PVPS

ANNUAL REPORT

Podtatranská vodárenská prevádzková spoločnosť, a. s. table of

contentsAnnual Report PVPS, a. s. 2017 4 Basic data 6 Corporate Statutory Bodies 23 Quality Supervision Department 8 Key Data of 2017 23 Drinking Water 10 Company´s Chief Executive 23 Wastewater Officer‘s Word of Introduction 12 Company‘s Organizational Structure 24 Customers 14 Our services 24 Customer Approach 24 Projects 14 Drinking Water Production and Distribution 25 External Communication 16 Selected Technical Parameters 25 Customer Services 17 The Department for Technical 26 Satisfaction Rate Survey and Operational Activities 27 Rates for Production, Distribution and Wastewater Treatment 18 Water Meters 19 Breakdowns in Water Mains Network 19 Water Loss Reduction 28 Top Customers 20 Sewerage and WWTP 30 Human resources 20 Breakdown Elimination Overview 31 Employees Structure - Sewerage Network 32 Age Structure of the Employees 21 Volumetric Indicators 32 Qualification Structure 21 Selected Operating Data of the Employees 21 New Operation Contracts 33 Structure of Employees According 22 Water Quality to the Duration of Employment

2 ANNUAL REPORT 2017 contentsAnnual Report PVPS, a. s. 2017 42 Innovations 33 Social Area 42 Innovations in the Area of Water 33 Education of Employees Production and Distribution 33 Internal Communication 43 Important Reconstruction Activities and Repair in the Area of Sewerage 34 Occupational Health and Safety and WWTP 43 Innovations of the Control System 36 Environmental of Production Management Education & Awareness 44 Care for Property, Plant 37 Educational Projects for Schools and Equipment 37 Slovakia-wide Employee Skills 44 Repairs by Company Staff Competition in Water Sector 45 Repairs by External Staff 37 World Water Day 45 Investment Purchase 37 Photography Contest for Employees 37 Excursions for Schools 46 Financial part 37 Support of Regional Activities 47 A Commentary on the Economic Results of the Company 38 Environment 48 Balance Sheet 50 Profit and Loss Statement 39 Waste Management 51 Cash Flow Statement 39 Production of Electricity 52 Independent Auditor‘s Report 40 Quality Management 56 Report by the Supervisory Board System 56 Intentions for the Year 2018 41 Succesful Maintaining of ISO Certificates 58 Contacts

Podtatranská vodárenská prevádzková spoločnosť, a. s. 3 background data

Business Title: Podtatranská vodárenská prevádzková spoločnosť, a.s Company Headquarters: Hraničná 662/17 058 89 Poprad Date of Incorporation: 21 December 2004 Legal Form: Public Limited Company Business Identification Number: 36 500 968 VAT Identification Number: SK 2021918459 Share Capital: 33,200 € Entered in: Commercial Register of the District Court in Prešov in Section Sa, Insert No: 10301/P Net Turnover as of the year 2017: 23,904,644 € Profit/Loss Result Result for the Accounting Period before Tax (EBT): 885,789 € Profit/Loss Result Result for the Accounting Period after Tax: 693,631 € EBT/ Turnover Ratio: 885,789 / 23,904,644 = 3.71 %

4 ANNUAL REPORT 2017 scope of main business activities

• operation of category 1 public PODTATRANSKÁ water supply networks, VODÁRENSKÁ • operation of category 1 public PREVÁDZKOVÁ sewerage networks, SPOLOČNOSŤ, PLC. PROVIDES FOR THE • intermediation of trade and services within the scope of free FOLLOWING ACTIVITIES trades, WITHIN THE TERRITORY OF ITS OPERATION: • building of constructions and their alterations, • concept of development strategy • construction supervision, and drinking water supply, engineering constructions – water collection and treatment of management projects, wastewater,

• laboratory water analyses, • production and supplies of drinking excluding official measurements, water for population, industry, and agriculture, • assembly, repair, maintenance, expert inspections and expert tests • wastewater collection from of electrical equipment, towns and villages, waste water treatment, • business activities within the field of hazardous waste management • protection of water sources, and management of other than • laboratory activities – chemical, hazardous waste. microbiological and biological analyses of water THE GOAL OF THE COMPANY is to adhere to the scope of business activities to its full extent and to provide that as many inhabitants get connected to the water mains THE COMPANY DOES NOT HAVE AN network and sewerage network ORGANIZATIONAL UNIT ABROAD. as possible.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 5 corporate statutory bodies as of 31 December 2017

6 ANNUAL REPORT 2017 BOARD OF DIRECTORS RNDr. Tomáš Paclík - chairman Philippe Guitard - member Ing. Martin Bernard, MBA - member Ing. Robert Tencer - member Ing. Peter Martinka - member

SUPERVISORY BOARD Ing. Ján Mlynár chairman until 31 October 2017 Ing. Zuzana Kováčová chairman from 1 November 2017

Ing. Jozef Havrila - member Mgr. Zuzana Nebusová - member Ing. Peter Dobrý - member Vladimír Majkuth - member Ing. Viktor Haydren, PhD. - member Igor Iľko - member until 21. March 2017 Mgr. Katarína Hamraková - member from 22. March 2017 Ing. Štefan Kováč - member Mgr. Jan Hrabák, PhD. - member

COMPANY´S EXECUTIVE MANAGEMENT Ing. Robert Tencer chief executive officer Ing. Eva Sýkorová finance director Ing. Mikuláš Kovaľ production director Ing. Patrik Tkáč, PhD., ACCA sales director

Podtatranská vodárenská prevádzková spoločnosť, a. s. 7 key data

8 ANNUAL REPORT 2017 306,479 Number of People Supplied 522 Number of Employees 15,654 thous. m3 Produced Water Volume 35,424 thous. m3 Treated Waste Water Volume 2,351 km Length of Operated Water Mains Network 24 Number of Water Treatment Plants 644.97 km Length of Operated Sewerage Network 30 Number of Waste Water Treatment Plants 2,053 Number of Breakdowns in Water Network 31.34 % Water Loss in Water Network 44,441 Number of Contractual Customers 46,405 Number of Invoicing Water Meters

Company auditor: KPMG Slovensko spol. s r.o. Dvořákovo nábrežie 10 811 02 Bratislava

Podtatranská vodárenská prevádzková spoločnosť, a. s. 9 Company’s Chief Executive Officer’s Word of Introduction

Dear shareholders, business partners, dear customers and colleagues,

we would like to present you the annual report of the company Podtatranská vodárenská spoločnosť, plc. Poprad that brings forward company´s results for the year 2017.

10 ANNUAL REPORT 2017 Company’s Chief Executive Officer’s Word of Introduction

The year opened a new decade of the existence of Within the scope of further education the company our company whose priority is to provide its cus- emphasized the importance of underground and tomers reliable services regarding drinking water surface water sources protection as well as the im- supplies and wastewater colection and treatment portance of environmental protection by means of at a level required by our as well as European gener- discussion meetings, excursions, contests and edu- ally binding rules. cational projects for pupils and students.

The employees of our company treated 15,654 m3 During the year 2017 no events occurred that would of drinking water and collected and treated have significantly affected the „ordinary operation“ 35,424 m3 of waste water. The company provided of the company. The continuous running of the drinking water for 306,479 inhabitants and took company was not disturbed. The company keeps care of 2,351 km of water mains and 645 km of a high level of the introduced integrated manage- sewerage network. ment system (ISO 9001, ISO 14001, ISO 18001 and ISO 50001). We continued meeting our customers and consum- ers halfway and helped them to deal with their Finally, I would like to thank all shareholders, Com- documents at our Customer Care Centres in Poprad, pany Bodies´ members, colleagues, business part- Spišská Nová Ves and Stará Ľubovňa. Many of our ners and all those who helped us achieve the results services are also available on our Company´s Inter- in the year 2017. Thank you for your confidence and net page, via our Call Centre, mobile telephones, or cooperation and we hope that you will continue to via emails. Customer care is a long-term priority of favour us with your support next year as well. our company.

Among our high-standard services there are for example breakdown repair of parts of water mains and sewerage network, water treatment plants, wastewater treatment plants, as well as repair of operational facilities.

