Eólica del Guadiana 2012 - memoria ENG - Saeta Yield · 31 December 2012 1. Company activities...

Eólica del Guadiana, S.L. Abridged Financial Statements for the year ended 31 December 2012

EÓLICA DEL GUADIANA, S.L.

ABRIDGED BALANCE SHEET AT 31 DECEMBER 2012

Euros

A S S E T S 2012 2011

NON-CURRENT ASSETS 59,107,725 79,547,768 Property, plant and equipment (Note 5) 56,188,753 78,035,100 Deferred tax assets (Note 13.4) 2,918,972 1,512,668

CURRENT ASSETS 13,113,788 6,222,035 Inventories 150 1,423 Trade and other receivables 526,443 817,558 Current investments in Group companies and associates (Note 6) 6,323,425 2,543,779 Current financial investments (Note 8) 2,743,355 2,719,757 Cash and cash equivalents (Note 9) 3,520,415 139,518

TOTAL ASSETS 72,221,513 85,769,803

The accompanying Notes 1 to 19 are an integral part of the abridged balance sheet at 31 December 2012.


ABRIDGED BALANCE SHEET AT 31 DECEMBER 2012

Euros

E Q U I T Y A N D L I A B I L I T I E S 2012 2011

EQUITY (9,011,896) 7,971,285 Shareholders' equity (Note 10) (3,709,427) 11,500,844 . Share capital 14,280,000 14,280,000 . Legal and statutary reserves 867 867 . Previous years’ earnings (2,780,023) (239,799) . Profit/(Loss) for the year (15,210,271) (2,540,224) Adjustments for changes in value (5,302,469) (3,529,559) . Hedging transactions (Note 7) (5,302,469) (3,529,559)

NON-CURRENT LIABILITIES 72,764,708 72,203,987 Non-current liabilities (Note 12) 58,497,688 57,936,967 . Bank borrowings 50,922,732 52,894,740 . Derivatives (Note 7) 7,574,956 5,042,227 Non-current payables to Group companies and associates (Note 6) 14,267,020 14,267,020

CURRENT LIABILITIES 8,468,701 5,594,531

Current liabilities 2,301,380 2,285,548 . Bank borrowings (Note 12) 2,301,380 2,285,548 Current payables to Group companies and associates 2,336,861 814,841 . Current payables to Group companies (Note 6) 2,336,861 814,841 Trade and other payables (Note 11) 3,830,460 2,494,142 . Sundry accounts payable 298,668 976,564 . Payable to suppliers - Group companies and associates (Note 6) 3,530,429 1,414,489 . Advances from customers - 101,850 . Other accounts receivable from public authorities (Note 13) 1,363 1,239

TOTAL EQUITY AND LIABILITIES 72,221,513 85,769,803

The accompanying Notes 1 to 19 are an integral part of the abridged balance sheet at 31 December 2012.


ABRIDGED INCOME STATEMENT FOR THE YEAR ENDED 31 DEC EMBER 2012

Euros

2012 2011

CONTINUING OPERATIONS Revenue (Note 15.1) 6,995,546 3,472,132 Capitalised expenses of in-house work on assets 767,861 1,761,258 Procurements (Note 15.2) - (1,726,532) Other operating income 26 - Staff costs (Note 15.4) (28,736) (7,245) Other operating expenses (Note 15.3) (2,507,404) (1,798,928) Depreciation and amortisation charge (Notes 5) (4,514,207) (2,479,533) Impairment of and gains or losses on disposal of property, plant and equipment (Note 5) (18,100,000) -

OPERATING INCOME (17,386,914) (778,847)

Finance Income (Note 15.5) 1,933 46,853 Incorporation of finance costs and income to assets - 1,373,977 Finance costs (Note 15.5) (4,343,977) (4,270,872)

FINANCIAL RESULTS (4,342,044) (2,850,042)

PROFIT/(LOSS) BEFORE TAX (21,728,958) (3,628,890)

Income tax (Note 13.3) 6,518,687 1,088,666

PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING (15,210,271) (2,540,224) OPERATIONS

PROFIT/(LOSS) FOR THE PERIOD (15,210,271) (2,540,224)

The accompanying Notes 1 to 19 are an integral part of the abridged income statement for 2012.


ABRIDGED STATEMENT OF CHANGES IN EQUITY A) STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR 2 012

Euros

2012 2011

A) PROFIT/(LOSS) PER INCOME STATEMENT (15,210,271) (2,540,224)

INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY

II. Cash flow hedges (3,625,567) (3,982,074)

VI. Tax effect 1,087,670 1,194,622

B) TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY (2,537,897) (2,787,452)

TRANSFERS TO PROFIT OR LOSS

IX. Cash flow hedges 1,092,838 806,848

XII. Tax effect (327,851) (242,055)

C) TOTAL TRANSFERS TO PROFIT OR LOSS 764,987 564,794

TOTAL RECOGNISED INCOME AND EXPENSE (16,983,181) (4,762,882)

The accompanying Notes 1 to 19 are an integral part of the abridged statement of changes in equity for 2012.

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Abridged Notes to the Financial Statements for the year ended 31 December 2012 1. Company activities

EÓLICA DEL GUADIANA, S.L. was incorporated as a limited company on 16 December 2002 and has not changed its name since its incorporation. Its registered office is currently in Huelva at calle Manuel Siurot, 27. The Company's object is: A) The positioning, construction and operation of wind farms, as well as the construction, expansion or adaptation of hydroelectric projects and, in general, research, study, construction and exploitation of facilities the purpose of which is to generate electricity with renewable resources (wind, solar, etc.) and the sale or distribution of the electricity produced to third parties. B) The preparation of any kind of engineering calculation project. C) The construction of any kind of civil engineering works, both public and private. D) The acquisition, administration, sale, general trade, exploitation of any kind, construction, promotion and development of any type of property and, in general, the performance of all types of transactions specific to real estate companies. E) The production, manufacture, sale and marketing, import and export of all types of agricultural products and electronic, electric and mechanic material and computer programs. F) Any other legal activity, related or not to the above, that the shareholders at the General Meeting resolve to undertake. These activities which compose the Company object may be wholly or partially carried on by the Company indirectly through the ownership of shares or equity interests in companies with an identical or similar company object. The wind farm through which Eólica del Guadiana operates is called Parque Eólico Montegordo. The Company does not have sufficient staff of their own or staff of this type and, therefore, it signed an agreement for the operation and maintenance of the farm with Urbaenergía, S.L. The provisional entry into service of the wind farm took place on 16 December 2010. The plant was definitively registered in the administrative registry of special regime production facilities established by Royal Decree 661/2007 on 6 April 2011. The Company belongs to a group of companies (ACS Group) which is managed in accordance with the Group's criteria. Energía y Recursos Ambientales, S.A. is the primary shareholder of the Company which is in turn 99.99% owned by the ACS Group company Cobra Gestión de Infraestructuras, S.A.

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Regulatory Framework The special regime electricity production business in Spain is regulated by Spanish Electricity Industry Law 54/1997, of 27 November, and by the subsequent implementing regulations which are as follows:

- Royal Decree 661/2007, in force from 1 June 2007. The remuneration framework supporting renewable energies under the special regime for facilities which were registered in the pre-assignment register at 28 January 2012 was regulated up until this year by this royal decree. This royal decree stipulates two tariff regimes for solar thermal facilities; the market price option through a representative where upper limits ("ceilings") and lower limits ("floors") are established at the aggregate price (market price plus the premium) applicable to the sale of energy on the market; and the tariff option in which the regulated tariff is received. The facilities may choose the sale option for periods of no less than one year.

- Likewise, Royal Decree 661/2007 recognises in its transitional provision one that solar thermal

facilities, among others, which started up prior to 1 January 2008 have the right to maintain the premiums and incentives established under the previous regime (RD 436/2004, of 12 March) until 31 December 2012 in the market price sale option.

