SOCIÉTÉ WALLONNE DES EAUX 2012 ANNUAL REPORTreport+2012.pdf · A Trend in TCD and TCS 7 B Trend in water consumption 8 ... The 2012 corporate balance sheet is commented on in the

SOCIÉTÉ WALLONNE DES EAUX 2012 ANNUAL REPORT

PoPulation suPPlied2,412,974 customers

KEy fIgUrES 2012

turnover€ 420,249,000

analyses carried out

103,193

samPles taken

25,909

total length of PiPelines

37,568 km

issued caPital1,252,076,175 €

Produced volume

167,621,014 m3

Partner municiPalities207 (out of 262)

investment Plan€ 125 million/year

volumes of water sold to consumers (including untreated water)

103,092,644 m3

distriButed

volume

101,798,616 m3

115

90

105

110

100

95

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

in m

3

average consumPtion Per household 98.62 m3

meters in oPeration 1,032,201

1,592 staff memBers

reservoirs and water towers 1,354

numBer of annual invoices

1,013,918

water aBstraction sites

436

catchment

sites

269

ACTIVITy rEPOrT

INTrODUCTION 4

PrESENTATION Of THE SWDE STrUCTUrE 5

1 KEEPINg THE PrICE Of WATEr UNDEr CONTrOL 6

A Trend in TCD and TCS 7

B Trend in water consumption 8

C Customers supplied 9

D Investment policy 10

2 ENSUrINg THE SECUrITy Of THE WATEr SUPPLy 12

A The production master plan 13

B Agreement between SWDE and CILE 13

C The end of joint possession between SWDE and De Watergroep (formerly VMW) 14

D Managing and operating resources 15

E Use of the resource 18

f Network performance 19

3 WATEr qUALITy 20

A High-level expertise 21

B Integrated and proactive management 21

C High quality level 22

D Qualitative analyses of samples 22

SOCIÉTÉ WALLONNE DES EAUX 2012 ANNUAL REPORT

4 CUSTOmEr SErVICE 26

A The service charter and complaints management 27

B Interventions of the Walloon Region Ombudsman 27

C Satisfaction survey 28

5 KEEPINg THE ENVIrONmENTAL ImPACT UNDEr CONTrOL 30

6 SOCIAL AND ECONOmIC rESPONSIBILITy 32

A Skills centre 33

B International cooperation 33

fINANCIAL rEPOrT

1 mANAgEmENT rEPOrT frOm THE BOArD Of DIrECTOrS 36 TO THE gENErAL mEETINg

2 BALANCE SHEET AND INCOmE STATEmENT AS AT 31 DECEmBEr 2012 52

2.1 Balance sheet after allocation as at 31 december 2012 53

2.2 Income statement 55

2.3 Appropriation account 57

3 ANNEXES 58

4 COrPOrATE BALANCE SHEET 76

5 VALUATION rULES 84

4

INTrODUCTIONWallonia counts on the Société wallonne des eaux (SWDE – Walloon water com-pany) to consolidate the public water service.

The new management contract was signed with the Walloon Government in June 2012 for a five-year period (2012-2017).

It confirms the position of SWDE as a driving force in the water sector and is reflected in the following commitments:

➜ Keeping the price of water under control➜ Ensuring the security of the water supply➜ Water quality➜ Customer service➜ Keeping the environmental impact under control➜ Social and economic responsibility.

The water sector in Wallonia is going through a pivotal period. Its water pro-duction, distribution and treatment activities call for substantial and regular investments. SWDE needs to find the right answer if it intends to continue to provide the community with an impeccable service.

This answer involves, among other things, reforming the way in which water re-sources in Wallonia are used and managed, a task for which SWDE has received a mandate from the regional authorities. It has joined forces with all the Wal-loon operators to draw up a master plan with a number of objectives:

➜ To guarantee access to a sufficient quantity of high-quality water by improv-ing security of supply in Wallonia. These measures also impact widely on the Brussels-Capital Region, which is highly dependent on the water resources in the south of the country

➜ To promote the implementation of synergies between the various operators so as to limit investment and operating costs. Carefully thought out and con-certed management of the true cost will prevent a sharp increase in the price of water

➜ To monitor and regulate public and private abstraction from the aquifers so as not to endanger their balance. The Walloon Region is to put in place a sys-tem of penalties for illegal water abstraction.

5

Presentation of the swde structure

➜ The operational services (Production, Distribution, Commercial) focus on SWDE’s missions and external customers

➜ The support services (Technical, Human Resources and Administration, Financial) provide services for internal customers, in particular the operational services

➜ The “staff” services cover strategy, development and monitoring.

To fulfil its undertakings and achieve its objectives, the organization chart put in place in SWDE revolves around three axes:

The 2012 corporate balance sheet is commented on in the financial section of the report.

staff

oPerationalservices

suPPort services

Telecontrol and Planning

Water resources

Coordination

Sectors (*)

Water quality

Engineering and Design office

Logistics

Coordination HR / legal department

CoordinationProcurement

Mons-Charleroi

Namur-Liège-Verviers

Accounting / Finance

Management control

Coordination

Contact centre

Customers

Collection

Mons-Charleroi

Namur-Liège

GIS and Networkperformance

Coordination

Distributionsites (*)

Workplace protection and Security

Audit Strategy andOrganisation

IT

Organisation

managementcommitee

Skills Centre and Training

International relations Communication Strategy

Quality and Environnement

Training

Commercial FinancialDistribution HR and AdministrationProduction Technical

* Liège, Namur, Charleroi, Mons

s o c i é t é wa l l o n ne de s e a u x 2 0 1 2 a c t i v i t y r e P o r t

Keeping the price of water under control 01

s o c i é t é wa l l o n ne de s e a u x 2 0 1 2 a c t i v i t y r e P o r t 7

a. trend in tcd and tcs

In 2012, the invoice for average consumption of 100 m3 amounted to € 423.20, com-pared with € 400.94 in 2011, an increase of 5.55 %.

The true cost of distribution (TCD) was modified twice during the course of the year and was finally set at € 2.4000/m3. SWDE receipts, including the average flat-rate fee, amounted to € 250.49 or 59.19 % of the invoice (€ 236.29 in 2011, or 58.93 %).

After the rise in the true cost of sanitation (TCS) on 1 January 2012, the corresponding receipts stood at € 147.50 or 34.85 % of the invoice (€ 140.70 in 2011, or 35.09 %). Receipts associated with the contribution to the social fund and taxes (VAT) rose from € 23.94 in 2011, or 5.97 % of the invoice, to € 25.20, or 5.95 %.

Between 2005 and 2012, the average price of water evolved as follows:

Leaving aside the price effect linked to inflation (constant prices = price level of 2005), the average invoice rose by 3.32 % in 2012. The factors behind this increase are a rise of 3.77 % in SWDE receipts and one of 2.62 % in TCS receipts.

The increase in the SWDE receipts in 2012 is largely due (almost 90 %) to the integra-tion of the abstraction contribution on the volumes produced decreed by the Wal-loon Region in 2012 and transferred in full to the Environment Fund. Without this, SWDE receipts, at constant 2005 prices, would only have increased by 0.38 %.

Moreover, unlike in previous years, the relative share of receipts associated with treatment in the invoice fell slightly, accounting for 34.85 % of the total invoice, com-pared with 35.09 % in 2011 (20.56 % in 2005).

50 10%

0%

250 50%

150 30%

350 70%

100 20%

300 60%

200 40%

400 80%

450 90%

100%

2005 20052007 20072006 20062008 20082009 20092010 20102011 20112012 2012

en €

Social fund and taxes receipts (constant price 2005)

Part related to sanitation (constant price 2005)

Part related to distribution (constant price 2005)

Amount of the average invoice

TCD TCS Social fund and taxes

TrendinTheamounTofTheaverageinvoice(2005-2012) reLaTiveShareSTcd-TcS-SociaLfundandTaxeSinTheinvoice(conSTanTprice2005)

01 Keeping the price of water under control

1 / K e e p i n g t h e p r i c e o f w a t e r u n d e r c o n t r o l8

B. trend in water consumPtion

During 2012, SWDE customers consumed 101,798,130 m3 of water. This figure does not include 1,294,028 m3 of untreated water (= raw water) for in-dustrial activities.

Consumption, not including raw water, fell by 1.02% compared with 2011 (102,842,479 m3). While the number of meters increased by 1.14%, average con-sumption per meter continued to follow the same downward curve, falling by 2.13% to 98.62 m3 com-pared with 100.8 m3 in 20111.

The decline in the level of consumption continues. The level reached this year is the lowest since 1990, confirming the downward trend which began at that time and has been interrupted only by the rise seen during the 2003 heat wave.

The fall in consumption may be attributed to a num-ber of phenomena:

› Variations related to fluctuations in the economic activity of a few industrial consumers which have

a significant influence because of the extent of the volumes consumed

› More sustained use by a growing number of cus-tomers of alternative resources (well and rainwa-ter tanks)

› Increase in the price of water due, among other things, to the rise in the cost of treatment, which promotes water-saving behaviour.

1 Average annual consumption

is determined without including

the figures for untreated water

115

90

105

110

100

95

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

in m

3

averageconSumpTionpermeTer(98.62m3in2012)

s o c i é t é wa l l o n ne de s e a u x 2 0 1 2 a c t i v i t y r e P o r t 9

c. customers suPPlied

As at 31 December 2012, la SWDE supplied 1,032,201 meters et 2,412,974 customers.

Compared with the previous year, the number of meters increased by 11,593 (+ 1.14%). Over the same period, the number of customers supplied by SWDE in-creased by 14,050.

The increase in the number of meters is due to new service connections established as new buildings are constructed and to the installation of individual meters in buil-dings containing several apartments.

Sub-baSinS popuLaTion2012 meTerS2011 meTerS2012 variaTion2012

Escaut-Lys 184,313 81,729 82,312 583

Dendre 116,231 50,542 51,134 592

Haine 413,029 186,832 188,955 2,123

Senne 175,768 70,182 71,412 1,230

Dyle-Gette 115,776 45,498 46,045 547

Sambre 550,198 235,627 237,143 1,516

Vesdre 190,879 73,315 74,365 1,050

Amblève 46,987 20,336 20,684 348

Meuse aval 241,050 98,773 100,293 1,520

Meuse amont 196,686 73,815 74,823 1,008

Lesse 17,199 7,974 8,087 113

Ourthe 86,749 40,888 41,430 542

Semois-Chiers 78,109 34,661 35,098 437

sub-total 2,412,974 1,020,172 1,031,781 11,609

Industriels Luxembourg 436 420 -16

grandToTaL 2,412,974 1,020,608 1,032,201 11,593

1 / K e e p i n g t h e p r i c e o f w a t e r u n d e r c o n t r o l1 0

SWDE is unable to release sufficient self-financing resources to cover all its capital expenditure, in par-ticular the production master plan. To fund its invest-ments for 2012-2017, SWDE has, among other things, just finalized a new loan of € 150 million with the European Investment Bank. Given the current situa-tion on the financial markets, the granting of this loan enhances SWDE’s financial credibility, especially as the EIB is revising its priorities, reducing its credit volume and increasing its requirements in terms of financial ratios linked to indebtedness and equity.

This transaction is to the advantage of SWDE. The guar-antee obtained by the company to finance part of its investment policy (€ 75 million was provided in Octo-ber 2012 and the balance will be paid in the first half of 2013) is a step towards improved cost control. In addi-tion, it ensures the long-term future of SWDE’s activity.

To date, SWDE’s indebtedness amounts to almost € 378 million, half of which is with the European Investment Bank. This credit volume is used to fund SWDE’s ambi-tious investment plan, which now amounts to € 125 million per year for the next ten years.

Over the next ten years, SWDE will therefore have in-vested € 1.25 billion. A substantial sum that is proving to be highly beneficial for employment in the water sector in Wallonia, with a measured impact on the calculation of the true cost of distribution and hence repercussions for consumers’ wallets.

In a context like this, SWDE is confident it can limit the trend in operating charges to the level of inflation + 0.50% per year at the most.

d. investment Policy

The invesTmenT iTems

The annual programme

Network maintenance and replacement (1% on a straight-line basis) € 75 millionModernization of buildings and industrial equipment € 20 million

The extraordinary programme (over ten years)

Restructuring technical-administrative offices (sectors and sites) € 2.5 millionModernizing remote meter reading and remote management € 2.5 million Production master plan € 25 million

Annual investment plan € 125 millions

TheeuropeaninveSTmenTbankLoan

Obtaining the loan from the EIB sends a signal to the mar-kets that SWDE has passed the financial stability tests with flying colours and that the company has a strategic vision that will enable it to ensure the long-term future of its bu-siness model.This loan is particularly advantageous for a number of reasons:› Granted for 25 years (compared with 10 years for the

conventional banks)› The commercial margin of the EIB is far lower than that

of the conventional banks (1% compared with 2.5%)› The use of EIB financing has the advantage of enhancing

SWDE’s image among other lenders.

s o c i é t é wa l l o n ne de s e a u x 2 0 1 2 a c t i v i t y r e P o r t 1 1

newparTicipaTinginTereSTSTakeninTheSwdecapiTaL

CAPITAL SUBSCRIBED AS AT 31/12/2012

Walloon Region € 6,200

Provinces € 18,522,175

Intermunicipalities € 46,941,675

Public financing companies € 100,000,000

SPGE € 366,769,050

Municipalities € 719,817,075

TOTAL € 1,252,056,175

Swde’SmainLenderS

› The EIB, accounting for 35% › The big banks (Belfius, BNP, ING), accounting for 23%› Private investment through direct recourse to the financial markets, accounting for 42%; SWDE has just raised € 50 million for durations ranging from four to 12 years.

In order to reinforce its balance-sheet position while retaining the EIB as its credit institution, again with a view to successfully implementing the production master plan, SWDE decided to approach the Société fédérale de participations et d’investissement (SFPI) and SOCOFE to manage its risk profile as well as pos-sible, thereby facilitating the refinancing of its due dates and its cost.

The capital brought in by these two financial bod-ies entailed their admittance as new SWDE partners. SFPI and SOCOFE have thus acquired a participat-ing interest in the SWDE capital amounting to € 50 million each. They will be able to cooperate on the implementation of a large-scale project in a strate-gic sector, that of water, which concerns both citizens and businesses and which extends beyond the strict-ly regional framework.

For its part, the Walloon Region will also optimize the SWDE financing by undertaking to invest € 50 mil-lion in order to implement a regional water resources plan (over ten years).

58%4%

29%

8% 1%

75 millions

20 millions

2,5 millions

2,5 millions

25 millions

Provinces

Municipalities

Intermunicipalities

Walloon Region / SPGE

Public financing companies

Ensuring the security of the water supply02


a. the Production master Plan

B. agreement Between swde and cile

In the management contract, SWDE has undertaken to finalize the regional water resources operating plan by the end of 2022. A major aspect of this plan con-cerns the modernization of the SWDE’s production infrastructures.

