Consolidated Financial Statements
ALTEO Energiaszolgáltató
Nyilvánosan Működő Részvénytársaság
for the business year ended on December 31, 2021
in accordance with the International Financial Reporting
Standards as adopted by the EU
Independent Auditor’s Report
ALTEO Consolidated Financial Statements
Management Report and Analysis
Issue date of Independent Auditor’s Report:
25
th
March, 2022
Approval date of the General Meeting:
19
th
April, 2022
Disclaimer: All information contained within this article is for information purposes only, and shall not
be considered an official translation of the official communication referred to herein. This document does
not include the integral wording of the official communication referred to herein, the original Hungarian
language version of it remains to be the solely legally binding material in the subject matter. For further
information, please do not hesitate to contact us.
1033 Hungary, Budapest, Kórház utca 6-12
PLC
Hungary
1033 Hungary, Budapest, Kórház utca 6-12
1033 Hungary, Budapest, Kórház utca 6-12
Energy
.pp://General Data/Name of parent entity?taxonomy=ESEF&labellanguage=en&period=1&allowhtml=false&allowunicode=false&merge=true
Alteo Nyrt
..
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú korlátolt felelősségű
társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 17780711-5-42
Group VAT Nr.: HU17780711
Independent Auditor's Report
to the Shareholders of ALTEO Nyrt.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of ALTEO Nyrt. and its subsidiaries (the „Group”)
in the ALTEO_konszolidált_2021_EN
1
digital file for the year 2021 which comprise the consolidated
statement of financial position as at December 31, 2021 (which shows a total assets of HUF 60 760 748
thousands) and the related consolidated statement of recognized income, consolidated statement of
other comprehensive income (which shows a net profit for the year of HUF 10 764 080 thousands),
consolidated statement of changes in equity and consolidated statement of cash flows for the year then
ended and consolidated notes to the financial statements including a summary of significant accounting
policies.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the
consolidated financial position of ALTEO Nyrt. and its subsidiaries as at December 31, 2021 and of
its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the European Union (the
„EU IFRS”), and the consolidated financial statements were prepared in all material respects in
accordance with the provisions of the effective Hungarian Act C of 2000 on Accounting (hereinafter:
"the Accounting Act") relevant to the entities preparing consolidated financial statements in
accordance with EU IFRS.
Basis for the opinion
We conducted our audit in accordance with Hungarian National Standards on Auditing (“HNSA”) and with
applicable laws and regulations in Hungary. Our responsibilities under those standards are further
described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements”
section of our report.
We are independent of the Group in accordance with the applicable laws of Hungary, with the Hungarian
Chamber of Auditors’ Rules on ethics and professional conduct of auditors and on disciplinary process
and, as well as with respect to issues not covered by these Rules, with the International Code of Ethics
for Professional Accountants (including International Independence Standards) issued by the International
Ethics Standards Board for Accountants (the IESBA Code) and we also comply with further ethical
requirements set out in these.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
1
the digital identification of above filename.xhtml consolidated financial statements with SHA 256 HASH
algorithm: 2237546d96c20a9bcad5bf8042f52aa4543685ea3527422100f561acb8e27402
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú korlátolt felelősségű
társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 17780711-5-42
Group VAT Nr.: HU17780711
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed the Key Audit
Matter
Revenue recognition
Refer to Notes IV.1. in the consolidated financial
statements
Revenue is an important measure used to
evaluate the performance of the Group. As a
consequence, it needs to be ensured that the
revenue in the consolidated financial
statements is real, accurate and refers to the
current year. Revenue from sales transactions
is recognized as of the performance date based
on the terms of the delivery contracts.
Our audit work supporting the revenue
recognition included the following substantive
audit procedures.
Existence and accuracy of sales revenue have
been tested on a sample basis and the items
selected have been reconciled to turnover
confirmation letters as well as source
documents (invoice, contract, certificate of
performance).
We have tested on a sample basis the accuracy
of prepaid or deferred income.
Also, we have tested the credit notes issued
after the above balance sheet date in order to
ensure that they did not refer to sales revenue
recognized in the financial year of 2021.
We have applied analytical review procedures as
well for analysing sales turnover.
We have checked the appropriate compliance
with relevant financial reporting standards,
accounting records and disclosures.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú korlátolt felelősségű
társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 17780711-5-42
Group VAT Nr.: HU17780711
Other issues
Management is responsible for the presentation of the financial statements in a form complying with the
requirements prescribed in the Article 3 of the Commission Delegated Regulation (EU) 2019/815 (17
December 2018) (“ESEF Regulation”). Our audit has referred to the human-readable layer of the digital
file, identified electronically in our report, containing the financial statements. The scope of our audit
has not referred to the audit of, and thus we do not express an opinion on whether the digitalized
information has been prepared, in all material respects, in accordance with the requirements of the ESEF
Regulation.
Other information
Other information comprises the information included in the consolidated business report and in the
integrated report of the Group for 2021. Management is responsible for the other information and for
the preparation of the consolidated business report in accordance with the provisions of the Accounting
Act and other relevant regulations. Our opinion on the consolidated financial statements expressed in
the “Opinion” section of our independent auditor’s report does not cover the other information.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If based on our work performed we conclude that the other information is
materially misstated we are required to report this fact and the nature of the misstatement.
Furthermore, in accordance with the Accounting Act, our responsibilities regarding the consolidated
business report also include reviewing the consolidated business report to assess whether the
consolidated business report was prepared in accordance with the relevant provisions of the Accounting
Act and other regulations, if any, including the assessment whether the consolidated business report
complies with the requirements of Section 95/B. (2) e) and f) of the Accounting Act. Furthermore, in
accordance with the Accounting Act we shall make a statement whether the information referred to in
Section 95/B. (2) a)-d), g) and h) and Section 95/C (2) a)-e) has been provided in the consolidated
business report.
In our opinion, the consolidated business report and the integrated report of ALTEO Nyrt. and its
subsidiaries for 2021 corresponds to the consolidated financial statements of ALTEO Nyrt. and its
subsidiaries for 2021 and the relevant provisions of the Accounting Act in all material respects. The
information referred to in Section 95/B. (2) a)-d), g) and h) ) and Section 95/C (2) a)-e) of the Accounting
Act has been provided. As there is no other regulation prescribing further content requirements for the
Group’s consolidated business report, we do not express an opinion in this respect.
We are not aware of any other material inconsistency or material misstatement in the consolidated
business report and in the integrated report therefore we have nothing to report in this respect.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú korlátolt felelősségű
társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 17780711-5-42
Group VAT Nr.: HU17780711
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with International Financial Reporting Standards as adopted by the European
Union, and for such internal control as management determines is necessary to enable the preparation
of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
The auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 HNSAs 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 consolidated financial statements.
As part of an audit in accordance with HNSAs, we exercise professional judgment and maintain
professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú korlátolt felelősségű
társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 17780711-5-42
Group VAT Nr.: HU17780711
• Conclude on the appropriateness of management’s use of the going concern basis in the
preparation of the consolidated financial statements 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 consolidated 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 consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
• We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance 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 those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated 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.
Report on Other Legal and Regulatory Requirements
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:
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú korlátolt felelősségű
társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 17780711-5-42
Group VAT Nr.: HU17780711
Appointment of the Auditor and the Period of Engagement
We were appointed as the auditors of ALTEO Nyrt. by the General Meeting of Shareholders on 30 April
2020 and our engagement has been lasting for two years without interruption.
Consistence with the Additional Report to the Audit Committee
We confirm that our audit opinion on the consolidated financial statements expressed herein is consistent
with the additional report to the Audit Committee of ALTEO Nyrt., which we issued on 25 March 2022 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 (1) of Regulation (EU) No.
537/2014 of the European Parliament and the Council were provided by us to the Group. In addition,
there are no other non-audit services which were provided by us to the ALTEO Nyrt. and its controlled
undertakings and which have not been disclosed in the consolidated financial statements or in the
consolidated business report.
The engagement partners on the audit resulting in this independent auditor’s report are the signatories
of the report.
Budapest, 25 March 2022
BDO Hungary Audit Ltd.
1103 Budapest, Kőér utca 2/A
Registration number: 002387
András Schillinger
Péter Kékesi
Director
Certified Auditor
Chamber registration No.:
007128
This is the translation of the original Hungarian statutory report. In case of any discrepancies, the original
Hungarian version prevails.
ALTEO Nyrt.
a consolidated company
Annual Report for the Fiscal Year 2021
Parts of the report:
ALTEO Nyrt. Financial statements
Independent auditor’s report
Management report, analysis, annual report
Audit closed on: 3/25/2022
Disclaimer: All information contained within this article is for information purposes only, and
shall not be considered an official translation of the official communication referred to herein.
This document does not include the integral wording of the official communication referred to
herein, the original Hungarian language version of it remains to be the solely legally binding
material in the subject matter. For further information, please do not hesitate to contact us.
Consolidated Financial Statements
of ALTEO Energiaszolgáltató
Nyilvánosan Működő Részvénytársaság
and its consolidated subsidiaries
for the fiscal year ended on December 31, 2021
in accordance with the
International Financial Reporting Standards as adopted by
the EU
ALTEO Nyrt. and its consolidated subsidiaries
IFRS consolidated financial statements
Table of Contents
I. Numeric reports of the financial statements
10
II. General information, accounting policy
15
III. Critical estimates used in preparing the financial statements and other sources
of uncertainty
50
IV. Notes to the statement of profit or loss and the statement of financial position
74
V. Other information
114
These financial statements consist of 115 pages.
3 / 115
Table of Contents
Consolidated Financial Statements ......................................................................................................... 1
I. Numeric reports of the financial statements ............................................................................ 10
1. Comprehensive income ................................................................................................. 10
2. Other comprehensive income ....................................................................................... 10
3. Statement of financial position - Assets ........................................................................ 11
4. Statement of financial position - Equity and liabilities .................................................. 12
5. Consolidated Statement of Cash Flows ......................................................................... 13
II. General information, significant accounting policies and the basis for the preparation of the
financial statements .............................................................................................................................. 15
II.1 Statement of IFRS compliance .............................................................................................. 15
II.2 The activity of ALTEO Group .................................................................................................. 15
II.3 ALTEO Group ......................................................................................................................... 16
II.3.1 Group members, group structure ................................................................................. 16
II.3.2 Acquisitions and divestments ........................................................................................ 19
II.3.3 Transformations ............................................................................................................ 19
II.4 The basis for preparation of the financial statements .......................................................... 19
Going concern requirement .......................................................................................................... 20
II.4.1 Preparation, approval and publication of the financial statements ............................. 20
II.4.2 The Group’s places of disclosure ................................................................................... 20
II.5 Significant accounting policies .............................................................................................. 22
II.5.1 Presentation of the financial statements ...................................................................... 22
II.5.2 Currency, accuracy and period of the presentation of the financial statements ......... 22
II.5.3 Decisions regarding presentation .................................................................................. 23
II.5.4 Principles for performing consolidation ........................................................................ 27
II.5.5 Transactions with owners ............................................................................................. 30
II.5.6 Dividends ....................................................................................................................... 30
II.5.7 Accounting policies relating to the statement of profit or loss..................................... 30
II.5.8 Accounting policies relating to the statement of financial position and the recognition
and measurement of assets and liabilities .................................................................................... 35
II.5.9 General accounting policies relating to cash flows ....................................................... 48
III. Critical estimates used in preparing the financial statements and other sources of uncertainty
50
III.1 Critical accounting assumptions and estimates .................................................................... 50
III.2 Changes in accounting policies, potential impact of IFRSs and IFRICs not yet effective as at
the reporting date of the financial statements and earlier application ............................................ 53
III.3 Risk matrix ............................................................................................................................. 54
1. Risks stemming from the legal system ...................................................................................... 56
4 / 115
2. Macroeconomic factors ............................................................................................................. 56
3. Taxation ..................................................................................................................................... 56
4. Risks related to the United Kingdom leaving the European Union (Brexit) .............................. 56
5. Energy market regulation .......................................................................................................... 56
6. Regulated prices ........................................................................................................................ 57
7. Electricity balancing reserve capacity system risks ................................................................... 57
8. Government grants ................................................................................................................... 57
9. CO
2
emission market, CO
2
quota allocation system and CO
2
quota prices ............................... 58
10. Changes in technology .............................................................................................................. 58
11. Competitive situation ................................................................................................................ 58
12. Funding risk ............................................................................................................................... 59
13. Foreign exchange rate changes ................................................................................................. 59
14. Impact of international market developments on domestic trade ........................................... 59
15. Risk of changing natural gas, electricity and heat energy price margins .................................. 59
16. Environmental legislation .......................................................................................................... 60
17. Risks related to the spread of COVID-19 ................................................................................... 60
18. Risks arising from operating the Virtual Power Plant ............................................................... 60
19. Political risks .............................................................................................................................. 60
20. Dependence on weather ........................................................................................................... 61
21. Risks of growth .......................................................................................................................... 61
22. Risks stemming from acquisitions, buying out projects and companies .................................. 62
23. Risks related to power plant project development and green-field investment ...................... 62
24. Large-scale, customized projects .............................................................................................. 62
25. Energy trade risks ...................................................................................................................... 63
26. Operating risks........................................................................................................................... 63
27. Fuel risks .................................................................................................................................... 64
28. Renewing and/or refinancing outstanding debts ...................................................................... 64
29. Information technology systems ............................................................................................... 64
30. Wholesale partner risks ............................................................................................................. 64
31. Dependence on third-party suppliers ....................................................................................... 65
32. Buyer risk ................................................................................................................................... 65
33. The risk of key managers and/or employees leaving the Company ......................................... 65
34. The risk of introducing and using new power plant technologies ............................................ 66
35. Risks arising from authorities' opinions and findings ................................................................ 66
36. Key licenses and qualifications .................................................................................................. 66
37. The risk of not fulfilling the obligations associated with operating its own balancing group .. 66
38. Options to purchase certain means of production ................................................................... 67
5 / 115
39. Business relationships associated with the Owners’ Group ..................................................... 67
40. The risk of being categorized as a de facto group of companies .............................................. 67
41. Taxation ..................................................................................................................................... 68
42. Environmental risks ................................................................................................................... 68
43. Risk of bankruptcy and liquidation proceedings ....................................................................... 68
44. Any discrepancies between the data in the consolidated and IFRS reports and the data in the
reports prepared in line with the Hungarian Accounting Standards (HAS) .......................................... 69
45. The risk of entering new geographical markets ........................................................................ 69
III.4 Financial risks and their management .................................................................................. 69
III.4.1 Recovery risk and its management ............................................................................... 69
III.4.2 Liquidity risk and its management ................................................................................ 71
III.4.3 Interest rate risk and its management .......................................................................... 72
III.4.4 Risk arising from changes in energy product prices and its management .................... 72
III.4.5 Foreign exchange risk and its management .................................................................. 72
III.4.6 Description of hedge relationships - objectives and procedures relevant for hedges
and hedging policy ......................................................................................................................... 72
III.4.7 Managing capital ........................................................................................................... 73
IV. Notes to the statement of profit or loss and other comprehensive income ............................ 74
IV.1 Sales revenue ........................................................................................................................ 74
IV.2 Material expenses ................................................................................................................. 75
IV.3 Personnel expenses ............................................................................................................... 75
IV.4 Other revenues, expenses, net.............................................................................................. 76
IV.5 Capitalized own production .................................................................................................. 77
IV.6 Finance income, expenditures, net ....................................................................................... 77
IV.7 Taxes ...................................................................................................................................... 78
IV.7.1 Taxes in the profit or loss - types of tax expenses ........................................................ 78
IV.7.2 Taxes in the profit or loss - income tax calculations ..................................................... 79
IV.7.3 Income taxes in the statement of financial position ..................................................... 80
IV.7.4 Taxation information ..................................................................................................... 80
IV.8 Deferred taxes ....................................................................................................................... 81
IV.9 Fixed assets and intangible assets ......................................................................................... 83
IV.9.1 Table on the movement of assets ................................................................................. 83
IV.9.2 Valuation of assets ........................................................................................................ 83
IV.9.3 Depreciation and amortization in the current period ................................................... 83
IV.9.4 Asset types..................................................................................................................... 84
IV.9.5 Construction of assets in the current period................................................................. 85
IV.9.6 Capitalization of borrowing costs .................................................................................. 86
6 / 115
IV.9.7 Environmental effects statement .................................................................................. 86
IV.9.8 Assets as borrowing collaterals ..................................................................................... 86
IV.10 Lease assets ........................................................................................................................... 86
IV.10.1 Finance lease (Group as Lessor) .................................................................................... 86
IV.10.2 Operating leases ............................................................................................................ 87
IV.11 Loans given ............................................................................................................................ 87
IV.12 Long-term participation in affiliated companies ................................................................... 87
IV.13 Inventories ............................................................................................................................. 88
IV.14 Trade receivables .................................................................................................................. 88
IV.15 Emission allowances .............................................................................................................. 89
IV.16 Other financial assets ............................................................................................................ 90
IV.17 Other receivables and accruals ............................................................................................. 90
IV.18 Cash and cash equivalents .................................................................................................... 91
IV.19 Application of the expected credit loss model (ECL) to financial assets ............................... 91
IV.20 Equity ..................................................................................................................................... 93
IV.20.1 Issued capital and own shares ....................................................................................... 93
IV.20.2 Reserves......................................................................................................................... 94
IV.20.3 Share-based payments reserve, share-based benefits ................................................. 94
IV.20.4 Hedge reserve ................................................................................................................ 94
IV.20.5 Conversion reserve ........................................................................................................ 96
IV.20.6 Retained earnings .......................................................................................................... 96
IV.20.7 Non-controlling interest ................................................................................................ 97
IV.21 Debts on the issue of bonds .................................................................................................. 97
IV.22 Borrowings ............................................................................................................................ 99
IV.22.1 Long-term loans and their collaterals ........................................................................... 99
IV.22.2 Borrowing cash flow .................................................................................................... 100
IV.23 Lease liabilities..................................................................................................................... 100
IV.24 Provisions ............................................................................................................................ 101
IV.25 Deferred income .................................................................................................................. 102
IV.26 Other long-term liabilities ................................................................................................... 103
IV.27 Advances received ............................................................................................................... 104
IV.28 Trade payables .................................................................................................................... 104
IV.29 Other financial liabilities ...................................................................................................... 105
IV.30 Other short-term liabilities and accruals ............................................................................. 105
IV.31 Accounting for project development contracts under IFRS15 ............................................ 105
IV.32 Presentations on acquisitions of companies ....................................................................... 106
IV.33 EBITDA ................................................................................................................................. 106
7 / 115
IV.34 Calculation of earnings per share (EPS) ............................................................................... 107
IV.35 Presentation of share-based and equity settled benefit schemes...................................... 107
IV.36 Financial liabilities and conditions ....................................................................................... 109
IV.37 Segments ............................................................................................................................. 110
IV.38 Related party disclosures .................................................................................................... 110
IV.39 Contingent liabilities, guarantees ........................................................................................ 112
IV.39.1 Economic relations subject to legal proceedings ........................................................ 113
IV.40 Fair value measurement disclosures ................................................................................... 113
V. Other information ................................................................................................................... 114
V.1 Disclosure of interests in other entities .............................................................................. 114
V.2 Significant events after the reporting date ......................................................................... 114
V.3 The auditor, the audit fee and non-audit services .............................................................. 115
V.4 Approval of the disclosure of the financial statements ...................................................... 115
8 / 115
Explanation of the abbreviations used in the financial statements:
Abbreviation
Explanation
ARO
Recultivation under IAS16
BGS
Bond Funding for Growth Scheme – the bond program of the Central Bank of
Hungary;
BoD
Board of Directors
BSE
Budapest Stock Exchange
BUBOR
Budapest Interbank Offered Rate
Capital Market Act
Act CXX of 2001 on the Capital Market
CGU
Cash-generating Unit
Company
ALTEO Energiaszolgáltató Nyilvánosan Működő Részvénytársaság
EKR
Energy efficiency obligation schemes under Section 12/A of Act LVII of 2015
(Energy Efficiency Act)
Electricity Act
Act LXXXVI of 2007 – on Electricity
EPS
Earnings per Share
ESOP
Employee Share Ownership Program
EUA
Allocated CO
2
emission rights
FVTPL
Fair Value through Profit or Loss
Gas Supply Act
Act XL of 2008 on Natural Gas Supply
HAS
Hungarian Accounting Standards
HEPURA
The Hungarian Energy and Public Utility Regulatory Authority (formerly known
as: Hungarian Energy Office);
HUDEX
Hungarian Derivative Energy Exchange. HUDEX was founded by HUPX Zrt. in
order to comply with the new legal provision that the derivatives of gas and
electricity traded on the HUPX and CEEGEX futures platforms are to be
considered as financial assets.
HUPX
Electricity market organized by the power exchange - a trading system
facilitating regional electricity trade operated by the organized electric power
licensee (HUPX Zrt)
IFRIC/SIC
Interpretations of the International Financial Reporting Standards
IFRS
International Financial Reporting Standards
9 / 115
KÁT
Electric power offtake system based on the provisions of the Electricity Act, the
Government Decree implementing the Electricity Act and Government Decree
no. 389/2007 (XII.23.) on the mandatory offtake and feed-in tariff of electricity
produced from renewable energy sources or waste and cogenerated electricity
KELER
Központi Értéktár Zártkörűen Működő Részvénytársaság (Central Treasury
Private Limited Company)
MAVIR
Magyar Villamosenergia-ipari Átviteli Rendszerirányító Zártkörűen Működő
Részvénytársaság
METÁR
Mandatory offtake system for heat and electricity produced from renewable and
alternative energy sources
O&M
Operation and Maintenance contract
PM
Ministry of Finances
SB
Supervisory Board
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
10 / 115
I. NUMERIC REPORTS OF THE FINANCIAL STATEMENTS
Consolidated statement of income
and consolidated statement of other comprehensive income in 2021
1. Comprehensive income
2. Other comprehensive income
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapters IV-V of the financial statements
Comprehensive income
(Negative values are denoted by parentheses)
Note
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Revenues 1. 44 249 448 32 981 301
Material expenses 2.
(25 624 444) (23 072 429)
Personnel expenses 3.
(4 192 237) (3 770 040)
Depreciation and amortization 9.
(3 936 669) (2 858 523)
Other revenues, expenses, net 4.
(1 795 605) (1 228 018)
Capitalized own production 5. 242 826 512 226
Operating profit or loss 8 943 319 2 564 517
Finance income 6.
384 928 479 576
Financial expenses 6.
(2 255 979) (1 569 892)
Net finance income 6. (1 871 051) (1 090 316)
Profit or loss before taxes 7 072 268 1 474 201
Income tax expenditures 7. (1 214 818) (883 660)
Net profit or loss 5 857 450 590 541
from which the owners of the Parent Company are entitled to: 20.
5 855 184 586 663
Of which the minority interest is entitled to: 20. 2 266 3 878
Base value of earnings per share (HUF/share) 34. 309,96 31,48
Diluted value of earnings per share (HUF/share) 34. 302,03 30,26
EBITDA 33. 12 879 988 5 512 091
Other comprehensive income
(Negative values are denoted by parentheses)
Note
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Other comprehensive income (after income tax)
4 906 630 2 114 292
Effect of cash flow hedges on other comprehensive income 20.
5 605 251 3 234 593
Reclassification into profit or loss due to the closing of cash flow hedge 20.
(698 621) (1 121 360)
Conversion reserve 20.
- 1 059
From which the owners of the Parent Company are entitled to:
4 906 630 2 114 292
From which the non-controlling interest is entitled to: - -
Comprehensive income
10 764 080 2 704 833
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
11 / 115
Consolidated statement of financial position
for December 31, 2021
3. Statement of financial position - Assets
’* For adjustments to the lines indicated relative to the comparative period, see Section II.5.31 Changes
in comparative data on page 23.
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapters IV-V of the financial statements
statement of financial position continued on the next page
Statement of financial position - Assets
(Negative values are denoted by parentheses.)
Note
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Non-current assets
31 370 772 31 065 255
Property, plant and equipment* 9.
25 738 088 25 523 292
Other intangible assets 9.
2 516 820 3 037 269
Operation contract assets 9.
1 052 216 1 212 987
Rights of use 9.
1 766 502 1 063 615
Deferred tax assets 8.
71 395 132 811
Long-term deposits or loans given 11.
225 651 95 181
Long-term participation in associate 12.
100 100
Current assets and
assets held for sale
Inventories 13.
1 076 779 442 622
Trade receivables 14.
4 425 345 3 263 224
Short-term lease assets 10.
- 128 949
Emission allowances 15.
2 395 525 843 488
Other financial assets* 16.
8 627 136 1 795 982
Other receivables and accruals 17.
9 155 718 3 796 983
Income tax receivables 7.
30 220 92 812
Cash and cash equivalents 18.
3 679 253 3 455 045
TOTAL ASSETS 60 760 748 44 884 360
29 389 976
13 819 105
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
12 / 115
Consolidated statement of financial position
for December 31, 2021
4. Statement of financial position - Equity and liabilities
’* For adjustments to the lines indicated relative to the comparative period, see Section II.5.31 Changes
in comparative data on page 23.
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapters IV-V of the financial statements
Statement of financial position - Liabilities
(Negative values are denoted by parentheses.)
Note
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Equity
19 009 318 8 547 657
Equity attributable to the shareholders of the
Parent Company
18 999 287 8 539 892
Issued capital 20.
242 235 232 972
Reserves* 20.
5 375 369 4 962 084
Share-based payments reserve 20.
(206 875) 62 819
Hedge reserve 20.
5 306 431 399 801
Retained earnings 20.
8 282 127 2 882 216
Non-controlling interest
20.
10 031 7 765
Long-term liabilities 24 490 928 27 905 833
Debts on the issue of bonds 21.
12 658 274 14 889 000
Long-term loans and borrowings 22.
6 583 098 8 411 397
Finance lease liabilities 23.
1 687 704 1 047 406
Deferred tax liabilities 8.
1 487 761 866 550
Provisions 24.
944 136 850 493
Deferred income 25.
593 865 436 864
Other long-term liabilities 26.
536 090 1 404 123
Short-term liabilities 17 260 502 8 430 870
Short-term bond payables 21.
2 312 138 -
Short-term loans and borrowings 22.
419 778 929 693
Short-term finance lease liabilities 23.
237 744 154 912
Advances received 27.
8 989 46 500
Trade payables 28.
4 546 498 2 308 413
Other financial liabilities 29.
- 189 130
Other short-term liabilities and accruals 30.
9 328 196 4 522 992
Income tax liabilities 7.
407 159 279 230
TOTAL EQUITY and LIABILITIES 60 760 748 44 884 360
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
13 / 115
Consolidated statement of cash flows for 2021
5. Consolidated Statement of Cash Flows
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapters IV-V of the financial statements
Cash flow
(Negative values are denoted by parentheses)
Note
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Profit or loss before taxes 7 072 268 1 474 201
(Interest income) and interest expenses, net 6. 971 977 953 839
Depreciation 9. 3 936 669 2 858 523
Recognition of impairment in profit or loss 4. 132 601 599 777
Scrapping of production and other machinery 4. 12 612 89 051
Provisions recognized (released) 24. 93 643 37 000
Provisions for asset retirement obligations recognized and (released) - IAS 16
24. (54 180) -
Deferred income increase (decrease)
25. 157 001 (98 810)
Effect of other comprehensive income 20. 4 682 760 2 277 463
Share-based payment cost 20. 261 275 101 292
Changes in deferred taxes 8. 197 356 191 786
Effect of income taxes on profit or loss 7. (1 214 818) (883 660)
Net cash-flow of business activity without change in current assets 16 249 164 7 600 462
-
Change in inventories 13. (634 157) (230 218)
Changes in emission allowances 15. (1 552 037) (501 388)
Change in trade receivables, other receivables, accrued income and deferred charges 14. (6 597 459) (94 583)
Change in other financial assets 16. (6 831 154) (1 336 175)
Change in trade payables, other liabilities, accrued expenses and deferred income 28. 6 784 178 347 875
Advances received (final settlement -) 27. (37 511) (451 463)
Cash flow from business activities (use of funds) 7 381 024 5 334 510
Interests received on deposits and investments 6. 41 355 15 446
Purchase of production and other machinery, and intangible assets 9. (3 534 766) (5 631 151)
Investment in acquiring businesses (net of cash) 32. - (2 134 892)
Revenue from the sale of production and other machinery, and intangible assets 9. 8 870 339
Change in lease assets 10. 128 949 136 241
Long-term loans or deposits given - lending 11. (131 395) (47 991)
Long-term loans or deposits given - repayment 11. - -
Cash flow of investment activities (cash outflow) (3 486 987) (7 662 008)
Interest paid on bonds and loans 21.,6. (770 035) (692 486)
Long-term loans and borrowings, financial liabilities
Assumption and prepayment of long-term loans and borrowings, financial liabilities,
lease liabilities
22. (2 361 869) (271 700)
Bonds repaid 21. - (2 150 000)
Bonds issued 21. - 3 904 709
Capital increase, purchase of own shares 20. - 129 160
Changes in ESOP cash and cash equivalents and other transactions with owners 20. (93 382) (30 725)
Dividend payment 20. (455 275) -
Cash flow from financing activities (3 680 561) 888 958
Changes in cash and cash equivalents 213 476 (1 438 540)
Opening cash and cash equivalents 3 455 045 4 847 671
Cash exchange gains/losses 10 732 45 914
Closing cash and cash equivalents 3 679 253 3 455 045
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
14 / 115
Consolidated Statements of Changes in Equity
for the period ended on December 31, 2021
The notes constitute an integral part of the financial statements.
Negative values are denoted by parentheses.
The amount of issued capital is different from the value registered at the registry court. Differences are presented in Note 23 to the Separate Financial Statements.
Data in HUF thousand Issued capital Reserves*
Share-based
payments
reserve
Retained earnings
Hedge
reserve
Conversion
reserve
Equity
attributable to
the shareholders
of the Parent
Company
Non-
controlling
interest
Total equity
01/01/2020
232 948 4 863 673 68 398 2 303 282 (1 713 432) (1 059) 5 753 810 (3 926) 5 749 884
Implementation of employee share award program
through shares
24 1 626 (1 650) - -
Purchase of own shares (452) (30 725) (31 177) (31 177)
Private placement - -
Dividend payment - -
Employee Share Ownership Program implementation 452 20 639 (3 929) 17 162 17 162
Employee Share Ownership Program lapse - -
Acquisition of the non-controlling interest of
Tisza-Bioterm Kft.
(7 813) (7 813) 7 813 -
Recognition of share benefits against profit or loss 106 871 106 871 106 871
Transfer of rounding differences of prior years 84 84 84
Comprehensive income 586 663 2 113 233 1 059 2 700 955 3 878 2 704 833
12/31/2020
232 972 4 962 084 62 819 2 882 216 399 801 - 8 539 892 7 765 8 547 657
Implementation of employee share award program
through shares
48 4 252 4 300 4 300
Purchase of own shares (3 118) (290 601) (293 719) (293 719)
Dividend payment (455 275) (455 275) (455 275)
Employee Share Ownership Program implementation 7 221 267 160 274 381 274 381
Employee Share Ownership Program option value 62 819 (62 819) - -
Own shares transferred to ESOP 5 112 (5 112) - - -
Cash transferred to ESOP (100 000) (100 000) (100 000)
Non-controlled ESOP participation 575 020 (575 020) - -
Receivable from ESOP 6 618 6 618 6 618
Recognition of share benefits against profit or loss 261 274 261 274 261 274
Transfer between capital element (106 871) 106 871 - -
Aggregate amount of rounding difference 2 2 2
Comprehensive income 5 855 184 4 906 630 10 761 814 2 266 10 764 080
12/31/2021
242 235 5 375 369 (206 875) 8 282 127 5 306 431 - 18 999 287 10 031 19 009 318
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
15 / 115
II. GENERAL INFORMATION, SIGNIFICANT ACCOUNTING POLICIES AND THE BASIS FOR THE
PREPARATION OF THE FINANCIAL STATEMENTS
II.1 Statement of IFRS compliance
The management declares that the consolidated financial statements for the year 2021 were
prepared in accordance with the International Financial Reporting Standards as adopted by the EU,
based on the management's best knowledge, providing a true and reliable picture of the assets,
liabilities, financial situation of the Group as an issuer, as well as of its profit and loss. Furthermore,
the management declares that its consolidated financial statements for the year 2021 provide a true
and fair view of the situation, development and performance of the issuer, outlining main risks and
uncertainties. The management made this declaration in full awareness of its responsibility.
II.2 The activity of ALTEO Group
By today, the ALTEO Group, founded in 2008, has become an acknowledged comprehensive energy
service provider in Hungary. The shares of the Company, having entered the Budapest Stock
Exchange in 2010, have been listed on the Equities Prime Market of the BSE since 2018, but ALTEO is
a member of the Hungarian stock exchange through its corporate bonds as well.
The corporate group is an energetics service provider and trader concern that represents a modern
approach and is in Hungarian ownership. Its business activity covers energy production based on
renewable energy carriers and on natural gas, energy trading, as well as personalized energy
services, development projects and maintenance for corporate entities.
The company group considers spreading renewable resource-based electricity production in Hungary
a priority task. Accordingly, we are striving for the development of an energy portfolio which strikes a
careful balance between relying on renewable energy and small power plants burning hydrocarbons,
as well as combining them with cogeneration technologies to achieve even higher efficiency. We are
building a client-oriented, reliable and flexible energy trading business to provide assistance to small,
medium and large corporations in our clientele in energy management, therefore minimizing
environmental burdens and costs.
Our strategic goals are closely linked to our core values. When compiling our portfolio, our endeavor
was to become a decisive energy service provider on several fronts through the optimal application
of both wholesale and retail energy trading, decentralized energy production and efficient energy
management. This way we provide our customers and partners with high quality and innovative
services, and produce sufficient yields to our shareholders.
Global energy market trends have changed in recent years: decarbonization has become a priority,
decentralization in energy production continued; innovative technologies emerged in the energy
industry as a result of digitalization. ALTEO not only intends to become a competitive market actor,
but also wishes to take the lead in the transformation of the energy market.
Its 2021 results confirmed ALTEO’s strategy and the successful investments of the past period.
ALTEO's profitability was only moderately affected by the COVID epidemic compared to other more
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
16 / 115
procyclical sectors due to the risk management measures taken by the company and the fact that the
negative impact of the epidemic was far outweighed by the excellent results achieved with other
activities.
The outstanding performance of the virtual power plant in charge of heat and electricity generation
has been positively impacted by the 18MW expansion of the power plant portfolio’s gas engine
capacity in 2020. In 2021 prices in the global market increased significantly, which also affected the
Group's profitability. The Retail segment closed with an outstanding, record profit, reflecting the
impact of rising global prices.
ALTEO also renewed key contracts with several important partners. On October 21, 2021, the
Kazincbarcika heat supply contract, a relevant heat sales element of ALTEO's energy production
business was renewed until September 30, 2031. On January 4, 2022, the operation and
maintenance contract with one of our key operating partners, BC Power Plant, owned by
BorsodChem Zrt., was renewed for another 15 years.
On December 7, 2021, the Group was awarded a grant of more than HUF 400 million for a new R&D
project that is a good example of ALTEO's innovation efforts. The aim of the project is to develop a
highly automated, AI based energy IT system that is capable of making autonomous production and
commercial decisions, and controlling and optimizing "smart" power plant electricity production.
In July 2021, Scope ratings reaffirmed the previous rating (BBB-) of Alteo's bonds, and on January 10,
2022, the bond package "ALTEO 2022/I" was repaid by the Group to the bondholders.
The above results, although partly a one-off event, are good feedback to ALTEO's management and
demonstrate that the strategy presented earlier and revised in early 2022 is working. Environmental
and social sustainability continues to have a crucial role in our strategy.
II.3 ALTEO Group
II.3.1 Group members, group structure
The Group consists of ALTEO Nyrt. (Parent Company) and the subsidiaries. The Group includes all
entities which are directly or indirectly controlled by the Parent Company. In the Group, control is
exercised based on ownership interest.
The Group's Parent Company is ALTEO Energiaszolgáltató Nyilvánosan Működő Részvénytársaság, a
company established (on April 28, 2008) under Hungarian law (governing law). As of September 6,
2010 the company was listed on the Budapest Stock Exchange.
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
17 / 115
The publicly issued shares of the Company are quoted on the Budapest Stock Exchange; the closing
rate of the shares on the last trading day of 2021 (on December 30) was HUF 2180, the annual
trading volume in 2021 amounting to 2,872,838 shares in the value of HUF 3931 million.
Registered office and center of operations of ALTEO Nyrt.: H-1033 Budapest, Kórház utca 6-12.
Registered core activity of the Parent Company: Engineering activities and related technical
consultancy (Hungarian NACE 7112).
The majority shareholder of ALTEO Nyrt. is Wallis Asset Management Zártkörűen Működő
Részvénytársaság (H-1055 Budapest, Honvéd utca 20, company registration number: 01-10-046529).
The Group's ultimate Parent Company was WALLIS PORTFOLIÓ Korlátolt Felelősségű Társaság (H-
1055 Budapest, Honvéd utca 20, company registration number: 01-09-925865) as at December 31,
2021. The shareholders of this entity are all private individuals.
Ownership structure of the Parent Company (ALTEO Nyrt.) based on the share register as at
December 31, 2021:
The structure of ALTEO Group on the reporting date is as follows:
2021 2020 2021 2020
Wallis Asset Management Zrt. and its subsidiaries 153 436 154 789 63,32% 63,88%
Members of the Board of Directors, the Supervisory Board
11 544 7 716 4,76% 3,18%
Own shares 94 9 357 0,04% 3,86%
ESOP 5 967 - 2,46% -
Free float 71 288 70 467 29,42% 29,08%
TOTAL 242 329 242 329 100,00% 100,00%
Face value (HUF thousand)
Ownership ratio (%)
Present shareholders of the Company based on the share
register on 12/31/2021
Energy services
Energy
trading
Alte-A KFt. Alteo-Depónia Kft. Energigas Kft. Tisza-Bioterm Kft.
Tisza-WTP Kft. e-Wind Kft. Windeo Kft. Alteo-Therm Kft.
Hidrogáz Kft.
Alteo-Go Kft.
Domaszék 2MW Kft. Monsolar Kft.
Alteo
Energiaszolgáltató
Nyrt.
Alteo
Energiakereskedő
Zrt.
Sinergy
Enerigakereskedő
Kft.
Euro-Green Energy Kft. Sunteo Kft.
Pannon Szélerőmű Kft.
Alteo Deutschland
GmbH 'i L'
Sinergy Energiaszolgáltató,
Beruházó és Tanácsadó Kft.
Kazinc-BioEnergy Kft.
ECO-FIRST Kft. Tisza-BioEnergy Kft.
Energy production and Virtual power plant
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
18 / 115
Amount of
equity (HAS)
Amount of
revenue
(HAS)
12/31/2021 12/31/2020 12/31/2021 12/31/2021
ALTEO Energiaszolgáltató Nyrt. H-1033 Budapest, Kórház utca 6-12. Engineering service N/A N/A N/A N/A N/A N/A
ALTE-A Kft. H-1033 Budapest, Kórház utca 6-12. property management 08/02/2011 Founding 100% 100% 11 974 30 323
ALTEO Energiakereskedő Zrt. H-1033 Budapest, Kórház utca 6-12. electricity and gas trade 12/05/2011 Founding 100% 100% 286 136 17 561 505
ALTEO-DEPÓNIA Kft. H-1033 Budapest, Kórház utca 6-12. electricity production 10/01/2008 Founding 100% 100% 29 722 189 213
ALTEO Deutschland GmbH 1 Marie-Curie-Str. 5, D-53359 Rheinbach heat energy production, electricity production 04/18/2018 Founding N/A 100% N/A N/A
Alteo-Go Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 05/04/2015 Purchase 100% 100% 4 057 52 042
BC-Therm Kft. 3 H-1033 Budapest, Kórház utca 6-12. electricity production 05/04/2015 Purchase N/A 100% N/A N/A
Domaszék 2MW Naperőmű Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 12/04/2017 Purchase 100% 100% 39 702 101 814
e-WIND Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 02/11/2013 Purchase 100% 100% (110 988) 70 271
ECO First Kft. 4 H-1033 Budapest, Kórház utca 6-12.
Treatment and disposal of non-hazardous waste
06/25/2019 Purchase 66,67% 66,67% 37 258 233 099
Euro Green Energy Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 05/28/2019 Purchase 100% 100% 2 671 138 2 245 909
ALTEO-THERM Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 12/31/2009 Purchase 100% 100% 3 403 046 20 121 780
HIDROGÁZ Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 07/13/2009 Purchase 100% 100% 11 898 499
Kazinc-BioEnergy Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/04/2015 Purchase 100% 100% 1 866 -
Monsolar Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (solar power plant) 11/06/2017 Purchase 100% 100% 50 062 218 724
Pannon Szélerőmű Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 10/14/2020 Purchase 100% N/A 2 282 272 1 058 912
Sinergy Energiakereskedő Kft. H-1033 Budapest, Kórház utca 6-12. energy production 05/04/2015 Purchase 100% 100% 294 502 19 144 050
Sinergy Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/04/2015 Purchase 100% 100% 475 451 427 652
SUNTEO Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 01/30/2013 Founding 100% 100% 206 571 685 074
Tisza BioTerm Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 05/04/2015 Purchase 100% 60% (939) -
Tisza-BioEnergy Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/04/2015 Purchase 100% 100% 2 415 -
Tisza-WTP Kft. 2 H-3580 Tiszaújváros, Ipartelep 2069/3. water treatment, desalinated water production 05/04/2015 Purchase 100% 100% 101 735 1 454 062
WINDEO Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/24/2012 Purchase 100% 100% 216 057 247 610
Rate of influence
Name of companies in Group
Note
Legal title
Ownership
acquisition
date
Activity
Registered office
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
19 / 115
1
Subsidiary registered under German law, closed in 2021 through voluntary winding-up
2
100% share; undertakings presented as lease assets
3
100% of the subsidiarity quota sold on May 31, 2021
4
The Group has a 66.67% share in Eco-First Kft., thus the share of the group in the net assets of Eco-
First Kft. is 66.67%, with that, however, the Group exercises control over this company.
The laws of Hungary are to be applied to the subsidiaries of the Group, with the exception of ALTEO
Deutschland GmbH. The subsidiaries - with the exception of ALTEO Deutschland GmbH - pay tax in
accordance with the Hungarian regulations.
The subsidiaries of the Group are also included in the consolidation of other companies.
year
Member company
Consolidating entity
2021
Tisza WTP Kft.
Mol Petrolkémia Zrt., 100% shares
II.3.2 Acquisitions and divestments
year
Member company
Change in participations
2020
Pannon Szélerőmű Kft.
Acquisition of 100% participation
2020
Tisza-BioTerm Kft.
Acquisition of 40% participation
2021
BC-Therm Kft.
Divestment of 100% quota
II.3.3 Transformations
9/30/2020 – “Sunny mergers”
As the next step in the process to streamline the corporate structure of ALTEO Nyrt. as announced at
the extraordinary General Meeting of November 8, 2017, the Company decided on the merger by
absorption of its subsidiaries operating photovoltaic power plants. In the course of the merger
- IT-Solar Kft. merged into Monsolar Kft.
- the following companies were merged into Sunteo Kft.:
• Péberény Ingatlanhasznosító Kft.
• True Energy Kft.
• F.SZ. Energia Kft.
The mergers by absorption were concluded on September 30, 2020.
II.4 The basis for preparation of the financial statements
These financial statements present the financial position, performance and financial situation of the
Parent Company ALTEO Energiaszolgáltató Nyilvánosan Működő Részvénytársaság and its
consolidated entities (collectively referred to as: the Group). The Group first published consolidated
financial statements prepared under the IFRSs in 2010.
The financial statements were prepared in accordance with the International Financial Reporting
Standards (IFRSs) developed by the International Accounting Standards Board (IASB). The IFRSs were
adopted by the Group as endorsed by the European Union. Where an IFRS does not provide detailed
guidelines for certain rules but the Accounting Act has such rules, the provisions of the Accounting
Act shall be applied. Beside the above, the Group prepared the financial statements considering the
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provisions of Decree No. 24/2008 (VIII. 15.) of the Minister of Finance on the detailed regulations on
information obligation in connection with the securities trade on the stock exchange.
These financial statements contain information for a comparable period. The comparable data
included in the report were prepared based on the same principles as the ones applied to the data of
the reporting period.
The companies consolidated in the Group – with the exception of ALTEO Deutschland GmbH – pay
tax in accordance with the Hungarian regulations. ALTEO Deutschland GmbH is a company
established under German law.
Going concern requirement
The management of the Parent Company is not aware of any information or data which would imply
that the Group intends to terminate or significantly reduce its operations in the foreseeable future
(within one year from the reporting date).
II.4.1 Preparation, approval and publication of the financial statements
The financial statements of the Group and the related business report are prepared and approved by
the management of ALTEO Nyrt. acting on behalf of the Board of Directors. The Board of Directors
publishes the finished financial statements and the business report and submits them to the General
Meeting after having it reviewed by the Supervisory Board.
The Group publishes its financial statements at its places of disclosure.
II.4.2 The Group’s places of disclosure
• www.alteo.hu
• e-beszamolo.im.gov.hu
• www.kozzetetelek.mnb.hu
• www.bet.hu
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The persons authorized to jointly sign the consolidated annual report:
• Attila László Chikán (H-1144 Budapest, Gvadányi utca 15. 8. ép. B. lház. fszt. 2.) member of
the Board of Directors, CEO
• Zoltán Bodnár (H-2045 Törökbálint, Honfoglalás utca 12.) Deputy CFO.
The person commissioned to control and lead the auditing tasks in accordance with Section 88 (9) of
Act C of 2000:
• Anita Magdolna Lénárt (registration number: 186427).
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II.5 Significant accounting policies
II.5.1 Presentation of the financial statements
The Group prepares consolidated financial statements involving its controlled entities and the Parent
Company (hereinafter: financial statements). The Group's financial statements are comprised of the
following (parts):
▪ consolidated statement of income
▪ consolidated statement of financial position
The Group has decided to present the statement of income and the statement of other profit or loss
in separate statements.
▪ consolidated statement of other comprehensive income
Other comprehensive income includes items which increase or decrease net assets (i.e. the
difference between assets and liabilities) and such decrease may not be recognized against any asset,
any liability or profit or loss, but instead change an element of equity directly in respect of the
broadly defined performance of the Group. Other comprehensive income does not include, among
others, equity transactions which result in a change in the available equity and transactions
conducted by the Group with the owner acting in its capacity as owner.
▪ consolidated statement of changes in equity;
▪ consolidated statement of cash flows;
▪ notes to the consolidated financial statements.
▪ Management report
In the context of the financial statements but as a separate document, the Group
prepares its Management Report in accordance with the disclosure requirements
relating to publicly traded securities.
II.5.2 Currency, accuracy and period of the presentation of the financial statements
▪ The reporting period and the fiscal year of the Group is identical with the calendar
year.
▪ The reporting date of the report is December 31.
▪ The functional currency of the reporting Group is the Hungarian forint.
▪ The presentation currency of the report is the Hungarian forint.
▪ Indicated as: HUF; the figures displayed are in thousand HUF unless otherwise
indicated.
▪ The foreign currency relevant to the Group is the Euro. Foreign exchange rates:
Currency 12/31/2021
2021 average
12/31/2020
2020 average
euro (EUR) 369,00 358,53 365,13 351,17
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II.5.3 Decisions regarding presentation
1. Changes in comparative data
The previous IFRS consolidated financial statement of the Group was drawn up for the fiscal year of
2020. The consolidated financial statements contain one set of comparative data, except when the
figures for a period had to be restated or when the accounting policies had to be amended. In such
cases, the opening figures of the statement of financial position for the comparative period are also
presented.
In the event that an item needs to be reclassified for presentation purposes (e.g. due to a new line in
the financial statements), the figures for the previous year are adjusted by the Group so as to ensure
comparability.
The purpose of presenting the reclassifications in the detailed notes lines:
In the details of the report (Chapters IV and V), the classifications or designations of the comparative
period are the same as in the current period; as a result, there may be differences in the detailed
lines relative to prior disclosures due to the purpose of transparent presentation.
The purpose of presenting the reclassifications in the balance sheet lines
- power plant and power generating properties, plants and equipment and Other machinery,
plant and equipment are presented under the headings Property, plant and equipment
- Deposits and security deposits in the amount of HUF 98,820 thousand were reclassified from
Other receivables and accruals to Other financial assets
- Share premium and Transactions with owners are presented under the heading Reserves
data in HUF thousand
Statement of financial position - Assets
(Negative values are denoted by parentheses.)
Restated value for
the year ending on
12/31/2020
Reclassification
Year ending on
12/31/2020
HUF thousand
Non-current assets 31 065 255 - 31 065 255
Property, plant and equipment
25 523 292 87 369 25 435 923
Other property, plant and equipment
- (87 369) 87 369
Other intangible assets
3 037 269 - 3 037 269
Operation contract assets
1 212 987 - 1 212 987
Rights of use
1 063 615 - 1 063 615
Deferred tax assets
132 811 - 132 811
Long-term loans given
95 181 - 95 181
Long-term participation in associate
100 - 100
Current assets and assets held for sale 13 819 105 - 13 819 105
Inventories
442 622 - 442 622
Trade receivables
3 263 224 - 3 263 224
Short-term lease assets
128 949 - 128 949
Emission allowances
843 488 843 488
Other financial assets
1 894 802 98 820 1 795 982
Other receivables and accruals
3 698 163 (98 820) 3 796 983
Income tax receivables
92 812 - 92 812
Cash and cash equivalents
3 455 045 - 3 455 045
TOTAL ASSETS 44 884 360 - 44 884 360
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2. Determining the structure of the Group
(i) Subsidiaries
Starting from 2014, consolidation has been performed by the Group in accordance with the
provisions of IFRS 10. Before preparing financial statements for each period, the Group verifies
whether
• it still has control over the entities which were previously in the Group;
• it acquired control over any new entities.
If the existence of control is established, then that unit is consolidated regardless of its legal form
(full consolidation). Consolidation is to be performed using the acquisition method.
The Group’s ability to control means (after the effective date of IFRS 10) that it is able to direct the
subsidiary (has power over it), it has exposure, or rights, to variable returns, and is able to determine
the use of such variable returns. Rights existing as at December 31, 2021 that were exercisable at
that time or convertible to voting rights and provided substantial rights (i.e. actually provided control
data in HUF thousand
Statement of financial position - Liabilities
(Negative values are denoted by parentheses.)
Restated value for
the year ending on
12/31/2020
Reclassification
Year ending on
12/31/2020
HUF thousand
Equity 8 547 657 - 8 547 657
Equity attributable to the shareholders of the Parent Company
8 539 892 - 8 539 892
Issued capital
232 972 - 232 972
Reserves
5 408 602 223 259 5 185 343
Transactions with owners
- 223 259 (223 259)
Share-based payments reserve
62 819 - 62 819
Cash flow hedge reserve
399 801 - 399 801
Conversion reserve
- - -
Retained earnings
2 882 216 - 2 882 216
Non-controlling interest
7 765 - 7 765
Long-term liabilities 27 905 833 - 27 905 833
Debts on the issue of bonds
14 889 000 - 14 889 000
Long-term loans and borrowings
8 411 397 - 8 411 397
Finance lease liabilities
1 047 406 - 1 047 406
Deferred tax liabilities
866 550 - 866 550
Provisions
850 493 - 850 493
Deferred income
436 864 - 436 864
Other long-term liabilities
1 404 123 - 1 404 123
Short-term liabilities 8 430 870 - 8 430 870
Short-term bond payables
- - -
Short-term loans and borrowings
929 693 - 929 693
Short-term finance lease liabilities
154 912 - 154 912
Advances received
46 500 - 46 500
Trade payables
2 308 413 - 2 308 413
Other financial liabilities
189 130 - 189 130
Other short-term liabilities and accruals
4 522 992 - 4 522 992
Income tax liabilities
279 230 - 279 230
TOTAL EQUITY and LIABILITIES 44 884 360 - 44 884 360
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and there were no limitations which could restrict the exercise of such rights) were considered by the
Group for the purpose of determining the extent of such control.
Control (power) is assessed based on the following factors which are usually indicators of control.
These factors shall be assessed in their entirety and conclusion shall be derived by examining the
factors together, not separately:
• Any member of the Group or the Group collectively holds 50% of voting shares or initial
contributions plus one vote and there are no express agreements that would restrict the
Group when voting. Where a subsidiary entity which is not wholly owned possesses a share
in another entity, such share is considered in its entirety when determining the full extent of
the share (second-tier subsidiaries and below).
• If any member of the Group exercises the right to appoint senior executives (senior
executives include managers, as well as members of the Board of Directors and the CEO).
• If there is an agreement which provides conclusive evidence that the Group is able to make
significant decisions in respect of a given entity by itself.
• If there is an entity whose assets or capacities are fully and consciously allocated by the
Group. Control is not deemed to exist if this situation arises but not as a result of the Group's
conscious decisions.
Control is not deemed to exist by the Group if the Parent Company has a share of over 50% in an
entity but operates the assets of that entity at the specific direction and on behalf of someone else,
or if the capacities of that entity are fully allocated by someone else. The net assets of such entities
are treated by the Group as if such assets were leased to someone else (IFRS 16), which means that
these entities are not consolidated.
The ability to control is not deemed by the Group to exist if such control is only on someone else’s
behalf in such a way that the controlling entity (apparent parent company) does not bear any risks in
connection with the controlled entity.
Entities which are insignificant and subsidiaries whose operations are different from the Group’s
scope of activities are not exempted from consolidation by the Group.
The reporting date of the subsidiaries’ financial statements was the same as the Parent Company’s
reporting date, and the accounting policies adopted by the subsidiaries were identical to the Parent
Company’s accounting policies. The accounting policies of the entities which have recently joined the
Group have been harmonized with the Group’s accounting policies and accounting policies have
been developed in connection with the newly introduced activities and accounting events.
(ii) Associates
Associates are presented by the Group using the so-called equity method. The compensation paid for
the share is recognized by the Group at initial recognition as the initial value. If the amount paid for
the share exceeds the fair value of the net assets, then this difference is treated by the acquirer as
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goodwill in such a way that this difference is not shown in a separate line in the statement of
financial position; instead, the amount will be the same as the value of the share. Any negative
difference is immediately credited by the Group to profit or loss as negative goodwill.
Subsequent to initial recognition, the part proportional to the comprehensive income for the current
year is recognized by the Group as an increase or decline in the value of the share. The effect of the
change is recognized by the Group in a separate line in the statement of profit or loss and other
comprehensive income (share of profit of associate) up to the part which is derived from net profit or
loss. Any change in the net assets of the associate against other comprehensive income is presented
by the Group in other comprehensive income, also in a separate line (share of other comprehensive
income of the associate).
Should the value of the share turn negative as a result of the year-end valuation, then a liability
arising from this position is recognized by the Group only if it is subject to a legal or constructive
obligation to meet its liability. If no such obligation exists, then the Group merely discloses the value
of unrecognized loss.
In the statement of financial position, balances with entities of the Group are not eliminated, but the
part of the profit recognized by associates that has an effect on the comprehensive income and is
attributable to the Group, need to be eliminated proportionally. Goodwill arising on the acquisition
of these investments will not be recognized separately, but will be included in the value of the share.
3. Definition of segments
The Group discloses operating segment information in the notes to the financial statements.
Operating segments are determined in accordance with the strategic expectations.
(i) Activity based segments
The activity of the ALTEO Group can be classified in the following main groups (segments):
Description of segment
Segment activity
Energy trading
Electric power and gas retail activities
“Subsidized”
electricity production – (formerly
“KÁT”)
Electric power production of power plants producing for
the subsidized KÁT or METÁR system (utilizing renewable
energy).
Market-based
Heat and electricity generation
Market-based heat and electricity generation, including the
portfolio performance of the Virtual Power Plant.
Energy services
Operation, maintenance of energy generating assets and
construction-installation activity.
Other
Other non-segment activities and central administration.
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The principle of identifying segments is the formation of segment units by differences in risks and
business models.
These activities are monitored by the strategic and operational decision-makers. The content and
name of the single segments is continuously tracked by the management of the Group and is also
clarified by the management of the Group as necessary. Since the management does not review the
assignment of assets and resources to specific segments, the segment level breakdown of assets and
resources is not published.
(ii) Geographic segments
The activities of the Group are limited exclusively to Hungary, with the exception of ALTEO
Deutschland GmbH in charge of assessing the market in Germany; the management did not consider
the creation of regional segments for the territory of the country necessary.
II.5.4 Principles for performing consolidation
1. Treatment of business combinations
Business combinations include cases where the Group acquires control over a new entity and the
goal of the transaction is to acquire the business operations of the acquiree and not only its assets.
The acquisition of control is recorded as of the day after which any of the circumstances that result in
the entity being treated as a subsidiary apply.
The value of goodwill or negative goodwill is determined for the date of the business combination.
This value is the difference between the fair value of the assets transferred in return for the share
(the consideration) and the fair value of the share of net assets acquired. The consideration includes
previously held shares in the entity.
The consideration includes the following:
• money paid or due;
• the fair value of the stocks issued by the acquirer in relation to the combination (the fair
value is derived from the stock price at the date of issue);
• the fair value of other assets transferred (reduced by any liabilities transferred);
• the fair value of any contingent consideration, i.e. the part of the consideration which is
payable or refundable if certain future events occur (or do not occur).
If the actual amount transferred (returned) is different from the estimated value of the contingent
consideration, then such difference is recognized by the Group in profit or loss in the period in which
the value of the difference can be calculated.
Determining the acquired net assets
The assets and liabilities acquired as part of the business combination are measured at the fair value
as at the date of the combination. The principles for determining fair value are described in the
chapter on fair value. During valuation, assets and liabilities which are not included in the acquiree’s
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separate financial statements but need to be recognized under the standards are recorded in the
statement of financial position. In particular, this includes internally-generated intangible assets and
owned by the acquiree; in addition, any contingent liabilities of the acquiree as at the date of the
business combination are recognized (at fair value) as liabilities, regardless of the fact that these may
not be recognized as liabilities in separate financial statements under IAS 37.
2. Goodwill
The difference between the consideration paid for the acquired subsidiary (cost of control) and the
net assets acquired is recognized by the Group as an intangible asset which cannot be amortized,
provided that such difference is greater than zero. If the value of the goodwill is negative, the
procedure to be adopted is as follows:
• an organization that is different from the one that performed the original calculation (or, if
none is available, a different person within the organization) recalculates the value of
goodwill (does calculations and reviews the valuation, focusing on the undervaluation of
liabilities and overvaluation of assets) and makes adjustments as required;
• if the result of the calculation is still a negative value, then such difference is credited to
profit or loss in one lump sum as profit on a “bargain purchase” from the Group’s
perspective; such profit is attributable to the shareholders of the acquirer.
Measurement period
Determining the fair value of the assets acquired may take a long time. In accordance with the
provisions of IFRS 3, the value of net assets acquired as well as the resulting goodwill or negative
goodwill are finalized by the Group within one year from the date of acquisition (measurement
period). The value of net assets and goodwill (negative goodwill) is recognized by the Group in the
financial statements issued in the measurement period at a value that is based on its best estimate at
the time of issue; however, such estimate may change considerably during the measurement period.
In accordance with the rules under IFRS 3, these changes are treated by the Group not as corrections,
but as adjustments relating to the measurement period. No such change happened in the current
year. Note IV.32 contains further details on the acquisitions.
Impairment of goodwill
The Group recognizes goodwill when it participates in a business combination as a buyer and the
value of assets handed over in order to obtain control (including the value of liabilities accepted from
former owners) exceeds the fair value of its net assets concerning the purchased group. The Group
assigns it to the cash-generating unit (CGU) and tests it every year whether the goodwill became
impaired. In the course of the impairment test of the goodwill the recoverable amount of the CGU
must be compared to the carrying amount of the CGU. If the recoverable amount is smaller than the
carrying amount of the CGU then - if there are no clearly damaged assets - the goodwill must be
written off first. The goodwill must not be reversed later. The recoverable value of CGU is the greater
one of the value in use and the fair value less point-of-sale costs.
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3. Treatment of non-controlling interests (NCI)
The net assets (assets and liabilities) of non-controlled interests are recognized by the Parent
Company in their entirety. However, only the part of consolidated equity which is held after the
acquisition and attributable to the Group is recognized by the Group as equity attributable to the
Parent Company.
The value of the net assets of the subsidiaries attributable to non-controlling interests is recognized
by the Group separately, in one line, as non-controlling interest. The non-controlling interest is part
of the equity not attributable to the owners of the parent company.
Non-controlling interests are recognized by the Group in proportion to net assets (at carrying
amount) at each reporting date and are not re-measured at fair value at the end of each reporting
period.
4. Changes in the structure of the Group (in respect of existing shares)
In the event that the Group sells a part of its share in a subsidiary, the following procedure must be
used:
• if control is retained (the entity remains a subsidiary), then the difference between the
change in non-controlling interest and the selling price (compensation) is accounted for in
equity (no profit or loss is realized) and is recognized separately as a transaction with owners
in the statement of changes in equity;
• if control is lost, then the difference between the value of the derecognized net assets and
the selling price (compensation) is recognized in the consolidated financial statements as
profit or loss. Any share that is retained is measured at fair value as at the date on which
control is lost and shown as associate or financial instruments.
If the Group acquires an additional share in an entity in which it already has a share, and
• if control is not obtained even after the increase in its share, then the Group continues to
account for its share in the relevant entity as a financial instrument or associate;
• if control is obtained as a result of the increase in share through the transaction in question,
then the Group applies the rules if IFRS 3 to this step, consolidates the assets and liabilities of
the relevant entity and recognizes goodwill or negative goodwill according to the provisions
of the standard;
• if a share is increased in such a way that the entity associated with the share was already
controlled by the Group before the increase, then the Group reduces the amount of non-
controlling interests and the difference between this reduction and the compensation
received is recognized directly in equity as a transaction of owners; no profit or loss is
recognized with respect to these transactions and the value of goodwill (negative goodwill)
remains unchanged.
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II.5.5 Transactions with owners
No profit or loss or other comprehensive income may be realized with respect to transactions with
shareholders of the Parent Company in which the other counterparty is the Group. This rule is
applicable to transactions where the parties involved in the transaction acted in their capacity as
members or determined the terms of the transaction with a view to their capacity as members.
Such items are accounted for directly in equity as dividend payment or additional capital contribution
(designated as a transaction with owners).
Besides the above the Group recognizes the difference between the value of the share recognized
among non-controlling interests and the value of the capital increase in the case of ownership share
obtained through contribution among the Transactions with owners.
II.5.6 Dividends
At its annual General Meeting, the Parent Company may decide on the payment of dividends.
Dividend is paid only on the Company’s registered, dematerialized ordinary “A” series shares with a
face value of HUF 12.5, recorded with the identifier HU0000155726ISIN – excluding the treasury
shares held by the Group, as well as other shares that do not entitle their holders to dividends
pursuant to Section 3:298(3) of the Civil Code.
II.5.7 Accounting policies relating to the statement of profit or loss
1. Revenues
The Group accounted for its revenues in accordance with the rules of IFRS 15.
IFRS 15 established a unified model for revenues originating from contracts. With the help of the
unified five step model the standard determines when and in what amount do revenues have to be
recognized. This standard states explicit expectations for the situation when several elements are
transferred to the customer at the same time. IFRS 15 describes two methods for timing the
recognition of revenue: revenue accounted for at a given time and during a given period. The IFRS 15
standard also creates theoretical rules concerning what happens with the costs in connection with
acquiring and providing - not recognized elsewhere - the contract. The standard does not contain
revenue recognition rules for the financial instruments; those will be settled in IFRS 9.
According to the IFRS 15 standard, revenue elements shall be accounted for in accordance with the
termination of performance obligations. Performance obligations shall be considered as terminated
when an entity transfers the control over the goods or services to the buyer. Revenues must be
accounted for when the Company realized them - that is, if the Company contractually performed
towards its customers and the financial settlement of the claim (the realization of the economic
advantage in connection with the transaction by the company) is likely, and the amount of that and
the related costs can be adequately (reliably) measured.
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Items collected on behalf of other entities and to be recharged later, and excluded from revenues
The Group does not recognize items collected on behalf of other entities to be recharged later as
part of revenue because the Group has no control over these items. The Group identified the
following as such items:
In connection with the customer contracts, the Group applied the 5-step model specified in the
standard. In most of the existing contracts, the date of performance is not different from the billing
period, therefore, the realization of the revenues is not different from the actual billing. Regarding
contracts where several elements are transferred to the buyer at the same time or as recognized
revenue for a period, the Group performs the realization of the revenue - the allocation to
contractual elements or periods - by taking into consideration the underlying economic content. The
following contracts or contractual elements are included in this category:
Name
Content of item
Value added tax
Value added tax within the meaning of Act CXXVII of 2007.
Energy tax
The tax within the meaning of Act LXXXVIII of 2003 on Energy Tax.
Excise duty
The tax within the meaning of Act LXVIII of 2016 on Excise Duty.
Electric power system
usage fees
Distribution fees within the meaning of Item c) of Section 142 (1) of
Act LXXXVI of 2007 on electricity:
the distributor’s base fee, the distributor’s performance fee, the
distributor’s traffic fee, the distributor’s reactive energy fee, the
distributor’s loss fee and the distributor’s schedule balancing fee.
Financial assets
Financial assets within the meaning of Article 147 of Act LXXXVI of
2007 on electricity:
the fee payable for the structural transformation of the coal
industry, the fee payable for supporting the discount price electric
power and the related production structure transformation fee.
HHSA fee
Based on the Resolution No. 2/2016. (XII. 16.) of the General
Meeting of the Hungarian Hydrocarbon Stockpiling Association a
membership contribution payable after mineral oil products and
natural gas, according to the provisions of Section 40(2) of Act XXIII
of 2013 on the safety stockpiling of imported mineral oil and oil
products and of Sections 8(1) and (2) of Act XXVI of 2006 on the
safety stockpiling of natural gas.
Products, services acquired
for third parties in agent
status and forwarded in
unchanged form
If forwarding a given procurement (service or product) is done in the
same form in unchanged amount by the Group and no practical risk
arises on the part of the Group in connection with this, then reselling
is done in an “agency structure” and the item is no part of the
revenue.
Usually, water rates invoiced forward under district heating service
can be such transactions.
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• General construction-installation contracts: In the case of general construction-installation
contracts, revenues are accounted for depending on the stage of completion of the project in
question. The determination of the stage of completion shall be performed proportionately
to the ratio of any actually occurred costs to the total planned costs. If, in the case of the
project as a whole, a loss may be expected, that expected loss must be accounted for
immediately. All the estimates concerning the revenues accounted for must be prepared
considering all the information that is available at that moment. If the amount of the planned
(expected) profit changes in the course of a given project, then it involves the adjustment of
the revenues accounted for. If a given project is expected to generate loss, then accounting
for the loss in full becomes necessary in the earliest period when the related information
becomes available the first time. Estimates concerning the revenues accounted for must be
prepared considering all the information available at the time of publishing the report in
question.
• The overhaul component of flat-rate operation and maintenance contracts (at present, this
is relevant only in the intra-Group contract cases): For the appropriate operation of certain
pieces of power plant equipment (e.g. gas turbines, gas engines etc.), overhaul repairs are
required at predetermined intervals. If an operation and maintenance contract concluded
with an external party contains such a periodical element, the proportion of the related
revenue must be separated and shall be realized against the respective costs.
• TAKE-OR-PAY component in energy retail contracts: Certain energy trade contracts may
contain a provision determining that the consumer shall pay the contractual amount for the
allocated reserve even if it was not consumed. If it can be safely assumed that the Group is
entitled to such revenue and that revenue is realizable (enforceable), then that revenue must
be settled. In the case of the Group, according to market experience, no such realizable
revenue is available.
According to the opinion of the Group’s management, the revenues to be settled do not differ from
the invoiced amounts in the case of the following contracts:
• Energy retail transactions: Invoicing (settlement invoice) takes place on the basis of actual
consumption.
• Energy wholesale transactions: The settlement takes place according to the contractual
terms.
• Energy regulation, energy production: The settlement takes place on the basis of actual
production.
• Open-book accounting: The settlement takes place for a given period on the basis of cost
elements accepted by the parties.
The Group performs individual assessments and investigations of its buyers’ contracts, with the
exception of the retail business. Due to the individual character of the contracts, the portfolio
method is not applicable, either to the contract portfolio or any part thereof.
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Wherever a contract or a contractual element contains a significant financing element which is more
favorable than the market practice, with the deferral of payment exceeding one year, then that
financial component must be recognized separately. In such cases, only the present value of the
invoiced consideration can be accounted for as revenue.
If, in connection with a long-term contract, costs directly related to that contract incur where the
return is guaranteed by the contract for the full contractual period, these costs shall be recognized as
assets related to that contract and amortized over the term of the contract. Such elements may
include various legal, intermediation and contingency fees.
The Group presents any proceeds from leases strictly related to its core activities as revenues.
2. Expenses related to operation
In line with the presentation principles of the total cost method, non-finance expenses are to be
classified as follows:
• material expenses;
• personnel expenses;
• depreciation and amortization.
If a specific transaction belongs to the scope of a specific IFRS, then its recognition takes place in
accordance with that standard
3. Changes in the inventory of assets produced by the Company
The Group develops industrial equipment and facilities, which are presented as assets produced by
the Company.
4. Changes in the inventory of stocks produced by the Company
Expenditure allocated to the production of industrial equipment and facilities developed by the
Group for third parties is presented as inventories until their delivery. From the perspective of heat
and electricity produced by the Group, storage does not apply.
5. Other revenues and expenses
Other income recognized by the Group includes the consideration for sales that cannot be classified
as revenue, as well as any income that cannot be considered finance income or an item increasing
other comprehensive income. Other expenses include those that are directly related to operations
and are not classified as financial expenses or do not reduce other comprehensive income. Other
income and other expenses are recognized by the Group in the statement of profit or loss as net
figures.
6. GHG emission allowance / revenue from sales of CO
2
quota
The Group is allowed to sell its EUA quotas (emission allowances) under certain conditions. The profit
on such sales is recognized as other income.
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7. Finance income and expenses
The Group accounted for its finance income and expenses in accordance with provisions of IFRS 9.
Dividend income and interest income not eliminated upon consolidation are recognized as finance
income. Interest income is accounted for in a pro-rated manner and dividend income may only be
recorded if a final decision on dividend payment has been made by the entity disbursing such
dividend. Interest expenses are calculated using the effective interest rate method and are classified
as financial expenses. Exchange differences on foreign currency items (if not a part of other
comprehensive income under IAS 21 - The Effects of Changes in Foreign Exchange Rates) are
recognized by the Group in financial income. The Group shows financial income in its statement of
profit or loss and other comprehensive income on a net basis.
8. Income taxes
The following are recognized as income tax:
• corporate tax (Act LXXXI of 1996 on Corporate Tax and Dividend Tax)
• income tax on energy suppliers (Act LXVII of 2008 on Enhancing the Competitiveness of
District Heating Services)
• local business tax (Act C of 1990 on Local Taxes)
• innovation contribution (Act LXXVI of 2014 on Scientific Research, Development and
Innovation)
9. Offsetting
In addition to the requirements under IFRS, the impact of a transaction is recognized in the Group’s
financial statements on a net basis if the nature of the given transaction requires such recognition
and the item in question is not relevant to business operations (e.g. sale of a used asset outside
business operations).
