EPH Financing International, a.s.
Annual Financial Report
for the year ended 31 December 2025
Table
of Contents
I.
Auditor’s Report
II.
Text part of the Annual Financial Report
III.
Affidavit
IV.
Report on Relations
V.
Report of the Board of Directors
VI.
Financial statements as of 31 December 2025
I.
Auditor’s Report
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B01D76B0E416253389C0AD75E3E3283C
Deloitte Audit s.r.o.
Churchill I
Italská 2581/67
120 00 Prague 2 – Vinohrady
Czech Republic
Tel: +420 246 042 500
DeloitteCZ@deloitteCE.com
www.deloitte.cz
Registered by the Municipal
Court in Prague, Section C,
File 24349
ID. No.:49620592
Tax ID. No.: CZ49620592
INDEPENDENT AUDITOR’S
REPORT
To
the Shareholder of
EPH Financing International, a.s.
Having its registered office at: Pařížská
130/26, Josefov, 110 00 Prague
1
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
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 2025, and the income statement, statement
of comprehensive
income, statement of changes in equity and statement of cash
flows for the year then ended, 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 2025, and of its financial performance
and its cash flows for
the year then ended 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, as applicable to audits
of financial statements of public interest entities.
We have also 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).
Deloitte refers to one or more of Deloitte Touche
Tohmatsu Limited
(DTTL), its global network of member firms,
and their related entities (collectively,
the
“Deloitte organization”). DTTL
(also referred to as “Deloitte Global”) and each of
its member firms and related entities are legally separate
and independent
entities, which cannot obligate or bind each other in respect
of third parties. DTTL and each DTTL
member firm and related entity is liable only for its own
acts
and omissions, and not those of each other.
DTTL does not provide services to clients.
Please see www.deloitte.com/about
to learn more.
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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.
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As part of an audit in accordance with the above law or regulation, we exercise
professional judgment and maintain
professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error,
design
and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for
one resulting from error,
as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order
to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal
control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by 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 16 April 2024 and our
uninterrupted engagement has lasted for 3 years.
Consistency 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 24 April 2026 in accordance with Article 11 of Regulation (EU)
No. 537/2014 of the European Parliament and the Council.
Provision of Non-audit Services
We declare that no prohibited non-audit services referred
to in Article 5 of Regulation (EU) No. 537/2014 of the European
Parliament and the Council were provided. In addition, there
are no other non-audit services which were provided by us to
the Company and its controlled undertakings and which have not been disclosed in the financial statements.
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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 1 January 2025 to 31 December 2025 included in
the annual financial report are, in all material respects,
in compliance with the requirements of the ESEF Regulation.
In Prague on 24 April 2026
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Annual Financial Report of EPH Financing International, a.s. for the year ended 31 December 2025
II.
Text part of the Annual Financial 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 Financial
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.
On 2 July 2025,
the Company successfully placed
the third issue of
bonds in an aggregate
of EUR 500
million EUR on the
Euronext Dublin regulated market in Ireland under ISIN
XS3106539938.
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 2025 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 2025
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 2025
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 2025
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 Financial
Report) of
Energetický
a průmyslový holding, a.s. The Consolidated Annual Financial
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 EPH 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 2025
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 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 Financial Report.
ii.
Company’s Bodies
Statutory body of the Company as of 31 December 2025
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 2025
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 2025
Other Company’s Bodies as of 31 December 2025
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 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.
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;
Annual Financial Report of EPH Financing International, a.s. for the year ended 31 December 2025
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 2025
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 2025
and 2024,
the following
fees were
billed to
the Company
by auditors,
including
VAT
(in EUR
thousand):
2025
2024
Audit of the Annual Financial Report
92
20
Fees billed for other review services, net of
VAT
188
214
Fees billed for tax advisory
0
0
Fees billed for other non-audit services
0
0
Total
2
80
234
Fees billed for other review services include a remuneration for agreed procedures relating to the prospectus
of
the Issuer for the 3
rd
issue of bonds in 2025 and 2
nd
issue of bonds in 2024.
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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 2025 and 2024, the Company did not have any organisational unit located
abroad.
Acquisition of own shares or own ownership interests
During 2025 and 2024, no own shares or own ownership interests were
acquired.
Research and development expenses
In 2025 and 2024, the Company did not incur any research and development
expenses.
Data on investments in tangible and intangible fixed assets
During 2025 and 2024, 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 2025
In the
period from 1
January 2025 to
31 December 2025,
the Company reported
a loss
of EUR
259 thousand
(2024: EUR
419 thousand)
primarily due
to recognition
of an
allowance amounting
to EUR 470
thousand (2024:
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
1,510
thousand as of 31 December 2025 (2024: EUR 1,040 thousand).
As of 31 December 2025, 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 1,625,648
thousand (2024: EUR 1,113,935
thousand) of
which non-current
assets amount
to EUR
1,599,009 thousand
(2024: EUR
1,102,258 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 1,621,797 thousand (2024: EUR 1,109,825
thousand predominantly
include issued
bonds with
the long-term
portion of
EUR 1,595,145
thousand (2024:
EUR 1,098,182 thousand).
In the reporting period, the Company reports equity of EUR 3,851 thousand
(2024: EUR 4,110 thousand).
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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 2026, 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 means that the Company does not expect any
significant changes in its results, which will continue to be primarily affected by income in the form of interest
on loans provided, expenses relating to issued bonds and potential allowances for loans provided recognised in
line with 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 Financial 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 Financial 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 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 2025
For the period ended
31 Dec 2024
Revenues
26,997
23,331
Operating profit
2,359
1,701
Underlying EBITDA
2,973
2,550
Net financial debt
5,592
4,396
Total assets
36,274
26,410
of which: non-current
26,916
15,423
of which: current
9,358
10,987
Total equity
12,094
8,139
Total payables
24,180
18,271
of which: non-current
16,611
9,758
of which: current
7,569
8,513
Cash flows from operating activities
3,503
3,497
Cash flows used in investment activities
(328)
(1,084)
Cash flows used in financing activities
(2,209)
(2,464)
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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
represents
profit
(loss)
for
the
year
from
continuing operations before income tax
expenses, finance expense, finance income, change
in impairment on
financial instruments and other financial assets,
share of profit (loss)
of equity accounted investees, net
of tax,
gain (loss) on disposal
of subsidiaries, joint
ventures, joint operations
and associates, depreciation,
amortization
and impairment of tangible and intangible assets and bargain
purchase gain. The calculation of the Underlying
EBITDA
and
Net
financial
debt
can
be
found
in
the
Annual
Financial
Report
of
EPH
published
at
the
website.
