Management audit - March 2023

The shareholders unanimously approved both the Annual Report and the annual financial statements for 2021/22 and discharged the Board of Directors in accordance with Art. 758 CO – an expression of confidence. They officially acknowledged the report on the management audit.

The management audit was ordered by the extraordinary General Meeting on 20 December 2022 and was designed primarily to establish the reasons that led to the credit facility application. It also contained general questions on issues such as the risk strategy, liquidity management and the trading business.

The audit was carried out by the specialist audit company Deloitte.

Over two months, from 9 January to 9 March 2023.

• Deloitte confirms: ‘The audit revealed no major shortcomings or cause for complaint (“red flags”).’ 
• It confirmed that the application for the federal credit facility in September 2022 was attributable largely to the securing of Swiss electricity production. This in turn was due to the highly unusual price fluctuations in the last year. To date, Axpo has not called on the funds provided by the safety net. 
• Its activities in the international trading business and other international activities provided significant liquidity and helped to counteract the crisis.
• Axpo has a detailed and well-documented risk management policy.
• Axpo also has a detailed, industry-standard liquidity management system.

‘The findings of the report validate the shareholders’ trust in the company.’ (from the press release issued by the owners of Axpo). 

The report gave only suggestions for improvement. Axpo will take these on board, review them and implement them as appropriate.

The Axpo owners’ management audit is the fourth audit following the regular audit by KPMG, the due diligence audit carried out by the Federal Council in September 2022, and the assessment by PricewaterhouseCoopers on behalf of the Board of Directors in late 2022. All came to the same conclusions.

• Between September 2021 and late October 2022 – which includes the lead-up to the application to the federal government – Axpo secured additional funds of about CHF 10.6 billion. 
• The Board of Directors and Group management meet at more frequent intervals. 
• Trading activities have been reduced/discontinued to lessen risk. 
• Hedging of Swiss electricity production has been suspended to reduce the risk arising from margin calls, with a subsequent reduction of the hedging policy as soon as hedging resumes. 
• Liquidity risk management tools have been improved. 
• Additional liquidity risk indicators are included in various internal financial reports. 

Axpo’s diversified strategy has proved itself in the crisis, as Deloitte confirmed. Axpo’s diversified business model generates significant synergies and reduces commercial risk. Trading, which is independent of electricity prices, provides significant revenues that to a large degree make the investment in security of supply and energy future of Switzerland possible in the first place.