By 2022, SWDE will have deployed its large-volume transport network to contribute, in particular, towards securing supplies to approximately 700,000 service connections (70% of the total). Twelve construction sites of varying sizes will have been completed within

this period. The number of lines starting from strategic facilities such as dams (Eupen, La Gileppe, Nisramont) or Transhennuyère (Gaurain-Ramecroix) will have mul-tiplied. And the SWDE supply network will have been interconnected with those of other operators. The existing supply system will be enhanced by no fewer than 250 kilometres of new, large-diameter pipelines.

These investments, combined with the work to elimi-nate several dozen so-called “problem” catchments, have been made possible thanks to an envelope of

€ 250 million over ten years. This impressive stream-lining of production tools will result not only in a fall in operating and maintenance costs (one third fewer catchments), but also in a reduction of € 70 million in catchment protection costs.

An investment of € 300 million (€ 60 million per year) to modernize the networks is also planned for the dis-tribution activity so as to attain a replacement rate of 1% per year (± 350 km of pipelines).

In May 2012, SWDE and the Compagnie intercommu-nale liégeoise des eaux (CILE – the Liège intermunici-pal water company) signed an agreement under the terms of which they join forces to secure the water supply in Liège Province and the eastern part of Wal-lonia. This agreement will enable improved operation of the Eupen and Gileppe dams.

This “win-win” partnership agreement reinforces and seals a long-standing partnership both in time and in the field. It will enable SWDE:

› To secure the supply to the municipalities in the north of Luxembourg Province using water from the Néblon catchment (which belongs to CILE – 10 million m3 per year). This project, which is sched-uled to be completed by 2015, constitutes a com-plete break with the laying of a new supply system as initially planned. Savings: ± € 40 million

› To secure the Waremme/Dinant/Paliseul supply line by mixing dam water and water from the Hes-baye catchments (which belong to CILE – 15 mil-lion m3 per year)

› To reduce production costs by mixing supplies with water from Hesbaye, the operating costs of which are highly competitive

› To optimize the production capacities of the dams (25 million m3 per year with the potential for 45 million m3 per year), by abandoning a series of obsolete catchments, including that of Lodomez, which holds painful memories for the people of Stavelot.

02 Ensuring the security of the water supply

2 / e n s u r i n g t h e s e c u r i t y o f t h e w a t e r s u p p l y1 4

c. the end of joint Possession Between swde and de watergroeP (formerly vmw)

The division of the Société Nationale des Distribu-tions d’Eau (SNDE – Belgian national water company) into the Société Wallonne des Eaux (SWDE) and the Vlaamse Maatschappij voor Watervoorziening (VMW – Flemish water company) in the 1980s created a situa-tion of joint ownership of certain installations located in the Walloon Region which mainly served Flemish territory. This situation was supposed to have been settled within the first few years of the creation of the two companies.

On 4 December 2012, after almost three decades, the managers of SWDE and of VMW (which has since be-come De Watergroep) signed a framework agreement putting an end to their joint possession.

All the water production and distribution facilities which until then had been owned jointly now form an integral part of the SWDE’s assets. The installations operated by De Watergroep alone on the territory of the Walloon Region have also been transferred to the full ownership of SWDE.

This transfer transaction is not financially neutral. Un-der the terms of the new agreement, De Watergroep and SWDE acquire shares in their respective struc-tures on a reciprocal basis. De Watergroep acquires 419,073 shares in SWDE, representing issued capital of € 10,476,825. SWDE becomes a shareholder in De Watergroep with 66,259 shares representing issued capital of € 1,656,475.

As for the rest, the agreement guarantees the long-term future of reciprocal water supplies between SWDE and De Watergroep.

SWDE has even undertaken to provide additional vol-umes, in particular to supply Pajottenland (the area in Flemish Brabant that receives water from the Kester and Upper Dender supply systems).

Nevertheless, De Watergroep also retains a certain hold on a number of installations in Wallonia, mainly those that largely supply networks in Flanders. This “delegated technical management”, according to the terms of the agreement, positions SWDE and De

Watergroep in a new owner-lessee relationship. This means that the external building maintenance work, investments in extensions (increasing the production capacity, for example) and the replacement of trans-port pipelines are taken on by SWDE, while all the op-erating costs are borne by De Watergroep which will pass on the costs.

In any case, the water produced by sites formerly in joint possession will from now on be invoiced to De Watergroep.

The discussions on the end of the joint possession led the two companies, in view of their shared history and the major issues affecting the development of the wa-ter sector, to consider giving practical shape to their willingness to cooperate by undertaking joint studies.

Possible synergies in the fields of Research and De-velopment, staff training or benchmarking are being considered.


d. managing and oPerating resources

a) ThemainproducTionfaciLiTieS

groundwaTer abSTracTion

As at 31 December 2012, SWDE was operating 436 active abstraction points distributed over 269 catch-ment sites.

During 2012, 53 abstraction points were brought into use, including 33 from the end of the joint posses-sion between SWDE and VMW, 14 were halted, one was set aside for reserves and one was shut down.

PoNt-à-CeLLes - ViesViLLe NaMur - JaMbes WareMMe - boVeNistier

PoNt-à-CeLLes - thiMéoN ViLLers-PerWiN NaMur - beez et MarChe-Les-DaMessoigNies obroeCheuiL

Jurbise-LeNs

berNissart - bLatoN

boussu

MoNs - sPieNNes

La LouVière - stréPy

aiseau - PresLes

Mettet - biesMerée et Carrière LePoiVre

ouPeye - ViVegNis

Volumes abstracted in 2012 (m3)

0-500,000

500,001 - 1,000,000

1,000,001 - 2,000,000

More than 2,000,000

Municipal boundaries

Municipalities supplied by sWDe

MousCroN


groundwaTer

To determine the status of the aquifers, measure-ments are taken on a monthly basis at various points representative of the Walloon territory.

At the end of the previous decade, very significant groundwater recharge in Wallonia meant that each of the aquifers studied reached the highest level ever recorded.

From then on and until the beginning of 2006, the general trend was one of declining aquifer reserves and decreases in the duration and amplitude of the annual recharge cycles due to insufficient precipita-tion.

The years 2007, 2008 and 2009 coincided with a re-turn to normal precipitation, with fairly high tem-peratures in 2008 and in 2009, a year in which rainfall was slightly less than normal.

The year 2010 was marked by very wintry conditions – and the start and the end of the year – and average annual rainfall.

In 2011, two dry spells (in spring and in November) led to a lack of sufficient groundwater in certain re-gions. Surface water was also affected, as shipping had to be restricted for several days.

SurfacewaTerabSTracTion

SWDE has seven production centres for surface water resources, each of which is equipped with a process-ing plant:

› The Vesdre and Gileppe dam complexes supply water to municipalities in the Herve area, the Ver-viers region and the right bank of the Meuse via the Eupen-Seraing-Thiba supply system. These in-stallations can also supply water to the left bank of the Meuse as far as Thiba

› The Nisramont dam complex supplies Northern Luxembourg (Marche and the municipalities in the north of Luxembourg Province) and the Bas-togne plateau (as far as Martelage)

› The Ry de Rome dam complex supplies the Couvin region, the Viroin Valley, the area around the Eau d’Heure dams and the towns of Philippeville and Florennes

› The installations in the Transhennuyère facility provide water for Flanders (VMW) and for SWDE

› The installations in the Soignies facility treat and carry exhaust water from the Hainaut quarry to municipalities in Hainaut (Soignies, Ath, Chièvres, Lens, Braine-le-Comte, Enghien, etc.), Walloon Bra-bant (Tubize, Rebecq) and West Flanders

› The installations in the Ecaussinnes facility treat and carry exhaust water from the Restaumont quarry in Ecaussines, mainly to the petrochemical site in Feluy.

It should be noted that as regards the dams, substan-tial measures have been taken to protect the catch-ment basins and lakes so that urban and industrial pollution is essentially non-existent.

STorageSiTeS

SWDE has 1.354 storage sites, broken down as follows:

› 288 water towers with a storage capacity of 129,318 m3,

› 1.066 reservoirs with a storage capacity of 464,692 m3.

The total storage capacity of these facilities therefore amounts to 594.010 m3.

b) avaiLabiLiTYofThereSource


In 2012, precipitation was particularly heavy in sever-al months: April, June, July and October, while there were only two dry months (abnormally lower precip-itation than average): August and November. Total precipitation exceeded the normal level by 15%.

deveLopmenTofTheaquiferS

Whereas 2011 saw aquifer levels falling virtually every-where (despite rising again in December), the higher levels of rainfall recorded in 2012 led most piezometric levels to stabilize or even rise again.

Only the limestone aquifer measured at Villers-Per-win (northern edge of the Namur basin – eastern part) continued to fall. As the months of October and December 2012 saw substantial rainfall, the aquifers were sufficiently recharged to begin 2013 with mostly average level (or even above average in certain places).

SurfacewaTer

The rain that fell in December 2011 recharged the surface water reservoirs, bringing the total volume to over 85 % of the capacity of each of the dams.

The lowest level was seen in September, as a conse-quence in particular of a very dry August. The level then rose again until the dams in the east were only slightly over 50 % full in December 2012, a level kept deliberately low to cope with rising water levels in winter.

STaTegroundwaTeranddamSinwaLLoniainThemonThofapriL2013

DamS totalcapacity(m3) Unavailablevolume(m3) availablevolume(m3)on 15 January 2013

VESDRE (Eupen) 25,000,000 2,700,000 (10.8%) 17,964,190 (71.9%)

GILEPPE 26,000,000 3,100,000 (11.9%) 19,048,370 (73.3%)

OURTHE (Nisramont) 3,000,000 1,000,000 (33.3%) 2,000,000 (66.7%)

RY DE ROME 2,200,000 194,500 (8.8%) 2,005,201 (91.1%)

L’étatdesnappessouterrainesetdesbarragesenwallonie

au mois de février 2011

Quaternary deposits

tertiary sands

Cretaceans chalks secondary

Jurassic formations of the secondary

Calcareans Primary

Massive skale-sandstone of Primary

Well above the average (2>5m)

above the average (0,5>2m)

average (-0,5<0<0,5m)

Lower than the average (0,5>2m)

Well lower than the average (2>5m)

Not available data

Legende of aquifers

groundwater LeVeL

ability of the damVolume available nowVolume available

0 5 10 20 30 40 50Kilometers

Sour

ce :

SPW

measurement points

1.1 Viemme1.2 avin2. Villers Perwin3. saint gérard4. spiennes Pz55. Neufvilles Pr16. Kain7. anseremme Pz48. gembloux Pz49. Virton10. Walhain

dams

a. Vesdreb. gileppeC. ourtheD. ry de rome

> 1m

0,5 < * < 1m

0,1 < * < 0,5m

stable

0,1 < * < 0,5m

0,5 < * < 1m

> 1m

upward

stable

down

trend of the Last 3 months

e. use of the resource

In 2012, SWDE abstracted 167,621,014 m3 of water:

› Abstraction of groundwater (volume) 130,606,377 m3

› Abstraction of surface water (volume) 37,014,637 m3

Compared with 2011, the volume abstracted increased considerably after the installations formerly owned jointly with VMW were taken over entirely by the com-pany.

Taking into account water purchased from other op-erators, exhaust water from quarries and the volumes discarded when treating the water, in 2012 SWDE con-sequently had 193,906,477 m3 of water available for distribution. Of this volume, 40,681,517 m3 was sold to third parties and 103,092,644 m3 was actually used by SWDE customers.

The volumes not registered for invoicing (losses on the network, drainage to maintain water quality or to pro-ceed with repairs, etc.) came to 50,132,316 m3.

breakdownofvoLumeSbYreSourceSanduSeS

abStracteD(include quarry water but not waste water)

166,279,477 m3

reSSoUrceS:193,906,477 m3 USeS:193,906,477 m3

PUrchaSeD27,627,000 m3

notregiStereD50,132,316 m3

conSUmeD

103,092,644 m3

SolD

40,681,517 m3

main purchases from third parties (> 500,000 m3)

Vivaqua 10,315,395 m3 IDEA 4,066,733 m3

GIE IDEA / SWDE 3,954,788 m3 CILE 2,455,073 m3 TMVW 1,602,433 m3

VMW 1,561,515 m3

IECBW 1,268,510 m3

IEG 959,707 m3

main sales to third parties (> 500,000 m3)

VMW (exclude joint possession) 23,788,698 m3

CILE 9,378,246 m3

IEG 4,074,096 m3

INASEP 1,297,502 m3



Network performance is measured by a “linear index of unmetered volumes (ILVNE - Indice linéaire des vol-umes non enregistrés), calculated by the ratio of the volume not registered by meters to the total length of the network (not including service connections). This new parameter is significantly more objective than

the network yield. In addition, comparisons between network performances can be made more easily and on a more reliable basis.

Performance of the SWDE networks for 2012 is based on the following data:

➜ Unmetered water 50,132,316 m3

➜ Distribution pipelines (without service connections) 22,692 km

➜ Supply pipelines 4,371 km

f. network Performance

The crisis in January 2009, when a long and intense peri-od of freezing weather occurred, had a significant impact on the networks. Their yields deteriorated substantially: the ILVNE fell by 0.74 m3/km/day. This impact continued to be felt in 2010, although the trend began to reverse; progress was recorded in 2011 and was consolidated in 2012, with reduced losses of 0.20 m3/km jour.

Part of this improvement may be attributed to the im-provement in yields further to positive operating con-ditions and the introduction of recently acquired leak detection equipment. The upward revaluation of pipe-line lengths in the context of the enhancing of the new geographic information system is also contributing, al-beit to a lesser extent, to the fall in the indicator.

Moreover, of the 50 million unmetered cubic metres, slightly more than half actually concerned leaks in the network.

The remainder is used for various purposes that are needed for the proper functioning of the production and distribution network and for public utility purposes:

› cleaning the pipelines,› systematic draining needed to maintain water

quality,› ad hoc draining needed for repairs or improve-

ments or to start up equipment,› periodic cleaning of storage facilities,› process water (for example, cleaning filters ac-

counts for almost 7 million m3),

› water used by the fire services,› water used from fire hydrants in towns and mu-

nicipalities (for example, to clean the streets),› under-metering and tolerance on meters,› fraud and theft on the network.

2008 2009 2010 2011 2012

ilVne(m3/km/day) 5.16 5.90 5.83 5.26 5.06

The ILVNE for this financial year is therefore : 50,132,316 : 366 = 5.06 m³/km/day, or an improvement of network performance of 4.17% compared with 2011. 27,063

03Water quality


a. high-level exPertise

B. integrated and Proactive management

The SWDE laboratory constantly develops its expertise in the various field of monitoring, treating and man-aging water quality.

