Annual Accounts and Director's Report Canal De Isabel II, S.A
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Annual Accounts and Director’s Report Canal de Isabel II, S.A. (Free translation from the original in Spanish. In the2017 event of discrepancy, the Spanish-language version prevails.) Canal de Isabel II, S.A. Annual Accounts and Directors’ Report 31 December 2017 (Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.) Canal de Isabel II, S.A. Canal de Isabel II, S.A. CONTENTS BALANCE SHEETS AT 31 DECEMBER 2017 AND 2016. INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2017 AND 31 DECEMBER 2016. STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2017 AND 31 DECEMBER 2016. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2017 AND 31 DECEMBER 2016. NOTES TO THE ANNUAL ACCOUNTS FOR 2017 1. NATURE AND ACTIVITIES OF THE COMPANY AND COMPOSITION OF THE GROUP ............................. 1 2. BASIS OF PRESENTATION ..................................................................................................................... 3 3. NON-MONETARY CONTRIBUTION AND CONTRACT-PROGRAMME ..................................................... 5 4. DISTRIBUTION OF PROFIT .................................................................................................................. 10 5. SIGNIFICANT ACCOUNTING POLICIES ................................................................................................ 12 6. JOINT VENTURES ................................................................................................................................ 28 7. INTANGIBLE ASSETS ........................................................................................................................... 29 8. TANGIBLE ASSETS .................................................................................. ¡Error! Marcador no definido. 9. INVESTMENT PROPERTY .................................................................................................................... 44 10. FINANCIAL RISK MANAGEMENT POLICY ............................................................................................ 48 11. CLASSIFICATION OF FINANCIAL ASSETS BY CATEGORY AND INVESTMENTS IN EQUITY INSTRUMENTS OF GROUP COMPANIES AND ASSOCIATES ................................................................ 49 12. INVESTMENTS AND TRADE RECEIVABLES .......................................................................................... 52 13. INVENTORIES ..................................................................................................................................... 60 14. PREPAYMENTS ................................................................................................................................... 62 15. CASH AND CASH EQUIVALENTS ......................................................................................................... 63 16. EQUITY ............................................................................................................................................... 63 17. GRANTS, DONATIONS AND BEQUESTS RECEIVED .............................................................................. 64 18. PROVISIONS AND CONTINGENT LIABILITIES ...................................................................................... 68 19. FINANCIAL LIABILITIES BY CATEGORIES ............................................................................................. 74 20. PAYABLES AND TRADE PAYABLES ...................................................................................................... 77 21. ACCRUALS .......................................................................................................................................... 84 22. TAXATION ........................................................................................................................................... 85 23. ENVIRONMENTAL INFORMATION...................................................................................................... 91 24. RELATED PARTY BALANCES AND TRANSACTIONS .............................................................................. 92 25. INCOME AND EXPENSES .................................................................................................................... 97 26. EMPLOYEE INFORMATION ............................................................................................................... 100 27. AUDIT FEES ....................................................................................................................................... 101 28. AVERAGE SUPPLIER PAYMENT PERIOD. “REPORTING REQUIREMENT”, THIRD ADDITIONAL PROVISION OF LAW 15/2010 OF 5 JULY 2010. ........................................................... 