EPH Financing International, a.s.
 
Annual Financial Report
 
for the year ended 31 December 2024
Table
 
of Contents
I.
Auditor’s Report
II.
Text part of the financial annual report
 
III.
Affidavit
IV.
Report on Relations
 
V.
Report of the Board of Directors
VI.
Financial statements as of 31 December 2024
I.
Auditor’s Report
 
 
 
 
image_0
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Deloitte Audit s.r.o.
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120 00 Prague 2 – Vinohrady
Czech Republic
Tel: +420 246 042 500
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Registered by the Municipal
Court in Prague, Section C,
File 24349
ID. No.: 49620592
Tax ID. No.: CZ49620592
INDEPENDENT AUDITOR’S REPORT
To
 
the Shareholders of
 
EPH Financing International,
 
a.s.
Having its registered office at: Pařížská
 
130/26, Josefov,
 
110 00 Prague 1
Opinion
We
 
have
 
audited
 
the
 
accompanying
 
financial
 
statements
 
of
 
EPH
 
Financing
 
International,
 
a.s.
 
(hereinafter
 
also
 
the
“Company”)
 
prepared
 
on
 
the
 
basis
 
of
 
IFRS
 
Accounting
 
Standards
 
as
 
adopted
 
by
 
the
 
European
 
Union,
 
which
comprise
 
the
 
statement
 
of
 
financial
 
position
 
as
 
at
 
31 December 2024,
 
and
 
the
 
statement
 
of
 
comprehensive
income,
 
statement
 
of
 
changes
 
in
 
equity
 
and
 
statement
 
of
 
cash
 
flows
 
for
 
the
 
period
 
from
 
1
 
January
 
2024
 
to
31 December 2024, and notes to the financial statements,
 
including material accounting policy information.
In
 
our
 
opinion,
 
the
 
accompanying
 
financial
 
statements
 
give
 
a
 
true
 
and
 
fair
 
view
 
of
the
 
financial
 
position
 
of
 
EPH
 
Financing
 
International,
 
a.s.
 
as
 
at
 
31
 
December
 
2024,
 
and
 
of
 
its
 
financial
 
performance
 
and
 
its
 
cash
 
flows
 
for
the
 
period
 
from
 
1
 
January
 
2024
 
to
 
31
 
December
 
2024
 
in
 
accordance
 
with
 
IFRS
 
Accounting
 
Standards
 
as
 
adopted
by the European Union.
Basis for Opinion
We
 
conducted
 
our
 
audit
 
in
 
accordance
 
with
 
the
 
Act
 
on
 
Auditors,
 
Regulation
 
(EU)
 
No.
 
537/2014
 
of
 
the
 
European
Parliament
 
and
 
the
 
Council,
 
and
 
Auditing
 
Standards
 
of
 
the
 
Chamber
 
of
 
Auditors
 
of
 
the
 
Czech
 
Republic,
 
which
 
are
 
International
 
Standards
 
on
 
Auditing
 
(ISAs),
 
as
 
amended
 
by the related
 
application
 
guidelines.
 
Our
 
responsibilities
under
 
this
 
law
 
and
 
regulation
 
are
 
further
 
described
 
in
 
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 Act on
 
Auditors and the
Code
 
of Ethics
 
adopted
 
by
 
the Chamber
 
of
 
Auditors
 
of
 
the
 
Czech
 
Republic
 
and
 
we
 
have
 
fulfilled
 
our
 
other
 
ethical
responsibilities in accordance with these
 
requirements. We believe that the audit evidence
 
we have obtained is sufficient
and appropriate to provide a basis for
 
our opinion.
Key Audit Matters
Key
 
audit
 
matters
 
are
 
those
 
matters
 
that,
 
in
 
our
 
professional
 
judgment,
 
were
 
of
 
most
 
significance
 
in
 
our
 
audit
of the financial
 
statements
 
of
 
the
 
current
 
period.
 
These
 
matters
 
were
 
addressed
 
in
 
the
 
context
 
of
 
our
 
audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
As
 
stated
 
in
 
Note
 
1
 
to
 
the
 
financial
 
statements,
 
General
 
Information,
 
the
 
Company
 
was
 
founded
 
by
 
Energetický
 
a
 
průmyslový
 
holding,
 
a.s.
 
for
 
the
 
purpose
 
of
 
obtaining
 
funds
 
in
 
the
 
form
 
of
 
subscription
 
of
 
bonds
 
and
managing
 
these
 
bonds.
 
The
 
funds
 
obtained
 
from
 
the
 
subscription
 
of
 
bonds
 
were
 
provided
 
to
 
the
 
parent
 
company
 
–
Energetický
 
a průmyslový
 
holding, a.s.
 
– in
 
the form
 
of a
 
loan and
 
further distributed
 
to
 
operating
 
companies
 
of
 
the
Energetický a průmyslový holding a.s. group (hereinafter also referred
 
to as the “EPH Group”). Allowances for credit loss
represent the
 
best estimate
 
of expected losses
 
prepared by
 
the Company’s
 
management as
 
of the balance
 
sheet date.
The
 
estimate
 
was
 
established
 
in line
 
with the
 
requirements
 
of IFRS
 
9 Financial
 
Instruments.
 
The
 
expected
 
credit
 
loss
impairment model uses
 
the principle of
 
double measurement,
 
where the allowance
 
for impairment
 
losses is measured
either as
 
twelve-month
 
expected credit
 
losses, or
 
lifetime
 
expected
 
credit
 
losses, depending
 
on whether
 
a significant
increase in credit
 
risk has been identified
 
with respect to
 
the exposure.
 
This area was
 
selected as a
 
key audit
 
matter as
the determination of
 
expected credit loss
 
represents a significant
 
judgement of the Company’s
 
management. The most
significant judgements in the determination
 
of the allowance amount include the assumptions used in the model
 
 
 
(e.g. macroeconomic
 
and
 
credit
 
risk parameters),
 
timely identification
 
of
 
exposures
 
with
 
a significant
 
increase
 
in
 
risk
(stage 2) and non-performing exposures
 
(stage 3).
In
 
the
 
aforementioned
 
area,
 
our
 
audit
 
procedures
 
included
 
taking
 
inventory
 
of
 
the
 
financial
 
instruments
 
and
 
other
financial assets
 
and testing
 
of the
 
measurement
 
of the
 
gross amount
 
of the
 
receivable. Our
 
procedures
 
also included
inquiries
 
of
 
the
 
management
 
concerning
 
the
 
performance
 
of
 
Energetický
 
a
 
průmyslový
 
holding,
 
a.s.
 
(including
 
its
subsidiaries)
 
and
 
reading
 
the
 
EPH
 
Group’s
 
management
 
meeting
 
minutes.
 
We
 
tested
 
the
 
control
 
pertaining
 
to
 
the
determination
 
of
 
the
 
allowance.
 
We
 
used
 
the
 
work
 
of
 
an
 
internal
 
specialist
 
for
 
the
 
assessment
 
of
 
the
 
expected
 
credit
 
loss
 
impairment
 
model
 
made
 
by
 
the
 
Company’s
 
management,
 
their
 
assumptions
 
and the reliability of these assumptions. The internal specialist tested the reliability of the input
 
data (including assessing
macroeconomic, credit and other risk
 
parameters). The internal specialist additionally assessed the
 
allowance calculation
methodology and evaluated whether the model
 
reflected all relevant risks
 
and whether the model assumptions were in
line with historical results and future outlook.
Other Information in the Annual Financial Report
In
 
compliance
 
with
 
Section
 
2(b)
 
of
 
the
 
Act
 
on
 
Auditors,
 
the
 
other
 
information
 
comprises
 
the
 
information
 
included
 
in the Annual Financial Report
 
other than the financial statements
 
and auditor’s report
 
thereon. The Board of
 
Directors
 
is responsible for the other information.
Our
 
opinion
 
on
 
the
 
financial
 
statements
 
does
 
not
 
cover
 
the
 
other
 
information.
 
In
 
connection
 
with
 
our
 
audit
 
of the
 
financial statements,
 
our responsibility
 
is to
 
read the
 
other information
 
and, in
 
doing so,
 
consider whether
 
the
other
 
information
 
is
 
materially
 
inconsistent
 
with
 
the
 
financial
 
statements
 
or our
 
knowledge
 
obtained
 
in
 
the
 
audit
 
or
otherwise appears to be materially misstated.
 
In addition, we assess whether the other information
 
has been prepared,
in all
 
material
 
respects,
 
in accordance
 
with
 
applicable law
 
or regulation,
 
in particular,
 
whether
 
the other
 
information
complies
 
with
 
law
 
or
 
regulation
 
in
 
terms
 
of
 
formal
 
requirements
 
and
 
procedure
 
for
 
preparing
 
the
 
other
 
information
 
in the context of materiality, i.e. whether any non-compliance with these requirements could influence judgments made
on the basis of the other information.
Based on the procedures performed, to the extent
 
we are able to assess it, we report that:
●
The
 
other
 
information
 
describing
 
the
 
facts
 
that
 
are
 
also
 
presented
 
in
 
the
 
financial
 
statements
 
is,
 
in
 
all
 
material
respects, consistent with the financial statements;
 
and
 
●
The other information is prepared in compliance with
 
applicable law or regulation.
In
 
addition,
 
our
 
responsibility
 
is
 
to
 
report,
 
based
 
on
 
the
 
knowledge
 
and
 
understanding
 
of
 
the
 
Company
 
obtained
 
in the audit, on whether the other information contains
 
any material misstatement of
 
fact. Based on the procedures we
have performed on the other information
 
obtained, we have not identified any
 
material misstatement of fact.
Responsibilities of the Company’s Board
 
of Directors and Supervisory Board for the Financial Statements
The Board of Directors is responsible for the preparation
 
and fair presentation of the financial statements
 
in accordance
with
 
IFRS
 
Accounting
 
Standards
 
as
 
adopted
 
by
 
the
 
European
 
Union
 
and
 
for
 
such
 
internal
 
control
 
as
 
the
 
Board
 
of
Directors
 
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, the Board
 
of Directors 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
 
the
 
Board
 
of
 
Directors
 
either
 
intends
 
to
 
liquidate
 
the
 
Company
 
or
 
to
 
cease
 
operations,
 
or
 
has
 
no
realistic alternative but to do so.
The Supervisory Board is 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
 
are
 
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
 
the above
 
law or
 
regulation,
 
we exercise
 
professional
 
judgment
 
and maintain
professional scepticism 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 the Board
 
of Directors.
●
Conclude on the appropriateness
 
of the Board of Directors’
 
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
 
financial
 
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 the Board
 
of Directors, the
 
Supervisory Board and the
 
Audit Committee 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.
We
 
also
 
provide
 
the
 
Audit
 
Committee
 
with
 
a
 
statement
 
that
 
we
 
have
 
complied
 
with
 
relevant
 
ethical
 
requirements
regarding
 
independence,
 
and to
 
communicate
 
with
 
them all
 
relationships
 
and other
 
matters
 
that
 
may
 
reasonably
 
be
thought to bear on our independence, and where applicable, related
 
safeguards.
 
From
 
the
 
matters
 
communicated
 
with
 
the
 
Board
 
of
 
Directors,
 
the
 
Supervisory
 
Board
 
and
 
the
 
Audit
 
Committee,
 
we
determine those
 
matters
 
that were
 
of most
 
significance in
 
the audit
 
of the
 
financial statements
 
of the
 
current period
and
 
are
 
therefore
 
the
 
key
 
audit
 
matters.
 
We
 
describe
 
these
 
matters
 
in
 
our
 
auditor’s
 
report
 
unless
 
law
 
or
 
regulation
precludes
 
public
 
disclosure
 
about the
 
matter
 
or when,
 
in extremely
 
rare
 
circumstances,
 
we
 
determine
 
that
 
a matter
should not be communicated in our
 
report because the adverse consequences of
 
doing so would reasonably be expected
to outweigh the public interest benefits of
 
such communication.
REPORTS ON OTHER LEGAL AND REGULATORY
 
REQUIREMENTS
Information Required by Regulation (EU)
 
No. 537/2014 of the European Parliament and of the Council
In
 
compliance
 
with
 
Article
 
10
 
(2)
 
of
 
Regulation
 
(EU)
 
No.
 
537/2014
 
of
 
the
 
European
 
Parliament
 
and
 
the
 
Council,
 
we
provide the following information in our independent auditor’s report, which is required in addition to the requirements
of International Standards on Auditing:
Appointment of the Auditor and the Period of Engagement
We were appointed as the auditors of the Company by the General Meeting of
 
Shareholders on 11 September 2023. This
marks our first year serving as the Company’s
 
auditor.
Consistence with the Additional Report to the Audit Committee
We confirm that
 
our audit opinion on the financial
 
statements expressed
 
herein is consistent
 
with the additional report
to the Audit
 
Committee of the
 
Company,
 
which we issued
 
on 16 April
 
2025 in accordance
 
with Article 11
 
of Regulation
(EU) No. 537/2014 of the European Parliament and the Council.
 
 
 
 
 
image_1
Provision of Non-Audit Services
We
 
declare
 
that
 
no
 
non-audit
 
services
 
referred
 
to
 
in
 
Article
 
5
 
of
 
Regulation
 
(EU)
 
No.
 
537/2014
of the European Parliament
 
and the
 
Council were
 
provided. At
 
the same time,
 
we did
 
not provide
 
any other
 
non-audit
services
 
to
 
the
 
Company
 
or
 
its
 
controlled
 
entities
 
that
 
are
 
not
 
disclosed
 
in
 
the
 
notes
 
to
 
the
 
Company’s
 
financial
statements.
Report on Compliance with the ESEF Regulation
We have
 
conducted a
 
reasonable assurance
 
engagement on
 
the verification
 
of compliance
 
of the
 
financial statements
included
 
in
 
the
 
annual
 
financial
 
report
 
with
 
the
 
provisions
 
of
 
the
 
Commission
 
Delegated
 
Regulation
 
(EU)
 
2019/815
on the European Single Reporting Format that
 
apply to the financial statements (the “ESEF Regulation”).
Responsibilities of the Board of Directors
 
The
 
Company’s
 
Board
 
of
 
Directors
 
is
 
responsible
 
for
 
the
 
preparation
 
of
 
the
 
financial
 
statements
 
in
 
compliance
 
with
the ESEF Regulation. Inter alia, the Company’s
 
Board of Directors is responsible for:
●
The
 
design,
 
implementation
 
and
 
maintenance
 
of
 
the
 
internal
 
controls
 
relevant
 
for
 
the
 
application
of the requirements of the ESEF Regulation; and
●
The preparation of all financial statements
 
included in the annual financial report in the valid XHTML format.
Auditor’s Responsibilities
Our task
 
is to
 
express
 
a conclusion
 
whether the
 
financial statements
 
included in
 
the annual
 
financial report
 
are, in
 
all
material respects,
 
in compliance
 
with the
 
requirements
 
of the ESEF
 
Regulation, based
 
on the
 
audit evidence
 
obtained.
Our
 
reasonable
 
assurance
 
engagement
 
was
 
conducted
 
in
 
accordance
 
with
 
the
 
International
 
Standard
 
on
 
Assurance
Engagements 3000
 
(Revised) Assurance
 
Engagements Other
 
Than Audits
 
or Reviews
 
of Historical
 
Financial Information
(hereinafter “ISAE 3000”).
The
 
nature,
 
timing
 
and
 
scope of
 
the
 
selected
 
procedures
 
depend
 
on the
 
auditor’s
 
judgment.
 
A reasonable
 
assurance
is a high level of assurance; however,
 
it is not a guarantee that the examination conducted in accordance
 
with the above
standard will always detect a potentially existing material non-compliance with
 
the requirements of the ESEF Regulation.
As part of our work, we performed the following procedures:
●
We obtained an understanding
 
of the requirements of the ESEF Regulation;
●
We obtained
 
an understanding
 
of the Company’s
 
internal controls
 
relevant
 
for the
 
application of
 
the requirements
of the ESEF Regulation;
 
●
We identified and evaluated risks
 
of material non-compliance
 
with the ESEF
 
Regulation, whether due
 
to fraud or error;
and
●
Based on this, we designed and performed procedures responsive to those risks and aimed at obtaining a reasonable
assurance for the purposes of expressing our
 
conclusion.
The aim of our procedures was to assess
 
whether all the financial statements included in the
 
annual financial report were
prepared in the valid XHTML format.
We believe that the evidence we have
 
obtained is sufficient and appropriate
 
to provide a basis for our conclusion.
Conclusion
In our opinion, the Company’s financial statements for the period
 
from 6 September 2023 to 31
 
December 2023 included
in the annual financial report are, in all material respects, in
 
compliance with the requirements of the ESEF Regulation.
In Prague on
22 April 2025
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
II.
Text part of the Financial Annual Report
 
1)
Description of the Company
 
Name:
 
EPH Financing International,
 
a.s. (hereinafter the “Company” or the “Issuer”)
Registered office:
 
Pařížská 130/26, Josefov, 110 00 Prague 1, Czech Republic
Corporate ID:
 
196 78 185
LEI code:
 
3157003E5A4ZV0JCSM65
Legal status:
 
Joint stock company
Legal system:
 
The Company is established and exists in compliance with
 
the law of the Czech Republic, in
particular Act No. 89/2012 Coll., the Civil Code, as amended (hereinafter the
 
"Civil Code")
and Act No. 90/2012 Coll., on Business Corporations, as amended, (hereinafter
 
referred to as
the “Business Corporations Act”), Act No. 455/1991 Coll., on Trade Licensing, as amended,
and Act No. 256/2004 Coll., on Capital Market Business as amended
Telephone number:
 
+420 232 005 200
Website:
 
www.epholding.cz
EPH Financing International, a.s. was formed on
 
6 September 2023 and was registered in
 
the Register of Companies
held by the Municipal Court in Prague, Section B, Insert 28346.
The
 
annual
 
reports
 
will
 
be
 
published
 
in
 
electronic
 
form
 
on
 
the
 
Company’s
 
website
Investors
section, EPH Financing International, a.s. section.
Business activities:
 
Management of own property
The Company was
 
established for
 
the purpose of
 
issue of securities
 
– bonds with
 
fixed interest
 
yield pursuant
 
to a bond
programme (the “Programme”) up to the expected total nominal
 
value of EUR 3 billion.
The first
 
issue of
 
the bonds
 
pursuant to
 
the Programme
 
was accepted
 
for trading
 
on the
 
Euronext Dublin
 
regulated
market in Ireland in the amount of EUR 500 million. The trading was initiated on
 
the issue date of 6 November 2023.
The code of the bonds is ISIN XS2716891440.
On 23 May 2024, the second issue of
 
bonds pursuant to the Programme was accepted for trading on the
 
Euronext Dublin
regulated market in Ireland in the aggregate amount of EUR 500 million.
 
The code of the bonds is ISIN XS2822505439.
 
On 25 July 2024, the second tranche to the first issue of bonds was accepted for trading on the Euronext Dublin regulated
market in Ireland in the amount of EUR 100 million. The code of the
 
bonds is ISIN XS2716891440.
No rating has been allocated to the Issuer. The bonds have the rating of BBB-.
Organisational structure
The sole shareholder of the Company as of 31 December 2024 is:
Interest in the share capital
Voting rights
in EUR
thousand
%
%
Energetický a průmyslový holding, a.s.
82
100
100
Total
82
100
100
Shareholders of Energetický
 
a průmyslový
 
holding, a.s. as of 31 December 2024
 
are:
Interest in the share capital
Voting rights
%
%
EP
 
Group, a.s.
56 plus 1 share
56 plus 1 share
J&T Energy Holding, a.s.
44 less 1 share
44 less 1 share
Total
100
100
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
The information on
 
the number of shares
 
or similar securities representing
 
a share
 
in the Issuer
 
owned
by
 
persons
 
discharging
 
managerial
 
responsibilities
 
of
 
the
 
Issuer,
 
options
 
and
 
comparable
 
investment
instruments the value of which pertains to shares or similar
 
securities representing a share
 
in the Issuer
as of 31 December 2024
 
is as follows:
Shares or similar securities
 
Options and
comparable investment
instruments
pieces
pieces
Members of the statutory body
0
0
Members of the Supervisory Board
 
0
0
Total
0
0
The Company’s
 
share capital
 
has been paid
 
up in
 
full, is
 
composed of 10
 
ordinary registered shares
 
in certificated
form with
 
a nominal
 
value of
 
EUR 8,200
 
(CZK 200,000
 
thousand). The
 
rights and
 
obligations attached
 
to the
 
ordinary
registered shares are defined in the Business Corporations Act (Act
 
No. 90/2012 Coll., as amended) and in Article 6
of the Company's
 
Articles of
 
Association. The
 
shareholders are
 
entitled to
 
receive dividends
 
and hold
 
1 vote
 
per share
with a nominal value of EUR 8,200 at the Company's general meeting.
The sole shareholder, Energetický a průmyslový holding, a.s. (hereinafter
 
"EPH"), is a joint-stock company, with its
registered
 
office
 
at
 
Pařížská
 
130/26,
 
Josefov,
 
110
 
00
 
Prague
 
1,
 
Czech
 
Republic.
 
The
 
principal
 
activities
 
of
 
EPH
include corporate investment in infrastructure and power industry.
 