This takes practical shape through participation in col-loquiums and research projects (among other things, members of staff from the Fleurus Laboratory have taken part in the International Water Days organized by Poitiers University, specializing in research tech-

nologies relating to water quality management – re-search projects: Imhotep, Sensport and Progenuis), as well as the implementation of new analytical meth-ods for the identification and quantification of six emerging substances.

In addition, the expertise cell has developed a proce-dure which formalizes the debriefing further to inci-dents that affect water quality or that cause pollution.

It has produced 30 expert reports on matters relating, among other things, to the management of water quality or the optimization of production processes.

Evaluating hEalth risks

The expertise cell of the Water Quality department has developed a methodology for the implementation of Water Safety Plans (WSP). This was sent to the Ser-vice Public de Wallonie (SPW - Walloon public service) and to the two other regions, and was the subject of a communication during the international congress of the IWA (International Water Association).

The methodology proposed is based on the ISO 31000 standard (Risk management) and on recognized, con-ventional risk identification and evaluation tools.

At the end of 2012, the bacteriological and physico-chemical risks of all 317 distribution areas were pre-defined and pre-evaluated using various approaches. An initial Pareto analysis was carried out for each distribution area, enabling the identification of areas responsible for over 80 % of the health risk.

This list will be used to define the order of priority for the implementation of the WSPs.

Drawing up wsps

All the methodological tools relating to WSPs were put in place in 2012 and coordinated with the SPW and the two other regions.

These tools were tested in a pilot area (Jandrain) and an area in Morocco (Al Hoceima) in the context of our international cooperation.

03 Water quality

3 / w a t e r q u a l i t y2 2

c. high quality level

d. qualitative analyses of samPles

SWDE has always adopted a preventive policy by car-rying out substantially more analyses to monitor water quality than are required by law, enabling the various departments of the company to take anticipa-tive action when the deterioration of certain param-eters could adversely affect the quality of the water distributed to consumers.

Moreover, the number of parameters analysed is far greater than is required. This determination to strive for exhaustive monitoring makes it possible to cover the broadest possible range of potential pollutants. Depending on the quality of the raw water, it is either treated or mixed before distribution.

For the year 2012, SWDE took 25,909 samples and car-ried out 103,193 analyses for monitoring purposes (raw water, monitoring of treatment, facilities and distribution networks), representing 1,290,980 param-eters, including field measurements.

From its very beginnings, SWDE has developed part-nerships with other operators. The laboratory received 1,442 samples taken by external customers, on which

2,792 analyses were carried out.

SWDE analysed 3,083 samples in all for its external customers (i.e. 7,333 sets of analyses) for:

› The SPW (water for distribution, surface water and raw water)

› The Armed Forces (Legionella monitoring)› Various intermunicipal companies:

INASEP, IDEA, CILE› Many private enterprises and companies.

raw grounDwatEr

BacterioLogicaL quaLity

The percentage of cases of raw water conformity in 2012 was 48.3 %, which is virtually equivalent to the figure for 2011 (48.5 %), compared with 58.2 % in 2010. This drop in the conformity rate as compared with

2010 can be explained both by a policy for rational-izing analyses and a decision to focus on catchments that pose problems.

In 2012, 488 control points were analysed regularly for the microbiological quality of raw water: 155 control points (31.8 %) reached a conformity rate of more than 95 %, indicating water of very good microbiological

quality. This statistic includes intakes (drains, galler-ies, springs, etc.) sampled in 2012, without considering their operating status (shut down, in service, etc.).


ChEmiCal quality

nitrates

In 2012, the mean nitrate levels in 39 % of the SWDE catchment sites were in excess of half the parametric value:

› 9 sites had an average above 50 mg/l NO3 (compared with 10 in 2011)

› 24 sites had an average of between 40 and 50 mg/l en NO3 (17 in 2011)

› 67 sites had an average of between 25 and 40 mg/l en NO3 (72 in 2011).

The number of sites in operation (255) has remained unchanged since 2011. The situation is stable. In fact, the number of sites in operation that are affected is virtually the same. Some sites are improving slightly, while others are deteriorating slightly.

numberofabSTracTionpoinTSSTudied

abSTracTionpoinTSwhereconformiTY>95%

abSTracTionpoinTSwhereconformiTY>50%

Production-Mons 69 26 (37.7%) (39.9%)* 54 (78.3%) (72.7%)*

Production-Charleroi 151 77 (51.0%) (38.5%)* 98 (64.9%) (60.6%)*

Production-Namur 110 19 (17.3%) (33.5%)* 35 (31.8%) (50.0%)*

Production-Liège 158 33 (20.9%) (35.6%)* 61 (38.6%) (55.4%)*

488 155 31.8% 248 50.8%

A more realistic image of the microbiological quality of raw water is obtained by evaluating the conformity rates site by site in comparison with predefined objectives. A conformity rate of 95 % indicates water of very good microbiological quality; over 50 % indicates sporadic contamination.

* 20

11 d

ata

2 4 3 / w a t e r q u a l i t y

heaVy metaLs

The problems encountered are essentially related to the geology of the subsoil:

› Aluminium (mainly in the Ardennes)› Boron (certain carboniferous limestone catch-

ments in Hainaut Province and, to a lesser extent, in the Ardennes)

› Selenium (Holcim, Lemay, Cimescaut quarries and the Hornu site)

› Uranium (Holcim, Lemay, Cimescaut quarries and the Hornu site).

ph

Water that has too much acidity comes primarily from catchments in the Ardennes and the southeast of Liège Province, because of their natural geological characteristics.

iron and manganese

These natural elements are present almost every-where in variable amounts.

raw surface water

In storage dams with protected catchment basins (Vesdre, Gileppe and Ry de Rome), there are hardly any raw water pollution problems: only traces of pesti-cides carried by precipitation are present.

Increasing quantities of natural organic matter, con-sisting mainly of humic acid, are however to be found. Investments of around € 50 million, mainly intended to add a nanofiltration stage to the water treatment process, were implemented as of 2009 in the Ves-dre and the Gileppe facilities to resolve the problem. These new treatment plants were inaugurated in March 2010. After a year of operation, the biofilm and biostability problems in these bodies of water seem to be under control (the content of organic matter in the treated water has been limited to 1.5 mg/l).

distriButed water

In 2012, SWDE took 17,965 samples of distributed wa-ter, 11,532 of which were analysed in the networks.

The conformity rate for required parameters reached 96.2% (+ 0.9% compared with 2011). The conformity rate is established by considering analyses of treated water. Any parameter that is not in conformity with

the regulations for both bacteriological and chemical analyses is taken into account.

This means that 3.8% of the analyses (corresponding to 686 samples) presented one or several cases of non-conformity for these parameters. The main reason is the pH parameter (521 cases of non-conformity). The number of cases of non-conformity due to microbio-logical parameters is falling.

In fact, out of 312 distribution areas that are moni-tored regularly, 43 show recurrent non-conformity for the value of at least one parameter. In 25 areas, this non-conformity relates to pH.

Irrespective of the fact that these areas have a small number of service connections (0.29% of the total), they are monitored very frequently, which has a nega-tive impact on the conformity rate.

Excluding these areas where the water is naturally acid, the conformity rate would be 98.80% for the vast majority of customers.


04Customer service


a. the service charter and comPlaints management

B. interventions of the walloon region omBudsman

A charter of commitments (service charter or cus-tomer charter) has been drawn up in conjunction with all the departments directly involved with customers; this document was submitted to the Walloon Region Ombudsman for an opinion.

In this charter, which was approved by the Board of Di-rectors on 6 July 2012, SWDE undertakes to:› Produce and distribute water subject to constant

quality control,› ensure continuity of supply in terms of both flow

and pressure,

› Give prior warning of interruptions to the service,› Act promptly in emergencies,› Promote the processing of requests by telephone

and by electronic means,› Draw up a clear and comprehensible invoice,› Establish new service connections within 40 days,› Restore sites to their original condition quickly af-

ter work and/or interventions.

This charter is to be sent out to all members of staff in March 2013 and every SWDE customer will receive a copy during the second quarter of 2013.

The new complaints management procedure has been in operation since the second half of 2012.

Altogether 425 complaints were recorded in 2012. These involved complaints for which, in accordance with the complaints management procedure applied, the heads of the departments concerned deemed it necessary to send an acknowledgement of receipt and provide administrative follow-up.

In 2012, relations between the Ombudsman and SWDE were characterized by constructive collaboration. In particular, an increasing number of dossiers are being resolved directly by the services of the Ombudsman thanks to their increased expertise in the sector. These dossiers no longer pass through SWDE.

During 2012, SWDE handled 54 new dossiers sent by the services of the Walloon Region Ombudsman (76 in 2011). The most frequent requests can be classified as follows:

NUMBER OF DOSSIERS PERCENTAGE

Challenged invoices 21 39%

Overconsumption 10 18%

Hidden leak 3 6%

Works and service connections 9 17%

Meter problem 5 9%

Water quality 2 4%

Miscellaneous 4 7%

Total 54 100%

04Customer service

4 / c u s t o m e r s e r v i c e 2 8

c. satisfaction survey

Keen to ensure transparency and constantly improve its services, SWDE conducts an annual satisfaction survey among its customers.

The 2012 survey aimed to measure the degree of sat-isfaction among SWDE customers with regard to sys-tematic meter replacement.

The questionnaire was submitted to a representa-tive sample of customers whose meters had been re-placed by SWDE (between May and August 2012). The questionnaire covered the following elements:

› The presence of the customer at the time of the first visit by SWDE staff

› Receipt of the visit notification› Making the appointment› Satisfaction with staff› The quality of the information provided› Any inconvenience caused during and after

the work.

From September to November 2012, a total sample of 1,234 customers’ telephone numbers was used to conduct the survey. These customers’ meters had been replaced between May and August 2012.

The rate of positive participation in the survey (pen-etration rate) compared with the total sample tested was 47%.

The overall level of satisfaction of the customers ques-tioned was 96%.

Nevertheless, a number of sources of dissatisfaction remain:

presence of the customer at the time of the first visit by our staff/receipt of the visit notification

Approximately one customer in three was not pres-ent for the first visit:

› They said they had not received a notice in their letter box

› The notice had been sent to the owner rather than the tenant.

making the appointment

Five per cent of customers are dissatisfied for the fol-lowing reasons:

› Difficulty in finding a convenient date› Difficulty in contacting SWDE to make an appointment.

satisfaction with our staff

Over 96 % of customers are satisfied with the presen-tation and behaviour of our staff.

It should, however, be noted that members of our staff do not always spontaneously present their identifica-tion card.

quality of the information provided

In total, 44% of those questioned felt they had not re-ceived sufficient information about why their meter was being replaced.

Customers who received the information found it clear and understood why their meter was replaced.

any inconvenience caused during and after the work

The levels of inconvenience during and after the work are around 1 and 4% respectively. This mainly concerned leaks from the valve and/or the service connection.


05 Keeping the environmental impact under control


the environment Project

Certification audits took place in October 2012, no ma-jor cases of non-conformity were raised and ISO 14001 certification was renewed for the Couillet and Verviers sites until January 2016.

However, the experience of the sites that currently have ISO 14001 certification has revealed limits, as it consisted of adopting an analytical and conventional approach that involved identifying and quantifying the environmental risks for each work station.

On the basis of this experience, the major risk identi-fied is that the outcome is an analysis of the environ-mental risks that cannot be used owing to excessive information, the inclusion of “insignificant” details and updating that requires sizeable resources.

The finding is that vast resources have to be mobi-lized to produce an environmental management tool which may well comply with the standard but which is not very practicable in the field.

An innovative approach towards environmental anal-ysis was therefore considered during the second half of 2012. This resulted in the following:

› A strategic environmental analysis: a decision-making tool for projects and investments. This analysis will cover strategic environmental im-pacts

› An operational environmental analysis intended for staff in the field (using awareness tools de-veloped in conjunction with the operational di-visions). This analysis will cover the operational environmental impacts.

To devise this environmental analysis tool approach, the campaign of regulatory conformity audits (second half of 2012) provided numerous useful tools such as an evaluation of compliance with environmental regulations, the list of environmental impacts on sites that are representative of the activity as a whole, etc.

In addition, an initial environmental impacts aware-ness tool was devised with the Distribution division for the environmental impacts of activities on distri-bution construction sites. Prevention consultants have been trained to use this awareness tool. They will be responsible for training the entire line management and staff in the Distribution division during the first half of 2013.

This methodological proposal for the environmental impact management tool was presented to our ex-ternal certifying authority, which validated it as an original approach perfectly in line with the reality of SWDE’s situation.

reducingThecompreSSibLeporTionofgreenhouSegaSemiSSionSbY30%.

In 2010, SWDE launched the first Carbon Balance of its organization. On the basis of this initial diagnosis, the following observations were identified:

› A substantial proportion of the Carbon Balance (70 %) cannot be compressed in the short and me-dium term because the greenhouse gas emissions are largely related to property, plant and equip-ment with a useful life that may be as long as a hundred years

› Emissions can be reduced on operational activities that constitute a compressible part of the SWDE emissions (30 % of the total impact): energy con-sumption, travel, the purchase of goods and ser-vices.

06Social and economic responsibility


a. skills centre

B. international cooPeration

Actions involving international cooperation focused on two countries: Morocco and Algeria.

Since 2005, SWDE has undertaken regular cooperation actions with ONEE (Morocco) focusing on virtually all the activities of the water production and distribution company.

In Algeria, the actions planned as part of the twinning contract signed between SWDE and Algérienne des eaux (ADE) in 2011 were finalized.

Over a period of 18 months (from January 2011 to June 2012), SWDE sent 20 of its experts to support their col-leagues at ADE. One person was seconded to Algeria as

a resident twinning consultant for 18 months. He was in charge of coordinating the actions planned (workshops, seminars, study visits). This was a first for Belgium, as well as being proof of excellence: SWDE, which has had contacts with Algérienne des eaux since two AWEX missions in 2005 and 2007, was initially selected despite competition from France (Ministry of Health) and Italy.

In fact, the twinning initiative was originally devised by the European Commission to help candidate coun-tries to acquire the skills and experience needed to adopt and implement Community law. Since 2003, this initiative has been extended to include the inde-pendent states of eastern Europe and countries in the Mediterranean region.

By the end of the contract, SWDE had achieved the fol-lowing concrete results:

› ISO 17025 certification of the central laboratory in Algiers has started

› staff at the central laboratory in Algiers and re-gional laboratories have been trained in the latest analysis techniques

› a computing program for the management of wa-ter samples, based on Web technologies and an SQL database, has been developed and deployed;

› water quality management and crisis manage-ment procedures have been defined and imple-mented for production and distribution (pilot units)

The skills centre is often highlighted during interna-tional procedures or meetings.

