accounting is done for the companies named
with the aide of the PAISY IT system, which is connected via
an interface to the financial bookkeeping system. The bookkeeping
material of NES is read into the SAP system on the
basis of monthly balances so that all the data necessary for
preparing the Group income statement is available in the SAP
system. Ongoing bookkeeping and preparation of annual
financial statements is done centrally for all consolidated subsidiaries
by staff of the Accounting department of GELSEN-
WASSER AG on the basis of service agreements. Monitoring
financial instruments, payment transactions and monetary investments
and acceptances into the Group-wide cash pooling
is also done centrally by GELSENWASSER AG. The same
applies to the planning process specified above.
The existing directives in connection with the accounting
process generally apply throughout the Group to all companies
supported in bookkeeping by GELSENWASSER AG. A
standard IFRS Group directive applies to all Group companies
for the preparation of the Group financial statements in
accordance with International Financial Reporting Standards
(IFRS), as they are to be applied in the EU. This directive is
regularly adjusted to amended standards.
The documentation of the circumstances necessary for
accounting in accordance with HGB and IFRS is ensured
by the accounting department of GELSENWASSER AG and
controlled with process orientation.
The correct recording and processing of corporate circumstances
and their assumption into the accounting system is
monitored by regular audits by Internal Audit. Internal audits
are done Group-wide for all consolidated companies with the
exception of NES. Internal audit is subject to the Chair of the
Management Board organisationally and in disciplinary terms.
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5 CORPORATE GOVERNANCE STATEMENT
The Management Board reports – the Supervisory Board too
at the same time – in accordance with Fig. 3.10 of the German
Corporate Governance Code on the corporate governance of
the company and gives the declaration on corporate governance
in accordance with Section 289a (1) HGB.
5.1 CORPORATE GOVERNANCE REPORT AND
DECLARATION OF COMPLIANCE
5.1.1 CORPORATE GOVERNANCE REPORT
GELSENWASSER AG is obliged to comply with principles to
provide responsible and good corporate governance, which
also represent the action maxims of its management and control
committees. For this reason GELSENWASSER AG consistently
implements the recommendations and numerous
suggestions of the German Corporate Governance Code in
particular. Adjustments to the Code are taken up promptly and
implemented. Corporate Governance issues are regularly on
the agenda of the Management Board and Supervisory Board.
If individual recommendations of the Code cannot be implemented
by GELSENWASSER AG due to structural peculiarities,
this will be disclosed in the declaration of compliance
and justified. The current and all previous declarations of compliance
are permanently accessible on the internet under
www.gelsenwasser.de.
5.1.2 WORDING OF THE CURRENT
DECLARATION OF COMPLIANCE
The current declaration of compliance in accordance with
Section 161 AktG of GELSENWASSER AG of 21 November
2012 can be called up on the internet under www.gelsenwasser.de.
Its wording is as follows:
The Management Board and the Supervisory Board declares
compliance with the recommendations published by the
Federal Ministry of Justice in the official section of the Federal
Gazette of the “Government Commission German Corporate
Governance Code” in the version of 15 May 2012 (that came
into force on 15 June 2012) and that in 2012 compliance
was ensured in accordance with the declaration of compliance
of 23 November 2011 with, however, the following exceptions:
1. In accordance with Figure 3.8 Sentences 4 and 5 of the
German Corporate Governance Code it is intended to
agree an insurance excess for the D & O insurance
policy that the company has taken out for the Management
Board and for the Supervisory Board of at least 10% of
the amount of claims up to at least the amount of the one
hand a half times the fixed annual remuneration of the affected
board member or equivalent to this amount.
GELSENWASSER AG has met the parallel obligations
justified by the Act on the appropriateness of management
board remuneration with reference to the Management
Board within the transition period envisaged by law. Any
excess beyond the regulation to date for members of
the Supervisory Board corresponding to the minimum
amounts envisaged for the Management Board is in contrast
not seen to be necessary in view of the business
extent and business structure of GELSENWASSER AG.
GELSENWASSER AG is of the opinion that the motivation
and responsibility with which the members of the Supervisory
Board carry out their tasks will not be influenced by
a higher excess.
2. Figure 4.2.3 (3) Sentence 3 of the German Corporate
Governance Code envisages that a retrospective amendment
of targets for success or comparable parameters is
excluded for the variable remuneration of the members of
the Management Board.
The Management Board contracts at GELSENWASSER
AG follow this recommendation with the exception of possible
large investments/acquisitions. Should these take
place and the Supervisory Board and Management Board
agree on any adjustment of the business plan, if app -
licable, the Supervisory Board and the relevant member
of the Management Board will agree on a corresponding
adjustment of the targets (ROCE percentage). If, due to a
large investment or acquisition, a necessary adjustment to
the business plan does not accompany an adjustment of
the ROCE targets for the part of the success-dependent
remuneration to which these targets are subject, from the
point of view of GELSENWASSER AG misguided incentives
would be set on the basis of which the Management Board
would counter or block such projects.
3. In accordance with Figure 4.2.3 (4) Sentence 1 of the
German Corporate Governance Code, when concluding
Management Board contracts attention has to be paid
that payment to a member of the Management Board on
premature termination of Management Board employment
including ancillary services shall not exceed a value of two
annual remuneration payments (severance pay cap) and
not more than the remaining term of the contract employment.
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A Management Board contract at GELSENWASSER AG
sets transitional payments of 50% of basic salary until
the 63rd birthday in the event of a termination of contract
after 30 September 2016. This commitment can lead to
the severance pay cap being exceeded, if applicable. This
commitment is the result of contract negotiations prepared
with external consultants, and the Supervisory Board is
convinced among others that in this manner a highly
qualified member of the Management Board has been
acquired in the interest of the company.
4. Figure 5.4.6 (1) Sentence 3 2. Half Sentence of the German
Corporate Governance Code envisages that all members
of the Supervisory Board should also receive separate
payment for the assumption of the chair and membership
of a Supervisory Board committee.
The members of the Supervisory Board currently do not
receive any separate payment for assuming the chair and
membership of a Supervisory Board committee. The previous
remuneration system has proved itself. GELSEN-
WASSER AG is of the opinion that the members of the
Supervisory Board will also assume the chair and membership
of a Supervisory Board committee without separate
payment and will carry out the tasks and roles assigned to
them responsibly.
Figure 5.4.6 (2) Sentence 2 of the German Corporate
Governance Code recommends orientation on sustainable
corporate development when the members of the Supervisory
Board are promised success oriented remuneration.
In accordance with Section 16 (1) Sentence 2 of the
articles of association of GELSENWASSER AG, the members
of the Supervisory Board receive an amount as a
success oriented remuneration component that is calculated
depending on the result of a financial year before
taxes on income arising from the consolidated financial
reports. An assessment basis over several years as an
explicit reference to sustainability is not envisaged. GEL-
SENWASSER AG assumes, however, that a limitation of
success oriented remuneration not taking account of any
results components over € 80 million in the calculation
sufficiently considers sustainability considerations. The
Group has achieved or exceeded this amount of results
continually in the past few financial years. Misguided incentives
for possibly too short term results increases are
avoided as a result.
5.2 CORPORATE MANAGEMENT PRACTICES
Through corporate management oriented on the long term
the Management Board and Supervisory Board guarantee
the continuation of the company and sustainable value creation.
For this reason GELSENWASSER AG deals responsibly
with business risks and complies with all guidelines arising
from the law or the German Corporate Governance Code in
ac cor dance with the declaration of compliance and that, at
the same time, are the condition for good and responsible corporate
management practices. The company specific report
and control systems are continually developed further and
are adjusted to changed conditions.
Any requirements beyond these made of corporate management
practices are not currently made due to the struc -
tural peculiarities and business orientation of GELSENWAS-
SER AG. Should the implementation of additional corporate
management instruments be necessary due to future developments,
GELSENWASSER AG will prepare and implement these
directly.
5.3 MANAGEMENT BOARD AND SUPERVISORY BOARD
In accordance with the guidelines of the German Stock Corporation
Act, as a stock exchange listed German public limited
company, GELSENWASSER AG has a two-level management
structure consisting of the Management Board (running the
company) and the Supervisory Board (monitoring). Through a
strict separation of operational decision-making and supervision,
both committees can meet their different tasks independently
of each other.
The general composition and manner of working of the
Management Board and Supervisory Board are presented
below. Please refer to the notes to the annual financial statements
and Group financial statements for the specific staffing
of both committees and the duties in accordance with Section
285 (10) HGB.
5.3.1 COMPOSITION AND MANNER OF WORKING
OF THE MANAGEMENT BOARD
The Management Board of GELSENWASSER AG consists of
two members who take their resolutions unanimously. Decisions
of the Management Board are usually taken as part of
common working meetings. Each member of the Management
Board heads their area of responsibility according to the business
distribution plan. The chair of the Management Board,
Mr Henning R. Deters, heads the commercial and Dr.-Ing. Dirk
Waider heads the technical departments.
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5.3.2 COMPOSITION OF THE SUPERVISORY BOARD
The Supervisory Board of GELSENWASSER AG consists
of 12 members. Eight members are elected by the annual
general meeting and four members by the employees in
accordance with the provisions of the German Outside Investment
Act. Election is generally made for five years.
The Supervisory Board must elect a chair and two deputy
chairs from among its members. The knowledge, abilities and
specialist experience necessary for their position are taken
into consideration during proposals for election of members
of the Supervisory Board. Furthermore, in this connection the
Supervisory Board takes into account the targets outlined
below.
5.3.3 TARGETS OF THE SUPERVISORY BOARD WITH
REFERENCE TO ITS COMPOSITION
In the meetings of 23 March 2011 and then on 21 November
2012, the Supervisory Board resolved on the following targets
for its composition in addition to the regulations of the
rules of procedure of the Supervisory Board in accordance with
Fig. 5.4.1 of the German Corporate Governance Code taking
the company specific situation into account:
1. The members of the Supervisory Board should overall have
the knowledge, abilities and specialist experience necessary
to carry out their tasks properly. For this purpose the
individual knowledge, abilities and experience of the individual
members of the Supervisory Board should complement
each other so that for the work of the Supervisory
Board as such there should be sufficient specialist expertise
for every important company department at all times
in order permanently to guarantee the professional and
efficient monitoring and consulting accompaniment of
the Management Board.
2. The Supervisory Board should have at least one member
who is independent in accordance with Section 100 (5)
AktG and who has expertise in the areas of accounting or
auditing.
3. The Supervisory Board should have at least one additional
member who is independent in accordance with Figure
5.4.2 Sentence 2 DCGK, i.e. does not have any personal
or business relation to the company, its bodies, a controlling
shareholder or with an associate company that could
justify an important and not merely temporary conflict of
interest. For this purpose, in the opinion of the Supervisory
Board, it is important that not every relation of a member
of the Supervisory Board with a large shareholder leads to
dependence, but only such relations are damaging that
could justify an important and not merely temporary conflict
of interest. Such potential conflicts of interest cannot be
recognised by the Supervisory Board per se in connection
with large shareholders or with their affiliated companies.
The circumstances of the individual case are decisive.
4. No persons who exercise a management body or consultancy
task at important competitors of the company or
the Group should be members of the Supervisory Board.
5. As a rule only candidates who are not older than 70 at
the time of their election should be proposed for election to
the Supervisory Board.
6. As a rule not more than one former member of the Management
Board should be a member of the Supervisory
Board. In any case not more than two former members of
the Management Board should belong to the Supervisory
Board.
7. There should be at least two members of the Supervisory
Board who are qualified to a special degree with reference
to the international activities of GELSENWASSER (for example,
through foreign citizenship or relevant experience
abroad).
8. As a rule there should be at least two female members
of the Supervisory Board of whom at least one should be
a shareholder representative. Increasing the proportion of
women to two members or reaching this again should be
attempted medium term.
9. When preparing and adopting candidate proposals to the
annual general meeting for the election of members of
the Supervisory Board the Supervisory Board shall in
each case be guided by the best interests of the company.
The targets of Figures 6 to 8 are therefore subject to the
reservation that guidelines in accordance with Section 2
of the rules of procedure of the Supervisory Board and
the targets of Figures 1 to 5 always have to be guaranteed
and correspondingly qualified candidates for the Supervisory
Board are available at the times needed.
10. The Supervisory Board shall regularly review these targets.
The targets set were taken into account in the proposal of
the Supervisory Boards for elections to the Supervisory
Board to the annual general meeting on 1 June 2011. The
current composition of the Supervisory Boards corresponds
with the targets.
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5.3.4 MANNER OF WORKING
OF THE SUPERVISORY BOARD
The Supervisory Board is in continuous contact with the
Mana gement Board, which it regularly advises and whose
management of the business it monitors. On the basis of
reports from the Management Board all business transactions
that require the approval of the Supervisory Board in accordance
with the law and the articles of association, as well as
important matters that affect the development of the company,
are dealt with in detail in regular Supervisory Board meetings
together with the Management Board. The approval of the
Supervisory Board is required in particular for the acquisition,
disposal and encumbrance of plots of land, the assumption
of long term liabilities and the assumption of guarantees insofar
as the respectively applicable statutory threshold is exceeded.
The Management Board regularly informs the Supervisory
Board in verbal and written reports promptly and comprehensively
of all important questions of corporate planning, strategic
orientation and development, the course of business and the
position of the company including the risks, risk management
and compliance. Furthermore, the chair of the Supervisory
Board is also informed immediately between the meetings of
the Management Board about all other important business
transactions.
The Supervisory Board is included in all decisions of great
significance to the company. The necessity of its approval is
checked in each individual case. If this is the case, it must be
strictly complied with. The Supervisory Board convenes at
least four times during a calendar year.
With reference to the individual incidents in the 2012 financial
year we refer to the report of the Supervisory Board.
5.4 COMMITTEES OF THE SUPERVISORY BOARD
The Supervisory Board has set up a Steering Committee, a
Nomination Committee and an Audit Committee from among
its members. The three committees support the work of the
Supervisory Board by preparing the meetings and drawing up
the resolutions of the Supervisory Board and – in the case of
the presidium – as part of the rules of procedure of the
Supervisory Board, to resolve on authorisations in place of the
Supervisory Board. The respective chairs of the committees
regularly report to the plenum about the work of their committees.
5.4.1 COMPOSITION OF THE COMMITTEES
The respective committee is put together in accordance with
the guidelines of the rules of procedure of the Supervisory
Board.
Steering Committee
The Steering Committee consists of three members. The Chair
of the Supervisory Board as Chair of the Committee and their
deputy belong to the committee. The Steering Committee currently
consists of
• Dr Ottilie Scholz, Mayor of the City of Bochum (Chairwoman),
• Guntram Pehlke, Chairman of the Management Board of
Dortmunder Stadtwerke AG,
• Rainer Althans, full-time Chairman of the Works Council
of GELSENWASSER AG.
Audit Committee
Four members of the Supervisory Board to be selected by
the Supervisory Board belong to the Audit Committee. At
least one independent member must have expertise about
accounting or auditing. The chair should have special knowledge
and experience in applying accounting principles and
internal control procedures. The chair of the Audit Committee
should not simultaneously be the chair of the Supervisory
Board of the company. These conditions are met by the composition
of the committee, currently consisting of
• Guntram Pehlke, Chairman of the Management Board of
Dortmunder Stadtwerke AG (Chair),
• Bernhard Wilmert, Spokesman of the Management
of Stadtwerke Bochum Holding GmbH (Deputy Chairman),
• Hans-Detlef Bösel, Businessman
• Jürgen Pellny, Operating Technician.
Nomination Committee
The Nomination Committee consists of three members. It is
exclusively staffed by shareholder representatives. The committee
currently consist of
• Dr Ottilie Scholz, Mayor of the City of Bochum, (Chairwoman),
• Guntram Pehlke, Chairman of the Management Board of
Dortmunder Stadtwerke AG,
• Bernhard Wilmert, Spokesman of the Management
of Stadtwerke Bochum Holding GmbH.
5.4.2 MANNER OF WORKING OF THE COMMITTEES
The committees generally meet as needed. In 2012 the
Steering Committee convened five times and the Audit
Committee twice. The Nomination Committee did not convene.
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Steering Committee
The essential task of the Steering Committee is preparing
the meetings of the Supervisory Board. Furthermore, it is the
responsibility of the Steering Committee to prepare certain
transactions and measures for resolutions to be made in the
Supervisory Board. This includes in particular setting the
total remuneration of individual members of the Management
Board and decisions of the Supervisory Board on appointing
members of the Management Board.
Audit Committee
The Audit Committee carries out a pre-audit of the annual
financial statements and consolidated financial statements of
GELSENWASSER AG in particular, as well as the consolidated
management and Group management report and submits
its recommendations to the Supervisory Board. The drafts
of the financial statements, the management reports and the
audit reports are subsequently discussed in detail in the
presence of the auditors and subsequently by the Super -
visory Board in turn together with the auditor. In addition, the
Audit Committee discusses the half yearly financial report with
the Management Board before publication. Furthermore, it reviews
the independence of the auditor. For this purpose the
Audit Committee obtains a declaration of independence from
the auditor envisaged and contractually agrees with the auditor
that the Supervisory Board must be informed directly of any
possible reasons for exclusion or prejudice that occur and
about the important findings and circumstances during the
audit.
Nomination Committee
The Nomination Committee is commissioned and empowered
to propose suitable candidates for its election proposals to the
Supervisory Board to the annual general meeting.
6 TAKEOVER RELEVANT DISCLOSURES
6.1 PROVISIONS ON THE APPOINTMENT TO AND RECALL
OF MEMBERS OF THE MANAGEMENT BOARD AND
AMENDMENTS TO THE ARTICLES OF ASSOCIATION
When appointing and recalling the Management Board and
when amending the articles of association the current corporate
law provisions (Sections 84, 85, 133 and 179 AktG) apply.
6.2 AUTHORISATIONS OF THE MANAGEMENT BOARD
WITH REFERENCE TO ISSUING AND REPURCHASING
EQUITIES
For the authorities of the Management Board with respect to
the possibility to issue or repurchase equities, the corporate
law provisions (Sections 71 (1) No. 6-8, 202 ff AktG) apply.
There are currently no annual general meeting resolutions to
issue or repurchase equities.
6.3 COMPOSITION OF THE SHARE CAPITAL
The corresponding details can be found in the notes.
6.4 CHANGE-OF-CONTROL CLAUSES
The corresponding details can be found in the following
Chapter 7.
7 MAIN FEATURES OF THE REMUNERATION
SYSTEMS OF THE MANAGEMENT BOARD,
SUPERVISORY BOARD AND WORKS COUNCIL
The remuneration of Dr Bernhard Hörsgen consists of a fixed
and success related variable component. The basis for the
variable remuneration is the result of the GELSENWASSER
Group before taxes on income.
For Mr Henning R. Deters, in addition to a fixed basic salary
there is also success dependent remuneration, the basis
of which is also the annual result of the GELSENWASSER
Group before taxes on income. This amount is at the dis -
cretion of the Supervisory Board and is success dependent
remuneration, the amount of which is assessed according to
the degree of target achievement over a three year period. The
target here is compliance with the agreed sizes of the key
performance indicator ROCE (return on capital employed).
Furthermore, the remuneration of the members of the Management
Board includes non-cash and other payments, which
largely consist of values to be set in accordance with taxation
directives for the use of company cars and for insurance premiums.
In addition, there is income from board mandates for
supervisory board activities in companies of the GELSEN-
WASSER Group.
P. 38 || CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP

For the 2012 financial year the payments of the Management
Board amounted to:
IN € Dr.-Ing. Berhard Hörsgen henning R. Deters TOTAL
Remuneration independent of success (basic salary) 235,176.00 390,000.00 625,176.00
Success dependent remuneration
- on the basis of the annual result 353,111.17 136,500.00 489,611.17
- at discretion – 9,750.00 9,750.00
- assessed over several years – 104,000.00 104,000.00
Non-cash and other benefits 17,990.59 17,145.40 35,135.99
Mandate income 7,724.00 8,796.09 16,520.09
614,001.76 666,191.49 1,280,193.25
The pension that has been paid to Dr. Hörsgen since 1 January
2013 currently amounts to € 12,987.00. The pension
com mitments granted to Dr Hörsgen amount to a present
value of the pension obligation of € 3,507.884 in the consolidated
financial statements to 31 December 2012 (2011:
€ 2,866,469), whereby the calculation is based on a technical
interest rate of 3.25% (2011: 4.75%). In the annual financial
statements of GELSENWASSER AG the present value
applying a technical interest rate of 5.04% (2011: 5.14%) to
31 December 2012 is € 2,787,591 (2011: € 2,731,592).
On reaching his 63rd birthday Mr Deters has been promised
a pension of 70% of his basic salary. In the event of death or if
he has to leave the company early due to illness a pension has
been promised from the second period of appointment of
32% of basic salary that will rise by 2% of pensionable remuneration
on the completion of each additional year of
service.
The entitlements to a widow’s pension amount to 55% of
pension payments for Mr Deters and 60% for Dr Hörsgen.
In the event of death during the term of the contract of employment,
six months’ full pay will be paid to the widow for
the month of death and for the following six months. In
addition, claims to orphans’ pensions have been agreed in
Dr Hörsgen’s case.
In the event of a termination of the contract after 30 September
2016, transition payments of 50% of basic salary have
been up to the 63rd birthday. The pension commitments granted
to Mr Deters amount to a present value of the pension
obligations of € 292,728 to 31 December 2012 in the consolidated
financial statements and in the annual financial
statements of GELSENWASSER AG to € 172,348, whereby
the calculation is based on a technical interest rate of 3.25 %
and 5.04 %.
There are pension obligations (defined benefit obligations) towards
former members of the Management Board (excluding
Dr Hörsgen) and their surviving dependents with a total present
value of € 18,914,371 in the consolidated financial statements
and € 16,079,628 in the annual financial statements of GEL-
SEN WASSER AG. The calculation is based on a technical
in terest rate of 3.25% and 5.04%. Payments amounted to
€ 1,433,159.83.
Gelsenkirchen, 13 March 2013
GELSENWASSER AG
The Management Board
Furthermore, a change-of-control clause has been agreed
with Mr Deters that grants him a right of special notice of termination.
On exercising this special notice of termination right
there would be a claim to severance pay of a maximum of
€ 1,000,000.00. In the event of a termination of the contract
of employment by mutual agreement before 30 September
2016, a transition payment of half a month’s salary is agreed
for the duration of each month of the contract of employment.
Henning R. Deters
Dr.-Ing. Dirk Waider
CONSOLIDATED MANAGEMENT REPORT OF GELSENWASSER AG AND THE GELSENWASSER GROUP || P. 39

EXPLANATORY REPORT
OF THE MANAGEMENT BOARD
S. 40 || EXPLANATORY REPORT OF THE MANAGEMENT BOARD

EXPLANATORY REPORT OF THE MANAGEMENT BOARD
ON THE DISCLOSURES IN ACCORDANCE WITH SECTIONS
289 (4), 315 (4) HGB IN THE CONSOLIDATED MANA-
GEMENT REPORT OF GELSENWASSER AG AND THE
GELSENWASSER GROUP FOR THE 2012 FINANCIAL YEAR
In the consolidated management report of GELSENWASSER
AG and the GELSENWASSER Group for the 2012 financial
year, the Management Board has made disclosures in accordance
with Sections 289 (4), 315 (4) HGB and explains these
as follows:
The share capital of € 103,125,000 is divided into 3,437,500
no par bearer ordinary shares (single shares) that each grant
the same rights and duties. There are no different classes of
shares. Each single share grants one vote in the annual general
meeting. The rights and duties associated with the shares arise
in detail from the regulations of the German Stock Corporation
Act in particular from Sections 12, 53a ff., 118 ff. and 186 AktG.
The Management Board is not aware of any restrictions that
affect voting rights or the transfer of shares.
Wasser und Gas Westfalen GmbH & Co. Holding KG, Bochum,
Germany, a joint venture of Stadtwerke Bochum GmbH and
Dortmunder Stadtwerke AG, via Wasser und Gas Westfalen
GmbH, Bochum, Germany, to 31 December 2012 with
3,194,401 shares corresponding to a share of 92.93% of the
share capital and the voting right, holds an investment in
GELSENWASSER AG.
Amendments to the articles of association are made by a resolution
of the annual general meeting in accordance with
Sections 179, 133 AktG. Section 23 of the articles of association
reduces what is approved by statute in the statutory majority
requirements. In accordance with Section 17 of the articles
of association, the Supervisory Board is empowered to amend
the articles of association where the wording is affected.
For the authorisations of the Management Board with reference
to the possibility to issue or repurchase shares corporate law
provisions (Sections 71 (1), 202 ff. AktG) apply. There are currently
no annual general meeting resolutions to issue or repurchase
equities.
The regulations presented correspond with the legal situation
and with those usual for other stock exchange listed companies.
They are not intended to impede any attempted takeovers.
Gelsenkirchen, 18 March 2013
GELSENWASSER AG
The Management Board
Henning R. Deters Dr.-Ing. Dirk Waider
The appointment and recall of members of the Management
Board is oriented in accordance with the statutory provisions in
Sections 84, 85 AktG. The appointment and recall of members
of the management Board is the responsibility of the Supervisory
Board. This appoints members of the Management
Board for a maximum of five years. A repeated appointment or
extension of the term of office, each for a maximum of five
years, is permissible – subject to the reservations of Section 84
(1) Sentence 3 AktG. In supplement to this, Section 7 of the
articles of association determines that the Management Board
consists of two or more people and the number of members of
the Management Board is determined by the Supervisory
Board.
EXPLANATORY REPORT OF THE MANAGEMENT BOARD || S. 41

CONSOLIDATED FINANCIAL
STATEMENTS
OF GELSENWASSER AG
S. 42 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 43

CONTENTS CONSOLIDATED FINANCIAL STATEMENTS
45
45
46
46
48
49
45
46
48
49
45
46
48
49
45
46
48
49
INCOME STATEMENT
CONSOLIDATED INCOME STATEMENT
BALANCE SHEET
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
CONSOLIDATED NOTES
GENERAL BASIS
NEW ACCOUNTING REGULATIONS
GROUP OF CONSOLIDATED COMPANIES
CONSOLIDATION PRINCIPLES
FOREIGN CURRENCY TRANSLATION
ACCOUNTING POLICIES AND VALUATION METHODS
EXPLANATIONS OF THE INCOME STATEMENT
EXPLANATIONS OF THE BALANCE SHEET
EXPLANATIONS OF THE STATEMENT OF CASH FLOWS
SEGMENT REPORTING
FINANCIAL INSTRUMENTS
SUPPLEMENTARY DISLCOSURES
S. 44 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

INCOME STATEMENT FROM 1 JANUARY TO 31 DECEMBER 2012
IN MILLION € NOTE 2012 2011
Sales revenues (incl. natural gas/electricity tax) (1) 1,082.3 891.2
Natural gas/electricity tax (2) – 24.0 – 24.7
SALES REVENUES 1,058.3 866.5
Change in inventories of finished goods and work in progress – 0.6 0.2
Other capitalised company produced additions 4.7 4.1
Other operating income (3) 39.8 24.0
Cost of sales (4) – 834.6 – 614.6
Employee salaries and benefits (5) – 100.1 – 101.9
Depreciation and amortisation expense (6) – 35.4 – 37.0
Other operating income (7) – 67.9 – 69.7
NET CASH FROM OPERATING ACTIVITIES 64.2 71.6
Result of investments capitalised at equity 25.0 28.6
Other investments result 10.7 8.7
Financial income (8) 4.5 4.2
Financial expenses (8) – 8.5 – 9.6
Taxes on income (9) – 0.3 – 1.1
PROFIT FOR THE YEAR 95.6 102.4
Dividends to non-majority shareholders – 0.7
DIVIDENDS TO SHAREHOLDERS OF GELSENWASSER AG 95.6 101.7
Result per share in € - undiluted and diluted (10) 27.82 29.60
CONSOLIDATED INCOME STATEMENT FROM 1 JANUARY TO 31 DECEMBER 2012
IN MILLION € NOTE 2012 2011
Profit for the year 95.6 102.4
Currency translation differences 1.6 – 1.9
Market valuation of financial assets – 6.2 13.3
Taxes on income (9) – 11.7 –
TOTAL OF INCOME AND EXPENSES RECORDED DIRECTLY IN EQUITY
(OTHER CONSOLIDATED RESULT) – 16.3 11.4
TOTAL OF INCOME AND EXPENSES RECORDED (CONSOLIDATED RESULT) 79.3 113.8
Dividends to non-majority shareholders – 0.7
DIVIDENDS TO SHAREHOLDERS OF GELSENWASSER AG 79.3 113.1
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 45

BALANCE SHEET TO 31 DECEMBER 2012
ASSETS
IN MILLION € NOTE STATUS 31.12.2012 STATUS 31.12.2011
Fixed assets
Intangible asserts (11) 20.6 22.1
Property, plant and equipment (12) 679.3 684.0
Investment properties (13) 1.9 2.3
Investments capitalised at equity (14) 196.0 191.2
Financial assets (15) 207.7 220.2
Tax on income receivables (16) 8.2 9.9
Other receivables (17) 0.5 0.5
1,114.2 1,130.2
Current assets
Inventories (18) 34.2 28.4
Financial assets (15) 16.2 31.4
Tax on income receivables (16) 2.1 2.1
Trade receivables (17) 195.4 218.7
Cash and cash equivalent 103.1 53.1
Available-for-sale assets – 76.6
351.0 410.3
1,465.2 1,540.5
STATEMENT OF CHANGES IN EQUITY TO 31 DECEMBER 2012
Share capital Capital reserves Retained earnings Profit for the year
IN MILLION €
STATUS 1.1.2011 103.1 32.2 588.8 –
Consolidated result 101.7
Profit transfer to Wasser und Gas Westfalen GmbH – 83.0
Trade tax assessment to Wasser und Gas Westfalen GmbH – 6.6
Allocation to retained earnings 12.1 – 12.1
Other changes
AS OF 31.12.2011 103.1 32.2 600.9 –
Consolidated result 95.6
Profit transfer to Wasser und Gas Westfalen GmbH – 81.2
Trade tax assessment to Wasser und Gas Westfalen GmbH – 5.7
Allocation to retained earnings 8.7 – 8.7
Disposals from deconsolidation
STATUS 31.12.2012 103.1 32.2 609.6 –
S. 46 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

LIABILILITIES
IN MILLION € NOTE STATUS 31.12.2012 STATUS 31.12.2011
Equity (19)
Share capital 103.1 103.1
Capital reserves 32.2 32.2
Retained earnings 609.6 600.9
Cumulative other consolidated result 75.4 91.7
DIVIDENDS TO SHAREHOLDERS OF GELSENWASSER AG 820.3 827.9
Dividends to non-majority shareholders – 10.4
820.3 838.3
Non-current liabilities
Pension provisions (20) 154.2 151.6
Tax provisions (21) 5.1 4.0
Other payables (22) 7.0 6.8
Financial payables (23) 2.9 3.0
Grants (24) 193.9 196.9
Other liabilities (25) 0.3 0.5
Deferred taxes (9) 11.4 1.1
374.8 363.9
Current liabilities
Other provisions (22) 31.7 35.8
Financial payables (23) 10.9 28.9
Grants (24) 7.6 7.6
Trade payables and other payables (25) 219.9 220.5
Liabilities available-for-sale – 45.5
270.1 338.3
1,465.2 1,540.5
Difference from
currency translation
Cumulative other consolidated result
Market valuation
of financial assets
Equity of shareholders
of GELSENWASSER AG
Equity of non-majority
shareholders
6.8 73.5 804.4 10.4 814.8
– 1.9 13.3 113.1 0.7 113.8
TOTAL
– 83.0 – 83.0
– 6.6 – 6.6
– –
– – 0.7 – 0.7
4.9 86.8 827.9 10.4 838.3
1.6 – 17.9 79.3 79.3
– 81.2 – 81.2
– 5.7 – 5.7
– –
– – 10.4 – 10.4
6.5 68.9 820.3 – 820.3
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 47

STATEMENT OF CASH FLOWS FROM 1 JANUARY TO 31 DECEMBER 2012
IN MILLION € 2012 2011
Profit for the year 95.6 102.4
Depreciation less attributions to asset items 35.4 36.8
Value changes from the equity valuation – 2.0 18.9
Changes to provisions – 1.5 7.8
Dissolution of capital grants – 0.2 – 0.2
Proceeds from construction and earnings grants 4.6 6.4
Dissolution of construction and earnings grants – 7.4 – 7.8
Result from the disposal of asset items – 14.3 –
Changes to inventories, trade receivables and other assets that are not classified
as investment of financing activities 50.9 – 41.4
Change to trade payables and other liabilities that are not classified
as investment or financing activities – 8.2 33.0
NET CASH FROM CURRENT BUSINESS ACTIVITIES 152.9 155.9
Proceeds from disposals of property, plant and equipment 10.9 1.1
Purchases of property, plant and equipment – 29.3 – 29.7
Purchases of intangible assets – 1.7 – 1.9
Proceeds from disposals of financial assets 3.6 1.8
Purchases of financial assets – 1.5 – 2.4
Proceeds from the sale of consolidated companies 23.7 –
NET CASH INVESTMENT ACTIVITIES 5.7 – 31.1
Payment of dividends to shareholders – 90.4 – 89.6
Repayments of borrowings – – 2.2
Proceeds from the repayment of current borrowings 57.1 23.5
Payments from issuing current loans – 75.3 – 67.9
Payments to non-majority shareholders – – 0.6
NET CASH FROM FINANCING ACTIVITIES – 108.6 – 136.8
Net increase (decrease) in cash and cash equivalents 50.0 – 12.0
Change to cash and cash equivalents caused by merger – 0.1
Cash and cash equivalents at the beginning of the year 53.1 65.0
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 103.1 53.1
S. 48 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

CONSOLIDATED NOTES
GENERAL BASIS
GELSENWASSER AG and its fully consolidated subsidiaries
(together the GELSENWASSER Group) supply their customers
– households, business, public organisations and industry –
with drinking water and process water as well as natural gas
and heat. Furthermore, the companies carry out tasks in waste
water disposal, electricity supply and offer various utility services.
The focus of domestic activities is the Ruhr region, the
Münsterland, the Lower Rhine, East Westphalia and neighbouring
Lower Saxony. The supply area of the French sub -
sidiary Nantaise des Eaux Services SAS (NES), Sainte Lucesur-Loire,
mainly focuses on North and East France as well as
on the region around Paris and in the overseas departement
Guadeloupe. In addition, GELSENWASSER AG has investments
in the Czech Republic and Poland.
The parent company, GELSENWASSER AG, is a stock exchange
listed German public limited company registered in
Germany with its registered office in Gelsenkirchen, Willy-
Brandt- Allee 26. The company is entered in the commercial
register of Gelsenkirchen District Court under HRB 165.
Wasser und Gas Westfalen GmbH & Co. Holding KG,
Bochum, a joint venture of Stadtwerke Bochum Holding GmbH
and Dortmunder Stadtwerke AG, held 3,194,401 shares of
GELSENWASSER AG through Wasser und Gas Westfalen
GmbH on 31 December 2012. This corresponded to a share
of 92.93% of the share capital and the voting rights.
The consolidated financial statements of the consolidated
management report of GELSENWASSER AG for the 2012
financial year have been submitted to the Electronic Federal
Gazette and published. The management report of GELSEN-
WASSER AG has been merged with the management report of
the GELSENWASSER Group.
The company is listed on the stock exchanges in Frankfurt,
Düsseldorf and Berlin (Official Market/General Standard).
The consolidated financial statements of GELSENWASSER AG
are prepared in accordance with the International Financial
Reporting Standards (IFRS), as these are applied in the EU,
supplemented by the regulations of commercial law in accordance
with Section 315a (1) HGB and comply to these. The
IFRS include the standards adopted by the International
Accounting Standards Board (IASB) and the interpretations of
the International Financial Reporting Interpretations Committee
(IFRIC), as these have been accepted by the European Union.
These consolidated financial statements have been prepared
completely in euros. All amounts, insofar as nothing to the
contrary is noted, are given in million euros (million €). The
income statement has been structured in accordance with
total costs accounting.
In order to improve the clarity of the presentation, various items
of the consolidated balance sheet and the income statement
have been merged and correspondingly explained in the notes.
Assets and payables have been divided into non-current – for
maturities of over one year – and current items.
In addition to the income statement, the balance sheet and
the statement of cash flows, the statement of changes in
equity is shown. The disclosures in the notes also include segment
reporting.
NEW ACCOUNTING REGULATIONS
IASB and IFRIC have adopted a range of amendments to the
existing IFRS as well as some new standards and interpretations,
the application of which has been mandatory since the
2012 financial year for the first time. These are:
STANDARD
Amendments to IFRS 1
Amendments to IFRS 1
Amendments to IFRS 7
Amendments to IAS 12
DESCRIPTION
Severe Hyperinflation
Removal of Fixed Dates for First-time Adopters
Disclosures - Transfers of Financial Assets
Deferred tax: Recovery of Underlying Assets
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 49