10. Use of the EBITDA in the ALTEO Group
To facilitate the assessment of profit or loss, the Group management discloses the EBITDA figure with
the content defined by the Group. The method of EBITDA calculation is presented below:
EBITDA = Net profit or loss
+ finance income
+ Income taxes
+ depreciation and amortization
where
The Group modifies the net profit or loss with the following items:
Finance income: the Group adjusts the net income with all the items in the finance income (effective
interest, exchange rate differences, etc.) so the Group fully neutralizes the effect of the finance
income when calculating this indicator.
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Income taxes: income taxes in the net profit or loss (current and deferred taxes alike) are neutralized
by the Group when calculating the indicator.
Depreciation and amortization: the depreciation, amortization of assets belonging under IAS 16, IAS
40 and IAS 38 and assets recognized at the Group as assets and given to operating lease or
concession is eliminated when calculating the indicator (they are “given back”). The non-systematic
decrease of such assets (typically: impairment) is adjusted by the Group retroactively, similar to
depreciation and amortization. (We do not adjust the impairment of other assets, e.g. financial
instruments when calculating the indicator.)
11. EPS - earnings per share the shareholders are entitled to
When calculating earnings per share the “net profit or loss concerning the owners of the Parent
Company” are divided for the shares in circulation. When calculating the diluted EPS indicator all the
diluting factors (e.g. shares bought back, issued options, etc.) shall be considered.
II.5.8 Accounting policies relating to the statement of financial position and the
recognition and measurement of assets and liabilities
1. Property, plant and equipment
Only assets which are used in production or for administrative purposes and are used for at least one
year after commissioning are classified by the Group as property, plant and equipment (PPE). In
terms of their purpose, the Group makes a distinction between production and non-production
(other) assets.
The initial carrying amount of an asset comprises all items which are related to the purchase or
creation of the given asset, including borrowing costs (for details, see the accounting policy on
borrowing costs).
If an asset needs to be removed or demolished at the end of its useful life (or if the given asset is no
longer used, it is sold or abandoned), then the costs incurred to retire it (asset retirement obligation
or ARO) are added to the initial value of the asset and a provision is recognized in this respect, given
that the Group has at least a constructive obligation for the retirement. No provisions are made for
ARO is the estimated expense of deconstruction is not significant, that is, it remains under HUF
500,000. Assets that belong together must be reviewed as a group and if the decommissioning costs
of a group of assets that belong together is significant in total, then provisions must be made for ARO
concerning the group of assets.
The Group estimates the ARO using a percentage coefficient between 0% and 10%. The Group used a
discount rate of 8.57% for discounting in 2021.
The discounted liability is increased each year, taking into account the passing of time (unwinding of
the discount) and future changes in the estimation of unwinding costs. The increase in the liability
arising from the unwinding of the discount is accounted for as interest expense.
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The Group uses the component approach, which means that the parts of a physically uniform asset
which have different useful lives are treated separately, mainly in the case of production assets.
Fixed assets are measured subsequent to initial recognition using the cost model (initial value
reduced by accumulated depreciation and accumulated impairment losses).
The depreciable amount is the initial cost reduced by the residual value. Residual value is determined
if its amount is significant. Residual value is equal to the income that can be realized after the asset is
decommissioned, reduced by the cost of disposal.
Depreciation is calculated on the basis of the depreciable value for each component.
The Group uses the hours of service for power plant equipment and the straight-line depreciation
method for all other assets. The following depreciation rates are used for assets:
Asset group
Extent of depreciation
Land
non-depreciable
Buildings
1–5%
Power plant equipment
1 – 20% / or proportionate to production
Non-production machinery
14–33%
Office equipment
14–50%
The Group reviews the useful life of each component and determines whether the asset can be
utilized during its remaining useful life and whether the residual value is realistic. If not, then the
depreciable amount and/or the residual value are adjusted for the future.
In the current year, the Group reviewed the depreciation method, in connection with the wind
turbines dropped from KÁT. As a result of this review, the depreciation expense and the useful life
parameters were adjusted to comply with the power plant’s operating license, instead of the
previous performance-based accounting. As the result of the review, HUF 322 million in
extraordinary depreciation was recognized.
The value of a fixed asset is increased by significant repair projects which involve substantial cost and
occur regularly but not every year. These projects are treated by the Group as a component of the
given asset and its useful life is aligned with the next (expected) occurrence of such projects.
Income from the sale of a fixed asset is recognized among other items, with the remaining carrying
amount of the asset deducted. Expenses arising upon the scrapping of fixed assets are also
recognized among other items. Only expenses are accounted for in this case and no income.
For the presentation of Fixed assets, see below IV.9 Fixed assets and intangible assets below.
2. Other intangible assets
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The Group determines whether any of its intangible assets have indefinite useful lives. Goodwill is
classified as an asset with an indefinite useful life; such items arise upon consolidation.
The Group is not engaged in any research activities. The Group performed development activities
concerning the production of other intangible assets that meet the recognition requirements of IAS
38 in the year 2017 the first time. In the opinion of the management of the Group, know-how that
can generate income may be realized as the result of the development activity. Costs incurred in the
course of the development project are recognized among intangible assets. If no asset could be
produced as the result of development that meets the relevant requirements of IAS 38, recognition
of impairment becomes necessary.
The initial value of intangible assets is determined using the method described in the case of fixed
assets.
Intangible assets with indefinite useful lives are not amortized; instead, they are subject to
impairment testing in each period or when there is an indication of impairment (see impairment
losses).
For all other intangible assets, the existence of any contractual periods which restrict the use of such
rights must be considered. In such cases, the depreciation period may not be longer (though it may
be shorter) than this period. By default, the term of the contract is accepted as the useful life.
For software and other similar intangible assets, amortization rates of 20% to 33% are used.
Subsequent to initial recognition, intangible assets are uniformly measured using the cost model. The
residual value of intangible assets is considered zero, unless proven otherwise.
The Group has identified the acquired KÁT eligibility of the acquired KÁT permit holders as an asset
The Group amortizes KÁT permits in proportion to production until the expiry of the KÁT permit. The
KÁT permit gives the right to the Group to put the production of certain power plants to the state
(the state is obligated to buy at a guaranteed price). KÁT permits connected to projects developed
internally cannot be recognized with values.
3. Operation Contract Assets
Accounting for concession assets according to the IFRIC 12 standard: The Contracts for district heat
production, investment and long-term heat supply with the entity under service obligation as of the
inclusion in consolidation of the heating power plants of the Group in Kazincbarcika, Tiszaújváros,
Ózd, and Budapest Füredi utca are presented in accordance with the IFRIC 12 standard. At the time
of purchase, no value was allocated to concession assets in the course of allocating purchase price.
Accounting for revenues is performed based on the “Intangible assets” model according to the
standard. The Group decided on recognition in view of the expiry of the Long-term Heat Supply
Contracts, which expiry is regularly verified at the time the statement of financial position is
prepared. If a contract is extended, that event increases the value of the investments made by the
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Group and of the concession agreement. Amortization of the concession contract is time
proportionate, in accordance with the duration of the contract.
4. Rights of use, leases (IFRS 16)
Leases are contractual arrangements where the owner of an asset transfers the right to use that
asset in return for a series of payments.
The IFRS 16 “Leases” standard entered into force on January 1, 2019. The Group applies the
recognition exceptions provided by IFRS 16 for short-term leases and low value assets (below USD
5,000). No right-of-use asset and associated liability are recognized for leases where the indefinite
duration and the related contractual termination conditions, or the absence of a fixed fee element,
do not permit such a determination.
The leasing component must be separated in the case of complex sales or supply contracts where
one of the contractual elements meets the standard’s conditions.
For the initial recognition of a lease, in the case of establishment of the value of the right of use and
the obligation, the existing comparative data of the ALTEO Group must be used when determining
the market interest rate. If such data are not available, the statistics published by the Central Bank of
Hungary shall be taken into account. The right-of-use asset is amortized taking into account the same
useful life as the lease term.
For contracts with a term of more than 12 months and high value, the initial cost of the right-of-use
asset is determined by the Group at the discounted present value of payments due for the remaining
lease term. For establishing the market interest rate the Company used the statistics published by
the Central Bank of Hungary.
Leases and agreements that qualify as leases
The Group records assets and asset groups for which it transfers the right to use such assets and
asset groups to other parties based on a contractual relationship and, at the same time, transfers
control over such assets or asset groups. The latter means that, for the given asset or asset group
• the entire capacity is used by that other party;
• essentially all of the outputs are obtained by that other party;
• that other party has physical access;
• and the Group is essentially unable to change this situation or any change would be
completely irrational from an economic perspective.
In such situations, in accordance with the provisions of IFRS 16 (formerly: IAS 17 and IFRIC 4), the
Group does not recognize the underlying asset as an own fixed asset, but instead the contract is
treated as a lease (despite the legal form) where the Group acts as a lessor in such cases.
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In cases where the given asset group is organized in a separate legal entity, the subsidiary is not
consolidated (i.e. individual assets and liabilities are not recognized); instead, the entire arrangement
is treated as a lease contract.
Where the Group acts as a lessor, it
• recognizes the related receivable (which will first be the present value of future cash flows);
• splits subsequent cash flows into principal repayment and return using the implicit interest
rate applied in the lease (the former reduces the asset, while the latter is recognized in profit
or loss);
• and, if required, performs the foreign currency translation of the remaining asset according
to the rules of IAS 21.
The return on the lease is recognized by the Group as revenue (in accordance with its content).
Policy on borrowing costs
In accordance with the provisions of IAS 23, borrowing costs are capitalized by the entity if the
borrowing is attributable to a qualifying asset. For dedicated borrowings (those that are assigned to a
specific purpose), the amount to be capitalized is determined using the effective interest rate of the
borrowing. For general purpose borrowings, the capitalization rate is calculated manually. The
capitalization rate is the average of the effective interest rates of general purpose borrowings
weighted by the time elapsed since the date of payment or, if later, the time elapsed since the start
of capitalization and the amount of the payment.
An asset (project) is regarded as a qualifying asset (project) in the following cases:
• if a construction contract is involved that is longer than six months;
• if an asset is involved whose construction, preparation or transformation takes longer than
six months (regardless of whether the asset in question is created by the Group or third
parties).
The value of the given asset is irrelevant for the purpose of classification.
The capitalization of borrowing costs starts when an irrevocable commitment to acquire the asset or
implement the project exists or is probable. For assets, this is usually when the cost necessary to
build the asset is incurred; for projects, this occurs when the actual work begins or, if planning is also
done by the Group, the start of the preparation of the plan subject to the licensing process.
The capitalization of borrowing costs is suspended if work is interrupted for a period of time that is
longer than technologically reasonable.
The capitalization of borrowing costs is finished when the asset is ready or when the actual work on
the project is completed or, if earlier, the asset created in the course of the project is in use or its use
has been approved.
5. Accounting for government grants
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As a general rule, grants are recognized by the Group as income. Income is spread out over the
periods in which the asset is used. The part that cannot be credited to profit or loss is recognized in
liabilities as deferred income. Items to be credited to profit or loss are deducted from the related
expenses where possible.
If a grant is related to expenses, then such grant is principally accounted for by reducing expenses. If
this is not possible, it is recognized as other income.
Grants may be accounted for if
• it is essentially certain that the Group will meet the requirements for the grant, and
• it is certain that the Grant will be awarded to the Group.
In the event that a grant must be repaid subsequently, a liability is recorded when this becomes
known by increasing the value of the asset or the expense.
If any advance is paid against the government grant, it must be recognized among liabilities. In the
case of such a grant construct deferred income may only be recognized if the grant settlement is
done.
In accordance with the above principle, the Group recognizes assets received without consideration
as assets by recording deferred income (liability) against the asset (as a result, emission quotas
received from the government without consideration is recognized as assets at their fair value).
6. Assets held for sale and discontinuing operations
Non-current assets whose carrying amount will be recovered principally through an imminent sale
transaction rather than through continuing use are classified as assets held for sale. Assets held for
sale also include so-called disposal groups which comprise assets and closely related liabilities that
are expected to be disposed of subsequently as part of a transaction (e.g. a subsidiary to be sold).
This classification may be used if it is highly probable that the sale in question will be completed
within one year from the date of classification and the asset or disposal group is available for
immediate sale in its present condition, the activities necessary for the sale to take place are
underway and the asset or disposal group is being offered at a reasonable price.
Assets held for sale are separately presented by the Group in its statement of financial position and
their value is not included in either non-current or current assets. These assets are not depreciated
by the Group and are measured at the lower of their cost on the reporting date and fair value less
costs to sell. The resulting difference is recognized by the Group against profit or loss.
If an asset needs to be subsequently reclassified as a non-current asset due to the fact that the
conditions of classification are no longer met, then after the reclassification the asset is measured at
the lower of the value adjusted by the unrecognized depreciation and the recoverable amount. The
resulting difference is recognized in profit or loss.
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According to the provisions of the standard, the Group recognizes its discontinuing operations
separately, if they are significant. It does not qualify as a discontinuing operation if the legal form of a
given activity gets changed but the underlying economic content does not change significantly (e.g.
the amount of heat sold earlier as “district heating supplier licensee activity” is sold later as “district
heating producer licensee activity”).
7. Inventories
Inventories are stated in the financial statements at the lower of initial recognition cost and net
realizable value. Inventories are classified as inventories expected to be recovered within a year and
those expected to be recovered after more than one year. Fuels are assumed to be used up within
one year. The Group determines the closing value of inventories based on their average cost and the
value of inventories includes all costs which are required for the use of inventories in the intended
manner and at the intended location.
8. Emission allowances
GHG emission allowance
The emission units allocated based on the National Allocation Plan (EUA) are accounted for by the
Group as Current assets and assets held for sale. When determining the initial cost of emission units,
the price on the date on which the units are credited is taken into account. Emission units are
amortized on the basis of verified emission data at the time of use (charging the cost of revenues).
The Group records values maintained for satisfying the return obligation among short-term assets.
The values to be returned within one year and received without consideration are shown at cost by
the Company.
If the Company holds emission assets for trading purposes or for investment purposes, the Group
subjects them to an impairment test at the reporting date. Emission units are tested by the Group for
impairment at the end of each calendar year.
Emission allowances are traded on a regulated market. The Group does not participate in market
trading actively with its assets received without consideration; nevertheless, it obtains any additional
quota required from the market.
Rights related to the energy efficiency obligation scheme
According to the provisions of Act LVII of 2015 on Energy Efficiency (Energy Efficiency Act), starting
from 1 January 2021, electricity traders are required to introduce programs that result in energy
savings for end-users. The party subject to the obligation may fulfil its energy saving obligation either
through energy efficiency investments or energy efficiency improvement measures in its own sector
of activity or in another sector outside its own sector of activity, as well as through certified energy
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savings by other obligated parties, energy efficiency service providers that are not obligated parties
or other third parties.
The volume (GJ) of the energy saved by another obligor is recognized by the Group in Inventories at
cost.
9. Accounting for impairment losses other than financial instruments and
identifying CGUs
The Group tests its assets for impairment each year. Testing consists of two stages. The first stage is
to examine whether there are signs indicating that the assets in question are impaired. The following
may be signs that a given asset is impaired:
• damage;
• decline in income;
• unfavorable changes in market conditions and a decline in demand;
• increase in market interest rates.
Should there be any indication that an asset is impaired, a calculation that allows the recoverable
amount of the asset to be determined is performed (this is the second step). The recoverable
amount is the higher of the fair value of the asset reduced by the cost of disposal and the present
value of the cash flows derived from continuous use. In the absence of more precise estimations, the
cost of disposal is deemed to be 10%.
If the value in use of a group of assets cannot be determined as it does not generate any cash flows
itself (it is not in use), the test is performed with respect to the cash-generating units (CGUs).
If the value in use can only be determined with respect to the CGUs and impairment needs to be
accounted for, impairment losses are split as follows:
• first, damaged assets are impaired;
• second, goodwill is reduced;
• third, the remaining amount of impairment losses are split among fixed assets (PPE) and
intangible assets in proportion to their carrying amount prior to impairment.
The value of assets may not drop below their fair value reduced by their individual cost of disposal.
The Group tests the value of goodwill generated in the course of earlier acquisitions on every
reporting date for impairment regardless of indications, as provided for in IAS 36. All the goodwill
created in the course of previous acquisitions was already impaired.
10. Provisions
Only existing liabilities which are based on past events and have uncertain value and timing may be
recognized as provisions. No provisions may be recognized for liabilities which are not linked to
present legal or constructive obligations.
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If the existence of a liability cannot be clearly identified, then a provision may only be recognized if
its existence is more likely than not (probable obligation). If the probability is lower than this, a
contingent liability is disclosed (possible obligation). Such items may not be shown in the statement
of financial position; instead, they are presented in the notes to the financial statements.
Provisions are shown as liabilities and are classified as non-current and current liabilities. If the time
value of money in respect of a provision is considered material (as it will be due much later), the
expected cash flows are discounted. The time value of money is considered material if cash flows are
still generated after 3 years or even later.
The following items are typically included in provisions:
• compensation payable in relation to legal cases;
• indemnification or compensation based on an agreement;
• warranty liabilities;
• asset decommissioning liabilities;
• severance pay and costs arising due to restructuring;
• CO
2
emission costs not covered by a quota.
If a decision needs to be made in respect of a specific obligation, then the value of the provision will
be the most likely unique outcome, while the effect of all remaining outcomes must be reasonably
taken into account. If the value of the provision needs to be estimated based on a set of data
(guarantees, payments concerning a large number of persons), then the fair value (probability-
weighted average) of the expected outcomes is used as the value of the provision.
If a contract has been signed by the Group where the costs arising from the contract exceed the
benefits derived therefrom, then a provision is recognized for the lower of the legal ramifications of a
failure to carry out the contract and the losses arising from executing the contract (onerous
contracts).
If there is such a CO
2
emission position at the end of the period that is not covered by a quota,
provisions must be recognized for the future liabilities. The amount of the provision needs to be
determined considering the market price of the emission unit at the end of the period.
A restructuring provision (e.g. for severance pay) may be recognized if there is a formal plan for the
restructuring which has been approved and communicated to those affected. Provisions may only be
recognized for costs associated with discontinued operations. But no provision can be recognized for
continuing operations (e.g. cost of retraining or relocation).
No provisions may be recognized for:
• future operating losses;
• “safety purposes” to cover unforeseeable losses;
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• write-offs (e.g. for the write-down of receivables and inventories) - these reduce the value of
the relevant assets.
11. Employee benefits
The Group provides predominantly short-term employee benefits to its employees. These are
recognized by the Group in profit or loss after they have vested.
Employee bonuses and other items of similar nature are shown in the statement of financial position
if they result in liabilities, i.e.
• if they are subject to a contractual condition and such condition has been fulfilled (e.g. a
given revenue level is reached); in such cases, the item is accounted for not in the period
when the Group established that the contractual condition was fulfilled, but in the period
when such condition was fulfilled (when the employees rendered the service entitling them
to the benefit).
• if such an item is created as a result of a management decision instead of a contractual
condition, then the item may be recognized when the decision is communicated to the group
affected (constructive obligation).
The Group operates the prescribed contribution retirement benefit plan only as required by
legislation or undertaken voluntarily, and the contribution is calculated on the basis of salaries paid;
therefore, such contribution is accounted for at the same time as salaries.
The Group operates in a legal environment in which employees are entitled to paid leave. If for any
member of the Group there is a legal possibility or an agreement between the employer and
employees which provides that any unused leave may be carried forward to subsequent years, then a
liability is recognized against employee benefits with respect to such unused leave accrued by the
end of the year.
12. Financial instruments
Financial instruments are contracts which create financial assets for one party and financial liability
or equity instruments for the other party. Financial instruments include financial assets, financial
liabilities and equity instruments.
The IFRS 9 Financial instruments standard replaced the previous IAS 39 standard, with effect from
January 1, 2018. The Group had no financial instruments the classification or evaluation of which
would have changed, therefore the transition did not have a significant effect on the financial
statements.
13. Financial assets
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These include cash, equity instruments of another entity, contractual rights which entitle the Group
to future cash flows as well as those which entitle the Group to exchange financial instruments at
potentially favorable conditions. In accordance with its investment policy, the Group does not
purchase instruments acquired in order to earn short term profits.
Financial assets are classified by the Group as follows:
• Debt
• Equity instrument
• Derivative
In the case of debt instruments:
Loans and receivables: this group includes financial assets with fixed (or at least determinable) cash
flows that are not quoted in an active market and are not classified into any of the remaining three
categories. The Group typically records the following items in this category:
• Loans given
• Trade receivables
• Advances received
• Other receivables
These assets are held by the Group not for trading purposes, and not for achieving short-term profits
based on these instruments. These assets are priced at fair value and the follow-up valuation is
performed based on amortized cost. The valuation of the assets is performed individually; at present,
the Group has no assets with massive multiplicity or assets with similar characteristics in the case of
which the portfolio method could be applied.
Equity instruments include the following items:
• Shares in other companies
These assets are held by the Group not for trading purposes, and not for achieving short-term profits
based on these instruments. These assets are recognized at cost and the follow-up valuation is
performed at fair value against profit. The Group performs the necessary annual impairment tests,
using the approved business plans and long-term assumptions as a basis. The carrying amount of the
share is not substantially different from its fair value
Derivatives include:
derivative transactions. If the hedge accounting rules are met, they are recognized in Other
comprehensive income on the basis of fair value.
Financial liabilities must be classified into the following groups:
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Financial liabilities measured at fair value through profit or loss: derivatives and forward contracts
acquired for trading purposes are included by the Group in this category. The Group does not
typically engage in such transactions. If hedge accounting rules are applied, the valuation of interest
rate swaps and forward foreign exchange contracts is recognized in Other comprehensive income.
Other financial liabilities: All other financial liabilities are classified into this category. Typical items
include:
• trade payables;
• loan payables;
• bond payables;
• advances received from customers.
Issued instruments that represent an interest in the residual assets of the Group and no repayment
obligation is attached thereto are classified by the Group as equity instruments.
With regard to the financial asset and liability instruments, the Group classifies instruments as part of
the initial valuation. The Group measures its financial asset and liability instruments at amortized
cost. Transaction costs are capitalized by the Group.
In the case of a follow-up valuation based on amortized cost, the rules applicable to follow-up
valuation of financial instruments are:
(i) Items not resulting in interest expense or interest income
For initial measurement these items are measured at fair value. Fair value is the present value of the
expected future cash flows. Where the time value of money is material, the item is discounted. For
subsequent measurement purposes these items are measured at amortized cost.
The value of a receivable is reduced by write-offs if such receivable is not settled after 180 days from
its due date or there is any other indication at the reporting date which requires impairment to be
recognized. Receivables that have been overdue for more than one year may only be shown in the
financial statements with a value assigned to them if there is an agreement on deferred payment or
rescheduled payment and the debtor has provided collateral. This rule is not applicable to tax assets.
Collective assessment is used for calculation of impairment in case of large portfolios of individually
insignificant assets based on statistical data.
In the case of liabilities, rules concerning delay are, accordingly, not applicable. An item may not be
reclassified as a long-term liability merely because the Group has failed to meet its payment
obligation. Only an irrevocable contractual commitment may provide a basis for reclassification.
Items which are repayable on demand (those that have no fixed maturity) are classified as short-term
liabilities.
(ii) Items resulting in interest expense or interest income
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These items are measured at amortized initial recognition cost. The principles for calculating
amortized initial recognition cost are as follows: the Group determines the cash flows relating to the
given borrowing or receivable. In addition to principal and interest rate payments, these cash flows
also include all items directly associated with the given movement of cash (e.g. disbursement
commission, contracting fee, fee for the certification of the contract by a public notary, etc.) and the
interest rate (effective interest rate) at which the net present value of the cash flows will be zero, is
determined. The interest expense for the period is calculated using this effective interest rate.
Changes in interest rates for a floating rate instrument may be accounted for only with respect to the
future. If impairment needs to be recognized with respect to such an asset (receivable), the last
applicable interest rate is used by the Group as the effective interest rate.
The Group also issues bonds through public placement in order to fund its operations. Liabilities
resulting from the bonds are recognized using the effective interest method, i.e. the effective
interest rate is determined on the basis of all bond-related cash flows. For zero coupon bonds, the
difference between the issue price and the redemption price is regarded by the Group as interest.
The Group derecognizes financial assets when substantially all of the risks and rewards of ownership
of the asset are permanently transferred to another entity or the asset is repaid or expired.
Financial liabilities are derecognized when they are discharged (e.g. settled) or when they no longer
need to be met for any other reason (e.g. expired or ended).
14. Expected impairment (ECL) model
IFRS 9 introduced the expected impairment model. The basis of determination is the expected
impairment, as opposed to the objective, incurred (already happened) impairment. The expected
impairment model brings the time of recognizing (occurrence) of impairments closer. The accepted
model includes the simplified method that allows it for the entity to apply rules other than the
complex ones in connection with certain financial assets (e.g.: trade receivables and similar
instruments).
The expected credit loss model (ECL) is applied in light of non-payment experienced. The extent of
the impairments relating to electricity is low in the retail business line, due to the receivable
management processes developed in the past years. The Group performed the segmentation of its
revenues and studied the recovery of billings on this basis.
In the current year the Company reviewed the rates to be used in the model and determined the ECL
based on publicly available databases. These items are presented in detail in Section IV.18.
15. Hedge accounting
The Group has adopted the hedge accounting provisions of IFRS 9.
(i) Hedge transactions
In the case of cash flow hedge transactions, in accordance with IFRS 9, the difference in fair value, as
of the reporting date, arising on hedge instruments satisfying hedging objectives is recognized in
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other comprehensive income, in the Equity hedge reserve line. The concerned part of the cash-flow
hedge reserve is recognized in the statement of profit or loss when the hedged cash flow (e.g.
interest) occurs or when the hedge fails to meet the hedging objective of the Group.
To qualify for hedge accounting, the relevant transaction must be formally designated and it must be
assessed whether the hedge is effective. Effectiveness exists only when and as long as the aggregate
effect of the hedge instrument and changes in the hedged item is within the range set by the Group.
16. Share-based payments
The Group motivates certain senior employees with share option benefits within the framework of
an ESOP organization. The internal value of the share options in question must be accounted for as
expense under the vesting period in accordance with the provisions of IFRS 2 against personnel
expenses.
Upon the management’s decision, the Group grants Shares to employees who have become entitled
to these on the basis of the Group’s recognition system. Such amounts granted as a reward are
recognized in profit or loss on the date when the reward can be exercised. The benefit is to be
distributed in the form of shares on a later date. The conversion of the amount of the benefit into
shares takes place on the date of the grant of the shares based on the market value of the shares.
17. Current income tax expense and deferred taxes
The actual income tax for the current year is calculated by the Group in accordance with the tax laws
that the given member is subject to and is recognized in current liabilities (or current receivables, as
the case may be). In addition, deferred taxes are also estimated for each entity and are shown in
long-term liabilities or non-current assets. Deferred taxes are calculated using the balance sheet
method. Deferred tax assets are recognized only if it is certain that the item in question will be
realized (reversed). Deferred taxes are determined using the tax rate effective at the expected date
of reversal.
II.5.9 General accounting policies relating to cash flows
The Group’s statement of cash flows is based on the indirect method for cash flows from operating
activities. Cash flows from investing activities and cash flows from financing activities are calculated
using the direct method. Overdrafts are regarded as cash equivalents until proven otherwise.
1. Foreign currencies
Transactions denominated in foreign currencies
The Group presents its consolidated financial statements in HUF. Each entity within the Group
determines its functional currency. The functional currency is the currency which reflects the
operation of the entity in question the most accurately.
The points to consider are as follows:
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• which is the currency in which the majority of the entity's income is derived;
• which is the currency in which the entity's costs are incurred;
• which is the main financing currency.
The above considerations are listed in order of importance.
An entity may incur exchange differences on translation only with respect to a foreign currency.
Each of the Group’s entities classifies its assets and liabilities as monetary and non-monetary items.
Monetary items include those whose settlement or inflow involves the movement of cash, and also
include cash itself. Items relating to receivables or liabilities which do not involve the movement of
cash (e.g. advances given for services or inventories) do not qualify as monetary items.
At the reporting date, monetary items denominated in foreign currency are revalued to the spot rate
effective at the reporting date. For the purpose of translation, all entities use the exchange rate for
the reporting date published by the Central Bank of Hungary.
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III. CRITICAL ESTIMATES USED IN PREPARING THE FINANCIAL STATEMENTS AND OTHER SOURCES
OF UNCERTAINTY
III.1 Critical accounting assumptions and estimates
Changes in accounting estimates is done by assessing the modification of the carrying amount of an
asset or liability or the amount of the periodical use of the asset, performed based on the evaluation
of the present situation of the assets and liabilities and the related expected future profits and
commitments. Changes in accounting estimates are caused by new information or new
developments, so, accordingly, these do not qualify as corrections. The changes in accounting
estimates affect the report in the course of the preparation of which the future estimate was made
(with no retroactive effect).
The Group generally measures its assets on a historical cost basis, except for cases where a given
item should be measured at fair value under the IFRSs. In the financial statements the trading
financial instruments, the derivatives and in certain situations the assets held for sale had to be
evaluated at fair value.
In preparing its financial statements, the Group made critical estimates in connection with the
following topics which, as a result, are sources of uncertainty.
▪ Estimates concerning the depreciation of the fixed assets (e.g.: useful life)
The useful lives and residual values of fixed assets and the related decommissioning liability can be
determined using estimates. Due to the high value of fixed assets, even slight changes in such
estimates can have a considerable effect. The fair value of assets acquired in the course of business
combinations is determined on a discounted cash flow basis, which requires several complex
assumptions. Subsequent changes in estimated amounts can have a direct impact on profit or loss.
Permits disclosed in relation to an earlier business combination (KÁT) represent a significant asset
value. This permit makes it possible for the Group to sell certain previously produced energy to the
state. Although reception is guaranteed; however, the related prices may change and also the
extension of this permit and the requirements depend on factors outside the Group’s control. The
permits were evaluated based on the presently available data, but the evaluation can change due to
the above uncertainties.
The management of the Group uses estimates when preparing the financial statements. The
estimates are always based on the best information available at that time.
The following significant items are determined using estimates.
Allocating the purchase price to assets in the case of acquisitions. The estimate concerning the
distribution of the purchase price may change during the year of the measurement period if any new
information arises.
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The useful life of Power Plant equipment was determined considering the present market and
regulatory environment. Possible negative changes in these factors may lead to impairment.
The present market and regulatory environment was also considered when determining the
provision for the asset retirement obligation.
Revenues and profit or loss recognized in connection with the construction-installation projects were
determined based on the present circumstances.
▪ The recovery of deferred tax assets recognized was accounted for based on the present
market environment and tax legal regulations. Changes in any of these factors may modify
actual recovery.
▪ Estimates concerning the creation of provisions (e.g.: methodology of calculation, indicators
for determining provisions)
▪ Estimates concerning the evaluation of inventories and receivables The management’s
judgement in calculating the impairment of trade receivables is a critical decision which
directly impacts profit or loss.
Estimates concerning fair value
In the case of an obligation arising from a conditional purchase price, the management estimates
applied influence the size of the obligation.
Tax assets and liabilities in the statement of financial position Deferred tax assets were recorded due
to considerable deferred losses and are expected to be recovered according to the Group’s plans;
however, changes in the legal environment may result in a significant change in the value of such
assets.
Changes or observations giving rise to the review of accounting estimates:
• Changes in legal regulations,
• Changes in the economic environment,
• Changes in the operation or procedures of the companies.
The interest rate used for discounting could not be determined using actual market data;
consequently, alternative methods had to be employed.
Many of the Group’s assets can be tested for impairment at CGU level. Identifying CGUs requires
complex professional judgement. In addition, when determining the recoverable value of CGUs, the
Group’s management is forced to rely on forecasts for the future which are uncertain by nature. The
estimation of the recoverable value involves significant amounts even at the level of the financial
statements.
The Group’s profit or loss is heavily dependent on the global market price of energy carriers and
indirectly on the exchange rates of the USD and the Euro in which the price of such commodities is
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denominated. The natural gas purchases of power plants are denominated in a currency other than
the functional currency. The Group enters into forward contracts in order to hedge foreign exchange
exposures. Similarly, the Group enters into hedge transactions to protect itself from changes in the
price of energy carriers themselves.
For the electricity trade division, purchases are also made predominantly in EUR, while sales
contracts are denominated mostly in HUF. The Group enters into hedging transactions and, where
possible, uses foreign-currency-indexed customer price formulas in order to manage foreign
exchange exposure.
Power plant units of the ALTEO Group:
• heating power plants (ALTEO-Therm Kft.),
• wind turbines (WINDEO Kft., e-Wind Kft., EGE Kft. Pannon Szélerőmű Kft.),
• hydropower plants (Sinergy Kft.)
• solar power plants (Domaszék 2MW Naperőmű Kft., Monsolar Kft. Sunteo Kft.)
The energy production of power plants relying on renewable energy sources depends on the
weather, therefore, changes in certain elements of the weather (sunshine, wind force, temperature,
water yield) can also have a significant impact on the efficiency of the units in question.
Certain entities in the Group are involved in the district heating production business.
Much of the capacities of certain power plants of the Group are devoted to one or two clients. Power
plants where the Group has not signed long-term supply contracts with clients are exposed to the
risk of clients being lost.
The Group’s operation and profitability depends on the government regulation of the market,
especially on the taxation policy adopted by the state.
The Group presents in detail the risks relating to its operation in Notes No III.3 and III.4.
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III.2 Changes in accounting policies, potential impact of IFRSs and IFRICs not yet effective
as at the reporting date of the financial statements and earlier application
The Group’s accounting policies applied earlier did not change, with the exception of the listed items.
New accounting policies as of January 1, 2021
The following standards and interpretations (and their respective amendments) became effective
during the 2021 fiscal year
New and amended standards and interpretations published by IASB and accepted by the EU that
become effective from this reporting period:
New and amended standards – to be applied for the financial years starting on January 1,
2021 or thereafter:
IASB publication
Effective date
EU endorsement
ALTEO Group
Extension of the Temporary Exemption from Applying IFRS 9 – Amendment to IFRS 4
(issued on June 25, 2020, effective for business years starting on January 1, 2021 or
thereafter, the amendments have been endorsed by the EU).
06/25/2020
01/01/2021
12/16/2020
none
Interest Rate Benchmark Reform, Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16 (issued on August 27, 2020, effective for the business years starting on January 1,
2021 or thereafter, the amendments have been endorsed by the EU).
08/27/2020
01/01/2021
01/13/2021
none
Covid-19-Related Rent Concessions beyond June 30, 2021 (Amendment to IFRS 16 issued on
March 31, 2021, effective as of April 1, 2021 and for financial years beginning on or after that
date, endorsed by the EU).
03/31/2021
04/01/2021
08/30/2021
none
Amendments to the existing Standards issued by IASB and adopted by the EU but not yet effective
At the date of authorization of these financial statements the following standards issued by IASB and
adopted by the EU and amendments to the existing standards and interpretations were in issue but
not yet effective.
The implementation of these amendments, new standards and interpretations would not influence
the financial statements of the Company in a significant manner.
Application for subsequent business years:
IASB publication
Effective date
EU endorsement
ALTEO Group
IFRS 17 Insurance Contracts (issued on May 18, 2017, endorsed by the EU)
05/18/2017
01/01/2023
11/19/2021
there will be no effect
Reference to the ‘Framework for the Preparation and Presentation of Financial Statements’ –
Amendment to IFRS 3 Business Combinations (issued on May 14, 2020, effective for the
business years starting on January 1, 2022 or thereafter, the amendments have been
endorsed by the EU).
05/14/2020
01/01/2022
06/28/2021
there will be no effect
Proceeds before Intended Use – Amendment to IAS 16 (issued on May 14, 2020, effective for
the business years starting on January 1, 2022 or thereafter, the amendments have been
endorsed by the EU)
05/14/2020
01/01/2022
06/28/2021
there will be no effect
Onerous Contracts: Cost of Fulfilling a Contract – Amendments to IAS 37
(issued on May 14, 2020, effective for the business years starting on January 1, 2022 or
thereafter, the amendments have been endorsed by the EU)
05/14/2020
01/01/2022
06/28/2021
there will be no effect
Annual Improvements to IFRS Standards – 2018–2020 (issued on May 14, 2020,
the amendments have been endorsed by the EU).
05/14/2020
01/01/2022
H2/2021
there will be no effect
New and amended standards and interpretations issued by IASB and not adopted yet by the EU
Application for subsequent business years:
IASB publication
Effective date
EU endorsement
ALTEO Group
Classification of Liabilities as Current or Non-current – Amendment to IAS 1 (issued on January
23, 2020, effective for the business years starting on January 1, 2023 or thereafter, the
amendments have not been endorsed by the EU).
01/23/2020
01/01/2023
–
there will be no effect
Disclosure of material accounting policy information amending IAS 1 and IAS 8, and IFRS
Practice Statement 2 (issued: not yet endorsed by the EU)
01/01/2023
–
there will be no effect
Definition of accounting estimates amending IAS 8 (issued:...., not yet endorsed by the EU)
01/01/2023
–
there will be no effect
Amendment of IAS 12 Income Taxes (issued: not yet endorsed by the EU)
01/01/2023
–
there will be no effect
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The IFRSs adopted by the EU currently do not significantly differ from the regulations adopted by the
International Accounting Standards Board (IASB), with the exception of the new standards listed
below, any amendments of the existing standards and new interpretations that were not yet
adopted by the EU by the disclosure date of the financial statements.
The implementation of these amendments, new standards and interpretations would not influence
the financial statements of the Group in a significant manner.
III.3 Risk matrix
The management of the Group considered and assessed the specific risk factors associated with the
ALTEO Group and the securities issued by the Company as well as the potential risks involved in
making an informed investment decision, based on the probability of the occurrence of such risks
and the anticipated extent of their negative impact. These Financial Statements only contain the risk
factors that were assessed as material by the Company. The Company provides the results of the
materiality analysis using a qualitative scale, indicating a “low”, “medium” or “high” risk level next to
each risk factor. The risk factors have been ordered within their respective categories based on their
materiality.
Risk categories:
A/ Macroeconomic and legal system related risks
type
number
Risk
2021
2020
change
A
1
Risks stemming from the legal system
high
high
none
A
2
Macroeconomic factors
medium
medium
none
A
3
Taxation
medium
medium
none
A
4
Risks related to the United Kingdom leaving the European Union (Brexit)
low
low
none
B/ Risks specific to the market and the industry
type
number
Risk
2021
2020
change
B
5
Energy market regulation
high
high
none
B
6
Regulated prices
high
high
none
B
7
Electricity balancing reserve capacity system risks
high
high
none
B
8
Government grants
high
high
none
B
9
CO
2
emission market, CO
2
quota allocation system and CO
2
quota prices
medium
medium
none
B
10
Changes in technology
medium
medium
none
B
11
Competitive situation
medium
medium
none
B
12
Funding risk
medium
medium
none
B
13
Foreign exchange rate changes
medium
low
yes
B
14
Impact of international market developments on domestic trade
medium
medium
none
B
15
Risk of changing natural gas, electricity and heat energy price margins
medium
medium
none
B
16
Environmental legislation
medium
medium
none
B
17
Risks related to the spread of COVID-19
high
high
none
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C/ Risks specific to the ALTEO Group:
type
number
Risk
2021
2020
change
C
18
Risks arising from operating the Virtual Power Plant
high
high
none
C
19
Political risks
high
medium
yes
C
20
Dependence on weather
high
high
none
C
21
Risks of growth
medium
medium
none
C
22
Risks stemming from acquisitions, buying out projects and companies
medium
medium
none
C
23
Risks related to power plant project development and green-field investment
medium
medium
none
C
24
Large-scale, customized projects
medium
medium
none
C
25
Energy trade risks
medium
medium
none
C
26
Operating risks
medium
medium
none
C
27
Fuel risk
medium
medium
none
C
28
Renewing and/or refinancing outstanding debts
medium
medium
none
C
29
Information technology systems
medium
medium
none
C
30
Wholesale partner risks
medium
medium
none
C
31
Dependence on third-party suppliers
medium
medium
none
C
32
Buyer risk
medium
medium
none
C
33
The risk of key managers and/or employees leaving the Company
medium
medium
none
C
34
The risk of introducing and using new power plant technologies
medium
medium
none
C
35
Authority risk
low
low
none
C
36
Key licenses and qualifications
low
low
none
C
37
The risk of not fulfilling the obligations associated with operating its own
balancing group
low
low
none
C
38
Options to purchase certain means of production
low
low
none
C
39
Business relationships associated with the Owners’ Group
low
low
none
C
40
The risk of being categorized as a de facto group of companies
low
low
none
C
41
Taxation
low
low
none
C
42
Environmental risks
low
low
none
C
43
Risk of bankruptcy and liquidation proceedings
low
low
none
C
44
Any discrepancies between the data in the consolidated and IFRS reports and the
data in the reports prepared in line with the Hungarian Accounting Standards
(HAS)
low
low
none
C
45
The risk of entering new geographical markets
low
low
none
Type of changes:
Updating and clarification of text and wording in Items 20 and 44
The quantitative effects of risks are presented in Section III.4.6.
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A. Macroeconomic and legal system related risk factors
1. Risks stemming from the legal system
The legal system can be considered relatively underdeveloped in Hungary—where the ALTEO Group
currently pursues its activities—and in the Company’s various strategic target countries. According to
conventional wisdom throughout these countries, legal regulations change quite frequently,
authority and court decisions are, on occasion, contradictory or inconsistent or difficult to construe.
These circumstances can make it difficult for the Company to perform its tasks in a manner fully
compliant with legal regulations, and this can expose the company to arbitration, litigious, non-
litigious and other risks of legal nature that affect its profitability.
2. Macroeconomic factors
The ALTEO Group’s operations and profitability stands exposed to macroeconomic developments in
Hungary and the countries of the European Union, particularly to how economic growth and
industrial production, as well as the financial position of general government shapes up. Certain
negative developments in the macroeconomic environment may have adverse effects on the
profitability of specific the ALTEO Group activities.
3. Taxation
The current taxation, contributions and duties payment regulations applicable to the ALTEO Group
are subject to change in the future, meaning that it is particularly impossible to rule out potential
increases in the rate of the special tax imposed on energy generators and energy traders, moreover
that new taxes with adverse effects on enterprises active in the electricity sector could be imposed,
any of which would, in turn, increase the ALTEO Group’s tax liability. Applicable tax regulations are
open to frequent and major changes, even with retroactive effect, and that could impact the ALTEO
Group’s sales revenue and profitability alike.
4. Risks related to the United Kingdom leaving the European Union (Brexit)
The risk is not considered relevant to the Company's operations. Further description and further
monitoring of the risk has been discontinued.
B. Risks specific to the market and the industry
5. Energy market regulation
The operation and profitability of the ALTEO Group greatly depend on the energy market regulations
in Hungary and in the European Union, as well as on the application of such regulations, including in
particular legislation, authority and court practice, Hungarian and international processes, trade and
operational regulations, as well as other applicable regulations relating to electricity generation,
electricity trade, the market of ancillary services in the electricity industry, the utilization of
renewable energy sources, energy and heat produced in cogeneration power plants, district heat
generation and district heating services, natural gas trade, as well as allowance allocation and trade.
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In 2018, the European Union adopted new energy-related legal regulations under the title “Clean
Energy For All Europeans”.
Changes in these regulations and the transposition of the EU regulatory framework may have a
significant impact on the operation, profitability, market position and competitiveness of the ALTEO
Group.
6. Regulated prices
The various affiliates of the ALTEO Group engage in activity whose price is determined or capped
through legislation or regulation by some authority (including in particular the HEPURA, ministries
and municipal governments). These prices, set out in legal regulations or set by an authority,
furthermore, any modifications in the material scope of official price regulation may have a
significant impact on the profitability and competitiveness of the Company, as well as its various
Subsidiaries.
7. Electricity balancing reserve capacity system risks
In addition to the development of the price margin between electricity and heat energy, the financial
position of gas-fired power plants is significantly influenced by the pricing and accessibility of the
electricity markets for balancing reserve capacity and energy. If, for any reason, access to these
markets becomes limited with respect to production units within the sphere of business interests of
the ALTEO Group, including a drop in service volumes attributable to a substantial fall in market
prices, this may have an adverse impact on the business activity and profitability of the ALTEO Group.
Considering that the ALTEO Group is present on the balancing energy market(s) as a service provider
as well as a buyer of services, price changes in such market(s) may have a significant effect on the
capacity of the Company to generate finance income.
8. Government grants
ALTEO Group’s operation and profitability could depend on the amount of state subsidies applicable
to the utilization of renewable energy sources and cogenerated energy in Hungary and the countries
of the European Union, as well as those for investment projects and operation, moreover on any
future changes in government grants.
The Commission Guidelines on State Aid for Environmental Protection and Energy set up a new
framework of EU requirements to be met by any government grant provided to the energy sector
and to be applied in Hungary too. Furthermore, in December 2018, the EU adopted the RED2
Directive and Member States, including Hungary, had to transpose it by June 30, 2021.
In recent years, the ‘KÁT’ (i.e. mandatory electricity off-take) system has undergone changes that
also affected the operating model. ‘METÁR’ (i.e. the support system for renewables), which
embodies a comprehensive recast of the KÁT regime, became effective on 1 January 2017 (some of
its elements on 21 October 2017). Changes in state subsidy regimes, and especially in the KÁT and
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METÁR regulations, or a possible cancellation of applicable grants may have a significant impact on
the operation, profitability, market position and competitiveness of the Company. Hungarian legal
regulations aimed at transposing the RED2 Directive have not yet been created, furthermore, no
tender subject to the METÁR system has yet been announced, so whatever potential impact those
might have on the Company’s sales revenue and profitability is as yet unknown.
9. CO
2
emission market, CO
2
quota allocation system and CO
2
quota prices
The fourth EU ETS trading period (2021–2030) began on 1 January 2021. During this period, in
addition to emission allowances received free of charge, emitters can acquire emission allowances
solely at auctions or through secondary commercial channels. In the period between 2021 and 2030,
specific power plants in the ALTEO Group are going to be allocated, free of charge, an emission unit
allowance that will decrease every year, based on the National Implementing Measure published by
the Ministry for Innovation and Technology and approved by the European Commission. A significant
change compared to the third trading period is that in trading period IV, the free allocation available
for a given year is largely determined by the level of activity of installations to be certified each year,
as well as its changes. In the event of a 15% change in the activity level compared to the base period,
the predetermined quota levels will need to be adjusted and approved by the European Commission.
This is to ensure that the allocation better reflects the real activity of the facilities. Changes in the
legal environmental and allocation system rules to achieve the climate policy targets, and the
increase in price of the emission allowances can have a considerable impact on the operating costs
and economic results of the ALTEO Group.
10. Changes in technology
Technological innovations can significantly improve the efficiency of the energy industry, especially in
the area of renewable energy production. Technological development can not only reshape the
technologies the ALTEO Group uses, but, in certain cases, might even completely eliminate their use.
If the ALTEO Group has no appropriate experience with or cannot access (on account of patent
protection or due to other grounds) solutions and technologies that become prominent, this may
lead to a loss of the ALTEO Group’s market share and a decrease in its revenues and profitability.
There is no way to guarantee that the ALTEO Group will always be in a position to choose and
procure, then operate—in a most profitable way—the most efficient technology.
11. Competitive situation
There are multiple companies both in Europe and Hungary that have significant positions and
experience, as well as advanced technologies, major capacities and financial strength—among them
state or municipal government owned and controlled ones—that compete on the ALTEO Group’s
various markets or may start competing with the ALTEO Group in the future. Should it become more
intensive in the future, competition may necessitate unforeseen improvements and investments,
furthermore, might also have a negative effect on the price of the ALTEO Group’s services or increase
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the Group’s costs, which may have an adverse effect on the ALTEO Group’s bottom line, as measured
on a consolidated basis. The ALTEO Group has demonstrated to possess substantial professional
experience and background in the preparation and implementation of energy investments and in the
operation of such facilities.
12. Funding risk
Preparing for and implementing investments and developments in the energy segment are capital-
intensive processes requiring substantial funding. Changes in certain factors (including the general
economic environment, credit markets, bank interest rates and foreign exchange [FX] rates) may
increase the costs of funding, make the accessing and repayment of funding more difficult, and cause
delays in the same or even render it outright impossible, and this is understood to also include
financing schemes already established on the date of these Financial Statements.
A large part of the ALTEO Group’s bank loans come with variable interest rates and are linked to
reference interest rates, such as BUBOR or EURIBOR. An unfavorable change in the interest rates
could have an adverse effect on the profitability of the ALTEO Group. The ALTEO Group enters into
interest rate swap (IRS) transactions to mitigate its interest rate exposure. Such transactions are
concluded after due consideration of the respective economic environment, and facility-related
terms and conditions. These transactions allow for reducing risk, however, the ALTEO Group is not
able to completely eliminate negative risks stemming from variable interest rates.
ALTEO’s current indebtedness in bonds fully comprises HUF-denominated, zero-coupon or fixed
annual interest-bearing bonds.
13. Foreign exchange rate changes
The part of ALTEO Group’s sales revenue generated in HUF and, on the expenditure side, not covered
with FX-revenue, to be settled in FX or subject to foreign exchange rates, the Group may incur gain or
loss, due to the changes in HUF and FX prices, To manage foreign exchange exposures, the Group
operates a forecasting system using foreign exchange cash flow modelling, on the basis of which it
manages the assessed and evaluated risks by means of market transactions.
14. Impact of international market developments on domestic trade
Market prices seen on foreign commodity exchanges have a major influence on energy prices in
Hungary, even though those prices move, to a significant degree, on the basis of economic processes,
as well as supply/demand conditions outside Hungary. New developments in economic processes
and changes in supply-demand relations may have a negative effect on ALTEO Group’s profitability
under certain circumstances.
15. Risk of changing natural gas, electricity and heat energy price margins
Any changes in the difference between (margin on) the (procurement) price of natural gas and the
price of electricity and/or heat that is sold influence the financial position of natural gas-fired power
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plants significantly. Were this margin to drop significantly, it could have a negative effect on the
business and profitability of the ALTEO Group.
16. Environmental legislation
Any unfavorable changes in the environmental legislation applicable to the ALTEO Group may
generate surplus costs or additional investment requirements for the ALTEO Group.
17. Risks related to the spread of COVID-19
To the best of its knowledge, ALTEO Group does not have any direct customers or suppliers for its
revenue-generating activities or services who are domiciled in countries that are under quarantine
due to the COVID-19 virus as of the date of publication of this Management Report. However, COVID-
19 may affect those markets where ALTEO Group is also active, and so it may have an indirect impact
on ALTEO Group’s operations and profitability. The management of ALTEO Group is not in a position
to assess the risks from the potential outcomes of COVID-19 in the entire supply chain or the risks
indirectly affecting the Company.
The direct personnel of ALTEO Group and the workforce of its subcontractors and suppliers involved
in each ongoing project may be affected by the spread of the COVID-19 virus and the measures taken
or to be taken during the same. Illnesses can have a negative impact on ALTEO Group’s work
processes, the timing of ongoing projects and may also have detrimental effects on the labor market.
The state of danger imposed in Hungary may have a negative impact on the profitability and liquidity
on the clients and consumers of ALTEO Group and may also result in the decline of their demand for
energy and willingness to invest, which may have a detrimental effect also on ALTEO Group’s profit.
ALTEO Group’s management has taken the necessary measures to address the risks related to the
protection of its employees’ health and has set up a Pandemic Executive Board and adopted a
Pandemic Plan. ALTEO Group’s management continuously monitors events related to the COVID-19
virus and, if necessary, takes the necessary steps based on these.
C. Risks specific to the ALTEO Group
18. Risks arising from operating the Virtual Power Plant
The income generating capacity of the ALTEO Virtual Power Plant and related production units within
the sphere of business interests of the ALTEO Group is highly dependent on the availability and
pricing of balancing reserve capacity and energy markets in the electricity system. If, for any reason,
access to these markets becomes limited with respect to the Virtual Power Plant, including a drop in
service volume attributable to a substantial fall in market prices, this may have a highly adverse
impact on the business activity and profitability of the ALTEO Group.
19. Political risks
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The ALTEO Group provides some of its services to institutions which are owned by municipalities or
are under the influence of municipalities or certain statutory corporations. Furthermore, the
agreements made with such institutions have a major effect on the operation of certain members
and projects of the ALTEO Group. The considerations governing the motivation of bodies having
influence over such institutions may differ from the considerations of a rational, profit-oriented
market player, which is a risk in terms of contract performance. Such risks arise primarily relating to
the district heating generation activities of Alteo Therm at its sites in Sopron, Kazincbarcika,
Tiszaújváros and Zugló.
The occurrence of events that may be classified as political risks may have an adverse impact on the
exposed Subsidiaries of the ALTEO Group and, overall, the profitability of the ALTEO Group.
20. Dependence on weather
Part of the ALTEO Group’s energy production capacities (e.g. wind turbines, solar power plants,
hydropower plants) and the energy demand of certain buyers (e.g. heat demands) depend on the
weather, therefore, changes in weather may significantly affect the profitability of the ALTEO Group.
In the case of weather-dependent energy production, no major change can be expected in the
average annual output, but within a year and between years, differences may occur. In the case of a
weather-dependent change in energy demand, even longer-term trends of changes may develop
(such as milder winters).
In the case of weather-dependent energy production, the Company relies on meteorological
forecasts to estimate (schedule) the quantity of electricity that can potentially be generated. If the
weather is not as predicted, there will be changes in the amount of electricity produced as compared
to the plans (Day-Ahead or Intra-Day schedules), which may cause a significant loss for the ALTEO
Group. See also Electricity balancing reserve capacity system risks.
The weather affects the ability to perform heat supply contracts that have no heat volume
commitment, given the heat purchase obligations. The actual weather, as compared to the
forecasted trend, has an effect on the profitability of the Group. The actual value of heat transfer
may in reality be different from the planned level; as a consequence, the fair value of the hedging
transactions obtained in accordance with the hedging policy of the Group in respect of such products
may need to be reclassified into profit or loss.
The Company’s strategy is to keep on developing weather-dependent, renewable energy production
projects, and that might increase the dependence on weather in the future.
21. Risks of growth
The ALTEO Group is in the phase of business growth, coupled with the growth of employee staffing,
the number and value of the facilities and tools. The ALTEO Group is planning to expand further both
in terms of business activities and geographical areas. There is no guarantee that the Company
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strategy will be successful and the Company will be able to manage this growth efficiently and
successfully.
With contributions from its Subsidiaries, in accordance with the present Financial Statements, the
Company is currently preparing for the implementation of several projects. In addition to the
Company’s intention, these project implementations depend on a number of other external factors.
It cannot be guaranteed that these projects will be actually implemented, or will be implemented in
accordance with the present Financial Statements; furthermore, the implementation of other future
projects may precede or substitute projects known on the date of the present Financial Statements.
Any of the potential risk events associated with growth may result in stagnation of the Company’s
growth or even operation at a loss.
22. Risks stemming from acquisitions, buying out projects and companies
The ALTEO Group wishes to implement its business plans partially via acquisition of already existing
energy projects and/or buying out companies. Although acquisition targets always undergo detailed
screening before the transaction, we cannot exclude the possibility of such financial, legal or
technical events occurring in relation to an acquired project or company that may have an adverse
effect on the business and profitability of the ALTEO Group.
Any of the potential risk events associated with the acquisition strategy may result in stagnation of
the Company’s growth or even operation at a loss.
23. Risks related to power plant project development and green-field
investment
In ALTEO Group’s business plans, licensing and implementation of green-field energy investments
plays an important role. Although the ALTEO Group draws up careful technical, legal and profitability
plans when preparing for project implementation, there is always a possibility that the authorization
of specific projects becomes unreasonably long or impossible. During implementation phases, the
ALTEO Group strives to contract main and subcontractors that offer appropriate guarantees and
references, but even so, the possibility of disputes arising between the parties cannot be excluded in
these phases.
Any of the potential risk events associated with green-field investments or development projects in
power plants may result in stagnation of the ALTEO Group’s growth or even operation at a loss.
24. Large-scale, customized projects
In line with the characteristics of the industry, a significant share of ALTEO Group’s revenues comes
from large-scale, customized projects. Consequently, completing or not implementing just a few
projects may already make a big difference in terms of the Company’s future revenues and
profitability. These large-scale projects are frequently long-term (may take even several years),
require a long-term allocation of significant resources and are, in several cases, implemented using
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subcontractors. An eventual failure of or loss on such large-scale investments may have a significant
negative impact on ALTEO Group’s profitability.
25. Energy trade risks
Changes in the demand on electricity and natural gas markets may have a profound influence on the
revenues, profitability and strategic expansion plans of the ALTEO Group.
During ALTEO Group’s energy trading activities, portfolio planning is done on the basis of data service
from consumers and the Group’s calculations. A planning mistake or incorrect data service may lead
to inappropriate procurement strategy, where a subsequent correction can cause losses or gains to
the ALTEO Group.
The Company covers 100% of the annual consumer demand, but due to natural seasonality, open
positions remain, which are mainly closed on the spot market. Prices on the spot markets cannot be
planned in advance, any change in them may have unfavorable/favorable effect on the profitability
of the ALTEO Group.
Natural gas and electricity volumes are mainly contracted through low-risk wholesale partners and,
to a lesser extent, through exchanges. Trading is continuous, and therefore the prices of products
change on a daily basis, given that the trading in exchange-traded products is continuous. Day-by-day
price movements, sometimes with significant changes, may represent a risk in the case of longer-
term consumer proposals. Even though the ALTEO Group performs its trading activities on the basis
of a risk management procedure adopted by the Board of Directors; an eventual mistaken
transaction may have a significant negative effect on the profitability of the ALTEO Group.
26. Operating risks
The economic performance of the ALTEO Group depends on the proper operation of its projects,
which may be influenced by several factors, such as:
• costs of general and unexpected maintenance or renewals;
• unplanned outage or shutdown due to malfunction of the equipment;
• natural disasters (fire, flood, earthquake, storm and other natural disasters);
• change in operative parameters;
• change in operating costs;
• eventual errors during operations; and
• dependence on third-party operators.
The energy generating companies of the ALTEO Group have in place “all risk” type property insurance
policies for machinery breakdown and outage, as well certain natural disasters. These provide cover
for damages traceable to such causes and also apply to liability insurance policies as well, where a
cover is provided for third-party damage caused by energy generating activities. However, it is not
excluded that a loss event is partially or entirely outside the scope of the risk assumed by the insurer,
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and so, the insurant—either as the injured party or the responsible party—may be obliged to bear
the damage.
The occurrence of any operational risks may have a highly adverse impact on the perception and
profitability of the ALTEO Group.
27. Fuel risks
The price of strategic fuels used by the ALTEO Group is in line with the market processes. The
possibility that the price of the fuels procured by the ALTEO Group will increase in the future cannot
be excluded, which can have a negative effect on the Group’s profitability.
For ALTEO Group’s power plants burning hydrocarbons, the key types of fuel (primarily natural gas)
are procured from third-party suppliers. The natural gas transport agreements made by the ALTEO
Group are in line with the practices used by the entire industry. Despite that, there is no guarantee
that the fuel required for fueling the power plants will always be available, and it is especially difficult
to plan with fuel supply in the case of external events. The natural gas transport agreements made by
the ALTEO Group are also in line with the practices used by the entire industry and these may include
an offtake (a.k.a. “take-or-pay”) obligation, for the respective period, with a certain tolerance band.
In the event of a significant drop in natural gas consumption, incurrence of a penalty by the ALTEO
Group due to gas not taken over cannot be completely ruled out, and such an occurrence would have
an adverse impact on the profitability of the Company.
28. Renewing and/or refinancing outstanding debts
In addition to loans from financial institutions, the ALTEO Group uses in part bonds - issued by ALTEO
either in a private or public offering - to fund its financing needs.
Negative changes and risks in the business prospects of the ALTEO Group, in the general financing
environment, in the interest environment or in the general capital market atmosphere may have a
negative effect on the renewal of bond debt and the refinancing of the ALTEO Group’s outstanding
loans would be possible only with significantly worse conditions or it might even become impossible.
These circumstances may have a negative effect on future financing and on the financial situation of
the ALTEO Group.
29. Information technology systems
The activity of the ALTEO Group (in particular, the supervision of the power plants) depends on how
information technology systems operate. The improper operation or security of the ALTEO Group’s
information technology (IT) systems may have adverse consequences for the business and
profitability of the ALTEO Group.
30. Wholesale partner risks
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If the partner in a wholesale transaction does not deliver or accept the contracted amount of energy,
or cannot pay for the energy delivered, such failed transactions may lead to short- or long-term
losses for the Company. Although the ALTEO Group exercises utmost care in selecting its partners,
any failure by them to meet their obligations would have a negative impact on the profitability of the
ALTEO Group.
31. Dependence on third-party suppliers
During the implementation of energy investments, the ALTEO Group greatly depends on the
suppliers, manufacturers of certain equipment, as well as on the implementers and subcontractors,
and that may have an impact on the implementation of the investments. The ALTEO Group does not
always have full control over the equipment, installations and materials. If, for any reason,
manufacturers or suppliers fail to deliver the equipment ordered by the ALTEO Group at the right
time, for the right price and in the right quality, delays may occur in the implementation of
investments and additional costs may arise, which may have an adverse impact on the profitability of
the ALTEO Group.
32. Buyer risk
A significant share of the ALTEO Group’s revenues comes from a small number of buyers making
large purchases. Consequently, winning or losing a client contract may already make a big difference
in terms of the Company’s future revenues and profitability.
As a consequence of having significant buyers, the ALTEO Group is exposed to non-payment risk. If
an important buyer of the ALTEO Group fails to pay or pays lately, that might cause a significant loss
to the ALTEO Group.
The ALTEO Group has fixed-term contracts with its significant buyers, suppliers and financing
partners. There is no guarantee that after the expiry of these contracts, the parties can reach an
agreement regarding the extension of these contracts. Even fixed-term contracts offer no guarantee
against their termination before the end of their specified term due to some unexpected or
exceptional event.
ALTEO Group sells electricity and provides district heating services for certain public institution users.
Upon request from such users, the relevant Subsidiary is obliged to provide an exemption from
termination due to late payment (a moratorium), for a specified period, subject to the conditions laid
down by law. Costs occurred due to the moratorium must be borne by the relevant Subsidiary.
33. The risk of key managers and/or employees leaving the Company
The performance and success of the ALTEO Group greatly depends on the experience and availability
of its managers and key employees. Managers or key employees leaving the Company or their
absence may have a negative impact on the ALTEO Group’s operation and profitability.
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34. The risk of introducing and using new power plant technologies
In accordance with its business plans, the ALTEO Group may introduce into the portfolio certain
technologies that were not included in their power plant portfolio until now. Although the ALTEO
Group implements only proven technologies holding a number of references, if the performance of a
given technology is lower than previously projected, it may cause a loss to the ALTEO Group.
35. Risks arising from authorities' opinions and findings
In addition to the tax authority, several other authorities (such as the Central Bank of Hungary and
HEPURA) are entitled to check the proper functioning of the rules at the ALTEO Group. The ALTEO
Group does everything that can reasonably be expected of it to ensure the compliance of its
operation with the requirements set out in legal regulations or specified by the authorities.
Nevertheless, the possibility that future inspections by the authorities will result in statements
leading to substantial expenses for the ALTEO Group, or that the competent authorities will impose
certain sanctions (penalty, suspension of operation or withdrawal of the license required for
operation) against some companies of the ALTEO Group cannot be excluded, which may have an
adverse impact on the perception and profitability of the Company.
36. Key licenses and qualifications
For performing their activities, members of the ALTEO Group need several permissions (such as small
power plant consolidated permit, KÁT permit, as well as environmental and water rights licenses). If
these certificates, qualifications and licenses are revoked or not extended, the business of the ALTEO
Group would be profoundly limited. Therefore, this could have a significant negative impact on the
Group’s profitability.
37. The risk of not fulfilling the obligations associated with operating its own
balancing group
As part of its electricity trading activity, ALTEO Energiakereskedő operates a balancing group of its
own, an accounting organization with the membership of electricity users and electricity producers in
contractual relationship with ALTEO Energiakereskedő, and performs its related tasks specified in
legislation and in the electricity supply regulations. ALTEO Energiakereskedő itself has all licenses,
financial securities, assets and resources required for operating the balancing group, but in the case
of a malfunctioning or a shortage, ALTEO Energiakereskedő may not be able to perform its duties as
the entity responsible for the balancing group, therefore, it would have to bear all relevant damages
and fines.
ALTEO Energiakereskedő is involved in a balancing group cooperation with several balancing group
managers. Should these balancing group managers suspend or terminate their activities, the transfer
of their tasks may imply significant costs for ALTEO Energiakereskedő and, if the transfer of the tasks
performed by the balancing group managers cannot be settled immediately, without problems, then,
even a significant amount of surcharge payment may be the result thereof.
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38. Options to purchase certain means of production
Third parties have options to purchase certain means of production of the ALTEO Group. If the
relevant contracts are not amended or new service contracts are not signed, these assets will not
contribute to the Company’s revenues and profits after the time when they are sold. Apart from that,
the Company may suffer losses from such sale transactions. In its business plans, the Company
anticipates the expiration of these contracts and the loss of ownership of the means of production;
any contract renewals or the retention or more favorable sale of ownership will result in additional
profits compared to the plans.
On the basis of the investment and long-term heat supply contracts concluded between the legal
predecessors of Alteo Therm Kft. and the local municipalities of Kazincbarcika, Ózd and Tiszaújváros,
the municipalities are entitled to buy those heating power plants upon the expiry of such contracts,
at the value specified in the accounting records.
Under a purchase option contract between MOL Petrochemicals Co. Ltd. and Sinergy on the Tisza-
WTP business share, MOL Petrochemicals Co. Ltd. is entitled to purchase, until June 30, 2027 at the
latest, the Tisza-WTP business share at a price calculated according to the methodology specified in
the contract.
Under a long term contract concluded by Zugló-Therm and FŐTÁV Zrt. on purchasing and selling heat
energy, as well as an agreement establishing a purchase option concluded at the same time, upon
expiry of that contract (expected by May 31, 2030) or in the case of termination by Zugló-Therm,
FŐTÁV Zrt. is entitled to buy the gas engine block heating power plant established by Zugló-Therm
for an amount of EUR 1, further to its decision adopted at its discretion. If FŐTÁV Zrt. fails to exercise
their purchase option, and the parties are unable to reach an agreement on the future of the heating
power plant, Zugló-Therm will be obliged to demolish it at its own expense and restore the property
used by it for this purpose to its original condition.
39. Business relationships associated with the Owners’ Group
The ALTEO Group is part of the Owners’ Group, and there are several business relationships between
the two groups. A portion of the ALTEO Group’s revenues and services used comes from the
Ownership Group. There is no guarantee that in the case of an eventual future change in the
ownership structure of the Company or of these businesses the relationship of the ALTEO Group with
these businesses remains unchanged. The termination of these buyer, financing and supplier
relationships may have a negative effect on the profitability of the ALTEO Group and limit its options
to access funding in the future.
40. The risk of being categorized as a de facto group of companies
The ALTEO Group includes several Subsidiaries. In the case of ALTEO Group, in the absence of a
uniform business policy or, in the case of certain Subsidiaries, the lack of other conditions, no control
agreement was concluded and ALTEO Group does not qualify as a recognized company group. At the
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same time, it cannot be excluded that based on the request of a legal entity with an interest of legal
nature, the court will oblige the member companies of ALTEO Group to enter into a subordination
agreement and to initiate the registration of the company group with the Court of Registration, or
categorize ALTEO Group as an actual company group even in the lack of a court registration. In a
situation like that, if a subsidiary was liquidated, the Company would be obligated to honor its debt
repayment obligations toward the creditors, except if it can prove that the insolvency was not the
consequence of the company group’s integrated business policy.
41. Taxation
The ALTEO Group does everything that can reasonably be expected of it to ensure that its operation
is in compliance with the regulations, but it cannot be excluded that a future tax audit will result in
substantial expenses in the form of a tax liability payable by the Company or its subsidiaries. The
National Tax and Customs Administration of Hungary (abbreviation in Hungarian: NAV) performed a
comprehensive tax audit at the Company for the year 2018. The audit findings did not result in any
noteworthy changes in the tax positions of the Company, and the Company met all obligations
imposed on it on the basis of those findings.
In certain acquisition contracts, the parties to the contract acting as sellers to the ALTEO Group
accepted a full guarantee for the period of tax law limitation for the reimbursement of the tax debts
of the target companies for the periods prior to their getting into the ALTEO Group. Nevertheless,
there is no guarantee that any claims for reimbursement against the sellers may be fully enforceable,
which may result in a loss for the ALTEO Group.
42. Environmental risks
During their activities the ALTEO Group’s companies use materials and apply technologies that could
be harmful to the environment if used inappropriately, not complying with legislation or with the
relevant permissions. Members of the ALTEO Group have the necessary environmental licenses and
policies in place, and their expert staff do their job with special care as required by the nature of this
business. But there could be extraordinary events which may entail invoking the environmental
remediation obligation of the affected company or imposing a fine, or may lead to enforcing claims
against the affected company. The ALTEO Group’s insurance policies may not provide any cover or
full cover for damages and costs resulting from such events, which may result in a loss for the ALTEO
Group.
43. Risk of bankruptcy and liquidation proceedings
If the court requires bankruptcy proceedings to be instituted against the Company, the Company will
be granted a payment extension. Pursuant to Section 10(4) of the Bankruptcy Act, the term of
payment is extended until 00:00 a.m. on the second business day following the 120
th
day from the
publication of the decision on the bankruptcy proceedings. Under certain conditions, the extension
may be prolonged for up to 365 days from the start date of the bankruptcy proceedings. In the event
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of liquidation proceedings, the Bond claims of Bond holders will be satisfied as other receivables
pursuant to Section 57(e) of the Bankruptcy Act. Any bankruptcy or liquidation proceedings initiated
against the Company would have a significantly adverse impact on the rate of Bonds and the
probability of their full repayment.
44. Any discrepancies between the data in the consolidated and IFRS reports
and the data in the reports prepared in line with the Hungarian Accounting
Standards (HAS)
The Company and its Subsidiaries prepare individual reports in line with HAS for each financial year.
Beginning with the fiscal year of 2010, the Company prepares a consolidated financial statement
according to the IFRS standards in addition to the separate HAS report. As of 2017, the Company has
prepared its separate financial statement in line with the IFRS standards. Valuation and presentation
principles applied in the reports of subsidiaries and of the Company prepared according to the HAS
requirements are different from those applied in the consolidated financial statement. Due to the
differences in the accounting systems, the information content of the simple aggregation of the
separate HAS financial statements and that of the consolidated IFRS financial statement are
independent and separate.