The information for
the year
ended 31 December
2025 and
the period
ended 31 December
2024 in
the above
table are taken from
the consolidated financial statements
of EPH for the
year ended 31 December
2025
and the
period ended 31
December 2024 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 2025,
total sales
of EPH
increased by
16% and Underlying
EBITDA increased by
17%. This development
primarily related to the Carbon Free&Neutral Power segment
and was primarily driven by full consolidation of
Slovenské elektrárne, a.s. since June 2025.
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
energy
infrastructure
and
power
generation,
encompassing
gas
transport,
distribution
and
storage,
electricity
and
heat
production
from
conventional
and
renewable sources, as well as logistics and commodity trading activities.
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
160
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
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
2025
was 12,379
(2024: 10,526).
The
EPH
Group is
internally
structured into
three
operating
segments:
EP
Infrastructure (“EPIF
Segment”),
which
primarily
covers
gas
transport,
gas
and
electricity
distribution,
gas
storage
and
heat
infrastructure;
Flexible Power, encompassing
flexible electricity
generation assets;
and Carbon
Free &
Neutral Power, focusing
on carbon‑free or carbon-neutral electricity production, including renewable
and nuclear sources.
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
EP Infrastructure (“EPIF Segment”)
EPIF
segment
focuses
on
regulated
and
quasi‑regulated
energy
infrastructure
assets.
Its
activities
primarily
include gas
transport, gas
and electricity
distribution, gas
storage and
heat infrastructure
across several
European
markets. The
segment plays
a key
role in
ensuring energy
security and
stability of
supply and
benefits from
long‑term, stable cash flows under regulatory or contractual frameworks.
Flexible Power
Flexible Power segment
focuses on the
development of a
coherent power generation
portfolio in Europe.
The
portfolio includes
flexible gas-fired
power plants,
such as
newly built
hydrogen-ready units,
as well
as hard
coal-
fired power plants critical for power
supply in the region, making
Flexible Power segment one of
the top power
producers in Europe.
Flexible Power segment specializes
in power generation from
conventional sources, and
also operates as a trading house.
Carbon Free&Neutral Power
The Carbon Free&Neutral Power
segment focuses on carbon‑free
and carbon-neutral electricity production. It
includes
nuclear
power
assets
as
well
as
renewable
energy
sources
such
as
wind,
solar,
biomass
and
hydro
generation. The segment supports the Group’s
decarbonisation strategy and contributes to reducing the carbon
intensity of electricity generation while maintaining reliable baseload
and sustainable energy output.
Other
The subsegment Other consists of companies which are not managed within other segments or subsegments of
the
Group.
Entities
in
this
subsegment
primarily
include
Group’s
logistic
companies
and
other
supporting
function to Group’s main segments.
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+ (negative
outlook) granted by S&P,
A3 (stable outlook) granted by Moody’s and A- (stable outlook) granted by Fitch. In
2024, the
population was
5.4 million
and its nominal
GDP per
capita was
nearly USD
26 thousand (World Bank,
GDP per capita (current US$)).
Czech Republic
The Czech Republic has been
a member of the
European Union since 2004. The
country has a credit rating
of
AA-
(stable
outlook)
granted
by
S&P,
Aa3
(stable
outlook)
granted
by
Moody’s
and
AA-
(stable
outlook)
granted by Fitch. In 2024, the population was 10.6 million and its nominal GDP per capita was almost USD
32
thousand (World Bank, GDP per capita (current US$)).
Italy
Italy is a founding member of the European Union. The country has a credit rating of BBB+ (positive outlook)
granted by S&P,
Baa3 (positive outlook) granted by Moody’s and
BBB (positive outlook) granted by Fitch. In
2024,
the
population
was
59
million
and
its
nominal
GDP
per
capita
was
approximately
USD
40
thousand
(World Bank, GDP per capita (current US$)).
United Kingdom of Great Britain and Northern
Ireland
The country
has a
credit rating
of AA
(stable outlook)
granted by
S&P, Aa3 (stable outlook)
granted by
Moody’s
and AA-
(stable outlook)
granted by
Fitch. In
2024, the
population was
68 million
and its
nominal GDP
per
capita was more than USD 53 thousand (World Bank, GDP per capita (current US$)).
Germany
Germany is a
founding member of
the European Union.
The country has
a credit rating
of AAA (stable
outlook)
granted by S&P, Aaa (stable outlook) granted by
Moody’s and AAA (stable outlook) granted
by Fitch. In 2024,
the population
was 84.7
million and
its nominal
GDP per
capita was
above USD
56 thousand
(World
Bank,
GDP per capita (current US$)).
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
France
France is
a founding
member of
the European
Union. The
country has
a credit
rating of
A+ (stable
outlook)
granted by S&P, Aa3 (negative outlook)
granted by Moody’s and
A+ (stable outlook)
granted by Fitch.
In 2024,
the population was 68.4
million and its
nominal GDP per capita
was approximately USD 46
thousand (World
Bank, GDP per capita (current US$)).
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 (stable outlook) granted by S&P,
Aaa (stable outlook) granted by Moody’s
and AAA (stable outlook)
granted by Fitch. In 2024, the population was
17.9 million and its nominal GDP per capita was nearly USD 68
thousand (World Bank, GDP per capita (current US$)).
The EPH Group additionally operates in Ireland and Switzerland.
iii.
Development in the Energy Sector where the EPH Group operates
Most recent development
Global macroeconomic
conditions in
2025 remained
broadly stable
but subdued.
Growth was
resilient across
major
economies despite
heightened geopolitical
and trade
uncertainty,
with
the United
States continuing
to
outperform
other
advanced
economies,
while
the
Euro
Area
recorded
only
modest
expansion
and
Germany
returned to marginal
growth after two
weak years. Inflationary
pressures eased further,
particularly for goods,
although services
inflation remained
sticky due
to lagged
wage effects
and still-tight
labour markets.