As regards enhancing and improving internal skills and know-how, apart from the implementation of the 2012 training plan itself, the following actions were taken:

› Definition of a training cycle for hydraulic engi-neers. A number of the modules organized after one or two years will result in a certificate. This ap-proach is part of the general move to enhance the value of experience and training

› Implementation of a welcome session for 28 new staff members taken on in October 2012

› Preparation of a management training cycle for SWDE managerial staff

› Promotion of linguistic knowledge by means of a four-year language course and the provision of a learning platform

› Definition of a three-year contract with different instructors on the subject of safety.

Themini«drinkingwaTer»neTwork

SWDE has undertaken to add a mini “drinking water” network to the infrastructure managed jointly with Forem (Walloon employment and training service). The hall that is to house the educational network will include a water tower and remote management equip-ment. The network will be fitted with ad hoc equipment to enable the remote management of automatons to be installed in the training rooms.

These tools will be used by SWDE and Forem for their own training courses. They may also be made available to companies wishing to test their equipment or for demonstrations.

06Social and economic responsibility

6 / s o c i a l a n d e c o n o m i c r e s p o n s i b i l i t y3 4

› Poor water quality indicators have been defined and put in place

› The project plan for the implementation of an ISO 9001 procedure has been validated

› A quality policy based on the ISO 9001 standards has been validated and published

› An audit of the water quality communication policy and organization has been conducted. This contains practical proposals for improvement

› The guide for the management of cases of non-conformity in water quality has been improved

› A computer program has been produced to capi-talize on experience, in particular in the manage-ment of cases of non-conformity

› Means of reducing vulnerability in production and distribution in respect of contamination have been implemented.

aSucceSSSTorY

These results and the way the twinning was carried out are such that:

› The project management unit in Algeria (acting in Algeria under the authority of the European Union) described the project as a “success story”;

› The European Union has decided to highlight the SWDE project as one of the three best twinning programmes of 2012 (around 300 projects were underway in 2012).

Another twinning programme is being considered at the instigation of the Algerian authorities.

TwinningfigureS

European Commission funding € 900,000

SWDE experts sent as instructors 20

Number of man days needed to implement the twinning programme 430

Number of trips to Algeria 83

2012 financiaL REpoRt

Management report from the Board of Directors to the General meeting of 28 May 2013

01

S o c i é t é Wa l l o n ne De S e a u x 2 0 1 2 f i n a n c i a l r e p o r t 3 7

1. coMMentS

assEts

Assets (in thousands €) Financial year 2012 Financial year 2011 Difference

Actifs immobilisés 1,537,616 1,458,554 79,062

Intangible assets 4,332 2,650 1,681

Property, plant and equipment 1,524,598 1,449,858 74,740

Land and buildings 298,205 295,629 2,577

Plant, machinery and equipment 972,391 887,721 84,670

Furniture and vehicles 7,392 7,708 -316

Finance lease and similar rights 0 0 0

Other non-current tangible assets 377 390 -13

Assets under construction and advance payments 246,233 258,411 -12,178

Non-current financial assets 8,687 6,045 2,641

Current assets 303,525 174,690 128,836

Amounts receivable after one year 1,342 1,924 -582

Inventories and orders in progress 14,327 17,224 -2,898

A. Inventories 5,239 4,903 336

B. Orders in progress 9,088 12,321 -3,233

Amounts receivable within one year 121,447 115,468 5,979

A. Trade receivables 110,605 106,611 3,993

B. Other amounts receivable 10,842 8,857 1,985

Investments 62,596 12,177 50,420

Cash and cash equivalents 94,438 16,302 78,136

Deferred charges and accrued income 9,376 11,595 -2,219

totaL assEts 1,841,141 1,633,243 207,898

1.1. Balance sheet situation

Intangible assets and property, plant and equipment

The acquisitions made during the year (including work in progress) amount to € 163,311,000. Of this sum, € 160,268,000 relates to the implementation of the programme of work. The balance of € 3,043,000

concerns the acquisition of furniture and vehicles for € 1,444,000 as well as the costs of studies and IT licenc-es obtained amounting to € 1,599,000.

As regards assets under construction more specifi-cally, these were down € 12,178,000, amounting to € 246,233,000 as at 31 December 2012. This movement can be explained by work carried out during the finan-cial year for the sum of € 126,142,000 and by transfers for final inclusion under non-current assets amount-ing to € 138,320,000 further to the completion of in-vestments. It should be noted that the amount thus transferred is € 27,485,000 higher than in 2011 and € 66,872,000 higher than in 2010, due to ever faster derecognition of investment work.

SWDE sold real property and withdrew assets from use (equipment and vehicles) during the year 2012 for the sum of € 7,036,000, compared with € 1,387,000 in 2011.

01 Management report from the Board of Directors to the General meeting of 28 May 2013

1 / ManageMentr eportfroMth eBoar dofdi r ectorstoth egen eralMeeti ngof28May20133 8

The depreciation recorded during the year 2012 amounted to € 86,794,000, including € 1,633,000 for intangible assets and € 85,161,000 for property, plant and equipment. Depreciation reversals on outgoing assets amounted to € 6,939,000.

Finally, the net carrying amount of the intangible assets and property, plant and equipment rose by € 76,421,000, from € 1,452,508 as at 31 December 2011 to € 1,528,929,000 as at 31 December 2012.

Amounts receivable after one year

The “Amounts receivable after one year” stood at € 1,342,000 as at 31 Decem-ber 2012, compared with € 1,924,000 as at 31 December 2011, a fall of € 582,000 (-30.26%). This is due mainly to the reclassification of long-term receivables falling due within the year from the “Walloon Region and provinces” partners under the heading “Amounts receivable within one year” for the sum of € 598,000.

Inventories and orders in progress “Inventories” rose by € 336,000 compared with 2011, standing at € 5,239,000 as at 31 December 2012. This increase may be attributed primarily to the “Inventories – General Warehouse” account which rose by € 340,000 compared with 31 Decem-ber 2011, to reach € 6,795,000 at the end of the 2012 financial year (+ 5.27%). This significant increase is due in particular to the prudential measures applied further to the conclusion of new supply contracts.

The “Orders in progress” account fell by € 3,233,000 in 2012. This account includes the work for third parties relating to the relocation of pipelines and studies or work undertaken on behalf of SPGE.

“Work for third parties relating to the relocation of pipelines” fell by € 143,000

compared with 31 December 2012, mainly further to:➜ The derecognition of work invoiced (cost of work) during the financial year

amounting to a total of € 54,000

➜ The derecognition of work without invoicing in return (on cost centre), amounting to € 90,000

➜ Expenses relating to work in progress amount to € 1,000.

As for the “work on behalf of Société publique de gestion de l’eau (SPGE - Water Management Public Company)”, owing to the derecognition of € 3,247,000 for conversion work, and study and protection dossiers which were published in the Moniteur belge (Belgian official journal), the account is down by € 3,090,000. The difference of € 157,000 may be attributed to the studies and work carried out dur-ing the financial year.

Amounts receivable within one year

“Trade receivables” were up € 3,993,000, broken down as follows:

(in thousands of €) Financial year 2012 Financial year 2011 Variation Variation %

Customers 50,933 48,378 2,555 5.28%

Invoices to be issued and credit notes to be received

14,713 14,888 -174 -1.17%

Doubtful debts 82,564 79,845 2,719 3.41%

Amounts written down -37,605 -36,499 -1,106 3.03%

trade receivables 110,605 106,611 3,993 3.75%


“Customer accounts” were up by € 2,555,000 compared with the previous financial year, due to the increases in the TCD (= true cost of distribution), which rose from € 2.2504 in 2011 to € 2.31 as at 9 January 2012 and € 2.40 as at 23 February 2012.

Similarly, the TCS (= true cost of water sanitation) rose from € 1.4070 as at 1 Janu-ary 2011 to € 1.4750 as at 1 January 2012.

“Invoices to be issued and credit notes to be received” were down by € 174,000

compared with the 2011 financial year, due to:➜ Reclassification of advances on water, which fell by € 6,546,000 to € 140,490,000

as at 31 December 2012

➜ invoices to be issued excluding water sales, which fell by € 1,941,000

➜ the increase of € 7,729,000 in estimated invoices to be issued concerning our water sales activity

➜ the increase of € 584,000 in credit notes to be received from our suppliers com-pared with 2011.

“Doubtful debts” rose by € 2,719,000 compared with 31 December 2011. These are separated from the other trade receivables within one year and, as provided for in the chart of accounts for water, are written down in line with the age of the receivable:

In excess of one year > 30%In excess of two years > 75% In excess of three years > 100%

As in the previous year, it may be noted that customers’ payment conditions are worsening. This is linked to the rise in the cost of living and of energy in particular, and the increase in the average water bill (higher TCD and TCS).

The increase of € 1,985,000 in “other amounts receivable” can be explained as follows:

(in thousands of €) Financial year 2012 Financial year 2011 Variation Variation %

Capital due from "Region and Provinces" partners within the year

598 613 -15 -2.38%

VAT to be recovered 8,092 6,799 1,292 19.00%

Partners' current accounts 1 1 0 0.00%

Walloon Region debts due within the year

198 69 128 185.85%

EIG current account 0 160 -160 -100.00%

Sundry debtors 8 0 8 0.00%

Various other amounts receivable

1,946 1,214 732 60.25%

Other receivables 10,842 8,857 1,985 22.42%

4 0 1 / ManageMentr eportfroMth eBoar dofdi r ectorstoth egen eralMeeti ngof28May2013

As at 31 December 2011, the “EIG current account” item held the sum of € 160,000 in receivables from the economic interest group GLPDE, comprising SWDE’s share in the results of the years 2009, 2010 and 2011. In 2012, the economic interest group GLPDE paid these amounts and was wound up.

The “various other amounts receivable” rose by € 732,000, primarily due to the promise of “grants” of € 700,000 in the context of the IMHOTEP project (research programme on emerging substances in water, which is of interest for public health and the environment) and to subsidies to be received from SPI up € 211,000 further to the closing of several dos-siers. However, it is worth noting the partial clearing of the amount receivable linked to the cooperation contract with the company Algérienne des Eaux for the sum of € 330,000.

Investments and cash and cash equivalents

“Investments and cash and cash equivalents” amounted to € 157,034,000 as at 31 December 2012, compared with € 28,479,000 as at 31 December 2011, an increase of € 128,555,000.

At the close of the financial year, the cash level was high further to long-term financing transactions (EMTN issues amounting to € 50,000,000 and EIB loan of € 75,000,000) and the taking of a participating inter-est by SFPI and SOCOFE in the capital of SWDE, paid up to the amount of € 40,000,000 on 31 December 2012.

The cash stock established at the end of the financial year is sufficient to meet the financing requirements of the next two financial years.

In 2012, the cash surplus management policy focused primarily on capital protection and diversification as regards both income and financial partners relating to short-, medium- and long-term due dates (maximum of 60 months).

Our investment horizon comprises mainly short and medium terms as it is directly linked to our cash cycle based on our economic activity and in particular on the quarterly reimbursement to SPGE of the “true cost of sanitation” share collected through our invoices.

The surplus alone was invested in due dates of over 36 months.

Our assets consist of monetary income (term ac-counts, savings accounts, commercial paper, etc.), but also of SICAVs (unit trusts) (monetary, bond, mixed) as well as discretionary management.

The funds are invested with seven financial partners with a default risk divided among a great many coun-terparts through our SICAVs.

Deferred charges and accrued income

The “deferred charges and accrued income” amount-ed to € 9,376,000.

These accounts comprise two headings. The first re-lates to the charges to be carried forward, which stand at € 9,134,000 and include:➜ The carrying forward of the appropriation to

the pension fund in the context of the merger (€ 7,133,000)

➜ the balance to be depreciated on the goodwill not-ed upon the takeover of Aquasambre and IDEMLS; this amount will be depreciated when the assets to which it relates reach the end of their useful life, given the prorata temporis basis applied when the transaction was undertaken on 1 December 2006 (€ 1,697,000)

➜ the carrying forward (€ 304,000) of the following charges: fleet management (contract for vehicle servicing and repair), various rental charges, com-puting services and the installation maintenance contracts.

The second heading concerns the “income acquired” which amounts to € 242,000 and relates to creditor interest of € 183,000 and the intervention of AWHIP for certain members of staff amounting to € 59,000.


Capital

The SWDE capital, which stood at € 1,095,459,000

at the end of the 2011 financial year, amounted to € 1,146,227,000 as at 31 December 2012. This increase may be explained as follows:

The “issued capital” rose from € 1,141,246,000 as at 31 December 2011 to € 1,252,056,000 as at 31 December

2012, up € 110,810,000 further to various capital in-creases in 2012:

➜ € 100,000,000 with the entry into the capital of SOCOFE and SFPI

➜ € 10,500,000 to remunerate the transfer of the in-stallations from De Watergroep

➜ € 310,000 for extension work.

The “uncalled capital” rose from € 45,787,000 as at 31 December 2011 to € 105,829,000 as at 31 Decem-ber 2012, mainly further to the increase in the issued capital of € 110,810,000 and as a result of the contri-butions and payments made to pay up shares in full amounting to € 50,664,000.

Revaluation surpluses

The “revaluation surpluses” amounted to € 30,770,000 as at 31 December 2012.During the 2012 financial year, full ownership of the water distribution installations established in the Charleroi region in the context of the repair of the damage caused by mining was transferred to SWDE by the Walloon Public Service free of charge.A revaluation surplus was recorded for the net car-rying amount of these goods that amounted to € 31,831,000.At the end of the financial year, the revaluation sur-plus equal to the depreciation recorded on this, i.e. the sum of € 1,061,000, was transferred to reserves avail-able for distribution.

Reserves

The “reserves” amounted € 44,228,000 as at 31 December 2012, compared with € 42,443,000 as at 31 December 2011, an increase of € 1,785,000.

In addition to the transfer to a reserve available for distribution of the revaluation surplus of € 1,061,000, of the result for the financial year of € 724,000, the sum of € 36,000 was allocated to the legal reserve

LiabiLitiEs

LIAbILItIes (in thousands of €) Financial year 2012 Financial year 2011 Difference

equity 1,273,620 1,175,059 98,561

Capital 1,146,227 1,095,459 50,768

Issue premium 0 0 0

Revaluation surpluses 30,770 0 30,770

Reserves 44,228 42,443 1,785

Profit / Loss to be carried forward 0 0 0

Investment grants 52,395 37,157 15,238

Provisions and deferred taxes 7,835 10,990 -3,155

Provisions for liabilities and charges 7,835 10,990 -3,155

Amounts payable 559,686 447,194 112,492

Amounts payable after one year 368,096 256,381 111,715

Amounts payable within one year 181,092 185,544 -4,452

Accrued charges and deferred income 10,498 5,269 5,229

totaL LiabiLitiEs 1,841,141 1,633,243 207,898


and the sum of € 688,000 to the reserve available for distribution, in accordance with the provisions of the articles of association.