The first mandatory application of the new interpretations
had no significant effects on the consolidated financial statements
of GELSENWASSER AG.
The following standards and interpretations were applied at
the first mandatory point in time of the European Union in
the GELSENWASSER Group financial statements:
STANDARD
Amendments to IFRS 7
DESCRIPTION
FIRST
APPLICATION
Disclosures - Offsetting Financial
Assets and Financial Liabilities 2013
IFRS 13 Fair Value Measurement 2013
Amendments to IAS 1
Presentation of items of Other
Comprehensive income 2013
Amendments to IAS 19 Employee Benefits 2013
IFRIC 20
Stripping Costs in the Production
Phase of a Surface Mine 2013
IFRS 10 Consolidated Financial Statements 2014
IFRS 11 Joint Arrangements 2014
IFRS 12 Disclosure of interests in Other Entities 2014
IAS 27 Separate Financial Statements 2014
IAS 28
Amendments to IAS 32
Investments in Associates
and Joint Ventures 2014
Presentation - Offsetting Financial
Assets and Financial Liabilities 2014
The following (partly revised) standards and interpretations
are made on condition of endorsement by the European Union
for the first time in the GELSENWASSER Group financial
statements at the time of their adoption:
The amendments to IAS 19 provide among others that the
so-called corridor method for delayed actuarial profits and
losses will no longer be permitted in future. Instead, actuarial
profits and losses must be recorded directly in full in the
cum u lative other consolidated result from the 2013 financial
year. The actuarial profits and losses not yet recorded with an
effect on net income amounted to a total net loss of € 62.6
million on 31 December 2012. With the application of the new
regulations of IAS 19 on 1 January 2013, the pension provisions
shown at the end of the year will be increased by this
amount at the expense of the cumulative other consolidated
result.
The effects from the first application of the other amended
or new standards and interpretations on the consolidated
financial statements of GELSENWASSER AG are currently being
identified. In particular, the mandatory first application of
IFRS 11 (Joint Arrangements) from 2014 can be expected to
have considerable effects on the consolidated financial statements,
if the classification from a joint venture as a joint
arrangement demands inclusion in accordance with the proportionate
consolidation method and no longer in accordance
with the equity method.
GROUP OF CONSOLIDATED COMPANIES
In addition to the parent company, the group of consolidated
companies includes a total of ten subsidiaries and 38 companies
valued with the help of the equity method.
In addition to the Group parent company GELSENWASSER
AG, the following companies are included in the consolidated
financial statements:
STANDARD
Amendments to
various IFRS
DESCRIPTION
FIRST
APPLICATION
Improvements to IFRSs 2009-2011 2013
Amendments to IFRS 1 Government Loans 2013
Amendments to
IFRS 10, IFRS 11
and IFRS 12
Amendments to
IFRS 10, IFRS 11
and ISA 27
IFRS 9
Transition Guidance 2013
Investment Entities 2014
Financial instruments:
Classification and Measurement 2015
• GELSENWASSER Dresden GmbH, Dresden
• GELSENWASSER Energienetze GmbH, Gelsenkirchen
• GELSENWASSER Projektgesellschaft mbH, Hamburg
• GELSENWASSER Stadtwerkedienstleistungs-GmbH,
Hamburg (formerly GELSENWASSER 3. Beteiligungs-
GmbH, Hamburg)
• Nantaise des Eaux Services SAS, Sainte Luce-sur-Loire/
France
• NGW GmbH, Duisburg
• Osmo GmbH, Hamburg
• Stadtische Werke Magdeburg Beteiligungs-GmbH,
Gelsenkirchen (since 1 August 2012)
Amendments to
IFRS 9 and IFRS 7
Subsequent amendments 2015
S. 50 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

• Stadtwerke Oranienburg GmbH, Oranienburg
(until 24 January 2012)
• Vereinigte Gas- und Wasserversorgung GmbH,
Rheda-Wiedenbrück
• WESTFALICA GmbH, Bad Oeynhausen.
Despite a 51% share of voting rights, Abwassergesellschaft
Gelsenkirchen mbH is not included in the full consolidation in
the consolidated financial statements but in accordance with
the equity method, because due to corporate law provisions
GELSENWASSER does not have a controlling position.
Number of fully
consolidated companies
Number of investments
capitalised at equity
Number of other
investments
DOMESTIC
FOREIGN
TOTAL
31.12.2012
TOTAL
31.12.2011
10 1 11 11
34 4 38 39
22 1 23 25
The main groups of assets and payables, which were shown
as held for disposal to 31 December 2011, included:
in miLLION € 31.12.2011
Intangible assets 3.2
Property, plant and equipment 60.4
Investments capitalised at equity 6.0
Financial assets 0.8
Inventories 0.4
Trade receivables and other receivables 3.3
Cash and cash equivalent 2.5
AVAILABLE-FOR-SALE ASSETS 76.6
Pension provisions 2.0
Other provisions 1.0
Financial payables 20.0
Grants 15.1
Deferred taxes 3.1
Trade receivables and other payables 4.3
PAYABLES AVAILABLE-FOR-SALE 45.5
TOTAL COMPANIES 66 6 72 75
CONSOLIDATION PRINCIPLES
ASSETS AND PAYABLES AVAILABLE-FOR-SALE
Due to various interests at shareholder level with reference
to the future strategic orientation and further development
of Stadtwerke Oranienburg GmbH (SWO), at the end of the
previous year GELSENWASSER had decided to dispose of
the shares in SWO. The co-shareholder of SWO, the Town of
Oranienburg, was offered the possibility to acquire all the
shares, amounting to 64.9%, with effect on 1 January 2012.
This offer was accepted by the co-shareholder on 24 January
2012. The revenues from the disposals amounted to a total
of € 26.2 million and were made completely in payment instruments.
The assets and payables of SWO (disposal group) were shown
as available-for-sale to 31 December 2011. The disclosure in
the segment reporting was made pro rata in the energy and
water segments. The sales revenues were significantly above
the net present value of the disposal group so that no impairments
had to be recorded in the wake of the reclassification.
(A) SUBSIDIARIES
Subsidiaries are all companies in which GELSENWASSER
controls the finance and business policy. Usually control is
possible with more than 50% of voting rights. Initial consolidation
and deconsolidation is generally done at the time of
acquisition or loss of control. Minority shares in the net assets
of the consolidated subsidiary are calculated separately from
the equity of the Group. Minority shares consist of the amount
of such shares on the day of the original company merger and
the minority share of the amendments of equity from the time of
the merger.
The goodwill incurred on acquisition of a subsidiary corresponds
to the excess of purchase costs of the acquisition
over the group share in the net fair value of identifiable assets,
payables and possible payables of the subsidiary at the time
of acquisition. The goodwill is capitalised at the time of the
acquisition at the acquisition costs and is subject to a value
reduction test in every following period.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 51

On the first preparation of the IFRS Group financial statements,
in the event of company mergers GELSENWASSER exercised
the relief option of IFRS 1, so that the consolidated results
calculated in accordance with HGB could be taken into the
opening IFRS balance sheet to 1 January 2004.
Receivables and payables between the companies included in
the consolidation were charged against each other, sales and
income offset with the corresponding expenses or reclassified
as internally generated assets.
(B) ASSOCIATED COMPANIES
An associated company is deemed to be company on which
a Group company can have a decisive influence in accordance
with co-determination of the financial and business policy decision-making
processes of the investment company, but
which is neither a subsidiary nor a joint venture. These include
regular companies at which GELSENWASSER directly or indirectly
holds over 20% and up to 50% of the voting rights.
Investments in associated companies are capitalised in accordance
with the equity method; their acquisition is shown at
purchase costs. Any goodwill that may exist on purchasing
(less cumulative value reduction expenses) is recorded in the
investment present value. Goodwill is calculated as the excess
of the purchase costs of a company acquisition over the share
valued at fair value of the group’s net asset share of the
acquired associated company at the time of acquisition. Because
goodwill is included in the investment present value, it
is not separately checked for a value reduction (impairment
test). Instead, an impairment test in accordance with IAS 36 is
carried out on the whole investment present value in the event
the requirements of IAS 39 occur.
The Group’s share of profits and losses from associated companies
is recorded from the time of their acquisition in the
income statement, the share of success-neutral amendments
in the cumulative other consolidated result. The counter booking
is done as an increase or decrease in the present value of
the associated company. Profits and losses from purchases
(upstream) and sales (downstream) from and to associated
companies (interim results) that were not realised by disposal
to non-Group third parties, are eliminated in the amount of our
investment share as a correction of the present value. If
the Group’s share in the losses of the associated company or
the interim result to be eliminated is greater than the investment
present value and unsecured non-current loans to the
associated company, no additional losses are recorded unless
there is a legal or de facto obligation to make compensation
payments. If the losses were greater than the present value,
later profits are only capitalised when they exceed the nonbooked
loss.
The accounting and valuation methods of important associated
companies are, insofar as the necessary information is available,
adjusted to the methods on which the consolidated
financial statements are based.
The equity valuation is generally done in a manner so that the
results expected from the investments for the year are taken
into account at the same time.
(C) JOINT VENTURES
Companies that are under the joint management of at least
two shareholders are deemed to be joint ventures. GELSEN-
WASSER assesses the shares in joint ventures applying the
equity method. The principles apply as those used for accounting
for associated companies.
CURRENCY TRANSLATION
In the individual financial statements of the consolidated
companies, business transactions in foreign currency are
translated at the exchange rate applicable at the time of the
transaction. Foreign currency profits and losses arising from
settling these transactions and from translating monetary
foreign currency items are generally recorded affecting net
income in the income statement.
The functional currency calculation is applied to the translation
of the financial statements of the foreign companies valued
using the equity method. For this purpose the translation of
the balance sheet items from the respective national currency
into euros is done at the period-end exchange rate at the end
of the reporting period. Expenses are translated at the average
exchange rate for the year. All translation differences arising
are recorded with a neutral effect on net income in the
balance sheet item cumulative other consolidated result.
If a foreign company is disposed of, such currency differences
are recorded with an effect on net income in the income statement
as part of the disposal profit or disposal loss.
S. 52 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

The following exchange rates were set as the basis for the
currency translation:
Average
exchange rate
Balance sheet date
exchange rate
€ 1 EQUALS 2012 2011 31.12.2012 31.12.2011
Czech Crown 25.15 24.47 25.15 25.79
Polish Zloty 4.19 4.07 4.07 4.46
ACCOUNTING AND VALUATION METHODS
The same accounting and valuation methods used in the previous
year’s financial statements were applied.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is set at its procurement or
manufacturing costs less scheduled depreciation. The procurement
or manufacturing costs includes all directly attributable
costs. Furthermore, this contains the present values of
the costs for future reconversion obligations. Retrospective
procurement or manufacturing costs are recorded, depending
on the circumstances, either at the present value of the asset or
as an independent asset, if it is likely that the Group will gain
future financial benefits from it and the costs can be reliably
measured. All other repair and maintenance costs are also
taken into account in the year they are incurred with an effect
on net income in the income statement.
INTANGIBLE ASSETS
Acquired intangible assets were set at the cost of acquisition.
Intangible assets that were acquired as part of a company
merger were identified and recorded separately from goodwill
as soon as they met the definition of an intangible asset
and could be reliably determined at their fair value. The cost of
acquisition of such intangible assets corresponds to their fair
value at the time of acquisition.
In the following periods intangible assets acquired as part of a
company merger and whose use is limited in time are valued
in the same manner as individually acquired intangible assets,
i.e. with their cost of acquisition less cumulative amortisation
and cumulative impairments. The residual present value and
economic useful life are reviewed at the end of every reporting
period and adjusted, if applicable.
If the use of intangible assets acquired as part of a company
merger is unlimited in time, these are subject to an impairment
test in every following period.
The valuation is based on the following useful life:
YEARS
Software licences 3-5
Customer relations 20-22
Supply rights and other rights 5-40
Land is not subject to scheduled depreciation. Straight line
depreciation is used for all other assets, whereby the costs of
acquisitions are depreciated over the expected useful life of the
asset on the residual present value:
YEARS
Buildings 25-50
Water treatment plants 40-65
Pipeline network 50
Machinery 3-25
Fixtures and equipment 3-23
The residual present value and useful economic life are
reviewed at the end of every reporting period and, if necessary,
adjusted. When calculating the useful life factors such as wear
and tear, aging, technical standards and contractual terms are
taken into account. Any changes to these factors can result in
a reduction or extension to the useful life of an asset. In this
case the residual present value was depreciated over the
remaining, new useful life, which would lead to higher or lower
annual depreciation amounts.
Profits and losses from the disposal of assets are calculated
using a comparison of the disposal revenues with the present
value and recorded in the income statement.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 53

INVESTMENT PROPERTIES
According to IAS 40, investment properties are defined as
property held to achieve rental income and/or value increases
and not for use in production, for services, for administrative
purposes or for sales as part of the ordinary business activities
of the company.
Property held as a financial investment includes office, warehouse
and laboratory buildings as well as land. These are set at
their historical cost of acquisition less scheduled depreciation
and impairment expenses.
Depreciation on buildings is done using the straight line method
over the useful economic life of 10 to 50 years. Land is not
subject to straight line depreciation.
The basic residual values and useful lives are reviewed at the
end of every reporting period and adjusted, if applicable.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Intangible assets that have an indefinite useful life are not
subject to linear depreciation, but are reviewed at least once
a year to identify if they have to be subjected to impairment.
Assets subject to scheduled depreciation are reviewed for
whether they have to be subjected to impairment, if the corresponding
events or changes to circumstances indicate that
it may not be possible to achieve their present value. An impairment
expense is recorded at the amount by which the
present value of an asset exceeds its achievable amount. The
achievable amount is the higher amount of the fair value of the
asset less disposal costs and the use value. If it is not possible
to estimate the achievable amount of the individual asset, asset
values at the lowest level for which cash flows can be separately
identified (cash generating units) are summarised for the
impairment test. If the reasons for non-scheduled depreciation
cease, the corresponding appreciation in value will be carried
out.
FINANCIAL ASSETS
The assets included under financial instruments are divided into
the following categories in accordance with IAS 39: financial
assets measured at fair value through profit or loss, loans and
receivables, financial assets held-to-maturity and financial assets
available-for-sale. The classification depends on the respective
purpose for which the financial assets were acquired.
The management determines the classification of financial assets
on initial recognition and reviews the classification at the
end of every period. During the year and in the previous year
financial assets in the following categories were held in the
GELSENWASSER Group:
(a) Financial assets at fair value through profit or loss
At GELSENWASSER, in addition to derivatives (commodity
swaps), gas procurement and sales contracts (both only if
the fair values are positive) are also recorded under this
category. As part of the business model implemented, gas procurement
is done both for in-house gas distribution and with
the intention to achieve profits through short term fluctuations
in the price or the dealer margin. A breakdown of the contracts
into a distribution and trading part is not possible. For
this reason the physical gas procurement and sales contracts
are treated as financial assets or financial liabilities (for negative
market values) for the purposes of accounting.
To identify the fair value, the nominal values of the contracts
were compared with their market value at the end of the reporting
period. The market value at the end of the reporting
period here arises from the contracted quantity valued at the
current market price. The difference between the nominal value
(contracted quantity valued at contracted price) and market
value reflects the fair value at the end of the reporting period.
Because exchange valuations are not available for the whole
valuation period at the required granularity, GELSENWASSER
uses so-called Price Forward Curves (PFCs) to identify the
market price of various commodities and trading centres.
This concerns the commodities gas oil, fuel oil, light heating
oil, heavy heating oil as well as gas on the virtual trading
points NetConnect Germany (NCG), Gaspool and Title Transfer
Facility (TTF). PFCs are automatically prepared by GELSEN-
WASSER AG using internationally recognised mathematical
calculation procedures, whereby a manual check is subsequently
carried out. To guarantee the absence of arbitrage,
S. 54 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

the up-to-date settlement prices of the EEX and the broker
ICE as well as market information according to ICIS Heren
are used as gas input parameters. For oil the up-to-date
settlement prices of the broker ICE and ICAP are applied. The
discounting and fair value identifications are done with an interest
rate appropriate in risk and maturity (EURIBOR and publicly
listed swap rates plus a risk mark-up of one per cent for
the creditworthiness risk). The valuation procedure applied
is Level 2 of the fair value hierarchy in accordance with IFRS
7.27(b).
Financial assets at fair value through profit or loss are recorded
exclusively in commodities futures items both as non-current
and current assets.
All purchases and sales of financial assets are set on the
trading day, i.e. the day on which the Group is obliged to purchase
or sell the asset. The financial assets of the GELSEN-
WASSER Group are initially set at their fair value plus transaction
costs. They are booked out when the rights to payments
from the investment expire or were transferred and the
Group has transferred all the risks and opportunities ownership.
Available-for-sale assets are valued at their fair value. If
there is no active market for these assets and there is no
exchange listing, the fair value is identified using a suitable
in-house method. During the year the Discounted Cashflow
Method (DCF) was used for this. Changes to the fair value
are recorded with a neutral effect on net income in the balance
sheet item cumulative other consolidated result within equity.
(b) Loans and receivables
Loans and receivables are financial assets with fixed or definable
payments that are not derivatives and are not listed
on an active market. They emerge when the Group makes
money, goods or services available directly to a debtor without
any intention of trading the receivables. Loans and receivables
are capitalised at the amortised cost applying the effective
interest method. They are included under current assets with
the exception of those that only become due 12 months
after the end of the reporting period. The latter are shown as
non-current assets. Loans and receivables are included in the
balance sheet items financial assets, trade receivables and
cash and cash equivalents. If there are any individual risks,
individual value adjustments are carried out. Furthermore, portfolio-based
value adjustments are carried out for credit risks
of the same type that relate to empirical experience values.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial
assets that do not come into any of the other categories
or have been voluntarily allocated to these categories. They
belong to non-current assets if the management does not
intend to dispose of them within 12 months of the end of the
reporting period.
At the end of every reporting period it is checked whether there
is objective evidence for impairment of a financial asset or
a group of financial assts. In the case of equity instruments
that are classified as available-for-sale assets, any important or
permanent decline in the fair value below the cost of acquisition
has to be seen as evidence of impairment. If such evidence
exists for an available-for-sale asset, the losses from equity are
taken from the cumulative other result and recorded in the
income statement. Impairment losses of equity instruments
recorded once in the income statement are not reversed, including
in the event of a later increase in value.
Available-for-sale assets are exclusively recorded in the other
investments items as non-current assets.
INVENTORIES
Inventories are set at the lower of cost and estimated selling
price less costs to complete and sell. The costs are determined
on the basis of the average cost method. The costs of finished
products and work in progress include all costs of purchase,
direct labour costs and production overheads (based on normal
operating capacity). The working gas in gas storage facilities
is valued at the average cost of acquisition. The net disposal
value is determined as the estimated usual sales price
less the estimated costs up to completion and the necessary
distribution costs. Furthermore, inventory risks in connection
with a reduced exploitability are taken into account by appropriate
reductions.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 55