Central
banks cautiously shifted
toward policy easing,
but real
interest rates
stayed restrictive by
historical standards.
Commodity
markets,
especially
oil,
gas
and
power,
continued
to
influence
inflation
and
industrial
competitiveness,
with
energy
prices
structurally
below
the
2022–2023
crisis
peaks
but
remaining
volatile.
Looking ahead, IMF projections
point to continued moderate growth
into 2026, reflecting persistent structural
headwinds such as demographics, high debt levels and fragmented global
trade and energy flows.
European energy markets in 2025 and
early 2026 were defined by
elevated volatility rather than
sustained price
trends,
driven
by
geopolitical
shocks,
policy
interventions
and
positioning
dynamics.
Gas
and
power
prices
fluctuated sharply amid the expiry of Russian transit routes, changing
winter risk premium, nuclear availability
concerns,
carbon
price
movements
and
repeated
geopolitical
escalations,
culminating
in
early
2026
with
a
significant supply
shock following
conflict involving
Iran and
direct attacks
on Qatari
LNG infrastructure.
While
absolute price levels remained below
the extremes of the
crisis years, structurally reduced pipeline supply
and
limited global LNG spare capacity
left the market highly
sensitive to disruption across the forward
curve. Gas
continued
to
set
marginal
power
prices
in
winter,
while
higher renewable
penetration and
improved
nuclear
availability weakened this
link during summer
months. Carbon pricing
and evolving EU
policy responses under
the
ETS
and
REPowerEU framework
added
further
uncertainty,
reinforcing
a
fragile
energy
market
regime
characterised by heightened sensitivity to geopolitical, regulatory and weather-related
risks.
Electricity consumption
Electricity
demand
across Europe
showed
only
a
modest
recovery
in
2025
and
remained
structurally
below
pre‑pandemic
levels.
Consumption
continued
to
be
negatively
affected
by
subdued
economic
growth,
persistently high
interest rates
and structural
changes in
energy‑intensive industries,
particularly in
Germany
and
other
core
EU
markets.
Certain
industrial
consumers
permanently
reduced
output
or
exited
the
market,
resulting in lasting demand destruction in selected sectors.
Household consumption
stabilised but
did not
return to
historical growth
trends, reflecting
energy
efficiency
improvements,
behavioural
changes
following
the
energy
crisis
and
continued
deployment
of
decentralised
generation. Overall, electricity demand
growth remained uneven
across countries, with
Southern and Western
European markets showing relatively more resilience compared to Central
Europe.
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
Electricity production
In 2025,
the European
power generation
mix continued
to evolve
toward lower‑emission
sources. Coal‑fired
generation further declined as additional capacities were decommissioned or operated
only as strategic backup.
Renewable energy sources, particularly solar
and wind, recorded continued expansion
and increased their share
in total electricity production, supported by favourable regulatory frameworks
and declining technology costs.
Nuclear
generation
recovered
further,
driven
mainly
by
improved
availability
of
French
nuclear
reactors,
contributing
positively
to
baseload
supply
and
helping
to
mitigate
price
volatility
during
periods
of
low
renewable output. Gas‑fired
power plants retained
a crucial role
in balancing the
system, despite higher
fuel cost
volatility, as flexible
dispatchable capacity remains essential for grid stability.
Capacity mechanisms, ancillary
services and balancing markets therefore gained further importance
for the profitability of flexible assets.
Natural gas
Natural gas markets in Europe
remained tight in 2025.
The termination of Russian transit
via Ukraine increased
dependence on LNG, intensifying
competition with Asian markets and
exposing Europe to global
price swings.
While Norway remained
the largest pipeline supplier
and LNG infrastructure
utilisation increased,
limited spare
liquefaction capacity and ongoing geopolitical risks kept gas price volatility
elevated.
Gas demand
for power
generation declined
slightly in
line with
higher renewable
output, whereas
residential
and
commercial
demand
increased
during
colder
periods.
Industrial
demand
remained
structurally
weaker
compared to historical levels. Despite
these headwinds, gas‑fired generation
remained indispensable for system
flexibility,
supporting
investment
in
new
high‑efficiency
and
hydrogen‑ready
combined‑cycle
gas
turbine
(CCGT) plants.
European emission allowances
The market
for European
Union Allowances
(EUAs) in
2025 was influenced
by lower
emissions from
the power
sector,
increased
renewable
generation
and
weak
industrial
activity.
EUA
prices
generally
traded
within
a
moderated
range
compared to
peak levels
observed during
the
energy
crisis,
reflecting reduced
demand and
continued auction volumes under the EU Emissions Trading System (EU ETS).
At
the
same
time,
expectations
related
to
future
tightening
of
climate
targets,
including
the
European
Commission’s
proposals
for
long‑term
decarbonisation
objectives,
continued
to
support
EUA
price
levels.
Ongoing
discussions
regarding
industrial
competitiveness,
carbon
leakage
and
the
pace
of
decarbonisation
introduced additional uncertainty into the market outlook.
iv.
Information on trends
According
to
the
information
available
to
the
Company
since
the
publication
of
the
audited
consolidated
financial statements of
EPH for 2025,
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 Financial 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).
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.
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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
Macroeconomic and geopolitical environment
The
Company
continues
to
monitor
geopolitical
developments,
including
the
ongoing
military
invasion
in
Ukraine and related international sanctions.
The Parent Company has evaluated
potential risks arising from this
situation and implemented measures to mitigate any possible effects. Based on currently available
information,
management concluded that
these circumstances do not
have a material impact
on the 2025 financial
statements
or the
Company’s
going‑concern assumption
for 2026.
While future
developments cannot
be fully
predicted,
management continues to observe the situation closely.
In early 2026, geopolitical tensions in
the Middle East increased following the escalation
of conflict involving
Iran. This has led
to temporary disruptions in regional
shipping activity,
including a reported decline in
traffic
through the
Strait of
Hormuz and
a rise
in oil
and gas
prices. Although
these events
contributed to
some volatility
in global energy markets, they seem not to
have a direct operational impact on the Company and operations of
the Parent Company, and broader market fundamentals remain relatively stable.