Robert Tencer Chief Executive Officer of PVPS, plc.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 11 12 ANNUAL REPORT2017 company’s PVPS, a.s.Poprad organizational structure and Safety Department Occupational Health Occupational Health CONTROLLING DEPARTMENT ACCOUNTING DEPARTMENT AND PRICING PLANNING, CENTRAL PROCUREMENT Administration Organizational Organizational AND FINANCE Department Legal and Legal and Director DEPARTMENT DEPARTMENT Finance Finance Section TAXES

General Assembly Supervisory Board Civil Protection Board of Directors Department HR Department CEO Section IT Department Quality Supervision

Production Sales Director Director Section Section

ADMINISTRATION DEPARTMENT OF TECHNICAL AND TECHNOLOGICAL ACTIVITIES CUSTOMER CARE CENTRE CONTROL ROOM AND GIS DPT. BACK OFFICE OPERATION POPRAD CALL CENTRE OPERATION SPIŠSKÁ NOVÁ VES OPERATION STARÁ ĽUBOVŇA CUSTOMER CARE CENTRE FRONT OFFICE OPERATION OF TECHNICAL SERVICES

Podtatranská vodárenská prevádzková spoločnosť, a. s. 13 our services drinking water production and distribution Public water mains operated by PVPS, plc. are supplied mainly from underground water sources, but there are also locations in our scope of activity where the collection of surface water is the main source of drink- ing water. The collected water is then treated by water treatment units and in this way quality parameters for drinking water are achieved. Water infrastructure management is divided into regular and irregular maintenance. Regular maintenance includes the care for water sources, collection-point objects, water ac- cumulation, pumping stations, water mains network and replacement of water meters for our custom- ers. Irregular maintenance includes activities such as elimination of emergencies in the public water mains network, repair in the area of water mains valves, re- placement of hydrant network, eventually reduction valves and other fittings. Selected water storage tank facilities and further operational objects were re- paired within the scope of irregular maintenance, as well. Last year the company did not register any emer- gencies that would have significantly affected con- tinuous drinking water supplies. On the basis of prob- lems that occur in the operation of public water mains during the year, draft plans for repair and investments are compiled and elaborated for the following period. new operation contracts in 2017

Contract No. Schedule Owner Subject of Contract/Schedule 1. 16/2017/AZ/DV CafeRAZY, s.r.o. Operation of the watermain Terraced houses, Mlynská ul. Poprad 2. 117/2016/AZ/DV D1 Michal Hanečák Operation of the watermain - IBV* for 7 detached houses Spišská Sobota, Schmoerova ul. 3. 61/2017/AZ/DV ZAMBO, s.r.o. Operation of the watermain – IBV* for 16 detached houses Spišská Sobota (Za Walltechom) 4. 71/2017/Z/DV Pavol Šoltés Operation of the watermain – for 4 detached houses (Za Walltechom) Spišská Sobota, Poprad 5. 72/2017/AZ/DV VEMAR, s.r.o. & spol. Operation of the watermain - IBV* for 5 detached houses Spišská Sobota, Poprad 6. 85/2017/AZ/DV Obec Švábovce Operation of the watermain – IBV* Dolinky II., Švábovce 7. 167/2017/AZ/DV SK Promotion Operation of the watermain, II. phase IBV* Záhumena, Spišská Teplica 8. 174/2017/AZ/DV SCHEIDEGGER TRAINING INSTITUTE E. Operation of the watermain – IBV* Poprad - Veľká 9. 177/2017/AZ/DV KOMPAKT SERVIS, s.r.o. Operation of the watermain – IBV* Nová Lesná

14 ANNUAL REPORT 2017 our services

PUBLIC WATER MAINS EXECUTED BY OTHER INVESTORS FOR NEWLY CREATED LOCATIONS MAINLY FOR INDIVIDUAL HOUSE CONSTRUCTION WERE TAKEN INTO OPERATION. THE FOLLOWING INVESTORS AND LOCATIONS ARE CONCERNED:

Contract No. Schedule Owner Subject of Contract/Schedule 1. 16/2017/AZ/DV CafeRAZY, s.r.o. Operation of the watermain Terraced houses, Mlynská ul. Poprad 2. 117/2016/AZ/DV D1 Michal Hanečák Operation of the watermain - IBV* for 7 detached houses Spišská Sobota, Schmoerova ul. 3. 61/2017/AZ/DV ZAMBO, s.r.o. Operation of the watermain – IBV* for 16 detached houses Spišská Sobota (Za Walltechom) 4. 71/2017/Z/DV Pavol Šoltés Operation of the watermain – for 4 detached houses (Za Walltechom) Spišská Sobota, Poprad 5. 72/2017/AZ/DV VEMAR, s.r.o. & spol. Operation of the watermain - IBV* for 5 detached houses Spišská Sobota, Poprad 6. 85/2017/AZ/DV Obec Švábovce Operation of the watermain – IBV* Dolinky II., Švábovce 7. 167/2017/AZ/DV SK Promotion Operation of the watermain, II. phase IBV* Záhumena, Spišská Teplica 8. 174/2017/AZ/DV SCHEIDEGGER TRAINING INSTITUTE E. Operation of the watermain – IBV* Poprad - Veľká 9. 177/2017/AZ/DV KOMPAKT SERVIS, s.r.o. Operation of the watermain – IBV* Nová Lesná * IBV (Civil Investment Construction)

Podtatranská vodárenská prevádzková spoločnosť, a. s. 15 our services selected technical parameters

239 2,222.56 l/s 2,351 km water sources capacity of water resources water mains network

306,479 5,234 thous. m3 customers supplied water pumped

15,527 thous. m3 24 water produced within company´s 37 water treatment plants own facilities pumping stations

15,527 thous. m3 198 thous. m3 water produced for realisation water sold to municipalities

12,899 thous. m3 4,639 thous. m3 2,946 thous. m3 underground water consumption non-invoiced water water treated

15,654 thous. m3 2,755 thous. m3 water consumption total surface water consumption

35,424 thous. m3 166 119 treated wastewater volume water storage tank facilities emergencies in the sewerage network

127 thous. m3 10,653 thous. m3 Industrial water total water invoiced total

out of which: out of which: surface water: 127 thous. m3 households: 7,206 thous. m3 underground water: 0 m3 other customers: 3,263 thous. m3 village and town municipal authorities: 182 thous. m3

16 ANNUAL REPORT 2017 the department • 957 written opinions concerning • 766 – written opinions regarding the determination of technical condi- other customer´s requirements (engi- for technical and tions for property connection to the neering networks, high and low volt- operational activities public water mains or disconnection age adjustments, garages, other build- of a property from the public water ings not requiring connections to the received and mains and for establishing or remov- civil engineering networks), processed 2,623 ing a customer´s service pipe, • 232 – extending of public water written opinions, • 668 written opinions concerning mains network, public sewerage net- the determination of technical condi- work, IBV (Civil Investment Construc- out of which were: tions for property connection to the tion), reconstruction and relocation of public sewerage or property discon- water work networks, completion of nection from the public sewerage and water mains network and sewerage establishing or removing a sewerage network, territorial plans, shopping connection, centres, sports facilities.

number of written opinions to project documentations according to individual centres PP TOTAL 2,623

POPRAD 1,658 SN SPIŠSKÁ NOVÁ VES 619 SL STARÁ ĽUBOVŇA 346

Podtatranská vodárenská prevádzková spoločnosť, a. s. 17 our services water meters AS OF 31 DECEMBER 2017, 46,556 INVOICING WATER METERS IN TOTAL WERE INSTALLED WITHIN THE PUBLIC NETWORK.

Out of them, 24 water meters were demounted and sent for official test- ing and by the end of the year the company received a negative result in two cases only. In total, 8,103 water meters were repaired.

18 ANNUAL REPORT 2017 breakdowns in water mains network

WATER-PIPE WATER SERVICE-­ CENTRE TOTAL ROW PIPE CONNECTION

POPRAD 620 81 701

SPIŠ. NOVÁ VES 376 511 887

STARÁ ĽUBOVŇA 167 298 465

TOTAL 1,163 890 2,053

water loss reduction The volume of non-invoiced water (as cure standard quality water in the water well as water loss) was decreased mainly mains pursuant to the effective legisla- by cyclical examination of the water tion (namely concerning the indicator mains network and the subsequent of iron). The number of breakdowns in elimination of water leakage from wa- water mains network rises regularly ter mains. Water loss which is the larg- in transient seasonal periods such as est segment in non-invoiced water in winter – spring and autumn – winter volumetric terms occurred mainly in which occurs because of the movement outdated steel and grey cast iron water of soil (freezing and thawing). In order pipes. The next segment in non-invoiced to decrease the number of breakdowns water is the company´s own consump- we focused on the preparation and tion where the volumes are still signifi- elaboration of reconstruction plans for cant as desludging and flushing water the parts of the network with the most pipes has to be carried out more and breakdowns, completion of measure- more frequently because of decreased ment transfers to the control room and water consumption and in order to se- monitoring of critical sections.