TRADE RECEIVABLES
Trade receivables are set at fair value on accrual and as a
result are shown at amortised cost applying the effective interest
method and deducting impairments. An impairment
to trade receivables is then recorded if there is objective
evidence that the receivable amounts due cannot be collected
in full under usual conditions. The amount of the impairment
is measured as the difference between the present value of
the receivable and the underlying present value of the ex -
pected future cash flow identified using the effective interest
rate. In addition to taking individual risks into account through
individual impairments, portfolio-based impairments are
carried out for the same type of credit risks relating to empirical
experience values. Impairments carried out are recorded with
an effect on net income in the income statement. An impairment
account is used in the balance sheet to lower the
present value reduced by possible credit defaults.
PRODUCTION ORDERS
Production orders are capitalised using the percentage-ofcompletion
method (POC method), whereby the degree of
completion is identified using the cost-to-cost method. Orders
are shown automatically under receivables from POC or, in the
event of threatened loss, under payables from POC. If prepayments
exceed the cumulative performance, these are shown
under payables.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are set at their acquisition costs
in the balance sheet. They include cash, on demand bank
deposits and other highly liquid short term financial assets with
an original term of less than three months.
AVAILABLE-FOR-SALE ASSETS AND DEBTS
Non-current assets or groups of assets (for-sale groups or disposal
groups) are classified as available-for-sale if they can be
sold in their present condition and a sale is highly likely. These
assets or groups of assets are separately shown in the balance
sheet as “available-for-sale assets”. Directly attributable debts
that should be given together with assets in a transaction are
part of a disposal group. They are also shown separately as
“available-for-sale debts”.
In the event that GELSENWASSER has made a commitment to
a sale that is accompanied by a loss of control over a subsidiary,
all assets and debts of this subsidiary have to be classified
as available-for-sale if the conditions detailed above are met.
Non-current assets and disposal groups classified as availablefor-sale
are no longer subject to scheduled depreciation. They
are set at their fair value less sales costs as long as this amount
is less than the present value.
LOAN PAYABLES
Loan payables are set at their fair value after deducting transaction
costs on first recognition. In the following period they
are valued at amortised cost. Every difference between the
amount payable (after transaction costs) and the repayment
amount is recorded in the income statement during the term of
the payable applying the effective interest.
Loan payables are recorded as current liabilities as far as the
Group does not have the express right to settle the payable at
least 12 months after the end of the reporting period.
Loan payables are shown in the balance sheet items bank
loans and other payables and are financial liabilities.
PENSION COMMITMENTS
Provisions for pensions are calculated according to the projected
unit credit method. Here not only pensions and acquired
entitlements known on the period end date are taken into account,
but also salary and pension rises expected in the future.
Actuarial profits and losses are, insofar as they exceed 10% of
the present value of the performance oriented commitment –
related to every single pension provision plan – are recorded
with an effect on net income over the remaining service time
of the staff. The service time expenses are shown in long term
employee benefit obligations, the interest part of the provision
allocation under finance expenses. The actuarial valuation of
pensions is based on assumptions about discount rates, salary
rises, pension rises and mortality tables. These assumptions
can differ from the actual data due to changed economic conditions
and a changed market situation.
S. 56 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

OTHER PROVISIONS
Other provisions take into account all obligations recognisable
at the end of the reporting period that relate to past events and
whose amount and maturity is uncertain. Provisions are only
formed if they are based on legal or de facto obligations to
third parties and settling the obligation is more likely than not.
Pro visions with a remaining term of more than one year are
generally discounted.
BUILDING COSTS AND INVESTMENT GRANTS
Building cost grants from customers are recognised as liabilities
and are usually dissolved using the straight line method
over the average contract term of 50 years. The dissolution is
then shown under sales revenues.
Public grants are also shown as liabilities and dissolved using
the straight line method over the expected useful life of the subsidised
asset as other operating income.
DEFERRED TAXES
Deferred taxes are set using the liability method for all temporary
differences between the tax basis of assets and liabilities
and their present values in the IFRS financial statements,
unless the deferred taxes arise from the initial recognition of
an asset or a debt from a business transaction that is not a
business merger and that at the time of the business transaction
influenced neither the period result in accordance with
IFRS nor the tax result. Excluded from this regulation are, apart
from goodwill, any items arising from business mergers. To
determine deferred taxes, currently the respective time of the
reversal of the legally applicable (or almost definitely to be
enacted) tax rates are drawn on.
Deferred taxes are set at the extent to which it is probable
that sufficient taxable profits will be accrued against which the
temporary differences can be offset. For tax losses carried
forward, deferred taxes are set at the amount at which the
realisation of the associated tax benefits is probable due to
future tax profits.
FINANCIAL LIABILITIES
The financial liabilities in the GELSENWASSER Group include
those contractual obligations, cash or cash equivalents or
another financial asset or financial liability to be given to another
company or financial asset or financial liability to be exchanged
with another company at potentially disadvantageous conditions.
The balance sheet items banks loans, commodity
futures transactions, trade receivables, receivables from
associated companies and at equity liabilities to capitalised
investments exclusively include financial liabilities. The accounting
and valuation methods presented under financial assets apply
to commodity futures transactions with a negative
market value.
REVENUE RECOGNITION
Revenue includes values invoiced for the sale of goods and
services less value added tax, discounts and price reductions
as well as the elimination of interim profits from internal Group
sales. Revenue is recorded as follows:
(a) Revenues from sales of goods
Revenues from sales of goods are recorded when the
Group has made the corresponding delivery and the probability
of settlement of the corresponding receivable is seen as
sufficiently secure. Due to the invoicing technology in water and
gas supplies, revenue from tariff customers can only be
estimated with the aide of suitable procedures after the date
of the meter reading.
(b) Revenue from the rendering of services
Sales revenues from rendering services are recorded in the
financial year in which the service is rendered. When services
are rendered across periods, sales revenues are recorded
in the relationship of the services rendered to services to be
rendered.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 57

(c) Interest
Interest is recorded commensurate with time applying the
effective interest method. If a receivable is impaired, impairment
is carried out on the amount achievable, which corresponds
to the present value of the expected cash flows identified
on the basis of the original effective interest rate. Subsequently,
the proportional addition of accrued interest is continued with
corresponding recording as interest.
(d) Royalties
Revenue from royalties is recorded appropriate to the period in
accordance with the provisions of the underlying contract.
(b) GELSENWASSER Group is a lessor
If assets are let as part of a finance leasing arrangement, the
present value of the lease payments is recorded as a finance
receivable. The not-yet realisable finance income calculated as
the difference between the gross receivable and the present
value of the receivable is recorded over the term of the leasing
arrangement in such a manner that there is a constant interest
payment of the still outstanding receivable. The lessee’s
payments are divided into a repayment amount, which reduces
the receivable, and an interest amount, which lowers the not
yet realised financial income and is recorded with an effect on
net income.
(e) Dividends
Dividends are recognised at the time at which the right to
receipt of payment arises.
LEASING ARRANGEMENTS
(a) GELSENWASSER Group is a lessee
Leasing arrangements where the GELSENWASSER Group
largely bears all the risks and opportunities associated with the
ownership of the lease property are classified as finance leases.
Finance lease arrangements are recorded at the fair value of
the leasing property or the present value of the minimum lease
payments, if this is lower. The lease payable to be set at the
corresponding amount of the lease property is – with the
exception of parts due for payment within one year – shown as
a non-current item. In following periods the lease property
is depreciated over the shorter of two periods, the useful life
of the lease item or the term of the leasing arrangement. The
payments made to the lessor in following periods are divided
into an interest and a repayment amount. The interest amount
is distributed with an effect on net income over the term of
the leasing arrangement so that there is a constant interest
payment of the respectively still outstanding leasing payable.
Currently there are no such leasing arrangements in the
GELSENWASSER Group.
Leasing arrangements where a significant proportion of the
opportunities and risks associated with ownership of the lease
property remains with the lessor are classified as operating
leasing arrangements. Payments made as part of operating
leasing arrangements are recorded on a straight line basis
with an effect on expenses over the term of the leasing
arrangement.
Assets let as part of operating leasing arrangements are set
as property, plant and equipment in the balance sheet. They
are depreciated over their expected useful life. Lease income is
recorded on a straight line basis over the term of the leasing
arrangements.
DIVIDENDS
GELSENWASSER has concluded a profit and loss transfer
agreement with its majority shareholder, Wasser und Gas
Westfalen GmbH. The profits to be transferred on the basis of
the profit and loss transfer agreement and the taxes allocated
to be paid do not reduce the profit for the year but are part
of the appropriation of profit. They are shown as liabilities at
the end of the reporting period.
The minority shareholders of GELSENWASSER AG receive
a contractually set guarantee dividend to be paid by the
majority shareholder.
EXPLANATIONS OF THE INCOME STATEMENT
SALES REVENUES
(INCL. NATURAL GAS/ELECTRICITY TAX) (1)
in miLLION € 2012 2011
Revenue from gas sales 756.8 555.9
Revenue from water sales 215.6 208.3
Revenue from electricity sales 29.0 41.5
Revenue from net addition payments 20.6 17.7
Revenue from waste water disposal 10.6 10.3
Revenue from dissolving building costs grants 7.4 7.8
Other revenue 42.3 49.7
1,082.3 891.2
S. 58 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

The increase in sales revenues from gas sales is largely
attributable to central gas purchasing and the expanded
trading activities of GELSENWASSER AG.
Revenue from electricity sales fell, particularly due to the
deconsolidation of SWO at the start of the financial year.
COST OF materials (4)
in miLLION € 2012 2011
Expenses on raw materials and consumables 743.3 522.9
Expenses on purchased services 91.3 91.7
834.6 614.6
NATURAL GAS/ELECTRCITY TAX (2)
Natural gas and electricity tax is incurred on the delivery of
natural gas and electricity to end consumers. They are openly
deducted from sales revenues.
OTHER OPERATING INCOME (3)
in miLLION € 2012 2011
Income from forward transactions 17.3 14.0
Income from the disposal of assets 9.3 0.8
Income from the deconsolidation of SWO 5.6 –
Income from the dissolution of provisions 0.3 0.7
Lease and rental income 0.9 0.7
Income from the dissolution of capital grants 0.2 0.2
Income from other periods 0.6 1.4
Other operating income 5.6 6.2
39.8 24.0
Expenses on raw materials and consumables and on pur -
chased services largely include expenses on purchasing gas,
electricity and water and also energy expenses and repair
materials. The increases largely resulted from high gas purchase
costs as part of central gas purchasing. Expenses on
purchased services are largely due to plant maintenance and
network payments for the transit of gas and electricity.
EMPLOYEE SALARIES AND BENEFITS (5)
in miLLION € 2012 2011
Wages and salaries 79.2 79.6
Social security contributions 15.7 16.1
Expenses on pensions and
other benefits 5.2 6.2
100.1 101.9
The income from forward transactions includes payments
made from derivatives concluded for hedging purposes
(commodity swaps) as well as the value change of derivatives
valued at fair value and physical gas purchasing and sales
contracts.
The expenses on pensions and other benefits included
special payments in the previous year of € 1.1 million on the
occasion of the 125th anniversary of GELSENWASSER AG.
All employees received a one-off payment to increase their
pension provision – depending on their length of service.
€ 0.3 million of the income from investment disposal is due
to financial assets and € 9.0 million to property, plant and
equipment. As a participant in the land consolidation procedure
“Mid-Ruhr” and “Accelerated Consolidation Lippeaue”,
GELSENWASSER AG has given land waiver declarations to
the land consolidation authority. Thus in accordance with
Section 52 FlurbG, GELSENWASSER has irrevocably waived
a settlement in land and has received a monetary settlement.
The ownership, administration and use of the corres -
pon ding plots of land were transferred to Arnsberg and
Düsseldorf District Councils for payment of a monetary settlement
of a total of € 9.5 million during the year. The present
value of the plots of land amounted to € 1.0 million, the income
from investment disposal thus € 8.5 million.
Income from other periods included income from impairment
reversals in property, plant and equipment of € 0.2 million.
The employer contribution to the pension scheme was
€ 6.8 million (2011: € 7.0 million).
Average number of employees, divided according to type of
employee:
2012 2011
Employees 1,513 1,539
Apprentices and interns 56 59
GROUP STAFF 1,569 1,598
of whom in the passive phase of early retirement 21 24
The decline in Group staff results exclusively from the deconsolidation
of SWO. The consolidation related decline of
an average of 94 employees contrasts with an increase in
employees at NES and GELSENWASSER AG in particular.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 59

DEPRECIATION (6)
The depreciation shown includes extraordinary impairments to
the goodwill of NES of € 0.9 million.
OTHER OPERATING EXPENSES (7)
in miLLION € 2012 2011
Concession fees 18.3 18.8
Water extraction payment 5.2 4.9
Contributions to water management associations 4.2 4.7
Other taxes 1.8 2.5
Impairments/derecogntion of trade receivables 2.0 6.0
Losses from disposals of property, plant
and equipment 0.6 0.8
Expenses from currency conversion – 0.1
Remaining operating expenses 35.8 31.9
67.9 69.7
The impairments/derecognitions of trade receivables in the
previous year included impairments of receivables in connection
with the termination of the management contract in
Algeria.
The increase of remaining operating expenses primarily
results from allocations to reserves for process risks in connection
with the management contract in Algeria.
FINANCIAL RESULT (8)
in miLLION € 2012 2011
Interest from loans 0.2 0.2
Interest from finance leasing 2.6 2.8
Other interest 1.7 1.2
FINANCIAL INCOME 4.5 4.2
Interest expenses from addition of accrued
interest on pension provisions 7.8 8.0
Interest expenses from accrued interest
on other provisions 0.3 0.3
Other interest expenses 0.2 1.2
Discounting loans/ writing off
financial investments 0.2 0.1
FINANCIAL EXPENSES 8.5 9.6
FINANCIAL RESULT – 4.0 – 5.4
Due to higher levels of cash and cash equivalents during the
year, other interest was above the previous year’s level. The
decline of other interest expenses resulted almost exclusively
from the deconsolidation of SWO.
TAXES ON INCOME (9)
Taxes on income in the income statement for the 2012 and
2011 financial years consisted exclusively of deferred taxes as
follows:
in miLLION € 2012 2011
Current taxes on income 1.7 0.9
Deferred taxes – 1.4 0.2
TAXES ON INCOME 0.3 1.1
The taxes on income recorded directly in equity exclusively
include deferred taxes from the market valuation of financial
assets. Due to the contribution of the shares in Städtischen
Werken Magdeburg GmbH & Co. KG by GELSENWASSER AG
to the subsidiary Städtische Werke Magdeburg Beteiligungs-
GmbH (SWMB), which does not belong to the tax consolidation
group of Wasser und Gas Westfalen GmbH und
Co. Holding KG, deferred taxes on the difference between
the present value in the IFRS financial statements and re -
cog nition in the tax balance sheet were formed for the first
time during the year. The taxes on income shown of € 11.7
million concern a balance from tax expenses of market value
changes recorded directly in equity (€ 13.0 million) and the tax
income from the market value change in the year (€ 1.3 million).
GELSENWASSER AG and the incorporated subsidiaries
GELSENWASSER Energienetze GmbH, NGW GmbH, Vereinigte
Gas- und Wasserversorgung GmbH and WESTFALICA
GmbH belong to the consolidated tax group of Wasser und
Gas Westfalen GmbH und Co. Holding KG and are thus not
subject to tax. GELSENWASSER AG merely has to pay the
corporation tax (including solidarity supplement for the former
East Germany) on the compensation payment to be paid by
the parent company to the external shareholders and taxes
on income for a foreign business location. All other Group
companies are subject to tax independently.
S. 60 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

