ANNUAL REPORT 2020 Accelerating to a net-zero society Elia Transmission Belgium Elia Transmission Belgium | Annual report 2020 Table of Contents About this report .......................................................................................................................... 6 Introduction ................................................................................................................................. 6 Legal structure ............................................................................................................................ 11 1. Corporate governance statement ............................................................................................ 13 Composition of the management bodies ........................................................................................................ 13 Board of Directors ............................................................................................................................................ 15 Diversity within the Board of Directors .......................................................................................................... 16 Audit Committee competencies ....................................................................................................................... 16 Diversity within the Executive Board............................................................................................................... 17 2. Risk management and uncertainties facing the company ....................................................... 18 Strategic/regulatory risks and responses provided ....................................................................................... 18 Changing HR needs........................................................................................................................................ 18 Changing/new regulatory conditions ............................................................................................................... 18 Pandemic risk (COVID type) ........................................................................................................................... 19 Early termination of TSO license .................................................................................................................... 19 Sustainability of incomes ................................................................................................................................ 20 Operational risks and responses provided ..................................................................................................... 20 Balancing ........................................................................................................................................................ 20 Adequacy ........................................................................................................................................................ 21 Contingency events & business continuity disruption ..................................................................................... 22 Climate risks ................................................................................................................................................... 23 Failure of information and communication technology (ICT), data security & protections ............................... 24 Permitting risk ................................................................................................................................................. 24 Supplier’s risk ................................................................................................................................................. 25 Health and safety accidents ............................................................................................................................ 26 Financial risks and responses provided ......................................................................................................... 26 Negative changes in financial markets ........................................................................................................... 26 Cashflow ......................................................................................................................................................... 27 Legal disputes and liabilities ........................................................................................................................... 28 Contextual factors ............................................................................................................................................. 29 Covid19 ........................................................................................................................................................... 29 2 Elia Transmission Belgium | Annual report 2020 Preparing for the energy transition .................................................................................................................. 29 Energy demand & energy efficiency ............................................................................................................... 29 Macroeconomic context .................................................................................................................................. 29 3. Features of the internal control and risk management systems ............................................. 30 Control environment ......................................................................................................................................... 30 Risk management .............................................................................................................................................. 32 Control activities ............................................................................................................................................... 34 Information and communication ...................................................................................................................... 34 Monitoring .......................................................................................................................................................... 35 4. Elia Transmission Belgium Consolidated financial statements .............................................. 36 Consolidated financial statement of profit or loss ......................................................................................... 36 Consolidated financial statement of profit or loss and comprehensive income ......................................... 37 Consolidated financial statement of financial position .................................................................................. 38 Consolidated financial statement of changes in equity ................................................................................. 39 Consolidated financial statement of profit or cash flows .............................................................................. 40 Notes to the consolidated financial statements ............................................................................................. 41 Reporting entity ............................................................................................................................................... 41 Basis of preparation ........................................................................................................................................ 42 Significant accounting policies ........................................................................................................................ 45 Segment reporting .......................................................................................................................................... 56 Items in the consolidated statement of profit or loss and other comprehensive income ................................. 61 Items in the consolidated statement of financial position ................................................................................ 65 Group structure ............................................................................................................................................... 86 Other notes ..................................................................................................................................................... 87 Regulatory frameworks and tariffs .................................................................................................................. 92 Joint auditors report on the consolidated financial statements ................................................................... 96 Information about the parent company ........................................................................................................... 97 Statement of financial position after distribution of profits .......................................................................... 98 Income statement .............................................................................................................................................. 99 Financial terms or Alternative Performance Measures .................................................................................. 99 3 Elia Transmission Belgium | Annual report 2020 5. Elia Transmission Belgium sustainability report ................................................................. 103 About the company ........................................................................................................................................