In order to decrease the number of emergencies we focused on preparation and elaboration of plans for reconstruction of the parts of the water supply network with the most frequent breakdowns, completion of measurement transfers to the control room and monitoring of critical sections. A group for detecting emergencies in water mains was concerned not with detection of emergencies only but also with staking out water supply network for investment activities of external buyers. At the same time cyclical monitoring (acoustic leak detection) in the water mains network was carried out.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 19 our services sewerage and WWTP

Among the priority activities of the the built-up areas, and also the impact complaints and give opinions on their production operation of Sewerage and on the natural environment in the corri- necessity. We contribute to a better over- Wastewater treatment plants are trou- dors of the sewage pipe network. A con- all information and awareness among ble-free disposal of wastewater effluent siderable part of the operated area be- people we meet at work. We cooperate and wastewater draining, maintenance, longs to Tatra National Park /TANAP/. It is with municipal authorities and take part cleaning of sewage pipes, removal of of course much more difficult to manage in preparation and provision of construc- breakdowns, water treatment, raw ma- our activities in areas such as national tion plans in the respective locations. terial and waste management. We moni- parks or protected areas as they require In total, waste water was carried away tor the impact on the environment – not a special regimen and our activities are from 221,455 households and industrial only on the quality of water in recipients monitored by several institutions. We plants in six districts – Poprad, Spišská in which we discharge treated water - take part in all negotiations at all stages Nová Ves, Kežmarok, Levoča, Gelnica and but also the impact of the operation on of the investment construction, exter- Stará Ľubovňa. Wastewater was treated the environment and the inhabitants in nal repair, deal with requirements and at 30 wastewater treatment plants.

breakdown elimination overview - sewerage network

CENTRE SEWERAGE ROW SEWERAGE CONNECTION TOTAL

POPRAD 59 0 59

SPIŠSKÁ NOVÁ VES 33 0 33

STARÁ ĽUBOVŇA 27 0 27

TOTAL: 119 0 119

20 ANNUAL REPORT 2017 selected operational data

No. of waste water treatment plants 30 and No. of projects equivalent to the no. of inhabitants (EO) 343,822 sewerage WWTP No. of actual EO – year 264,073 Projected capacity of WWT Plants 103,398.3 m3/day

Projected flow Q24 1,196.8 l/s

Actual flow Q24 per year 1,122.9 l/s

No. of sewer network connections 27,928 ks

Length of sewer network excluding connections 644.97 km

No. of breakdowns in sewer network 119

volumetric indicators in thous. m3

Indicator Reality

Wastewater drained total 35,871

Wastewater drained (invoiced) 10,805

out of Households 6,347 which: Other producers 4,458

Based on invoices Rainfall water 2,485 10,805 tons of solid included out of which: Households 864 sludge were disposed in it: of, out of this amount, Other producers 1,621 2,135.18 tons were Water treated 35,424 dry sludge. Water untreated 447

INVESTOR-OWNED SEWERAGE TAKEN INTO OPERATION new operation contracts UNDER A CONTRACT FROM INVESTORS

Contract No. Schedule Owner Subject of Contract/Schedule 1. 565/05/AZ/DOvDK Obec Ľubica Sewerage operation for the year 2017 Sewerage operation Terraced houses Ul. 2. 17/2017/AZ/DK CafeRAZY, s.r.o. Mlynská Poprad Sewerage operation IBV* for 16 detached 3. 62/2017/AZ/DK ZAMBO, s.r.o. houses Sp. Sobota (za Walltechom) Sewerage operation IBV* for 5 detached 4. 73/2017/AZ/DK VEMAR, s.r.o. & spol. houses Sp. Sobota, Poprad 5. 86/2017/AZ/DK Obec Švábovce Sewerage operation IBV* Dolinky II.,Švábovce 6 300/07/AZ/DKaČOV D6 Obec Spišský Štvrtok Sewerage operation and WWTP (Eurofonds) 7. 175/2017/AZ/DK Scheidegger Training Institute E. Sewerage operation IBV* Poprad - Veľká 8. 178/2017/AZ/DK KOMPAKT SERVIS, s.r.o. Sewerage operation IBV* Nová Lesná Waste water drainage operation IBV* Modrý 9. 31/2017/Z/DK Spoluvlastníci Ing. Strmeň a spol. vrch, II. phase, Spišská Nová Ves Waste water drainage operation IBV* 10. 183/2017/AZ/DK SK Promotion, s.r.o. Zahumena, Spišská Teplica, II.phase Construction) Investment * IBV (Civil

Podtatranská vodárenská prevádzková spoločnosť, a. s. 21 water quality

22 ANNUAL REPORT 2017 quality supervision department Quality of drinking and waste water is examined in regular intervals by the Testing Lab- oratory of the Department of Quality Inspection (SLÚKK). SLÚKK performs its activi- ties pursuant to the Accreditation Decree of S-250, issued by the Slovak National Ac- creditation Service in Bratislava. The testing laboratory showed again its ability to carry out the tests unbiased and trustworthy, within the meaning of STN EN / ISO 17025. Laboratory activities include physical and chemical tests, microbiological and biologi- cal tests of underground, technological, drinking and waste waters as well as sludge, including sampling of drinking water and waste water. drinking water The Quality Supervision Department pro- substances, its quality is monitored in sible to state that the quality of drinking vided for the inspection of the quality of systematic intervals and is in accordance water meets the European standards as water resources, fresh water treatment with the Notice of MZ SR No. 247/2017 viewed from physical, chemical, microbi- plants, group municipal water mains, Coll. (Ministry of Health of the Slovak Re- ological and biological aspects. water storage tank facilities and at the public) which specifies the requirements The drinking water laboratory tested the points of final consumption. for drinking water quality. Based on con- quality of drinking water in 1,417 sam- Drinking water supplied to the public tinuous monitoring of drinking water ples. 96,8 % of samples taken were of water mains is clean, without harmful quality within the water mains, it is pos- ­satisfactory quality.

Water Storage Tanks and Microbiological and Physical and Water Transmission Network Biological Indicators Chemical Indicators

Overall No. of Samples/ 744/25 673/19 No. of Non-Compliant Samples

Overall No. of Analyses/ 8,589/37 8,281/25 No. of Non-Compliant Analyses waste water Waste water Laboratory carried out qual- were monitored are in concordance with The Laboratory processed the total num- ity inspections focusing on the quality of the Public Notice No.: 269/2010 Coll. and ber of 4,273 waste water samples, out waste water and sludge from the outlets related legal regulations in force con- of which: 4,017 samples of wastewater of particular technological stages in the cerning waste water. The observance of and sludge were taken from waste wa- process of waste water treatment within the regulated limits of waste water dis- ter treatment plants, 48 samples from our waste water treatment plants and charged into the recipients is monitored, untreated outlets, 166 samples from pro- also on the inspections of the producers in order to ensure that no harm to the ducers and 42 waste water samples from of industrial and foul waste water. The environment is caused. water treatment plants. extent and the number of samples that

Podtatranská vodárenská prevádzková spoločnosť, a. s. 23 customers

customer approach

The company approaches customers who found themselves in an unfavour- able financial situation individually by solving each particular situation. Dur- projects ing the last year, 717 repayment plans were concluded, so we accepted 98 % At the beginning of the year we changed 21/2017 Coll. – to return all the invoices of requests recorded. What is more, our over successfully to the water and sewer to their previous settings along with the first smart water meter readers were billing in form of a two-component price retrospective force of the one-component tested successfully thanks to which our pursuant to a regulation of URSO (the price. In total, we issued 9,160 corrective employees can monitor water remotely Regulatory Authority for Network Indus- invoices to the invoices with the two- even at those water meters that are dif- tries). Beside water and sewer rate we component price. ficult to access. They can also eliminate also billed our customers for their water In order to detect unauthorised sewer possible human errors. This wireless meter of the respective tariff group. The connection, our employees checked the water meter reading will be carried out total billing amount was higher only in inflow points by means of a smoke gen- much faster than the ordinery one. It the case of zero or minimum water con- erator. The device helps us effectively de- can also detect possible water leakage, sumption. Consequently, in March 2017 tect waste water producers who have not so that the customer can prevent un- we adopted a new regulation pursu- entered into a contract with our company expected costs connected with a break- ant to the Notice of URSO (the Regula- regarding waste water draining yet. down at the point of final consumption. tory Authority for Network Industries) No In the end of the year we started first pre-

24 ANNUAL REPORT 2017 external communication Important elements of company´s exter- municipal engineering Aqua in Trenčín, nal communication are mainly electronic organized together with Stredoslovenská means – company website, email com- vodárenská prevádzková spoločnosť Ban- munication, telephone calls. As far as ská Bystrica, has become an important press materials are concerned, we issue presentation activity. All forms of com- various leaflets, brochures and bulletins munication answer the purpose of creat- for our customers. The regular participa- ing a positive perception of the company tion in the Slovakia-wide trade fair for image among customers, business part- water, hydropower, environmental and ners, institutions and authorities.

