The International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) have revised or newly adopted some standards and interpretations which require mandatory application for the first time in the 2008/09 financial year. The MVV Energie Group applied the following standards and interpretations for the first time in the 2008/09 financial year:

IFRIC 13 “CUSTOMER LOYALTY PROGRAMMES”: This interpretation governs the recognition of sales revenues in connection with customer loyalty programmes organised by the manufacturers and services providers themselves or by third parties. The interpretation requires first-time application in financial years beginning on or after
1 July 2008. It was endorsed by the EU in December 2008.

IFRIC 14 “IAS 19 – THE LIMIT ON A DEFINED BENEFIT ASSET, MINIMUM FUNDING REQUIREMENTS AND THEIR INTERACTION”: This interpretation provides guidelines for determining the maximum surplus which may be recognised as an asset under IAS 19 Employee Benefits in connection with a defined benefit plan. The interpretation requires first-time application in financial years beginning on or after 1 July 2008. It was endorsed by the EU in December 2008.

IFRIC 16 “HEDGES OF A NET INVESTMENT IN A FOREIGN OPERATION”: This governs the application of hedge accounting to the hedge pursuant to IAS 39.71 et seq. and clarifies doubtful questions concerning the hedging of a foreign operation. The interpretation requires first-time application in financial years beginning on or after 1 October 2008. It was endorsed by the EU in June 2009.

Apart from extended disclosures in the notes, the initial application of these new requirements did not have any material implications for the net asset, financial or earnings position of the MVV Energie Group.

Implications of new accounting standards not yet requiring application:

The IASB and the IFRIC have adopted the following standards and interpretations not yet requiring mandatory application in the 2008/09 financial year and of which no voluntary premature application has been made:

IMPROVEMENT PROJECT (2008) AND (2009) “IMPROVEMENTS TO IFRS”: Within the framework of its annual improvement projects, the IASB has pooled minor amendments and clarifications to various standards in an omnibus standard. These amendments are intended to specify requirements and to eliminate unintended inconsistencies between the standards. The amendments require first-time application in financial years beginning on or after 1 January 2009 and 1 July 2009 respectively. The amendments for 2008 were endorsed by the EU in January 2009. EU endorsement of the amendments for 2009 was still outstanding as of 30 September 2009.

IAS 1 AMENDMENT (2007) “PRESENTATION OF FINANCIAL STATEMENTS”: The amendments relate in particular to the introduction of a statement of comprehensive income including both the earnings generated in a given period and as yet unrealised gains and losses previously recognised in equity. This statement is due to replace the income statement in its existing form. As a result of this amendment, non-owner-related changes in equity will in future be strictly separated from owner-related changes in equity. Extended disclosures will also have to be made on other comprehensive income. This amendment to the standard requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in December 2008.

IAS 23 AMENDMENT (2007) “CAPITALISATION OF BORROWING COSTS: The revised version of IAS 23 has abolished the option previously permitted of recognising borrowing costs directly incurred on the acquisition, construction or production of qualifying assets immediately through profit or loss. In future, these borrowing costs will require mandatory capitalisation as costs of acquisition or manufacture. The amendment to this standard requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in December 2008.

IAS 32 AND IAS 1 (2008) “FINANCIAL INSTRUMENTS: PRESENTATION (PUTTABLE INSTRUMENTS)”: This standard is of crucial importance for the delineation of equity and debt capital. The new version allows puttable instruments to be classified as equity in specific circumstances. This is dependent on compensation being agreed at fair value and that the contributions thereby made represent the most subordinate claim to the net assets of the company. The amendment to the standard requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in January 2009.

IFRS 1 / IAS 27 AMENDMENTS (2008) “FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS” AND “CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS”: These amendments mainly involve the introduction of simplifications for the initial measurement of subsidiaries and for the separation of profits in the acquisition period. The amendment to the standard requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in January 2009.

IFRS 1 AMENDMENTS (2008) “FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS”: The version of IFRS 1 now published retains the contents of the previous version with an amended structure. The amendment to the standard requires first-time application in financial years beginning on or after 1 July 2009. EU endorsement was still outstanding as of 30 September 2009.

IFRS 2 AMENDMENT (2008) “SHARE-BASED PAYMENT (VESTING CONDITIONS AND CANCELLATION)”: This defines the vesting conditions for share-based compensation plans more precisely and specifies the regulations applicable in the event of the premature termination of compensation plans. The amendment to the standard requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in December 2008.

IFRS 2 AMENDMENT (2009) “CLARIFICATION OF ACCOUNTING FOR GROUP CASH-SETTLED SHARE-BASED PAYMENT TRANSACTIONS”: This amendment clarifies how an individual subsidiary within a group should account for specific share-based compensation agreements in its own financial statements. The amendment to the standard requires first-time application in financial years beginning on or after 1 January 2010. EU endorsement was still outstanding as of 30 September 2009.