- In addition, Royal Decree 6/2009, of 30 April, introduces the pre-assignment system such that it limits

the pre-assigned facilities to the amounts and premiums set forth in RD 661/2007, as well as for those established going forward once the objectives of the 2020 Renewable Energies Plan are reached.

- The objective of Royal Decree 1614/2010, of 7 December, is to modify and regulate matters related to

electricity production from solar thermal and wind technologies, in a deficit control scenario. The main developments are the establishment of a limit on the equivalent operating hours entitled to a premium for solar thermal and wind power technologies, the obligation of the solar thermal energy industry to sell at a regulated tariff for the 12 months following the entry into force of the RD, or the start-up of the plant, if it were subsequent thereto and a 35% reduction of the premiums for wind power technology qualifying under RD 661/2007 and for the period between the approval of the RD and 31 December 2012.

- On 28 January 2012, Royal Decree-Law 1/2012 (RDL 1/2012) was published in the Official State

Gazette (Boletín Oficial del Estado, BOE), taking effect on the same day, which eliminated the pre-assignment remuneration process and the economic incentives for new facilities which produce electricity from cogeneration, renewable energy sources and waste.

- On 28 December 2012, Law 15/2012, of 27 December, on tax measures for energy sustainability was

published in the BOE which affects all facilities which produce electricity in Spain from 2013. Noteworthy among these measures is the creation of a 7% tax on activities related to the production and incorporation of electricity measured at power station busbars in the electric system (mainland, island and non-mainland). Likewise, this law also amends the current economic framework of certain renewable energy facilities excluding from the premium economic regime energy attributable to the use of fuel produced in facilities which use non-consumable renewable energy as a primary source, unless they are hybrid facilities which use non-consumable and consumable renewable energy sources (in which case the energy attributable to the use of the consumable renewable source could have the right to the premium economic regime), and the Ministry of Industry, Energy and Tourism is responsible for establishing the methodology for calculating the aforementioned energy.

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The facilities owned by the Company which operate in the Spanish market have elected the remuneration option established in article 24.1.a) through GNERA which acts merely as an intermediary between the producer and the electricity market (OMEL and REE). The regulatory modifications described above were included in the Company's business plan. The sole director considers that the impact has reduced the recoverable amount of property, plant and equipment below its carrying amount and, therefore, the corresponding impairment loss has been recognised under "Property, plant and equipment" in the abridged balance sheet at 31 December 2012 (Note 5). In addition to the regulatory amendment made to Law 15/2012 establishing the 7% tax on the income from the sale of energy (which was taken into account by the Company in its impairment test on 31 December 2012), in 2013 a new RD was published, which is described in the note on events after the reporting period (Note 19), the effects of which are being assessed by the Company in order to take them under appropriate consideration in 2013.

2. Basis of presentation of the financial statements

2.1) Regulatory financial reporting framework appli cable to the Company

These abridged financial statements were prepared by the sole director in accordance with the regulatory financial reporting framework applicable to the Company, which consists of:

- The Spanish Commercial Code and all other Spanish corporate law. - The Spanish National Chart of Accounts approved by Royal Decree 1514/2007 and its industry

adaptations. - The mandatory rules approved by the Spanish Accounting and Audit Institute in order to implement the

Spanish National Chart of Accounts and its supplementary rules. - All other applicable Spanish accounting legislation.

2.2) Fair presentation

The abridged financial statements, which were obtained from the accounting records of EÓLICA DEL GUADIANA, S.L., are presented in accordance with Royal Decree 1514/2007 approving the Spanish National Chart of Accounts and, accordingly, present fairly the Company's equity, financial position and results of operations. These financial statements at 31 December 2012, which were formally prepared by the Company's sole director, will be submitted for approval by the shareholders at the General Meeting, and it is considered that they will be approved without any changes. The financial statements for 2011 were approved by the shareholders at the Annual General Meeting held on 25 July 2012. The Company's sole director prepared the abridged financial statements in accordance with the going concern principle of accounting taking into account the credit facilities available and that it has the on-going financial support of the Group to which it belongs in order to meet the obligations it has undertaken so that it may realise its assets and settle its liabilities for the amounts and with the classification reflected in the abridged financial statements. 2.3) Accounting principles applied The principal accounting policies and measurement bases applied in preparing the Company's abridged financial statements are summarised in Note 4. All obligatory accounting principles with a material impact on the abridged financial statements were applied.

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2.4) Key issues in relation to the measurement and estimation of uncertainty In preparing the accompanying financial statements estimates were made by the Company's sole director in order to quantify certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following: - The useful life of the property, plant and equipment (Note 4.1). - The assessment of possible impairment losses on certain assets (Note 4.1). - The fair value of certain financial instruments (Note 4.3). - The recovery of deferred tax assets (Note 4.4). - Credit risk management (Note 18.2). Although these estimates were made on the basis of the best information available at the date of preparation of these financial statements on the events analysed, events that take place in the future might make it necessary to change these estimates in coming years. Changes in accounting estimates would be applied prospectively, recognising the effects of the change in estimates in the financial statements. 2.5) Comparative information

The information relating to 2012 included in these notes to the financial statements is presented for comparison purposes with that relating to 2011. 2.6) Grouping of items Certain items in the abridged balance sheet, abridged income statement and abridged statement of changes in equity are grouped together to facilitate their understanding; however, whenever the amounts involved are material, the information is broken down in the related notes to the abridged financial statements. 2.7) Changes in accounting policies

In 2012 there were no significant changes in accounting policies with respect to the policies applied in 2011. 2.8) Correction of errors In the preparation of the accompanying abridged financial statements no significant errors were detected that would have made it necessary to restate the amounts included in the abridged financial statements for 2011.

3. Allocation of profit/(losses)

The allocation of 2012 profit/(loss) proposed by the Company’s sole director is as follows:

Euros

Profit/(Loss) for the year 2012 (15,210,271)

Allocation of profit/(loss):

. Previous years’ earnings

(15,210,271)

As stated in Note 10, in accordance with the financing agreement entered into with various financial institutions, there are restrictions on the distribution of dividends to the shareholder, unless the conditions established in provision 14, point 3 of the agreement is met. The aforementioned restrictions are:

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• Any other significant debt owed by the borrower which has matured has been settled in full, including that arising from this credit facility.

• No early maturity event has arisen and the distribution to shareholders does not give rise to any of the aforementioned events;

• The first amortisation payment has been made on this credit facility;

• The debt service reserve fund is fully funded;

• The debt service coverage ratio for the previous year exceeds 1.10.

• The amounts to be distributed to the shareholders do not in any case exceed the balance of the

restricted drawdown account; and

• There was a net profit in the previous year.

• No other means of capital remuneration will be allowed other than those included in the definition of shareholder distributions, unless prior authorisation has been obtained from the lenders.