customers services We try to offer better and better services works, ordering a cistern, water analy- to our customers. Employees at our Cus- ses, cesspool/ septic pumping, sewer tomer Care Centres and the managers cleaning, etc.) from the Sales Department successfully We registered a growing trend in elec- completed an educational programme tronic communication which means focusing on communication with cus- sending invoices for water supplies and tomers, typology of problems and prob- sewer collection mainly in an electronic lem solving as well as assertiveness.The form. As of the end of the year 2017 we quality of services provided are guaran- registered more than 1,600 customers teed by the adopted commitments of whom we sent more than 4 thousand customer services – availability, custom- on-line invoices. During the year the er awareness and solidarity. number of customers using the service We provide our services in person at of an electronic invoice rose by 25%. our Customer Care Centres in Poprad, in We received 2 thousand customer re- Spišská Nová Ves and in Stará Ľubovňa. quests in total and these were solved If our customers prefer a telephone con- within 24 hours. In total, we sent 9,432 tact, we are available at the Customer text messages regarding breakdowns, Care Line of our Call Centre on weekdays emergencies, planned outages that are from 7:00 am to 5:00 pm where we sent to our clients within the scope of dealt with more than 13,000 telephone the free service: Text message informa- inquieries. We also solved problems re- tion. 2,322 customers registered for the ported by customers in the water mains service „Internet Customer Account“ or in the sewerage network 24 hours which is an increase by 257 new cus- daily non-stop. Customers contact us tomer accounts for the last year. For the often in order to report unavailability of customers registered for this service is parations connected with the pilot project their water meters because of their ab- the following available: basic data, rates, of remote water meter reading. The goal sence from home at the time of water payments, displayed regulations, water of the preparations was to choose a loca- meter reading within 3 business days meter places and water meter reading, tion with points of final consumption that or because they want to clear misun- or they can enter their requests regard- are difficult to access in terms of tradition- derstandings in the billing for water ing payments, address and contact de- al water meter reading or a location with supplies and and sewer collection, they tails, report water meter status. unpredictable conditions of mountain establish or alter their monthly up-front We offer households to pay in form of environments. Finally, Štrbské Pleso and payments via SIPO or via standing or- advance payments via standing orders forest park Lesopark Kvetnica were chosen ders, inform themselves on overpay- or collection of money. Invoices can be as testing locations. We hope that in 2018 ments, payment reminders, file com- paid at our cash desks at our Customer our pilot project proves effective (water plaints, or they are interested in our Care Centre (cash or cashless), by bank meter reading, billing, lifetime) and that services (new service connection, water transfer, at post offices or via payments our customers will be able to use our new meter installation, opinion to a building at COOP Jednota supermarkets (UNI- smart meters for a fee. procedure, staking out engineering net- KASA service).

Podtatranská vodárenská prevádzková spoločnosť, a. s. 25 satisfaction rate survey

Last year again, the company had an In the survey, we included customers sibly in order to build up a good repu- external customer satisfaction rate who had not come into a direct con- tation among customers. Emphasis is survey elaborated through which it tact with our company and could not continuously put on further education receives customer feedback. From the answer the above mentioned ques- of all employees. Steps undertaken data received we get an overview how tions. If we do not take the latter re- by the company contribute to a con- customer satisfaction rate changes spondents into consideration, the tinuous improvement and reaching year-on-year and it shows us what overall satisfaction with the services the goal – to be a customer-oriented areas we have to focus on. The survey provided is then 93.05%. company. also provides information about what The company perceives the satisfac- services are preferred most by our tion rate survey as an important in- customers. dicator showing where the company The survey was carried out by an ex- is going. The results are analyzed and ternal company via standardized tele- improvement is approached respon- phone calls on a sample of randomly selected 500 customers from all activ- ity spheres of the society. The first six questions focused on the overall sat- isfaction and the next six questions asked about customers preferences. The average overall satisfaction with our services reached 92.43%. Com- pared to the average overall satisfac- tion for the previous year it rose by 0.40%. The increase definitely encour- ages our company as it is a result of work of all our employees.

overall results

LEVEL OF SATISFACTION SATISFACTION SATISFACTION WITH WITH SERVICES WITH QUALITY WATER SUPPLIES AND PROVIDED OF DRINKING WATER WASTE WATER COLLECTION 92.20 % 96.80 % 92.80 %

SATISFACTION WITH SATISFACTION WITH SATISFACTION WITH QUALITY OF INFORMATION PAYMENT METHODS PROFESSIONALITY PROVIDED OFFERED OF EMPLOYEES 94.00 % 91.60 % 87.20 %

26 ANNUAL REPORT 2017 rates for production, distribution and drinking water supplies and wastewater treatment

Maximum prices for drinking water pro- that cancelled the original decision No. On 1st March.2017 our company recei- duction, supply as well as for distribution 0094/2017/V from 8th December 2016 ved a pricing decision No. 0215/2017/V by means of public water mains have on the introduction of the two-compo- from URSO /Regulatory Authority for remained unchanged since 1st January nent price from 1st January 2017 and Network Industries/ for the period from 2014. Maximum price for wastewater water and sewer rates were brought 1st January 2017 till 31st December 2021 collection and treatment by means of back to the previous level of a one-com- when we proceeded pursuant the valid public sewerage has remained unchan- ponent price. Beside a charge for water legislation – URSO Notice No 21/2017 ged since 1st July 2015. At the beginning supply and sewer collection the cancel- Coll., by which the price regulation of of the year our company introduced a led two-component price should have drinking water production, distribution two-component water and sewer rates included a fixed charge for the point of and supply by means of public water according to a Notice by URSO /Regu- final consumption according to the no- mains and collection of waste water by latory Authority for Network Industries/ minal flow of the installed water meter. means of public sewerage is stipulated:

Rates valid from 1st January 2017 to 31st December 2021

MAXIMUM RATE MAXIMUM RATE MAXIMUM RATE FOR DRINKING WATER FOR DRINKING WATER FOR DRAINING AND PRODUCTION AND SUPPLY DISTRIBUTION BY PUBLIC TREATMENT OF WASTEWATER BY PUBLIC WATER MAINS WATER MAINS BY PUBLIC SEWERAGE

1.0884 €/m3 0.6925 €/m3 1.0904 €/m3 VAT exclusive VAT exclusive VAT exclusive

The price development is influenced by the development of justified costs, as well as by realized drinking water production, distribution and supply by means of public water mains as well as waste water collection and treatment by means of public sewerage in technical units.

IN 2017 THE COMPANY:

registered issued sent more than 95,560 7,590 67 thousand 717 water and sewer reminders personal, telephone, postal repayment plans invoices and electronic contacts were entered with customers

Podtatranská vodárenská prevádzková spoločnosť, a. s. 27 top customers

Bytové družstvo Spravbytherm s.r.o. (Ltd.) Spišská Nová Ves (IČO 36690856) (Housing Association) (IČO 00174505)

Popradská energetická SLOBYTERM, spol. s r.o. (Ltd.) spoločnosť, s.r.o. (IČO 31719104) (Energy Company of Poprad, Ltd.) (IČO 50339729)

EMKOBEL, a.s. (plc.) TATRAVAGÓNKA a.s. (plc.) (IČO 31736785) (IČO 31699847)

Tatranská Okresné stavebné bytové mliekareň a.s. družstvo Stará Ľubovňa (Tatra Milk Plant, plc.) (District Civil Housing Association) (IČO 31654363) (IČO 31673821)

Tatranský správcovský Bytový podnik dom s.r.o. Poprad, s.r.o. (Tatra Managerial House, Ltd.) (Housing Business Poprad, Ltd.) (IČO 46764178) (IČO 36451967)

28 ANNUAL REPORT 2017 top customers

WHIRLPOOL Stavebné bytové SLOVAKIA spol. s r.o. (Ltd.) družstvo Levoča (IČO 35796570) (District Civil Housing Association) (IČO 00594423)

Bytový podnik Nemocnica Poprad, a.s. Svit, s.r.o. (Hospital Poprad, plc.) (Housing Business Svit Ltd.) (IČO 36513458) (IČO 36816949)

Bytové družstvo SOREA, spol. s r.o. (Ltd.) Kežmarok (IČO 31339204) (Housing Association) (IČO 36168807)

AQUAPARK Mesto Spišská Poprad, s.r.o. (Ltd.) Nová Ves (IČO 36482609) (Town of Spišská Nová Ves) (IČO 00329614)

Mesto Poprad TATRY - TEPLO, s.r.o. (Ltd.) (Town of Poprad) (IČO 36486311) (IČO 00326470)

Podtatranská vodárenská prevádzková spoločnosť, a. s. 29 human resources

30 ANNUAL REPORT 2017 At the beginning of the year the physical headcount totalled 518. During the year 34 new employees joined the company (including external staff, such as employees after parental leave) and 30 employees left our company. As of 31st December 2017 the physical headcount was 522. The average calculated number of employees for the year 2017 was 509.30 – which was by 5.7 employees less compared to the plan.

GROWTH IN THE NUMBER OF EMPLOYEES 518 34 PHYSICAL HEADCOUNT out of which: OF EMPLOYEES AS OF 31 temporary contract ... 30 DECEMBER 2016 permanent contract ... 0 external staff ... 4 employment structure

DECLINE IN THE NUMBER OF STAFF 522 PHYSICAL HEADCOUNT 30 OF EMPLOYEES out of which: § 60 of the labour code - contracted ... 15 AS OF 31 DECEMBER 2017 § 70 of the labour code - temporary ... 0 § 63 of the LC - organizational reasons ... 0 Other reasons (disability, deaths, early retirement,..) ... 5 509.3 going into the external staff AVERAGE RECORDED database ... 4 CALCULATED NUMBER leaving as a result of OF STAFF IN 2017 retirement ... 6

Podtatranská vodárenská prevádzková spoločnosť, a. s. 31 age structure of employees

Age Female Male Total 20 - 24 0 7 7 25 - 29 7 11 18 30 - 34 7 15 22 35 - 39 10 26 36 40 - 44 15 55 70 45 - 49 21 67 88 50 - 54 25 92 117 55 - 59 19 83 102 over 60 5 57 62 Total 109 413 522 Average Age 47.56 49.53 49.13

