GEK TERNA SOCIETE ANONYME HOLDINGS REAL ESTATE CONSTRUCTIONS 85 Mesogeion Ave., 115 26 Athens, Greece General Commercial Registry No. 253001000 (former S.A. Reg. No. 6044/06/Β/86/142) ANNUAL FINANCIAL REPORT for the period 1 January to 31 December 2019 In accordance with article 4 of L. 3556/2007 and the relevant executive Decisions by the Board of Directors of the Hellenic Capital Market Commission [page intentionally blank] CONTENTS I. STATEMENTS BY MEMBERS OF THE BOARD OF DIRECTORS ....................................................... 7 II. ANNUAL MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR FY 2019 ON CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS ................................................................................... 9 A. Financial Developments and Performance in the Reference Period ........................................... 9 Β. Significant events for the fiscal year 2019 ................................................................................ 10 C. Significant Events after the end of the period 01.01 – 31.12.2019 ............................................ 18 D. Risk Factors and Uncertainties ................................................................................................. 26 E. Alternative Performance Measures (“APMs”) .......................................................................... 30 F. Report concerning Payments to the Government .................................................................... 34 G. Non‐Financial Information Report 2019 .................................................................................. 34 Η. Outlook and Prospects ............................................................................................................ 57 I. Treasury Shares ........................................................................................................................ 60 J. Transactions with Related Parties ............................................................................................. 61 CORPORATE GOVERNANCE STATEMENT .......................................................................................... 68 EXPLANATORY REPORT OF THE BOARD OF DIRECTORS ACCORDING TO ARTICLE 4 OF L. 3556/2007 ............................................................................................................................ 78 III. Independent Auditor’s Report .................................................................................................. 81 IV. ANNUAL FINANCIAL STATEMENTS SEPARATE AND CONSOLIDATED OF 31 DECEMBER 2019 ..... 88 CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION 31ST DECEMBER 2019 ..... 90 CONSOLIDATED AND SEPARATE STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 01.01‐31.12.2019 ............................................................................................................ 92 CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS FOR THE PERIOD 01.01‐31.12.2019 ........................................................................................................................ 94 CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY FOR 2019 ......................... 96 NOTES ON THE FINANCIAL STATEMENTS ................................................................................................. 99 1. ESTABLISHMENT AND ACTIVITY OF THE COMPANY ......................................................................... 99 2. BASIS FOR THE PRESENTATION OF THE FINANCIAL STATEMENTS ................................................. 101 3. SIGNIFICANT ACCOUNTING ESTIMATES AND MANAGEMENT ASSESSMENTS ............................... 108 3.1 Significant judgments of the Management .................................................................................... 109 3.2 Uncertainty of estimates and assumptions .................................................................................... 109 4. SUMMARY OF KEY ACCOUNTING PRINCIPLES ................................................................................ 113 4.1 Basis for consolidation .................................................................................................................... 113 4.2 Business combinations ................................................................................................................... 116 4.3 Foreign currency translation ........................................................................................................... 117 4.4 Operating segments ........................................................................................................................ 117 4.5 Goodwill .......................................................................................................................................... 118 4.6 Intangible assets ............................................................................................................................. 118 3 4.7 Tangible assets ................................................................................................................................ 120 4.8 Borrowing costs .............................................................................................................................. 121 4.9 Impairment of non‐current assets (intangible, goodwill and tangible assets/investments in consolidated companies) ................................................................................................................ 121 4.10 Investment Property ....................................................................................................................... 122 4.11 Inventory ........................................................................................................................................ 123 4.12 Cash and Cash Equivalents ............................................................................................................. 123 4.13 Financial instruments ..................................................................................................................... 123 4.13.1 Recognition and derecognition ................................................................................................... 123 4.13.2 Classification and initial recognition of financial assets .............................................................. 124 4.13.3 Impairment of financial assets .................................................................................................... 124 4.13.4 Classification and measurement of financial liabilities ............................................................... 125 4.13.5 Derivative financial instruments and hedge accounting ............................................................. 126 4.13.6 Offsetting financial assets and financial liabilities ....................................................................... 128 4.13.7 Offsetting financial assets and financial liabilities ....................................................................... 130 4.14 Receivables on Embedded Derivatives .......................................................................................... 130 4.15 Service concession agreements ..................................................................................................... 131 4.16 Employee benefits .......................................................................................................................... 132 4.17 Leases ............................................................................................................................................. 133 4.18 Government grants ........................................................................................................................ 135 4.19 Provisions, contingent Assets and Liabilities ................................................................................. 136 4.20 Revenue ......................................................................................................................................... 137 4.21 Income tax ..................................................................................................................................... 141 4.22 Earnings per share ......................................................................................................................... 142 4.23 Share capital, reserves and distribution of dividends .................................................................... 142 5. GROUP AND COMPANY STRUCTURE .............................................................................................. 143 6. OPERATING SEGMENTS .................................................................................................................. 151 7. BUSINESS COMBINATIONS ‐ GOODWILL ........................................................................................ 157 8. INTANGIBLE FIXED ASSETS .............................................................................................................. 160 9. RIGHT OF USE ASSETS ..................................................................................................................... 165 10. TANGIBLE FIXED ASSETS ................................................................................................................. 167 11. INVESTMENT PROPERTY ................................................................................................................. 172 12. PARTICIPATIONS IN SUBSIDIARIES .................................................................................................. 177 13.