In addition to the two main
 
activities, the Group
is engaged in business in a number of other areas, such as logistics and
 
trade brokering.
The ultimate majority
 
owner of EP
 
Group, a.s. and
 
EP Investment S.
 
à r.l. is Daniel
 
Křetínský, chairman of
 
the Board
of Directors
 
of Energetický
 
a průmyslový
 
holding, a.s.
 
and chairman
 
of the
 
Board of
 
Directors of
 
the Issuer.
 
The
control of the Issuer by indirectly controlling entities is based on the voting share which corresponds to the
 
share in
the
 
Company's share
 
capital. Indirectly
 
controlling entities
 
exercise supervision
 
over
 
the Company's
 
management
through
 
their
 
participation in
 
the
 
general meeting
 
of
 
the
 
parent company
 
Energetický
 
a
 
průmyslový holding,
 
a.s.
Measures taken
 
to ensure
 
that control
 
is not
 
abused are
 
based on
 
generally applicable
 
legal regulations.
 
The Company
has not taken any special step in addition to the generally applicable
 
legal regulations.
The Company
 
is directly
 
owned and
 
controlled by
 
EPH, due
 
to which
 
it is
 
included in
 
the consolidation
 
group of
Energetický a průmyslový
 
holding, a.s.,
 
with its
 
registered office
 
at Pařížská
 
130/26, Josefov, 110 00
 
Prague 1,
 
Czech
Republic, corporate
 
ID: 283
 
56 250.
 
The details
 
contained in
 
the Company's
 
financial statements
 
are thus
 
incorporated
into the consolidated
 
financial statements
 
(or the Consolidated
 
Annual Report)
 
of Energetický a
 
průmyslový holding,
a.s. The
 
consolidated annual report
 
can be obtained
 
at the address
 
of Energetický a
 
průmyslový holding, a.s,
 
or on
the
 
website
or
,
 
in
 
the
 
collection
 
of
 
documents
 
relating
 
to
 
Energetický
 
a průmyslový holding, a.s.
EPH Financing
 
International, a.s.
 
is financially
 
dependent on
 
the parent
 
company EPH
 
as all
 
of its
 
revenues are
 
linked
to the
 
parent company.
 
EPH is
 
a guarantor in
 
the form
 
of financial guarantee
 
for the
 
Company's bond debts
 
under
English law. The Company is not aware of any grounds that such dependence on the EHP Group has been abused.
2)
Company Administration and Management
i.
Risks and Risk Management Principles
 
The Company is exposed
 
to a number of risks,
 
primarily those related to
 
regulation and new laws,
 
liquidity risks and
interest rate risks.
Credit risk
Credit risk is the
 
risk of financial loss
 
that is imminent when
 
a counterparty in a
 
financial instrument transaction
 
fails
to meet
 
its contractual
 
obligations. This
 
risk arises
 
for the
 
Company primarily
 
in loans,
 
as the
 
Company provided
 
a loan to the
 
parent company Energetický a
 
průmyslový holding, a.s. The parent
 
company was assigned a
 
rating of
BBB- with a
 
stable outlook from
 
S&P Global Ratings
 
Europe Area and
 
Fitch Ratings Ireland
 
Limited. The Company
continuously monitors potential changes in the parent company’s credit risk.
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Liquidity risk
Liquidity risk
 
is the
 
risk that
 
the Company
 
will encounter
 
difficulties in
 
meeting the
 
obligations associated
 
with its
financial liabilities that are settled by cash or other financial assets.
 
On
 
a
 
standard
 
basis,
 
the
 
Company
 
ensures
 
that
 
it
 
has
 
sufficient
 
cash
 
and
 
assets
 
within
 
short-term
 
maturity
 
(or maturity corresponding
 
to the maturity
 
of expected
 
expenditure) to
 
meet expected
 
operational expenses
 
for a
 
period
of
 
90
 
days,
 
including
 
settlement
 
of
 
financial
 
obligations;
 
however
 
not
 
to
 
cover
 
the
 
potential
 
impact
 
of
 
extreme
circumstances that cannot reasonably be predicted, such as natural
 
disasters.
Interest rate risk
 
The Company is exposed
 
to a low risk
 
on interest rate fluctuations
 
in its operations because
 
interest-bearing assets and
interest-bearing liabilities have
 
almost the same
 
maturity dates and
 
are due in
 
the same amount,
 
while reflecting the
form of interest rates, be it fixed interest rates or variable interest
 
rates.
Risk related to the legal, regulatory and tax environment
The legal, regulatory and tax environment in the Czech Republic and Ireland is often subject to
 
changes and the laws
may not be always implemented uniformly by the courts and public
 
authorities.
 
Internal control principles and policies and rules
 
of approach to potential risks arising in
 
connection with the financial
reporting process
The
 
control
 
system
 
includes
 
both
 
internal
 
control
 
mechanisms
 
created
 
within
 
the
 
Company
 
and
 
external
 
control
mechanisms.
 
The
 
internal
 
control
 
system
 
includes
 
control
 
mechanisms
 
created
 
within
 
the
 
Company.
 
It
 
ensures,
evaluates and minimises operational, financial, legal and other
 
risks of the Company. Work
 
procedures are stipulated,
and
 
powers and
 
responsibilities are
 
allocated within
 
the
 
internal control
 
system. Results
 
of
 
the
 
internal control
 
are
objectively and
 
regularly evaluated.
 
In case
 
of any
 
findings, appropriate
 
measures for
 
rectification of
 
the identified
defects are determined. Financial
 
control of the financial
 
reporting process is provided
 
for by responsible employees
as a part
 
of internal management in
 
the preparation of operations
 
before their approval and
 
in their course until
 
their
settlement.
The Company keeps double-entry accounting for the accounting
 
entity and the financial reporting process is provided
for
 
by responsible
 
persons. The
 
Company's accounting
 
period coincides
 
with the
 
calendar year;
 
the prior
 
reporting
period is
 
the reporting
 
period from
 
the
 
Company’s
 
incorporation on
 
6 September
 
2023 to
 
31 December
 
2023. The
Company complies with all accounting and tax
 
regulations required by applicable legal regulations. The Company is
subject to external audit and established an audit committee with effect from 15 September 2023.
A more
 
detailed description of
 
risks and
 
management principles
 
is included
 
in Note
 
14 of
 
the notes
 
to the
 
financial
statements which are part of this annual report.
ii.
Company’s Bodies
Statutory body of the Company as of 31 December 2024
Acting on
 
behalf of
 
the Company:
 
Members of the
 
Board of
 
Directors may represent
 
the Company
 
in respect
 
of all
matters by two directors always acting on behalf of the Company
 
in dealings with third parties jointly.
Company’s Board of Directors
Daniel Křetínský
 
Chairman of the Board of Directors
Marek Spurný
 
Member of the Board of Directors
Pavel Horský
 
Member of the Board of Directors
The business address of all members of the Board of directors of the Company
 
is as follows: Pařížská 130/26,
Josefov, 110 00 Prague 1, Czech Republic.
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Daniel Křetínský
Daniel Křetínský is
 
the Chairman of
 
the Board
 
of Directors in
 
Energetický a
 
průmyslový holding, EP
 
Infrastructure
and
 
EP
 
Power
 
Europe.
 
Given
 
his
 
position
 
as
 
a
 
partner
 
in
 
J&T
 
Group,
 
he
 
was
 
at
 
the
 
formation
 
of
 
Energetický
 
a průmyslový holding. In addition, he is a member of the Board of Directors
 
in several subsidiaries of EPH.
 
He
 
holds
 
bachelor's
 
degree in
 
political
 
sciences
 
and
 
a
 
master's
 
degree
 
and
 
a
 
Doctor
 
of
 
Law
 
degree
 
from
 
Masaryk
University in Brno.
Pavel Horský
Pavel
 
Horský
 
presides
 
over
 
the
 
committee
 
to
 
assess
 
risks
 
of
 
EPH,
 
also
 
taking
 
posts
 
in
 
Boards
 
of
 
Directors
 
and
Supervisory Boards of several subsidiaries of EPH. He is also
 
Vice-Chairman of the Board of
 
Directors of the parent
company Energetický
 
a průmyslový
 
holding, a.s.,
 
EP Infrastructure
 
and EP
 
Power Europe.
 
Before joining
 
EPH, he
worked as advisor for market risk management at the Royal Bank of Scotland.
He holds a master's degree in mathematics and physics from Masaryk University
 
in Brno.
Marek Spurný
Marek Spurný has worked for
 
the EPH Group and
 
its legal predecessor in
 
title since 2004. As
 
the lead lawyer of
 
the
Group, he
 
is mainly
 
responsible for
 
concluding transactions,
 
legal negotiations
 
and mergers and
 
acquisitions, corporate
restructuring and for the
 
legal support in general
 
and also for
 
the compliance area. Marek
 
Spurný also takes posts
 
in
statutory bodies:
 
he is
 
Vice-Chairman
 
of
 
the
 
Board of
 
Directors of
 
the
 
parent company
 
Energetický
 
a průmyslový
holding, EP Infrastructure and EP Power
 
Europe. Similarly, he
 
also holds positions in bodies
 
of other subsidiaries of
the Group. Before joining the Group, he had worked for the Czech Securities Commission, i.e. the previous authority
for regulation of capital markets in the Czech Republic, for five years.
He graduated from the faculty of law of Palacký University in Olomouc.
The
 
members
 
of
 
the
 
Board
 
of
 
Directors
 
declare
 
that
 
there
 
is
 
no
 
conflict
 
of
 
interests.
 
None
 
of
 
the
 
persons
 
is
 
in
employment relationship
 
with the
 
Company.
 
The members
 
of the
 
statutory body
 
have not
 
received any
 
financial or
non-financial remuneration related to the exercise of their position.
Powers of the statutory body
The Board of Directors
 
is the statutory body
 
of the Issuer and
 
is entitled to act
 
on behalf of
 
the Issuer in all
 
matters and
represents the Company
 
in dealings with third
 
parties, courts and other
 
authorities. The Board
 
of Directors is in
 
charge
of the Company's business management.
The Board of
 
Directors takes decisions
 
concerning all matters
 
of the Company
 
unless they fall
 
within the powers
 
of
the general meeting, the
 
Supervisory Board or other bodies
 
of the Company by law
 
or under the Company's
 
Articles
of Association.
Any member of the Board of Directors may request
 
the Company’s general meeting to give an instruction concerning
the business management; this shall not affect his duty to act with due managerial
 
care.
The Board
 
of Directors
 
provides for
 
proper keeping
 
of accounts,
 
submits annual,
 
extraordinary or
 
interim financial
statements to
 
the general
 
meeting for
 
approval and
 
also a
 
proposal for
 
distribution of
 
profit or
 
settlement of
 
loss in
compliance with the Company’s Articles of Association.
In its activities the
 
Board of Directors adheres to
 
generally applicable legal regulations, decisions and
 
instructions of
the general meeting if they
 
are in compliance with the
 
legal regulations and the Articles
 
of Association as well as
 
their
decisions.
Members of the
 
Board of Directors always
 
attend the general meeting.
 
A member of the
 
Board of Directors is
 
given
the floor whenever he/she requests so.
 
The
 
Board
 
of
 
Directors
 
has
 
quorum
 
if
 
its
 
meeting
 
is
 
attended
 
by
 
absolute
 
majority
 
of
 
the
 
directors.
 
The
 
Board
 
of
Directors shall decide by majority of votes of the directors. Every member
 
of the Board of Directors has one vote.
The Company's Board
 
of Directors has
 
3 members. Members
 
are elected and
 
recalled by the
 
general meeting.
 
The term
of office of the members lasts until they are removed by the general meeting.
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Other Company’s Bodies as of 31 December 2024
Supervisory Board
Company’s
 
Supervisory Board
 
Petr Sekanina
 
member of the Supervisory Board
 
The business address of the Supervisory Board member of the
 
Company is as follows: Pařížská 130/26, Josefov,
 
110
00 Prague 1.
The Supervisory
 
Board oversees
 
the exercise
 
of the
 
powers of
 
the Board
 
of Directors
 
and the
 
activities of
 
the Company.
The Company's Supervisory Board has one member.
 
The
 
member
 
of
 
the
 
Supervisory
 
Board
 
declares
 
that
 
there
 
is
 
no
 
conflict
 
of
 
interest,
 
and
 
he
 
is
 
in
 
no
 
employment
relationship with the Company. The member of the Supervisory Board has
 
not received any financial or non-financial
remuneration related to the exercise of his position.
General meeting
The general
 
meeting is
 
the supreme
 
body of
 
the Company.
 
The Company's
 
shareholders exercise
 
their right
 
to take
part in the Company’s management at or outside the general meeting.
The general meeting power include:
a)
Taking decisions to amend the Articles of Association unless the amendment is made as a result of increase
of the share capital by the Board of Directors authorised to do so or any change taking
 
place based on other
legal facts;
b)
Taking
 
decisions to change
 
the share
 
capital amount and
 
to authorise the
 
Board of Directors
 
to make
 
such
share capital increase;
c)
Taking decisions to allow setting
 
off a cash receivable
 
to be recovered from
 
the Company against
 
a claim for
issue price payment;
d)
Taking decisions to issue convertible or preference bonds;
e)
Appointing and recalling Board of Directors members;
f)
Appointing and recalling Supervisory Board members;
g)
Approving annual, extraordinary or consolidated financial statements or also
 
interim financial statements if
the preparation thereof is imposed by another legal regulation;
h)
Taking decisions to distribute profit or any other own resources or to settle a loss;
i)
Taking
 
decisions to
 
file
 
an
 
application
 
to
 
admit
 
the
 
Company’s
 
participation securities
 
for
 
trading
 
in
 
the
European regulated market or withdraw such securities from trading in
 
the European regulated market;
j)
Taking decisions to wind up the Company and place it into liquidation;
k)
Appointing and recalling a liquidator;
l)
Approving a proposal for distribution of the balance of assets upon liquidation;
m)
Approving transfer or pledging an enterprise or any part thereof which would amount to material
 
change of
the
 
existing
 
structure
 
of
 
such
 
enterprise
 
or
 
material
 
change
 
of
 
the
 
scope
 
of
 
the
 
Company’s
 
business
 
or
activities;
n)
Taking
 
decisions
 
to
 
accept
 
the
 
effects
 
of
 
the
 
conduct
 
performed
 
on
 
behalf
 
of
 
the
 
Company
 
prior
 
to
 
its
incorporation;
o)
Approving a silent partnership agreement, including approval of
 
any amendments to or termination of such
agreement; and
p)
Taking other
 
decisions falling under the Act or the Articles of
 
Association within the powers of the general
meeting.
The general meeting may not
 
reserve taking decision concerning cases that
 
do not fall within its
 
powers by Business
Corporations Act No. 90/2012 Coll. or by the Articles of Association.
The Issuer has a sole
 
shareholder, no general meeting takes
 
place, and the powers of
 
the general meeting are
 
exercised
by the sole shareholder. As such, the sole shareholder assumes the position and the capacity of the general
 
meeting.
 
The general meeting (the
 
sole shareholder) takes
 
decisions by adopting
 
resolutions. The general
 
meeting has a quorum
if shareholders are present holding shares the nominal value
 
or the number of which exceeds 30 per
 
cent of the share
capital. The general meeting takes decisions by a majority of votes of the attending
 
shareholders.
The person with managerial responsibilities is the Board of Directors
 
and the Supervisory Board of the Company.
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Audit Committee
The
 
Issuer established
 
the Audit
 
Committee (the
 
"Committee") with
 
effect
 
from 15
 
September 2023.
 
Pending
appointment of
 
the Audit Committee
 
members such
 
position was
 
exercised by
 
the Company’s Supervisory Board.
The Audit Committee has two independent and three professional qualified
 
members:
Company’s
 
Audit Committee
 
Václav Moll
 
Chairman of the Audit Committee (independent
)
Jakub Šteinfeld
 
member of the Audit Committee (independent)
Lukáš Jiránek
 
member of the Audit Committee
Position and powers of the Audit Committee
 
The Audit Committee
 
primarily oversees
 
the Company's
 
financial reporting
 
and risk management
 
and reviews
 
the
Company's internal financial
 
controls (including internal
 
audit) and statutory
 
audit process. The
 
Audit Committee
makes recommendations regarding the
 
selection and remuneration
 
of the external
 
auditor and the
 
policy for the
provision of non-audit services by the external auditor
Without prejudice to
 
the responsibilities of the Company's
 
directors and Supervisory Board members,
 
the Audit
Committee member particularly perform
 
the following activities:
a)
Monitor the effectiveness of internal control and the risk management process;
b)
Monitor the
 
effectiveness of
 
internal audit
 
and its
 
functional independence, if
 
the function
 
of internal
audit is set up;
c)
Monitor the procedure of preparation of financial statements and consolidated financial statements and
submits to the managing
 
or controlling body
 
recommendations to provide
 
for integrity of
 
the systems of
accounting and financial records;
d)
Recommend
 
auditors
 
to
 
the
 
controlling
 
body
 
provided
 
that
 
such
 
recommendation,
 
unless
 
a
 
directly
applicable regulation
 
of the
 
European Union
 
governing specific
 
requirements for
 
mandatory audit
 
of
entities of public interest provides otherwise, is duly justified by such Audit
 
Committee member;
e)
Consider independence of
 
the statutory auditor
 
and auditing company
 
and the provision of
 
non-auditing
services to the entity of public interest by the statutory auditor and auditing
 
company;
f)
Discuss with the auditor any risks
 
endangering his independence and protective measures taken by the
auditor with the objective of alleviating such risks`
g)
Monitor
 
the
 
process
 
of
 
mandatory
 
audit,
 
proceeding
 
from
 
the
 
comprehensive
 
report
 
on
 
the
 
quality
assurance system;
h)
Make
 
statements
 
as
 
to
 
termination
 
of
 
the
 
obligation
 
arising
 
from
 
mandatory
 
audit
 
agreement
 
or
withdrawal
 
from
 
mandatory
 
audit
 
agreement
 
pursuant
 
to
 
Section
 
17a
 
(1)
 
of
 
the
 
Auditors’
 
Act
 
No.
93/2009 Coll.;
i)
Consider whether the
 
auditing order is subject
 
to review of quality
 
management of the auditing
 
order by
another statutory auditor
 
carrying out auditing activity
 
in his own
 
name and on
 
his own account
 
or by
the auditing
 
company pursuant
 
to Article
 
4(3), subparagraph
 
1 of
 
Regulation of
 
the European
 
Parliament
and the Council (EU) No. 537/2014;
j)
Inform the controlling
 
body concerning
 
the outcome of
 
the mandatory audit
 
and his knowledge
 
obtained
from the overseeing the mandatory audit process;
k)
Inform
 
the
 
controlling
 
body
 
as
 
to
 
how
 
the
 
mandatory
 
audit
 
contributed
 
to
 
ensuring
 
integrity
 
of
 
the
systems of accounting and financial records;
l)
Take
 
decisions to
 
continue to
 
carry
 
out
 
the
 
mandatory
 
audit
 
by
 
the
 
auditor
 
pursuant to
 
Article
 
4(3),
subparagraph 2 of Regulation of the European Parliament and the Council
 
(EU) No. 537/2014;
m)
Approve the provision of other non-auditing services;
n)
Approve the report
 
on conclusions of tender
 
proceedings in compliance
 
with Article 16
 
Regulation of
the European Parliament and the Council (EU) No. 537/2014;
 
and
o)
Carry out further
 
powers pursuant to
 
Auditors
’
Act No. 93/2009
 
Coll. or a
 
directly applicable regulation
of the
 
European Union
 
governing specific
 
requirements for
 
mandatory audit
 
of entities
 
of public
 
interest.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Meetings of the Audit Committee are attended by Audit Committee members. Audit Committee members may
invite other persons
 
to attend the
 
meeting, if they
 
consider it appropriate.
 
Matters discussed at
 
the Committee
meeting are put to the vote and decision
 
is taken by passing a resolution. The Audit
 
Committee has a quorum if
an absolute majority of the Audit Committee members are present at the meeting. Every member has one vote;
in case of a tie, the chairman of the Audit Committee shall have a casting
 
vote.
Audit Committee members are appointed and recalled by the general
 
meeting for an indefinite term.
Apart
 
from
 
the
 
Audit
 
Committee
 
members,
 
the
 
Issuer
 
has
 
not
 
introduced
 
any
 
remuneration
 
system
 
as
 
the
Company has no
 
employees, nor are any
 
persons discharging managerial responsibilities
 
entitled to claim any
remuneration
 
on
 
the
 
grounds
 
of
 
their
 
position.
 
Remuneration
 
to
 
the
 
Audit
 
Committee
 
members
 
is
 
agreed
pursuant to the agreement on performance of duties and in the fixed amount.
Diversity policy
The Company does not apply
 
a diversity policy; nevertheless,
 
when taking positions in
 
its bodies, the Company
approaches all
 
candidates without
 
prejudice, irrespective
 
of their
 
age, sex,
 
religion, ethnic
 
origin, nationality,
sexual orientation,
 
health disability, belief
 
or view
 
of life
 
and exclusively
 
assesses their
 
abilities and
 
professional
competence.
 