Management applies the same monitoring and assessment
approach used in relation to the
conflict in Ukraine.
The
Company
has
no
direct
exposure
in
the
affected
regions,
and
current
market
conditions
indicate
that
developments in
the Middle
East are
being treated
primarily as
geopolitical risk
events rather
than structural
shifts,
supported
by
stabilising
factors
such
as
available
production
capacity
and
diversified
global
supply
patterns. Based on
information available at
the reporting date,
management does not
expect these geopolitical
developments to
materially affect
the Company’s
and Parent
Company’s
financial position
or going‑concern
assessment. Nonetheless,
further negative
developments cannot
be ruled
out, and
these may
materially affect
the Company’s businesses, financial condition, results, cash flows, and overall outlook.
image_2
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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
2025
to
31 December 2025, 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
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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 2025.
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 2025
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 2025 under Section 82 (2) (d) of Act No. 90/2012 Coll., on Business
Corporations and Cooperatives
In 2025, 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 2025, 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 2025
On 2
July 2025,
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.
V.1.2.
Other contracts effective in 2025 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 2025, 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.
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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 2025
and 31 December 2024 are summarised in the below table.
Open balances with the related parties as of 31 December 2025 and 31 December 2024:
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
2025
as of 31 Dec
2025
as of 31 Dec
2024
as of 31 Dec
2024
to the parent company
arising from the provided loan
1,618,472
-
1,110,191
-
arising from rebilling of costs/transfer of
revenues
9
175
2
90
Companies
controlled
by
end
shareholders
arising from rebilling of costs
-
9
-
10
Total
1,618,481
184
1,110,193
100
in EUR thousand
Income
Expenses
Income
Expenses
as of 31 Dec
2025
as of 31 Dec
2025
as of 31 Dec
2024
as of 31 Dec
2024
to the parent company
arising from accrued interest on the loan
81,478
-
54,085
-
arising from rebilling of costs and transfer
of revenues
2,345
-
1,938
-
arising from the income from the sale of
services
10
-
8
-
Companies
controlled
by
end
shareholders
arising from rebilling of costs
-
(10)
-
(10)
Total
83,833
(10)
56,031
(10)
image_3
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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 2025
to 31 December 2025, all information known at the
time of signing this report regarding:
image_4
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
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 2025:
●
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 2025:
●
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.
In 2025
the third
issue of bonds
totalling EUR
500 million
with ISIN
XS3106539938 and a
maturity date
of
2
nd
July 2032 took place and was fully subscribed
Basic numerical data on financial management of the Company for 2025
In the period
from 1 January 2025
to 31 December
2025, the Company reported
a loss of
EUR 259 thousand,
primarily due to the recognition of an allowance amounting to EUR 470 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
1,510 thousand as of
31 December 2025.
As of
31 December 2025,
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 1,625,648 thousand of which
non-current
assets
amount
to
EUR
1,599,009
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 1,621,797 thousand
primarily include issued bonds,
of
which non-current portion amounts to EUR 1,595,145 thousand.
In the reporting period, the Company reports a positive
equity of EUR 3,851 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.
image_5
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
Concept of the Company’s activities for 2026:
Annual Financial Report of EPH Financing International,
a.s. for the year ended 31 December 2025
VI.
Separate Financial Statements as of 31 December 2025
EPH Financing International, a.s.
Separate Financial Statements
as of 31 December 2025
in accordance with the International Financial Reporting Standards
as adopted by the European Union
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
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
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
2
Separate Statement of Comprehensive Income
in EUR thousand
Note
For the year
ended
31 Dec 2025
For the year
ended
31 Dec 2024
Other operating income
12
2,356
1,997
Other operating expenses (Services)
12
(2,355)
(1,958)
Subtotal
1
39
Financial income amortised by the effective interest rate
13
81,517
54,139
Financial expenses
13
(81,250)
(53,911)
Change in allowance for financial instruments
13
(470)
(630)
Operating profit (loss)
(202)
(363)
Profit/(loss) before tax
(202)
(363)
Income tax expense
11
(57)
(56)
Profit/(loss) for the period
(259)
(419)
Total
comprehensive income or loss for the reporting
period
(259)
(419)
Total
comprehensive income or loss attributable to:
Owners of the controlling entity:
Profit/(loss) for the reporting period from continuing operations
(259)
(419)
Total
comprehensive income or loss for the reporting
period
(259)
(419)
Basic and diluted earnings per share from continuing operations
in
EUR
(25,900)
(41,900)
Total basic and diluted earnings
per share
(25,900)
(41,900)
The notes presented on pages 6 to 30 form an integral
part of these financial statements.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
3
Separate statement of financial position
in EUR thousand
Note
as of 31 Dec 2025
as of 31 Dec 2024
Assets
Financial instruments and other financial assets
7
1,599,009
1,102,258
of which to the parent company
1,599,009
1,102,258
Total non-current
assets
1,599,009
1,102,258
Trade receivables and other assets
6
9
2
of which to the parent company
9
2
Financial instruments and other financial assets
7
19,463
7,933
of which to the parent company
19,463
7,933
Prepayments and other deferred payments
6
-
-
Cash and cash equivalents
5
7,167
3,742
Total current assets
26,639
11,677
Total assets
1,625,648
1,113,935
Equity
Share capital
8
82
82
Other capital funds
8
4,890
4,890
Retained earnings and comprehensive income or loss for the period
(1,121)
(862)
Total equity
3,851
4,110
Payables
Financial instruments and other financial liabilities
9
1,595,145
1,098,182
Total non-current
liabilities
1,595,145
1,098,182
Trade payables and other payables
10
7,166
3,654
Financial instruments and other financial liabilities
9
19,463
7,933
Deferred income
-
-
Current income tax liability
11
23
56
Total current
payables
26,652
11,643
Total liabilities
1,621,797
1,109,825
Total equity and liabilities
1,625,648
1,113,935
The notes presented on pages 6 to 30 form an integral part of these financial statements.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
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 2024
82
4,890
(862)
4,110
Contributions from owners
-
-
Total comprehensive income or loss for the reporting period
(Profit or (loss)
-
-
(259)
(259)
Balance at 31 Dec 2025
82
4,890
(1,121)
3,851
The equity of EUR 3,851 thousand is attributable to owners of the controlling
entity.