4. Accounting Policies

The principal measurement bases used by EÓLICA DEL GUADIANA, S.L. in preparing its abridged financial statements for 2012, in accordance with the Spanish National Chart of Accounts, were as follows: 4.1) Property, plant and equipment Property, plant and equipment are initially recognised at acquisition cost and are subsequently reduced by the related accumulated depreciation and by any impairment losses recognised. Property, plant and equipment upkeep and maintenance expenses are recognised in the income statement for the year in which they are incurred. However, the costs of improvements leading to increased capacity or efficiency or to a lengthening of the useful lives of the assets are capitalised. For non-current assets that necessarily take a period of more than twelve months to get ready for their intended use, the capitalised costs include such borrowing costs as might have been incurred before the assets are ready for their intended use and which have been charged by the supplier or relate to loans or other borrowings directly attributable to the acquisition or production of the assets. In-house work on non-current assets is measured at accumulated cost (external costs plus in-house costs, determined on the basis of in-house materials consumption, labour and general manufacturing costs calculated using absorption rates similar to those used for the measurement of inventories). The Company depreciates the cost of its property, plant and equipment using the straight-line method over the years of estimated useful life of the assets, the detail being as follows:

Years of Estimated Useful Life

Construction and installation work

18

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Impairment of property, plant and equipment At the end of each year, the Company performs an impairment test to determine the possible existence of impairment loss that might have reduced the recoverable amount of the assets to below their carrying amount. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately. 4.2) Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases. The Company as lessee Assets acquired under finance leases are classified based on the nature of the leased asset. A liability is recognised for the same amount, which is the lower of the fair value of the leased asset and the present value at the start of the lease of the agreed upon minimum lease payments. Lease payments are distributed between finance costs and the reduction of the liability. The same depreciation, impairment and derecognition criteria are applied to the leased assets as to assets of the same nature. Payments under operating leases are recognised as expenses in the income statement when incurred. 4.3) Financial instruments 4.3.1) Financial assets The financial assets held by the Company are classified in the following categories:

a) Loans and receivables: financial assets arising from the sale of goods or the rendering of services in the ordinary course of the Company's business, or financial assets which, not having commercial substance, are not equity instruments or derivatives, have fixed or determinable payments and are not traded in an active market. Interest income is calculated in the year in which it accrues on a time proportion basis.

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b) Held-to-maturity (fixed-income securities): debt securities with fixed maturity and determinable payments that are traded in an active market and which the Company has the positive intention and ability to hold to the date of maturity.

Financial assets are initially recognised at the fair value of the consideration given, plus any directly attributable transaction costs. Subsequently, loans and receivables are measured at amortised cost. The Company derecognises a financial asset when it expires or when the rights to the cash flows from the financial asset have been transferred and substantially all the risks and rewards incidental to ownership of the financial asset have been transferred, such as in the case of the outright sale of assets, factoring of trade receivables in which the Company does not retain any credit or interest rate risk, sale of financial assets under an agreement to repurchase them at their fair value or the securitisation of financial assets in which the transferor does not retain any subordinated debt, provide any type of guarantee or assume any other type of risk. However, the Company does not derecognise financial assets, and recognises a financial liability for an amount equal to the consideration received, in transfers of financial assets in which substantially all the risks and rewards of ownership are retained, such as in the case of bill discounting, with-recourse factoring, sales of financial assets under an agreement to repurchase them at a fixed price or at the selling price plus interest and the securitisation of financial assets in which the transferor retains a subordinated interest or any other kind of guarantee that absorbs substantially all the expected losses. 4.3.2) Financial liabilities Financial liabilities include accounts payable by the Company that have arisen from the purchase of goods or services in the normal course of the Company’s business and those which, not having commercial substance, cannot be classed as derivative financial instruments. Accounts payable are initially recognised at the fair value of the consideration received, adjusted by the directly attributable transaction costs. These liabilities are subsequently measured at amortised cost. Liability derivative financial instruments are measured at fair value, following the same criteria as for financial assets held for trading described in the previous section. The Company derecognises financial liabilities when the obligations giving rise to them cease to exist. 4.3.3) Hedging financial instruments The Company uses derivative financial instruments to hedge the risks to which its business activities, operations and future cash flows are exposed. Basically, these risks relate to changes in interest rates. The Company arranges hedging financial instruments in this connection, mainly IRS (Interest Rate Swap). In order for these financial instruments to qualify for hedge accounting, they are initially designated as such and the hedging relationship is documented. Also, the Company verifies, both at inception and periodically over the term of the hedge (at least at the end of each reporting period), that the hedging relationship is effective, i.e. that it is prospectively foreseeable that the changes in the fair value or cash flows of the hedged item (attributable to the hedged risk) will be almost fully offset by those of the hedging instrument and that, retrospectively, the gain or loss on the hedge was within a range of 80-125% of the gain or loss on the hedged item.

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In 2012 and 2011, the Company used only cash flow hedges. In hedges of this nature, the portion of the gain or loss on the hedging instrument that has been determined to be an effective hedge is recognised temporarily in equity and is recognised in the income statement in the same period during which the hedged item affects profit or loss, unless the hedge relates to a forecast transaction that results in the recognition of a non-financial asset or a non-financial liability, in which case the amounts recognised in equity are included in the initial cost of the asset or liability when it is acquired or assumed. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the year. The fair value of the hedging financial instruments used by the Company (interest rate swaps) is calculated by discounting future settlements between fixed and floating interest rates to their present value, in line with implicit market rates, obtained from long-term interest rate swap curves. Implicit volatility is used to calculate the fair values of caps and floors using option valuation models. The derivatives arranged by the Company at 31 December 2012 met all the requirements indicated above to qualify as hedges and, therefore, the changes in the fair value of these derivative financial instruments for the year ended 31 December 2012 were recognised under “Valuation adjustments” in equity. 4.4) Income tax Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). The current income tax expense is the amount payable by the Company as a result of income tax settlements for a given year. Tax credits and other tax benefits, excluding tax withholdings and pre-payments, and tax loss carryforwards from prior years effectively offset in the current year reduce the current income tax expense. The deferred tax expense or income relates to the recognition and derecognition of deferred tax assets and liabilities. These include temporary differences measured at the amount expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and their tax bases, and tax loss and tax credit carryforwards. These amounts are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences, except for those arising from the initial recognition of goodwill or of other assets and liabilities in a transaction that is not a business combination and affects neither accounting profit/(loss) nor taxable profit (tax loss). Deferred tax assets are recognised to the extent that it is considered probable that the Company will have taxable profits in the future against which the deferred tax assets can be utilised. Deferred tax assets and liabilities arising from transactions charged or credited directly to equity are also recognised in equity.

9

The deferred tax assets recognised are reassessed at the end of each reporting period and the appropriate adjustments are made to the extent that there are doubts as to their future recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that they will be recovered through future taxable profits. The Company is included in consolidated tax group no. 30/99 headed by ACS Actividades de Construcción y Servicios, S.A., as well as VAT group no. 0194/08 headed by ACS Actividades de Construcción y Servicios, S.A. since 2010. 4.5) Income and expense Revenue and expenses are recognised in profit or loss for the year on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Revenue is measured at the fair value of the consideration received, net of discounts and taxes. Revenue from sales is recognised when the significant risks and rewards of ownership of the goods sold have been transferred to the buyer, and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. Revenue from the rendering of services is recognised by reference to the stage of completion of the transaction at the end of the reporting period, provided the outcome of the transaction can be estimated reliably. Interest income from financial assets is recognised using the effective interest method and dividend income is recognised when the shareholder's right to receive payment has been established. Interest and dividends from financial assets accrued after the date of acquisition are recognised as income. 4.6) Related-party transactions The Company performs all its transactions with related parties on an arm's length basis. Also, the transfer prices are adequately supported and, therefore, the Company’s sole director considers that there are no material risks in this connection that might give rise to significant liabilities in the future. 4.7) Provisions and contingencies When preparing the financial statements, the Company’s sole director made a distinction between: a) Provisions: credit balances covering present obligations arising from past events, the settlement of which is

likely to cause an outflow of resources, but which are uncertain as to their amount and/or timing. b) Contingent liabilities: possible obligations that arise from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the Company's control.

The financial statements include all the provisions with respect to which it is considered that it is more likely than not that the obligation will have to be settled. Contingent liabilities are not recognised in the abridged financial statements but rather are disclosed in the notes to the abridged financial statements, unless the possibility of an outflow in settlement is considered to be remote. Provisions are measured at the present value of the best possible estimate of the amount required to settle or transfer the obligation, taking into account the information available on the event and its consequences, recording the adjustments which arise as a result of the update of these provisions as a finance cost as it accrues.