At GELSENWASSER Stadtwerkedienstleistungs-GmbH, GEL-
SENWASSER Dresden GmbH, Osmo GmbH and GELSEN-
WASSER Projektgesellschaft mbH the present values in the
IFRS financial statements correspond to those in the tax
balance sheet. In this respect, at these companies there are
no deferred tax claims or debts to be capitalised.
Deferred taxes were accrued from the temporary differences
between the Group present values and the tax basis of the
assets and liabilities at the subsidiaries NES and SWMB. The
applicable tax rates are 33.3% (NES) and 14.0% (SWMB).
Deferred taxes are as follows with reference to the period
of the reversal:
in miLLION €
NON-
CURRENT
31.12.2012 31.12.2011
CURRENT
NON-
CURRENT
CURRENT
Deferred tax assets – 1.4 – –
Deferred tax liabilities 12.7 0.1 1.0 0.1
BALANCE OF DEFERRED
TAX ASSETS (+) AND
LIABILITIES (-) – 12.7 1.3 – 1.0 – 0.1
The following table shows the transition from expected to
declared tax expenses. The expected tax expenses result
from the product of the balance sheet results of the independent
Group companies subject to tax of € 15.6 million (2011:
€ 33.7 million) and the applicable tax rate of 28.8% on the
basis of a trade tax rate of assessment of 370%.
in miLLION € 2012 2011
Expected tax expenses 4.5 9.8
Taxes on income of a foreign business location – 0.1
Corporation tax on compensation payment 0.6 0.6
Tax refund for previous years – – 0.1
Addition of accrued interest to corporation tax credits – 0.4 – 0.5
Tax effects on tax free income – 4.4 – 9.0
Change of provision for tax risks – 0.2
DECLARED TAX EXPENSES 0.3 1.1
RESULT PER SHARE (10)
The result per share is identified as a quotient from the profit
for the year and the weighted average of the shares in circulation.
The number of shares of GELSENWASSER AG did
not change in the course of the financial year. Because
shares, options or similar were not owing on either 31 December
2012 or 31 December 2011 that could dilute the
result per share, the undiluted result per share corresponds
to the diluted result per share.
The deferred tax assets and liabilities are distributed across the
following items of the balance sheet:
in miLLION € 31.12.2012 31.12.2011
Investments 1.4 –
DEFERRED TAX ASSETS 1.4 –
Intangible assets 1.1 1.1
Investments 11.7 –
DEFERRED TAX LIABILITIES 12.8 1.1
BALANCE OF DEFERRED TAX ASSETS (+)
AND LIABILITIES (-) – 11.4 – 1.1
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 61

EXPLANATIONS OF THE BALANCE SHEET
INTANGIBLE ASSETS (11)
COST OF ACQUISITION AND PRODUCTION
Purchased industrial
property rights, licences and
similar rights Customer relations Goodwill
IN MILLION €
TOTAL
AS OF 01.01.2011 42.3 5.1 11.0 58.4
Additions 1.9 – – 1.9
Disposals 1.6 – – 1.6
Transfers – 2.0 – 1.6 – 1.4 – 5.0
AS OF 31.12.2011 40.6 3.5 9.6 53.7
Additions 1.7 – – 1.7
Disposals 0.3 – – 0.3
AS OF 31.12.2012 42.0 3.5 9.6 55.1
DEPRECIATION
AS OF 01.01.2011 28.0 0.6 3.9 32.5
Additions 2.3 0.2 – 2.5
Disposals 1.6 – – 1.6
Transfers – 1.7 – 0.1 – – 1.8
AS OF 31.12.2011 27.0 0.7 3.9 31.6
Additions 2.1 0.2 0.9 3.2
Disposals 0.3 – – 0.3
AS OF 31.12.2012 28.8 0.9 4.8 34.5
PRESENT VALUE
AS OF 31.12.2011 13.6 2.8 5.7 22.1
AS OF 31.12.2012 13.2 2.6 4.8 20.6
Commercial industrial property rights, licences and similar
rights include compensation payments of € 7.7 million (2011:
€ 8.2 million) in connection with water supply contracts.
In the 2007 financial year GELSENWASSER Projektgesellschaft
mbH (GWP) acquired 60% of the shares in Nantaise
des Eaux Services SAS (NES) and took control of this company.
The initial incorporation of NES in the GELSENWASSER
Group was done on 1 June 2007. In the 2009 financial year
the remaining shares in NES were acquired so that since
then GWP has held all the shares in NES as the sole shareholder.
NES is a small water supply and waste water disposal
company, which needed a larger partner in order also to be
able to acquire more extensive projects. The acquisition costs
for the 60% share amounted to € 9.4 million. The purchase
price was reflected in planning scenarios before the acquisition
that justified this price. Goodwill of € 8.5 million arose for the
only low pure assets due to the size of NES, which was
allocated to the cash generating unit “Water France” (CGU
Water France). This goodwill is not subject to scheduled depreciation.
Instead, it is subjected to an impairment test at
least once a year. In the 2008 financial year the goodwill of
€ 3.9 million was subject to extraordinary depreciation. The
S. 62 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

impairment test carried out during the year after completion of
the medium term business planning in November 2012, led
to the result of a further impairment of € 0.9 million. Thus the
present value of the goodwill at the end of the reporting period
is € 3.7 million.
The identification of the recoverable amount was done in the
past on the basis of the calculation of a value in use applying
cash flow forecasts for the next ten years. Because NES is a
company that is still growing, which should only reach the
market share it is striving for in around ten years under the
current planning assumptions, an extension of the period under
consideration was justified. Due to the growth achieved in the
past few years an adjustment of the planning period to the five
years generally foreseen in accordance with IAS 36.35 seems
appropriate.
The NES brand acquired in the 2007 financial year at acquisition
costs of € 0.5 million has an unlimited useful life because
it is intended to continue this over an indefinite period of time.
The brand has been allocated to the CGU Water France.
CGU Water France is allocated to the segment reporting of the
Water division.
On 8 November 2010 GELSENWASSER 3. Beteiligungs-
GmbH (now named GELSENWASSER Stadtwerkedienstleistungs-GmbH,
abbreviated as GWSD) acquired all the shares
in Osmo GmbH (OSMO). The acquisition costs of the shares
amounted to € 30.5 million. At acquired pure assets of OSMO
of € 29.4 million this resulted in goodwill of € 1.1 million.
The non-tax-deductible goodwill applied to assets that are
not valued individually. It was allocated to the CGU “OSMO”.
The current five year business planning relates to the experiences
gained after the acquisition of the shares and expectations
about future market development. The key assumption
of this business planning is the development of the market
share of NES in the coming five years. The sales and results
forecasts continue to be below the plan figures on which the
acquisition was based in the year as well. The reason for this
is the strengthened predatory competition recorded by GEL-
SENWASSER since the takeover. In the current planning a
positive result for the year is expected in the 2014 financial year
for the first time. Until the end of the detailed planning period
sales growth of almost 50% on the year is foreseen with an
unchanged gross profit.
The discounting rate applied was identified on the basis of market
data and amounts to 8.23% before tax and 5.40% after tax.
The growth according to the detailed five year planning period
was taken into account under consideration of a reduction of
0.5% on the discounting rate.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 63

PROPERTY, PLANT AND EQUIPMENT (12)
COST OF ACQUISITION AND PRODUCTION Land Buildings
Energy and
water
networks
Machinery
Fixtures and
equipment
Plants under
construction
IN MILLION €
TOTAL
AS OF 01.01.2011 27.6 215.1 1,087.9 108.9 66.0 7.4 1,512.9
Additions – 2.0 14.7 2.8 3.5 6.8 29.8
Disposals 0.1 0.4 3.6 0.5 5.0 0.1 9.7
Transfers – 1.4 – 10.1 – 41.6 – 31.0 – 2.1 – 7.2 – 93.4
AS OF 31.12.2011 26.1 206.6 1,057.4 80.2 62.4 6.9 1,439.6
Additions – 1.1 15.0 2.9 4.8 5.5 29.3
Disposals 1.4 0.6 2.0 0.2 3.1 0.1 7.4
Transfers – 0.1 5.1 0.5 0.2 – 5.9 –
AS OF 31.12.2012 24.7 207.2 1,075.5 83.4 64.3 6.4 1,461.5
DEPRECIATION
AS OF 01.01.2011 2.2 124.8 514.9 71.4 49.5 – 762.8
Additions – 5.1 22.0 3.6 3.8 – 34.5
Disposals – 0.1 3.5 0.4 4.5 – 8.5
Attributions – – 0.2 – – – 0.2
Transfers – – 3.8 – 15.6 – 11.7 – 1.9 – – 33,0
AS OF 31.12.2011 2.2 126.0 517.6 62.9 46.9 – 755.6
Additions – 4.6 21.4 2.6 3.5 – 32.1
Disposals 0.4 0.6 1.6 0.1 2.8 – 5.5
AS OF 31.12.2012 1.8 130.0 537.4 65.4 47.6 – 782.2
PRESENT VALUE
AS OF 31.12.2011 23.9 80.6 539.8 17.3 15.5 6.9 684.0
AS OF 31.12.2012 22.9 77.2 538.1 18.0 16.7 6.4 679.3
The Group companies let and lease land and buildings both for
commercial and private use.
The facilities let to third parties as part of operating leasing
arrangements are capitalised in the following property, plant
and equipment categories:
IN MILLION €
ACQUISITION
COSTS
31.12
CUMULATIVE
DEPRECIATION
TO 31.12
CUMULATIVE
IMPAIRMENTS
31.12
NET PRESENT
VALUE
31.12
DEPRECIATION
DURING THE
PERIOD
Land
2012 4.9 – – 4.9 –
2011 4.8 – – 4.8 –
Buildings
2012 6.1 4.3 0.8 1.0 0.1
2011 5.6 3.8 0.8 1.0 0.1
S. 64 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

The following future rent payments arise from these leasing
agreements during the term that cannot be terminated:
IN MILLION € 31.12.2012 31.12.2011
Total of future minimum leasing payments 0.9 0.9
Due within 1 year 0.3 0.3
Due after 1 to 5 years 0.4 0.4
Due after 5 years 0.2 0.2
INVESTMENT PROPERTIES (13)
AQUISITION AND PRODUCTION COSTS
IN MILLION €
AS OF 01.01.2011 6.9
Additions 0.1
Disposals –
AS OF 31.12.2011 7.0
Additions –
Disposals 1.7
AS OF 31.12.2012 5.3
DEPRECIATION
AS OF 01.01.2011 4.6
Additions 0.1
Disposals –
AS OF 31.12.2011 4.7
Additions 0.1
Disposals 1.4
AS OF 31.12.2012 3.4
The fair value of property held as financial investments
amounted to € 3.9 million at the end of the reporting period
(2011: € 4.7 million). This was identified using our own calculations
applying the DCF method.
The following amounts were recorded in the income statement:
IN MILLION € 2012 2011
Rental income 0.4 0.4
Directly attributable costs from property
held as a financial investment with which
rental income was achieved 0.2 0.2
Directly attributable costs from property
held as a financial investment with which
no rental income was achieved – –
The rental income includes no income recorded as contingent
rental payments.
The following future rental payments result from the property
held as financial investments during the term that cannot be
terminated:
IN MILLION € 31.12.2012 31.12.2011
Total of future minimum leasing payments 3.1 3.3
Due within 1 year 0.4 0.4
Due after 1 to 5 years 1.0 1.0
Due after 5 years 1.7 1.9
PRESENT VALUE
AS OF 31.12.2011 2.3
AS OF 31.12.2012 1.9
INVESTMENTS CAPITALISED AT EQUITY (14)
The present values include goodwill of a total of € 19.6
million (2011: € 19.6 million).
The following table shows consolidated finance information
of the investments capitalised at equity. These concern the
pro rata values due to GELSENWASSER on the basis of the
individual financial statements, prepared according to the
respective national accounting regulations.
2012 2011
IN MILLION € Joint ventures Joint ventures
Non-current assets 588.6 101.0 570.7 92.1
Current assets 91.4 21.6 96.0 29.2
Non-current debts 100.6 7.4 86.9 6.6
Current debts 374.1 71.1 368.1 67.6
Sales revenues 281.8 83.8 226.7 84.5
Profit for the year 23.5 6.0 24.2 5.7
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 65

FINANCIAL ASSETS (15)
31.12.2012 31.12.2011
IN MILLION €
TOTAL
REMAINING TERM
OF MORE THAN 1 YEAR
TOTAL
REMAINING TERM
OF MORE THAN 1 YEAR
Other investments 132.2 132.2 141.1 141.1
Loans 3.0 2.5 3.6 2.7
Receivables from finance leasing 71.7 69.7 73.9 71.9
Commodity futures transactions 17.0 3.3 33.0 4.5
223.9 207.7 251.6 220.2
(a) Other investments
Other investments are exclusively in companies not listed on
stock exchanges that have been classified as financial assets
in the “available for sale” category. The other investments are
– if important – set at the fair value applying the DCF method.
For this purpose the future cash flows – taken from the current
planning calculations of the companies – are discounted at
the end of the reporting period. The amount exceeding the
acquisition costs is placed in the market valuation reserve. In
total the present value of the investments recorded at fair value
amounts to € 126.9 million.
(b) Loans
Loans largely relate to financial loans granted to gas customers
to convert heating facilities and mortgages to employees.
These are due within the next 17 years.
(c) Receivables from financing leasing
IN MILLION € 31.12.2012 31.12.2011
Gross investments 115.6 120.5
Due within 1 year 4.5 4.7
Due after 1 to 5 years 16.2 16.9
Due after 5 years 94.9 98.9
Interest included 43.9 46.6
Present value of receivables from finance leasing 71.7 73.9
Due within 1 year 2.0 2.0
Due after 1 to 5 years 6.8 7.2
Due after 5 years 62.9 64.7
The fair value of the minimum leasing payments largely corresponds
to the present values.
In the 2012 financial year GELSENWASSER received interest
due on loans of € 0.1 million (2011: € 0.1 million).
During the year impairment expenses of € 0.2 million (2011:
€ 0.2 million) and impairment reversals of previously impaired
loans of € 0.1 million (2011: € 0.1 million) were recorded.
The effective interest rate of non-current loans is between
0 and 4.9%. The fair value of the loans largely corresponds to
the present values.
The receivables from finance leasing of € 56.3 million (2011:
€ 56.9 million) relate to leasing agreements between GEL-
SENWASSER AG and GSW Wasser-plus GmbH for the water
treatment facilities in the former concession municipalities
Kamen, Bergkamen and Bönen. The present value identification
is based on the contractual agreed discount rate of
3.6%.
A further € 12.5 million (2011: € 13.1 million) is due on a leasing
agreement for water treatment facilities between GEL-
SENWASSER AG and Wassergewinnung Essen GmbH. The
present value of the receivable has been identified on the basis
of contractually agreed discount rate of 3%.
As part of the contracting models, water treatment and waste
water treatment facilities are set up, financed and operated
over the contractual term of up to 21 years. The present values
of the agreed leasing payments correspond to the acquisition
costs. The discount rates are between 5.8 and 9.6%.
S. 66 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

(d) Commodity futures transactions
As part of gas procurement, gas distribution and gas trading,
both procurement and sales contracts are made with oil and
gas indices (e.g. gas oil, fuel oil, heating oil extra light, heating
oil super light, TTF) and fixed prices. Considered together,
the gas procurement and gas sales contracts partly have a
risk compensating effect, because the contracts are subject
either to the same or a similar gas price risk (TTF, NCG,
Gaspool) or the same or a similar oil price risk. The net remaining
impairment risk from the overall consideration of the
gas procurement and gas sales contracts is hedged by concluding
commodity swaps depending on the net position.
For this purpose the price index of these derivative financial
instruments is selected so that it is in accordance with the
price index of the gas procurement or gas sales contracts and
the derivative financial instruments are thus subject to the
same price risk – however opposed. The derivative financial
instruments and the physical futures transactions are valued
at fair value and capitalised accordingly. Thus there is largely a
balance of the opposing change in value in the income statement
across all gas contracts and derivatives (“natural hedge”).
Futures transactions with a positive market value are shown
under non-current and current financial assets depending on
the settlement time.
INCOME TAX RECEIVABLES (16)
On enactment of the German Act on Fiscal Accompanying
Measures for the Introduction of the European Community and
for the Modification of Further Fiscal Regulations (SEStEG), the
previous system of corporation tax reduction was replaced by
a proportional disbursement of the corporate tax credit in ten
even annual instalments beginning in 2008. The capitalised
present value corresponds to the present value of the payment
claims on 31 December 2012. The present values of the instalments
due in 2013 are shown under current assets.
TRADE RECEIVABLES AND
OTHER RECEIVABLES (17)
The fair values of trade receivables and other receivables correspond
to the present values. Long term receivables are due
within the next 21 years.
Of the receivables from associated companies, € 2.0 million
(2011: € 0.1 million) and of the investments capitalised at equity
€ 6.6 million (2011: € 4.2 million) are due on trade receivables.
Of receivables from companies in which a participating interest
is held, € 0.1 million (2011: € 0.1 million) related to trade
receivables.
INVENTORIES (18)
IN MILLION € 31.12.2012 31.12.2011
Raw materials and consumables 5.2 5.0
Work in progress 1.9 2.5
Finished products 7.7 6.9
Advance payments 19.4 14.0
34.2 28.4
The gross value of all inventories to 31 December 2012
amounted to a total of € 35.1 million (2011: € 28.6 million).
During the year impairments of € 0.6 million (2011: € 0.0
million) were made. No reversals of impairments were recorded.
The present value of the inventories set at the lower net
disposal value amounted to € 4.7 million (2011: € 1.4 million).
Advance payments related to advance payments made to
Wassergewinnung Essen GmbH (WGE) for constructing water
treatment facilities. After full completion of the facilities these
will be sold to GELSENWASSER AG and subsequently leased
by it as part of the existing leasing agreement (finance leasing)
to WGE.
31.12.2012 31.12.2011
IN MILLION €
TOTAL
REMAINING TERM
OF MORE THAN 1 YEAR
TOTAL
REMAINING TERM
OF MORE THAN 1 YEAR
Trade receivables 113.2 – 152.5 –
Receivables from associated companies 3.8 – 0.6 –
Receivables from investments capitalised at equity 15.2 – 12.1 –
Receivables from other companies in which a participating
interest is held 50.2 – 42.3 –
Other receivables 13.5 0.5 11.7 0.5
195.9 0.5 219.2 0.5
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 67