The notes presented on pages 6 to 30 form an integral
part of these financial statements.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
5
Separate cash flow statement
in EUR thousand
Note
For the year
ended
31 Dec 2025
For the year
ended
31 Dec 2024
OPERATING ACTIVITIES
Profit/(loss) for the reporting period before tax
(259)
(419)
Income tax on ordinary activities
11
57
56
Change in allowances
13
470
630
Net interest income
13
(258)
(259)
Operating profit/(loss) before changes in working
capital
10
8
Change in trade receivables and other assets
(8)
268
Change in trade payables and other payables
37
(495)
Cash generated from (used in) operating activities
Income from the issue of bonds
496,555
600,229
Interest paid on bonds
(65,809)
(55,773)
including paid withholding tax
(8,231)
(6,382)
Paid transaction fees
(2,303)
(1,989)
Loan provided to the parent company
(496,555)
(600,229)
Interest received from loans
69,281
59,303
Transaction fees received
2,303
2,074
Income tax paid on ordinary activities
(86)
(1)
Cash flows generated from (used in) operating activities
3,425
3,395
FINANCING ACTIVITIES
Cash investment in equity
-
-
Cash flows from (used in) financing activities
-
-
Net increase (decrease)
in cash and cash equivalents
3,425
3,395
Cash and cash equivalents at the beginning of the year
3,742
347
Cash and cash equivalents at the end of the year
7,167
3,742
The notes presented on pages 6 to 30 form an integral
part of these financial statements.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
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
2025
to 31
December
2025. The comparative period is the period from 1 January 2024 to 31 December
2024 (“2024”).
The
Annual
Financial
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. Since than 3 other issues
were placed - see Note 9.
The issuer and the bonds were allocated no rating.
Statutory body of the Company as of 31 December 2025
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 2025 is:
Interest in share capital
Voting rights
in EUR thousand
%
%
Energetický a průmyslový holding, a.s.
82
100
100
Total
82
100
100
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
7
Shareholders of Energetický a průmyslový holding, a.s. as of 31 December 2025
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 2025:
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 2025
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 Financial 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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
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
year ending 31
December
2025 and comparison with the corresponding for year ending 31 December
2024
As of 31 December 2025, the Company reported a loss of EUR 259 thousand (31 December 2024: EUR
419 thousand), primarily
due to
a recognition
of an
allowance amounting to
EUR 470 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
1,510 thousand as of 31 December 2025 (31 December 2024: EUR 1,040
thousand).
As of
31 December
2025, 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
1,625,648
thousand (31 December 2024:
EUR 1,113,935 thousand) of
which non-current
assets amount to
EUR 1,599,009
thousand (31 December
2024: EUR 1,102,258 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 1,621,797 thousand (2024: EUR
1,109,825 thousand) predominantly
include issued bonds
with the long-term portion
of EUR 1,595,145 thousand
(31 December 2024: EUR
1,098,182 thousand).
The increase
in non-current assets
and liabilities of
the Company
was due to
a successful
placement of
the third issue
of bonds in
July 2025, 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. Total
value
of issued bonds
as of 31
st
December 2025
amounts to EUR
1,600,000 thousand (31
December 2024:
EUR
1,100,000 thousand).
The above increase is also reflected in interest expense which amounted to EUR 81,221
thousand (2024:
EUR 53,828 thousand)
and interest income
of EUR 81,478
thousand (31 December
2024: EUR 54,058
thousand).
As of 31
December 2025, the Company
reported positive equity of
EUR 3,851 thousand (31
December
2024: EUR 4,110 thousand) after recognising the loss for the reporting period of EUR 259 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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
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 2026
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 means
that the
Company does
not expect
any significant changes in its results, which will continue to be primarily affected by income in the form
of
interest
on
loans
provided,
expenses
relating
to
issued
bonds
and
potential
allowances
for
loans
provided recognised in line with 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.
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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
10
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).
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 – Operating income and expenses,
and in Note 13 – Financial income and expenses.
(f)
Most recent accounting standards
i.
Newly
adopted
IFRS
accounting
standards
and
amendments
to
standards
and
interpretations
effective for
the period ended
31 December 2025
that have
been applied in
the preparation of
the
Company’s financial statements
The following
paragraphs provide
a summary
of the
key requirements
of IFRS
Accounting Standards
that are effective for
annual periods beginning
on or after
1 January 2025
and that have
thus been applied
by the Company for the first time.
Newly adopted IFRS Accounting Standards, Amendments to
Standards and Interpretations with
no material impact on the Company’s financial statements:
●
Amendments to IAS 21 – Lack of Exchangeability.
ii.
IFRS Accounting
Standards not yet
effective
At the date
of authorisation
of these
financial statements,
the following significant
Amendments to IFRS
Accounting Standards have been
issued but are not yet
effective for the period ended 31
December 2025
and thus have not been adopted by the Company:
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
11
IFRS
18
–
Presentation
and
Disclosure
in
Financial
Statements
(Effective
for
annual
reporting
periods beginning on or after 1 January 2027)
IFRS 18 Presentation and Disclosure in Financial statements applies to all financial
statements prepared
and presented in accordance
with IFRS and will
replace IAS 1
Presentation of Financial Statements.
The
new standard introduces
three main sets
of new requirements
with the
aim to
improve how companies
report financial performance
and provide investors
with a more
useful basis for
analysing and comparing
companies:
(a)
Categories for classifying income and expenses in the statement of profit
or loss
Entities are required to classify income and expenses included in the statement of profit or loss into one
of
the
following
categories:
operating,
investing,
financing,
income
taxes,
discontinued
operations.
Modifications
of
the
classification
requirements
are
applicable
for
entities
with
specified
business
activities
(banks,
investment
entities,
investment
property
entities).
The
standard
also
requires
the
presentation of specified subtotals in the statement of profit or loss.