20 - 24 0 7 20 - 24 25 - 29 7 11 25 - 29 30 - 34 FEMALE 7 15 MALE 30 - 34 35 - 39 10 26 35 - 39 40 - 44 15 55 40 - 44 45 - 49 21 67 45 - 49 50 - 54 25 92 50 - 54 55 - 59 19 83 55 - 59 over 60 5 57 over 60

qualification structure of employees

Education Degree Female Male Total Elementary 5 16 21 Secondary Vocational 9 210 219 Secondary Vocational + Leaving Exam 48 152 200 Higher Vocational 1 0 1 University Degree 46 35 81 Total 109 413 522

Elementary 5 16 Secondary Vocational FEMALE 9 210 Secondary Vocational + Leaving exam 48 152 Higher Vocational 1 0 University Degree 46 35 MALE

32 ANNUAL REPORT 2017 structure of employees according to duration of employment

97 under 5 years

77 under 10 years

127 under 20 years

221 over 20 years social area Last year the social fund created by versaries of our employees (12,659.00 €) of 241,986.83 €, to health care amount- the company amounted to the sum and in the social area (4,165.00 €). The ing to the sum of 27,463.45 €, to drinking 92,022.48 € including the fund balance social fund balance amounting to the regimen 1,330.62 €, for temporary sick from the previous year (9,078.60 €) and sum of 6,116.52 € will be used in the leave totalling to the sum of 21,175.23€. the allocation of profit (18,879.27 €). It year 2018. Severance money and retirement ben- was drawn for various purposes, mainly Within the frame of social expenses the efits were paid totalling to the sum of as a contribution to catering of our company contributed to the additional 54,484.88 €. out of which the severance employees (50,289.35 €), to recreation, pension fund schemes of our employ- money was paid to employees whose sport and the regeneration of workforce ees totalling the sum 155,941.52 €, to employment, according to a medical (18,792.61 €), to regeneration of work- catering of our employees (apart from opinion, ended because of a long-term force regarding major work and life anni- the social fund) amounting to the sum loss of their ability to perform their work. education of employees The total costs incurred by the company The total number of training courses at- trainings in given dates, determined by for educational purposes amounted tended amounted to 1,072 of the total special regulations. to the sum of 28,128.81 €. The average length of 9,651 hours, out of which the An important part of the employment costs for educational trainings per em- number of hours dedicated to health education of staff members were regu- ployee amounted to the sum of 55.23 €. and safety trainings totalled 4,118. lar training courses in the field of occu- The compulsory trainings (stipulated The company focused mainly on the pational health and safety and fire pre- by legislative decrees) amounted to the development of professional skills and vention which apart from the planned sum of 11,632.50 €, language courses competence in employees, increas- ones were attended by all newly recruit- 5,104.00 € and further training courses ing and extending their professional ed employees. and seminaries, etc. amounted to the qualifications, knowledge and skills. The sum of 11,392.31 €. corporate staff attended compulsory internal communication The electronic communication and the operation Company of Central Slovakia/ For our employees who do not have ac- Intranet belong to the most effective we publish the magazine „Voda je život cess to the Internet, company notice communication tools among our em- – Water is Life“ for our employees on a boards are available. Apart from this, ployees. In a short-time-interval they regular basis that comes out four times workshops and meetings beyond com- help inform our employees on current a year. Via the electronic memo of the pany control between the company´s events, orders, regulations, requirements, Veolia group “La letter”, information on management and the subordinates, as guidelines and other important rules. innovative technologies from the whole well as various activities are a regular and Within the VEOLIA group and in coop- world are available to our employees. The an important communication means. eration with Stredoslovenská vodáren- memo is sent from our centre – from Par- ská prevádzková spoločnosť / Water is in four world languages each month.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 33 occupational health & safety

34 ANNUAL REPORT 2017 The permanent goal of the Department of Health and Safety at Work and Fire Prevention as well as the whole company is that all our employees are able to perform their duties in a safe environment without any health hazard.

The Integrated Management System (ISM) tive equipment /PPE/ at work was examined. that includes Quality Management System No fine was imposed upon the company for (ISO 9 001), environmental management non-observance of health and safety regula- system (ISO 14 001), occupational safety and tions at work. health management system (OHSAS 18 001) In the department of fire prevention regu- and energy management system (ISO 50 lar fire prevention inspections of buildings 001) brought effectiveness to our production and rooms were carried out on determined processes and services provided. The result dates. Within the scope of prevention in- becomes evident in the quality of products spections fire extinguishers, hydrants, fire as well as in the attitude to the environment, protection valves, and further fire protection energetics and in the area of health and safe- devices were examined. Also, regular revi- ty at work. sions of electrical tools and selected techni- Adopting commitments and setting goals cal equipment were carried out according to that concerned decreasing dangers and haz- the respective schedule. Expert training of ard in all operations of our company directly fire patrols at workplace and employees en- contributed to a safer work environment. suring fire protection in non-working times Last year only one work accident was regis- continued. All precautions and measures led tered however, we did not register any work- to the fact that there has not been fire in the related illnesses at our company. objects of the company for a long time. The In the monitored period 300 alcohol screen- result of the controls of the Fire and Rescue ing tests were performed in order to check Corps of the Slovak Republic was a finding possible use of alcoholic drinks during work- that the company fulfils all its duties in the ing hours out of which 300 were negative. Fire protection department. Further check-ups and inspections focused The permanent goal of the Department of on observing health and safety rules and Health and Safety at Work and Fire Preven- further regulations that ensure health and tion as well as the whole company is that safety at work, safe work procedures and safe all our employees are able to perform their behaviour at work. The duty of distribution, duties in a safe environment without any wear and use of respective personal protec- health hazard.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 35 environmental education and awareness

36 ANNUAL REPORT 2017 environmental education educational projects slovakia-wide employee and awareness for schools skills competition In cooperation with Stredoslovenská vodárenská prevádzková in water sector spoločnosť, a.s.( Water Operation Company of Central Slova- The annual Slovakia-wide competition of employee skills kia, plc.) we joined a two-year educational project for primary in water sector belongs to important events for employees. schools called „Tajný život vody“ (Secret Life of Water). Each Last year the competition was organized by Západosloven- school participating in the programme received a tablets for ská vodárenská spoločnosť, a.s. Nitra (Water Company of taking photographs of plants and their determination with Western Slovakia, plc. Nitra). As usual, the completion was the help of the mobile application Pl@ntNEt. One of the tasks divided in two disciplines “A” – assemblyman and “B” – find- of the project was creation of an information campaign on ers. The winner was the organizing company ZsVS, a.s. Our biodiversity discovered by children in their town. Thanks to company was ranked the 8th place in the competition. the tablets they could take pictures about it and then pres- The activity enables our employees to compare their tech- ent their projects in an interesting way to the public. Out of nical skills with those of their colleagues, to follow the in- 50 schools participating in the project 3 schools whose, infor- novations in the technological area and to exchange their mation campaign was the most original and addressed the experience in the water sector. widest spectrum of public, were chosen. The winners became: Kukučínova Primary School in Detva, Tajovského Primary School and Nursery School in Poprad and Ivan Krasko Gram- mar School in Rimavská Sobota. For all winning teams stays excursions for schools had been prepared at the Educational Centre in Záježová. Througout the year our company offers excursions into se- lected water company objects and wastewater treatment plants to school groups. Pupils and students have a possi- support of regional bility to visit different production processes of water com- pany facilities. Apart from exterior visit we inform them activities through presentations on various technologies and innova- At the level of social responsibility we support various acti- tions of the company. vities and events our region develop. In order to provide the necessary drinking water regimen we supply drinking water in water tank trucks at various large social events (traditio- world water day nal annual Marian pilgrimage in Levoča, summer music fes- In the testing laboratory of the Department of Water Quality, tivals, sports and cultural events), we also provide material 534 drinking water analyses were carried out free of char- and non-material resources for organisation of regional and ge where water was tested for nitrates – water brought by international competitions (ice-hockey, basketball, skiing, fit- our customers who had no possibility to get connected to ness, aerial sports, dance competitions, chess tournaments the public water mains or whose drinking water might have and various school and out-of-school activities). been polluted by nitrates through keeping livestock or other agricultural activity. Out of all samples analyzed, the maximum nitrate limit 50 photography contest mg/l, which means 15,7% of overall contamination, was exceeded in 84 samples. The highest nitrate concentration for employees 300.0 mg/l was detected in the water sample from a well In summer months we regularly organize a Company Pho- in Toporec. The best indicators were detected from samples tography Contest for our employees focusing on an envi- from the surroundings of the town of Poprad that reached ronmental topic. The main topic of the last year´s contest only 6,2% contamination.The samples from the surround- was „Water Games“ in which 18 of our employees took part. ings of the town of Stará Ľubovňa reached 18,5% contamina- Three most original photographs were awarded and the win- tion. The most adverse results were measured in the district ners received promotional packets from our company. of Spišská Nová Ves – 23,3% contamination.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 37 environment

38 ANNUAL REPORT 2017 waste management

In the area of waste Management, the disposal of waste The company has in its premises small and medium-sized was in compliance with the valid laws and regulations sources of air pollutants. In total, 28,95881 t of pollutants and with the permission for disposal of hazardous waste. were discharged into the air from small and from medium- During the operation of facilities, 2,171.59 t of waste out sized sources. Reports on their amounts were sent to the re- of which 2.852 t of hazardous waste was produced. Their spective environmental authorities according to the sched- removal and disposal was provided by contracting partners. ule and based on them charges were levied on discharging Yearly reports on waste amount were sent to the respective emissions into air. environmental authorities according to schedule.