EQUITY (19)
The basic capital of GELSENWASSER AG has been subscribed
in full. It is unchanged at € 103,125,000.00 and is
divided into 3,437,500 no par bearer shares.
An increase in the technical rate of interest by 0.25%
would reduce the total commitment by € 8.4 million to 31 December
2012, while a reduction in the technical interest rate
of 0.25% would increase the total commitment by € 9.0 million.
The capital reserves originate exclusively from premiums as
part of increases in the capital of GELSENWASSER AG.
The development of equity in the 2012 and 2011 financial years
is presented in the statement of changes in equity.
PENSION PROVISIONS (20)
Provisions for pension commitments are formed on the basis
of performance oriented pension provision plans for commitments
to retirement, invalidity and surviving dependents’
benefits. The company’s commitment here is to meet its
promises to active and earlier employees. These commitments
are usually oriented on length of service and employees’ remuneration.
The valuation of pension provision plans is done according to
the projected unit credit method.
The actuarial calculations of the pension provision commitments
and pension expenses are based on the following
parameters for all plans consistently throughout the Group:
in % 31.12.2012 31.12.2011
Technical interest rate 3.25 4.75
Salary trend 2.5 2.5
Pension trend 2.0 2.0
Fluctuation 1.0 1.0
Calculation basis
Reference tables
2005 G by Prof.
Dr. Klaus Heubeck
Reference tables
2005 G by Prof.
Dr. Klaus Heubeck
Reconciliation of the total commitment to the provision:
in MiLLION € 2012 2011
Total commitment on 31.12. 216.8 171.6
Non-recorded actuarial profits (+)/
Losses (-) – 62.6 – 18.0
Transfer into debts
available-for-sale – – 2.0
PROVISION ON 31.12. 154.2 151.6
€ 9.0 million (2011: € 8.9 million) of the pension provisions
are short term.
The expenses to be considered in the income statement
consist of the following:
in MiLLION € 2012 2011
Length of service expenses 3.3 3.4
Interest expenses 7.8 8.0
Actuarial profits (-) / losses (+)
with an effect on net income – –
PENSION EXPENSES 11.1 11.4
Interest expenses are recorded under finance expenses, all
other expenses in employee salaries and benefits.
€ 1.5 million (2011: € 2.5 million) were paid for contribution
oriented pension provision plans. The previous year’s amount
includes a one-off special payment in connection with the
125th company anniversary of GELSENWASSER AG.
Development of the total commitment:
IN MILLION € 2012 2011 2010
Total commitment on 01.01 171.6 164.1 154.7
Length of service expenses 3.3 2.9 2.6
Interest expenses 7.8 8.0 7.9
Actuarial profits (-) / Losses (+) 44.6 4.5 5.8
(Parameter changes) (43.2) (5.7) (5.3)
(Due to adjustments based on experience) (1.4) (– 1.2) (0.5)
Recalculated length of service expenses – 0.5 –
Pension payments – 8.5 – 8.4 – 8.3
Disposals (–) / Additions (+) from changes to the group of consolidated companies – 2.0 – 1.4
Total commitment on 31.12 216.8 171.6 164.1
S. 68 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

TAX PROVISIONS (21)
Tax provisions predominantly relate to risks from outstanding
audits.
OTHER PROVISIONS (22)
Other provisions developed as follows in the 2012 financial
year:
IN MILLION €
Opening
balance Claim Dissolution
Compounding
Contribution
Final
balance
Long term
Sales market oriented commitments 22.5 8.0 0.1 – 3.2 17.6 –
Renewal and retirement commitments 2.5 0.8 – – 1.3 3.0 –
Environmental risks 2.4 – 0.1 0.1 – 2.4 2.4
Employee commitments 5.6 2.8 – 0.1 2.3 5.2 2.7
Concession charges 3.8 3.8 – – 3.8 3.8 –
Remaining other provisions 5.8 2.6 0.6 0.1 4.0 6.7 1.9
42.6 18.0 0.8 0.3 14.6 38.7 7.0
Provisions for sales market oriented commitments largely
related to risks from price reductions and threatened losses
from pending transactions.
The employee commitments mainly include anniversary
commitments and commitments to employees from success
dependent remuneration components.
The renewal and retirement commitments largely include
contractual commitments of NES.
The provisions for environmental risks relate to recultivation
commitments in water acquisition.
The concession charges incurred for revenues delimited
from the middle meter reading period end date to the end of
the reporting period are postponed.
FINANCIAL LIABILITIES (23)
31.12.2012 31.12.2011
in MiLLION €
TOTAL
REMAINING TERM
MORE THAN 1 YEAR
TOTAL
REMAINING TERM
MORE THAN1 YEAR
Commodity futures transactions 13.8 2.9 31.9 3.0
13.8 2.9 31.9 3.0
Commodity futures transactions are shown with negative fair
values. To identify the values the details under financial assets
apply accordingly.
GRANTS (24)
31.12.2012 31.12.2011
in MiLLION €
TOTAL
REMAINING TERM
MORE THAN 1 YEAR
TOTAL
REMAINING TERM
MORE THAN1 YEAR
Building cost grants 198.2 190.8 201.0 193.6
Investment cost grants 3.3 3.1 3.5 3.3
201.5 193.9 204.5 196.9
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 69

TRADE PAYABLES AND OTHER PAYABLES (25)
31.12.2012 31.12.2011
in Mio. €
TOTAL
REMAINING TERM
MORE THAN 1 YEAR
TOTAL
REMAINING TERM
MORE THAN1 YEAR
Trade payables 104.1 – 85.6 –
Payables to associated companies 69.2 – 76.9 –
Payables to investments capitalised at equity 3.2 – 9.4 –
Payables to other investments 1.4 – – –
Other payables 37.9 0.3 45.1 0.5
Advance payments received 4.4 – 4.0 –
220.2 0.3 221.0 0.5
Apart from borrowing as part of Group-wide cash pooling,
payables generally have to be repaid interest-free and in euros.
€ 63.7 million (2011: € 66.9 million) of the payables to associated
companies are due to Wasser und Gas Westfalen
GmbH. Tax refund claims of € 15.3 million (2011: € 10.9
million) and receivables from the cash pooling of € 2.2 million
were balanced with payables from the profit transfer of
€ 81.2 million (2011: € 83.0 million). For the payables to investments
capitalised at equity, trade receivables of € 1.0 million
were offset with payables from cash pooling of € 4.2 million.
In the previous year the item trade payables contained € 0.5
million.
EXPLANATIONS OF THE CASH FLOWS STATEMENT
Payment flows in the cash flows statement are structured
according to the divisions, business, investment and financing
activities.
In the cash flows from operating activities interest income
(including interest income from loans and finance leasing) of
€ 4.3 million (2011: € 4.0 million), interest expenses of € 0.2
million (2011: € 1.2 million), refunded taxes on income of
€ 2.4 million (2011: € 2.1 million), taxes on income paid of
€ 0.6 million (2011: € 1.4 million) and dividends received for
investments capitalised at equity and other investments of
€ 36.7 million (2011: € 56.2 million) are included.
The net cash shown in the cash flows statement exclusively
includes the cash and cash equivalents and cash at bank
shown in the balance sheet.
SEGMENT REPORTING
The chief operating decision maker in accordance with IFRS 8
is the full Management Board. Due to the different regulatory
frameworks arising from the water and energy market, the
GELSENWASSER Group is segmented into the two divisions:
Water (drinking water and waste water disposal) and Energy
(gas and electricity supply).
The most important activities in the Water division are producing,
purchasing and selling as well as transporting and
distributing drinking water and treating waste water. This
segment includes the water activities of GELSENWASSER AG
and Vereinigten Gas- und Wasserversorgung GmbH, as well
as the entire business of Nantaise des Eaux Services SAS.
Furthermore, investments and services for third parties with a
focus on the water business are taken into account.
The most important activities in the Energy division are
purchasing and selling natural gas and electricity as well as
transporting and distributing natural gas. In this segment the
gas, electricity and heating activities of GELSENWASSER
AG, Vereinigten Gas- und Wasserversorgung GmbH and
GELSENWASSER Energienetze GmbH as well as the entire
business of NGW GmbH, WESTFALICA GmbH, as well as
the businesses not recorded in the Water division, are taken
into account.
Transfers and transactions between the segments are done
at usual market conditions, as would be applied to third parties.
S. 70 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

The planning and reporting system set up at GELSENWASSER
includes segmentation exclusively on the basis of the income
statement. The central control parameter here is the EBIT. Assets
and debts are not segmented.
ACCORDING TO DIVISION
IN MILLION € YEAR WATER ENERGY
OTHER/
CONSOLIDATION
GROUP
External sales
Internal sales
Total sales
Result investments capitalised at equity
Depreciation
Important revenues and income with no effect on net income
Important revenues and income with no effect on net income
(without depreciation)
EBIT
2012 266.0 792.3 – 1,058.3
2011 265.7 600.8 – 866.5
2012 – – – –
2011 – – – –
2012 266.0 792.3 – 1,058.3
2011 265.7 600.8 – 866.5
2012 17.6 7.4 – 25.0
2011 19.1 9.5 – 28.6
2012 24.3 11.1 – 35.4
2011 23.5 13.5 – 37.0
2012 5.9 2.3 – 8.2
2011 5.8 2.6 – 8.4
2012 17.2 38.6 – 55.8
2011 21.9 78.7 – 100.6
2012 57.7 42.2 – 99.9
2011 44.4 64.5 – 108.9
RECONCILIATION FROM THE SEGMENT EBIT TO THE
CONSOLIDATED RESULT BEFORE TAXES ON INCOME
in Mio. € 2012 2011
EBIT Water segment 57.7 44.4
EBIT Energy segment 42.2 64.5
EBIT Group 99.9 108.9
Finance income 4.5 4.2
Finance expenses 8.5 9.6
CONSOLIDATED RESULT
BEFORE TAXES ON EARNINGS 95.9 103.5
EXPLANATION OF SEGMENT REPORTING
In the 2012 financial year the division allocation of an in vestment
was changed. The previous year’s figures have been adjusted
accordingly.
In total the EBIT of € 99.9 million has fallen by € 9 million on the
previous year. Developments in both divisions strongly contrast
here.
In the Water division the EBIT rose by € 13.3 million to € 57.7
million in the year. The increase predominantly resulted from
one-off income from monetary settlements for land waiver declarations
in connection with land consolidation procedures.
In addition, there were lower result burdens due to the risk
provision for burdens from the premature termination of the
management agreement in Algeria in the previous year.
In contrast, the EBIT in the Energy division fell by € 22.3 million
to € 42.2 million. The cause for this was largely declining margins
from gas sales in the end customer business due to not
passing on procurement cost increases (including hedging
transactions) – among others by increased transit payments
for upstream network operators.
BREAKDOWN OF SALES BY PRODUCT GROUPS
A breakdown of sales revenues from external customers
according to product groups or services can be found in the
explanations of the income statement in the first part of the
consolidated notes.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 71

INFORMATION ABOUT IMPORTANT CUSTOMERS
€ 181.5 million or around 17% of the sales revenues of the
GELSENWASSER Group are due to a single external customer.
The sales are fully included in the Energy segment.
FINANCIAL INSTRUMENTS
Due to its business activities the GELSENWASSER Group is
subject to various financial risks:
(II) Interest rate change risk of the expected
cash flows or goodwill
The income and operating cash flows are only influenced insignificantly
by changes to market interest rates. The interest
risk of the Group is incurred due to the short term investment
of available cash and cash equivalents. Due to the variable interest
that is usual, there is a low interest change risk for the
Group with reference to the expected cash flows.
• Market risks (currency, interest and price risks)
• Credit risks
• Liquidity risks.
A change to the investment interest rate by one per cent would,
at the current holding of cash and cash equivalents, lead to a
lower or higher interest result of around € 1.0 million.
In order to obtain early information about risks and the associated
financial effects, the GELSENWASSER Group operates
a decentralised risk management system that is managed
centrally. Each of the units responsible identify, value and report
risks corresponding to their decentral responsibility.
Through this the continual early recognition and standard
recording, evaluation, managing and monitoring of Group-wide
risks are achieved.
(A) MARKET RISK
(I) Currency risk
The GELSENWASSER Group achieves its sales revenues
almost exclusively in Germany and France and as a result is
not subject to any significant foreign currency risks in its operating
activities. 85% of the sales of the foreign operating
centre in Algeria were made in euros so that here too there was
only an insignificant currency risk.
In addition, the GELSENWASSER Group holds investments in
foreign companies in East European countries whose net
assets are subject to the risk of exchange rate changes in the
currency translation. The same applies to the profit distributions
received from these foreign companies. A continual hedging of
these foreign currency items and transactions is not made.
From a Group point of view these are relatively insignificant in
total.
The GELSENWASSER Group is subject to an impairment risk
to its equity investments, because the investments held by the
Group are classified as available-for-sale in the consolidated
balance sheet. GELSENWASSER exclusively holds financial
instruments to be valued at fair value that are not traded on
an active market. The fair value of these financial instruments
is identified by applying valuation models. The valuation of the
financial investments available-for-sale is done on the basis of
the discounted cash flow method. For this purpose assumptions
are made that relate to market circumstances at the end
of the reporting period. During the year a discounting rate
of 5.59% was set. Fair values fell by € 6.2 million during the
year. The reduction was recorded in the other consolidated
result. A change to this discounting interest rate of one per cent
would increase the fair value by around € 35 million or reduce it
by around € 23 million.
(III) Price risk
In addition to fixed prices, the gas procurement contracts of
GELSENWASSER AG also partly include gas and oil price indices
(e.g. gas oil, fuel oil, heating oil extra light, heating oil
super light, TTF). On the basis of the price indices and on
the basis of fluctuating gas market prices (TTF, NCG, Gaspool),
gas procurement contracts are subject to a market value
change risk with reference to changing oil and gas prices or a
changed gas-to-oil-spread. The same applies to gas sales
contracts.
S. 72 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

Considered together, the gas procurement and gas sales
contracts partly have a risk-compensating effect, because the
contracts are either subject to the same or a similar gas price
risk (TTF, NCG, Gaspool) or the same or a similar oil price risk
(e.g. gas oil, fuel oil, heating oil extra light, heating oil super
light). The remaining gas procurement and gas sales adjustment
risk from the summary is hedged, depending on the net
position, by concluding payer or receiver oil or gas swaps or
oil and gas swaps in combination (double swaps). For this
purpose the price index of the derivative financial instruments
is selected in each case so that it corresponds with the price
index of the gas procurement or gas sales contracts and thus
the derivative financial instruments are subject to the same
price risk. As a result, derivative financial instruments are exclusively
concluded to hedge the net remaining adjustment risk
of the gas procurement and gas sales contracts.
Both the derivative financial instruments and the physical gas
forward transactions are capitalised at fair value according to
IFRS. Thus, according to IFRS, there is largely a balance of the
opposing adjustments in the income statement across all gas
contracts and derivatives capitalised at fair value (“natural
hedge”). As far as there are (temporarily) outstanding items, this
can have an effect on the result.
(B) CREDIT RISK
Credit risks emerge when contractual partners are not in a
position to meet their commitments as agreed. To avoid a considerable
receivable default risk, a creditworthiness check is
carried out on concluding new contracts from a volume of
€ 20,000/a on the basis of the GELSENWASSER Group directive
“Solvency Check before Concluding Contracts”. The scope
of this directive includes other service contracts besides water
and energy supply contracts. In the operating business outstanding
accounts are continually monitored. Receivables that
are more than two years overdue are generally written off individually.
The default risks of the remaining receivables are
taken into account by a portfolio based adjustment on the
basis of historically proved experiences in defaults.
The adjustments to trade receivables have developed as
follows:
in MiLLION € 2012 2011
ADJUSTMENTS 01.01. 7.8 3.4
Additions 1.4 5.5
Availments – 0.3 – 0.4
Dissolution – 0.5 – 0.4
Transfers – – 0.3
ADJUSTMENTS 31.12. 8.4 7.8
Loans are largely granted to employees to finance residential
property. Furthermore, short term loans are made to associated
and investment companies within the context of Groupwide
cash pooling, as well as to other municipal companies.
For default risks for customer loans granted, a specific adjustment
of € 0.1 million (2011: € 0.1 million) has been formed.
There is no concentration of an important part of trade receivables
and other receivables as well as loans to a few customers
or borrowers. The maximum default risk to receivables
results from present values set in the balance sheet – as with all
other financial assets. Write downs of trade receivables
amounted to under 0.4% of sales revenues on average over
the past three financial years.
(C) LIQUIDITY RISK
The GELSENWASSER Group has organised liquidity management
so that there are always sufficient reserves of cash and
cash equivalents.
The following table shows the age structure of the overdue and
non-adjusted trade receivables:
in MiLLION € 31.12.2012 31.12.2011
Less than 6 months overdue 8.3 15.9
More than 6 months and less than
one year overdue 1.3 1.5
More than one year and less than
two years overdue 1.7 2.1
11.3 19.5
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 73

In both of the following tables the contractually agreed payment
flows of the payables are presented in the application
scope of IFRS 7:
The net result largely includes interest, dividends, income
and expenses from commodity futures transactions and value
adjustments.
IN MILLION € 2013 2014
Cash flows to 31.12.2012
2015
– 2017
From
2018
Commodity futures
transactions 10.9 2.7 0.2 –
During the year value adjustments of – € 6.2 million were re -
corded with a neutral effect on net income on assets avai lablefor-sale
in the cumulative other consolidated result.
Cash flows from trade
payables and other payables 186.4 – – –
Cash flows payables
in application scope
of IFRS 7 197.3 2.7 0.2 –
Cash flows to 31.12.2011
IN MILLION € 2012 2013
2014
– 2016
FROm
2017
Commodity futures
transactions 29.2 2.4 0.7 –
Cash flows from trade payables
and other payables 186.6 – – –
Cash flows payables
in application scope
of IFRS 7 215.8 2.4 0.7 –
Financial instruments were recorded in the income statement
at the following net results in accordance with IFRS 7.20:
in MiLLION € 2012 2011
Financial assets and liabilities
payables capitalised at fair value with
an effect on net income 17.3 14.0
Held for trading purposes 17.3 14.0
Assets available-for-sale 10.7 7.9
Loans and receivables – 0.3 – 4.8
Financial liabilities valued at
amortised costs – 0.2 – 0.3
S. 74 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