10

4.8) Environmental assets and liabilities

Environmental assets are deemed to be assets used on a lasting basis in the Company's operations whose main purpose is to minimise environmental impact and protect and improve the environment, including the reduction or elimination of future pollution. 4.9) Current/non-current classification Balances are classified as current and non-current in the accompanying balance sheet. Current balances include balances which the Company expects to sell, consume, pay or realise during its normal operating cycle. The remaining balances are classified as non-current.

5. Property, plant and equipment The breakdown of the balance of this heading in the balance sheets at 31 December 2012 and 2011 is as follows: 2012

2011 Euros

Balance at 31/12/2010

Additions or charges for

the year Transfers Disposals or

reductions Balance at 31/12/2011

Cost:

Property, plant and equipment in the course of construction 78,265,392 2,249,241 (80,514,633) - -

Plant - - 80,514,633 - 80,514,633

Total cost 78,265,392 2,249,241 - - 80,514,633

Depreciation:

Plant - (2,479,533) - - (2,479,533)

Total accumulated depreciation (2,479,533) (2,479,533)

Total property, plant and equipment, net 78,265,392 (230,292) - - 78,035,100

Euros

Balance at 31/12/2011

Additions or charges for

the year Transfers Disposals or

reductions Balance at 31/12/2012

Cost:

Plant 80,514,633 767,860 - - 81,282,493

Total cost

80,514,633

767,860

-

-

81,282,493

Depreciation:

Plant (2,479,533) (4,514,207) - - (6,993,740)

Total accumulated depreciation (2,479,533) (4,514,207) (6,993,740)

Impairment losses: Plant - (18,100,000) - - (18,100,000)

Total property, plant and equipment, net 78,035,100 (21,846,347) - - 56,188,753

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Property, plant and equipment is comprised of equipment and facilities necessary to exploit the wind farm operated by the Company (Note 1). The additions recognised in 2012 correspond in full to the capitalisation of the expenses related to the construction work in progress corresponding to the tax on building, installations and other works (Impuesto sobre Construcciones, Instalaciones y Obras, ICIO) for the years in which the construction work on the wind farm was performed. The Company takes out insurance policies to cover the possible risks to which its property, plant and equipment are subject. At 2012 and 2011 year end these risks were adequately covered. The addition to impairment loss corresponds to the difference between the recoverable amount of the property, plant and equipment in the course of construction and their carrying amount at 31 December 2012. The assets' recoverable amount is obtained from the Company's business plan which includes the regulatory modifications implemented in the year (see Note 1). To secure compliance with the obligations arising from the financing agreement described in Note 11, the Company definitively assigned to the lenders all of the collection and other rights and the guarantees arising from the plant construction, operation, maintenance and refurbishment agreements, management and administration services, as well as land use and energy sale and purchase agreements and indemnities for the insurance policies taken out by the Company. At 31 December 2012, the Company did not have any fully depreciated items of property, plant and equipment.

Operating leases

With respect to the land on which the wind farm described in the previous note is located, various leases were entered into which expire on 18 August 2041. The future minimum lease payments for the aforementioned non-cancellable lease at 31 December 2012 and 2011 are as follows:

Euros 2012 2011

Within one year 210,000 213,500

Two to five years 854,000 854,000

Over five years 5,124,000 5,337,500

Total 6,188,000 6,405,000

6. Balances with Group companies and associates

Long Term The detail of the non-current balances with Group companies and associates at 31 December 2012 and 2011 is as follows:

Euros 2012 Euros 2011 Loans received Loans received

(C) (C) Energía y Recursos Ambientales, S.A. (13,613,675) (13,613,675) Eólica FFMA 2E, S.L. (653,345) (653,345)

Total (14,267,020) (14,267,020)

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On 16 February 2010, Energía y Recursos Ambientales, S.A., a shareholder of Eólica del Guadiana, S.L., granted the latter a subordinated loan for a maximum amount of EUR 13,613,675, which accrues a floating interest rate calculated as an addition to the reference interest rate (Euribor) plus a 3% spread. The principal of the subordinated loan must be repaid in full at the final maturity date, 15 December 2027. Likewise, on 28 December 2012, the aforementioned loan was subject to a modifying novation, becoming a participating loan (Note 8.3). On 16 February 2010, Eólica FFMA 2E, S.L., a shareholder of Eólica del Guadiana, S.L., granted the latter a subordinated loan for a maximum amount of EUR 653,345, which accrues a floating interest rate calculated as an addition to the reference interest rate (Euribor) plus a 3% spread. The principal of the subordinated loan must be repaid in full at the final maturity date, 15 December 2027. Likewise, on 28 December 2012, the aforementioned loan was subject to a modifying novation, becoming a participating loan (Note 8.3). The subordinated debt agreements were drawn down by EUR 14,267,020 at 31 December 2012. The principal of the subordinated loan must be repaid in full at the final maturity date, 15 December 2027. However, the Company may amortise the subordinated debt early, totally or partially, provided that it meets the subordination conditions. At 31 December 2012, the shareholders have stated that they do not require a partial maturity of the subordinated loan over the coming 18 months and, therefore, the debt is classified as non-current. Current The detail of the current balances with Group companies and associates at 31 December 2012 and 2011 is as follows: 2012

2012

Euros

Income tax Current account VAT Interest

Payable to suppliers

D/(C) (C) D/(C) D/(C) D/(C)

Energía y Recursos Ambientales, S.A. - (7,276) - (1,356,127) (136,360)

Urbaenergía, S.L. - - - - (3,053,250)

Eólica FFMA 2E, S.L. - - - (79,560) -

Centro de Control Villadiego, S.L. - - - - (340,819)

Cobra Gestión de Infraestructuras, S.A. - - (442,675) - -

Cobra Instalaciones y Servicios, S.A. - (351,078) - - -

ACS Actividades de Construcción y Servicios, S.A.

6,323,425 - - - -

Total 6,323,425 (358,354) (542,820) (1,435,687) (3,530,429)

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2011

2011

Euros

Income tax VAT Interest Payable to suppliers

D/(C) D/(C) D/(C) D/(C)

Energía y Recursos Ambientales, S.A. - - (763,713) (72,464)

Urbaenergía, S.L. - - - (1,322,305)

Eólica FFMA 2E, S.L. - - (51,128) -

Centro de Control Villadiego, S.L. - - - (19,720)

Cobra Gestión de Infraestructuras, S.A. - 1,449,345 - -

ACS Actividades de Construcción y Servicios, S.A. 1,094,433 - - -

Total 1,094,433 1,449,345 (814,841) (1,414,489)

The Company maintains its VAT and income tax balances with the Group since it is part of the consolidated tax group. At 31 December 2012, the current account with Cobra Instalaciones y Servicios, S.A. is composed of one-off cash flows which do not accrue interest.

7. Derivative financial instruments The Company uses derivative financial instruments to hedge the risks to which its activities, transactions and future cash flows are exposed. In the framework of the aforementioned transactions, the Company has entered into the following IRSs:

Bank Initial notional

amount Fixed rate Inception Maturity date

Caixanova 1,374,000 3.78% 08/03/2013 15/12/2023

Banco Popular 3,542,000 3.78% 08/03/2013 15/12/2023

Banco Santander 3,542,000 3.78% 08/03/2013 15/12/2023

BBVA 3,542,000 3.78% 08/03/2013 15/12/2023

The Company met the requirements described in Note 4.3 on measurement bases in order to classify the financial instruments detailed as hedges. The following table shows the fair value of these hedges at 31 December 2012 and 2011:

Euros Euros

2012 2011

Liabilities Liabilities

B. POPULAR 2,235,875 1,488,297

CAIXA NOVA 867,331 577,336

SANTANDER 2,235,875 1,488,297

BBVA 2,235,875 1,488,297

Total 7,574,956 5,042,227

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The Company covers the interest rate risk on the loans taken out (see Note 12) through interest rate swaps (IRS). In IRSs interest rates are exchanged so that the Company receives a floating rate from the bank and pays a fixed rate on the same nominal amount. The floating interest rate received for the derivative offsets the interest payable on the hedged borrowings. The end result is a fixed interest rate payment on the hedged borrowings. The Group determines the fair value of interest rate derivatives (fixed-rate swaps or IRSs) by discounting cash flows on the basis of the implicit euro interest rate calculated on the basis of market conditions at the measurement date. The pertinent hedging relationships were designated at 31 December 2012 by the Parent and are fully effective. In these hedging relationships, the changes in the floating Euribor rate of the hedged borrowings constitute the hedged risk. At 31 December 2012, EUR (1,772,910) was recognised directly in equity in relation to the effective portion of the cash flow hedging relationships of the IRSs and had accrued interest at the aforementioned date amounting to EUR 1,092,838, which are included under "Finance costs" (Note 15) in the income statement for the year ended 31 December 2012 and are fully effective. In these hedging relationships, the changes in the floating Euribor rate of the hedged borrowings constitute the hedged risk.