3.225 t 2.852 t AMOUNT AMOUNT OF HAZARDOUS OF HAZARDOUS WASTE WASTE 2016 2017 TOTAL T-OTAL 11,335.52 t 2 171,59 t

AMOUNT AMOUNT OF OTHER OF OTHER WASTE 11,332.29 t WASTE 2,168 t

production of electricity

Production of electricity at cogeneration unit at the Waste • From October to November the sludge digester VN1 was Water Treatment Plant in Poprad-Matejovce included shut down for cleaning 522,786 kWh. Compared to the year 2016 a decrease by 135,673 kWh was registered which was caused for the fol- By means of effective use of sludge gas when generating lowing reasons: electricity at the co-generation unit, costs for purchasing electricity from our supplier are significantly saved. By pro- • In February 2017 a planned general repair of the ducing electric energy, the costs for its purchase were de- cogeneration unit was carried out, creased by 61.752 thousand €.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 39 quality management system

40 ANNUAL REPORT 2017 succesful maintaining of ISO certificates

Company Management tries to build a leader in providing certification services high level of quality of service connected with a long-term tradition. with drinking water supplies and waste All activities and processes of the company, water collection. At the same time it upholding the goals in terms of quality, en- pays attention to environmental protec- vironmental protection, energetics and oc- tion and puts an emphasis on health and cupational health and safety were exam- safety at work. ined. In their final assessment the auditors The company has been using the Inte- positively assessed highly set ISM goals, grated Management System (IMS) that process performance, their monitoring, consists of Quality Management System professional knowledge of our employees, (ISO 9 001), Environmental Management improvements concerning hazard and System (ISO 14001), Energy Management threat reduction as well as environmen- System (ISO 50001) and Occupational tal load reduction and also reduction in Health and Safety at Work Management energy demands. Successfully completed System (OHSAS 18001). Merging several audits confirmed the functionality of the management systems into one integrated implemented integrated management system is a very effective way of creation system. It was also confirmed that all four of a management system that takes not systems are kept in line with the require- only quality of products and services, but ments of the respective standards. also environmental approach, health and The company thoroughly obeys the re- safety at work as well as saving energy and quirements of the standards throughout financial sources into consideration. the year which was examined continu- From 6th – 8th November 2017 the fol- ously by eight internal and two external lowing audits were carried out at our audits carried out in individual depart- company: 7th Supervisory Audit pursuant ments of the company. External auditors to the international standard STN EN ISO from Stredoslovenská vodárenská pre- 9001:2009, 5th Supervisory Audit pursu- vádzková spoločnosť, a. s. /Operational ant to the international standard STN EN Water Company of Central Slovakia, plc./ OHSAS 18001:2009, 4th Supervisory Audit took part in internal audits. Even though pursuant the international standard STN a positive change in employees approach EN ISO 14001:2005 and 2nd Supervisory to the environment, to the quality of ser- Audit pursuant the international standard vices provided and to upholding health STN EN ISO 50001:2012. All the audits and safety is becoming obvious, the com- were carried out by the Certification Com- pany undertakes to constantly ensure pany TÜV SÜD Slovakia, Ltd. Bratislava, the highest level of the integrated man- group member of TÜV SÜD, the world agement system.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 41 innovations

innovations in the area of water production and distribution IN COOPERATION WITH PVS, PLC. POPRAD WE CARRIED OUT RECONSTRUCTION AND RENOVATION OF WATER SUPPLY NETWORK PARTS IN THE FOLLOWING LOCATIONS:

In the towns of Poprad, Kežmarok, Spišská Belá, water at the water treatment plant Lomnička, filter No 1 was supply network was renovated and reconstructed, reconstructed, new filtration system was supplied, in Stará Ľubovňa the water supply network was by means of our own staff, hydrants and slides in the reconstructed in Zámocká street, water supply network v Podolínec, Stará Ľubovňa and in the village of Reľov, water supply pipe was Jarabina were replaced, reconstructed fom the water storage tank to the village, from our own sources, the roof of the object in the village of Matiašovce – water supply network „Sedimentation tank“ at the water treatment plant reconstruction was carried out and the public water mains Jakubany was repaired and water leaks were eliminated were extended in the part of the village „Za potokom“, – water storage tank repair. in the village of Hniezdne – water distribution network was reconstructed, In November reconstruction of the water treatment plant in in Nová Ľubovňa – pipeline network was reconstructed Štrbské Pleso started. The purpose of the reconstruction is to below the brook Kolačkovianka, modernize the plant with regard to the technology and the at the automated pressure station Matiašovce, the tech- building of the facility. nology was reconstructed and the pumps were replaced,

42 ANNUAL REPORT 2017 innovations

important reconstruction activities and repair in the area of sewerage and WWTP

Last year the following Waste Water Nová Ves the testing period was com- 269/2010 Coll., that stipulates the re- Treatment Plants (WWTP) were put in pleted. The results of testing opera- quirements for achievement of good testing operation after reconstruction: tions received up to now meet the re- water condition and ensures reduc- WWTP – Stará Lesná, WWTP Hranovni- quirements of the national legislation, tion of pollution of the surface waters ca, WWTP – Liptovská Teplička. At especially those included in the Act of of the rivers Poprad and Hornád by WWTP Kežmarok and WWTP Spišská Government of the Slovak Republic No waste water.

innovations of the control system of production management

Adding further possibilities of water plant Popradské pleso was carried out. control room. Operational activities in distribution monitoring and managing A part of the analog radio network was the production programme PTIS (op- contributed to a better monitoring of changed into digital technologies and erational/technical information sys- quality indicators. Reconstruction and hardware and software system equip- tem) were interconnected by a new completion of the Control Manage- ment was updated within the scope economics software Helios Green with ment system at the water treatment of the programme equipment of the the order system.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 43 care for property, plant and equipment

repairs of property, plant and equipment by company staff

By means of its own staff the company the basis of contracts with towns and moval of breaks on water mains and in carried out planned and non-planned villages. the sewer system, repairs to techno- repairs as well as maintenance on wa- In order to ensure continuous supplies logical equipment and electric facili- ter mains, sewerage system and fur- of drinking water for the inhabitants, ties, treatment and disinfection of wa- ther objects, on the property leased collection and disposal of sewage from ter storage tank facilities, exchanging from PVS, plc. Poprad, on its own prop- towns and villages and treatment of water meters, painting work as well as erty and on the property operated on wastewater, we focused mainly on re- fence repair.

44 ANNUAL REPORT 2017 HERE WE SPECIFY PLANNED REPAIRS REALIZED: In order to ensure continuous sup- replacement of 50 surface hydrants, 56 of line valves, plies of drinking water for the in- repair of 168 manhole covers, habitants, collection and disposal of Gerlachov Old water storage tank – plaster and fence repair, sewage from towns and villages and pumping station Žehra – plaster repair, treatment of wastewater, we focused water treatment plant Helcmanovce – repair of sanitary rooms and the control centre, mainly on removal of breaks on water operations building Spišské Bystré – plaster and fence repair, mains and in the sewer system, re- water treatment plant Jakubany – roof cover repair of the sedimentation tank, pairs to technological equipment and Spišské Bystré water storage tank Palesok – plaster repair, electric facilities, treatment and disin- Gelnica water storage tank Uhliarska- building repair, fection of water storage tank facilities, replacement of 3 fibreglass laminate kiosks, stations of cathodic protection replacement of water meters, painting in Huncovce, Poprad - Kvetnica, Poprad - Stráže. work as well as fence repair.

repairs of property, plant and equipment by external staff COSTS OF REPAIRS OF PROPERTY, PLANT AND EQUIPMENT REALISED:

Operated on the Property leased from Owned by basis of contracts PVS, plc. Poprad PVPS, plc. Poprad with towns and villages 829,804 € 144,963 € 21,286 €

TOTAL 996,053 €

investment purchase

PURCHASE OF TANGIBLE INVESTMENT ASSETS AMOUNTED TO 674,061 €. The company bought 2 special CAS vehicles for sewerage network, 8 personal vehicles, 2 inspection cameras for monitoring pipelines, 2 hydropower Beaver, 1 geodetic device, 10 GPS monitoring devices, 1 plotter, 2 Dell servers, economics software Herp Opex, Herp Capex.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 45 financial part

The net profit of the company for the past year was 911,108 € and the company’s profit/loss after tax 693,631€.