The
 
Company
 
believes
 
that
 
a
 
dynamic
 
approach,
 
not
 
linked
 
to
 
any
 
fixed
 
quotas,
 
gives
 
rise
 
to
selection of
 
the candidates of
 
best quality and
 
best ensures accomplishment
 
of the
 
Company's business goals.
The Company consistently
 
abides by all requirements
 
arising from Act No.
 
198/2009 Coll., on
 
Equal Treatment
and on Legal Means of Protection against Discrimination.
iii.
Compliance with the Code of Company Management and Administration
 
Currently,
 
the Issuer
 
abides by and
 
complies with all
 
requirements for
 
administration and management
 
of the
Company which
 
are set
 
out in
 
generally applicable
 
legal regulations
 
of the
 
Czech Republic,
 
in particular
 
the
Business Corporations Act. In its administration and management, the Issuer does not apply the rules set out in
the Code of Management
 
and Administration of Companies of
 
the Czech Republic (2018,
 
hereinafter referred
to as the "Code").
The
 
rules laid
 
down
 
in
 
the Code
 
overlap, to
 
a
 
certain extent,
 
the
 
requirements placed
 
on
 
administration and
management in
 
generally applicable
 
legal regulations
 
of the
 
Czech Republic.
 
Therefore, one
 
can say
 
that the
Issuer
 
actually
 
abides
 
by
 
certain
 
rules
 
laid
 
down
 
in
 
the
 
Code
 
as
 
of
 
the
 
date
 
of
 
the
 
financial
 
statements;
nevertheless, in view of the fact
 
that the Issuer has not
 
explicitly implemented the rules laid
 
down in the Code
in its administration and management, the
 
Issuer hereby makes a declaration for
 
the purpose of these financial
statements that in its administration and management, the Issuer
 
does not apply the rules laid down in the Code
as a whole.
3)
Other Information
Information on Fees Paid to the Statutory Auditors
 
In 2024
 
and 2023,
 
the following
 
fees were
 
billed to
 
the Company
 
by auditors,
 
including
VAT
(in EUR
 
thousand):
2024
2023
Audit of the financial statements and the annual report
 
20
0
Fees billed for other review services, net of
VAT
214
213
Fees billed for tax advisory
 
0
0
Fees billed for other non-audit services
 
0
0
Total
234
213
Fees billed for other review services include a remuneration for agreed procedures relating to the prospectus
 
of
the Issuer for the 2
nd
 
issue of bonds.
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Significant legal proceedings
The Company is
 
not and has
 
not been a
 
part to any
 
legal dispute or
 
state, adjudication
 
or arbitration proceedings,
and the Board
 
of Directors does
 
not anticipate participation
 
in legal disputes,
 
state, adjudication or
 
arbitration
proceedings in the foreseeable future.
Significant Contracts
To
 
the knowledge
 
of the
 
Company,
 
there are
 
no significant
 
contracts, other
 
than contracts
 
entered into
 
in the
ordinary course of
 
the business of
 
the Company, that could give
 
rise to a liability
 
or claim on
 
any member of
 
the
EPH group that would be material to the ability of the Company to meet
 
its obligations to bondholders.
Ownership interests that establish a controlling influence of the Company
The Company has no ownership interests.
Data on organisational units
In 2024 and 2023, the Company did not have any organisational unit located
 
abroad.
Acquisition of own shares or own ownership interests
During 2024 and 2023, no own shares or own ownership interests were
 
acquired.
Research and development expenses
In 2024 and 2023, the Company did not incur any research and development
 
expenses.
Data on investments in tangible and intangible fixed assets
During 2024 and 2023, the Company did not make any significant investments in tangible and intangible fixed
assets.
Data on activities in the field of environmental protection and labour relations
The Company
 
complies with
 
all legal
 
regulations in
 
the field
 
of environmental
 
protection and
 
complies with
applicable legislation in the field of labour relations.
The Company has no employees.
4)
Financial Situation of the Company
Basic numerical data on the Company's financial management
 
for 2024
In the
 
period from 1
 
January 2024 to
 
31 December 2024,
 
the Company reported
 
a loss
 
of EUR
 
419 thousand
(2023: EUR 443
 
thousand) primarily due
 
to recognition of
 
an allowance amounting
 
to EUR 630
 
thousand for
the loans provided to the parent company EPH
 
in line with the applied IFRS 9 (described
 
in detail in Note 3 (c)
of
 
the
 
Notes).
 
The
 
final
 
balance
 
of
 
the
 
allowance
 
for
 
the
 
loans
 
amounted
 
to
 
EUR
 
1,040
 
thousand
 
as
 
of
 
31 December 2024 (2023: EUR 410 thousand).
 
As of 31 December 2024, the financial
 
position of the Company in
 
terms of provision of financing to entities
 
in
the EPH
 
Group is
 
reflected in
 
the total
 
assets of
 
EUR 1,113,935
 
thousand (2023:
 
EUR 507,096
 
thousand)
 
of
which non-current assets amount to EUR 1,102,258 thousand (2023: 501,931 thousand). Non-current financial
instruments include the
 
loan principal; its maturity
 
depends on the
 
maturity of individual
 
bond issues, refer to
note 9. Total
 
liabilities of the Company amounting to EUR 1,109,825 thousand (2023:
 
EUR 502,567 thousand
predominantly include
 
issued bonds
 
with the
 
long-term portion
 
of EUR
 
1,098,182 thousand
 
(2023: EUR
 
497,484
thousand).
 
In
 
the
 
reporting
 
period,
 
the
 
Company
 
reports
 
positive
 
equity
 
of
 
EUR
 
4,110
 
thousand
 
(2023:
 
EUR
 
4,529
thousand).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
No decision
 
having a
 
crucial impact
 
on the
 
Company,
 
or its
 
shareholders,
 
was taken
 
in the
 
reporting period.
Decisions of
 
the Company’s
 
bodies concerned
 
current course
 
of business
 
relating to
 
the reported
 
activities of
the Company and
 
performance of
 
obligations imposed
 
upon those bodies
 
by applicable
 
laws and the
 
Company’s
Articles of Association.
Information on the Anticipated Financial Situation in the Following Year
In 2025, the Company plans to continue its primary activities,
 
i.e. the issuance and administration of bonds and
provision of loans/borrowings to entities in the EPH Group. This involves the fact that it expects no significant
changes in
 
the results
 
of the
 
Company, and these will
 
be primarily
 
impacted by
 
the income
 
in the
 
form of
 
interest
on provided loans, expenses
 
relating to issued bonds
 
and potential allowances to provided
 
loans recognised in
line with the rules of IFRS Accounting Standards.
 
5)
Issue of bonds and use of proceeds from their sale
As noted in
 
clause 1 of
 
the Text Part of the
 
Annual Report,
 
the Issuer exists
 
for the sole
 
purpose of issuing
 
bonds
and the
 
object of
 
its core
 
business activities
 
is the
 
provision of
 
loans/borrowings to
 
the entities
 
in the
 
EPH Group.
Hence, the sole source of the Issuer's
 
income consists of interest income from
 
loans/borrowings provided to the
entities
 
in
 
the
 
EPH
 
Group
 
and
 
remuneration
 
for
 
credit
 
management.
 
The
 
Issuer
 
does
 
not
 
engage
 
in
 
any
investment activities.
Funds received from the issue of bonds were provided by the Issuer
 
in the form of loans to its sole shareholder,
Energetický a průmyslový holding, a.s., with its registered office at Pařížská 130/26, Josefov, 110 00 Prague 1,
Czech Republic,
 
corporate ID:
 
283 56 250,
 
file number
 
B 21747, administered
 
by the
 
Municipal Court
 
in Prague
(hereinafter “EPH”). The obtained funds were used by EPH in the process of
 
liquidity management of the EPH
Group,
 
including
 
refinancing
 
of
 
other
 
indebtedness
 
of
 
EPH
 
and
 
of
 
the
 
other
 
EPH
 
Group
 
members.
 
Basic
information about the
 
loan agreements is
 
provided in the
 
following section of
 
the Annual Report
 
- IV.
 
Report
on Related Parties (specifically in note V.1.1.).
The Issuer’s financial and economic situation, its business activities, position in the market and ability to repay
its debts from the bonds depends
 
on EPH's ability to repay duly
 
and in time its debts to
 
the Issuer.
 
This ability
depends of
 
the liquidity
 
situation of
 
EPH, which
 
is based,
 
in particular,
 
on business
 
results of
 
its subsidiaries
and on their
 
ability to
 
generate idle funds,
 
on legal
 
and tax regulations
 
and restrictions
 
resulting from
 
contractual
arrangements. Hence,
 
the Issuer
 
is exposed
 
to the
 
secondary risk
 
of dependence
 
on risks
 
relating to
 
the EPH
Group,
 
particularly
 
on
 
risks
 
resulting
 
from
 
regulation
 
and
 
regulatory
 
interventions
 
into
 
the
 
energy
 
market
(regulatory tariffs, capacity
 
payments and similar interventions),
 
from geopolitical situation, technical
 
failures
and
 
shortage
 
of
 
some
 
input
 
commodities,
 
such
 
as
 
natural
 
gas,
 
and
 
from
 
restrictions
 
based
 
on
 
decisions
 
of
regulators.
6)
General Information on the EPH Group
 
in EUR million
For the year ended
 
31 Dec 2024
For the period ended
 
31 Dec 2023 (restated)
Revenues
23,331
23,981
Operating profit
1,701
2,805
Underlying EBITDA
2,550
3,576
Net financial debt
4,396
4,828
Total assets
26,410
28,855
 
of which: non-current
15,423
15,914
 
of which: current
10,987
12,941
Total equity
8,139
9,210
Total payables
18,271
19,645
 
of which: non-current
9,758
11,313
 
of which: current
8,513
8,332
Cash flows from operating activities
3,497
3,620
Cash flows from investment activities
-1,084
-1,332
Cash flows from financing activities
 
-2,464
-1,796
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
The Underlying EBITDA indicator is
 
a principal indicator that
 
the Board of Directors of
 
EPH uses to assess the
performance of
 
its operating
 
segments. The
 
Underlying EBITDA indicator
 
is defined
 
as operating
 
profit plus
depreciation
 
and
 
amortisation,
 
further
 
cleared
 
of
 
any
 
impact
 
of
 
negative
 
goodwill.
 
The
 
calculation
 
of
 
the
Underlying
 
EBITDA
 
and
 
Net
 
financial
 
debt
 
can
 
be
 
found
 
in
 
the
 
Annual
 
report
 
of
 
EPH
 
published
 
at
 
the
 
website.
The information for
 
the year
 
ended 31 December
 
2024 and the
 
period ended 31
 
December 2023 in
 
the above
table are taken from
 
the consolidated financial statements
 
of EPH for the
 
year ended 31 December
 
2024 and the
period ended 31
 
December 2023 prepared in
 
accordance with the
 
International Financial Reporting Standards
approved for the use in the
 
European Union and audited by Deloitte Audit s.r.o.,
 
having its registered office at
Budova Churchill I, Italská 2851/67, Prague 2- Vinohrady,
 
120 00, Czech Republic, corporate ID: 496 20 592.
The auditor issued an “unqualified” opinion on the financial statements.
 
In 2024,
 
total sales
 
of EPH
 
decreased by
 
3% which
 
was accompanied
 
by an
 
even more
 
significant decline in
EBITDA
 
by
 
29%.
 
This
 
development
 
primarily
 
related
 
to
 
the
 
flexible
 
energy
 
generation
 
segment
 
and
 
was
primarily due to drop in
 
spreads and decrease in commodity prices that
 
had a significant impact on the
 
overall
performance of EPH.
 
i.
Business Overview
Energetický
 
a
 
průmyslový holding
 
is
 
a
 
joint
 
stock company,
 
having
 
its
 
registered office
 
at
 
Pařížská 130/26,
Josefov,
 
110
00
 
Prague,
 
Czech
 
Republic.
 
It
 
was
 
formed
 
on
 
7
 
August
 
2009
 
and
 
recorded
 
in
 
the
 
Register
 
of
Companies on 10 August 2009.
Principal activities of the
 
company include investments in the
 
power sector, gas
 
industry and mining industry,
logistics and hedging transactions.
 
The EPH group (the “EPH Group”) is a leading European energy group operating
 
primarily in Slovakia, Czech
Republic, Germany,
 
Italy, United
 
Kingdom (including Northern Ireland), Ireland,
 
France, Switzerland and the
Netherlands. It is a vertically integrated
 
energy utility firm covering a complete
 
chain of activities in the energy
sector.
 
It
 
includes
 
more
 
than
 
70
 
entities
 
operating
 
in
 
heat
 
and
 
electricity
 
production
 
from
 
traditional
 
and
renewable
 
sources, including
 
the
 
distribution of
 
these energies,
 
as
 
well
 
as
 
trading
 
with
 
electricity,
 
gas,
 
their
supplies to end customers, coal mining and
 
last but not least in gas industry which
 
involves primarily transport,
distribution and storage of gas.
 
The average number
 
of employees
 
in entities
 
in the EPH
 
Group in
 
the year ended
 
31 December
 
2024
 
was 10,518
(2023: 10,967).
The EPH Group is
 
internally structured in two
 
main pillars –
 
EP Infrastructure (“EPIF”) which is
 
an umbrella
company
 
for
 
entities
 
operating
 
primarily
 
gas
 
transport,
 
gas
 
and
 
electricity
 
distribution,
 
gas
 
storage
 
and
 
heat
infrastructure, and
 
the Power
 
Generation segment,
 
which is
 
an umbrella
 
company for
 
entities engaging
 
primarily
in electricity production from conventional sources and electricity production
 
from renewable sources.
 
The EPH Group operates in the following segments:
Gas industry
Through the SPP Infrastructure (SPPI; which is part of the EPIF group and where EPIF indirectly holds a 49%
 
investment
 
and
 
full
 
management
 
control)
 
group,
 
it
 
holds
 
a
 
share
 
in
 
gas
 
industry
 
assets
 
which
 
cover
 
the
transportation,
 
distribution
 
and
 
storage
 
of
 
gas.
 
The
 
controlled
 
gas
 
industry
 
assets
 
are
 
one
 
of
 
the
 
largest
 
gas
industry groups in Central Europe, are a key transporter of the Russian natural gas to the EU and are an almost
monopoly distributor of gas to companies and households in Slovakia.
 
Electricity generation
 
Key electricity
 
producers in
 
the EPH
 
Group are
 
modern gas
 
power plants,
 
biomass combustion
 
power plants
and one
 
hard coal
 
power plant
 
in Italy,
 
hard coal,
 
wind
 
and photovoltaic
 
power plants
 
in France,
 
two CCGT
facilities and biomass combustion
 
power plant in
 
the United Kingdom, two
 
CCGT plants in Northern
 
Ireland,
and a CCGT
 
plant in
 
Ireland. In Germany,
 
the EPH Group
 
holds the Schkopau
 
power plant with
 
net installed
capacity of 900 MWe. The net capacity
 
of Italian power
 
plants is 4,757 MWe (and concurrently the
 
EPH Group
holds 50% in Ergosud
 
S.p.A. which owns
 
a gas power
 
plant with the net
 
installed capacity of
 
834 MWe), power
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
plants in England
 
with totalling capacity
 
of 2,104 MWe,
 
power plants in
 
Northern
 
Ireland of 1,472
 
M
We
and
power plants
 
in Ireland
 
of 384
 
MWe
 
and power
 
plants in
 
France of
 
745 MWe.
 
In 2023,
 
EPH purchased
 
gas
power plants in the
 
Netherlands with the installed
 
capacity of 2,603 MWe
 
(including a 50% investment
 
in the
Enecogen power
 
plant with
 
the net installed
 
capacity of
 
950 MWe). The generation
 
of electricity
 
in these
 
entities
is concentrated in the Power Generation Group.
 
The EPH
 
Group is
 
additionally one
 
of the
 
largest
 
electricity producers
 
(including supporting
 
services) in
 
the
Czech Republic.
 
All power
 
plants of
 
the EPH
 
Group in
 
the Czech
 
Republic work
 
in the
 
co-generation mode
(combined generation) when they produce heat for customers in addition to electricity. All domestic traditional
facilities
 
of
 
the
 
EPH
 
Group
 
also
 
provide
 
supporting
 
services
 
for
 
the
 
transmission
 
power
 
grid
 
in
 
the
 
Czech
Republic. EPH manages the above power plants through the EPIF Group.
 
Distribution and supply of energies
 
Distribution of electricity in
 
Central Slovakia and power
 
supply to end customers
 
in Slovakia is provided
 
by the
EPIF Group through SSE.
 
In the Czech Republic and Slovakia, the EPH Group is a major player in electricity
 
and gas trade and supply to
end customers. Power
 
supply to customers
 
is provided
 
by EP ENERGY
 
TRADING, a.s.
 
(EPET),
 
Dobrá Energie
s.r.o. primarily in the Czech Republic and
 
by SSE primarily in the Slovak
 
Republic. Both companies are
 
part of
the EPIF Group.
Heat industry
With the total normalised annual supply of heat
 
to Czech end customer of approximately
 
7.4 PJ the EPH Group
is one of the most
 
significant heat suppliers to end customers in the
 
Czech Republic. Co-generation sources of
the EPH Group
 
supply about 150
 
thousand households in
 
the Czech Republic,
 
specifically in Plzeň
 
(Plzeňská
teplárenská),
 
Hradec
 
Králové,
 
Pardubice
 
and
 
Chrudim
 
(Elektrárny
 
Opatovice),
 
Litvínov
 
and
 
Most
 
(United
Energy), and other
 
municipalities.
 
In addition, the heat production
 
plants of the EPH
 
Group in all
 
above cities
and towns
 
supply heat
 
to industrial
 
plants, companies
 
and institutions.
 
EPH manages
 
its heat
 
industry assets
through the EPIF Group.
 
Renewable sources
The EPH
 
Group includes
 
renewable sources
 
with a
 
total current
 
net installed
 
capacity of
 
66 MWe
 
within the
EPIF Group and another 659 MWe
 
of net installed capacity within the Power Generation Group. They include
wind power
 
plants, photovoltaic
 
power plants,
 
biogas power
 
plants and
 
biomass plants
 
generating renewable
power in the Czech Republic, Slovakia, Germany, United Kingdom, Italy and France.
Logistics and trade in power commodities
 
The EPH
 
Group additionally focuses
 
on coal trade,
 
including sale of
 
energy by-products. It
 
is a
 
key player in
the transportation of loose material, in both internal and international
 
transport.
ii.
Significant markets where EPH operates
Slovakia
Slovakia has been a member of
 
the European Union since 2004. The country
 
has a credit rating of
 
A+ granted
by S&P,
 
A3 granted by Moody’s
 
and A- granted by Fitch. In
 
2023, the population was 5.4 million
 
and its real
GDP per capita was EUR 22,533 (https://slovak.statistics.sk/).
 
Czech Republic
The Czech Republic has been
 
a member of the
 
European Union since 2004. The
 
country has a credit rating
 
of
AA- granted
 
by S&P,
 
Aa3 granted
 
by Moody’s
 
and AA-
 
granted by
 
Fitch. In
 
2023, the
 
population was
 
over
10.9 million and its real GDP per capita was EUR 17,370 (https://www.czso.cz/).
 
 
 
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Italy
Italy is
 
a founding
 
member of
 
the European
 
Union. The
 
country has
 
a credit
 
rating of
 
BBB granted
 
by S&P,
Baa3 granted by Moody’s and
 
BBB granted by Fitch. In 2023, the population was
 
59 million and its real GDP
per capita was EUR 35,435 (https://www.istat.it/).
 
United Kingdom of Great Britain and Northern
 
Ireland
The country has a credit rating of
 
AA granted by S&P,
 
Aa3 granted by Moody’s
 
and AA- granted by Fitch. In
2023, the population was 68 million and its real GDP per capita was
 
EUR 49,700 (https://www.ons.gov.uk/).
 
Germany
Germany is
 
a founding
 
member of
 
the European
 
Union. The
 
country has
 
a credit
 
rating of AAA
 
granted by
 
S&P,
Aaa granted by Moody’s and AAA granted by Fitch. In
 
2023, the population was 84.7 million and
 
its real GDP
per capita was USD 54,343 (https://data.worldbank.org).
 
France
France is a
 
founding member of
 
the European Union.
 
The country has
 
a credit rating
 
of A- granted
 
by S&P, Aa3
granted by Moody’s
 
and AA-
 
granted by Fitch. In
 
2023, the population was
 
68.4 million and its
 
real GDP per
capita was EUR 41,300 (https://www.insee.fr/).
Kingdom of the Netherlands
The Kingdom of the Netherlands is a founding member of the European Union. The country has a credit rating
of AAA granted
 
by S&P, Aaa granted by Moody’s and AAA
 
granted by Fitch. In
 
2023, the population
 
was 17.9
million and its real GDP per capita was EUR 59,600 (https://www.cbs.nl/).
The EPH Group additionally operates in Ireland, Switzerland, Slovenia and Poland.
 
iii.
Development in the Energy Sector where the EPH Group operates
 
Most recent development
 
At the beginning
 
of 2025 European
 
natural gas prices
 
remain highly unstable
 
which is due
 
to restricted supplies,
geopolitical
 
uncertainties
 
and
 
changing
 
dynamics
 
in
 
the
 
demand.
 