Investment grants

Investment grants, which stood at € 37,157,000 as at 31 December 2011, amounted to € 52,395,000 as at 31 December 2012, an increase of € 15,238,000.

Most of the amounts booked as “investment grants” originate in the accounting mechanism laid down in Article 308 bis of the chart of accounts for water and do not concern grants provided by the public authorities.

Provisions for liabilities and charges

The “provisions for liabilities and charges” fell from € 10,990,000 as at 31 December 2011 to € 7,835,000 as at 31 December 2012, down € 3,155,000.

This fall may be explained by:

➜ The use of € 1,279,000 from the social fund estab-lished in 2011, which includes € 1,243,000 for the Social Fund and € 36,000 for technical improve-ment

➜ The reversal in full of the provision for pre-retire-ment leave amounting to € 3,312,000

➜ The use and reversal of the provision for litigation of € 1,416,000

➜ The use in full of the provision for bad weather established as at 31 December 2011 amounting to € 648,000, in order to alleviate the impact of the winter crisis.

Alongside the use of existing provisions, further ap-propriations were effected in 2012:

➜ The appropriation to the provisions for bad weath-er of € 227,000

➜ The appropriation to the Social Fund provision (new system) of € 1,295,000, which includes € 1,233,000 for the Social Fund and € 62,000 for technical improvement in 2012

➜ The appropriation for pre-retirement leave of € 1,705,000. It should be noted that further to the new legislation on pensions and the decision taken by the Board of Directors to abolish pre-re-tirement leave, no further agents will be admitted to the pre-retirement leave system in future

➜ The appropriation for ongoing litigation of € 73,000

➜ The appropriation to the provision for occupation-al illnesses of € 199,000.

Amounts payable after one year

As at 31 December 2012, “financial debts” were up by € 112.393,000 compared with the previous financial year.

In fact, long-term financial debts rose sharply in 2012 further to a new loan taken out with the European In-vestment Bank (EIB) amounting to € 75,000,000 and to EMTN issues amounting to € 50,000,000.

This new funding was used to cover the cash require-ments of the financial year closed but will also cover those of the 2013 and 2014 financial years, which makes the situation more comfortable in this context

marked by economic crisis in which it is more difficult to gain access to credit.

The EIB loan was taken out partly at a fixed rate for € 40,000,000 and partly at a floating rate for € 35,000,000, over a period of 25 years, while benefit-ing from a grace period of three years. The fixed part offers the advantage of a guaranteed rate throughout the contract, while the floating rate based on the Euri-bor 3 months makes it possible to benefit as much as possible from record low interest rates and also im-proves the diversification of our outstanding debt by increasing the variable portion of this amount.

The EMTN issues were carried out through Belfius bank, the dealer of our commercial paper programme, in favour of four investors with due dates of between 4 and 12 years. The credit facilities will be reimbursed in full upon maturity (bullet) and the coupons are paid to the investors annually on the basis of a fixed rate.

Four loans fell due in 2012. No others were repaid in advance or restructured.


Amounts payable within one year

The “current portion of amounts payable after one year” fell by € 3,871,000.

This situation is contradictory given the sharp rise in long-term financial debts, but is due to the fact that the two instalments of the EIB loan (€ 40,000 and € 35,000,000) benefit from a grace period of three years. Reimbursement of the capital will therefore only be-gin as of the fourth year.

Similarly, the EMTN issues were taken out on a bullet basis, which means that no capital will be reimbursed until the final due date of the securities.

As these new credit facilities do not involve any capital reimbursement in 2013, amounts payable within one year fall from one financial year to the next, as most of the other loans were taken out on a degressive basis.

"Financial debts (commercial paper)” amounted to € 11,000,000 as at 31 December 2012, compared with € 15,000,000 as at 31 December 2011, down € 4,000,000.

Our commercial paper programme functioned well during the first four months of 2012 to cope with cur-rent cash requirements.

Thereafter, when the long-term financing dossiers were finalized, activity fell back sharply, giving way only to opportunity issues intended to satisfy our regular investors.

The level of issues may not, however, fall below € 10,000,000, that is the level of the macro hedge cover linked to the commercial paper programme.

A number of drawings on our credit lines were under-taken during the first half of the year with due dates of less than one month.

Given the extremely low level of short-term rates during the 2012 financial year (Euribor), short-term financing (commercial paper programme and credit lines) was the least costly means of financing.

We therefore effected 22 short-term commercial pa-per issues for a total amount of € 156,500,000 with due dates between one and six months and four drawings on our credit lines for a total amount of € 22,000,000

for periods of one week.

“Trade debts” rose by € 7,652,000. Invoices to be re-ceived and credit notes to be issued were down by € 1,250,000 as at 31 December 2012 and an increase of € 8,902,000 was noted in amounts payable to suppliers and creditor customers, which stood at € 73,836,000 as at 31 December 2012.

Advances not linked to the sale of water to private in-dividuals and amounts in excess collected from cus-tomers fell by € 409,000.

Amounts payable in “taxes, remuneration and social se-curity" rose by € 608,000 at the end of the financial year.

“Other amounts payable” fell by € 4,432,000 com-pared with the previous financial year. This reduction

is basically due to the settlement at the start of the financial year of the sum of € 6,427,000 in ONSSAPL allowances concerning financial years prior to 2012.

Accrued charges and deferred income

The “accrued charges and deferred income” amount-ed to a total of € 10,498,000 as at 31 December 2012.

These consist, on the one hand, of the “charges to be assigned” amounting to € 3,751,000, relating to the financial charges on loans, and, on the other hand, of “income to be carried forward” amounting to € 6,747,000.

Income to be carried forward comprises:

➜ € 467,000 from the invoicing of antennas➜ € 123,000 from the remaining carryover of the al-

lowance collected in the Tramaka affair➜ € 107,000 linked to the grants in the context of the

cooperation with certain African countries➜ € 700,000 in the context of the IMHOTEP grant

(research programme on emerging substances in water, which is of interest for public health and the environment)

➜ € 39,000 in financial income to be carried forward➜ € 5,311,000 relating to the carrying over of the TCS

adjustment.


1.2. income statement

(in thousands of €) 31/12/2012 31/12/2011 Variation 12/2012-12/2011(excluding water sanitation) Amount %

Operating income (sales and services) 328,048 312,413 15,635 5.00%

Turnover 282,588 263,216 19,371 7.36%

Changes in work in progress -3,233 -4,743 1,510 -31.83%

Non-current assets - own construction 31,653 36,521 -4,868 -13.33%

Other operating income 17,041 17,418 -378 -2.17%

Operating charges (Cost of sales and services) 319,506 293,881 25,625 8.72%

Raw materials and consumables 40,526 33,453 7,073 21.14%

Services and other goods 70,765 69,754 1,011 1.45%

Wages, social security and pensions 98,313 96,510 1,803 1.87%

Depreciation, write-downs and provisions 84,736 84,080 656 0.78%

Other operating charges 25,166 10,085 15,081 149.55%

Operating result 8,543 18,532 -9,989

Financial income 3,950 2,631 1,319 50.14%

Financial charges 12,819 10,684 2,135 19.99%

Financial result -8,870 -8,053 -816

Extraordinary income 1,500 385 1,116 290.06%

Extraordinary charges 174 541 -367 -67.87%

extraordinary result 1,326 -156 1,483

Income taxes 275 204 71 34.93%

Net result 724 10,118 -9,394


opERatinG REsULt:

The operating result as at 31 December 2012 amount-ed to € 8,543,000, compared with € 18,532,000 as at 31 December 2011.

With regard to the “operating income” (excluding water sanitation), an increase may be noted of 5.00% resulting from the rise in turnover (+ € 19,371,000) on the one hand and the fall in non-current assets – own construction (- € 4,868,000) on the other.

The “operating charges” also rose 8.72% further to the increase in “other operating charges” (+ € 15,081,000) and “raw materials and consumables” (+ € 7,073,000).

Operating income

“Turnover”, excluding water sanitation, increased by 7.36% to reach € 282,588,000 as at 31 December 2012.

The statistics show a fall in consumption of ap-proximately 0.87% compared with 2011. The over-all estimated volume of consumption in 2011 was 103,999,144 m3, whereas in 2012 it stood at 103,092,644 m3. The increase in turnover is due to the increases in the TCD price introduced on 9 January 2012 (€ 2.3100) and 23 February 2012 (€ 2.4000). For the 2011 finan-cial year, the TCD price stood at € 2.2504.

With regard to “changes in orders in progress”, continuing from the previous financial year, faster

derecognition of work on behalf of third parties and SPGE should be noted.

“Non-current assets – own construction” fell by € 4,868,000.

All the items making up non-current assets – own construction fell significantly compared with the previous financial year: use of our inventories for € 603,000, valuation of services provided by SWDE staff of € 1,963,000 and surcharges calculated at € 2,302,000.

Operating charges

Generally speaking, the operating charges (exclud-ing water sanitation) increased by € 25,625,000 com-pared with 31 December 2011.

“Raw materials and consumables” amounted to € 40,526,000 as at 31 December 2012, compared with € 33,453,000 as at 31 December 2011, an increase of € 7,073,000 (+ 21.14%).

In fact, a very sharp increase was recorded in “sub-contracting of operation” (+ € 8,236,000) compared with 31 December 2011. This is due on the one hand to the impact of + € 5,608,000 of the new agreement concluded with De Watergroep in the context of the end of the joint possession dating from the division of the SNDE and on the other to the increased use of subcontracting further to the exceptional winter amounting to € 1,374,000.

“Services and other goods” remained stable, since the rise compared with the previous financial year was just € 1,011,000 or 1.45% and therefore lower than inflation.

“Wages and social security” amounted to € 98,313,000, compared with € 96,510,000 as at 31 December 2011, up 1.87%.

This slight increase is due to the rise in the scale as well as the effect of promotions granted in 2011 and during 2012.

It should be noted that in addition to the full effect of the index granted on 1 June 2011 in the 2012 ac-counts, another jump in the index of 2% was record-ed on 1 March 2012.

These various increases had a limited impact on the financial year further, in particular, to the fall in aver-age staff numbers of 44.2 FTE, bringing the total to 1,562.5.

Depreciation expenses amounted to € 86,794,000 as at 31 December 2012, compared with € 80,673,000 as at 31 December 2011, an increase of € 6,121,000 (+ 7.59%).

This is mainly due to the contribution in kind of non-current assets by De Watergroep, the transfer by the Walloon Region of work financed by the mining damage budget, the clearance of work in progress and faster derecognition, and the steady increase in the non-current assets of the company.


A fall may be noted in amounts written down of € 1,314,000 compared with the previous financial year. This is due mainly to appropriations and rever-sals of amounts written down on “water” receivables.

The total appropriations, utilizations and reversals of provisions for liabilities and charges showed a negative amount of € 3,155,000 as at 31 December 2012. During the financial year, the entire provision for bad weather of € 648,000 was used further to the harsh climatic conditions at the start of the year and at the end of the financial period a new provision for bad weather was established (€ 227,000 including indexation). Utilizations and reversals of the provi-sions for ongoing litigation were effected further to the closing of several dossiers, leaving a positive re-sult of € 1,343,000 for the financial year.

The other operating charges amounted to €€25,166,000 as at 31 December 2012, compared with € 10,085,000 as at 31 December 2011, an in-crease of € 15,081,000 (+ 149.55%).

This increase is chiefly due to the recording for the first time of the water abstraction contribu-tion amounting to € 10,479,000 under the heading “Other operating charges”, but also to the increase of € 4,353,000 in losses on “water” trade receivables compared with the previous financial year.

financiaL REsULt:

The financial income rose substantially by € 1,319,000 (50.14%) compared with 31 December 2011. This is mainly due to the increase of € 887,000

in financial income linked to the depreciation of in-vestment grants. This relates to the payments made in the context of work involving extension, connec-tion, the relocation of pipelines and studies. In accor-dance with the stipulations of the chart of accounts for water, these payments are recorded as grants and transferred to financial income at the same rate as the depreciation applied to the non-current as-sets in question.

Generally speaking, the financial income accounts were not able to benefit from very attractive remu-neration conditions in 2012 owing to the sluggish-ness of the markets characterised by a sharp fall in interest rates.

However, in 2012 the company saw cash peaks fur-ther to long-term financing operations by means of EMTN issues (€ 50 million in June ), the EIB loan (€ 75 million in October) and capital brought in by SFPI and SOCOFE (€ 40 million at the end of December).

This cash amount was used to make diversified and targeted investments with short to long due dates, mainly on guaranteed capital products.

For instance, SWDE gave preference to diversifica-tion among banks and products by opting for fixed- and floating-term investments or those whose

performance depends on underlying indexes, sav-ings accounts, cash, bond or mixed SICAVs, commer-cial paper, etc., with the main Belgian banks.

The financial charges amounted to € 12,819,000 as at 31 December 2012, compared with € 10,684,000 as at 31 December 2011, an increase of € 2,135,000 (+ 19.99%).

During the course of the 2012 financial year, the company considerably increased its long-term debts through bond issues for an overall amount of € 50 million and by taking out a new loan of € 75 mil-lion with the EIB so as to cover its financing require-ments for the financial year closed and for the next two financial years.

EXtRaoRDinaRY REsULt:

"Extraordinary income" amounted to € 1,500,000 as at 31 December 2012, compared with € 385,000 as at 31 December 2011, a rise of € 1,116,000 (+ 290.06%).

Extraordinary income results mainly from:➜ The correction of an accounting transaction re-

corded by the former Aquasambre (appropria-tion to a provision for litigation) which in reality consisted of a guarantee deposit relating to the “road fund” litigation

➜ The invoice to be drawn up amounting to € 148,000 for the recovery of a professional with-holding tax still to be reimbursed by SDWORX

➜ The recovery of the damage in the context of the Vivegnis bridge claim amounting to € 225,000.


“Extraordinary charges” amounted to € 174,000 as at 31 December 2012, compared with € 541,000 as at 31 December 2011, a fall of € 367,000 (- 67.87%).

These consist mainly of the sum of € 148,000 in charges linked to the professional withholding tax of a previous financial year.

incomE taXEs

“Income taxes” consist primarily of the withholding tax on moveable property borne during the financial year and amounted to € 275,000 as at 31 December 2012.

The financial year was closed with a profit of € 724,000, compared with a profit of € 10,118,000 in 2011.

The fall in the profit is attributable mainly to the deterioration in the operating result, whereby the sharp rise in operating charges was only partially offset by the increase in the operating income.

