Consolidated Financial Statements 2015
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2015 ACEA S.P.A. FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS ACEA GROUP REPORT ON OPERATIONS 2015 ACEA S.P.A. FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS ACEA GROUP REPORT ON OPERATIONS CONTENTS 6 ACEA AT A GLANCE 13 REPORT ON OPERATIONS 14 Corporate bodies 16 Summary of results 18 Summary of operations and income, equity and financial performance of the Group 24 ACEA Group Financial Position and Cash Flows 34 Reference context 38 Regulations and tariffs 47 Trends of Operating segments 47 Economic results by segments 48 Environment operating segment 53 Energy operating segment 57 Water operating segment 65 Networks operating segment 69 Corporate 72 Significant events during and after the period 73 Main risks and uncertainties 78 Operating (and financial) outlook 79 Resolutions on profit for the year and distribution to Shareholders 81 ACEA SPA FINANCIAL STATEMENTS 82 Form and Structure 83 Accounting standards and measurement criteria 88 Accounting standards, amendments, interpretations and improvements applied from 1 January 2015 89 Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance 92 Income Statement 93 Statement of Comprehensive Income 94 Statement of Financial Position 96 Statement of changes in shareholders’ equity at 31 December 2014 97 Statement of changes in shareholders’ equity at 31 December 2015 98 Statement of Cash Flows 99 Notes to the Income Statement 106 Notes to the Statement of Financial Position - Assets 117 Notes to the Statement of Financial Position - Liabilities 125 Related Party Transactions 129 List of related party transactions 130 Update on major disputes and litigation 4 ACEA GROUP • 2015 FINANCIAL STATEMENTS 133 Additional disclosures on financial instruments and risk management policies 137 Commitments and contingencies 138 Annexes 146 Report of the Board of the Statutory Auditors 156 Independent Auditors' Report 159 Certification of Separate Financial Statements in Accordance with Art. 154-Bis of Legislative decrete 59/98 161 CONSOLIDATED FINANCIAL STATEMENTS 162 Form and Structure 163 Consolidation policies, procedures and basis of consolidation 165 Basis of consolidation 166 Accounting standards and measurement criteria 171 Accounting standards, amendments, interpretations and improvements applied from 1 January 2015 172 Accounting standards, amendments and interpretations applicable after the end of year and not adopted in advance by the Group 175 Consolidated Income Statement 176 Consolidated Statement of Comprehensive Income 177 Consolidated Statement of Financial Position 179 Consolidated Statement of Cash Flows 180 Consolidated Statement of Changes in Shareholders’ equity 181 Notes to the Consolidated Income Statement 195 Notes to the Consolidated Statement of Financial Position 219 Purchases in the year 221 Commitments and contingencies 222 Service Concession Arrangements 230 Related Party Transactions 234 Update on major disputes and litigation 241 Additional disclosures on financial instruments and risk management policies 248 Annexes 259 Independent Auditors' Report 262 Certification of Consolidated Financial Statements in accordance with Art. 154-Bis of Legislative decrete 59/98 Corporate Governace and ownership Structure Report 2015 FINANCIAL STATEMENTS 5 LETTER TO SHAREHOLDERS CATIA TOMASETTI ALBERTO IRACE CHAIRMAN CHIEF EXECUTIVE OFFICER DEAR SHAREHOLDERS, The figures on investments are also worthy of note, and with pride, increasing by 428.9 million euros, an increa- The results obtained in 2015 are the just rewards of se of over 34% even when compared to the remarkable the effort we've put into renewing Acea. This confirms 2014 result of 318.6 million euros. we're on the right track and encourages us to continue The figure on average per capita investments in ATO 2 in the direction we started in 2014. It's an incentive to – Central Lazio is significant; 49.4 euros per inhabitant bring the process of evolution and transformation we was invested in 2015, 45% more than the national (Ita- know as “Acea 2.0” to a successful conclusion. lian) average of 34 euros (source, Utilitalia). Indicators confirm the solidity of the strategies on whi- This figure confirms our capacity and the driving force ch this new phase of evolution is based, and this is all our company represents, focused on development and the more reassuring, as the financial statements we growth, in the social and economic context we operate in. submit for Your approval are the result of endogenous resources, a global stimulus towards improvement and The Net Financial Position (NFP), while still negative was rationalisation, involving everyone in the company, and an improvement on 2008, decreasing by 79 million eu- which will continue into the future. ros compared to 2014, and by about 121 million euros compared to 30 September 2015. At the same time, The importance of the results obtained, far in excess operating costs were reduced