After
 
the
 
transit
 
of
 
Russian
 
gas
 
through
Ukraine was stopped at the beginning of
 
2025, the dependence of Europe on
 
LNG increased which resulted in
a
 
significant
 
tension
 
on
 
the
 
global
 
gas
 
market.
 
Even
 
though
 
the
 
level
 
of
 
gas
 
storage
 
was
 
sufficient
 
at
 
the
beginning of
 
winter 2024,
 
the supplies
 
were used
 
quickly as
 
the weather
 
was cold
 
and supplies
 
from Russia
 
were
reduced which
 
led to
 
concerns regarding
 
filling of
 
capacities before
 
the next
 
winter.
 
Some countries
 
did not
meet
 
the
 
objectives
 
of
 
the
 
European
 
Commission
 
relating
 
to
 
the
 
volume
 
of
 
gas
 
storage
 
which
 
points
 
to
weaknesses
 
in
 
planning
 
and
 
securing
 
of
 
the
 
supplies.
 
The
 
geopolitical
 
uncertainties,
 
risks
 
involved
 
in
 
the
supplies and
 
political responses
 
continue to
 
have an
 
impact on
 
price fluctuation
 
while the
 
prices of
 
TTF will
likely remain above the
 
traditional level of the
 
economic transition from
 
coal to gas
 
to secure sufficient quantity
of
 
LNG
 
available
 
on
 
the
 
market.
 
European
 
energy
 
markets
 
remain
 
to
 
be
 
highly
 
volatile
 
till
 
2027
 
when
 
the
expansion of LNG capacities is expected.
 
Electricity consumption
In 2024, the demand for electricity in Europe was
 
not revived to a considerable extent as the consumption was
negatively impacted
 
by weak
 
economic conditions,
 
high inflation
 
and increased
 
interest rates.
 
The industrial
sector, primarily
 
energy intensive sectors
 
in Germany,
 
saw a permanent
 
decline in the
 
demand which resulted
in significant losses of
 
the chemical and automotive
 
industry.
 
The EU policy focusing
 
on decarbonisation and
long-term changes
 
in the
 
behaviour of
 
households and
 
companies continued
 
to inhibit
 
the revival
 
of consumption
due to high
 
energy prices.
 
The electricity
 
consumption in
 
the EU remained
 
significantly below
 
the level of
 
2019;
Germany
 
slightly
 
improved
 
by
 
0.3%
 
above
 
the
 
pre-pandemic
 
level,
 
France
 
remained
 
stable,
 
and
 
the
 
United
Kingdom continued its decline while underlining the transition to a lower dependence
 
on grid electricity.
 
 
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Electricity production
 
In
 
2024,
 
the
 
gradual
 
decommissioning
 
of
 
coal
 
capacities
 
continued
 
which,
 
together
 
with
 
the
 
expansion
 
of
renewable sources, resulted in further year-on-year
 
decrease in electricity production from fossil fuels
 
by 10%
(610 TWh). In Germany,
 
brown coal power plants and
 
black coal power plants
 
dropped in proportion by 35%
which increased the dependence on cross-border electricity flows. The production from wind and solar energy,
enhanced by favourable weather and a massive expansion of solar power plants, exceeded the production from
fossil fuels for the first time, specifically by 86 TWh. Similarly,
 
hydropower sector and nuclear energetics saw
 
a significant increase, primarily
 
thanks to an improved
 
availability of reactors
 
in France. Even though
 
the prices
of gas decreased,
 
and the profitability of gas power plants
 
improved, the overall electricity production
 
from gas
dropped, which reflects the continuing transition to low-emission sources.
 
Coal
In 2024,
 
the prices of
 
coal according
 
to API2
 
decreased from approximately
 
USD 118 per
 
tonne at
 
the beginning
of the
 
year to
 
USD 95
 
per tonne
 
at the
 
year-end which
 
was due
 
to a
 
long-standing excessive
 
offer and
 
weak
demand. The
 
global demand
 
for coal
 
increased only
 
by 1.2%
 
while it
 
dropped by
 
15% in
 
the EU
 
due to
 
the
development in
 
renewable sources
 
and improved
 
performance of
 
the
 
nuclear energy
 
sector.
 
USA, Japan
 
and
South
 
Korea recorded
 
similar
 
trends
 
while
 
China and
 
India
 
on
 
the
 
contrary
 
saw
 
an
 
increase
 
in
 
the
 
demand.
 
China increased local mining in order to reduce the
 
dependence on imports and India expanded the production
by 8%, primarily due to
 
mining in blocks for own consumption (captive
 
blocks). Coal reserves declined in the
regions shifting
 
away from
 
coal while
 
they remain
 
hight in
 
principal consumer
 
countries such
 
as China
 
and India
which had an impact on prices on the global market.
 
Natural gas
 
Natural gas
 
consumption in
 
Europe in
 
2024 slightly
 
decreased
 
third year
 
in a
 
row when
 
the cold
 
weather partially
mitigated the impacts of
 
the decline in the
 
demand due to
 
closing of large industrial
 
consumers. The demand
 
for
gas used for
 
heating increased
 
by 1.1 bcm
 
while the consumption
 
in the energy
 
sector declines due
 
to the growth
in renewable sources and better availability of French nuclear power stations. Norway remained the
 
largest gas
supplier, its export increased by
 
7.6% to 113 bcm thanks
 
to lower number of maintenance shutdowns. Russian
gas supplies remained
 
well below historical
 
values, while the
 
transit through Ukraine
 
was discontinued at
 
the
beginning of
 
2025. The
 
production in
 
the Netherlands,
 
Denmark and
 
the United
 
Kingdom continued
 
to drop
while exports from the north of Africa were limited due to resource depletion.
 
European emission allowances
 
The demand
 
for EUAs
 
was weakened
 
by a
 
decrease in
 
emission in
 
the energy
 
sector,
 
increase in
 
renewable
sources
 
and
 
weak
 
economic
 
revival.
 
Even
 
though
 
the
 
gas
 
prices
 
increase
 
in
 
the
 
spring,
 
the
 
prices
 
of
 
the
allowances remained within the range of EUR 60 to 70 per tonne. The offer of the allowances increased by 5%
thanks
 
to
 
the
 
expanded
 
application
 
scope
 
in
 
order
 
to
 
include
 
emissions
 
from
 
naval
 
transport
 
and
 
additional
auctions. The European
 
Commission proposed a
 
new climatic goal
 
till 2040, aiming
 
at a decrease
 
in greenhouse
gas emissions by
 
90%, however
 
the discussions on
 
this goal were
 
overshadowed by
 
growing concerns
 
regarding
the competitiveness of the European industry.
 
The sources of
 
the above data
 
can be found
 
in the annual
 
report of Energetický
 
a průmyslový holding
 
a.s. for
2024.
iv.
Information on trends
 
According
 
to
 
the
 
information
 
available
 
to
 
the
 
Company
 
since
 
the
 
publication
 
of
 
the
 
audited
 
unconsolidated
financial statements of
 
EPH for 2024,
 
there were no
 
significant negative changes
 
in the
 
prospects of the
 
EPH
Group and there were no significant changes in the financial performance
 
of EPH.
 
As
 
of
 
the
 
preparation
 
date
 
of
 
this
 
annual
 
report,
 
the
 
Company
 
is
 
not
 
aware
 
of
 
trends,
 
uncertainties,
 
claims,
obligations or events that
 
would have, with a
 
realistic probability, a significant impacts on
 
the prospects of EPH
for at least the current reporting period.
 
Given that the EPH Group operates
 
in the energy sector, there are a number of factors and
 
trends that may have
an impact on the EPH Group (and therefore indirectly EPH and the
 
Company).
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
In the gas industry,
 
it is possible to see as a recent trend the
 
efforts of the EU to reduce the energy
 
dependence
on the Russian gas,
 
which results in the
 
construction of alternative transport routes and
 
highlights the key role
of regional energy security.
 
From
 
the
 
EPH
 
Group
 
perspective,
 
the
 
trends
 
predominantly
 
focus
 
on
 
the
 
factors
 
determining
 
the
 
price
 
of
electricity and commodities
 
on European markets.
 
The production capacities
 
of the EPH
 
Group are however
 
not
critically dependent
 
on electricity
 
prices thanks
 
to various
 
fuel types
 
and diversified
 
activities of
 
the EPH
 
Group.
The heat distribution is
 
subject to regulation and
 
the heat supply is
 
also impacted by
 
the efforts of the customers
to minimise
 
heat losses
 
in the
 
form of
 
thermal insulation
 
of buildings,
 
search for
 
suitable heating
 
schemes aiming
at heating cost savings, etc.
 
On European energy markets where
 
the Group operates, it actively takes
 
part in ensuring grid stability,
 
as part
of supporting services and
 
capacity payments for new
 
and existing power plants.
 
These became more important
primarily after
 
the start
 
of the
 
war in
 
Ukraine and
 
related energy
 
crisis. For
 
this reason,
 
the Group
 
is making
significant
 
investments
 
in
 
new
 
flexible
 
CCGT
 
plants
 
capable
 
of
 
co-firing
 
hydrogen
 
to
a significant extent in the future and in battery storage systems designed
 
to support grid stability.
 
7)
Other external influences
Military operation in Ukraine
In
 
relation
 
to
 
the
 
ongoing
 
war
 
conflict
 
in
 
Ukraine
 
and
 
related
 
sanctions
 
against
 
the
 
Russian
 
Federation,
 
the
Company identified
 
risks and
 
adopted reasonable
 
measures to
 
minimise the
 
impact on
 
its business
 
activities.
Based on available information and
 
current development, the Company
 
continues to analyse the entire
 
situation
and assesses its direct impact on the Company.
 
The management of the Company has considered any potential
effects of the situation on its operations and business and concluded that they do not have any major impact on
the financial statements,
 
nor on
 
the going concern
 
assumption in
 
2025. Nevertheless,
 
it is not
 
possible to exclude
any
 
further
 
negative
 
development
 
of
 
this
 
situation
 
which
 
could
 
subsequently
 
have
 
a
 
negative
 
impact
 
on
 
the
Company, its business, financial position, results, cash flow and prospects in general.
 
image_2
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
III.
AFFIDAVIT
Today,
 
the Board of Directors and the Supervisory Board discussed and approved the Annual Financial Report
of
 
EPH
 
Financing
 
International,
 
a.s.,
 
(hereinafter
 
the
 
“Company”)
 
for
 
the
 
period
 
from
 
1
 
January
 
2024
 
to
 
31 December 2024,
 
prepared in accordance with Czech accounting legislation.
The statutory separate
 
financial statements
 
of the Company
 
have been
 
prepared in
 
accordance with International
Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) issued by the Accounting
Standards Board (IASB) as adopted by the European Union.
To the
 
best of our knowledge, the presented Annual
 
Report and Financial Statements give a true
 
and fair view
of the
 
financial position, business
 
activities and results
 
of operations of
 
the Company for
 
the reporting period
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
IV.
REPORT ON RELATIONS
 
between the controlling and controlled entities and on the relations between
 
the controlled entity
and other entities controlled by the same controlling entity
 
(related parties)
prepared by the Board of Directors of EPH Financing International, a.s., having
 
its registered office at
Pařížská 130/26, Josefov, 110 00 Prague 1, corporate ID: 196 78 185, pursuant to Section 82 (1) of Act
 
No. 90/2012 Coll., on Business Corporations and Cooperatives, as amended
(the “
Report
”)
__________________________________________________
I.
Preamble
The
 
Report
 
has
 
been
 
prepared
 
pursuant
 
to
 
Section
 
82
 
(1)
 
of
 
Act
 
No.
 
90/2012
 
Coll.,
 
as
 
amended
 
(the
“
Business Corporations Act
”).
The
 
Report has
 
been submitted
 
for review
 
to
 
the
 
Company’s
 
Supervisory Board
 
in
 
accordance with
 
Section
 
83
 
(1)
 
of
 
the
 
Business
 
Corporations Act
 
and
 
the
 
Supervisory Board’s
 
position will
 
be
 
communicated to
 
the
Company’s General
 
Meeting deciding on the approval
 
of the Company’s
 
general purpose financial statements
and on the distribution of the Company’s profits or the settlement of its loss.
The report was prepared for the year ended 31 December 2024.
II.
Structure of Relations between Entities
CONTROLLED ENTITY
The controlled
 
entity is
 
EPH Financing
 
International, a.s.
 
having its
 
registered office
 
at Pařížská
 
130/26, Josefov,
110 00 Praha 1, corporate ID: 196
 
78 185, recorded in the Register of Companies held by the Municipal Court
in Prague, File B, Insert 28346.
 
DIRECTLY
 
CONTROLLING ENTITIES
Energetický a průmyslový holding, a.s.,
 
registered
 
office:
 
Pařížská
 
130/26,
 
Josefov,
 
110
 
00
 
Prague
 
1,
 
Czech
Republic
corporate ID: 283 56 250
INDIRECTLY
 
CONTROLLING ENTITIES
EP Investment S.à r.l.
registered office: 2, Place de Paris, L–2314,
 
Luxembourg
reg. no.: B 184488
EP Group, a.s.
registered
 
office:
 
Pařížská
 
130/26,
 
Josefov,
 
110
 
00
 
Prague
 
1,
 
Czech
Republic
 
corporate ID: 086 49 197
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
OTHER CONTROLLED ENTITIES
 
The structure of
 
relations of the
 
controlling entity EP
 
Investment S.à.r.l.
 
and groups of
 
controlled entities that
are controlled by this
 
controlling entity is
 
listed in Appendix
 
No. 1 to the
 
Report. The appendix
 
does not include
a complete
 
ownership structure
 
of EP
 
Investment S.à.r.l.,
 
and does
 
not include
 
shareholders who
 
do not
 
hold
controlling shares.
 
III.
Role of the Controlled Entity, Manner and Means of Control
Role of the controlled entity
●
Administration of own assets
 
●
Issuance of bonds; and
 
●
Provision of borrowings, loans or other forms of financing to the related
 
parties.
 
Manner and Means of Control
 
The controlling entity holds a majority share in voting rights in EPH Financing International,
 
a.s. and exercises
decisive influence in EPH Financing International,
 
a.s.
 
IV.
List of Acts in 2024 under Section 82 (2) (d) of Act No. 90/2012 Coll., on Business
Corporations and Cooperatives
 
In 2024, no
 
acts were made
 
at the initiative
 
or in the
 
interest of the
 
controlling entity relating
 
to assets exceeding
10% of equity of
 
the controlled entity identified
 
from the most recent financial
 
statements,
 
except for the loan
provided to the shareholder.
 
V.
Contracts entered into between EPH Financing International, a.s. and other
related parties
 
V.1.1.
In 2024, the following loan contracts entered into with entities in the Energetický a průmyslový
holding, a.s. Group were in effect:
On 13 November 2023, Energetický a průmyslový holding,
 
a.s., as the debtor,
 
signed a loan contract, including
effective amendments, with EPH Financing International, a.s., as the creditor.
 
On 20 December 2023, Energetický a průmyslový holding, a.s., as the debtor,
 
signed a loan contract, including
effective amendments, with EPH Financing International, a.s., as the creditor.
 
On 29
 
January 2024,
 
Energetický a
 
průmyslový holding, a.s.,
 
as the
 
debtor,
 
signed a
 
loan contract,
 
including
effective amendments, with EPH Financing International, a.s., as the creditor.
 
On
 
31
 
May
 
2024,
 
Energetický
 
a
 
průmyslový
 
holding,
 
a.s.,
 
as
 
the
 
debtor,
 
signed
 
a
 
loan
 
contract,
 
including
effective amendments, with EPH Financing International, a.s., as the creditor.
 
 
 
 
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
V.1.2.
Other contracts effective in 2024 entered into between the entities in the
 
Energetický a průmyslový holding, a.s. Group:
On 15 September 2023, service agreements were signed between the
 
members of the audit committee and
 
EPH Financing International,
 
a.s.
 
Financial
 
guarantee
 
for
 
the
 
debts
 
of
 
EPH
 
Financing
 
International,
 
a.s.
 
issued
 
by
 
Energetický
 
a
 
průmyslový
holding, a.s. on 12 October 2023.
V.1.3.
In 2024, the following operating contracts entered into between entities in the Energetický
 
a průmyslový holding, a.s. Group were in effect:
 
Contract
 
for
 
the
 
provision
 
of
 
professional
 
assistance
 
between
 
EP Investment
 
Advisors,
 
s.r.o.,
 
as
 
the
 
service
provider, and EPH Financing International,
 
a.s., as the client, on 6 September 2023.
Sublease
 
contract
 
between
 
EP
 
Investment
 
Advisors,
 
s.r.o.,
 
as
 
the
 
service
 
provider,
 
and
 
EPH
 
Financing
International,
 
a.s., as the client, on 13 October 2023.
VI.
Other Legal Acts Made between EPH Financing International, a.s. and Other
Related Parties
 
Except for the above, there were no other contracts entered into between EPH Financing International, a.s. and
the related parties and no other performance and counter-performance was
 
provided.
 
EPH Financing
 
International, a.s.
 
received and
 
made no
 
other legal
 
acts or
 
measures in
 
the interest
 
or at
 
the
initiative of the related parties.
 
VII.
Transa
 
ctions, receivables and payables of EPH Financing International,
 
a.s. in
respect of the related parties
 
The
 
receivables and
 
payables of
 
EPH Financing
 
International,
 
a.s.
 
and
 
related party
 
transactions
 
in
 
the
 
year
ended 31 December 2024
 
are summarised in the below table.
 
Open balances with the related parties as of 31 December 2024 and 31 December 2023:
 
in EUR thousand
Receivables
and other
financial assets
 
Payables and
other financial
liabilities
 
Receivables and
other financial assets
 
Payables and
other financial
liabilities
 
as of 31 Dec
2024
as of 31 Dec
2024
as of 31 Dec 2023
as of 31 Dec
2023
to the parent company
arising from the provided loan
 
1,110,191
-
506,395
-
arising from rebilling of costs
 
2
90
330
421
Companies controlled by end shareholders
 
arising from rebilling of costs
 
-
10
-
-
Total
1,110,193
100
506,725
421
 
 
image_3
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
in EUR thousand
Income
Expenses
Income
Expenses
as of 31 Dec
2024
as of 31 Dec
2024
as of 31 Dec 2023
as of 31 Dec
2023
to the parent company
arising from accrued interest on the loan
 
54,085
-
4,526
-
arising from rebilling of costs
 
1,939
-
-2
arising from the income from the sale of services
 
8
-
8
-
Companies controlled by end shareholders
arising from rebilling of costs
-
-10
-
-
Total
56,031
-10
4,534
-2
VIII.
We hereby confirm that we have included in this Report on
 
relations between related entities of EPH
 
Financing
International,
 
a.s., prepared pursuant
 
to Section 82
 
(1) of the Business
 
Corporations Act (Act
 
No. 90/2012 Coll.,
as amended), for the reporting period from 1 January 2024 to 31 December 2024, all information known at the
time of signing this report regarding:
◾
contracts between the related parties;
 
◾
performance and counter-performance provided to the related parties;
 
◾
other legal acts made in the interest of these entities; and
 
◾
all measures adopted or made in the interest or at the initiative of these parties.
 
image_4
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
V.
Report of the
 
Board of Directors
 
on the Company’s Business
 
Activities and Balance
of Assets
 
I.
Bodies of the Company worked in the following composition
Composition of the Board of Directors as of 31 December 2024:
 
●
Daniel Křetínský (Chairman of the Board of Directors)
●
Marek Spurný (member of the Board of Directors)
●
Pavel Horský (member of the Board of Directors)
Composition of the Supervisory Board as of 31 December 2024:
 
●
Petr Sekanina (member of the Supervisory Board)
II.
Business Activities and Balance of Assets
 
The Company
 
was formed on
 
6 September
 
2023 for the
 
purpose of issuing
 
securities –
 
bonds.
 
The first issue
took place on 13
 
November 2023 when the
 
maximum possible volume of
 
bonds amounting to EUR
 
500 million
due on 13 November 2028 with the ISIN code XS2716891440 was subscribed.
In 2024,
 
the Company
 
issued bonds
 
totalling EUR
 
600 million,
 
EUR 500
 
million due
 
on 30
 
November 2029
with the
 
ISIN code
 
XS2822505439 and an
 
additional EUR 100
 
million under
 
the conditions
 
of the
 
first bond
issue due on 13 November 2028 with the ISIN code XS2716891440.
 
Basic numerical data on financial management of the Company for 2024
 
In the period
 
from 1 January 2024
 
to 31 December
 
2024, the Company reported
 
a loss of
 
EUR 419 thousand,
primarily due to the recognition of an allowance amounting to EUR 630 thousand for the loans provided to the
parent company EPH
 
in accordance with
 
the applied IFRS
 
9 (described in
 
detail in Note
 
3 (c) to
 
the financial
statements). The final balance
 
of the allowance for
 
the loans was EUR
 
1,040 thousand as of
 
31 December 2024.
 
As of
 
31 December 2024,
 
the financial
 
position of the
 
Company in
 
terms of
 
the provision
 
of financing to
 
the
entities in the EPH Group is reflected
 
in the total assets of the
 
Company of EUR 1,113,935 thousand
 
of which
non-current
 
assets
 
amount
 
to
 
EUR
 
1,102,258
 
thousand.
 