(b)
Management-defined performance measures (“MPMs”)
MPMs are subtotals
of income and
expenses that an
entity uses in
public communication with users
of
financial statements to communicate management’s
view of an aspect of
the financial performance and
that complement totals or
subtotals included in IFRSs.
Entities disclose information about
its MPMs in a
single note, the standard specifies disclosure requirements for each MPM.
(c)
Aggregation and disaggregation of information
The standard introduces principles for aggregation and disaggregation
of information and for presenting
information in the primary financial statements or in the notes.
The issuance
of IFRS
18 includes
amendments to
other IFRS
standards, among
other amendments
to
IAS 7 Statement of cash flow
which removes the presentation alternatives
for interest and dividends and
uses operating profit subtotal as the single starting point for
the indirect method of reporting cash flows
from operating activities.
The Company is currently
reviewing the impact of
the new standard to
its financial statements and
to the
disclosure the Company provides.
New
IFRS
Accounting
Standards,
Amendments
to
Standards
and
Interpretations
that
are
not
expected to have a significant impact on the Company’s financial statements:
●
IFRS 19 –
Subsidiaries without
Public Accountability:
Disclosures and Amendments
to IFRS
19
Subsidiaries without
Public Accountability:
Disclosures (Effective
for
annual reporting
periods beginning on or after 1 January 2027 (not adopted by EU yet));
●
Amendments
to
IFRS
9
and
IFRS
7
–
Classification
and
Measurement
of
Financial
Instruments (Effective for annual reporting periods beginning on or after 1 January 2026);
●
Annual
Improvements
to
IFRS
Accounting
Standards
–
Volume
11
(Effective
for
annual
reporting periods beginning on or after 1 January 2026);
●
Amendments to
IFRS 9
and IFRS
7 –
Contracts Referencing
Nature-dependent Electricity
(Effective for annual reporting periods beginning on or after 1 January 2026);
●
Amendments to
IAS 21
– Translation to
a Hyperinflationary
Presentation Currency
(Effective
for annual reporting periods beginning on or after 1 January 2027
(not adopted by EU yet)).
The Company has not early adopted
any new standard and amendments to
IFRS Accounting Standards
where adoption is not
mandatory at the reporting
date. Where transition provisions
in 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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
12
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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
13
(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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
14
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
EPH
Financing
International,
a.s. is
part
of
a
multinational
group
of
companies (the
“Group”) subject to
new 15% minimum taxation
rules introduced based
on the
Pillar Two rules
of the
BEPS 2.0 initiative since 2024.
Pillar
Two
rules
provide
that
if
in
certain
jurisdictions
where
the
Group
operates
the
effective
tax
rate (“ETR”) (given by the
ratio between adjusted
accounting result and
adjusted corporate income
taxes
in the jurisdiction) falls below
15%, the Group will
be required to pay an additional
tax (“top-up tax”) to
reach the 15% tax rate threshold.
The Company
EPH
Financing
International,
a.s. has,
in
cooperation
with
the
Group’s
Pillar
Two
team, performed
an
assessment
of
its
potential
exposure
for
Pillar
Two
top-up
taxes
in
2025.
The
assessment
relies
on
the
most recent
information available regarding the financial
performance
of
the
Group’s
entities.
This
includes
the
2024 Country-by-Country
Reporting
and
available
preliminary
financial data for 2025.
The potential top-up
tax exposure
was provisionally
calculated based
on the
preliminary 2025 accounting
data revised for material Pillar
Two rules adjustment (if and where applicable). Based on
the provisional
calculation, the Company EPH Financing International, a.s. would not
be subject to top-up tax.
The above analysis must be considered as an estimate, as the indicative calculation is based on complex
regulations
that
have
only
recently
been
enacted
(and
are
still
subject
to
amendments
in
various
jurisdictions) with
limited guidelines
and not
all relevant
data available
to perform
the full
Pillar Two
calculation.
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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
15
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.
5.
Cash and cash equivalents
in EUR thousand
as of 31 Dec 2025
as of 31 Dec 2024
Cash at bank
7,167
3,742
Total
7,167
3,742
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
2025, the
Company reports
trade receivables
amounting to
EUR 9
thousands.
(31
December 2024: EUR 2 thousands).
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 2025
as of 31 Dec 2024
Financial assets
Loans to entities other than credit institutions
1,619,982
1,111,231
of which: loans owed by the parent company
1,619,982
1,111,231
Allowance for loans
(1,510)
(1,040)
Total
1,618,472
1 110 191
Long-term
1,599,009
1,102,258
Short-term
19,463
7,933
Total
1,618,472
1,110,191
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 2025
additionally include a provided loan of EUR 5,374
thousand (31 December 2024: EUR 5,116 thousand), including interest, which matures on 13 November
2028.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
16
Current financial assets as of 31 December 2025
include interest of EUR 19,463 thousand (31
December
2024: EUR 7,933 thousand) payable annually.
The weighted average of the effective interest
rate on loans to entities other than
credit institutions as of
31 December 2025 amounted to 5.831% (31 December 2024: 6.294%).
As
of
31
December
2025,
the
Company
reported
an
allowance
of
EUR
1,510
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 2025 (31 December 2024:
EUR 1,040 thousand).
The parent company was granted the BBB- rating by S&P Global and Fitch
Ratings.
The following table shows detailed information on the loan provided
to the parent company EPH:
as of 31 Dec 2025
Principal
Accrued
interest
Unamortised
fee
Discount
premium
Maturity
Interest
rate
(%)
Effective
interest
rate (%)
in EUR thousand
Loan to EPH (1)**
4,857
517
-
13 Nov 2028
5.31
6.02
Loan to EPH (2)*
600,000
5,357
(1,581)
2,766
13 Nov 2028
6.651
6.7681/5.561
Loan to EPH
(3)*
496,240
2,575
-
964
30 Nov 2029
5.875
6.0316
Loan to EPH (4)*
496,555
11,531
201
2 July 2032
4.625
4.7374
Total
1,597,652
19,980
(1,581)
3,931
-
-
-
* 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 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.