(in thousands of €) 31/12/2012 31/12/2011 Variation 12/2012-12/2011(excluding water sanitation) Amount %

Operating income (Sales and services) 328,048 312,413 15,635 5.00%

Operating charges (Cost of sales and services) 319,506 293,881 25,625 8.72%

Operating result 8,543 18,532 -9,989

Financial income 3,950 2,631 1,319 50.14%

Financial charges 12,819 10,684 2,135 19.99%

Financial result -8,870 -8,053 -816

Extraordinary income 1,500 385 1,116 290.06%

Extraordinary charges 174 541 -367 -67.87%

extraordinary result 1,326 -156 1,483

Income taxes 275 204 71 34.93%

Net result 724 10,118 -9,394

sUmmaRY of tHE incomE statEmEnt


Cost of retired staff at Aquasambre, AIE and AIENPN

Further to the mergers by takeover, the law of 6 August 1993 on the pensions of permanently ap-pointed staff of local authorities stipulates an ob-ligation for the acquirer to contribute towards the pension charges of entities taken over.

The consequence of this law for SWDE is that every year, the company has to pay an allowance to ONS-SAPL to cover expenses relating to the retirement and survival pensions of permanently appointed members of staff at Aquasambre and AIE who re-tired or passed away before the merger.

Following the takeover by SWDE in 2003 of the Association Intercommunale des Eaux du Nord de la Province de Namur (AIENPN), at the end of 2012 ONSSAPL sent the company an invoice for € 534,502.52 covering the charge of the AIENPN pensions for the years 2003 to 2011. A legal analy-sis is underway to determine the share of the ONS-SAPL claim that is statute-barred owing to legal provisions.

Retirement scheme for SWDE staff

The pensions of SWDE staff are managed via the company’s own pension fund, which is fed by contributions from the employer and employees amounting respectively to 27% and 7.5% of the

wage bill. As at 1 January 2011, the level of cover of pension commitments stood at approximately 60%.

Further to the transposition into Belgian law of a European directive concerning the activity and su-pervision of professional retirement institutions, the law of 27 October 2006 was published.

As a public body, SWDE is subject to the provisions of this law and is therefore obliged to outsource its retirement scheme and meet minimum financing requirements (100% cover of current pensions and pensions in formation).

However, the law makes specific provision for an exemption mechanism when the State, a region, a community, a province or a municipality expressly guarantees the proper fulfilment of the commit-ments made under these retirement schemes.

In order to abide by the provisions of the law by fulfilling the minimum financing requirements and therefore provide full cover for the pension commitments entered into, SWDE would have to make a considerable financial effort which would impact on its operating budget. These heavier charges would consequently affect the cost price of water.

An actuarial study shows that to attain full cover for the SWDE pensioners and assets, an extraordi-nary payment of € 100 million would have to be

made to the pension fund and this would represent an annual impact of around 9 cents on the true cost of distribution (TCD), or an increase of about € 10 in the average invoice of SWDE customers.

In order to avoid this increase, SWDE asked the Walloon Region to provide an express guarantee of the proper fulfilment of the pension commitments which would exempt the company from the need to provide full cover for its pension commitments.

In a decree of 15 December 2011, the Walloon gov-ernment stands surety for the fulfilment of pen-sion commitments made for SWDE.

Moreover, the management contract concluded with the Walloon Region states that “SWDE will implement the legal and financial perpetuation of the retirement scheme for its members of staff in 2014 at the latest.” and that “the Government guarantees the proper fulfilment of the SWDE re-tirement scheme commitments until the actual implementation of the financial and legal perpetu-ation of the pension scheme for SWDE members of staff”.

2. Main riSKS anD uncertaintieS


3. iMportant eVentS occurrinG after tHe cloSe of tHe financial Year

The Board of Directors is not aware of any major events subsequent to the closure which are likely to substantially modify the results and the financial situation of the company as reflected in the annual accounts.

4. reSearcH anD DeVelopMent actiVitieS

During the 2012 financial year, the company continued with its Research and Development efforts in the context of distance management, water quality and tech-niques for producing drinking water.

5. exiStence of BrancHeS

SWDE does not have any branches within the meaning of Article 96 of the Companies Code.

6. JuStification of tHe application of tHe accountinG ruleS on continuitY

Not applicable.

7. uSe of financial inStruMentS

SWDE uses hedging instruments (rate swaps) to reduce its exposure to rates risks and optimize the structure of its debts (fixed rate compared with variable rate):

➜ On 30 March 2009, conclusion of a swap transaction (IRS) for a notional amount of € 25 million with Fortis Bank➜ On 30 March 2009, conclusion of a swap transaction (IRS) for a notional amount of € 20 million with CBC➜ On 24 March 2011, conclusion of a swap transaction (IRS) for a notional amount of € 25 million with Dexia Bank➜ On 24 March 2011, conclusion of a swap transaction (IRS) for a notional amount of € 25 million with BNP Paribas Fortis➜ On 23 June 2011, conclusion of a swap transaction (IRS) for a notional amount of € 20 million with ING➜ On 20 November 2012, conclusion of a forward swap transaction (IRS) for a notional amount of € 10 million with BNP Paribas Fortis. This contract takes effect on 15 January 2013 and partially covers the EIB II loan.

The swap transactions are standard rate exchange contracts whereby the company moves from a variable rate to a fixed rate.


Other hedging contracts have been concluded and existing IRS contracts have been restructured entail-ing, as for a standard swap, the exchange of a fixed rate for a variable rate, but with certain constraints relating to the maintenance of the fixed rate:

➜ On 10 April 2008, conclusion of a rate exchange transaction (CMS spread) for a notional amount of € 10 million

➜ on 23 December 2009, restructuring (BRA) of the swap transaction concluded on 9 May 2008 further to the sale of two Range Accrual op-tions to the bank (BRA) for a notional amount of € 10 million

➜ on 10 March 2011, restructuring of the swap transaction concluded on 28 February 2008 fur-ther to the sale of a Range Accrual option to the bank (BRA) for a notional amount of € 20 mil-lion

➜ on 23 June 2011, conclusion of a rate exchange transaction (CMS spread) for a notional amount of € 20 million with BNP Paribas Fortis.

These contracts involve a degree of uncertainty and risk compared with a fixed rate.

In fact, should the trend followed by various finan-cial parameters involve an inversion of the short and long rates curve (CMS), or should the Euribor rate move beyond a predefined range (BRA), this may result in additional interest, limited in time to the period covered by the event.

Finally, in February 2012, the company also re-structured a “macro hedge” contract concluded in November 2010 secured by its commercial paper programme, which guarantees it an interest rate set in advance for the two years of the contract.

This contract was taken out with BNP Paribas For-tis. In the context of falling rates, the fixed rate was thus reduced to a level more in line with the market conditions. This restructuring did, however, entail payment of a fee.

Done at Verviers, 26 april 2013.

Thierry MEUNIERVice-Chairman of the Board of Directors


02 Balance sheet and income statement as at 31 December 2012


Assets (in thousands of €) Financial year 2012 Financial year 2011 Difference

NON-CURReNt Assets 1,537,616 1,458,554 79,062

Intangible assets 4,332 2,650 1,681

Property, plant and equipment 1,524,598 1,449,858 74,740

Land and buildings 298,205 295,629 2,577

Plant, machinery and equipment 972,391 887,721 84,670

Furniture and vehicles 7,392 7,708 -316

Finance lease and similar rights 0 0 0

Other non-current tangible assets 377 390 -13

Assets under construction and advance payments 246,233 258,411 -12,178

Non-current financial assets 8,687 6,045 2,641

CURReNt Assets 303,525 174,690 128,836

Amounts receivable after one year 1,342 1,924 -582

Inventories and orders in progress 14,327 17,224 -2,898

A. Inventories 5,239 4,903 336

B. Orders in progress 9,088 12,321 -3,233

Amounts receivable within one year 121,447 115,468 5,979

A. Trade receivables 110,605 106,611 3,993

B. Other amounts receivable 10,842 8,857 1,985

Investments 62,596 12,177 50,420

Cash and cash equivalents 94,438 16,302 78,136

Deferred charges and accrued income 9,376 11,595 -2,219

totaL assEts 1,841,141 1,633,243 207,898

1. Balance SHeet anD incoMe StateMent aS at 31 DeceMBer 2012

On the basis of Article 105 of the Companies Code, the corporate

accounts are given below in an abbreviated version of the annual

accounts, which do not include all the annexes required by law

or the report from the Board of Auditors.

The unabridged version of the annual accounts as filed

with the National Bank of Belgium is available upon request

at the registered office of the company ; it is also available

on the website (www.swde.be).

The Board of Auditors has issued a certificate without reservation

for the corporate accounts.

02 Balance sheet and income statement as at 31 december 2012

2 / B a l a n c e s h e e t a n d i n c o M e s t a t e M e n t a s a t 3 1 d e c e M B e r 2 0 1 25 4

LIAbILItIes (in thousands of €) tOtAL CHARGes 2012

LIAbILItIes (in thousands of €) Financial year 2012 Financial year 2011 Difference

eqUIty 1,273,620 1,175,059 98,561

Capital 1,146,227 1,095,459 50,768

Issue premium 0 0 0

Revaluation surpluses 30,770 0 30,770

Reserves 44,228 42,443 1,785

Profit / Loss to be carried forward 0 0 0

Investment grants 52,395 37,157 15,238

PROVIsIONs AND DeFeRReD tAXes 7,835 10,990 -3,155

Provisions for liabilities and charges 7,835 10,990 -3,155

AMOUNts PAyAbLe 559,686 447,194 112,492

Amounts payable after one year 368,096 256,381 111,715

Amounts payable within one year 181,092 185,544 -4,452

Accrued charges and deferred income 10,498 5,269 5,229

totaL LiabiLitiEs 1,841,141 1,633,243 207,898


CHARGes (in thousands of €) Financial year 2012 Financial year 2011 Difference

COst OF sALes AND seRVICes 457,167 426,263 30,905

Raw materials and consumables 40,526 33,453 7,073

Purchases 40,853 33,271 7,583

Changes in inventories -327 182 -509

Services and other goods 208,426 202,135 6,291

Wages, social costs and pensions 98,313 96,510 1,803

Depreciation, amounts written off non-current assets 86,794 80,673 6,121

Amounts written off inventories and trade receivables 1,098 2,412 -1,314

Provisions for liabilities and charges -3,156 995 -4,151

Other operating charges 25,166 10,085 15,081

OPeRAtING PROFIt 8,543 18,532

FINANCIAL CHARGes 12,819 10,684 2,135

Debt charges 12,809 10,679 2,130

Amounts written off current assets 3 0 3

Other financial charges 7 5 2

CURReNt PRe-tAX PROFIt 10,478

eXtRAORDINARy CHARGes 174 541 -367

Extraordinary depreciation and amounts written off non-current assets 2 27 -25

Losses on disposal of non-current assets 0 0 0

Other extraordinary charges 172 514 -342

PRe-tAX PROFIt 999 10,322

INCOMe tAXes 275 204 71

Taxes 275 204 71

PROFIt FOR tHe FINANCIAL yeAR 724 10,118

totaL cHaRGEs 471,160 447,810

2. incoMe StateMent

2 / B a l a n c e s h e e t a n d i n c o M e s t a t e M e n t a s a t 3 1 d e c e M B e r 2 0 1 25 6

INCOMe (in thousands of €) Financial year 2012 Financial year 2011 Difference

sALes AND seRVICes 465,710 444,794 20,916

Turnover 420,249 395,598 24,652

Changes in work in progress and orders in progress -3,233 -4,743 1,510

Non-current assets - own construction 31,653 36,521 -4,868

Other operating income 17,041 17,419 -378

OPeRAtING LOss

FINANCIAL INCOMe 3,950 2,631 1,319

Income from non-current financial assets 545 577 -32

Other financial income 3,405 2,053 1,351

CURReNt PRe-tAX LOss -327

eXtRAORDINARy INCOMe 1,500 385 1,115

Reversal of provisions for extraordinary liabilities and charges 0 0 0

Gain on disposal of non-current assets 0 1 -1

Other extraordinary income 1,500 384 1,116

PRe-tAX LOss

LOss FOR tHe FINANCIAL yeAR

totaL incomE 471,160 447,810


3. appropriation account

Financial year 2012 Financial year 2011

PROFIt (LOss) FOR tHe FINANCIAL yeAR tO be APPROPRIAteD 724 1.972

Profit (Loss) for the financial year to be appropriated 724 10.118

Profit (Loss) carried forward from the previous financial year 0 -8.147

APPROPRIAtIONs tO eqUIty 724 1.972

to the legal reserve 36 99

to other reserves 688 1.873

pRofit (Loss) to bE caRRiED foRwaRD 0 0

The net result as at 31 December 2012 amounted to € 724,000, compared with € 10,118,000 as at 31 December 2011.

It is proposed that the result be allocated as follows:

➜ € 36,000 to feed the legal reserve➜ The balance of € 688,000 to the reserve available for distribution, in accordance with Article 47 of the articles

of association.

2 / l a s é c u r i t é d ’a p p r o v i s i o n n e M e n t e n e a u5 8

03 Annexes


(in thousands of €) Research and Concessions, Goodwill development costs patents, licences, etc

ACqUIsItION VALUe

At the end of the previous financial year 7,975 1,558 32

Movements during the financial year

Acquisitions, including non-current assets - own construction 126 1,472

Disposals and withdrawals

Transfers between headings 836 879

At the end of the financial year 8,938 3,910 32

DePReCIAtION AND WRIte-DOWNs

At the end of the previous financial year 6,166 718 32


Recorded 1,192 440

Cancellations further to disposals

Transfers between headings

At the end of the financial year 7,358 1,158 32

nEt caRRYinG amoUnt at tHE EnD of tHE YEaR 1,580 2,752 0

1. StateMent of intanGiBle aSSetS

03 Annexes

3 / a n n e x e s6 0

(in thousands of €) Land and Plant, Furniture Other Assets under buildings machinery and and vehicles non-current construction and equipment tangible assets advance payments

ACqUIsItION VALUe

At the end of the previous financial year 505,763 1,554,217 36,730 618 258,411


Acquisitions, including non-current assets - own construction 1,709 32,417 1,444 126,142

Disposals and withdrawals 4,061 2,974

Transfers between headings 20,386 114,818 1,401 -138,320

At the end of the financial year 527,858 1,697,391 36,601 618 246,233

CAPItAL GAINs

At the end of the previous financial year 2,565 23,563 75 8 -

Cancelled 1

At the end of the financial year 2,565 23,562 75 8 -

DePReCIAtION AND WRIte-DOWNs

At the end of the previous financial year 212,700 690,060 29,097 236 -


Recorded 19,518 62,563 3,066 13

Cancellations further to disposals 4,060 2,879

Transfers between headings

At the end of the previous financial year 232,217 748,563 29,284 249 -

nEt caRRYinG amoUnt at tHE EnD of tHE YEaR 298,205 972,391 7,392 377 246,233

2. StateMent of propertY, plant anD eQuipMent


(in thousands of €) Entreprises linked by a Other entreprises participating interest

PARtICIPAtING INteRests AND sHARes

ACqUIsItION VALUe

At the end of the previous financial year 7,080 1,352


Acquisitions 1,656

Disposals and withdrawals

At the end of the previous financial year 7,080 3,009

UNCALLeD AMOUNts

At the end of the previous financial year 2,390 0

Movements during the financial year 0

At the end of the previous financial year 2,390 0

nEt caRRYinG amoUnt at tHE EnD of tHE YEaR 4,690 3,009

ReCeIVAbLes

Net bOOK VALUe

At the end of the previous financial year 3


Additions 985

Reimbursements

nEt caRRYinG amoUnt at tHE EnD of tHE YEaR 0 988

3. StateMent of non-current financial aSSetS

3 / a n n e x e s6 2

4. inforMation relatinG to participatinG intereStS

paRticipatinG intEREsts anD RiGHts HELD in otHER UnDERtaKinGs

Undertakings in which the undertaking holds a participating interest (included in asset headings 280 and 282) and the other undertakings in which the undertaking holds rights (included in asset headings 284 and 51/53) representing at least 10% of the issued capital are mentioned below.