Non-current
 
financial
 
instruments
 
include
 
a
 
loan
principal, the maturity of which is based on
 
the maturity of individual bond issues, refer
 
to Note 9 of the Notes.
Total
 
liabilities of the
 
Company in the amount
 
of EUR 1,109,825 thousand
 
primarily include issued bonds,
 
of
which non-current portion amounts to EUR 1,098,182 thousand.
 
In the reporting period, the Company reports a positive
 
equity of EUR 4,110 thousand thanks to the resolutions
of
 
the
 
Company’s
 
sole
 
shareholder on
 
the
 
payment
 
over
 
and
 
above the
 
share
 
capital
 
balance of
 
EUR
 
4,890
thousand in December 2023.
 
In the
 
reporting period,
 
no decision
 
was made
 
with a
 
significant impact
 
on the
 
Company or
 
its shareholders.
Decisions of the Company’s
 
bodies related to general duties
 
relating to the reported activities
 
of the Company
and fulfilment of
 
obligations determined
 
for these bodies
 
by applicable legal
 
regulation and Company’s Articles
of Association.
 
Concept of Company’s activities for 2025:
 
The Company intends to continue its primary activities,
 
which involve the issuance and management of bonds
and provision
 
of loans/borrowings
 
to the
 
entities in
 
the EPH
 
Group. This
 
also involves
 
the fact
 
that no
 
significant
changes are expected in the composition of the Company’s results, and these will be primarily impacted by the
image_5
Annual Financial Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
income from the interest on provided loans,
 
expenses relating to the issued bonds and
 
potential allowances for
provided loans recognised in accordance with IFRS.
Since the formation
 
of the Company
 
on 6 September
 
2023, there have
 
been no changes
 
in the composition
 
of
the Company bodies and no changes in the corporate details held
 
in the Register of Companies.
 
Annual Report of EPH Financing International,
 
a.s. for the year ended 31 December 2024
VI.
Separate Financial Statements as of 31 December 2024
EPH Financing International, a.s.
 
Separate Financial Statements
as of 31 December 2024
in accordance with the International Financial Reporting Standards
 
as adopted by the European Union
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
1
Table
 
of contents
Separate statement of comprehensive income ................................................................
 
................................................................
 
.
 
2
Separate statement of financial position ................................................................
 
................................................................
 
..........
 
3
Separate statement of changes in equity ................................................................................................
 
.......................................... 4
Separate statement of cash flows
 
................................................................
 
................................................................
 
.....................
 
5
Notes to the Financial Statements
 
................................................................
 
................................................................
 
....................
 
6
1.
 
General Information
 
................................................................
 
................................................................
 
.......................... 6
2.
 
Basis of preparation of the separate financial statements
 
................................................................
 
............................... 10
3.
 
Significant accounting policies ................................................................................................
 
....................................... 14
4.
 
Determination of fair value
 
................................................................
 
................................................................
 
.............
 
17
5.
 
Cash and cash equivalents ................................................................
 
................................................................
 
..............
 
18
6.
 
Trade receivables and other assets (including prepayments) ................................................................
 
.......................... 18
7.
 
Financial instruments and other financial assets
 
................................................................
 
............................................ 18
8.
 
Equity................................
 
................................................................
 
................................................................
 
..............
 
19
9.
 
Financial instruments and other financial liabilities................................
 
................................................................
 
........
 
20
10.
 
Trade payables and other payables ................................
 
................................................................
 
.................................
 
22
11.
 
Income taxation ................................................................
 
................................................................
 
.............................. 23
12.
 
Operating income and expenses
 
................................................................
 
................................................................
 
......
 
23
13.
 
Financial income and expenses, profit/loss from financial instruments
 
................................................................
 
..........
 
23
14.
 
Risk management and disclosure policies
 
................................................................
 
....................................................... 23
15.
 
Related parties ................................................................
 
................................................................
 
................................ 30
16.
 
Military operation in Ukraine ................................................................
 
................................................................
 
.........
 
31
17.
 
Other information ................................................................
 
................................................................
 
........................... 32
18.
 
Significant post balance sheet events
 
................................................................
 
.............................................................. 32
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
2
Separate Statement of Comprehensive Income
 
in EUR thousand
Note
For the year
ended
 
31 Dec 2024
For the period
from
 
6 Sept 2023 to
 
31 Dec 2023
Other operating income
12
1,997
8
Other operating expenses (Services)
12
(1,958)
-6
Subtotal
39
2
Financial income amortised by the effective interest rate
13
54,139
4,547
Financial expenses
13
(53,911)
(4,581)
Change in allowance for financial instruments
 
13
(630)
(410)
Operating profit (loss)
(363)
(442)
Profit/(loss) before tax
(363)
(442)
Income tax expense
11
(56)
(1)
Profit/(loss) for the period
(419)
(443)
Total comprehensive
 
income or loss for the reporting period
 
(419)
(443)
Total comprehensive
 
income or loss attributable to:
Owners of the controlling entity:
Profit/(loss) for the reporting period from continuing operations
 
(419)
(443)
Total comprehensive
 
income or loss for the reporting period
 
(419)
(443)
Basic and diluted earnings per share from continuing operations in
 
EUR
(41,900)
(44,300)
Total basic and diluted earnings per share
(41,900)
(44,300)
The notes presented on pages 6 to 32 form an integral
 
part of these financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
3
Separate statement of financial position
 
in EUR thousand
Note
as of 31 Dec 2024
as of 31 Dec 2023
Assets
Financial instruments and other financial assets
 
7
1,102,258
501,931
of which to the parent company
 
1,102,258
501,931
Total non-current
 
assets
1 102 258
501,931
Trade receivables and other assets
 
6
2
354
of which to the parent company
 
2
330
Financial instruments and other financial assets
 
7
7,933
4,464
of which to the parent company
 
7,933
4,464
Prepayments and other deferred payments
 
6
Cash and cash equivalents
5
3,742
347
Total current assets
11,677
5,165
Total assets
1,113,935
507,096
Equity
 
Share capital
8
82
82
Other capital funds
8
4,890
4,890
Retained earnings and comprehensive income or loss for the period
 
-862
-443
Total equity
4,110
4,529
Payables
Financial instruments and other financial liabilities
 
9
1,098,182
497,484
Total non-current
 
liabilities
1,098,182
497,484
Trade payables and other payables
 
10
3,654
618
Financial instruments and other financial liabilities
 
9
7,933
4,464
Tax payable arising from tax payable
 
11
56
1
Total current
 
payables
11,643
5,083
Total liabilities
1,109,825
502,567
Total equity and liabilities
1,113,935
507,096
The notes presented on pages 6 to 32 form
 
an integral part of these financial statements.
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
4
Separate statement of changes in equity
 
in EUR thousand
Share
capital
Other capital
funds
Retained earnings
and comprehensive
income or loss for
the period
Total equity
Balance at 31 Dec 2023
82
 
4,890
(443)
 
4,529
Contributions from owners
-
-
Total comprehensive
 
income or loss for the reporting
period
 
(Profit or (loss)
-
-
(419)
(419)
Balance at 31 Dec 2024
82
4,890
(862)
4,110
The equity of EUR 4,110 thousand is attributable to owners of the controlling entity.
 
The notes presented on pages 6 to 32 form an integral
 
part of these financial statements.
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
5
Separate cash flow statement
 
in EUR thousand
For the period
For the period
Note
 
from 1 Jan 2024
to 31.12.2024
 
from 6 Sept 2023
to 31 Dec 2023
OPERATING ACTIVITIES
Profit/(loss) for the reporting period before tax
 
(419)
(443)
Income tax on ordinary activities
11
56
1
Change in allowances
13
630
410
Net interest income
13
(259)
(4)
Operating profit/(loss) before changes in working capital
 
8
(36)
Change in trade receivables and other assets
 
268
(90)
Change in trade payables and other payables
 
(495)
93
Cash generated from (used in) operating activities
Income from the issue of bonds
 
600,229
500,000
Interest paid on bonds
(55,773)
-
Paid transaction fees
 
(1,989)
(1,988)
Loan provided to the parent company
(600,229)
(504,855)
Interest received from bonds
 
59,303
Transaction fees received
 
2,074
2,250
Income tax paid on ordinary activities
(1)
-
Cash flows generated from (used in) operating activities
3,395
(4,626)
FINANCING ACTIVITIES
Cash investment in equity
 
-
4,890
Cash flows from (used in) financing activities
-
4,890
Net increase (decrease) in cash and
 
cash equivalents
 
3,395
264
Cash and cash equivalents at the beginning of the year
347
83
Cash and cash equivalents at the end of the year
3,742
347
The notes presented on pages 6 to 32 form an integral
 
part of these financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
image_p36i0
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
6
Notes to the Separate Financial Statements
1.
General Information
EPH Financing
 
International,
 
a.s. (the
 
“Company” or
 
the “Issuer”)
 
was formed
 
on 6
 
September 2023
 
by
being
 
recorded
 
in
 
the
 
Register
 
of
 
Companies,
 
File
 
B
 
28346,
 
held
 
by
 
the
 
Municipal
 
Court
 
in
 
Prague,
corporate ID: 196 78 185, LEI code: 3157003E5A4ZV0JCSM65.
The Company’s
 
principal activities
 
include the
 
issuance and
 
management of
 
bonds and
 
the provision
 
of
loans/borrowings to entities in the EPH Group.
 
The financial
 
statements of
 
the Company
 
were prepared
 
for the
 
period from
 
1 January
 
2024 to
 
31 December
2024. The comparative period
 
is the period from
 
the formation of the
 
Company on 6 September
 
2023 to 31
December 2023 (“2023”).
 
The annual report will be
 
published in electronic form
 
on the website of the
 
Company:
Investors
 
section,
 
EPH
 
Financing
 
International
 
section.
 
The
 
data
 
in
 
the
 
financial
 
statements
 
have
 
been
reviewed by an auditor.
Company’s
 
registered office
Pařížská 130/26,
 
Josefov, 110 00 Prague 1
Czech Republic
 
Principal activities:
-
Management of own assets
The
 
Company
 
was
 
established
 
for
 
the
 
purpose
 
of
 
issuing
 
securities
 
–
 
bonds
 
with
 
fixed
 
interest
 
yield
pursuant
 
to
 
a
 
bond
 
programme
 
(the
 
“Programme”)
 
up
 
to
 
the
 
expected
 
total
 
nominal
 
value
 
of
 
EUR
 
3 billion. The
 
first issue of
 
the bonds pursuant
 
to the Programme
 
was accepted
 
for trading on
 
the Euronext
Dublin regulated market
 
in Ireland in
 
the amount of
 
EUR 500 million.
 
The trading was
 
initiated on the
issue date of 6 November 2023. The code of the bonds is ISIN XS2716891440.
The issuer and the bonds were allocated no rating.
 
Statutory body of the Company as of 31 December 2024
Composition of the Board of Directors:
 
●
Daniel Křetínský (Chairman of the Board of Directors)
●
Marek Spurný (member of the Board of Directors)
●
Pavel Horský (member of the Board of Directors)
Composition of the Supervisory Board:
 
●
Petr Sekanina (member of the Supervisory Board)
There are no conflicts of interest in members of the management and supervisory
 
bodies.
Organisational structure:
The sole shareholder of the Company as of 31 December 2024 is:
Interest in share capital
Voting rights
in EUR thousand
%
%
Energetický a průmyslový holding, a.s.
82
100
100
Total
82
100
100
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
7
Shareholders of Energetický
 
a průmyslový
 
holding, a.s. as of 31 December 2024
 
are
:
Interest in share capital
Voting rights
%
%
EP Group, a.s.
56 plus 1 share
56 plus 1 share
J&T Energy Holding, a.s.
44 less 1 share
44 less 1 share
Total
100
100
Information on the
 
number of shares
 
or similar securities
 
constituting an interest
 
in the Issuer
 
that are
owned by entities with the management authority over the Issuer, on options and comparable investment
instruments the
 
value of
 
which relates
 
to the
 
shares
 
or similar
 
securities constituting an
 
interest
 
in the
Issuer as of 31 December 2024:
 
Shares or similar securities
 
Options and
comparable investment
instruments
 
pieces
pieces
Members of the statutory body
0
0
Members of the Supervisory Board
0
0
Total
0
0
The Company
 
is included
 
in the
 
consolidation group
 
of the
 
EPH Group.
 
The Company
 
has no
 
investments
in
 
subsidiaries,
 
associates
 
and
 
joint
 
ventures
 
and
 
therefore
 
does
 
not
 
prepare
 
consolidated
 
financial
statements. The consolidated financial statements of the broadest group of entities for 2024
 
are prepared
by
 
EP
 
Investment
 
S.
 
à
 
r.l.,
 
having
 
its
 
registered
 
office
 
at
 
Place
 
de
 
Paris
 
2,
 
2314
 
Grand
 
Duchy
 
of
Luxembourg. This company is the ultimate parent company of the Company’s sole shareholder.
 
The
 
sole
 
shareholder,
 
Energetický
 
a
 
průmyslový
 
holding,
 
a.s.
 
(hereinafter
 
"EPH"),
 
is
 
the
 
joint-stock
company,
 
with its
 
registered office
 
at Pařížská 130/26,
 
Josefov,
 
110
 
00 Prague
 
1, Czech
 
Republic. The
principal activities of EPH include corporate
 
investment in infrastructure and power
 
industry. In addition
to the two main activities, the Group is
 
engaged in business in a number of other areas,
 
such as logistics
and trade brokering.
The ultimate majority owner of EP Group, a.s. and EP Investment S. à r.l. is Daniel Křetínský, chairman
of
 
the
 
Board
 
of
 
Directors
 
of
 
Energetický
 
a
 
průmyslový
 
holding,
 
a.s.
 
and
 
chairman
 
of
 
the
 
Board
 
of
Directors of the Issuer.
 
The control of the
 
Issuer by indirectly controlling entities
 
is based on the
 
voting
share
 
which
 
corresponds
 
to
 
the
 
share
 
in
 
the
 
Company's
 
share
 
capital.
 
Indirectly
 
controlling
 
entities
exercise supervision over the Company's management through their participation in
 
the general meeting
of the
 
parent company Energetický
 
a průmyslový holding,
 
a.s. Measures taken
 
to ensure that
 
control is
not abused are
 
based on generally
 
applicable legal regulations.
 
The Company has
 
not taken any
 
special
step in addition to the generally applicable legal regulations.
The
 
Company
 
is
 
directly
 
owned
 
and
 
controlled
 
by
 
EPH
 
as
 
part
 
of
 
the
 
EPH
 
Group
 
(parent
 
company
Energetický a průmyslový
 
holding, a.s. is
 
the consolidating entity
 
which prepares
 
the consolidated annual
report in Czech
 
which includes the
 
consolidated financial statements under
 
IFRS that will
 
be published
in
 
the Register
 
of
 
Companies). EPH
 
provided a
 
financial guarantee
 
for the
 
debts from
 
the
 
Company’s
bonds under English law.
 
EPH
 
Financing
 
International,
 
a.s.
 
is
 
financially
 
dependent
 
on
 
the
 
parent
 
company
 
EPH
 
as
 
all
 
of
 
its
revenues are linked to the parent company.
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
8
The Issuer exists solely for the purpose
 
of bonds issue and its principal
 
activities include the provision of
loans/borrowings to entities in the EPH Group. The
 
sole source of Issuer’s income will be repayments of
loans/borrowings from entities in the EPH Group. The Issuer uses the income from the bonds to provide
financing to
 
the entities
 
in the
 
EPH Group.
 
The Issuer’s
 
financial and
 
economic situation,
 
its business
activities, position on the market and ability to repay debts arising from the bonds depends on the ability
of its
 
debtors to
 
repay their
 
debts to
 
the Issuer
 
in a
 
due and
 
timely manner.
 
If any
 
debtor is
 
not able
 
to
repay its debts
 
to the Issuer
 
in a due
 
and timely manner,
 
it may have
 
a negative impact
 
on the financial
and economic situation of the Issuer, its business activities and the ability of
 
the Issuer to repay the debts
arising from the bonds.
 
The Company is not aware of any grounds that such dependence of the EHP
 
Group has been abused.
The Issuer engages in no investing activities.
 
Basic numerical data on the
 
Company’s financial management for the
 
period from 1 January 2024
to 31 December 2024 and comparison with the corresponding period from 6 September 2023 to 31
December 2023
As of 31 December
 
2024, the Company
 
reported a loss
 
of EUR 419 thousand
 
(2023: EUR 443
 
thousand),
primarily due to a recognition
 
of an allowance amounting to EUR
 
630 thousand for the loans provided
 
to
the parent company EPH in accordance
 
with the applied IFRS 9 (described
 
in detail in Note 3
 
(c) to the
financial statements). The final balance of the allowance for the loans amounted to EUR 1,040 thousand
as of 31 December 2024
 
(2023: EUR 410 thousand).
 
As of
 
31 December
 
2024, the
 
financial position
 
of the
 
Company in
 
terms of
 
provision of
 
financing to
entities in the EPH
 
Group is reflected in
 
the total assets of
 
EUR 1,113,935 thousand (2023: EUR
 
507,096
thousand)
 
of
 
which
 
non-current
 
assets
 
amount
 
to
 
EUR
 
1,102,258
 
(2023:
 
EUR
 
501,931
 
thousand).
 
Non-current financial instruments and
 
other financial assets represent the
 
long-term portion of the
 
loan;
its maturity depends on
 
the bonds’ principal maturity
 
by individual issues, refer
 
to note 9. Total liabilities
of the
 
Company amounting to
 
EUR 1,109,825 thousand
 
(2023: EUR 502,567
 
thousand) predominantly
include
 
issued
 
bonds
 
with
 
the
 
long-term
 
portion
 
of
 
EUR
 
1,098,182
 
thousand
 
(2023:
 
EUR
 
497,484
thousand).
 
The increase
 
in non-current assets
 
and liabilities of
 
the Company
 
was due to
 
a successful
 
placement of
the
 
first
 
issue
 
of
 
bonds
 
in
 
November
 
2023,
 
when
 
the
 
nominal
 
value
 
of
 
the
 
issue
 
was
 
EUR
 
500,000
thousand, and a subsequent
 
provision of the gained funds
 
to the parent company under
 
a loan contract. In
May
 
2024,
 
the
 
Company
 
placed
 
the
 
second
 
tranche
 
of
 
bonds
 
of
 
EUR
 
100,000
 
thousand
 
under
 
the
conditions of the first issue
 
of November 2023. The obtained
 
funds were provided to the parent
 
company
in the form of a loan.
 
The above increase is also reflected
 
in interest expense which amounted to
 
EUR 53,828 thousand (as of
31 December
 
2023: interest
 
expense amounts
 
to EUR
 
4,523 thousand)
 
and interest
 
income of
 
EUR 54,058
thousand (as of 31 December 2023: interest income amounts to EUR
 
4,526 thousand).
 
As
 
of
 
31
 
December
 
2024,
 
the
 
Company
 
reported
 
positive
 
equity
 
of
 
EUR
 
4,110
 
thousand
 
(as
 
of
 
31 December 2023: EUR 4,529 thousand) after recognising the loss for the reporting period of EUR 419
thousand).
 
No
 
decision
 
having
 
a
 
crucial
 
impact
 
on
 
the
 
Company,
 
or
 
its
 
shareholders,
 
was
 
taken
 
in
 
the
 
reporting
period. Decisions of the Company's bodies concerned current
 
course of business relating to the reported
activities of the Company and performance of obligations
 
imposed upon those bodies by applicable laws
and the Company's Articles of Association.
Significant legal proceedings
The
 
Company
 
is
 
not
 
and
 
has
 
not
 
been
 
a
 
part
 
to
 
any
 
legal
 
dispute
 
or
 
state,
 
adjudication
 
or
 
arbitration
proceedings,
 
and
 
the
 
Board
 
of
 
Directors
 
does
 
not
 
anticipate
 
participation
 
in
 
legal
 
disputes,
 
state,
adjudication or arbitration proceedings in the foreseeable future.
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
9
Significant contracts
To the knowledge of the Company, there are no significant contracts, other than contracts entered into in
the ordinary
 
course of
 
the business
 
of the
 
Company,
 
that could
 
give rise
 
to a
 
liability or
 
claim on
 
any
member of the EPH Group
 
that would be material to
 
the ability of the Company
 
to meet its obligations
 
to
bondholders.
Ownership interests that establish a controlling influence of the Company
The Company has no ownership interests.
Information on the Anticipated Financial Situation in 2025
 
The Company
 
plans to
 
continue its
 
primary activities,
 
i.e. the
 
issuance and
 
management of
 
bonds and
provision
 
of
 
loans/borrowings
 
to
 
entities
 
in
 
the
 
EPH
 
Group.
 
This
 
involves
 
the
 
fact
 
that
 
it
 
expects
 
no
significant changes in the results of the Company, and these will be primarily impacted by the income in
the
 
form
 
of
 
interest
 
on
 
provided
 
loans,
 
expenses
 
relating
 
to
 
issued
 
bonds
 
and
 
potential
 
allowances
 
to
provided loans recognised in line with the IFRS Accounting Standards.
 