PRESENT VALUES, FAIR VALUES AND VALUATION
CATEGORIES ACCORDING TO CLASSES TO 31.12.2012
CLASSIFICATION IN MILLION €
MEASUREMENT
CATEGORIES ACCORDING
TO IAS 39
PRESENT
VALUE
31.12.2012
Fair Value
31.12.2012
Assets
FINANCIAL ASSETS (NON-CURRENT) 207.7 207.4
Other investments AfS 132.2 132.2
Loans LaR 2.5 2.5
Receivables from finance leasing Not IAS 39 69.7 69.4
Commodity futures transactions FVtPL 3.3 3.3
OTHER RECEIVABLES (NON-CURRENT) 0.5 0.5
Other receivables LaR 0.5 0.5
FINANCIAL ASSETS (CURRENT) 16.2 16.2
Loans LaR 0.5 0.5
Receivables from finance leasing Not IAS 39 2.0 2.0
Commodity futures transactions FVtPL 13.7 13.7
TRADE RECEIVABLES AND OTHER RECEIVABLES (CURRENT) 187.6 187.6
Trade receivables LaR 113.2 113.2
Receivables from associated companies LaR 3.8 3.8
Receivables from investments capitalised at equity LaR 15.2 15.2
Receivables from other companies in which an interest is held LaR 50.2 50.2
Other receivables LaR 5.2 5.2
CASH AND CASH EQUIVALENTS LaR 103.1 103.1
Liabilities
FINANCIAL PAYABLES (NON-CURRENT) 2.9 2.9
Commodity futures transactions FVtPL 2.9 2.9
FINANCIAL PAYABLES (CURRENT) 10.9 10.9
Commodity futures transactions FVtPL 10.9 10.9
TRADE PAYABLES AND OTHER PAYABLES (CURRENT) 186.4 186.4
Trade payables AmC 104.1 104.1
Payables to associated companies AmC 69.2 69.2
Payables to investments capitalised at equity AmC 3.2 3.2
Payables to other companies in which an interest is held AmC 1.4 1.4
Other Payables AmC 8.5 8.5
Aggregated according to measurement categories according to IAS 39:
Financial assets
AfS 132.2 132.2
LaR 294.2 294.2
FVtPL 17.0 17.0
Financial liabilities
AmC 186.4 186.4
FVtPL 13.8 13.8
AfS: Available-for-Sale financial assets
LaR: Loans and Receivables
AmC: Financial liabilities measured at amortised cost
FVtPL: Fair Value through Profit or Loss
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 75

PRESENT VALUES, FAIR VALUES AND VALUATION
CATEGORIES ACCORDING TO CLASSES TO 31.12.2011
CLASSIFICATION IN MILLION €
MEASUREMENT
CATEGORIES ACCORDING
TO IAS 39
PRESENT VALUE
31.12.2011
Fair Value
31.12.2011
Assets
FINANCIAL ASSETS (NON-CURRENT) 220.2 219.9
Other investments AfS 141.1 141.1
Loans LaR 2.7 2.7
Receivables from finance leasing Not IAS 39 71.9 71.6
Commodity futures transactions FVtPL 4.5 4.5
OTHER RECEIVABLES (NON-CURRENT) 0.5 0.5
Other receivables LaR 0.5 0.5
FINANCIAL ASSETS (CURRENT) 31.4 31.4
Loans LaR 0.9 0.9
Receivables from finance leasing Not IAS 39 2.0 2.0
Commodity futures transactions FVtPL 28.5 28.5
TRADE RECEIVABLES AND OTHER RECEIVABLES (CURRENT) 213.4 213.4
Trade receivables LaR 152.5 152.5
Receivables from associated companies LaR 0.6 0.6
Receivables from investments capitalised at equity LaR 12.1 12.1
Receivables from other companies in which an interest is held LaR 42.3 42.3
Other receivables LaR 5.9 5.9
CASH AND CASH EQUIVALENTS LaR 53.1 53.1
Assets available-for sale AfS 6.6 6.6
Liabilities
FINANCIAL PAYABLES (NON-CURRENT) 3.0 3.0
Commodity futures transactions FVtPL 3.0 3.0
FINANCIAL PAYABLES (CURRENT) 28.9 28.9
Commodity futures transactions FVtPL 28.9 28.9
TRADE PAYABLES AND OTHER PAYABLES (CURRENT) 186.6 186.6
Trade payables AmC 85.6 85.6
Payables to associated companies AmC 76.9 76.9
Payables to investments capitalised at equity AmC 9.4 9.4
Payables to other companies in which an interest is held AmC 14.7 14.7
Other Payables AfS 24.0 24.0
Aggregated according to measurement categories according to IAS 39:
Financial assets
AfS 147.7 147.7
LaR 270.6 270.6
FVtPL 33.0 33.0
Financial liabilities
AmC 186.6 186.6
FVtPL 31.9 31.9
AfS 24.0 24.0
AfS: Available-for-Sale financial assets
LaR: Loans and Receivables
AmC: Financial liabilities measured at amortised cost
FVtPL: Fair Value through Profit or Loss
S. 76 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

SUPPLEMENTARY DISCLOSURES
CONTINGENT LIABILITIES
Contingent liabilities are possible or existing commitments
relating to past events where an outflow of resources is not
expected. They are not recorded in the balance sheet.
There are security commitments of GELSENWASSER AG for
payables of an associated company of € 30.9 million.
Furthermore, GELSENWASSER AG has issued a counter
security for guarantee declarations made by this company of
€ 25.6 million.
As part of an investment in municipal utility providers in the
former East Germany, GELSENWASSER AG has assumed
counter securities for investment loans guaranteed by the
municipalities of € 2.4 million and has also committed to retain
its investment relation for the term of additional loans.
It is not expected that any significant actual liabilities will be
incurred from these contingent liabilities.
On the basis of shareholder promises and due to a possible
request for payment of still outstanding capital contributions,
additional payment liabilities of € 24.9 million could be incurred.
€ 3.0 million would be due for joint ventures.
GELSENWASSER is obliged to make a payment and use
services as a debtor from a long standing licence agreement
with an associated company. Through a partial sale of the
receivables to be incurred from this licence agreement, the
associated company has covered its financing needs. To
secure financing needs GELSENWASSER has entered into the
fixed payment commitment in the receivables sales contract
towards the financing banks. The fixed payment commitments
from the receivables sale could exceed the commitments
dependant on the actual use of services. According to the
volumes of the receivables sold up to the end of the reporting
period these amount to € 25.5 million.
COMMITMENTS
Purchase commitments for investment measures:
in MiLLION € 31.12.2012 31.12.2011
Intangible assets 0.9 0.1
Property, plant and equipment 4.0 4.7
4.9 4,8
The Group rents parts of the fixtures and equipment, office
space, pipelines and water treatment facilities as part of
operating leasing arrangements. The leasing agreements have
different conditions, rent increase clauses, notice of termination
periods and extension options. The total expenses resulting
from leasing arrangements during the year amounted to
€ 2.2 million (2011: € 2.0 million).
Future minimum leasing payments from these leasing arrangements
amount to:
in MiLLION € 31.12.2012 31.12.2011
Due within 1 year 1.7 1.6
Due after 1 to 5 years 2.9 3.2
Due after 5 years 2.9 3.1
7.5 7.9
CONCESSION AGREEMENTS
There are a variety of concession agreements between
the companies of the GELSENWASSER Group and local
authorities in the areas of gas and water. These concession
agreements are the legal basis for supplying towns/cities
and municipalities. With the transfer of supply the company is
responsible for planning, operating, maintaining and renewing
the supply facilities. The company has to ensure supplies in
the respective municipalities at all times. The concession
agreements have a term, depending on legal admissibility, of
up to 30 years. After the expiry of a concession agreement
there is usually an obligation for the municipality to purchase
the supply facilities
A payment commitment of up to € 0.3 million could result
from an options agreement until 31 December 2014.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 77

DISTRIBUTIONS TO THE SHAREHOLDERS
On the basis of the existing profit transfer agreement, in the
2012 financial year a profit of € 81.2 million (2011: € 83.0
million) as well as a trade tax assessment of € 5.7 million
(2011: € 9.6 million) were transferred to Wasser und Gas Westfalen
GmbH (WGW). In total this amounts to € 25.29 (2011:
€ 26.93) per share. At the end of the reporting period there
was an additional payable in this respect of € 79.5 million
(2011: € 83.0 million). As in the previous year, the minority
shareholders received a guaranteed dividend of € 17.74 per
share from the majority shareholder.
During the year an € 83.0 million profits transfer for 2011 (2011:
€ 83.0 million for 2010) and € 7.4 million pre-payment for
trade tax assessments for 2012 (2011: € 9.6 million for 2011)
were paid to WGW. WGW refunded € 0.0 million (2011:
€ 3.0 million) for excessive trade tax assessments paid in previous
years. On balance this is a total of € 26.29 per share
(2011: € 26.05 per share).
These supplies and services usually involve sold and acquired
goods, management services, income from interest from
finance leasing and interest income and expenses from short
term monetary investments and borrowing as part of Groupwide
cash pooling.
The key management (management in key positions) of
the GELSENWASSER Group includes all authorised representatives
of GELSENWASSER AG in addition to the Supervisory
Board and the Management Board. The remuneration
of key management consists of the following:
in MiLLION € 2012 2011
Salaries and other short term benefits 3.7 3.5
Benefits after the end of employment 0.4 0.3
BUSINESS TRANSACTIONS WITH
RELATED COMPANIES AND PERSONS
Related persons are the Supervisory Board, the Management
Board and the authorised representatives of GELSENWASSER
AG, as well as the directors of Wasser und Gas Westfalen
GmbH and their close relations. The group of related companies
largely includes investments capitalised at equity and
Wasser und Gas Westfalen GmbH and its shareholders,
Stadtwerke Bochum Holding GmbH and Dortmunder Stadtwerke
AG.
The volumes of performances provided by the GELSEN-
WASSER Group to related persons and companies and received
from related persons and companies are as follows:
Volumes of performances provided
Volumes of performances received
in MiLLION € 2012 2011 2012 2011
Wasser und Gas Westfalen GmbH 0.1 - - -
Joint ventures 63.5 62.3 43.9 41.7
Associated companies 32.0 24.9 33.0 52.6
Other related companies 11.8 12.3 15.1 13.1
Management in key positions - - - -
S. 78 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

There were the following receivables and payables or provisions
existing to and from related persons and companies at
the end of the reporting period:
Receivables
Payables
in MiLLION € 31.12.2012 31.12.2011 31.12.2012 31.12.2011
Wasser und Gas Westfalen GmbH – – 63,7 66,9
Joint ventures 76,4 78,1 1,3 6,8
Associated companies 8,0 4,0 – 0,4
Other related companies 53,9 41,2 5,5 10,0
Management in key positions – – 1,6 1,5
The outstanding amounts largely related to receivables from
finance leasing, trade payments, short term monetary investments
and borrowing as part of Group-wide cash pooling
and profit transfer agreements.
AUDITORS‘ FEES
The annual financial statement and the consolidated financial
statements of GELSENWASSER AG were audited by Dr.
Bergmann, Kauffmann und Partner GmbH & Co. KG firm of
auditors and tax consultants (BKP), Dortmund. With the
ex ception of NGW GmbH, WESTFALICA GmbH, GELSEN-
WASSER Dresden GmbH and Nantaise des Eaux Services
SAS, the fully consolidated subsidiaries were also audited
by BKP.
In total the fees agreed with the auditors for the 2011 financial
year amounted to € 401,000.
This included the following services:
IN K € 2012
Audit services 326
By other auditors 76
Other consultancy services 6
By other auditors 4
Other services 69
By other auditors 40
401
GERMAN CORPORATE GOVERNANCE CODE
During the year the Supervisory Board and Management
Board of GELSENWASSER AG once again addressed the
German Corporate Governance Code. The wording of the
current declaration of 21 November 2012 can be called up on
the internet under http://www.gelsenwasser.de.
TOTAL REMUNERATION OF THE SUPERVISORY BOARD,
THE ADVISORY BOARD AND THE MANAGEMENT BOARD
(a) Total remuneration of the Supervisory Board
The payment of the Supervisory Board is regulated in the
articles of association and is set by the annual general meeting.
The members of the Supervisory Board receive a fixed payment
of € 4,000.00 for each full financial year of their membership
of the Supervisory Board. Furthermore, they receive
32 cents per € 1,000.00 of the result of the consolidated financial
statements before taxes on income. Any proportions of
the result above € 80,000,000.00 are not considered for these
purposes.
The Chair of the Supervisory Board receives double and
each deputy chair one and a half times the amounts specified
above. Supervisory Board members who have not belonged
to the Supervisory Board during a full financial year receive
lower payments corresponding to the duration of their membership
of the Supervisory Board.
In addition, the members of the Supervisory Board receive
refunds of their expenses.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 79

The remuneration of the Supervisory Board in the 2012
financial year was as follows:
in € Payment Refunded expenses Total
Dr. Ottilie Scholz 59,200.00 383.45 59,583.45
Guntram Pehlke 44,400.00 536.83 44,936.83
Rainer Althans 44,400.00 383.45 44,783.45
Frank Baranowski 29,600.00 230.07 29,830.07
Hans-Detlef Bösel 29,600.00 4,457.43 34,057.43
Klaus Franz 29,600.00 306.76 29,906.76
Thomas Kaminski 29,600.00 306.76 29,906.76
Manfred Kossack 29,600.00 306.76 29,906.76
Christina Leitner 29,600.00 306.76 29,906.76
Jürgen Pellny 29,600.00 460.14 30,060.14
Jörg Stüdemann 29,600.00 230.07 29,830.07
Bernhard Wilmert 29,600.00 460.14 30,060.14
414,400.00 8,368.62 422,768.62
(b) Total remuneration of the Advisory Board
In order to make closer contact with groups of consumers,
local authorities, cross-regional authorities and businesses, in
accordance with Section 18 of the articles of association of
GELSENWASSER AG, the Supervisory Board can, at the proposal
of the Management Board, form advisory boards to
enact rules of procedure for it and set remuneration for its
members. Total remuneration of € 20,000.00 was paid to the
advisory board formed in this manner during the year.
In addition to a fixed basic salary, success dependent remuneration
on the basis of the annual result of the GELSEN-
WASSER Group before taxes on income also exists for Mr
Henning R. Deters. The amount of this remuneration depends
partly on the discretion of the Supervisory Board, and success
dependent remuneration which is measured according to the
degree to which targets are met over a three year period. The
target here is complying with various agreed levels for the key
performance indicator ROCE (return on capital employed).
(c) Total remuneration of the Management Board
The remuneration of Dr Bernhard Hörsgen consists of a fixed
and a variable, success dependent component. The basis for
the variable remuneration is the result before taxes on income
of the GELSENWASSER Group.
Furthermore, the remuneration of the Management Board
members includes non-cash and other benefits that largely
consist of values set in accordance with tax directives for company
car use and insurance premiums. There is also income
from exercising Supervisory Board mandates in the companies
of the GELSENWASSER Group.
The remuneration of the Management Board for the 2012
financial year amounted to the following:
in € Dr.-Ing. Bernhard Hörsgen Henning R. Deters TOTAL
Fixed remuneration (basic salary) 235,176.00 390,000.00 625,176.00
Success dependent remuneration
- on the basis of the annual result 353,111.17 136,500.00 489,611.17
- at discretion – 9,750.00 9,750.00
- assessed over several years – 104,000.00 104,000.00
Non-cash and other benefits 17,990.59 17,145.40 35,135.99
Mandate income 7,724.00 8,796.09 16,520.09
614,001.76 666,191.49 1,280,193.25
S. 80 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

In addition, there are pension commitments granting the
members of the Management Board lifelong retirement and
surviving dependents provision.
The pension to be paid to Dr Hörsgen since 1 January
2013 currently amounts to € 12,987.00 per month. The present
value of the pension commitment made to Dr Hörsgen
to 31 December 2012 amounts to € 3,507,884 (2011:
€ 2,866,469), whereby the calculation is based on a technical
interest rate of 3.25% (2011: 4.75%).
There are pension commitments (defined benefit obligations)
to former members of the Management Board (excluding
Dr Hörsgen) and their surviving dependents with a total
present value of € 18,914,371. The calculation is based on a
technical interest rate of 3.25%. Payments amounted to
€ 1,433,159.83.
EVENTS AFTER THE END OF THE REPORTING PERIOD
These consolidated financial statements were released for
publication by the Management Board on 13 March 2013.
On reaching his 63rd birthday Mr Deters has been granted
a pension commitment of 70% of basic salary. In the event
of death or if he has to leave the company due to illness a pension
has been granted from the second period of his appointment
amounting to 32% of basic salary that increases by 2% of
pensionable remuneration on completion of each additional
year of service.
Entitlement to widow’s pensions amounts to 55% of pension
payments for Mr Deters and 60% for Dr Hörsgen. In the event
of death during the contract of employment full payments
will be made to the widow for the month of death and for the
following six months. In addition, claims to orphans’ payments
have been agreed with Dr Hörsgen.
Furthermore, a change-of-control clause has been agreed
with Mr Deters that grants him a special termination right. On
exercising this special termination right there would be a
claim to a severance payment of a maximum of € 1,000,000.00.
In the event of a mutually agreed termination of the contract
of employment before 30 September 2016, a transition payment
of one half of a monthly basic salary has been agreed
for each calendar month of the duration of the contract of
employment. In the event the contract is terminated after
30 September 2016, transition payments of 50% of basic
salary up to the 63rd birthday have been agreed. The present
value of the pension commitments issued to Mr Deters
amount to € 292,728 €, to 31 December 2012, whereby the
calculation is based on a technical interest rate of 3.25%.
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 81

