The annual report for 2004 of BKW FMB Energie AG (BKW) was not prepared in full accordance with the Listing Rules. BKW treated as normal purchase and sale agreements certain electricity contracts that had been concluded in order to generate margins by benefiting from price differences. This is in breach of the International Financial Reporting Standards (IFRS), which set out that contracts that do not meet physical demand must be recognized as financial instruments at fair value.
By recognizing these contracts in the income statement instead of as assets and liabilities on the balance sheet as required under IFRS, BKW presented a turnover for 2004 that was CHF 1.15 billion higher than the actual turnover. The annual profit and shareholders' equity, on the other hand, were affected only insignificantly by the incorrect treatment of the electricity contracts concluded in order to achieve trade margins. The company’s treatment of these electricity contracts in its annual report for 2004 constitutes a breach of IFRS and the relevant provisions of the Listing Rules. The Executive Committee of the Admission Board of the SWX has therefore issued a reprimand with publication against BKW.
Periodic financial reporting in compliance with applicable accounting standards represents an integral part of the information that contributes to transparent trading as stipulated by the Stock Exchange Act and the Listing Rules. One of the regulatory tasks of SWX is to ensure enforcement of the transparency rules imposed on issuers.