46 ANNUAL REPORT 2017 financial a commentary on the economic results of the company part In 2017 the net turnover of the com- the company has also properties from pany reached 23,904,644 €. Out municipalities and third parties in use of this, water rates accounted for that are operated by the company on 11,595,296 €, sewer and roof drain the basis of operating agreements rates for 11,788,342 € and other rev- and outsourcing agreements. enues for 521,006 €. Revenues that With the regard to the fact that Veo- the accounting unit reached from the lia is a consolidated company, it was sale of excess property do not belong granted a long-term loan amounting here. The net profit of the company to 1,000,000 € with a payback period for the past year was 911,108 € and in December 2019. In 2017 the com- the company´s profit / loss after tax pany drew a short-term loan amount- 693,631 €. ing to 1,490,000 €. The company has leased the infra- Financial statement was drawn up structural assets (operative leasing) under the assumption that the com- totalling to the sum at the value of ac- pany will continuously carry on with quisition of 195,890,585 €. The term its activities (going concern). Account- of lease is set for a definite period ing methods and general accounting of time, for 30 years beginning from principles were consistently applied 24th August 2006. by the accounting unit. The results of In compliance with the concluded the company are detailed in the ac- Lease and Operating Agreement the counting reports annexed. company has leased the infrastruc- After 31 December 2017 no impor- tural assets for the project “Comple- tant circumstances occurred that tion of the sewer network and WWTP might have an impact on the finan- in the agglomeration Hôrka and cial, economic and capital situation Švábovce totalling to the sum at the of the water company Podtatranská value of the acquisition 6,897,176 €, vodárenská prevádzková spoločnosť, for the project WWTP Kežmarok plc. The company did not carry out to the sum of 15,233,302 € and for any activities in the field of research WWTP Spišská Nová Ves to the sum of and development. During the year 19,255,533 €. The term of lease is set the company did not acquire its own for 10 years from the date the agree- shares, interim certificates, business ment enters into force. shares and shares, interim certificates The lease for the given assets and business shares of the mother ac- amounts to 6,525,031 €. Furthermore, counting unit.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 47 FINANCIAL STATEMENTS OF ENTREPRENEURS IN DOUBLE

BALANCE SHEET as of 31 december 2017 (in €)

Current accounting period Line Desig- Preceding No. nation ASSETS accounting Brutto Correction Netto period

1 TOTAL ASSETS line 02 + line 33 + line 74 23,273,390 15,425,118 7,848,272 6,848,678

2 A. Non-current assets l. 03 + l. 11 + l. 21 17,073,490 14,689,018 2,384,472 2,165,949

3 A.I. Non-current intangible assets - total (l. 04 to 10) 11,646,855 11,386,950 259,905 90,078

5 2. Software (013) - /073,091A/ 86,765 44,801 41,964 13,065

7 4. Goodwill (015) - /075,091A/ 11,342,149 11,342,149 0 0

9 6. Non-current intangible assets acquired (041) - /093/ 217,941 0 217,941 77,013

11 A.II. Property, plant and equipment - total (l. 12 to 20) 5,425,899 3,302,068 2,123,831 2,074,052 Separate movable assets and sets of movables (022) 14 3. 5,368,233 3,253,219 2,115,014 2,058,546 - /082,092A/ Other property, plant and equipment (029, 02X, 17 6. 57,666 48,849 8,817 15,506 032) - /089, 08X, 092A/

21 A.III. Non-current financial assets - total (l. 22 to 32) 736 0 736 1,819 Shares and ownership interests in affiliated accoun- 22 A.III.1. 736 0 736 1,819 ting entities (061A, 062A, 063A) - /096A/

33 B. Current assets l.34 + l. 41 + l. 53 + l. 66 + l. 71 6,180,592 736,100 5,444,492 4,657,828

34 B.I. Inventory - total (l. 35 to 40) 256,005 2,455 253,550 283,156

35 B.I.1. Raw material (112, 119, 11X)-/191, 19X/ 256,005 2,455 253,550 2,831,565

41 B.II. Non-current receivables - total (l. 42 + l. 46 to 52) 339,989 0 339,989 310,883

52 8. Deferred tax asset (481A) 339,989 0 339,989 310,883

53 B.III. Current receivables - total (line 54 + lines 58 to 65) 4,563,760 733,645 3,830,115 3,350,959

54 B.III.1. Trade receivables - total (lines55 to 57) 4,287,048 733,645 3,553,403 3,263,892

Trade receivables from affiliated accounting entities 55 1.a. 16,663 0 16,663 148,056 (311A, 312A, 313A, 314A, 315A, 31XA) - /391A/ Other trade receivables (311A, 312A, 313A, 314A, 57 1.c. 4,270,385 733,645 3,536,740 3,115,836 315A, 31XA) - /391A/ Other receivables from affiliated accounting entities 60 4. 301 0 301 301 (351A) - /391A/ Tax assets and subsidies (341, 342, 343, 345, 346, 63 7. 200,280 0 200,280 344 347) - /391A/ Other receivables (335A, 33XA, 371A, 374A, 375A, 65 9. 76,131 0 76,131 86,422 378A) - /391A/

71 B.V. Financial accounts (l. 72 and l. 73) 1,020,838 0 1,020,838 712,830

72 B.V.1. Cash (211, 213, 21X) 3,937 0 3,937 3,467

73 2. Bank accounts (221A, 22X, +/- 261) 1,016,901 0 1,016,901 709,363

74 C. Accruals / Defferals - total (l. 75 to 78) 19,308 0 19,308 24,901

75 C.1. Prepaid expenses - long-term (381A, 382A) 809 0 809 5,193

76 2. Prepaid expenses - short-term (381A,382A) 18,499 0 18,499 19,709

48 ANNUAL REPORT 2017 ENTRY BOOKKEEPING AS OF 31 DECEMBER 2017

Line Desig- Current accounting Preceding No. nation LIABILITIES AND EQUITY period gross accounting period

79 Total equity and liabilities line 80 + line 101 + line 141 7,848,272 6,848,678

80 A. Equity l. 81 + l. 85 + l. 86 + 87 + 90 + 93 + 97 + 100 1,533,296 1,784,711

81 A.I. Share capital - total (l. 82 to 84) 33,200 33,200

82 A.I.1. Share capital (411 or +/-491) 33,200 33,200

86 A.III. Other capital funds (413) 821,188 821,188

87 A.IV. Legal reserve funds line 88 + line 89 6,640 6,640

88 A.IV.1. Legal reserve fund and non-distributable fund (417A, 418, 421A,422) 6,640 6,640

93 A.VI. Differences from revaluation - total (lines 94 to 96) -21,363 -20,280

94 A.VI.1. Differences from revaluation of assets and liabilities (+/- 414) -21,363 -20,280

Net profit/loss for the accounting period after tax /+-/ l. 01 - 100 A.VIII. 693,631 943,963 (l. 81 + l. 85 + l. 86 + l. 87 + l. 90 + l. 93 + l. 97 + l. 101 + l. 141)

101 B. Liabilities l. 102 + l. 118 + l. 121 + l. 122 + l. 136 + l. 139 + l. 140 6,313,795 5,062,838

102 B.I. Non-current liabilities - total (l. 103 + l. 107 to 117) 1,175,169 1,163,107

108 Other liabilities to affiliated accounting entities (471A, 47XA) 1,000,000 1,000,000

114 9. Liabilities ralated to social fund (472) 6,117 9,079

117 12. Deferred tax liability (481A) 169,052 154,028

122 B.IV. Current liabilities - total (l. 123 + l. 127 to 135) 4,533,755 3,057,343

123 B.IV.1. Trade liabilities - total (l. 124 to 126) 2,079,734 1,506,709

Trade liabilities to affiliated accounting entities (321A, 322A, 324A, 124 1.a. 586,273 219,070 325A, 326A, 32XA, 475A, 476A, 478A, 47XA) Other trade liabilities 126 1.c. 1,493,461 1,287,639 (321A, 322A, 324A, 325A, 326A, 32XA, 475A, 476A, 478A, 47XA) Other liabilities under share participation, other than liabilities to 128 4. 1,494,168 704,062 related entities (361A, 36XA, 471A, 47XA)

131 6. Liabilities to employees (331, 333, 33X, 479A) 476,984 387,716

132 7. Liabilities related to social security (336A) 342,480 282,499

133 8. Tax liabilities and subsidies (341, 342, 343, 345, 346, 347, 34X) 126,439 160,612

135 10. Other liabilities (372A, 379A, 474A, 475A, 479A, 47XA) 13,950 15,745

136 B.V. Short-term provisions l. 137 + l. 138 604,871 842,388

137 B.V.1. Legal provisions (323A, 451A) 151,105 134,694

138 2. Other provisions (323A, 32X, 459A, 45XA) 453,766 707,694

141 C. Accruals/defferals - total (l. 142 to 145) 1,181 1,129

143 2. Accrued expenses - short-term (383A) 1,181 1,129

Podtatranská vodárenská prevádzková spoločnosť, a. s. 49 Profit and Loss Statement as of 31 december 2017

