Annual Report 2023/2024 Report Archive

Audit Certificate

Report on the Consolidated Financial Statements

Audit opinion

We have audited the Consolidated Financial Statements of Energie AG Oberösterreich, Linz, and its subsidiaries (the Group) comprising the Consolidated Statement of Income from 1 October 2023 to 30 September 2024, the Consolidated Statement of Comprehensive Income from 1 October 2023 to 30 September 2024, the Consolidated Statement of Financial Position as of 30 September 2024, the Consolidated Statement of Changes in Equity, and the Consolidated Cash Flow Statement for the fiscal year ending on that date, as well as the Notes to the Consolidated Financial Statements.

It is our opinion that the attached Consolidated Financial Statements comply with the statutory requirements and offer an adequately accurate representation of the asset and financial position of the Group as of 30 September 2024, as well as the Group’s earnings position and cash flows during the fiscal year ending as of that date, in accordance with the International Financial Reporting Standards (IFRS), as they are to be applied in the EU and the additional requirements stipulated in § 245a of the Austrian Commercial Code (UGB), the Electricity Industry and Organisation Act 2010, and the Gas Industry Act 2011.

Basis for our audit opinion

We have conducted our audit in accordance with Directive (EU) No. 537/2014 (EU Directive hereinafter) and the Austrian Principles of Proper Auditing of Financial Statements. These principles require the application of the International Standards on Auditing (ISA). Our responsibilities under these regulations and standards are set out in more detail in Section “Responsibilities of the Auditor in Auditing the Consolidated Financial Statements” of the audit certificate. We are independent from the Group in compliance with the Austrian corporate law and professional regulation and have discharged our other professional duties in accordance with these requirements. We are of the opinion that the audit evidence obtained by us by the date of our audit certificate is sufficient and suitable for forming the basis for our audit opinion expressed as of that date.

Highly significant audit findings

Highly significant audit findings are findings concerning circumstances that, in our professional judgement, had the highest significance for our audit of the Consolidated Financial Statements for the fiscal year. These findings were considered in the context of our audit of the Consolidated Financial Statements in their entirety, as well as in forming our audit opinion. We do not issue a separate opinion on these findings.

Valuations of cash generating units and of goodwill

Circumstances and problem

The intangible assets (of which goodwill assets in the amount of EUR 89.3 million) and property, plant and equipment with a total carrying amount of around EUR 2,369.5 million represent 60.5% of the Group’s total assets as of 30 September 2024. The goodwill assets were to the largest extent allocated to the cash generating units “Sales”, “Waste Management” and “Czech Republic”. Energie AG Oberösterreich analyses all cash-generating units and the reported goodwill in compliance with the applicable rules and regulations on accounting to determine whether there is a need for impairment or, in the case of previously impaired cash-generating units, a need to reverse any impairment charges applied, taking into account the current framework conditions in the financial and energy sectors.

Details here can be found in the Notes, particularly section 5.5 Impairment of goodwill, 5.6 Impairment of other intangible assets and property, plant and equipment, 16.1 Impairment of cash generating units with own goodwill and 16.2 Impairment of cash generating units without own goodwill.

Measuring the recoverable amount requires a number of discretionary decisions and is subject to significant components derived by estimation, e.g. selection of the appropriate method for measuring the company’s value, estimation of future cash flows, and determination of a reasonable discounting rate. This means that numerous input factors are included in the valuation models used to review the valuations based on capital-value-oriented methods. In particular, this also includes the future development of electricity, heat and primary energy prices, the availability and price developments of waste and recycling materials, and assumptions concerning regulatory developments. Assumptions regarding costs and price developments for the supply of water and management of waste water are also a factor when determining values. Material planning assumptions are that existing contracts for waste incineration, drinking water and waste water with the municipal bodies and water authorities are maintained.

This is a particularly important aspect of the audit given the complexity of the valuation models and the fact that the results depend on the assessment of market developments by the legal representatives.