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 2025
as of 31 Dec 2024
Carrying amount
Fair value
Carrying amount
Fair value
Loan to EPH (1)
4,857
5,369
4,857
5,137
Loan to EPH (2)
601,185
620,929
601,572
626,488
Loan to EPH (3)
497,204
495,436
496,609
498,424
Loan to EPH (4)
496,756
501,193
-
-
Total
1,600,002
1,622,927
1,103,038
1,130,049
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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
17
8.
Equity
The authorised,
issued and
fully paid
share capital
as of
31 December
2025 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.
as of 31 Dec 2025
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 2024
10
Newly issued shares
-
Shares issued as of 31 Dec 2025
10
Basic earnings/(loss) per share
Basic
earnings/(loss)
per
share
in
EUR
to
CZK
200,000
nominal
value
is
the
loss
of
EUR
25,900
(31 December 2024: EUR 41,900).
The
calculation
of
basic
earnings/(loss)
per
share
as
of
31
December
2025
was
based
on
the
loss
attributable to ordinary shareholders in the amount of EUR 259
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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
18
9.
Financial instruments and other financial liabilities
in EUR thousand
as of 31 Dec 2025
as of 31 Dec 2024
Issued bonds at amortised cost
1,595,145
1,098,182
Other financial liabilities from bonds
19,463
7,933
Total
1,614,608
1,106,115
Long-term
1,595,145
1,098,182
Short-term
19,463
7,933
Total
1,614,608
1,106,115
The weighted average of the
interest rate on the issued
bonds as of 31 December 2025
was 5.828% (as of
31 December 2024: 6.298%).
Issued bonds at amortised cost
The following table shows detailed information on issued bonds:
as of 31 Dec 2025
in EUR thousand
ISIN
Principal
Accrued
interest
Unamortised
fee
Discount
Premium
Maturity
Interest
rate (%)
Effective
interest
rate (%)
Bonds of EPH Fin Int. (1)
XS2716891440
600,000
5,357
(1,581)
2,766
13/11/2028
6.651
6.7681/
5. 5561*
Bonds of
EPH Fin Int.
(2)
XS2822505439
500,000
2,575
-
(2,796)
30/11/2029
5.875
6.0316
Bonds of EPH Fin Int. (3)
XS3106539938
500,000
11,531
(3,244)
2/7/2032
4,625%
4,737%
Total
1,600,000
19,463
(1,581)
(3,274)
-
-
-
*Different effective interest rates
for the first tranche of EUR 500 thousand and the second tranche of
EUR 100 thousand.
as of 31 Dec 2024
in EUR thousand
ISIN
Principal
Accrued
interest
Unamortised
fee
Discount
Premium
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 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.
EPH
Financing
International
Notes
described
above
contain
a
covenant
limiting
certain
types
of
distributions to the shareholders under certain circumstances. The Group has to monitor the ratio of total
amount of Group’s
net debt to
Group’s EBITDA
(i.e. net leverage)
before certain types
of distributions
are carried out.
Bonds 2032 (XS3106539938)
On 2 July
2025, EPH Financing
International, a.s.,
a 100%
subsidiary of EPH,
issued bonds in
the amount
of EUR
500 million
in the
denomination of
EUR 100,000
each, under
the EUR
3,000,000,000 EMTN
Programme, guaranteed
by EPH
(the “EPH
Financing International
2032 Notes”).
The EPH
Financing
International
2032
Notes were
issued
as
“green
bonds”
with
the
net
proceeds intended
specifically
to
finance
or
refinance,
in
whole
or
in
part,
a
portfolio of
eligible
green
projects
in
line
with
the
use
of
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
19
proceeds, project evaluation and
selection process described in the
Green Finance Framework, which is
available at
https://www.epholding.cz/ under section
‘Sustainability’ and
has been
prepared in
accordance
with the
Green Bond
Principles published
by ICMA.
The EPH
Financing International 2032
Notes are
listed on
the Official
List of
the Irish
Stock Exchange
and traded
on the
regulated market
of Euronext
Dublin. Unless
previously redeemed
or cancelled,
the EPH
Financing International
2032 Notes
will be
redeemed at their principal amount on 2 July 2032.
The EPH Financing International 2032 Notes
bear a fixed interest rate
of 4.625% p.a. and are
stated net
of debt issue costs. These costs are allocated to the profit and loss account through effective interest rate
of 4.940%.
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 2025
as of 31 Dec 2024
ISIN
Carrying
amount
Fair value
Carrying
amount
Fair value
Issued bonds at amortised value (1)
XS2716891440
601,185
647,394
601,573
601,573
Issued bonds at amortised value (2)
XS2822505439
497,204
534,885
496,609
496,609
Issued bonds at amortised value (3)
XS3106539938
496,756
509,915
-
-
Total
1,595,145
1,692,194
1,098,182
1,098,182
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 2025
as of 31 Dec 2024
Trade payables and other payables
7,166
3,654
Total
7,166
3,654
Long-term
-
-
Short-term
7,166
3,654
Total
7,166
3,654
Trade
payables and
other payables
were not
collateralised as
of 31
December 2025
and 31
December
2024. 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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
20
11.
Income taxation
Tax payable
As of 31
December 2025
the Income tax
expense amounts
of EUR
57 thousand (31
December 2024:
EUR
56 thousand).
The total
tax payable
as of 31
December 2025
amounts to
EUR 23
thousand which
represent
a balance
of tax
provision of
EUR 57
thousand lowered
by Income
tax advance
payments of
EUR 34
thousand. The total tax payable
as of 31 December 2024 amounts to
EUR 56 thousand which equals the
balance of posted tax provision.
Effective tax rate
in EUR thousand
2025
2024
Tax at the domestic tax
rate
21.0%
21.0%
Non-tax-deductible expenses - allowances
(49,2%)
(36.4%)
Non-tax-deductible expenses – other
-
-
Average effective
tax rate (tax expense divided by profit/loss before tax)
(28,2%)
(15.4%)
Effective tax rate for 2025
is -28,2% (2024: -15.4%).
12.
Operating income and expenses
Other operating expenses for
services predominantly include the
expenses relating to
the 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
2025
2024
Interest income amortised by the effective interest rate
81,478
54,085
Exchange rate gains
39
54
Financial income
81,517
54,139
Interest expenses amortised by the effective interest rate
(81,221)
(53,828)
Expenses of derivative transactions
(12)
(5)
Exchange rate losses
(17)
(78)
Financial expenses
(81,250)
(53,911)
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 2025.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
21
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.