by over 125 million euros, of expectations, is cause for optimism and considering a decrease of 5.4% on last year. These results, as men- the coherence of conditions, consolidates the decisions tioned above, are an emblematic representation of the taken and the choices made in the new 2016 - 2020 positive effects of the targeted corporate rationalisation Business Plan. and greater efficiency in operating processes. In particular, there was a noteworthy 7.7% increase in The market has rewarded Acea's efforts towards re- net profit compared to last year, reaching 175 million newal and in 2015 the value of the company share in- euros, an excellent result in today's particular macroe- creased by around 60%, compared to an average FTSE conomic context. Mib increase of 13%. 6 ACEA GROUP • 2015 FINANCIAL STATEMENTS These are the solid foundations on the basis of which This paves the way for a forecasted annual increase in we've laid the 2016 – 2020 Business Plan, the notewor- EBITDA of 4% and an increase in the distribution of divi- thy and strategic objectives of which include both the dends from 3% to 6%. central role played by the customer, improving the qua- lity of the services supplied, as well as organizational The Plan does not consider the positive effects that and operational efficiency, the former to be achieved could derive from the acquisition of stakes in Italian wa- through technological innovation and the development ter companies in the territories of reference, in other of contact channels, the latter by continuing to develop words from the process of consolidation, focusing on IT systems and promote work force management. The the core Regions, promoted by the Government and further development of this technology, which was lau- the new regulation approved by the Italian Authority nched in Acea Ato 2 a few months ago, represents and for Electricity, Gas and Water (AEEGSI). On this point it will continue to represent a new work concept, also in must be said that, by the end of the year amongst other the near future for the other Group Companies. things, two legislative decrees will come into force im- plementing the “Madia” Law No. 124 of 2015, with new The process of profound change in “Acea 2.0” is therefo- consolidated acts on local public services of economic re destined to pick up speed not only with an increasing interest and public limited companies. These measures number of objectives for operational and economic effi- may help, above all and if suitably integrated with drafts ciency, but also by really turning over a new leaf. In this that have been preliminarily approved by the Govern- way the Group intends to start afresh after inheriting ment, to create regulatory conditions that encourage a monopolist legacy, which by now is something that similar initiatives. belongs to the past, promoting an entirely new range of relations with our customers, characterised by the Finally, it must be said that, following the decisions ta- substantial promotion of the latest digital technologies. ken by the previous Shareholders' Meeting, the number It's a challenging goal, but when we reach it Acea will be of members in the Board of Directors increased from one of the most technologically advanced utility compa- seven to nine, maintaining the original ratios in terms of nies in Europe. gender representation. The appointment of these two new Directors, both of whom are independent, has me- So Acea is counting on digitalisation to improve servi- ant an improvement in the distribution of tasks in the ce quality, but also on investments. The 2016-2020 Plan various Committees, making the relevant work more sets a significant and challenging investment target of effective and faster. 2.4 billion euros, 80% of which will be in regulated bu- siness. More specifically, over one billion euros will be Dear Shareholders, this Board of Directors, with the full invested in the Water Segment, while 878 million eu- collaboration of the Group and the people who continue ros will be invested in the Networks Segment. The 262 to make the Group what it is today, has performed its million euros investment in the Environment Segment duties with the greatest and most professional commit- will mainly be allocated to the development of existing ment to obtaining the results we submit to You. We've plants, while 159 million euros will be invested in the set some challenging goals for the future, but they are Energy Segment, on the one hand to improve the quali- also realistic goals, focusing on the creation of value in a ty of services and customer relations, and on the other context of sustainability both in economic-financial and to update electricity production plants. environmental terms, well-aware of our role in relation to the territory in which we are operating. Just as noteworthy is the reduction in operating costs in the period that comes within the scope of the Plan, In consideration of the above, we trust in Your conti- amounting to 94 million euros. nued support.