Audit methodology

We have assessed the valuations carried out in the following areas:

  • Critical examination of the Group’s analyses of indications for a necessary material impairment or reversal of impairment, and their assessment in consideration of the insights gained from our audit of the Consolidated Financial Statements;
  • Plausibility check of the future cash flows recognised in the valuation models according to internal planning calculations with company-specific information, contractual framework conditions and relevant market data from external sources;
  • The mathematical accuracy of the valuation models;
  • Assessment of the parameters used to determine the discount rate.

Other Disclosures

The legal representatives are responsible for the other required disclosures. The other disclosures encompass all information presented in the Group annual report, with the exception of the Annual Financial Statements and the Consolidated Financial Statements, the Management Report and Group Management Report, and the associated audit certificates. The Non-financial Report was received by us prior to the date of this audit certificate, the other components of the Group Annual Report are expected to be made available to us after that date.

Our audit opinion on the Consolidated Financial Statements does not extend to the other disclosures, which are excluded from the assurances given by our firm.

Our audit of the Consolidated Financial Statements comes with the responsibility to read and consider the abovementioned other disclosures with the objective of determining whether they contain significant discrepancies from the Consolidated Financial Statements and the insights gained during our audit, or whether they are significantly misrepresented in another way.

We are compelled to report if the work carried out in relation to the other disclosures received before the date of this audit certificate leads us to the conclusion that these other disclosures are significantly misrepresented. Our audit has not resulted in any reportable circumstances.

Responsibilities of the legal representatives and the Audit Committee for the Consolidated Financial Statements

The legal representatives are responsible for compiling the Consolidated Financial Statements in compliance with the IFRS rules applicable in the EU and the additional requirements stipulated in § 245a of the Austrian Commercial Code (UGB), the Electricity Industry and Organisation Act 2010 and the Gas Industry Act 2011, and for assuring that they provide a true and fair view of the Group’s assets, liabilities, financial position and profit or loss. The legal representatives are further responsible for the internal controls deemed necessary by them for preparing a set of Consolidated Financial Statements that is free from significant misrepresentations caused by fraud or human error.

In compiling the Consolidated Financial Statements, the legal representatives have the duty to form an opinion on the Group’s ability to continue its business operations, to disclose any relevant circumstances relating to the continuation of the business operations and to base their considerations on the principle of continued business operations, unless they intend to liquidate the Group, cease business operations or find themselves in lack of any viable alternative to such course of action.

The Audit Committee is responsible for supervising the Group’s accounting processes.

Responsibilities of the auditors for the audit of the Consolidated Financial Statements

Our objective is to assure an adequate degree of certainty on whether the Consolidated Financial Statements in their entirety are free from significant misrepresentations caused by fraud or human error, and to issue an audit certificate that reflects our audit findings. An adequate degree of certainty means a high degree of certainty, but is not an absolute guarantee that the audit conducted in accordance with the EU Directive and the Austrian Principles of Proper Auditing, which require application of ISA, has in fact identified all significant misrepresentations that may be contained in the audited financial statements. Misrepresentations may result from malicious acts or misconceptions and are deemed significant if they could, individually or collectively, have a potential influence on the commercial decisions made by their readers on the basis of these Consolidated Financial Statements.

In conducting our audit in accordance with the EU Directive and the Austrian Principles of Proper Auditing, which require application of ISA, we form our opinions on the basis of our professional judgement and maintain a critical view of the circumstances presented to us throughout the entire course of the audit.

We further adhere to the following:

  • We identify and assess the risks stemming from any significant misrepresentations in the Financial Statements caused by fraud or human error, plan our audit activities as a response to these risks, perform our audit activities and gain sufficient and suitable audit evidence to serve as the basis for our audit findings. The risk of significant misrepresentations resulting from malicious acts remaining undetected is higher than the risk resulting from misconceptions, because malicious acts may include collusion, fraudulent acts, forgery, intentional omissions, deceiving representations or the circumvention of internal controls.
  • In order to plan audit activities that adequately address the prevailing circumstances, we gain an understanding of the Group’s system of internal controls bearing relevance for our audit, but without the objective of forming an audit opinion on its effectiveness.
  • We evaluate the appropriateness of the accounting methods applied by the legal representatives, as well as the tenability of values estimated by the legal representatives and represented in the accounts and the disclosures associated with such estimates.
  • We draw inferences about the appropriateness of the legal representatives operating under the accounting principle of continued business operations, as well as, on the basis of the evidence presented to us for our audit, whether any events or circumstances are subject to a considerable uncertainty that would give rise to doubts about the viability of the Group continuing its business operations. If we arrive at the conclusion that a material uncertainty exists, we are obliged to draw attention to the associated disclosures contained in the Consolidated Financial Statements in our audit certificate, or to modify our audit certificate if these disclosures are inappropriate. We draw our conclusions on the basis of the audit evidence gathered by the date of our audit certificate. Future events or circumstances may however result in the Group resolving to discontinue its business operations.
  • We form an opinion on the overall presentation, structure and contents of the Consolidated Financial Statements including the disclosures therein, as well as on whether they present a true and fair view of the underlying business transactions and events.
  • We issue our audit opinion on the Consolidated Financial Statements on the basis of sufficient and suitable audit evidence for the financial information of the business units or the business activities of the Group. We are responsible for managing, supervising and performing the audit of the Consolidated Financial Statements. We bear the sole responsibility for our audit opinion.

We consult with the Audit Committee on matters such as the planned scope and timing of the audit as well as significant audit findings, including any significant defects in the system of internal control system detected during our audit.

We also issue a statement to the Audit Committee confirming our adherence to the relevant professional requirements pertaining to our independence, and exchange information with the Audit Committee on all relationships and other circumstances that may reasonably be expected to affect our independence and, if applicable, any actions taken to eliminate risks or as a precautionary measure.

From the circumstances discussed with the Audit Committee, we determine those that had the highest significance for the audit of the Consolidated Financial Statements for the fiscal year and are therefore the circumstances bearing special audit significance. We describe these circumstances in our audit certificate, unless public disclosure of a certain circumstance is prohibited by law or other legal requirement, or determine in very rare cases that certain circumstances should not be disclosed in our audit certificate because the negative implications of disclosing them could reasonably be expected to exceed the benefits for the public interest.

Report on the Group Management Report

Austrian corporate law requires an assessment of whether the Group Management Report reconciles with the Consolidated Financial Statements and whether it was compiled in accordance with the applicable legal requirements.

The legal representatives are responsible for compiling the Group Management Report in compliance with the requirements under Austrian corporate law.

We have conducted our audit on the basis of the professional principles for the auditing of group management reports.

Audit opinion

We have formed the opinion that the attached Group Management Report complies with the applicable legal requirements, that it contains accurate information pursuant to § 243a para 2 UGB, and that it reconciles with the Consolidated Financial Statements.

Declaration

Our audit of the Consolidated Financial Statements and the understanding formed about the Group and its business environment has not identified any material misrepresentations in the Group Management Report.

Additional information pursuant to Article 10 EU Directive

Our firm was elected auditors of the financial statements for the fiscal year ending on 30 September 2024 by the General Meeting held on 19 December 2023. On 19 December 2023, the Supervisory Board has granted our firm the mandate to audit the Company’s Financial Statements. We have been the Group’s auditors without interruption since the fiscal year ending 30 September 2021.

We hereby declare that our audit opinion presented in section “Report on the Consolidated Financial Statements” reconciles with the additional report to the Audit Committee pursuant to Article 11 of the EU Directive.

We hereby declare that we have not performed any prohibited non-audit services pursuant to Article 5 para 1 EU Directive and that we have maintained our independence from the audited group during the conduct of our audit of the financial statements.

Responsible auditor

The responsible auditor for this assignment was Mag. Gerhard Marterbauer.

Vienna

2 December 2024

Deloitte Audit Wirtschaftsprüfungs GmbH

Mag. Gerhard Marterbauer
Auditor

Mag. Gerhard Marterbauer, Auditor (signature)

The Consolidated Financial Statements with our audit certificate may only be published or disclosed in the format certified by us. This audit certificate refers exclusively to the full original Consolidated Financial Statements and the Group Management Report issued in German. The provisions of § 281 para 2 of the Austrian Commercial Code (UGB) must be observed for any other versions. Please note that the audit certificate contained in our audit report has been provided with a qualified electronic signature and that the audit certificate contained in this copy of the document has only been signed again with a qualified electronic signature to enable the signature to be verified.