(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 1,603,038 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 2025, 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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
22
Credit risk by type of counterparty
as of 31 Dec 2025
in EUR thousand
Companies
(non/financial
institutions)
Banks
Total
Assets
Cash and cash equivalents
-
7,167
7,167
Trade receivables and other assets (including prepayments)
9
-
9
Financial instruments and other financial assets
1,618,472
-
1,618,472
Total
1,618,481
7,167
1,625,648
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
Credit risk by territory
protistrany
As of 31 Dec 2025
in EUR thousand
Assets
Czech
Republic
Other
Total
Cash and cash equivalents
7,167
-
7,167
Trade receivables and other assets
9
-
9
Financial instruments and other financial assets
1,618,472
-
1,618,472
Total
1,625,648
-
1,625,648
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
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
23
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 2024
1,040
1,040
Recognition/(release) of allowances for expected loss during the
period
470
470
Balance at 31 Dec 2025
1,510
1,510
(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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
24
Maturity of financial liabilities
as of 31 Dec 2025
in EUR thousand
Carrying
amount
Contractual
cash flows
(1)
Less than
3 months
3 months
to 1 year
1–5 years
Above 5
years
Undefined
Liabilities
Financial
instruments
and
other financial liabilities
1,614,608
1,999,093
-
92,406
1,383,562
523 125
-
Trade payables and other
payables
7,189
7,189
7,189
-
-
-
-
Total
1,621,797
2,006,282
7,189
92,406
1,383,562
523 125
-
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
Above 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
-
-
(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 Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
25
as of 31 Dec 2025
in EUR thousand
Less than 1
year
1 year to 5 years
Above 5
years
Undefined
Total
Assets
Cash and cash equivalents
-
-
-
7,167
7,167
Trade receivables and other
assets (including
prepayments)
-
-
-
9
9
Financial instruments and
other financial assets
1,102,253
496,756
19,463
1 618 472
Total
-
1,102,253
496,756
26,639
1,625,648
Liabilities
Trade payables and other
payables
-
-
-
7,189
7,189
Financial instruments and
other financial liabilities
-
1,098,389
496,756
19,463
1,614 608
Total
-
1,098,389
496,756
26,652
1,621,797
Net interest rate risk
-
3,864
-
(13)
3,851
as of 31 Dec 2024
in EUR thousand
Less than 1
year
1 year to 5 years
Above 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 liabilities
-
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
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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
26
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 2025,
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.
(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
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
27
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.
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.
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
28
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 2025
in EUR thousand
Receivables and
other financial
assets
Payables and other
financial liabilities
as of 31 Dec 2025
as of 31 Dec 2025
To the parent
company
From provided loan
1,618,472
-
From rebilling of costs/received advance payments
-
175
From
provision
of
payment
over
and
above
the
share capital balance
-
-
Companies controlled by end shareholders
From cost invoicing
-
9
Total
1,618,472
184
in EUR thousand
Income
Expenses
as of 31 Dec 2025
as of 31 Dec 2025
To the parent
company
From the interest accrued on the loan
81,478
-
From the income
generated from the
sale of services
10
-
From rebilling of costs/transfer of income
2,345
-
Companies controlled by end shareholders
From cost invoicing
-
10
Total
83,833
10
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
29
(b)
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
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
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
2025
to
31 December
2025. At
the same
time, these
members were
employees of
other companies
within the
EPH Group.
16.
Other Information
Basic information
from ESG
is disclosed
in the
consolidated financial
statements of
EPH for
2025 in
sections 8. Sustainability – Management Review and 10. Consolidated Sustainability
Statement.
17.
Significant Post-Balance Sheet Events
The Group operates within
a global environment influenced
by several geopolitical
factors. The ongoing
military
invasion
in
Ukraine
and
the
associated
international
sanctions
continue
to
be
monitored
by
image_6
Annual Financial Report of EPH Financing International, a.s. for the
year ended 31 December 2025
30
management. The Parent Company has
identified potential risks linked to
this situation and taken steps
to
mitigate
them.
Based
on
the
information
currently
available
and
the
latest
market
conditions,
management has concluded that developments relating to Ukraine
have not had a material effect
on the
2025
financial
statements
or
the
Company’s
going-concern
assumption
for
2026.
Management
will
continue to observe the situation and respond as circumstances evolve.
Geopolitical uncertainty also
increased in early 2026
due to the escalation
of conflict involving
Iran. The
conflict
temporarily
affected
regional
energy
infrastructure
and
contributed
to
a
notable
reduction
in
shipping
activity
through
the
Strait
of
Hormuz.
Oil
prices
experienced
a
short-term
increase.
These
developments
resulted
in
temporary
volatility
in
global
energy
markets,
although
several
stabilising
factors remain present, including available spare capacity within OPEC+ and resilient production levels
in
the
United
States.
As
a
result,
current
indications
suggest
that
the
market
views
the
situation
as
a
geopolitical
risk
event
with
contained
economic
implications
rather
than
a
longer-term
structural
disruption.
In
line
with
the
approach
adopted
for
Ukraine-related
risks,
management
continues
to
analyse
both
situations
within
the
Group’s
established
risk-management
framework.
The
Group
has
no
direct
operational presence
in the
regions affected
by the Iran
conflict,
and indirect
effects—such as commodity
price
fluctuations
or
logistical
uncertainties—have
so
far
remained
manageable.
Management
has
incorporated updated assumptions
into its forecasts
and continues to
evaluate potential impacts
as part of
regular sensitivity analyses.
Current
assessments
do
not
indicate
any
material
effect
on
the
Group’s
financial
stability
or
going-concern
position.
The
Group’s
diversified
portfolio,
strong
liquidity
position,
and
established
risk-mitigation
procedures
provide
resilience
under
various
geopolitical
scenarios.
Management
will
maintain
ongoing
monitoring
of
both
geopolitical
situations
and
adjust
relevant
planning
and
risk-management activities where appropriate.