45. The risk of entering new geographical markets
The ALTEO Group might implement acquisitions and green-field investments overseas as well,
therefore, any unfavorable changes in the macroeconomic, business, regulatory and/or legal
environment of the target countries may have an adverse effect on the financial performance of the
projects obtained through acquisition or implemented through green-field investments and
consequently, on the profitability of the ALTEO Group.
III.4 Financial risks and their management
Over and above the listing of risks in Section III.3, in this section the Group presents its risks related
to financial asset and receivables, the way they are managed, and it analyzes its risk management
objectives in the current period.
III.4.1 Recovery risk and its management
The Group has classified its clients into the following risk categories:
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Assessed risk categories
managed collectively
Group Risk characteristics of the category, risk management
procedures
Retail trade in natural gas
and electricity
In establishing a customer portfolio, diversification by industry and
company size reduces risk.
Before establishing trade relations, our partners undergo a
customer rating, which is reviewed annually.
We monitor our receivables on a daily basis. In the event of
default, the act regulating the electricity sector allows, as the last
resort, partners to be excluded from consumption.
District heating
Customers are typically municipality-owned heat suppliers; they
are monitored continuously.
Business and project
development
Customers are subjected to a pre-qualification assessment; non-
payment related risk is managed by requiring financial
performance guarantees (bank guarantee, security deposit).
Large corporate clients
(energy services)
Customers possess the critical infrastructure of the Hungarian
corporate sector; they are mostly listed companies operating in a
transparent manner. Customers are monitored continuously.
Wholesale trade in
electricity
The settlement of sales through the power exchange is assured by
the regulations of the exchange. Trading partners (may) use
performance guarantees vis-à-vis each other.
System Operator
(MAVIR Zrt.) – KÁT
The risk rating of the system operator is the same as that of
Hungary. All the generators in Hungary that sell in the KÁT system
are required to be members solely of this balancing group; the
consideration for their production is covered by the fee
component allocated to non-retail users as specified in
Section 13/A of the Electricity Act. The system has been operating
for over one decade without any financial problems.
System Operator
(MAVIR Zrt.) – ancillary
services
With regard to the collection of the consideration payable for
those services, see the comments on KÁT above.
Lease receivables
The value of the receivables is guaranteed by the title of the assets
concerned.
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In 2020, the restrictions on business operation and on the working of sectors due to the COVID-19
pandemic resulted in an increased client risk; as a result, the Group identified an increasing risk
value.
Increased risk factors have been taken into account and have been quantified in the course of the
review of the ECL model. During the current year, it was not necessary to draw down bank
guarantees or any other collateral pledged by clients.
The details of the Group’s receivables and the expected losses relating to such receivables are
presented in Sections IV.14; IV.17 and IV.19.
III.4.2 Liquidity risk and its management
The Group makes liquidity plans, in which it examines liquidity positions and, having analyzed the
plans, ensures in advance, in due time, that sufficient liquidity is maintained.
▪ The Group has a cash pool system settled through banks, available to its members, which is
successful in managing cash use and demand within the Group at different times and in
different amounts.
▪ Furthermore, the Group has shared bank liquidity facilities, the availability of which assures
sufficient and flexible liquidity options for the Group.
▪ The 10-year bonds issued in 2019 and 2020 changed the composition of the sources of the
liquid cash assets available to the Group; the shift of liabilities towards long term has
considerably improved short- and medium-term liquidity.
The future cash flows of the borrowings and bonds, and also the credit terms are explained in detail
in Sections IV.21 and IV.22.
The maturity dates of the Group’s financial instruments are the following:
less than 1 year within 2-5 years longer than 5 year
Assets:
Long-term deposits or loans given - 225 651 -
Trade receivables 4 425 345 - -
Other financial assets 8 627 136 - -
Other receivables and accruals 9 155 718 - -
Liabilities:
Bond payable 2 312 138 - 12 658 274
Loans and borrowings 419 778 1 906 519 4 676 579
Finance lease liabilities 237 744 751 441 936 263
Advances received 8 989 - -
Trade payables 4 546 498 - -
Other long-term liabilities - 320 000 216 090
Other short-term liabilities and accruals 9 328 196 - -
Income tax liabilities 407 159 - -
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III.4.3 Interest rate risk and its management
The Group is financed through fixed-interest bonds and variable-interest project loans.
▪ To fix the interest rates of project loans, the Group has entered into interest rate swaps, in
which it agrees to exchange the variable cash flows, for a predefined period, to fixed cash
flows with respect to the principal amount. The effects of these swaps are considered to be
cash flow hedges.
▪ The Group regards hedging transactions to be efficient as they were concluded with the
lending bank, adjusted to the terms of the loans in question.
III.4.4 Risk arising from changes in energy product prices and its management
Due to its scope of activities, the Group is considerably exposed to the variations in the prices of
energy carriers, but such risk is managed by appropriate pricing and by hedging transactions.
Risk to be managed
(hedged transaction)
Hedge transaction
Objective
Volume and price components of
the gas necessary for the
production of district heating
subject to regulated price
Entering into forward gas
hedging transactions when the
HEPURA district heating rate is
established
Maximum hedging for the gas
price specified in the decree
regulating the district heating
price, as well as for the
necessary volumes
Market-priced heat generation
Use of price formulas to reflect
the inputs necessary for the
heat generated (gas) as well as
other features of production
Sustainable heat generation
through optimizing the co-
generation of electricity
III.4.5 Foreign exchange risk and its management
The Group's exposure to foreign exchange risk arises when the income from and expenses of
transactions are denominated in different currencies. The Group has no significant hidden foreign
exchange risks (embedded derivatives) regarding its activities.
Risk to be managed
Hedge transaction
Objective
Change in the exchange rate of
electricity purchase and sale in
the retail trade
Hedging of the net foreign
exchange position (EUR)
through forward contracts
(mostly to buy)
The target is 95%
Change of the components of
district heat production (gas,
CO
2
) relative to the regulated
(fixed) exchange rate
Foreign exchange forward
transactions to hedge the EUR
consideration for energy
carriers required for heat
production
Total hedging of the FX
exposure of the regulated
heat price
III.4.6 Description of hedge relationships - objectives and procedures relevant for hedges
and hedging policy
IFRS 9 provides for the terms of hedge accounting, and the Group complies with the requirements
set out in IFRS 9: the Group keeps a register of the hedged items and hedging instruments, the
hedging relationships have been identified, the hedging relationships exist and are effective.
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• With respect to the volume and price risk of energy products, the Group has set up plans and risk
management models regarding the various business segments. These models calculate the type
and value of the necessary hedge transactions in accordance with the contracts and plans in
effect. Hedge transactions are concluded on that basis.
• In the case of district heating, due to the non-obligatory volume purchase, the Group
continuously assesses the relationship of hedged items and hedging instruments relating to the
production of heat. The volume to be hedged is based on historic data of several years as well as
on consumption forecasts. In the current period, the relationship was effective, with no
relationships discontinued.
• In the case of FX risk, the Group covers the foreign exchange risk of its future purchases to be
settled in a foreign currency in the next 12 months by concluding hedging transactions. The
maturity date of the hedging transactions is as close to the date of expected payment as
possible.
• The Group regards interest rate hedging (IRS) transactions to be efficient as they were concluded
with the lending bank, adjusted to the terms of the loans in question.
III.4.7 Managing capital
By transforming its capital structure, the Group intends to retain its capacity to operate continuously
in order to provide profit for its shareholders and maintain an optimal capital structure for the sake
of reducing the cost of capital. In order to preserve or adjust capital structure, the Board of Directors
proposes to the General Meeting the amount of dividends to be paid to shareholders, and acting
within its authorization received from the General Meeting, it decides, in connection with the capital
structure or at its discretion, on capital increase and issuing new shares, or submits a proposal to that
effect to the General Meeting.
The Group complies with the statutory capital requirements applicable to it. In performing a review
of that, the Group observes the requirements of Act V of 2013 on the Civil Code (of Hungary). The
table below shows equity and its ratio relative to issued capital:
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Issued capital 242 235 232 972
Equity 19 009 318 8 547 657
Issued capital/ Equity ratio 78,47 36,69
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IV. NOTES TO THE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
IV.1 Sales revenue
Revenue contains returns attributable to the Group’s core activity.
Activities of the Group:
Production activity: In the course of production, the Group produces the energy sold through its
own power plants (electricity and heat energy).
Commercial activity: Purchase and resale of gas and electricity to consumers and trading partners.
The commercial segment purchases energy from the production units of the Group and also from
other production partners.
Operation and maintenance (O&M): The Group carries out operation and maintenance activities
related to power plants and energy generating equipment.
Implementation of energy industry projects: For energy industry project activities, revenue is
presented by stage of completion.
Virtual Power Plant: Full management of scheduling services, HEPURA and MAVIR data reporting
and administration, and real-time production monitoring activities for our contracted partners'
power generation units.
Waste management: the revenue of the waste management activity launched in 2019 is presented
here.
E-mobility service: operation of licensed charging equipment and e-mobility services for residential
and corporate customers
Operating lease income: The Group gives certain parts of its properties at the sites of Alteo-Therm
Kft. in Sopron and Győr to operating lease (based on lease agreements). The Group does not have
Revenues
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Electricity production 23 324 047 12 415 089
Electric power trade 7 304 142 7 595 012
Heat sales 5 850 254 4 708 397
Operation and maintenance (O&M) 2 853 248 3 227 435
Gas trade 3 892 114 2 717 494
Energy industry service fees and projects 631 399 1 789 231
Waste management 232 917 440 261
E-mobility service 51 967 -
Other revenues 47 058 20 287
Trade commission revenues 37 075 23 863
Operating lease income 25 085 25 874
Finance lease income 142 18 358
Total
44 249 448 32 981 301
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
75 / 115
any separate dedicated assets for leasing purposes; however, it leases some of its own assets. The
Group does not sublease its leased assets.
Finance lease income: The lease interest rate in contracts classified as long-term leases in
accordance with the rules of IFRS16 is presented here.
Other revenues: accounting services provided to third parties and revenues that are not classifiable
in other activities are recognized as other revenues.
Other activities in the business period requiring special principles of presentation:
• In the current year the Group had no discontinuing operations.
• The Group did not have interest, royalty or dividend, which should be presented as
revenue.
Turnover items not recognized in the revenue:
• The Group leaves out taxes, fees recovered on behalf of the state or some other party from
its revenues and recognizes them as items decreasing expenses (consolidates revenues and
expenses). For an itemized list, see Section II.5.71 above
IV.2 Material expenses
IV.3 Personnel expenses
The personnel expenses line contains the wages, other disbursements of the Group and the related
benefit expenses.
Material expenses
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Energy carrier - electricity (10 094 979) (9 816 751)
Energy carrier - gas (10 683 258) (7 082 976)
Material and service needs of maintenance and projects (2 380 998) (4 052 174)
Expert services (counselling, auditing, IT) (633 639) (464 250)
Waste management services (178 417) (344 664)
Agent’s commission (573 071) (311 964)
Bank expenses, insurance (271 792) (227 260)
Rent (office, machinery, vehicles, data cables, IT) (133 293) (204 748)
HSE, ISO, environmental protection (162 441) (148 520)
Other fuels and water (129 604) (125 981)
Administration and office costs (100 641) (101 398)
Other (126 421) (81 987)
Marketing (107 125) (69 569)
Fees paid to authorities, duties (41 258) (40 187)
Cost of E-mobility service (7 507) -
Total
(25 624 444) (23 072 429)
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Share-based payment expenses: The profit effects on the shares granted to the employees as
benefit are also recognized as part of the personnel expenses. For more details on related
presentations see Section IV.35.
IV.4 Other revenues, expenses, net
• CO
2
expenditure includes the current year's expenditure on CO
2
emission allowances
related to electricity production.
• METÁR overcompensation includes the amounts claimed by the MAVIR Group under the
rules of the support system.
Personnel expenses
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Wages (2 960 051) (2 813 246)
Other personnel expenses (417 830) (291 144)
IFRS 2 remuneration (261 274) (106 871)
Share-based benefit expenses (2 460) (7 297)
Contributions (550 622) (551 482)
Total
(4 192 237) (3 770 040)
Average statistical headcount 2021 2020
ALTEO Nyrt. 270 260
Profit or loss from other revenues and expenses
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Other expenses:
CO2 expenses (1 275 960) (960 621)
Fines, compensation, default interest paid (414 747) (28 917)
Impairment of inventories and receivables (119 856) (248 446)
METÁR overcompensation (56 446) -
EKR quota expense (53 516) -
Parafiscal contributions, fees, payment obligations (52 534) (55 400)
Provisions released (recognized) (39 791) (37 000)
Scrapping of fixed and intangible assets (12 612) (89 051)
Grants, released receivables (9 639) (19 297)
Sale of fixed and intangible assets (557) 339
Other revenues:
Income from (expenses of) loss events 141 216 55 945
Subsidies and grants received 68 696 101 621
Fines, compensation, default interest received 24 118 21 512
Other settlements 6 023 31 297
Total
(1 795 605) (1 228 018)
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• The amount of the obligation for the year 2021 for the Group under the Energy Efficiency
Obligation Scheme has been recognized as an EKR quota expense
• Parafiscal items: These contain mainly deductions imposed by local municipalities (vehicle
tax, building tax, line tax and duties), as well as environmental burden fees and
environmental product fees.
• Detailed description of the information concerning the recognition and release of
provisions is in Note IV.24.
• It contains the pro rata temporis amount of grants received from the grants awarded for
the establishment of the assets. (Energy storage renovation in Füredi u. in Felsődobsza)
• The most significant items among the items in the Fines, compensation, default interest
received line were penalties, contract termination penalties received for non-performance
of the schedule keeping obligation related to energy production and trade.
• Other items include income and expenses not categorized elsewhere, such as settlements
on partner and tax current accounts, rounding differences, levies not classified as income
tax and derecognition of time-barred liabilities.
IV.5 Capitalized own production
Personnel and other material expenses directly related to the investments made within the group
are recognized in capitalized own performances.
IV.6 Finance income, expenditures, net
Within finance income and expenses, the main element in exchange differences was the unrealized
exchange loss at year-end. Exchange differences incurred on the foreign currency transactions of
the Group.
The impairment of the loan granted to Energigas Kft. (third party) and the amount of damages paid
by the Group for terminated electricity trading contracts were recognized in other financial
accounts.
Capitalized own production
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Capitalized production from material expenses 6 175 231 078
Capitalized production from personnel expenses 236 651 281 148
Total
242 826 512 226
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IV.7 Taxes
IV.7.1 Taxes in the profit or loss - types of tax expenses
The Group's members pay tax under Hungarian tax law, with the exception of the German
subsidiary. Taxes presented as tax expense:
Net finance income
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Finance income 384 928 479 576
Received/receivable interest 53 175 30 430
Exchange rate gains 331 546 420 257
Other finance income 207 28 889
Financial expenses (2 255 979) (1 569 892)
Interests paid/payable (1 025 152) (984 268)
Indemnification for terminated contract (1 005 894) -
Exchange rate losses (212 188) (381 652)
Other financial expenses (12 745) (203 972)
Net finance income (1 871 051) (1 090 316)
Net interest expenses (971 977) (953 838)
Net exchange rate profit or loss 119 358 38 605
Other financial settlements (1 018 432) (175 083)
Total
(1 871 051) (1 090 316)
Taxes
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Local business tax expenditure (604 793) (417 966)
Innovation contribution expenditure (94 514) (64 223)
Corporate tax expenses (214 997) (160 410)
Special tax of energy producers (103 158) (49 275)
Deferred tax expenses (197 356) (191 786)
Total
(1 214 818) (883 660)
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IV.7.2 Taxes in the profit or loss - income tax calculations
Elaboration of the tax base
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
IFRS profit or loss before taxes 7 072 268 1 474 201
Effect of differences 1 553 962 394 305
HAS profit or loss before taxes 8 626 230 1 868 506
Increasing items 4 996 511 3 161 201
Total provisions recognized 23 193 121 254
Planned and extraordinary depreciation charge recognized in the
tax year pursuant to the Accounting Act
2 863 451 2 703 063
Costs and expenses not related to business activity - 129
Fines established in final decisions or obligations arising from
legal consequences, recognized as expenses
2 938 223
Amount of impairment recognized regarding receivables 142 351 110 264
Receivables released (except to the benefit of a private
60 518 20 184
Other 84 074 206 084
Amount of Share based payment to employees for equity
instruments recognized against profit or loss before taxes, and
the specified sum of the ESOP organization relating to equity
instruments
1 819 986 -
Decreasing items 11 205 556 2 952 603
Amount written off from the loss carried forward (negative tax
base) from previous years
1 586 487 1 438 085
Provision recognized in the tax year due to the use of provisions
37 000 60 173
Depreciation recognized in accordance with the tax legislation
1 950 990 1 516 762
Allocated reserves within retained earnings, but not more than
50% of profit before taxation or HUF 500 million per tax year
(development reserve)
3 150 000 -
Dividends, shares received and recognized as income 1 930 000 258 560
Impairment reversed regarding receivables in the tax year,
irrecoverable portion of the cost of receivables
34 079 439
Other 313 -
Cost of renovation of listed and protected historic structure
increasing the value of the asset at the taxpayer that carries the
fixed asset on its books
- 4 821
Amount of Share based payment to employees for equity
instruments recognized against profit or loss before taxes, and
the specified sum of the ESOP organization relating to equity
instruments
2 540 369 -
Negative tax base of the Group (23 682) (326 237)
Tax base 2 417 185 2 077 104
Tax (9%) 217 547 186 939
Benefit (reducing taxes) (11 368) (11 368)
Difference due to group corporate tax (2 160) -
Tax pursuant to the Corporate Tax Act (204 019) (175 571)
Support for sports and arts entitling to tax benefit - -
Amendment of corporate tax for previous years (10 979) 15 161
Effect of corporate tax on profit or loss (214 997) (160 410)
Deferred tax due to changes in the statement of financial position:
Recognition of deferred tax assets (tax gain) 71 395 132 811
De-recognition of deferred tax assets (tax loss) (132 811) (286 856)
Recognition of deferred tax liability (tax loss) (1 487 761) (866 550)
De-recognition of deferred tax liability (tax gain) 866 550 599 716
Deferred taxes recognized in Other comprehensive income:
Deferred taxes recognized in Other comprehensive income 524 812 39 541
Deferred taxes derecognized in Other comprehensive income (39 541) 169 460
Acquired deferred tax liability - 20 092
Effect of deferred taxes on profit or loss (197 356) (191 786)
Local business tax expenditure (604 793) (417 966)
Innovation contribution expenditure (94 514) (64 223)
Special tax of energy producers (103 158) (49 275)
Effect of income taxes on profit or loss (1 214 818) (883 660)
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IV.7.3 Income taxes in the statement of financial position
Income tax receivables in the statement of financial position:
Income tax liabilities in the statement of financial position:
IV.7.4 Taxation information
Presentation of Tax Group members
As of January 1, 2019, the following companies formed a Corporate Tax Group, to which further
companies joined as of January 1, 2022.
Income taxes in the statement of financial position
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Corporate tax overpayment 1 365 22 798
Innovation contribution overpayment 6 307 7 898
Local business tax overpayment 22 548 62 116
Income tax receivables 30 220 92 812
Income taxes in the statement of financial position
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Corporate tax liability
108 971 93 051
Innovation contribution liability
51 438 40 031
Energy suppliers’ income tax liability
59 193 23 509
Local business tax liability 187 557 122 639
Income tax liabilities 407 159 279 230
12/31/2021 As of 1/1/2022
Head of group: Head of group:
Sinergy Energiakereskedő Kft. Sinergy Energiakereskedő Kft.
Members: Members:
Alte-A Kft. Alte-A Kft.
Alteo Energiakereskedő Zrt. Alteo-Go Kft.
ALTEO-Therm Kft. (legal predecessor: Győri Erőmű Kft.) Alteo Energiakereskedő Zrt.
Sinergy Energiaszolgáltató, Beruházó és Tanácsadó Kft. ALTEO-Depónia Kft.
Windeo Kft. ALTEO-Therm Kft. (legal predecessor: Győri Erőmű Kft.)
Domaszék 2MW Kft.
Euro-Green Energy Kft.
E-Wind Kft.
Hidrogáz Kft.
Kazinc-BioEnergy Kft.
Monsolar Kft.
Pannon Szélerőmű Kft.
Sinergy Energiaszolgáltató, Beruházó és Tanácsadó Kft.
SUNTEO Kft.
Tisza-BioEnergy Kft.
Tisza-BioTerm Kft.
Windeo Kft.
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List of tax audits
The tax authorities carried out the following audits concerning the Group:
IV.8 Deferred taxes
Deferred tax assets and liabilities were calculated by the Group for each taxpayer. The change in
deferred taxes was recognized by the Group in the statement of profit or loss.
Taxable entity Type of 2021 review, tax type, period
Alteo Energiakereskedő Zrt. Compliance review – VAT – 2018 07-09. month (closed)
Alteo Nyrt. Comprehensive tax review – 2018 (closed)
Alteo Nyrt. Compliance review - Personal Income Tax (closed)
Alteo-Therm Kft. Compliance review – Energy tax – November 2020 (closed)
Sinergy Energiakereskedő Kft. Comprehensive tax review – 2017 (in progress)
Sinergy Energiakereskedő Kft. Compliance review – VAT – November 2021 (closed)
Sinergy Energiakereskedő Kft. Compliance review – VAT – December 2020 (closed)
Sinergy Energiakereskedő Kft. Compliance review – VAT – January to March 2021 (closed)
Sinergy Energiaszolgáltató,
Beruházó és Tanácsadó Kft.
Comprehensive tax review – 2018 (in progress)
Tisza WTP Kft. Compliance review – VAT – 1/1/2020-8/31/2020 (closed)
Deferred tax changes
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Deferred tax asset
opening assets 132 811 286 856
increase 71 395 (154 045)
decrease (132 811) -
71 395 132 811
Deferred tax liability
opening liability 866 550 599 716
acquired - 20 092
increase 1 487 761 246 742
decrease (866 550) -
1 487 761 866 550
Deferred taxes in other comprehensive income
opening assets 39 541 (169 460)
increase - 209 001
decrease 485 271 -
524 812 39 541
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Elaboration of deferred taxes
Tax value
Accounting
value
Deferred tax
asset base
Deferred tax
liability base
Tax value
Accounting
value
Deferred tax
base
Deferred tax
liability base
Property, plant and equipment
20 598 006 25 738 088 - (5 140 082) 20 498 709 25 523 292 1 702 275 (6 726 858)
Other intangible assets 691 801 2 516 820 - (1 825 019) 547 883 3 037 269 - (2 489 386)
Operation contract assets - 1 052 216 - (1 052 216) - 1 212 987 - (1 212 987)
Rights of use 1 006 221 1 766 502 - (760 281) 228 883 1 063 615 - (834 732)
Deferred tax assets 71 395 71 395 - - 132 811 132 811 - -
Long-term deposits or loans given 47 551 225 651 178 100 - 256 624 95 181 161 443 -
Long-term participation in associate 100 100 - - 100 100 - -
Assets held for sale - - - - - - - -
Inventories 1 076 779 1 076 779 - - 442 622 442 622 - -
Trade receivables 4 064 680 4 425 345 360 665 - 3 539 435 3 263 224 276 211 -
Short-term lease assets - - - - 129 244 128 949 295 -
Emission allowances 2 336 075 2 336 075 - - 843 488 843 488 -
EKR rights 59 450 59 450 - - - -
Other financial assets 2 795 893 8 627 136 (5 831 243) 370 278 1 697 162 1 326 884
Other receivables and accruals 9 097 176 9 155 718 58 542 - 3 756 003 3 895 803 (139 801) -
Income tax receivables 30 220 30 220 - - 92 812 92 812 - -
Cash and cash equivalents 3 679 253 3 679 253 - - 3 455 045 3 455 045 - -
Losses carried forward - - - - 296 911 - 296 911 -
Issued capital 242 235 242 235 - - 232 972 232 972 - -
Share premium 5 889 229 5 889 229 - - 5 185 343 5 185 343 - -
Share-based payments reserve (688 513) (688 513) - - 62 819 62 819 - -
Retained earnings 8 281 398 8 281 398 - - 2 882 216 2 882 216 - -
Transactions with owners (32 222) (32 222) - - (223 259) (223 259) - -
Hedge reserve 5 306 431 5 306 431 - - 399 801 399 801 - -
Conversion reserve - - - - - - - -
Allocated reserves 3 592 318 - (3 592 318) 716 709 - - (716 709)
Non-controlling interest 10 031 10 031 - 7 765 7 765 - -
Long-term loans and borrowings 6 629 712 6 583 098 (46 614) 8 481 667 8 411 397 - (70 270)
Debts on the issue of bonds 12 658 274 12 658 274 - 14 889 000 14 889 000 -
Finance lease liabilities 785 542 1 687 704 902 162 - 235 858 1 047 406 811 548 -
Deferred tax liabilities 1 487 761 1 487 761 - 866 550 866 550 -
Provisions - 944 136 944 136 - - 850 493 850 493 -
Deferred income 593 865 593 865 - 436 864 436 864 - -
Other long-term liabilities 705 712 536 090 - - 705 712 1 404 123 - (698 411)
Short-term liabilities 17 259 460 17 261 231 1 171 - 8 430 871 8 430 870 - -
Short-term loans and borrowings 419 778 419 778 - - 929 693 929 693 - -
Short-term bond payables 2 312 138 2 312 138 - - - - - -
Short-term finance lease liabilities 237 744 237 744 - - - 154 912 154 912 -
Advances received 8 989 8 989 - - 46 500 46 500 - -
Trade payables 4 546 498 4 546 498 - - 2 308 413 2 308 413 - -
Other financial liabilities - - - - - 189 130 - (189 130)
Other short-term liabilities and accruals 9 211 696 9 328 196 116 500 - 4 178 564 4 522 992 - -
Income tax liabilities 407 246 407 888 642 - 279 230 279 230 - -
- - (0) - (0)
- -
Deferred tax position of balance sheet items 2 565 518 (18 247 773) 5 441 171 (12 938 483)
Differences not qualifying as returning - - 10 214
Net deferred tax position of consolidation units 793 281 16 530 674 1 915 021 (9 628 333)
Of which part of the comprehensive income: 5 831 243 439 342 -
Deferred tax assets (9%) 9% 71 395 9% 172 352
Of which: part of the comprehensive income: 9% - 9% 39 541
Deferred tax liability (9%) 9% (1 487 761) 9% 866 550
Of which: part of the comprehensive income: 9% 524 812 9% -
Year ending on 12/31/2021 HUF thousan
Year ending on 12/31/2020 HUF thousan
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IV.9 Fixed assets and intangible assets
IV.9.1 Table on the movement of assets
IV.9.2 Valuation of assets
• For the accounting policy on the valuation of assets, see Sections II.5.81 and II.5.83 in
Accounting policies relating to the statement of financial position and the recognition and
measurement of assets and liabilities.
• Intangible assets include no assets with indefinite lifecycles. The Group does not possess
assets regarding which it would employ the revaluation model.
• Discounts applied to decommissioning reserve (2021: 8.57%; 2020: 8.57%).
• The management of the Group performs the necessary tests for CGUs as at each reporting
date to determine whether the recognized value can be considered recoverable.
IV.9.3 Depreciation and amortization in the current period
Cost of assets
Property, plant and
equipment*
Emission allowances
Other intangible
assets
Operation contract
assets
Rights of use Total
January 1, 2020 21 406 839 342 100 4 310 139 1 878 930 1 047 220 28 985 228
Adjustment for 2019
106 147 - - - - 106 147
Acquisition/put to use
5 016 862 - 495 808 2 368 305 252 5 820 290
Increase through acquisition
7 101 461 - 1 000 - - 7 102 461
Sale
(1 027) - - - - (1 027)
Scrapping
(371 468) - (32 114) - (52 780) (456 362)
Recla ssification to inventories
- (342 100) - - (342 100)
December 31, 2020 33 258 814 - 4 774 833 1 881 298 1 299 692 41 214 637
Acquisition/put to use
2 631 923 - 634 370 - 919 007 4 185 300
Sale
(16 082) - - - - (16 082)
Scrapping
(9 765) - - - (29 603) (39 368)
December 31, 2021
35 864 890 - 5 409 203 1 881 298 2 189 096 45 344 487
Accumulated depreciation
and amortization of assets
Property, plant and
equipment*
Emission allowances
Other intangible
assets
Operation contract
assets
Rights of use Total
January 1, 2020 (3 622 027) - (817 782) (471 189) (122 452) (5 033 450)
Adjustment for 2019
- - - (1 950) (1 950)
De-recognition, s ale
309 - - - - 309
De-recognition, s crapping
299 008 24 400 - 43 903 367 311
Increase through acquisition
(2 850 171) - (1 000) - - (2 851 171)
Depreciation a nd amortization
(1 562 641) - (943 182) (197 122) (155 578) (2 858 523)
December 31, 2020 (7 735 522) - (1 737 564) (668 311) (236 077) (10 377 474)
De-recognition, s ale
7 124 - - - - 7 124
De-recognition, s crapping
7 066 - - 29 092 36 158
Depreciation a nd amortization
(2 405 470) - (1 154 819) (160 771) (215 609) (3 936 669)
December 31, 2021
(10 126 802) - (2 892 383) (829 082) (422 594) (14 270 861)
Net value of assets
Property, plant and
equipment*
Emission allowances
Other intangible
assets
Operation contract
assets
Rights of use Total
31/12/2019 17 784 812 342 100 3 492 357 1 407 741 924 768 23 951 778
31/12/2020 25 523 292 - 3 037 269 1 212 987 1 063 615 30 837 163
31/12/2021 25 738 088 - 2 516 820 1 052 216 1 766 502 31 073 626
Depreciation and amortization
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Recognized depreciation, amortization (3 936 669) (2 858 523)
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
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IV.9.4 Asset types
Property, plant and equipment
The Group created the above assets using its own capacity as main contractor, engineering,
maintenance, business, legal and economic advisor. The table above excludes the increase in
intangible assets related to the investments (KÁT, R&D, Concession).
The contractual assets as per IFRS 15 recognized among intangible assets are presented in detail in
Section IV.11.
The management of the Group performs the necessary tests for CGUs as at each reporting date to
determine whether the recognized value can be considered recoverable. In the current year during
an in-year review, the Group recognized an impairment loss for part of its wind farm based on
updated discounted cash flow models.
In the Other assets item, the Group recognizes its office and IT equipment.
Other intangible assets
Property, plant and equipment
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Power plant properties
3 510 227 3 690 082
Energy generation equipment:
Gas engine, heat cogeneration
4 255 642 4 121 003
Energy storage block
1 612 278 739 911
Solar panel farm
4 875 333 5 130 934
Wind turbine
7 949 233 8 689 154
Hydropower Plant
693 971 760 733
Auxiliary systems
1 874 118 1 925 636
E-charger
35 268 -
Control engineering assets
534 507 378 470
Other assets
397 511 87 369
Total 25 738 088 25 523 292
Carrying amount of other intangible assets
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
R&D intellectual property
354 426 332 880
Purchased software
325 050 202 385
Trade license
7 384 8 084
License, connection charge
648 45 382
KÁT instrument
1 178 579 2 116 334
Other legal instrument
411 765 107 202
Contractual asset (IFRS15)
155 327 165 051
Internally developed control software
83 641 59 951
Total 2 516 820 3 037 269
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Operation contracts (IFRIC 12 concessions)
Rights of use (IFRS 16 presentation, the Group as Lessee)
• There is no right of use where the Group would sublease the underlying asset.
• Rights of use are written off in a straight-line manner over the term of the contract granting
the right.
• The Group does not keep any separate assets for leasing purposes. Rent income is presented
in Section IV.1.
• The 1532.29 m
2
of office space rented in the Globe 3 Office Building is recognized under
rights of use in IFRS 16. The office lease has a term of 5+5 years with a gross value of
HUF 808,720 thousand in the Company's books.
• Lease liability is presented in Sections IV.10 and IV.23.
IV.9.5 Construction of assets in the current period
The Group performed the following priority power plant investments:
Carrying amount of operation contracts
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Tisza-WTP operation contract
62 583 73 629
BC Power Plant operation contract
- 1 597
BC Therm operation contract
- 2 542
Kazincbarcika Heating Power Plant operation (IFRIC12)
- 30 277
Tiszaújváros Heating Power Plant operation (IFRIC12)
66 086 71 594
Füredi út Heating Power Plant operation (IFRIC12)
923 547 1 033 348
Total
1 052 216 1 212 987
Carrying amount of rights of use
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Land lease Windeo Kft.
9 271 10 198
Land lease EGE Kft.
148 987 161 152
Land lease Pannon Szélerőmű Kft.
90 791 97 476
Ground rent Zugló Power Plant
356 758 399 355
Lease of power plant asset Felsődobsza/Gibárt
154 474 166 362
Iroda bérlet Alteo Nyrt.
775 035 -
Vehicle rental Alteo Nyrt.
231 186 229 072
Total 1 766 502 1 063 615
Investments
Value (in HUF
thousand)
Energy storage block Kazincbarcika 982 438
Overhaul and renovation of gas engines in heating power plants 436 880
Office renovation works Globe3 294 334
Control engineering development at the Füredi u. power plant 46 115
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IV.9.6 Capitalization of borrowing costs
In 2021, the Group did not take out any loans for which additional costs were capitalized.
IV.9.7 Environmental effects statement
The Group does not possess assets which are expected to cause environmental damage that the
Group would be required to neutralize.
IV.9.8 Assets as borrowing collaterals
For power plants financed using borrowings, a lien is attached to the assets and the capital
contribution of the entity owning the asset under the loan contract. For a full asset hedging
presentation, see Section IV.22.2.
IV.10 Lease assets
IV.10.1 Finance lease (Group as Lessor)
The Group presents the contract of BC Therm Kft. (up to 31.05.2021) and Tisza-WTP Kft. concluded
with customers as a finance lease.
Presentation of finance lease activities, considered terms and results of evaluations performed on
specific contracts:
✓ no other, unidentified future conditions may be linked to guaranteed residual values
✓ there are no contingent fees
✓ the lessee has a call option on the assets
✓ the asset meets special customer needs and is not available to entities other than the buyer
✓ during the period of use, the contract is terminated with the transfer of title in the asset,
which happens by exercising the option
Lease asset values
In 2020, among lease assets, the lease value of BC-Therm Kft. was presented. Our outstanding lease
receivable in connection with BC-Therm Kft. was settled in 2021. The Group sold its 100% stake in the
subsidiary.
With regard to Tisza WTP Kft., the Group is entitled to no lease income; the value of the lease
receivable is zero.
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IV.10.2 Operating leases
The Group gives certain parts of the properties of the sites in Győr and Sopron to operating lease.
These items form part of the Group revenue. The Group keeps no separate assets for leasing
purposes; i.e. it leases exclusively some of its own assets under such arrangement. See Section IV.1.
IV.11 Loans given
▪ None of the loans given is measured at fair value.
▪ Clearing house deposits are KELER deposits related to the power exchange presence of
Sinergy Energiakereskedő Kft. and Alteo Energiakereskedő Zrt.
▪ Employee loan see Section IV.36 (related parties) interest: Central bank base rate + 5%, term:
5 years, capital repayment was made
▪ The ECL impairment is presented in Section IV.19.
IV.12 Long-term participation in affiliated companies
Long-term participation is represented by the 1% share in Energigas Kft. (HUF 100 thousand). The fair
value of the asset is identical to its initial recognition cost, so this value change was not recognized in
connection with this investment.
Lease assets
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Amounts due within a year - 129 244
Amounts due between 1 and 5 years - -
Amounts due in more than 5 years - -
ECL recognized - (295)
Total - 128 949
Unearned interests - -
Total lease revenue - 128 949
Long-term deposits or loans given
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Loans given 174 188 161 444
Clearing house deposit 215 283 73 026
Employee loan 14 280 23 037
Recognized impairment of loans given (161 444) (161 444)
Recognized ECL for long-term loans (16 656) (882)
Total 225 651 95 181
Long-term participation in associate
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Energigas Kft. share 100 100
Total 100 100
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IV.13 Inventories
Inventory types:
▪ Project inventories: Inventories related to projects are the value of materials and services
not received by the buyer on the reporting date.
▪ Spare parts, operating materials: These include the stock of spare parts relating to the
maintenance of power plant equipment and, inter alia, work clothing, empties and auxiliary
materials.
▪ Fuels: Inventories include the fuels (fuel oil) used by power plants.
Valuation of inventories: Inventories are evaluated by the Group on a case by case basis, with the
average price method.
IV.14 Trade receivables
The trade receivables of the Group are the reporting date balances of the items of energy production
and energy services, trade and project development contracts recognized by the buyers but not yet
financially settled.
• The impairment of receivables and write-offs are accounted for in other expenses.
• Buyers are qualified on a case by case basis.
• A significant part of trade receivables is unsecured because they are not covered by deposits,
bank guarantees, etc.
• The Group has guarantees from buyers of construction projects. No guarantees had to be
enforced during the presentation periods.
• The maximum credit risk is equal to the carrying amount of trade receivables.
• The items relating to the ECL impairment applied to financial assets are presented in detail in
Section IV.19.
Inventories
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Projects 519 527 28 988
Spare parts, operating materials 533 618 405 768
Fuels 23 634 7 866
Total 1 076 779 442 622
Trade receivables
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Trade impairment
losses
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Gross value of trade receivables
4 786 010 3 539 434 Opening balance 276 210 98 378
Impairment (360 665) (276 210) Impairment recognized 84 455 177 832
Total 4 425 345 3 263 224 Closing balance 360 665 276 210
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
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The largest buyers of the Group are:
Presentation of trade receivables as per due dates (2021):
IV.15 Emission allowances
In 2021 In 2020
MAVIR Zrt. MAVIR Zrt.
Lego Manufacturing Kft. ALPIQ Energy SE
ALPIQ Energy SE TVK-Erőmű Kft.
Barcika Szolg Vagyonkezelő és Szolgáltató Kft. Barcika Szolg Vagyonkezelő és Szolgáltató Kft.
TVK-Erőmű Kft. Lego Manufacturing Kft.
Trade receivables
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Not overdue:
1 to 30 days 3 058 627 2 155 352
31 to 60 days 830 492 575 594
61 to 90 days 774 378 176 411
Past due trade receivables:
1 to 30 days 74 811 446 493
31 to 60 days 36 201 92 365
61 to 90 days 617 17 144
91 to 180 days 752 54 746
180 to 365 days 277 9 620
over 365 days 9 854 11 709
Total 4 786 009 3 539 434
Emission allowances
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Emission allowances CO2 quota 2 336 075 843 488
EKR quota 59 450 -
Total 2 395 525 843 488
CO2 quota Quantity (of shares) Value HUF thousand
12/31/2020 128 458 843 488
Quota taken over without charge
14 832 372 912
Purchased quota
118 800 1 864 209
Quota returned without charge
(110 607) (744 534)
12/31/2021 151 483 2 336 075
EKR quota Quantity (GJ) Value HUF thousand
12/31/2020 - -
Purchased quota
2 569 59 450
12/31/2021 2 569 59 450
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
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IV.16 Other financial assets
The receivable balance of derivative transactions includes the non-realized profit balance of hedging
transactions (EUR/HUF FX forward, interest rate swaps, gas forward) at the end of the year.
The aggregate values for derivative transactions and the valuation procedure for the transactions are
set out in subsection IV.20.4
Deposits and security deposits are financial assets pledged as collateral for gas forward transactions
and electricity trading transactions with the Group's trading partners.
Separate bank accounts contain cash, the use of which is limited in time or is conditional. These are
financial assets set aside for debt servicing, on the one hand, and financial assets set aside in a bank
account to cover future gas purchase transactions, on the other. These assets are not treated as cash
or cash equivalents in the financial statements. The financial assets in the separate bank accounts
involve variable interest credits.
IV.17 Other receivables and accruals
▪ Deposits and security deposits* were reclassified to Other financial assets in 2021.
▪ Advances given are related to the construction-installation projects in progress.
▪ The amount due from the clients of the projects is presented in detail in Section IV.31
Accounting for project development contracts under IFRS15.
▪ Other receivables include certain tax assets and the KÁT cash receivable due from MAVIR and
VAT reclaims at the end of the period.
Other financial assets
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Derivative transactions 5 831 243 1 326 883
Deposits, sec. deposits 1 872 525 -
Separate bank accounts 923 368 370 279
Total 8 627 136 1 697 162
Other receivables and accruals
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Accrued revenues 6 463 569 2 495 480
Accrued expenses 196 021 656 449
Advances paid (related to projects) 52 271 27 537
Projects - Receivables due from customers - 44 516
Receivables from employees 4 592 1 068
Other receivables 2 489 744 622 412
ECL impairment (50 479) (50 479)
Total 9 155 718 3 796 983
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
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Other receivables are not past due, or are not considered doubtful by the management. The items
relating to the ECL impairment applied to financial assets are presented in detail in Section IV.19
Application of the expected credit loss model (ECL) to financial assets.
IV.18 Cash and cash equivalents
Cash only includes the balances of items which can be converted to cash and used three months
from acquiring. The interest rate on current account balances is about 0%, considering the extremely
low interest environment.
The statement of cash flows contains the detailed causes of the changes in financial assets.
IV.19 Application of the expected credit loss model (ECL) to financial assets
The management of the Group has performed the risk analysis of its financial assets (ECL modeling).
Risks of financial assets are presented in Section III.4. Taking into account the risks presented,
financial assets are classified into the following categories:
Category
Definition
Application of ECL
Performing
The partner is trustworthy and non-payments did
not occur in the past. All related items are
considered performing.
Recognition of 12-month
expected credit loss.
Doubtful
Delay exceeding 60 and 365 days by an external
partner but no direct evidence of risk of non-
payment.
Recognition of full lifetime
expected credit loss.
Non-performing
Item past due for 365+ days in the case of an
external partner.
Recognition of full lifetime
expected credit loss.
Impairment recognized for the financial assets of the Group by classification category (and not by
balance sheet) are presented in the ECL amount column:
Financial assets
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Bank accounts – HUF 1 534 732 2 442 471
Bank accounts – foreign currency 2 144 521 1 012 574
Total 3 679 253 3 455 045
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In current year's valuation, the management of the Group uses the data available in public databases
to determine ECL rates. In the opinion of the Group’s management, the overall credit risk in the
market of the partners and segments showed a 0 to 2.5% change in the recent period. As a result of
COVID and the impact of the extraordinary increase in energy prices on the solvency of customers,
the Group has maintained the classification of its receivables or assigned them to a riskier level.
Application of the expected loss model to financial
assets
External
credit rating
Internal
credit rating
ECL% Gross value ECL amount Net amount
Customers - with large corporate background N/A Performing 3,41% 915 054 (31 185) 883 869
Customers - public sector N/A Performing 3,41% 1 089 779 (37 140) 1 052 639
Customers - retail energy trade N/A Performing 6,81% 2 430 569 (165 559) 2 265 010
Customers - energy production N/A Performing 1,70% - - -
Customer - scheduling service N/A Performing 1,70% 59 746 (1 018) 58 728
Customer - project development N/A Performing 0,02% 15 323 (35) 15 288
Customer - other N/A Performing 1,70% 73 785 (2 642) 71 143
Long-term loan Third party N/A Performing 1,70% 21 582 (7 545) 14 037
Customer - waste management N/A Performing 3,41% 25 177 (852) 24 325
Deposits, security deposits given N/A Performing 1,70% 2 120 131 (36 138) 2 083 993
Advances given N/A Performing 1,70% 51 260 (873) 50 387
Customer - employees N/A non-performing 1,70% 5 - 5
Long-term loan Third party N/A non-performing 100,00% 166 886 (166 886) -
Customer - Energigas N/A non-performing 100,00% 100 875 (100 875) -
Customer - MOM N/A non-performing 100,00% 3 388 (3 388) -
Customer - retail energy trade, legal proceedings in process N/A non-performing 100,00% 17 219 (17 219) -
Customer - recognized impairment of revaluations N/A non-performing 100,00% - (752) (752)
Other receivables N/A non-performing 100,00% 25 200 (25 200) -
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
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IV.20 Equity
IV.20.1 Issued capital and own shares
Issued capital includes the face value of the shares issued (in circulation).
As of the reporting date, all issued shares are from one series (series A).
The face value is HUF 12.5 per share.
Shares traded:
• On December 31, 2021, the Group held 7,487 own shares.
• The Company reports its registered capital less the value of the redeemed own shares in the
Issued capital line.
• There are no other agreements between owners or with other parties which would require
the Company to issue new ordinary shares or repurchase existing ones.
Issued capital
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening 232 972 232 948
Implementation of employee share award program through shares
48 24
Purchase of own shares (3 118) (452)
Employee Share Ownership Program implementation 7 221 452
Own shares transferred to ESOP 5 112 -
closing 242 235 232 972
Date Event Number of shares
12/31/2019
Closing balance
750 424
01/31/2020
Transfer of employee share ownership program
(1 878)
09/11/2020
Excercise of ESOP option
(24 000)
09/21/2020
Purchase of own shares
24 000
12/16/2020
Excercise of ESOP option
(12 128)
12/16/2020
Purchase of own shares
12 128
12/31/2020
Closing balance
748 546
01/29/2021
Transfer of employee share ownership program
(3 837)
04/13/2021
Excercise of ESOP option
(577 644)
04/13/2021
Purchase of own shares
249 422
12/21/2021
Share transfer to ESOP
(409 000)
12/31/2021
Closing balance
7 487
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IV.20.2 Reserves
The settlement of the Employee Share Ownership Plan is the settlement of the capital (HUF 62,819
thousand) of the Option I/2017 plan settlements upon the settlement of the Option Plan. The option
plan was settled by the transfer of HUF 267,160 thousand of shares at cost.
In addition to the 249,422 own shares repurchased in excess of issued capital, the ownership
transactions in the current year included the transfer of equity (409,000 own shares) and cash (HUF
100,000 thousand) to Alteo ESOP Organization for an amount of HUF 575,020 thousand. The part of
the cash transferred for the purchase of shares not used for the intended purpose at the reporting
date is HUF 6,618 thousand.
HUF 106,871 thousand was reclassified to share-based payments.
IV.20.3 Share-based payments reserve, share-based benefits
Out of the Reserves line, HUF 106,871 thousand was reclassified to share-based payments.
The ESOP programs are described in more detail in IV.35 and IV.20.2.
IV.20.4 Hedge reserve
Reserves*
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening 4 962 084 4 863 673
Implementation of employee share award program
through shares
4 252 1 626
Purchase of own shares (290 601) (30 725)
Employee Share Ownership Program implementation 267 160 20 639
Employee Share Ownership Program option value 62 819 -
Own shares transferred to ESOP (5 112) -
Cash transferred to ESOP (100 000) -
Non-controlled ESOP participation 575 020 -
Receivable from ESOP 6 618 -
Transfer between capital element (106 871) 106 871
closing 5 375 369 4 962 084
Share-based payments reserve
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening 62 819 68 398
Implementation of employee share award program
through shares
- (1 650)
Employee Share Ownership Program option value (62 819) -
Non-controlled ESOP participation (575 020) -
Receivable from ESOP - (3 929)
Recognition of share benefits against profit or loss 261 274 -
Transfer between capital element 106 871 -
closing (206 875) 62 819
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The fair value of future transactions existing on the reporting date is presented by the Group based
on hedging combinations and achieved hedging objectives in other comprehensive income and
equity.
The hedge reserve has the following movement in its balance:
• The amounts recognized in Other comprehensive income reflect the fair value of open
transactions on the reporting date.
• The profitability of the transactions closed during the current period has been maintained.
• Profitable transactions recorded at opening value and closed during the current period have
been reclassified to comprehensive income.
The Group evaluated its existing hedging positions; the balances of the various types as of reporting
date are shown in the table below:
Hedge reserve
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening 399 801 (1 713 432)
Hedge reserve 4 906 630 2 113 233
closing 5 306 431 399 801
Name
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Opening 399 801 (1 713 432)
Remeasurement in other comprehensive income 3 991 645 3 234 593
Transactions turned ineffective - -
Reclassification to the statement on profit or loss 914 985 (1 121 360)
Total 5 306 431 399 801
of which, derivative position recognized against OCI 5 831 243 439 342
of which, deferred tax recognized against OCI (524 812) (39 541)
Reclassification to income tax (90 493) 110 904
Reclassification to financial expenses (49 516) (118 153)
Reclassification to other expenses - (13 787)
Reclassification to material expenses 792 401 (1 100 324)
Reclassification to the statement on profit or loss 698 621 (1 121 360)
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IV.20.5 Conversion reserve
The Group has not recognized any conversion reserve.
IV.20.6 Retained earnings
The retained earnings show the part of the profit from the profit of the Group after taxes attributable
to the ownership stake of ALTEO Nyrt.
Exposure Interest rate- BUBOR
Foreign exchange
rate - EUR/HUF
Price - electricity
Foreign exchange
rate - price of gas
CO
2
quota price Total
Effect of
deferred taxes
Description of the
hedging activity
Transactions to fix the
interest rates
Future purchases
Purchase or sale of
products in the
future
Purchasing products
in the future
Future purchases
Description of the
financial instruments
designated as hedging
instruments
Interest rate swap
derivative
Forward deals
Bilateral
transactions with
partners
Asian swap deals,
options
Forward deals
OCI on 12/31/2020 (698 411) 82 758 180 687 792 401 81 906 439 341 (39 541)
De-recognition against
net profit or loss
107 444 (82 758) - (792 401) - (767 715) 69 094
De-recognition due to
revaluation
590 967 - (180 687) - (81 906) 328 374 (29 554)
Revaluation of CF
hedge positions
514 592 136 486 - 5 180 165 - 5 831 243 (524 812)
OCI on 12/31/2021 514 592 136 486 - 5 180 165 - 5 831 243 (524 812)
Increase in quota prices
Nature of the risks
being hedged
Increase in the BUBOR
rate
EUR/HUF rate
increase
Rate of electricity
increase/decrease
Rate of gas increase
Retained earnings
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening 2 882 216 2 303 282
Dividend payment (455 275) -
Acquisition of the non-controlling interest of Tisza-
Bioterm Kft.
- (7 813)
Aggregate amount of rounding difference 2 84
Comprehensive income 5 855 184 586 663
closing 8 282 127 2 882 216
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IV.20.7 Non-controlling interest
In 2020, the Group acquired a 40% minority interest in Tisza-Bioterm Kft. from GDHS Kft.; in 2021,
100% of the profit of that company was accounted for as a parent company interest.
IV.21 Debts on the issue of bonds
For the purpose of uniform presentation, the detailed terms of the bonds are listed in the notes
entitled Terms of borrowings in Section IV.36.
Nominal liabilities also include interest accrued on bonds, as well as principal.
Profit or loss attributable to non-controlling interests
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Profit or loss of ECO First Kft. in the current period 6 797 11 634
Alteo Nyrt. Participation % 66,67% 66,67%
Attributable to ALTEO Nyrt. Participation 4 531 7 756
Attributable to non-controlling interests 2 266 3 878
From which the owners of the Parent Company are entitled to:
4 531 7 756
Of which the minority interest is entitled to:
2 266 3 878
Non-controlling interest
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening 7 765 (3 926)
Profit or loss of Eco First Kft. in the current period attributable
to non-controlling interests
2 266 3 878
Acquisition of the non-controlling interest of Tisza-Bioterm Kft.
- 7 813
closing 10 031 7 765
Debts on the issue of bonds Interest terms
Issue value
HUF thousand
Face value Currency Maturity date
Nominal liabilities
12/31/2021
(HUF thousand)
Nominal liabilities
12/31/2020
(HUF thousand)
ALTEO Nyrt. NKP1 2029 Interest payment per annum 8 818 285 8 600 000 HUF 2029.10.28 8 600 000 8 600 000
ALTEO Nyrt. "2022/II" bond end of maturity 1 505 905 1 693 630 HUF 2022.06.07 1 663 087 1 594 617
ALTEO Nyrt. “2022/I” bond end of maturity 498 526 650 000 HUF 2022.01.10 649 051 615 361
Alteo Nyrt. NKP1 2031 Interest payment per annum 3 912 499 3 800 000 HUF 2031.10.08 3 800 000 3 800 000
Bond cash flow 2021 2022 2023 2024 2025 2026 up to 2031
ALTEO Nyrt. NKP1 2029 (270 900) (270 900) (270 900) (270 900) (270 900) (270 900) (9 412 700)
ALTEO Nyrt. "2022/II" bond - (1 693 630) - - - - -
ALTEO Nyrt. “2022/I” bond - (650 000) - - - - -
Alteo Nyrt. NKP1 2031 (93 100) (93 100) (93 100) (93 100) (93 100) (93 100) (4 265 500)
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
98 / 115
ALTEO NKP/2029 On October 24, 2019, the parent company within the Group issued bonds
designated as “ALTEO NKP/2029” with a total face value of HUF 8.6 billion. The average issue value of
the bonds was 102.5382% of the face value. The bonds have a fixed rate coupon of 3.15% and the
maturity is 10 years. The bonds were admitted to listing on the regulated market on January 24,
2020.
In the current year, the Company capitalized borrowing costs in the amount of HUF 7,790 thousand
on the issued bonds (legal, organizer and distributor fees).
ALTEO 2022/I On January 10, 2017 the parent company within the Group issued dematerialized zero
coupon bonds with a maturity of 5 years by private placement under the designation “ALTEO
2022/I”. The total face value of the issue is HUF 650,000,000, the issue value is 76.6963% of the face
value. The total nominal value of the bond was repaid on January 10, 2022.
ALTEO 2022/II On June 7, 2019 the parent company within the Group issued dematerialized zero
coupon bonds with a maturity of 3 years by private placement under the designation “ALTEO
Bonds
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening principal and interest 14 889 000 13 124 132
ALTEO Nyrt. NKP1 2029 8 776 449 8 840 811
ALTEO Nyrt. "2022/II" bond 1 594 617 1 528 790
ALTEO Nyrt. “2022/I” bond 615 361 583 334
ALTEO Nyrt. “2020/I” bond - 2 171 197
Alteo Nyrt. NKP1 2031 3 902 573 -
Issues in the current period: - 3 904 710
Alteo Nyrt. NKP1 2031 - 3 904 710
Interest recognized in the current period 439 476 446 519
ALTEO Nyrt. NKP1 2029 252 844 254 038
ALTEO Nyrt. "2022/II" bond 68 470 65 827
ALTEO Nyrt. “2022/I” bond 33 690 32 027
ALTEO Nyrt. “2020/I” bond - 75 337
Alteo Nyrt. NKP1 2031 84 472 19 290
Principal and interest payments in the current period (364 000) (2 517 435)
ALTEO Nyrt. NKP1 2029 (270 900) (270 900)
ALTEO Nyrt. “2020/I” bond - (2 246 535)
Alteo Nyrt. NKP1 2031 (93 100) -
Closing principal and interest 14 964 476 14 957 926
Recognized interest rate change of short-term liabilities (5 936) 68 926
Debts on the issue of bonds 12 658 274 14 889 000
Short-term bond payables 2 312 138 -
14 970 412 14 889 000
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
99 / 115
2022/II”. The total face value of the issue is HUF 1,693,630,000, the issue value is 88.9158% of the
face value. The bonds were admitted to listing on the regulated market on November 22, 2019.
ALTEO NKP1/2031A On October 8, 2020, the parent company within the Group issued bonds
designated as “ALTEO NKP1/2031” with a total face value of HUF 3.8 billion. The average issue value
of the bonds was 102.9605% of the face value. The bonds have a fixed rate coupon of 2.45% and the
maturity is 11 years.
IV.22 Borrowings
IV.22.1 Long-term loans and their collaterals
The terms of the borrowings and loans are presented in the table in Note IV.36.
Loans and borrowings used to finance the Group:
• Borrowings are measured at amortized cost. The fair value of the items above does not
materially differ from their amortized cost.
• A borrowing is classified as non-current in the financial statements only if at the end of the
year the Group had a unilateral right not to repay the amount before the next reporting date.
The instalments for the next year are included in current liabilities.
• Monsolar Kft. took advantage of the Repayment Moratorium provided for in Act LVIII of 2020
again in 2021.
• Repayments due in 2022 were reclassified to short-term borrowings and loans in the amount
of HUF 419,778 thousand.
• In the current year, Pannon Szélerőmű Kft., E-Wind Kft. and Alteo-Therm Kft. repaid their
loans in the amount of HUF 1,259,987, 308,529 and 387,410 respectively.
The Group has provided the following collaterals to meet its credit obligations:
Credits (in HUF) Financing party
Frequency of
repayments
Amounts paid
(HUF thousand)
Maturity
date
Liabilities to
banks
(HUF thousand)
12/31/2021
Capitalized lending
cost 2020
Liability disclosed
in the statement
of financial
position
(HUF thousand)
12/31/2021
Liability disclosed
in the statement of
financial position
(HUF thousand)
12/31/2020
Principal and interest liabilities
e-WIND Kft. MTB quarterly 542 830 2027.12.31 - - - 303 212
Alteo-Therm Kft. (legal predecessor: Soproni Erőmű Kft.) K&H quarterly 500 000 2026.09.30 - - - 377 315
Monsolar Kft. MKB six-monthly 656 575 2034.03.31 596 419 (4 855) 591 564 625 964
Monsolar Kft. (legal predecessor: IT-Solar Kft.) MKB six-monthly 656 575 2034.03.31 596 419 (4 884) 591 535 625 932
Domaszék Kft. OTP quarterly 601 000 2034.06.30 533 800 (10 848) 522 952 562 860
Sunteo Kft. (legal predecessor: Péberény Kft.) K&H quarterly 2 147 328 2035.06.30 1 958 563 (12 682) 1 945 881 2 054 543
Sunteo Kft. (legal predecessor: FSZ Energia Kft.) K&H quarterly 1 449 748 2035.09.30 1 328 341 - 1 328 341 1 400 664
Sunteo Kft. (legal predecessor: True Energy Kft.) K&H quarterly 1 459 872 2035.09.30 1 337 777 - 1 337 777 1 410 509
Sinergy Kft. K&H quarterly 744 000 2034.06.30 698 170 (13 344) 684 826 720 104
Pannon Szélerőmű Kft. OTP quarterly 2 439 000 2023.09.15 - - - 1 259 987
Liabilities to banks in the statement of financial position 7 049 489 (46 613) 7 002 876 9 341 090
Long-term loans and borrowings 6 583 098 8 411 397
Short-term loans and borrowings 419 778 929 693
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
100 / 115
IV.22.2 Borrowing cash flow
The ALTEO Group has variable rate borrowings and lease liabilities where the rate of interest is based
on the BUBOR, with premiums between 1% and 5.5%.
All borrowings are recognized in the statement of financial position at amortized cost.
In order to optimize the interest burden on the loans, the Group has entered into interest rate swaps
with the following terms.
The following overdraft facilities are available to Group members:
*The increase of the credit line of Alteo Energiakereskedő Zrt. entered into force on October 27, 2021.
IV.23 Lease liabilities
The Group recognizes its obligations arising from long-term leases of land, area and assets under
leases.
Company Designation of the collateral
ALTEO
Energiakereskedő Zrt.
a lien on claim, surety and lien on bank accounts
Monsolar Kft.
mortgage on a business share, mortgage on real property, as well as prohibition of
alienation and encumbrance, mortgage on movable property, mortgage on
receivables, surety and mortgage on bank accounts
Sunteo Kft.
purchase option and mortgage on a business share, purchase option and mortgage on
real property, as well as prohibition of alienation and encumbrance, purchase option
and mortgage on movable property, lien on receivables, surety and lien on bank
accounts
Domaszék 2MW Kft.
mortgage on a business share, mortgage on real property, mortgage on movable
property, lien on receivables, surety and lien on bank accounts
Sinergy Kft.
mortgage on a business share, mortgage on movable property, lien on receivables,
surety and lien on bank accounts
Borrowing cash flow 2021 2022 2023 2024 2025 2026 up to 2031
-
Monsolar Kft. (35 361) (37 086) (39 077) (41 001) (43 124) (45 313) (263 983)
Monsolar Kft. (legal predecessor: IT-Solar Kft.) (35 361) (37 086) (39 077) (41 001) (43 124) (45 313) (263 983)
Domaszék Kft. (41 500) (33 000) (35 500) (37 500) (39 500) (41 500) (243 000)
Sunteo Kft. (legal predecessor: Péberény Kft.) (112 486) (119 408) (126 331) (129 359) (134 767) (140 391) (794 542)
Sunteo Kft. (legal predecessor: FSZ Energia Kft.) (72 052) (76 692) (81 186) (85 680) (89 884) (93 654) (529 013)
Sunteo Kft. (legal predecessor: True Energy Kft.) (72 556) (77 227) (81 753) (86 278) (90 512) (94 308) (532 707)
Sinergy Kft. (36 902) (39 134) (41 366) (44 045) (46 574) (49 401) (294 922)
IRS transactions
Financing
party
Main
currency
Amount
Interests
received
Trade day Effective date Maturity date
Sunteo Kft. (legal predecessor: True Energy Kft.)
K&H HUF
1 301 870 335 3,35% 11/06/2018 12/31/2019 12/31/2027
Sunteo Kft. (legal predecessor: True Energy Kft.)
K&H HUF
144 652 259 2,40% 01/07/2019 12/31/2019 12/31/2027
Sunteo Kft. (legal predecessor: FSZ Energia Kft.)
K&H HUF
1 294 526 451 3,35% 11/06/2018 12/31/2019 12/31/2027
Sunteo Kft. (legal predecessor: FSZ Energia Kft.)
K&H HUF
143 836 272 2,40% 01/07/2019 12/31/2019 12/31/2027
Sunteo Kft. (legal predecessor: Péberény Kft.)
K&H HUF
1 932 260 400 3,10% 09/27/2018 09/30/2019 06/30/2027
Sunteo Kft. (legal predecessor: Péberény Kft.)
K&H HUF
214 695 600 2,30% 01/07/2019 09/30/2019 06/30/2027
Domaszék 2MW Erőmű Kft.
OTP HUF
594 400 000 2,25% 06/30/2016 12/31/2028 12/29/2028
Monsolar Kft.
MKB HUF
658 935 108 3,05% 08/23/2018 06/28/2019 06/30/2028
Monsolar Kft. (legal predecessor IT Solar Kft.)
MKB HUF
658 935 108 3,05% 08/23/2018 06/28/2019 06/30/2028
Sinergy Kft.
K&H HUF
744 000 000 1,50% 12/16/2020 12/18/2020 12/31/2030
Overdraft facility 12/31/2021 Bank
Amount
HUF thousand
Utilization rate,
HUF thousand
Alteo Energiakereskedő Zrt.* OTP 1 000 000 363 000
Alteo Energiaszolgáltató Nyrt. ERSTE (Cash Pool) 2 000 000 -
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
101 / 115
The following table represents the leasing conditions:
None of the lease arrangements include contingent lease payments. The ownership of leased cars,
land, property and power plants is not transferred to the Group upon maturity of the lease and there
is no related call option in place either. None of the lease contracts contain an automatic extension
option.
The Group uses the benefits of presentation options as per IFRS 16. Accordingly, it recognizes the
following items as lease payments: car leases maturing within one year and the lease of certain IT
equipment of small value. The lease of these assets is recognized directly in the statement of
financial position of the period in question among the material expenses.
Movements in rights of use in the current year are included in Note IV.9.
IV.24 Provisions
The provision recognized for the existing onerous contracts of the Group (non-terminable, causes
losses) and for elements of similar nature is recognized among provisions with a significant value.
Presentation of provisions for the current period:
Leases Leasing partner type
Exposure
12/31/2021
(HUF thousand)
Exposure
12/31/2020
(HUF thousand)
Currency Maturity date
Sinergy Kft. ÉMÁSZ lease of power plant asset 246 726 258 314 HUF 12/31/2035
Alteo Nyrt. Lease Plan vehicles 248 251 235 858 HUF
individual
Alteo Nyrt. HSP 612 Kft. Office space rent 775 035 - HUF 06/30/2031
Alteo Therm Kft. (legal predecessor: Zugló Therm Kft.) Főtáv land lease 372 323 410 349 HUF 05/31/2030
Euro Green Energy Kft. Multiple partners land lease 180 371 189 036 EUR 03/31/2035
Windeo Kft. Multiple partners land lease 10 156 10 896 EUR 10/31/2032
Pannon Szélerőmű Kft. Multiple partners land lease 92 586 97 865 HUF 07/31/2035
Total 1 925 448 1 202 318
of which:
Amounts due within a year 237 744 154 912
Amounts due between 2 and 5 years 751 441 329 972
Amounts due in more than 5 years 936 263 609 606
Provisions
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening balance 850 493 568 680
of which:
Onerous contracts 192 031 134 311
Regarding asset decommissioning 658 462 413 648
Greenhouse gas quota - 20 721
Provisions released (37 000) -
Provisions recognized 130 643 281 813
closing balance 944 136 850 493
of which: 944 136 850 493
Onerous contracts 231 822 192 031
Regarding asset decommissioning 712 314 658 462
Greenhouse gas quota - -
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
102 / 115
IV.25 Deferred income
Provisions recognized and released in 2021
ARO interest (IFRS) 54 180
ARO settlement against financial expenses (328)
Provisions for onerous contracts 74 091
Future costs 2 700
Total 130 643
Provisions released to offset costs 37 000
Total 37 000
Deferred income
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Deferred income related to subsidized assets 593 865 436 864
Total 593 865 436 864
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
103 / 115
The not yet recognized part of grants received was stated as deferred income, the main terms and
conditions of which are as follows:
IV.26 Other long-term liabilities
RDI 1
Purpose of the grant Systemic integration and innovative application model of an electricity storage architecture
Conditions of the grant
The grant is tied to the performance and presentation of technical R&D work. In addition, a
number of indicators need to be met also during the maintenance period:
the creation of one newly developed product, technology, service or prototype
the preparation of one know-how
Business exploitability: the revenues from the outcome of the RDI project reach 30% (HUF
300 million) of the grant amount in two consecutive years combined during the maintenance
period
Export revenues: the average of export revenues in two consecutive years during the
maintenance period is HUF 109 million
One appearance at a domestic and an international forum (RENEXPO and the international
energy trade fair, ENERGOexpo, were indicated in the grant application, however, this may
2 publications
Grant period 5 years starting from July 2019
RDI 2
Purpose of the grant
Integration into the electricity system of storage facilities with battery cells of various
parameters
Conditions of the grant
The grant is tied to the performance and presentation of technical R&D work. In addition, a
number of indicators need to be met also during the maintenance period:
1 subsidized undertaking for the manufacture of the new product
In the 2 financial years following implementation, the amount of R&D expenditures amounts
to 30% of grants as evidenced in the corporate tax returns
Grant period End of 2027
RDI 3
Purpose of the grant
Development of real-time autonomous energy information and production management
Conditions of the grant
The grant is tied to the performance and presentation of technical R&D work. In addition, a
number of indicators need to be met also during the maintenance period:
1 new product developed
involvement of 3 enterprises in development
publication of the project achievements on domestic forums on 3 occasions
3 publications
1 publication resulting from private-public cooperation
3 undertakings making use of the project achievements
9 researchers/developers and 2 other employed project participants
1 additional agreement with universities or research institutes
Grant period End of 2027
Other long-term liabilities
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Conditional purchase price liabilities 294 408 705 712
Contractual support obligation 225 165 -
Interest payment obligation during the loan moratorium
16 517 -
Interest rate swaps liabilities - 698 411
Total 536 090 1 404 123
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
104 / 115
IV.27 Advances received
In accordance with its contractual practice, the Group stipulates the payment of an advance in the
general contracts, which is presented in the line of advances received.
IV.28 Trade payables
This line in the statement of financial position contains liabilities arising from the purchase of goods
and services. Trade payables are unsecured, which means that the Group does not provide
guarantees, with the exception of those routinely provided in the normal course of business.
The largest suppliers of the Group are:
Advances received
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Advances received 8 989 46 500
Total 8 989 46 500
Trade payables
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Past due trade payables
past due for 1-30 days 144 309 81 686
past due for 31-60 days 1 958 3 157
past due for 61-90 days 1 453 1 084
past due for 91-120 days - -
past due for 121-365 days 766 -
past due for more than 365 days 7 220 12 794
Trade payables not yet due
due within 30 days 4 289 949 1 952 046
due in 31-60 days 5 499 32 220
due in 61-90 days 12 018 48 443
due in 91-120 days 14 064 -
due in 121-365 days 56 652 91 351
due in more than 365 days 12 610 85 632
Total 4 546 498 2 308 413
Major suppliers
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
MET Magyarország Kft.
10 123 696 4 054 217
MVM Partner Zrt.
8 291 716 5 497 825
NKM Földgázszolgáltató Zrt., legal successor MVM Next
Energiakereskedő Zrt.
4 290 082 1 699 997
E.On Energiakereskedelmi Kft., legal successor E.On
Energiamegoldások Kft.
3 921 688 3 205 794
PPD Hungária Energiakereskedő Kft.
3 270 216 2 503 274
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
105 / 115
IV.29 Other financial liabilities
Year-end market value of derivatives due to hedge transactions, the contents of which are explained
in Notes IV.40 and III.4 Financial risks and their management.
IV.30 Other short-term liabilities and accruals
Other short-term liabilities include non-interest-bearing items.
IV.31 Accounting for project development contracts under IFRS15
• The Group recognized contractual assets and liabilities opened in the previous year against
the revenues of the current year.
• The amounts due from the customer are included in the line Other receivables and accruals
(presented in Section IV.17), while the amounts due to the customer are included in the
balance sheet line Other short-term liabilities and accruals (presented in Section IV.29).
Other financial liabilities
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Liabilities arising from derivative transactions - 189 130
Total - 189 130
Other short-term liabilities and accruals
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Cost accruals 8 408 276 3 180 531
Income accruals 112 173 135 701
Projects - amounts due to customer 70 000 257 007
Other tax liabilities 426 039 581 739
Accrued interest payable - -
Income settlement 146 051 127 348
Other short-term liabilities 165 657 240 666
Total 9 328 196 4 522 992
Name 12/31/2021 12/31/2020
Recognized
current year
sales revenue
total
Sales revenue
adjustment against
statement of
financial position
Invoiced
sales
revenue
MPK Project (70 000) (257 007) 263 748 187 007 76 741
Maintenance project - 44 516 7 876 (44 516) 52 392
Projects - Receivables due from customers -
Projects - amounts due to customer (70 000)
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
106 / 115
IV.32 Presentations on acquisitions of companies
The Group evaluated the net assets of the subsidiaries acquired in the business combination - for
initial consolidation - for fair value. The Group settled the purchase price in cash, no contingent
consideration related to the acquisitions referred to was established as a portion of the purchase
price.
IV.33 EBITDA
The Group discloses its EBITDA indicator. The process of the calculation is in the accounting policies
summary. The detailed analysis of EBITDA is included in the Management Report for the period.
Elaboration of EBITDA:
Name Pannon Szélerőmű Kft. Tisza BioTerm Kft.
