Annual Report and Accounts 2019 Metropolitano de Lisboa, E.P.E. 2 Annual Report and Accounts 2019 Contents 1. Message from the Chairman .............................................................................................................. 7 2. Nature of the Report ....................................................................................................................... 11 3. Indicator Summary .......................................................................................................................... 12 4. Organization .................................................................................................................................... 13 4.1 Mission, Vision, Values and Customer Charter ............................................................................................................................ 13 4.2 Governance Structure .......................................................................................................................................................................... 15 4.3 Corporate Bodies ................................................................................................................................................................................... 15 4.4 Metropolitano de Lisboa's financial interests ........................................................................................................................ 18 5. Context Analysis .............................................................................................................................. 19 5.1 Macroeconomic framework .............................................................................................................................................................. 19 5.2 Strategic Guidelines .............................................................................................................................................................................. 23 6. Performance.................................................................................................................................... 25 6.1 Business Model ....................................................................................................................................................................................... 25 6.2 Risk management ................................................................................................................................................................................... 26 6.3 Activity Performance ............................................................................................................................................................................ 30 6.4 Business performance .......................................................................................................................................................................... 42 6.5 Economic and Financial Performance ......................................................................................................................................... 50 7. Proposal for the Application of Profits .............................................................................................. 60 8. Attachments .................................................................................................................................... 61 8.1 Compliance with Legal Guidelines ................................................................................................................................................ 61 8.2 Final Remarks ........................................................................................................................................................................................... 77 8.3 Appendix to the Annual Management Report (Board of Directors, art. 447(5) of the Portuguese Companies Code) .................................................................................................................................................................................. 78 8.4 Appendix to the Annual Management Report (Supervisory Board, art. 447(5) of the Portuguese Companies Code) .................................................................................................................................................................................. 79 8.5 Financial Statements and corresponding Attachment for the financial year ended on 31-12-2019 and 31-12-2018 .............................................................................................................................................................................................. 80 Notes to the financial statements with reference to the 31st of December 2019 .......................................... 84 1. Identification of the Entity ............................................................................................................... 84 2. Accounting framework for the preparation of the financial statements ............................................. 85 2.1 Basis of preparation ................................................................................................................................................................................... 85 2.2 Comparability of the financial statements .................................................................................................................................... 85 3. First-time implementation of the NCRF - transitional disclosure ........................................................ 85 4. Key accounting policies .................................................................................................................... 85 4.1 Long-term infrastructure (LTI) investment activities .............................................................................................................. 85 4.2 Property, plant and equipment ............................................................................................................................................................ 87 Metropolitano de Lisboa, E.P.E. 3 Annual Report and Accounts 2019 Allocated to infrastructure management (non-LTI assets): ......................................................................................................... 87 Allocated to long-term infrastructure (“LTI”): ..................................................................................................................................... 88 4.3 Intangible assets .......................................................................................................................................................................................... 89 4.4 Leases................................................................................................................................................................................................................. 89 Leases in which the Company acts as a lessor: .................................................................................................................................. 89 4.5 Investment property................................................................................................................................................................................... 89 4.6 Impairment of property, plant and equipment (non-LTI) ..................................................................................................... 90 4.7 Financial interests in subsidiaries, associates companies and joint ventures ........................................................... 91 4.8 Inventories ....................................................................................................................................................................................................... 91 4.9 Financial assets and financial liabilities .......................................................................................................................................... 92 4.10 Financial costs related to borrowings ........................................................................................................................................... 94 4.11 Income tax .................................................................................................................................................................................................... 95 4.12 Government Subsidies (non-LTI) .................................................................................................................................................... 95 4.13 Provisions, contingent assets and contingent liabilities..................................................................................................... 95 4.14 Post-employment benefits .................................................................................................................................................................. 95 4.15 Derivative financial instruments ....................................................................................................................................................... 96 4.16 Classification of the balance sheet ................................................................................................................................................. 97 4.17 Revenue.........................................................................................................................................................................................................