ANNUAL FINANCIAL REPORT for the Period
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TERNA ENERGY Industrial Commercial Technical Societe Anonyme 85 Mesogeion Ave., 115 26 Athens, Greece Societe Anonyme Reg. No. 318/06/Β/86/28 ANNUAL FINANCIAL REPORT for the period from 1st January to 31st December 2019 In accordance with Article 4, Law 3556/2007 and the relevant Executive Decisions of the Hellenic Capital Market Commission Board of Directors WorldReginfo - 4769e546-f5fa-4142-95a3-8ef7c41bb3a2 TERNA ENERGY GROUP Annual Financial Report for 2019 CONTENTS Ι. REPRESENTATIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS ................................................................................ 4 ΙΙ. INDEPENDENT AUDITOR’S REPORT ...................................................................................................................................... 5 ΙΙΙ. ANNUAL MANAGEMENT REPORT OF THE BOARD OF DIRECTORS OF “TERNA ENERGY S.A.” ON CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR FINANCIAL YEAR 2019 ........................................................................................... 10 CORPORATE GOVERNANCE STATEMENT ................................................................................................................................ 30 ΙV. ANNUAL SEPARATE AND CONSOLIDATED FINANCIAL STATEMENTS ............................................................................... 40 NOTES TO FINANCIAL STATEMENTS ...................................................................................................................................... 51 1 GENERAL INFORMATION ABOUT THE GROUP ............................................................................................................... 51 2 BASIS FOR THE PREPARATION OF FINANCIAL STATEMENTS ......................................................................................... 52 3 SIGNIFICANT ACCOUNTING ESTIMATES AND MANAGEMENT ASSESSMENTS .............................................................. 58 4 SUMMARY OF KEY ACCOUNTING PRINCIPLES ............................................................................................................... 62 5 CONSOLIDATED COMPANIES AS AT 31/12/2019 ........................................................................................................... 90 6 SEGMENT REPORTING ................................................................................................................................................... 95 7 BUSINESS COMBINATIONS ........................................................................................................................................... 102 8 INTANGIBLE ASSETS ..................................................................................................................................................... 104 9 RIGHT – OF – USE ASSETS ............................................................................................................................................ 106 10 PROPERTY, PLANT AND EQUIPMENT....................................................................................................................... 108 11 INVESTMENT PROPERTY .......................................................................................................................................... 111 12 INVESTMENTS IN SUBSIDIARIES .............................................................................................................................. 111 13 INVESTMENTS IN ASSOCIATES ................................................................................................................................. 115 14 INVESTMENTS IN JOINT ARRANGEMENTS .............................................................................................................. 116 15 INVESTMENTS IN EQUITY INTERESTS ...................................................................................................................... 117 16 OTHER LONG-TERM RECEIVABLES ........................................................................................................................... 118 17 FINANCIAL ASSETS – CONCESSIONS ........................................................................................................................ 119 18 INVENTORIES ........................................................................................................................................................... 121 19 TRADE RECEIVABLES ................................................................................................................................................ 121 20 PREPAYMENTS AND OTHER RECEIVABLES .............................................................................................................. 123 21 RECEIVABLES/(LIABILITIES) FROM CONTRACTS WITH CUSTOMERS ........................................................................ 125 22 CASH AND CASH EQUIVALENT ................................................................................................................................. 126 23 BORROWINGS .......................................................................................................................................................... 127 24 LEASE LIABILITIES ..................................................................................................................................................... 135 25 FINANCIAL DERIVATIVES .......................................................................................................................................... 135 26 PROVISIONS FOR EMPLOYEE COMPENSATION ....................................................................................................... 138 27 OTHER PROVISIONS ................................................................................................................................................. 140 2 WorldReginfo - 4769e546-f5fa-4142-95a3-8ef7c41bb3a2 TERNA ENERGY GROUP Annual Financial Report for 2019 28 GRANTS .................................................................................................................................................................... 141 29 EQUITY INSTRUMENTS HAVING A SUBSTANCE OF FINANCIAL LIABILITY ................................................................ 142 30 SUPPLIERS ................................................................................................................................................................ 145 31 ACCRUED AND OTHER SHORT-TERM LIABILITIES .................................................................................................... 146 32 SHARE CAPITAL AND SHARE PREMIUM ................................................................................................................... 146 33 RESERVES ................................................................................................................................................................. 147 34 EARNINGS PER SHARE ............................................................................................................................................. 149 35 INCOME TAX ............................................................................................................................................................ 149 36 TURNOVER ............................................................................................................................................................... 156 37 COST OF SALES, ADMINISTRATIVE AND RESEARCH AND DEVELOPMENT EXPENSES .............................................. 158 38 OTHER INCOME/EXPENSES...................................................................................................................................... 160 39 FINANCIAL INCOME/(EXPENSES) ............................................................................................................................. 161 40 PAYROLL COST ......................................................................................................................................................... 162 41 TRANSACTIONS WITH RELATED PARTIES................................................................................................................. 162 42 RISK MANAGEMENT POLICIES AND PROCEDURES .................................................................................................. 165 43 PRESENTATION OF FINANCIAL ASSETS AND LIABILITIES PER CATEGORY ................................................................ 170 44 LIABILITIES ARISING FROM FINANCING ACTIVITIES ................................................................................................. 171 45 FAIR VALUE MEASUREMENT ................................................................................................................................... 172 46 CAPITAL MANAGEMENT POLICIES AND PROCEDURES ............................................................................................ 174 47 EFFECTIVE LIENS ...................................................................................................................................................... 175 48 CONTINGENT ASSETS AND LIABILITIES .................................................................................................................... 175 49 SIGNIFICANT EVENTS AFTER THE REPORTING DATE OF STATEMENT OF FINANCIAL POSITION ............................. 180 50 APPROVAL OF FINANCIAL STATEMENTS ................................................................................................................. 184 3 WorldReginfo - 4769e546-f5fa-4142-95a3-8ef7c41bb3a2 TERNA ENERGY