Start date of control/Date of acquisition of share 2020.09.14 2020.05.18
share (%) 100% 40%
HUF thousand HUF thousand
Consideration paid 2 405 890 1 000
Non-current assets 4 251 290 -
Long-term receivables - -
Short-term receivables 138 338 283
Financial assets 271 998 35
Provisions (159 849) -
Long-term liabilities (2 281 318) -
Short-term liabilities (17 720) (7 614)
Total: 2 202 739 (7 297)
Contractual assets identified in acquisition 223 243 -
Deferred tax liability (9%) (20 092) -
2 405 890 (7 297)
Revenue in the period following the acquisition 247 610 650
Earnings in the period following the acquisition 200 641 (1 847)
Elaboration of EBITDA
12/31/2021
HUF thousand
12 months
12/31/2020
HUF thousand
12 months
Operating profit 8 943 319 2 564 517
Recognized depreciation, amortization 3 936 669 2 858 523
Recognized impairment of fixed assets - 89 051
EBITDA 12 879 988 5 512 091
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
107 / 115
IV.34 Calculation of earnings per share (EPS)
IV.35 Presentation of share-based and equity settled benefit schemes
ALTEO Nyrt. developed an equity settled
share-based incentive scheme for ALTEO
employees (ESOP program) subject to the
following conditions:
Calculation of earnings per share (EPS)
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Number of shares for EPS 18 890 107 18 636 921
Number of shares for diluted EPS 19 386 274 19 386 274
Profit or loss attributable to controlled interests 5 855 184 586 663
Base value of net earnings per share (HUF/share) 309,96 31,48
Diluted value of net earnings per share (HUF/share) 302,03 30,26
Chart of changes in share program Option I/ 2017 Option II/ 2020 Option I/ 2017 Option II/ 2020
2021 2021 2020 2020
PCS.
Outstanding at the beginning of the period 577 644 355 917 613 772 -
Granted during the current period - - - -
Vested - 257 023 - 355 917
Exercised during the current period (577 644) - (36 128) -
Expired during the current period - - - -
Forfeited during the current period - - - -
Outstanding at the end of the current period - 612 940 577 644 355 917
of which:
Available for exercise at the end of the
current period
- - 577 644 -
Value (HUF thousand)
Outstanding at the beginning of the period 62 819 106 871 66 748
Granted during the current period - 106 871
Vested - 261 274
Exercised during the current period (62 819) - (3 929) -
Expired during the current period - -
Forfeited during the current period - - - -
Outstanding at the end of the current period - 368 145 62 819 106 871
of which:
Available for exercise at the end of the
current period
- - 62 819 -
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
107 / 115
ESOP Program I (2017)
The settlement of the fair value of the options was completed in 2017. The fair value of the option
program was recognized as personnel expense in the profit or loss statement of previous periods.
The entire scheme is equity settled; therefore, no revaluation will be required in the forthcoming
periods. The value of the options cannot be remeasured at a later time. ALTEO Nyrt. does not
provide cash benefits with respect to this scheme.
Under the option program, the options – 96,253 in total – vested in August 2017. The price of the
options as of the time of distribution was uniformly HUF 3,800/share, apportioned by splitting the
shares in 1:8 proportions. By splitting the shares the number of share options changed
proportionately (770,024 options). 21,500 shares were called under the scheme during 2019.
Call options will expire on November 7, 2021. Neither the beneficiaries nor the ESOP organization
may sell their shares below the 2016 IPO issue price (HUF 579/share, having regard to the division by
eight).
ESOP Program II (2020)
Certain executive employees of the Company receive share-based benefits as of December 21, 2020
(the date of grant): the detailed rules of the so-called Employee Share Ownership Program (“ESOP”)
are set forth in the Company’s Remuneration Policy for 2020, published and effective on December
21, 2020.
https://alteo.hu/wp-content/uploads/2020/12/ALTEO_2020_evi_MRP_Jav_Pol_20201221.pdf
https://www.bet.hu/site/newkib/hu/2020.12./Tajekoztatas_az_ALTEO_MRP_Szervezet_2020._evi_J
avadalmazasi_Politikajarol__128504486
The ESOP applies to the 9 executive Employees specified in the 2020 Remuneration Policy. The
Employee is eligible to acquire the Available Shares if their legal relationship making them eligible to
participate in the Remuneration Policy for 2020 is in place with the Company on the day of
publication of the Company's consolidated financial statement for 2022.
The subject of the ESOP is a maximum of 645,200 Available Shares which may be distributed –
provided the below criteria are met – after the closing of the 2022 fiscal year of the Company
(following the adoption of the consolidated financial statement). The Available Shares are acquired
by the Employee without consideration. The Employee may choose whether they wish to receive the
Available Shares as securities or whether they wish to receive the consideration thereof in cash.
The Employees may acquire the following ratios (specified as a %) of the full volume of Available
Shares, provided that certain performance conditions also presented below are met in full:
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
108 / 115
1. ALTEO Share Price: in the period between January 1, 2022 and December 31, 2022, the
volume-weighted average trading price on the BSE reaches HUF 1,178. (15% weight, partial
performance is not possible)
2. Turnover: The aggregate turnover of ALTEO Shares as traded on the BSE in the period
between January 1, 2022 and December 31, 2022 exceeds HUF 2,479 million and the volume-
weighted average trading price in the same period is at least HUF 950. (15% weight, partial
performance is not possible)
3. The audited profit after taxation filtered from ESOP effect per share reaches or exceeds HUF
54.7 in 2022. (25% weight, partial performance is possible)
4. The audited EBITDA filtered from ESOP effect per share reaches or exceeds HUF 320 in 2022.
(45% weight, partial performance is possible)
5. Excluding criterion: the rating of the bonds of ALTEO Nyrt. at Scope – or an alternative credit
rating agency – drops below B+. In the event of the occurrence of the excluding criterion, 0
(zero) Available Shares may be distributed, regardless of whether criteria 1-4 are fulfilled.
The vesting period of ESOP is January 1, 2020 – December 31, 2022, that is 3 years, with the
emphasis on meeting 2022 target figures. Given that the above conditions may be met by December
31, 2022, the date of vesting is that date.
The ESOP Organization is entitled to withhold a ratio of Available Shares whose market value at the
time of provision provides coverage for the fulfillment of tax and contribution payment obligations
borne by the Employee.
Early exercise of the option is not possible. No option was exercised before the reporting date.
Principles of presentation
Considering that ESOP is a transaction related to services received from employees, the fair value of
which cannot be measured reliably, their fair value was determined based on the fair value of the
equity instrument provided.
Not applying the provisions of the Remuneration Policy for 2020, the beneficiary Employees
irrevocably waived their right of choice retroactively to 12/21/2020 and according to such waiver
they intend to acquire the shares that may be acquired in the form of securities. Consequently, the
accounting treatment of ESOP is governed by the rules for share-based payment transactions where
the terms of the arrangement are no longer affected by the choice and the method of settlement
under which the equity component of a complex financial instrument needs to be accounted for.
• In view of this, the ESOP as a whole was accounted for as an equity instrument.
Calculation principles for fair valuation
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
109 / 115
As of the reporting date, the fair value of ESOP is equal to the time-vested part of the fair value of a
share multiplied by the number of shares expected to be acquired (i.e. the fair value of the total
liability).
• The starting point of the current fair value of the shares is the market price, i.e. the closing
price observed on the Budapest Stock Exchange and valid as at the grant date.
• The market price is reduced by the present value of the dividends expected to be paid during
the vesting period (2021-2022) as the Employees will not be entitled to them prior to
fulfillment of the criteria. The expected amount of the dividend payment is based on the
dividend paid in the past.
The number of benefits expected to be vested has been determined on the basis of the best estimate
available, using analyzes and simulations for the financial indicators underlying the performance
conditions (see vesting criteria).
The Company recognizes expenses when they are provided by the employee during the vesting
period, that is, between the beginning of the scheme (January 1, 2020) and the date of vesting
(December 31, 2022). The value of the liability on the reporting date is the time-vested part of the
total liability, i.e. two thirds.
Employee reward program
In the employee program, the Group
distributes shares to the employees who have
become entitled to these on the basis of the
recognition system applied at the Group. In
connection with the shares granted, the
shares will be transferred in January following
the anniversary of the current period.
IV.36 Financial liabilities and conditions
In the notes on each instrument, we present the interest rate conditions associated with the
instrument.
Highly probable forecasted gas purchases in 2022 worth HUF 5,180,165 thousand, foreign exchange
forward transactions in 2022 worth HUF 136,486 thousand, interest rate swaps in 2022 and beyond
worth HUF 514,592 thousand.
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
110 / 115
IV.37 Segments
The Business (Annual) Report presents the performance of the individual segments in detail.
’*Details in Section IV.33.
IV.38 Related party disclosures
The entity’s key management personnel qualify as related parties. The Company’s management
identified the following related parties for the period covered by the financial statements and in the
comparative period.
For the presentation of the Board of Directors and the Supervisory Board, see the Business Report.
Executive Board
The Executive Board (EB) is part of the internal control structure of the Company. The members of
this board make operative, financial and other decisions that are not in the jurisdiction of the Board
of Directors. As a consequence, members of this board also qualify as related parties. The
aforementioned members of the EB were employed by the Company during the period referred to
above.
Members: Attila Chikán Jr., Domonkos Kovács, Zoltán Bodnár, Péter Luczay, Viktor Varga, Anita
Simon
Remuneration paid to related parties (executive officers):
12/31/2021
Energy
production
(outside the
subsidized
system)
Electricity
production
(within the
subsidized
system)
Energy services Energy trading Other
Items
eliminated due
to consolidation
Total
Revenue
24 284 975 5 006 568 3 305 469 16 369 622 216 (4 717 402) 44 249 448
Material expenses
(12 802 207) (665 126) (1 379 316) (14 690 037) (805 037) 4 717 279 (25 624 444)
Personnel expenses
(880 228) (187 552) (1 413 190) (113 630) (1 597 637) - (4 192 237)
Other revenues and Other expenses
(1 645 710) (36 851) 47 988 (154 358) (6 674) - (1 795 605)
Capitalized value of own production 84 733 - 135 431 - 22 662 - 242 826
EBITDA*
9 041 563 4 117 039 696 382 1 411 597 (2 386 470) (123) 12 879 988
12/31/2020
Energy
production
(outside the
subsidized
system)
Electricity
production
(within the
subsidized
system)
Energy services Energy trading Other
Items
eliminated due
to consolidation
Total
Revenue
14 179 346 3 584 994 10 746 657 11 997 630 455 003 (7 982 329) 32 981 301
Material expenses
(9 965 849) (669 376) (7 808 750) (11 616 010) (614 626) 7 602 181 (23 072 430)
Personnel expenses
(268 810) (50) (2 445 579) (100 728) (954 876) 4 (3 770 040)
Other revenues and Other expenses
(1 072 075) 39 092 (94 563) 4 709 (7 594) (8 536) (1 138 967)
Capitalized value of own production 60 413 - 43 138 - 19 659 389 016 512 226
EBITDA*
2 933 025 2 954 660 440 902 285 602 (1 102 434) 336 5 512 091
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
111 / 115
The Group has no doubtful receivables due from related parties; the detailed presentation of the ECL
model applied to related receivables is included in Section IV.19.
In the current year, the Group disclosed the following outstanding balances due from affiliated
companies in the financial statements:
In the current year, the Group recognized the following outstanding receivables due from affiliated
companies in profit or loss:
2021
Wages,
commissions,
benefits
Reimbursement
of costs
IFRS2 benefits
Board of Directors 99 641 10 430 34 837
Supervisory Board 23 620 1 516 -
Executive Board non-BoD members 190 436 19 967 43 087
Total 313 697 31 913 77 924
Name Category
thousand HUF
NEO Property Services Zrt. Customer 125 258
Energigas Kft. Customer 114 988
Praktiker Kft. Customer 56 655
Tisza-WTP Vízelőkészítő és Szolgált Customer 35 814
Executive employee Loans given 21 582
WIPEUROPA INGATLANFEJLESZTŐ KFT. Customer 19 354
Wallis Asset Management Kft. Supplier 7 863
MANHATTAN DEVELOPMENT GLOBAL KFT.
Customer 5 688
Magnum Hungária Invest Kft. Customer 2 784
SH-FEJLESZTŐ KFT. Customer 1 637
GRABOPLAST PADLÓGYÁRTÓ ZRT. Customer 1 310
Wallis Autómegosztó Kft Customer 1 085
NEO Property Services Zrt. Supplier 902
SH-ÜZEMELTETŐ KFT. Customer 308
Name Category
thousand HUF
NEO Property Services Zrt. Revenue 1 023 834
Tisza WTP Kft. Revenue
649 823
Energigas Kft. Revenue
436 680
PRAKTIKER KFT. Revenue 328 999
GRABOPLAST PADLÓGYÁRTÓ ZRT. Revenue 150 934
WIPEUROPA INGATLANFEJLESZTŐ KFT. Revenue 122 946
HPS612 Kft. Services used 74 553
MANHATTAN DEVELOPMENT GLOBAL KFT.
Revenue 50 282
Wallis Autókölcsönző Kft.
Services used 26 063
Energigas Kft. Services used
21 289
WALLIS MOTOR PEST KFT. Revenue 20 663
Wallis Asset Management Kft.
Services used 18 961
SH Fejlesztő Kft Revenue
17 956
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
112 / 115
According to the judgement of the management of the Group, transactions with related parties are
transactions concluded under market terms, with market based pricing.
IV.39 Contingent liabilities, guarantees
Other than contingent liabilities arising from litigation, there are no liabilities which are not included
in the Group's financial statements with their amounts for the reason that their existence depends
on future events.
For certain products (electricity, gas), the suppliers of the energy trading division require guarantees
as part of the normal course of business. In 2021, guarantees were provided by OTP Bank Nyrt. and
ERSTE Bank Hungary Zrt., the banks used for funding the retail and wholesale trading business.
ERSTE Bank provides an advance repayment and good performance bank guarantee for the
customers in connection with its construction-installation contract.
ERSTE Bank provides a good performance bank guarantee for the customer in connection with the
power plant’s operation and maintenance contract.
The following bank guarantees existed as at the reporting date.
The hedged liabilities are recognized in the financial statements of the Group.
The details of relationships with other banks that have no value in the financial statements are
presented in Note IV.22.2 attached to these financial statements.
Guarantee limit 12/31/2021 Bank Amount HUF thousand
Utilization rate,
HUF thousand
Alteo Energiakereskedő Zrt. OTP 4 000 000 2 756 000
Alteo Energiaszolgáltató Nyrt. ERSTE (Cash Pool) 4 750 000 4 097 000
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
113 / 115
IV.39.1 Economic relations subject to legal proceedings
With regard to the letter of VPP Magyarország Zrt. (registered office: H-1113 Budapest, Bocskai út
134-146. C. ép. 3. em.; company registration number: 01-10-048666), sent to Sinergy
Energiakereskedő Kft. in 2018 – the content of which and the response to which by Sinergy
Energiakereskedő Kft. are presented in detail in an announcement published on February 14, 2018,
at the official disclosure points of the Company – on March 14, 2018, Sinergy Energiakereskedő Kft.
requested the Hungarian Intellectual Property Office to establish that the six control procedures it
uses in total in the course of operating the virtual power plant are not in violation of the patent
“Decentralized energy production system, control tool and procedure, controlling the energy
production of the system” registered for VPP Magyarország Zrt. as holder under number E031332.
Sinergy Energiakereskedő Kft. initiated the procedures for the so-called negative clearance with the
goal to clearly and definitively disprove the infringement assumed by VPP Magyarország Zrt. and
presented in the announcement of the Company published on February 14, 2018. The proceedings
are still ongoing at the time of publishing this document.
The Group has not identified any situation affecting its statement of financial position with respect to
this case.
IV.40 Fair value measurement disclosures
Other than derivative transactions, on the reporting date the Group has no financial instruments that
would be measured at fair value.
The fair value of derivative transactions is HUF 5,831,243 thousand (previous year: HUF 1,326,883
thousand). These qualify as expert estimates built-up from observable inputs, therefore they are on
Level 2 of the fair value hierarchy.
No differences were identified between the carrying amount and fair value of the remaining financial
instruments. For valuation purposes, all other assets are on Level 3 of the fair value hierarchy.
Almost all the financial instruments presented have maturities under one year.
Name 12/31/2021 12/31/2020
Derivative assets (in hedge relationship) 5 316 651 1 326 883
Obligations from loan IRS Derivatives (for hedge) 514 592 -
Assets evaluated at fair value through profit and loss (FVTPL) 5 831 243 1 326 883
Liabilities from loan IRS Derivatives (for hedge) - 698 411
Liabilities from derivatives (for hedge) - 189 130
Liabilities evaluated at fair value through profit and loss (FVTPL) - 887 541
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
114 / 115
V. OTHER INFORMATION
V.1 Disclosure of interests in other entities
The Group was not faced with any uncertainty and was not forced to decide on complex matters
when making a judgment about how to treat its investments. All controlled entities qualify as
subsidiaries. The subsidiaries are controlled by the Parent Company, since control, operative daily
tasks and exposure to variable return can be justified easily and in full. Where the Group does not
control the entity, it is not consolidated but treated another way.
The Group has no associates, it does not participate in joint organizations.
The Group has to face no limitations concerning any of its entities that would influence access to net
assets, the profit or the cash flow. The Group has no consolidated or not consolidated interests in
which control is not established through voting rights or where voting rights are not for controlling
relevant activities leading to control (structured entities). None of the members of the Group qualify
as or have shares in an investment entity.
V.2 Significant events after the reporting date
The following significant events occurred between the reporting date and the date of approval of the
disclosure of the financial statements:
January 4, 2022: Alteo Nyrt. and BC-Erőmű Kft. (registered office: 3700 Kazincbarcika, Bolyai tér 1.;
company registration number: Cg. 05-09-007481; tax number: 11795346-4-05) signed a long-term
operation and maintenance contract for the operation and maintenance of the power plant and
steam boiler owned by BC-Erőmű Kft. until December 31, 2036.
January 10, 2022: The ‘ALTEO 2022/I’ bonds were repaid at maturity and therefore terminated on
the maturity date, i.e. on January 10, 2022, and the Company has no other obligations to the
bondholders, in view of the repayment.
January 2022: The Group has published its new five-year strategy for 2022-2026 for information
purposes. The company strategy is available at the following link:
https://www.bet.hu/newkibdata/128662993/ALTEO_PPT_VallalatiStrategia2022_2026_final.pdf
February 4, 2022: The parent company of the Group began the transfer of 1,267 shares to the
employees who have become eligible for them based on the Company’s recognition plan.
February 2022: the Group received an ESG certification, for more information on this certification see
https://www.bet.hu/site/newkib/hu/2022.02./ALTEO_megszerezte_elso_ESG_minositeset_2022.02.
02_128668992
ALTEO Nyrt. Consolidated Annual Report and Management Report for 2021 Data in HUF thousand
115 / 115
February 23, 2022: At the Best of BSE awards ceremony, Alteo was named the Issuer of the Year with
the highest share price increase in the premium category, and also won the Responsibility,
Sustainability, Corporate Governance Award and the Issuer Transparency Midcap Award.
The impact of the global political events (Russia-Ukraine conflict, COVID 19) was taken into
consideration in Section III.3
V.3 The auditor, the audit fee and non-audit services
The Accounting Act requires the Group to prepare consolidated financial statements, which, in
accordance with Section 155 (2) of that Act, is to be mandatorily reviewed by the auditor. The chosen
auditor of the Company is BDO Magyarország Könyvvizsgáló Kft. (chamber registration number:
002387), the person responsible for auditing is Péter Kékesi, chamber membership number: 007128.
The fee for auditing the unconsolidated financial statements and the IFRS consolidated financial
statements is HUF 8,400,000 + VAT.
In the fiscal year 2021, the Company and its subsidiaries used non-audit services for a total of HUF 0
provided by BDO Magyarország Könyvvizsgáló Kft., as the auditor engaged to perform the audit of
the annual financial statement of the Company, and other companies within the network of the
auditor with prior written consent from the Company’s Audit Committee in accordance with
Regulation (EU) No 537/2014 of the European Parliament and of the Council.
V.4 Approval of the disclosure of the financial statements
On March 25, 2022, the Board of Directors of the Group’s parent company approved the disclosure
of the financial statements in its current form.
Budapest, March 25, 2022
On behalf of ALTEO Nyrt.:
Attila László Chikán Zoltán Bodnár
Member of the Board of Directors CFO
Chief Executive Officer
1 / 48
Annual Report of ALTEO Nyrt.
and its subsidiaries
for the financial year 2021
Disclosure: March 25, 2022
2 / 48
Table of Contents
1 The Management’s report and analysis of business activities for 2021 ......................................... 5
1.1 Executive summary on events yielding significant results over the period ............................ 5
1.2 Management summary on comprehensive income ............................................................... 8
1.3 Management summary on the performance of the segments ............................................. 10
1.3.1 Heat and electricity generation segment (market-based, outside the “Subsidized”
system) 10
1.3.2 Electricity generation (within the “Subsidized” system) segment ................................ 15
1.3.3 Energy Services segment ............................................................................................... 16
1.3.4 Energy retail segment .................................................................................................... 19
1.3.5 Other segment ............................................................................................................... 21
1.4 Management summary of the Consolidated Statement of Financial Position ..................... 22
2 Annexes ......................................................................................................................................... 26
2.1 The Company’s details .......................................................................................................... 26
2.2 Information on the ownership structure of the Company and voting rights ....................... 30
2.2.1 Composition of the issued capital, rights and obligations related to the shares .......... 30
2.2.2 Limitation of voting rights related to the shares ........................................................... 30
2.2.3 Presentation of investors with a significant share ........................................................ 31
2.2.4 Powers of senior executives .......................................................................................... 31
2.3 Presentation of consolidated entities according to the financial statements ...................... 34
2.4 Changes in the structure of the Group .................................................................................. 34
2.5 Presentation of significant results and events of the Company and the Subsidiaries between
January 1, 2021 and the date of disclosure of this Annual Report, as well as future prospects ...... 35
2.5.1 Events at the Company relevant in terms of company law .......................................... 35
2.5.2 Events at the Company’s Subsidiaries relevant in terms of company law .................... 37
2.5.3 Own securities issued by the Company ......................................................................... 37
2.5.4 Publication of an Integrated Report .............................................................................. 37
2.5.5 Personal changes in senior management ..................................................................... 37
2.5.6 GINOP ............................................................................................................................ 38
2.5.7 Strategic cooperation .................................................................................................... 38
2.5.8 New RDI project............................................................................................................. 38
2.5.9 Own share transactions ................................................................................................. 38
2.5.10 Exercise of option rights of the ALTEO ESOP Organization ........................................... 39
2.5.11 Long-term trade and business agreements .................................................................. 39
2.5.12 Use of non-audit services .............................................................................................. 40
2.5.13 Presentation of ongoing litigations ............................................................................... 40
3 / 48
2.6 The following significant events occurred between the reporting date and the publishing
date of the Annual Report: ................................................................................................................ 41
2.6.1 Own share transactions ................................................................................................. 41
2.6.2 Long-term trade and business agreements .................................................................. 41
2.6.3 Company strategy.......................................................................................................... 41
2.6.4 Bonds repaid .................................................................................................................. 41
2.6.5 Share purchase by the ALTEO ESOP Organization ........................................................ 42
2.6.6 ESG certification ............................................................................................................ 42
2.6.7 Best of BSE ..................................................................................................................... 42
2.6.8 Merger of subsidiaries ................................................................................................... 42
2.7 The business environment of ALTEO, classification of risks according to their characteristics
43
2.8 Description of the policies applied in the ALTEO Group, detailing the results by policy ....... 43
2.8.1 Environmental guidelines .............................................................................................. 43
2.8.2 Respect for human rights, ethics ................................................................................... 44
2.8.3 Fundamental rights in practice ...................................................................................... 44
2.8.4 Policies applied in connection with the fight against corruption .................................. 44
2.8.5 Employment policy ........................................................................................................ 45
3 Statements of the issuer ............................................................................................................... 46
3.1 Corporate governance statement ......................................................................................... 46
3.2 The issuer's statement pursuant to Section 3.4.1 of the Decree No. 24/2008 (VIII.15.) of the
Minister of Finance ............................................................................................................................ 48
3.3 Statement of the issuer on the independent audit of the report ......................................... 48
4 / 48
ALTEO Group’s Annual Report for 2021
Introduction
Pursuant to Act V of 2013 on the Civil Code (hereinafter: “Civil Code”), Act CXX of 2001 on the Capital
Market, the Regulation of the Budapest Stock Exchange Ltd. on the Rules of Listing and Continued
Trading (hereinafter: “Regulation”), Decree No. 24/2008 (VIII.15.) of the Minister of Finance
(hereinafter: “MF Decree”), and Act C of 2000 on Accounting, ALTEO Energiaszolgáltató Nyilvánosan
Működő Részvénytársaság (hereinafter: “Company” or “ALTEO”) has prepared and hereby publishes
“The Management Report and Analysis” on the consolidated annual profit and the consolidated
Annual Financial Statements for the Fiscal Year 2021 (hereinafter collectively: “Annual Report”; the
Company and the Presentation of consolidated entities according to the financial statements 2.3
Presentation of consolidated entities according to the financial statements of this Report hereinafter:
“Subsidiaries”; the Subsidiaries and the Company hereinafter collectively: “Group” or “ALTEO
Group”). In view of the above, the Annual Report constitutes also a business report under Act C of
2000 on Accounting.
The consolidated Annual Report and the consolidated Annual Financial Statements of the Company
have been prepared based on Annex 2 to the MF Decree, according to the requirements set forth in
Act C of 2000 on Accounting, in accordance with the International Financial Reporting Standards
published in the Official Journal of the European Union.
The data presented in the Company's consolidated Annual Report and consolidated Annual Financial
Statements for 2021 were verified by an independent auditor.
ALTEO Group’s Annual Report consists of the following documents, occasionally in separate
documents, but disclosed at the same time as this Annual Report:
1. Annual report (statement of financial position and statement of profit or loss disclosed in
a separate document);
2. Auditor’s report, as part of the annual report;
3. Business report, included in this document;
4. Management report, included in this document;
5. Non-financial statements, included in this document.
5 / 48
1 The Management’s report and analysis of business activities for 2021
1.1 Executive summary on events yielding significant results over the period
Its 2021 results confirmed ALTEO’s strategy and the successful investments of the past period. ALTEO’s
profitability was only moderately affected by the COVID epidemic compared to other more procyclical
sectors due to the risk management measures taken by the Company and the fact that the negative
impact of the epidemic was far outweighed by the excellent results achieved with other activities.
In 2021, both the revenue and net after-tax profit of the Group increased significantly. A 34% revenue
growth was accompanied by a 892% growth in after-tax profit. Consolidated EBITDA increased by 134%
year-on-year, primarily (i) on account of the remarkable profitability of the virtual power plant
controlling heat and electricity generation, which was positively supported by the expansion of the
power plant portfolio’s gas engine capacities in 2020 with an additional 18 MW and the price increase
in the global market, (ii) within the subsidized electricity generation segment, the surplus profits of the
15 MW wind farm acquired by the Group in October 2020 and the reconstructed Gibárt Hydropower
Plant helped the increase of the EBITDA, and (iii) the outstanding, record profits of the Energy Retail
segment (which was hit the hardest by the pandemic) which were also impacted by the rise of global
market prices.
In November 2021, a new 5 MW capacity energy storage unit was commissioned at the Kazincbarcika
Heating Power Plant, thereby further increasing the Group’s total capacity. This project was, in part,
implemented using a non-refundable grant.
ALTEO was also able to renew key contracts with several important partners. On October 21, 2021, the
Kazincbarcika heat supply contract, an important heat sales element of ALTEO's energy production
business was renewed until September 30, 2031. On January 4, 2022, the existing contract for
operation and maintenance services with one of its key operating partners, BC Power Plant, owned by
BorsodChem Zrt., was renewed for another 15 years.
On December 7, 2021, the Group was awarded an investment development grant of more than HUF
400 million to realize its innovation efforts. The aim of the project is to develop a highly automated, AI
based energy IT system that is capable of making autonomous production and commercial decisions,
and controlling and optimizing “smart” power plant electricity production.
In July 2021, Scope ratings reaffirmed the previous rating (BBB-) of Alteo's bonds, and on January 10,
2022, the bond package "ALTEO 2022/I" (HUF 650 million) was repaid by the Group.
6 / 48
The Group was presented with the Green Frog Award for the Best Sustainability Report by Deloitte
Hungary.
Executive summary of the operating profit or loss statement
The result of 2021, although partly a one-off event, is a good feedback to ALTEO’s management that
the strategy presented earlier and revised in early 2022 is working. Environmental and social
sustainability continues to have a crucial role in our strategy.
The comparative analysis of the ALTEO Group's financial data for 2021 and 2020 is presented below.
* For the definition and calculation of EBITDA, see Section IV.33 Financial reports.
12/31/2021
HUF million
12/31/2020
HUF million
Change
HUF million
Change
%
data in HUF million audited audited
compared to
the previous
year
compared to
the previous
year
Revenues 44 249 32 981 11 268 34%
Capitalized own production
243 512 (269)
53%
Material expenses (25 624) (23 072) (2 552) 11%
Personnel expenses
(4 192) (3 770) (422)
11%
Depreciation and amortization
(3 937) (2 859) (1 078)
38%
Other revenues, expenses, net
(1 796) (1 228) (568)
46%
Impairment loss - - n/a N/A
Operating profit or loss 8 943 2 565 6 379 249%
Net financial income (1 871) (1 090) (781) 72%
Profit or loss before taxes 7 072 1 474 5 598 380%
Income tax expenses
(1 215) (884) (331)
37%
Net profit or loss 5 857 591 5 267 892%
from which the owners of the Parent
Company are entitled to:
5 855 587 5 268 898%
Of which the minority interest is entitled to:
2 4 (2) (42%)
Base EPS (HUF/share)
309,96 31,48 270,66
860%
Diluted EPS (HUF/share) 302,03 30,26 271,76 898%
EBITDA* 12 880 5 512 7 368 134%
Consolidated Statement of profit or loss
7 / 48
The Group’s revenues increased by 34%, i.e. HUF 11.3 billion, to HUF 44.2 billion, as compared to
2020. Revenue growth was driven by multiple factors:
• Revenue from the Heat and Electricity Generation segment rose significantly, primarily due
to the excellent performance by heat and electricity cogeneration plants in the electricity
market, heat and electricity cogeneration, actively leveraging a volatile market throughout
2021 that was markedly different than in the past and presumably will not persist in the long
term. Management stability in the segment was strongly supported by the unit that was put
into operation last year as part of the gas engine capacity expansion projects and generated
revenue over the reporting period (18MW capacity expansion at the Tiszaújváros and Győr sites).
• Revenues from the Energy Retail segment increased significantly. In addition to the growth in
energy prices compared to 2020 (apparent in both the revenue and material expenses lines),
effective response to further lockdowns due to Covid early in the year and the resulting market
anomalies also contributed to the segment’s revenue outperforming the lower baseline
resulting from the pandemic.
• Acquired in October 2020, Pannon Szélerőmű Kft. (Bábolna wind farm) was not owned by the
Group over the entirety of the comparative period; as such its performance is consolidated
from October 1, 2020.
• In the Energy Services segment, the drop in revenue is mainly attributable to the focus of the
project development team being shifted to internal projects.
The particularly high revenue growth of 34% was accompanied by an 11% increase in material
expenses. The relationship between revenue and material expenses was affected by the following
management effects:
• The revenue growth in the structured electricity market did not involve a significant increase
in material expenses.
• The commercial segment is characterized by revenue growth being accompanied by a significant
increase in COGS, the level of which, however, is below that of the revenue growth.
• The wind farm acquired by the Group through the aforementioned acquisition typically
operates with low material expenses.
• The drop in the revenue of energy services entails a significant decrease in material expenses,
offsetting the COGS increase in the commercial segment.
The 11%, i.e. HUF 0.4 billion, increase in personnel expenses is directly linked to the expansion of the
Group and the effect of the management incentive program revealed in late 2020 is also recognized
here.
8 / 48
Depreciation and amortization was up by 38%, i.e. HUF 1.1 billion, mainly as a result of a significant
increase of HUF 10.9 billion in production capacities throughout 2020, comprised of the following:
• The HUF 7.1 billion asset portfolio acquired in relation to the Bábolna wind farm appeared in
the Group’s depreciation as of October 2020.
• The HUF 2.7 billion investment project to increase the capacity of gas engines at the
Tiszaújváros and Győr sites was handed over in two phases starting in July and November 2020.
• The HUF 1.1 billion renovation of the Gibárt hydropower plant was completed and handed
over in October 2020.
The balance of other revenues, expenses, net shows a HUF 0.6 billion increase, reflecting the amount,
and increased unit price, of the quota that had to be purchased for the increased CO
2
emissions as a
result of additional gas consumption.
The ALTEO Group generated an operating profit of HUF 8.9 billion and an EBITDA of HUF 12.9 billion
in 2021.
Hedge expenses, resulting from a physical delivery transaction being terminated prematurely, had a
dominant role in the HUF 781 million decrease in net finance income.
The ALTEO Group realized a HUF 7.1 billion profit before taxes in 2021. The ALTEO Group’s profit
before taxes in 2021 exceeded its profit before taxes in 2020 by 380%.
Income tax expenses increased in parallel to the Group’s profits. Income tax expenses exceeded
expenses in the comparative period by HUF 331 million.
In 2021, the after-tax profit, i.e. net profit, of the Group was HUF 5.9 billion, representing an increase
of 892% over the comparative period.
1.2 Management summary on comprehensive income
12/31/2021
HUF million
12/31/2020
HUF million
Change
HUF million
Change
%
audited audited
compared to
the previous
year
compared to
the previous
year
Net profit or loss 5 857 591 5 267 892%
Other comprehensive income
(after taxes on profits)
4 907 2 114 2 792 132%
Comprehensive income 10 764 2 705 8 059 298%
from which the owners of the Parent
Company are entitled to:
10 762 2 701 8 061 298%
Of which the minority interest is entitled to:
2 4 (2) (71%)
Consolidated Comprehensive Statement of Profit or Loss
9 / 48
The Group recognized the cumulative effects (including deferred tax) of the end-of-period revaluation
of hedges in other comprehensive income. The aggregate profit of the revaluation of transactions as
at the reporting date, recognized in the profits for the period, was an unrealized change of HUF 4,907
million. Transactions are recognized, depending on comprehensive income or transaction profit
nature, against the balance sheet items of other financial assets or other financial expenses.
Changes in the consolidated comprehensive income was most affected by forward contracts, including
the revaluation of open hedging positions to manage price changes for natural gas assets in kind
involved in regulated heat energy sales for December 31. The majority of the Group’s annual heat sales
agreements are concluded at a fixed and regulated price level, the effect of which, however, cannot
be included in other comprehensive income in accordance with the IFRS rules due to the impossibility
of predicting the sales volume. The management estimates that fluctuations in the price of assets in
kind required for regulated heat energy sales are eliminated through hedges by the Group under
normal market conditions.
The business mechanism of hedges applied by the Group is as follows:
- The Group adapts its gas purchases to its regulated heat energy sales pricing system and concluded
forward contracts to manage currency price volatilities.
- The Group entered into interest rate swaps on some of its outstanding project loans in line with
its risk management policy. The Group intends to manage the interest rate risk on project loans
with interest rate swaps.
- The Group presents the tax effect of the forward contracts shown in the comprehensive income
by applying a corporate tax effect of 9%.
10 / 48
1.3 Management summary on the performance of the segments
In relation to segment information, we present the detailed description, analysis and comparison of
the segments in question.
* For the definition and calculation of EBITDA, see Section IV.33 Financial reports.
Starting from 2021, the presentation of ALTEO segments has changed in the interest of better
interpretability for investors and an improved presentation of segment profitability.
The following structural changes were implemented in the presentation of the segments:
• Intra-group, inter-segment construction works were eliminated on both the revenue and cost side.
• Activities related to the operation of power plants owned by ALTEO were shown directly in the
segment presenting profit/loss generated by the power plant.
• In the previous reporting structure, internal production in the “Other” segment was presented in
the revenue line. The new structure shows the profit or loss of the segments by allocating
expenses. Those indirect expenses previously shown in the “Other” segment that are closely linked
to ALTEO’s operations, have been reclassified as administrative costs and then allocated to
productive segments.
• Amounts net of administration costs allocated to segments are shown as EBITDA. Through the
allocation procedure, we assigned indirect administrative costs (called administrative costs in the
tables) to segments, followed by the presentation of EBITDA II.
• “Administration costs” are also presented in segment-specific tables as assigned to segments.
1.3.1 Heat and electricity generation segment (market-based, outside the
“Subsidized” system)
This segment includes combined heat and electricity generation (cogeneration), the Virtual Power
Plant and wind turbines that are no longer subsidized (being excluded from KÁT, having produced their
subsidized volumes). The Virtual Power Plant is responsible for planning and managing the Group’s
market-based renewable electricity generation, the electricity generation by cogeneration equipment
in heating power plants and the production by external partners connected to the Virtual Power Plant.
The Virtual Power Plant also grants access to the Ancillary Services market through the integration of
the units managed. The profit that can be realized on the electricity production portfolio with the
12/31/2021
data in HUF million
Revenue
24 285 5 007 3 305 16 370 - - (4 717) 44 249
Capitalized value of own production
85 - 135 - - 23 - 243
Material expenses
(12 802) (665) (1 379) (14 690) (261) (545) 4 717 (25 624)
Personnel expenses
(880) (188) (1 413) (114) (699) (899) - (4 192)
Other revenues and Other expenses (1 646) (37) 48 (154) 4 (10) - (1 796)
EBITDA*
9 042 4 117 696 1 412 (956) (1 431) - 12 880
ALTEO GROUP MANAGEMENT STATEMENT – FINANCIAL STATEMENT BY ACTIVITIES
Energy production
(outside the
subsidized
system)
Electricity
production
(within the
subsidized
system)
Energy services
Energy Trading
Other
Administration
costs
Items
eliminated
due to
consolidation
Total
11 / 48
electricity production integrated through the Virtual Power Plant, with the related electricity
management functions, and with the production and sale of structured electricity products, greatly
exceeds the levels that can be achieved by implementing conventional production strategies.
Since fall 2020, in addition to managing its own renewables-based electricity production portfolio, the
ALTEO Group has provided comprehensive commercial and production management services to power
plants operating on a market basis or in subsidized systems (KÁT, METÁR).
’* For the definition of EBITDA see the “Consolidated statement of profit or loss” report.
The revenue of the segment was 72% up compared to the base period.
The current year’s significant revenue growth is attributable to the appreciation in the market value of
electricity generation capacities expanded as a result of investment projects implemented in the base
year, a significant hike in capacity and regulatory prices, a higher heat demand and increasing heat
feed-in tariffs, as well as the dynamic growth in revenues for the Scheduling business that was only
observed to a limited extent in the base period.
Under the gas engine investment program, flexible own electricity generation capacities have been
expanded from the second half of 2020, resulting in a considerable increase in the profit margin
achievable on the market in the current year. In 2021, the expansion continued with the Group’s
second electricity storage facility put into operation in Q4, boosting ALTEO’s electricity storage
capacity to 11MW/9MWh by the end of the period. Renewable capacities in the segment that were
previously integrated into the Virtual Power Plant provided stable output.
In Q3 2020 ALTEO launched a smart, comprehensive and risk-free scheduling service to provide
partners with a solution to the challenges faced by renewable energy producers. The Group’s market
share in the current year grew significantly, with the revenue and profit generated by the new business
reaching the upper third of the target range.
Heat and electricity generation (market rate, outside the KÁT regime)
12/31/2021 12/31/2020 12/31/2020
Change HUF
million
Change %
data in HUF million
audited comparison** audited
compared to
the previous
year
compared to
the previous
year
Revenue
24 285 14 138 14 179 10 147 72%
Capitalized own production
85 71 60 14 20%
Material expenses
(12 802) (8 868) (9 966) (3 934) 44%
Personnel expenses
(880) (803) (269) (77) 10%
Other revenues and Other expenses (1 646) (1 072) (1 072) (574) 54%
EBITDA*
9 042 3 465 2 933 5 577 161%
Allocated administrative expenses (474) (437) - (36) 8%
EBITDA II*
8 568 3 028 2 933 5 540 183%
12 / 48
Material expenses in the segment include three major items: the cost of gas purchased, the cost of
electricity purchased from external (non-consolidated, third-party) power plants, and the costs and
expenses incurred by the division responsible for the operation and maintenance of the power plant
portfolio.
In 2021, the segment sold heat energy not only to district heating suppliers but also to industrial
customers, including Heineken Hungária. On the basis of these contracts, the company continued to
provide a stable and predictable performance.
The segment’s EBITDA II for 2021 was HUF 8.6 billion, a 183% increase over the previous period,
primarily attributable to the following factors:
• For the entire year of 2021, the Virtual Power Plant realized significantly higher margins, relative
to the prior period, as a result of the change in the behavior of actors in the balancing reserve
capacity market and under volatile market conditions.
• This result arose from the aggregate effect of several external and internal factors. The availability
of major industry producers, the increasing ratio of weather-dependent capacities and,
simultaneously, the higher volatility of the demand-supply side of the electricity market leads to
the appreciation of flexible electricity production capacities.
• The intensive capacity expansion projects over the previous period, and the development and
upgrading of the Virtual Power Plant was met with positive feedback from the market.
• The sales revenue of the FCR (formerly called primary) regulatory capacity produced by the
electricity storage architecture saw an increase of 21%.
• The Scheduling business makes an increasingly positive contribution to the segment’s
performance.
• The losses incurred on the heat production and sales activities subject to price regulation have
become marginal as compared to dominant operations.
13 / 48
Presentation of the markets of the heat and electricity segment
The quantitative impact of structured electricity product sales on the segment’s profit
The 22% increase in electricity production is
primarily attributable to the additional
electricity produced as a result of capacity
expansion projects.
The renewable energy production volume is
highly exposed to weather conditions, which
were about the same as in the previous year for
the purposes of generation.
The balancing reserve capacity sold by the
Virtual Power Plant saw an increase in terms of
both quantity and unit price, which had a
fundamental effect on the profit growth of the
segment.
Self-generated electricity sold by the Virtual Power Plant (GWh)
in 2020 and 2021
Electricity production capacities sold by the Virtual Power
Plant in 2020 and 2021 (aFRR: GWh; FCR: GWh
sym
)
14 / 48
Impact of heat energy production (district heating) and sale on the segment’s profit
The volume of heat energy sold by the segment
increased by 7% over the period. The 24% increase in
revenues generated from heat sales is attributable to
weather conditions and increased heat demand in 2021
as well as higher feed-in tariffs set by authorities. As a
result of the hedging policy applied by the Group, the
costs to cover the estimated resource needs for retail
heat sales are fixed, ensuring low volatility for hedging
in this subsegment.
As a result of the hedging policy applied by the Group, the costs to cover the estimated resource needs
for retail heat sales to final consumers are fixed. Fixing the costs ensures low volatility for hedging in
the subsegment.
Changes in the amount of natural gas used for
electricity and heat energy production
The amount of natural gas used by the
segment increased by 12%, in line with the
growth of both heat and electricity production.
Amount of heat sold by the segment (GWh)
in 2020 and 2021
Amount of natural gas used by the segment (GWh
GCV
)
in 2020 and 2021
15 / 48
1.3.2 Electricity generation (within the “Subsidized”
1
system) segment
Electricity generation recognized in this segment comprises renewable assets (solar, wind, hydro,
landfill gas) used for production within the “KÁT” balancing group and under the METÁR subsidy
regime. It is mainly made up of production by weather-dependent (wind, hydro, solar) power plants.
* For the definition and calculation of EBITDA, see Section IV.33 Financial reports.
Revenue from the Group's electricity production plants selling electricity within the subsidized
system rose by HUF 1,4 billion. A significant portion of this revenue growth is a result of the production
by Pannon Szélerőmű Kft., owned by the ALTEO Group since October 1, 2020, over the entire year of
2021, which, by itself, boosted the segment’s revenue by HUF 805 million. Furthermore, the technical
issues affecting wind turbines in 2020 were resolved, resulting in a significant increase in the revenue
produced by the wind farms in both Bőny and Törökszentmiklós.
Profit was further boosted by a full year’s production at the Gibárt hydropower plant, put into
operation in October, 2020, sold through “METÁR”.
The key difference between the two systems, “KÁT” and “METÁR”, is that while fixed electricity feed-
in tariffs are set for producers by MAVIR, as Buyer, under the KÁT purchase system, power plants
selling under the METÁR system sell the electricity they produce to any buyer on the free market at
free-market prices. Under METÁR system, after free-market sales, MAVIR makes price adjustments
with a view to the difference between the contractual METÁR price and the price considered as market
price as laid down by law in order to pay the corresponding amount to or collect such amount from
producers (collectively: “price supplement”). From September 2021, market prices were higher than
the contractual METÁR price for the Gibárt power plant; therefore, the Gibárt production unit
1
The name “Subsidized” energy market corresponds to the term “KÁT” used earlier; in this report, these two
names are used by the Company interchangeably.
Electricity production (within the subsidized system)
12/31/2021 12/31/2020 12/31/2020
Change HUF
million
Change %
data in HUF million
audited comparison** audited
compared to
the previous
year
compared to
the previous
year
Revenue
5 007 3 596 3 585 1 410 39%
Capitalized own production
- - - -
n.a.
Material expenses
(665) (535) (669) (130) 24%
Personnel expenses
(188) (131) - (56) 43%
Other revenues and Other expenses (37) 45 39 (82) (182%)
EBITDA*
4 117 2 974 2 955 1 142 38%
Allocated administrative expenses (93) (89) - (4) 5%
EBITDA II*
4 024 2 886 2 955 1 138 39%
16 / 48
recognized the cash flow to MAVIR as price supplement. The effect of the price supplement in 2021
amounts to HUF 61 million and is included other expenses.
Thanks to high EBITDA rates in this segment, the EBITDA II output of the segment rose to HUF 4 billion
in 2021. As a consequence of the segment’s cost structure, a significant portion of the increase in the
revenue of the segment is reflected in EBITDA II.
Sold volume in 2021 was up by 29% compared to 2020,
mainly as a result of the now full year’s production by
Pannon Szélerőmű, purchased in Q4 of the previous
year, as part of the ALTEO Group’s portfolio and the
production by the Gibárt hydropower plant.
In 2021, a number of major technical issues were
resolved, including the repair of the inverter
malfunctions that affected the Balatonberény solar
power plant since it was commissioned, causing loss of
revenue in 2020/2021. The issue was addressed with
the involvement, and at the expense, of the
manufacturer. Since the second half of September, the
power plant has produced the expected output.
The composition of the segment reflects the fact that the Group gives high priority to having a renewable
energy portfolio, both in terms of profitability and environmental consciousness.
1.3.3 Energy Services segment
The Energy Services segment comprises power plant operation and maintenance (O&M) services
provided to third parties as well as construction, engineering services and energy consultancy, and also
includes the Waste Management business launched in 2019 and the E-mobility business established in
2020.
The Group also offers its customers engineering, project development and project management
services, as well as general construction services related to energy investments and developments,
under individual orders and contracts.
Third-party O&M services provided by this business are used by important players in the Hungarian
industry (e.g. MOL Petrolkémia, BorsodChem, Heineken, AUDI, Gönyű Power Plant, LEGO, FŐTÁV),
Quantities sold and their breakdown
for 2020 and 2021 (MWh)
17 / 48
Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
where our core activity is to operate the critical infrastructure of these clients, ensuring close to 100%
availability. We provide long-term services to our customers, and our contracts cover the complete
range of the operational and maintenance tasks.
* For the definition and calculation of EBITDA, see Section IV.33 Financial reports.
In 2021, the segment realized a negative EBITDA II of HUF 35 million. The negative value is due to the
launch and ramping-up of newly introduced business lines involving higher allocated administrative
costs, relatively significant compared to their profit generation capacity. ALTEO's management
continues to consider the long-term value-creation of the new business lines to be ensured. The
segment’s revenue dropped by HUF 2 billion as a result of the higher share of external investment
projects implemented in 2020 and the work performed for third parties last year by the Project
Development Division.
Project development
A substantial part of the Project Development division’s resources was dedicated to development
projects considered own-account construction from the Group’s perspective, i.e. own-account
investment to support the Group’s growth objectives. The extension of the lifespan of the TVK Power
Plant, which was launched in 2020, was completed in 2021 to the utmost satisfaction of the client. The
Covid situation continues to hinder the launch of investment projects for external partners, but
negotiations are actively ongoing with a number of partners.
In 2021, due to the periodical nature of major jobs, power plant operation and maintenance (O&M)
services provided to third parties entailed lower costs compared to the previous year, with unchanged
technical standards and high satisfaction levels of clients. In January, 2022, the contract for the operation
of the BC Power Plant was renewed for another 15 years, ensuring a stable, predictable coverage for the
business.
Energy services
12/31/2021 12/31/2020 12/31/2020
Change HUF
million
Change %
data in HUF million
audited comparison** audited
compared to
the previous
year
compared to
the previous
year
Revenue
3 305 5 353 10 747 (2 047) (38%)
Capitalized own production
135 33 43 103 312%
Material expenses
(1 379) (3 264) (7 809) 1 885 (58%)
Personnel expenses
(1 413) (1 269) (2 446) (144) 11%
Other revenues and Other expenses 48 (117) (95) 165 (141%)
EBITDA*
696 736 441 (39) (5%)
Allocated administrative expenses (731) (653) - (78) 12%
EBITDA II*
(35) 83 441 (118) (142%)
18 / 48
Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
Maintenance business
For the Maintenance business, 2021 went according to plan. Besides individual profit in 2020, revenues
in 2021 also reflect a stable return on operations. The 2022 objectives for the business seem increasingly
promising as the effects of Covid wane. A sign pointing toward this is that the business concluded
contracts with a number of existing partners and new clients at the end of 2021.
E-mobility
Launched in 2020, this business is still finding the market niche corresponding to the state of the
industry, and is still in the pre-growth phase. The mobility business was particularly affected by Covid-
related restrictions; however, experts used the temporary inactivity in the business to develop the
concept and products. This temporary period of inactivity allowed for the implementation of pilot
projects. Charging points were installed at Praktiker stores, Wallis Motor dealerships and a number of
office buildings (WING Infopark, Liget Center) in 2021 within the framework of these pilot projects.
Chargers of ALTE Go Kft. are also available in parking lots of the Hunguest Hotel chain. There are ongoing
negotiations with market actors in vehicle distribution and building construction industry to ensure the
availability of a high number of charging points. The e-mobility business is the business line of the future
and an investment for the present, being a key priority in ALTEO’s strategy.
Waste management
Due to downward waste trends, this business underperformed in 2021 compared to 2020. Owing to the
slow recovery in the HORECA sector after Covid, the market for liquid raw material base also shifted,
while the evolution of prices on the feed market resulted in changing market conditions.
In the packaged waste segment, the second half of 2021 saw a successful push towards the market of
inorganic waste from retail chains, an increase in volume and new partners gained, promising growth
for the business in 2022.
19 / 48
Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
1.3.4 Energy retail segment
The Group’s energy trading activity involves selling electricity and natural gas on the free market.
The Group does not pursue any sales activities under universal service.
* For the definition and calculation of EBITDA, see Section IV.33 Financial reports.
Covid-related restrictions had a substantial negative impact on the profits of the segment in 2020,
resulting in a low base figure. In 2021, due to the expansion of the customer base and the reopening,
the segment has grown significantly compared to the base period. Thanks to new trends in the market,
which was previously hedged at a lower unit price, the volume of electricity not used by the various
consumers resulted in a selling position in the spot market, which contributed to the segment's
outstanding result as a one-off profit-increasing item. Despite changing consumer trends, the volume of
electricity sold was higher than in the previous year as a result of our expanding portfolio. The gas trade
business also increased over the base period as a result of the volatility of the weather, a reduction in
the number of competitors and the expansion of our portfolio.
Presentation of components with an impact on sales revenue
The segment’s revenue in the first half of 2021 increased by HUF 4.4 billion over the same period in
2020. This revenue increase is attributable, in part, to increasing energy prices in the global market and,
in part, to the growth of the electricity trading business (HUF 3.2 million), while the revenue from the
gas trading activity also saw a significant growth of HUF 1.2 billion as compared to last year. Within the
segment, an overall increase was realized in the volume and revenue of both natural gas and
electricity sale transactions. The segment’s EBITDA was up by a total of HUF 1.1 billion compared to
2020.
Retail energy trade
12/31/2021 12/31/2020 12/31/2020
Change HUF
million
Change %
data in HUF million
audited comparison** audited
compared to
the previous
year
compared to
the previous
year
Revenue
16 370 11 998 11 998 4 372 36%
Capitalized own production
- - - -
n.a.
Material expenses
(14 690) (11 602) (11 616) (3 088) 27%
Personnel expenses
(114) (101) (101) (13) 13%
Other revenues and Other expenses (154) 5 5 (159) (3 378%)
EBITDA*
1 412 299 286 1 112 371%
Allocated administrative expenses (133) (131) - (2) 2%
EBITDA II*
1 278 169 286 1 110 659%
20 / 48
Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
The volume of natural gas sold increased from 249 GWh to 307 GWh (+24%), which is mainly the result
of the unusually unpredictable weather and also the entry of several new industrial consumers and the
portfolio expansion after the previous gas year.
As a result of the current situation in the global market, the
average gas sales price is nearly 16% higher than in the
previous year.
The volume of electricity sold increased from 495 GWh to
511 GWh (+3%), and the average sales price (in line with
the existing situation in the market) grew by 30%.
Material expenses represent the biggest cost item in this segment. We present the natural gas and
electricity procured and resold here. Nearly a third of the electricity was purchased from ALTEO’s Heat
and electricity generation segment presented above (from the operator of the Virtual Power Plant,
Sinergy Energiakereskedő Kft., which buys electricity products in part from own power plants and in part
directly from the exchange as a member of HUPX, and resells them).
Its operation requires the use of additional personnel and other costs, which changed insignificantly in
comparison with their value.
On January 1, 2021, the EKR system was launched through the amendment of Act LVII of 2015, requiring
energy suppliers to achieve energy savings in proportion to the amount of energy they sell to end-users.
Items related to this system are among the underlying reasons for the increase in other expenses.
Provisions for potentially non-paying customers were established more cautiously than in previous years
due to the epidemic and the volatile economic and market situation.
21 / 48
Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
1.3.5 Other segment
Activities involving costs incurred in ensuring ALTEO’s long-term, transparent and successful operation
are shown in the “Other” segment. These include expenses of activities necessary for the purposes of
administration, participation in capital markets, publicity and leveraging future growth potential.
* For the definition and calculation of EBITDA, see Section IV.33 Financial reports.
The profit or loss of the Group’s “Other” segment is determined by the expenses related to the human
resources necessary to perform the aforementioned functions and other material expenses.
Material expenses were up by HUF 78 million over the previous year, primarily as a result of an increase
in consultancy fees related to the optimization of internal processes.
Personnel expenses in the segment were HUF 215 million higher compared to the previous year, mainly
due to recognition in line with the management compensation system published in December 21, 2020,
as well as wage hikes and staff increases related to the increase in company size.
Other segments
12/31/2021 12/31/2020 12/31/2020
Change HUF
million
Change %
data in HUF million
audited comparison** audited
compared to
the previous
year
compared to
the previous
year
Revenue
- - 455 -
n.a.
Capitalized own production
- 20 20 (20) (100%)
Material expenses
(261) (183) (615) (78) 42%
Personnel expenses
(699) (484) (955) (215) 44%
Other revenues and Other expenses 4 (1) (8) - (782%)
EBITDA*
(956) (648) (1 103) (308) 47%
22 / 48
Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
1.4 Management summary of the Consolidated Statement of Financial Position
The Group’s balance sheet total shows a year-on-year increase of 35% (HUF 15.9 billion) from 2020 to
2021.
Consolidated Statement of Financial Position 2021 (assets)
Note references in the table refer to sections in Chapters IV and V of the ALTEO Group’s 2021 IFRS statements.
* Consolidations in the “Property, plant and equipment” and “Other financial assets” lines compared to the statements published
in the previous period, see ALTEO Group’s 2021 IFRS statements, Section II.5.3.1.
Statement of financial position - Assets
(Negative values are denoted by parentheses.)
Note
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
change % diff. Value
Non-current assets
31 370 772 31 065 255 1% 305 517
Property, plant and equipment* 9.
25 738 088 25 523 292 1% 214 796
Other intangible assets 9.
2 516 820 3 037 269 (17%) (520 449)
Operation contract assets 9.
1 052 216 1 212 987 (13%) (160 771)
Rights of use 9.
1 766 502 1 063 615 66% 702 887
Deferred tax assets 8.
71 395 132 811 (46%) (61 416)
Long-term deposits or loans given 11.
225 651 95 181 137% 130 470
Long-term participation in associate 12.
100 100 0% -
Current assets and 113% 15 570 871
assets held for sale #ZÉRÓOSZTÓ! -
Inventories 13.
1 076 779 442 622 143% 634 157
Trade receivables 14.
4 425 345 3 263 224 36% 1 162 121
Short-term lease assets 10.
- 128 949 (100%) (128 949)
Emission allowances 15.
2 395 525 843 488 184% 1 552 037
Other financial assets* 16.
8 627 136 1 795 982 380% 6 831 154
Other receivables and accruals 17.
9 155 718 3 796 983 141% 5 358 735
Income tax receivables 7.
30 220 92 812 (67%) (62 592)
Cash and cash equivalents 18.
3 679 253 3 455 045 6% 224 208
TOTAL ASSETS 60 760 748 44 884 360 35% 15 876 388
29 389 976
13 819 105
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
Consolidated Statement of Financial Position 2021 (liabilities)
Note references in the table refer to sections in Chapters IV and V of the ALTEO Group’s 2021 IFRS statements. * Consolidations
in the “Reserves” line compared to the statements published in the previous period, see ALTEO Group’s 2021 IFRS statements,
Section II.5.3.1.
Significant changes in the structure of the statement of financial position are attributable to the
following events:
Non-current assets increased by 1% (HUF 0.3 billion), with the change stemming from the following:
• In July, 2021, ALTEO moved to a new office building (address: H-1033 Budapest, Kórház u. 6-
12.). Offices are set up in a rented property (with the right of use recognized as an asset), while
Statement of financial position - Liabilities
(Negative values are denoted by parentheses.)
Note
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
change % diff. Value
Equity
19 009 318 8 547 657 122% 10 461 661
Equity attributable to the shareholders of the
Parent Company
18 999 287 8 539 892 122% 10 459 395
Issued capital 20.
242 235 232 972 4% 9 263
Reserves* 20.
5 375 369 4 962 084 8% 413 285
Share-based payments reserve 20.
(206 875) 62 819 (429%) (269 694)
Hedge reserve 20.
5 306 431 399 801 1 227% 4 906 630
Retained earnings 20.
8 282 127 2 882 216 187% 5 399 911
Non-controlling interest
20.
10 031 7 765 29% 2 266
Long-term liabilities 24 490 928 27 905 833 (12%) (3 414 905)
Debts on the issue of bonds 21.
12 658 274 14 889 000 (15%) (2 230 726)
Long-term loans and borrowings 22.
6 583 098 8 411 397 (22%) (1 828 299)
Finance lease liabilities 23.
1 687 704 1 047 406 61% 640 298
Deferred tax liabilities 8.
1 487 761 866 550 72% 621 211
Provisions 24.
944 136 850 493 11% 93 643
Deferred income 25.
593 865 436 864 36% 157 001
Other long-term liabilities 26.
536 090 1 404 123 (62%) (868 033)
Short-term liabilities 17 260 502 8 430 870 105% 8 829 632
Short-term bond payables 21.
2 312 138 - N/A 2 312 138
Short-term loans and borrowings 22.
419 778 929 693 (55%) (509 915)
Short-term finance lease liabilities 23.
237 744 154 912 53% 82 832
Advances received 27.
8 989 46 500 (81%) (37 511)
Trade payables 28.
4 546 498 2 308 413 97% 2 238 085
Other financial liabilities 29.
- 189 130 (100%) (189 130)
Other short-term liabilities and accruals 30.
9 328 196 4 522 992 106% 4 805 204
Income tax liabilities 7.
407 159 279 230 46% 127 929
TOTAL EQUITY and LIABILITIES 60 760 748 44 884 360 35% 15 876 388
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
the materials, equipment and work used to fit out and furnish the office space are shown as
fixed assets in the statement of financial position of the Group.
• In Q4 2021, the development project for the recycling of car batteries under the KFI2 program
in Kazincbarcika was completed. The project generated HUF 1 billion new asset value and
provides 5MWh storage capacity.
Current assets increased by 113% (HUF 15.6 billion), with the change stemming from the following:
• A HUF 6.9 billion increase in other financial assets, of which HUF 4.5 billion is attributable to a
change in the fair value of hedging transactions. The change in the situation in the global market
for energy products had a significant impact on the level of deposits and security deposits.
The value of deposits and security deposits on the reporting date showed an increase in excess
of HUF 1.5 billion.
• The increase in the value of emission allowances followed sales growth. The Group made sure
to obtain and keep available the carbon dioxide emission allowances required to comply with
its obligations arising from gas consumption.
• Trade receivables, and accrued income and deferred charges are in line with changes in the
volume of revenue between 2021 and 2020. Higher prices give rise to higher outstanding debt.
The price hike in the global market resulted in a HUF 7.9 billion increase compared to the debt
stock at the end of the previous year.
Equity increased by 122% (HUF 10.4 billion), with the change stemming from the following:
In 2021, the Group’s equity saw a growth of HUF 10.5 billion, of which HUF 5.8 billion is net profit and
HUF 4.9 billion corresponds to a change in the fair value of hedging transactions. Earnings per share in
2021 equaled to HUF 309.
Long-term liabilities decreased by 12% (HUF 3.4 billion), with the change stemming from:
• With regard to loans, the Group decided not to make use of the moratorium in 2021. The asset-
financing loan related to the acquisition of a wind farm in 2020, worth HUF 0.9 billion, was
repaid prior to maturity. Early repayment, amounting to HUF 0.6 billion, was also made on
investment loans.
• Debts on the issue of bonds decreased by HUF 2.2 billion to HUF 12.7 billion due to the
reclassification of short-term bond payables.
• Finance lease liabilities increased by HUF 640 million to HUF 1.7 billion. A lease liability is
recognized by recording the 10-year lease on the head office. The opening balance includes
liabilities relating to the right of lease of the land belonging to the 13 wind turbines of the Bőny
wind farm, as well as the new liabilities arising from the renewal of the right of use of the land
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
belonging to the Zugló heat power plant, and liabilities relating to the rights of use of other
leased property and vehicles.
• Deferred tax liabilities increased by HUF 621 million. A tax liability is recorded due to the
development reserve generated in 2021.
• The HUF 0.9 billion decrease in other long-term liabilities is attributable to the revaluation of
interest rate swaps.
Short-term liabilities increased by 105% (HUF 8.8 billion), with the change stemming from:
• Short-term bond payables amounted to HUF 2.3 billion, including the interest and principal
payments due within a year, reclassified from long-term bond liabilities.
• As a result of the repayment of Investment and asset-financing loans prior to maturity, short-
term credit liabilities were reduced by HUF 0.5 billion.
• Advances received were used.
• The Group’s Trade payables, and accrued expenses and deferred income are in line with the
price hike in the global market, resulting in an increase of HUF 7 billion.
• Owing to a higher profit, Income tax liabilities rose by HUF 0.1 billion.
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
2 Annexes
2.1 The Company’s details
The Company’s name
ALTEO Energiaszolgáltató Nyilvánosan Működő
Részvénytársaság
The Company’s abbreviated name
The Company’s name in English
The Company’s abbreviated name
in English
ALTEO Nyrt.
ALTEO Energy Services Public Limited Company
ALTEO Plc.
The Company’s registered office
H-1033 Budapest, Kórház utca 6-12.
The Company’s telephone number
+36 1 236 8050
The Company’s central electronic
mailing address
info@alteo.hu
The Company’s web address:
www.alteo.hu
The Company’s place of
registration,
date of registration and
company registration number
Budapest
April 28, 2008
Cg.01-10-045985
The Company’s tax number:
14292615-2-41
The Company’s EU VAT number:
HU14292615
The Company’s statistical code:
14292615-7112-114-01.
Term of the Company’s operation
indefinite
The Company’s legal form
public limited company
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
Governing law
Hungarian
The Company’s share capital
HUF 242,328,425
Date of the effective Articles of
Association
November 9, 2021
The Company’s core activity
Engineering activities and related technical consultancy
Fiscal year
same as the calendar year
Place of publication of notices
The Company publishes its notices regarding regulated
information on its website www.investors.alteo.hu, on the
website of the BSE www.bet.hu and on the
www.kozzetetelek.mnb.hu website operated by the Central
Bank of Hungary; furthermore, if specifically required by the
applicable law, the notices of the Company are also published in
the Company Gazette.
ISIN code of the Shares
HU0000155726
Stock exchange listing
19,386,274 shares of the Company have been listed on the BSE
in the “Premium” category.
Other securities
Bonds
ALTEO 2022/I: zero coupon bonds issued by private placement,
with a maturity of 5 years, total face value: HUF 650,000,000,
issue value: 76.6963% of the face value; not listed. ISIN code:
HU0000357405. It was repaid on January 10, 2022 and
subsequently cancelled.
ALTEO 2022/II: zero coupon bonds issued by private placement,
with a maturity of 3 years, total face value: HUF 1,693,630,000,
issue value: 88.9158% of the face value; listed on the BSE. ISIN
code: HU0000359005
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
ALTEO NKP/2029: registered bonds with a fixed coupon rate,
issued by private placement, having a face value of HUF
50,000,000 and 10 years maturity, total face value: HUF
8,600,000,000, its average selling price at auction was
102.5382% of face value, average yield: 2.8546%, listed on the
BSE. ISIN code: HU0000359252
ALTEO NKP/2031: registered bonds with a fixed coupon rate,
issued by public offering, having a face value of HUF 50,000,000
and a maturity of 11 years, total face value: HUF 3,800,000,000,
its average selling price at auction was 102.9605% of the face
value, average yield: 2.1178%, listed on the BSE. ISIN code:
HU000036003
The Company’s Board of Directors
Attila László Chikán, Member of the Board of Directors entitled
to hold the title of CEO
Domonkos Kovács, Member of the Board of Directors, Deputy
CEO, M&A and Capital Markets
Gyula Zoltán Mező, Chairman of the Board of Directors
Zsolt Müllner, Member of the Board of Directors
Ferenc Karvalits, Member of the Board of Directors
The Company’s Supervisory Board
István Zsigmond Bakács, Chairman of the Supervisory Board
Dr István Borbíró, Member of the Supervisory Board
Péter Jancsó, Member of the Supervisory Board
Dr János Lukács, Member of the Supervisory Board
Attila Gyula Sütő, Member of the Supervisory Board
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
The Company’s Audit Committee
István Zsigmond Bakács, Chairman of the Audit Committee
Dr István Borbíró, Member of the Audit Committee
Dr János Lukács, Member of the Audit Committee
The Company’s Auditor
Currently, the auditor of the Company is BDO Magyarország
Könyvvizsgáló Korlátolt Felelősségű Társaság (registered office:
H-1103 Budapest, Kőér utca 2/A. C. ép., company registration
number: 01-09-867785, registration number with the Chamber
of Hungarian Auditors: 002387). The auditor personally
responsible for auditing the Company is Péter Krisztián Kékesi,
registration number: 007128. The mandate of the auditor is from
April 30, 2020 to the date of the adoption of the General
Meeting’s resolution approving the financial statements of the
fiscal year ending on December 31, 2022 but to May 31, 2023 the
latest.
Shareholder of the Company with
a share exceeding 5%
WALLIS ASSET MANAGEMENT Zrt.
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
2.2 Information on the ownership structure of the Company and voting rights
2.2.1 Composition of the issued capital, rights and obligations related to
the shares
The Company is a company established under Hungarian law (governing law).
The Company was founded on April 28, 2008 as a private limited company for an indefinite period of
time. The legal form was changed to public limited company as of September 6, 2010 and the Company
was listed on the Budapest Stock Exchange. The ordinary shares issued belong to the same series and
have the same rights. The rights related to the shares of the Company are set out in the Civil Code and
in the Company’s Articles of Association. The transferability of the shares is not restricted.
2.2.2 Limitation of voting rights related to the shares
Pursuant to Section 9.8 of the Articles of Association of the Company, a shareholder or holder of voting
rights (hereinafter, for the purposes of this section: “shareholder”) is required, when notifying a change
in their voting rights as defined in Article 61 of Act CXX of 2001 on the Capital Market (“Capital Market
Act”), to submit a written declaration to the Board of Directors concerning the composition of the
shareholder group and the nature of the relationship between the members of such shareholder group,
taking into account Section 61(5) and (9) of the Capital Market Act. Such notification obligation applies
to shareholders only if there has been a change in the shareholder group since the publication of the
previous notice. In the event of failure to provide notification or full notification regarding the
composition of the shareholder group as required in the previous sentence, or where the acquisition of
control is subject to a regulatory approval or acknowledgement, which the shareholder had failed to
obtain, or if there is reason to assume that the shareholder has deceived the Board of Directors
concerning the composition of the shareholder group, the voting right of the shareholder will be
suspended by the decision of the Board of Directors at any time even after its entry into the share
register, and may not be exercised until the above requirement has been fully satisfied. Furthermore, at
the request of the Board of Directors, shareholders are required to promptly make a statement
specifying who the ultimate beneficial owner with respect to the shares owned, or the beneficial owner
of the shareholder is. If the shareholder fails to act upon such request or if there is reason to assume
that the shareholder has deceived the Board of Directors, the voting right of the shareholder is
suspended and may not be exercised until the above requirements have been fully satisfied. For the
purposes of this section, “shareholder group” means, with respect to a particular shareholder, such
shareholder and the persons specified in Section 61(5) and (9) of the Capital Market Act, whose voting
rights related to their share must be regarded as the voting rights of the shareholder concerned. For the
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
purposes of this Section, “beneficial owner” means the person specified in Section 3(38) of Act LIII of
2017 on the Prevention and Combating of Money Laundering and Terrorist Financing.
Pursuant to Section 19(7) of the Act XVIII of 2005 on District Heating, Section 95(3) of the Act LXXXVI of
2007 on Electricity and Section 123(7) of the Act XL of 2008 on Natural Gas Supply, in the case of an
event relevant in terms of company law or acquisition specified in these laws, in the absence of the prior
decision on approval or the acknowledgement of the Hungarian Energy and Public Utility Regulatory
Authority (the specific form of consent is governed by the given law, depending on the event relevant
in terms of company law, the range of acquisition, and the nature of the license), the acquiring party
shall not exercise any right against the Company in respect of its interest therein, except for the right to
dividend, and shall not be entered in the share register.
2.2.3 Presentation of investors with a significant share
The majority shareholder of ALTEO is WALLIS ASSET MANAGEMENT Zártkörűen Működő
Részvénytársaság (registered office: H-1055 Budapest, Honvéd utca 20, company registration number:
01-10-046529). The ultimate parent company of the Group as at December 31, 2021 was WALLIS
PORTFOLIÓ Korlátolt Felelősségű Társaság (registered office: H-1055 Budapest, Honvéd utca 20,
company registration number: 01-09-925865). The shareholders of this entity are all private individuals.
Ownership structure of the parent company (ALTEO Nyrt.) based on the share register as at December
31, 2021.