NAME, full address of the registered office and for undertakings incorporated under Belgian law, the BUSINESS NUMBER

Rights heldData from the most recent annual accounts available

directly by subsidiaries Annual accounts closed on

Currency code

Equity Net result

Nombre % % (+) or (-) (in units)

AQUAWAL SArue F. Wodon 21, 5000 NamurBelgium 0466.523.181

3,185,641 5,649

Nominatives 2,351 37.75 0.00

Terranova SArue d’Ile Monsin 80, 4020 Liège 2Belgium0872.242.806

31/12/2011 EUR 474,712 62,075

Nominatives 435 12.50 0.00

Protectis SArue Laoureux 46, 4800 VerviersBelgium0876.201.592

31/12/2011 EUR 686,522 34,040

Nominatives 24,665 30.83 0.00

SFE SAav. Maurice Destenay 13, 4000 Liège 1Belgium0466.557.627

31/12/2011 EUR 6,429,171 303,248

Registered 1,007 20 0.00


5. liSt of unDertaKinGS for WHicH tHe unDertaKinG HaS unliMiteD liaBilitY aS a partner or a MeMBer WitH unliMiteD liaBilitY

The annual accounts for each of the undertakings for which the undertaking has unlimited liability are attached to these annual accounts to be published at the same time, unless in the second column of the table below, the undertaking has stated why this is not the case. This information is provided by indica-ting the code (A, B or C) defined below.

The annual accounts of the undertaking in question: › A. are published by being filed with the Na-

tional Bank of Belgium by this undertaking› B. are effectively published by this under-

taking in another Member State of the European Union, in the forms required by Article 3 of Directive 68/151/EEC

› C. are integrated by global consolidation or by proportional consolidation into the conso-lidated accounts of the undertaking, drawn up, audited and published in accordance with the provisions of the Companies Code on consolidated accounts.

NAME, full address of the REGISTERED OFFICE, LEGAL FORM and, for undertakings incorporated under Belgian law, BUSINESS NUMBER

Code, if any

GLPDE GIE

Drève de l’Arc-en-Ciel, 98

6700 Arlon

Belgium

0447.505.936

A

Valorisation de l’eau d’exhaure des carrières de Soignies et Ecaussines EIG

Rue de Nimy, 53

7000 Mons

Belgium

0479.987.078

A

Groupement Brabançon de production et d’adduction d’eau EIG

Rue de la Concorde, 41

4800 Verviers

Belgium

0448.940.150

A

3 / a n n e x e s6 4

6. caSH inVeStMentS – otHer inVeStMentS

7. DeferreD cHarGeS anD accrueD incoMe

(in thousands of €) Financial year Previous financial year

sHARes 19,096 677

Carrying amount plus uncalled amount 19,096 677

FIXeD-yIeLD seCURItIes 10,000 2,000

teRM ACCOUNts HeLD IN CReDIt INstItUtIONs 33,500 9,500

With a remaining term or notice

of one month at most 9,500

of more than one month to one year at most 10,500

of more than one year 23,000

(in thousands of €) Financial year

bReAKDOWN OF DeFeRReD CHARGes AND ACCRUeD INCOMe

Deferred charges for appropriations to the pension fund 7.133

Goodwill resulting from mergers to be depreciated 1.697

Deferred charges: various 304

Accrued income: various 242


8. StateMent of capital


ReGIsteReD CAPItAL

Issued capital at the end of the financial year 1,141,247

Issued capital at the end of the financial year 1,252,056

(in thousands of €) Amounts Number of shares

Modifications during the financial year:

A Shares (EUR 25) 310 12,385

Be Shares (EUR 25,000) 10,500 420

D Shares (EUR 25,000) 100,000 4,000

Representation of capital

Share categories

A Shares (EUR 25) 888,181 35,527,247

B Shares (EUR 24,789.35) 0 0

Be Shares (EUR 25,000) 263,875 10,555

D Shares (EUR 25,000) 100,000 4,000

Registered shares - 35,541,802

Bearer shares -

(in thousands of €) Uncalled amount Capital called, not paid up

CAPItAL NON PAID UP

Uncalled capital 105,830 -

Capital called, not paid up -

Shareholders owing payments 105,830

3 / a n n e x e s6 6

9. proViSionS for otHer liaBilitieS anD cHarGeS


Breakdown of provisions for other liabilities and charges

Water social fund 1,233

Provisions for bad weather 227

Provisions for ongoing disputes 4,226

Provisions for pre-retirement leave 1,705

Provisions for pensions for occupational illnesses 199

ESF technical improvement Decree 245

10. StateMent of aMountS paYaBle


CURReNt PORtION OF AMOUNts PAyAbLe AFteR ONe yeAR Financial debts 13,625

Credit institutions 13,625

Trade debts 678

Suppliers 678

Other amounts payable 0

totaL cURREnt poRtion of amoUnts paYabLE aftER onE YEaR 14,303

AMOUNts PAyAbLe AFteR ONe yeAR bUt WItHIN FIVe yeARs Financial debts 68,126


Other loans 65,000

Advance payments received on orders 0

Other amounts payable 0

totaL amoUnts paYabLE aftER onE YEaR bUt witHin fiVE YEaRs 68,126

AMOUNts PAyAbLe AFteR FIVe yeARs Financial debts 285,955


Other loans 35,000

Trade debts 14,015

Suppliers 14,015

totaL amoUnts paYabLE aftER fiVE YEaRs 299,970

AMOUNts PAyAbLe GUARANteeD by tHe beLGIAN PUbLIC AUtHORItIes Financial debts 31,521


totaL amoUnts paYabLE GUaRantEED bY tHE bELGian pUbLic aUtHoRitiEs 31,521

tAXes, ReMUNeRAtION AND sOCIAL seCURIty Taxes

Taxes not yet payable 1,324

Remuneration and social security

Other remuneration and social security charges payable 9,644

3 / a n n e x e s6 8

11. accrueD cHarGeS anD DeferreD incoMe

12. operatinG reSultS


Breakdown of accrued charges and deferred income

Various financial charges 3,750

Grants receivable (International assignments) 807

Tramaka allowances to be carried forward 123

Antennas invoices to be carried forward 467

Adjustment of TCS (true cost of sanitation) obtained relative to irrecoverable receivables (years 2010, 2011 and 2012) 5,311

Deferred financial income 39


OPeRAtING INCOMe Other operating income

Operating grants and compensatory amounts from the public authorities 431 498

OPeRAtING CHARGes Workers enrolled in the staff register

Total number on the date of closure 1,592 1,638

Average workforce calculated in full-time equivalents 1,562.53 1,606.70

Number of hours actually worked 1,985,845 2,055,790

Staff costs

Remuneration and direct social benefits 66,327 65,441

Employer's social insurance contributions 10,325 10,314

Other staff costs 6,546 6,285

Retirement and survival pensions 15,115 14,471


(operatinG reSultS)


Provision for pensions and similar obligations

Appropriations (utilizations and reversals) 0 0

Write-downs

on inventories and orders in progess

recorded

reversed 8 87

on trade receivables

recorded 14,075 12,799

reversed 12,969 10,300

Provisions for liabilities and charges

Allocations 3,499 5,566

Utilizations and reversals 6,655 4,571

Other operating charges

Taxes and duties relating to operations 10,724 111

Other 14,441 9,973

Temporary staff and those made available to the undertaking

Average number calculated in full time equivalents 0.3

Number of hours actually worked 665.1

Costs for the undertaking 17,687

3 / a n n e x e s7 0

13. financial reSultS

14. extraorDinarY reSultS


Other financial income

Grants from the public authorities booked in the income statement

Investment grants 0 0

Interest grants 0 0

Breakdown of other financial income

Gain on disposal of current assets 13 39

Income from current assets and various financial income 645 388

Interest on arrears 283 49

Write-downs on current assets

Recorded 3 0

Reversed 0 0


Breakdown of other extraordinary income

Correction of the accounting transaction recorded by the former Aquasambre which in reality consisted of a guarantee deposit relating to the "Fonds des routes" ("Road fund") litigation 985

Invoice to be drawn up for the recovery of the professional withholding tax still to be reimbursed to us by SDWORX 147

Various extraordinary income 332

Fines due by suppliers 36

Breakdown of other extraordinary charges

Charges related to the professional withholding tax from a previous financial period 148

Various extraordinary charges 24


15. taxeS anD DutieS


INCOMe tAXes

Taxes on income for the financial year 275

Taxes and withholding taxes due or paid 275


VALUe ADDeD tAXes AND tAXes bORNe by tHIRD PARtIes

Value added taxes, booked in the accounts

Charged to the company (deductible) 94,602 92,954

By the company 78,617 78,613

Amounts withheld payable by third parties, for

Professional withholding tax 19,126 18,558

Withholding tax on income from securities

3 / a n n e x e s7 2

16. riGHtS anD coMMitMentS off Balance SHeet


Personal guarantees constituted or irrevocably committed by the undertaking as surety for debts or for commitments of third parties 612

Pledges on other assets - Carrying amount of pleged assets 612

Major commitments to acquire non-current assets

Programme of work 102,894

Major litigation and other major commitments

Fee for occupation of the public domains € 3,951,618.27, or (3 years x € 1,317,206.09)

> After the merger with IDEMLS and AIE, maintenance of an annual payment to five towns for a period strictly limited to ten years (2006-2015)

SWDE uses hedging instruments (rate swaps) to reduce its exposure to rates risks and to optimize the structure of its debts (fixed rate compared with variable rate):

> On 30 March 2009, conclusion of a swap transaction (IRS) for a notional amount of € 25 million with Fortis Bank

> On 30 March 2009, conclusion of a swap transaction (IRS) for a notional amount of € 20 million with CBC

> On 24 March 2011, conclusion of a swap transaction (IRS) for a notional amount of pour € 25 million with Dexia Bank

> On 24 March 2011, conclusion of a swap transaction (IRS) for a notional amount of € 25 million with BNP Paribas Fortis

> On 23 June 2011, conclusion of a swap transaction (IRS) for a notional amount of € 20 million with ING

> On 20 November 2012, conclusion of a forward swap transaction (IRS) for an amount of € 10 million with BNP Paribas Fortis.



The swap transactions are standard rate exchange contracts whereby the company moves from a variable rate to a fixed rate.

Other hedging contracts have been concluded and existing IRS contracts have been restructured entailing, as for a standard swap, the exchange of a fixed rate for a variable rate, but with certain constraints relating to the maintenance of the fixed rate:

> On 10 April 2008, conclusion of a rate exchange transaction (CMS spread) for a notional amount of € 10 million

> On 23 December 2009, restructuring of the swap transaction concluded on 9 May 2008 further to the sale of two Range Accrual option to the bank (BRA) for a notional amount of € 10 million

> On 10 March 2011, restructuring of the swap transaction concluded on 28 February 2008 further to the sale of a Range Accrual option to the bank (BRA) for a notional amount of € 20 million

> On 23 June 2011, conclusion of a rate exchange transaction (CMS spread) for a notional amount of € 20 million with BNP Paribas Fortis.

These contracts involve a degree of uncertainty and risk compared with a fixed rate.

In fact, should the trend followed by various financial parameters involve an inversion of the short and long rates curve (CMS), or should the Euribor rate move beyond a predefined

range (BRA), this may result in additional interest, limited to the period covered by the event.

Finally, in February 2012 the company also restructured a "macro hedge" contract concluded in November 2010, secured by its commercial paper programme, which guarantees

it an interest rate set in advance for the two years of the contract. This contract was taken out with BNP Paribas Fortis. In the context of falling interest rates, the fixed rate was

reduced to a level more in line with market conditions. This restructuring did, however, entail payment of a fee.

Financial commitment to take part in works initiated by IDELUX in the context of the former Luxembourg zoning service in Luxembourg for an amount of € 1,017,300.67.