102 Canal de Isabel II, S.A. 29. EVENTS AFTER THE REPORTING PERIOD .......................................................................................... 102 APPENDIX I.- DETAILS OF JOINT VENTURES AT 31 DECEMBER 2017 AND 2016 ...................................... 107 APPENDIX II (1) – DETAILS OF GROUP COMPANIES AT 31 DECEMBER 2017 AND 2016 .......................... 108 APPENDIX II (2) – DETAILS OF ASSOCIATES AT 31 DECEMBER 2017 AND 2016 ....................................... 112 APPENDIX III.- DETAILS OF RESERVES AND PROFIT AND MOVEMENT FOR THE YEAR ENDED 31 DECEMBER 2017 AND 2016 ........................................................................................................ 113 DIRECTORS' REPORT FOR 2017 Canal de Isabel II, S.A. Annual Accounts 2017 Annual Accounts and Directors’ Report Canal de Isabel II, S.A. Anual accounts 2017 (Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.) BALANCE SHEETS AT 31 DECEMBER 2017 AND 2016. (Expressed in thousands of Euros) Note 2017 2016 ASSETS A) NON-CURRENT ASSETS 4,631,542 4,647,880 I. intangible assets 7 4,210,933 4,230,886 1. Concession arrangements, regulated assets 3,980,102 4,006,250 2. Concession arrangements, capitalisation 64,570 62,561 3. Concession arrangements, regulated assets under construction 166,261 162,075 II. Tangible assets 8 7,320 21,319 1. Land and buildings 7,320 21,079 2. Under construction and advances - 240 III. Investment property 9 14,541 13,954 1. Land 7,537 7,535 2. Buildings 7,004 6,419 IV. Non-current long-term investments in Group companies and associates 11 & 12 247,999 231,496 1. Equity instruments 142,999 142,996 2. Loans to companies 105,000 88,500 V. Non-current investments 11 y 12 65,859 66,474 1. Loans to third parties 54,216 53,848 2. Other financial assets 11,643 12,626 VI. Deferred tax assets 22 126 144 VII. Prepayments for non-current assets 14 84,764 83,607 B) CURRENT ASSETS 323,126 263,501 I. Inventories 13 5,758 4,981 1. Raw materials and other supplies 5,625 4,839 2. Raw materials and other supplies long cycle 133 142 II. Trade and other receivables 11, 12 & 22 161,393 168,360 1. Trade receivables 138,202 138,968 2. Trade receivables from Group companies and associates 1,703 3,303 3. Other receivables 19,897 24,480 4. Public entities, other 22 1,591 1,609 III. Current investments in Group companies and associates 11 & 12 11,287 12,040 1. Loans to companies 4,988 5,531 2. Other financial asset 6,299 6,509 IV. Current investments 11 & 12 12,721 12,808 1. Loans to third parties 12,702 12,789 2. Other financial assets 19 19 V. Prepayments for current assets 14 4,216 4,488 VI. Cash and cash equivalents 15 127,751 60,824 1. Cash 127,751 60,824 TOTAL ASSETS (A+B) 4,954,668 4,911,381 The attached report forms an integral part of the Annual Accounts for the year ended 31 December 2017 Canal de Isabel II, S.A. Annual Accounts and Directors’ Report Canal de Isabel II, S.A. Anual accounts 2017 (Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.) BALANCE SHEETS AT 31 DECEMBER 2017 AND 2016 (Expressed in thousands of euros) Note 2017 2016 EQUITY AND LIABILITIES A) EQUITY 3,285,892 3,172,621 A.1) Own capital 16 2,573,401 2,467,132 I. Capital 1,074,032 1,074,032 II. Share premium 1,074,032 1,074,032 III. Reserves 287,201 205,758 1. Legal reserve 102,147 78,878 2. Other reserves 185,054 126,880 IV. Profit for the year 261,886 232,693 V. (Interim dividend) (123,750) (119,383) A.2) Grants, donations and bequests received 17 712,491 705,489 B) NON-CURRENT LIABILITIES 1,267,784 1,311,172 I. Non-current provisions 18 341,796 300,694 1. Provisions for infrastructure maintenance 334,198 293,477 2. Other provisions 7,598 7,217 II. Non-current payables 19 and 20 598,483 600,254 1. Bonds and other marketable securities 500,000 500,000 2. Other financial liabilities 98,483 100,254 III. Group companies and associates, non-current 19 and 20 298,809 379,857 IV. Deferred tax liabilities 22 1,786 1,768 V. Non-current accruals 21 26,910 28,599 C) CURRENT LIABILITIES 400,992 427,588 I. Current provisions 18 97,040 90,888 1. Provisions for infrastructure maintenance 85,967 76,586 2. Other provisions 11,073 14,302 II. Current payables 19 and 20 80,728 89,271 1. Bonds and other marketable securities 7,111 7,115 2. Other financial liabilities 73,617 82,156 III. Group companies and associates, current 19 and 20 87,222 117,762 19,20 and IV. Trade and other payables 22 131,057 125,000 1. Suppliers 5,995 4,785 2. Suppliers, Group companies and associates 18,971 21,899 3. Other payables 94,323 86,129 4. Personnel (salaries payable) 7,718 8,102 5. Public entities, other 22 4,050 4,085 V. Current accruals 21 4,945 4,667 TOTAL EQUITY AND LIABILITIES (A + B + C) 4,954,668