Notes to the Financial Statements

1 Preliminary note

Squeeze-out merger

On 24 June 2020, the Annual General Meeting of Alpiq Holding Ltd. (VAT ID no. CHE‑100.032.288) approved the squeeze-out merger with Alpha 2020 Ltd. proposed by the Board of Directors. Following the approval resolution passed at the Extraordinary General Meeting of Alpha 2020 Ltd. on the same day, Alpiq Holding Ltd. was merged as the transferring company into Alpha 2020 Ltd. with retroactive effect from 1 January 2020, assuming all assets and liabilities at their previous carrying amount. On the same day, Alpha 2020 Ltd. was renamed Alpiq Holding Ltd. The merger became legally effective upon entry in the Swiss commercial register on 26 June 2020.

Basis of preparation

The financial statements of Alpiq Holding Ltd., Lausanne, have been prepared in accordance with the provisions of Swiss accounting legislation (Title 32 of the Swiss Code of Obligations). As in the previous year, the company employed no staff during the financial year.

The following section describes the main valuation principles applied that are not specified by law.

Securities

Securities held in current assets are measured at the market price on the reporting date. No fluctuation reserve is recognised.

Loans receivable / hedges

Loans receivable that are denominated in foreign currencies are measured at the closing rate on the reporting date, whereby unrealised losses are recognised, and unrealised gains are not reported. In the case of derivatives deployed in hedges, too, unrealised losses are recognised, but unrealised gains are not recognised.

Investments

The investments are generally measured individually. The only exceptions are the investments in Alpiq Ltd. and Alpiq Suisse Ltd., which have been tested for impairment by way of group measurement since 2017, as these companies form an economic unit. Since 2017, Alpiq Suisse Ltd. has operated as a meta partner power plant that sells its energy to Alpiq Ltd. at production cost.

Bonds

Bonds are recognised at face value. The discount and issue costs of bonds are recognised as finance costs in the issue year. Any premium (less issue costs) is recognised as a deferred credit and amortised on a straight-line basis over the bond’s maturity.

2 Dividend income

Dividend income comprises dividends received from subsidiaries.

3 Finance income

4 Finance costs

5 Loss on sale of investments

In 2018, Alpiq sold the Engineering Services business, which comprises the Alpiq InTec Group and the Kraftanlagen Group. On 22 December 2020, Alpiq and Bouygues Construction reached an out-of-court settlement in connection with diverging views on the definitive sale price. In 2020, Alpiq refunded CHF 54.5 million to Bouygues Construction. The arbitration proceedings, which were simultaneously initiated by both parties on 12 February 2019, therefore came to an end.

6 Trade receivables

7 Other current receivables

Other current receivables comprise cash pool balances, loans and non-current term deposits with a maximum term of 12 months as well as VAT and withholding tax receivables.

8 Loans receivable

9 Investments

A list of direct and significant indirect investments is disclosed in note 5.2 of the notes to the consolidated financial statements.

10 Trade payables

11 Current interest-bearing payables

Current interest-bearing payables include cash pooling payables, bonds due for repayment in the next 12 months and loans payable with a remaining term of no more than 12 months.

12 Other current liabilities

13 Provisions

Provisions include a provision for the recapitalisation of Alpiq Deutschland GmbH that may become necessary. They also contain a provision for the expected legal costs in connection with the compensation review proceedings pursuant to Art. 105 of the Swiss Merger Act (FusG) filed against Alpiq Holding Ltd. With these two proceedings, former shareholders are seeking a judicial review of the compensation paid by Schweizer Kraftwerksbeteiligungs-AG (SKBAG) in connection with the squeeze-out merger. On account of the facts and circumstances known at that time, in particular the two independent valuation reports which deemed the amount of compensation per share to be appropriate, Alpiq Holding Ltd. considers it unlikely that this litigation will result in a negative outcome for the company. For more information about this matter, please refer to note 4.8 of the notes to the consolidated financial statements.

14 Interest-bearing loans payable

The loan payable has a remaining maturity of 23 months.

15 Bonds

16 Equity

17 Collateral provided for third-party liabilities

Guarantees in favour of group companies and third parties totalled CHF 844 million at 31 December 2021 (previous year: CHF 592 million). Of this, an amount of CHF 512 million (CHF 303 million) relates to bank guarantees and CHF 332 million (CHF 289 million) to guarantees issued by Alpiq Holding Ltd.

18 Contingent liabilities

As part of the sale of the Engineering Services business, Alpiq Deutschland GmbH, for which Alpiq Holding Ltd. has subsidiary liability, must bear any fines and costs of Kraftanlagen Energies & Services GmbH (formerly Kraftanlagen München GmbH) resulting from the proceedings started by the state prosecutor of Munich I and the German Federal Cartel Office in the first quarter of 2015. Alpiq still deems it unlikely that Kraftanlagen Energies & Services GmbH will be convicted, which is why it was decided not to record a liability for this matter. For more information about this matter, please refer to note 5.1 of the notes to the consolidated financial statements.