8. Financial investments

Current This heading was comprised mainly of the deposit made by the Company at Banco Bilbao Vizcaya, S.A. in relation to the debt service reserve fund amounting to EUR 2,724,982 and EUR 2,701,384 in 2011. It also includes the deposit made at Endesa amounting to EUR 18,373 in 2012 and 2011. This debt service reserve fund will be maintained until all of the payment obligations arising from the financing agreement described in Note 12 have been settled.

9. Cash and cash equivalents

The breakdown of the balance of this heading in the balance sheets at 31 December 2012 and 2011 is as follows:

2012 2011

Cash at banks 3,520,415 139,518

TOTAL 3,520,415 139,518 At 2012 and 2011 year end, the entire balance of this heading is unrestricted.

10. Equity and shareholders’ equity

10.1) Share capital

The share capital at 31 December 2012 and 2011 amounted to EUR 14,280,000, divided into fully subscribed and paid equal shares of EUR 680 par value each.

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The detail of the shareholders at 31 December 2012 and 2011 is as follows:

% Ownership Shares Ownership amount in euros

Energía y Recursos Ambientales, S.A.

90.00 18,900 12,852,000

Eólica FFMA 2E S.L 10.00 2,100 1,428,000

Total 100.00 21,000 14,280,000

On 23 November 2011, the Company's shareholders approved a capital increase for a total of EUR 2,772,000 by increasing the par value of the 21,000 shares by EUR 132 each. Thus, the share value stands at EUR 680 and the share capital amounts to EUR 14,280,000 and both shareholders maintain their percentage of ownership. The capital increase has been fully paid and was registered at the Mercantile Registry of Madrid on 12 January 2012. 10.2) Legal and statutary reserves

Under article 274 of the Consolidated Spanish Corporate Enterprises Law, 10% of net profit for each year must be transferred to the Legal and statutary reserves until the balance of this reserve reaches at least 20% of the share capital. The Legal and statutary reserves cannot be distributed to shareholders except in the event of liquidation. The Legal and statutary reserves can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. Otherwise, until the Legal and statutary reserves exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose.

10.3) Equity situation

In accordance with Article 363 of the Spanish Corporate Enterprises Law, the company will be dissolved when losses incurred reduce its equity to less than one-half of its share capital, unless capital is increased or decreased by a sufficient amount, and provided that the Company does not need to declare insolvency. In accordance with Royal Decree-Law 10/2008, the valuation adjustments arising from cash flow hedges which are pending recognition in the income statement do not need to be recognised in equity for the purposes of profit distribution, capital reductions and obligatory dissolution. Furthermore, transitional provision three of Law 16/2007 on accounting reform stipulates that the participating loans regulated in article 20 of Royal Decree-Law 7/1996 are considered equity for the purposes of capital reductions and the liquidation of companies.

16

Thus, despite the equity deficit at 31 December 2012, due to the participating loans granted by the shareholders of the Company (Note 6), the Company's equity for the purpose of article 363 of the Spanish Corporate Enterprises Law, is that detailed below and, therefore, the Company is not subject to dissolution at 31 December 2012.

Thousands of euros

Equity as per the financial statements at 31/12/2012 (9,011,896) Minus adjustments for changes in value from cash flow hedges 5,302,469 Novation of subordinated loans (Note 6) 14,267,020 Equity at 31 December 2012 for the calculation stip ulated in article 363 of the Corporate Enterprises Law 10,557,593

11. Trade and other payables

The detail of “Trade and other payables” at 2012 and 2011 year end is as follows: 2012

LIABILITIES Euros 2012

Sundry accounts payable Payable to suppliers - Group companies and associates (Note 6) Advances from customers Other accounts receivable from public authorities (Note 13.1)

1,217,269 2,611,828

- 1,363

3,830,460 2011

LIABILITIES Euros 2011

Sundry accounts payable Payable to suppliers - Group companies and associates (Note 6) Advances from customers Other accounts receivable from public authorities (Note 13.1)

976,564

1,414,489 101,850 1,239

2,494,142 Deferred payment to suppliers for commercial transactions

In relation to the disclosures required by additional provision three of Law 15/2010, of 5 July, for these first financial statements prepared since the entry into force of the aforementioned law on 31 December 2012, there were balances payable to suppliers that were past due by more than the maximum legal payment period amounting to EUR 2,452,185. This balance relates to suppliers which, due to their nature, are trade payables to suppliers of goods and services, such that the information includes data relating to “Current liabilities - Payable to suppliers - Group companies” and “Current liabilities - Sundry accounts payable” in the balance sheet. The maximum legal payment period applicable to the Company according to Law 3/2004, of 29 December, establishing measures combating late payment in commercial transactions and in accordance with the transitional provisions established in Law 15/2010, of 5 July, is 85 days between the entry into force of the law and 31 December 2011, and 75 days in 2012.

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The volume of payments with VAT made during 2012 and 2011 and the volume of payments made during the period established under the law is as follows:

Payments made and payable at the closing date of th e balance sheet

31/12/2012 31/12/2011

Amount % Amount %

Within maximum legal period 505,134 16% 5,697,615 38%

Other 2,599,830 84% 9,144,815 62%

Total payments in the year 3,104,964 100% 14,842,43 0 100%

Deferred payments which at year end exceed the maximum period 2,452,185 396,618

12. Non-current and Current liabilities

12.1) Non-current financial liabilities

The detail of “Non-Current liabilities” at 2012 and 2011 year end is as follows:

On 16 February 2010 the Company entered into a financing agreement (syndicated credit facility) with BBVA (agent bank), Banco Popular Español, Banco de Santander, Caixa de Aforros de Vigo, Ourense e Pontevedra (Caixanova), Caja de Ahorros de Asturias y Monte de Piedad and Caja de Ahorros San Fernando de Huelva, Jerez y Sevilla (Cajasol) to finance the construction and start-up of the wind farm. This credit facility accrues interest at a floating rate which is calculated in addition to the reference interest rate (Euribor) plus a spread of 3% from the entry into operation of the wind farm which may vary based on the annual debt service coverage ratio with a final maturity scheduled for 2027. At 31 December 2012 and 31 December 2011, "Non-current bank borrowings" included net debt arrangement expenses amounting to EUR 1,803,141 and EUR 1,985,349, respectively. The Company will repay the aforementioned expenses based on the syndicated credit facility's schedule (Note 15.5).