The publicly issued shares of the Company are listed on the Budapest Stock Exchange; the closing
exchange rate of the shares on the last trading day of 2021 (on December 30) was HUF 2180, which is
134.4% higher than the same value in the last year (HUF 930). Annual turnover was HUF 3.930 billion,
133% higher than in 2020.
2.2.4 Powers of senior executives
The rules governing the appointment and removal of senior executives and the amendment of the
Articles of Association are laid down in the Articles of Association of the Company and the Civil Code.
The Articles of Association of the Company are available on the Company’s website and other display
points (www.investors.alteo.hu; www.bet.hu; www.kozzetetelek.hu).
2021 2020 2021 2020
Wallis Asset Management Zrt. and its subsidiaries 153 436 154 789 63,32% 63,88%
Members of the Board of Directors, the Supervisory Board
11 544 7 716 4,76% 3,18%
Own shares 94 9 357 0,04% 3,86%
ESOP 5 967 - 2,46% -
Free float 71 288 70 467 29,42% 29,08%
TOTAL 242 329 242 329 100,00% 100,00%
Face value (HUF thousand)
Ownership ratio (%)
Present shareholders of the Company based on the share
register on 12/31/2021
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
The Board of Directors is the managing organ of the Company and exercises its rights and duties as a
body. The members of the Board of Directors are elected by the General Meeting for a definite term of
up to five years. The members of the Supervisory Board and the Audit Committee are elected by the
General Meeting for a definite term of up to five years.
As a general rule, the amendment of the Articles of Association is within the competence of the General
Meeting; however, in the context of decisions made pursuant to Section 13.5 of the Articles of
Association, the Board of Directors has the powers to amend the Articles of Association in compliance
with the relevant rules of the Civil Code.
Without specific authorization from the General Meeting, the Board of Directors may not make any
decision on issuing shares.
In its Resolution No. 13/2019. (IV.26.) the General Meeting of the Company repealed its previous
Resolution No. 3/2015. (XI.10.) on authorization and authorized the Board of Directors to adopt a
decision on the increase of the share capital of the Company at its own discretion, with at least four
members of the Board of Directors voting in favor. Pursuant to such authorization, the Board of Directors
may increase the share capital of the Company by up to HUF 150,000,000, calculated at the face value
of the shares issued by the Company, in aggregate (authorized share capital) in the five-year period
starting on April 26, 2019. The authorization shall cover all cases and means of share capital increase set
out in the Civil Code, as well as the restriction or exclusion of exercising preferential rights regarding
subscription for and takeover of the shares, as well as the adopting of decisions relating to the share
capital increase otherwise delegated by the Civil Code and other legislation and by the Company’s
Articles of Association to the competence of the General Meeting, including any amendment of the
Articles of Association necessitated by the capital increase.
Acting within the competence of the General Meeting, the Board of Directors adopted Resolution No.
8/2021. (IV.19.) to provide the Board of Directors with an authorization for a period of 18 (eighteen)
months starting on April 19, 2021, to adopt resolutions on the acquisition by the Company of shares of
all types and classes and of any face value, issued by the Company, supported by at least three quarters
of the votes that can be cast by the members of the Board of Directors, and to enter into and perform
such transactions for and on behalf of the Company, or to engage a third party for the conclusion of such
transactions. The number of shares that can be acquired based on the authorization is equal to a number
of shares with a total face value of no more than twenty-five per cent of the share capital, and the total
face value of own shares owned by the Company may not exceed this rate at any time. The own shares
can be acquired for or without consideration, on the stock market and through public offering or – unless
the possibility is excluded by the law – in over-the-counter trading. In the event of acquiring own shares
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
for consideration, the lowest amount of the consideration payable for a share should be HUF 1 (one
Hungarian forint), and the highest amount should be HUF 2,500 (two thousand five hundred Hungarian
forint). The authorization hereof shall also cover share purchases by the Company’s subsidiaries in such
a way that the Company may authorize the management of any subsidiary of the Company by means of
resolutions of the members or shareholders (resolutions adopted by the members’ meeting or the
general meeting) to acquire the shares issued by the Company according to a resolution adopted by the
Board of Directors under the above authorization. The authorization of the General Meeting will expire
on October 19, 2022; the Board of Directors has initiated its extension by an additional eighteen months.
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
2.3 Presentation of consolidated entities according to the financial statements
Subsidiaries mean the following companies:
• Not identical to the main activity of the Companies, which can be found in the certificate of incorporation
2.4 Changes in the structure of the Group
Sale of business share
On March 3, 2021, ALTEO as seller and BorsodChem Zártkörűen Működő Részvénytársaság (registered
office: H-3700 Kazincbarcika, Bolyai tér 1.; company registration number: 05-10-000054; hereinafter:
“BorsodChem”) as buyer concluded a business share sale and purchase contract to transfer the
ownership of a business share representing the entire issued capital of BC-Therm Kft. fully owned by
ALTEO. With the fulfillment of the closing conditions stipulated in the sale and purchase contract, the
ownership of the business share in BC-Therm Kft. was transferred to BorsodChem on May 31, 2021. By
2
As of May 31, 2021 BC-Therm Kft. is no longer a part of the Group. See the details of the transaction in Section
2.4.
Name of Subsidiary,
12/31/2021
(for information on changes, see
footnote numbers)
Nature* of the revenue-generating
activity during the current period
Rate of influence
12/31/2021
06/30/2021
12/31/2020
ALTE-A Kft.
property management
100%
100%
100%
ALTEO Deutschland GmbH, being
wound up
no revenue earned
100%
100%
100%
ALTEO Energiakereskedő Zrt.
trade in natural gas and electricity
100%
100%
100%
ALTEO-Depónia Kft.
electricity production
100%
100%
100%
ALTE-GO Kft.
E-mobility service
100%
100%
100%
ALTEO-Therm Kft.
electricity production, heat energy production
100%
100%
100%
BC-Therm Kft.
2
steam supply, air conditioning, heat energy
production
production
n/a
n/a
100%
Domaszék 2MW Kft.
electricity production (solar power plant)
100%
100%
100%
ECO-FIRST Kft.
treatment and disposal of non-hazardous waste
66.67%
66.67%
66.67%
EURO GREEN ENERGY Kft.
electricity production (wind turbine)
100%
100%
100%
e-Wind Kft.
electricity production (wind turbine)
100%
100%
100%
HIDROGÁZ Kft.
no revenue earned
100%
100%
100%
Kazinc-BioEnergy Kft.
no revenue earned
100%
100%
100%
Monsolar Kft.
electricity production (solar power plant)
100%
100%
100%
Pannon Szélerőmű Kft.
electricity production (wind turbine)
100%
100%
100%
Sinergy Energiakereskedő Kft.
electricity trading
100%
100%
100%
Sinergy Kft.
electricity production (hydropower plant)
100%
100%
100%
SUNTEO Kft.
electricity production (solar power plant)
100%
100%
100%
Tisza BioTerm Kft.
no revenue earned
100%
100%
100%
Tisza-BioEnergy Kft.
no revenue earned
100%
100%
100%
Tisza-WTP Kft.
water collection, treatment and supply
100%
100%
100%
WINDEO Kft.
electricity production (wind turbine)
100%
100%
100%
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
executing the sale and purchase contract, the parties discharged their obligations arising from the long-
term heat supply and capacity utilization contract they had previously concluded, where BorsodChem
undertook to purchase the business share in BC-Therm Kft. by the date set out therein.
The sale and purchase contract is without prejudice to the operation and maintenance activities pursued
by the Company at BorsodChem’s site; ALTEO will continue to operate and maintain the boiler plant.
2.5 Presentation of significant results and events of the Company and the Subsidiaries between
January 1, 2021 and the date of disclosure of this Annual Report, as well as future prospects
With respect to the fiscal year 2021, it is worth highlighting the changes and events that occurred during
the period in relation to the following companies within the Group.
2.5.1 Events at the Company relevant in terms of company law
Due to the COVID pandemic, it was again the Company’s Board of Directors that adopted resolutions on
matters within the competence of the General Meeting throughout 2021, in accordance with the
provisions of Government Decree No. 502/2020. (XI. 16.) on the re-enactment of deviating provisions
for the operation of partnerships and corporations in a state of danger. These resolutions include the
following:
a) The Board of Directors approved the statement of financial position proposed for acceptance
by the Company’s auditor regarding the Company’s fiscal year ending on December 31, 2020,
along with the separate financial statement (comprehensive income: HUF 266,918 thousand,
total assets: HUF 27,632,775 thousand), the business (annual) report and the report of the Board
of Directors prepared in line with the provisions of the Accounting Act applicable to entities
preparing their annual report under the EU IFRS, as well as the relevant written reports of the
auditor, the Audit Committee and the Supervisory Board.
b) The Board of Directors approved the consolidated statement of financial position proposed for
acceptance by the Company’s auditor for the Company’s fiscal year ending on December 31,
2020, along with its consolidated financial statement (comprehensive income: HUF 2,704,833
thousand and total assets: HUF 44,884,360 thousand) and the business (annual) report prepared
in accordance with the IFRSs, the report of the Board of Directors, as well as the relevant written
reports of the auditor, the Audit Committee and the Supervisory Board.
c) The Board of Directors approved the corporate governance report relating to the Company’s
2020 operations with the proposed content.
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
d) The Board of Directors resolved to pay dividends from the free retained earnings supplemented
with the Company’s profit after taxation in the previous fiscal year, calculated according to
Section 39(3a) of Act C of 2000 on Accounting, and the subsidiary dividends established for 2020,
which corresponds to HUF 24 gross per share (excluding own shares owned by the Company).
Furthermore, the Board of Directors authorizes the Board of Directors to adopt the resolutions
specified in Article 18 of the Articles of Association, and any other decisions necessary in relation
to the payment of dividends with due regard to the laws in effect.
e) The Board of Directors has given the discharge to the members of the Board of Directors in
accordance with Section 3:117 (1) of Act V of 2013 on the Civil Code of Hungary, with the
conditions described therein.
f) The Board of Directors consented to the extension of the scope of the Remuneration Policy for
2020 of the ALTEO ESOP Organization to BoD Members Domonkos Kovács and Attila László
Chikán; furthermore, it adopted the amendment of the Remuneration Policy for the extension
thereof to the new Deputy CEOs as per the proposal.
g) The Board of Directors acknowledged and approved the information provided on own share
transactions in accordance with the proposals, as well as the additional information on the
transaction to be accounted for on April 13, 2021.
h) The Board of Directors decided to extend the authorization given to the Board of Directors
regarding own share transactions for another eighteen months from April 19, 2021 as per the
conditions set forth in the proposal.
i) The General Meeting adopted the Company’s Articles of Association in a consolidated structure
with the amendments.
Based on the resolution of the Board of Directors of the Company adopted within the competence of
the General Meeting concerning the payment of dividend, the Board of Directors of the Company
specified May 20, 2021 as the starting date of dividend payment, and published the conditions of
dividend payment through the Company’s official disclosure points on May 3, 2021.
Based on the decision of the Board of Directors, the Company moved its registered office to H-1033
Budapest, Kórház utca 6-12 on June 15, 2021, and also ceased its operations at H-1131 Budapest, Babér
utca 1-5 as of the same date.
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2.5.2 Events at the Company’s Subsidiaries relevant in terms of company
law
Considering the number of its subsidiaries and the company law events affecting them, in this chapter
the Company only addresses the major events of its subsidiaries relevant in terms of company law, thus
in particular it will not cover decisions regarding changes in personnel, establishments and branches.
The Company decided to move the registered office of the Subsidiaries listed in its notice published on
May 27, 2021 to H-1033 Budapest Kórház utca 6-12 on June 15, 2021, and the subsidiaries also ceased
their operations at H-1131 Budapest Babér utca 1-5 as of the same date.
On March 16, 2022, ALTEO approved the annual report of the Subsidiaries for 2021, has taken note of
the auditor’s report and, furthermore, in case of the following Subsidiaries, the Company decided to pay
dividends.
Name of subsidiary:
Amount of dividend:
Domaszék 2MW Kft.
HUF 30,000,000
EURO GREEN ENERGY Kft.
Monsolar Kft.
Pannon Szélerőmű Kft.
SUNTEO Kft.
HUF 1,300,000,000
HUF 32,000,000
HUF 1,100,000,000
HUF 40,000,000
2.5.3 Own securities issued by the Company
2.5.3.1 Annual review of the credit rating
Scope Ratings GmbH carried out the annual review of the credit rating of the Company’s bonds issued
as part of the Bond Funding for Growth Scheme, as a result of which last year's credit rating was
maintained, in other words bond rating was confirmed at BBB-. The credit rating agency also confirmed
both the BB+/Stable issuer credit rating of the Company and its S-3 short-term debt rating.
2.5.4 Publication of an Integrated Report
The Company published its Integrated Report for 2020 on May 6, 2021.
2.5.5 Personal changes in senior management
Anita Simon, former Head of the Waste Management Division, will continue as ALTEO’s Deputy CEO for
Sustainability and Circular Economy with effect from June 1, 2021, following her appointment by CEO
Attila László Chikán. As of that day, Anita Simon is also in charge of ALTEO’s newly established
Sustainability and Circular Economy area in addition to the Waste Management Division. Furthermore,
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also from June 1, 2021, Péter Luczay, who had held the position of Deputy CEO for Production and Risk
Management, will continue as Deputy CEO for Production Management and Business Development.
2.5.6 GINOP
Construction work for ALTEO’s research project “Integration of storage installation built using different
parameter battery cells into the electricity system” was completed in line with the original plans. The
Company has been awarded EU support in the form of a non-refundable grant amounting to
HUF 227.84 million and a refundable loan amounting to HUF 249.68 million for the implementation of
the project in the framework of the Economic Development and Innovation Operational Program
(GINOP). The 5MW/5MWh electricity storage facility implemented at the Kazincbarcika Heating Power
Plant was officially handed over on November 3, 2021, with the grant and subsidized loan related to the
project currently being drawn down.
2.5.7 Strategic cooperation
ALTEO and AutoWallis Nyrt. have concluded a strategic cooperation agreement to coordinate their e-
mobility-related services in the future. The agreement is based on the shared commitment of the two
companies to sustainable and transparent operation and to transition to green economy. The agreement
also covers the sales of innovative energy solutions related to the charging of electric vehicles.
2.5.8 New RDI project
ALTEO and the Alfréd Rényi Institute of Mathematics have submitted a grant application as a consortium
in response to tender notice code number 2020-1.1.2-PIACI KFI, titled “Support for Market-driven
Research/Development and Innovation Projects”, which was announced by the Hungarian National
Research, Development and Innovation Office. The Ministry of Innovation and Technology has found the
grant application titled “Development of a Real-time Autonomous Power Engineering Information and
Generation Management System”, ID 2020-1.1.2-PIACI-KFI-2021-00229, worthy of support. The amount
of non-reimbursable aid comes to HUF 401,021,730 out of the nearly HUF 1 billion total cost of the
project.
2.5.9 Own share transactions
Under the Company’s employee share award program, the Company distributed 3,837 ALTEO ordinary
shares in January 2021 (through a transfer dated January 29, 2021) to employees who were eligible
under the Company’s recognition plan.
As the founder of the ALTEO Employee Share Ownership Program Organization (hereinafter: “ALTEO
ESOP Organization”), ALTEO transferred 409,000 ALTEO ordinary shares to the ALTEO ESOP
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Organization in order to ensure that the objectives identified in the ALTEO ESOP Organization’s 2020
Remuneration Policy adopted on December 21, 2020 are achieved.
2.5.10 Exercise of option rights of the ALTEO ESOP Organization
On March 31, 2021, the ALTEO ESOP Organization exercised its option right in respect of 577,644 ALTEO
ordinary shares (ISIN: HU0000155726) at a price of HUF 475 per share. Thereafter, the ALTEO ESOP
Organization, making use of the repurchase offer of the Company published on March 29, 2021, sold,
on the same date, to the Company 249,422 shares at a price equal to 92% of the stock market closing
price of March 30, 2021, i.e., HUF 1,178 per share. The transactions were settled on April 13, 2021.
This repurchase transaction described above was designed, on the one hand, to facilitate the cashing in
on shares by the ALTEO ESOP Organization by creating increased demand and, on the other, to create
coverage for shares distributable under the 2020 Remuneration Policy by maintaining ALTEO’s portfolio
of own shares.
2.5.11 Long-term trade and business agreements
ALTEO-Therm Kft. with ALTEO being its sole member, Barcika Szolg Vagyonkezelő és Szolgáltató Korlátolt
Felelősségű Társaság and the Municipality of Kazincbarcika agreed with regard to the contract for district
heat production, investment and long-term heat supply concluded on September 11, 2001, in effect
until September 15, 2022, and other relevant contracts that, in order to continue their mutually
beneficial long-term cooperation, they would conclude another long-term contract for heat supply for a
term of 10 years following the expiry of their previous contract, and proceeded to sign this contract
today. Pursuant to the newly signed contract, in accordance with the terms and conditions therein,
ALTEO-Therm Kft. will supply Barcika Szolg Kft. with heat until September 30, 2032.
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Financing agreements
Members of the ALTEO Group did not conclude any new financing agreements with any Hungarian
financial institutions to finance their activities in 2021. The details of existing financing agreements and
financing agreements amended in 2021 due to specific circumstances (including, for example, budget
increase) are included in the Annual Report.
In the fall of 2021, the ALTEO Group repaid three of its project loans with the shortest remaining terms
until maturity, including the early repayment of bank loans taken out by ALTEO-Therm Kft., e-Wind Kft.
and Pannon Szélerőmű Kft., with the related bank collateral removed.
2.5.12 Use of non-audit services
In 2021, the ALTEO Group did not use any audit services provided by BDO Magyarország Könyvvizsgáló Kft.
2.5.13 Presentation of ongoing litigations
Sinergy Energiakereskedő Kft.
With regard to the letter of VPP Magyarország Zrt. (registered office: H-1113 Budapest, Bocskai út 134-
146. Company registration number 01-10-048666), sent to Sinergy Energiakereskedő Kft. in 2018 – the
content of which and the response to which by Sinergy Energiakereskedő Kft. are presented in detail in
an announcement published on February 14, 2018, at the official disclosure points of the Company – on
March 14, 2018, Sinergy Energiakereskedő Kft. requested the Hungarian Intellectual Property Office to
establish that the six control procedures it uses in total in the course of operating the virtual power
plantare not in violation of the patent “Decentralized energy production system, control tool and
procedure, controlling the energy production of the system” registered for VPP Magyarország Zrt. as
holder under number E031332.
Sinergy Energiakereskedő Kft. initiated the procedures for the so-called negative clearance with the goal
to clearly and definitively disprove the alleged infringement claimed by VPP Magyarország Zrt. and
presented in the announcement of the Company published on February 14, 2018. The proceedings are
still ongoing at the time of this document.
The Group has not identified any situation affecting its statement of financial position with respect to
this case.
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
2.6 The following significant events occurred between the reporting date and the publishing date
of the Annual Report:
2.6.1 Own share transactions
Under the Company’s employee share award program, the Company distributed 1,267 ALTEO
ordinary shares in February 2022 (through a transfer dated February 4, 2022) to employees who were
eligible under the Company’s recognition plan.
2.6.2 Long-term trade and business agreements
ALTEO and BC-ERŐMŰ Kft. (registered office: H-3700 Kazincbarcika, Bolyai tér 1.; company
registration number: Cg. 05-09-007481; tax number: 11795346-4-05) agreed with regard to the
operation and maintenance contract they concluded on September 29, 1999 and amended several
times that, in order to continue their mutually beneficial long-term cooperation, they would conclude
another long-term operation and maintenance contract for a term of 15 years following the expiry
of their previous contract, and proceeded to sign this contract on January 4, 2022. The new contract
secures energy supply for one of the major industrial companies in Hungary, BorsodChem Zártkörűen
Működő Részvénytársaság (registered office: H-3700 Kazincbarcika, Bolyai tér 1.; company
registration number: Cg.05-10-000054), reinforcing ALTEO’s leadership in the B2B energy service
sector. Pursuant to the newly signed contract, in accordance with the terms and conditions therein,
ALTEO will operate and maintain the power plant and steam boiler owned by BC-Erőmű Kft. until
December 31, 2036.
2.6.3 Company strategy
A new five-year strategy for 2022-2026 has been published by ALTEO for information purposes. The
fundamental goals and areas remain the same, but the Company has set itself much more ambitious
milestones than before. The company strategy is available at the following link:
https://www.bet.hu/newkibdata/128662993/ALTEO_PPT_VallalatiStrategia2022_2026_final.pdf
2.6.4 Bonds repaid
On January 10, 2017 the Company issued a zero coupon bond with a total face value of HUF 650,000,000
(ISIN identifier: HU0000357405, name: ALTEO 2022/I).
The Company’s ‘ALTEO 2022/I’ bonds were repaid at maturity and therefore ceased to exist on the
maturity date, i.e. on January 10, 2022, and the Company had no other obligations to the bondholders,
in view of the repayment.
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2.6.5 Share purchase by the ALTEO ESOP Organization
Based on its transactions announced on January 25, 2022, the ALTEO ESOP Organization has purchased
135,700 ALTEO ordinary shares from DAYTON-Invest Kft. (registered office: H-1055 Budapest, Honvéd
utca 20; company registration number: 01-09-927201) and WALLIS ASSET MANAGEMENT Zrt.
(registered office: H-1055 Budapest, Honvéd utca 20; company registration number: 01-10-046529) and,
so now it is in possession of all the required shares, which can be distributed to eligible shareholders
upon fulfillment of the criteria set out in the ALTEO ESOP Organization’s Remuneration Policy for 2020.
2.6.6 ESG certification
In February 2022, ALTEO became the first company in the Hungarian electricity sector to obtain an
independent, international ESG certificate. More information on ESG certification is available at the
following link:
https://www.bet.hu/site/newkib/hu/2022.02./ALTEO_megszerezte_elso_ESG_minositeset_2022.02.0
2_128668992
2.6.7 Best of BSE
ALTEO was successful in three categories based on its 2021 performance at the Best of BSE Awards, one
of the most prestigious events of the Budapest Stock Exchange. ALTEO shared the title of Issuer of the
Year with the highest share price increase in the premium category, and also won the Responsibility,
Sustainability, Corporate Governance Award and the Issuer Transparency Midcap Award.
2.6.8 Merger of subsidiaries
As the next step in the process to streamline the corporate structure of the ALTEO Group as
announced at the extraordinary General Meeting of November 8, 2017, the Company decided on the
merger by absorption of its subsidiaries listed below. The merger involves the absorption of the
following companies also under the Company’s direct and exclusive control into EURO GREEN ENERGY
Kft., operating with the Company as its only member:
• WINDEO Kft.;
• e-Wind Kft.;
• HIDROGÁZ Kft.;
• Kazinc-BioEnergy Kft.;
• Tisza-BioEnergy Kft.;
• Tisza BioTerm Kft.
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Annual Report of ALTEO Nyrt. and its subsidiaries for 2021
The Company schedules the mergers by absorption for June 30, 2022, and therefore the legal effects
associated with the mergers will apply as of July 1, 2022.
2.7 The business environment of ALTEO, classification of risks according to their characteristics
The description and assessment of risks are included in Section III.2 Risks of the Financial Statements.
Changes in risks are presented in the financial statements.
2.8 Description of the policies applied in the ALTEO Group, detailing the results by policy
2.8.1 Environmental guidelines
The ALTEO Group prepared its Sustainability Report for the first time for its fiscal year 2016, detailing
our non-financial, social and environmental policies and our annual performance. We ensure the
relevance and transparency of our sustainability data by applying the GRI (Global Reporting Initiative)
Standards methodology, the most recognized international standard, in preparing our non-financial
reports, and by having these certified by a third party annually. We prepare a report on our
sustainability efforts every year and, since 2019, we have published it in the form of an Integrated
Report. Our Sustainability Reports published so far are available to all interested parties on this website:
https://alteo.hu/fenntarthatosag/fenntarthatosagi-jelentesek/. As our Integrated Report contains the
details of the Company's data, policies, objectives in connection with environmental protection and
sustainable business operations, this business report, based on the contents of the Integrated Report,
provides only a summary of environmental policies and results.
Our Integrated Management System, which includes the standards ISO 9001:2015 Quality Management
Systems, ISO 14001:2015 Environmental Management Systems, ISO 45001:2018 Health & Safety
Management System and ISO 50001:2018 Energy Management Systems, has been extended to apply to
the entire ALTEO Group. The Integrated Management Policy (publicly available at
https://alteo.hu/wp-content/uploads/2020/11/alteo_integralt_politika.pdf)
is the fundamental document for this system, in which the company’s management commits itself to
providing quality services, safe work environment, energy efficiency, environmental protection and
sustainability.
In 2021, we ensured our compliance with the standards by conducting 44 internal audits covering the
operation of the Integrated Management System in compliance with all four standards at all of our sites
and organizational units.
In 2021, 10 HSE-type inspections were carried out by various authorities, which resulted in 4 logged
inspections. The inspections did not result in any compulsory orders or fines being imposed by the
authorities.
Since the residual fuel stock stored at the Győr Power Plant can no longer be used in power plant
technology and thus poses a significant environmental threat and fire hazard, the entire stock thereof
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was removed from the site in 2021. The removal of the residual fuel oil stock involved the sale of nearly
137 tons of fuel oil and the disposal of 90 tons of hazardous waste.
A separate document, the Integrated Report 2021, will describe our environmental policies and the
associated results in detail.
2.8.2 Respect for human rights, ethics
The purpose of this section is to describe the significant risks to human rights compliance that may result
in adverse effects in the context of the Company's activities and how it manages those risks.
The ALTEO Group has established a Compliance Management System (hereinafter: “CMS”). The CMS is
designed to ensure compliance with laws, internal rules and the Group’s Code of Ethics in respect of the
entire Group.
The standards established in ALTEO Group’s Code of Ethics impose higher requirements on Group
employees compared to existing laws.
It is a useful guide which offers help and protection to our employees and provides information to our
partners about the standards of behavior endorsed and expected by our Group.
The standards established in ALTEO Group’s Code of Ethics impose higher requirements on Group
employees compared to existing laws.
In 2021, in line with ESG considerations and due to the two-year review, we amended the Code of Ethics,
with an increased focus on our commitment to basic human rights, meeting our sustainability objectives
and action against corruption and fraud. We have added to our core values: respect for human rights,
transparency, fair market practices, respect for others and integrity.
The Company is committed to respecting human rights. Respect for human rights includes, among
others: non-discrimination, freedom of thought, conscience and religion, freedom of expression, respect
for private and family life.
2.8.3 Fundamental rights in practice
The CMS fundamentally provides a supportive, preventive and control function to prevent damage and
abuse and minimize risk across the entire operation of the Company.
2.8.4 Policies applied in connection with the fight against corruption
The CMS fundamentally provides a supportive, preventive and control function to prevent damage and
abuse and minimize risk across the entire operation of the Company.
We firmly reject all forms of corruption and bribery, which are regarded as particularly serious ethical
violations in the context of government officials, suppliers and business partners. We apply zero
tolerance to all cases involving bribery or corruption.
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We conduct our procurement procedures transparently and in accordance with our internal rules.
We assess potential suppliers on the basis of a pre-qualification process (also taking financial and legal
aspects into consideration). We do not enter into a business relationship with any supplier that does not
meet the Company’s requirements. We expect our business partners to know, accept and comply with
our Code of Ethics.
We operate a whistleblowing hotline for reporting corruption and fraud, but reports can also be made
via email or over the phone. We also provide whistleblowers with the possibility of anonymity.
In all cases of suspected corruption or fraud, we conduct an investigation in accordance with our internal
rules of procedures. The ALTEO Group firmly stands up for the principle that all forms of retaliation or
discrimination are unacceptable against whistleblowers who report suspected corruption or fraud, even
if a bona fide report does not result in the identification of any illegal or inappropriate acts.
In 2021, no cases of suspected corruption came to the Company’s knowledge.
Conflict of interest
The ALTEO Group is particularly dedicated to the detection and prevention of economic conflicts of
interest, therefore all new entrants must make a conflict-of-interest statement. In 2021, we reviewed
the employee conflict-of-interest statements of the entire Group. According to the review, there were
no employees who did not report their relationship with companies, other employment, etc.
RISK MAP – Corruption index
In 2021, now for the seventh consecutive year, the ALTEO Group has prepared a compliance risk map
using a questionnaire to measure the Group-level risk index in finances, accounting, human resources,
corporate management and publicity in order to eliminate the potential for corruption, fraud and abuse.
An extended group of managers (28) completed the questionnaire this year. In order to fill the gaps
identified by the questionnaire, the Ethics, Compliance and Control entity organizes regular meetings
and provides ongoing support to the business areas on all compliance issues.
2.8.5 Employment policy
The employment policy of the ALTEO Group continues to focus on the retention, motivation and
development of existing employees and, at the same time, on the selection and integration of new ones.
We create an effective teamwork culture: we consider developing an innovative corporate culture and
establishing standards of behavior key strategic objectives. The Group believes that the loyalty and
motivation of their employees are founded on the stable workplace, good working conditions, complex
tasks and competitive wages provided by the Group. The physical safety of our employees always comes
first; we focus on their long-term commitment, assess their wellbeing through different measurements
and forums, and make efforts to maintain a partner like relationship with the Works Council. Every year,
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we provide our employees with a cafeteria allowance, and we offer a wide variety of benefits within the
framework thereof, in accordance with the relevant laws.
At the end of 2021, the closing workforce headcount was 286, which is 8 more than in 2020; there were
7 part-time and 279 full-time employees. The number of employees with indefinite term contracts was
286. In 2020, 77% of the staff members were men and 23% were women. This gender ratio is basically
defined by the nature of the energy sector, as most of the staff deal with the operation of power plants.
At the same time, the Company aims to increase the proportion of women, which shows an improving
trend year after year.
ALTEO Nyrt. is considered an attractive workplace, as evidenced not only by the number of new entrants,
but also by the rate of staff turnover at 11%.
The Group consciously seeks to increase the proportion of the young generation within the organization,
since the management of the Company believes that ALTEO Group can provide professional
development and great opportunities to them. This is a fundamental criterion of maintaining ALTEO
Group’s quality services and reliable work performance, as the age pyramid of colleagues with great
expertise and work experience - who in many cases have been working in the energy sector for 30 years
- is very constrictive, with many set to retire in the coming years, and the Company strives to recruit
highly-trained and committed young colleagues to the positions that will be opening up down the line.
The expertise and experience obtained in various fields of the energy industry are the core values of
ALTEO Group. To ensure that ALTEO Group can provide high-quality services to its partners, it enables
its employees to deepen their knowledge via regular training courses. The objectives of the courses are
to enable our employees to improve their efficiency, to acquire critical qualifications for their work, and
to update and complement their existing knowledge base. The training offerings also include compulsory
courses prescribed by law or by internal regulations, as well as internal knowledge sharing.
3 Statements of the issuer
3.1 Corporate governance statement
The Group’s parent company, ALTEO, prepares its corporate governance statement in accordance with
the Responsible Corporate Governance Recommendations of Budapest Stock Exchange Ltd. and
publishes it in a separate document upon approval by the Company’s General Meeting. The Company
only provides a summary in this business report.
The Board of Directors is the main decision-making body of the Group’s parent company that governs
the Group and monitors its day-to-day operation on the basis of existing legislation, the Articles of
Association and the resolutions passed by the General Meeting, as well as the Supervisory Board and
the Audit Committee.
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The members of the Board of Directors are elected by the General Meeting for a term of up to five years.
Members of the Board of Directors elect the Chair and the member entitled to hold the title of CEO
(“CEO”) from among themselves. The Group has no nomination committee or remuneration committee;
the remuneration of members of the Board of Directors is determined by the General Meeting. The
Board of Directors consists of five members.
The Board of Directors is entitled and required to decide on all issues that, by virtue of the provisions of
legislation or the effective Articles of Association, do not fall within the competence of the General
Meeting, the Supervisory Board or the Audit Committee.
The member of the Board of Directors entitled to hold the title of CEO is at the head of the Group’s work
organization and is responsible for managing and monitoring the Company’s operations in accordance
with the resolutions of the General Meeting and the Board of Directors. The CEO acts on and is entitled
to decide all issues concerning the Group’s operational management that do not fall within the exclusive
competence of the Board of Directors as a body or the General Meeting according to the Articles of
Association and the rules of procedure of Board of Directors. During the day-to-day operations of the
Group, the CEO works with members of the management responsible for each function to make
decisions.
The CEO is assisted in the day-to-day operational management of the Group by management, the
members of which are responsible for functions within their scope of responsibility.
The Supervisory Board of the Group’s parent company acts as a body under mandate from the General
Meeting. Members of the Supervisory Board are required to act in person; agency is not allowed in the
activities of this body. Members of the Supervisory Board may not be instructed in that capacity by their
employer or shareholders of the Company. Members of the Supervisory Board are elected by the
General Meeting for a definite term of up to five years. Members of the Supervisory Board can be
removed at any time and may be reelected upon the expiry of their mandates. The General Meeting
decides on the remuneration of members of the Supervisory Board. The Chair of the Supervisory Board
is elected by the Supervisory Board from among its members. The Supervisory Board sets out its own
rules of procedure, which are then approved by the General Meeting. The Supervisory Board currently
consists of five members, three of whom are independent individuals.
The Audit Committee verifies the Group’s accounting regime, comments on its annual report prepared
pursuant to the Accounting Act, monitors compliance with professional requirements and conflict of
interest rules applicable to auditors and performs the tasks specified in its rules of procedure.
Within the scope of the Group’s risk assessment activities, business, financial, technical, commercial,
legal and compliance functions supervised by members of management work together and assess types
of risk based on written reports prepared by each function and presented to the entire management on
a weekly basis and identify the steps needed to manage risks. These organizational units report to the
CEO and the Deputy CEOs.
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The assessment of financial risks is a part of every planning and forecasting process as well as preparing
new investment decisions. Decisions regarding risks identified during planning and forecasting and how
they should be managed are made. For new investments, the management of expected risks is already
covered by the proposal.
The ALTEO Group launched its compliance program in 2015.
3.2 The issuer's statement pursuant to Section 3.4.1 of the Decree No. 24/2008 (VIII.15.) of the
Minister of Finance
The Company declares that its consolidated Financial Statements and Business Report for the year 2021
were prepared in accordance with the International Financial Reporting Standards as adopted by the
EU, based on the Company’s best knowledge, providing a true and fair view of the assets, liabilities,
financial situation, profit and loss of the Company as an issuer and the companies involved in the
consolidation.
The Company also declares that its consolidated Annual Report for the year 2021 provides a true and
fair view of the situation, development and performance of the issuer and the companies involved in
the consolidation, outlining the risks and uncertainties likely to arise in the remainder of the fiscal year.
3.3 Statement of the issuer on the independent audit of the report
The Company declares that the data of this Annual Report were audited by an independent auditor.
The independent auditor's report was published as part of the Consolidated Financial Statements.
Budapest, March 25, 2022
On behalf of ALTEO Nyrt.:
Attila László Chikán
Member of the Board of Directors, CEO
Zoltán Bodnár
CFO
Separate Financial Statements
ALTEO Energiaszolgáltató
Nyilvánosan Működő Részvénytársaság
for the business year ended on December 31, 2021
in accordance with the International Financial Reporting
Standards
as adopted by the EU
Independent Auditor’s Report
ALTEO Consolidated Financial Statements
Management Report and Analysis
Issue date of Independent Auditor’s Report:
25
th
March, 2022
Approval date of the General Meeting:
19
th
April, 2022
Disclaimer: All information contained within this article is for information purposes only, and shall not
be considered an official translation of the official communication referred to herein. This document does
not include the integral wording of the official communication referred to herein, the original Hungarian
language version of it remains to be the solely legally binding material in the subject matter. For further
information, please do not hesitate to contact us.
Separate Financial Statements
of ALTEO Energiaszolgáltató
Nyilvánosan Működő Részvénytársaság
for the fiscal year ended on December 31, 2021
in accordance with the
International Financial Reporting Standards as adopted by the EU
1 / 104
Explanation of the abbreviations used in the financial statements:
Abbreviation
Explanation
ARO
Asset Retirement Obligation
BGS
Bond Funding for Growth Scheme
–
the bond program of
the Central Bank of Hungary;
BoD
Board of Directors
BSE
Budapest Stock Exchange
BUBOR
Budapest Interbank Offered Rate
-
BUBOR;
Capital
Market Act
Act CXX of 2001 on the Capital Market
CDO
Chief Decision Officer
CGU
Cash
-
generating Unit
Company
ALTEO Energiaszolgáltató Nyilvánosan Működő Részvénytársaság
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization (typically: impairment)
Electricity
Act
Act LXXXVI of 2007
–
on Electricity
EPS
Earnings per Share
EUA
European Emission Allowances
FVTPL
Fair Value through Profit or Loss
Gas Supply
Act
Act XL of 2008 on Natural Gas Supply
HEPURA
The Hungarian Energy and Public Utility Regulatory Authority (formerly known as:
Hungarian Energy Office);
HTM
Financial instruments held to maturity
HUDEX
Hungarian Derivative Energy Exchange. HUDEX was founded by HUPX Zrt. in order to
comply with the new legal provision that the derivatives of gas and electricity traded on
the HUPX and CEEGEX futures platforms are to be considered as financial assets
HUPX
Electricity market organized by the power exchange
-
a trading system facilitating
regional electricity trade operated by the organized electric power licensee (HUPX Zrt)
IFRIC/SIC
Interpretations of the International Financial Reporting Standards
IFRS
International Financial Reporting Standards
KÁT
Electric power offtake system based on the provisions of the Electricity Act, the
Government Decree implementing the Electricity Act and Government Decree no.
389/2007 (XII.23.) on the mandatory offtake and feed-in tariff of electricity produced
from renewable energy sources or waste and cogenerated electricity
KELER
Központi Értéktár Zártkörűen Működő Részvénytársaság
(Central Treasury Private
Limited Company)
MAVIR
Magyar Villamosenergia
-
ipari Átviteli Rendszerirányító Zártkörűen Működő
Részvénytársaság
METÁR
obligatory system of taking over heat energy and electricity generated out of renewable
and alternative sources;
O&M
Operation and Maintenance contract
PM
Ministry of Finances
R&D
Research and development
–
Innovation
SB
Supervisory Board
2 / 104
Table of Contents
Separate Financial Statements 0
I.
Numeric reports of the financial statements 11
II.
General information, significant accounting policies and the basis for the preparation of the
financial statements 16
1.
Statement of IFRS compliance 16
2.
Statement of compliance with decrees of the Ministry of Finance 16
3.
Statement of compliance with Act CXX of 2001 on the Capital Market
16
4.
Introduction to ALTEO Nyrt. 16
5.
Basic information of ALTEO Nyrt. 17
6.
The basis for preparation of the financial statements 19
7.
Key elements of the accounting policy 21
8.
Description of risks 40
1.
Risks stemming from the legal system 42
2.
Macroeconomic factors 42
3.
Taxation 42
4.
Risks related to the United Kingdom leaving the European Union (Brexit) 42
5.
Energy market regulation 42
6.
Regulated prices 43
7.
Electricity balancing reserve capacity system risks 43
8.
Government grants 43
9.
CO
2
emission market, CO
2
quota allocation system and CO
2
quota prices 44
10.
Changes in technology 44
11.
Competitive situation 44
12.
Funding risk 45
13.
Foreign exchange rate changes 45
14.
Impact of international market developments on domestic trade 45
15.
Risk of changing natural gas, electricity and heat energy price margins 45
16.
Environmental legislation 45
17.
Risks related to the spread of COVID-19 46
18.
Risks arising from operating the Virtual Power Plant 46
19.
Political risks 46
20.
Dependence on weather 47
21.
Risks of growth 47
22.
Risks stemming from acquisitions, buying out projects and companies 48
23.
Risks related to power plant project development and green-field investment 48
24.
Large-scale, customized projects 48
25.
Energy trade risks 48
26.
Operating risks 49
27.
Fuel risk 49
28.
Renewing and/or refinancing outstanding debts 50
29.
Information technology systems 50
30.
Wholesale partner risks 50
31.
Dependence on third-party suppliers 50
3 / 104
32.
Buyer risk 51
33.
The risk of key managers and/or employees leaving the Company 51
34.
The risk of introducing and using new power plant technologies 51
35.
Risks arising from authorities' opinions and findings 51
36.
Key licenses and qualifications 52
37.
The risk of not fulfilling the obligations associated with operating its own balancing group 52
38.
Options to purchase certain means of production 52
39.
Business relationships associated with the Owners’ Group 53
40.
The risk of being categorized as a de facto group of companies 53
41.
Taxation 53
42.
Environmental risks 54
43.
Risk of bankruptcy and liquidation proceedings 54
44.
Any discrepancies between the data in the consolidated and IFRS reports and the data in the
reports prepared in line with the Hungarian Accounting Standards (HAS) 55
45.
The risk of entering new geographical markets 55
III.
Changes in accounting policies, potential impact of IFRSs and IFRICs not yet effective as at the
reporting date of the financial statements and earlier application 55
IV.
Critical estimates used in preparing the financial statements and other sources of uncertainty
56
V.
Statements of profit or loss and of financial position 59
1.
Revenue 59
2.
Material expenses 60
3.
Personnel expenses 61
4.
Depreciation and amortization 61
5.
Capitalized own production 61
6.
Other revenues, expenses, net 62
7.
Financial income, expenses, net 62
8.
Income tax expenses 63
9.
Fixed assets and intangible assets 67
10.
Long-term loans given 69
11.
Shares in subsidiaries and associates 70
12.
Deferred tax assets and liabilities 71
13.
Lease receivables 72
14.
Inventories 72
15.
Trade receivables 73
16.
Other receivables and income tax receivables 74
17.
Application of the expected loss model to financial assets 74
18.
Cash and cash equivalents 75
19.
Elements of equity 75
19.1.
Shares traded: 76
19.2.
Reserves 78
19.3.
Retained earnings 78
19.4.
Share-based payments reserve 79
20.
Cash flow hedge reserve 84
21.
Equity correlation table required as part of Section 114/B of the
Accounting Act 84
22.
Provisions 84
4 / 104
23.
Debts on the issue of bonds 85
24.
Long-term loans and borrowings and other long-term liabilities 87
25.
Lease liabilities 87
26.
Deferred income 88
27.
Financial liabilities – conditions 89
28.
Trade payables 90
29.
Other short-term liabilities and accruals 90
30.
Advances received 91
31.
Income tax liabilities 91
32.
Operating segments 92
33.
Related party disclosures 92
34.
Financial risks, their management and the sensitivity analysis 94
35.
Contingent liabilities 96
36.
Significant events after the reporting date 96
37.
Litigation and claims 97
38.
Economic relations subject to legal proceedings 98
39.
Fair value measurement disclosures 98
40.
Contractual assets and liabilities 98
41.
Disclosure of interests in other entities 99
42.
The auditor, the audit fee and non-audit services 99
43.
Approval of the disclosure of the financial statements 100
I.1.2
Acquisitions and divestments 103
I.1.3
Transformations 104
The financial statements consist of 104 pages.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú
korlátolt felelősségű társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 177807-5-44
Group VAT Nr.: HU1778011
1
Independent Auditor's Report
to the Shareholders of ALTEO Nyrt.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of ALTEO Nyrt. (the „Company”) in the
ALTEO_egyedi_2021_EN
1
digital file for the year 2021 which comprise the statement of financial position
as at December 31, 2021 – which shows an equal amount of total assets and total liabilities of
HUF 34 833 009 thousands –, and the related statement of recognized income, statement of other
comprehensive income (which shows a net profit for the year of HUF 6 262 118 thousands), statement
of changes in equity and statement of cash flows for the year then ended and notes to the financial
statements including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial
position of ALTEO Nyrt. as at December 31, 2021 and of its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards as adopted
by the European Union (the „EU IFRS”), and the financial statements were prepared in all material
respects in accordance with the provisions of the effective Hungarian Act C of 2000 on Accounting
(hereinafter: "the Accounting Act") relevant to the entities preparing financial statements in
accordance with EU IFRS.
Basis for the opinion
We conducted our audit in accordance with Hungarian National Standards on Auditing (“HNSA”) and with
applicable laws and regulations in Hungary. Our responsibilities under those standards 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 applicable laws of Hungary, with the
Hungarian Chamber of Auditors’ Rules on ethics and professional conduct of auditors and on disciplinary
process and, as well as with respect to issues not covered by these Rules, with the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (the IESBA Code) and we also comply with further
ethical requirements set out in these.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
1
the digital identification of above filename.xhtml financial statements with SHA 256 HASH algorithm:
9b798bbabe4542b81fdf1639344ee757dc447a839587d9967ad4d844c15a1c97
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú
korlátolt felelősségű társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 177807-5-44
Group VAT Nr.: HU1778011
2
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.
Key Audit Matter
How our audit addressed the Key Audit
Matter
Valuation of long-term investments in
subsidiaries
Refer to Notes V.11. in the financial statements
The Company owns several subsidiaries and
presents investments in a value of Thousand HUF
10,512,859 in the balance sheet under the
category of Long-term investments in
subsidiaries.
As required by the applicable accounting
standards, the management prepares regularly
(at least annually) impairment tests to assess
whether there is need for recording impairment
on investments. The Company has valued its
investments based on the future expected cash
flows and the shareholders‘ equity values of the
subsidiaries.
The impairment test is dependent on certain
assumptions, which bear uncertainty, thus the
value of investments may change in parallel with
the change of influencing factors.
Our audit procedures regarding the valuation of
long-term investments were as follows.
We have checked current year’s additions and
disposals of long-term investments by
reconciling them to the relating supporting
documents.
In course of our audit procedures relating to the
valuation of investments we have assessed the
management’s valuation and compared the data
and methodology used to the audited financial
data of the subsidiaries as well as to available
relevant external information.
We have checked the appropriateness of the
value of subsidiaries estimated by the
management by critically challenging the
reasonableness and validity of the calculation
method and the key assumptions used.
In course of our audit we have analysed the
future projected cash flows used in the model to
determine whether they are reasonable and
supportable for estimating expected future
performance of the investment.
We have checked the appropriate compliance
with relevant financial reporting standards,
accounting records and disclosures.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú
korlátolt felelősségű társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 177807-5-44
Group VAT Nr.: HU1778011
3
Key Audit Matter
How our audit addressed the Key Audit
Matter
Revenue recognition
Refer to Notes V.1. in the financial statements
Revenue is an important measure used to
evaluate the performance of the Company. As a
consequence, it needs to be ensured that the
revenue in the financial statements is real,
accurate and refers to the current year.
Revenue from sales transactions is recognized as
of the performance date based on the terms of
the delivery contracts.
Our audit work supporting the revenue
recognition included the following substantive
audit procedures.
Existence and accuracy of sales revenue have
been tested on a sample basis and the items
selected have been reconciled to turnover
confirmation letters as well as source
documents (invoice, contract, certificate of
performance).
We have tested on a sample basis the accuracy
of prepaid or deferred income.
Also, we have tested the credit notes issued
after the above balance sheet date in order to
ensure that they did not refer to sales revenue
recognized in the financial year of 2021.
We have applied analytical review procedures as
well for analysing sales turnover.
We have checked the appropriate compliance
with relevant financial reporting standards,
accounting records and disclosures.
Other issues
Management is responsible for the presentation of the financial statements in a form complying with the
requirements prescribed in the Article 3 of the Commission Delegated Regulation (EU) 2019/815 (17
December 2018) (“ESEF Regulation”). Our audit has referred to the human-readable layer of the digital
file, identified electronically in our report, containing the financial statements. The scope of our audit
has not referred to the audit of, and thus we do not express an opinion on whether the digitalized
information has been prepared, in all material respects, in accordance with the requirements of the ESEF
Regulation.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú
korlátolt felelősségű társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 177807-5-44
Group VAT Nr.: HU1778011
4
Other information
Other information comprises the information included in the business report of ALTEO Nyrt. for 2021.
Management is responsible for the other information and for the preparation of the business report in
accordance with the provisions of the Accounting Act and other relevant regulations. Our opinion on the
financial statements expressed in the “Opinion” section of our independent auditor’s report 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. If based on our work performed we conclude that the other information is materially misstated
we are required to report this fact and the nature of the misstatement.
Furthermore, in accordance with the Accounting Act, our responsibilities regarding the business report
also include reviewing the business report to assess whether the business report was prepared in
accordance with the relevant provisions of the Accounting Act and other regulations, if any, including
the assessment whether the business report complies with the requirements of Section 95/B. (2) e) and
f) of the Accounting Act. Furthermore, in accordance with the Accounting Act we shall make a statement
whether the information referred to in Section 95/B. (2) a)-d), g) and h) has been provided in the
business report.
In our opinion, the business report of ALTEO Nyrt. for 2021 corresponds to the financial statements of
ALTEO Nyrt. for 2021 and the relevant provisions of the Accounting Act in all material respects. The
information referred to in Section 95/B. (2) a)-d), g) and h) of the Accounting Act has been provided. As
there is no other regulation prescribing further content requirements for the Company’s business report,
we do not express an opinion in this respect.
We are not aware of any other material inconsistency or material misstatement in the business report
therefore we have nothing to report in this respect.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards as adopted by the European Union, and for
such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú
korlátolt felelősségű társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 177807-5-44
Group VAT Nr.: HU1778011
5
The 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 HNSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with HNSAs, we exercise professional judgment and maintain
professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis in the
preparation of the financial statements 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 gives a true and fair view.
• We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
BDO Magyarország
Könyvvizsgáló Kft.
1103 Budapest
Kőér utca 2/A. C. épület
1476 Budapest, Pf.138.
BDO Magyarország Könyvvizsgáló Kft. egy magyar korlátolt felelősségű társaság, az egyesült királyságbeli BDO International Limited garancia alapú
korlátolt felelősségű társaság tagja és a független cégekből álló nemzetközi BDO hálózat része.
BDO Hungary Audit Ltd., a Hungarian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and
forms part of the international BDO network of independent firms.
Fővárosi Bíróság Cégbírósága, Cégjegyzékszám: Cg. 01-09-867785
Csoportazonosító (Group-ID-Nr): 177807-5-44
Group VAT Nr.: HU1778011
6
We also provide those charged with governance 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 those charged with governance, 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.
Report on Other Legal and Regulatory Requirements
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 ALTEO Nyrt. by the General Meeting of Shareholders on 30 April
2020 and our engagement has been lasting for two years without interruption.
Consistence with the Additional Report to the Audit Committee
We confirm that our audit opinion on the financial statements expressed herein is consistent with the
additional report to the Audit Committee of ALTEO Nyrt., which we issued on 25 March 2022 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 (1) of Regulation (EU) No.
537/2014 of the European Parliament and the Council were provided by us to the Company. In addition,
there are no other non-audit services which were provided by us to the ALTEO Nyrt. and its controlled
undertakings and which have not been disclosed in the financial statements or in the business report.
The engagement partners on the audit resulting in this independent auditor’s report are the signatories
of the report.
Budapest, 25 March 2022
BDO Hungary Audit Ltd.
1103 Budapest, Kőér utca 2/A
Registration number: 002387
András Schillinger
Péter Kékesi
Director
Certified Auditor
Chamber registration No.:
007128
This is the translation of the original Hungarian statutory report. In case of any discrepancies, the original
Hungarian version prevails.
11 / 104
I.
Numeric reports of the financial statements
ALTEO Nyrt.
Statement of income
and statement of other comprehensive income
Period: 1/1/2021-12/31/2021
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapter VI of the financial statements
Continued overleaf
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Revenues 1. 13 762 321 13 725 724
Material expenses 2.
(4 053 835) (8 912 854)
Personnel expenses 3.
(4 189 712) (3 767 469)
Depreciation and amortization 4.
(460 830) (352 643)
Capitalized own production 5.
207 697 96 033
Other revenues, expenses, net 6. (85 569) (74 689)
Operating profit or loss 5 180 072 714 102
Income from financial transactions 7.
2 258 848 437 920
Expenses from financial transactions 7.
(571 571) (701 877)
Profit or loss on financial transactions (-) 7. 1 687 277 (263 957)
Profit or loss before taxes 6 867 349 450 145
Income taxes 8. (605 231) (183 227)
Net profit or loss 6 262 118 266 918
2021 2020
12 months 12 months
Other comprehensive income (after income tax) 20. - -
Reserves relating to derivative transactions 20.
- -
Reclassification of other comprehensive income
- -
from cash flow hedges into profit/loss
Comprehensive income
6 262 118 266 918
(Negative values are denoted by parentheses.) Note
20.
Data in HUF thousand
(Negative values are denoted by parentheses.)
Note
12 / 104
ALTEO Nyrt.
Statement of financial position
for December 31, 2021
Assets
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapter VI of the financial statements
Continued overleaf
(Negative values are denoted by parentheses.) Note
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Non-current assets 21 392 355 18 868 492
Property, plant and equipment
9.
2 191 124
983 405
Other intangible assets
9.
304 405
176 524
R&D
9.
354 426
332 880
Rights of use
9.
1 006 221
228 884
Long-term loans given
10.
7 023 220
6 650 692
Long-term share in subsidiary
11.
10 512 859
10 496 007
Long-term participation in associate
11.
100
100
Inventories
14.
1 072 351
402 818
Trade receivables
15.
6 797 338
2 745 795
Part of lease asset liabilities due within the year
13.
-
128 949
Other short-term receivables and accruals
16.
2 649 641
2 438 143
Cash and cash equivalents
18.
2 921 324
3 048 578
TOTAL ASSETS 34 833 009 27 632 775
13 440 654 8 764 283 Current assets and assets held for sale
13 / 104
ALTEO Nyrt.
Statement of financial position
for December 31, 2021
Equity and liabilities
’* The adjustments to the lines indicated relative to the comparative period are presented in the section on profit or
loss and financial position
The notes constitute an integral part of the financial statements.
The references in the Notes refer to Chapter VI of the financial statements
(Negative values are denoted by parentheses.) Note
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Equity 14 470 592 8 510 896
Issued capital
19.
242 235
232 972
Reserves*
19.
5 237 704
4 717 549
Retained earnings
19.
9 197 528
3 390 685
Share-based payments reserve
19.
(206 875)
169 690
Long-term liabilities 14 724 291 15 816 688
Debts on the issue of bonds
23.
12 658 274
14 889 000
Deferred tax liabilities
12.
331 180
47 838
Provisions
22.
15 500
15 500
Deferred income
26.
570 613
397 240
Lease liabilities - long
25.
854 316
147 099
Other long-term liabilities
24.
294 408
320 011
Short-term liabilities 5 638 126 3 305 191
Short-term bond payables
23.
2 375 128
68 926
Advances received
30.
8 989
46 500
Trade payables
28.
652 527
613 493
Lease liabilities - short
25.
168 970
88 759
Other short-term liabilities and accruals
29.
2 298 514
2 407 298
Income tax liabilities
31.
133 998
80 215
TOTAL EQUITY and LIABILITIES 34 833 009 27 632 775
Notes to the separate financial statement 2021 of ALTEO Nyrt.
14 / 104
ALTEO Nyrt.
Statement of Changes in Equity
for the period ended on December 31, 2021
The Equity correlation table required as part of Section 114/B of the Accounting Act is presented in Note 21.
Data in HUF thousand Issued capital Reserves Retained earnings
Share-based
payments
reserve
Transactions
with owners
Total equity
01/01/2020 232 948 5 092 255 3 123 766 68 398 (366 247) 8 151 120
Implementation of employee share award program
24 1 626 - (1 650) - -
Purchase of own shares (452) - - (3 929) (30 724) (35 105)
Exercise of Employee Share Ownership Program
452 20 638 1 - - 21 091
Employee Share Ownership Program implementation
- - - - - -
Share-based benefits - 106 872 - - - 106 872
Comprehensive income in the period
- - 266 918 - - 266 918
12/31/2020 232 972 5 221 391 3 390 685 62 819 (396 971) 8 510 896
Transfers between capital elements
- (503 842) - 106 871 396 971 -
01/01/2021 232 972 4 717 549 3 390 685 169 690 - 8 510 896
Implementation of employee share award program
48 4 252 - - - 4 300
Purchase of own shares (3 118) (290 601) - - - (293 719)
Exercise of ESOP I option
62 819 - (62 819) - -
Implementation of ESOP I
7 221 267 159 - - - 274 380
Cash transferred to ESOP organization
(100 000) - - - (100 000)
Own shares transferred to ESOP organization 5 112 (5 112) - - - -
Non-controlled ESOP participation - 575 020 - (575 020) - -
Receivable form ESOP organization
- 6 618 - - - 6 618
Recognition of share benefits against profit or loss - - - 261 274 - 261 274
Dividend payment - - (455 275) - - (455 275)
Comprehensive income in the period
- - 6 262 118 - - 6 262 118
12/31/2021 242 235 5 237 704 9 197 528 (206 875) - 14 470 592
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Statement of Cash Flows of ALTEO Nyrt.
Period: 1/1/2021-12/31/2021
Note
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Profit or loss before taxes 6 867 349 450 145
Interest income and interest expenses, net loss (gain) 7. 198 957 163 784
Dividend (income) 7. (1 930 000) (8 560)
Unrealized exchange rate differences (loss/gain) 7. 8 424 (2 387)
Effect of depreciation on profit or loss 4. 460 830 352 643
Profit/loss on scrapping of production and other machinery 9. 415 35 279
Recognition of impairment and forgiveness in profit or loss 6. 137 061 272 027
Provisions recognized and released 6. - -
Deferred income increase (decrease) 26. 173 373 (49 070)
Exchange rate effect of other comprehensive income 20. - -
Share-based payment cost 19. 252 853 (5 579)
Changes in deferred tax 8. 283 342 3 424
Profit or loss on derecognizing fixed assets 6. 582 508
Net cash-flow of business activity without change in current assets 6 453 186 1 212 214
Inventories (increase) and decrease 14. (669 533) (172 357)
(Increase) and decrease in trade receivables, other receivables,
accrued income and deferred charges
15. (4 334 326) (1 765 880)
(Increase) and decrease in other financial assets 16. 128 949 107 353
Increase and (decrease) in trade payables, other liabilities, accrued
expenses and deferred income
28. (91 570) 801 908
Advances received (increase) and decrease 30. (37 511) (451 463)
Change in net current assets (5 003 991) (121 285)
Operating cash flow before taxes 1 449 195 (268 225)
Effect of income taxes on profit or loss (605 231) (183 227)
Cash generated / (used) in operating activity 843 964 (451 452)
Interests received on deposits and investments 7. 174 048 401 323
Purchase of production and other machinery, and intangible assets 9. (1 836 414) (330 502)
Investment in acquiring businesses (net of cash) 11. (16 852) (5 142 889)
Revenue from the sale of production and other machinery, and
intangible assets
6. 826 209
Long-term loans given - disbursement 10. (1 301 000) (1 274 615)
Long-term loans given - repayment 10. 982 866 6 017 760
Cash generated / (used) in investment activities (1 996 526) (328 715)
Interest paid 7. (366 596) (369 188)
Long term loans borrowed and bonds issued 23. - 3 904 710
Long term loans and bonds repaid 24. 25 603 (2 152 500)
Change in leases 25. - -
Capital increase, purchase of own shares 19. - 129 160
Reserves relating to derivative transactions 20. -
Transfer of ESOP cash and cash equivalents and other transactions
with owners
19. (100 000) (30 724)
Dividend received 7. 1 930 000 8 560
Dividend payment 7. (455 275) -
Cash generated / (used) in financing activities 1 033 732 1 490 018
Changes in cash and cash equivalents (118 830) 709 851
Opening cash and cash equivalents 18. 3 048 578 2 336 340
Cash exchange gains/losses 7. (8 424) 2 387
Closing cash and cash equivalents 18. 2 921 324 3 048 578
Notes to the separate financial statement 2021 of ALTEO Nyrt.
16 / 104
The notes constitute an integral part of the financial statements.
II.
General information, significant accounting policies and
the basis for the preparation of the financial statements
1. Statement of IFRS compliance
ALTEO Energiaszolgáltató Nyrt. (the “Company”) declares that its separate Financial Statements for the
year 2021 were prepared in accordance with the International Financial Reporting Standards as adopted
by the EU, based on the Company’s best knowledge, providing a true and fair view of the assets,
liabilities, financial situation of the Company as an issuer, as well as of its profit and loss. Furthermore,
the Company declares that its separate Financial Statements for the year 2021 provide a true and fair
view of the situation, development and performance of the issuer, outlining main risks and
uncertainties.
2. Statement of compliance with decrees of the Ministry of Finance
ALTEO Energiaszolgáltató Nyrt. (the Company) represents and warrants that with regard to its individual
data reporting obligations for 2021 it has complied with the statutory requirement concerning its
disclosure obligation regarding publicly traded securities as set out in Decree 24/2008 (VIII. 15.) of the
Minister of Finance. The Company has fully complied with the requirements set out in Annex 1 to the
aforementioned legislative provision.
3. Statement of compliance with Act CXX of 2001 on the Capital Market
ALTEO Energiaszolgáltató Nyrt. (the Company) states that with regard to its individual data reporting
obligations for 2021 it has complied with the legal obligations concerning its disclosure obligation set
out in Section 54 of Act CXX of 2001 on the Capital Market.
4. Introduction to ALTEO Nyrt.
ALTEO Nyrt. is a Hungarian-owned energy service and trading company with a modern outlook. The
scope of our business activity covers renewable and natural gas energy production, energy trade and
bespoke energy services and development for companies. We provide our customers with a reliable and
environmentally responsible energy supply based on the sustainable use of renewable energy.
ALTEO is a dynamically developing company, and we are always on the lookout for new opportunities
for investment and growth and we work continuously to ensure that we provide our customers and
partners with the most innovative range of services of the highest quality in an effort to achieve a
continuous increase in shareholder value.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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The shares of the company, admitted to the Budapest Stock Exchange in 2010, have been listed on the
Equities Prime Market of the BSE since 2018, but ALTEO is a member of the Hungarian stock exchange
through its corporate bonds as well.
ALTEO strives to be not only a financially profitable, but also environmentally and socially sustainable
and responsible energy company. Throughout its operations, it is constantly seeking solutions that can
respond to the challenges of energy supply in a sustainable and also profitable manner.
The combination of these values created the concept of impact investment as an investment strategy.
This is an extremely popular concept in western countries but still relatively new in Hungary, with ALTEO
as a responsible company being one of the first representatives in the country. The essence of impact
investment is for a given investment to be also socially and environmentally sustainable, in addition to
generating financial returns. It is important to emphasize that the three factors together make up this
investment strategy, so in terms of its positive impact on the environment and society, it is not a
donation: return is clearly one of the most important measures of investment also in this case.
5. Basic information of ALTEO Nyrt.
The Company was founded on April 28, 2008 as a private limited company for an indefinite period of
time. The legal form was changed to public limited company as of September 6, 2010 and the company
was listed on the Budapest Stock Exchange.
Basic information of ALTEO Nyrt.
The Company’s name
ALTEO
Energiaszolgáltató Nyilvánosan
Működő Részvénytársaság
The Company’s abbreviated name
ALTEO Nyrt.
Registered office and center of operations of
the Company
H
-
1033 Budapest, Kórház utca 6
-
12.
The Company’s telephone number
+36
1
236 8050
The
Company’s central electronic mailing
address
info@alteo.hu
The Company’s web address:
www.alteo.hu
The Company’s place of registration,
date of registration:
Budapest
April 28, 2008
Company registration number
Cg.01
-
10
-
045985
The Company’s tax number:
14292615
-
2
-
41
The Company’s EU VAT number:
HU14292615
The Company’s statistical code:
14292615
-
7112
-
114
-
01
Term of the Company’s operation
indefinite
The Company’s legal form
public limited company
Registered core activity of the Company
Engineering activities and related
technical consultancy (Hungarian NACE
7112'08)
Governing law
Hungarian
The Company’s share capital
HUF 242,328,425
Date of the effective Articles of
Association
11/9/2021
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Ownership structure of the Company
The majority shareholder of the Company is Wallis Asset Management Zártkörűen Működő
Részvénytársaság (H-1055 Budapest, Honvéd utca 20, company registration number: 01-10-046529).
The Company’s ultimate parent company as at December 31, 2021 was WALLIS PORTFOLIÓ Korlátolt
Felelősségű Társaság (H-1055 Budapest, Honvéd utca 20, company registration number: 01-09-925865).
The shareholders of this entity are all private individuals. Ownership structure of ALTEO Nyrt. based on
the share register as at December 31, 2021:
The publicly issued shares of the Company are listed on the Budapest Stock Exchange; the closing
exchange rate of the shares on the last trading day of 2021 (on December 30) was HUF 2,180, which is
134% higher than the same value in the last year (HUF 930).
Scopes of consolidation
The Company’s parent company involving it in consolidation is WALLIS PORTFOLIÓ Kft.
ALTEO Nyrt., as parent company, is obligated to prepare a consolidated annual report and a consolidated
business report. In accordance with Section 10 (2) of the effective Act C of 2000 on Accounting, the
Company complies with its consolidation obligation by publishing a report and a Board of Directors
report compiled in accordance with the IFRSs.
2021 2020 2021 2020 2021 2020
Wallis Asset Management Zrt.
and its subsidiaries
12 274 864 12 383 120 153 436 154 789 63,34% 63,88%
Members of the Board of Directors,
the Supervisory Board and the
Executive Board
923 509 617 280 11 544 7 716 4,77% 3,18%
Repurchased own shares
7 487
748 546
94
9 357
0,04%
3,86%
ESOP 477 363 - 5 967 - 2,46% 0,00%
Free float
10 866 505
5 637 328
71 289
70 467
31,89%
29,08%
TOTAL 19 386 274 19 386 274 242 329 242 329 100,00% 100,00%
Present shareholders of the Company
based on the share register on
12/30/2021
Face value (HUF thousand) Ownership ratio (%)Quantity (of shares)
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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6. The basis for preparation of the financial statements
These financial statements present the financial position, performance and financial situation of ALTEO
Energiaszolgáltató Nyilvánosan Működő Részvénytársaság. The Company first published separate
financial statements prepared under IFRS for its 2017 business year.
These Financial Statements were prepared in accordane with Act C of 2000 on Accounting (“Accounting
Act”) as currently in force. In accordance with the Accounting Act's rules for the preparation of IFRS
financial statements, the International Financial Reporting Standard (“IFRS”) established by the
International Accounting Standards Board (“IASB”), as endorsed by the European Union, applies. Where
an IFRS does not provide detailed guidelines for certain rules but the Accounting Act has such rules, the
provisions of the Accounting Act shall be applied.
Beside the above, the Company prepared the financial statements considering the provisions of Decree
No. 24/2008 (VIII. 15.) of the Minister of Finance on the detailed regulations on information obligation
in connection with the securities trade on the stock exchange and Act CXX of 2001 on the Capital Market.
These financial statements contain information for a comparable period and were prepared based on
the same principles.
Going concern requirement
The Company’s Board of Directors determined that the Company will be able to continue as a going
concern, which means that there are no signs that would imply that the Company intends to terminate
or significantly reduce its operations in the foreseeable future (within one year from the reporting date).
Critical accounting assumptions and estimates
The Company generally measures its assets on a historical cost basis, except for cases where a given
item should be measured at fair value under the IFRSs. In the financial statements the trading financial
instruments, the derivatives and in certain situations the assets held for sale had to be evaluated at fair
value.
Preparation, approval and publication of the financial statements
The Company’s CEO acting on behalf of the Board of Directors ensures that the Company’s financial
statements and the related Separate Business (Management) Report are prepared. The Board of
Directors publishes the finished financial statements and the Separate Business (Management) Report
and submits them to the General Meeting after having them reviewed by the Supervisory Board.
The Company publishes its financial statements at its places of disclosure.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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The Company’s places of disclosure
• On the electronic reporting portal operated by the Ministry of Justice (www.e-
beszamolo.im.gov.hu),
• on the website operated by the Central Bank of Hungary www.kozzetetelek.mnb.hu,
• on the website of the Budapest Stock Exchange (www.bet.hu), and
• on its own website (www.alteo.hu).
The authorized signatories of the annual report are Attila László Chikán (H-1144 Budapest, Gvadányi
utca 15. 8. ép. B. lház. fszt. 2.), member of the Board of Directors, CEO, and Zoltán Bodnár (H-2045
Törökbálint, Honfoglalás utca 12.) CFO.
The person commissioned to control and lead the auditing tasks in accordance with Section 88 (9) of Act
C of 2000: Anita Magdolna Lénárt (registration number: 186427).
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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7. Key elements of the accounting policy
Presentation of the separate financial statements
The separate financial statements of ALTEO Nyrt. comprise the following (parts):
• separate statement of financial position;
• separate statement of income;
• separate statement of other comprehensive income;
• separate statement of changes in equity;
• separate statement of cash flows;
• notes to the separate financial statements.
The Company has decided to present the separate statement of income and other comprehensive
income in separate statements.
The Other comprehensive income line presents items that increase or decrease net assets (i.e. the
difference between assets and liabilities) and where such decrease may not be recognized against any
asset, any liability or profit or loss, but instead they change an element of equity directly in connection
with the broadly defined performance of the Company. Other comprehensive income does not include,
amongst others, equity transactions which result in a change in the available equity and transactions
conducted by the Company with the owner acting in its capacity as owner.
Currency of presentation of the financial statements
The Company’s functional currency is the Hungarian Forint. The financial statements were drawn up in
HUF (presentation currency) and the figures displayed are in thousand HUF unless otherwise indicated.
The foreign currency relevant to the Company is the Euro. The exchange rate of the currency in the
reporting period was as follows (currency unit per HUF according to the exchange rates of the Central
Bank of Hungary):
Currency 12/31/2021 2021 average 12/31/2020 2020 average
euro (EUR) 369.00
358.57
365.13
351.17
Significant decisions regarding presentation
The financial statements cover a period of one calendar year. The reporting date of the financial
statements for each year is the last day of the calendar year, i.e. December 31. The Company prepares
and publishes separate financial statements annually. No interim separate financial statements are
prepared.
The financial statements contain one set of comparative data, except when the figures for a period had
to be restated or when the accounting policies had to be amended. In such cases, the opening figures of
the statement of financial position for the comparative period are also presented.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
22 / 104
In the event an item needs to be reclassified for comparative presentation purposes (e.g. due to a new
line in the financial statements), the figures for the previous year are adjusted by the Company so as to
ensure comparability.
The Company discloses operating segment information in the notes to the financial statements.
Operating segments are determined in accordance with the strategic requirements of the management.
The Company’s management established the following segments:
Name of segment
Description of segment
Operation Business
Operation and maintenance of power plants
Ventures and Power Plant
Construction Business
Construction
-
installation activities
Other
Other non
-
segment activities and central administration.
The activity of the Company is limited to Hungary only, the management did not consider it necessary
to establish regional segments for the area of the country.
Changes in comparative data
The previous IFRS financial statement of the Company was drawn up for the fiscal year of 2020. The
financial statements contain one set of comparative data, except when the figures for a period had to
be restated or when the accounting policies had to be amended. In such cases, the opening carrying
values for the comparative period are also presented by the Company.
In the event that an item needs to be reclassified for presentation purposes (e.g. due to a new line in
the financial statements), the figures for the previous year are adjusted by the Group so as to ensure
comparability.