The Company is exposed
 
to a number of risks
 
relating to business activities
 
on European markets such
 
as
commodity risks, currency and interest rate risks, risks relating
 
to regulation and new legislation.
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
10
2.
Basis of Preparation of the Separate Financial Statements
 
(a)
Statement of compliance
The financial
 
statements have
 
been prepared
 
in accordance
 
with International
 
Accounting Standards
 
(IAS)
and International
 
Financial Reporting
 
Standards (“IFRS®
 
Accounting Standards”)
 
issued by
 
International
Accounting Standards Board (IASB) as adopted by the European
 
Union.
These financial statements are unconsolidated.
(b)
Basis of measurement
The financial statements have been prepared on a going-concern
 
basis using the historical cost method.
The
 
accounting
 
policies
 
described
 
in
 
the
 
following
 
paragraphs
 
are
 
consistently
 
applied
 
in
 
individual
reporting periods.
(c)
Functional currency and presentation currency
 
The
 
functional
 
and
 
presentation
 
currency
 
of
 
the
 
Company
 
is
 
euro
 
(“EUR”).
 
All
 
financial
 
information
presented in EUR is rounded to the nearest thousand, unless stated otherwise.
(d)
Use of estimates and judgements
The preparation of financial
 
statements in accordance with IFRS
 
Accounting Standards requires the use
of
 
certain
 
critical
 
accounting
 
estimates
 
that
 
affect
 
the
 
reported
 
items
 
of
 
assets,
 
liabilities,
 
income
 
and
expenses. It also
 
requires management to exercise
 
judgement in the process
 
of applying the Company’s
accounting policies.
 
The resulting
 
accounting estimates
 
will, by
 
definition, seldom
 
equal the
 
related actual
results.
i.
Assumption and estimate uncertainties
 
Information
 
about
 
assumptions
 
and
 
estimate
 
uncertainties
 
that
 
have
 
a
 
significant
 
risk
 
resulting
 
in
 
a material adjustment in the following years is included in the following
 
notes:
●
Note 7 – Financial instruments and other financial assets;
●
Note 9 – Financial instruments and other financial liabilities.
Measurement of fair value
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
The Company has an established control framework with respect
 
to the measurement of fair values. This
includes
 
a
 
valuation
 
team
 
that
 
has
 
overall
 
responsibility
 
for
 
overseeing
 
all
 
significant
 
fair
 
value
measurements.
The valuation
 
team regularly
 
reviews significant
 
unobservable input
 
data and
 
valuation adjustments.
 
If
third party information, such as broker quotes or
 
pricing services, is used to measure fair
 
values, then the
valuation team assesses the
 
evidence obtained from the
 
third parties to
 
support the conclusion that
 
such
valuations meet the
 
requirements of IFRS,
 
including the level
 
in the fair
 
value hierarchy in
 
which such
valuation should be classified.
When measuring the fair value of
 
an asset or a liability, the Company uses market data as
 
far as possible.
Fair values are
 
categorised into different
 
levels in a
 
fair value hierarchy based
 
on the input
 
data used in
the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets
 
or liabilities.
Level
 
2: input
 
data that
 
does not
 
include quoted
 
level 1
 
prices that
 
can be
 
determined for
 
the asset
 
or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: input
 
data for a
 
given asset or
 
liability that cannot
 
be identified
 
in the market
 
(unobservable input
data).
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
11
If the input data used to measure the
 
fair value of an asset or a liability
 
might be categorised in different
level of the fair value hierarchy, then the fair value measurement is
 
categorised in its entirety in the same
level of the fair value hierarchy as the lowest level input that is significant
 
to the entire measurement.
The Company recognises transfers
 
between levels of the
 
fair value hierarchy at
 
the end of
 
the reporting
period during which the change has occurred.
(e)
Reporting by segments
 
All revenues were generated in the
 
territory of the Czech Republic and the
 
Company does not divide its
activities into
 
various operational
 
segments. Most
 
of the
 
revenues are
 
of financial
 
nature and
 
are described
in
 
detail
 
in
 
Note
 
12
 
–
 
Incomes
 
and
 
services,
 
and
 
in
 
Note
 
13
 
–
 
Financial
 
income
 
and
 
expenses,
 
gains
(losses) from financial instruments.
(f)
Most recent accounting standards
i.
Newly
 
adopted
 
IFRS
 
accounting
 
standards
 
and
 
amendments
 
to
 
standards
 
and
 
interpretations
effective for
 
the period ended
 
31 December 2024
 
that have
 
been applied in
 
the preparation of
 
the
Company’s financial statements
Amendment
 
to
 
IAS
 
1
 
Presentation
 
of
 
Financial
 
Statements
 
–
 
Classification
 
of
 
Liabilities
 
as
Current
 
or
 
Non-Current
 
and
 
Non-Current
 
Liabilities
 
with
 
Covenants
 
(effective
 
for
 
annual
periods beginning
 
on or after 1 January
 
2024)
 
The
 
amendment
 
‘Classification
 
of
 
Liabilities
 
as
 
Current
 
or
 
Non-Current’
 
clarifies
 
the
 
classification
 
of
 
debts
 
and
 
other
 
liabilities
 
as
 
current
 
or
 
non-current
 
and
 
defines
 
how
 
to
 
determine
 
whether
 
debts
 
and other liabilities in the statement of financial position with
 
an uncertain settlement date are classified
as current (due or repayable within one year) or non-current. The amendment specifies the classification
requirements
 
for
 
debt
 
instruments
 
that
 
the Company
 
can
 
settle
 
by
 
capitalisation.
 
The
 
amendment
 
‘Non-Current Liabilities
 
with Covenants’
 
clarifies the
 
information an
 
entity provides
 
when its
 
right to
defer settlement of a liability for at least twelve months is subject to
 
covenants.
The amendments
 
to IAS
 
1 issued in
 
January 2020
 
have an
 
impact only
 
on the
 
presentation of
 
the liabilities
as current or non-current
 
in the statement on
 
financial position, they
 
do not have an
 
impact on the amount
or timing
 
of reporting
 
of any
 
assets, liabilities,
 
income or
 
expenses or
 
on the
 
information disclosed
 
relating
to these items.
 
Details are discussed in Note 7. Financial instruments and other financial assets and in Note 9. Financial
instruments and other financial liabilities.
 
Newly adopted IFRS
 
accounting standards, amendments to standards and
 
interpretations that
do not have a material
 
impact on the Company’s
 
financial statements:
●
Amendments to IFRS 16 – Lease Liabilities in a Sale and Leaseback;
●
Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements
ii.
IFRS accounting standards not yet effective
As
 
of
 
the
 
date
 
of
 
approval
 
of
 
these
 
consolidated
 
financial
 
statements,
 
the
 
following
 
significant
amendments to
 
IFRS Accounting
 
Standards and
 
interpretations were
 
issued, however,
 
they have
 
not
yet been effective for the period ended 31 December 2024:
Amendments to
 
IAS 21
 
- Lack
 
of Exchangeability
 
(effective for
 
annual periods beginning
 
on or
after 1 January 2025)
The
 
amendments
 
require
 
entities
 
to
 
apply
 
a
 
consistent
 
approach
 
in
 
assessing
 
whether
 
a
 
currency
 
is
convertible into another currency. If the currency is not convertible, the amendment specifies a method
for estimating the exchange rate and defines disclosure requirements.
Given
 
the
 
nature
 
of
 
the
 
Company’s
 
principal
 
activities,
 
this
 
standard
 
will
 
have
 
no
 
impact
 
on
 
the
Company’s financial statements.
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
12
IFRS
 
18
 
–
 
Presentation
 
and
 
Disclosures
 
in
 
Financial
 
Statements
 
(effective
 
for
 
annual
 
periods
beginning on or after 1 January 2027 (not yet adopted by the EU)
IFRS 18 Presentation and
 
Disclosures in Financial
 
Statements applies to
 
all financial statements prepared
and presented
 
in line
 
with IFRS
 
and will
 
replace standard
 
IAS 1
 
Presentation of
 
Financial Statements.
The new standard
 
introduces three sets
 
of new requirements
 
to improve companies’
 
reporting of financial
performance and give investors a better basis for analysing and comparing
 
companies.
 
(a)
Category for the classification of income and expenses in the statement of
 
profit and loss
 
Entities must
 
classify income
 
and expense
 
items in
 
profit or
 
loss into
 
one of
 
the following
 
categories:
operating,
 
financing,
 
income
 
tax,
 
discontinued
 
operations.
 
Amendments
 
to
 
the
 
requirements
 
for
classification
 
are
 
allowed
 
to
 
entities
 
with
 
specific business
 
activities
 
(banks, investment
 
units,
 
entities
investing in
 
real estate). The
 
standard additionally requires
 
a disclosure of
 
subtotals in the
 
statement of
profit and loss.
 
(b)
Management-defined performance measures “MPMs”)
MPMs are defined as subtotals of income and expenses that the Company uses in public communication
with
 
users
 
of
 
financial
 
statements.
 
They
 
communicate
 
the
 
perspective
 
of
 
the
 
management
 
on
 
certain
aspect of financial performance and amend totals
 
or subtotals required by IFRS 18.
 
Entities disclose the
information on
 
their MPMs
 
in a standalone
 
note and the
 
standard specifies
 
the requirements
 
for disclosure
to every indicator.
 
(c)
Aggregation and disaggregation of the information
 
The standard
 
introduces procedures
 
focusing on
 
the aggregation
 
and disaggregation
 
of the
 
information
and presentation of the information in primary financial statements or
 
in the notes.
 
IFRS 18
 
additionally contains
 
amendments to
 
other IFRSs,
 
among others
 
to
 
IAS 7
 
Statement of
 
Cash
Flows that
 
remove alternatives
 
for the
 
presentation of
 
interest and
 
dividends and
 
use
 
a subtotal
 
of
 
the
operating profit
 
as the
 
only possible
 
starting point
 
in the
 
indirect method
 
of presentation
 
of cash
 
flows
from operating activities.
 
The
 
Company
 
is
 
currently
 
assessing
 
the
 
impact
 
of
 
the
 
new
 
standard
 
on
 
the
 
financial
 
statements
 
and
disclosures.
IFRS
 
19
 
–
 
Subsidiaries
 
without
 
Public
 
Accountability:
 
Disclosure
 
(effective
 
for
 
annual
 
periods
beginning on or after 1 January 2027 (not yet adopted by the EU))
The standard specifies requirements for disclosure that an entity may use instead of the requirements for
the disclosure listed in
 
other IFRS accounting
 
standards. It applies to
 
entities that are subsidiaries
 
without
public accountability, if their
 
parent prepares consolidated
 
financial statements
 
in line
 
with IFRS.
 
Eligible
entities may, but,
 
do not
 
have to,
 
apply IFRS
 
19 in
 
their financial
 
statements and
 
provide a
 
reduced version
of the requirements for disclosure stated in other IFRS accounting standards.
 
As the Company is not
 
classified as a subsidiary without
 
public accountability, this standard will have
 
no
impact on the Company’s financial statements.
 
Amendments
 
to
 
IFRS
 
9
 
and
 
IFRS
 
7
 
–
 
Amendments
 
to
 
the
 
Classification
 
and
 
Measurement
 
of
Financial Instruments (effective for
 
annual periods beginning on
 
or after 1 January
 
2026 (not yet
adopted by the EU))
The amendment
 
specifies requirements for
 
derecognition of
 
financial liabilities
 
that are
 
settled through
an electronic
 
delivery,
 
for an
 
assessment of
 
contractual cash
 
flows of
 
financial assets,
 
including assets
with ESG features. Additionally, it defines certain requirements
 
for disclosures relating to investments
 
in
equity instruments
 
at fair
 
value in
 
other comprehensive
 
income or
 
loss and
 
financial instruments
 
with
contingent features that do not relate directly to changes in underlying
 
loan risks and costs.
 
The Company is currently assessing the impact of the amendments
 
on the financial statements.
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
13
Annual Improvements
 
to IFRS
 
Accounting Standards
 
– Volume
 
11
 
(effective for
 
annual periods
beginning on or after 1 January 2026 (not yet adopted by the EU))
The annual
 
improvements cover
 
the following
 
standards: IFRS
 
1 First
 
Adoption of
 
International Financial
Reporting
 
Standards
 
(hedge
 
accounting
 
by
 
a
 
first-time
 
adopter),
 
IFRS
 
7
 
Financial
 
instruments:
Disclosures (clarification
 
of certain
 
paragraphs relating
 
to the profit
 
or loss
 
from derecognition,
 
disclosure
of
 
information
 
on
 
credit
 
risk
 
and
 
disclosure
 
of
 
the
 
deferred
 
difference
 
between
 
the
 
fair
 
value
 
and
transaction
 
price),
 
IFRS
 
9
 
Financial
 
Instruments
 
(alignment
 
of
 
requirements
 
of
 
IFRS
 
9
 
for
 
lessee
derecognition of
 
lease liability
 
and removal
 
of unclear
 
reference to
 
transaction price
 
in line
 
with IFRS
15),
 
IFRS
 
10
 
Consolidated Financial
 
Statements (clarification
 
in
 
determining
 
a
 
“de
 
facto
 
agent“)
 
and
 
IAS 7 Cash Flow Statement (
).
 
The Company is currently assessing the impact of the amendments
 
on the financial statements.
Amendments
 
to
 
IFRS
 
9
 
and
 
IFRS
 
7
 
–
 
Contracts
 
Referencing
 
Nature-dependent
 
Electricity
(effective for annual periods beginning on or after 1 January 2026 (not
 
yet adopted by the EU))
The amendment
 
defines requirements
 
in contracts
 
for own
 
use
 
under IFRS
 
9 to
 
include the
 
factors an
entity
 
is
 
required
 
to
 
consider
 
when
 
applying
 
the
 
requirement
 
to
 
contracts to
 
buy
 
and
 
take
 
delivery
 
of
renewable electricity for which the source of electricity production is nature-dependent. The amendment
additionally
 
defines
 
requirements
 
for
 
hedge
 
accounting
 
to
 
allow
 
the
 
use
 
of
 
the
 
contract
 
for
 
nature-
dependent
 
electricity
 
as
 
a
 
hedging
 
instrument.
 
Amendments
 
to
 
IFRS
 
7
 
relate
 
to
 
requirements
 
for
disclosure of contracts for nature-dependent electricity.
 
Given
 
the
 
nature
 
of
 
the
 
Company’s
 
principal
 
activities,
 
this
 
standard
 
will
 
have
 
no
 
impact
 
on
 
the
Company’s financial statements.
 
The
 
Company
 
has
 
not
 
early
 
adopted
 
any
 
IFRS
 
amendments
 
where
 
adoption
 
was
 
not
 
mandatory
 
at
the reporting
 
date.
 
If transition
 
provisions in
 
an adopted
 
IFRS give
 
an entity
 
the choice
 
of
 
whether to
apply
 
new
 
standards
 
prospectively
 
or
 
retrospectively,
 
the
 
Company
 
elects
 
to
 
apply
 
the
 
Standards
prospectively from the date of transition.
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
14
3.
Significant Accounting Policies
(a)
Cash and cash equivalents
Cash and
 
cash equivalents
 
comprise cash
 
balances on
 
hand and
 
in banks,
 
and short-term
 
highly liquid
investments with original maturities of three months or less.
(b)
Non-derivative financial assets
The fair
 
value of
 
financial assets
 
at fair
 
value through
 
profit or
 
loss, debt
 
and asset
 
instruments at
 
fair
value through other comprehensive
 
income and financial
 
assets at amortised cost
 
is based on their
 
quoted
market price as of the balance sheet date, without deducting transaction costs. If the quoted market price
is not available, the fair value of a specific instrument is estimated by the
 
Company’s management using
price models or techniques based on discounted cash flows.
 
When techniques applying discounted cash flows are
 
used, the estimated future cash flows are
 
based on
best possible
 
estimated made
 
by the
 
Company’s management;
 
the rate
 
determined in
 
relation to
 
the market
as of
 
the balance
 
sheet date
 
for an
 
instrument with
 
similar conditions
 
is used
 
as discount
 
rate. If
 
price
models are used, input data for the model are based on market rate
 
as of the balance sheet date.
 
The fair value of
 
trade receivables and other
 
receivables is estimated as the
 
present value of future
 
cash
flows, discounted using the market interest rate as of the balance
 
sheet date.
 
The fair value of trade receivables, other receivables and financial assets at amortised cost is determined
only for disclosure purposes.
 
(c)
Impairment
i.
Financial assets (including trade receivables and other receivables
 
and contract assets)
The
 
Company
 
measures
 
allowances
 
using
 
expected
 
credit
 
loss
 
(“ECL”)
 
model
 
for
 
financial
 
assets
 
at
amortised cost, debt instruments at
 
FVOCI and contract assets. Allowances
 
are measured on either of the
following base:
•
twelve-month ECLs: ECLs that result from possible default events within the 12 months after
the reporting date;
•
lifetime
 
ECLs:
 
ECLs
 
that
 
result
 
from
 
all
 
possible
 
default
 
events
 
over
 
the
 
expected
 
life
 
of
 
a financial instrument.
The
 
Company measures
 
an
 
allowance at
 
an
 
amount equal
 
to
 
lifetime
 
ECLs
 
except
 
for
 
those
 
financial
assets for which credit risk has not increased significantly since initial recognition. For trade receivables
and contract assets, the
 
Company will quantify allowances
 
in the amount of
 
expected credit losses for
 
the
duration in the simplified regime.
The ECL model
 
is based on
 
the principle of
 
expected credit losses.
 
For the purposes
 
of designing
 
the ECL
model, the
 
portfolio of
 
financial assets
 
is split
 
into segments.
 
Financial assets
 
within each
 
segment are
allocated to three stages (Stage I
 
– III) or to a group of
 
financial assets that are impaired at
 
the date of the
first recognition of purchased or
 
originated credit-impaired financial assets ("POCI"). At
 
the date of the
initial recognition, the
 
financial asset is
 
included in Stage
 
I or POCI.
 
Subsequent to initial
 
recognition, the
financial
 
asset
 
is
 
allocated
 
to
 
Stage
 
II
 
if
 
there
 
was
 
a
 
significant
 
increase
 
in
 
credit
 
risk
 
since
 
initial
recognition or to Stage III if the asset has been credit impaired.
The Company assumes that the credit risk on a financial asset has increased
 
significantly if:
(a)
a financial asset or its
 
significant portion is overdue
 
for more than 30
 
days (if a financial
 
asset or
its significant portion is
 
overdue for more
 
than 30 days and
 
less than 90 days,
 
and the delay does
not indicate an increase
 
in counterparty credit risk,
 
the individual approach shall
 
be used and the
financial asset shall be classified in Stage I); or
(b)
the Company negotiates with
 
the debtor about debt’s
 
restructuring (at the request
 
of the debtor
or the Company) or;
(c)
the probability of default (PD) of the debtor increases by 20%; or
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
15
(d)
other material
 
events occur
 
which require
 
individual assessment
 
(e.g. development
 
of an
 
external
rating of the main credit risks).
At each balance sheet date, the
 
Company assesses whether financial assets carried at amortised cost and
investments to
 
equity instrument
 
are credit
 
impaired. A
 
financial asset
 
is
 
credit impaired
 
when one
 
or
more events that have a detrimental impact on the estimated future cash flows of the financial asset have
occurred. The Company considers financial asset to be credit-impaired
 
if:
(a)
a financial asset or its significant part is overdue for more
 
than 90 days; or
(b)
legal action has been
 
taken in relation to
 
the debtor which outcome
 
or the actual process
 
may have
an impact on the debtor’s ability to repay the debt; or
(c)
insolvency proceedings
 
or similar
 
proceedings under
 
the foreign
 
legislation have
 
been initiated
 
in
respect
 
of
 
the
 
debtor,
 
which
 
may
 
lead
 
to
 
a
 
declaration
 
of
 
bankruptcy
 
and
 
the
 
application
 
for
 
the
opening
 
of
 
this
 
proceeding
 
has
 
not
 
been
 
refused
 
or
 
rejected
 
or
 
the
 
proceedings
 
have
 
not
 
been
discontinued within 30 days of initiation ((b) and (c) are considered as
 
"Default event"); or
(d)
the probability of default of the debtor increases by 100% compared
 
to the previous rating; or
(e)
other material
 
events occur
 
which require
 
individual assessment
 
(e.g. development
 
of external
 
ratings
of the main credit risks).
For the purposes of ECL calculation,
 
the Company uses components needed for
 
the calculation, namely
probability of
 
default ("PD"),
 
loss given
 
default ("LGD")
 
and exposure
 
at default
 
("EAD"). In
 
case of
short-
 
term
 
loans,
 
the
 
"maturity
 
adjustment"
 
is
 
also
 
included
 
in
 
the
 
calculation.
 
Forward-looking
information means any macroeconomic factor projected for future, which has
 
a significant impact on the
development of credit losses.
 
ECLs are present values
 
of probability-weighted estimate of
 
credit losses.
The Group
 
considers mainly
 
expected growth
 
of gross
 
domestic product,
 
reference interest rates,
 
stock
exchange indices or unemployment rates.
Recognition of allowances
Allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets
 
and the annual
 
change is recognised
 
in the income
 
statement. For debt
 
securities valued at
FVOCI, the provision is recognized in other comprehensive income ("OCI").
(d)
Non-derivative financial liabilities
The Company has the following liabilities that are not derivatives ("non-derivative financial
 
liabilities"):
 
issues of debt securities,
 
trade payables
 
and other liabilities.
 