Classes Non-current financial instruments 2012

Categories Bank borrowings

Derivatives and other Total

Accounts payable 50,922,732 - 50,922,732 Derivatives - 7,574,956 7,574,956 Total 50,922,732 7,574,956 58,497,688

Classes Non-current financial instruments 2011

Categories Bank borrowings

Derivatives and other Total

Accounts payable 52,894,740 - 52,794,740 Derivatives - 5,042,227 5,042,227 Total 52,894,740 5,042,227 57,936,967

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In accordance with the financing agreement, in addition to the basic obligation to repay the principal, interest, fees and taxes, the Company undertakes to comply throughout the term of the agreement with the obligations detailed in provision 16 (grounds for termination), among which the following are included:

- Maintain a credit facility/equity ratio of no more than 32.9/67.1 per cent.

- Not have a debt service cover ratio below 1.10 during the life of the credit facility.

- The investment in the wind farm operated by the Company was financed through a project finance structure.

These financing structures are applied to projects capable in their own right of providing sufficient guarantees to the participating financial institutions with regard to the repayment of the funds borrowed to finance them. The project's assets are financed, on the one hand, through a contribution of funds by the developers, which is limited to a given amount, and on the other, generally of a larger amount, through borrowed funds in the form of long-term debt. The debt servicing of these credit facilities or loans is supported mainly by the cash flows to be generated by the project in the future and by security interests in the project's assets.

The syndicated credit facility shall be repaid according to the following schedule:

DATE % TO BE PAID

DATE % TO BE PAID

16 June 2013 1.85% 16 December 2020 3.07%

16 December 2013 1.85%

16 June 2021 3.28%

16 June 2014 1.99% 16 December 2021 3.28%

16 December 2014 1.99%

16 June 2022 3.50%

16 June 2015 2.14% 16 December 2022 3.50%

16 December 2015

2.14% 16 June 2023 3.64%

16 June 2016 2.32% 16 December 2023 3.64% 16 December

2016 2.32%

16 June 2024 3.95%

16 June 2017 2.39% 16 December 2024 3.95%

16 December 2017 2.39%

16 June 2025 4.31%

16 June 2018 2.62% 16 December 2025 4.31%

16 December 2018

2.62% 16 June 2026 4.65%

16 June 2019 2.83% 16 December 2026 4.65% 16 December

2019 2.83%

16 June 2027 4.58%

16 June 2020 3.07% 16 December 2027 4.60%

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12.2) Current financial liabilities The detail of “Current liabilities” at 2012 and 2011 year end is as follows:

In addition, the Company obtained a VAT credit facility for a maximum amount of EUR 12,693,957 from La Caixa (Agent Bank), BBVA, Banco Popular Español and Banco Santander, to finance the VAT tax payable during the construction of the farm and which must be settled in full when any deposit of any amount is made into the VAT account in question. This loan bears annual interest tied to Euribor plus a spread of 1.75%. In 2011 the Company amortised EUR 12,150,000 corresponding to the amounts drawn down with a charge to the VAT credit facility in 2010 and as indicated in the agreement, it was fully amortised on 30 June 2012.

13. Tax matters

13.1) Current tax receivables and payables

The detail of "Current tax receivables and payables" in the abridged balance sheets at 31 December 2012 and 2011 is as follows:

LIABILITIES Euros 2012 Euros 2011 Personal income tax withholdings Social Security contributions payable

640 723

652 587

1,363 1,239 The Company files consolidated VAT returns with the Group to which it belongs. 13.2) Reconciliation of the accounting profit/(loss), tax able base amount and receivables and payables

Since its incorporation, the Company has filed consolidated tax returns as part of the ACS Group. For this period income tax expense purposes the calculations for each company in the tax group were made individually.

Classes Current financial instruments 2012

Categories

Bank borrowings Total

Accounts payable 2,154,215 2,154,215 Accrued interest payable 147,165 147,165 Total 2,301,380 2,301,380

Classes Current financial instruments 2011

Categories Bank borrowings Total

Accounts payable 1,583,639 1,583,639 VAT Credit facility 543,956 543,956 Accrued interest payable 157,953 157,953 Total 2,285,548 2,285,548

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The reconciliation of the accounting profit/(loss) for 2012 and 2011 to the corresponding taxable base amount and current income tax is as follows:

EUR 2012 2011 Total Total

Accounting profit/(loss) for the year before tax (21,728,958) (3,628,890)

Non-deductible net finance costs 2,154,951 - Taxable base amount (19,574,007) (3,628,890) Tax rate of 30% 5,872,202 1,088,666 Withholdings and prepayments 451,223 - Income tax receivable from the tax group (Note 6) 6,323,425 1,088,666

The current income tax was recognised as an accounts receivable from ACS Actividades de Construcción y Servicios, S.A.

13.3) Income tax income

The income tax income for 2012 and 2011 was calculated as follows:

Euros Euros 2012 2011

Accounting profit/(loss) before tax multiplied by 30% 6,518,687 1,088,666

Total 6,518,687 1,088,666 13.4) Deferred tax assets The detail of the balance recognised by company at 31 December 2012 and 2011 is as follows:

Balance at 31.12.2011 Additions

Balance at 31.12.2012

Temporary differences (deferred tax assets) 1,512,668 1,406,304 2,918,972 Hedging financial instruments 1,512,668 759,819 2,272,487

Net finance costs 646,485 646,485

Total deferred tax assets 1,512,668 1,406,304 2,918,972

The amount of the temporary differences relates to the tax effect of following items:

- The value of the derivative hedging instrument at 2012 and 2011 year end.

- The net non-deductible finance costs for the year based on Royal Decree-Law 12/2012, of 30 March, limiting the deduction of "net finance costs", in general, to a maximum of 30% of the "operating profit for the year". For these purposes, the law determines "net finance costs" as the excess finance costs with respect to the income arising from the transfer to third parties of equity incurred in the tax period. In any case, up to EUR 1 million in net finance costs for the period, without any limit, are deductible. The net finance costs which have not been deducted may be deducted in the tax periods which conclude in the immediate and consecutive 18 years, together with those of the corresponding tax period.

21

The deferred tax assets indicated above were recognised because the Company’s directors considered that, based on their best estimate of the Company’s future earnings, in accordance with the Company's economic and financial model and the expected cash flows, it is likely that these assets will be recovered. 13.5) Years open for review by the tax authorities and tax audits

Under current legislation, taxes cannot be deemed to have been definitely settled until the tax returns have been reviewed by the tax authorities or until the statute-of-limitation period has expired. At 31 December 2012, the Company has the last four years open for review for all the taxes applicable to it, as well as income tax since 2007 and Value Added Tax since 2008 because it belongs to the tax group. At present, specifically, VAT from 2008 to 2010 is being reviewed. The Company's sole director considers that the tax returns for the various taxes have been filed correctly and, therefore, even in the event of discrepancies in the interpretation of current tax legislation in relation to the tax treatment afforded to certain transactions, such liabilities as might arise would not have a material effect on the accompanying financial statements for the year ended 31 December 2012 and, thus, no provision was recorded in this connection. The system for determining transfer prices is adequately designed with a view to complying with tax legislation. Therefore, transfer prices are adequately supported and there are no material risks in this connection.

14. Guarantee given to third parties

At 31 December 2012 and 2011, EÓLICA DEL GUADIANA, S.L. had provided bank guarantees to third parties mainly for the purpose of securing certain of its normal business operations, the detail being as follows:

Euros 2012 2011 Ayamonte Municipal Council Directorate-General of Energy Policy and Mines

369,943 960,000

369,943 960,000

Total 1,329,943 1,329,943

The sole director does not expect that the guarantees outstanding at 31 December 2012 will give rise to liabilities additional to those recognised in the Company's financial statements at that date.

15. Income and expense

15.1) Revenue The Company has recognised net income amounting to EUR 6,995,546 and EUR 3,472,132 in 2012 and 2011, respectively, for energy sales since its start-up on 16 April 2011. 15.2) Procurements In 2011 this heading included mainly the work performed by other companies for the construction of the wind farm and the main supplier was Energía y Recursos Ambientales, S.A. In 2012 there were no procurements.