CURRENT SHAREHOLDINGS
Share of capital Equity Result
DIRECT
%
INDIRECT
% € K € K
1. Associated companies
GELSENWASSER Stadtwerkedienstleistungs-GmbH
(vormals GELSENWASSER 3. Beteiligungs-GmbH), Hamburg 100 49,629 3,754
GELSENWASSER Dresden GmbH, Dresden 100 59,965 5,210
GELSENWASSER Energienetze GmbH, 1) Gelsenkirchen 100 33,094 –
GELSENWASSER Projektgesellschaft mbH, Hamburg 100 5,389 – 3,410
NGW GmbH, 1) Duisburg 100 3,010 –
Städtische Werke Magdeburg Beteiligungs-GmbH
(vormals GELSENWASSER 1. Beteiligungs-GmbH), Gelsenkirchen 100 42,971 – 1,369
Vereinigte Gas- und Wasserversorgung GmbH, 1) Rheda-Wiedenbrück 100 10,743 –
WESTFALICA GmbH, 1) Bad Oeynhausen 100 6,000 –
Nantaise des Eaux Services SAS, Sainte Luce-sur-Loire, France 100 909 – 120
Osmo GmbH, Hamburg 100 36,050 6,695
Abwassergesellschaft Gelsenkirchen mbH, * 2) Gelsenkirchen 51 23,260 3,190
AWS GmbH, Gelsenkirchen 100 3,390 1,190
energiehoch3 GmbH, Hamburg 100 995 – 151
Gasversorgung Hünxe GmbH, Hünxe 90 738 188
GELSENWASSER 1. Beteiligungs-GmbH
(vormals Erdgaswärme Gesellschaft für Heizungs- und Klimatechnik mbH), 1) Gelsenkirchen 100 26 –
GELSENWASSER 2. Beteiligungs-GmbH (vormals Wasserwirtschaft Südniedersachsen GmbH), Hamburg 100 25 –
Westfälische Wasser- und Umweltanalytik GmbH, Gelsenkirchen 60 520 320
Entsorgungsgesellschaft mbH Neues Land, Calvörde 60 281 13
Gasversorgung Zehdenick GmbH, Zehdenick 51 1,431 153
GELSENWASSER Polska GmbH (vormals GELSENWASSER 2. Gesellschaft für Projekte mbH), Hamburg 100 24 –
GELSENWASSER Energienetze 1. Beteiligungsgesellschaft mbH, Hamburg 100 23 –
GELSENWASSER Entwicklungsgesellschaft Dresden mbH, Dresden 100 27 2
Havelstrom Zehdenick GmbH, Zehdenick 51 2,378 360
Stadtwerke Zehdenick GmbH, Zehdenick 74,9 5,394 745
2. Associated companies (capitalised at equity)
CHEVAK Cheb a.s., Cheb, Czech Republic 29.5 57,393 1,268
Erdgasversorgung Schwalmtal GmbH & Co. KG, * Viersen 50 3,109 1,840
Erdgasversorgung Schwalmtal Verwaltungs-GmbH, * Viersen 50 32 1
GENREO - Gesellschaft zur Nutzung regenerativer Energien in Olfen mbH
(vormals GELSENWASSER 2. Beteiligungs-GmbH), * Olfen 50 23 –
GSW Wasser-plus GmbH, * Kamen 50 961 374
Hansewasser Ver- und Entsorgungs-GmbH, Bremen 49 45,631 11,718
hertenwasser GmbH, * Herten 50 293 93
KGBE - Kommunale Gasspeicher Beteiligungsgesellschaft Epe mbH, Gronau 25 30 1
KGE - Kommunale Gasspeichergesellschaft Epe mbH & Co. KG, Gronau 25 32,619 -309
KMS KRASLICKÁ MESTSKÁ SPOLECNOST s.r.o., * Kraslice, Czech Republic 50 3,271 183
novogate GmbH, Munich 30 5,975 425
Przedsiębiorstwo Wodociągów i Kanalizacji w Głogowie Sp. z o.o., Głogów, Poland 46 24,462 1,201
PVU Prignitzer Energie- und Wasserversorgungsunternehmen GmbH, Perleberg 50 6,744 1,280
Stadtwerke Burg GmbH, Burg 49 9,132 1,295
Stadtwerke Kaarst GmbH, * Kaarst 50 4,087 1,487
Stadtwerke Kalkar GmbH & Co. KG, Kalkar 49 3,263 565
S. 82 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

Share of capital Equity Result
DIRECT
%
INDIRECT
% € K € K
2. Assoziierte Unternehmen (at Equity bilanziert)
Stadtwerke Kalkar Verwaltungs-GmbH, Kalkar 49 32 1
Stadtwerke Weißenfels GmbH, Weißenfels 24.5 23,044 4,274
Stadtwerke Wesel GmbH, Wesel 20 17,228 2,202
Stadtwerke Zeitz GmbH, Zeitz 24.5 20,434 3,050
Technische Werke Emmerich am Rhein GmbH, Emmerich am Rhein 49.9 650 550
TEREA Cheb s.r.o., Cheb, * Czech Republic 50 9,536 850
Wassergewinnung Essen GmbH, * Essen 50 2,242 266
Wasserbeschaffung Mittlere Ruhr GmbH, * Bochum 50 5,585 267
Wasserversorgung Herne GmbH & Co. KG, * Herne 50 16,536 2,513
Wasserversorgung Herne Verwaltungs-GmbH, * Herne 50 34 1
Wasserversorgung Voerde GmbH, * Voerde 50 4,229 470
Wasserwerk Mühlgrund GmbH, * Bielefeld 50 551 31
Wasserwerke Westfalen GmbH, * Dortmund 50 17,138 310
WBDU Wasserbeschaffungsgesellschaft Duisburg mbH
(vormals GELSENWASSER 1. Gesellschaft für Projekte mbH), * Duisburg 50 24 –
Gas- und Wasserversorgung Höxter GmbH, * Höxter 50 3,935 600
Gas- und Wasserversorgung Höxter Verwaltungs-GmbH, * Höxter 50 63 3
Nahwärme Bad Oeynhausen-Löhne GmbH, Bad Oeynhausen 26 3,414 189
Stadtwerke Holzminden GmbH, Holzminden 24.9 3,951 237
Stadtentwässerung Dresden GmbH, Dresden 49 121,073 15,365
Stadtwerke - Altmärkische Gas-, Wasser- und Elektrizitätswerke GmbH Stendal, Stendal 37.5 20,495 3,898
ZID Zukunft in Delitzsch GmbH, Delitzsch 49.9 11,612 1,081
3. Investment companies
IWW Rheinisch-Westfälisches Institut für Wasserforschung gemeinnützige GmbH, Mülheim an der Ruhr 5.1 1,223 – 9
Städtische Werke Magdeburg GmbH & Co. KG, Magdeburg 19.3 182,887 39,048
Städtische Werke Magdeburg Verwaltungs-GmbH, 3) Magdeburg 19.3 30 –
Stadtwerke Göttingen AG, Göttingen 1 53,294 1,893
Trianel Gasspeicher Epe GmbH & Co. KG, Aachen 8.7 33,353 5,994
Societe Guadeloupeenne des Eaux et Effluents SAS, * 4) Baie Mahault, France 50 100 –
Wasserversorgung Hünxe GmbH, Hünxe 5 1,933 146
INSTITUT FÜR WASSERFORSCHUNG GmbH, Dortmund 33.3 63 2
Wasserwirtschaft Leidersbach GmbH, Leidersbach 50 131 32
WVE Wasserversorgungs- und -entsorgungsgesellschaft mbH, Schriesheim 24.5 3,595 –
The disclosures of the first ten companies detailed under
associated companies are based on the financial statements
to 31 December 2012 and for the other companies on the
financial statements to 31 December 2011.
Equity and the results of foreign companies with translated
with the following end of period of average exchange rates:
Average
exchange rate
End of period
exchange rate
€ 1 EQUALS 2012 31.12.2012
* Joint venture in accordance with IAS 31
1) Profit transfer agreement
2) Capitalised at Equity
3) Founded in 2012, annual financial statements not yet available
4) Founded in 2008, annual financial statements not yet available
Czech Crown 25.15 25.15
Polish Zloty 4.19 4.07
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 83

SUPERVISORY BOARD
AND MANAGEMENT BOARD
The mandates of the members of the Supervisory Board and
Management Board are given as of 31 December 2012 or as of
appointment to the Management Board GELSENWASSER AG.
a) Membership of another Supervisory Board to be formed
under statute
b) Membership of another comparable domestic or foreign
controlling body of a commercial enterprise
* Employees‘ representative
MEMBERS OF THE SUPERVISORY BOARD
Dr. Ottilie Scholz
Bochum
Chairwoman
Mayor
a) • Bochum-Gelsenkirchener Straßenbahnen AG
(Chairman)
• Holding für Versorgung und Verkehr GmbH (HVV)
(Chairwoman)
• Stadtwerke Bochum GmbH (Chairwoman)
• Stadtwerke Bochum Hol ding GmbH (Chairwoman)
• Stadtwerke Bochum Netz GmbH
• Energie- und Wasserversorgung Mittleres
Ruhrgebiet GmbH
• RWE Deutschland AG
• KSBG Kommunale Verwaltungsgesellschaft GmbH
(Chairwoman)
b) • Emschergenossenschaft
(Chairwoman of the Cooperative Board)
• Sparkasse Bochum
(Chairwoman of the Administrative Board)
• evu zählwerk Abrechnungs- und
Servicegesellschaft mbH (Chairwoman)
• Bochum-Gelsenkirchener Bahngesellschaft mbH
(Deputy Chairwoman)
• Tierpark Bochum gGmbH
• NRW.BANK (Member of the Advisory Board)
• Sparkassenverband Westfalen-Lippe
(various committees of the association)
Guntram Pehlke
Dortmund
Deputy Chairman
Chairman of the Management Board of
Dortmunder Stadtwerke AG
a) • Dortmunder Energie- und Wasserversorgung GmbH
(Chair)
• EDG Entsorgung Dortmund GmbH
• RWE Vertrieb AG
• STEAG GmbH
• WV Energie AG
b) • EDG Holding GmbH
Rainer Althans *
Gelsenkirchen
Deputy Chairman
Full-time Chairman of the Works Council
of GELSENWASSER AG
Frank Baranowski
Gelsenkirchen
Mayor
a) • Emscher-Lippe-Energie GmbH
b) • Emschergenossenschaft
(Member of the Cooperative Board)
• Sparkasse Gelsenkirchen
(Chairman of the Administrative Board)
Hans-Detlef Bösel
Madlitz-Wilmersdorf
Businessman
a) • DF Deutsche Forfait AG (Chairman)
• OYSTAR HOLDING GmbH
Klaus Franz
Bochum
Member of the Group Management
ROCKWOOL INTERNATIONAL A/S
Senior Vice President Innovation & Business Development
a) • Holding für Versorgung und Verkehr GmbH (HVV)
• Stadtwerke Bochum GmbH
b) • ROXUL Inc. (Chair)
• ROCKWOOL INDIA & MIDDLE EAST (Chairman)
• ROCKWOOL Foundation
S. 84 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

Thomas Kaminski *
Gladbeck
Full-time Deputy Chairman of the Works Council
of GELSENWASSER AG
Manfred Kossack
Unna
Member des Management Board of
Dortmunder Stadtwerke AG
a) • EDG Entsorgung Dortmund GmbH
b) • Container Terminal Dortmund GmbH
(Chairman des Advisory Board)
• EDG Holding GmbH
• Wasserwerke Westfalen GmbH
Bernhard Wilmert
Bochum
Spokesman of the Board of
Stadtwerke Bochum Holding GmbH
a) • STEAG GmbH
b) • VBW Bauen und Wohnen GmbH (Chairman)
• Fernwärmeversorgung Universitäts-Wohnstadt
Bochum GmbH (Chairman of the Advisory Board)
• rku.it GmbH
• Stadtwerke Bochum Netz GmbH
• TRIANEL GmbH (Chairman)
• VfL Bochum 1848 Fußballgemeinschaft e.V.
Christina Leitner *
Gelsenkirchen
Secretary
Jürgen Pellny *
Duisburg
Operating Technician
b) • Gasversorgung Hünxe GmbH
Jörg Stüdemann
Dortmund
City Director and City Councillor
a) • Dortmunder Energie- und Wasserversorgung GmbH
• EDG Entsorgung Dortmund GmbH
b) • AMK – Abfallentsorgungsgesellschaft des
Märkischen Kreises mbH
• EDG Holding GmbH
• MVA Hamm Betreiber-GmbH
• Technologiezentrum Dortmund GmbH
• Westfalenhallen Dortmund GmbH
• Konzerthaus Dortmund GmbH
2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 85

MANAGEMENT BOARD
Henning R. Deters
Essen
Chairman
b) • hertenwasser GmbH (Chairman)
• Stadtentwässerung Dresden GmbH
(Deputy Chairman)
• Wasserbeschaffung Mittlere Ruhr GmbH
(Deputy Chairman)
• Stadtwerke - Altmärkische Gas-, Wasser- und
Elektrizitätswerke GmbH Stendal
(Deputy Chairman)
• hanseWasser Bremen GmbH
• Städtische Werke Magdeburg GmbH & Co. KG
• Wasserwerke Westfalen GmbH
Dr.-Ing. Dirk Waider
Krefeld
since 1 January 2013
b) • Abwassergesellschaft Gelsenkirchen mbH
(Chairman)
• Wasserversorgung Herne GmbH & Co. KG
(Alternating Chairman)
• Wasserversorgung Herne Verwaltungs- GmbH
(Alternating Chairman)
• Wasserwerk Mühlgrund GmbH
(Alternating Chairman)
• Wasserwerke Westfalen GmbH
(Alternating Chairman)
• SEH Stadtentwässerung Herne GmbH & Co. KG
(Deputy Chairman)
• SEH Stadtentwässerung Herne Verwaltungs GmbH
(Deputy Chairman)
• Stadtentwässerung Dresden GmbH
• Stadtwerke Kaarst GmbH
• Lippeverband (Member of the Association Council)
Dr.-Ing. Bernhard Hörsgen
Essen
until 31 December 2012
b) • Gas- und Wasserversorgung Höxter GmbH & Co. KG
(Alternating Chairman)
• Stadtentwässerung Höxter GmbH
(Alternating Chairman)
• SEH Stadtentwässerung Herne GmbH & Co. KG
(Alternating Chairman)
• SEH Stadtentwässerung Herne Verwaltungs GmbH
(Deputy Chairman)
• Wasserversorgung Herne GmbH & Co. KG
(Alternating Chairman)
• Wasserversorgung Herne Verwaltungs- GmbH
(Alternating Chairman)
• Wasserwerk Mühlgrund GmbH
(Alternating Chairman)
• Wasserwerke Westfalen GmbH
(Alternating Chairman)
• Lippeverband (Member of the Association Council)
• Stadtentwässerung Dresden GmbH
Gelsenkirchen, 13 March 2013
GELSENWASSER AG
The Management Board
Henning R. Deters Dr.-Ing. Dirk Waider
S. 86 || 2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG

2012 CONSOLIDATED FINANCIAL STATEMENTS OF GELSENWASSER AG || S. 87

AFFIRMATION
AFFIRMATION OF THE LEGAL REPRESENTATIVES
We affirm that, to the best of our knowledge in accordance
with the accounting principles to be applied that the consolidated
financial statements convey a true and fair picture of
the net assets, financial position and results of operations of
the Group and that the position of the Group and the course of
business, including the business results, are presented in the
consoli dated management report in a manner that conveys a
picture corresponding to the actual circumstances and that the
important opportunities and risks to the likely development of
the Group are described.
Gelsenkirchen, 13 March 2013
GELSENWASSER AG
The Management Board
Henning R. Deters
Dr.-Ing. Dirk Waider
S. 88 || AFFIRMATION OF THE LEGAL REPRESENTATIVES

AUDITOR’S
CERTIFICATE
We have audited the consolidated financial statements of
GELSENWASSER AG, Gelsenkirchen – consisting of the
balance sheet, consolidated income statement, statement of
changes to equity, statement of cash flows and notes – as
well as the consolidated management report summarised
in the management report of GELSENWASSER AG, for the
financial year from 1 January to 31 December 2012. The compilation
of the consolidated financial statements in accordance
with IFRS as they are to be applied in the EU and the supplementary
regulations under commercial law in accordance with
Section 315a (1) HGB are the responsibility of the legal representatives
of the company. It is our task to make an assessment
of the consolidated financial statements and the consolidated
management report on the basis of the audit that has
been carried out by us.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated
financial statements comply with IFRS as they are to
be applied in the EU and the supplementary legal regulations
under commercial law in accordance with Section 315a (1)
and give a true and fair view of the actual net assets, financial
position and results of operations of the Group in accordance
with these regulations. The consolidated management report
corresponds with the consolidated financial statements and
overall conveys an appropriate presentation of the Group’s
position and suitably presents the risks and opportunities of
future development.
Dortmund, 14 March 2013
We have carried out our audit of the consolidated financial
statements in accordance with Paragraph 317 HGB (German
Commercial Code) and the principles in Germany for the audit
of financial statements promulgated by the “Institut der Wirtschaftsprüfer”
(Institute of Public Auditors in Germany [IDW]).
Those standards require that we plan and perform the audit
in such a way that any irregularities or infringements that
materially affect the presentation of the net assets, financial
position and results of operations in the consolidated finan -
cial statements and by the consolidated management report,
in accordance with the principles of proper accounting, are
detected with reasonable assurance. Knowledge of the business
activities and the economic and legal environment of
the company and expectations as to possible mistakes are
taken into account in the determination of audit procedures.
The effectiveness of the accounting-related internal control
system and the evidence supporting the disclosures in the
consolidated financial statements and consolidated management
report are examined primarily on a spot check basis
within the framework of the audit. The audit includes an
assessment of the annual financial statements of the companies
incorporated in the consolidated financial statements,
the delineation of the group of consolidated companies, the
accounting and consolidation principles used and significant
estimates made by the legal representatives, as well as an
evaluation of the overall presentation of the consolidated financial
statements. We believe that our audit provides a reasonable
basis for our assessment.
Dr. Bergmann, Kauffmann und Partner GmbH & Co. KG
Firm of auditors and tax consultants
(Dr. Wollenhaupt)
(Tellmann)
Auditor
Auditor
AUDITOR’S CERTIFICATE || S. 89

GELSENWASSER AG
Willy-Brandt-Allee 26
45891 Gelsenkirchen
Germany
Phone: +49 209 708-0
Fax: +49 209 708-650
Email: info@gelsenwasser.de
Internet: www.gelsenwasser.de