Annual Report 2016 ANNUAL W R Ww.Eydap.G REPORT
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Annual Report 2016 Annual Report ANNUAL w r ww.eydap.g REPORT 2016 Application EydApp ANNUAL REPORT 1 CONTENTS 1. COMPANY’S PRESENTATION 10 1.1 BOARD OF DIRECTORS 12 1.2 PRESENTATION OF THE BOARD OF DIRECTORS 13 1.3 COMPANY’S EXECUTIVES PROFILE 16 1.4 BACKGROUND- INCORPORATION 18 1.5 OBJECTS 18 1.6 OPERATIONS 19 1.7 AREA OF SERVICE 20 1.8 EASTERN ATTICA WASTEWATER WORKS 22 1.9 PRICING POLICY 22 1.10 EYDAP NISON 24 2 KEY FINANCIAL 26 2.1 KEY Financials (Group) 29 2.2 CONSUMPTION Evolution & Breakdown 32 2.3 SHARE Information 35 3. ANNUAL REPORT 38 3.1 STATEMENTS OF MEMBERS OF THE BOARD OF directors 41 3.2 Annual Report 42 3.3 Annual FINANCIAL statements 84 GENERAL INFORMATION FOR THE COMPANY 85 STATEMENT OF INCOME FOR THE FINANCIAL YEARS ENDED ON 31ST DECEMBER 2016 & 2015 86 STATEMENT OF TOTAL COMPREHENSIVE INCOME FOR FINANCIAL YEARS ENDED ON 31st DECEMBER 2016 & 2015 86 STATEMENT OF FINANCIAL POSITION OF 31st DECEMBER 2016 & 31st DECEMBER 2015 87 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY 1st JANUARY – 31st DECEMBER 2016 & 2015 88 CASH FLOW STATEMENTS OF 1ST JANUARY - 31st DECEMBER 2016 & 2015 89 NOTES ON THE ANNUAL FINANCIAL STATEMENTS OF 31st DECEMBER 2016 90 1. ESTABLISHMENT, OPERATIONS AND LEGAL FRAMEWORK OF THE COMPANY 90 2. NEW STANDARDS, INTERPRETATIONS AND AMENDMENT OF EXISTING STANDARDS 91 3. SIGNIFICANT ACCOUNTING policies 94 4. CRITICAL ACCOUNTING TREATMENTS AND IMPORTANT SOURCES OF ESTIMATION OF UNCERTAINTities 101 5. REVENUES 102 6. ALLOCATION OF EXPENSES INTO THE OPERATIONS AND OTHER EXPENSES 103 7. Depreciation Expenses 105 2 ANNUAL REPORT 8. PERSONNEL FEES & EXPENSES (GROUP & COMPANY) 105 9. FINANCIAL INCOME (GROUP & cOMPANY) 105 10. FINANCIAL EXPENSES (GROUP & cOMPANY) 106 11. INCOME TAX 106 12. EARNINGS PER SHARE 107 13. GOODWILL 107 14. OTHER Intangibles assets (GROUP & COMPANY) 108 15. TANGIBLE assets 108 16. INVESTMENTS IN SUBSIDIARIES 109 17. INVESTMENTS AVAILABLE FOR SALE 109 18. LONG-TERM receivables (group & company) 110 19. DEFERRED TAX RECEIVABLE (GROUP & COMPANY) 110 20. MATERIALS, SPARE PARTS & CONCUMABLES (GROUP & COMPANY) 111 21. receivables from customers, consumers (group & company) 111 22. OTHER RECEIVABLES (GROUP & COMPANY) 112 23. CASH AND CASH EQUIVALENTS 112 24. SHARE CAPITAL 113 25. RESERVES 113 26. RETAINED EARNINGS 114 27. LIABILITIES FOR EMPLOYEE BENEFITS (GROUP & COMPANY) 114 28. Provisions for PENDING litigationS (group & company) 120 29. INVESTMENT SUBSIDIES AND CUSTOMER CONTRIBUTIONS (GROUP AND COMPANY) 120 30. CONSUMERS’ GUARANTEES 120 31. OPERATING AND OTHER CURRENT LIABILITIES 120 32. EVENTS AFTER THE BALANCE SHEET DATE 121 33. COMMITMENTS AND CONTINGENT LIABILITIES – ASSETS 121 34. RELATED PARTY TRANSACTIONS (GROUP & COMPANY) 122 35. auditors’ remuneration 122 36. EYDAP FIXED ASSETS «EYDAP L.E.P.L.» 122 37. MANAGEMENT OF CAPITAL 123 38. FINANCIAL RISK Management 123 39. FAIR VALUE ASSESEMENT 124 INDEPENDENT AUDITOR’S REPORT 125 CORPORATE ANNOUNCEMENTS – RELEASES 2016 126 DATA & INFORMATION 127 ANNUAL REPORT 3 MESSAGE FROM THE CHAIRMAN OF THE BoD Dear Shareholders, A public utility company is not an ordinary business entity. We have the most important and basic responsibility, to provide our customers with safe and reliable services. In addition, like any other corporation, we make sure to create value for our stockholders. Our strategy is based on the achievement of a balanced, sustainable development to the benefit of society as a whole, our customers, our employees, our stockholders and to any party involved, which has legal interest. 2016 was a year of consolidating Management’s strategy, and the systematic implementation of all the planned actions necessary to maintain and improve the reliability of the Company’s operations. The new organizational structure was approved, and it was delegated with a smoother and more efficient operation of the Company, always aiming at optimum performance for the benefit of the customers, the stockholders and the employees. Regarding Company’s basic financial results for 2016, EYDAP continued its steady profitable performance and its reliable operating profitability, as Company’s turnover increased by 1.4% (+4.6 million) and amounted to 328.8 million, while revenues from our main activities (water supply – sewerage) increased by 1.7% (+5.5 million). Company’s gross earnings amounted to 146.2 million, increased by 5.6%, while after taxes earnings amounted to 24.1 million. There was a sharp decrease in customers’ debt due to the fact that the company has implemented a favorable settlement program. Regarding the Business Plan, it will be completed during the first half of 2017, and it will reflect the Company’s exact investment needs. EYDAP has planned for 2017 all necessary