22

15.3) Other operating expenses The detail of “Other operating expenses” in the accompanying income statements for 2012 and 2011 is as follows:

Euros

Item 2012 2011 Leases 209,900 280,547 Independent professional services 36,815 26,644 Insurance premiums 38,676 63,903 Banking services 16,034 15,933 Supplies 64,600 34,637 Other services 1,213,396 1,158,361 Taxes other than income tax 927,983 218,903

Total 2,507,404 1,798,928 "Other services" includes mainly the amount corresponding to the operations and maintenance expenses and the management of the farm provided by Urbaenergía S.L. and Energía y Recursos Ambientales, S.A., respectively, amounting to EUR 1,163,903 in 2012 and EUR 1,099,302 in 2011. "Taxes other than income tax" includes the amount corresponding to the tax on building, installations and other works, amounting to EUR 767,860 in 2012 and EUR 0 in 2011.

15.4) Staff costs

The following items are recognised under "Staff costs":

2012 2011 Wages and salaries 21,406 5,776 Employee benefit costs 7,330 1,469

TOTAL 28,736 7,245

The average number of employees at the Company in 2012 and 2011, by category, was as follows:

Categories

2012

2011

Senior executives Line personnel and middle management Clerical staff Manual workers

- 1 - -

- 1 - -

Total 1 1

23

Also, the headcount at the end of 2012 and 2011, by category and gender, was as follows:

2012 2011

Categories

Men

Women

Men

Women Senior executives Line personnel and middle management Clerical staff Manual workers

- 1 - -

- - - -

- 1 - -

- - - -

Total 1 - 1 - 15.5) Finance income and costs "Finance income" includes EUR 1,933 in 2012 and EUR 46,853 in 2011 corresponding to the placement of cash surpluses and interest from current accounts. "Finance costs" includes interest on the bank loan amounting to EUR 2,439,145 in 2012 and EUR 2,524,700 in 2011, interest on the subordinated debt amounting to EUR 620,845 in 2012 and EUR 597,961 in 2011, interest on the VAT credit facility amounting to EUR 8,941 in 2012 and EUR 239,970 in 2011, interest on the derivative amounting to EUR 1,092,838 in 2012 and EUR 806,848 in 2011, debt arrangement expenses amounting to EUR 182,208 in 2012 and EUR 12,928 in 2011 and EUR 93,230 for fees in 2011.

16. Related-party balances and transactions

16.1) Related-party transactions

The transactions carried out by EÓLICA DEL GUADIANA, S.L. with Group companies and associates in 2012 and 2011 were as follows: 2012

Euros 2012

Consumables used and

other Finance costs

Energía y Recursos Ambientales, S.A. 97,223 592,414

Urbaenergía, S.L 1,066,680 -

Centro de Control Villadiego, S.L. 36,804 -

FMMA 2E - 28,431

Total 1,200,707 620,845

2011

Euros 2011

Consumables used and

other Finance costs

Energía y Recursos Ambientales, S.A. 18,918 568,287

Urbaenergía, S.L 493,164 -

Centro de Control Villadiego, S.L. 61,410 -

Total 573,492 568,287

24

17. Information on the environment

In view of the business activities carried on by the Company, it does not have any environmental liability, expenses, assets, provisions or contingencies that might be material with respect to its equity, financial position or results. Therefore, no specific disclosures relating to environmental issues are included in these notes to the financial statements for 2012.

18. Other disclosures 18.1) Fees paid to auditors

The fees for audit services provided to the Company amounted to:

Description

Euros

2012 2011

Services provided by the auditor and by related

companies

Services provided by the auditor and by related

companies

Audit services 4,500 4,500

Other attest services 1,000 1,000

Total audit and related services 5,500 5,500

18.2) Information on the nature and level of risk o f financial instruments

The Company's financial risk management is centralised in the financial department of the Group to which it belongs, which has established the mechanisms required to control exposure to interest rate and exchange rate fluctuations and credit and liquidity risk. The main financial risks that affect the Company are as follows: Price risk

Electricity production from renewable energies in Spain revolves around a law which establishes the option of remunerating the sale freely at market price. The Company is exposed to fluctuations in the market price of electricity. However, a percentage of these prices are composed in reference to regulated tariffs (premium, incentive and reactive energy supplement) and the risk of long-term fluctuation is noticeably reduced because it is tied to various conditions. Other external factors with an impact on the Company's business activities

The Company's business activity is influenced by weather, an external factor which may adversely affect its operations, results and financial situation. Credit risk:

In general, the Company holds its cash and cash equivalents at banks with high credit ratings. Liquidity risk:

The Company, for the purpose of ensuring liquidity and enabling it to meet all the payment obligations arising from its business activities, has the cash and cash equivalents disclosed in its balance sheet, together with the credit and financing facilities, in accordance with the project finance structure, detailed in Note 12 and it has the financial support of the Group to which it belongs mentioned in Note 2.2.

25

Market risk (includes interest rate, foreign currency and other price risks):

Both the Company's cash and its bank borrowings are exposed to interest rate risk, which could have an adverse effect on financial results and cash flows. Therefore, Company policy is to ensure that its bank borrowings at any given time are tied to fixed interest rates. 18.3) Detail of investments in companies engaging i n similar activities and of the activities carried on by the sole director as independent professionals o r as employees. On 11 May 2012, in a deed executed before Madrid notary Mr. Segismundo Álvarez Rollo Villanova, under number 2,122 of his notary record, the appointment of Mr. Antonio Gómez Zamora as sole director of the Company is revoked. On the same date in a deed executed before Madrid notary Mr. Segismundo Álvarez Rollo Villanova, under number 2,108 of his notary record, Mr. Ramón Jiménez Serrano was appointed as an individual representative of the sole director of Energías y Recursos Ambientales, S.A. At 31 December 2012, the sole director did not held any investments in non-Group companies engaging in an activity that is identical, similar or complementary to the activity that constitutes the Company’s object. Additionally, the sole director discharges the following functions at companies engaging in an activity that is identical, similar or complementary to the activity that constitutes the Company’s object.

26

Antonio Gómez Zamora

Name of Company

Company activities

Position

Al-Andalus Wind Power, S.L.

Aldebarán Servicios de

Mantenimiento Eólico, S.A.

Aldeire Solar, S.L.

Aldeire Solar-2, S.L.

Altomira Eólica, S.L.

Andasol-3 Central

Termosolar Tres, S.L.

Andasol-4 Central

Termosolar Cuatro, S.L.

Andasol-5 Central

Termosolar Cinco, S.L.

Andasol-6 Central

Termosolar Seis, S.L.

Andasol-7 Central

Termosolar Siete, S.L.

Berea Eólica, S.L.

Calvache Eólica, S.L.

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Individual appointed to discharge the functions of

the sole director, Energía y Recursos Ambientales,

S.A.



S.A.


the sole director, Cobra Sistemas y Redes, S.A.





S.A.












the chairman of the Board of Directors, Energía y

Recursos Ambientales, S.A.


27

Carta Valley Wind Power

USA, LLC

Cobra Termosolar USA, S.L.

Cobra Solar del Sur, S.L.

Cobra Sun Power USA, INC

Centro de Control Villadiego,

S.L.

Desarrollos Energéticos

Asturianos, S.L.

Desarrollos Energéticos

Riojanos, S.L.

El Chaparral Wind Power,

S.L.

El Otero Wind Power, S.L.

El Recuenco Eólica, S.L.

El Robledo Eólica, S.L.

Electra de Montánchez, S.A.

Energía Sierrezuela, S.L.

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies




the sole director, Eyra Wind Power USA, Inc.


the sole director, Cobra Instalaciones y Servicios,

S.A.




the sole director, Cobra Termosolar USA, S.L.



S.A.

Chairman of the Board of Directors

Chairman of the Board of Directors


the sole director, Urbaenergía, S.L.