IFRS 3 / IAS 27 AMENDMENTS (2008) “BUSINESS COMBINATIONS” AND “CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS”: As well as the option of measuring minority interests at fair value (full goodwill approach) or at prorated net assets upon a business acquisition, these amendments introduce the reassessment through profit or loss of shares held upon control ultimately being gained and the recognition directly in equity of changes in the level of shareholding not leading to a loss of control. Also worthy of mention are the mandatory recognition upon acquisition of any consideration contingent on future events and the recognition of transactions expenses through profit or loss. The amendment to the standard requires first-time application in financial years beginning on or after 1 July 2009. It was endorsed by the EU in June 2009.

IFRS 7 AMENDMENT (2009) “IMPROVING DISCLOSURES ON FINANCIAL INSTRUMENTS”: This amendment provides for extended disclosures on fair value measurements and liquidity risk. The amendment to the standard requires first-time application in financial years beginning on or after 1 January 2009. EU endorsement was still outstanding as of 30 September 2009.

IFRS 8 “OPERATING SEGMENTS”: IFRS 8 replaces the previous standard IAS 14. This standard stipulates that operating segments must be identified on the basis of the company’s internal reporting structures (management approach). This interpretation requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in November 2007.

IFRIC 9 / IAS 39 AMENDMENT (2009) “EMBEDDED DERIVATIVES”: This amendment clarifies the accounting treatment of embedded derivatives for companies which make use of a reclassification amendment. The amendment to this interpretation and standard requires first-time application in financial years beginning on or after 30 June 2009. EU endorsement was still outstanding as of 30 September 2009.

IFRIC 12 “SERVICE CONCESSION ARRANGEMENTS”: This interpretation governs the recognition of arrangements where the public sector concludes contracts with private companies involving the performance of public sector tasks. To perform these tasks, the private company uses infrastructure which remains at the disposal of the public sector. The private company is responsible for the construction, operation and maintenance of the infrastructure. This interpretation requires first-time application in financial years beginning on or after 1 January 2008. It was endorsed by the EU in March 2009.

IFRIC 15 “AGREEMENTS FOR THE CONSTRUCTION OF REAL ESTATE”: This interpretation governs the applicability of the competing standards IAS 11 and IAS 18 in respect of real estate sales where the contract is concluded with the buyer prior to the completion of construction work. This interpretation requires first-time application in financial years beginning on or after 1 January 2009. It was endorsed by the EU in July 2009.

IFRIC 17 “DISTRIBUTIONS OF NON-CASH ASSETS To OWNERS”: This interpretation governs how a company must measure assets other than cash which it transfers to owners by way of profit distribution. This interpretation requires first-time application in financial years beginning on or after 1 July 2009. EU endorsement was still outstanding as of 30 September 2009.

IFRIC 18 “TRANSFERS OF ASSETS FROM CUSTOMERS”: This interpretation clarifies the requirements of IFRS for arrangements in which a company receives property, plant or operating funds from a customer which the company must then use either to connect the customer to a distribution network or to provide the customer with ongoing access to a supply of goods or services. It also deals with cases where a company receives cash on the condition that it will acquire or manufacture one of the aforementioned assets. This interpretation, which was published in January 2009, requires first-time application in financial years beginning on or after 1 July 2009. EU endorsement was still outstanding as of 30 September 2009.

IAS 39 (2008) “RECOGNITION AND MEASUREMENT (ELIGIBLE HEDGED ITEM)”: This standard specifies the application of hedge accounting to hedges of the unilateral risks involved in a hedged item and to hedged items involving inflation. The amendment to the standard requires first-time application in financial years beginning on or after 1 July 2008. It was endorsed by the EU in September 2009.

IAS 39 AMENDMENT “RECLASSIFICATIONS OF FINANCIAL ASSETS”: This revision of the standard allows the reclassification of some financial instruments out of the measured at fair value through profit or loss and available for sale categories in specified circumstances and deems such reclassification to be permissible. The amendment to the standard requires first-time application in financial years beginning on or after 1 July 2009. It was endorsed by the EU in September 2009.

The implications of the first-time application of IFRIC 9, IFRIC 17 and IFRIC 18, as well as of the improvement project (2008) and IFRS 3, on the consolidated financial statements of the MVV Energie Group are currently under review. IAS 23 and IFRIC 12 will have implications for the net asset, financial and earnings position. The application of IAS 1 will lead to changes in the presentation of the income statement and the statement of changes in equity. These cannot yet be reliably determined. The application of IFRS 8 will not result in any material changes to segment reporting. Apart from the amendments required in the presentation of the financial statements, the first-time application of the other requirements is not expected to have any material implications for the consolidated financial statements of the MVV Energie Group.

To enhance transparency and in contrast to the presentation in the 2007/08 financial year, in the cash flow statement the dividend payment line item has been supplemented by the dividend payment to minority shareholders line item. The comparable figures have been adjusted as appropriate. These amendments did not lead to any displacements within the cash flow statement.