Report

19.04.2018

Report

Statement of financial position

«Armenian Nuclear Power Plant» CJSC

Financial statements

December 31, 2016

 

In thousand drams

As of December                             31, 2016

As ofDecember                             31, 2015

(restated)

As of January

1, 2015

(restated)

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

66,025,067

60,388,299

61,848,505

Intangible assets

272,770

176,097

180,964

Non-current prepayments

2,341,209

2,341,209

2,311,583

 Other financial assets

33,826

33,826

33,826

 

68,672,872

62,939,431

64,374,878

Current assets

 

 

 

inventories

26,133,166

19,124,194

18,044,70.7

Trade and other receivables

4,278,818

10,737,345

4,453,662

Borrowings provided

 

 

1,482,564

Current income tax assets

361,854

 

 

Term deposits

3,759,871

 

 

Cash and bank balances

1,701,834

3,768,172

387,354

 

36,235,543

33,629,711

24,368,287

Total assets

104,908,415

96,569,142

88,743,165

 

Equity and liabilities

 

 

 

Capital and reserves

 

 

 

Share capital

14,663,599

14,670,349

9,247,849

Reserve capital

954,943

954,943

954,943

Capital contribution

1,585,206

1,585,206

1,585,206

Accumulated profit

31,673,134

35,934,581

36,408,461

 

48,876,882

53,145,079

48,196,459

Non-current liabilities

 

 

 

Loans and borrowings

18,691,807

7,279,411

585,469

 Defferred income tax liabilities

2,553,068

3,273,441

6,141,620

Grants related to assets

6,749,173

6,222,877

5,935,251

Provisions

8,894,451

7,877,256

6,612,715

 

36,888,499

24,652,985

19,275,055

Current liabilities

 

 

 

Loans and borrowings

193,612

5,093,438

8,670,573

Trade and other payables

18,949,422

13,233,346

12,105,539

Current income tax liabilities

 

  444,294

    495,539

 

19,143,034

 

18,771,078

 

         21,271,651

 

Total equity and liabilities   

104,908,415

96,569,142

          88,743,165

                                                                                                                                                        

The financial statements were approved on June 29, 2017

«Armenian Nuclear Power Plant» CJSC

Financial statements

December 31, 2016

Statement of profit or loss and other comprehensive income

In thousand drams

Year ended                             December 31, 2016

Year ended                             December 31, 2015

(restated)

Revenude

23,736,970

27,345,200

Gost of sales

(26,699,577)

(27,733,381)

Gross loss

(2,962,607)

(388,181)

Other income

1,051,154

1,819,317

Adminstrative and general expenses

(1,137,389)

(1,114,657)

Other expenses

(729,181)

(1,252,768)

Results from operating activities

(3,778,023)

(936,289)

Finance income

50,021

62,177

Finance costs

(296,858)

(1,287,588)

Foreign exchange loss, net

(388,341)

(131,986)

Loss before income tax

(4,413,201)

(2,293,686)

Income tax recovery

151,754

1,819,806

Loss for the year

(4,261,447)

(473,880)

Other comprehensive income

 

 

Total comprehensive income for the year

(4,261,447)

(473,880)

 

The statement of profit or loss and other comprehensive income is to be  in conjunction with the notes to

                                and forming part of the financial statements set out on pages 11 to 46

 

Independent auditor's report         

To the shareholder of Armenian Nuclear Power Plant CTSC

Qualified Opinion

We have audited the accompanying financial statements of «Armenian Nuclear Power Plant» CJSC (the "Company''), which comprise the statement of financial position as of December 31, 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, the accompanying financial statements give a true and fair view of the financial position of the Company as of December 31, 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRSs").

Basis for Qualified Opinion

            1. As described in note 15, the Company creates a provision for storage of used fuel. The amount of the provision mainly represents the costs actually incurred for the construction and maintenance of a dry storage building for the used fuel, limited to amounts included in the electricity tariffs for the reporting period. In our opinion the amounts recorded as a provision do not meet the recognition criteria for provisions as defined by IAS 37 Provisions, Contingent Liabilities and Contingent Assets. As a result the balance of provisions, deferred taxes as well as accumulated profit and related elements of the profit or loss were misstated in the financial statements. S7e could not determine the effects of the above departure on the financial statements as of December 31, 2016 and December 31, 2015 and for the years then ended.

            2. As described in note 6, non-current prepayments in the amount of drams 2,341,209 thousand as of December 31, 2016 represent amounts paid in prior years for acquisition of non-current assets. We have not received confirmation letters to confirm the balance of the prepayment as of December 31, 2016. We were unable to satisfy ourselves as to the accuracy of the mentioned amount through alternative audit procedures and we were unable to determine if any adjustments to this amount were necessary as of December 31, 2016 and December 31, 2015.

We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described n the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (the "IESBA Code") together with the ethical requirements that are relevant to our audit of the financial statements in the Republic of Armenia, and we have fulfilled our other ethical responsibilities in accordance with those ethical requirements. 'We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Matter

The financial statements of the Company for the year ended December 31, 2015 were audited by another auditor who expressed qualified opinion on those financial statements on April 19, 2016.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole ate free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
  • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
  • Evaluate the overall presentation, structure and content of the ftnancial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal requirements

In accordance with item C.2.a.(vi) of Schedule 2 of the loan Agreement 8615-AM, signed on May 12, 2016 between the Republic of Armenia and International Bank for Reconstruction and Development and with item 4.14 of the Sub-loan agreement signed on June 22, 2016 between the Ministry of Finance of the Republic of Armenia and the Company, the Company is obligated not to incur any expenditure, indebtedness, or any liability or provide loans and grants, for purpose not related to the Company's core business of providing energy generation services.

In our opinion, based on our audit procedures described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report, the Company complied, in all material respects, with the above term during the period from May 12, 2016 to December 3l ,2016.