Pensions to be serviced by the undertaking itself

Estimated amount of commitments for the undertaking resulting from services already provided 195,453

3 / a n n e x e s74

17. relationS WitH affiliateD unDertaKinGS anD unDertaKinGS linKeD BY a participatinG intereSt

18. financial relationS WitH tHe DirectorS anD ManaGerS, natural perSonS or leGal entitieS, WHo DirectlY or inDirectlY control tHe unDertaKinG WitHout BeinG linKeD to it or tHe otHer unDertaKinGS DirectlY or inDirectlY controlleD BY tHeSe perSonS


UNDeRtAKINGs LINKeD by A PARtICIPAtING INteRest

Non-current financial assets 4,690 4,690

Participating interests 4,690 4,690

Other amounts receivables

Amounts receivables

Within one year

Amounts payable

Within one year


Direct and indirect remuneration and pensions allocated, recorded on the income statement, insofar as this does not relate exclusively or primarily to the situation of a single identifiable person

To directors and managers 690


19. financial relationS WitH tHe auDitor or auDitorS anD tHe perSonS WitH WHoM He (tHeY) are linKeD


Fees of the Auditor or Auditors 40

Fees for extraordinary services or special missions carried out within the company by the auditor or auditors

Other certification missions 4

04Corporate balance sheet


During the financial year Codes Total 1. Men 2. Women

Average number of workers

Full time 1001 1,470.7 1,145.5 325.2

Part time 1002 143.1 111.4 31.6

Total in full-time equivalents (ETP) 1003 1,562.5 1,217.0 345.5

Number of hours actually worked

Full time 1011 1,886,553 1,469,426 417,127

Part time 1012 99,292 77,338 21,954

Total 1013 1,985,845 1,546,764 439,081

Staff costs

Full time 1021 79,038,252.80 61,562,458.20 17,475,794.60

Part time 1022 4,159,908.00 3,240,129.30 919,778.70

Total 1023 83,198,160.80 64,802,587.50 18,395,573.30

Amount of benefits awarded in addition to wages 1033 2,069,825.27 1,612,175.46 457,649.81

During the previous financial year Codes P. Total 1P. Men 2P. Women

Average number of workers in ETP

Number of hours actually worked 1013 2,055,790

Staff costs 1023 82,039,294.49

Amount of benefits awarded in addition to wages 1033 1,999,384.51

1. StateMent of perSonS eMploYeD - WorKerS for WHoM tHe unDertaKinG HaS SuBMitteD a DiMona Declaration (immediate declaration of employment) or WHo are enrolleD on tHe General Staff reGiSter

04Corporate balance sheet

4 / c o r p o r a t e B a l a n c e s h e e t7 8

At the date of the closure of the financial year Codes 1. Full time 2. Part time 3. Total in full-time equivalents

Number of workers 105 1,405 187 1,525.9

By type of employment contract

Open-ended employment contract 110 1,397 184 1,517.4

Fixed-term employment contract 111 8 3 8.5

Contract for a specific assignment 112

Replacement contract 113

By sex and level of studies

Men 120 1,166 74 1,210.5

primary education 1200 682 44 708.4

secondary education 1201 325 23 340.3

higher, non-university education 1202 73 0 73.0

university education 1203 86 7 88.8

Women 121 239 113 315.4

primary education 1210 44 36 67.5

secondary education 1211 137 61 179.9

higher, non-university education 1212 23 8 29.0

university education 1213 35 8 39.0

By professional category

Management 130 121 15 127.9

Office staff 134 617 107 691.9

Manual workers 132 667 65 706.1

Others 133


During the financial year Codes 1. Temporary staff 2. Persons made available to the undertaking

Average number of persons employed 0.3

Number of hours actually worked 665.1

Cost for the undertaking 17,687

2. teMporarY Staff anD perSonS MaDe aVailaBle to tHe unDertaKinG

3. taBle of Staff MoVeMentS DurinG tHe financial Year

Arrivals Codes 1. Full time 2. Part time 3. Total in full-time equivalents

Number of workers for whom the undertaking has submitted a DIMONA declaration or who were enrolled in the general staff register during the financial year

205 14 1 14.80


Open-ended employment contract 210 13 1 13.80





Departures Codes 1. Full time 2. Part time 3. Total in full-time equivalents

Number of workers whose the contract termination date was recorded in a DIMONA declaration or in the general staff register during the financial year

305 43 18 54.2


Open-ended employment contract 310 36 18 47.2




Reason for termination

Retirement 340 20 16 31.2

Early retirement 341

Dismissal 342 4 0 4.0

Other reason 343 19 2 19.0

Including: the number of persons who continue to work at least part-time, to provide services for the undertaking as self- employed workers

350


IInitiatives in formal, continuing vocational training at the employer's expense

Codes Men Codes Women

Number of workers concerned 5801 1,229 5811 187

Number of hours' training followed 5802 18,026.80 5812 2,827.80

Net cost for the undertaking 5803 402,559.86 5813 313,274.51

gross cost related directly to training programmes 58031 402,559.86 58131 313,274.51

contributions paid and payments to collective funds 58032 58132

subsidies and other financial benefits received (to be deducted) 58033 58133

Initiatives in informal or less formal continuing vocational training at the employer's expense

Codes Men Codes Women

Number of workers concerned 5821 101 5831 66

Number of hours' training followed 5822 1,506.68 5832 687.80

Net cost for the company 5823 83,874.69 5833 43,737.18

Initiatives in basic vocational training at the employer's expense Codes Men Codes Women

Number of workers concerned 5841 5851

Number of hours' training followed 5842 5852

Net cost for the company 5843 5853

4. inforMation on WorKer traininG courSeS DurinG tHe financial Year


Executives

Office staff

Manual workers

5. Staff BreaKDoWn

9%

45%

46%

51%

11%

8%

7%

2% 4%

17%

9%

45%

46%

51%

11%

8%

7%

2% 4%

17%

The 1,592 members of staff employed by SWDE as at 31 December 2012 are broken down as follows:

By professional category:

Executives 136

Administrative staff (office staff) 724

Manual workers 732

1,592

By serVice:

Production 273

Distribution 805

Commercial 182

Technical 125

HR and Administration 119

Financial 29

Staff 59

1,592

Production

Distribution

Commercial

Technical

HR & Administration

Financial

Staff


05Valuation rules


a. aSSetS

FORMATION ExPENSES

The formation expenses are recognised as charges immediately.

INTANGIbLE ASSETS AND PROPERTy, PLANT AND EQUIPMENT

For the intangible assets and for property, plant and equipment whose use is limited in time, the following linear depreciation rates are applied:

➜ Intangible assets 20%

The balance of studies prior to 2009 linked to catchment protection work, booked as “orders in progress” and not invoiced on entirely when the final statement is drawn up, is reclassified as of the 2009 financial year as intangible assets. These studies are depreciated over five years using the linear method.

As of the 2012 financial year, the stock of green certificates is booked as intangible assets and valued at the minimum price guaranteed by law. These green certifi-cates are not depreciated.

➜ Property, plant and equipment

The networks are included at their market value taking account of their level of obsolescence.They are depreciated from the year of their acquisition by SWDE, as are any new goods, in accordance with the valuation rules applicable to the non-current asset category to which they belong.

Constructions

› Technical and administrative buildings Prior to 1987 5% From 1987 to 1997 3.33% (degressive)

From 1997 to 2006 3.33% Since 2006 3.33%

› Production buildings Prior to 1987 5% From 1987 to 1997 3.33% (degressive) From 1997 to 2006 3.33% Since 2006 5%

Plant, machinery and equipment

› Pipelines Prior to 1987 3.33% From 1987 to 1997 2% (degressive) From 1997 to 2006 2% Since 2006 3.33%

› Electromechanical equipment and appliances Prior to 1987 10% From 1994 to 1997 10% (degressive) From 1997 to 2006 10% Since 2006 10%

› Connection replacements Before 2006 10% Since 2006 5%

› Meter replacements Before 2006 10% Since 2006 12.5%

05Valuation rules

5 / v a l u a t i o n r u l e s8 6

› Equipment 20% Laboratory 14.29 or 20% Radio 10%

high-heeled ankles

› Computing equipment 25%› Office furniture and equipment 10%› New vehicles Cars, vans and mini-excavators 20% Lorries and excavators 10%› Used vehicles The base rate applied (converted into years) for new vehicles is increased by

the number of years which have lapsed since the date the vehicles were first taken into service. This is determined on the basis of the registration certifi-cate or, if this is not available, any accounting document from the seller.

Assets under construction

Assets under construction are valued at the cost price plus flat-rate overheads (0% to 12.25%) and are not depreciated.

CONNECTION WORk

As of 1 January 2010, work (mainly installation) carried out on connections, meters and related appliances have been invoiced to customers and are included under the assets on a quarterly basis under the heading of property, plant and equipment.

These non-current assets are valued at their cost price plus overheads of 15% on withdrawals from inventories and 12.25% on all costs.

Similarly, the invoicing income is recorded as a grant for the amount of the liabili-ties in the balance sheet. If appropriate, the balance of income in excess of costs is transferred to the heading “Other operating income”.

The rates of depreciation calculated on this invoiced work are identical to those applied for the replacement of connections, meters and appliances since 2006.

WATER DISTRIbUTION NETWORk ExTENSION WORk CONTRIbUTED by ThIRD PARTIES FREE OF ChARGE

As of the 2011 financial year, network extension work carried out by third parties and contributed to SWDE free of charge, in line with the obligations imposed by the decree of 12 February 2004 (relating to the rates set and the general terms and conditions governing public water distribution in Wallonia) are booked as non-current assets for the amount of the SWDE estimate, excluding overheads and including the cost of earthworks.

The amount of the contribution must be considered to be a grant and recorded as such in the liabilities on the balance sheet. The rates of depreciation calculated on these grants are identical to those applied for the corresponding non-current assets.

Non-current financial assets

Non-current financial assets are included under the assets on the balance sheet at their acquisition value.


Inventories

Inventories are valued at their acquisition cost, including the purchase price and incidental costs. Incoming and outgoing inventories are realized using the weighted average price method.

The new method relating to write-downs takes account of the rotation rate of each type of stock (distribution parts, production parts, electrical equipment, small meters, large meters and sundry). However, for the “clothing fund” type of stock, which has been part of the stock of the company since the 2010 financial year, no write-down has to be applied.

The rotation rate calculation period is one year for all articles except for produc-tion articles which undergo less rotation and for which the period is five years.

The rotation rate is the result of the quantities used divided by the average stock.

The possibility of excluding new articles created during the last two years was chosen so as not to reduce the value of new parts that have not yet been used.

Write-downs for production parts and small meters:

Rotation rate Write-down ratebetween 99 and 51 15%between 50 and 01 30%below 01 45%

Write-downs for all other types of stock:

Rotation rate Write-down ratebetween 99 and 51 25%between 50 and 01 50%below 01 75%


Orders in progress

Orders in progress are valued at the cost price plus flat-rate overheads (0% to 12.25%).

Invoices to be issued in the context of the annualization of income on water sales

A discount on the estimated amounts of consumption subject to the TCD has been applied annually since the 2010 financial year.

Doubtful debts

For trade receivables, doubtful debts are separated from the trade receivables due within one year after 120 days, taking into account the amounts credited to customer accounts.

These receivables are written down on a flat-rate basis depending on the pre-cedence of open receivables:

› More than one year 30 %› More than two years 75 %› More than three years 100 %

Investments

Fixed-yield securities are valued at their acquisition value. When the acquisi-tion value differs from the reimbursement value, the difference is included in the result pro rata temporis over the remaining duration of the securities.

Deferred charges and accrued income

These include:

› The charges incurred during the financial year but wholly or partially assig-ned to a subsequent financial year

› The revenues or fractions of revenues which are to be linked to a current finan-cial year but which will only be collected during the following financial year.

At its meeting on 29 September 2006, the Board of Directors decided:

› to make a one-off payment of € 12,000,000 to the pension fund to take ac-count of the post-merger impact resulting from the integration of the staff of Aquasambre and AIE into the SWDE workforce

› to stagger (as of 1 December 2006) the recognition of this payment as an expense over fifteen years, the period between the current average age of the Aquasambre staff and the expected retirement age.

The goodwill created at the time of the mergers with Aquasambre, IDEMLS and AIE was distributed among the various non-current asset headings in proportion to the assets brought in and depreciated in accordance with the valuation rules applied at SWDE. As at 31 December 2006, an annual depreciation of € 1,852,000

was booked in the SDE accounts. However, the merger took place on 1 December 2006; a charge to be carried forward of 11/12ths of the annual depreciation was therefore booked as at 31 December 2006 amounting to € 1,697,000. This amount will be recognised as an expense on the following due dates:

year of recognition as an expense Amount recognised as an expense2014 € 28,181.31

2016 € 7,028.51

2026 € 53,387.64

2036 € 1,608,667.32

€ 1,697,264.78


B. liaBilitieS

GRANTS

Grants are depreciated at the same rate as the relevant non-current assets.

For projects initiated as of 2008, the partial or total intervention of SPGE in the context of the protection of catchments and which relates to the acquisition of property, plant and equipment is registered as a grant. This intervention is depre-ciated at the same rate as the corresponding non-current assets.

The amounts paid by third parties for the extension works dossiers created as of 2008 and for the connection dossiers that are still ongoing or created as of 2010 are booked as grants. This intervention is depreciated at the same rate as the cor-responding non-current asset. However, when the grant relating to the extension is lower than the cost of the work, it is linked, as a priority, to the pipeline and depreciated at the same rate as this.

PROvISION FOR bAD WEAThER

A provision for bad weather is established to guard against the risk linked to bad weather (frozen pipelines, etc. The valuation was estimated on a statistical ba-sis depending on the frequency and extent of the damage caused. The sum of € 210,000 will be allocated every year and indexed as of the 2010 book year in accordance with the following formula:

€ 210.000 x health index December N Health index December N-1

PROvISION FOR PRE-RETIREMENT LEAvE

Until 2012 and the government reform of pension schemes, all members of staff at SWDE had the possibility of opting in favour of pre-retirement leave between 57 years and 59 years and 11 months. This imperatively entailed admission to reti-rement at the age of 60. The amount of the appropriation is calculated on the basis of the wage bill, until retirement age, of persons having requested this leave.

ADvANCES ON WATER SALES

As of the 2010 financial year, the advances invoiced in relation to the sale of water are no longer included in the liabilities of the balance sheet, but are deducted from the assets (trade receivables).

ACCRUED ChARGES AND DEFERRED INCOME

These comprise:

› Charges relating to the financial year but which will only be paid during the subsequent financial year

› Revenues collected during the financial year but that are to be assigned whol-ly or partially to a subsequent financial year.


c. riGHtS anD coMMitMentS off Balance SHeet

The rights and commitments off balance sheet are indicated in the annex, per category, at the nominal value stated in the contract or the agreement or othe-rwise at their estimated value.

(Article 15 – Decree of 12 February 2004 on the status of the public administrator)

Remuneration of bodies

Board of DirectorsYear 2012 (gross amount): € 689,694

Mandates:

One or more members of the Board of Directors or the Management Committee have been appointed by the Board to sit on the boards of the following compa-nies, organizations or associations:

› Aquawal SA› EIG Groupement brabançon de Production et d’Adduction d’Eau› EIG Groupement luxembourgeois de Production et de Distribution d’eau› EIG Valorisation de l’Eau d’Exhaure des Carrières de Soignies et Ecaussines› Network Research Belgium (NRB)› Protectis SA› Société Financement des Eaux (SFE)› Société Publique de Gestion de l’Eau (SPGE)› Terranova SA› Compagnie intercommunale Liégeoise des Eaux (CILE)› Société de Leasing, de Financement et d’Economies d’énergie (SLF)› Ethias› Aquapôle› Cebedeau


uSeful inforMationSResponsible editor

Éric SMITSociété wallonne des eaux

Rue de la Concorde, 41B-4800 Verviers

[email protected] - www.swde.be

› 087 87 87 87 (French)› 087 87 87 88 (German)› 087 87 87 89 (Dutch)

Graphic design and layout

Debie graphic design - www.debie.com

Photos

© Reporters / Roger Job

Documents

SOCIÉTÉ WALLONNE DES EAUX 2012 ANNUAL REPORTreport+2012.pdf · A Trend in TCD and TCS 7 B Trend in water consumption 8 ... The 2012 corporate balance sheet is commented on in the