Individual appointed to discharge the functions of a

member of the Board of Directors, Energía y




28

Energía y Recursos

Ambientales, S.A.

Energía y Recursos

Ambientales Internacional,

S.L.

Energías Alternativas Eólicas

Riojanas, S.L.

Energías Ambientales de

Soria, S.L.

Energías Renovables de

Ricobayo, S.A.

Manchasol-1 Central

Termosolar Uno, S.L.

Manchasol-2 Central

Termosolar Dos, S.L.

Eólica del Guadiana, S.L.

Eólica Majadillas, S.L.

Gestión Inteligente de

Cargas, S.L.

Extresol-1, S.L.

Extresol-2, S.L.

Extresol-3, S.L.

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies



S.A.



S.A.

Member of the Board of Directors










S.A.











29

Eyra Instalaciones y

Servicios, S.L.

Eyra Wind Power USA, INC

Garby Aprovechamientos

Energéticos, S.L.

Infraestructuras Energéticas y

Medioambientales

Extremeñas, S.L.

La Caldera Energía Burgos,

S.L.

Parque Eólico Bandelera,

S.L.

Parque Eólico Buseco, S.L.

Parque Eólico Valdecarro,

S.L.

Parque Eólico Donado, S.L.

Parque Eólico La Boga, S.L.

Parque Eólico Las Tadeas,

S.L.

Parque Eólico Marmellar, S.L.

Parque Eólico Monte das

Augas, S.L.

Parque Eólico Monte dos

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies



S.A.

Sole director



S.A.



S.A.




Joint director






S.A.














S.A.


30

Nenos, S.L.

Parque Eólico Rodera Alta,

S.L.

Parque Eólico Santa

Catalina, S.L.

Parque Eólico Sierra de las

Carbas, S.L.

Parque Eólico Tesosanto,

S.L.

Parque Eólico Valcaire, S.L.

Parque Eólico Valdehierro,

S.L.

Parques Eólicos de la Región

de Murcia, S.A.

Recursos Ambientales de

Guadalajara, S.L.

Red Top Wind Power, LLC

Riansares Eólica, S.L.

Ribagrande Energía, S.L.

Sociedad de Generación

Eólica Manchega, S.L.

Somozas Energías

Renovables, S.A.

Torre de Miguel Solar, S.L.

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies


S.A.

Joint director



S.A.
















the chairman, Eyra Wind Power USA, Inc.






Joint director

Individual appointed to discharge the functions of a

member of the Board of Directors, Urbaenergía,

S.L.


the joint director, Cobra Sistemas y Redes, S.A.

31

Urbaenergía, S.L.

Urbaenergía Instalaciones y

Servicios, S.L.

Valdelagua Wind Power, S.L.

Energías Renovables

Andorranas, S.L.

Extresol 4, S.L.

Serrezuela Solar II, S.L.

Parque Eólico La Val, S.L.

Parque Eólico Cortado Alto,

S.L.

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies

Renewable energies



S.A.



S.A.





S.L.




the joint director, Cobra Sistemas y Redes, S.A.







Ramón Jiménez Serrano

Name of Company

Company activities

Position

Técnicas de Desalinización de

Aguas, S.A.

Construction of all types of public and

private works

Sole director

Depuradoras del Bajo Aragón, S.A. Construction and operation of a water-

treatment plant

Board member

Hydro Management, S.L.

Desalination of seawater, exploitation of

aquifer resources and water treatment

CEO

Sociedad Aguas Residuales,

Pirineos, S.A.

Construction and operation of

infrastructures for waste water treatment

Board member

32

Name of Company

Company activities

Position

Planta De Tratamiento De Aguas

Residuales Taboada S.A. (Perú)

Treatment and management of all types

of natural resources

Chairman

Cotefy, S.A. de CV.

Construction and operation of industrial

facilities

Board member

Tedagua México, S.A. de CV.


private works

Sole director

Golden State Tedagua

Environmental Corporation, S.A.

Infrastructures, concessions and

constructions

Sole director (Tedagua,

S.A.)

Cobra Infraestructuras Internacional,

S.A.

Gas installations

Sole director (Cobra

Instalaciones y

Servicios, S.A.)

Tedagua Renovables, S.L.

Treatment and management of all types

of natural resources

Sole director

(Tedagua, S.A.)

Tedagua Internacional, SL


private works

Sole director

(Tedagua, S.A.)

Tedra Australia PTY LTD Water desalination, distribution and

treatment

Board member

Infraestructuras Energéticas

Aragonesas, S.L.

All types of construction work Sole director (Cobra

Instalaciones y Servicios,

S.A.)

Energías Ambientales de

Guadalajara, S.L.

Renewable energies Sole director (Urbaenergía,

S.L.)

Agua Tratada de Hermosillo, S.A. de

C.V.

Water desalination, distribution and

treatment

Board member

Sociedad Aragonesa de Estaciones

Depuradoras, S.A.

Water desalination, distribution and

treatment

Board member (Cobra

Concesiones, S.L.)

Cobra Ingeniería de Montajes, S.A. All types of construction and engineering

work

Sole director (ACS

Servicios, Comunicaciones

y Energía, S.L.)

Cobra Thermosolar Plants, INC

Solar thermal facilities

Board member

Cobra Energy Investment, LLC

Investment company

Chairman

Cobra Great Island Limited

Industrial facilities

Chairman

Planta de Reserva Fría de

Generación de Eten, S.A.

Electricity generation and transmission

Board member

33

Name of Company

Company activities

Position

Central Solar Termoeléctrica

Cáceres, S.L.

Construction and operation of the solar

thermal plant in Caceres

Sole director (Cobra

Concesiones, S.L.)

Serrezuela Solar II, S.L.

Development and promotion of energy

projects

Joint director (Cobra

Concesiones, S.L.)

Torre de Miguel Solar, S.L.

Promotion, management, design,

construction and maintenance of facilities

engaged in the production of renewable

energies

Joint director

Escal UGS, S.L.

Oil and gas storage

Board member

34

19. Events after the reporting period As indicated in Note 1, Royal Decree Law 2/2013 on urgent measures for the electric system and the financial sector establishing certain adjustment to certain electricity sector costs was approved on 1 February 2013: - Updates to remunerations for electric system activities tied to the Consumer Price Index (CPI): effective

from 1 January 2013, in all of the methodologies which, being linked to the Consumer Price Index, regulate updates to remunerations, tariffs and premiums received by those subject to the electric system due to the application of the sector regulations, the aforementioned index will be replaced by the Consumer Price Index at a constant tax rate without unprocessed foodstuffs or energy products (underlying CPI which replaces the general CPI).

- From 01/01/2013 premium of the technologies are set at zero, eliminating the floor and ceiling of the

market sale option, and maintaining the tariff sale option. This royal legislative decree establishes that the owners of the facilities must choose between the sale of energy under the regulated tariff option or the option to sell freely on the market without receiving their premium. Once the option is chosen it is irrevocable. For practical purposes, this RD has determined that the wind farm will sell at a set tariff for the remaining years of its life.

This regulatory amendment affects the Company's business plan and its impact on the recoverable amount of the Company's assets is being evaluated as an unexpected event in 2013. A priori, the sole director considers that, based on the aforementioned updated plan, impairment will arise which will be recognised in 2013.

35


PREPARATION OF THE FINANCIAL STATEMENTS: Madrid, 24 June 2013 The sole director of EÓLICA DEL GUADIANA, S.L. prepare these financial statements for the year ended 31 December 2012 which will be submitted to the Shareholders' Meeting for definitive approval. The sole director, ________________________________________ Energía y Recursos Ambientales, S.A. Represented by: Mr. Ramón Jiménez Serrano

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Eólica del Guadiana 2012 - memoria ENG - Saeta Yield · 31 December 2012 1. Company activities...

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