These financial liabilities
 
are first recognised
as of
 
their settlement
 
date at
 
their fair
 
value increased
 
by all
 
relevant directly
 
related transaction
 
costs,
with the exception
 
of financial liabilities at
 
fair value recognized in
 
profit or loss, where
 
the transaction
costs are recognized in profit or loss as incurred. Thereafter, financial liabilities are valued by amortized
acquisition cost with the use of the effective interest rate, with the exception
 
of financial liabilities at fair
value recognized in profit or loss. Methods of making fair value estimates are described in Note 4 of the
notes to the financial statements – Determination of fair value.
Following the
 
performance, cancellation
 
or expiration
 
of contractual
 
obligations, the
 
Company eliminates
the financial liability from its accounting.
(e)
Financial income and expenses
i.
Financial income
 
Financial income comprises interest income
 
on funds invested, foreign currency
 
gains, gains on sale
 
of
investments in securities and gains
 
on hedging instruments that are recognised in
 
profit or loss. Interest
income is recognised in profit or loss as it accrues, using the effective interest method.
ii.
Financial expenses
Financial expenses comprise interest
 
expense on borrowings,
 
unwinding of the
 
discount on provisions,
foreign currency losses, changes
 
in the fair
 
value of financial assets
 
at fair value through
 
profit or loss,
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
16
fees and
 
commissions expense for
 
payment transactions and
 
guarantees, impairment losses
 
recognised
on financial assets, and losses on hedging instruments that are recognised
 
in profit or loss.
(f)
Income taxation
Income
 
tax
 
comprises
 
current
 
and
 
deferred
 
tax.
 
Income
 
tax
 
is
 
recognised
 
in
 
the
 
Statement
 
of
comprehensive income.
Income tax payable is an estimate of tax (tax liability
 
or tax receivable) calculated from taxable income
or loss for the
 
reporting period, using tax rates enacted
 
at the balance sheet date,
 
and any adjustment to
tax payable in respect of previous years.
A deferred tax asset is recognised only to the extent that
 
it is probable that future taxable profits will be
available
 
against
 
which
 
the
 
unused
 
deductible
 
temporary
 
differences
 
can
 
be
 
utilised.
 
For
 
the
 
above
reason, the
 
Company did
 
not account
 
for a
 
deferred tax
 
asset. A
 
deferred tax
 
liability is
 
always recognised.
 
(g)
Pillar 2
The Company is part of a multinational group of entities (the “Group”)
 
which has been subject to new
rules for minimum taxation of multinational groups of 15%, introduced based
 
on the Pillar 2 rules as
part of the BEPS 2.0 initiative since 2024.
 
In more simple terms, the rules of Pillar 2 require the Group to pay the top-up
 
tax if the effective tax
rate (calculated as a ratio of the adjusted accounting profit or loss and
 
adjusted corporate income tax in
the specific jurisdiction) in jurisdictions where the Group operates drops
 
below 15% in order to achieve
the minimum rate of 15%.
 
In addition, the
 
relevant rules stipulate
 
a transition period
 
during which the
 
affected groups may
 
avoid the
difficult
 
calculation
 
of
 
the
 
effective
 
tax
 
rate
 
required
 
by
 
the
 
new
 
legislation.
 
The
 
Pillar
 
2
 
legislation
introduces the
 
possibility of
 
the Transitional
 
safe harbour
 
(TSH) effective
 
for the
 
minimum of
 
the first
three
 
years
 
from
 
the
 
moment
 
when
 
the
 
relevant
 
regulation
 
takes
 
effect.
 
TSH
 
replaces
 
the
 
difficult
calculation under
 
the Pillar
 
2 rules
 
by simplified
 
calculations based
 
primarily on
 
data contained
 
in the
Country-by-Country Report and in three types of alternative tests. In every jurisdiction where the Group
operates and at least one of the tests is complied with, the top-up
 
tax is considered to be zero.
 
In cooperation with the team of the
 
Group responsible for Pillar 2, the Company made
 
an assessment of
its
 
potential
 
liability
 
to
 
top-up
 
tax
 
under
 
Pillar
 
2
 
for
 
2024.
 
This
 
assessment
 
is
 
based
 
on
 
available
preliminary financial
 
data of
 
Group entities
 
for 2024
 
and the data
 
listed in
 
the Country-by-Country
 
Report
for 2023.
Following the assessment made, the Company is supposed to meet the
 
TSH conditions.
 
The above
 
analysis is
 
an estimated
 
exposure as
 
the indicative
 
calculation is
 
based on
 
a comprehensive
regulation adopted only
 
recently (and is subject
 
to changes in various
 
jurisdictions). At the
 
same time, not
all required data for the complete calculation under the Pillar 2 rules are available.
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
17
4.
Determination of Fair Value
The
 
Company’s
 
accounting
 
policies
 
and
 
disclosures
 
require
 
the
 
determination
 
of
 
fair
 
value,
 
for
 
both
financial
 
and
 
non-financial
 
assets
 
and
 
liabilities.
 
Fair
 
values
 
have
 
been
 
determined
 
for
 
measurement
and/or disclosure purposes based on the following methods.
 
Where applicable, further information about
the assumptions made
 
in determining fair
 
values is disclosed,
 
in the notes
 
specific to
 
that asset or
 
liability.
(a)
Non-derivative financial assets
The fair
 
value of
 
financial assets
 
at fair
 
value through
 
profit or
 
loss, debt
 
and equity
 
instruments at
 
FVOCI
and
 
financial assets
 
at
 
amortized cost
 
is
 
based
 
on
 
their
 
quoted
 
market
 
price
 
at
 
the
 
balance
 
sheet
 
date
without any deduction
 
for transaction costs. If
 
a quoted market
 
price is not available,
 
the fair value of
 
the
instrument is estimated by management using pricing models or discounted
 
cash flows techniques.
Where discounted
 
cash flow
 
techniques are
 
used, estimated
 
future cash
 
flows are
 
based on
 
management’s
best estimates
 
and the
 
discount rate
 
is a
 
market-related rate at
 
the balance
 
sheet date
 
for an
 
instrument
with similar
 
terms and
 
conditions. Where
 
pricing models
 
are used,
 
inputs are
 
based on
 
market-related
measures at the balance sheet date.
The fair
 
value of
 
trade and other
 
receivables, including service
 
concession receivables, is
 
estimated as
the present value of future cash flows, discounted at the market rate of
 
interest at the balance sheet date.
The fair value
 
of trade and other
 
receivables and of financial
 
assets at amortized cost
 
is determined for
disclosure purposes only.
(b)
Non-derivative financial liabilities
Fair value, which is
 
determined for disclosure
 
purposes, is calculated based
 
on the present value
 
of future
principal and interest cash flows, discounted at the market rate of interest
 
at the balance sheet date.
 
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
18
5.
Cash and cash equivalents
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
Cash at bank
3,742
347
Total
3,742
347
The Company assessed the need to recognise a credit loss allowance
 
for receivables from banks (which
are included in Cash and cash equivalents)
 
and concluded that the resulting allowance
 
would be
negligible.
 
6.
Trade receivables
 
and other assets (including prepayments)
As of
 
31 December
 
2024, the
 
Company records
 
trade receivables
 
and other
 
assets amounting
 
to
 
EUR
 
2 thousand (as of 31 December 2023: EUR 354 thousand).
 
Credit risks
 
and impairment
 
losses in
 
relation to
 
trade and
 
other receivables
 
are discussed
 
in Note
 
14 -
Risk management policies and disclosures.
7.
Financial instruments and other financial assets
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
Financial assets
Loans to entities other than credit institutions
 
1,111,231
506,805
of which: loans owed by the parent company
1,
111
,231
506,805
Allowance for loans
(1,040)
 
(410)
Total
1 110 191
506,395
Long-term
1,102,258
501,931
Short-term
7,933
4,464
Total
1,110,191
506,395
Long-term financial instruments
 
include a loan
 
principal the amount
 
and maturity of
 
which is based
 
on
the maturity of the bond principal,
 
and accrued interest, refer to Note
 
9 – Financial instruments and other
financial liabilities.
 
Non-current financial assets as of 31 December 2024
 
additionally include a provided loan of EUR 4,857
thousand (31 December 2023: EUR 4,855 thousand), including interest, which matures
 
on 13 November
2028.
 
Current financial assets as of
 
31 December 2024 include interest of
 
EUR 7,933 thousand (31 December
2023: EUR 4,464 thousand) payable annually.
 
The weighted average of the effective interest rate and
 
loans to entities other than credit institutions
 
as of
31 December 2024 amounted to 6.294% (31 December 2023: 6.761%).
 
As
 
of
 
31
 
December
 
2024,
 
the
 
Company
 
reported
 
an
 
allowance
 
of
 
EUR
 
1,040
 
thousand
 
for
 
the
 
loans
provided
 
to
 
the
 
parent
 
company
 
Energetický
 
a
 
průmyslový
 
holding,
 
a.s.
 
The
 
allowance
 
was
 
reported
following an impairment test made as of 31 December 2024 (31 December 2023:
 
EUR 410 thousand).
 
The parent company was granted the BBB- rating.
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
19
The following table shows detailed information on the loan provided
 
to the parent company EPH:
as of 31 Dec 2024
Principal
Accrued
interest
Unamortised
fee
Discount
premium
Maturity
Interest
rate (%)
Effective
interest rate
(%)
in EUR thousand
Loan to EPH (1)**
4,857
259
-
13 Nov 2028
5.31
6.02
Loan to EPH (2)*
600,000
5,357
(2,064)
3,637
13 Nov 2028
6.651
6.7681/5.561
Loan to EPH
(3)*
496,240
2,576
-
369
30 Nov 2029
5.875
6.0316
Total
1,101,097
8,192
(2,064)
4,006
-
-
-
* The interest rate is based on the rate used for the bonds, refer
 
to Note 9 – Financial instruments and other financial liabilities.
 
** Interest payable together with the principal.
as of 31 Dec 2023
Principal
Accrued
interest
Unamortised
fee
Maturity
Interest
rate (%)
Effective
interest rate (%)
in EUR thousand
Loan to EPH (1)**
4,853
4
-
13 Nov 2028
6.8
6.02
Loan to EPH (2)*
500,000
4,464
(2,516)
13 Nov 2028
6.651
6.768
Total
504,853
4,468
(2,516)
-
-
-
* The interest rate is based on the rate used for the bonds, refer
 
to Note 9 – Financial instruments and other financial liabilities.
 
** Interest payable together with the principal.
Information on fair value
 
The following table shows the fair value of the interest-bearing instruments reported
 
at amortised cost:
 
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
Carrying amount
Fair value
Carrying amount
Fair value
Loan to EPH (1)
4,857
5,137
4,853
4,937
Loan to EPH (2)
601,572
626,488
497,484
520,729
Loan to EPH (3)
496,609
498,424
-
-
Total
1,103,038
1,130,049
502,337
525,666
All
 
interest-bearing financial
 
instruments
 
carried
 
at
 
amortised cost
 
are
 
included in
 
Level
 
2
 
of
 
the
 
fair
value
 
hierarchy (for more
 
details on valuation
 
methods refer to Note 2
 
(d) i. – Assumption
 
and estimation
uncertainties.
 
8.
Equity
The authorised,
 
issued and
 
fully paid
 
share capital
 
as of
 
31 December
 
2024 consisted
 
of 10
 
ordinary shares
with a nominal value of EUR 8,200 per share.
Ordinary shares
 
represent a
 
100% share
 
in the
 
share capital
 
of EPH
 
Financing International, a.s.
 
There
are no special rights and obligations associated with ordinary shares.
The rights and obligations associated
 
with registered ordinary shares are
 
defined in the Act
 
on Business
Corporations (Act No. 90/2012 Coll., as amended) and in the Articles of Association of the Company in
Article 6. Shareholders of EPH Financing International, a.s. are not limited in their rights attached to the
shares or in the payment of dividends.
Shareholders
 
have
 
the
 
right
 
to
 
receive
 
dividends
 
and
 
at
 
the
 
General
 
Meeting
 
of
 
the
 
Company
 
they
 
have 1 vote per share with a nominal value of EUR 8,200.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
20
as of 31 Dec 2024
Number of shares
Ownership
Voting rights
%
%
Energetický a průmyslový holding, a.s.
10
100
100
Total
10
100
100
Reconciliation of the number of issued shares at the beginning and end
 
of the period.
Number of issued shares
 
Shares issued as of 31 Dec 2023
10
Newly issued shares
 
-
Shares issued as of 31 Dec 2024
10
Basic earnings/(loss) per share
Basic
 
earnings/(loss)
 
per
 
share
 
in
 
EUR
 
to
 
CZK
 
200,000
 
nominal
 
value
 
is
 
the
 
loss
 
of
 
EUR
 
41,900
 
(31 December 2023: EUR 44,300).
The
 
calculation
 
of
 
basic
 
earnings/(loss)
 
per
 
share
 
as
 
of
 
31
 
December
 
2024
 
was
 
based
 
on
 
the
 
loss
attributable to ordinary shareholders in the
 
amount of EUR 419 thousand and
 
weighted average number
of 10 issued ordinary shares.
Diluted profit/(loss) per share
As the Company issued
 
no convertible bonds
 
or other financial
 
instruments with potential
 
dilutive effects
on ordinary shares, diluted earnings per share is the same as basic earnings
 
per share.
Other capital funds
In 2024, there were no changes in other capital funds. On 20 December
 
2023, the sole shareholder of the
Company made an investment in other capital funds of EUR 4,890 thousand.
 
9.
Financial instruments and other financial liabilities
 
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
Issued bonds at amortised cost
 
1,098,182
497,484
Other financial liabilities from bonds
 
7,933
4,464
Total
1,106,115
501,948
Long-term
1,098,182
497,484
Short-term
7,933
4,464
Total
1,106,115
501,948
The weighted average of
 
the interest rate on
 
the loan from entities
 
other than credit institutions as
 
of 31
December 2024 was 6.298% (as of 31 December 2023: 6.651%).
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
21
Issued bonds at amortised cost
 
The following table shows detailed information on issued bonds:
 
as of 31 Dec 2024
in EUR thousand
ISIN
Principal
Accrued
interest
Unamortised
fee
Discount
Premiu
m
Maturity
Interest
rate (%)
Effective
interest
rate (%)
Bonds of EPH Fin Int.
(1)
XS2716891440
600,000
5,357
(2,064)
3,637
13/11/2028
6.651
6.7681/
 
5. 5561*
Bonds of y EPH Fin Int.
(2)
XS2822505439
500,000
2,576
-
(3,391)
30/11/2029
5.875
6.0316
Total
1,100,000
7,933
(2,064)
246
-
-
-
 
*Different effective interest rates
 
for the first tranche of EUR 500 thousand and the second tranche of
 
EUR 100 thousand.
as of 31 Dec 2023
in EUR thousand
ISIN
Principal
Accrued
interest
Unamortised
fee
Maturity
Interest
rate (%)
Effective
interest rate
(%)
Bonds of EPH Fin Int.
(1)
XS2716891440
500,000
4,464
(2,516)
13 Nov 2028
6.651
6.768
Total
500,000
4,464
(2,516)
-
-
-
 
Bonds 2028 (ISIN XS2716891440)
The Company was
 
formed with a
 
purpose of issuing
 
debt securities in
 
the anticipated nominal
 
value of
the issue
 
totalling EUR
 
3 billion.
 
In 2023,
 
the Company
 
issued the
 
1
st
 
issue of
 
bonds in
 
the aggregate
amount of EUR 500,000 thousand
 
with a fixed interest income
 
of 6.651% p.a. payable in 2028,
 
while the
interest is payable once a year as of 13 November (“Bonds 2028”). The bonds were accepted for trading
on the Euronext Dublin regulated market in
 
Ireland. The trading with the bonds was
 
started on the issue
date, on 6 November 2023. The code of the bonds is ISIN XS2716891440.
On 29
 
July 2024,
 
the first
 
issue of
 
debt securities
 
was increased
 
by the
 
subscription of
 
bonds totalling
EUR 100,000 thousand with
 
a fixed interest income of
 
6.651% and payable in 2028.
 
The above premium
of the additional issue of bonds was EUR 3,989 thousand upon subscription.
 
The Company will repay the principle of
 
Bonds 2028 totalling EUR 600,000 thousand
 
on a one-off basis
on 13 November 2028.
 
Bonds 2029 (XS2822505439)
On
 
30
 
May,
 
the
 
Company issued
 
the
 
2
nd
 
issue of
 
bonds totalling
 
EUR 500,000
 
thousand with
 
a fixed
interest
 
income
 
of
 
5.875%
 
p.a.
 
payable
 
in
 
2029
 
(“Bonds
 
2029”).
 
The
 
first
 
interest-bearing
 
period
 
is
shortened from
 
30 May
 
2024 to
 
30 November
 
2024, subsequently
 
the interest
 
is payable
 
on an
 
annual
basis as of 30 November.
 
The discount
 
in the
 
2
nd
 
issue of
 
bonds was
 
EUR 3,760
 
thousand. As
 
of 31
 
December 2024,
 
the total
 
of
EUR 369 thousand was amortised in interest expenses (31 December 2023:
 
CZK 0).
 
The
 
Company
 
will
 
repay
 
the
 
principal
 
of
 
the
 
Bonds
 
2029
 
in
 
the
 
aggregate
 
amount
 
of
 
EUR
 
500,000
thousand on a one-off basis on 30 November 2029.
 
Under the Czech law, Energetický a průmyslový holding, a.s. provides
 
a financial guarantee for the debts
of the Issuer from Bonds 2028 and Bonds 2029.
 
The bonds carry
 
primarily the right
 
for the payment
 
of the nominal
 
value as of
 
the final maturity
 
of the
bonds and the right for the payment of
 
yields from the bonds. In addition, the
 
bonds carry the right of the
bond owner to require an early redemption of the bonds in cases when obligations are breached.
 
Further,
the bonds carry the
 
right to attend and
 
vote at the meetings
 
of bond owners in cases
 
when such meeting
is summoned in line with issue conditions.
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
22
Bonds
 
2028
 
are
 
reported
 
less
 
the
 
costs
 
relating
 
to
 
the
 
issue
 
in
 
the
 
amount
 
of
 
EUR
 
2,064
 
thousand
 
(31
 
December
 
2023:
 
EUR
 
2,516
 
thousand).
 
These
 
costs
 
are
 
gradually
 
reported
 
in
 
the
 
profit
 
and
 
loss
account throughout the existence of the Bonds 2028 based on the effective interest rate of 6.7681%
 
as of
31 December 2024.
 
The premium totalling EUR 3,989 thousand achieved in the additional issue of Bonds 2028 in July 2024
in the amount of EUR 100,000 thousand is reported
 
in the profit and loss account based on the
 
effective
interest rate of 5.5661%.
 
Bonds 2029 are
 
reported in the
 
nominal value less
 
the discount totalling
 
EUR 3,760 thousand
 
as of
 
the
issue date.
 
The discount
 
is gradually
 
released into
 
expenses based
 
on the
 
effective interest
 
rate of
 
6.0316%
throughout the existence of Bonds 2029.
 
Information on fair value
The following table shows the fair value of interest-bearing instruments reported
 
at amortised cost:
 
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
ISIN
Carrying
amount
Fair value
Carrying
amount
Fair value
Issued bonds at amortised value (1)
 
XS2716891440
601,573
 
640,340
497,484
520,729
Issued bonds at amortised value (2)
XS2822505439
496,609
529,950
-
-
Total
1,098,182
1,170,290
 
497,484
520,729
All
 
interest-bearing financial
 
instruments carried
 
at
 
amortised cost
 
are included
 
in
 
Level 2
 
of
 
the
 
fair
value hierarchy
 
(for more details
 
on valuation
 
methods refer
 
to Note 2
 
(d) i. –
 
Assumption and
 
estimation
uncertainties).
10.
Trade payables
 
and other payables
 
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
Trade payables and other payables
 
3,654
618
Total
3,654
618
Long-term
-
-
Short-term
3,654
618
Total
3,654
618
Trade
 
payables and
 
other payables
 
were not
 
collateralised as
 
of 31
 
December 2024
 
and 31
 
December
2023. An estimate of
 
payables is based on
 
contractual conditions or invoices received
 
after the balance
sheet date, however before the publication of the financial statements.
The
 
liquidity
 
risk
 
to
 
which
 
the
 
Company
 
is
 
exposed
 
in
 
connection
 
with
 
trade
 
and
 
other
 
payables
 
is
described in Note 14 – Risk Management and Disclosure Procedures.
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
23
11.
Income taxation
Tax payable
The Company recognised a provision for income tax of EUR 56 thousand.
 
