OPAP S.A. Annual Financial Report 2016 1 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 OPAP S.A. Annual Financial Report 2016 2 TABLE OF CONTENTS I. Representation of the Members of the Board of Directors ........................................................................ 5 II. Board of Directors’ Report for the period 1.1.2016 -31.12.2016 ............................................................... 6 1. Financial progress and performances of year 2016 .................................................................................... 6 2. Significant events during the year 2016 and their effect on the financial statements ................................... 7 3. Main risks and uncertainties..................................................................................................................... 9 4. Company’s strategy and Group’s prospects for the year 2017 .................................................................. 13 5. Non-financial report – Sustainable development ...................................................................................... 16 6. Related Parties significant transactions ................................................................................................... 22 7. Corporate Governance Statement .......................................................................................................... 23 8. Dividend policy – Distribution of net profit .............................................................................................. 45 9. Number and par value of shares ............................................................................................................ 45 10. Subsequent events after the end of fiscal year 2016 and until the announcement of the annual financial report ......................................................................................................................................... 46 11. Alternative Performance Indicators (API) .............................................................................................. 47 ANNEX ........................................................................................................................................................ 48 III. Annual Financial Statements .................................................................................................................. 52 Independent Auditor’s Report ............................................................................................................... 53 1. Statement of Financial Position............................................................................................................... 55 2. Statement of Comprehensive Income ..................................................................................................... 57 3. Statement of Changes in Equity .............................................................................................................. 58 4. Cash Flow Statement .............................................................................................................................. 60 5. Information about the Company and the Group ..................................................................................... 62 5.1. General information ........................................................................................................................... 62 5.2. Nature of operations .......................................................................................................................... 62 6. Basis of preparation ................................................................................................................................ 65 6.1. New Standards, amendments to standards and interpretations ............................................................. 66 6.2. Important accounting decisions, estimations and assumptions .............................................................. 73 7. Summary of accounting policies ............................................................................................................. 75 7.1. Basis of consolidation and investments in associates ............................................................................ 75 7.2. Foreign currency translation................................................................................................................ 77 7.3. Operating segments ........................................................................................................................... 77 7.4. Income and expense recognition ......................................................................................................... 77 7.5. Property, plant and equipment ............................................................................................................ 79 7.6. Intangible assets ................................................................................................................................ 80 OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 OPAP S.A. Annual Financial Report 2016 3 7.7. Goodwill ............................................................................................................................................ 80 7.8. Impairment of non-financial assets ...................................................................................................... 80 7.9. Leases ............................................................................................................................................... 81 7.10. Financial assets ................................................................................................................................ 82 7.11. Inventories ...................................................................................................................................... 83 7.12. Cash and cash equivalents ................................................................................................................ 83 7.13. Equity .............................................................................................................................................. 84 7.14. Current and deferred income tax ....................................................................................................... 84 7.15. Provisions, contingent liabilities and contingent assets ........................................................................ 85 7.16. Financial liabilities ............................................................................................................................ 86 7.17. Retirement benefits costs ................................................................................................................. 87 7.18. Investment property ......................................................................................................................... 88 8. Structure of the Group ............................................................................................................................ 89 9. Dividend distribution .............................................................................................................................. 90 10. Operating segments .............................................................................................................................. 91 11. Notes on the financial statements ........................................................................................................ 93 11.1. Intangible assets .............................................................................................................................. 93 11.2. Property, plant and equipment .......................................................................................................... 95 11.3. Investment property ......................................................................................................................... 97 11.4. Goodwill .......................................................................................................................................... 97 11.5. Investments in subsidiaries ............................................................................................................... 99 11.6. Investments in associates ............................................................................................................... 100 11.7. Other non-current assets ................................................................................................................ 101 11.8. Deferred tax (assets) / liabilities ...................................................................................................... 102 11.9. Cash and cash equivalents .............................................................................................................. 104 11.10. Inventories .................................................................................................................................. 104 11.11. Trade receivables ......................................................................................................................... 105 11.12. Other current assets ..................................................................................................................... 106 11.13. Share capital ................................................................................................................................ 107 11.14. Reserves .....................................................................................................................................