Line Desig- Period Previous Text No. nation monitored period 1 * Net turnover (part of Account Class 6 according to the Act) 23,904,644 23,831,756 2 ** Operating income - total (lines03 - 09) 24,024,675 23,922,895 5 III. Revenue from the sale of services (602,606) 23,904,644 23,831,756 7 V. Own group capitalized (accounting group 62) 47,095 38,799 8 VI. Revenue from the sale of non-current intangible assets, property, plant and 12,427 3,317 equipment, and raw materials (641,642) 9 IV. Other operating income (644,645,646,648,655,657) 60,509 49,023 10 ** Operating expenses - total line 11 + line 12 + line 13 + line 14 + line 15 + 23,104,439 22,660,324 line 20 + line 21 + line 24 + line 25 + line 26 12 B. Consumed raw materials, energy consumption, and consumption of other 4,252,153 4,325,624 non-inventory supplies (501,502,503) 14 D. Services (account group 51) 9,969,366 9,568,692 15 E. Personnel expenses - total (l. 16 to 19) 8,204,496 7,934,697 16 E.1. Wages and salaries (521, 522) 5,617,969 5,458,093 17 2. Remuneration of board members of company or cooperative (523) 44,448 42,638 18 3. Social security expenses (524, 525, 526) 2,125,132 2,044,148 19 4. Social expenses (527, 528) 416,947 389,818 20 F. Taxes and fees (account group 53) 117,520 186,511 21 G. Amortization and value adjustment to non-current intangible assets and 416,495 421,929 depreciation and value adjustments to property, plant and equipment (line 22 + l. 23) 22 G.1. Amortization of non-current intangible assets and depreciation of 416,495 421,929 property, plant and equipment (551) (551) 24 H. Carrying value of non-current assets sold and raw materials sold (541,542) 120 0 25 I. Value adjustments to receivables (+/-) (547) 31,140 67,109 26 J. Other operating expenses (543,544,545,546,548,549,555,557) 113,149 155,762 27 *** Profit/loss from operations (+/-) (line 02 - line 10) 920,236 1,262,571 28 * Added value (l. 03+l. 04 + l. 05 + l. 06 + l. 07)-(l. 11+l. 12+l. 13+ l. 14) 9,730,220 9,976,239 29 ** Income from financial activities - total (l. 30+l. 31+l. 35+l. 39+ l. 42+l. 43+l. 44) 0 52 39 XI. Interest income (l. 40 + l. 41) 0 46 41 2. Other interest income (662A) 0 46 42 XII. Exchange rate gains (663) 0 6 45 ** Expenses related to financial activities - total l. 46+ l. 47+ l. 48+l. 49+ l. 52+ l. 53+ l. 54) 34,447 30,741 49 N. Interest expense (l. 50 + l. 51) 25,319 25,139 50 N.1. Interest expenses related to affiliated accounting entities (562A) 25,319 25,139 52 O. Exchange rate losses (563) 3,090 491 54 Q. Other expenses related to financial activities (568,569) 6,038 5,111 55 *** Profit/Loss from financial activities (+/-) (r.29-r.45) -34,447 -30,689 56 **** Profit/Loss for the accounting period before tax (+/-) (l. 27+l. 55) 885,789 1,231,882 57 R. Income tax (l. 58 + l. 59) 192,158 287,919 58 R.1. Income tax - current (591, 595) 206,240 427,512 59 2. Income tax - deferred (+/-) (592) -14,082 -139,593 61 **** Profit/Loss for the accounting period after tax (+/-) (l. 56-l. 57-l. 60) 693,631 943,963

50 ANNUAL REPORT 2017 Cash Flow Statement as of 31 december 2017

2017 (€) 2016 (€) Cash flow from operating activities Operating Cash Flow 1,373,238 2 487,576 Interests Paid -25,160 -21,706 Interests Received 0 46 Income Tax Paid -449,502 -512,848 Dividends Paid -925,084 -1,014,088 Cash Flow prior to Items of Extraordinary Extent or Occurrence -26,508 -938,980 Revenues from Items of Extraordinary Extent or Occurrence 0 0 Net Cash Flow from Operating Activities -26,508 -938,980

Cash Flow from Investment Activities Non-Current Assets Purchase -467,765 -597,834 Non-Current Assets Sales Revenues 12,281 3,309 Investment Purchasing 0 0 Dividends Received 0 0 Net Cash Flow from Investment Activities -455,484 -594,525

Cash Flow from Financial Activities Revenues from Share Capital Increase 0 0 Revenues from Loans 790,000 0 Long-term liabilities Installments 0 0 Received Loans Installments 0 -300,000 Net Cash Flow from Financial Activities 790,000 -300,000

Net (Decrease) Increase in Cash and Cash Equivalents 308,008 44,455

Cash and Cash Equivalents at the Beginning of the Year 712,830 668,375

Cash and Cash Equivalents at the End of the Year 1,020,838 712,830

Cash flow from operating activities Net Profit 911,108 1,256,977 (prior to deducing interest, tax and items of extraordinary extent and occurrence)

Alternations of Non-Monetary Operations: Amortization of non-current intangible assets and depreciation of property, plant and equipment 416,495 421,929 Value adjustments to Accounts Receivables -3,440 -34,369 Value adjustment to Inventory 0 0 Value adjustment to property, plant and equipment 0 0 Value adjustment to Non-Current Financial Assets 0 0 Unrealized Exchange Rate Losses 0 2 Unrealized Exchange Rate Gains 0 0 Reserves -237,517 168,690 Loss (Profit) from Non-Current Assets Sale 0 0 Revenues from Non-Current Financial Assets 0 0 Difference between acknowledged capital contribution value and its accounting value 0 0 Other Non-Monetary Operations 0 0 Profit from Operation prior to Working Capital Change 1,086,646 1,813,229

Working Capital Change Decrease (Increase) in Receivables from Commercial Activities and other Receivables -275,777 507,128 (including Accrued Assets) Decrease (Increase) in Inventories 29,606 -36,490 Decrease (Increase) in Liabilities (including accrued Liabilities) 532,763 203,709

Cash Flow from Operation 1,373,238 2,487,576

Podtatranská vodárenská prevádzková spoločnosť, a. s. 51 independent auditor’s report

52 ANNUAL REPORT 2017 independent auditor’s report

Podtatranská vodárenská prevádzková spoločnosť, a. s. 53 54 ANNUAL REPORT 2017 Podtatranská vodárenská prevádzková spoločnosť, a. s. 55 report by supervisory board 2017

Intentions for 2018 continuous quality improvement of water management services provided renovation and optimisation of operations and technological facilities of wastewater treatment plants in cooperation with PVS, plc. improvement of services for our customers support of education and educational processes at primary and secondary schools implementation of new technologies in order to achieve permanent reduction in water loss make sure that all activities are in compliance with the requirements regarding health and environmental protection cooperation with state organs in order to ensure that legislation is observed

56 ANNUAL REPORT 2017 OPINION

of the SUPERVISORY BOARD of Podtatranská vodárenská prevádzková spoločnosť,plc.

on the Annual Financial Statement as of the Year 2017 and on the Corporate Annual Report as of the year 2017 The Financial Statement and the Corporate Annual Report were audited by the auditing company of KPMG Slovensko, Ltd., SKAU License No. 96.

In the report to the shareholder, the Supervisory Board, the Board of Directors of the PVPS, plc., the auditor expressed his opinion on the Financial Statement.

According to the auditor, the Financial Statement faithfully reflects the actual corporate financial situation of the company as of 31 December 2017 and its result regarding Profit and Loss for the year ending to the above mentioned date and pursuant to the Act on Accounting No. 431/2002 Coll. as amended.

In their meeting on 11 June 2017, the Supervisory Board examined the Current Corporate Financial Statement pursuant to the articles § 198 of the Act 513/1991 Coll. of the Commercial Code as amended and the Article XII., Section 4 of the Book of Statutes.

Following the examination of the Financial Statement and as a follow-up to the Report of the auditor, the Supervisory Board states that the company keeps its corporate accounting in full observance and concordance with the Act on Accounting and further related regulations and rules. Examining the formal and material validity and credibility of the Current Consolidated Financial Statement as of the year 2017 proved that no shortcomings were found.

The company attained the total accounting profit of 693,631.51 € as of the year 2017.

CONCLUSION: he Supervisory Board recommends to the General Assembly of the PVPS, plc. to approve of the Annual Consolidated Financial Statement , the Corporate Annual Report as well as the proposed draft proposal for the profit distribution achieved in the year 2017.

In Poprad, 11 June 2018

Ing. Zuzana Kováčová Chairman of the Supervisory Board of PVPS, plc.

Podtatranská vodárenská prevádzková spoločnosť, a. s. 57 ANNUAL REPORT

Podtatranská vodárenská prevádzková spoločnosť, a. s.

Hraničná 662/17, 058 89 Poprad | Tel.: 00421 / 052 / 7873 115 | e-mail: [email protected] | www.pvpsas.sk

Call centre 0850 111 800

CUSTOMER CARE CENTRES

CUSTOMER CARE CENTRE POPRAD Hraničná 662/17 058 89 Poprad e- mail: [email protected] Fax: +421 52 772 95 48

CUSTOMER CARE CENTRE SPIŠSKÁ NOVÁ VES Duklianska 40 052 01 Spišská Nová Ves e-mail: [email protected] Fax: +421 53 415 52 41

CUSTOMER CARE CENTRE STARÁ ĽUBOVŇA Levočská 34 064 01 Stará Ľubovňa e-mail: [email protected] Fax: +421 52 426 54 40

PRINTED ON RECYCLED PAPER

Issued by: PVPS, plc. (Poprad 2018)