investments to meet today’s challenges, aiming to achieve results on improved functional and environmental performance, better functional and technical efficiency and effectiveness, and improved customer services. Throughout 2016, the Company continued the implementation of actions undertaken during previous years regarding the modernization of its functionality, always aiming at improving efficiency, as well as improving customer service. EYDAP is contributing in environment improvement and transferring its knowhow. Within this context EYDAP is cooperating with the Ministry of Environment and Energy and the Municipality of Tanagra in the project “Integrated Management of Water Systems in Asopos Area” targeting to solve the severe environmental problem in that area. 4 ANNUAL REPORT The implementation of its energy program, its sustainable development, research and development programs and innovation in optimizing processes and methods, are priorities in all of our corporate actions. Particular emphasis was given in 2016, on the plan and its implementation of the construction of the Wastewater Treatment Plants in eastern Attica, in an effort to solve a long outstanding problem, which has led to our country’s conviction by the European Court of Justice. EYDAP initiated planning and construction of all necessary works, aiming to solve the sewage management issue in eastern Attica, with an environment friendly approach, using best practices. These works will solve the problem of sewage management in eastern Attica permanently, with the collection and treatment of wastewater as well as the reuse of the treated wastewater by the state-of-the-art technology Wastewater Treatment Plants in eastern Attica. EYDAP’s employees with their experience and knowhow are a crucial asset of the Company, which determines the successful and effective, technical and economical operation. Employees’ devotion, all day, all year round, is the driving force of EYDAP’s operation, while being a determining factor for its development. Our country is in an economic crisis which is undoubtedly affecting our customers. The Company is keeping affordable rates, the increases of which, during these last few years, were below the average increase of the Consumer Price Index. Due to the citizens’ current difficult financial situation, there was a favorable debt repayment program put in place. EYDAP feels a special responsibility, committed to its social role, implementing a series of Board of Directors decisions, and it applies lower rates to vulnerable social groups so they will not be deprived of water. EYDAP has incorporated social projects into its overall business activity, motivated by a desire to foster social solidarity, growth and prosperity. Acknowledging therefore the value of fulfilling its social role, aiming to improve society’s social and cultural living, the Company supports education, health, vulnerable social groups, arts, sports, through sponsorships, donations, systematically cooperating with social and educational entities. Responsibly planning tomorrow’s opportunities, on behalf of all EYDAP employees we thank you for your trust and support. The Chairman of the BoD Konstantinos Papadopoulos ANNUAL REPORT 5 MESSAGE FROM THE CEO Ladies and Gentlemen, The results of 2016 confirmed yet another year, the steady and profitable growth of the Company, while it was characterized by the essential support on economically sensitive groups affected by the economic crisis. Based on our solid financial environment, our high level of know-how and our well-trained Human Resources, we have managed to offer high quality services once again. As a Company that manages the most valuable natural resource, EYDAP sensitively and consistently ensures that its operations meet the needs and requirements of contemporary consumers while protecting in every possible way the natural environment. Towards this direction, and among other social initiatives, the Company’s Administration applied the special social tariff in 2016 as well as a favorable program of settlements that provided incentives to customers to settle their debts to the Company. This initiative provided an opportunity for interested parties to respond better to their family budget obligations and was highly responsive to consumers, as approximately 50,000 debt cases were settled, while the objective of reducing outstanding claims from private clients was met, reinforcing the financial soundness of the Company. Alongside its social profile, EYDAP’s primary objective is to safeguard the interests of all Shareholders and Customers through further rationalization of costs, reduction of operating expenses, continuous improvement and simplification of corporate processes, and targeted investments. In 2016, the Company’s turnover was formed at € 328.8 million,