Accounting policies related to the separate statement of income
Revenues
The Company accounted for its revenues in accordance with the rules of IFRS 15.
IFRS 15 established a unified model for revenues originating from contracts. With the help of the unified
five step model the standard determines when and in what amount do revenues have to be recognized.
The standard states explicit expectations for the situation when several elements are transferred to the
customer at the same time. IFRS 15 describes two methods for timing the recognition of revenue:
revenue accounted for at a given time and during a given period. The IFRS 15 standard also creates
theoretical rules concerning what happens with the costs in connection with acquiring and providing -
not recognized elsewhere - the contract. The standard does not apply to financial instruments; they are
regulated by IFRS 9.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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According to the IFRS 15 standard, revenue elements shall be accounted for in accordance with the
termination of performance obligations. Performance obligations shall be considered as terminated
when an entity transfers the control over the goods or services to the buyer. Revenues must be
accounted for when the Company realized them - that is, if the Company contractually performed
towards its customers and the financial settlement of the claim (the realization of the economic
advantage in connection with the transaction by the company) is likely, and the amount of that and the
related costs can be adequately (reliably) measured.
The Company does not recognize items collected on behalf of other entities to be recharged later as part
of revenue because the Company has no control over these items. The Company identified the following
as such items:
Name
Content of item
Products, services
acquired for third parties
in agent status and
forwarded in unchanged
form
If forwarding a given
procurement (service or product) is done in the
same form in unchanged amount by the Company and no practical risk
arises on the part of the Company in connection with this, then reselling
is done in an “agency structure” and the item is no part of the revenue.
Value added tax
Value added tax within the meaning of Act CXXVII of 2007.
In connection with the customer contracts, the Company applies the 5-step model specified in the
standard. In most of the existing contracts, the date of performance is not separate from the billing
period, therefore, the realization of the revenues is not separate from the actual billing. Regarding
contracts where several elements are transferred (or are recognized as being transferred) to the buyer
at the same time, the Company realizes of the revenue – allocates it to contractual elements or periods
– according to the underlying economic content.
The following contracts or contractual elements are included in this category:
• general construction-installation contracts
• overhaul component in operation and maintenance contracts
In the case of general construction-installation contracts, revenues are accounted for depending on the
stage of completion of the project in question. The determination of the stage of completion shall be
performed proportionately to the ratio of any actually occurred costs to the total planned costs. If, in
the case of the project as a whole, a loss may be expected, that expected loss must be accounted for
immediately.
The Company performs individual assessments and investigations of its buyers’ contracts. Due to the
individual character of the contracts, the portfolio method is not applicable, either to the contract
portfolio or any part thereof.
Wherever a contract or a contractual element contains a significant financing element which is more
favorable than the market practice, with the deferral of payment exceeding one year, then that financial
Notes to the separate financial statement 2021 of ALTEO Nyrt.
24 / 104
component must be recognized separately. In such cases, only the present value of the invoiced
consideration can be accounted for as revenue. The Company found that its contracts do not contain
such an element.
Contractual assets
If, in connection with a long-term contract, costs directly related to that contract incur where the return
is guaranteed by the contract for the full contractual period, these costs shall be recognized as assets
related to that contract and amortized over the term of the contract. Such elements may include various
legal, intermediation and contingency fees.
The Company presents any proceeds from leases strictly related to its activities as revenues.
Expenses related to operation
Non-finance expenses are to be classified as follows:
• material expenses;
• personnel expenses;
• depreciation and amortization.
Other revenues and expenses
Other income recognized by the Company includes the consideration for sales that cannot be classified
as revenue, as well as any income that cannot be considered finance income or an item increasing other
comprehensive income. Other expenses include those that are directly related to operations and are
not classified as financial expenses or do not reduce other comprehensive income. Other income and
other expenses are recognized by the Company in the statement of profit or loss and other
comprehensive income as net figures.
Finance income and expenses
The Company accounts for its finance income and expenses according to the IFRS 9 regulation.
IFRS 9 introduced the expected impairment model. The basis of determination is the expected
impairment, as opposed to the objective, incurred (already happened) impairment. The expected
impairment model brings the time of recognizing (occurrence) of impairments closer. The accepted
model includes the simplified method that allows it for the entity to apply rules other than the complex
ones in connection with certain financial assets (e.g.: trade receivables and similar instruments).
IFRS 9 regulates hedge accounting anew as well; according to this, far more connections (economic
phenomena) will meet the conditions of the application of hedge accounting, and the previous
conditions of compliance (extent of efficiency, proving the existence of efficiency) are relaxed.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Dividend income and interest income are recognized as finance income. Interest income shall be
accounted for on a pro rata temporis basis. Dividend income must be recorded if a final decision on
dividend payment has been made by the entity disbursing such dividend. Interest expenses are
calculated using the effective interest rate method and are classified as financial expenses. Exchange
differences on foreign currency items (if not a part of other comprehensive income under IAS 21 - The
Effects of Changes in Foreign Exchange Rates) are recognized by the Company in finance income. The
Company shows finance income in its statement of profit or loss and other comprehensive income after
offsetting.
Income taxes
The following are recognized as income tax:
• corporate tax (Act LXXXI of 1996 on Corporate Tax and Dividend Tax)
• income tax on energy suppliers (Act LXVII of 2008 on Enhancing the Competitiveness of District
Heating Services)
• local business tax (Act C of 1990 on Local Taxes)
• innovation contribution (Act LXXVI of 2014 on Scientific Research, Development and Innovation)
In 2017, the Company ceased to be subject to income tax on energy suppliers.
Consolidated (Presentation of net balances)
In addition to the requirements under IFRS, the impact of a transaction is recognized in the Company’s
financial statements on a net basis if the nature of the given transaction requires such recognition and
the item in question is not relevant to business operations (e.g. sale of a used asset outside business
operations).
Discontinued activities
According to the provisions of the standard, the Company recognizes its discontinuing operations
separately, if they are significant. It does not qualify as a discontinuing operation if the legal form of a
given activity gets changed but the underlying economic content does not change significantly. It is no
longer presented separately for 2021 and 2020.
Application and concept of EBITDA
Although the IFRS does not use the concept of EBITDA, the Company decided to use this often used
indicator as well, considering that it is widely used in the industry and that, in the Company’s opinion,
recognizing this value is useful for users of the financial statements as it has information content.
The indicator is calculated as follows:
EBITDA = Net profit or loss
+ finance income
+ profits taxes
+ depreciation and amortization
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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For discontinuing activities, if any, the net profit or loss containing the profit or loss of that activity must
be modified by the following items.
Finance income: the Company adjusts the net income with all the items in the finance income (effective
interest, exchange rate differences, etc.) so the Company fully neutralizes the effect of the finance
income when calculating this indicator.
Income taxes: income taxes in the net profit or loss (current and deferred taxes alike) are neutralized by
the Company when calculating the indicator.
Depreciation and amortization: the depreciation, amortization of assets belonging under IAS 16, IAS 40
and IAS 38 and assets recognized at the Company as assets and given to operating lease or concession
is eliminated when calculating the indicator (they are “given back”). The non-systematic decrease of
such assets (typically: impairment) is adjusted by the Company retroactively, similar to depreciation and
amortization. We do not adjust the impairment of other assets, financial instruments (e.g. trade
receivables, inventories) when calculating the indicator. However, the amount of any adjustments
recognized in respect of the measurement of certain liabilities (e.g. amortization, revaluation of a
deferred purchase price) is adjusted.
EPS - earnings per share the shareholders are entitled to
When calculating earnings per share, the Company presents them in the consolidated financial
statements based on the net profit or loss concerning the ALTEO Group. The EPS indicators of the
individual IFRS report are presented in the numeric reports of the financial statements.
Accounting policies relating to the statement of financial position and the recognition and
measurement of assets and liabilities
Property, plant and equipment
Only assets which are used in production or for administrative purposes and are used for at least one
year after commissioning are classified by the Company as property, plant and equipment. In terms of
their purpose, the Group makes a distinction between production and non-production (other) assets.
The initial carrying amount of an asset comprises all items which are related to the purchase or creation
of the given asset, including borrowing costs (for details, see the accounting policy on borrowing costs).
If an asset needs to be removed or demolished at the end of its useful life (or if the given asset is no
longer used, it is sold or abandoned), then the costs incurred to retire it (asset retirement obligation or
ARO) are added to the initial value of the asset and a provision is recognized in this respect, given that
the Company has at least a constructive obligation for the retirement. No provisions are made for ARO
is the estimated expense of deconstruction is not significant, that is, it remains under HUF 500,000.
Assets that belong together are reviewed as a group and if the decommissioning costs of a group of
Notes to the separate financial statement 2021 of ALTEO Nyrt.
27 / 104
assets that belong together is significant in total, then provisions must be made for ARO concerning the
group of assets.
The Company estimates the ARO using a percentage coefficient between 0% and 10%. The Company
used a discount rate of 8.57% for discounting in 2021. For the present PPE inventory, no ARO need to
be recognized.
The discounted liability is increased each year, taking into account the passing of time (unwinding of the
discount) and future changes in the estimation of unwinding costs. The increase in the liability arising
from the unwinding of the discount is accounted for as interest expense.
The Company uses the component approach, which means that the parts of a physically uniform asset
which have different useful lives are treated separately, mainly in the case of production assets.
The Company measures the fixed assets subsequent to initial recognition using the cost model (initial
value reduced by accumulated depreciation and accumulated impairment losses).
The base of depreciation is the initial cost reduced by the residual value. Residual value is determined if
its amount is significant. Residual value is equal to the income that can be realized after the asset is
decommissioned, reduced by the cost of disposal.
The Company calculates depreciation for each component on the basis of the depreciable value and
uses the straight-line depreciation method.
The following depreciation rates are used for assets:
Asset
group
Extent of depreciation
Land
non
-
depreciable
Buildings
1
–
5%
Power plant equipment
1
–
20%
Non
-
production machinery
14
–
33%
Office equipment
14
–
50%
The useful life of each component must be reviewed, and it must be determined whether the asset can
be utilized during its remaining useful life and whether the residual value is realistic. If not, then the
depreciable amount and/or the residual value are adjusted for the future.
The value of a fixed asset is increased by significant repair projects which involve substantial cost and
occur regularly but not every year. These projects are treated by the Company as a component of the
given asset and the Company examines whether the asset’s useful life is aligned with the next (expected)
occurrence of such projects.
Income from the sale of a fixed asset is recognized among other items, with the remaining carrying
amount of the asset deducted. Expenses arising upon the scrapping of fixed assets are also recognized
among other items. Only expenses are accounted for in this case and no income.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Intangible assets
The initial recognition cost of intangible assets is determined using the method described in the case of
fixed assets.
Intangible assets with indefinite useful lives are not amortized; instead, they are subject to impairment
testing in each period or immediately when there is an indication of impairment.
For all other intangible assets, the existence of any contractual periods which restrict the use of such
rights must be considered. In such cases, the depreciation period may not be longer (though it may be
shorter) than this period. By default, the term of the contract is accepted as the useful life.
For software and other similar intangible assets, straight-line amortization rates of 20% to 33% are used.
Subsequent to initial recognition, intangible assets are uniformly measured using the cost model. The
residual value of intangible assets is considered zero, unless proven otherwise.
Internally developed assets
The Company management considered the recognition of internally developed assets.
In the opinion of the Company’s management, the development activity aimed at generating other
intangible assets meets the IAS 38 recognition criteria and the know-how created as a result of the
activity will be recovered through increased income or reduced costs. The cost of the development
project is recognized among intangible assets. The cost of intangible assets shows the certified and
accrued expenses directly related to the project.
Leases
Leases are contractual arrangements where the owner of an asset transfers the right to use that asset
in return for a series of payments.
The Company applies the recognition exceptions provided by IFRS 16 for short-term leases and low value
assets (below USD 5,000). No right-of-use asset and associated liability are recognized for leases where
the indefinite duration and the related contractual termination conditions, or the absence of a fixed fee
element, do not permit such a determination.
The leasing component must be separated in the case of complex sales or supply contracts where one
of the contractual elements meets the standard’s conditions.
For the initial recognition of a lease, in the case of establishment of the value of the right of use and the
obligation, the existing comparative data of the ALTEO Group must be used when determining the
market interest rate. If such data are not available, the statistics published by the Central Bank of
Hungary shall be taken into account. The right-of-use asset is amortized taking into account the same
useful life as the lease term.
For contracts with a term of more than 12 months and high value, the initial cost of the right-of-use
asset is determined by the Company at the discounted present value of payments due for the remaining
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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lease term. For establishing the market interest rate the Company used the statistics published by the
Central Bank of Hungary....
Borrowing costs
In accordance with the provisions of IAS 23, borrowing costs are capitalized by the Company if it uses
the loan to finance a qualifying asset. For dedicated borrowings (those that are assigned to a specific
purpose), the amount to be capitalized is determined using the effective interest rate of the borrowing.
For general purpose borrowings, the capitalization rate is calculated manually. The capitalization rate is
the average of the effective interest rates of general purpose borrowings weighted by the time elapsed
since the date of payment or, if later, the time elapsed since the start of capitalization and the amount
of the payment.
An asset (project) can be considered as a qualifying asset as follows:
• if a construction contract is involved that is longer than six months;
• if an asset is involved whose construction, preparation or transformation takes longer than six
months (regardless of whether the asset in question is created by the Company or third parties).
The classification is independent of the value of the asset.
The capitalization of borrowing costs starts when an irrevocable commitment to acquire the asset or
implement the project exists or is probable. For assets, this is usually when the cost necessary to build
the asset is incurred; for projects, this occurs when the actual work begins or, if planning is also done by
the Company, the start of the preparation of the plan subject to the licensing process.
The capitalization of borrowing costs is suspended if work is interrupted for a period of time that is
longer than technologically reasonable.
The capitalization of borrowing costs is finished when the asset is ready or when the actual work on the
project is completed or, if earlier, the asset created in the course of the project is in use or its use has
been approved.
Government grants
As a general rule, grants are recognized by the Company as income. Income is distributed over the
periods for which it is granted. The part that cannot be credited to profit or loss is recognized in liabilities
as deferred income. Items to be credited to profit or loss are deducted from the related expenses where
possible.
If a grant is related to expenses, then such grant is principally accounted for by reducing expenses. If this
is not possible (e.g. asset-related grant), it is recognized as other income.
In the case of asset-related grants, the revenue recognition period is during which the subsidized asset
is used.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Grants may be accounted for if
• it is essentially certain that the Company will meet the requirements for the grant, and
• it is certain that the Grant will be awarded to the Group.
In the event that a grant must be repaid subsequently, a liability is recorded when this becomes known
by increasing the value of the asset or the expense.
If any advance is paid against the government grant, it must be recognized among liabilities. In the case
of such a grant construct deferred income may only be recognized if the grant settlement is done.
In accordance with the above principle, the Company recognizes assets received without consideration
as assets by recording deferred income (liability) against the asset (as a result, emission quotas received
from the government without consideration is recognized as assets at their fair value).
Assets held for sale
Non-current assets whose carrying amount will be recovered principally through an imminent sale
transaction rather than through continuing use are classified as assets held for sale. Assets held for sale
also include so-called disposal groups which comprise assets and closely related liabilities that are
expected to be disposed of subsequently as part of a transaction (e.g. a subsidiary to be sold).
This classification may be used if it is highly probable that the sale in question will be completed within
one year from the date of classification and the asset or disposal group is available for immediate sale
in its present condition, the activities necessary for the sale to take place are underway and the asset or
disposal group is being offered at a reasonable price.
Assets held for sale are separately presented by the Company in its statement of financial position and
their value is not included in either non-current or current assets. These assets are not depreciated by
the Company and are measured at the lower of their carrying amount as at the reporting date and fair
value less the cost of disposal. The resulting difference is recognized by the Company against profit or
loss.
If an asset needs to be subsequently reclassified as a non-current asset due to the fact that the
conditions of classification are no longer met, then after the reclassification the asset is measured at the
lower of the value adjusted by the unrecognized depreciation and the recoverable amount. The resulting
difference is recognized in profit or loss.
Inventories
Inventories are stated in the financial statements at the lower of their cost or net realizable value. The
Company determines the closing value of inventories based on their average cost and the value of
inventories includes all costs which are required for the use of inventories in the intended manner and
at the intended location.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Accounting for impairment losses other than financial instruments and identifying CGUs
The Company tests its assets for impairment each year. Testing consists of two stages. The first stage is
to examine whether there are signs indicating that the assets in question are impaired. The following
may be signs that a given asset is impaired:
• damage;
• decline in income;
• unfavorable changes in market conditions and a decline in demand;
• increase in market interest rates.
If an asset is impaired, the appropriate value calculation needs to be performed, which allows the
recoverable amount of the asset to be determined (this is the second step). The recoverable amount is
the higher of the fair value of the asset reduced by the cost of disposal and the present value of the cash
flows derived from continuous use.
If the value in use of a group of assets cannot be determined as it does not generate any cash flows itself
(it is not in use), the test is performed with respect to the cash-generating units (CGUs).
If the value in use can only be determined with respect to the CGUs and impairment needs to be
accounted for, impairment losses are split as follows:
• first, damaged assets are impaired;
• second, the remaining amount of impairment losses are split among fixed assets (PPE) and
intangible assets in proportion to their carrying amount prior to impairment.
The value of assets may not drop below their fair value reduced by their individual cost of disposal.
Provisions
Only existing liabilities which are based on past events and have uncertain value and timing may be
recognized as provisions. No provisions may be recognized for liabilities which are not linked to present
legal or constructive obligations.
If the existence of a liability cannot be clearly identified, then a provision may only be recognized if its
existence is more likely than not (probable obligation). If the probability is lower than this, a contingent
liability is disclosed (possible obligation). Such items may not be shown in the statement of financial
position; instead, they are presented in the notes to the financial statements.
Provisions are shown as liabilities and are classified as non-current and current liabilities. If the time
value of money in respect of a provision is considered material (as it will be due in the distant future),
the expected cash flows are discounted. The time value of money is considered material if cash flows
are still generated after 3 years or even later.
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The following items are typically included in provisions:
• onerous contracts
• compensation payable in relation to legal cases;
• indemnification or compensation based on an agreement;
• warranty liabilities;
• asset decommissioning liabilities;
• severance pay and costs arising due to restructuring;
If a decision needs to be made in respect of a specific obligation, then the value of the provision will be
the most likely unique outcome, while the effect of all remaining outcomes must be reasonably taken
into account. If the value of the provision needs to be estimated based on a set of data (guarantees,
payments concerning a large number of persons), then the fair value (probability-weighted average) of
the expected outcomes is used as the value of the provision.
If a contract has been signed by the Company where the costs arising from the contract exceed the
benefits derived therefrom, then a provision is recognized for the lower of the legal ramifications of a
failure to carry out the contract and the losses arising from executing the contract (onerous contracts).
A restructuring provision (e.g. for severance pay) may be recognized if there is a formal plan for the
restructuring which has been approved and communicated to those affected. Provisions may be
recognized for costs associated with discontinued operations. But no provision can be recognized for
continuing operations (e.g. cost of retraining or relocation).
No provisions may be recognized for:
• future operating losses;
• “safety purposes” to cover unforeseeable losses;
• write-offs (e.g. for the write-down of receivables and inventories) - these reduce the value of
the relevant assets.
Employee benefits
The Company provides predominantly short-term employee benefits to its employees. These are
recognized by the Company in profit or loss after they have vested.
Employee bonuses and other items of similar nature are shown in the statement of financial position if
they result in liabilities, i.e.
• if they are subject to a contractual condition and such condition has been fulfilled (e.g. a given
revenue level is reached); in such cases, the item is accounted for not in the period when the
Group established that the contractual condition was fulfilled, but in the period when such
condition was fulfilled (when the employees rendered the service entitling them to the benefit).
• if such an item is created as a result of a management decision instead of a contractual
condition, then the item may be recognized when the decision is communicated to the company
affected (constructive obligation).
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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The Company operates a defined contribution retirement benefit plan only and the contribution is
calculated on the basis of salaries paid; therefore, such contribution is accounted for at the same time
as salaries.
The Company operates in a legal environment in which employees are entitled to paid leave. If there is
a legal possibility or an agreement between the employer and employees which provides that any
unused leave may be carried forward to subsequent years, then a liability is recognized against employee
benefits with respect to such unused leave accrued by the end of the year.
Financial instruments
Financial instruments are contracts which create financial assets for one party and financial liability or
equity instruments for the other party. Financial instruments include financial assets, financial liabilities
and equity instruments.
Financial assets
These include cash, equity instruments of another entity, contractual rights which entitle the Company
to future cash flows as well as those which entitle the Company to exchange financial instruments at
potentially favorable conditions.
Financial assets are classified by the Company as follows:
a) debt
b) equity instrument
c) derivatives
a) In the case of debt instruments:
Loans and receivables (assets evaluated at amortized cost): this group includes financial assets with fixed
(or at least determinable) cash flows that are not quoted in an active market and are not classified into
any of the remaining three categories. The Company typically records the following items in this
category:
• loans given
• trade receivables
• advances received
• other receivables
The purpose of holding these assets is to collect contractual cash flows, that is, these assets are held by
the Company not for trading purposes, and not for achieving short-term profits based on these
instruments. These assets are priced at fair value and the follow-up valuation is performed based on
amortized cost. The valuation of the assets is performed individually. At present, the Company has no
assets with massive multiplicity or assets with similar characteristics in the case of which the portfolio
method could be applied.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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b) Capital instruments include only assets that represent a shareholding and do not fall within the
scope of the standards regulating group accounts, that is, are not subsidiaries, joint organizations or
associates.
c) Derivatives include all instruments whose value is a function of a change in an underlying
variable; their initial investment need is negligible and their settlement takes place in the future. In the
case of the Company, these are typically derivative transactions, except where the rules on hedge
accounting provide otherwise. If the Company concludes a transaction (such as forward foreign
exchange contracts or interest rate swaps) which do not comply with the hedge accounting rules, these
will be classified as FVTPL.
Financial liabilities must be classified into the following groups.
Financial liabilities measured at fair value through profit or loss: derivative transactions and forward
contracts acquired for trading purposes are included by the Company in this category. Typically, the
Company does not enter into contracts which result in such financial assets, with the exception of
forward foreign exchange contracts and interest rate swaps.
Other financial liabilities: All other financial liabilities are classified into this category. Typical items
include:
• trade payables;
• loan payables;
• bond payables;
• advances received from customers.
Issued instruments that represent an interest in the residual assets of the Company and no repayment
obligation is attached thereto are classified by the Company as equity instruments.
At initial recognition, all financial instruments are measured by the Company at fair value. Transaction
costs are capitalized unless the instrument is classified as FVTPL. In this case the transaction cost is
expensed.
In the case of a follow-up valuation based on amortized cost, the rules applicable to follow-up valuation
of financial instruments are:
Items not resulting in interest expense or interest income
For initial measurement these items are measured at fair value. Fair value is the present value of the
expected future cash flows. Where the time value of money is material, the item is discounted. For
subsequent measurement purposes these items are measured at amortized cost.
The value of a receivable is reduced by write-offs if such receivable is not settled after 180 days from its
due date or there is any other indication at the reporting date which requires impairment to be
recognized. Receivables that have been overdue for more than one year may only be shown in the
financial statements with a value assigned to them if there is an agreement on deferred payment or
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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rescheduled payment and the debtor has provided collateral. This rule is not applicable to tax assets.
Collective assessment is used for calculation of impairment in case of large portfolios of individually
insignificant assets based on statistical data.
In the case of liabilities, rules concerning delay are, accordingly, not applicable. An item may not be
reclassified as a long-term liability merely because the Company has failed to meet its payment
obligation. Only an irrevocable contractual commitment may provide a basis for reclassification. Items
which are repayable on demand (those that have no fixed maturity) are classified as short-term
liabilities.
Items resulting in interest expense or interest income
These items are measured at amortized initial recognition cost. The principles for calculating amortized
initial recognition cost are as follows: the Company determines the cash flows relating to the given
borrowing or receivable. In addition to principal and interest rate payments, these cash flows also
include all items directly associated with the given movement of cash (e.g. disbursement commission,
contracting fee, fee for the certification of the contract by a public notary, etc.) and the interest rate
(effective interest rate) at which the net present value of the cash flows will be zero is determined. The
interest expense for the period is calculated using this effective interest rate. Changes in interest rates
for a floating rate instrument may be accounted for only with respect to the future. If impairment needs
to be recognized with respect to such an asset (receivable), then the last applicable interest rate is used
by the Company as the effective interest rate.
The Company also issues bonds through public placement in order to fund its operations. Liabilities
resulting from the bonds are recognized using the effective interest method, i.e. the effective interest
rate is determined on the basis of all bond-related cash flows. For zero coupon bonds, the difference
between the issue price and the redemption price is regarded by the Group as interest.
The Company derecognizes financial assets when substantially all of the risks and rewards of ownership
of the asset are permanently transferred to another entity or the asset is repaid or expired.
Financial liabilities are derecognized when they are discharged (e.g. settled) or when they no longer
need to be met for any other reason (e.g. expired or ended).
Application of the expected credit loss (ECL) model
The management of the Company updated its estimates for the model in the current year. The applied
rates were redefined by taking account of the risks associated with that business line. The extent of the
Company’s impairments is low, due to the receivable management processes developed in the past
years. In the case of the related transactions (including the majority shareholder, the WALLIS Group),
previously there was no need to account for impairment.
Hedge accounting
The Company has adopted the hedge accounting provisions of IFRS 9. In the case of cash flow hedge
transactions, in accordance with IFRS 9, the difference arising on hedge instruments is recognized in
other comprehensive income instead of net profit or loss to the extent of the effective portion, and the
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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resulting difference is accumulated in a separate reserve in equity (the cash flow hedging reserve). The
concerned part of this reserve is recognized in the statement of profit or loss when the hedged cash flow
(interest) occurs or when the hedge becomes ineffective.
To qualify for hedge accounting, the relevant transaction must be formally designated and there must
be evidence for hedge effectiveness.
Interest in other entities
The Company holds several investments in other entities that are consolidated or must be treated as
associates. In the separate financial statements, these shall be valued by the Company at their initial
recognition cost, reduced by accumulated impairment. Dividends received from a subsidiary are
recognized by the Company in the profits.
Detailed information relating to subsidiaries are provided in the presentation of ALTEO.
The net assets (assets and liabilities) of the subsidiary are recognized by the parent company in their
entirety. The part of the consolidated equity which is held after the acquisition and is attributable to the
Group is recognized by the Group as equity attributable to the parent company. Non-controlling
interests are recognized by the Group in proportion to net assets (at carrying amount) at each reporting
date and are not re-measured at fair value at the end of each reporting period.
The Group had no joint ventures. The cash flow generated by the companies involved in the
consolidation is freely available to the Group (there are no restrictions on access). The rate of control
within the Group is determined based on voting rights. The ownership-based rate of control in the Group
subsidiaries was not affected by any management contracts.
The Group has no interests where voting rights do not serve the management of the relevant activities
leading to control (structured entities).
None of the Group members qualify as an investment entity.
The Company recognizes its controlled subsidiaries at cost.
Share-based payments
The Company motivates certain senior employees with share option benefits within the framework of
an ESOP organization. The internal value of the share options in question must be accounted for as
expense under the vesting period in accordance with the provisions of IFRS 2 against personnel
expenses.
Upon the management’s decision, the Company grants Shares to the employees who have become
eligible to them on the basis of the Company’s recognition system. The number of shares corresponding
to the amount granted as a reward is determined by the market price effective on the date of the
transfer. The amount of the benefit must be accounted for as expense at the moment when it is granted,
in accordance with the provisions of IFRS 2, against personnel expenses.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Current income tax expense and deferred taxes
The actual income tax expense for the current year is calculated by the Company in accordance with the
applicable tax laws and is recognized in current liabilities (or current receivables, as the case may be). In
addition, deferred taxes are also estimated and are shown in long-term liabilities or non-current assets.
Deferred taxes are calculated using the balance sheet method, with the effects of subsequent changes
in tax rates taken into account. Deferred tax assets are recognized only if it is certain that the item in
question will be realized (reversed). Deferred taxes are determined using the tax rate effective at the
expected date of reversal.
General accounting policies relating to the statement of cash flows
The Company’s statement of cash flows is based on the indirect method for cash flows from operating
activities. Cash flows from investing activities and cash flows from financing activities are calculated
using the direct method. Overdrafts are regarded as cash equivalents until proven otherwise.
Equity
The Company recognizes the following items in the statements as parts of the equity:
Name of capital element
Content of capital element
Issued capital
Number of issued shares times the face value. The face value of
own shares bought back is deducted from the capital element
Reserves
The entirety of payments for the issued shares above their face
value, the value of transactions conducted with capital owners as
such, presenting allocations for the owners (e.g. part of the shares
bought back above face value) separately
Retained earnings
the amount of the cumulated profit or loss not paid as dividend
(that is, the aggregate profit or loss), development reserve
generated
Share
-
based payments reserve
Reserves established based on the IFRS 2 sta
ndard
Cash flow hedge reserve
Reserves established in accordance with the provisions of the
IFRS9 standard, based on the value of the non-realized cash flow
positions at the end of the period. Only the efficient part according
to the documentation of the cash-flow hedge transactions can be
recognized as part of the reserves.
In the notes the Company publishes information concerning the following shares with regards to all
classes of the share capital:
• number of shares authorized for issuing;
• number of shares issued and fully paid, and the number of shares issued but not yet fully paid;
• face value of shares;
• checking the number of shares in circulation at the beginning and the end of the period;
• rights, preferential rights and limitations assigned to the share class in question, including
• limitations concerning dividend payment and capital repayment;
• shares owned by the Company or its subsidiaries or associates;
• shares reserved to be issued under options and contracts concerning sale of shares, including
terms and amounts.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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The Company prepares the equity correlation table prescribed in Section 114/B of the Accounting Act.
The equity correlation table contains the opening and closing data of the individual elements of equity
according to the IFRSs and, deduced from that, the opening and closing data of the following equity
elements:
Name of element
Content
Equity
amount of the equity according to the IFRSs, increased by the amount of the
received additional monetary contribution recognized as liabilities according
to the IFRSs, decreased by the amount of the paid additional monetary
contributions recognized as assets according to the IFRSs, increased by the
amount recognized as deferred income from the value of financial assets,
assets received to be transferred into capital reserve according to legal
regulations, decreased by the amount of the receivable recognized against
shareholders due to capital increase qualifying as capital instrument.
Issued capital
according to the
IFRSs
the issued capital as determined by the articles of association if it qualifies as
capital instrument.
Issued but yet
unpaid capital
the amount not yet at the disposal of the business entity from the issued
capital according to the IFRSs.
Capital reserve
the amount of all the elements of equity not belonging to the concepts of
issued capital, the issued but unpaid capital, the retained earnings, the
evaluation reserve, the profit after taxes or allocated reserve according to the
IFRSs.
Retained earnings
accumulated profit after taxes recognized in the annual report according to
the IFRSs not yet paid to the shareholders, including amount accounted for
the benefit or against the accumulated profit or loss according to the IFRSs; it
cannot contain other comprehensive income according to the standard IAS 1
Presentation of Financial Statements with the exception of reclassification
modifications. Amounts generated this way must be decreased by the
amount of the paid additional monetary contribution recognized as asset
according to the IFRSs and the amount of the unused development reserve
decreased by the related deferred tax calculated based on the standard IAS
12 Income Taxes.
Evaluation reserve
the cumulated amount of the other compre
hensive income in the
comprehensive income statements according to the standard IAS1
Presentation of Financial Statement also including the other comprehensive
income in the current year.
Profit or loss after
taxes
the concept defined in Section 114/A (9)
of the Accounting Act.
Allocated reserves
the amount of the received additional monetary contribution recognized as
liability according to the IFRSs, increased by the amount of the unused
development reserve decreased by the related deferred tax calculated based
on the standard IAS 12 Income Taxes.
When preparing the final statement of assets and liabilities in the case of transformation, the Company
settles negative capital elements from retained earnings during the settlement phase. However, these
capital elements are only reclassified with a view to the final statement of assets and liabilities.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Dividends
Dividend is paid on the Company’s registered, dematerialized ordinary “A” series shares with a face
value of HUF 12.5, recorded with the identifier HU0000155726ISIN – excluding the treasury shares held
by the Group, as well as shares that do not entitle their holders to dividend pursuant to Section 3:298(3)
of the Civil Code.
Other accounting policies
Transactions denominated in foreign currencies
The Company determines its functional currency. The functional currency is the currency which reflects
the operation of the entity in question the most accurately. The Company’s functional currency is the
Hungarian Forint (HUF).
The points to consider are as follows:
• which is the currency in which the majority of the entity's income is derived;
• which is the currency in which the entity's costs are incurred;
• which is the main financing currency.
The above considerations are listed in order of importance.
An entity may incur exchange differences on translation only with respect to a foreign currency.
Transactions in foreign currencies are translated into forint using the foreign exchange rate announced
by the Central Bank of Hungary, effective on the day of performance. Incoming supplier and outgoing
customer invoices where the exchange rate calculation according to the provisions concerning the
determination of the tax base in forint, within the meaning of Act CXXVII of 2007 on the Value Added
Tax shall be applied, are exceptions.
During the year the realized exchange rate gain/loss amounts are from the difference between the
exchange rates effective on the day of performance and the day of financial performance; these
amounts are recognized by the Company among other incomes, expenses of financial transactions.
The Company classifies its assets and liabilities as monetary and non-monetary items. Monetary items
include those whose settlement or inflow involves the movement of cash, and also include cash itself.
Items relating to receivables or liabilities which do not involve the movement of cash (e.g. advances
given for services or inventories) do not qualify as monetary items.
At the reporting date, monetary items denominated in foreign currency are revalued to the spot rate
effective at the reporting date. For the purpose of translation, the Company uses the exchange rate for
the reporting date published by the Central Bank of Hungary.
Objectives of accounting system maintenance
The Company established the structure of its financial system (e.g. chart of accounts, analytics) beyond
the provisions of the IFRS so that data required by other fields of expertise can be retrieved.
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Significance, faults and fault effects
According to the rules of the IFRS an item qualifies as significant if omission or false presentation of the
item can influence the decisions of users made based on the financial statements. Considering
significance the Company uses the value limit of the fault with a significant amount as defined in Act C
of 2000 on Accounting.
An item is always significant if the total amount (regardless of sign) of faults and fault effects increasing
or decreasing profits, equity, discovered in the year of discovering the fault, in the course of the series
of reviews - concerning the same year - exceeds 2 percent of the Company’s statement of financial
position total of the financial year under review. If 2% of the statement of financial position total exceeds
HUF 150 million, then the limit of significance is HUF 150 million. At the same time the management of
the Company reserves the right to qualify an item of smaller amount significant, depending on the
evaluation of the extent and nature of the omission or false presentation under the given circumstances.
When evaluating an item the size and nature of the item in question or the combination of the two is
the decisive factor.
With regards to their content, the faults can be omissions or false presentations in the financial
statements of the entity for one or more previous periods, originating from not using or improper usage
of reliable information. Such faults can be mathematical faults, faults in the application of the accounting
policy, disregarding or incorrect interpretation of facts and the effects of fraud.
Earlier periodical faults shall be corrected with retroactive re-establishment, except if the effects or
cumulative effects of the fault concerning individual periods are impossible to determine. Impossibility
occurs if the Company cannot correct a fault or cannot apply a new rule retroactively even after doing
everything that can be reasonably expected for the right application. The causes of impossibility can be
for example uncertainties of calculations due to the lack of available data.
8. Description of risks
The management of the Group considered and assessed the specific risk factors associated with the
ALTEO Group and the securities issued by the Company as well as the potential risks involved in making
an informed investment decision, based on the probability of the occurrence of such risks and the
anticipated extent of their negative impact. These Financial Statements only contain the risk factors that
were assessed as material by the Company. The Company provides the results of the materiality analysis
using a qualitative scale, indicating a “low”, “medium” or “high” risk level next to each risk factor. The
risk factors have been ordered within their respective categories based on their materiality.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
41 / 104
Risk categories:
A/ Macroeconomic and legal system related risks
B/ Risks specific to the market and the industry
C/ Risks specific to the ALTEO Group:
type type number Risk 2021 2020 change
A/ Macroeconomic and legal system related risk factors
A
1
Risks stemming from the legal system
high
high
none
A/ Macroeconomic and legal system related risk factors
A
2
Macroeconomic factors
medium
medium
none
A/ Macroeconomic and legal system related risk factors
A
3
Taxation
medium
medium
none
A/ Macroeconomic and legal system related risk factors A 4 Risks related to the United Kingdom leaving the European Union (Brexit) low low none
type type number Risk 2021 2020 change
B/ Risks specific to the market and the industry B 5
Energy market regulation
high
high
none
B/ Risks specific to the market and the industry B 6
Regulated prices
high
high
none
B/ Risks specific to the market and the industry B 7
Electricity balancing reserve capacity system risks
high
high
none
B/ Risks specific to the market and the industry B 8
Government grants
high
high
none
B/ Risks specific to the market and the industry B 9 CO
2
emission market, CO
2
quota allocation system and CO
2
quota prices medium medium none
B/ Risks specific to the market and the industry B 10
Changes in technology
medium
medium
none
B/ Risks specific to the market and the industry B 11
Competitive situation
medium
medium
none
B/ Risks specific to the market and the industry B 12
Funding risk
medium
medium
none
B/ Risks specific to the market and the industry B 13
Foreign exchange rate changes
medium
low
yes
B/ Risks specific to the market and the industry B 14
Impact of international market developments on domestic trade
medium
medium
none
B/ Risks specific to the market and the industry B 15
Risk of changing natural gas, electricity and heat energy price margins
medium
medium
none
B/ Risks specific to the market and the industry B 16
Environmental legislation
medium
medium
none
B/ Risks specific to the market and the industry B 17 Risks related to the spread of COVID-19 high high none
type type number Risk 2021 2020 change
C/ Risks specific to the ALTEO Group C 18
Risks arising from operating the Virtual Power Plant
high
high
none
C/ Risks specific to the ALTEO Group C 19
Political risks
high
medium
yes
C/ Risks specific to the ALTEO Group C 20
Dependence on weather
high
high
none
C/ Risks specific to the ALTEO Group C 21
Risks of growth
medium
medium
none
C/ Risks specific to the ALTEO Group C 22
Risks stemming from acquisitions, buying out projects and companies
medium
medium
none
C/ Risks specific to the ALTEO Group C 23 Risks related to power plant project development and green-field investment medium medium none
C/ Risks specific to the ALTEO Group C 24
Large-scale, customized projects
medium
medium
none
C/ Risks specific to the ALTEO Group C 25
Energy trade risks
medium
medium
none
C/ Risks specific to the ALTEO Group C 26
Operating risks
medium
medium
none
C/ Risks specific to the ALTEO Group C 27
Fuel risk
medium
medium
none
C/ Risks specific to the ALTEO Group C 28
Renewing and/or refinancing outstanding debts
medium
medium
none
C/ Risks specific to the ALTEO Group C 29
Information technology systems
medium
medium
none
C/ Risks specific to the ALTEO Group C 30
Wholesale partner risks
medium
medium
none
C/ Risks specific to the ALTEO Group C 31
Dependence on third-party suppliers
medium
medium
none
C/ Risks specific to the ALTEO Group C 32
Buyer risk
medium
medium
none
C/ Risks specific to the ALTEO Group C 33
The risk of key managers and/or employees leaving the Company
medium
medium
none
C/ Risks specific to the ALTEO Group C 34
The risk of introducing and using new power plant technologies
medium
medium
none
C/ Risks specific to the ALTEO Group C 35
Authority risk
low
low
none
C/ Risks specific to the ALTEO Group C 36
Key licenses and qualifications
low
low
none
C/ Risks specific to the ALTEO Group C 37
The risk of not fulfilling the obligations associated with operating its own
balancing group
low low none
C/ Risks specific to the ALTEO Group C 38
Options to purchase certain means of production
low
low
none
C/ Risks specific to the ALTEO Group C 39
Business relationships associated with the Owners’ Group
low
low
none
C/ Risks specific to the ALTEO Group C 40
The risk of being categorized as a de facto group of companies
low
low
none
C/ Risks specific to the ALTEO Group C 41
Taxation
low
low
none
C/ Risks specific to the ALTEO Group C 42
Environmental risks
low
low
none
C/ Risks specific to the ALTEO Group C 43
Risk of bankruptcy and liquidation proceedings
low
low
none
C/ Risks specific to the ALTEO Group C 44
Any discrepancies between the data in the consolidated and IFRS reports and the
data in the reports prepared in line with the Hungarian Accounting Standards
(HAS)
low low none
C/ Risks specific to the ALTEO Group C 45 The risk of entering new geographical markets low low none
Notes to the separate financial statement 2021 of ALTEO Nyrt.
42 / 104
a. Macroeconomic and legal system related risk factors
1.
Risks stemming from the legal system
The legal system can be considered relatively underdeveloped in Hungary—where the ALTEO Group
currently pursues its activities—and in the Company’s various strategic target countries. According to
conventional wisdom throughout these countries, legal regulations change quite frequently, authority
and court decisions are, on occasion, contradictory or inconsistent or difficult to construe. These
circumstances can make it difficult for the Company to perform its tasks in a manner fully compliant
with legal regulations, and this can expose the company to arbitration, litigious, non-litigious and other
risks of legal nature that affect its profitability.
2.
Macroeconomic factors
The ALTEO Group’s operations and profitability stands exposed to macroeconomic developments in
Hungary and the countries of the European Union, particularly to how economic growth and industrial
production, as well as the financial position of general government shapes up. Certain negative
developments in the macroeconomic environment may have adverse effects on the profitability of
specific the ALTEO Group activities.
3.
Taxation
The current taxation, contributions and duties payment regulations applicable to the ALTEO Group are
subject to change in the future, meaning that it is particularly impossible to rule out potential increases
in the rate of the special tax imposed on energy generators and energy traders, moreover that new taxes
with adverse effects on enterprises active in the electricity sector could be imposed, any of which would,
in turn, increase the ALTEO Group’s tax liability. Applicable tax regulations are open to frequent and
major changes, even with retroactive effect, and that could impact the ALTEO Group’s sales revenue and
profitability alike.
4.
Risks related to the United Kingdom leaving the European Union (Brexit)
The risk is not considered relevant to the Company's operations. Further description and further
monitoring of the risk has been discontinued.
b. Risks specific to the market and the industry
5.
Energy market regulation
The operation and profitability of the ALTEO Group greatly depend on the energy market regulations in
Hungary and in the European Union, as well as on the application of such regulations, including in
particular legislation, authority and court practice, Hungarian and international processes, trade and
operational regulations, as well as other applicable regulations relating to electricity generation,
electricity trade, the market of ancillary services in the electricity industry, the utilization of renewable
energy sources, energy and heat produced in cogeneration power plants, district heat generation and
district heating services, natural gas trade, as well as allowance allocation and trade. In 2018, the
Notes to the separate financial statement 2021 of ALTEO Nyrt.
43 / 104
European Union adopted new energy-related legal regulations under the title “Clean Energy For All
Europeans”.
Changes in these regulations and the transposition of the EU regulatory framework may have a
significant impact on the operation, profitability, market position and competitiveness of the ALTEO
Group.
6.
Regulated prices
The various affiliates of the ALTEO Group engage in activity whose price is determined or capped through
legislation or regulation by some authority (including in particular the HEPURA, ministries and municipal
governments). These prices, set out in legal regulations or set by an authority, furthermore, any
modifications in the material scope of official price regulation may have a significant impact on the
profitability and competitiveness of the Company, as well as its various Subsidiaries.
7.
Electricity balancing reserve capacity system risks
In addition to the development of the price margin between electricity and heat energy, the financial
position of gas-fired power plants is significantly influenced by the pricing and accessibility of the
electricity markets for balancing reserve capacity and energy. If, for any reason, access to these markets
becomes limited with respect to production units within the sphere of business interests of the ALTEO
Group, including a drop in service volumes attributable to a substantial fall in market prices, this may
have an adverse impact on the business activity and profitability of the ALTEO Group. Considering that
the ALTEO Group is present on the balancing energy market(s) as a service provider as well as a buyer
of services, price changes in such market(s) may have a significant effect on the capacity of the Company
to generate finance income.
8.
Government grants
ALTEO Group’s operation and profitability could depend on the amount of state subsidies applicable to
the utilization of renewable energy sources and cogenerated energy in Hungary and the countries of the
European Union, as well as those for investment projects and operation, moreover on any future
changes in government grants.
The Commission Guidelines on State Aid for Environmental Protection and Energy set up a new
framework of EU requirements to be met by any government grant provided to the energy sector and
to be applied in Hungary too. Furthermore, in December 2018, the EU adopted the RED2 Directive and
Member States, including Hungary, had to transpose it by June 30, 2021.
In recent years, the ‘KÁT’ (i.e. mandatory electricity off-take) system has undergone changes that also
affected the operating model. ‘METÁR’ (i.e. the support system for renewables), which embodies a
comprehensive recast of the KÁT regime, became effective on 1 January 2017 (some of its elements on
21 October 2017). Changes in state subsidy regimes, and especially in the KÁT and METÁR regulations,
or a possible cancellation of applicable grants may have a significant impact on the operation,
profitability, market position and competitiveness of the Company. Hungarian legal regulations aimed
at transposing the RED2 Directive have not yet been created, furthermore, no tender subject to the
METÁR system has yet been announced, so whatever potential impact those might have on the
Company’s sales revenue and profitability is as yet unknown.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
44 / 104
9.
CO
2
emission market, CO
2
quota allocation system and CO
2
quota prices
The fourth EU ETS trading period (2021–2030) began on 1 January 2021. During this period, in addition
to emission allowances received free of charge, emitters can acquire emission allowances solely at
auctions or through secondary commercial channels. In the period between 2021 and 2030, specific
power plants in the ALTEO Group are going to be allocated, free of charge, an emission unit allowance
that will decrease every year, based on the National Implementing Measure published by the Ministry
for Innovation and Technology and approved by the European Commission. A significant change
compared to the third trading period is that in trading period IV, the free allocation available for a given
year is largely determined by the level of activity of installations to be certified each year, as well as its
changes. In the event of a 15% change in the activity level compared to the base period, the
predetermined quota levels will need to be adjusted and approved by the European Commission. This
is to ensure that the allocation better reflects the real activity of the facilities. Changes in the legal
environmental and allocation system rules to achieve the climate policy targets, and the increase in price
of the emission allowances can have a considerable impact on the operating costs and economic results
of the ALTEO Group.
10.
Changes in technology
Technological innovations can significantly improve the efficiency of the energy industry, especially in
the area of renewable energy production. Technological development can not only reshape the
technologies the ALTEO Group uses, but, in certain cases, might even completely eliminate their use. If
the ALTEO Group has no appropriate experience with or cannot access (on account of patent protection
or due to other grounds) solutions and technologies that become prominent, this may lead to a loss of
the ALTEO Group’s market share and a decrease in its revenues and profitability. There is no way to
guarantee that the ALTEO Group will always be in a position to choose and procure, then operate—in a
most profitable way—the most efficient technology.
11.
Competitive situation
There are multiple companies both in Europe and Hungary that have significant positions and
experience, as well as advanced technologies, major capacities and financial strength—among them
state or municipal government owned and controlled ones—that compete on the ALTEO Group’s various
markets or may start competing with the ALTEO Group in the future. Should it become more intensive
in the future, competition may necessitate unforeseen improvements and investments, furthermore,
might also have a negative effect on the price of the ALTEO Group’s services or increase the Group’s
costs, which may have an adverse effect on the ALTEO Group’s bottom line, as measured on a
consolidated basis. The ALTEO Group has demonstrated to possess substantial professional experience
and background in the preparation and implementation of energy investments and in the operation of
such facilities.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
45 / 104
12.
Funding risk
Preparing for and implementing investments and developments in the energy segment are capital-
intensive processes requiring substantial funding. Changes in certain factors (including the general
economic environment, credit markets, bank interest rates and foreign exchange [FX] rates) may
increase the costs of funding, make the accessing and repayment of funding more difficult, and cause
delays in the same or even render it outright impossible, and this is understood to also include financing
schemes already established on the date of these Financial Statements.
A large part of the ALTEO Group’s bank loans come with variable interest rates and are linked to
reference interest rates, such as BUBOR or EURIBOR. An unfavorable change in the interest rates could
have an adverse effect on the profitability of the ALTEO Group. The ALTEO Group enters into interest
rate swap (IRS) transactions to mitigate its interest rate exposure. Such transactions are concluded after
due consideration of the respective economic environment, and facility-related terms and conditions.
These transactions allow for reducing risk, however, the ALTEO Group is not able to completely eliminate
negative risks stemming from variable interest rates.
ALTEO’s current indebtedness in bonds fully comprises HUF-denominated, zero-coupon or fixed annual
interest-bearing bonds.
13.
Foreign exchange rate changes
The part of ALTEO Group’s sales revenue generated in HUF and, on the expenditure side, not covered
with FX-revenue, to be settled in FX or subject to foreign exchange rates, the Group may incur gain or
loss, due to the changes in HUF and FX prices, To manage foreign exchange exposures, the Group
operates a forecasting system using foreign exchange cash flow modelling, on the basis of which it
manages the assessed and evaluated risks by means of market transactions.
14.
Impact of international market developments on domestic trade
Market prices seen on foreign commodity exchanges have a major influence on energy prices in
Hungary, even though those prices move, to a significant degree, on the basis of economic processes,
as well as supply/demand conditions outside Hungary. New developments in economic processes and
changes in supply-demand relations may have a negative effect on ALTEO Group’s profitability under
certain circumstances.
15.
Risk of changing natural gas, electricity and heat energy price margins
Any changes in the difference between (margin on) the (procurement) price of natural gas and the price
of electricity and/or heat that is sold influence the financial position of natural gas-fired power plants
significantly. Were this margin to drop significantly, it could have a negative effect on the business and
profitability of the ALTEO Group.
16.
Environmental legislation
Any unfavorable changes in the environmental legislation applicable to the ALTEO Group may generate
surplus costs or additional investment requirements for the ALTEO Group.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
46 / 104
17.
Risks related to the spread of COVID-19
To the best of its knowledge, ALTEO Group does not have any direct customers or suppliers for its
revenue-generating activities or services who are domiciled in countries that are under quarantine due
to the COVID-19 virus as of the date of publication of this Management Report. However, COVID-19 may
affect those markets where ALTEO Group is also active, and so it may have an indirect impact on ALTEO
Group’s operations and profitability. The management of ALTEO Group is not in a position to assess the
risks from the potential outcomes of COVID-19 in the entire supply chain or the risks indirectly affecting
the Company.
The direct personnel of ALTEO Group and the workforce of its subcontractors and suppliers involved in
each ongoing project may be affected by the spread of the COVID-19 virus and the measures taken or
to be taken during the same. Illnesses can have a negative impact on ALTEO Group’s work processes,
the timing of ongoing projects and may also have detrimental effects on the labor market. The state of
danger imposed in Hungary may have a negative impact on the profitability and liquidity on the clients
and consumers of ALTEO Group and may also result in the decline of their demand for energy and
willingness to invest, which may have a detrimental effect also on ALTEO Group’s profit. ALTEO Group’s
management has taken the necessary measures to address the risks related to the protection of its
employees’ health and has set up a Pandemic Executive Board and adopted a Pandemic Plan. ALTEO
Group’s management continuously monitors events related to the COVID-19 virus and, if necessary,
takes the necessary steps based on these.
c. Risks specific to the ALTEO Group
18.
Risks arising from operating the Virtual Power Plant
The income generating capacity of the ALTEO Virtual Power Plant and related production units within
the sphere of business interests of the ALTEO Group is highly dependent on the availability and pricing
of balancing reserve capacity and energy markets in the electricity system. If, for any reason, access to
these markets becomes limited with respect to the Virtual Power Plant, including a drop in service
volume attributable to a substantial fall in market prices, this may have a highly adverse impact on the
business activity and profitability of the ALTEO Group.
19.
Political risks
The ALTEO Group provides some of its services to institutions which are owned by municipalities or are
under the influence of municipalities or certain statutory corporations. Furthermore, the agreements
made with such institutions have a major effect on the operation of certain members and projects of
the ALTEO Group. The considerations governing the motivation of bodies having influence over such
institutions may differ from the considerations of a rational, profit-oriented market player, which is a
Notes to the separate financial statement 2021 of ALTEO Nyrt.
47 / 104
risk in terms of contract performance. Such risks arise primarily relating to the district heating generation
activities of Alteo Therm at its sites in Sopron, Kazincbarcika, Tiszaújváros and Zugló.
The occurrence of events that may be classified as political risks may have an adverse impact on the
exposed Subsidiaries of the ALTEO Group and, overall, the profitability of the ALTEO Group.
20.
Dependence on weather
Part of the ALTEO Group’s energy production capacities (e.g. wind turbines, solar power plants,
hydropower plants) and the energy demand of certain buyers (e.g. heat demands) depend on the
weather, therefore, changes in weather may significantly affect the profitability of the ALTEO Group. In
the case of weather-dependent energy production, no major change can be expected in the average
annual output, but within a year and between years, differences may occur. In the case of a weather-
dependent change in energy demand, even longer-term trends of changes may develop (such as milder
winters).
In the case of weather-dependent energy production, the Company relies on meteorological forecasts
to estimate (schedule) the quantity of electricity that can potentially be generated. If the weather is not
as predicted, there will be changes in the amount of electricity produced as compared to the plans (Day-
Ahead or Intra-Day schedules), which may cause a significant loss for the ALTEO Group. See also
Electricity balancing reserve capacity system risks.
The weather affects the ability to perform heat supply contracts that have no heat volume commitment,
given the heat purchase obligations. The actual weather, as compared to the forecasted trend, has an
effect on the profitability of the Group. The actual value of heat transfer may in reality be different from
the planned level; as a consequence, the fair value of the hedging transactions obtained in accordance
with the hedging policy of the Group in respect of such products may need to be reclassified into profit
or loss.
The Company’s strategy is to keep on developing weather-dependent, renewable energy production
projects, and that might increase the dependence on weather in the future.
21.
Risks of growth
The ALTEO Group is in the phase of business growth, coupled with the growth of employee staffing, the
number and value of the facilities and tools. The ALTEO Group is planning to expand further both in
terms of business activities and geographical areas. There is no guarantee that the Company strategy
will be successful and the Company will be able to manage this growth efficiently and successfully.
With contributions from its Subsidiaries, in accordance with the present Financial Statements, the
Company is currently preparing for the implementation of several projects. In addition to the Company’s
intention, these project implementations depend on a number of other external factors. It cannot be
guaranteed that these projects will be actually implemented, or will be implemented in accordance with
the present Financial Statements; furthermore, the implementation of other future projects may
precede or substitute projects known on the date of the present Financial Statements.
Any of the potential risk events associated with growth may result in stagnation of the Company’s
growth or even operation at a loss.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
48 / 104
22.
Risks stemming from acquisitions, buying out projects and companies
The ALTEO Group wishes to implement its business plans partially via acquisition of already existing
energy projects and/or buying out companies. Although acquisition targets always undergo detailed
screening before the transaction, we cannot exclude the possibility of such financial, legal or technical
events occurring in relation to an acquired project or company that may have an adverse effect on the
business and profitability of the ALTEO Group.
Any of the potential risk events associated with the acquisition strategy may result in stagnation of the
Company’s growth or even operation at a loss.
23.
Risks related to power plant project development and green-field
investment
In ALTEO Group’s business plans, licensing and implementation of green-field energy investments plays
an important role. Although the ALTEO Group draws up careful technical, legal and profitability plans
when preparing for project implementation, there is always a possibility that the authorization of
specific projects becomes unreasonably long or impossible. During implementation phases, the ALTEO
Group strives to contract main and subcontractors that offer appropriate guarantees and references,
but even so, the possibility of disputes arising between the parties cannot be excluded in these phases.
Any of the potential risk events associated with green-field investments or development projects in
power plants may result in stagnation of the ALTEO Group’s growth or even operation at a loss.
24.
Large-scale, customized projects
In line with the characteristics of the industry, a significant share of ALTEO Group’s revenues comes from
large-scale, customized projects. Consequently, completing or not implementing just a few projects may
already make a big difference in terms of the Company’s future revenues and profitability. These large-
scale projects are frequently long-term (may take even several years), require a long-term allocation of
significant resources and are, in several cases, implemented using subcontractors. An eventual failure
of or loss on such large-scale investments may have a significant negative impact on ALTEO Group’s
profitability.
25.
Energy trade risks
Changes in the demand on electricity and natural gas markets may have a profound influence on the
revenues, profitability and strategic expansion plans of the ALTEO Group.
During ALTEO Group’s energy trading activities, portfolio planning is done on the basis of data service
from consumers and the Group’s calculations. A planning mistake or incorrect data service may lead to
inappropriate procurement strategy, where a subsequent correction can cause losses or gains to the
ALTEO Group.
The Company covers 100% of the annual consumer demand, but due to natural seasonality, open
positions remain, which are mainly closed on the spot market. Prices on the spot markets cannot be
Notes to the separate financial statement 2021 of ALTEO Nyrt.
49 / 104
planned in advance, any change in them may have unfavorable/favorable effect on the profitability of
the ALTEO Group.
Natural gas and electricity volumes are mainly contracted through low-risk wholesale partners and, to a
lesser extent, through exchanges. Trading is continuous, and therefore the prices of products change on
a daily basis, given that the trading in exchange-traded products is continuous. Day-by-day price
movements, sometimes with significant changes, may represent a risk in the case of longer-term
consumer proposals. Even though the ALTEO Group performs its trading activities on the basis of a risk
management procedure adopted by the Board of Directors; an eventual mistaken transaction may have
a significant negative effect on the profitability of the ALTEO Group.
26.
Operating risks
The economic performance of the ALTEO Group depends on the proper operation of its projects, which
may be influenced by several factors, such as:
• costs of general and unexpected maintenance or renewals;
• unplanned outage or shutdown due to malfunction of the equipment;
• natural disasters (fire, flood, earthquake, storm and other natural disasters);
• change in operative parameters;
• change in operating costs;
• eventual errors during operations; and
• dependence on third-party operators.
The energy generating companies of the ALTEO Group have in place “all risk” type property insurance
policies for machinery breakdown and outage, as well certain natural disasters. These provide cover for
damages traceable to such causes and also apply to liability insurance policies as well, where a cover is
provided for third-party damage caused by energy generating activities. However, it is not excluded that
a loss event is partially or entirely outside the scope of the risk assumed by the insurer, and so, the
insurant—either as the injured party or the responsible party—may be obliged to bear the damage.
The occurrence of any operational risks may have a highly adverse impact on the perception and
profitability of the ALTEO Group.
27.
Fuel risk
The price of strategic fuels used by the ALTEO Group is in line with the market processes. The possibility
that the price of the fuels procured by the ALTEO Group will increase in the future cannot be excluded,
which can have a negative effect on the Group’s profitability.
For ALTEO Group’s power plants burning hydrocarbons, the key types of fuel (primarily natural gas) are
procured from third-party suppliers. The natural gas transport agreements made by the ALTEO Group
are in line with the practices used by the entire industry. Despite that, there is no guarantee that the
fuel required for fueling the power plants will always be available, and it is especially difficult to plan
with fuel supply in the case of external events. The natural gas transport agreements made by the ALTEO
Group are also in line with the practices used by the entire industry and these may include an offtake
(a.k.a. “take-or-pay”) obligation, for the respective period, with a certain tolerance band. In the event of
Notes to the separate financial statement 2021 of ALTEO Nyrt.
50 / 104
a significant drop in natural gas consumption, incurrence of a penalty by the ALTEO Group due to gas
not taken over cannot be completely ruled out, and such an occurrence would have an adverse impact
on the profitability of the Company.
28.
Renewing and/or refinancing outstanding debts
In addition to loans from financial institutions, the ALTEO Group uses in part bonds - issued by ALTEO
either in a private or public offering - to fund its financing needs.
Negative changes and risks in the business prospects of the ALTEO Group, in the general financing
environment, in the interest environment or in the general capital market atmosphere may have a
negative effect on the renewal of bond debt and the refinancing of the ALTEO Group’s outstanding loans
would be possible only with significantly worse conditions or it might even become impossible. These
circumstances may have a negative effect on future financing and on the financial situation of the ALTEO
Group.
29.
Information technology systems
The activity of the ALTEO Group (in particular, the supervision of the power plants) depends on how
information technology systems operate. The improper operation or security of the ALTEO Group’s
information technology (IT) systems may have adverse consequences for the business and profitability
of the ALTEO Group.
30.
Wholesale partner risks
If the partner in a wholesale transaction does not deliver or accept the contracted amount of energy, or
cannot pay for the energy delivered, such failed transactions may lead to short- or long-term losses for
the Company. Although the ALTEO Group exercises utmost care in selecting its partners, any failure by
them to meet their obligations would have a negative impact on the profitability of the ALTEO Group.
31.
Dependence on third-party suppliers
During the implementation of energy investments, the ALTEO Group greatly depends on the suppliers,
manufacturers of certain equipment, as well as on the implementers and subcontractors, and that may
have an impact on the implementation of the investments. The ALTEO Group does not always have full
control over the equipment, installations and materials. If, for any reason, manufacturers or suppliers
fail to deliver the equipment ordered by the ALTEO Group at the right time, for the right price and in the
right quality, delays may occur in the implementation of investments and additional costs may arise,
which may have an adverse impact on the profitability of the ALTEO Group.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
51 / 104
32.
Buyer risk
A significant share of the ALTEO Group’s revenues comes from a small number of buyers making large
purchases. Consequently, winning or losing a client contract may already make a big difference in terms
of the Company’s future revenues and profitability.
As a consequence of having significant buyers, the ALTEO Group is exposed to non-payment risk. If an
important buyer of the ALTEO Group fails to pay or pays lately, that might cause a significant loss to the
ALTEO Group.
The ALTEO Group has fixed-term contracts with its significant buyers, suppliers and financing partners.
There is no guarantee that after the expiry of these contracts, the parties can reach an agreement
regarding the extension of these contracts. Even fixed-term contracts offer no guarantee against their
termination before the end of their specified term due to some unexpected or exceptional event.
ALTEO Group sells electricity and provides district heating services for certain public institution users.
Upon request from such users, the relevant Subsidiary is obliged to provide an exemption from
termination due to late payment (a moratorium), for a specified period, subject to the conditions laid
down by law. Costs occurred due to the moratorium must be borne by the relevant Subsidiary.
33.
The risk of key managers and/or employees leaving the Company
The performance and success of the ALTEO Group greatly depends on the experience and availability of
its managers and key employees. Managers or key employees leaving the Company or their absence
may have a negative impact on the ALTEO Group’s operation and profitability.
34.
The risk of introducing and using new power plant technologies
In accordance with its business plans, the ALTEO Group may introduce into the portfolio certain
technologies that were not included in their power plant portfolio until now. Although the ALTEO Group
implements only proven technologies holding a number of references, if the performance of a given
technology is lower than previously projected, it may cause a loss to the ALTEO Group.
35.
Risks arising from authorities' opinions and findings
In addition to the tax authority, several other authorities (such as the Central Bank of Hungary and
HEPURA) are entitled to check the proper functioning of the rules at the ALTEO Group. The ALTEO Group
does everything that can reasonably be expected of it to ensure the compliance of its operation with
the requirements set out in legal regulations or specified by the authorities. Nevertheless, the possibility
that future inspections by the authorities will result in statements leading to substantial expenses for
the ALTEO Group, or that the competent authorities will impose certain sanctions (penalty, suspension
of operation or withdrawal of the license required for operation) against some companies of the ALTEO
Group cannot be excluded, which may have an adverse impact on the perception and profitability of the
Company.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
52 / 104
36.
Key licenses and qualifications
For performing their activities, members of the ALTEO Group need several permissions (such as small
power plant consolidated permit, KÁT permit, as well as environmental and water rights licenses). If
these certificates, qualifications and licenses are revoked or not extended, the business of the ALTEO
Group would be profoundly limited. Therefore, this could have a significant negative impact on the
Group’s profitability.
37.
The risk of not fulfilling the obligations associated with operating its own
balancing group
As part of its electricity trading activity, ALTEO Energiakereskedő operates a balancing group of its own,
an accounting organization with the membership of electricity users and electricity producers in
contractual relationship with ALTEO Energiakereskedő, and performs its related tasks specified in
legislation and in the electricity supply regulations. ALTEO Energiakereskedő itself has all licenses,
financial securities, assets and resources required for operating the balancing group, but in the case of
a malfunctioning or a shortage, ALTEO Energiakereskedő may not be able to perform its duties as the
entity responsible for the balancing group, therefore, it would have to bear all relevant damages and
fines.
ALTEO Energiakereskedő is involved in a balancing group cooperation with several balancing group
managers. Should these balancing group managers suspend or terminate their activities, the transfer of
their tasks may imply significant costs for ALTEO Energiakereskedő and, if the transfer of the tasks
performed by the balancing group managers cannot be settled immediately, without problems, then,
even a significant amount of surcharge payment may be the result thereof.
38.
Options to purchase certain means of production
Third parties have options to purchase certain means of production of the ALTEO Group. If the relevant
contracts are not amended or new service contracts are not signed, these assets will not contribute to
the Company’s revenues and profits after the time when they are sold. Apart from that, the Company
may suffer losses from such sale transactions. In its business plans, the Company anticipates the
expiration of these contracts and the loss of ownership of the means of production; any contract
renewals or the retention or more favorable sale of ownership will result in additional profits compared
to the plans.
On the basis of the investment and long-term heat supply contracts concluded between the legal
predecessors of Alteo Therm Kft. and the local municipalities of Kazincbarcika, Ózd and Tiszaújváros, the
municipalities are entitled to buy those heating power plants upon the expiry of such contracts, at the
value specified in the accounting records.
Under a purchase option contract between MOL Petrochemicals Co. Ltd. and Sinergy on the Tisza-WTP
business share, MOL Petrochemicals Co. Ltd. is entitled to purchase, until June 30, 2027 at the latest,
the Tisza-WTP business share at a price calculated according to the methodology specified in the
contract.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
53 / 104
Under a long term contract concluded by Zugló-Therm and FŐTÁV Zrt. on purchasing and selling heat
energy, as well as an agreement establishing a purchase option concluded at the same time, upon expiry
of that contract (expected by May 31, 2030) or in the case of termination by Zugló-Therm, FŐTÁV Zrt. is
entitled to buy the gas engine block heating power plant established by Zugló-Therm for an amount of
EUR 1, further to its decision adopted at its discretion. If FŐTÁV Zrt. fails to exercise their purchase
option, and the parties are unable to reach an agreement on the future of the heating power plant,
Zugló-Therm will be obliged to demolish it at its own expense and restore the property used by it for
this purpose to its original condition.
39.
Business relationships associated with the Owners’ Group
The ALTEO Group is part of the Owners’ Group, and there are several business relationships between
the two groups. A portion of the ALTEO Group’s revenues and services used comes from the Ownership
Group. There is no guarantee that in the case of an eventual future change in the ownership structure
of the Company or of these businesses the relationship of the ALTEO Group with these businesses
remains unchanged. The termination of these buyer, financing and supplier relationships may have a
negative effect on the profitability of the ALTEO Group and limit its options to access funding in the
future.
40.
The risk of being categorized as a de facto group of companies
The ALTEO Group includes several Subsidiaries. In the case of ALTEO Group, in the absence of a uniform
business policy or, in the case of certain Subsidiaries, the lack of other conditions, no control agreement
was concluded and ALTEO Group does not qualify as a recognized company group. At the same time, it
cannot be excluded that based on the request of a legal entity with an interest of legal nature, the court
will oblige the member companies of ALTEO Group to enter into a subordination agreement and to
initiate the registration of the company group with the Court of Registration, or categorize ALTEO Group
as an actual company group even in the lack of a court registration. In a situation like that, if a subsidiary
was liquidated, the Company would be obligated to honor its debt repayment obligations toward the
creditors, except if it can prove that the insolvency was not the consequence of the company group’s
integrated business policy.
41.
Taxation
The ALTEO Group does everything that can reasonably be expected of it to ensure that its operation is
in compliance with the regulations, but it cannot be excluded that a future tax audit will result in
substantial expenses in the form of a tax liability payable by the Company or its subsidiaries. The National
Tax and Customs Administration of Hungary (abbreviation in Hungarian: NAV) performed a
comprehensive tax audit at the Company for the year 2018. The audit findings did not result in any
noteworthy changes in the tax positions of the Company, and the Company met all obligations imposed
on it on the basis of those findings.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
54 / 104
In certain acquisition contracts, the parties to the contract acting as sellers to the ALTEO Group accepted
a full guarantee for the period of tax law limitation for the reimbursement of the tax debts of the target
companies for the periods prior to their getting into the ALTEO Group. Nevertheless, there is no
guarantee that any claims for reimbursement against the sellers may be fully enforceable, which may
result in a loss for the ALTEO Group.
42.
Environmental risks
During their activities the ALTEO Group’s companies use materials and apply technologies that could be
harmful to the environment if used inappropriately, not complying with legislation or with the relevant
permissions. Members of the ALTEO Group have the necessary environmental licenses and policies in
place, and their expert staff do their job with special care as required by the nature of this business. But
there could be extraordinary events which may entail invoking the environmental remediation
obligation of the affected company or imposing a fine, or may lead to enforcing claims against the
affected company. The ALTEO Group’s insurance policies may not provide any cover or full cover for
damages and costs resulting from such events, which may result in a loss for the ALTEO Group.
43.
Risk of bankruptcy and liquidation proceedings
If the court requires bankruptcy proceedings to be instituted against the Company, the Company will be
granted a payment extension. Pursuant to Section 10(4) of the Bankruptcy Act, the term of payment is
extended until 00:00 a.m. on the second business day following the 120
th
day from the publication of
the decision on the bankruptcy proceedings. Under certain conditions, the extension may be prolonged
for up to 365 days from the start date of the bankruptcy proceedings. In the event of liquidation
proceedings, the Bond claims of Bond holders will be satisfied as other receivables pursuant to Section
57(e) of the Bankruptcy Act. Any bankruptcy or liquidation proceedings initiated against the Company
would have a significantly adverse impact on the rate of Bonds and the probability of their full
repayment.
The maturity dates of the Company’s financial instruments are the following:
Notes to the separate financial statement 2021 of ALTEO Nyrt.
55 / 104
44.
Any discrepancies between the data in the consolidated and IFRS reports
and the data in the reports prepared in line with the Hungarian Accounting
Standards (HAS)
The Company and its Subsidiaries prepare individual reports in line with HAS for each financial year.
Beginning with the fiscal year of 2010, the Company prepares a consolidated financial statement
according to the IFRS standards in addition to the separate HAS report. As of 2017, the Company has
prepared its separate financial statement in line with the IFRS standards. Valuation and presentation
principles applied in the reports of subsidiaries and of the Company prepared according to the HAS
requirements are different from those applied in the consolidated financial statement. Due to the
differences in the accounting systems, the information content of the simple aggregation of the separate
HAS financial statements and that of the consolidated IFRS financial statement are independent and
separate.
45.
The risk of entering new geographical markets
The ALTEO Group might implement acquisitions and green-field investments overseas as well, therefore,
any unfavorable changes in the macroeconomic, business, regulatory and/or legal environment of the
target countries may have an adverse effect on the financial performance of the projects obtained
through acquisition or implemented through green-field investments and consequently, on the
profitability of the ALTEO Group.