Effective tax rate
V tis. EUR
2024
2023
Tax at the domestic tax rate
21.0%
19.0%
Non-tax-deductible expenses - allowances
(36.4%)
(17.6%)
Non-tax-deductible expenses – other
-
(1.6%)
Average effective tax rate (tax expense divided by profit/loss
 
before tax)
(15.4%)
(0.2%)
Effective tax rate for 2024 is -15.4% (2023: -0.2%).
12.
Operating income and expenses
 
Other operating
 
expenses for
 
services predominantly
 
include the
 
expenses relating
 
to the
 
formation of
the Company,
 
bookkeeping, administration,
 
payroll costs
 
and bond
 
issuance costs
 
borne by
 
the parent
company.
 
Other operating income
 
of the
 
Company includes a
 
compensation of all
 
bond issuance costs
from the parent company and a administration fee attributable to the Company.
 
13.
Financial income and expenses
Reported in the profit and loss account
 
in EUR thousand
as of 31 Dec 2024
as of 31 Dec 2023
Interest income amortised by the effective interest rate
 
54,085
4,526
Exchange rate gains
54
21
Financial income
54,139
4,547
Interest expenses amortised by the effective interest rate
(53,828)
(4,523)
Expenses of derivative transactions
(5)
-
Exchange rate losses
(78)
(58)
Financial expenses
(53,911)
(4,581)
Interest
 
income
 
relates
 
to
 
the
 
provided
 
loans
 
and
 
interest
 
expense
 
relates
 
to
 
the
 
issued
 
bonds.
 
The
expenses relating
 
to the
 
issue of
 
bonds such
 
as fees
 
to banks,
 
costs of
 
the review
 
of the
 
Bond Issuer’s
prospectus by an
 
auditor, legal services
 
and similar expenses are
 
paid and released in
 
interest expenses
using the
 
effective interest rate
 
on the
 
level of
 
the consolidated
 
statements of
 
the parent company
 
in 2024.
 
14.
Risk Management and Disclosure Policies
 
This section describes the financial and operational risks to which the Company is exposed and the way
in which it
 
manages such risks. The
 
most important types of
 
financial risks for the
 
Company are credit
risk, interest rate risk and liquidity risk.
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
24
(a)
Credit risk
Credit risk is
 
the risk of
 
financial loss imminent
 
when a counterparty
 
in a financial
 
instrument transaction
fails to
 
meet its
 
contractual obligations.
 
This risk
 
arises for
 
the Company
 
primarily from
 
loans as
 
the
Company provided a loan to the parent company Energetický a průmyslový holding, a.s. The Company
individually analyses
 
the creditworthiness
 
of the
 
parent company
 
and only
 
then payment
 
and delivery
terms are offered to it. The Company
 
continuously monitors credit risk. The
 
carrying amount of the loan
represents
 
the
 
maximum
 
credit
 
risk
 
of
 
the
 
Company.
 
The
 
Company
 
recognises
 
an
 
allowance
 
for
impairment, which
 
is an
 
estimate of
 
expected credit
 
losses and
 
quantifies it
 
in the
 
amount of
 
expected
credit losses over time.
The basis for
 
calculation of the allowance
 
by the end
 
of the relevant reviewed
 
period is the book
 
value
of
 
the
 
loan
 
provided
 
to
 
the
 
parent
 
company
 
(i.e.
 
the
 
principal
 
plus
 
unpaid
 
interest).
 
If
 
the
 
remaining
maturity period is shorter than 1 year, such fact is
 
taken into account in the calculation. This means that
if
 
there
 
are,
 
for
 
instance,
 
9
 
months
 
until
 
the
 
maturity of
 
the
 
loan,
 
the
 
book
 
value
 
of
 
the
 
loan
 
will
 
be
adjusted by a
 
coefficient of 0.75.
 
Furthermore, the LGD parameter
 
and the stipulated "default
 
rate" are
considered. The
 
default rate
 
is determined
 
on the
 
basis of the
 
rating of
 
the parent company
 
granted by
leading rating agencies.
 
The Company provided a loan to the parent
 
company up to a total amount of EUR
 
1,103,038 thousand.
The loan
 
is provided
 
mainly from
 
funds raised
 
from already
 
subscribed bonds.
 
Based on
 
the financial
results of the debtor, the parent company, the Company evaluates its ability
 
to meet its obligations on an
annual basis.
As of 31 December 2024, the Company reported no financial assets past
 
their due dates.
 
At
 
the
 
balance
 
sheet
 
date,
 
the
 
maximum
 
credit
 
risks,
 
broken
 
down
 
by
 
type
 
of
 
counterparty
 
and
 
by
geographical area, are set out in the following tables.
 
 
 
 
 
 
 
 
 
image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_6 image_7 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_9 image_10 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11 image_11
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
25
Credit risk by type of counterparty
as of 31 Dec 2024
in EUR thousand
Companies
(non/financial
institutions)
Banks
Total
Assets
Cash and cash equivalents
-
3,742
3,742
Trade receivables and other assets (including prepayments)
2
-
2
Financial instruments and other financial assets
 
1,110,191
-
1,110,191
Total
1,110,193
3,742
1,113,935
as of 31 Dec 2023
in EUR thousand
Companies
(non/financial
institutions)
Banks
Total
Assets
Cash and cash equivalents
-
347
347
Trade receivables and other assets (including prepayments)
354
-
354
Financial instruments and other financial assets
 
506,395
-
506,395
Total
506,749
347
507,096
Credit risk by territory
protistrany
As of 31 Dec 2024
 
in EUR thousand
Assets
Czech Republic
Other
 
Total
Cash and cash equivalents
3,742
-
3,742
Trade receivables and other assets
 
2
-
2
Financial instruments and other financial assets
 
1,110,191
-
1,110,191
Total
1,113,935
-
1,113,935
As of 31 Dec 2023
in EUR thousand
Assets
Czech Republic
Other
 
Total
Cash and cash equivalents
347
-
347
Trade receivables and other assets
 
330
24
354
Financial instruments and other financial assets
 
506,395
-
506,395
Total
507,072
24
507,096
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
26
Impairment losses
Loss allowances are measured on either of the following bases:
●
12-month ECLs:
 
these are
 
ECLs that
 
result from
 
possible default
 
events within
 
the 12
 
months
after the balance sheet date, and
●
Lifetime ECLs: these are ECLs that result from all possible default events over the expected life
of a financial instrument.
The ECL model
 
is based on
 
the principle of
 
expected credit losses.
 
For the purposes
 
of designing
 
the ECL
model, the
 
portfolio of
 
financial assets
 
is split
 
into segments.
 
Financial assets
 
within each
 
segment are
allocated to three levels (Level I –
 
III) or to a group of financial assets that
 
are impaired at the date of the
first recognition of purchased
 
or originated credit-impaired financial assets
 
("POCI"). At the date
 
of the
initial recognition, the assets are included in Level I or POCI.
Subsequent allocation
 
to stages
 
is as
 
follows: assets
 
with significant
 
increase in
 
credit risk
 
since initial
recognition (Stage II), respectively credit impaired assets (Level III).
The
 
Company
 
calculated
 
allowances
 
using
 
the
 
expected
 
credit
 
loss
 
(ECL)
 
model
 
for
 
the
 
entire
 
loan
existence.
 
The Company reports no trade
 
receivables past their due
 
dates. For this reason, all
 
financial assets were
allocated to Level I.
 
The following changes were reported in allowances for impairment
 
of financial assets:
 
in EUR thousand
Loans to other than
credit institutions
 
Total
Balance at 31 Dec 2023
410
410
Recognition/(release) of allowances for expected loss during the period
 
630
630
Balance at 31 Dec 2024
1,040
1,040
(b)
Liquidity risk
Liquidity risk
 
is the
 
risk that
 
the Company
 
will encounter
 
difficulties in
 
meeting the
 
obligations associated
with its financial liabilities that are settled by delivering cash or another
 
financial asset.
By
 
default,
 
the
 
Company
 
ensures
 
that
 
it
 
has
 
sufficient
 
cash
 
on
 
demand
 
and
 
assets
 
within
 
short-term
maturity
 
to
 
meet
 
expected operational
 
expenses
 
for
 
a
 
period
 
of
 
90
 
days,
 
including
 
servicing
 
financial
obligations;
 
this
 
excludes
 
the
 
potential
 
impact
 
of
 
extreme
 
circumstances
 
that
 
cannot
 
reasonably
 
be
predicted, such as natural disasters.
The table below provides an analysis
 
of financial liabilities by relevant maturity
 
groupings based on the
remaining
 
period
 
from
 
the
 
reporting
 
date
 
to
 
the
 
contractual
 
maturity
 
date.
 
For
 
cases
 
where
 
there
 
is
 
a possibility of earlier repayment,
 
the Company chooses the
 
most prudent method of assessment.
 
For this
reason,
 
liabilities are
 
expected to
 
be repaid
 
as
 
soon as
 
possible
 
and for
 
assets
 
they
 
are
 
expected to
 
be
repaid
 
as
 
late
 
as
 
possible.
 
Liabilities
 
that
 
do
 
not
 
have
 
a
 
contractual
 
maturity
 
are
 
grouped
 
into
 
the
"Undefined" category.
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
27
Maturity of financial liabilities
as of 31 Dec 2024
in EUR thousand
Carrying
amount
Contractual
cash flows
(1)
Less than 3
months
3 months to 1
year
1–5 years
 
Undefined
 
Liabilities
Financial instruments and other
financial liabilities
 
1,106,115
1,406,499
 
-
69,281
1,337,218
-
Trade payables and other
payables
 
3,654
3,654
3,654
-
-
Total
1,109,769
1,410,153
3,654
69,281
1,337,218
-
as of 31 Dec 2023
in EUR thousand
Carrying
amount
Contractual
cash flows
(1)
Less than 3
months
3 months to 1
year
1–5 years
 
Undefined
 
Liabilities
Financial instruments and other
financial liabilities
 
501,948
666,275
-
33,255
633,020
-
Trade payables and other
payables
 
618
618
618
-
-
-
Total
502,566
666,893
618
33,255
633,020
-
(1)
Contractual cash flows disregarding discounting to the net present value and including potential interest
(c)
Currency risk
The Company is not exposed
 
to risk of changes in exchange
 
rates as all transactions are carried
 
out in the
functional currency of the Company (EUR).
(d)
Interest rate risk
The
 
Company is
 
exposed to
 
a low
 
risk on
 
interest rate
 
fluctuations in
 
its operations
 
because interest-
bearing assets and interest-bearing
 
liabilities have almost the
 
same maturity date and
 
are due in the same
amount, while reflecting the form of interest rates, whether fixed interest rates or variable interest rates.
The
 
table
 
below
 
provides
 
information
 
on
 
the
 
extent
 
of
 
the
 
Issuer´s interest
 
rate
 
risk
 
according
 
to
 
the
contractual maturity
 
of financial
 
instruments. Assets
 
and liabilities
 
that do
 
not have
 
a contractual
 
maturity
or are not interest-bearing are grouped in the "Undefined" category.
Financial information
 
concerning interest-bearing
 
and non-interest-bearing
 
assets and liabilities
 
and their
contractual maturity or revaluation dates are:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
28
as of 31 Dec 2024
in EUR thousand
Less than 1
year
1 year to 5
years
Undefined
Total
Assets
Cash and cash equivalents
-
-
3,742
3,742
Trade receivables and other assets (including
prepayments)
-
-
2
2
Financial instruments and other financial assets
 
1,102,258
7,933
1,110,191
Total
-
1,102,258
11,677
1,113,935
Liabilities
Trade payables and other payables
-
-
3,654
3,654
Financial instruments and other financial
payables
 
-
1,098,182
7,933
1,106,115
Total
-
1,098,182
11,587
1,109,769
Net interest rate risk
-
4,076
90
4,166
as of 31 Dec 2023
in EUR thousand
Less than 1
year
1 year to 5
years
Undefined
Total
Assets
Cash and cash equivalents
-
-
347
347
Trade receivables and other assets (including
prepayments)
-
-
354
354
Financial instruments and other financial assets
 
501,931
4,464
506,395
Total
-
501,931
5,165
507,096
Liabilities
Trade payables and other payables
-
-
618
618
Financial instruments and other financial
payables
 
-
497,484
 
4,464
501,948
Total
-
497,484
5,082
502,566
Net interest rate risk
-
4,447
83
4,530
Nominal amounts of financial instruments are disclosed in Notes 7
 
and 9 – Financial instruments and
other financial assets and Financial instruments and other financial
 
liabilities.
Sensitivity analysis
The
 
Company
 
performs
 
stress
 
testing
 
using
 
a
 
standardised
 
interest
 
rate
 
shock,
 
which
 
means
 
that
 
an
immediate reduction/increase in interest
 
rates by 100 basis
 
points is applied to
 
the portfolio’s interest rate
positions along the entire length of the yield curve.
As of the balance sheet date and 31 December 2024, a change in interest rates of 100 basis points would
not affect
 
the overall
 
position of
 
the portfolio.
 
The parameters
 
of the
 
loan provided
 
to EPH
 
reflect the
parameters of the issued bonds.
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
29
(e)
Information on internal
 
control policies and
 
procedures and rules
 
of approach to
 
potential
risks in connection with the financial reporting process
 
The
 
internal
 
control
 
system
 
includes
 
control
 
mechanisms
 
created
 
within
 
the
 
Company.
 
It
 
ensures,
evaluates and minimises
 
operational, financial, legal
 
and other risks
 
of the Company.
 
Work
 
procedures
are
 
stipulated,
 
and
 
powers
 
and
 
responsibilities
 
are
 
allocated
 
within
 
the
 
control
 
system.
 
Results
 
of
 
the
internal control are objectively and regularly
 
evaluated. In case of any findings,
 
appropriate measures for
rectification of the identified defects are determined.
Financial control of the financial reporting process is provided for by responsible employees as a part of
internal management in the preparation of operations before their approval and in their course until their
settlement.
The bookkeeping
 
system is
 
governed by
 
the relevant
 
provisions of
 
the following
 
laws, decrees
 
and internal
regulations:
●
Act No. 563/1991 Coll. on Accounting, as amended;
●
International Financial
 
Reporting Standards
 
(IFRS), International
 
Accounting Standards
 
(IAS)
and their
 
interpretations (SIC
 
and IFRIC)
 
(jointly "IFRS")
 
issued by
 
the International
 
Accounting
Standards Board (IASB) and adopted by the European Union;
●
Decree
 
No.
 
500/2002
 
Coll.
 
implementing
 
some
 
provisions
 
of
 
Act
 
No.
 
563/1991
 
Coll.
 
for
accounting entities which are entrepreneurs using the double-entry
 
accounting system;
●
Czech
 
Accounting
 
Standards
 
for
 
accounting
 
entities
 
keeping
 
their
 
books
 
in
 
accordance
 
with
Decree No. 500/2002 Coll., as amended;
●
Act No. 586/1991 Coll. on Income Taxes, as amended;
●
Act No. 235/2004 Coll. on Value Added Tax,
 
as amended;
●
Act No. 593/1992 Coll., on Reserves for Determining the Income Tax Base, as amended
 
●
internal bookkeeping policies and procedures
EPH Financing
 
International,
 
a.s. uses
 
the double-entry
 
accounting system
 
for the
 
accounting entity
 
in
accordance with
 
binding IFRS Accounting
 
Standards issued by
 
the International Accounting
 
Standards
Board (IASB)
 
and adopted
 
by the
 
European Union,
 
and keeps
 
also another
 
accounting system
 
for tax
purposes under the Czech Accounting Standards (CAS). Any changes in charts of account may be made
solely by
 
the responsible
 
department. Both
 
accounting systems
 
are processed
 
by Microsoft
 
Dynamics AX.
Balances of all accounts are checked at the cut-off date.
The
 
Company is
 
also
 
managed by
 
controlling tools.
 
These
 
tools are
 
focused
 
on the
 
evaluation of
 
key
financial
 
and
 
non-financial performance
 
indicators
 
with
 
the
 
aim
 
of
 
achieving
 
the
 
Company's
 
business
plan.
Financial
 
accounting
 
is
 
controlled
 
once
 
a
 
year
 
by
 
external
 
auditors
 
(a
 
preliminary
 
and
 
final
 
audit).
Balances of all accounts are duly evidenced in the process of documentary
 
inventory and physical stock-
taking. The
 
financial section and
 
the controlling department
 
check as
 
of the
 
cut-off date
 
of each month
the balances of accounts which contain records
 
of tax payments, balances of cash and
 
bank accounts, as
well as accounts where there were any significant movements. The financial sectors check the
 
balancers
of all accounts twice a year at the cut-off dates.
The
 
auditor
 
of
 
the
 
Company
 
for
 
2024
 
is
 
Deloitte
 
Audit
 
s.r.o.,
 
having
 
its
 
registered
 
office
 
at
 
Italská
2581/67, 120
 
00, Prague 2, Czech Republic.
(f)
Operational risk
The
 
operational
 
risk
 
consists
 
of
 
the
 
risk
 
of
 
loss
 
from
 
embezzlement,
 
unauthorised
 
activities,
 
errors,
omissions, inefficiencies or
 
system failure. The
 
risk of this
 
type occurs in
 
all activities and
 
threatens all
business entities. The operational risk also includes legal risk.
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
30
The
 
primary
 
responsibility
 
for
 
the
 
application
 
of
 
controlling
 
mechanisms
 
for
 
the
 
management
 
of
operational risks rests with
 
the Company's management. Generally
 
applied standards
 
cover the following
areas:
●
requirement regarding reconciliation and monitoring of transactions,
●
identification of operational risks in the control system,
●
by
 
gaining
 
an
 
overview
 
of
 
operational
 
risks,
 
the
 
Company
 
creates
 
prerequisites
 
for
 
the
determination and
 
focusing of
 
processes and
 
measures which
 
will lead
 
to a
 
reduction of
 
operational
risks and to the adoption of decisions on:
-
the recognition of individual existing risks;
-
the initiation of processes leading to mitigation of potential impacts;
 
or
-
narrowing the space for or total termination of risky activities.
15.
Related Parties
Identification of related parties
Relationships with related parties include relationships with shareholders and other entities, as set out
 
in
the following table.
(a)
Summary of outstanding balances with the related parties as of 31 December 2024
in EUR thousand
Receivables and
other financial
assets
 
Payables and
other financial
liabilities
 
as of 31 Dec 2024
as of 31 Dec 2024
To the parent
 
company
From provided loan
1,110,191
-
From rebilling of costs
2
-
From provision of payment over and above the share
capital balance
 
-
-
Companies controlled by end shareholders
 
From cost invoicing
-
10
Total
1,110,193
10
(b)
in EUR thousand
Income
Expenses
as of 31 Dec 2024
as of 31 Dec 2024
To the parent
 
company
From the interest accrued on the loan
54,085
-
From the income generated from the sale of services
 
8
-
From rebilling of costs
1,938
-
Companies controlled by end shareholders
 
From cost invoicing
-
10
Total
56,031
10
 
 
 
 
 
 
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
31
(a)
Summary of outstanding balances with the related parties as of 31 December 2023
in EUR thousand
Receivables and
other financial
assets
 
Payables and other
financial liabilities
 
as of 31 Dec 2023
as of 31 Dec 2023
To the parent
 
company
From provided loan
506,395
-
From rebilling of costs
330
421
From provision of payment over and above the share
capital balance
 
-
-
Companies controlled by end shareholders
 
From cost invoicing
-
-
Total
506,725
421
(b)
in EUR thousand
Income
Expenses
as of 31 Dec 2023
as of 31 Dec 2023
To the parent
 
company
From the interest accrued on the loan
 
4,526
-
From the rebilling of costs
 
-
(2)
From income generated from the sale of services
 
8
-
Companies controlled by end shareholders
-
-
Total
4,534
(2)
All transactions were under arm’s length basis.
Transactions with key management members
Members
 
of
 
the
 
Board
 
of
 
Directors
 
and
 
the
 
Supervisory
 
Board
 
of
 
EPH
 
Financing
 
International,
 
a.s.
received
 
no
 
significant
 
monetary
 
or
 
non-monetary
 
benefits
 
for
 
the
 
period
 
from
 
1
 
January
 
2024
 
to
 
31 December 2024.
 
At the same
 
time, these
 
members were
 
employees of other
 
companies within
 
the EPH
Group.
16.
Military Conflict in Ukraine
In relation to the
 
ongoing war conflict in Ukraine
 
and relating sanctions against the Russian
 
Federation,
the Company
 
identified risks
 
and adopted
 
reasonable measures
 
to minimise
 
the impact
 
on its
 
business
activities. Based
 
on available
 
information and
 
current development,
 
the Company
 
continues to
 
analyse
the entire situation and assesses its direct impact on
 
the Company. The management of the Company has
considered any potential effects
 
of the situation on
 
its operations and business
 
and concluded that they
 
do
not
 
have any
 
major impact
 
on the
 
financial statements,
 
nor
 
on the
 
going concern
 
assumption in
 
2024.
Nevertheless, it is not possible to exclude any further negative
 
development in this situation which could
subsequently have a negative impact on the
 
Company, its
 
business, financial position, results, cash flow
and prospects in general.
image_13
Annual Report of EPH Financing International, a.s. for the year ended 31
 
December 2024
32
17.
Other Information
Basic
 
information from
 
ESG is
 
disclosed in
 
the
 
consolidated financial
 
statements of
 
EPH for
 
2024 in
sections 8. Sustainability – Management Review and 10. Consolidated Sustainability
 
Statement.
 
18.
Significant Post-Balance Sheet Events