III. Changes in accounting policies, potential impact of IFRSs and IFRICs not
yet effective as at the reporting date of the financial statements and earlier
application
The Company’s accounting policies applied earlier did not change, with the exception of the listed items.
New accounting policies as of January 1, 2021
The following standards and interpretations (and their respective amendments) became effective
during the 2021 fiscal year
New and amended standards and interpretations published by IASB and accepted by the EU that become
effective from this reporting period:
Amendments to the existing Standards issued by IASB and adopted by the EU but not yet effective
New and amended standards - to be applied for the financial years starting on January 1, 2021
or thereafter:
EU endorsement ALTEO Group
Extension of the Temporary Exemption from Applying IFRS 9 - Amendment to IFRS 4 (issued on
June 25, 2020, effective for business years starting on January 1, 2021 or thereafter, the
amendments have been endorsed by the EU).
12/16/2020 none
Interest Rate Benchmark Reform, Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
16 (issued on August 27, 2020, effective for the business years starting on January 1, 2021 or
thereafter, the amendments have been endorsed by the EU).
01/13/2021 none
Covid-19-Related Rent Concessions beyond June 30, 2021 (Amendment to IFRS 16 issued on
March 31, 2021, effective as of April 1, 2021 and for financial years beginning on or after that
date, endorsed by the EU).
08/30/2021 none
IASB publication Effective date
06/25/2020 01/01/2021
08/27/2020 01/01/2021
03/31/2021 04/01/2021
Notes to the separate financial statement 2021 of ALTEO Nyrt.
56 / 104
At the date of authorization of these financial statements the following standards issued by IASB and
adopted by the EU and amendments to the existing standards and interpretations were in issue but not
yet effective.
The implementation of these amendments, new standards and interpretations would not influence the
financial statements of the Company in a significant manner.
New and amended standards and interpretations issued by IASB and not adopted yet by the EU
The IFRSs adopted by the EU currently do not significantly differ from the regulations adopted by the
International Accounting Standards Board (IASB), with the exception of the new standards listed below,
any amendments of the existing standards and new interpretations that were not yet adopted by the
EU by the disclosure date of the financial statements.
The implementation of these amendments, new standards and interpretations would not influence the
financial statements of the Company in a significant manner.
IV. Critical estimates used in preparing the financial statements and other
sources of uncertainty
In preparing its financial statements, the Company made critical estimates in connection with the
following topics which, as a result, are sources of uncertainty.
Changes in accounting estimates is done by assessing the modification of the carrying amount of an
asset or liability or the amount of the periodical use of the asset, performed based on the evaluation of
the present situation of the assets and liabilities and the related expected future profits and
commitments. Changes in accounting estimates are caused by new information or new developments,
so, accordingly, these do not qualify as corrections. It is not necessary to change the modification of the
data of the comparative period if the accounting estimates change.
The management of the Company must review the accounting estimates of the following areas at least
annually:
Application for subsequent business years: EU endorsement ALTEO Group
IFRS 17 Insurance Contracts (issued on May 18, 2017, endorsed by the EU) 11/19/2021 there wil l be no effect
Reference to the ‘Framework for the Preparation and Presentation of Financial Statements’ -
Amendment to IFRS 3 Business Combinations (issued on May 14, 2020, effective for the
business years starting on January 1, 2022 or thereafter, the amendments have been endorsed
by the EU).
06/28/2021 there wil l be no effect
Proceeds before Intended Use - Amendment to IAS 16 (i ssued on May 14, 2020, effective for the
busi ness years starting on January 1, 2022 or thereafter, the amendments have been endorsed
by the EU)
06/28/2021 there will be no effect
Onerous Contracts: Cost of Fulfilling a Contract - Amendments to IAS 37 (issued on May 14,
2020, effective for the business years starting on January 1, 2022 or thereafter, the amendments
have been endorsed by the EU)
06/28/2021 there will be no effect
Annual Improvements to IFRS Standards - 2018–2020 (issued on May 14, 2020, the amendments
have been endorsed by the EU).
H2/2021 there wil l be no effect
IASB publication Effective date
05/18/2017 01/01/2023
05/14/2020 01/01/2022
05/14/2020 01/01/2022
05/14/2020 01/01/2022
05/14/2020 01/01/2022
Application for subsequent business years: EU endorsement ALTEO Group
Classification of Liabilities as Current or Non-current - Amendment to IAS 1 (issued on January
23, 2020, effective for the business years starting on January 1, 2023 or thereafter, the
amendments have not been endorsed by the EU).
- there will be no effect
Disclosure of material accounting pol icy information amending IAS 1 and IAS 8, and IFRS
Practice Statement 2 (issued: not yet endorsed by the EU)
- there will be no effect
Definition of accounting estimates amending IAS 8 (issued:...., not yet endorsed by the EU) - there will be no effect
Amendment of IAS 12 Income Taxes (issued: not yet endorsed by the EU) - there will be no effect
01/23/2020 01/01/2023
01/01/2023
IASB publication
01/01/2023
Effective date
01/01/2023
Notes to the separate financial statement 2021 of ALTEO Nyrt.
57 / 104
• estimates concerning the depreciation of the intangible assets (e.g.: useful life),
• estimates concerning the depreciation of the fixed assets (e.g.: useful life),
• estimates concerning the creation of provisions (e.g.: methodology of calculation, indicators for
determining provisions),
• estimates concerning the evaluation of inventories and receivables,
• estimates concerning fair value,
• accounting for project revenues,
• estimates concerning R&D assets,
• estimates concerning conditional purchase price.
The following might indicate the review of accounting estimates:
• changes in legal regulations,
• changes in the economic environment,
• changes in the operation, procedures of the company.
The useful lives and residual values of fixed assets and the related decommissioning liability can be
determined using estimates. Due to the high value of fixed assets, even slight changes in such estimates
can have a considerable effect.
The interest rate used for discounting could not be determined using actual market data; instead, the
Group was forced to employ alternative methods.
The management’s judgement in calculating the impairment of trade receivables is a critical decision
which directly impacts profit or loss.
Whether the assets and know-how created under the R&D project can be utilized is highly dependent
on the market and regulatory environment.
Of the power plant units of certain subsidiaries of the Company, the energy production of
• wind turbines,
• heating power plants,
• hydroelectric power plants,
• solar power plants
depends on the weather, therefore, changes in certain elements of the weather (wind force,
temperature, water yield) can also have a significant impact on the efficiency of the units in question.
Certain subsidiaries of the Company are involved in the district heating production business. This
business has been consistently making a loss for an extended period of time.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
58 / 104
In the case of certain subsidiaries of the Company, much of the capacities of power plants of are devoted
to one or two clients. Power plants where the Group has not signed long-term supply contracts with
clients are exposed to the risk of clients being lost.
The operation and profitability of the Company and its subsidiaries depends on the government
regulation of the market, especially on the taxation policy adopted by the state.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
59 / 104
V. Statements of profit or loss and of financial position
Allocation of the Company's statement of profit or loss to segments has been performed.
Presentation of the profit by segments is included in Note 32.
1.
Revenue
On the Company’s revenue line only items attributable to the Company’s core activity are accounted
for, not being revenues connected to discontinued activities.
The Company uses the amounts invoiced when recognizing revenue (with the exception of accruals
and deferrals). Generally, the nature of the Company’s services does not require other types of
adjustments. In the case of the energy industry projects, the recognized revenue was determined
taking account of the stage of completion. The Company leaves out taxes, fees recovered on behalf
of the state or some other party from its revenues and recognizes then as items decreasing expenses.
Lease income on subsidiaries recognized under leases according to IFRS16 rules are recognized as
revenues. Apart from the energy storage units, the Company does not keep any separate assets for
leasing purposes, nor does it lease its own assets. The Company does not sublease its leased assets.
The Company did not have royalty or dividend which should have been presented as revenue; its
revenue is only from domestic sales.
The breakdown of revenue by activities is as follows:
The Company derived its operating lease revenue from the leasing of energy storage units set up in
the course of its R&D activities.
Revenues
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Operation
13 160 772 7 859 016
Project development
350 959 5 640 887
Accounting fees
68 748 58 415
Income from lease
142 21 969
Operating lease
169 000 144 000
Other
12 699 1 437
Total
13 762 321 13 725 724
Notes to the separate financial statement 2021 of ALTEO Nyrt.
60 / 104
2.
Material expenses
Material expenses include items attributable to the Company’s core activity only, not being expenses
connected to discontinued activities.
In 2021, the Company recognized HUF 7,900 thousand as cost of auditing.
The Company uses the benefits as per IFRS16 in force in the current year and recognizes the following
items as lease payments: the central offices until the date of the relocation of headquarters, the car
leases maturing within one year and the lease of certain IT equipment of small value. The lease of these
assets is recognized directly in the statement of financial position of the period in question among the
material expenses.
Material expenses
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Operation, maintenance and project development (3 036 669) (8 031 315)
Expert fees (accounting, auditing, consultancy) (473 085) (307 777)
Rent /office, car, other devices, IT/ (182 906) (261 051)
Marketing, education, further training costs (118 352) (61 789)
Fuel (60 419) (61 007)
Bank expenses, insurance (70 289) (78 013)
Office maintenance exp. /operation, telephone, materials/ (50 216) (52 456)
Membership fees, duties (5 909) (3 644)
Other costs (55 991) (55 802)
Total
(4 053 835) (8 912 854)
Rental fees
2021
12 months
data in HUF
2020
12 months
data in HUF
Real estate rent (67 465) (115 263)
Vehicle rental (23 882) (49 476)
Site premises rent (36 660) (35 488)
Workwear rent (35 805) (33 788)
IT equipment rent (4 605) (7 715)
Rental fee of machinery, equipment (3 311) (9 547)
Other rental fees (11 178) (9 774)
Total (182 906) (261 051)
Notes to the separate financial statement 2021 of ALTEO Nyrt.
61 / 104
3.
Personnel expenses
The increase in personnel expenses was caused by the significant expansion of the workforce and the
related wage bill as well as an inflation-indexed wage increase.
In the current year, the Company distributed shares in the value of HUF 2,550 thousand to the
employees who were entitled to these on the basis of the Company’s recognition plan. In connection
with the shares granted, the transfer of the shares started on February 1, 2021.
The activities of the Company relating to its obligations regarding its share-based benefits are explained
in Section 19.4.
4.
Depreciation and amortization
Depreciation is explained in detail in Section
9
.
5.
Capitalized own production
Personnel expenses
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Wages (2 960 051) (2 813 246)
Other personnel expenses (415 305) (395 444)
Costs of share-based benefits (263 734) (7 297)
Contributions (550 622) (551 482)
Total
(4 189 712) (3 767 469)
Average statistical headcount 2021 2020
Alteo Nyrt. 270 260
Depreciation and amortization
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Depreciation and amortization (460 830) (352 643)
Total
(460 830) (352 643)
Capitalized own production
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Capitalized value of assets produced by the Company, wages 201 929 76 578
Other own performance - wages and material expenses 5 768 19 455
Total
207 697 96 033
Notes to the separate financial statement 2021 of ALTEO Nyrt.
62 / 104
Personnel and other material expenses directly related to the investments made within the group
are recognized in capitalized own performances.
Costs directly related to the production of inventories and to the cost of participations are disclosed
as other own production.
6.
Other revenues, expenses, net
Other income and expenses incurred in the current year and the comparative period were as follows:
Taxes among other items are not income taxes. These mainly contain deductions imposed by
municipalities (vehicle tax), taxes to be credited to other expenses (environmental product tax) and
other fees.
The value of scrapping recognized in Fixed assets and Intangible assets decreased significantly. That
is because assets shown among rights of use under IFRS16 included vehicles used under operating
lease contracts that were returned in 2020 before the end of the lease term and thus were de-
recognized in long-term lease liabilities as well.
Other revenues and (expenditures) comprise time-proportionate revenues of grants recognized
among deferred income, gains relating to insurance policies as well as expenses and incomes that
cannot be categorized, such as partner and tax current account settlements, time-proportionate
personnel repayments due to the departure of staff, rounding differences.
7.
Financial income, expenses, net
Finance income consists of the following items:
Other revenues and expenses
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Sale/scrapping of fixed and intangible assets (582) (26 611)
Fines, compensation, default interest received (paid) (182) 12 697
Reversal (settlement) of impairment, released receivables (143 696) (132 422)
Taxes and other payment obligations (388) (86)
Settlement of excess (deficit) in inventories (3 168) -
Other revenues (expenses) 62 447 71 733
Total
(85 569) (74 689)
Notes to the separate financial statement 2021 of ALTEO Nyrt.
63 / 104
The Company is entitled to dividend after its shares in its subsidiaries. In 2021 dividends received
included the following:
• Alte-A Kft. HUF 7,000 thousand
• Domaszék Kft. HUF 16,000 thousand
• Monsolar Kft. HUF 61,000 thousand
• Sunteo Kft. HUF 108,000 thousand
• Pannon Szélerőmű Kft. HUF 238,000 thousand
• Euro Green Energy Kft. HUF 1,500,000 thousand
Within finance income and expenses, the main component in translation gains and losses was the
exchange loss realized on items recognized in euros. The Company did not enter into cash flow
hedges in 2021.
Recognized impairment of shares was determined based on the discounted cash-flow model
considering the recoverable amount. The share traffic table in Note 11 contains the distribution of
recognized impairment concerning certain subsidiaries.
8.
Income tax expenses
The Company pays tax under Hungarian tax law. In the Hungarian tax system, such tax expenses for
the entity included corporate tax, the innovation contribution and the local business tax. The
breakdown of tax expenses is as follows:
Tax matters often require estimates and decisions which will later contradict the opinion of the tax
authority; therefore, a subsequent tax audit may reveal additional tax liabilities for periods for which
Financial profit
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Interests paid/payable (493 175) (484 362)
Received/receivable interest 294 218 320 578
Net interest expenses (198 957) (163 784)
Dividend received 1 930 000 8 560
Impairments (13 156) (153 957)
Foreign exchange difference (31 385) 45 116
Other financial settlements 775 108
Total
1 687 276 (263 957)
Income taxes
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Corporate tax 49 801 21 337
Other income taxes (local business tax, innovation contribution,
support deductible from corporate tax)
272 089 158 466
Deferred tax expenses 283 341 3 425
Total
605 231 183 227
Notes to the separate financial statement 2021 of ALTEO Nyrt.
64 / 104
a tax return has already been submitted. The Company operates in a tax environment which grants
tax authorities a wide range of powers to reclassify items and taxpayers are usually helpless against
these powers.
The ALTEO Group does everything that can reasonably be expected of it to ensure that its operation
is in compliance with the regulations, but it cannot be excluded that a future tax audit will result in
substantial expenses in the form of a tax liability payable by the Company or its subsidiaries. The
National Tax and Customs Administration of Hungary (abbreviation in Hungarian: NAV) performed a
comprehensive tax audit at the Company for the year 2018. In the course of the audit, no tax
deficiencies were identified, and no negative sanctions arising from legal consequences were
established.
In certain acquisition contracts, the parties to the contract acting as sellers to the ALTEO Group
accepted a full guarantee for the period of tax law limitation for the reimbursement of the tax debts
of the target companies for the periods prior to their joining the ALTEO Group. Nevertheless, there
is no guarantee that any claims for reimbursement against the sellers may be fully enforceable, which
may result in a loss for the ALTEO Group.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
65 / 104
Elaboration of corporate tax (data in thousand HUF)
The amount of deferred taxes disclosed in the statement of financial position is included in Note 12.
HUF thousand HUF thousand
IFRS profit or loss before taxes 6 867 349 450 145
Increasing items 2 503 089 680 977
Planned and extraordinary depreciation charge recognized in the
tax year pursuant to the Accounting Act
461 656 388 393
Costs and expenses not related to business activity 129
Fines established in final decisions or obligations arising from
legal consequences, recognized as expenses
157 33
Amount of impairment recognized regarding receivables 130 594 97 309
Receivables released (except to the benefit of a private individual) 54 618 14 351
Other 36 078 178 017
Amount of Share based payment to employees for equity
instruments recognized against profit or loss before taxes, and
the specified sum of the ESOP organization relating to equity
instruments
1 819 986
Amendment of corporate tax for previous years 2 745
Decreasing items 8 817 089 737 249
Amount written off from the loss carried forward (negative tax
base) from previous years
550 965 393 873
Depreciation recognized in accordance with the tax legislation 346 940 176 350
Allocated reserves within retained earnings, but not more than
50% of profit before taxation or HUF 500 million per tax year
(development reserve)
3 150 000
Dividends, shares received and recognized as income 1 930 000 8 560
Impairment reversed regarding receivables in the tax year,
irrecoverable portion of the cost of receivables
26 726
Amount of Share based payment to employees for equity
instruments recognized against profit or loss before taxes, and
the specified sum of the ESOP organization relating to equity
instruments
2 540 369
Local business tax, innovation contribution 272 089 158 466
Tax base 553 349 393 873
Tax (9%) 49 801 35 449
Benefit (reducing taxes) -11 368 0
Difference due to group corporate tax
Tax pursuant to the Corporate Tax Act 38 433 35 449
Support for sports and arts entitling to tax benefit -
-
Amendment of corporate tax for previous years 11 368 -2 744
Effect of corporate tax on profit or loss 49 801 32 705
Deferred tax asset (Fixed assets, Intangible assets) 984 200 960 968
Deferred tax asset (Impairment) -438 925 -450 181
Deferred tax asset (loss carried forward) -101 946
Recognition of deferred tax liabilities (Provisions) -15 500 -15 500
Recognition of deferred tax liabilities (Development reserve) 3 150 000 138 196
Effect of deferred taxes on profit or loss 283 342 -7 943
Local business tax expenditure 235 670 137 064
Innovation contribution expenditure 36 418 21 402
Effect of income taxes on profit or loss 605 231 183 228
Elaboration of the tax base
Year ending on 12/31/2021 Year ending on 12/31/2020
Notes to the separate financial statement 2021 of ALTEO Nyrt.
66 / 104
The tax authority may review books and records at any time within the 6 years following the relevant
tax year and may impose additional taxes or fines. The management of the company is not aware of
any circumstances from which a significant obligation might originate burdening the Company under
such a legal title.
The recognized tax expense can be related to the theoretical tax (which is the profit or loss before
taxes times the effective tax rate):
Permanent differences include, for example, the Company’s dividend income, which is a factor
decreasing the tax base, and all expenses not recognized by the Corporate Tax Act.
Income taxes
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Profit or loss before taxes 6 867 349 450 145
Theoretical tax (9%) 618 061 40 513
Explanation:
Current tax 49 801 30 442
Tax benefits 11 368 -
Tax for discontinued activities - -
Timing differences (deferred tax) 283 341 3 425
Permanent differences and unrecognized tax assets 284 919 6 647
Amount of theoretical tax (corporate tax)
618 061 40 513
Notes to the separate financial statement 2021 of ALTEO Nyrt.
67 / 104
9.
Fixed assets and intangible assets
The changes in assets are detailed in the following table:
data in HUF thousand
The depreciation of fixed assets is determined as explained in the accounting policy, in a straight-line
manner.
Between July 1, 2017 and June 30, 2019, co-funded by the National Research Development and
Innovation Fund, the Company successfully produced an R&D know-how asset as a result of its R&D
activity in connection with the integration of small heat and electricity cogeneration plants and weather-
dependent electricity generators, electricity-based heat energy production units and a battery electricity
storage facility belonging to the existing virtual power plant. In the opinion of the Company’s
management, the research activity aimed at generating other intangible assets meets the IAS 38
recognition criteria and the know-how created as a result of the activity generates revenue. Costs
incurred in the course of the development project are recognized among intangible assets.
The Company’s management considers that the fixed assets acquired and intangible asset (the R&D
asset) recorded under the R&D project for “Developing an innovative model for battery energy storage
applications” acquired through succession as part of the merger by absorption in 2018 can be recognized
Gross value
Property, plant and
equipment
Other intangible
assets
R&D intangible
assets
Rights of use Total
January 1, 2020 1 244 271 234 025 362 267 186 597 2 027 160
Decrease IFRS 16 - - - - 420 199
Investment 1 050 - - - -
Sale (1 126) - - - 1 050
Scrapping (57 281) (32 114) - (52 780) (1 126)
Reclassification to inventories - - - (142 175)
December 31, 2020 1 312 397 286 115 378 432 328 164 2 305 108
Decrease IFRS 16 - - - (29 602) 2 543 763
Investment 52 378 - - - (29 602)
Sale (962) - - - 52 378
Scrapping - - - - (962)
Reclassification to inventories - - - - -
December 31, 2021 2 748 943 466 012 438 161 1 217 569 4 870 685
Accumulated depreciation
Property, plant and
equipment
Other intangible
assets
R&D intangible
assets
Rights of use Total
January 1, 2020 193 952 80 480 9 170 54 723 338 325
De-recognition, sale (334) - - - (334)
De-recognition, scrapping (38 915) (24 400) - (43 903) (107 218)
Increase through acquisition - - - - -
De-recognition due to reclassification - - - - -
Depreciation and amortization 174 289 53 511 36 382 88 461 352 643
December 31, 2020 328 992 109 591 45 552 99 281 583 416
De-recognition, sale (551) - - (29 187) (29 738)
De-recognition, scrapping - - - - -
Increase through acquisition - - - - -
De-recognition due to reclassification - - - - -
Depreciation and amortization 229 378 52 016 38 183 141 254 460 831
December 31, 2021 557 819 161 607 83 735 211 348 1 014 509
Net amount
Property, plant and
equipment
Other intangible
assets
R&D intangible
assets
Rights of use Total
12/31/2018 1 010 392 86 207 243 563 1 340 162
12/31/2019 1 050 319 153 545 353 097 131 874 1 688 834
12/31/2020 983 405 176 524 332 880 228 884 1 721 693
12/31/2021 2 191 124 304 405 354 426 1 006 221 3 856 176
Notes to the separate financial statement 2021 of ALTEO Nyrt.
68 / 104
and will deliver a return on investment as indicated by existing business plans. The R&D asset meets the
IAS 38 criteria.
The Company’s management considers that the fixed assets acquired and intangible asset (the R&D
intangible asset) recorded under the R&D 2 project for “Developing an innovative model for battery
energy storage applications” launched in 2019 and implemented in 2021 can be recognized and will
deliver a return on investment as indicated by existing business plans. The R&D asset meets the IAS 38
criteria. The 5 MW battery energy storage facility implemented at the Kazincbarcika Heating Power Plant
in addition to the primary (FCR) regulatory objective, provides gradient support to the secondary (aFRR)
regulation required for the maintenance of balance in the system. It participates in frequency regulation
(FCR) and secondary regulation (aFRR) alike. The invested amount is around HUF 1,015 billion, to be
amortized over 10 years.
At the end of 2021 the Company participated in another R&D tender, where it pursued the related
activities using its own resources. With regard to this R&D project, the Company proposes internal
utilization and expects future incoming cash flows to be generated.
The 1532.29 m2 of office space rented in the Globe 3 Office Building is recognized under rights of use in
IFRS 16. The office lease has a term of 5+5 years with a gross value of HUF 808,720 thousand in the
Company's books.
There are no assets that might need to be removed at the end of their useful life and such removal would
involve significant expenses. There is no asset to which the component approach needs to be applied.
As at December 31, 2021 the Company had no asset to be considered as a qualifying asset, so no
borrowing costs had to be capitalized; and there is no asset that is subject to a lien under a loan
agreement. The Company does not possess assets which are expected to cause environmental damage
that the Company would be required to neutralize.
Apart from the energy storage units, the Company does not keep any separate assets for leasing
purposes, nor does it lease its own assets.
The Company had no assets, either in the previous or in the current year, classified as assets held for
sale.
The Company does not possess assets regarding which it would employ the revaluation model. The
Company does not possess intangible assets with indefinite lifecycles.
The management of the Company performs the necessary tests for CGUs as at each reporting date to
determine whether the recognized value can be considered recoverable. In the current year, the tests
performed showed the Group's assets to be recoverable so it is not necessary to recognize impairment.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
69 / 104
10.
Long-term loans given
In the current year, long-term loans given were as follows: (in HUF thousand)
The Company adjusted the interest rates of loans given to those of the sources of funding.
• Based on the assessment of the management of the Company, the 100% of the loan given to
Energigas Kft. has been impaired. The recoverable values of loans given are shown in the
statement of financial position.
• The Company remitted HUF 46,000 thousand of the loans granted to Alte-Go, working in the E-
mobility business.
• The subsidiaries of the Company made repayments of their loans as follows:
Alteo Depónia Kft. HUF 27,000 thousand
Euro Green Energy Kft. HUF 600,000 thousand
Pannon Szélerőmű Kft. HUF 297,178 thousand
Windeo Kft. HUF 50,000 thousand
The items relating to the ECL impairment applied to financial assets are presented in detail in section 17.
Alte Go Kft.
42 452 - 170 000 - - (46 000) -
166 452
Alteo Deutschl and GmbH
68 376 (68 376) - - - - -
-
ALTEO-DEPÓNIA Kft.
166 000 - - (27 000) - - -
139 000
Domas zék Kft.
22 292 - - - - - -
22 292
Energigas Kft.
166 886 (166 886) - - (11 820) - 11 820
-
Euro-Green Energy Kft.
2 700 000 - - (600 000) - - -
2 100 000
e-WIND Kft.
59 886 - 300 000 - - - -
359 886
Monosolar Kft.
431 288 - - - - - -
431 288
Pannon Szélerőmű Kft.
1 017 178 - 830 000 (297 178) - - -
1 550 000
Tisza-BioTerm Kft.
1 500 - 1 000 - - - -
2 500
Sinergy Energias zol gáltató Kft.
200 000 - - - - - -
200 000
SUNTEO Kft.
1 090 417 - - - - - -
1 090 417
WINDEO Kft.
860 000 - - (50 000) - - -
810 000
Loans given - total principal 6 826 275
(235 262)
1 301 000
(974 178) (11 820) (46 000) 11 820
6 871 835
Interests on loans given to associates and affili ated companies
49 347 - 102 084 - - - -
151 431
Employer l oans to employees
23 036 - 2 243 (11 000) - - -
14 279
ECL model interest
- (6 327) - 6 327 (7 302) - - (7 302)
ECL model principal
- (6 377) - 6 377 (7 023) - - (7 023)
Loans given total 6 898 658
(247 966)
1 405 327
(972 474) (26 145) (46 000) 11 820 7 023 220
interest
capitalization
12/31/2021Long-term loans given
January 1, 2021 opening
gross
January 1, 2021 opening
impairment
Increase Decrease Impairment Forgiveness
Notes to the separate financial statement 2021 of ALTEO Nyrt.
70 / 104
11.
Shares in subsidiaries and associates
Shares in subsidiaries: (in HUF thousand)
• The Company has 100% share in it’s subsidiaries excluded ECO First Kft and Energigas Kft.
• The Company has a 66.67% share in ECO First Kft., however, the control of the company is held
by the Company.
• The Company has 1% share in Energigas Kft.
• Registered offices and sites of subsidiaries’s geographical location take place in Hungary.
• In 2019 the Company acquired a 100% share in Euro Green Energy Kft. In the course of the
previous acquisition the adjustment of the purchase price following the receipt of certain cash
flows was a contractual condition. As those conditions were satisfied the cost of the purchased
participation was adjusted.
• In 2021 the Company made additional payments to make up for the loss of equity of its
subsidiaries.
• In 2021 Domaszék Kft. repaid HUF 13,500 thousand with regard to additional monetary
payments received in prior years.
Investments recognized as leases:
• Tisza-WTP Vízelőkészítő és Szolgáltató Korlátolt Felelősségű Társaság
The Company recognizes one of its subsidiaries not under shares, but rather as lease receivables in
accordance with the IFRS 16 (formerly IFRIC4) rules (see Note 13). The Company has a 100% share in
this undertaking.
Valuation of investments in the current period:
The management of the Company performs the necessary tests for shares by every reporting date to
determine whether the reported value is considered recoverable. For subsidiaries where the tests
performed showed that the shares, fully or in part, were not recoverable, impairment was recognized
in the current year.
Long-term share in subsidiary
ALTE-A Kft.
1 070 - - - -
1 070
ALTEO Energiakereskedő Zrt.
48 094 - - - -
48 094
ALTE-GO Kft.
- 20 000 - - -
20 000
ALTEO-DEPÓNIA Kft.
- 13 000 - - -
13 000
Domaszék Kft.
186 660 - (13 500) - -
173 160
Eco First Kft.
3 000 - - - -
3 000
Euro Green Energy Kft.
2 750 000
-
-
-
(32 648)
2 717 352
Alteo-Therm Kft.
4 082 025 - - - - 4 082 025
HIDROGÁZ Kft.
- 10 000 - - -
10 000
Monosolar Kft.
38 000 - - - -
38 000
Pannon Szélerőmű Kft.
2 405 890
-
-
-
-
2 405 890
Sinergy Energiakereskedő Kft.
100 000 - - - -
100 000
Sinergy Kft.
245 353 - - - -
245 353
SUNTEO Kft.
634 915 - - - -
634 915
Tisza-Bioterm Kft.
1 000 - 20 000 - -
21 000
Participating interests total
10 496 007 43 000 6 500 -
(32 648)
10 512 859
Long-term participation in associate 12/31/2020 Purchase
Additional monetary
contribution/ Capital
increase
Impairment/ Reversal
Adjustment of purchase
price
12/31/2021
Energigas Kft.
100
-
-
-
-
100
Participating interests total
100 - - - - 100
Additional monetary
contribution/ Capital
increase
12/31/2020
Additional monetary
contribution repayment
Impairment/ Reversal
Adjustment of purchase
price
12/31/2021
Notes to the separate financial statement 2021 of ALTEO Nyrt.
71 / 104
Concerning subsidiaries, the Company applied the DCF model with the discount rate according to the
activity of the subsidiary in question (renewable/traditional energy production) and the date of the
generated cash flows 7.3%-9.8%).
Breakdown of the discount rates used:
• The WAAC rate used for the Alteo Group is 8.3%
• The WAAC rate used for the cogeneration virtual power plant is 8.8%
• The WAAC rate used for the renewables industry is 7.3%
• The Alteo complex WAAC rate is 9.8%
12.
Deferred tax assets and liabilities
When calculating deferred taxes, the Company compares the amounts to be considered for taxation
purposes with the carrying amount of each asset and liability. If the difference is reversible (i.e. the
difference is equalized in the foreseeable future), then a deferred tax liability or asset is recorded in a
positive or negative amount as appropriate. Recoverability was separately examined by the Company
when recording each asset.
When computing taxes, the Company used a 9% rate upon reversal for both years as the assets and
liabilities in question will turn into actual taxes in periods when the tax rate is 9% as specified by the
effective laws.
Deferred tax assets are supported by a tax strategy which confirms that the asset is expected to be
recovered based on the information available. The change in deferred taxes was recognized by the
Company in the statement of profit or loss.
The tax balances and temporary differences for 2021 are as follows:
12/31/2021
Tax value
Accounting value
Difference
Fixed and intangible assets
2 871 976 3 856 176 984 200
Impairments
- (438 925) (438 925)
Provisions
- 15 500 (15 500)
Development reserve
(3 150 000) 3 150 000
Deductible temporary difference
(454 425)
Taxable temporary difference
4 134 200
Deferred tax liability (9%)
331 180
Notes to the separate financial statement 2021 of ALTEO Nyrt.
72 / 104
The following differences were identified in 2020:
Recognized tax expense may be related to the theoretical tax (profit or loss before taxes times the
effective tax rate) in the following manner. Details under Note 8.
13.
Lease receivables
The shares held by The Company in its Tisza-WTP Kft. subsidiary is recognized as lease receivables and
liabilities as per the IFRS16 (formerly IFRIC4) rules.
• Tisza WTP Kft.
The Tisza WTP Kft. lease receivable has zero value. The profit or loss of the O&M activity relating to the
subsidiary has an impact on the profitability of the Company.
The Company is in possession of publicly available information that these entities are consolidated by
its service user business partners in their own financial statements.
The Company did not identify unguaranteed residual values in any of the contracts. There are no
contingent fees in the relevant contracts. Both business partners have purchase options for the business
interest of underlying legal entities. Due to the special conditions, the lease deal cannot be cancelled,
only terminated by calling the buy option.
14.
Inventories
Inventories include parts purchased for the performance of O&M contracts in the amount of HUF
555,181 thousand and materials and services not transferred related to project development in the
amount of HUF 517,170 thousand.
12/31/2020
Tax value
Accounting value
Difference
Fixed and intangible assets
759 673 1 720 642 960 968
Impairments
- (450 181) (450 181)
Provisions
- 15 500 (15 500)
Development reserve
(138 196) - 138 196
Losses carried forward
101 946 - (101 946)
Deductible temporary difference
(567 627)
Taxable temporary difference
1 099 164
Deferred tax liability (9%)
47 838
Inventories
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Parts 555 181 363 010
Project development inventories 517 170 39 808
Total inventories 1 072 351 402 818
Notes to the separate financial statement 2021 of ALTEO Nyrt.
73 / 104
15.
Trade receivables
Relevant information on trade receivables and impairment losses of trade receivables:
• The impairment of receivables and write-offs are accounted for in other expenses.
• Buyers are qualified on a case by case basis.
• A significant part of trade receivables is unsecured because they are not covered by deposits,
bank guarantees, etc.
• The Company has guarantees from buyers of construction projects. No guarantees had to be
enforced during the presentation periods.
• The maximum credit risk is equal to the carrying amount of trade receivables.
• The items relating to the ECL impairment applied to financial assets are presented in detail in
Sections 17 and 35.
The breakdown of impairment losses is as follows:
The items relating to the ECL impairment applied to financial assets are presented in detail in section 17.
The aging list of trade receivables:
The Company’s five largest customers:
In 2021
In 2020
Sinergy Energiakereskedő Zrt.
Alteo
-
Therm Kft.
Alteo
-
Therm Kft.
TVK
-
Erőmű Kft.
TVK Erőmű Kft.
Sinergy Energiaszolgáltató Kft.
Alteo Energiakereskedő Zrt.
Sarpi Dorog
Környezetvédelmi Kft.
Tisza
-
WTP Kft.
Tisza
-
WTP Kft.
Trade receivables
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Gross value of trade receivables 7 028 965 2 888 253
Recognized impairment (231 627) (142 458)
Total receivables 6 797 338 2 745 795
Trade impairment losses
2021.12.31
HUF thousand
2020.12.31
HUF thousand
Opening balance 142 458 88 525
Impairment reversed (27 418) -
Impairment recognized 116 587 53 933
Closing balance 231 627 142 458
12/31/2021 Not overdue
1-30
day
31-60
day
61-90
day
91 to 180
days
181 to 365
days
over 365
days
Total
Trade receivable at initial recognition cost
5 662 295 1 130 177 216 106 - - 19 434 953 7 028 965
Impaired trade receivables (35 198) (65 677) - - - - -
(100 875)
Impairment recognized based on the ECL model (105 329) (21 024) (4 020) - - (362) (18)
(130 752)
Total trade receivables 5 521 768 1 043 476 212 086 - - 19 072 935 6 797 338
Notes to the separate financial statement 2021 of ALTEO Nyrt.
74 / 104
16.
Other receivables and income tax receivables
Other receivables:
• Accrued incomes are connected to the operational contracts of the Company.
• Other receivables include items to employees (advances given, etc.) and deposits.
• Assets in a value of HUF 68,291 thousand relating to contracts for construction-installation
services are recognized and presented in detail in Section 40.
• The items relating to the ECL impairment applied to financial assets are presented in detail in
section 17.
17.
Application of the expected loss model to financial assets
The management of the Company has performed the risk analysis of its financial assets. Risks of financial
assets are presented in Section 34. Financial assets are classified into the following categories:
Category Definition Application of ECL
Performing The partner is trustworthy and non-payments did not
occur in the past. All related items are considered
performing.
Recognition of 12-month expected
credit loss
Delinquent Significant delay by an external partner but no direct
evidence of risk of non-payment
Recognition of full lifetime
expected credit loss
Non-performing Item past due for 365+ days in the case of an external
partner, direct evidence for risk of non-payment
Recognition of full lifetime
expected credit loss
The Company reviewed its previous year's practice on related party receivables and, in the current year,
recognizes impairment on related party receivables and performing outstanding external party
receivables in accordance with the logic of the above table. For related party loans and receivables, in
the case of ALTEO, the Company's management determined the rate of expected credit loss based on
the BBB rating specified by Scope Rating for senior unsecured loans.
Impairment recognized for the financial assets of the Company by classification category (and not by the
statement of financial position) are presented in the ECL amount column:
Other receivables and income tax receivables
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Accrued revenues 2 075 021 2 235 237
Advances paid (related to projects) 51 935 27 537
Receivables from affiliated companies 347 033 61 824
Receivables due from the customer 68 291 44 516
Other cash 36 572 29 981
Other receivables 12 262 4 783
Total 2 649 641 2 438 143
Notes to the separate financial statement 2021 of ALTEO Nyrt.
75 / 104
In current year's valuation, the management of the Company uses the data available in public databases
to determine ECL rates. In the opinion of the Company’s management, the overall credit risk in the
market of the partners and segments showed a 0 to 2.5% change in the recent period. As a result of
COVID and the impact of the extraordinary increase in energy prices on the solvency of customers, the
Company has maintained the classification of its receivables or assigned them to a riskier level.
18.
Cash and cash equivalents
Cash only includes the balances of items which can be converted to cash and used three months from
acquiring. The interest rate on current account balances is about 0%, considering the extremely low
interest environment.
The detailed reasons for changes in cash are included in the statement of cash flows.
19.
Elements of equity
By transforming its capital structure, the Group intends to retain its capacity to operate continuously in
order to provide profit for its shareholders and maintain an optimal capital structure for the sake of
reducing the cost of capital. In order to preserve or adjust capital structure, the Board of Directors
proposes to the General Meeting the amount of dividends to be paid to shareholders, and acting within
its authorization received from the General Meeting, it decides, in connection with the capital structure
or at its discretion, on capital increase and issuing new shares, or submits a proposal to that effect to
the General Meeting.
The Group complies with the statutory capital requirements applicable to it. In performing a review of
that, the Group observes the requirements of Act V of 2013 on the Civil Code (of Hungary). The table
below shows equity and its ratio relative to issued capital:
Application of the expected loss model to financial assets External credit rating Internal credit rating ECL%
Gross value
HUF thousand
ECL amount
HUF thousand
Net amount
HUF thousand
Customers - with large corporate background
N/A Performing 3,41% 258 278 (8 789) 249 489
Customers - public sector
N/A Performing 3,41% 98 967 (3 373) 95 594
Customer - project development
N/A Performing 0,02% 15 324 (35) 15 289
Customer - other
N/A Performing 1,70% 3 738 (1 000) 2 738
Customer - IC
N/A Performing 1,70% 6 898 811 117 556 6 781 255
Customer - employees
N/A Performing 1,70% 5 - 5
Long-term loan IC
N/A Performing 1,70% 7 061 963 (6 779) 7 055 184
Deposits, security deposits given
N/A Performing 1,70% 488 (18) 470
Advances given
N/A Performing 1,70% 50 919 (868) 50 051
Long-term loans given - employees
N/A Performing 1,70% 14 280 (243) 14 037
Long-term loan Third party
N/A non-performing 100,00% 174 188 (174 188) -
Customer - Energigas
N/A non-performing 100,00% 100 875 (100 875) -
Other receivables
N/A non-performing 100,00% 25 200 (25 200) -
Cash and cash equivalents
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Bank accounts – HUF 2 368 426 2 780 802
Bank accounts – foreign currency 552 898 267 776
Total 2 921 324 3 048 578
Notes to the separate financial statement 2021 of ALTEO Nyrt.
76 / 104
19.1. Shares traded:
The movements in ordinary shares are listed in the following table:
Issued capital includes the face value of the shares issued (in circulation). As of the reporting date, all
issued shares are from one series (series A).
The current face value is HUF 12.5 per share.
There are no other agreements between owners or with other parties which would require the Company
to issue new ordinary shares or repurchase existing ones. The Company’s approved issued capital (the
share capital registered with the registry court) is equal to the amount of the issued capital.
On December 31, 2021, the Group held 7,487 own shares.
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
Issued capital 242 235 232 972
Equity 14 470 592 8 510 896
Issued capital/ Equity ratio 59,74 36,53
Date Event Number of shares
Face value
(HUF/share)
Change in issued capital
(HUF thousand)
Balance of issued capital (HUF
thousand)
Reserves (change in share
premium)
Reserves (transactions with
owners)
12/31/2019 Closing balance 18 635 850 12,5 232 948
01/31/2020 Transfer of employee share ownership program 1 878 12,5 24 1 626
09/11/2020 Excercise of ESOP option 24 000 12,5 300 13 710
09/21/2020 Purchase of own shares (24 000) 12,5 (300) (19 524)
12/16/2020 Excercise of ESOP option 12 128 12,5 152 6 928
12/16/2020 Purchase of own shares (12 128) 12,5 (152) (11 200)
12/31/2020 Closing balance 18 637 728 12,5 232 972
02/01/2021 Transfer of employee share ownership program 3 837 12,5 48 4 252
04/13/2021 Excercise of ESOP option 577 644 12,5 7 221 267 160
04/13/2021 Purchase of own shares (249 422) 12,5 (3 118) (290 701)
12/22/2021 ESOP share transfers 409 000 12,5 5 112 476 526
12/31/2021 Closing balance 19 378 787 12,5 242 235 747 938
Date
Event
Number of shares
12/31/2019 Closing balance
750 424
01/31/2020
Transfer of employee share ownership program
(1 878)
09/11/2020
Excercise of ESOP option
(24 000)
09/21/2020
Purchase of own shares
24 000
12/16/2020
Excercise of ESOP option
(12 128)
12/16/2020
Purchase of own shares
12 128
12/31/2020 Closing balance
748 546
01/29/2021
Transfer of employee share ownership program
(3 837)
04/13/2021
Excercise of ESOP option
(577 644)
04/13/2021
Purchase of own shares
249 422
12/21/2021 Share transfer to ESOP
(409 000)
12/31/2021 Closing balance
7 487
Notes to the separate financial statement 2021 of ALTEO Nyrt.
77 / 104
The Company reports its registered capital less the value of the redeemed own shares in the Issued
capital line.
The development of capital elements is illustrated in the Equity table.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
78 / 104
19.2. Reserves
Transactions with owners and share premiums are presented among reserves.
At the end of 2020, share premium included a total of HUF 106,872 thousand liability under the ESOP II
program, to be presented subsequently among Share-based payments
Ownership transactions in the current period included 249,422 own shares repurchased in excess of
issued capital, the transfer of 409,000 own shares in excess of issued capital to the ALTEO ESOP
organization, cash transferred to the ESOP organization for the purchase of shares, and the portion of
such cash not yet used for its intended purpose.
19.3. Retained earnings
The Company approved dividends of HUF 455,275 thousand from the profit after taxes of 2020, the
dividends were disbursed in 2021.
Retained earnings comprise the development reserve of HUF 3,150,000 thousand approved by
Management for 2021, proposed to be used in the following four years.
Share premium
Transactions with
owners
12/31/2021 12/31/2020 12/31/2020
Opening balance - 5 092 255 (366 247)
Implementation of employee share award program 4 252 1 626 -
Purchase of own shares (290 601) - (30 724)
Share premium reclassification 2020 5 221 391 - -
Transactions with owners reclassification 2020 (396 971) - -
ESOP II liability reclassification 2020 (106 872) - -
Exercise of Employee Share Ownership Program 62 819 20 638
Employee Share Ownership Program implementation 267 159 106 872
Cash transferred to ESOP organization (100 000) - -
Own shares transferred to ESOP organization (5 111) - -
Non-controlled ESOP participation 575 020 - -
Receivable form ESOP organization 6 618 - -
Closing balance 5 237 704 5 221 391 (396 971)
Reserves
Retained earnings
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Opening balance 3 390 685 3 123 767
Comprehensive income 6 262 118 266 918
Dividend payment (455 275) -
Closing balance 9 197 528 3 390 685
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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19.4. Share-based payments reserve
The above capital element comprises the following items:
• The part of the Company’s grants calculated in accordance with IFRS2 regarding the past and
recognized at the closing date of the report.
• Cost of the assets granted by the Company for those receiving benefits in the program
ALTEO Nyrt. developed an equity settled share-
based incentive scheme for some ALTEO
employees, under which these employees will
become entitled to ALTEO Nyrt.’s shares within
the framework of ESOP, provided that certain
requirements are met.
Share-based payments reserve
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Opening balance 169 690 68 398
Reclassification on account of share option exercise (62 819) (3 929)
Reclassification on account of transfer of employee bonus - (1 650)
ESOP share transfers (575 021) -
ESOP II liability reclassification 2020 - 106 871
ESOP II liability 2021 261 275 -
Closing balance (206 875) 169 690
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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ESOP Program I (2017)
The fair value of the options granted was calculated using option pricing models. The value of the
options were not remeasured later. ALTEO Nyrt. does not provide cash benefits with respect to this
scheme.
Expenses concerning the entire option scheme were recognized as personnel expenses in the
statement of profit or loss of previous periods. The entire scheme is equity settled; therefore, no
revaluation will be required in the forthcoming periods.
Under the option program, the options – 96,253 in total – vested in August 2017. The price of the
options as of the time of distribution was uniformly HUF 3,800/share, apportioned by splitting the
shares in 1:8 proportions. By splitting the shares the number of share options changed proportionately
(770,024 options). 21,500 shares were drawn down under the scheme during 2019, and 36,128 in
2020.
Pursuant to the remuneration policy of ALTEO’s ESOP Organization, call option holders did not exercise
their option until the termination of their employment relationship and thus forfeited the option in
respect of a total of 134,752 shares. The part of the reserve covering terminated and called options
was reclassified into retained earnings. The 577,644 shares outstanding at the end of 2020 were drawn
down under the program. Neither the beneficiaries nor the ESOP organization may sell their shares
below the 2016 IPO issue price (HUF 579/share, having regard to the division by eight).
ESOP Program II (2020)
Certain executive employees of the Company receive share-based benefits as of December 21, 2020
(the date of grant): the detailed rules of the so-called Employee Share Ownership Program (“ESOP”)
are set forth in the Company’s Remuneration Policy for 2020, published and effective on December
21, 2020.
https://alteo.hu/wp-content/uploads/2020/12/ALTEO_2020_evi_MRP_Jav_Pol_20201221.pdf
https://www.bet.hu/site/newkib/hu/2020.12./Tajekoztatas_az_ALTEO_MRP_Szervezet_2020._evi_J
avadalmazasi_Politikajarol__128504486
The ESOP applies to the 9 executive Employees specified in the 2020 Remuneration Policy. The
Employee is eligible to acquire the Available Shares if their legal relationship making them eligible to
participate in the Remuneration Policy for 2020 is in place with the Company on the day of publication
of the Company's consolidated financial statement for 2022.
The subject of the ESOP is a maximum of 645,200 Available Shares which may be distributed – provided
the below criteria are met – after the closing of the 2022 fiscal year of the Company (following the
adoption of the consolidated financial statement). The Available Shares are acquired by the Employee
Notes to the separate financial statement 2021 of ALTEO Nyrt.
82 / 104
without consideration. The Employee may choose whether they wish to receive the Available Shares
as securities or whether they wish to receive the consideration thereof in cash.
The Employees may acquire the following ratios (specified as a %) of the full volume of Available
Shares, provided that certain performance conditions also presented below are met in full:
1. ALTEO Share Price: in the period between January 1, 2022 and December 31, 2022, the
volume-weighted average trading price on the BSE reaches HUF 1,178. (15% weight, partial
performance is not possible)
2. Turnover: The aggregate turnover of ALTEO Shares as traded on the BSE in the period between
January 1, 2022 and December 31, 2022 exceeds HUF 2,479 million and the volume-weighted
average trading price in the same period is at least HUF 950. (15% weight, partial performance
is not possible)
3. The audited profit after taxation filtered from ESOP effect per share reaches or exceeds HUF
54.7 in 2022. (25% weight, partial performance is possible)
4. The audited EBITDA filtered from ESOP effect per share reaches or exceeds HUF 320 in 2022.
(45% weight, partial performance is possible)
5. Excluding criterion: the rating of the bonds of ALTEO Nyrt. at Scope – or an alternative credit
rating agency – drops below B+. In the event of the occurrence of the excluding criterion, 0
(zero) Available Shares may be distributed, regardless of whether criteria 1-4 are fulfilled.
The vesting period of ESOP is January 1, 2020 – December 31, 2022, that is 3 years, with the emphasis
on meeting 2022 target figures. Given that the above conditions may be met by December 31, 2022,
the date of vesting is that date.
The ESOP Organization is entitled to withhold a ratio of Available Shares whose market value at the
time of provision provides coverage for the fulfillment of tax and contribution payment obligations
borne by the Employee.
Early exercise of the option is not possible. No option was exercised before the reporting date.
Principles of presentation
Considering that ESOP is a transaction related to services received from employees, the fair value of
which cannot be measured reliably, their fair value was determined based on the fair value of the
equity instrument provided.
Not applying the provisions of the Remuneration Policy for 2020, the beneficiary Employees
irrevocably waived their right of choice retroactively to 12/21/2020 and according to such waiver they
intend to acquire the shares that may be acquired in the form of securities. Consequently, the
accounting treatment of ESOP is governed by the rules for share-based payment transactions where
the terms of the arrangement are no longer affected by the choice and the method of settlement
under which the equity component of a complex financial instrument needs to be accounted for.
• In view of this, the ESOP as a whole was accounted for as an equity instrument.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Calculation principles for fair valuation
As of the reporting date, the fair value of ESOP is equal to the time-vested part of the fair value of a
share multiplied by the number of shares expected to be acquired (i.e. the fair value of the total
liability).
• The starting point of the current fair value of the shares is the market price, i.e. the closing
price observed on the Budapest Stock Exchange and valid as at the grant date.
• The market price is reduced by the present value of the dividends expected to be paid during
the vesting period (2021-2022) as the Employees will not be entitled to them prior to
fulfillment of the criteria. The expected amount of the dividend payment is based on the
dividend paid in the past.
The number of benefits expected to be vested has been determined on the basis of the best estimate
available, using analyzes and simulations for the financial indicators underlying the performance
conditions (see vesting criteria).
The Company recognizes expenses when they are provided by the employee during the vesting period,
that is, between the beginning of the scheme (January 1, 2020) and the date of vesting (December 31,
2022). The value of the liability on the reporting date is the time-vested part of the total liability, i.e.
two third.
Employee reward program
In the current year, the Company distributed shares to the value of HUF 1,650 thousand to the
employees who were entitled to these on the basis of the Company’s recognition plan. In connection
with the shares granted, the transfer of the shares started on February 4, 2022.
Employee rewards 2021 2020
PCS.
Opening liabilities in the statement of financial position 3 837 1 878
Exercised by transfer (3 837) (1 878)
Awarded as benefit 1 267 3 837
Closing 1 267 3 837
Value (HUF thousand)
Opening liabilities in the statement of financial position 4 300 1 650
Exercised by transfer (4 300) (1 650)
Awarded as benefit 2 550 4 300
Closing 2 550 4 300
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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20.
Cash flow hedge reserve
The accounting policy of the Company established hedge connection between certain transactions and
certain derivatives. These hedges qualify as cash flow hedges. The Company recognizes profits and
losses from the hedging item of the cash flow hedge as other comprehensive income, and gathers such
profits and losses in this equity component. The balance in the cash flow hedge fund is reclassified by
the Company in the net profit or loss at the closing of the transaction (or if the hedge connection is
cancelled from any other reason). No such transaction took place in 2021.
21.
Equity correlation table required as part of Section 114/B of the
Accounting Act
The correlation table presents the impact of transactions that modify equity compared to the format
required by the annual report according to the Accounting Act applied earlier.
• The face value of own shares repurchased decreases the amount of the issued capital
according to the IFRS standards. As of the end of the period, the Company held 7,487
shares with a face value of HUF 12.5 each. This share inventory is the reason for the
difference between the amount of issued capital from the value registered at the registry
court.
• Share based payments reserve. Its content is explained in Note 19.4.
Unused development reserve. In 2019, the Company established development reserves in
the amount of HUF 203,257 thousand, all of which had been used by the end of 2021. In
2021 the Company generated development reserves in the amount of HUF 3,150,000
thousand.
22.
Provisions
The Company recognized provisions in respect of the O&M contractual obligations of a subsidiary
merged in the previous year. The entire amount relates to the renovation of the mixed bed at Tisza
WTP Kft. These contractual obligations still existed unchanged in the current year. In the opinion of
the Company’s management, the provisions will be released beyond one year.
12/31/2021 IFRS Own shares CF hedge IFRS 2 Development reserve Subject year profit or loss Equity HAS
Total equity
14 470 592 - - - - - 14 470 592
Issued capital
242 235 94 - - - - 242 329
Share premium / capital reserve
5 237 704 - - - - - 5 237 704
Retained earnings
9 197 528 (94) - (206 875) (3 150 000) (6 262 118) (421 559)
Allocated reserves
- - - - 3 150 000 - 3 150 000
Profit or loss after taxes
- - - - - 6 262 118 6 262 118
Share-based payments
(206 875) - - 206 875 - - -
Transactions with owners
- - - - - - -
Provisions
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Opening balance 15 500 15 500
Provisions recognized - -
Provisions released - -
Closing balance 15 500 15 500
Notes to the separate financial statement 2021 of ALTEO Nyrt.
85 / 104
23.
Debts on the issue of bonds
On January 10, 2017 the Company issued dematerialized zero coupon bonds with a maturity of 5 years
by private placement under the designation “ALTEO 2022/I”. The total face value of the issue is HUF
650.000.00, the issue value is 76.6963% of the face value.
On June 7, 2019 the Company issued dematerialized zero coupon bonds with a maturity of 3 years by
private placement under the designation “ALTEO 2022/II”. The total face value of the issue is HUF
1,693,630,000, the issue value is 88.9158% of the face value. The bonds were admitted to listing on
the regulated market on November 22, 2019.
On October 24, 2019, the Company issued bonds designated as “ALTEO NKP/2029” with a total face
value of HUF 8.6 billion. The average issue value of the bonds was 102.5382% of the face value. The
bonds have a fixed rate coupon of 3.15% and the maturity is 10 years. The bonds were admitted to
listing on the regulated market on January 24, 2020.
On October 8, 2020, the parent company of the Company issued bonds designated as “ALTEO NKP
1/2031” with a total face value of HUF 3.8 billion. The average issue value of the bonds was 102.9605%
of the face value. The bonds have a fixed rate coupon of 2.45% and the maturity is 11 years.
For the purpose of uniform presentation, the detailed terms of the bonds are listed in Note IV.34 Terms
of borrowings.
Name Frequency of repayments Amounts paid Currency
Nominal
liabilities
12/31/2021
Maturity date
ALTEO Nyrt. “2022/I” bond End of maturity 498 525 950 HUF 650 000 000 01/10/2022
ALTEO Nyrt. "2022/II" bond End of maturity 1 505 904 664 HUF 1 693 630 000 06/07/2022
ALTEO Nyrt. NKP 2029 Interest payment per annum 8 818 284 700 HUF 8 600 000 000 10/28/2029
ALTEO Nyrt. NKP1 2031 Interest payment per annum 3 912 499 250 HUF 3 800 000 000 10/08/2031
data in HUF thousand 2022 2023 2024 2025 2026 up to 2031 Total
ALTEO Nyrt. “2022/I” bond 650 000 - - - - 650 000
ALTEO Nyrt. "2022/II" bond 1 693 630 - - - - 1 693 630
ALTEO Nyrt. NKP 2029 270 900 270 900 270 900 270 900 270 900 9 412 700 10 767 200
ALTEO Nyrt. NKP1 2031 93 100 93 100 93 100 93 100 93 100 93 100 558 600
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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Debts on the issue of bonds
Year ending on
12/31/2021
HUF thousand
Year ending on
12/31/2020
HUF thousand
opening principal and interest 14 957 926 13 124 132
ALTEO Nyrt. “2020/I” bond - -
ALTEO Nyrt. “2022/I” bond 649 051 583 334
ALTEO Nyrt. "2022/II" bond 1 663 087 1 528 790
ALTEO Nyrt. NKP1 2029 8 805 893 8 840 811
Alteo Nyrt. NKP1 2031 3 915 371 2 171 197
Issues in the current period: - 3 904 710
ALTEO Nyrt. “2020/I” bond - -
ALTEO Nyrt. “2022/I” bond - -
ALTEO Nyrt. "2022/II" bond - -
ALTEO Nyrt. NKP1 2029 - -
Alteo Nyrt. NKP1 2031 - 3 904 710
Interest recognized in the current period 439 476 446 519
ALTEO Nyrt. “2020/I” bond - 75 337
ALTEO Nyrt. “2022/I” bond 33 691 32 027
ALTEO Nyrt. "2022/II" bond 68 470 65 827
ALTEO Nyrt. NKP1 2029 252 844 254 038
Alteo Nyrt. NKP1 2031 84 472 19 290
Principal and interest payments in the current period
(364 000) (2 517 435)
ALTEO Nyrt. “2020/I” bond (2 246 535)
ALTEO Nyrt. “2022/I” bond -
ALTEO Nyrt. "2022/II" bond - -
ALTEO Nyrt. NKP1 2029 (270 900) (270 900)
Alteo Nyrt. NKP1 2031 (93 100) -
Closing principal and interest 15 033 402 14 957 926
ALTEO Nyrt. “2020/I” bond - -
ALTEO Nyrt. “2022/I” bond 1 663 087 -
ALTEO Nyrt. "2022/II" bond 649 051 -
ALTEO Nyrt. NKP1 2029 43 743 42 271
Alteo Nyrt. NKP1 2031 19 247 26 655
Reclassification into short-term liabilities 2 375 128 68 926
Debts on the issue of bonds
12 658 274 14 889 000
Short-term bond payables
2 375 128 68 926
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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24.
Long-term loans and borrowings and other long-term liabilities
Other long-term liabilities
HUF 294,408 thousand is recorded as conditional purchase price under other long-term liabilities in
relation to the Zugló-Therm Kft. share. In the current year, in addition to the impact of the
amortization, an adjustment was also recognized in relation to the purchase price because the
condition related to the payment of the obligation was met. The above stated items are measured by
the Company at amortized cost. The liability’s amortized carrying value as of the reporting date was
HUF 294,408 thousand. The fair value of the items above does not materially differ from their
amortized cost.
25.
Lease liabilities
The Company’s leases mature as follows:
None of the lease arrangements include contingent lease payments. The ownership of leased cars is
not transferred to the Company upon maturity of the lease and there is no related call option in place
either. None of the lease contracts contain an automatic extension option.
If the mileage is exceeded, settlement takes place at the end of the lease term. The variable fee
component is calculated based on the number of excess kilometers. The variable fee components are
not recognized either as part of the right-of-use asset or the lease liability.
The Company uses the benefits as per IFRS16 in force in the current year and recognizes the following
items as lease payments: the lease payments on central offices up to the date of the change of the
registered office, the car leases maturing within one year and the lease of certain IT equipment of small
value. The lease of these assets is recognized directly in the statement of financial position of the
period in question among the material expenses. These items are presented in detail in section 2.
Movements in rights of use in the current year are included in Note 9.
Long-term loans and borrowings,
and other long-term liabilities
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Conditional purchase price liabilities 294 408 320 011
Total 294 408 320 011
Finance lease liabilities
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Long-term liabilities relating to rights of use (over 5 years) 786 333 -
Long-term liabilities relating to rights of use (1-5 years) 67 983 147 099
854 316 147 099
Instalments due within a year 168 970 88 759
Total 1 023 286 235 858
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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26.
Deferred income
The deferred income balance sheet line contains the part of the grant received towards the RDI project
not yet recognized through profit or loss. The R&D III project has not been implemented to this date.
The advance payment on the project in the implementation phase is shown in the value of HUF 224,626
thousand.
The grant for the R&D storage facilities at Kazincbarcika has not yet been disbursed.
The main requirements of funding are the following:
R&D I
Purpose of the grant
Systemic integration and innovative application model of an electricity storage
architecture
Conditions of the grant
The grant is tied to the performance and presentation of technical R&D work. In
addition, a number of indicators need to be met also during the maintenance period:
- the creation of 1 newly developed product, technology, service or prototype
- the preparation of one know-how
- Business exploitability: the revenues from the outcome of the RDI project reach
30% (HUF 300 million) of the grant amount in two consecutive years combined
during the maintenance period
- Export revenues: the average of export revenues in two consecutive years during
the maintenance period is HUF 109 million
- one appearance at a domestic and international forum each (RENEXPO and the
international energy trade fair, ENERGOexpo, were indicated in the grant
application, however, this may be modified)
- 2 publications
Grant period 5 years from July 2019
Finance lease
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Right-of-use asset 1 006 221 228 884
Right-of-use liability total 1 023 286 235 858
Recognized amortization 112 066 44 558
Recognized interest expense 26 706 10 629
Deferred income
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
KFI I grant 345 987 397 240
KFI III grant 224 626 -
Total 570 613 397 240
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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R&D II
Purpose of the grant
Integration into the electricity system of facilities with battery cells of various
parameters
Conditions of the grant
The grant is tied to the performance and presentation of technical R&D work. In
addition, a number of indicators need to be met also during the maintenance period:
- The creation of 1 newly developed product or technology
- In the two financial years following implementation the amount of R&D expenditures
amounts to 30% of grants as evidenced in the corporate tax returns
- Business exploitability, with the index numbers regularly achieved during the
retention period.
Grant period until 12/31/2027
R&D III
Purpose of the grant
Development of real-time autonomous energy information and production
management system
Conditions of the grant
The grant is tied to the performance and presentation of technical R&D work. In
addition, a number of indicators need to be met also during the maintenance period:
- 1 newly developed product
- Involvement of 3 enterprises in development
- Business exploitability, with the index numbers regularly achieved during the
retention period.
- 4 publications, 1 presenting private-public cooperation
- 3 domestic publications of the project results
Grant period until 12/31/2027
27.
Financial liabilities – conditions
The working capital loan facility available to ALTEO Nyrt. amounts to HUF 2,000,000 thousand. A
mortgage on receivables and a surety and mortgage on bank accounts serve as security for the working
capital loan facility. The loan facility was unused as of the reporting date.
The planned cash flows from borrowings for the upcoming five years for bonds:
The related interest terms were presented in previous notes for all instruments.
data in HUF thousand 2022 2023 2024 2025 2026
ALTEO Nyrt. NKP1 2031 93 100 93 100 93 100 93 100 93 100
ALTEO Nyrt. NKP 2029 270 900 270 900 270 900 270 900 270 900
ALTEO Nyrt. "2022/II" bond 1 693 630 - - - -
ALTEO Nyrt. “2022/I” bond 650 000 - - - -
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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28.
Trade payables
This line in the statement of financial position contains liabilities arising from the purchase of goods
and services in the amount of HUF 652,527 thousand. Trade payables are unsecured, which means
that the Company does not provide guarantees, with the exception of those routinely provided in the
normal course of business.
The Company’s five largest suppliers:
In 2021
In 2020
Wärtsilä Hungary Kft.
Wärtsilä Hungary Kft.
Vestas Hungary Kft.
Hőtechnika Kőolajipari Zrt.
HSP612 Kft.
Siemens Zrt.
Siemens Energy Kft.
Voith Hydro GmbH
Invitech ICT Services Kft.
Bijász Ipari és Szolgáltató Kft.
29.
Other short-term liabilities and accruals
The composition of the “other short-term liabilities and accruals” balance sheet line is as follows:
These liabilities do not bear interest.
Other tax liabilities consist of VAT, other local taxes and other payroll taxes and contributions.
Trade payables
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Trade payables not yet due 548 057 534 542
Invoices past due for 1-30 days 96 335 68 340
Invoices past due for 31-90 days 2 912 2 603
Invoices past due for 91-180 days - -
Invoices past due for 181-365 days 3 244 478
Past due for over one year 1 979 7 530
Total 652 527 613 493
Other short-term liabilities and accruals
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Cost accruals 706 512 750 553
Income accruals 10 864 5 078
Amounts payable to customers 1 157 343 1 035 216
Income settlement 150 822 130 166
Other tax liabilities 249 127 409 747
Conditional purchase price installment - 50 000
Other short-term liabilities 23 846 18 899
Other liabilities to Alteo Group members - 7 639
Total 2 298 514 2 407 298
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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30.
Advances received
The advance received relating to the overhaul of gas engines at the end of 2020 was fully used by the
Company in 2021 in the course of the works.
The advance recognized at the end of 2021 represented cash received relating to the replacement of
the MPK transformer.
31.
Income tax liabilities
Advances received
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Advances received 8 989 46 500
Total 8 989 46 500
Income tax liabilities
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Corporate tax liability 17 501 19 197
Innovation contribution liability 16 240 13 375
Local business tax liability 100 257 47 643
Total 133 998 80 215
Notes to the separate financial statement 2021 of ALTEO Nyrt.
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32.
Operating segments
No geographic segments were determined as the Company has no substantial foreign operations and
its domestic business also cannot be clearly classified into regional units.
Decisions of strategic importance with respect to the operation of the Company are made by the
members of the Board of Directors; thus the Company discloses classification by the following
segments:
- operation,
- power plant construction,
- administrative services and management
The breakdown of the statement of profit or loss by segments:
33.
Related party disclosures
According to the judgement of the management of the Company, transactions with related parties are
transactions concluded under market terms, with market based pricing.
The Company does not enter into supply contracts where the customer has the right to subsequently
return the goods delivered or to withdraw from the services provided.
The entity’s key management personnel qualify as related parties. The Company’s
management identified the following related parties for the period covered by the financial
statements and in the comparative period.
2021 Construction Operation
Admin. and
management
Total
Revenues 350 530 5 831 228 7 580 563 13 762 321
Material expenses
(158 956) (2 978 036) (916 843) (4 053 835)
Personnel expenses
(364 566) (1 718 805) (2 106 341) (4 189 712)
Depreciation, amortization
(22 251) (246 560) (192 019) (460 830)
Capitalized own production
96 871 28 243 82 583 207 697
Other revenues, expenses
2 018 81 567 (169 154) (85 569)
Operating profit or loss (96 354) 997 637 4 278 789 5 180 072
2020 Construction Operation
Admin. and
management
Total
Revenues 5 502 667 5 478 557 2 744 500 13 725 724
Material expenses
(4 947 480) (3 226 370) (739 004) (8 912 854)
Personnel expenses
(532 124) (1 698 305) (1 537 040) (3 767 469)
Depreciation, amortization
(21 901) (212 766) (117 976) (352 643)
Capitalized own production
15 956 - 80 077 96 033
Other revenues, expenses (5 351) (1 637) (67 701) (74 689)
Operating profit or loss 11 767 339 479 362 856 714 102
Notes to the separate financial statement 2021 of ALTEO Nyrt.
93 / 104
For the presentation of the Board of Directors and the Supervisory Board, see the Business
Report.
Executive Board
The Executive Board (EB) is part of the internal control structure of the Company. The members of this
board make operative, financial and other decisions that are not in the jurisdiction of the Board of
Directors. As a consequence, members of this board also qualify as related parties. The
aforementioned members of the EB were employed by the Company during the period referred to
above.
Members: Attila Chikán Jr., Domonkos Kovács, Zoltán Bodnár, Péter Luczay, Viktor Varga, Anita Simon
Remuneration paid to related parties (executive officers):
The Company has no doubtful receivables due from related parties; the detailed presentation of the
ECL model applied to related party receivables is included in section 17.
In the current year, the Company disclosed the following outstanding balances due from affiliated
companies in the financial statements: (in HUF thousand)
2021 Board of Directors
Supervisory
Board
Executive Board
non-BoD
members
Total
Wages, commissions, benefits 99 641 23 620 190 436 313 697
Reimbursements 10 430 1 516 19 967 31 913
IFRS2 benefits 34 837 - 43 087 77 924
Total 144 908 25 136 253 490 423 534
Amount / 12/31/2021 Loans given Accrued income Trade payables Trade receivable other receivables
Alte-A Kft.
- - - - 7 000
ALTEO Energiakereskedő Zrt.
- 599 740 - 919 294 -
ALTEO-Therm Kft.
- 907 268 - 572 517 -
ALTEO-DEPÓNIA Kft.
139 000 580 - 25 267 -
ALTE-GO Kft.
166 452 -
(13)
- 33
Domaszék Kft.
22 292 - - - -
Euro-Green Energy Kft.
2 100 000 131 470 - - 300 000
e-WIND Kft.
359 886 10 367 - 11 541 -
Energigas Kft.
- 5 191 - - -
Monosolar Kft.
431 288 - - 9 058 -
Pannon Szélerőmű Kft.
1 550 000 91 751 - - -
Péberény Kft. (absorbed I)
- - - - -
Sinergy Energiakereskedő Kft.
- 260 385 - 4 993 139 -
Sinergy Energiaszolgáltató Kft.
200 000 - - - -
SUNTEO Kft.
1 090 416 - - 20 962 40 000
Tisza Bioterm Kft.
2 500 - - - -
Tisza WTP Kft.
- - - 35 814 -
HSP612 Kft.
- -
(13 149)
- -
Executive employees
14 280 -
-
- -
Wallis Asset Management Kft.
- -
(7 863)
- -
WINDEO Kft.
810 000 17 200 - - -
Total
6 886 114 2 023 952 (21 025) 6 587 592 347 033
Notes to the separate financial statement 2021 of ALTEO Nyrt.
94 / 104
In the current year, the Company recognized the following outstanding balances due from affiliated
companies in profit or loss:
Related party transactions are measured on an arm’s length basis.
34.
Financial risks, their management and the sensitivity analysis
In addition to the risks listed in Section II.8, the Company focuses specifically on the following financial
risks.
Credit (trade receivables) risk and its management
Each of the Company’s segments provide services to a different client base and they have different
default risks. The risks associated with the various types of clients are assessed and managed as
follows:
Type of client
Risk management
Business and project
development
Assessment of the individual client risk, requesting bank guarantees
and, optionally, advance payment prior to launching projects.
Large corporate clients
(energy services)
The Company provides services to the critical infrastructures of
large Hungarian companies of which several are listed and
thoroughly analyzed, transparent entities. Key clients are monitored
continuously.
ALTEO members
Thanks to the Group’s centralized processes, the Company has a
comprehensive understanding of the risks of its subsidiaries.
Year 2021 Revenue Asset purchase Material expenses
Personnel
expenses
Other expenses Interest income
Dividend
income
Alte-A Kft.
1 476
- - - -
- 7 000
ALTE-GO Kft.
12 636
- (95) - (46 000)
3 416 -
ALTEO Energiakereskedő Zrt.
1 402 686
- - - -
1 607 -
ALTEO-DEPÓNIA Kft.
64 968
- - - -
4 783 -
ALTEO-Therm Kft.
3 167 416
- (36 681) - -
47 176 -
Domaszék Kft.
8 088
- - - -
702 16 000
Eco-First Hulladék Kereskedelmi
34 932
144 (191) - -
- -
Energias Kft.
303 127
- (18 780) - -
12 745 -
Euro-Green Energy Kft.
338 438
- - - -
69 918 1 500 000
e-WIND Kft.
40 666
- - - -
4 242 -
Foxpost Zrt.
-
- (12) - -
- -
Hidrogáz Kft.
252
- - - -
- -
Hotel Schweizerhof Kft.
-
(35) - -
- -
HSP612 Kft.
-
218 794 (71 848) - -
- -
Kazinc-BioEnergy Kft.
252
- - - -
- -
Monosolar Kft.
17 208
- - - -
14 478 61 000
Pannon Szélerőmű Kft.
236 512
- - - -
37 820 238 000
Sinergy Energiakereskedő Kft.
5 756 775
- - - -
2 605 -
Sinergy Energiaszolgáltató Kft.
135 134
- - - -
6 300 -
SUNTEO Kft.
61 974
- - - -
34 348 108 000
Tisza Bioterm Kft.
312
- - - -
77 -
Tisza WTP Kft.
648 583
- - - -
580 -
Tisza-BioEnergy Kft.
252
- - - -
- -
WALLIS MOTOR PEST Autókereskedő Kft.
-
- (45) - -
- -
Wallis Asset Management Zrt.
-
- (11 097) - -
- -
Wallis Autókölcsönző Kft.
-
- (25 417) (807) (100)
- -
Wallis Kerepesi Kft.
-
67 - - -
- -
WINDEO Kft.
101 221
- - - -
27 095 -
Grand total 12 332 908 219 005 (164 201) (807) (46 100) 267 892 1 930 000
Notes to the separate financial statement 2021 of ALTEO Nyrt.
95 / 104
Type of client
Risk management
Lease receivables
The receivable is secured by the ownership rights of the Company’s
own subsidiary and its free cash balances provide additional
collateral.
In Management’s opinion, client risks have not changed significantly compared to the previous periods.
During the current year, it was not necessary to draw down bank guarantees or any other collateral
pledged by clients.
Risk factors have been taken into account and have been quantified in the course of the review of the
ECL model.
The details of the Company’s receivables and the expected losses relating to such receivables are
presented in Sections 15 and 17.
Interest rate risk calculation and management
The Company is funded through fixed coupon bonds.
The future cash flows of the bonds and the credit terms are explained in detail in Section 27
Foreign currency risk calculation and management
Foreign currency risk is the risk that the fair value of the Company’s future cash flows will fluctuate
because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates to the Company’s operating activities (certain expenses are denominated in a
foreign currency). ALTEO manages its foreign currency risk by hedging transactions the forecasted
purchases that are expected to occur within the next 12-month period and that are settled by members
through the cash pool system.
Presentation of the Company’s foreign exchange denominated financial instruments as at the
reporting date, and changes to the same where there is a one per cent change in the exchange rate.
The Company had no hedging transactions in 2021.
Financial instruments Eur
exchange rate 1%-os the effect of a
change
Assets:
Trade receivables 390 646 1 441
Other financial assets 134 346 496
Liabilities:
Loans and borrowings (30 753) (113)
Trade payables (510 695) (1 884)
Other short-term liabilities and accruals (389 473) (1 437)
Closing balance (405 930) (1 498)
Notes to the separate financial statement 2021 of ALTEO Nyrt.
96 / 104
Liquidity risk
The 10-year bonds issued in 2020 significantly contributed to the improvement of the liquid assets
available to the Group. As of the reporting date, it was not necessary to use the available working
capital loan facility for ensuring liquidity. The Group supports the liquidity requirements of its members
through a cash-pool system.
The future cash flows of the borrowings and bonds and the credit terms are explained in detail in
Section 27
35.
Contingent liabilities
Other than contingent liabilities arising from litigation, there are no liabilities which are not included
in the Company’s financial statements with their amounts for the reason that their existence depends
on future events.
In line with the course of business in the industry, the Company issued guarantees related to its
activities in accordance with its contracts for construction & installation services and operation. The
guarantees were provided by Erste Bank Zrt.
ERSTE Bank issued a good performance bank guarantee to the customer in connection with the power
plant’s operation and maintenance contract.
The Company did not draw down on its bank guarantees either in the current year or in the previous
period.
On the reporting date, the bank guarantees offered by Erste Bank to Alteo Nyrt. amounted to HUF
4,097,000 thousand.
The relationships with other banks that have no value in the financial statements are presented in
detail in Section 27 of the notes to these financial statements.
36.
Significant events after the reporting date
less than 1 year within 2-5 years longer than 5 year
Assets:
Long-term deposits or loans given - 14 280 7 008 940
Trade receivables 6 797 338 - -
Other receivables and accruals 2 649 641 - -
Liabilities:
Bond payable 2 375 118 - 12 658 274
Finance lease liabilities 168 970 452 996 401 320
Advances received 8 989 - -
Trade payables 652 527 - -
Other long-term liabilities - 294 408 -
Other short-term liabilities and accruals 2 298 514 - -
Income tax liabilities 133 998 - -
Notes to the separate financial statement 2021 of ALTEO Nyrt.
97 / 104
The following significant events occurred between the reporting date and the date of approval of the
disclosure of the financial statements.
January 4, 2022: Alteo Nyrt. and BC-Erőmű Kft. (registered office: 3700 Kazincbarcika, Bolyai tér 1.;
company registration number: Cg. 05-09-007481; tax number: 11795346-4-05) signed a long-term
operation and maintenance contract for the operation and maintenance of the power plant and steam
boiler owned by BC-Erőmű Kft. until December 31, 2036.
January 10, 2022: The ‘ALTEO 2022/I’ bonds were repaid at maturity and therefore terminated on the
maturity date, i.e. on January 10, 2022, and the Company has no other obligations to the bondholders,
in view of the repayment.
January 2022: To promote the objectives set out in its remuneration policy of 2020, the Company
transferred HUF 300,000 thousand to the ESOP organization. The Alteo Employee Share Ownership
Program Organization purchased, from the cash received on 1/21/2022, 135,700 shares at the price of
HUF 2,200 per share. Following that purchase, the ESOP organization owns all the 612,940 shares to
be distributed if the remuneration program is achieved.
January 2022: The Group has published its new five-year strategy for 2022-2026 for information
purposes. The company strategy is available at the following link:
https://www.bet.hu/newkibdata/128662993/ALTEO_PPT_VallalatiStrategia2022_2026_final.pdf
February 4, 2022: The parent company of the Group began the transfer of 1,267 shares to the
employees who have become eligible for them based on the Company’s recognition plan.
February 2022: the Group received an ESG certification, for more information on this certification see
https://www.bet.hu/site/newkib/hu/2022.02./ALTEO_megszerezte_elso_ESG_minositeset_2022.02.
02_128668992
February 23, 2022: At the Best of BSE awards ceremony, Alteo was named the Issuer of the Year with
the highest share price increase in the premium category, and also won the Responsibility,
Sustainability, Corporate Governance Award and the Issuer Transparency Midcap Award.
The impact of the global political events (Russia-Ukraine conflict, COVID 19) was taken into
consideration in Section II.8.C.27.
37.
Litigation and claims
On the reporting date the Company has no significant instances of litigation that might influence the
content of the statements.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
98 / 104
38.
Economic relations subject to legal proceedings
With regard to the letter of VPP Magyarország Zrt. (registered office: 1113 Budapest, Bocskai út 134-
146. Company registration number 01-10-048666), sent to Sinergy Energiakereskedő Kft. in 2018 – the
content of which and the response to which by Sinergy Energiakereskedő Kft. are presented in detail
in an announcement published on February 14, 2018, at the official disclosure points of the Company
– on March 14, 2018, Sinergy Energiakereskedő Kft. requested the Hungarian Intellectual Property
Office to establish that the six control procedures it uses in total in the course of operating the virtual
power plant are not in violation of the patent “Decentralized energy production system, control tool
and procedure, controlling the energy production of the system” registered for VPP Magyarország Zrt.
as holder under number E031332.
Sinergy Energiakereskedő Kft. initiated the procedures for the so-called negative clearance with the
goal to clearly and definitively disprove the infringement assumed by VPP Magyarország Zrt. and
presented in the announcement of the Company published on February 14, 2018. The proceedings are
still ongoing at the time of publishing this document.
The Company has not identified any situation affecting its statement of financial position with respect
to this case
.
39.
Fair value measurement disclosures
The Company did not have any assets to be evaluated at fair value either in 2021 or in the previous
year. The Company did not have any derivatives as of the reporting date or in the reference period.
40.
Contractual assets and liabilities
The Company concluded several large value fixed price construction-installation contracts with its
business partners during the current year. Revenue from the projects is recognized by the Company in
accordance with the rules of the IFRS 15 standard. The Group registers its costs concerning the
construction-installation contract separately, and recognizes revenue against the amount due from
the Customer, proportionate to the occurrence of such costs, considering the level of completion and
the planned (expected) profit. According to the management of the Company it is likely that the
economic benefits of the contract will be realized. The estimate concerning the recognized revenue
was prepared considering all the information available at the time of the disclosure of the statement.
Notes to the separate financial statement 2021 of ALTEO Nyrt.
99 / 104
The overhaul of gas engines constitutes a significant component of the O&M contracts of subsidiaries.
The Company treats this liability separately and discloses it as a contractual obligation.
The Company has recognized the changes in outstanding contractual assets and liabilities in the
previous year against the revenues of the current year. No pre-contractual (initial) costs were
capitalized in the current year whose recovery needs to be assessed.
41.
Disclosure of interests in other entities
The Company was not faced with any uncertainty and was not forced to decide on complex matters
when making a judgment about how to treat its investments. All controlled entities qualify as
subsidiaries.
The Company has no associates, it does not participate in joint organizations. Apart from the
subsidiaries disclosed as leases, the Company does not face any limitations concerning any of its
entities that would influence access to net assets, the profit or the cash flow.
The Company has no consolidated or not consolidated interests in which control is not established
through voting rights or where voting rights are not for controlling relevant activities leading to control
(structured entities).
None of the members of ALTEO qualify as or have shares in an investment entity.
42.
The auditor, the audit fee and non-audit services
The Accounting Act requires the Group to prepare consolidated financial statements, which, in
accordance with Section 155 (2) of that Act, is to be mandatorily reviewed by the auditor. The chosen
auditor of the Nyrt. is BDO Magyarország Könyvvizsgáló Kft. (chamber registration number: 002387),
the person responsible for auditing is Péter Krisztián Kékesi, chamber membership number: 007128.
The fee for auditing the unconsolidated annual report and the IFRS consolidated financial statements
is HUF 7,900,000 + VAT.
In the fiscal year 2021, the Company and its subsidiaries used non-audit services for a total of HUF 0
provided by BDO Magyarország Könyvvizsgáló Kft., as the auditor engaged to perform the audit of the
Name 12/31/2021 12/31/2020
Recognized current
year sales revenue
total
Sales revenue
adjustment against
statement of financial
position
Invoiced sales
revenue
MPK Project (70 000) (257 007) 263 748 187 007 76 741
Győr Power Plant Project 55 357 - 55 357 55 357 -
Balatonberény Solar Power Plant (110 346) (106 711) - (3 635) 3 635
Gibárt Hydropower Plant 12 934 - 12 934 12 934 -
Subsidiary gas engine overhauls (976 997) (671 498) - (305 499) 305 499
Maintenance project - 44 516 7 876 (44 516) 52 392
Notes to the separate financial statement 2021 of ALTEO Nyrt.
100 / 104
annual financial statement of the Company, and other companies within the network of the auditor
with the prior written consent from the Company’s Audit Committee in accordance with Regulation
(EU) No 537/2014 of the European Parliament and of the Council.
43.
Approval of the disclosure of the financial statements
On March 25, 2022, the Board of Directors of the Group’s parent company approved the
disclosure of the financial statements in their current form
.
Budapest, March 25, 2022
On behalf of ALTEO Nyrt.:
Attila László Chikán Zoltán Bodnár
Member of the Board of Directors CFO
Chief Executive Officer
Notes to the separate financial statement 2021 of ALTEO Nyrt.
101 / 104
Schedule – ALTEO members on the reporting date
Energy services
Energy
trading
Alte-A KFt. Alteo-Depónia Kft. Energigas Kft. Tisza-Bioterm Kft.
Tisza-WTP Kft. e-Wind Kft. Windeo Kft. Alteo-Therm Kft.
Hidrogáz Kft.
Alteo-Go Kft.
Domaszék 2MW Kft. Monsolar Kft.
Alteo
Energiaszolgáltató
Nyrt.
Alteo
Energiakereskedő
Zrt.
Sinergy
Enerigakereskedő
Kft.
Euro-Green Energy Kft. Sunteo Kft.
Pannon Szélerőmű Kft.
Alteo Deutschland
GmbH 'i L'
Sinergy Energiaszolgáltató,
Beruházó és Tanácsadó Kft.
Kazinc-BioEnergy Kft.
ECO-FIRST Kft. Tisza-BioEnergy Kft.
Energy production and Virtual power plant
Notes to the separate financial statement 2021 of ALTEO Nyrt.
102 / 104
Amount of
equity (HAS)
Amount of
revenue
(HAS)
12/31/2021 12/31/2020 12/31/2021 12/31/2021
ALTEO Energiaszolgáltató Nyrt. H-1033 Budapest, Kórház utca 6-12. Engineering service N/A N/A N/A N/A N/A N/A
ALTE-A Kft. H-1033 Budapest, Kórház utca 6-12. property management 08/02/2011 Founding 100% 100% 11 974
30 323
ALTEO Energiakereskedő Zrt. H-1033 Budapest, Kórház utca 6-12. electricity and gas trade 12/05/2011 Founding 100% 100% 286 136
17 561 505
ALTEO-DEPÓNIA Kft. H-1033 Budapest, Kórház utca 6-12. electricity production 10/01/2008 Founding 100% 100% 29 722 189 213
ALTEO Deutschland GmbH 4 Marie-Curie-Str. 5, D-53359 Rheinbach heat energy production, electricity production, 04/18/2018 Founding N/A 100% N/A N/A
Alteo-Go Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 05/04/2015 Purchase 100% 100% 4 057
52 042
Domaszék 2MW Naperőmű Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 12/04/2017 Purchase 100% 100% 39 702 101 814
e-WIND Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 02/11/2013 Purchase 100% 100% (110 988)
70 271
ECO First Kft. 2 H-1033 Budapest, Kórház utca 6-12.
Treatment and disposal of non-hazardous waste
06/25/2019 Purchase 67% 66,67% 37 258 233 099
Euro Green Energy Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 05/28/2019 Purchase 100% 100% 2 671 138
2 245 909
ALTEO-THERM Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 12/31/2009 Purchase 100% 100% 3 403 046
20 121 780
HIDROGÁZ Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 07/13/2009 Purchase 100% 100% 11 898
499
Kazinc-BioEnergy Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/04/2015 Purchase 100% 100% 1 866
-
Monsolar Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (solar power plant) 11/06/2017 Purchase 100% 100% 50 062 218 724
Pannon Szélerőmű Kft. H-1033 Budapest, Kórház utca 6-12. electricity production (wind turbine) 10/14/2020 Purchase 100% N/A 2 282 272
1 058 912
Sinergy Energiakereskedő Kft. H-1033 Budapest, Kórház utca 6-12. energy production 05/04/2015 Purchase 100% 100% 294 502
19 144 050
Sinergy Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/04/2015 Purchase 100% 100% 475 451 427 652
SUNTEO Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production 01/30/2013 Founding 100% 100% 206 571 685 074
Tisza BioTerm Kft. 3 H-1033 Budapest, Kórház utca 6-12. heat energy production 05/04/2015 Purchase 100% 60% (939)
-
Tisza-BioEnergy Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/04/2015 Purchase 100% 100% 2 415
-
Tisza-WTP Kft. 1
H-3580 Tiszaújváros, Ipartelep
2069/3. water treatment, desalinated water production 05/04/2015 Purchase 100% 100% 101 735
1 454 062
WINDEO Kft. H-1033 Budapest, Kórház utca 6-12. heat energy production, electricity production 05/24/2012 Purchase 100% 100% 216 057 247 610
Rate of influence
Name of companies in Group Note Registered office Activity
Ownership
acquisition
date
Legal title
Notes to the separate financial statement 2021 of ALTEO Nyrt.
103 / 104
1 100% share; undertakings presented as lease assets
2 The Group has a 66.67% share in Eco-First Kft., thus the share of the group in the net assets of Eco-First
Kft. is 66.67%, with that, however, the Group exercises control over this company.
3 After the acquisition of a 40% share, Tisza BioTerm Kft. is a fully consolidated company.
4 Subsidiary constituted under German law, under voluntary winding up procedure
The laws of Hungary are to be applied to the subsidiaries of the Group. The subsidiaries pay tax in accordance with the Hungarian regulations.
The subsidiaries of the Group are also included in the consolidation of other companies.
year Member company Consolidating entity
2021
BC-Therm Kft.
Divestment of 100% business share
2021
Tisza WTP Kft.
Mol Petrolkémia Zrt. 100% share
I.1.2 Acquisitions and divestments
Member company Change in participations
2020
Pannon Szélerőmű Kft. Acquisition of 100% participation
2019 Tisza-BioTerm Kft. Acquisition of 100% participation
2019 Euro Green Energy Kft. Acquisition of 100% participation
2019 ECO First Kft. Acquisition of 66.67% business share
2019 ALTEO Hidrogáz Kft. Divestment of 100% business share
Notes to the separate financial statement 2021 of ALTEO Nyrt.
104 / 104
I.1.3 Transformations
9/30/2020 – “Sunny mergers”
As the next step in the process to streamline the corporate structure of ALTEO Nyrt. as announced at the extraordinary General Meeting of
November 8, 2017, the Company decided on the merger by absorption of its subsidiaries operating photovoltaic power plants. In the course of
the merger
- IT-Solar Kft. merged into Monsolar Kft.
- the following companies were merged into Sunteo Kft.:
•
Péberény Ingatlanhasznosító Kft.
•
True Energy Kft.
•
F.SZ. Energia Kft.
The merger by absorption was concluded on September 30, 2020.
ALTEO Nyrt.
a separate company
Annual Report
for the financial year 2021
Disclosure: March 25, 2022
ALTEO Nyrt. Annual Report for 2021
2 / 30
Table of Contents
1 The Management’s report and analysis of business activities for 2021 ......................................... 5
1.1 Executive summary on events yielding significant results over the period ............................ 5
1.2 Management summary of the statement of financial position .............................................. 8
2 Annexes ......................................................................................................................................... 10
2.1 The Company’s details........................................................................................................... 10
2.2 Information on the ownership structure of the Company and voting rights........................ 14
2.2.1 Composition of the issued capital, rights and obligations related to the shares .......... 14
2.2.2 Limitation of voting rights related to the shares ........................................................... 14
2.2.3 Presentation of investors with a significant share ........................................................ 15
2.2.4 Powers of senior executives .......................................................................................... 15
2.3 Presentation of the ALTEO Nyrt. Group ................................................................................ 18
2.4 Changes in the group structure of ALTEO Nyrt. .................................................................... 18
2.5 Presentation of significant results and events of the Company between January 1, 2021 and
the date of disclosure of this Annual Report, as well as future prospects........................................ 19
2.5.5 Own securities issued by the Company ......................................................................... 20
2.5.6 Publication of an Integrated Report .............................................................................. 21
2.5.7 Personal changes in senior management...................................................................... 21
2.5.8 GINOP ............................................................................................................................ 21
2.5.9 Strategic cooperation .................................................................................................... 21
2.5.10 New RDI project ............................................................................................................. 21
2.5.11 Own share transactions ................................................................................................. 22
2.5.12 Exercise of option rights of the ALTEO ESOP Organization ........................................... 22
2.5.13 Use of non-audit services .............................................................................................. 22
2.5.14 Presentation of ongoing litigations ............................................................................... 22
2.6 The following significant events occurred between the reporting date and the publishing
date of the Annual Report: ................................................................................................................ 23
2.6.1 Own share transactions ................................................................................................. 23
2.6.2 Long-term trade and business agreements................................................................... 23
2.6.3 Company strategy .......................................................................................................... 23
2.6.4 Bonds repaid .................................................................................................................. 24
2.6.5 Share purchase by the ALTEO ESOP Organization ........................................................ 24
2.6.6 ESG certification ............................................................................................................ 24
2.6.7 Best of BSE ..................................................................................................................... 24
ALTEO Nyrt. Annual Report for 2021
3 / 30
2.6.8 Merger of subsidiaries ................................................................................................... 24
2.7 The business environment of ALTEO, classification of risks according to their characteristics
25
2.8 Description of the policies applied in ALTEO, details of results by policy .............................. 25
2.8.1 Environmental guidelines .............................................................................................. 25
2.8.2 Respect for human rights, ethics ................................................................................... 26
2.8.3 Fundamental rights in practice ...................................................................................... 27
2.8.4 Policies applied in connection with the fight against corruption .................................. 27
2.8.5 Employment policy ........................................................................................................ 28
3 Statements of the issuer ............................................................................................................... 28
3.1 Corporate governance statement ......................................................................................... 28
3.2 The issuer's statement pursuant to Section 3.4.1 of the Decree No. 24/2008 (VIII.15.) of the
Minister of Finance ............................................................................................................................ 30
3.3 Statement of the issuer on the independent audit of the report ......................................... 30
ALTEO Nyrt. Annual Report for 2021
4 / 30
ALTEO Nyrt. Annual Report for 2021
Introduction
Pursuant to Act V of 2013 on the Civil Code (hereinafter: “Civil Code”), Act CXX of 2001 on the Capital
Market, the Regulation of the Budapest Stock Exchange Ltd. on the Rules of Listing and Continued
Trading (hereinafter: “Regulation”), Decree No. 24/2008 (VIII.15.) of the Minister of Finance
(hereinafter: “MF Decree”), and Act C of 2000 on Accounting, ALTEO Energiaszolgáltató Nyilvánosan
Működő Részvénytársaság (hereinafter: “Company” or “ALTEO”) has prepared and hereby publishes
“The Management Report and Analysis” on its annual profit or loss, and the financial statements for
the financial year 2021 (hereinafter collectively: “Annual Report”).
The Annual Report and the Annual Financial Statements of the Company have been prepared based
on Annex 2 to the MF Decree, according to the requirements set forth in Act C of 2000 on Accounting,
in accordance with the International Financial Reporting Standards published in the Official Journal of
the European Union.
The data presented in the Company’s consolidated Annual Report and Annual Financial Statements for
2021 were verified by an independent auditor.
The Annual Report of ALTEO Nyrt. consists of the following documents, occasionally in separate
documents, but disclosed at the same time as this Annual Report:
1. Annual report;
2. Auditor’s report, as part of the annual report;
3. Business report, included in this document;
4. Management report, included in this document;
5. Non-financial statements, included in this document.
ALTEO Nyrt. Annual Report for 2021
5 / 30
1 The Management’s report and analysis of business activities for 2021
1.1 Executive summary on events yielding significant results over the period
Its 2021 results confirmed ALTEO’s strategy and the successful investments of the past period. ALTEO’s
profitability was only moderately affected by the COVID epidemic compared to other more procyclical
sectors, partly due to the risk management measures taken by the Company and the fact that the
negative impact of the epidemic was far outweighed by the excellent results achieved with other
activities.
In 2021, the net profit of ALTEO Nyrt. after tax increased significantly. The change was stemming from
the following:
(i) the outstanding performance of the virtual power plant in charge of heat and electricity
generation has been positively supported by the 18MW expansion of the power plant
portfolio’s gas engine capacity in 2020 and the significant price increase in the global market;
(ii) an outstanding record profit in the Retail segment, which was the hardest hit by the effects of
the epidemic and was also impacted by the rise in global prices.
On December 7, 2021, ALTEO was awarded an investment development grant of more than HUF 400
million to realize its innovation efforts. The aim of the project is to develop a highly automated, AI
based energy IT system that is capable of making autonomous production and commercial decisions,
and controlling and optimizing “smart” power plant electricity production.
In November 2021, a 5 MW capacity energy storage unit was commissioned at the Kazincbarcika
Heating Power Plant. This project was, in part, implemented using a non-refundable grant.
In July 2021, Scope ratings reaffirmed the previous rating (BBB-) of Alteo’s bonds, and on January 10,
2022, the bond package “ALTEO 2022/I” (HUF 650 million) was repaid by ALTEO.
The Group was also presented with the Green Frog Award for the Best Sustainability Report by Deloitte
Hungary.
Executive summary of the operating profit or loss statement
The result of 2021, although partly a one-off event, is a good feedback to ALTEO’s management that
the strategy presented earlier and revised in early 2022 is working. Environmental and social
sustainability continues to have a crucial role in our strategy.
ALTEO Nyrt. Annual Report for 2021
6 / 30
Note references in the table point to subsections in Chapters IV and VI of the 2021 IFRS statements of ALTEO Nyrt.
2021
12 months
data in HUF thousand
2020
12 months
data in HUF thousand
Revenues 1. 13 762 321 13 725 724
Material expenses 2.
(4 053 835) (8 912 854)
Personnel expenses 3.
(4 189 712) (3 767 469)
Depreciation and amortization 4.
(460 830) (352 643)
Capitalized own production 5.
207 697 96 033
Other revenues, expenses, net 6. (85 569) (74 689)
Operating profit or loss 5 180 072 714 102
Income from financial transactions 7.
2 258 848 437 920
Expenses from financial transactions 7.
(571 571) (701 877)
Profit or loss on financial transactions (-) 7. 1 687 277 (263 957)
Profit or loss before taxes 6 867 349 450 145
Income taxes 8. (605 231) (183 227)
Net profit or loss 6 262 118 266 918
2021 2020
12 months 12 months
Other comprehensive income (after income tax) 20. - -
Reserves relating to derivative transactions 20.
- -
Reclassification of other comprehensive income
- -
from cash flow hedges into profit/loss
Comprehensive income
6 262 118 266 918
(Negative values are denoted by parentheses.) Note
20.
Data in HUF thousand
(Negative values are denoted by parentheses.)
Note
ALTEO Nyrt. Annual Report for 2021
7 / 30
The Company’s revenue remained on the 2020 level, while its profit after tax increased significantly.
ALTEO Nyrt.’s revenue was increased by the excellent performance of the subsidiaries, while the
volume of construction work with lower margins, but with a significant revenue in 2020, decreased.
The 11%, i.e. HUF 0.4 billion, increase in personnel expenses is directly linked to the expansion of
ALTEO and the effect of the management incentive program announced in late 2020 is also recognized
here.
The dividend income from the annual profit of subsidiaries for 2020 amounted to HUF 1.9 billion Net
finance income.
ALTEO generated an operating profit of HUF 5.1 billion and a net profit after tax of HUF 6.2 billion in
2021.
ALTEO Nyrt. Annual Report for 2021
8 / 30
1.2 Management summary of the statement of financial position
ALTEO’s balance sheet total shows a year-on-year increase of 26% (HUF 7.2 billion) from 2020 to 2021.
ALTEO Nyrt.
Statement of financial position
for December 31, 2021
Statement of financial position 2021 (Assets)
Note references
in the table point to subsections in
Chapters IV and VI
of the 2021 IFRS statements of ALTEO Nyrt.
Non-current assets increased by 13% (HUF 2.5 billion), with the change stemming from the following:
In July, 2021, ALTEO moved to a new office building (address: H-1033 Budapest, Kórház u. 6-12.).
Offices are set up in a rented property (with the right of use recognized as an asset), while the
materials, equipment and work used to fit out and furnish the office space are shown as fixed assets
in the statement of financial position of ALTEO Nyrt.
Current assets increased by 54% (HUF 4.7 billion), with the change stemming from the following:
The stock balance of ALTEO Nyrt. at the end of 2021 shows assets purchased for gas engine
refurbishment, and assets produced for resale and developed using own inputs.
Trade receivables represent the income of the regulatory activity for 2021 invoiced at the end of 2021.
(Negative values are denoted by parentheses.) Note
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Non-current assets 21 392 355 18 868 492
Property, plant and equipment
9.
2 191 124
983 405
Other intangible assets
9.
304 405
176 524
R&D
9.
354 426
332 880
Rights of use
9.
1 006 221
228 884
Long-term loans given
10.
7 023 220
6 650 692
Long-term share in subsidiary
11.
10 512 859
10 496 007
Long-term participation in associate
11.
100
100
Inventories
14.
1 072 351
402 818
Trade receivables
15.
6 797 338
2 745 795
Part of lease asset liabilities due within the year
13.
-
128 949
Other short-term receivables and accruals
16.
2 649 641
2 438 143
Cash and cash equivalents
18.
2 921 324
3 048 578
TOTAL ASSETS 34 833 009 27 632 775
13 440 654 8 764 283 Current assets and assets held for sale
ALTEO Nyrt. Annual Report for 2021
9 / 30
ALTEO Nyrt.
Statement of financial position
for December 31, 2021
Statement of financial position (
Equity and liabilities)
Note references
in the table point to subsections in
Chapters IV and VI
of the 2021 IFRS statements of ALTEO Nyrt. The
adjustments on the lines marked with * are presented in Section 19.2 of the financial statements.
Equity increased by 70% (HUF 5.9 billion), with the change stemming from the following:
ALTEO Nyrt.’s annual dividend payment for 2021 represents a capital decrease of HUF 455 million and
the annual profit for 2021 represents a capital gain of HUF 6.2 billion. The effect of the consolidated
movements in capital related to the settlement of stock option programs resulted in a capital increase
of HUF 142 million.
Long-term liabilities increased by 6.2% (HUF 1.2 billion), with the change stemming from:
A lease liability is recognized by recording the 10-year lease on the head office.
(Negative values are denoted by parentheses.) Note
12/31/2021
HUF thousand
12/31/2020
HUF thousand
Equity 14 470 592 8 510 896
Issued capital
19.
242 235
232 972
Reserves*
19.
5 237 704
4 717 549
Retained earnings
19.
9 197 528
3 390 685
Share-based payments reserve
19.
(206 875)
169 690
Long-term liabilities 14 724 291 15 816 688
Debts on the issue of bonds
23.
12 658 274
14 889 000
Deferred tax liabilities
12.
331 180
47 838
Provisions
22.
15 500
15 500
Deferred income
26.
570 613
397 240
Lease liabilities - long
25.
854 316
147 099
Other long-term liabilities
24.
294 408
320 011
Short-term liabilities 5 638 126 3 305 191
Short-term bond payables
23.
2 375 128
68 926
Advances received
30.
8 989
46 500
Trade payables
28.
652 527
613 493
Lease liabilities - short
25.
168 970
88 759
Other short-term liabilities and accruals
29.
2 298 514
2 407 298
Income tax liabilities
31.
133 998
80 215
TOTAL EQUITY and LIABILITIES 34 833 009 27 632 775
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ALTEO Nyrt. Annual Report for 2021
2 Annexes
2.1 The Company’s details
The Company’s name ALTEO Energiaszolgáltató Nyilvánosan Működő
Részvénytársaság
The Company’s abbreviated name
The Company’s name in English
The Company’s abbreviated name
in English
ALTEO Nyrt.
ALTEO Energy Services Public Limited Company
ALTEO Plc.
The Company’s registered office H-1033 Budapest, Kórház utca 6-12.
The Company’s telephone number +36 1 236 8050
The Company’s central electronic
mailing address
info@alteo.hu
The Company’s web address: www.alteo.hu
The Company’s place of
registration,
date of registration and
company registration number
Budapest
April 28, 2008
Cg.01-10-045985
The Company’s tax number: 14292615-2-41
The Company’s EU VAT number: HU14292615
The Company’s statistical code: 14292615-7112-114-01.
Term of the Company’s operation indefinite
The Company’s legal form public limited company
11 / 30
ALTEO Nyrt. Annual Report for 2021
Governing law Hungarian
The Company’s share capital HUF 242,328,425
Date of the effective Articles of
Association
November 9, 2021
The Company’s core activity Engineering activities and related technical consultancy
Fiscal year same as the calendar year
Place of publication of notices The Company publishes its notices regarding regulated
information on its website
www.investors.alteo.hu, on the
website of the BSE www.bet.hu and on the
www.kozzetetelek.mnb.hu website operated by the Central
Bank of Hungary; furthermore, if specifically required by the
applicable law, the notices of the Company are also published
in the Company Gazette.
ISIN code of the Shares HU0000155726
Stock exchange listing 19,386,274 shares of the Company have been listed on the
BSE in the “Premium” category.
Other securities Bonds
ALTEO 2022/I: zero coupon bonds issued by private
placement, with a maturity of 5 years, total face value:
HUF 650,000,000, issue value: 76.6963% of the face value;
not listed. ISIN code: HU0000357405. It was repaid on
January 10, 2022 and subsequently cancelled.
ALTEO 2022/II: zero coupon bonds issued by private
placement, with a maturity of 3 years, total face value:
HUF 1,693,630,000, issue value: 88.9158% of the face value;
listed on the BSE. ISIN code: HU0000359005
12 / 30
ALTEO Nyrt. Annual Report for 2021
ALTEO NKP/2029:
registered bonds with a fixed coupon rate,
issued by private placement, having a face value of HUF
50,000,000 and 10 years maturity, total face value: HUF
8,600,000,000, its average selling price at auction was
102.5382% of face value, average yield: 2.8546%, listed on
the BSE. ISIN code: HU0000359252
ALTEO NKP/2031: registered bonds with a fixed coupon rate,
issued by public offering, having a face value of HUF
50,000,000 and a maturity of 11 years, total face value: HUF
3,800,000,000, its average selling price at auction was
102.9605% of the face value, average yield: 2.1178%, listed
on the BSE. ISIN code: HU000036003
The Company’s Board of Directors Attila László Chikán, Member of the Board of Directors
entitled to hold the title of CEO
Domonkos Kovács, Member of the Board of Directors, Deputy
CEO, M&A and Capital Markets
Gyula Zoltán Mező, Chairman of the Board of Directors
Zsolt Müllner, Member of the Board of Directors
Ferenc Karvalits, Member of the Board of Directors
The Company’s Supervisory Board István Zsigmond Bakács, Chairman of the Supervisory Board
Dr István Borbíró, Member of the Supervisory Board
Péter Jancsó, Member of the Supervisory Board
Dr János Lukács, Member of the Supervisory Board
Attila Gyula Sütő, Member of the Supervisory Board
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ALTEO Nyrt. Annual Report for 2021
The Company’s Audit Committee István Zsigmond Bakács, Chairman of the Audit Committee
Dr István Borbíró, Member of the Audit Committee
Dr János Lukács, Member of the Audit Committee
The Company’s Auditor Currently, the auditor of the Company is BDO Magyarország
Könyvvizsgáló Korlátolt Felelősségű Társaság (registered
office: H-1103 Budapest, Kőér utca 2/A. C. ép., company
registration number: 01-09-867785, registration number with
the Chamber of Hungarian Auditors: 002387). The auditor
personally responsible for auditing the Company is Péter
Krisztián Kékesi, registration number: 007128. The mandate
of the auditor is from April 30, 2020 to the date of the
adoption of the General Meeting’s resolution approving the
financial statements of the fiscal year ending on December
31, 2022 but to May 31, 2023 the latest.
Shareholder of the Company with
a share exceeding 5%
WALLIS ASSET MANAGEMENT Zrt.
14 / 30
ALTEO Nyrt. Annual Report for 2021
2.2 Information on the ownership structure of the Company and voting rights
2.2.1 Composition of the issued capital, rights and obligations related to
the shares
The Company is a company established under Hungarian law (governing law).
The Company was founded on April 28, 2008 as a private limited company for an indefinite period of
time. The legal form was changed to public limited company as of September 6, 2010 and the Company
was listed on the Budapest Stock Exchange. The ordinary shares issued belong to the same series and
have the same rights. The rights related to the shares of the Company are set out in the Civil Code and
in the Company’s Articles of Association. The transferability of the shares is not restricted.
2.2.2 Limitation of voting rights related to the shares
Pursuant to Section 9.8 of the Articles of Association of the Company, a shareholder or holder of voting
rights (hereinafter, for the purposes of this section: “shareholder”) is required, when notifying a change
in their voting rights as defined in Article 61 of Act CXX of 2001 on the Capital Market (“Capital Market
Act”), to submit a written declaration to the Board of Directors concerning the composition of the
shareholder group and the nature of the relationship between the members of such shareholder group,
taking into account Section 61(5) and (9) of the Capital Market Act. Such notification obligation applies
to shareholders only if there has been a change in the shareholder group since the publication of the
previous notice. In the event of failure to provide notification or full notification regarding the
composition of the shareholder group as required in the previous sentence, or where the acquisition of
control is subject to a regulatory approval or acknowledgement, which the shareholder had failed to
obtain, or if there is reason to assume that the shareholder has deceived the Board of Directors
concerning the composition of the shareholder group, the voting right of the shareholder will be
suspended by the decision of the Board of Directors at any time even after its entry into the share
register, and may not be exercised until the above requirement has been fully satisfied. Furthermore, at
the request of the Board of Directors, shareholders are required to promptly make a statement
specifying who the ultimate beneficial owner with respect to the shares owned, or the beneficial owner
of the shareholder is. If the shareholder fails to act upon such request or if there is reason to assume
that the shareholder has deceived the Board of Directors, the voting right of the shareholder is
suspended and may not be exercised until the above requirements have been fully satisfied. For the
purposes of this section, “shareholder group” means, with respect to a particular shareholder, such
shareholder and the persons specified in Section 61(5) and (9) of the Capital Market Act, whose voting
rights related to their share must be regarded as the voting rights of the shareholder concerned. For the
15 / 30
ALTEO Nyrt. Annual Report for 2021
purposes of this Section, “beneficial owner” means the person specified in Section 3(38) of Act LIII of
2017 on the Prevention and Combating of Money Laundering and Terrorist Financing.
Pursuant to Section 19(7) of the Act XVIII of 2005 on District Heating, Section 95(3) of the Act LXXXVI of
2007 on Electricity and Section 123(7) of the Act XL of 2008 on Natural Gas Supply, in the case of an
event relevant in terms of company law or acquisition specified in these laws, in the absence of the prior
decision on approval or the acknowledgement of the Hungarian Energy and Public Utility Regulatory
Authority (the specific form of consent is governed by the given law, depending on the event relevant
in terms of company law, the range of acquisition, and the nature of the license), the acquiring party
shall not exercise any right against the Company in respect of its interest therein, except for the right to
dividend, and shall not be entered in the share register.
2.2.3 Presentation of investors with a significant share
The majority shareholder of ALTEO is WALLIS ASSET MANAGEMENT Zártkörűen Működő
Részvénytársaság (registered office: H-1055 Budapest, Honvéd utca 20, company registration number:
01-10-046529). The ultimate parent company of ALTEO and its subsidiaries as at December 31, 2021 was
WALLIS PORTFOLIÓ Korlátolt Felelősségű Társaság (registered office: H-1055 Budapest, Honvéd utca 20,
company registration number: 01-09-925865). The shareholders of this entity are all private individuals.
Ownership structure of the parent company (ALTEO Nyrt.) based on the share register as at December
31, 2021.
The publicly issued shares of the Company are listed on the Budapest Stock Exchange; the closing
exchange rate of the shares on the last trading day of 2021 (on December 30) was HUF 2180, which is
134.4% higher than the same value in the last year (HUF 930). Annual turnover was HUF 3.930 billion,
133% higher than in 2020.
2.2.4 Powers of senior executives
The rules governing the appointment and removal of senior executives and the amendment of the
Articles of Association are laid down in the Articles of Association of the Company and the Civil Code.
The Articles of Association of the Company are available on the Company’s website and other display
points (
www.investors.alteo.hu; www.bet.hu; www.kozzetetelek.hu).
2021 2020 2021 2020
Wallis Asset Management Zrt. and its subsidiaries
153 436
154 789
63,32%
63,88%
Members of the Board of Directors, the Supervisory Board
11 544
7 716
4,76%
3,18%
Own shares
94
9 357
0,04%
3,86%
ESOP
5 967
-
2,46%
-
Free float
71 288
70 467
29,42%
29,08%
TOTAL
242 329
242 329
100,00%
100,00%
Face value (HUF thousand) Ownership ratio (%)Present shareholders of the Company based on the share
register on 12/31/2021
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ALTEO Nyrt. Annual Report for 2021
The Board of Directors is the managing organ of the Company, and exercises its rights and duties as a
body. The members of the Board of Directors are elected by the General Meeting for a definite term of
up to five years. The members of the Supervisory Board and the Audit Committee are elected by the
General Meeting for a definite term of up to five years.
As a general rule, the amendment of the Articles of Association is within the competence of the General
Meeting; however, in the context of decisions made pursuant to Section 13.5 of the Articles of
Association, the Board of Directors has the powers to amend the Articles of Association in compliance
with the relevant rules of the Civil Code.
Without specific authorization from the General Meeting, the Board of Directors may not make any
decision on issuing shares.
In its Resolution No. 13/2019. (IV.26.) the General Meeting of the Company repealed its previous
Resolution No. 3/2015. (XI.10.) on authorization and authorized the Board of Directors to adopt a
decision on the increase of the share capital of the Company at its own discretion, with at least four
members of the Board of Directors voting in favor. Pursuant to such authorization, the Board of Directors
may increase the share capital of the Company by up to HUF 150,000,000, calculated at the face value
of the shares issued by the Company, in aggregate (authorized share capital) in the five-year period
starting on April 26, 2019. The authorization shall cover all cases and means of share capital increase set
out in the Civil Code, as well as the restriction or exclusion of exercising preferential rights regarding
subscription for and takeover of the shares, as well as the adopting of decisions relating to the share
capital increase otherwise delegated by the Civil Code and other legislation and by the Company’s
Articles of Association to the competence of the General Meeting, including any amendment of the
Articles of Association necessitated by the capital increase.
Acting within the competence of the General Meeting, the Board of Directors adopted Resolution No.
8/2021. (IV.19.) to provide the Board of Directors with an authorization for a period of 18 (eighteen)
months starting on April 19, 2021, to adopt resolutions on the acquisition by the Company of shares of
all types and classes and of any face value, issued by the Company, supported by at least three quarters
of the votes that can be cast by the members of the Board of Directors, and to enter into and perform
such transactions for and on behalf of the Company, or to engage a third party for the conclusion of such
transactions. The number of shares that can be acquired based on the authorization is equal to a number
of shares with a total face value of no more than twenty-five per cent of the share capital, and the total
face value of own shares owned by the Company may not exceed this rate at any time. The own shares
can be acquired for or without consideration, on the stock market and through public offering or – unless
the possibility is excluded by the law – in over-the-counter trading. In the event of acquiring own shares
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ALTEO Nyrt. Annual Report for 2021
for consideration, the lowest amount of the consideration payable for a share should be HUF 1 (one
Hungarian forint), and the highest amount should be HUF 2,500 (two thousand five hundred Hungarian
forint). The authorization hereof shall also cover share purchases by the Company’s subsidiaries in such
a way that the Company may authorize the management of any subsidiary of the Company by means of
resolutions of the members or shareholders (resolutions adopted by the members’ meeting or the
general meeting) to acquire the shares issued by the Company according to a resolution adopted by the
Board of Directors under the above authorization. The authorization of the General Meeting will expire
on October 19, 2022; the Board of Directors has initiated its extension by an additional eighteen months.
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ALTEO Nyrt. Annual Report for 2021
2.3 Presentation of the ALTEO Nyrt. Group
• Not identical to the main activity of the Companies, which can be found in the certificate of incorporation
2.4 Changes in the group structure of ALTEO Nyrt.
Sale of business share
On March 3, 2021, ALTEO as seller and BorsodChem Zártkörűen Működő Részvénytársaság (registered
office: H-3700 Kazincbarcika, Bolyai tér 1.; company registration number: 05-10-000054; hereinafter:
“BorsodChem”) as buyer concluded a business share sale and purchase contract to transfer the
ownership of a business share representing the entire issued capital of BC-Therm Kft. fully owned by
ALTEO. With the fulfillment of the closing conditions stipulated in the sale and purchase contract, the
ownership of the business share in BC-Therm Kft. was transferred to BorsodChem on May 31, 2021. By
executing the sale and purchase contract, the parties discharged their obligations arising from the long-
1
As of May 31, 2021 BC-Therm Kft. is no longer a part of the ALTEO investment. See the details of the transaction
in Section 2.4.
Name of Subsidiary,
12/31/2021
(for information on changes, see
footnote numbers)
Nature* of the revenue-generating
activity during the current period
Rate of
influence
12/31/2021 06/30/2021 12/31/2020
ALTE-A Kft. property management 100% 100% 100%
ALTEO Deutschland GmbH, being
wound up
no revenue earned 100% 100% 100%
ALTEO Energiakereskedő Zrt. trade in natural gas and electricity 100% 100% 100%
ALTEO-Depónia Kft. electricity production 100% 100% 100%
ALTE-GO Kft. E-mobility service 100% 100% 100%
ALTEO-Therm Kft. electricity production, heat energy production 100% 100% 100%
BC-Therm Kft.
1
steam supply, air conditioning, heat energy
production
production
n/a n/a 100%
Domaszék 2MW Kft. electricity production (solar power plant) 100% 100% 100%
ECO-FIRST Kft. treatment and disposal of non-hazardous waste 66.67% 66.67% 66.67%
EURO GREEN ENERGY Kft. electricity production (wind turbine) 100% 100% 100%
e-Wind Kft. electricity production (wind turbine) 100% 100% 100%
HIDROGÁZ Kft. no revenue earned 100% 100% 100%
Kazinc-BioEnergy Kft. no revenue earned 100% 100% 100%
Monsolar Kft. electricity production (solar power plant) 100% 100% 100%
Pannon Szélerőmű Kft. electricity production (wind turbine) 100% 100% 100%
Sinergy Energiakereskedő Kft. electricity trading 100% 100% 100%
Sinergy Kft. electricity production (hydropower plant) 100% 100% 100%
SUNTEO Kft. electricity production (solar power plant) 100% 100% 100%
Tisza BioTerm Kft. no revenue earned 100% 100% 100%
Tisza-BioEnergy Kft. no revenue earned 100% 100% 100%
Tisza-WTP Kft. water collection, treatment and supply 100% 100% 100%
WINDEO Kft. electricity production (wind turbine) 100% 100% 100%
19 / 30
ALTEO Nyrt. Annual Report for 2021
term heat supply and capacity utilization contract they had previously concluded, where BorsodChem
undertook to purchase the business share in BC-Therm Kft. by the date set out therein.
The sale and purchase contract is without prejudice to the operation and maintenance activities pursued
by the Company at BorsodChem’s site; ALTEO will continue to operate and maintain the boiler plant.
2.5 Presentation of significant results and events of the Company between January 1, 2021 and the
date of disclosure of this Annual Report, as well as future prospects
Due to the COVID pandemic, it was again the Company’s Board of Directors that adopted resolutions on
matters within the competence of the General Meeting throughout 2021, in accordance with the
provisions of Government Decree No. 502/2020. (XI. 16.) on the re-enactment of deviating provisions
for the operation of partnerships and corporations in a state of danger. These resolutions include the
following:
a) The Board of Directors approved the statement of financial position proposed for acceptance
by the Company’s auditor regarding the Company’s fiscal year ending on December 31, 2020,
along with the separate financial statement (comprehensive income: HUF 266,918 thousand,
total assets: HUF 27,632,775 thousand), the business (annual) report and the report of the Board
of Directors prepared in line with the provisions of the Accounting Act applicable to entities
preparing their annual report under the EU IFRS, as well as the relevant written reports of the
auditor, the Audit Committee and the Supervisory Board.
b) The Board of Directors approved the consolidated statement of financial position proposed for
acceptance by the Company’s auditor for the Company’s fiscal year ending on December 31,
2020, along with its consolidated financial statement (comprehensive income: HUF 2,704,833
thousand and total assets: HUF 44,884,360 thousand) and the business (annual) report prepared
in accordance with the IFRSs, the report of the Board of Directors, as well as the relevant written
reports of the auditor, the Audit Committee and the Supervisory Board.
c) The Board of Directors approved the corporate governance report relating to the Company’s
2020 operations with the proposed content.
d) The Board of Directors resolved to pay dividends from the free retained earnings supplemented
with the Company’s profit after taxation in the previous fiscal year, calculated according to
Section 39(3a) of Act C of 2000 on Accounting, and the subsidiary dividends established for 2020,
which corresponds to HUF 24 gross per share (excluding own shares owned by the Company).
Furthermore, the Board of Directors authorizes the Board of Directors to adopt the resolutions
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specified in Article 18 of the Articles of Association, and any other decisions necessary in relation
to the payment of dividends with due regard to the laws in effect.
e) The Board of Directors has given the discharge to the members of the Board of Directors in
accordance with Section 3:117 (1) of Act V of 2013 on the Civil Code of Hungary, with the
conditions described therein.
f) The Board of Directors consented to the extension of the scope of the Remuneration Policy for
2020 of the ALTEO ESOP Organization to BoD Members Domonkos Kovács and Attila László
Chikán; furthermore, it adopted the amendment of the Remuneration Policy for the extension
thereof to the new Deputy CEOs as per the proposal.
g) The Board of Directors acknowledged and approved the information provided on own share
transactions in accordance with the proposals, as well as the additional information on the
transaction to be accounted for on April 13, 2021.
h) The Board of Directors decided to extend the authorization given to the Board of Directors
regarding own share transactions for another eighteen months from April 19, 2021 as per the
conditions set forth in the proposal.
i) The General Meeting adopted the Company’s Articles of Association in a consolidated structure
with the amendments.
Based on the resolution of the Board of Directors of the Company adopted within the competence of
the General Meeting concerning the payment of dividend, the Board of Directors of the Company
specified May 20, 2021 as the starting date of dividend payment, and published the conditions of
dividend payment through the Company’s official disclosure points on May 3, 2021.
Based on the decision of the Board of Directors, the Company moved its registered office to H-1033
Budapest, Kórház utca 6-12 on June 15, 2021, and also ceased its operations at H-1131 Budapest, Babér
utca 1-5 as of the same date.
2.5.5 Own securities issued by the Company
2.5.5.1 Annual review of the credit rating
Scope Ratings GmbH carried out the annual review of the credit rating of the Company’s bonds issued
as part of the Bond Funding for Growth Scheme, as a result of which last year's credit rating was
maintained, in other words bond rating was confirmed at BBB-. The credit rating agency also confirmed
both the BB+/Stable issuer credit rating of the Company and its S-3 short-term debt rating.
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2.5.6 Publication of an Integrated Report
The Company published its Integrated Report for 2020 on May 6, 2021.
2.5.7 Personal changes in senior management
Anita Simon, former Head of the Waste Management Division, will continue as ALTEO’s Deputy CEO for
Sustainability and Circular Economy with effect from June 1, 2021, following her appointment by CEO
Attila László Chikán. As of that day, Anita Simon is also in charge of ALTEO’s newly established
Sustainability and Circular Economy area in addition to the Waste Management Division. Furthermore,
also from June 1, 2021, Péter Luczay, who had held the position of Deputy CEO for Production and Risk
Management, will continue as Deputy CEO for Production Management and Business Development.
2.5.8 GINOP
Construction work for ALTEO’s research project “Integration of storage installation built using different
parameter battery cells into the electricity system” was completed in line with the original plans. The
Company has been awarded EU support in the form of a non-refundable grant amounting to
HUF 227.84 million and a refundable loan amounting to HUF 249.68 million for the implementation of
the project in the framework of the Economic Development and Innovation Operational Program
(GINOP). The 5MW/5MWh electricity storage facility implemented at the Kazincbarcika Heating Power
Plant was officially handed over on November 3, 2021, with the grant and subsidized loan related to the
project currently being drawn down.
2.5.9 Strategic cooperation
ALTEO and AutoWallis Nyrt. have concluded a strategic cooperation agreement to coordinate their e-
mobility-related services in the future. The agreement is based on the shared commitment of the two
companies to sustainable and transparent operation and to transition to green economy. The agreement
also covers the sales of innovative energy solutions related to the charging of electric vehicles.
2.5.10 New RDI project
ALTEO and the Alfréd Rényi Institute of Mathematics have submitted a grant application as a consortium
in response to tender notice code number 2020-1.1.2-PIACI KFI, titled “Support for Market-driven
Research/Development and Innovation Projects”, which was announced by the Hungarian National
Research, Development and Innovation Office. The Ministry of Innovation and Technology has found the
grant application titled “Development of a Real-time Autonomous Power Engineering Information and
Generation Management System”, ID 2020-1.1.2-PIACI-KFI-2021-00229, worthy of support. The amount
of non-reimbursable aid comes to HUF 401,021,730 out of the nearly HUF 1 billion total cost of the
project.
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2.5.11 Own share transactions
Under the Company’s employee share award program, the Company distributed 3,837 ALTEO ordinary
shares in January 2021 (through a transfer dated January 29, 2021) to employees who were eligible
under the Company’s recognition plan.
As the founder of the ALTEO Employee Share Ownership Program Organization (hereinafter: “ALTEO
ESOP Organization”), ALTEO transferred 409,000 ALTEO ordinary shares to the ALTEO ESOP
Organization in order to ensure that the objectives identified in the ALTEO ESOP Organization’s 2020
Remuneration Policy adopted on December 21, 2020 are achieved.
2.5.12 Exercise of option rights of the ALTEO ESOP Organization
On March 31, 2021, the ALTEO ESOP Organization exercised its option right in respect of 577,644 ALTEO
ordinary shares (ISIN: HU0000155726) at a price of HUF 475 per share. Thereafter, the ALTEO ESOP
Organization, making use of the repurchase offer of the Company published on March 29, 2021, sold,
on the same date, to the Company 249,422 shares at a price equal to 92% of the stock market closing
price of March 30, 2021, i.e., HUF 1,178 per share. The transactions were settled on April 13, 2021.
This repurchase transaction described above was designed, on the one hand, to facilitate the cashing in
on shares by the ALTEO ESOP Organization by creating increased demand and, on the other, to create
coverage for shares distributable under the 2020 Remuneration Policy by maintaining ALTEO’s portfolio
of own shares.
2.5.13 Use of non-audit services
In 2021, ALTEO Nyrt. did not use any audit services provided by BDO Magyarország Könyvvizsgáló Kft.
2.5.14 Presentation of ongoing litigations
Sinergy Energiakereskedő Kft.
With regard to the letter of VPP Magyarország Zrt. (registered office: 1113 Budapest, Bocskai út 134-
146. Company registration number 01-10-048666), sent to Sinergy Energiakereskedő Kft. in 2018 – the
content of which and the response to which by Sinergy Energiakereskedő Kft. are presented in detail in
an announcement published on February 14, 2018, at the official disclosure points of the Company – on
March 14, 2018, Sinergy Energiakereskedő Kft. requested the Hungarian Intellectual Property Office to
establish that the six control procedures it uses in total in the course of operating the virtual power
plantare not in violation of the patent “Decentralized energy production system, control tool and
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ALTEO Nyrt. Annual Report for 2021
procedure, controlling the energy production of the system” registered for VPP Magyarország Zrt. as
holder under number E031332.
Sinergy Energiakereskedő Kft. initiated the procedures for the so-called negative clearance with the goal
to clearly and definitively disprove the alleged infringement claimed by VPP Magyarország Zrt. and
presented in the announcement of the Company published on February 14, 2018. The proceedings are
still ongoing at the time of this document.
ALTEO Nyrt. has not identified any situation affecting its statement of financial position with respect to
this case.
2.6 The following significant events occurred between the reporting date and the publishing date
of the Annual Report:
2.6.1 Own share transactions
Under the Company’s employee share award program, the Company distributed 1,267 ALTEO
ordinary shares in February 2022 (through a transfer dated February 4, 2022) to employees who were
eligible under the Company’s recognition plan.
2.6.2 Long-term trade and business agreements
ALTEO and BC-ERŐMŰ Kft. (registered office: H-3700 Kazincbarcika, Bolyai tér 1.; company
registration number: Cg. 05-09-007481; tax number: 11795346-4-05) agreed with regard to the
operation and maintenance contract they concluded on September 29, 1999 and amended several
times that, in order to continue their mutually beneficial long-term cooperation, they would conclude
another long-term operation and maintenance contract for a term of 15 years following the expiry
of their previous contract, and proceeded to sign this contract on January 4, 2022. The new contract
secures energy supply for one of the major industrial companies in Hungary, BorsodChem Zártkörűen
Működő Részvénytársaság (registered office: H-3700 Kazincbarcika, Bolyai tér 1.; company
registration number: Cg.05-10-000054), reinforcing ALTEO’s leadership in the B2B energy service
sector. Pursuant to the newly signed contract, in accordance with the terms and conditions therein,
ALTEO will operate and maintain the power plant and steam boiler owned by BC-Erőmű Kft. until
December 31, 2036.
2.6.3 Company strategy
A new five-year strategy for 2022-2026 has been published by ALTEO for information purposes. The
fundamental goals and areas remain the same, but the Company has set itself much more ambitious
milestones than before. The company strategy is available at the following link:
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https://www.bet.hu/newkibdata/128662993/ALTEO_PPT_VallalatiStrategia2022_2026_final.pdf
2.6.4 Bonds repaid
On January 10, 2017 the Company issued a zero coupon bond with a total face value of HUF 650,000,000
(ISIN identifier: HU0000357405, name: ALTEO 2022/I).
The Company’s ‘ALTEO 2022/I’ bonds were repaid at maturity and therefore ceased to exist on the
maturity date, i.e. on January 10, 2022, and the Company had no other obligations to the bondholders,
in view of the repayment.
2.6.5 Share purchase by the ALTEO ESOP Organization
Based on its transactions announced on January 25, 2022, the ALTEO ESOP Organization has purchased
135,700 ALTEO ordinary shares from DAYTON-Invest Kft. (registered office: H-1055 Budapest, Honvéd
utca 20; company registration number: 01-09-927201) and WALLIS ASSET MANAGEMENT Zrt.
(registered office: 1055 Budapest, Honvéd utca 20; company registration number: 01-10-046529) and,
so now it is in possession of all the required shares, which can be distributed to eligible shareholders
upon fulfillment of the criteria set out in the ALTEO ESOP Organization’s Remuneration Policy for 2020.
2.6.6 ESG certification
In February 2022, ALTEO became the first company in the Hungarian electricity sector to obtain an
independent, international ESG certificate. More information on ESG certification is available at the
following link:
https://www.bet.hu/site/newkib/hu/2022.02./ALTEO_megszerezte_elso_ESG_minositeset_2022.02.0
2_128668992
2.6.7 Best of BSE
ALTEO was successful in three categories based on its 2021 performance at the Best of BSE Awards, one
of the most prestigious events of the Budapest Stock Exchange. ALTEO shared the title of Issuer of the
Year with the highest share price increase in the premium category, and also won the Responsibility,
Sustainability, Corporate Governance Award and the Issuer Transparency Midcap Award.
2.6.8 Merger of subsidiaries
As the next step in the process to streamline the corporate structure of the ALTEO Group as
announced at the extraordinary General Meeting of November 8, 2017, the Company decided on the
merger by absorption of its subsidiaries listed below. The merger involves the absorption of the
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following companies also under the Company’s direct and exclusive control into EURO GREEN ENERGY
Kft., operating with the Company as its only member:
• WINDEO Kft.;
• e-Wind Kft.;
• HIDROGÁZ Kft.;
• Kazinc-BioEnergy Kft.;
• Tisza-BioEnergy Kft.;
• Tisza BioTerm Kft.
The Company schedules the mergers by absorption for June 30, 2022, and therefore the legal effects
associated with the mergers will apply as of July 1, 2022.
2.7 The business environment of ALTEO, classification of risks according to their characteristics
The description and assessment of risks are included in Section III.2 Risks of the Financial Statements.
Changes in risks are presented in the financial statements.
2.8 Description of the policies applied in ALTEO, details of results by policy
2.8.1 Environmental guidelines
ALTEO prepared its first Sustainability Report for the fiscal year 2016, detailing the Company’s non-
financial, social and environmental policies and its annual performance. We ensure the relevance and
transparency of our sustainability data by applying the GRI (Global Reporting Initiative) Standards
methodology, the most recognized international standard, in preparing our non-financial reports, and
by having these certified by a third party annually. We prepare a report on our sustainability efforts
every year and, since 2019, we have published it in the form of an Integrated Report. Our Sustainability
Reports published so far are available to all interested parties on this website:
https://alteo.hu/fenntarthatosag/fenntarthatosagi-jelentesek/. As our Integrated Report contains the
details of the Company's data, policies, objectives in connection with environmental protection and
sustainable business operations, this business report, based on the contents of the Integrated Report,
provides only a summary of environmental policies and results.
Our Integrated Management System, which includes the standards ISO 9001:2015 Quality Management
Systems, ISO 14001:2015 Environmental Management Systems, ISO 45001:2018 Health & Safety
Management System and ISO 50001:2018 Energy Management Systems, has been extended to apply to
the entire ALTEO and its subsidiaries. The Integrated Management Policy (publicly available at
https://alteo.hu/wp-content/uploads/2020/11/alteo_integralt_politika.pdf) is the fundamental
document for this system,
in which the company’s management commits itself to providing quality services, safe work
environment, energy efficiency, environmental protection and sustainability.
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In 2021, we ensured our compliance with the standards by conducting 44 internal audits covering the
operation of the Integrated Management System in compliance with all four standards at all of our sites
and organizational units.
In 2021, 10 HSE-type inspections were carried out by various authorities, which resulted in 4 logged
inspections. The inspections did not result in any compulsory orders or fines being imposed by the
authorities.
Since the residual fuel stock stored at the Győr Power Plant can no longer be used in power plant
technology and thus poses a significant environmental threat and fire hazard, the entire stock thereof
was removed from the site in 2021. The removal of the residual fuel oil stock involved the sale of nearly
137 tons of fuel oil and the disposal of 90 tons of hazardous waste.
A separate document, the Integrated Report 2021, will describe our environmental policies and the
associated results in detail.
2.8.2 Respect for human rights, ethics
The purpose of this section is to describe the significant risks to human rights compliance that may result
in adverse effects in the context of the Company's activities and how it manages those risks.
ALTEO has established a Compliance Management System (hereinafter: “CMS”). The CMS is designed to
ensure compliance with laws, internal rules and the Group’s Code of Ethics in respect of the entire
Group.
The standards established in ALTEO’s Code of Ethics impose higher requirements on Group employees
compared to existing laws.
It is a useful guide which offers help and protection to our employees and provides information to our
partners about the standards of behavior endorsed and expected by our Group.
The standards established in ALTEO’s Code of Ethics impose higher requirements on Group employees
compared to existing laws.
In 2021, in line with ESG considerations and due to the two-year review, we amended the Code of Ethics,
with an increased focus on our commitment to basic human rights, meeting our sustainability objectives
and action against corruption and fraud. We have added to our core values: respect for human rights,
transparency, fair market practices, respect for others and integrity.
The Company is committed to respecting human rights. Respect for human rights includes, among
others: non-discrimination, freedom of thought, conscience and religion, freedom of expression, respect
for private and family life.
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2.8.3 Fundamental rights in practice
The CMS fundamentally provides a supportive, preventive and control function to prevent damage and
abuse and minimize risk across the entire operation of the Company.
2.8.4 Policies applied in connection with the fight against corruption
The CMS fundamentally provides a supportive, preventive and control function to prevent damage and
abuse and minimize risk across the entire operation of the Company.
We firmly reject all forms of corruption and bribery, which are regarded as particularly serious ethical
violations in the context of government officials, suppliers and business partners. We apply zero
tolerance to all cases involving bribery or corruption.
We conduct our procurement procedures transparently and in accordance with our internal rules.
We assess potential suppliers on the basis of a pre-qualification process (also taking financial and legal
aspects into consideration). We do not enter into a business relationship with any supplier that does not
meet the Company’s requirements. We expect our business partners to know, accept and comply with
our Code of Ethics.
We operate a whistleblowing hotline for reporting corruption and fraud, but reports can also be made
via email or over the phone. We also provide whistleblowers with the possibility of anonymity.
In all cases of suspected corruption or fraud, we conduct an investigation in accordance with our internal
rules of procedures. ALTEO firmly stands up for the principle that all forms of retaliation or discrimination
are unacceptable against whistleblowers who report suspected corruption or fraud, even if a bona fide
report does not result in the identification of any illegal or inappropriate acts.
In 2021, no cases of suspected corruption came to the Company’s knowledge.
Conflict of interest
ALTEO is particularly dedicated to the detection and prevention of economic conflicts of interest,
therefore all new entrants must make a conflict of interest statement. In 2021, we reviewed the
employees’ conflict of interest statements. According to the review, there were no employees who did
not report their relationship with companies, other employment, etc.
RISK MAP – Corruption index
In 2021, now for the seventh consecutive year, ALTEO has prepared a compliance risk map using a
questionnaire to measure the Company’s risk index in finances, accounting, human resources, corporate
management and publicity in order to eliminate the potential for corruption, fraud and abuse.
An extended group of managers (28) completed the questionnaire this year. In order to fill the gaps
identified by the questionnaire, the Ethics, Compliance and Control entity organizes regular meetings
and provides ongoing support to the business areas on all compliance issues.
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2.8.5 Employment policy
The employment policy of ALTEO continues to focus on the retention, motivation and development of
existing employees and, at the same time, on the selection and integration of new ones. We create an
effective teamwork culture: we consider developing an innovative corporate culture and establishing
standards of behavior key strategic objectives. ALTEO believes that the loyalty and motivation of their
employees are founded on the stable workplace, good working conditions, complex tasks and
competitive wages provided by the Company. The physical safety of our employees always comes first;
we focus on their long-term commitment, assess their wellbeing through different measurements and
forums, and make efforts to maintain a partner like relationship with the Works Council. Every year, we
provide our employees with a cafeteria allowance, and we offer a wide variety of benefits within the
framework thereof, in accordance with the relevant laws.
At the end of 2021, the closing workforce headcount was 286, which is 8 more than in 2020; there were
7 part-time and 279 full-time employees. The number of employees with indefinite term contracts was
286. In 2020, 77% of the staff members were men and 23% were women. This gender ratio is basically
defined by the nature of the energy sector, as most of the staff deal with the operation of power plants.
At the same time, the Company aims to increase the proportion of women, which shows an improving
trend year after year.
ALTEO Nyrt. is considered an attractive workplace, as evidenced not only by the number of new entrants,
but also by the rate of staff turnover at 11%.
ALTEO consciously seeks to increase the proportion of the young generation within the organization,
since the management of the Company believes that ALTEO can provide professional development and
great opportunities to them. This is essential for maintaining ALTEO’s quality services and reliable work
performance, as a constrictive age pyramid means that numerous colleagues with great expertise and
work experience – many active in the energy sector for 30 years – are set to retire in the coming years,
and the Company strives to recruit highly-trained and committed young members of staff to the
positions that will be opening up down the line.
The expertise and experience obtained in various fields of the energy industry are the core values of
ALTEO. To ensure that ALTEO can provide high-quality services to its partners, it enables its employees
to deepen their knowledge through regular training courses. The objectives of the courses are to enable
our employees to improve their efficiency, to acquire critical qualifications for their work, and to update
and complement their existing knowledge base. The training offerings also include compulsory courses
prescribed by law or by internal regulations, as well as internal knowledge sharing.
3 Statements of the issuer
3.1 Corporate governance statement
ALTEO prepares its corporate governance statement in accordance with the Responsible Corporate
Governance Recommendations of Budapest Stock Exchange Ltd. and publishes it in a separate
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document upon approval by the Company’s General Meeting. The Company only provides a summary
in this business report.
The Board of Directors is the managing body of ALTEO Nyrt. that governs ALTEO Nyrt. and monitors its
day-to-day operation on the basis of existing laws, the Articles of Association and the resolutions passed
by the General Meeting, the Supervisory Board and the Audit Committee.
The members of the Board of Directors are elected by the General Meeting for a term of up to five years.
Members of the Board of Directors elect the Chair and the member entitled to hold the title of CEO
(“CEO”) from among themselves. ALTEO has no nomination committee or remuneration committee; the
remuneration of members of the Board of Directors is determined by the General Meeting. The Board
of Directors consists of five members.
The Board of Directors is entitled and required to decide on all issues that, by virtue of the provisions of
legislation or the effective Articles of Association, do not fall within the competence of the General
Meeting, the Supervisory Board or the Audit Committee.
The member of the Board of Directors entitled to hold the title of CEO is at the head of ALTEO Nyrt.’s
work organization and is responsible for managing and controlling the Company’s operations in
accordance with the resolutions of the General Meeting and the Board of Directors. The CEO acts on
and is entitled to decide all issues concerning ALTEO’s operational management that do not fall within
the exclusive competence of the Board of Directors as a body or the General Meeting according to the
Articles of Association and the rules of procedure of the Board of Directors. During the day-to-day
operations of ALTEO, the CEO works with members of the management responsible for each function
to make decisions.
The CEO is assisted in the day-to-day operational management of ALTEO by the management, the
members of which are responsible for functions within their scope of responsibility.
ALTEO’s Supervisory Board acts as a body under mandate from the General Meeting. Members of the
Supervisory Board are required to act in person; agency is not allowed in the activities of this body.
Members of the Supervisory Board may not be instructed in that capacity by their employer or
shareholders of the Company. Members of the Supervisory Board are elected by the General Meeting
for a definite term of up to five years. Members of the Supervisory Board can be removed at any time
and may be reelected upon the expiry of their mandates. The General Meeting decides on the
remuneration of members of the Supervisory Board. The Chair of the Supervisory Board is elected by
the Supervisory Board from among its members. The Supervisory Board sets out its own rules of
procedure, which are then approved by the General Meeting. The Supervisory Board currently consists
of five members, three of whom are independent individuals.
The Audit Committee verifies ALTEO’s accounting regime, comments on its annual report prepared
pursuant to the Accounting Act, monitors compliance with professional requirements and conflict of
interest rules applicable to auditors and performs the tasks specified in its rules of procedure.
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Within the scope of ALTEO’s risk assessment activities, business, financial, technical, commercial, legal
and compliance functions supervised by members of management work together and assess types of
risk based on written reports prepared by each function and presented to the entire management on a
weekly basis and identify the steps needed to manage risks. These organizational units report to the CEO
and the Deputy CEOs.
The assessment of financial risks is a part of every planning and forecasting process as well as preparing
new investment decisions. Decisions regarding risks identified during planning and forecasting and how
they should be managed are made. For new investments, the management of expected risks is already
covered by the proposal.
ALTEO launched its compliance program in 2015.
3.2 The issuer's statement pursuant to Section 3.4.1 of the Decree No. 24/2008 (VIII.15.) of the
Minister of Finance
The Company declares that its consolidated Financial Statements and Business Report for the year 2021
were prepared in accordance with the International Financial Reporting Standards as adopted by the
EU, based on the Company’s best knowledge, providing a true and fair view of the assets, liabilities,
financial situation, profit and loss of the Company as an issuer and the companies involved in the
consolidation.
The Company also declares that its consolidated Annual Report for the year 2021 provides a true and
fair view of the situation, development and performance of the issuer and the companies involved in
the consolidation, outlining the risks and uncertainties likely to arise in the remainder of the fiscal year.
3.3 Statement of the issuer on the independent audit of the report
The Company declares that the data of this Annual Report were audited by an independent auditor.
The independent auditor's report was published as part of the Consolidated Financial Statements.
Budapest, March 25, 2022
On behalf of ALTEO Nyrt.:
Attila László Chikán
Member of the Board of Directors, CEO
Zoltán Bodnár
CFO
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